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Calmirb. Man and Nature. Sixth edition re-
vised. Crown 8vo, $i .50.
Stukmsrb. Man and Man. Third edition re-
vised. Crown 8vo, $1.50.
On thb Civic Relations. Being a third edi-
tion of " Talks on Civics " rewritten from the
catechetical into the expository form, and re-
vised and enlarged.
HOUGHTON, MIFFLIN & CO.
Boston and New York
ON THE
CIVIC RELATIONS
BY
HENRY HOLT, A.B., LL.B., LL.D.
Member of the New York A cademy 0/ Political Science, the A merican
Political Science Association, and the A merican Economic
A ssociatioH ; A uthor 0/ " Sturmsee : Man
and Many** etc.
BOSTON AND NEW YORK
HOUGHTON, MIFFLIN & COMPANY
Gfre fflrotttffce preft> Cambridge
1907
COPYRIGHT 1907 BY HOUGHTON MIFFLIN * CO.
First Edition ( Third of " Talks on Civics ") printed May tqpj
GIFT OP
SCAN A. 8. WHITNEY
{■30
PREFACE TO THE THIRD EDITION.
While this book is, in one sense, a third edition of
my "Talks on Civics it is really, in many important
differences and additions, almost a new work. Among
the peculiarities, not to speak of the defects, under
which the earlier editions labored, was the catechetical
form, of which I expressed my distrust in the first
preface. That form was adopted largely because the
work was aimed at very young pupils. Before it was
finished, I became convinced, as stated in a note to
the earlier editions, that the aim was not one suited
either to the greatest possible usefulness of the book,
or to the capacity of the author. Both in regard to the
aim, and to the catechetical form, this conviction was
supported by many readers, and in consequence I
have rewritten the book. The rewriting of course has
led to many differences of detail ; and the growth of my
own convictions, as well as the astonishing develop-
ment during the past few years in many ctf the matters
treated, and the increase of topics demanding treat-
L ment, have combined to make the work, as already
< stated, in many particulars a new one. So rapid has
been the development in some particulars, as almost
i to render them unfit for treatment in a book, and to
make it impossible to keep pace with them except in
the daily and periodical press. Each proof and each
revise has clamored for insertions, and I go to press
neglecting important matter that has appeared since
my copy, and also my revises, went to the printer.
I must even beg the reader's charity for some incon-
iii
iv
Preface to the Third Edition.
sistencies that must have escaped me between matter
coming after the original draft, and matter contained
in it.
Notwithstanding the space saved by doing away with
question and answer, this edition is more than a hundred
and fifty pages longer than the preceding one. The
added matter contains its share of the sort of repeti-
tions that were confessed, and I hope justified, in the
preface to the first edition. Most of it relates to "the
labor question", socialism and municipal trading, and
will be found principally in Chapters XIX-XXII, and
XXVIII-XXX.
I confess, not quite without shame, to having, in the
earlier editions, handled the first of those subjects very
briefly, and with gloves; the excuse, such as it was,
being that whatever good the book might do, would
be put out of the reach of common-school pupils by
"Labor" influences. Having come to realize, however,
before the book was finished, that it had grown unavail-
able for such pupils, in this edition I have entirely
abandoned the attempt to adapt it to them. Yet
there may be places where enough of the earlier ten-
derness for the juvenile mind has survived, to demand
my humble apologies to the dignity of the under-
graduate. But a much stronger reason for the changes
regarding the subjects mentioned, was their growing
importance. In the six years since the second edition
was published, the "labor question" has become, not-
withstanding the graft in corporations, the leading
question of the time. I am sorry that my limits do
not permit even a fuller treatment of it, but less sorry
than I should be if I could not refer the reader for
fuller information to so admirable a book as the "Labor
" Problems" of Prof. T. S. Adams and Miss Helen L.
Sumner. Despite the strange showings of figures which
I have alluded to on page 252, and despite some other
matters which I cannot endorse, Professor Adams's
chapter on Strikes and Boycotts surpasses anything on
the subject which I know. The book has appeared
since the last edition of this one, and has done not a
Preface to the Third Edition.
v
little to furnish me material for hope that this edition
may be an improvAnent.
What I have found to say regarding the right to stop
work and the right to strike, tho not entirely novel,
and tho somewhat anticipated even by court decisions,
has nevertheless played so small a part as yet in dis-
cussions of the subject, that I cannot help regarding it
as well worth saying. I am also vain enough to hope
that the additional matter regarding socialism may do
a little to clear up in some minds that inevitably foggy
subject, or at least to show why it is inevitably
foggy.
The book is of course "second-hand": to write from
original investigation in so many fields, would be impos-
sible: for even if life were long enough, while an author
would be investigating one department, those pre-
viously gone over would grow beyond him. The utmost
possible is the exercise of reasonable care and dis-
crimination in choosing authorities. This I have striven
for, but I have not made any attempt like those which
I have sometimes been uncharitable enough to suspect
in others, to make the book appear more learned than
it is, by bothering the reader with citations of authori-
ties for all the statements.
Tho disliking excuses, I will allow myself the one
afforded in this connection, for not having taken the
trouble to hunt up the names of law cases when they
were not given where I found the substance of the
decisions. A book intended primarily for under-
graduates and general readers, does not need details
required only by the profession and investigators. One
of the critics of an earlier edition was at the pains to
inform his readers that its treatment of law topics
can be of little use to the profession. It will also be
of little use to students of Chinese. Perhaps, however, I
may be excused for saying that other critics (I do not
know whether of equal authority) have said that the
book contained a good introduction to the study of the
municipal law. Whether it did or not, this edition
contains a better one, largely due to the friends named
vi
Preface to the Third Edition.
below. I have also gleaned a few new points from
Professor Burdick's "Essentials of Business Law."
I am indebted for various valuable criticisms of the
earlier editions to Professor Daniels, Judge Baldwin,
and Messrs. Samuel Huntington and Ralph Curtis Ring-
wait of the New York bar.
My obligations to other writers not consulted for the
earlier editions, are, I believe, all acknowledged in the
body of the work.
I am glad again to name Mr. Neu, and to express
my continued obligation for his admirable proof-read-
ing, and for help in the cross-references and index.
I crave the reader's consideration for the reasons
set forth in the preface to the first edition, why the
work is a considerable departure from previous works
in the same field.
H. H.
Nbw York,
March 29, 1907.
FROM THE PREFACE TO THE FIRST
EDITION.
(March i, 1901.)
THE MOTIVES.
This book was written in the hope of doing a little
something to develop in young people the character of
mind which is proof against political quackery — espe-
cially the quackery which proposes immediate cures by
legislation for the abiding ills resulting from human
weakness and ignorance. Since the Civil War, America
has been cursed by such proposals probably more than
any other country ever was. What beneficent institu-
tions we have, have all been evolved through the long
and painful struggles which have at the same time
evolved character and morality. If Nature's ways are
plain in anything, they are plain in showing that it is
only for such prices that she yields such rewards. And
yet of all our hard-bought institutions, there is scarcely
one, from a stable currency down to the very right of
accumulating property, that has lately escaped a strong
attempt to overthrow it, and to substitute for it some
invention of the moment — or rather some invention
bearing a name of the moment, but being really a form
of some protean error as old as history.
As these errors all propose to get along faster than
Evolution, they would of course be impossible to a mind
habitually recognizing the law of Evolution. Yet that
law has not even been named, so far as I can recall at
the moment, in any of the American elementary books
vii
viii From the Preface to the First Edition.
on civic subjects that I have been able to get hold of.*
This may not in all cases be due to neglect, but some-
times to the conviction that it is useless to present the
subject to the young. My view is more hopeful, and
this book is, perhaps more than anything else, an at-
tempt to saturate young people's minds with the reali-
zation that social institutions are evolutions, and there-
fore (I) that they can no more be modified by laws or
votes or any other manifestations of human will than
plants or animals can ; but (II) that they can be modified
as much as plants or animals can, tho only by the same
means — careful study of their life-histories and habits,
and cautious efforts in accordance with the proved con-
ditions of their well-being; and (III) that they will be
vitiated or destroyed by forced or ignorant treatment.
This is why I have spent so much time over such
topics as early land-tenure and the relations of status
and contract — in short, over the archaeology of the sub-
ject. I want to give the pupil a consciousness that en-
during institutions are growths, and do not spring up
responsive to any magician's wand, be it in the hands of
Mr. Altgeld, Mr. Bryan, or even so good a man as Henry-
George — I want to accustom him, when any method is
presented for his vote, to ask: Has this thing roots?
A second motive for the book was to place before
American youths at least one text-book that should not
claim that our constitutions — state and national, present
the final word of human wisdom. Perhaps the admission
of notorious defects will bring upon the book charges of
lack of patriotism, yet it is not written in a pessimistic
spirit. The pessimist generally despairs because achieve-
ments fall short of ideals: the wise man compares,
rather, what he an$i his have achieved, with what others
have achieved. Our government may not be the best,
but we are too near the best to despair. But if our gov-
ernment is ideally good already, why bother to teach
* There is abundant illustration of Evolution in Mr. Fiske's
44 Civil Government in the United States but I believe the word
is not even mentioned, perhaps because of the theological preju-
dices prevailing so far back in the dark ages as ten years ago.
From the Preface to the First Edition. ix
anything about it ? : it can take care of itself ; and in fact,
until lately, our people have generally been taught to
leave it to do so.
A third motive of the book has been to get some
teaching on our constantly recurring questions of money,
land-tenure, distribution and taxation, into some places
where Economics are not usually taught, and also to
get into some places where Economics are taught, a
fuller treatment of those four topics than is usually
given.
A fourth intention has been to spread a just concep-
tion of Contract. The absence of such a conception is at
the root of most of the labor troubles, not to speak of
private breaches of faith. Those who realize the im-
portance of the subject will not be impatient with the
rather protracted and abstract discussion that prefaces
the treatment of the laws relating to it.
In time the pupil will, as a voter, need to make up his
mind on many hard subjects — so hard, some of them,
that for his conclusions, or anybody's, to be taken seri-
ously, seems almost ridiculous. But I am not sure that
just that fact is not the most important of all that I want
him to appreciate — the fact that in broad civic questions,
the wisest man can only feel his way — as Lincoln did:
and that of all pests for the voter to avoid, the chief is
the man with a scheme — be it silverism, greenbackism,
grangerism, socialism, communism, anarchism, or (I am
tempted to add) protectionism and militarism, but some-
times there are circumstances justifying these two.
This attitude regarding a scheme may seem inconsist-
ent with my close approach to recommending one re-
garding taxation. But that approach is only incidental
to an effort to trace the indications of Evolution. If our
men of schemes would honestly restrict themselves to
such efforts, they would be less dangerous.
I have hoped to add life, as well as significance,
even at the cost of interruptions, by frequent compari-
sons of early conditions with present ones.
I have not hesitated to repeat — even to repeat often,
where the topic seemed worth iterating or presenting
X
From the Preface to the First Edition.
from several sides. The significance of the matters
here treated is not as plain as that of the multiplication-
table, which needs to be presented but once.
THE MATERIAL.
From the unlimited range of topics embraced in civic
relations, how to select the little bookful best adapted to
the needs of the average American youth, is a hard
problem. Probably the authors of some of the other
text-books would be more puzzled to find good reasons
for my selections, than I am for theirs. They generally
give much more attention than I do to the anatomy of
the government — state minutely all the offices, national,
state and local, and not only the qualifications legally
required for them, but even for voting for them. Now
most of these things, so far as they affect a vote, the
voter, as he grows up, is pretty sure to learn from the
world; and so far as they do not affect his vote, they
must be relegated to the vast domain of useless knowl-
edge— unless indeed he aspire to be, as a politician,
something more than a mere voter. The few boys,
however, who have this spark of aspiration, get it from
the altar of genius, even if it be genius for nothing
higher than running a primary: and genius teaches
itself.
A man who tries to judge broad questions by details
is not going to get anywhere : they involve too many de-
tails : he can compass but a small part of them, and is in
danger of getting the wrong ones and missing the right
ones. Broad questions can only be judged on broad
principles. Then, it might be asked: Why expect the
man of ordinary attainments to judge them at all? I
never have been able to find out why ; but inasmuch as
a vote has been given him, that responsibility has been
laid upon him, whether he is fit for it or not. Well, with
a fatuity equal perhaps to that which gave him the vote,
I have tried in this little book to give him some notion
of the broad principles on which the vote should be
used. If Ethics — the profoundest and vaguest of all
From the Preface to the First Edition. xi
sciences, is taught in some shape from the cradle, is it
plain that problems of Civics need be entirely neglected
in all shapes, during adolescence? Frankly, I do not.
expect to teach very much about them : but I do hope
to give such a notion of how some sound principles look
from the outside, that the voter can tell whether they
are recognized or not by those who seek his suffrages,
and give his vote accordingly.
And yet I am far from believing that all of even this
little book can have much meaning, before it is illumi-
nated by experience. I do believe, however, that much
here which may be memorized as little more than dog-
matic statement, will gain meaning from day to day,
until it becomes significant ; and I have even some hope
that if the desperate experiment fails with the young,
the labor may be rewarded by clarifying to some maturer
minds a grave problem or two, through the same courses
of thought (even if borrowed thought) that have, I
assume, clarified them to my own.
It may seem inconsistent with the foregoing talk
about broad principles, that the book includes some
groups of such specific rules of the Municipal Law as a
layman ought to know and might have to learn at his
cost in ordinary business experience. Not only, how-
ever, do I think that their value makes them a justifi-
able part of the only teaching of civic relations that
many of my hoped-for readers are apt to get, but I
have tried to put even such matter in such a way that
it will do its share *in impressing the main lesson of
the book — the evolution of all the elements of social
order, especially the inevitably imperfect evolution of
some of the most important elements — "the glorious
uncertainties of the law ".
The original design included a second part, on the
Evolution of Government, to be issued in the same vol-
ume with the first. The first part, however, as is
usually the case, outran expectation; and as it has a
certain completeness in itself, and is long enough to
take up the time given in the majority of classes to
the subject, and especially as it contains most of the
xii From the Preface to the First Edition.
"practical" matter contemplated in the entire scheme,
it has been thought best to publish it without waiting
for the completion of the second part; and perhaps
to let the completion of that part depend upon the
reception accorded to the very uncertain experiment
as tried in the present volume.
Although in this part the evolution of several institu-
tions has been considered, the evolution of government
in general has not. The intention for the second part,
has been not only to give an account of that, but also,
as a natural concomitant, to give a fuller idea of the
structure of government, tho substituting for much of the
detail usually given in books for the same grade of pupils,
some of the criticism and suggestion usually avoided.
I let the foregoing paragraph stand to emphasize this
one. Since that one was written, I have reread the 4 * Civil
Government in the United States", by my lamented
friend Professor John Fiske, and I realize more fully
than I did in my first reading, that it is in many re-
spects what, while writing my first part, I have come
to intend my second part to be. If I ever carry out
that intention, it will be because of the other respects,
and especially because of a desire to reach minds less
mature than perhaps Mr. Fiske's book can reach.
Meanwhile, and perhaps afterwards (if there ever
should be an afterwards), Mr. Fiske's book may be
regarded as the best one known to me for supplementing
what I have tried to do here.
t
AUTHORITIES.
In addition to some of the older authorities which
are already matters of course, I am specially indebted
to the following, most of which are rapidly becom-
ing matters of course, if not so already. I let the
list grow larger than is usual in acknowledgments,
in order that it may serve as a brief bibliography
for the use of teachers.* — The late David A. Wells's
* I permit this to stand, tho the present edition is intended
for a grade of pupils whose teachers will know more of the
bibliography of the subject than I do.
From the Preface to the First Edition. xiii
"Recent Economic Changes" and "Theory and Prac-
tice of Taxation ",* Professor Mayo-Smith's "Economics
and Statistics", President Hadley's "Economics", Pro-
fessor Adams's "Finance", Professor Daniels's "Ele-
ments of Public Finance ", Professor Seligman's books
on Taxation, Mr. Shearman's " Rational Taxation ",
Judge Baldwin's "Modern Political Institutions", Mr.
Mallock's "Labor and the Popular Welfare" and
"Classes and Masses", Professor Goodnow's "Municipal
Problems", Doctor Shaw's books on Municipal Govern-
ment, the valuable quarterly on "Municipal Affairs"
published by the Reform Club, especially Dr. Maltbie's
number on "Municipal Functions", and Mr. Godkin's
"Problems of Democracy" as well as The Nation
from the time he founded it. A word of acknowledg-
ment is also due to the excellent articles on Civic
questions in Johnson's Cyclopaedia.
Among elementary books for pupils, I have found
help in Mr. Raleigh's admirable little "Elementary
Politics" (which, unfortunately for us, was written for
England), Professor Robinson's "Elementary Law",
Professor Bolles's "Commercial Law ", the summary of
Municipal Law in Mr. Young's "Government Class
Book", Mr. Fiske's "Civil Government in the United
States " (tho its field is very different from that of this
volume), and in several features of Mr. Martin's "Civil
Government". His summary of the "Establishment
of Liberty in England" (of course not touched in
my present volume), seems to me a little gem, tho
possibly rather condensed for the young pupil. I have
also found Mr. Ford's "American Citizen's Manual"
and Mr. Bartlett's "What I ought to know about the
Government of my Country" handy for quick reference.
* Two real books that ought to be read by every human being
old enough and civilized enough to understand thorn; this, too,
in spite of the fact that the latter was largely written during the
lamented author's last illness, and therefore lacks the terseness
and vigor of his earlier work. It appeared after the chapters on
taxation in this present volume were written , but it was still pos-
sible to inject from that work much of whatever good they may
contain.
xiv From the Preface to the First Edition.
If I have done what I have attempted, as well as these
authors have done the very different things which they
attempted, I ought to be content.
My hearty thanks are due to Mr. Theodore Neu for
rare intelligence, interest, and suggestiveness in read-
ing the proofs and preparing the index.
I am also under very great obligations to Professor
Goodnow for reading the proofs, and for calling atten-
tion to errors. Of course he is not responsible for
those which remain. I shall be similarly grateful to
any one pointing out any of them.
•
CONTENTS.
Preface to the Third Edition
From the Preface to the First Edition
page ill
vil
PRELIMINARY SURVEY.
Chapter I. — Society's Control of the Individual —
Sec. i. Introductory. 2. Social Influence and Control: 2 (a),
through the Family; 2 (b). through Public Opinion; 2 (c).
through Imitation; 2 (d). through Education; 2 (e). through
Government. 3. Civic Relations Defined. 4. Government's
Functions Illustrated. 5. Government's Functions Classified.
5 (a). Protection of Rights. 5 (6). Promotion of Convenience.
5 (c). Taxation. 6. Some General Results of Bad Govern-
ment. 7. Responsibility for Bad Government. 8. Good Gov-
ernment Requires Intelligence, Character and Effort. 9. Ex-
tent of Government's Influence. 9 (a). Illustrated by Money.
Sec. 10. Each Citizen Lives under Several Governments.
11. Overlappings of Local Governments. 12. Functions of
Local Government. 13. Of County Government. 14. Of State
Government. 15. Of National Government. 15 (a). Sover-
eignty.
Sec. 16. Legislative, Judicial, Executive. 17. Sources of Gov-
ernment. 18. The Three Departments Illustrated in Civil and
Criminal Suits. 19. Legislative, Judicial and Executive Func-
tions in Local Government. 20. The Functions in Counties.
21. The Three Functions in States. 22. The Same Functions
in the Nation.
Government
1
Geographical Divisions of Government.
Departments of Government.
xv
xvi
Contents.
book i.— the Protection of rights.
Chapter II. — Of Rights in General 21
Sec. 23. Rights Impose Duties. 24. " Greatest Happiness"
Principle and its Application in the Three Kinds of Law.
25. Rights and Duties Imply Each Other. 26 Rights Classi-
fied.
Chapter III. — Right to Life 25
Sec. 27. The State's Claims. 28. Humanity's Claims. 29.
Professional Claims. 30. Life and Work. 31. The Right to
Work. 31 (a). Subject Only to the State. 31 (6). Picketing
and Boycotting. 32. Duties Conditioning the Right to Work.
33. Society's Alleged Duty to Provide Work. 34. The Eng-
lish Poor Law and the French Workshops. 35. Public Charity.
Chapter IV. — Liberty 32
Sec. 36. Boundaries of Liberty. 37. Barbarian Liberty and
Civilized Liberty. 38. Duties Balancing Rights to Liberty.
39. State's Right to Restrain Liberty. 40. "Eternal Vigil-
ance." 41. Constitutional Defences, Bill of Rights. 42. The
Man with a Pull. 43. Freedom of Opinion. 44. Laws
Threatening Liberty.
Chapter V. — The Pursuit of Happiness 39
Sec. 45. A General Term for Many Rights. 46. Restricted,
as All Rights are. 47. The Right to Work Involves Rights of
Property and Exchange. 47^ (a). Limited, like All Other
Rights. 48. The Rights to Work, to Property and of Ex-
change Involve Rights to Contract 49. and to Reputation.
50. State does not Furnish Means %o Happiness, but Only
Rights to Work for Them. 51. Evolution of Property Rights.
51 (a). Their Sources — Raw Material, Labor, Ability.
Chapter VI. — Real Property 44
Sec. 52. Land and Sea the Source of Raw Material. 53. Early
Conditions. 54. Communistic Ownership. 55. The Feudal Sys-
tem. 55 (a). Why an Advance on Communism. 55 (&).
When Established. 55 (c). Evolution of Hereditary Feudal
Relations. 155 (d). Guardianship, Disposal by Marriage. 55 (<?).
Domesday Book. 56. Evolution of Private Ownership. 56 (a).
Scutage. 56 (6). Leases for Labor. 56 (c). Money Commuta-
tion of Labor Leases. 57. Land-tenure in America. 58. Land-
tenure Similar among All Peoples of the Same Grade. 59. Pri-
vate Property in Land a Great Stimulus to Ability. 60. The
Strong Man's Chance Not at the Expense of the Weak. 61.
Proportion of Private Owners Increases with Civilization. 62.
Landowners the Best Guardians of Government, 63. and the
Contents.
xvii
Most Thrifty Citizens. 64. Exaggerated Claims from the Fore-
going Advantages. 64 (a). The Right to a Home. 64 (6). The
Right to a Living. 65. Land Valueless to All but Able Men.
66. Proposed Reversion to Government Ownership. 67.
Landowners Support the Government under Either System.
68. Some Advocate Robbery, which would Disappoint Them.
69. •The Only Way to Help the Poor is to Help Them Help
Themselves. 70. The Moral Arguments — Original General
Ownership. 71. Attempt to Remedy Injustice Sometimes
only Increases It. 72. Performing Duties of Ownership Breeds
Rights of Ownership. 73. Rights in Improvements. 74. The
Unearned Increment. 74 (a). Not Characteristic of Land
Alone. 75. All Schemes to Abolish Private Ownership are
Retrogressive. 76. Private Property in Land of Universal
Importance. 77. Rights in Land Limited like All Rights. 78.
Rights of Eminent Domain.
Chapter VII.— Law op Real Property 65
Sec. 79. The Law in General. 80. Real Estate and Per-
sonal Property. 81. Laws Protecting Ownership. 81 (a).
Damages for Trespass. 81 (6). Right of Ejectment. 82. Laws
Affecting Transfers. 82 (a). Livery of Seisin. 82 (b). Statute
of Frauds Requiring Written Evidence of Transfer. 82 (c).
Contracts of Sale. 82 (d). Deeds. 82 (c). Seal and its Effect.
82 (/). Essentials of Deeds. 82 (g). Dower and Courtesy.
82 (h). Value of Established Forms. 82 (1). Registry. Title-
search. 82 (/). Judgments. 82 (k). Statutes of Limitations.
Prescriptions. Appurtenances. 82 (/). Title Insurance. 82 (m).
Clouds on Title. 82 (w). Delivery of Deed. 8^. Mortgages.
83 (a). Bonds. 84. Leases. 85. Rights of Third Parties Re-
garding Registry. 86. Effect of Fraud. 87. Land Differs from
Negotiable Papers. 88. Technical Meaning of "Estate" in
Land. 89. Rights under Estates for Years. 89 (a). Repairs.
89 (b). Subletting. 89 (c). Terminability, Notice. 90. Rights
under Life Estate. 91. Under Estates at Will. 92. Appur-
tenances. 92 (a). Party Walls. 92 (6). Land beside Roads.
Q2 (c). Land by Water. 93. Restrictions. 94. The Torrens
System.
Chapter VIII.— Personal Property 87
Evolution of Rights in It.
Sec. 95. Product Varies with Abilitv. 05 (a), even the
Product of the Lowest Laborers. 96. Difficulty of Adjusting
Rights between Ability and Labor. 97. General Functions ot
Ability. 97 (a). The Civilized Man Loses the Savage's Inde-
pendence. 97 (6). Things Made to Embody Thoughts. 97 (c).
Averages and Ability. 97 (d). The Lower Depends on the
Higher. 97 (e). "Finds Work." 97 (/). Increases Product.
97 GO- Saves Waste. 98. Detailed Functions of Ability.
xviii
Contents.
98 (a). Prophesying Wants. 98 (6). Raising Capital. 98 (c).
At the Works. 98 (d). Outside of the Works. 99. Popular
View of the Enterpriser. 100. Divisionjof Labor. 101. Few
Men can Conduct Large Enterprises. 102. Ability Outside of
Tangible Production. 103. 4 4 The Great Industry" Cheapens
Product. 104. Enterpriser's Income Not at Expense of Labor.
105. Invention and Evolution. 106. Labor Abounds in Poojest
Countries. 107. The Enterpriser must Pay Good Wages.
107 (a). Often in Bad Times. 108. Where Ability's Reward
does Come from. 109. Production Not All by Hand. no.
Destruction of Bad Economics. in. Values Depend on
Sound Morals. 112. Paradoxes of Distribution. 113. Para-
doxes of Opinion. 114. Why Returns of Labor are Nearly
Fixed. 115. Why Those of Ability Vary Widely. 116. Capi-
tal's Return More Like Labor's than Ability's. 117. Ability
cannot Waste Time and Strength in Grinding Labor or Capital.
118. Capital and Labor Powerless without Ability. 119. The
Rates of Division. 120. Enterprisers Generally Get Less than
Nothing. 121. Handworkers of Special Ability. 122. Prop-
erty Not All Tangible. 123. Comparative Profits in Different
Fields of Ability. 124. Why so Few have Great Ability.
125. Discovery of the Foregoing Truths. 126. Ability In-
creasing. 127. Suum Cuique. 128. Minimum Wage and Slid-
ing Scale. 129. No Lack of Opportunity. 130. But Few Able
to Embrace It. 131. Is Inequality of Fortune Right? 132.
Evils have their Uses.
Chapter IX. — Property as Capital 116
Sec. 133. As Much Entitled to Government's Protection as
Wages. 134. A Man who can Use Money can Hire It. 135.
What Capital Consists in. 136. Rent. 137. Interest. 138.
Usury. 138 (a). Laws against It Useless. 138 (6). Disappear-
ing from Enlightened Communities. 138 (c). Hard on Bor-
rowers. 139. Needs for Associating Capital. 140. Incorpora-
tions. 140 (a). As Affecting Liability. 140 (6). Perpetuity.
140 (c). Stocks and Bonds. 141. Large Corporations Not All
Owned by the Rich. 142. Irresponsibility of Corporations.
143. Very Small Corporations Undesirable. 144. Why Labor
Hates Corporations. 145. Danger of Monopoly.
Chapter X. — Competition, Monopoly and Industrial
and Labor Trusts 127
Sec. 146. Rights of and to Competition. 147. Hated by the
Lazy and Stupid. 148. Benefits Illustrated. 148 (a). In Do-
mestic Convenience. 148 (b). In Travel. 148 (c). In Com-
mercial Traveling. 148 (</). In Regulation of Prices through
Demand and Supply. 148 (e). Minor Exceptions. 149. Evils
in Competition. 149 (a). Suppressing Incapacity not among
Them. 149 (6). Nor is Poverty. 149 (c). But Wastefulness is.
150. Public Seldom Gainer by Wasteful Competition. 151.
Contents. xix
Codperation and Competition. 152. Capital Trusts. 152 (a).
Their Economy. 152 (6). Not Generally Profitable. 152 (c).
Their Monopoly Sometimes Causes its Own Cure, 152 (d).
and Sometimes does Not. 153. Property Rights do Not
Always Include Monopoly Rights. 154. State Control. 154 (a).
By Anti-trust Laws. 154 (6). Capital Trusts and Labor
Trusts. 154 (c). By Fixing Prices. 154 (</)• By Eminent
Domain. 154 (e). Danger of Government Tyranny. 155.
Effect of Great Aggregations of Capital on Legislation. 156.
Socialism as a Remedy. 157. The Only Real Remedies.
157 (a)- An Illustration.
Chapter XI. — Rights in Natural Monopolies 144
Sec. 158. Some Things are Inevitably Monopolies. 158 (a).
But the Earth Not One of Them. 150. Why Railroads are
Apt to be Monopolies. 159 (a). Why They Need Government
Authorization, 159 (6). and should Pay for It. 159 (c). So
with Other Facilities. 160. Those in America Being Generally
Grabbed by the Politicians. 161. Should Not be Sold Out-
right. 162. How Natural Monopolies Become Personal Prop-
erty.
Chapter XII. — The Law op Rights in Personal Prop-
erty 148
Sec. 163. Differences between Law of Personal Property and
that of Land. 163 (a). Personal Property Seldom Registered.
163 (6). Important Kinds Passed by Endorsement. 163 (c).
Can Take One's Own Wherever Found, and in Some Cases by
Force. 163 (d). Ownership of Some Kinds can be Lost With-
out Neglect. 163 (e). Can be Mortgaged without Registry if in
Mortgagee's Possession. 164. Pledges. 165. Personal Prop-
erty the Great Field of Contract.
Chapter XIII. — Contract 152
As an Element in Civilization.
Sec. 166. Difference between Contract Rights and Property
Rights. 167. Contract, Agreement, Bargain. 168. Contract
Possible Only to the Free. 169. Contract an Education in
Freedom. 170. Under Contract, only Able Employers can Se-
cure Labor. 171. Status versus Contract. 172. Contract,
Freedom and Private Property All Evolve Together. 173. As
They Evolve, Militarism Declines. 174. Because it is a Form
of Status. 175. Fighting versus Producing. 175 (a). Illus-
trated in Nations of To-day. 176. Why Private Property is
Essential to Advance beyond Status. 177. Civilization and
Trade Go Together. 178. Breaking Contracts and Advocating
Socialism.
XX
Contents.
Chapter XIV. — General Law op Contract 159
Sec. 179. Essentials of a Contract. 179 (a). Illustrations.
180. Natural Love and Affection. 181. Promises and Con-
tracts. 182. Legal Fiction. 183. Mutuality in Contracts.
184. Law and Religion. 185. Justice and Honor. 186. Con-
tracts the Law will not Enforce. 186 (a). For Wrong-doing.
186 (b). Wagers. 186 (c). "The Act of God or the Public
Enemy." 187. Law Imposes Self-preservation. 188. But can-
not Furnish Wisdom. 189. Contracts which the Law Assumes.
190. Estoppel. 191. Carelessness and Fraud. 192. Fraud
Never Denned. 193. Statutes of Limitations Again. 194.
Force Vitiates Contract. 195. Courts Needed against Ignor-
ance as much as against Fraud. 195 (a). Illustrated in Con-
fusion, Construction and Friendly Suits. 196. Contracts when
Parties do not Meet. 197. The Law is an Evolution.
Chapter XV. — Law of Contracts Concerning Personal
Property 173
Sec. 198. Sale and Delivery, 198 (a), as Generally Affected
by the Statute of Frauds, 198 (6). by Part Payment. 198 (c).
Prior Lien. 199. No One can Sell More Title than He Has.
200. Possession and Ownership. 201. Owner must not Secure
Possession by Force. 202. Delivery and Acceptance Com-
plete Ownership. 202 (a). Delivery to Agent or Carrier Good.
203. Conditional Sale. 204. Option. 205. When Defects must
be Disclosed. 206. Warranty. 207. Suretyship. 208. Insur-
ance. 209. Bailments 209 (a), on Different Kinds of Goods.
209 (6). "Common Carrier" Defined. 209 (c). Limiting Lia-
bility without Contract. 209 (d). Bill-of-Lading. 209 (e).
Hiring. 209 (/). The Law does not Require Impossibilities.
209 (g). Bailment without Consideration. 209 («). Liability
of Innkeepers. 209 (t). Pledge. 209 (/). General Principle of
Liability of Bailees. 210. Tender. 210 (a) . Kinds of Money in.
210 (6).- Determined by Congress. 211. Contractual Disabili-
ties. 212. Some Limits of Quantum Valebat. 212 (a). En-
richment. 213. The Law Protects the Weak.
Chapter XVI. — Law op Contracts for Personal Rela-
tions 190
Sec. 214. Agency. 214 (a). Authorized Acts Bind Principal.
214 (6). Agent Liable for Exceeding his Authority. 214 (c).
Principal Bound Also by Acts Third Party has Good Reason
to Believe Authorized. 214 (</). Agency through Necessity.
214 (e). Agent cannot Make any Profit for Himself. 214 (/).
The Superior is Generally Liable, 214 (g). even for Wrong
Done in Course of Routine Duties, 214 (h). which Justice to
the Sufferer Generally Requires. 214 (1). Both Principal and
Agent Liable in Wrong-doing. 214 (/). Classes of Agents.
215. Partnership. 216. Service. 216 (a). Discharge for Cause
Contents. xxi
Stops Pay for Rest of Term. 216 (6). Discharge without
Cause, or Leaving for Cause, does not. 216 (c). Both Bound
for the Entire Term. 217. Remedies for Broken Contracts.
Chapter XVII. — Law of Some Quasi-Contractual Re-
lations. .• 190
Sec. 218. Trusteeship in General. 219. Safeguards. 220.
Assignees of Bankrupts. 220 (a). Justice of Discharging
Bankrupts. 221. Administrators. Devolution of Intestate Es-
tates. 221 (a). Rights of Relatives of Intestates. 222. Execu-
tors. Wills. 222 (a). Who cannot Make Wills. 222 (6). Re-
strictions on Alienation. 222 (c). Devises for Educational or
Charitable Uses. 223. Guardianship. 224. Need of Probate
Courts. 225. Trustees for Defectives. 226. Court Supervision
of Trustees in jGeneral.
Chapter XVIII. — Personal Property 208
Schemes for Distributing It More Evenly.
(I) Scamping, Forbidding Work, Destroying Product, Anar-
chism, Communism.
Sec. 227. Poverty has No Causes. 228. Scamping Work.
228 (a). Keeps the Scamper Out of Jobs. 228 (6). He Gets
Only One Profit but Pays Many. 228 (c). Cannot Long Re-
ceive Good Wages unless Earned. Piecework. 229. Pretend-
ing and Forbidding Labor. 230. 4 'Shutting Down" a Different
Case. 231. Destruction as an Aid to Production. 232. Only
One Class of Many Schemes to Get Something Out of Nothing.
233. People Generally Consider Only Income, Not Outgo.
234. Anarchism. 234 (a). Badness of Present Laws docs not
Prove Goodness of Proposed Changes. 235. Communism.
235 (a)- $1,200 Apiece. 235 (6). Sudden Wealth a Doubtful
Blessing. 235 (c). Would Last but a Little While, 235 (d) .
and then there would be Less than Now. 235 (e). Meaning-
less without Robbery. 235 (/). Many Kinds of Wealth cannot
be Divided without Being Destroyed.
Chapter XIX. — Personal Property (Continued) 225
Schemes for Distributing It More Evenly (Continued).
(II) Socialism.
Sec. 236. Socialism. 236 (a). Wages could not Rise. 236 (6).
Impracticability of Political Management. 2^6 (c). Losses to
Education, Charity and Libertv. 236 (d). Forcing Ability.
236 (e). The Argument from Experience. 236 (/). Can be
Undertaken when Government is its Own Customer. 236 (g).
Private Initiative Essential to Variety. 236 (h). General Gov-
ernment Production Attacks Property, Contract and Charity.
236 (t) . Futility of Attempting It by Eminent Domain. 236 (J).
xxii Contents.
Effect on Laborers. 236 (k). A Premium on Laziness. 236 (/).
Would Destroy Freedom. 236 (m). The Unemployed. 237.
Names Socialism and Individualism. 237 (a). Socialism a
Vague Name. 237 (6). At Least Three Meanings. 238. So-
cialism against Competition. 239. All Experience for Indi-
vidualism. 240. Socialism and Maine an Illustration. 241.
Present Agencies toward Same Ends. 242. No Magic in
Laws and Names. 243. Another Specimen. 244. Need and
Desert. 245. High-pressure Progress. 246. Socialism, when
Possible, will be Needless. 247. The Web of Civilization.
Chapter XX. — Personal Property (Continued) 243
Schemes for Distributing It More Evenly (Continued).
(Ill) Trade-union Coercion.
Sec. 248. Corner of Supply of Labor. 248 (a). Justifiable
Only in Self-defence. 249. Demand and Supply in Labor.
250. Wages Necessarily Limited 250 (a), by Demand for
Product, 250 (b). by Competition, 250 (c). by Invention.
251. False Justifications for Coercion. 252. Aimed against
Laborer, Employer and Public. 253. Coercing the Employer.
254. The Strike. 255. Conspiring to Stop Work. 256. Other
Coercions. 257. Misleading Statistics of Strikes. 258. Co-
ercing the Laborer. 258(a). The Labor Trust. 259. Coercing
the Public. The Union Label. 260. A Second Illustration.
261. The Right to Stop Work. 262. The Community's De-
fence. 263. Society Organizing in Self-defence. 264. Educa-
tional Results. 264 (a). The Community's Defence will De-
fend the Workman.
Chapter XXI. — Personal Property (Continued) 265
Schemes for Distributing It More Evenly (Continued).
(IV) Labor and the Law.
Sec. 265. Natural Law and Civic Law. 265 (a). The Law of
Conspiracy. 265 (b). The "Corner" Again. 265 (c). Mali-
cious Intent. 265 (d). Labor-saving Machinery. 265 (e). The
Open Shop. 265 (/), " Immediate Interest" and the Sympa-
thetic Strike. 265 (£). Prof. Adams' Summary. 265 (h). Con-
flicting Laws. 265 (t). Duty of District Attorneys. 266. The
Workman's Freedom. 267. The Law Chaotic. 268. Picketing
Unlawful. 269. Unions* Liability for Damages. 26Q (a). Mis-
demeanor as a Substitute. 270. Some Summaries ot the Law.
271. Injunctions. 272. Regulation of Wages, Hours and Con-
ditions. 272 (a). The Labor Trust Again. 272 (b). Protecting
the Laborer against Himself. 272 (c). Wages Unlike Condi-
tions. 272 (d). The Living Wage. 272 (e). Too Much Care
Enervating and against Liberty. 272 (/). Extremes and the
Medium.
Contents,
xxiii
Chapter XXII. — Personal Property (Continued) 289
Schemes for Distributing It More Evenly (Continued).
(V) Remedies on Trial.
Sec. 273. Industrial War and Industrial Law. 274. Legal
Experiments in Australasia. 274 (a). Their Results to be Dis-
counted for American Conditions. 275. State Competition with
Monopolies. 275 (a). In Lending Capital. 275 (0). In Some
Industries. 276. The Minimum Wage. 276 (a). Against
Sweating. 276 (6). Sought by Good Employers. 276 (c). How
Regulated. 276 (d). Not Always Effective. 276 (e). Recru-
descence of the Sweat-shop. 276 (/). Exceptions Allowed.
276 (g). High Prices Resulting. 276 (h). Bolstering up Needed.
276 (?)• Points to State Employment and Socialism. 277.
Statute Law and Natural Law. 278. The Arbitration Courts.
278 (a). Started to Prevent Strikes. 279. Ineffectiveness of
Voluntary Arbitration. 280. The First Compulsory Arbitra-
tion Act. 280 (a). Recognized Only Unions. 280 (6). Could
Dismiss Trivial Claims. 280 (c). Damages. 280 (d). Faith-
ful Acceptance of Decrees. 280 (<?). Competence of Courts in
Business Affairs. 280 (/). Effect on Strikes. 280 (g). Spread
of the Courts and Unexpected Activity. 280 (/t). Both Sides
Arranged Cases to Refer. 280 (*). Courts Tried to Follow the
Market. 280 (/). Court's Power of Initiative. 280 (Ar). Ques-
tion of Overcrowding. 281. Aspects in 1890. 282. A Theory
of Wages and Prices. 283. Mr. Lloyd's Conclusions in 1900.
284. Mr. Reeves in 1903. 285. Claims Continued Success. 286.
Judge Backhouse's Testimony. 287. The Courts to Keep the
Peace. 288. Details by Mr. Reeves. 289. Dr. Clark in 1906
not Quite so Optimistic. 290. Courts Now Have Legislative
Power. 291. Laws against Strikes. 292. Current Law Pro-
hibits Sympathetic Strikes. 293. And Makes Awards Binding
in Adjoining Districts. 294. Awards Evaded. 295. Hard to
Fit Conditions. 296. Danger of Over-regulation. 297. Pro-
motes Centralization of Industry. 298. And Uniformity of
Wages. 299. But so Minimizes Oppression. 300. Only One
Side can Pay Damages. 301. But Moral Sanction Often
Effective. 302. Continued High Prices and Palliatives. 303.
Courts Consider Cost of Living, and Profits and All Condi-
tions. 304. Startling Declaration of Court's Powers. 305.
Supports the Closed Shop — Conditionally. 306. Political and
Class Legislation by Courts. 307. Curtails Freedom of the
Press. 308. And "the Obligation of Contracts". 309. And
the Right of Assembly. 310. And Trial by Tury. 311. At-
tacks on Liberty not Premeditated. 312. New Conditions,
Unexpected Results. 313. Yet All Admitted to be Progress
toward Socialism. 314. Has Experiment Proved Socialism at
War with Liberty and Progress? 315. No Business Disasters
yet. 316. Experimenting in Prosperous Times. 317. Dis-
xxiv
Contents.
agreement as to Prospects. 318. Increased Fealty to Law.
319. The Equilibrium Unstable. 320. The Latest Word. 321.
Repair as Likely as Failure. 322. Gains in Prosperity may
Carry through Adversity. 322 (a). America must Change.
Chapter XXIII. — Personal Property (Continued) 325
Proved Methods for Diffusing It More Evenly.
Sec. 323. Progress in General. 324. Diffusion of Wealth
Depends on Diffusion of Ability. 325. Averages Tend to Rise.
326. Diffusion Increasing. 327. *'Rich Richer, and Poor
Poorer" is not True in Civilized Countries. 327 (a). Pendu-
lum Swings Backward in 1903. 327 (6). Recent Reduction in
Hours. 328. Increase in Wages and Decrease in Other Prices
Come Largely from Capital's Share, 329. and from Labor's
Increased Ability, 330. and from Diffusion of Honesty, 330 (a),
which Makes Everybody's Money go Farther, 330 (6). especially
Honesty in Government, 331. and from Creating and Supply-
ing New Wants, 331 (a), mainly through Labor-saving Machin-
ery, 331 (b). which, tho of Some Harm at the Outset, 331 (c).
is but Seldom of Any Now. 332. A Man Secures Wealth Him-
self 332 (a), by Forehandedness against Hard Times, 332 (6).
in which Prices of Necessities Tend to Keep Up, while those of
Luxuries Fall. 332 (c). By Cultivating Ability. 333. Poverty
Seldom Blameless. 334. Most Rich Men Born Poor. 335.
Happiness not Dependent on Wealth. 736. Wise Philan-
thropy Necessary to Civilization. 336 (a). It should Continue
on Present Lines. 336 (6). It should Help Only Those that
cannot Work. 337. Province of the Law. 337 (a). Cannot
Discriminate between People. 338. Benevolence does not
Prevent Accumulating Wealth. 339. Speculation. 340. Law
cannot Regulate Wealth Wisely. 340 (a) Must not Paralyze
Ability. 341. Duties of Wealth. 341 (a). In Politics. 341 (6).
In Charity and Education or Even in Sport. 342. America's
Rich Men Peculiarly Oblivious of Public Duty. 343. Useless
Rich Man a ' ' Dependent ".
BOOK II.— THE PROMOTION OF CONVENIENCE.
Chapter XXIV. — Preliminary Survey 357
Chapter XXV. — Money 359
General Considerations.
Sec. 344. Reasons for Studying Money. 345. Barter and
Money. 346. Swindling by Money. 347. Kinds of Money.
348. Qualities °f All Money. 349. Bad Money as Legal Ten-
der. 350. Definition Reached. 351. Bad Money Buys Less
than Good. 352. Value in Paper Money. 353. Fiat Money,
Token Money. 354. Redemption Money.
nor tne wass tnat riancues i^easi uoia. 305. ine ranic 01 93.
365 (a). Begins with Alarm in Europe. 365 (6). Business Suf-
fers. 365 (c). Kansas Tries a New Way of "Bleeding".
365 (d). Hoarding Begins. 365 (e). The Banks and the Poor.
Contents. xxv
Chapter XXVI. — Money (Continued).. 366
Some American Experience.
Sec. 355. How Paper Money Cheated Creditors, 355 (a),
and Raised Prices. 356. "Never Mind Europe". 357. Effect
of Money Not Payable in Gold. 358. Why the Silver Dollar
has Depreciated. 359. Why Coins were not Made Heavier.
360. American Remonetization in '78 and '90. 361. The Ra-
pacious Fooling the Ignorant. 362. Who Profits by Light-
weight Silver? 363. The Poor are not the Debtor Class, 364.
nor the Class that Handles Least Gold. 365. The Panic of '93.
" ' ^ ' • in ~
is
365 (/)• Cleveland Stops the ^ahic, 765 (g). but at Heavy Cost.
366. Government Banking. 367. 16 to 1". 368. Improved
Trade Balance Supplies Gold. 369. But that cannot be
Depended upon. 370. Light-weight Silver Money no New
Scheme
Chapter XXVII. — Money (Continued) 380
Needs for the Future.
Sec. 371. The Best Safeguard. 372. The Safest Money.
373. Paper Better than Light-weight Silver. 374. Safety in
Large Bills. 375. Only Sate Silver Certificates. 376. Objec-
tions to All Government Notes. 377. Yet Coin Insufficient,
377 (a), and Inelastic, 377 (b). and Eats up Interest. 378.
Good Paper Currency Preferable. 379. But not from Govern-
ment. 380. Essentials of Banknotes. "Wildcat" Money.
^8i. Essentials of a Sound System. 382. Basis for an Elastic
Currency. 383. The Farmer s Needs. 383 (a). Partly his Own
Lookout. 383 (6). Remedy for Legitimate Needs.
Chapter XXVIII. — Public Works 39I
Extra-M unicipal.
Sec. 384. Roads. 384 (a). As Spreading Civilization. 384(6).
Evolution in Our Race. 384 {c). Bad American Organization!
385. Bridges. 386. Regulation. Ownership. Operation. ^87!
Ferries and Docks. 387 (a). Municipal and Private Con-
tracts. 388. Railroads. 388 (a). Superior Service in America
and England. 388 (b). Italy. 388 (c). Germany. 388 (d).
Government Operation in America. 388 (e). American Con-
struction Less Thorough, 388 (/). and Incidentally Less Care-
ful of Safety. 388 (#). "Freight Discriminations. 388 (/*).
Consolidation and Competition. 388 (i). Constitutional Ques-
tions. 388 (7). Taxation of Franchises. 388 (k). Corporation
Graft and Political Graft. 388 (/)• American Attempts at
Government Regulation. 388 (m). Unsuccessfulness of Gov-
ernment Regulation not Complete Argument for Government
xxvi Contents.
Operation. 388 (n). "Labor" under Government Operation.
388 (o). Improvements Possible under Private Control.
388 lp). Government Control of Private Operations. 388 (</).
Government Aids and Politics. 388 (r). The Conclusion.
389. Post-office and Express. 389 (a). City versus Country.
389 (6). Favoritism to Papers and Periodicals. 389 (c). Com-
pared with Other Countries. 389 (</). Damage to Literature.
389 (e). Government versus Private Enterprise. 389 (J). Best
where People Watch It Most. 390. Telegraph.
Chapter XXIX. — Public Works (Continued) 420
Municipal.
Sec. 301. Street Railways. 391 (a). Evolution. 391 (6).
Municipal Operation Increasing in England, Little on Conti-
nent, in America None. 391 (c). Need of Constant Govern-
ment Inspection. 391 (J). Municipal Sharing of Profits Ad-
vancing in America. 391 (e). Ownership in America. 391 (/).
Argument for Municipal Operation. 391 (g). American and
European Conditions. 391 (h). Glasgow. 391 (*). Great Brit-
ain versus America. 391 (j). Nashville. 391 (k). Rochester.
^91 (/). The "Increment" in Franchises. 391 (m). Should be
^eased but not Sold, and be under One Management. 391 (n).
Rates of Fare. 391 (0). Deteriorating Private Service may
Compel Municipal Experiment. 391 (p). Some Other Ex-
periments Desirable First. 392. Waterworks. 392 (a). Why
Fit for Municipalization. 392 (6). Health Questions. 392 (c)
Municipal Management Naturally Wasteful. 393. Lighting
393 (a)- Craves Municipalization Less than Water. 393 (6).
Cheapened by It in Some Places in Europe. 393 (c). American
Reports Unreliable but Increasingly Discouraging. 393 {d).
Peculiar Case in Richmond. 393 (c). Other American Cities.
393 (/)• General Considerations. 393 (g). Electricity. 393 (h).
Electricity versus Gas. 303 (*). Major Darwin on Utilities
Already Treated. 394. Telephone. 305. Tearing up Streets.
Tunnels for Pipes, Wires, etc. 396. Advertising Signs. 397.
Summary.
Chapter XXX. — Latest Aspects of Government Oper-
ation 447
Sec. 398. Platonists and Aristotelians. 399. Major Darwin
to 1903. 400. Municipal Operation Retarding Development.
400 (a). Dogs in the Manger. 400 (b). English Municipaliza-
tion Obstructive. 400 (c). Strangling Private Enterprise.
400 (d). Franchises too Short. 400 (e). Ownership Loaded
with Operation. 400 (/). Results in Number of Lighting Plants
and Telephones. 400 (g). "Politics". 400 (h). English Mu-
nicipalization Dangerous to the Purity of Government. 400 (t) .
Leaves Out the Able Man. 400 (j). Reversal of English Sen-
timent. 401. Russia and Socialism. 402. Australasian Ex-
Contents.
xxvii
perience. 403. Conditions Unprecedentedly Favorable. 404.
Government Railroads Run at a Loss. 405. Taxes Highest
among Civilized Peoples. 406. Vice of Statistics. 407. Tele-
phones and Coal-mines at a Loss. 408. Government Success in
Money-lending. 409. Life-insurance. 410. Conclusions Nega-
tive. 411. Laborers Demoralized. 412. Some Fallacies. 413.
The Latest American Experience. 413 (a). Omaha. 413 (6).
A Weak Showing. 413 (c). The Strong Man will Control
under any System. 413 (d). Monopoly and Privilege.
413 (e). Our Private Initiative Better than Europe's. 413 (/).
Democracy on Trial. 413 (g). Some Interesting Experiences.
413 (/t). Fallacious Reasoning. 413 (*). Desirability of Pub-
licity and Commissions. 413 (j). Monopolies the Ideal Field of
the State when Practicable. 414. Summary and Conclusions.
414 (a). English Taxation Increased without Proportionate Re-
sults. 414 (0). English Municipalization Obstructive. Espe-
cially to Inventive Talent . 4 1 4 (c) . " The Government Stroke ' ' .
414 (d). Municipalization Desirable Only as Defence against
Monopoly. 414 (e). Municipalization as Training in Citizen-
ship.
Chapter XXXI. — Peculiar American Municipal Diffi-
culties 473
Sec. 415. American Municipal Corruption. 416. New York
in 1870, 416 (a), in 1894, 416 (6). in i8q8. 417. City Works
are the Plums of Rural as well as Urban Politicians. 418. The
City Contrasted with the Nation. 419. Contractors in Office.
420. National Parties in Local Affairs. 420 (a). Partly Caused
by Method of Electing U. S. Senators. 420 (6). Corrupts Both
National and Local Politics. 420 (c). Paradoxes of Democracy.
421. Civil Service Reform as a Remedy. 422. State Functions
to the State, Local Functions to the Locality. 422 (a). Edu-
cation. 422 (6). Police. 423. America Alone in Confusing
Local and National Politics. 424. Vast American Wealth and
Good Nature Promote Carelessness. 425. Corruption of Voters
under the Guise of Charity. 426. Non-taxpayers Voting.
426 (a). Tilden Commission's Proposed Remedy. 426 (0).
Local Suffrage Rights Differ from Others. 426 (c). Limited
Local Suffrage in AH Well-governed Cities. 426 (d). Where
the Non-voter is Best Taken Care of. 426 (<?). America can
Only Improve the Voter and Limit what He Controls. 427.
Universal Suffrage Logically Implies Individualism.
Chapter XXXII. — Recreations and Other Help to the
Less Fortunate Capable 490
Sec. 428. Museums and Libraries. 429- Parks. 430. Clear-
ing Slums. 430 (a). Possible Only under Eminent Domain.
430 (6). Graft. 430 (c). The Negative Side. 430 (<i). Success
under Private Enterprise. 431. Housing the Poor. 431 (a)-
Community should Regulate It in Self-defence. 432. Personal
xxviii
Contents.
Conveniences, Army Outfitting? etc. 433. Economy and Civ-
ilization Both Require Chanty, 433 (a), preferably from
Individuals. 434. Hospitals and Asylums. 435. Relief
to Individual Poor. 436. Pawnshops. 437. Savings-banks.
438. Lodging-houses. 438 (a). Throw Light on Street-begging.
439. Labor Bureaus. 440. Insurance. 441. General Conclu-
sions Regarding Charity. 441 (a). Mutual Help Better than
Government Help. 441 (6). The Church, the State, the Philan-
thropist. 441 (c). The Taxpayer. 441 (ci). Many Improvements
not at Taxpayers' Expense.
Chapter XXXIII. — The Defective Classes 507
Sec. 442. The Persistently Poor. 442 (a). Neglect Increases
the Number. 443. The Insane. 444. The Criminal. 444 (a).
Generally Defective. 444 (6). One Wrong Step does not Dem-
onstrate a Criminal. 444 (c). The Indeterminate Sentence.
444 (d). Cheaper to Keep Rounders Permanently. 444 (e).
Prison Labor. 445. Euthanasia. 446. A Society Able to Use
Ideal Remedies will not Need Them. 447. Advisability of
Death as a Penalty.
Chapter XXXIV. — The Young; Education 517
Sec. 448. Nurture. 449. Education. 449 (a). The Illiterate
Voter. 449 (6). Unusable Education. 449 (c). Usable Edu-
cation. 449 (J). Practical Education no Foe to Poetry.
449 (r). Pauperization. 449 (/). State's Responsibility Estab-
lished. 449 (g). Parents should Pay when Abie. 450. The
Higher Education. 450 (a). Not Well Conducted by Political
Pulls. 450 (6). The State, the Church, the Philanthropist.
Chapter XXXV. — General Conclusions on the Sphere
of Government 523
Sec. 451. Individualism and Collectivism. 452. Municipaliza-
tion Increases with Independence, Decreases with Police Con-
trol. 452 (a). Increases with Good Local Government. 453.
Necessary Limits. 453 (a). Effective Industry Requires Com-
petition. 453 (b). Mainly Determined by Natural Monopoly.
453 W- Tax for Commodities Universally Used, Charge for
Others as Used. 454. The Fundamental Question. 455. Gov-
ernment Service Outside of Monopolies Demoralizing to People
and Officers.
BOOK III.— TAXATION.
Chapter XXXVI. — General Considerations on Taxa-
tion 529
Sec. 456. Taxes not the Only Source of Revenue. 457. In-
terest and Importance of the Subject. 458. Everybody Pays
Taxes. 459. Kates in Different Countries. 460. Methods In-
fluence Rate, 460 (a), and Morality, Prosperity. Peace, Stable
Government, and Even Health and Life, 460 (6). and Move-
Contents.
xxix
ments of Capital and Ability. 461. Taxation and Civilization.
462. Opposite Methods Illustrated. 463. Direct and Indirect
Taxes. 464. Shifting of Taxes. 464 (a). Need of Free Com-
petition. 464 (6). Prices Highest where Taxes are Highest.
Chapter XXXVII. — Indirect Taxes 539
Sec. 465. Excise. 465 (a). Taxes may Limit Dangerous
Pursuits. 466. Duties. 466 (a). Encourage Home Produc-
tion. 466 (b). Tariff Wars. 466 (c). The Foreigner Sometimes
Pays the Tax. 466 (d). Early American Experience. 466 (c).
From the Revolution to the Civil War. 466 (/). Since the Civil
War. 466 (g). Industrial Effects. 466 (It). Both Parties Cor-
rupted. 466 (1). Tariffs Tend to Expand. 466 (/). Protection
and Wages. 466 (fe). Numbers Concerned. 466 (/). Gluts.
466 (m). Effect on Trusts. 466 (»). Conclusions. 466 (0).
Causes of American System. 466 (p). Expert Opinion on
American Method. 467. Stamp-taxes. 467 (a). Both Direct
and Indirect. 467 (6). Often Merely a Petty Nuisance.
Chapter XXXVIII. — Indirect Taxes (Continued) 556
General Conclusions.
Sec. 468. Indirect Taxes Expensive to Pay and to Collect.
468 (a). Hard on the Poor. 468 (b). Stimulate Corrupt Legis-
lation. 468 (c). Fail to Stimulate Interest in Government.
468 (d). Why They are Popular. 468 (e). Summary for and
against.
Chapter XXXIX. — Inquisitorial Direct Taxes 562
Income and Inheritance Taxes.
Sec. 469. Direct Taxes Divided into Inquisitorial and Ob-
vious. 470. Income-tax. 470 (a). Falls Only on Successes and
Active Property. 470 (b), and is Proportioned to Ability.
470 (c). Like All Inquisitorial Taxes, a Premium on Lying.
470 (d). Violates Rights of Privacy. 470 (e). Generally
Doubles Taxation. 470 (J). As Illustrating Progressive Taxa-
tion. 470 (g). Discrimination of Sources. 470 (It). As Equal-
izing Fortunes. 470 (t). As Offsetting Injustice in Other
Taxes. 470 (/). Out of Proportion to State's Services.
470 (k). Taxation versus Benevolence. 470 (/)• Taxing away
Business and Benevolence. 470 (m). Characteristic of Mili-
tarism. 470 (n). Heaviest on Those Least Able to Bear It.
470 (0). Approved Only as a Necessity. 471- Inheritance-
taxes. 471 (a). Collateral not Very Objectionable. 471 (6).
Conclusions.
Chapter XL. — Inquisitorial Direct Taxes (Continued). .573
Personal-Pro per iy Tax.
Sec. 472. Personal-property Taxes. 472 (a). Uncertain of
Diffusion. 472 (6). Tend to Double Taxation. 472 (c). Ef-
XXX
Contents.
feet on Prosperity. 472 (d). Personal Property Hard to Find
or Appraise. 472 (e). Views of Authorities and Operation of
Natural Laws. 472 (f). Showing of Statistics. 472 (^."Pub-
licity" a Foolish Means toward a Foolish End. 472 (/*).
"Homogeneity" Fallacy. 472 (t). Effect on Corporations.
472 (/). Cause of Prejudice. 472 (k). As Affecting Franchise
and Non-franchise Corporations.
Chapter XLI. — Obvious Direct Taxes 586
I. The Realty-Taxes in General.
Sec. 473. Objections to Realty-taxes. 473 (a). Their His-
tory. 473 (6). Incidental to High Civilization. 473 (c). Ques-
tion of Diffusion. 473 (d). Views of Economists. 473 (e).
Fact versus Theory. 473 (f). Effects on Producers. 473 (g).
Stimulate Production. 473 (/1). Sure to be Paid, 473 (1).
and Easy to Assess, 473 m. and Cheapest to Collect. 473 (k).
All Owners must Always Pay Part of It. 473 (/). Summary
for and against the Real-estate Tax. 474. Real Estate under
Poor Government. 475. Opinion of the Fathers. 476. Equal-
ization. 476 (a). Remedies Proposed.
II. Varieties of Realty-Taxes.
477. Realty-tax, Single Tax, Separated Tax. Appropriation-
tax. 478. The Single Tax. 478 (a). Locke's Theory. 478 (6).
Walpole's. 478 (c). Diffusion on Different Grades of Property.
478 (d). Local Option in Taxation. 478 (e). Effect of Single
Tax Suddenly Imposed. 478 (/). Experience. 479. Separated
Tax on Land Exclusive of Improvements. 470 (a). Buildings
Diffuse Taxes More Readily than Land. 479 (0). Nevertheless
Separated Tax Encourages Improvement. 480. Appropriation-
tax.
III. Rental-Value Tax.
481. Rental-value Tax is on Consumption. 481 (a). Not a
Real-estate Tax. 481 (b). Not Double Taxation. 481 (c).
Should be on One Residence Only. 481 (d). Shifting.
IV. Franchise-Tax.
482. Has the Characteristics of a Real-estate Tax.
Chapter XLII. — Double Taxation 608
Sec. 483. Taxation of Mortgages. 483(a). Mortgage a Debt,
not a Value, 483 (b) . and Value Alone should be Taxed. 483 (c).
Mortgagor Generally Pays Tax Indirectly. 483 (d). Mortgage
not Properly Real Estate. 483 (e). In Different States.
483 (f)- Letting Mortgagor Pay Mortgagee's Tax. 483 (g).
Conclusion. 484. Why Tax Mortgages and not Notes? 485.
Tax All Recorded Liens "at the Source", and Deduct Them
from Value of Property. 486. Multiplied Taxation, Especially
bv Excises.
Contents.
XXXI
Chapter XLIII. — Summary and Conclusions on Taxa-
Sec. 487. Perfect Taxation not for Imperfect People. 488.
Vampire-taxes Needed Now. 488 (a). The Rental- value Tax
may Ultimately Replace Them. 489. Inquisition-taxes In-
tolerable. 490. The Remote Ideal. 490 (a). Nature Pays
Some Taxes, 490 (6). and can Pay All. 490 (c). A Question-
able Objection. 490 (d) . The Future of Taxation. 490(e). No
Hardship to Landowners. 400 (/). Amortization. 490 (g). A
Boon to the Poor. 490 (/i). How to Include All Citizens. 401.
Causes of Delay. 491 (a). Ignorance and Self-seeking. 491 (b).
In the U. S. Constitution.
Chapter XLIV. — General Summary and Conclusions. . 624
Sec. 492. General Conclusions regarding the Civic Relations.
493. The Questions for Experts. 494. Evolution of the Civic
Relations, 494 (a), and ot u.e.r Problems. 494 (6). Rapid Ac-
cumulation of Nostrums. 495. The Labor Trust. 496. The
Labor Question a Real Question for Real Reason. 497. Ag-
Government. 498. Improve Suffrage. 499 Evolution not All
Negative. 499 (a). Even the Desire for Wealth Beneficial.
499 (&}. The Struggle for Existence Ceasing to be a Brute
Struggle. 499 (c). Wisdom and Sympathy Gaining Control.
499 (3). They cannot be Forced. 499 (e). Their rlecessary
Creed.
Index 633
TION
615
Evolution of Vices in
ON THE CIVIC RELATIONS.
PRELIMINARY SURVEY.
CHAPTER I.
SOCIETY'S CONTROL OP THE INDIVIDUAL — GOVERNMENT.
Unless the student has grown up where
ory* discussion of the civic relations is more
frequent than in most homes, he is apt, before studying
them, to regard them as matters of course, just as
uninstructed persons regard light and air; and to realize
their importance as little. Such indeed is too often
the state of mind even of persons who take an interest
in what usually passes for "politics"; and it can
hardly be called rare even among those holding political
office. And yet it is certainly true that to civilized
men, nearly all that makes life worth living, depends
upon the civic relations, as much as life itself depends
upon light and air.
Virtually all good things must be paid for in effort
and self-control. This is no more true of the foods
that the simplest savage must gather, and of the portion
which he must deny himself at the moment, and lay
away for a rainy day, than it is true of the benefits
derived from the civic relations in the most advanced
communities.
Not all men have the character voluntarily to per-
2
Preliminary Survey.
form the labors, and impose upon themselves the con-
2. Social influence trol» called for by their civic responsibili-
md controli ties: consequently an important element of
civilization is a set of opinions, usages and institutions
whose function is to develop and stimulate and control
men, so as to insure their performance of the duties
essential to the general well-being. We shall have
occasion to touch upon nearly all of these opinions,
usages and institutions, but our space will permit
detailed attention to but one of them. Before pro-
ceeding to it, however, we would do well to glance at
the most important of the others.
2<a). through th* First among these is the Family, where
/amity; ^e civ[c relations begin, and where each
character that is to play its part in them, well or ill,
gets its direction and much of its development. Civic
relations begin with, and even before, the child's first
breath; and do not end until the last pennies of what-
ever estate he may accumulate, are divided among
his successors. And yet so unconscious of all the facts
just indicated, are even many intelligent people, that
it was lately possible for an eminent, and deservedly
eminent, authoress, who had been advocating great
freedom of divorce, when asked: "And how about
the children?" to answer. "Oh, I had not thought of
them!" This, however, was before the recent reports
from city police authorities, notably from those of
Chicago, gave a most suggestive illustration of the
importance of the home, in the fact that an astound-
ingly large proportion of juvenile (and why not adult ?)
crime and pauperism is found among the children of
divorced parents. While the home is generally
recognized as the chief seat of happiness, its immeasur-
able importance as the very cornerstone of civilized
life, is seldom thought of — as seldom as the importance '
of the state holding it together, in spite of alienation
and wrong, as long as human nature can reasonably
be called upon to endure the strain. But a full treat-
ment of this important and neglected topic cannot
come within the limits of this treatise.
§ 2 e] Society s Control of the Individual.
3
Neither can that of another topic of almost equal
2(b). through importance and interest — the effect on
pubao opinion; civic relations, of general opinion — class
opinion and public opinion. Class opinion makes the
heart-wringing question of who a person's associates
shall be, often depend upon such apparently trivial
points as the color of a cravat or the handling of a
table-knife; opinions held in trade-unions extend up
to such questions as whether a people shall freeze or
starve, with reason or against reason; public opinion
is probably a stronger motive than self-respect, in
making a man keep his clothes brushed; and public
opinion leads to the payment of more debts, a million
to one, than the law does. But even the colossal
influences of opinion on the civic relations, cannot be
treated here any more fully than can those of the home.
2(e), through There is a third influence in the civic
imitation; relations, perhaps as powerful as family
life and public opinion, which deserves mention, but
can here be given little more, tho it has lately been
the subject of volumes. I mean imitation — the ten-
dency to do the things which others do — things all
the way from, on the one hand, wearing cravats, and
in particular circles, particular cravats, up to respecting
the integrity of each other's throats inside the cravats;
but on the other hand, leading peaceable people to
join in lynchings because others do.
2(d). through The control of the civic relations by
education; education, is worth mentioning, too, but
cannot be gone into in detail here, tho it will be
touched upon more than once later.
Contenting ourselves, then, with the mere mention of
those four controllers of the civic relations — the family,
public opinion, imitation and education, let us proceed
to a fuller treatment of one which, while it is in some re-
spects more powerful than any, or even all, of the others,
is fortunately in many respects much easier to under-
2(€), through stand. It is that massing and arranging of
government. the opinions and powers of the people, called
the Government. In a very primitive community, the
4
Preliminary Survey.
government may seem to be rather the opinions and
powers of one strong man; but his strength consist? in
bringing under his own control, the faculties of all;
while in advanced communities, and indeed as a test
of their advance, the control is less in the hands of one
or a few, and more in the hands of all.
Our chief topic, then, tho we shall not avoid the
others indicated, will be the Civic Relations under Gov-
ernment.
3. civic Relations Probably the intelligent reader will have
defined. already noticed a gap in the system of
exposition: I have been writing very freely about the
civic relations, without having yet attempted to tell,
with any precision, what they are. The omission was
not altogether unintentional. The reader's own mind
has probably extracted from his previous knowledge,
and from what has already been said, a notion of them
that it will now be easy for him to make more precise.
The word relations requires no definition. The word
civic is one of a group evolved from the Latin word
civis — a citizen. All the words in the group relate
to the consequences of people living together in society,
and they range in meaning from "city" up to the
"civility" which city life is supposed to breed. It
may be asked: Why will not "political relations" do?
Why do we want the comparatively new-fangled word
"civic"? One reason is that, other things even, two
syllables are better than four; a better reason is that,
tho our fortunate language is often enriched by
both a Latin and a Greek word for the same thing —
just as we have "civil" and "civility" and their like,
from civis ; and 1 ' political ' ' and 4 ' polite ' ' and 1 1 polished "
and their like, from polis, yet the bottom meanings
of the words "civic" and "political", or "civil" and
"polite", are not the same. The fact is that when-
ever we start with both a Latin and a Greek word
originally meaning the same thing, we soon get to
applying them to different things. A boor can be
civil, but it takes a gentleman — a natural one at
§5]
Society s Control of the Individual.
5
least, to be polite — polished; politics really means
the art of civil government, but perhaps more often
merely the art of obtaining office or spoils, while civic
really covers all matters affecting a man as a member
of society, as distinct from purely personal and domestic
matters: it embraces all that political does, and, in
addition, law, economics, sanitation, public education,
public art, and other subjects, all of which it would
be a stretch of language to include under politics, tho
politics may touch them ; but government must touch
them. We will then define "Civic Relations" to
mean the relations between people living together,
especially as they are affected by government. Let
us approach them, then, through government, by
the way of a few simple illustrations.
4. Government's If a person going out on a bicycle,
functions Illustrated, finds the roads rough or dirty, the fault
is the government's; if somebody knocks the rider
down and takes away the bicycle, if the victim could
obtain no redress, the fault would be the govern-
ment's; if a foreign enemy in time of war, robbed
him of his machine, the fault would be the government's ;
if he bought a bicycle from a man who represented it
as something different from what it was, in case he
could not peaceably obtain money equal to his damages,
or make the exchange for one as represented, the fault
would be the government's; if he sold the bicycle to a
person with plenty of money, and could not peaceably
make him pay, the fault would be the government's.
* Government's These cases, if carefully considered, will
finctions classified, be found to illustrate the two great
divisions under which the functions of government
come — the protection of our rights — as against each
other and against foreign aggression; and the pro-
motion of the general convenience, as illustrated in the
roads and other objects of government care. Some
writers make a third division — the enforcement of
contracts — like those for buying and selling the bicycle.
But that really belongs under the head of the protec-
tion of rights.
6
Preliminary Survey.
Let us now consider more in detail what is meant by
5 (a). Protection rights and the protection of rights. Every-
ofRighu. one nas a right to the safety of his
person and property, and that people should live up
to their contracts with him, if he lives up to his with
them. It is the business of government to protect
these rights. Of course protecting rights promotes the
$(b). Promotion general convenience too, but there are far-
of convenience, ther functions of government, which more
specifically promote the general convenience. It usu-
ally lays out the streets and paves and lights them,
regulates buildings so as to guard against fire and, in
some European cities, so as to secure a reasonable
amount of sunlight in the streets, and pleasing archi-
tectural harmony. Government also often provides
the machinery for putting out fire; regulates the
liquor traffic so that a man shall not be tempted to
drink too much, and abuse his family, and perhaps
commit murder; shuts up stray animals in the pound
until their owners get them; looks after water-supply
and drainage and public health; provides public schools,
parks, libraries, and sometimes museums; and coins
money and carries the mails. The difference between
all those functions for the public convenience, and the
protection of rights, is that none of those convenien-
ces are directly in the nature of protecting person and
property from attack, or punishing for such attack, nor
yet of forcing people to make good their contracts.
Taxation There is still a third class of functions
o. ax ion. essential to the performance of the other
two classes, namely: getting the wherewithal — taxation.^*
These three classes — protecting rights, promoting con-
venience, and getting the money for so doing, through
taxation, include all the functions of government.
6 Someceneral ^e kave seen» then, that crime, unful-
resuits orbad filled contracts, and bad systems of tax-
Government. ation (whicn are worse things than the
novice is apt to realize) as well as bad roads, bad
drainage and resulting disease, bad conflagrations
wide-spread drunkenness, are all the fault of bad
§8]
Society s Control of the Individual.
7
government. Now if such things happen very often
in a place, of course people will not want to buy prop •
erty there, and so houses and lots will be sold for
very little. Yet this works both ways: for while
bad government has often made prosperous places
deserted and poor, a return to good government has
often made such places populous and rich.
7. Responsibility Therefore, in, a free country where
for bad everybody can vote, if a place suffers
Government from bad government, it must be the
fault of the people themselves. But why should people
suffer from bad government, when their own votes
make the government? For just the same reason
that people suffer from poverty and disease — usually
because they are ignorant, self-indulgent, dishonest
and lazy ; sometimes, tho comparatively seldom, because
they are unfortunate.
Ignorance leads people to suffer from bad
ment'rwiSres6"1" government, because government is one of
d5rtfterCtfid effort t^ie most difficult things men undertake,
' and ignorant people are apt to vote for
ignorant people to carry it on. They do this not
only because they do not know any better, but also
because they prefer to be governed by people of their
own kind. Ignorant people too often hate to acknowl-
edge anybody as superior to themselves. It is only as a
man grows wise, that he grows able to appreciate wis-
dom in others, especially when it is greater than his own.
Dishonesty leads people to suffer from bad government,
because dishonest voters can be bribed, or tempted in
some other way, to vote for dishonest officers.
Laziness makes people suffer from bad government,
because those who know something of what good
government is, and what capable officers are, are often
too lazy or too absorbed in their business or pleasure,
to work to get good government. Many educated
people do not even vote. Yet we have to work to get
good government, because there are always many igno-
rant, dishonest and selfish people working to secure
bad government True, it is their own government,
8
Preliminary Survey.
[§8
and they have to suffer with the rest of the community,
but the dishonest and selfish are, at bottom, stupid.
A dishonest man, no matter how bright he may be in
some ways, is always at bottom just what Solomon says
he is — a fool. This, too, despite the fact that dishonest
men often get rich and powerful. But frequent as such
facts are, they are far from being the rule. Many suc-
cessful dishonest men have plainly shown that they
were miserable, and it is fair to believe that at bottom
they generally are. A great artist who had painted
the portrait of a rich scoundrel, said that the face was
the most miserable he had ever seen. On the other
hand, if such people are poor (and dishonest people are
not apt to get rich) they generally sell their votes, sup*
posing that the money they get for them, or the favors
they expect if their friends are put in power, will be
worth more to them than good government would be.
Probably if all could be known, it would be found that
they never estimate correctly. No sensible man would
think that, any other human thing can help him do the
best for himself, as much as good government does:
for government affects almost everything a man does.
9. Extent of Govern- It decides whether every step he takes and
ment's Influence, every wheel he rolls, shall go with comfort
or with difficulty, whether every cent he spends shall
be spent to good advantage or poor, whether every
second he lives shall be one of danger or security, and,
in cities, whether every breath he takes shall be health-
giving or dangerous.
9 (a), illustrated So far, we have barely alluded to the
by Monty. money which is spent by the government.
But the government affects the worth of all money —
determines to a great extent how much a man shall
get for every cent he spends. If a government is honest
and capable, its expenses will be low in proportion to
the good it does: so taxes will be low, and taxes enter
into the cost of everything — a landlord has to pay
taxes on a store, for instance, and adds them to the rent;
and so the storekeeper has to add them to the prices
of the goods sold in the store. Thus prices will be
§ n] Society's Control of the Individual,
9
made high by high taxes, and each man gets less for his
money.
Moreover: government manufactures the money, and
if it manufactures bad money (as ours has done twice
since i860), a man cannot buy as much as he ought to
with it.
GEOGRAPHICAL DIVISIONS OP GOVERNMENT.
10 Each citizen ^° *ar* we have sP°ken of government
lives under several as if it were but one organization — as if we
*°vemments. lived under but one government. But
Americans generally live under at least four — local,
county, state and national. How much territory the
local government covers, mainly depends on the thick-
ness of the population. In New England and the
Middle States, the local government generally covers
a township, but often only a village or a city. In the
Western and Southern States the local government often
covers a whole county, or even more. We should note,
in passing, the most striking differences between a town,
a city and a village. A village or a city is always a
collection of buildings; a town (in the American sense,
not the English) may contain no buildings at all, or only
scattered ones, or it may contain villages or even cities.
A city is sometimes called a town, but that is only a
fashion of speaking, just as men, women and children
are alluded to as part of mankind. Although Americans
generally live under at least four governments, they
sometimes live under more — under both town and vil-
li. Overlapping! ^a£e» or c*tv 9 gpvernment» as we^ as county,
of local gov- state and national. Sometimes, too, even
emments. ^e school districts of a town attend to
more of its local affairs than merely those of the school,
and really constitute additional governments. On the
other hand, sometimes the whole township is covered by
a city, and even, in rare cases, it has both a town gov-
ernment and a city government. Generally, t ho, in such
cases, the city government replaces the town govern-
ment. But when the city covers the whole county, as a
IO
Preliminary Survey.
few of our leading cities do, both city and county govern*
ments generally continue side by side. On the other
hand, in very thinly populated regions, something like
the reverse occurs — the county is sometimes the smallest
political unit, and performs what functions of a local
government are necessary. Then people live under but
three governments — county, state and national.
12. Functions of Ordinarily, local governments do (or
local government, neglect to do) the laying out of such
streets and roads as are too short to come under the
jurisdiction of the wider governments; and do what-
ever grading, paving, sewering, sidewalking and policing
the streets and roads may have. They also punish
such offences and settle such disputes as are too petty
to come before the wider governments ; regulate building
and protect against fire; sell licenses for some trades;
look after the schools and the poor and sick; grant
permits (in thickly populated regions) for public vehicles ;
and sometimes supply water, light and other conve-
niences, or else grant franchises to companies that do
supply them.
13. Of County The county is mainly an organization
government. for the administration of justice better than
it could be done by smaller local governments. The
county generally provides better courts, jails and often
almshouses and hospitals, than the minor governments
could afford, and gives all its localities the use of them.
At the county seat, too, it generally keeps the records of
the real-estate transfers, and other important documents.
The county also sees that the longer roads are properly
laid out and cared for. When a city overgrows the
county, and there are no little local governments, there
is still need for all the more elaborate courts, records,
etc., and the county government is generally kept up
along with the city government.
14. Of State gov- Of the state government, some people in
ernment. the cities are beginning to say that its
main function is really to enable the country to milk
the cities — to give country legislators, who are in
the majority, the chance to lay an undue share of
§ 1 5] Society's Control of the Individual. 1 1
the state's taxes onto the cities, and to give them
also the chance to get bought off (or on) regarding all
sorts of legislative " strikes" against the cities. What
the state government professes to do, however, is, in
regard to justice, something for the counties like what
the counties do for their small local governments — it
provides a high and expensive grade of courts to which
important cases can be taken from all over the state,
especially cases that are appealed from the lower courts.
It also provides prisons, and often reformatories and
insane asylums, better than any that any one county
could ordinarily support; it regulates the roads and
railroads that pass through several counties; and what
is most important of all, it passes laws regulating per-
sonal rights and property rights over the whole state,
so that if a man wishes, he can deal safely with a neigh-
bor who lives, or owns a piece of property, more than a
mile or two from the place the former lives in, because
the same law judges for both, if any difficulty arises.
All the local and county governments can pass only
such ordinances, and judge only in accordance with
such laws, as the state government approves — in short,
the state government controls them.
Now the state government itself is not, like the
local and county governments, under the control of
15. Of Nttlontl anY higher government, except in the par-
government, ticulars where it has combined with the
other states to make the nation. In so doing,
each state gave up to the nation a carefully specified
portion of its powers, but reserved all the others.
There is a pretty distinct line between those given
up and those reserved. Roughly speaking, there
are but two fields in which the citizen's rights are
regulated, not by the state, but by the nation: first,
so far as his rights are affected by other nations; and
second, as we shall see more particularly hereafter, so
far as they come under certain broad principles of
liberty which the United States is to maintain if any
state should fail to do so. But these principles have
become so much matters of course in the Anglo-Saxon
12
Preliminary Survey.
race, that probably there is not one case in a hundred
where a man's rights are not practically under the
care of his state rather than of the nation. In the vast
majority of cases, the state is still sovereign, as it was
originally — so entirely that the terms "government"
and 4 ' state " are still interchangeable.
The expression "roughly speaking" may have been
noticed in the last paragraph, and it is well worth
while to realize before we go deeper, that Civics can-
not be as exact as Mathematics. Our civic relations
depend on human nature — the most complex and un-
certain topic we know anything about — and upon
human nature in many men, at that. So many influ-
ences are at work, that there are apt to be different
elements in cases that appear alike; and therefore
such cases sometimes turn out very differently. But
investigators have found plenty of principles that are
true in most cases — but true only "roughly speaking",
or "by and large". We will generally take the excep-
tions for granted, however, and not stop too often
to allude to them. But just here we are met by a
vfcry important fundamental question, to which the
best answers yet framed, are found to be "in the
rough", or "by and large". A few lines back is the
„, , 0 , _ expression: "the state is still sovereign".
Now what does sovereign mean? As a
noun and an adjective, its meanings differ. The king of
England is a sovereign, and yet he is not sovereign, but
the people are. The Czar of Russia or "the king of the
cannibal islands" is both a sovereign and sovereign.
Our national government, as already said, is sovereign
over 'the states only in certain particulars carefully
specified in the Constitution. But through that sover-
eignty, it makes the United States a great and power-
ful nation, instead of a group of little states on any
one of which any petty nation could impose, and
which would be apt to impose upon one another. To
prevent that, the national government provides courts
before which, for instance, "little Rhody" may obtain
justice in any dispute with big New York ; and it also
§ 1 6] Society's Control of the Individual.
13
regulates commerce between the states. The govern-
ment of the United States as a great nation, regulates
our relations of commerce, peace and war, with all
other nations. Hence it provides custom-houses, and
army and navy; makes laws regarding naturalization
of foreigners; and protects our citizens trading or
traveling in foreign lands. It also guards the coast,
by lighthouses and harbor improvements as well as
by ships and forts. Moreover, as it is a great con-
venience to have the same money, the same weights
and measures, and the same mails, over all the states,
the national government provides and regulates them.
It also secures to inventors and authors the fruits
of their labors by patent and copyright laws good
over the whole of the United States, and has arranged
for like security over most foreign civilized territory.
DEPARTMENTS OF GOVERNMENT.
16. Legblttlve, So much for a hasty preliminary sur-
Judklal, Executive. Vey of our various American governments
as geographically determined. Now let us take a
similar glance at their individual make-up. Roughly
speaking, they have these prominent features in com-
mon with each other and with all civilized govern-
ments:— they make laws, decide what laws apply to
particular situations, and see that those laws are carried
out. Those three functions are called Legislative, Ju-
dicial and Executive.
Now to understand these three functions of govern-
ment, let us inquire: What is the advantage of having
rights protected by government? Does not every man
understand his own rights better than anybody else
can? Why not leave each man to take care of himself?
The bottom reason perhaps is in the answer to the
second of those three questions. So far from it being
true that every man understands his own rights, it is
proverbially true that no man is a fit judge in his
own cause: so one of the most important functions
of government — a subdivision of its protection of
14
Preliminary Survey.
rights, is providing unprejudiced judges to determine,
when a man's rights are in dispute, what they really
are.
But after courts, with judges and juries, have deter-
mined what a man's rights are, why not let him go
for them himself? Because it would depend largely
on the size of the other man whether he would get
them, and nearly every lawsuit would end in a fight,
perhaps a killing, perhaps a long family vendetta.
They did so quite generally in the first few hundred
years where we get glimpses of the ways of our Saxon
and Norman ancestors, and still do in the primitive
parts of our country, and in primitive countries gen-
erally. It would be almost as well to have the fighting
come before the lawsuit as after it, and save the ex-
pense of the suit.
To make the machinery for finding judgment of
much use, there must be machinery for executing it,
and machinery so powerful that the losing side would
not think of resisting. In advanced societies, this power
17. Sources of *s that of the whole community, behind
Government. the officers of the law. In our*own coun-
try, the humblest rural constable can call upon every
citizen at hand, to help him enforce the law. If they
cannot do it, he can send for all officers within reach,
with such citizens as they can bring; if the resistance
is still too strong, he can call upon the governor for
every militia company in the state; if the resistance is
too strong for them, the governor can call upon the
President of the United States for its whole army and
navy; and if they are not large enough, the government
can enlarge them until every loyal citizen is in the ranks.
If not enough citizens are loyal, of course the affair
would amount to a revolution, and the resisting side
would overcome the government and set up a new one.
In fact, when people, like our neighbors in South
America or our friends in France, get into an uneasy
state, revolutions sometimes start in that way — in some
petty quarrel, and spread until the whole state is in-
volved. But in such cases, the community must already
§ 1 8] Society's Control of the Individual. 15
have been in irritated division over the question at
issue.
But great as is the need for a judicial department to
determine rights, and for a strong executive to protect
them and enforce duties, there is another reason almost
as good, and in some aspects better, why a strong execu-
tive is needed. If the executive is strong, there is very
little protecting or enforcing needed. People come down
quietly, as the 'coon did when he saw that the man be-
hind the gun was Davy Crockett; and what is more
important still, they do not go up — they behave them-
selves generally, because they know it will not pay to
do anything else.
We seem to have found reasons enough for the judicial
and executive departments of government, but in a
primitive government, there are not even that many
departments; the chief, with the men he can get to
do his will, is the whole establishment; but a govern-
ment highly organized (or highly differentiated, as
the philosophers say) is split up not merely into the
two departments we have already found necessary, but
also into a third — the legislative, which makes many
of the laws that the other two departments respectively
judge under, and execute. A separate legislative
department is always the last one evolved : for the priests
always make a judicial department early; but the chief
ruler — king or whatever he may be, always keeps the
law-making power in his own hands as long as he can.
He still holds it in Russia and Turkey.
Now to illustrate how the three depart-
d^artmentTliius- ments work, take the man going out on his
trated In civil and bicycle. He breaks his wheel because of
criminal suits. ,~ J , r ... j . •
the roughness of the road, tries to get
redress, and proceeds to sue somebody. He finds out
that under laws passed by the state legislature, it was
the duty of the men owning on the sides of that particular
road, to keep it in order: that is step first — a law has
been passed. Now it needs to be applied to the case:
our bicyclist goes to the man owning on the side of the
road where the damage was done, and the man says : "I
i6
Preliminary Survey. [§ 18
don't take care of one side of the road. My opposite
neighbor and I agreed to divide it lengthwise. We
take fifty yards apiece. Your accident occurred on
his fifty yards." But the neighbor says: 4 1 Nonsense:
the accident did not occur on my portion of the road:
I won't pay/ Then the bicyclist may have to go to
court to see which man is responsible. That is step
^second — determining how the law fits the case. When
'the judge, after hearing all the evidence, determines
that point, he may decree that one man or the other
owes the bicyclist ten dollars. Then comes in the third
step — executing the law: if the man does not pay, the
sheriff comes in and sells some of his property, and pays
the bicyclist out of the proceeds; and so are finished up
the three general functions of government — providing
the law, fitting it to a case, and enforcing it. Such a
suit, when nobody is on trial for a crime, is called
a civil suit.
Now to illustrate a criminal trial: Somebody knocks
the bicyclist down, and takes his wheel. The state
government has provided laws (step first) punishing
violence and robbery. The local government has a
policeman or constable to arrest the offender; it has
also a magistrate to determine what laws he has violated,
and whether the punishment they decree is one of the
slight ones that a local magistrate can inflict, or whether
his case is so serious that it must be tried in a more
important county court. After the offender is tried
in one or the other, and the law in his particular case
is declared (step second) and his punishment is decreed,
the third step is taken — the law is executed — the local
policeman locks him in the station-house for a day or
two, or the county sheriff takes him to jail for perhaps
a month, or the state officer receives him into the
penitentiary for a longer period.
In America, the town government, or
dfclaVand^iwutr^ sometimes the county, is generally first
fuovCernment.local evolved. Either of them starts in a
governmen . mere collection of farms. At first, all the
voters get together to legislate; they also select a magis-
§ 2o] Society* s Control of the Individual.
17
trate to judge in disputes and crimes, and a board of
"selectmen " (generally three), and perhaps a constable,
to execute or administer the laws.
As population increases, so many questions arise
that people generally cannot come together often
enough to settle them all. Moreover, when there are
very many people, they cannot hear each other speak,
and cannot readily count the votes. Under such cir-
cumstances, they usually divide up into smaller bodies,
each of which elects one man to represent it in a gather-
ing of all the representatives, and there to decide
matters of government for all the people. Thus a
village generally legislates through a representative
board of trustees, who pass ordinances about the
streets, bridges, local health, etc., but they must do
this in accordance with general laws laid down by
the state legislature. A village also has its own magis-
trates to judge under the state laws determining per-
sonal and property rights: thus they settle petty
quarrels and punish petty offences, or send the offenders
to higher county or state courts. The village also
has an executive or administrative head (the terms execu-
tive and administrative are interchangeable), in the
president of the board of trustees, who is assisted by
commissioners for streets, fires, health, etc., to execute
the ordinances of the board of trustees (legislative de-
partment), and the president is also helped by police-
men or constables to execute the decrees of the magis-
trates (judicial department).
A city government is generally composed of legis-
lative bodies (known in different places as aldermen,
councilmen, etc.) — sometimes of two chambers, to
pass laws regarding local matters; of judicial courts
as well — not only those of the magistrates, but addi-
tional ones of a higher grade; and a mayor with a
considerable body of assistants to see that the laws
are executed,
20. The functions The counties do not have any law-
ln Counties. making assemblies for the direct purpose
of legislation, tho the bodies known as Supervisors
1 8 Preliminary Survey. [§ 20
or Commissioners really have considerable legisla-
tive power over taxes, roads, care of the poor, etc.
Generally speaking, however, outside of these officers,
county governments are, as said before, merely organi-
zations for the administration of justice. They have
no law-making body, but only two sets of function-
aries— the judicial, consisting of judges of courts and
their assistants, to apply the laws which the state
legislature makes, and to record legal documents;
and also twofold executive bodies: first, the sheriff
and his assistants, to carry out the law after the courts
declare what it requires in each case; and second,
commissioners to care for the roads, court-houses and
other county buildings.
The state government has the " full
flons^StatM^1"0" kit" — legislative, judicial and executive.
ons ' The legislature generally (universally, so
far as I know) consists of two bodies, both of which
have to concur to pass a law: their laws provide
for the care of person and property over the whole
state, and are applied by local magistrates, city courts,
and county courts. Then the state has its judicial
bodies — the state courts, which generally hear cases
appealed from the county courts, and also determine
whether laws passed by the legislature are according
to the agreement of the people under which the state
was primarily organized (generally called the Consti-
tution, 79 *) ; and the state has also its executive
body — the governor and his various assistants, who
see that the general laws passed by the legislature,
and the particular applications of them determined
by the judiciary, are executed. Some state govern-
ments can remove local officers who fail in this regard.
22 The same ^e United States government has the
functions in the same general tripartite organization that
Nation. t^e jninoj. governments have — the legis-
lative body, consisting of two houses of congress; the
judicial body, consisting of United States courts
* The cross-references indicate numbered sections, not pages.
§ 22] Society's Control of the Individual. 19
scattered all over the country, and a supreme court
at Washington to try appeals from them; and finally
an executive body to carry out the laws and the deci-
sions of the courts. This executive body consists of
the president; his cabinet; all the national civil ser-
vice in the departments at Washington, in the mints,
custom-houses and post-offices, all over the country;
the army and navy; the lighthouse and coast life-
saving service; and many other divisions.
BOOK I.
THE PROTECTION OF RIGHTS
CHAPTER II.
OP RIGHTS IN GENERAL.
Of the three general functions of government — pro-
tecting rights (including protecting them against a
foreign enemy), promoting convenience, and taxing
for its own maintenance, protecting rights was evolved
first, because, in early societies, before some progress
has been made in civilization, there are no conveni-
ences to promote. A result, then, on the body of
Law and Political Science evolved even up to our
day, is that it deals mainly with rights. The functions
of government in promoting the public convenience
have been evolved so late in comparison, that they
are not nearly so clearly understood; in fact, com-
paratively little attention was paid to them before
the middle of the nineteenth century.
23. Righti Impose First, then, to take the greater field — that
duties. of rights, let us try to understand the in-
teresting fact that all rights impose duties — duties on
others, and also duties on oneself. They impose duties
on others, because a right is, of course, a power justly to
demand that somebody shall do something or refrain
from doing something; and this doing or refraining
on the part of somebody, in response to a right de-
manded, is of course a duty.
ax
22
The Protection of Rights.
Whether the demand and consequent obligation are
just, is determined by "the greatest good
24. "Greatest hap- of the greatest number". What that is,
njness " principle . , , ° , k . . „ f
and its application is declared not only m all rehgions, but
in thethne kinds by the generai experience of mankind.
But the religions differ, and so do the
opinions of mankind. Who, then, shall judge?
Each nation has its own dominant religion and domi-
nant opinions. In proportion to the advance of a
nation, its opinions, religious and secular (which gener-
ally correspond pretty closely), are embodied in cus-
toms and laws. Of course men's convictions of right
must be matured before laws are made to enforce
them: so there are always moral rights acknowledged
by good men, which have not yet become legal rights.
As fast as legal rights are established, priests and
judges apply them to the cases that come before them,
being guided, in very advanced races, by a body of
Law made up, (first) of recorded opinions and enact-
ments that have been applied to similar cases, and
piecing out such opinions to fit new cases. The body
of these opinions is called with us the common law;
(second) of statutes passed by law-making bodies, called
statute law; and (third) of decisions and practices
(like those of the treasury, the custom-house, and the
post-office) arising in the course of executing the laws.
The body of these last is called the administrative
law. Thus rights and duties are declared and enlarged,
and the power of the whole society, directed by the
government, is exerted to defend the rights and enforce
the duties.
Yet priests, judges, legislators and rulers are human,
and the system and its workings are hampered by
human imperfections. They have improved immensely,
however, in recorded history, and, taking the race
by and large, are improving every day. The plain
way of improving them faster among us, is by improving
each man's sense of civic duty — so he will follow only
wise priests, and vote for only good judges, legislators
and rulers — if that is a "plain way". If such persons
5*6]
Of Rights in General.
23
were always in authority, they would keep legal rights
closer up to the best convictions of moral rights.
25 Ri htsand One's rights impose duties not only on
duties Snpiy each others, but also on oneself , because a man
other' cannot justly expect other people to
grant his rights unless he grants theirs. He can assert
a right to life or property, for instance, only as he
performs the duty of granting other people their rights
to life and property. Why a man's rights are measured
by his duties, we do not know, any more than we know
why two and two make four. It is a law of Nature,
proved by all human experience. Justice must be
reciprocal — must be even to both sides: the goddess
holds the scales. The statements of that law that
have most influenced the civilized world are, 44 Do
unto others as you would they should do unto you",
and "Forgive us our trespasses as we forgive those
who trespass against us."
26. RJghti The rights for which our fathers de-
classified, manded government protection, were
summed up in the Declaration of Independence, as
the rights to Life, Liberty and the Pursuit of Happi-
ness. There might easily be a worse classification.
But classification suggests the idea of scientific treat-
ment. Now as these rights seem to spread everywhere,
and yet as you cannot touch or see them, as you can
a plant or an animal or a star, the idea of giving
them any scientific treatment may seem impracticable
to readers who have associated science only with tan-
gible and visible things. Yet what we know about
them can be given scientific arrangement, and that
is all we can give to what we know of any subject. As
to "scientific precision", however, of course we can
know some things more precisely than we can others —
simple things more precisely than complex things —
things of sense more precisely than affairs of thought
and feeling. For instance: the most precise science
of all — mathematics, deals with the simplest things,
mere quantity and position, without any reference
24
The Protection of Rights.
whatever to the infinite number of conditions which,
for instance, make the difference between a human
being and a stone of the same shape. Again, as a
stone is simpler than a plant, we have a more pre-
cise science of stones than of plants; and for the same
reasons, of plants than of animals; of the lower ani-
mals than of the higher; of the animal's body more
than of his mind; and of the individual animal's
mind more than of the interplay of a number of minds.
So we have got to be content with less precision, and
consequently more difference of opinion, in studying
the interplay of men's souls — their social relations,
than in studying almost anything else. Yet we can
make a science of them, as I said before, precisely
as we make a science of anything else, by getting
what knowledge we can, classifying it as best we can,
and using our system to help us to more knowledge.
To begin, then: Rights are usually first classified for
scientific treatment into Rights regarding Persons
and Rights regarding Things. At first sight, the
Declaration of Independence hardly followed that
classification, but it virtually did: for the rights to
Life and Liberty are plainly rights regarding Persons —
as against attacks from them, and as embracing duties
toward them; and under the rights to the Pursuit of
Happiness, we can easily treat separately those re-
lating to persons, and those relating to things.
Personal rights are sometimes regarded as rights
affecting one's own person, as distinct from rights
affecting one's property. The classifications cross in
some particulars, as nearly all classifications do; but
while, in this case, one may be no better than the
other, we may as well follow the lines laid down by
our fathers.
CHAPTER III.
RIGHT TO LIFE.
27. The Stated The right to life seems too plain to
d*1™' discuss, and yet the state need not always
preserve its citizens' lives, but on the contrary, it
often demands them — by thousands at a time, in
war for its own defence, and even (rightly or wrongly)
for its own extension. But even then, it is the state's
duty to guard the lives as well as circumstances per-
mit— to give its soldiers the best possible care: — to
give them such officers, surgeons, arms, food, and
attention of every kind as will bring their lives through
war if it is a possible thing.
The state also demands life in other ways than in
war. Under the laws of most states, a citizen for-
feits his right to his life when he does not perform the
duty on which that right rests. If he neglects that
duty, and kills somebody else, his right not to be killed
is gone, and the state may kill him if it sees fit.
28. Humanity's A man has not always a right to his
clalms» life, even outside of the state's demands
on it in war or for justice: it is often a man's duty
to risk it for those he loves, and in helping others in
danger of their lives; and not only soldiers, but doc-
tors, chemists, miners, engineers and many others,
29. Professional must risk their lives to do their mere
dalms. duty in the professions they have chosen.
They cannot turn back from danger when other peo-
ple's lives are in their hands. The time to turn back is
before adopting one of the heroic professions — before
26
TJte Protection of Rights.
subordinating their rights to life, to their strenuous
duties.
In some countries, Nature, unaided by
30. Life and work. the efforts 0f men> supplies the essen-
tials of life, and even the young reader need hardly
be reminded that in such countries Nature is an over-
indulgent parent, who spoils her children, and does
not lead them to civilization. Civilization comes
from work, and no country has ever become civilized,
and therefore (on the very strongest ground we have
for any expectation) no country ever can become
civilized, where life itself does not depend on work,
and where the right to life does not depend upon the
right to work; and where, accordingly, the right to
work is, to all but those dependent on others, of as
much importance as the right to life.
31. The Right And yet by one of those strange and
to Work. instructive paradoxes which the thought-
ful observer is continually noticing, in the countries
where the right to life is most effectively guarded, the
right to work is most generally attacked. One of
the instructions in this paradox is that, as intelli-
gence and the effectiveness of law advance,the absurdity,
not to say the criminality, of attacking the right to
work, advances with them. This may help us esti-
mate the reasonableness and morality of both the
American trade-union's claim that if a man will not
join it, it can properly interfere with his right to work;
and its practice, if he does not obey its demands, of
burning his house and taking his life.
But it has just been seen that the community has a
right to a man's work, even in the most dangerous of all
pursuits — in war, and even to his life itself,
lnlyto8thtJs^ate. wnen tne state requires either or both for
the greatest good of the greatest number.
The trade-union justifies its claim on the same ground —
the greatest good of the greatest number. In doing
this, as the intelligent reader has probably realized, it
simply performs the saltum of assuming itself to be
§3i a]
Right to Life.
27
"the greatest number'' — the state itself, or really, as
it often assumes, the superior of the state — a saltum
which we see it repeating in some connection every day.
Any trade-union is a ridiculously insignificant por-
tion of the state, all of the trade-unionists put together
with their wives and children, are less than an eighth
of the state, and what they may think for their great-
est good, may be for anything but "the greatest good of
the greatest number ", as they are constantly demonstra-
ting by stopping the transit and supplies of the greatest
number, and filling the streets of the greatest number
with riot, arson, bloodshed and murder.
Probably every war has been based on some similar
perversion of logic. Over this one, here and there in
America, civil war has been for some time cropping
out in little skirmishes between unionists and their
attendant hoodlums on one side, and the militia —
sometimes even the army — on the other; and there
are sober judges who look for an increase of it. Even
the greatest philosopher of our time — and perhaps
of any time, as he had more experience behind him
than any previous philosopher — thought that the
fallacy we have been treating, and the others vaguely
grouped with it under various vague names (one of
which vague names is socialism), will eventually pre-
vail in their chronic war with intelligence; that the
victory will be the greatest disaster so far experienced
by mankind ; and that the first step toward recovery
will be military despotism. But Spencer's unsurpassed,
perhaps unequalled, greatness, was in the impartial
grouping of passionless facts — a purely intellectual
process, where there was little room for the bias of
temperament. This pessimistic prophecy of his, on
the other hand, tho it dealt with a relatively small
group of facts, found every one of them hot with con-
troversy; and the interpretation of them was that
of an old and lonely man whose attitude toward life
had never had the hope-giving influence of children.
It is not inconsistent therefore with the profoundest
loyalty toward his philosophy, to take a more hopeful
28
The Protection of Rights.
[§3i<*
view than he did regarding this passion-laden and
(compared with his cosmic generalizations) minor
question, and to find much hope in the already visible
effects of very recent counter-organization and appeal
to the courts.
31 (b). picketing The courts try to guard the Right to
and Boycotting. Work, as they guard any other right.
They are now attacking both picketing and boy-
cotting, but there are thousands of ways of making
a man's life uncomfortable, and so interfering with
his liberty, that the law cannot take hold of.
If the people on whom a man depends for business
or companionship, conclude merely not to have any-
thing to do with him, it is pretty difficult for the govern-
ment to force them to. A marked case was in 1899,
when the workmen in Worcester, Mass., would not
go to see the local baseball club play, unless it dis-
charged a man who years before had refused to join
in a labor strike. The courts could hardly force people
to go to see baseball. Yet the law has done much, as
will appear later.
A workingman can avoid all this trouble by joining
the trade-union and sticking by it, but if he is not free
to join or not, as he pleases, he has no liberty. It
Is as much government's duty to protect him in this
liberty as in any other.
32. Duties condi- ^!eoJer^T w,hen £ a man claims the
tlonlng the Right Right to Work, of course he confesses
to Work. certain duties. The most obvious of
these are not to interfere with any other man's Right
to Work; and to do his own work honestly. Under
the first head, the effort to force men to stand idle
when others strike, is not only an attack on others'
Right to Work, in the very act of asserting the same
right for oneself; but what is more ridiculous, if pos-
sible, it is an assertion that the strike on hand has
not justification enough to stand by itself, without
being held up by force.
The other duty of a man claiming the Right to
534]
Right to Life.
29
Work, was said to be to work honestly. In asserting
that right, he confesses this duty not only to his em-
ployer, but also to society, because he calls upon society
to protect him in his Right to Work. Society, which
buys the laborer's product, really pays him his wages,
and has a right to its money's worth.
33 Society's Beyond society's duty to protect the
alleged Duty to Right to Work from interference, it has
Provide Work. been claime(i that society shall find work
for anybody needing it. But there is a vital difference
in the two things — to protect a man from being inter-
fered with in seeking honest work, is to secure him his
right to pursue his own happiness; while for society
to find work for him, is to take a share of the pursuit
of his happiness upon itself.
A more detailed treatment of this whole subject,
will be given in a later special chapter on Labor Coer-
cion, and in one on Labor and the Law.
Universal experience has shown that if government
attempts to do any more for people's work than to
see that they are not interfered with, people get to
depending upon government instead of upon them-
selves, become shiftless and lazy, and ultimately expect
government to feed and clothe them and do every-
thing else for them, without their doing any work.
34 The English Probably the most conspicuous demon-
Poor Law and the strations of this were the working of the
French workshops. English Poor Law in the eighteenth cen-
tury, and of the French public workshops established
after the revolution of 1848.
The Poor Law of 1782 required the guardians of the
poor to find work for everybody who did not find it
for himself, and to support him until they did. It
set the lazy all over the country to living at the ex-
pense of the industrious, and to raising large families
to get the benefit of the government dole for those
who were too young to work. In 1834, England had
to return to the old system of supporting only those
who were willing to live in the workhouses, and then
3°
The Protection of Rights.
[§34
people generally became able to find themselves work,
and the birth-rate among the useless classes diminished.
A person receiving relief from the state was dis-
franchised. When this book goes to press in 1907,
bills are pending with every prospect of passage — per-
haps some have been passed — to give meals to school
children without disfranchising their fathers. Old-age
pensions are expected next. The extension of the
suffrage since the repeal of the Poor Law, has inclined
politicians to curry favor with the poor, and similar
"relief" will probably be extended until new repeals
will be found necessary.
The experience in the French workshops was that
men would not hunt for work elsewhere, but flocked
to them; other industries became disorganized; the
officials could not turn away a man who claimed from
the state the Right to Work; shops were filled faster
than they could be built; but as the laborers felt sure
of their places, they worked carelessly, and soon the
whole thing had to be given up.
An attempt has been made to insure people against
loss of work. But even that is risky. When Germany
forced its railroad employees to insure themselves even
against accident, they became careless, and slow to
return to work after being laid up.
The moral of all this is that there is no way of super-
seding Nature's method of advancing man, which is by
forcing him to depend upon himself. Every effort to
relieve him of that responsibility has led to his deterio-
ration.
But human arrangements are not per-
35. Public Charity. fect There often come times of business
depression, when many deserving people who are per-
fectly willing to work, can find nothing to do. But
that is a question of an occasional emergency, and
notof the usual state of affairs ; and it is more a ques-
tion of public charity than of public justice. Public
charity should be reserved for only grave emergencies,
otherwise it does more harm than good. This is
illustrated by the experience with public kitchens,
§35]
Right to Life.
3i
soup-houses, and methods of relief of all kinds that
have been thrown open to all comers. Unless such
help has been restricted to those whom careful inves-
tigation proves unable, for the time, to take care of
themselves, it has spread idleness and beggary among
people perfectly able to provide for themselves if
obliged to. That has always been the case, tho it has
sometimes appeared otherwise: for instance, after the
great period of enforced idleness of '97, there was a
very encouraging evidence that of late years people
have been growing in self-reliance. When the unem-
ployed began to get work again, at least one of the
free-food depots was shut up because nobody applied.
Whether it was a less attractive place than the others
does not appear. But it was opened in an emergency,
understood to be only for an emergency, and sup-
ported only by voluntary private contributions ; there-
fore people did not depend on it as they did on the
French workshops.
CHAPTER IV.
LIBERTY.
The right to life, with its concomitant right to work,
in a sense belongs under rights to liberty. But the first
two are so fundamental as to justify being in a class
by themselves: they can exist in the absence of all
other rights, while in the absence of them, no other
rights can exist.
36 Boundaries There are many definitions of liberty, as
of Liberty. of most other important things. Probably
as good a one as any, is absence of restraint in the exer-
cise of one's rights. This of course cannot mean free-
dom to do as one pleases : for no man is at liberty to
do- as he pleases, if it interferes with another man's
right to do any innocent thing that he pleases. Let us
take some illustrative cases. If I should please to stop
a man striking a woman, I would have a right to do it,
altho it would interfere with his doing as he pleased:
for his doing as he pleased in that way, would be inter-
fering with her doing as she pleased — with her enjoying
freedom from pain and injury. If she were his
wife, and were wasting his substance, she would be
- interfering with his doing as he pleased with his money.
But if she were a hard-working woman, and he pleased
to waste the money, he would be interfering with Iter
right to do as she pleased with it. But how could
they each have a right to do what they pleased with
it, when each might want to do something different
from the other? Each would have the right, but it
would be limited, as was said a moment ago, by the
32
§37]
Liberty.
33
other's right. To determine how people are to
settle their rights when they conflict in this way, is
one of the things that the state is for; but if people
cannot settle their rights by themselves or with the
help of their friends, they should resort to law, not
to fisticuffs.
When people are living together, then, it seems as
if the liberty of each must be somewhat curtailed
by the rights of the others. This is by no means
restricted to husband and wife: all people Jjving near
enough to affect each other, must have their liberty
somewhat limited by the rights of the others. A
37 Barbarian man uv*ng al°ne in a forest would be at
Liberty and civilized liberty to shout and sing and fire his gun
Liberty. at anv ^me Qf nightf and shoot in any
direction. But if he were living in a community, such
conduct would very properly send him to the lockup.
Under proper conditions, however, one can shout and
sing or fire a gun in the city.
The name given to the conditions that limit the
exercise of rights, is duties, as already said. If a man
claims the liberty to shout, sing and fire a gun in
the city, he has the duties of doing it only at proper
times and places — ordinarily in enclosed buildings,
or on occasions rightly or wrongly considered proper,
like the Fourth of July, and in places where every-
body agrees to make a noise. If he claims the
right, he admits the duties limiting it. A man's right
to enjoy himself admits the right of others to enjoy
themselves, and confesses the duty of enjoying him-
self so as not to interfere with their enjoying themselves.
If a man claims the right to make a noise and fire
his gun in the wilderness, if nobody else is there, duties
do not enter into the case, because there is nobody to
claim them. But if there is anybody else there to
make the claim, there arises the duty of not disturbing
him or shooting in his direction.
Social duties arise, then, from men living together
in societies, and it pays to limit their rights by living
together in societies, because they gain vastly wider
34 The Protection of Rights. [§37
and better rights — they can do many things together
that they cannot do separately, and because there
has been evolved from this habit of living together, a
happiness in sociability itself.
When, then, a man calls upon the
,,riDhtftobLibert Power °f society to protect his liberty,
l g * ° • y*he confesses two duties to society — that
r r not interfering with the liberty of others, and that
of helping to protect the liberty of others, just as he
claims that others shall protect his. If he is called
upon, he must act as an officer (17) or, as but few men
are needed as officers, it is his duty to vote for proper
officers, honestly to pay his share of the expenses, and
to inform himself so that he can take the right side
in all social matters. His faithfulness in performing
the duties government requires of him, measures his
right to the liberty and the other rights and the con-
veniences which government provides him.
We have seen, then, that we get the advantages of
civilization at the expense of some of the rude liberties
of the savage, and it is easy to see that the state
has the same right to restrain these liberties that we
have seen it has to demand life itself whenever the
greatest good of the greatest number requires it. Not
only must the insane and the criminal be restrained,
but the noisy, the indecent, the filthy and those other-
wise disagreeable, must be kept within bounds.
And liberty needs protection not merely
wtrlh Ubert^1 10 a£amst tne corrupt, foolish and dis-
agreeable : sometimes in war, insurrection
and riot, the rights of good and wise men have to be
infringed upon, even by men as good and wise as Lin-
coln: for, tho every accused man has a right to a
trial, when people may be bearing arms against the
government, there is often no time to wait for trials;
and moreover, even in a free country at peace, a
majority is apt to impose on a minority or an indi-
vidual. Therefore it is well always to be sufficiently
alive to political rights to guard against the slightest
infringements. Like "the rift in the lute," infringe-
Liberty.
35
ments tend to grow. There is reason for the proverb
40 "Eternal vldl- tnat " Eternal vigilance is the price of
ance." liberty" (8).
But what is to determine when the state shall invade
the citizen's rights? Who is to judge, when rulers or
majorities are under temptation? Those are big ques-
tions, and cover most of the art of government. Most
of this book is to be taken up with them, and so are
thousands of other books.
41. Constitutional In the Constitution (79) of the United
defences States, strangely enough, very little was
Bill of Rights. originally said about liberty. It seems to
have been the feeling of the framers that the principles
of political liberty had been so firmly rooted in the
Anglo-Saxon race that it was not worth while to write
down many of them. But when the States were called
upon to ratify the Constitution, they thought differently,
and asked that certain other bases of political liberty
which the race had been working out for over a thou-
sand years, and which all the States then had in
their own constitutions, should be written down. Con-
sequently we have them in the first nine articles of
the amendments, generally called the Bill of Rights.
That name was first given to an English statute en-
acted after the revolution of 1688, and ever since has
been a favorite term for constitutional provisions to
protect the individual against the government.
The principal items in our "bill of rights" are (in
the Constitution itself *) provision against arbitrary
imprisonment, bills of attainder, ex post facto laws,
unequal taxation, misuse of public funds, and- cor-
ruption of public officers by giving titles of nobility
at home or abroad, or by bribery abroad; alsof against
wholesale charges of treason, and corruption of blood
for it. The first eight amendments provide for free
religion, free speech, free assembly, free locomotion,
publicity of all government proceedings, prompt and
fair trial by jury, the right to bear arms, and freedom
from excessive bails and fines.
♦ Art. I, See. IX.
t Art, III. Sec. III.
36
The Protection of Rights.
[§4i
Many of these rights are so well understood by every
American, and some of them can be so much better
treated later, that we need consider only part of them
here.
A bill of attainder is a mere resolution by a legislative
body, such as congress or a state legislature or the
British parliament, to convict of crime, without trial.
This was a favorite means of tyranny in the days of
religious persecution. Our Constitution provides that
every person accused of a crime is entitled to a full
trial in a court, by jury, and with witnesses that he
can cross-question and contradict face to face.
An ex post facto law is a law imposing or increasing
criminal penalties, or changing the evidence required
for conviction, for acts that were committed before the
law was passed. Laws imposing such penalties should
take effect only upon acts committed after their passage.
Free speech, which includes a free press, is necessary
to liberty, because a government whose acts cannot
be proclaimed and criticised, can easily impose on
people. One of the first things tyrants attempt, is to
muzzle the press; and even in our country, offices have
been given to editors, which of course limits their ten-
dency to criticise the party in power. In political
meetings, the majority sometimes refuses reasonable
attention to the opinions of the minority, or the rowdy
element dominates the peaceful element, and sometimes
drives them out ; even minorities have sometimes made
trouble enough to break up meetings.
The right of free assembly is necessary to liberty,
principally because if people could not meet to pro-
test against a bad government, every government
would tend to become bad, and it could do as it pleased
and hold on forever. Tyrants are all the time breaking
up meetings, and bad men often do so even in free
countries.
The right to bear arms would naturally be one of
the first rights a tyrant would try to suppress. It is
not opposed, of course, by the laws in many of our
states against carrying concealed weapons.
§4*]
Liberty.
37
Publicity of all government proceedings secures having
all laws debated and passed in public, so that the
people may know the reasons for and against, and
bring their opinion and the influence of the press to
bear on the law-makers; and may also know which
men vote for good laws, and which for bad. In courts,
publicity is perhaps even more necessary than in legis-
latures. There is no guarantee that a secret trial will
be fair, or a secret arrest justifiable. All the stories
of tyrannous times are full of secrecy.
Promptness of trial needs to be secured, because
tyrants nearly always delay trials, if they grant them
at all, and keep their victims lying in prison. True,
accused people sometimes try to put off their own trials,
but if they do, with decent courts, it is a strong sign that
they are guilty. An innocent man can almost always
prove his innocence promptly if he is free to call witnesses.
In our country, the great security against illegal
confinement, is the writ of Habeas Corpus. The words
mean: "thou shalt take the person" (or, more strictly,
"the body"), and they are the first words of a writ or
writing or order that any judge is bound to issue, on
proper application, requiring those who have the cus-
tody of any untried prisoner to "take" his "person"
promptly into open court to ascertain if he be legally
held. It may be questioned whether it is worth while
for us to consider such matters — whether we have in
America any tyrants to keep in prison any person
without proving charges against him. But we have
more tyrants than we always realize.
Sometimes a majority is the wrorst pos-
a2punl,e man w,th s^e tyrant; and in this case, we have
the "man with a pull." In one of the
bad wards of New York, for instance, such a man is
said to have got the police to arrest, and the magis-
trates to jail, almost anybody he pleased; tho of course
he could not "please" like Richard III. and Henry VIII.
to attack prominent people. He is also said to have
got almost anybody he pleased, 'let off by the police
and magistrates. We can defend our liberties against
3«
The Protection of Rights.
[§42
such people only by making government positions de-
pend upon character and intelligence — so that there
will not be corrupt police and judges.
43. Freedom of *n America it hardly seems worth while
Opinion. to speak of freedom of opinion, because
religious liberty is so well protected, but are we after
all free from attack on our liberty of opinion? A man's
neighbors are always exerting a silent pressure to make
him think and live in their way ; and laws favoring one
set of private opinions and industries, rather than
another, are constantly passed without people noticing
them or realizing their bearings. Such are laws dis-
44. Laws threaten- tributing charities or school funds with
Ing Liberty. reference to religious opinions, laws mak-
ing it easier to select from one political party than
from others, the public clerks and laborers with whose
work political opinion has nothing to do; and laws
favoring one kind of industry at the expense of others.
In such laws the danger of tyranny is greater than in open
attack on life, liberty and property, because open attack
would be understood and resisted by the whole community.
And yet there is wide agitation for laws to interfere
still farther with personal liberty. Some people want
laws to say how many hours a day a man shall work;
what wages he shall receive, whether earned or riot;
how much he shall lay up and accumulate; and even
who shall have charge of factories and stores. The
objection to government thus managing labor, is that
Nature manages it vastly better. For government to
manage it, would take away the test of capacity to
manage, and substitute the test of capacity to get
office — so that a man might be born to develop great
industries and find employment for thousands of his
less capable fellows, and yet be denied the chance unless
he were master of the arts of the politician; while the
ordinary politicians would be attempting the tasks of
the great captains of industry, and not have the ability
to carry them out.
CHAPTER V.
THE PURSUIT OP HAPPINESS.
Now let us consider the third right claimed in the
Declaration of Independence — the right to 4 4 The Pur-
suit of Happiness.' '
That right of course involves the rights to Life, to
Work and to Liberty: the best classifications will over-
lap.
But really what the fathers called the
for mtny,ri3ite!rm right to tne pursuit of happiness, is a gen-
eral name for innumerable special rights.
Perhaps we can feel our way to a scientific arrange-
ment of them, easier than we can lay it down at the
start, as the rights to political liberty were laid down
in the Constitution. To make a very simple begin-
ning: have you a right to pursue happiness into your
neighbor's watermelon patch? Certainly not. You
must pursue happiness under some restric-
m^Vi5MBTv«rd" M ti°ns» tnen» u^e the restrictions on liberty.
' Each man must respect the liberties of
others: so he must respect the happiness of others.
Every man has a right to pursue his own happiness so
far as he does not interfere with another man's pursuit
of his own happiness. How, then, about competing
with a man, and perhaps driving him out of business?
Competition exists among several people doing the
same thing. To race fairly, each must not interfere
with any other's doing the best he can, and govern-
ment should see that he does not.
Obviously, the very first thing necessary to do in
39
40
The Protection 0} Rights.
t§46
the pursuit of happiness, is to work for a living, but
that being, in civilized countries, a concomitant of the
right to life itself, we so treated it.
47 The Ri ht to There is another right essential to make
Work involves ° the Right to Work of any value — the
ri£nt| °[ Property Right to retain or use up the fruits of
and Exchange. Qne,s wofk . tfae tQ Wofk .g ^
for nothing unless a man can be protected in the right
to the products of his work ; and not merely the right to
use them, but also the right to exchange them as
one pleases. If a shoemaker could exchange no shoes
for bread, he would be in a bad way; or if a man
working for wages could not exchange his money for
anything else, he would be in even a worse way.
The general name given to a man's right to produce,
to keep what he produces, or to dispose of it as he
pleases, is the Right of Private Property. Yet that
right, like all others, is limited by the rights of others.
47 (a) Limited, a man can exchange his property as
like ah other ' he pleases, he has no right to spend his
rights. wages in getting drunk, and if other people
— his family, for instance, have a right to the money
he spends in getting drunk, government should inter-
fere to protect their rights. Even if nobody is depend-
ent on him for anything, a man is seldom so solitary
that nobody has any rights in him; and even if one is,
government has a right to see that he conducts him-
self so as not to annoy others, or become a charge
upon them. A man owns a thing, then, and has a
right to do as he pleases with it, only if he pleases
not to injure anybody else, or to do anything that
will harm other people more than it will benefit him (24).
48. The Rights to ^en se^om exchange product alone,
Work, to Property and seldom does any one man even start
fnvoive Rlghtsgto with the raw material and make any
Contract product into complete exchangeable shape.
Generally, things are made by a number of men who
exchange their labor for. money ; and in making these
exchanges — in making all sorts of bargains, other rights
arise to supplement the rights of Property and Exchange.
The Pursuit of Happiness.
41
The first is each man's right that the man he deals with
shall stand jip to his bargain — generally known as rights
under Contract.
49. and to Repu- Then as each man needs others to deal
tatlon» with him, in order to get them to do so,
there is another right almost as essential as rights of
Property and rights under Contract — the right to
Reputation. A man has a right not to be handicapped
by any false reports that will interfere with his Right
to Work and to hold or exchange the fruits of his
work.
But if he deserves a bad reputation, of course he
cannot expect anybody to employ him. Otherwise,
government should guard a man's reputation, as part
of his Right to Work, and as part of his general Right
to the Pursuit of Happiness. Government therefore
punishes spreading malicious and injurious untruths.
Moreover, a man can sue for damages to reputation.
He has as much right to safety in his reputation as
in his person and property.
But, similarly with other rights, the right to repu-
tation rests on the duty of deserving a good reputation.
If a man sues for damage to reputation, and the truth
of the charges is proved, he cannot usually recover any
damages. He sometimes may, however, if he proves
that there was malice in the charges.
The groups of rights we have just considered, seem
to contain all that a man needs in the pursuit of happi-
ness, tho there are a good many others that it
would be handy for him to have, such as rights in a
good bank balance, and two or three good houses,
with stables full of horses, and a yacht, and a few
50. State does not other trifles. But the Signers of the
furalsh means to Declaration evidently did not mean that
rigphVSwoScSry every man has a right to those things.
them' They only meant that every man has a
right to "pursue" them, with a fair field and no favor.
Nor does anybody mean even "them" to constitute
"happiness". They probably do not, as often as the
pursuit of them; and certainly not as often as the
42
The Protection of Rights. [§ 50
pursuit (not to speak of the possession) of the treasures
of the mind and heart.
But we will not attempt anything so difficult as a
discussion of "happiness*', but will treat of its most
essential conditions so far as government can protect
them, under the heads indicated. Now as to rights in
property: people first got property by
oropertyrighu. appropriating it from Nature — taking a
limb from a tree for a club, or picking
out a stone well shaped to hammer or chisel with. We
oan hardly tell why that gave the person doing it,
property rights in the thing: we simply know that it
is so; or at best, we only know from experience, that
its being so, is absolutely essential to human welfare.
A man's right to what he has produced or appropriated
from Nature, is one of those fundamental principles that
the experience of mankind has found out, just as it has
found out that two and two make four, or that rights
and duties involve each other, or any other bottom fact
in nature. It must have been realized very early, and
has been better realized every day, that it is for the
greatest good of the greatest number to admit such
rights, and to develop custom and law to protect
them. The conception of property rights is so ele-
mentary that if two monkeys are on a tree, and one
of them picks a piece of fruit, and the other tries to
take it from him, we feel that the property rights of
the first are invaded.
The monkey's picking the fruit, involved some labor,
and it also involved more or less intelligence: so the
first conditions of property rights seem to have been the
bounty of Nature, the desire for something, and in-
telligence enough and labor enough to carry out the
desire.
Now when we follow the evolution of property up
into man and into modern industry, we
Voices— taw ma- find the essentials of its production to be
aMilty lab°r' virtually the same three things as with
the monkey or the savage; but with the
names a little changed: we are now apt to call them
§5ia]
The Pursuit of Happiness.
43
Raw Material, Labor and Ability. The ttungs are
changed too. Most mechanics use raw material that
has already been produced by other mechanics — a
painter's raw material is paint made by somebody else,
and a carpenter's raw material is wood from a tree
cut down and sawed up by somebody else, and even a
blacksmith now seldom makes his own shoes or nails;
but the paint and beards and hoiseshoes and nails are
made of things that Nature furnishes directjy — from
real raw material.
CHAPTER VI.
REAL PROPERTY.
52. Land and sea Original raw material always comes
the source of from the land — its forests, farms, and
Raw Material. mines, and from the sea. But besides
his own labor, and land (which we will understand
as including the water and its products), man
uses the powers of Nature, such as falling water,
wind, heat, electricity, and the muscular strength of
animals. Yet these are mainly developed from the
land: to use a waterfall or tide power, a man must
control the waterside; to use even the wind, he must
have a place big enough to prevent others from shutting
off his wind; to use heat and electricity, he must con-
trol the powers already named, or some product of
coal-mines and forests; and to use the strength of
animals (including himself) he must feed them with
products of the earth, or with animals that were fed
with products of the earth.
53. Eirly Con- Then the land is plainly the first essen-
dltions. tial of property rights of any kind. Per-
haps that has something to do with the name Real
Property, or Real Estate, which is usually applied to it
and the things affixed to it, such as fences and buildings.
Among primitive peoples, everybody does as he
pleases with the land, but nobody pleases to do much:
so nobody exercises any property rights in it — no-
body either tills or builds upon it, or even systematic-
ally gathers any natural produce from it; nor could
everybody do so, even if they knew how, without
44
§54]
Real Property.
45
quarreling, and the strongest man driving the others off.
That is what has really taken place as our part of
the race has developed — the strongest has got posses-
sion— exclusive rights over portions of the land have
become the property of individuals; at first, by force
of arms, but in recent times, by force of ability, which
we shall see more of later. But it does not follow
that all people having land have forcibly taken it from
others who were weak in arms or ability. The early
king is often at the head of a people glad to reward
his leadership against their enemies, by making him lord
of land which he parcels among his followers; and the
modern man of ability, while he may control a great
deal of land himself, generally enables those whom he
guides to control more than they could without him.
The savage has no idea of property rights in land. He
simply wanders where he can find game and fish. For
that matter, savages have not much idea of property
rights anyhow; and this is true whether the savages
are primitive men or the backward members of modern
society. Barbarians, even when evolved up to the
grade of the Spartans, have generally thought it admir-
able to be a skilful thief; and even many ill-balanced
members of civilized society wish to take part of the
property accumulated by the wise and energetic, and
give it to the stupid and lazy.
The first germ of property rights in land, is the con-
viction that the tribe has a right to the territory it
roams over, so that no other tribe has a right to enter
it. When the savage gets civilized enough to culti-
54. Communistic va*e the soil, his idea of property rights
ownership. in it, is still very rudimentary — barbarians
simply use their land in common. As civilization ad-
vances, they portion it out among themselves for a
short period, and then reapportion it. Even to-day
backward people, like the Russian serfs and the In-
dian ryots, hold their land on short leases from the
community. But the community still owns all the
land, just as it does among barbarians, and reappor-
tions it from time to time.
46
The Protection of Rights.
[§55
As people progress farther than the Russians and
East Indians, the feudal system is generally the next
55. TheFeudil step, and it is a step toward distinct prop-
System. erty rights in land. It is generally a
result of conquest. The system was (and is still, for
that matter, in some backward places) that the con-
quering sovereign getting possession of all the land, lets
his dukes and great nobles have portions on condition
that when called upon, they shall furnish and lead large
bodies of soldiers; the great nobles parcel the land
out again to petty lords and squires, on the condition
that each shall help make up the overlord's quota of
the king's army, by furnishing and leading a few
soldiers; and these petty chiefs parcel out their pieces
of land again to the actual cultivators, on condition
that they shall serve as private soldiers.
While nobody but the ruler owned anything under
this system, it was an advance on such systems as still
55(a). why an nnger m Russia and India, because instead
advance on com- of a man being shifted from one piece of
muniam. land to another, as he is under the system
when the community periodically takes it back and
redivides it, he stayed on it, and his descendants after
him, and got interested in it, and could afford to fertilize
and make other improvements far ahead.
The feudal system, then, was a great advance over
the ownership by the community which goes with
primitive civilization, because a man takes care of
what he has some sort of permanent claim on, and
neglects what he has not. Farms on short leases are
always in a tumble-down condition.
55(b). when I*1 our own history, the communal sys-
9atabti8h9d. tern changed into the feudal system among
our forefathers in England, with the Saxon settlement,
and the division of the conquered lands among each
chief's followers. In some of the Saxon kingdoms the
system was evolved faster than in others. It can
hardly be said to have become universal, however,
before Cnut the Dane was able to impose a uniform
rule over all England.
Real Property.
47
55 rc;. Evolution When he conquered England, he di-
of hereditary vided what land he did not keep himself
feudal relate his g^at jarls (earls), but only for
their lifetimes. That was the first transition step toward
the present system of an ownership forever, subject to
only such taxes as the government may impose. At
the earl's death, the king was again nominal owner; but
as the earl had subdivided among a great number of
followers, of course it was to the interest of these fol-
lowers, as well as of the earl's family, that things should
be left undisturbed; and it was also to the king's
interest (unless he wanted to put a new favorite in the
place), provided the successor would render him the
same support in men or produce that his predecessor
had rendered. Thus, as it was to the interest of all
in possession, that no new favorite should come in and
upset things, in time they generally succeeded, by
arguments or payments or threats, in inducing the
king to invest the dead man's son with his father's
rights.
55 (d) euardian- t^le °^ principle that the land was
ship, 'disposal by the king's and returned to him as soon
marriage. ^ ^ holder died, gave the king opportu-
nities to exact heavy payments before letting widow
and children succeed to the holdings of the husband
and father. This was the original of our present suc-
cession tax. It also led to the king having rights of
guardianship over all minors, and of disposal of widows
and fatherless maidens in marriage; and he generally
got pretty big prices for the rich ones, and pretty
large commissions out of all estates. Now the only
relic of any such rights is, in England, the Chancery
Court; and in America, the Surrogate's Court, or Pro-
bate Court or Orphans' Court — the name varying in
the different states. All of these courts try to see
that nobody imposes on widows and minors, and they
all charge very moderate fees — probably less than
the cost of keeping up the court, and in some states
none at all.
To perfect the system started by Cnut, William the
48
The Protection of Rights.
[§ SS^
55 eh Domtsday Conqueror had an itinerant commission
Book- called barones regis make careful reports
of all the lands in England, with the occupants. These
reports made the celebrated Domesday Book. He con-
fiscated land right and left, and put all he could under
feudal tenure, but it took till the reign of his son Henry
to finish up the system.
56. Evolution of The first definite step toward an owner-
private ownership. ship more private still, was taken in the
twelfth century, when Henry II. (Becket's friend) needed
soldiers for war in France. His tenants, like our own
.c/ , - . militia, were not obliged to fight away
from home: so to get money to hire sol-
diers to fight abroad, he took from his knights "scu-
tage" (shield-money) for rent, in place of military ser-
vice.
56 (t). Leases for But as militarism declined with barba-
labor. rism, and soldiers were needed less often,
those who controlled land began to let it out for
other rewards than military service — sometimes even
for farm service on the land retained by the landlord
himself, to be rendered between times, when the tenant
was not cultivating his leased land ; and sometimes for
part of the produce; and sometimes for money pay-
ment. A very ill wind blew most of this good with it:
for the Wars of the Roses left the nobles in great need
of money, and but little need of military service.
56 (o) Mon*y ^ut tenant-service, and even money-
eommutation of rent, still left nobody permanent owner of
labor leases. jand but the king; and the next ^
vance naturally came about by one big payment for
life or for all time, in place of the annual payment;
or by increased annual payments for an agreed series
of years, on condition that all payment should stop
at the end of the time.
Now it may be asked what is the use
XmerlcsL"tinure ln of our g°in& over a11 this history? Could
not our ancestors have started on a pri-
vate-property basis in America without it ? But where
could they have got the idea? It had to be evolved.
§S9l
Real Property.
49
The full-grown ideas that we take as matters of course
to-day, have been the slow work — often the bloody
work, of centuries.
Land-tenure started in America by the kings of Eng-
land, France and Spain, giving much of the land to
individuals and companies, and these divided it up
among the people of the settled portions. In time,
most of the land not so divided up came, in one way
and another, into the possession of the United States
government.
The government has kept some still, has thrown some
open to rights of ownership by settlers on various con-
ditions, sold some to individuals, reserved some for
National Parks, given some to the Pacific Railroads
and a few other roads, so that they could sell it for
money to build the roads ; and also given some to the
states in aid of agriculture, the states having in turn
given it to educational institutions which sell it to
get money to pay expenses.
All the systems of use of land which
t&l&Lrwongall have been described, exist somewhere in
peoolesofthesaine the world now — there is plenty of land
gra now in the condition that all land was in
once— desert, or with savages roaming over it — land
which virtually no one owns. Then there is land in
every one of the conditions of tenure which we have
been describing: — among many partly civilized peoples,
there is common land and feudal land ; among civilized
rural communities there is much land let out for a
share of the product; and in both rural communities
and cities where civilization is at its height, there is
land whose rents are always paid in money; and last
of all, there is much land, in both city and country,
owned by those who occupy it.
Private property in land, whenever and
•rtyManVa*" where ver it has become established, has
gnbt ttlmului to been probably the greatest single step in
y* civilization. With it, appeared the first
chance for everybody with talent and energy to get
possession of land, and of the social consideration which
The Protection of Rights.
[§59
that possession brings. Outside of war, politics, and
the church, this was the first offering to energy and
invention, of the great prizes that have made the differ-
ence between the forest-community with no letters or
arts, and the community with steam, electricity, books,
schools, libraries, galleries, orchestras, and world-wide
travel — in a word, modern civilization has grown up
with private property in land.
This is saying distinctly that civilization has been
the work of a few prize-winners, or at least prize-seekers
— the men whom the chance of private property stimu-
lated— that it has been the work of individual men,
and not of the race — of a few able men guiding the
rest.
Often in barbarous times, the strong
man »J diance^ot man's chance is at the expense of the weak,
the weakpense °* ^ut se^om *n civilized times: a civilized
government tries to give all men a chance
to get all they can and keep all they get. That gives
the able man his chance, no matter how poor his start.
Rapid new development of corporations (140) in the
United States has just now outgrown the government's
capacity to control some of their overreachings. But
the cases are sporadic, and it may be hoped that govern-
ment will soon rise to the situation. Ordinarily, under
a good government, the strong man does not generally
get his sustenance from the weak one. On the con-
trary, he gets it from Nature, through energy and in-
vention. Widening and securing the range of private
property, leads the strong man to work harder and
invent more, by making his prizes greater, and increas-
ing his hold on them. And it does even more for the
weak man: it not only stimulates him to do his little
best, but gives his property a protection that the strong
man does not need, because he can take care of his
own. Another advantage to the weak man under a
constitution that recognizes and secures private prop-
erty, is that the strong man will be stimulated to reclaim
and cultivate so much more land, and to make so many
more things, that he will find much more profitable work
§61] Real Property. 51
for the weak man to do, and provide much more for
the weak man's good. That is proved by the wonder-
ful increase in rich men's gifts for the general benefit.
61 Proportion of pri- ^ wou^ be expected, then, as is found
viteowneraircrdwei to be true, that as civilization advances,
with clvliizit an. ^e proportion of absolute private owners
of land increases: in fact there is no more marked evi-
dence of the progress of civilization than that relative
increase; and there is no better field for philanthropy
or strengthening the state, than increasing the number
of people who own at least their homes. Napoleon
made it the law in France that the land of a person
dying should be divided among all his children. This
has produced an immense number of private owners,
and they are among the richest and best citizens of
their class in the world.* Yet this dividing could be
* For over forty years there has lingered in my memory a
quotation from Michelet, in Mill's Political Economy, regarding
tne effect of private property in land, and, as poetry is stronger
than philosophy, it has probably done more to make me realize
the merits of the question than all the discussions I have read
since. It seems worth translating here.
"If we want to get at the inmost thought, the passion, of
the French peasant, it is very easy to do. Let us take a walk
some Sunday in- the country, and follow him up. See him walk-
ing down there before you. It is two o'clock; his wife is at
vespers; he is gotten up in his Sunday best; and, I am ready
to vouch, is going to see his mistress.
" What mistress? His land.
" I don't say that he will go directly. No, he is free to-day,
he can go or not as he pleases. Doesn't he go there often
enough every day of the week? Moreover, he turns away, he
goes somewhere else, he has business somewhere else. But he
will go there all the same.
" It is true that he goes very near: but that just happened
so. He looks at it, but apparently he will not go in; what
has he to do there? But he will go in, all the same.
" Nevertheless, it is probable that he will not do any work;
he is gotten up for Sunday ; he has on a white blouse and a
white shirt — yet all that does not stop him from pulling out
an occasional weed, or throwing out that stone. Then there is
that stump which annoys him, but he has not his pick with
him: so tne stump can wait till to-morrow.
" Then he crosses his arms and stands still, looks around
earnestly, carefully. He looks long, very long, and seems to
The Protection of Rights.
carried to a point where the heir's farm would not be
big enough to support him or pay for using expensive
machinery; but then he can sell out and go to manu-
facturing or shopkeeping. The difficulty would cure
itself.
Our own country shares with France the leadership
of the world in wide dissemination of the ownership
of land, and the fact is of very great importance to us:
62. Landowners t^le *arge numbers of people owning their
the best guardians own farms and their own homes in America,
of government, probably do more in the desperate fight to
keep the government prudent and patriotic, than all
other influences put together. Any man owning land
must pay taxes — he cannot hide his land from the tax-
gatherer : therefore he must have a stake in honest and
economical government. We shall see much more of
this very important consideration.
The French peasants make better in-
thHffy citizens"1 comes tnan other small farmers, who
lease their land, just as our farmers who
own their land, generally make better incomes than
those who lease it : a man cares for that which belongs
to him in a way that he cares for nothing else, and
enjoys caring for it to a degree that keeps him cheerful
and capable; the more cheerful and energetic he is,
the more he produces; and the more that a man pro-
duces, the better not only for him, but for the whole
community, because the cheaper it can be sold to those
who do not produce it.
64. Exaggerated Some people have pushed reasoning
fo«golngadt-he *rom tnese advantages, to at least two
vantages. very absurd extremes.
forget himself. At last, if he thinks anybody is looking, if he
sees anybody coming, he moves off with reluctant steps. Yet
at thirty paces, he stops, turns again, and casts over his land
a last look, a look deep and somber, but to one who knows
how to see, the man is thrilled, his look is from the heart,
charged with devotion." — Le Peuple, par J. Michelet, Ir*
partie, ch. I.
§64 a]
Real Property.
53
As the first, they say that as every person born has
a right to exist on the earth, and therefore a right to
a place of existence — to a home: every person is en-
titled to own a piece of land.
It is hard to see how that right can be good against
anybody but his parents. Nobody else ordered him
here, and certainly a man with a little or no land, can-
not have a right to bring into the world as many children
as ne pleases, and require other people to give them
a part of their land. The only condi-
ttahom!ylgkt ti°n upon which a man can claim a right
to land or to anything else, is, of course,
by performing the duties which correspond to the
right (23, 25), either by appropriating what nobody
else had a right to (51), or exchanging for what he
wants, something he had appropriated or produced.
And even suppose it possible to give every man a piece
of land, how long would most of them keep it? Appar-
ently until they could sell it or give it away — one
cannot always do either. It is now very hard to
keep people on the land, they are flocking more and
more to the cities, even if they have to live in tene-
ment-houses. In 1905 one third of the half million
Italian immigrants were in the slums of New York,
while the agricultural industries of the South, in a
climate and labor congenial to the immigrants, were
crying for them in vain.
Yet the Salvation Army's farm colonies, for instance,
are excellent as far, as they go. . But so far, they have
got only a trifling portion of the three million people
they say they ought to have. With more money they
would get more, but not enough to reverse the rule.
Yet in spite of all the facts, there is a great outcry
against holders of idle land, for keeping the starving
millions away from it; but there is always a great
outcry against holders of anything by those who do
not hold anything, and all the time this idle land is
paying taxes which would not be paid if government
owned it.
The second reason given for the claim that every
54
The Protection of Rights. [§ 64 b
man has the right to own a piece of land, is that e very-
man has a right to a living, and that as
toabt!'oiniyi0ht everything that sustains life comes, in the
first instance, from the land, every man
has a right to enough of the land to make his living out
of. There are two answers: no healthy man has a
right to a living unless he earns it, or gets it honestly
from somebody who did earn it; and there are endless
ways of earning it without owning land, as already
stated, many people cannot be forced to make their
living out of the land. Moreover, not every prosperous
man gets his living directly out of the land, even many
very rich people do not own any land; and in fact, not
one American in ten owns any land whatever. So it
does not seem necessary that, to have a home and
make a living, a man must own land.
As a fact, any energetic poor man, under ordinary
circumstances, can get a farm to work if he wants it.
The older parts of the country, New England and the
South, abound in empty farms begging for tenants to
work them on shares; and the new Western wild land
needs them as much; there is plenty of open land and
sunlight and fresh air within easy reach of the people
who are packed in the city tenement-houses, but they
will not go to it.
But to work land, men require capital— money,
horses and farm machinery, and it may be urged that
it is because of lack of them that they will not go to
the land. But the fact is that the men who have farms
and capital to work them, are suffering because they
cannot hire labor; and all the while people are working
in other pursuits, at worse wages, and penned up in
city tenements. In answer to this, it is urged that
as the laborer going to work on another man's land,
would not make him its owner, the laborer's not going
for hire does not prove that he would not go if the
land were his own. But those who own land are
leaving it more and more. If anybody else wants any,
he can prove his right to it, as he can to anything else,
by earning it.
§66]
Real Property.
55
65. Land valueless ^° *ar as observed, those who object to
to all but able private ownership of land, have not gen-
men* erally shown any particular inclination to
work the land or improve it, or any ability to do it if
they try. The objection is most generally made by
men who have not had much success in any other pur-
suit, and that is a poor show for success in farming: it
certainly requires as much ability as any other ordinary
pursuit. People are constantly taking up land who
cannot support themselves on it, and who end by work-
ing for the people with the ability to show them how.
On the whole, then, it does not seem to make much
difference whether everyone is entitled to a portion of
the earth or not, as long as those who are able to do
anything with it. are generally able to get it ; and those
who are not able to get it, would not generally be able
to do anything with it if they had it.
66 Pro sed ' ^° muc^ t°T tne exaggerations of the
reverslonto gov- advantages of private ownership. Now
ernment ownership. ag ft fact> those gui]ty of these exaggera.
tions are generally about as consistent as people given
to exaggeration usually are. Those who in one breath
thus magnify the benefits of private ownership of land,
in the next breath generally propose to do away with
private ownership altogether — they generally propose
that government shall take all the land, and that
everybody who uses any, shall pay rent to govern-
ment, instead of, as now, owning the land without
rent, or paying rent to a private party. And all that,
in face of the plain fact that if government did take
all the land and pay for it and rent it to the people,
it could make no difference to people now paying rent,
unless they should pay less rent, and then it would
be simply a scheme for government making a present
of the difference, to anybody who wanted land, at the
expense of those who did not.
This speculation was once proposed by John Stuart
Mill to the English government. If they had gone
into it, instead of people in general being gainers, as
The Protection of Rights.
[§66
expected, the landlords would have been the gainers
at the expense of the rest of the community: at a fair
price, the lands of England would have cost the govern-
ment more then than they were worth fifty years later:
so far have our wheat and cattle, and those of Australia,
taken the place of England's productions.
But government's taking all the land by robbery, as
is quite widely proposed by those who have none to
lose, and renting it to the people, would help the tax-
payers more than it would the poor: for the state
would receive all that rent-money, and need less for
taxes. But the landlords pay most of the taxes now:
in New York and Massachusetts, for in-
suppfehTgovern- stance, four fifths of those collected di-
rye3ttem?dere,ther rectly- And most of the other fifth— the
taxes on personal property, are un-
doubtedly also paid by the persons owning the land.
Then after all, the scheme would be as broad as
long: for government ownership would not put the
land in new hands. If anybody wants land and has
the money to pay for it, he gets it now. What differ-
ence would it make if he got it from government?
Last of all, the state is not apt to make a good land-
lord: for it already has more to do than it does well
or honestly.
ro8bbe0mwhkVh0Ctte ^° *ar as we ^ave g°ne> then, there does
would disappoint not seem to be any rhyme or reason in
them' the scheme of government ownership: so
there is probably some "true inwardness* ' that we
have not yet attained to. That inwardness is that
all these foolish notions that we have been considering,
are given as reasons why government should take all
the land without paying for it — take it either directly
or by taxing all the value out of it, and rent it to
those wanting it, and devote the proceeds, above the
present amount of taxation, to public works and the
benefit of the poor. That certainly would at least be
helping the poor at the expense of the rich; but not
as exclusively as its advocates intend: for many of
Real Property.
57
the rich have little or no land — many owners of large
tracts are land-poor with their holdings mortgaged for
more than they are worth, and many of the poor, if
they were to receive land as a gift, would not keep it.
Yet certainly the scheme would help some of the
poor at the expense of some of the rich, but it would
help more of the rich at the expense of all of the poor:
for any attempt to carry out the scheme would make,
for a time, the greatest financial upset ever seen, and
there never yet was a financial upset in which the
rich did not generally hold on to what they had, and
buy cheaply what the poor had to part with at forced sale.
Government ownership of land, then, is
to9hc]Jth°enpWs one of half a dozen schemes to help the
g help th^m help poor without their helping themselves,
which are all equally unsound, and which
we will see more of as we go on. This world was
plainly made for the people who help themselves, and
there has been no way discovered for anybody else to
get much good out of it. Yet helping oneself is not
the only way to get good: more still can be had from
helping one's neighbor, but a man cannot do that be-
fore he takes reasonable care of himself.
We will more fully consider the questions of the
care of the poor, when we come to treat of govern-
ment's promotion of convenience. For the present
we are busy with its protection of rights. Now out-
side of alleged "public policy", which embraces the
points we have considered already, there is twofold
moral justification alleged for protecting the rights of
the community by robbing present holders of their
land — first, that the land originally belonged to every-
body, and was wrongfully seized by those from whom
its present owners got it, and therefore should go back
to everybody; second, the famous "unearned incre-
ment " argument.
70 The moral anru- ^s to sP°^ati°n argument, there
ments-^origlnal " is no evidence for it, except in such cases
general ownership. as when Europeans dealt with Americans
The Protection of Rights.
and Africans. If most of the land in Europe and
Asia was stolen by the original grantors of its present
owners, it was " stolen from a thief": for it had been
conquered and reconquered over and over again. The
rights of the present owners are vastly clearer than
any other rights that could be presented: no descend-
ants of previous proprietors who might want to stand
in the shoes of the present ones, could prove any rights
at all: if they could, courts are generally open to them.
But where civilized people have robbed barbarians —
the case of our ancestors in America, if you please —
that case might be a reason why the present owners
(including the heirs of Henry George, if he owned any
land) should give the land back to any heirs of the
savages they can find; but it cannot possibly be a rea-
son why the owners who are not heirs or followers of
Henry George, should give it to those who are. The
barbarians had not much idea of any such rights them-
selves : those rights take shape only as a civilized com-
munity grows up on the land. But some people we
call barbarous do use their land, and some land has
been taken from barbarians of that kind. Yet there
are very few such cases, and in most of them it is too
late to find anybody representing the barbarian owner;
and even if it were not, it is too late to do justice to
the former interests without doing more injustice to
interests now vested. Many a piece of land which was
never worth a dollar to the barbarian, is worth millions
to present innocent holders.
As a matter of abstract justice, you might give the
barbarian the dollar if you could find him, but that is
not what Henry George's followers are after. Yet of
course in theory, where civilized people have got posses-
sion by force, and not, as Penn did, by bargain, justice
should be done if it were possible. Some deny that
Penn's buying a great state for a few beads was a fair
bargain. But that was more than it was worth to the
savages. The fact that civilized men have made it
worth more, is not one that the savages are entitled
to any benefit from.
§72]
Real Property.
59
In a similar case, those who sold the site of the city of
Chicago little more than a lifetime ago, for a mere song,
are not entitled to any benefit from what later owners
have done with it : for what the latter men have made,
is their own.
Even if the site had been obtained by
Sme^dyTnjustke fraud, it ought not to be given back to
lncTeMe$slt?n,y t^ie original owner if he can be found : for
such a doctrine would stop all enterprise —
nobody could build or cultivate with guarantee that
some far-back landowner or his heirs would not come
along and claim the land and, of course, all on it.
Yet nobody can get a good title to land or anything
else through fraud, nor can anybody convey any better
title than he has himself ; and a title obtained through
fraud fifty or a hundred years ago, and passed from
hand to hand since, cannot be anything but a fraudulent
title.
But on the other hand, receiving an
dJtiw^oTnewhip old title, good or bad, is not the only way
owlfership hts °f to a g°oc* title. Using the land, or
ne * doing other duties incident to ownership,
will answer the purpose. The law provides that any-
body who performs duties of ownership for a reasonable
time (varying in different states — usually twenty years)
during which nobody else has performed any, has a
perpetual right to the land; and has that right, even if
the land clearly belonged to somebody else at the
beginning of the twenty years.
Such a law is justified by at least three good reasons :
first, no one has a right to neglect his property so far as
neither to use it himself, nor assert ownership while
another is using it; second, if an owner will not use
land, it is an advantage to the community to have
somebody else use it; third, if a man honestly comes
into a title that was originally fraudulent, a'nd the
rightful owner does not assert his claim within a reason-
able time, the honest occupier should not be disturbed
in the enjoyment of whatever improvements he may
have made for his own benefit and that of the community.
6o
The Protection of Rights.
73. Rights in Im- Attempts have been made to settle the
nrovements. matter by letting a claimant after twenty
years of another's adverse occupancy, pay for the im-
provements. But that was found to discourage improve-
ment, because the motive to improve is not merely to
get back cost, but to develop a profit.
There were two justifications cited for the proposed
robbery of present owners of land. The "original rob-
bery" one being disposed of, we come now to the "un-
earned increment" one. Wherever population grows,
74. The unearned land increases in value. If a man owns
increment. a lot worth a thousand dollars in a village
of, say, a thousand people, if that village grows to con-
tain two thousand, the value of the land is apt to be
increased by the coming of the second thousand, and it
is claimed that the community is entitled to the increased
value, because the increment of value is "unearned" by
the owner of the lot.
This good reasoning does not cover the case. The
second thousand people do not do anything to a former
resident's lot, and certainly the first thousand did not:
so how can either have any claim on its increased value?
The owner is the only person who does anything to it,
even if he only pays the taxes on it. If he starts on it
an industry which increases the population, he does
something to increase the value of every piece of property
in town, and he, if anybody, is entitled to the "unearned
increment". But the unearned-increment advocates
claim that it should be given to those who have not
built anything — to the poor. As a matter of fact,
74(a) Not char- increase °* population must bring all the
acteri'stic of land unearned increment to the business of a
<Uone' newspaper or a store or a blacksmith shop,
that it does to land, and more : for all the increment that
land can get, it must get from increased rent paid by
business of some sort, even if that business be farming.
(Scientifically speaking, all benefits coming from the
use of land are "rent", even if the owner gets them.)
Every man who does his work well — every capable
§74 <*]
Real Property.
61
and honest man who does something to improve the
lives of people, raises the value of land near him ; but
that gives him no right to any but an incidental share
in the benefit he confers on his neighbors — except that
it does make it fair that his neighbors should recipro-
cate by being capable and honest too, and so conferring
benefits on him.
The community has no more right, then, to partly
take possession of land by taxing away the unearned
increment, than by doing the same to the unearned
increment of the blacksmith's business or the news-
paperman's or the butcher's or baker's or candlestick-
maker's.
Under the present system, people invest in unoccu-
pied lands on the chances of the unearned increment,
and pay taxes and lie out of interest. If government
took possession, it would have all the unimproved land
on its hands, with nobody to pay taxes on it. Of all
the wild follies written in advocacy of government
ownership, the wildest is the assumption pervading
most of that writing, that if government owned the
"land which nobody cares to use now, such land would
all come into use, and all the poor be made rich by it.
And after all the fuss, it is very uncertain how much
unearned increment there is to tax. That is largely a
question of time and place. Henry George claimed
that paying the rent on unearned increment, directly
and indirectly, is the cause of virtually all poverty ; and
yet Superintendent Harris, in the Educational Review
for May, 1905, says: "Careful investigation has shown
that [rent of] land in the United States is a small burden :
only one eighteenth of the . . . earnings of the people
in 1880 — two and one-fifth cents per day as against
average production of more than forty cents a day for
each inhabitant." I know of no later calculation. Tho
one could be made without much difficulty, it would
be superfluous. Professor Mayo-Smith says: "From
the experience of England ... it may well be ques-
tioned whether the present ground-rents of agricultural
land represent more than a fair return for improvements
62
The Protection of Rights.
[§ 74 a
made. So too, in regard to the unearned increment, it
appears that there are numerous losses as well as gains,
so that it is doubtful whether, on the average, and in
the long run, land property is any more advantageous in
form than any other kind of property.' '
The whole consideration seems to show that the
idea of everybody being entitled to a piece of land,
or of government appropriating it for the general good,
is simply a proposition to return to the
abolish private* t0 half-civilized communal system — to go
relrozreisive! hack to where India and Russia are, and
wipe out all the stimulus to careful and
energetic and forethoughtful management, that rests in
private ownership.
Aside from the impossibility that a man should do
much for a farm that he holds for a short time, the
communal landholding of backward nations helps keep
them backward, because habit and the chance to get
land for nothing incline such people to keep on working
the land: therefore fewer people are led to manufac-
turing, commerce, and the other pursuits which per-
haps do even more than the primitive and sequestered
one of farming, to advance civilization.
At first it seems a paradox that while in America
it is hard to get people to take up the abandoned farms,
in Russia it is hard to get people away from the com-
munal land. The explanation is that the Russian and
his ancestors have been so long under the deadening
influence of communal land that he cannot rise above
it; but the American has always been planning ahead
for his own land, so the habit of thinking a long way
ahead and outside of his daily round has been formed
in him by the private ownership of land.
76. Private "rooerty Jhe management of land is not simply
In land of universal the owner s lookout, or that of the holder
Importance. for the time being> If he does not manage
well, he is not the only one to suffer. Everybody de-
pends on the land, whether he owns any or not, for his
§77]
Real Property.
63
food and clothing and everything he uses, except what
comes from the sea. So it is to everybody's interest that
the land should be managed in the most careful and pro-
ductive way; and the first essential to careful and pro-
ductive management of land or anything else, is that
a man should be sure of reaping where he sows — of
getting the results of what he plans — that he should
own the thing he works upon. While very few people
own the things they work upon — even the farms, not
to speak of the factories and shops, it is not unreason-
able to look forward to the time when most men will.
It is true that while hundreds of men work on a single
railroad or in a single factory, or even on a single
farm, they cannot each own it, but things are rapidly
shaping themselves so that each can own a share in it,
if he is economical enough and wise enough to do
any owning at all (126).
77. Rights In land ^ ought to be plain by this time that
llmitwriike all it is as much the state's duty to protect
fight,f rights to land, as rights to life or liberty.
But we saw that it sometimes becomes the state's
duty to limit the citizen's rights to life or liberty, and
we could expect to find the same true in regard to his
rights to land.
Whenever the greatest good of the greatest number
requires it, the state should take the citizen's land,
and despite the theories we have been considering,
experience seems to prove that a case where the state
should take it without paying for it is not apt to arise.
At least the fathers of our government were so well
satisfied that it never can (in this being less wise than
the Henry Georgians think themselves), that as early
as 1 79 1, it was provided in the Constitution that land
taken by the National Government for public uses
must always be paid for.*
The two principal sets of circumstances under which
land is so taken, are when the right to take it at a
* Amendment V.
64
The Protection of Rights.
78. Rights of fair valuation is given to citizens working
Eminent Domain. for the public accommodation — to rail-
road companies and water companies, for instance;
and when the state itself obliges holders to sell their
land for the use of legislatures, courts, custom-houses,
post-offices, police-stations, forts, barracks, dockyards,
roads, railroads (where the state builds them), and
many other purposes.
The greatest good of the greatest number requires
that a railroad should take a direct way, instead of being
obliged to zigzag only where people are willing to let it
go; and so the state may rightly enable a railroad to
cut a man's farm in two, or perhaps tear down his very
home; but it must compensate him. The government
usually decides through Some form of legislation, when
the greatest good of the greatest number requires a
proposed railroad; and if the justice of the law is dis-
puted, it must also be passed upon by the courts. Be-
sides deciding that the road would be for the greatest
good of the greatest number, the state must also give
the authority to lay out the road, and compel people to
sell the right of way at reasonable prices. Where the
parties cannot agree on values, the courts appoint com-
missioners to fix them.
The right of the state to take land or authorize citizens
to take it, is called the right of Eminent Domain.
One other condition places the citizen's rights in land
at the disposal of the government: land can be taxed
of course, like everything else, and sold if the taxes
are not paid.
CHAPTER VII.
LAW OP REAL PROPERTY.
Now we have some notion of the rights of property,
especially as concerns the land. Next let us consider
the rules under which rights are protected and trans-
ferred. Those rules are called the Law.
79. The Law In No man ever had a thorough knowledge
general. Qf the law. It is the most colossal product
of the human mind. Yet many men have thoroughly
known its outlines and some of its parts. To have a
good working knowledge, one must know some dozens
of big volumes well, and also know how to consult
some thousands. It need hardly be said that we can
get but very slight notions of it here, but those slight
ones may be well worth while.
Every citizen should have some appreciation of where
this immense mass of wisdom and justice comes from,
and an adequate appreciation of it stirs the admiration,
the reverence and even the affection of every liberal
mind. The law has been evolved slowly from many
sources. The four principal ones have been, first, Con-
stitutions— agreements made by peoples as to what sort
of executives, legislators and judges they shall have,
and what powers those functionaries shall have; second,
Statutes, rules made by legislative bodies — from primi-
tive tribal assemblies down to modern parliaments, con-
gresses, and state legislatures (perhaps in these we should
even include the law-making bodies of local govern-
ments) ; third, the Administrative Law — the decisions
and practices of the executive or administration in the
65
66
The Protection of Rights.
course of its business — such as the rules of the treasury,
the custom-house, the post-office and the other depart-
ments : many of these have been confirmed by courts or
legislatures or custom, and so become permanent parts
of the national policy ; and fourth, the Common Law —
the decisions made by judges (the judges in primitive
times having generally been priests). These decisions
have been handed down, first by tradition, and in
modern times by a very thorough system of printed
reports, with elaborate summaries (called digests) and
indexes. These volumes of reports now contain the
main bulk of the law. They are consulted in all im-
portant trials, and arguments and decisions are based
on the points of the case in hand which have been
decided in previous similar cases. Moreover, the grow-
ing wisdom of the ages has been shaped into a number
of maxims that have great authority in the law, some
of which we shall see hereafter (85, 182, 186, 191, 205,
214, 214/, 385). Many of them are in Latin, dating
back to the time when our legal proceedings were gen-
erally conducted in Latin — some of them even back
to Rome. From judges' decisions and maxims, and
occasionally from statutes, learned writers have made
many compendiums showing which way the weight of
opinion has gone in various classes of cases. These
constitute what are called the "text-books", on such
subjects, for example, as Real Property, Contracts,
Evidence, Corporations, and hosts of others.
As Constitutions prescribe what the officers shall be,
and their powers, all other bodies of law are made by
those whom the people elect to make them. All other
powers are reserved to the people. If officers want
more powers than the constitution gives them, the
constitution must be amended or a new one made.
Constitutions, with their amendments, are voted on by
the people. Countries like Russia or Turkey, without
constitutions, are governed by those who seize the
power or inherit it.
In England, Parliament has power to change the
constitution, but the people have power at any time
§8o]
Law of Real Property.
67
to change parliament, not needing to wait for the regu-
lar time, as we do.
As the administration is under the control of the
constitution, and to some extent under the control of
the legislature and even of the courts, administrative
law is constantly merging into constitutional law,
statute law and the common law.
While the president, or any one of his cabinet, or any
officer acting under any of them, must to some extent
make his own decisions and shape his own policy, he
must do it within the lines laid down by the constitu-
tion and the laws; and anybody thinking himself
aggrieved by any public officer, generally has some
sort of right of appeal to the courts. Similarly, judges
under the common law must decide in accordance with
the statutes and the constitution; and framers of
statute law, while they can override common law (sub-
ject to the danger of having its weight finally lead to
neglect or repeal of the statute), cannot override con-
stitutional law: if they do, the courts will declare the
statute null.
The order, then, of the four bodies of law, in respect
of their control, each but the last controlling what is
under it, is Constitutional Law, Statute Law, Common
Law, and Administrative Law. Constitutions control
legislatures, judiciaries and executives; legislatures con-
trol judiciaries and executives; judiciaries control ex-
ecutives. When executives attempt to control any of
the other powers, as they are often, especially lately,
accused of doing, they incur disapprobation, and risk
impeachment and deposition. Similarly with judges
(unless they have constitutions at their backs) when
they place themselves in opposition to legislatures, or,
of course, when they attempt undue control of execu*
tives.
80 Real Estate We wil1 be^n our consideration of the
and Personal law of property in land, with a few ele-
Property. mentary general notions. As you will re-
member, the name given to property rights in land and
68
The Protection of Rights.
[§8o
the things fixed to it, is Real Property, or Real Estate,
or, for short, Realty. Movable property is called Per-
sonal Property. One reason for calling land and the
things fixed to it, Real Property, was probably because
it is the source of all other property, and it looks as
if another reason was because land is less apt than other
property to slip out of sight.
But the rights in real property are not actually
more "real" than the rights in personal property. The
name deceives most people. Real estate usually fluctu-
ates more in value than personal property, and is
probably oftener hard to find a buyer for.
81. Uws protecting First, then, as to protecting the enjoy-
ownershlp. ment of property rights in real estate:
anybody may properly enter one's house or grounds
for any reasonable purpose, for instance, to make a
81 (a). Damages visit or a short cut on foot or with a team,
for trespass. unless the owner objects. But if he does
object, unless the person were doing some real harm,
the juries would probably give less damages than a
lawyer would cost.
81 (b). Right of If one has posted up a notice forbidding
ejectment persons to enter, greater damages would
probably be given. If the owner orders a person off,
and he refuses to go, the owner can use force, but
not enough to do serious injury. If he cannot get
rid of a trespasser without doing serious injury, he
may have to get an order from a court prohibiting him
from staying or coming; and if he violates that, he
will be shut up for contempt of court. An officer of
the law can use all the force necessary to take his man,
even if it kills him; but he must be careful not to use
more than necessary. If an officer cannot get a tres-
passer off, he has a right to call upon everybody to help
him. If in the course of the argument, the stubborn
gentleman seems likely to injure somebody else,
everybody has the right of self-defence, up to any
point.
If a man squats on land and builds a shanty there,
the owner can remove him and his shanty, if it is
§826]
Law of Real Property.
69
possible to do so without violence. If it is not, the
owner must appeal to a court to order him off.
If during an owner's absence, somebody has built
upon and improved land, claiming it as his — even under
a mistake, the owner may go to court for an order of
ejectment, which will be granted unless the occupant
shows a good case.
82. Laws affecting Now as to transferring property rights
transfer*. jn land. Rights in personal property are
generally recognized by possession — the property usu-
ally (we will deal with some exceptions later) being
near the person of its owner, and transferred by delivery.
But one cannot deliver a piece of land, and it can-
not always be near enough the person of the owner
to be recognized as his, unless it happens to be his
home estate or the location of his business. Hence in
old times, ownership in real estate was transferred and
recognized by the man who made the grant, and his
grantee, walking around the property together, gener-
ally with witnesses, and then the grantor delivering to
the grantee a token of possession, such as a piece of the
soil or a twig from one of the trees.
In your reading, you may often come across a tech-
nical phrase for this ceremony, which was called "livery
82 (a). Uoery of of seisin." Livery is plainly connected
«•/«/«. with delivery, and seisin is connected with
the fact that in early times (and even now in law phrase)
the owner was said to be " seised' ' of the property — a
suggestion that in rude times " seisin' ' was not always
connected with 4 'livery." But livery of seisin is not
the usual method, even in our gentler age, tho it does
survive in some remote and primitive regions, even
where the present method has grown up beside it.
The present method is by the transfer
Fnfdsnafffing of a written "deed", of which a copy is
oVf£cu>$/er.enC9 usuaUy registered at the chief town of the
county. Certain statutes to guard against
frauds (the principal one of which, generally known as
the "Statute of Frauds", was passed in the reign of
Charles II.) provide that contracts relating to real estate,
7°
The Protection of Rights.
[§826
and certain other things which we will consider later
(198), must be in writing, tho now in many states,
statute permits a verbal lease for a year, and sometimes
longer. Usually, now, when two parties have agreed on
a sale of real estate, they at once put their agreement in
writing — generally by filling out and signing a printed
form that the lawyers' experience has led the stationers
to prepare, and the purchaser generally pays something
on account, which will be forfeited if he does not carry
out the contract.
You may wonder what we have to do with a law
passed in England under Charles II. We were gener-
ally governed by the English laws until the Revolution;
and when we dissolved our connection with Great
Britain, each state enacted that the previous laws of
England should prevail within its borders, when not
in conflict with laws made by its own authorities. All
later states have so enacted, but Louisiana, which is
still under much of the law she received from France.
To return: part -payment is often supposed necessary
to make a written contract valid, but it is not: for,
as we saw, under the Statute of Frauds writing alone
makes the contract valid, if it is valid in other respects
which we will consider later.
82 (0). Contracts The written contract of sale usually
of8ai: recites that in consideration * of blank
dollars paid to A by B, A agrees to sell, and B agrees to
buy, a piece of land described; that the price shall be
blank dollars, so much payable on the signing of this
contract, so much on the delivery of the deed at some
specified time and place, and (if there are any deferred
payments) so much at other times specified, the deferred
payments to be secured by a mortgage (83).
82 <d) Deeds ^ deed is any instrument sealed as well
" *' as signed. This does not mean sealed up:
in old times before men generally — especially the great
fighting characters who owned most of the property,
* There may be other considerations, and it might be worth
the reader's while to anticipate the order of statement by reading
regarding them in Section 179 ff.
§ 8a f] Law of Real Property.
7i
knew how to write their names, it was the custom to
authenticate written instruments by putting on a
seal after words declaring that the instrument was
the parties' free act and deed; and even after it became
general to sign the name, on specially formal instru-
ments it remained customary to put the seal also, and the
name "deed" was retained for all instruments under
seal, tho in popular use it generally means a conveyance
of land.
92(e). 8001 and Generally the seal need not be an im-
tu effect. pression of some device peculiar to the
grantor, and on some impressible substance: in most
of the states, any spot of some adhesive substance will
do; and in many of the states a mere scrawl of the
pen, with the word "seal" written in it, is enough;
or perhaps even without that word, if the position and
nature of the scrawl make its purpose plain.
An instrument under seal has distinctions other than
in name, from one not under seal. Where an instru-
ment is under seal, the court takes it for granted that
the price or other consideration (1 79-181) was fair — the
grantee need not prove that it was, and the grantor
is not permitted to disprove it, unless mistake or fraud
is alleged.
Moreover, a person can claim damages under a con-
tract under seal, till some time fixed by statute — in
most states twenty years, has elapsed, while under
other contracts, six years is the usual limit. (See also
82 m, 190.)
Not all deeds convey an interest in land : instruments
for other purposes are often put under seal.
82 (fi E^entiais The laws regarding deeds vary in differ-
of deeda. en£ states, but usually the points essential
in a deed of real estate are that.it name the grantor and
the grantee, preferably with the town, village or city
of the residence of each, clearly describe the property,
name the consideration for the transfer, clearly state
that the land is transferred to the grantee to be held
by him, and it often has been decided by the courts that
unless property is conveyed to the grantee and his
72
The Protection of Rights.
[§82/
heirs, only a life-estate is conveyed. Moreover, a deed,
in order to be recorded (which, as we shall see hereafter,
is important) must be witnessed by a notary — that is,
must contain a notary's certificate that the signature
was acknowledged before him; and if it is not to be
recorded in the county where the notary acts, his signa-
ture must be attested by a certificate from the clerk
of the county.
82 (g). Dower and One other point is necessary if the
Courtesy. grantor is married. In many of the states,
if a married male grantor dies, his widow would have an
interest for her life (called her dower), in one third of
the property, unless she has relinquished it in the deed;
tho in a few states, this interest cannot exist in any
realty but the homestead, and such other realty as
the husband may die possessed of. The latter policy
seems the better, as the necessity of having the*wife
join in every deed given by her husband, is seldom of
any real value to her, and often involves much trouble
and delay, when she is ill or away from home, and the
custom is also in restraint of trade.
On the other hand, in some of the states, the old
law still exists that if the grantor is a married woman
and should die, and if she had had a child by her surviv-
ing husband, unless he had joined in the deed he would
be entitled to the use of the property for life — called the
courtesy of it.
82 (hi value of While the steps already recited are the
established only ones necessary to a deed, others are
*orm9' desirable. Questions regarding deeds have
been coming before the courts for hundreds of years,
and lawyers have been shaping the expression of deeds
so as to prevent such questions arising after the trans-
action : so it is very well to follow forms that experience
has approved. Yet there have been many embarrass-
ments regarding this: the lawyers have gradually
loaded up forms of deeds with so many provisions and
so many legal phrases, that common patience could
not read them, or mere common sense understand
them. This experience is by no means restricted to
§82 t]
Law of Real Property.
13
deeds. The whole business world knows it. Business
men who habitually make written contracts for any
specific purpose, and often print them, find that* new
features keep arising in the course of experience, which
they try to provide for in subsequent contracts. The
number of these provisions often so swells the printed
forms, that a fresh start with simple ones is found de-
sirable, even at the risk of leaving some contingencies
to be settled when they arise.
To remedy this unwieldy growth of legal forms, the
most progressive states have provided by legislative
statute, brief and simple forms for both deeds and
mortgages.
But their use is probably not imperative anywhere,
but only recommended and given the full sanction of
the law ; yet timid people who want to provide in
advance for everything that never happens, can make
their instruments as labored as they please.
82 Oh Registry, Real-estate sales are usually completed
mi9-mrch. some weeks after the contract is made, be-
cause delivery and possession cannot be as simple as with
personal property, and it takes time to arrange for them.
If a man has a piece of personal property in his posses-
sion, and delivers it to you for a consideration, the law
will not go back of that delivery for any reason except
the property's being stolen. But a small portion of the
world's real estate is in plain possession of anybody —
a man driving with you in the country, or even stand-
ing with you in a portion of the city, could easily say:
"This property is mine," and sell it to you, when it
was really somebody's else, or mortgaged to some-
body, or burdened with some other rights of somebody.
Consequently, in early times, as writing became gen-
eral, records were made of the ownership of property.
They began, in our race, with William the Conqueror's
Domesday Book. As our country was settled, each
commonwealth parceled out the land among the people,
and gave them deeds, which were put on record (or
registered — the terms are used interchangeably), usu-
ally in the county where the land is situated. Each
74
The Protection of Rights.
[§ 82 i
transfer since has been recorded. When any important
contract affecting land is made, the grantee, if he has
ordinary sense, has the records searched to find if the
title is good — that is, if his grantor has a good deed
from a chain of persons who had good deeds back to
the first grant by the state. He or his lawyer also
looks into the record of mortgages, taxes, and other
serious burdens on property, to see if the property
in question is free from them, and writes to the clerks
of all the courts in the county, to see if they have
any unsatisfied judgments.
82 (J)- Judgments. A judgment in this sense is a decree
of a court, usually against a loser in a suit,
which is put on record, and which makes the property
of the person against whom it is issued, liable for the
sum decreed by the court.
The principal Statute of Limitations was
ofSlmitatto?" passed in the reign of Charles I., and the
Ap^rtenaneis. effect of it on real estate, in nearly all cases,
unless modified by later statute , is to prevent
any claim taking effect unless it is urged within twenty
years of any adverse holder taking possession. After
anybody has held land unopposed for twenty years, the
law presumes that he had a grant of which evidence
has been lost. So if the title is found clear for twenty
years, it is often considered a good risk (72).
When a right has been used without dispute for the
time required by the statutes of limitations in the state
where the land is situated, it becomes a right by pre-
scription. Then the right becomes legal, even if it
covers the ownership of the property. Such rights,
however, are often for privileges less than those of
ownership, and are then called appurtenances (92).
They sometimes may so encumber land — for instance,
by preventing building in certain spots, as to be seri-
ous clouds on title.
82 Oh 77t/«/n- You can insure against a bad title, just
gurano: as yOU can against a fire, but the com-
pany generally first hunts up the title, for its own sake,
tho the older companies have searched titles of so
§ 82 m] Law of Real Property.
75
many pieces of land that they often have to search
only back to the time of some recent search, besides,
of course, making inquiries regarding judgments (82/)
to the clerks of the courts.
Unless the title is insured, so many questions are apt
to come up, that usually a good lawyer is needed to
make the search, and if there is a cloud on the title,
82 (m). cioud* on either the trade is called off, and the
m*- earnest-money returned, with interest, or
the parties agree to keep the trade open for some fixed
time, in the hope of paying off incumbrances or other-
wise clearing the title.
This second agreement, for delay, should be in writing,
tho, there being one written agreement already, the
courts would probably wink at a reasonable delay in
making another, as some time would be needed to settle
its conditions.
As the adjournment of passing the title is probably
for the mutual convenience, the mutuality would gen-
erally be deemed a consideration, tho the general view
is that the original consideration holds over for the
adjournment.
If the title is found all clear of outside claims, on
the appointed day, the grantor gives the grantee a
deed.
If the deed is delivered subject to conditions not
expressed in it, such as the performance of some act
by the grantee before the deed can take effect, the
conditions are ineffective. All the provisions of an
instrument under seal take effect upon delivery. Tho
one not under seal can be effectively delivered subject
to any lawful conditions, such as to take effect on a
certain day if certain prices rule, or even if the weather
is fit for certain operations. The only way to make
limiting conditions effective in an instrument under
seal, is to put them in the instrument itself, or to leave
it with a third party, to be delivered only when the
conditions are fulfilled. This is called putting it "in
escrow" — reducing it to the condition, for the time
being, of a mere " scroll " or memorandum.
76
The Protection of Rights.
[§ 82 »
82 (ni Deifoery of If the grantor dies before the deed is
dB9d- given to the grantee or to somebody else
for him, the deed takes no effect, but the proposed
grantee can call upon the heirs to give him a new
deed, and if he does not get it, he has a good claim on
the estate for any money that he may have paid in
advance.
83 Mort a es ^ mortgage is a right to sell a piece of
0 gages. property, real or personal, if the owner
of it (the mortgagor) does not, by a certain time, pay
a debt due the person holding the right (the mortgagee).
Originally all of the proceeds of such a sale belonged
to the mortgagee, but now the excess, if any, above
the loan with interest and expenses, belongs to the
mortgagor.
The form of a mortgage does not usually differ from
that of a deed, until near the end. Originally a mort-
gage was made by simply handing over a deed, with an
agreement that the land could be redeemed on paying
the borrowed money ; and even now the mortgage con-
veys the property just like a deed, and then provides
that the mortgagor can have the property back if
he pays the debt named in a certain bond (or perhaps
only promissory note) which accompanies the mortgage.
01 /id ^ The difference between a bond and a
83 (a). Bonds. . . . - - . A
promissory note is that a bond is under
seal (82 d) and may hold its maker to the performance
of some other act than the payment of money, tho it
always provides for the payment of some value in case
of non -performance. A promissory note, on the other
hand, is not under seal, and never promises anything
but the payment of money at a specified time.
The right to redeem the property under mortgage is
called the equity of redemption
Before accepting a mortgage, it is worth while to
be sure of a good title, just as before taking a deed:
if there are any previous mortgages or judgments, they
have to be satisfied before the new mortgage takes
effect, and the mortgagee should see that all taxes
levied previous to the mortgage, and during its life,
§85]
Law of Real Property.
77
are paid by the mortgagor: for they must be paid before
the mortgage can be paid.
A lease is a right to use real estate for
. eases. a ^ven or ascertainable time, generally
conditioned on the payment of rent.
The same precautions of form and search accompany
a lease, as a deed or mortgage, except as the interest
is smaller.
A deed or mortgage or lease being made out in proper
form, signed, sealed and delivered, the transaction is
closed as between the parties, but not as between
85. Rlirhts of third tnem anc* outsiders. As regards those
parties regarding without other notice, a piece of land be-
re*lstry' longs to the person in whose name it is
registered, and if A, after giving a deed of it to B, were
to sell or mortgage it to C, and C, without knowledge of
the existence of B's deed, were to get his instrument re-
corded before B, it would be good against B's earlier
instrument not recorded ; but record is notice to every-
body. The time of record is drawn so finely that on
any recorded instrument, the county register always
endorses the minute of the hour of the day he receives
it, and it is considered as recorded that minute.
If C gets on record first, giving him the property
would not ordinarily be unfair to B who had paid his
money first, because if B, by neglecting to record his
instrument, had left room for C to suppose that A was
still the owner, it would be B's fault that C had parted
with his money to A; and so if either B or C is to
suffer, plainly it should be B. There is a general
maxim of the law (79) governing such cases, to the
effect that: *'The law helps those who are wide awake,
not those who are dozing" * — in this case, it helps the
man who gets on record first, not the one who goes to
sleep over his deed.
Yet creditors could not seize the property of A if they
had given him credit supposing the land was his, while
B held an unrecorded deed of it, always provided that
* Vigilantibus, non dormientibus , subveniunt jures.
78
The Protection of Rights.
[§86
A» r~ * «r a all parties had acted honestly and could
86. Effect of Friud. r> x j j j a
prove it. But an unrecorded deed or
mortgage always is subject to suspicion of fraudulent
intent to make the grantor or mortgagor still appear
to own the land, and so keep a better aspect on his
credit than it really deserves; and this suspicion of
fraud might be very readily accepted in court if later
creditors tried to get hold of the land on the ground of
fraud in the unrecorded deed or mortgage.
87 Land differs Even such a formal instrument as a
from negotiable deed can be set aside on the ground of
papers> fraud, and so can any instrument or con-
tract whatever, except in a few rare cases where a
title to negotiable paper (a bill of exchange, bank
check, or promissory note) has passed on to an innocent
holder. Exception is made in some such cases,
because it has been found better to run the risk of an
occasional fraud than to choke the avenues of commerce
by impeding the rapid transfer of such instruments.
Transfers of land and even of merchandise do not
occur with such frequency and rapidity.
AO T.,kniMimMB ^ mav be worth while to know a pecu-
88. Technical mean- . . . ; P , , , r
In -of "Estate" in liar legal use of the word estate . The
Land' lawyers use the term "estate in land" to
signify the quantity and quality of an interest. For
instance, a mortgagor and mortgagee and a lessee may
each have an estate in the same piece of land, so may a
widow have a dower estate, or a widower a courtesy
estate, and perhaps a creditor may have a judgment, all
in respect to the same piece of land. The largest pos-
sible estate is called a fee simple — when the land belongs
to a man and his heirs or assigns forever. The person
holding that can carve out all the lesser estates from
it if he sees fit. Sometimes he carves out so many that
the fee simple is worth less than nothing — for instance,
he may give a mortgage for more than his estate is
worth, or even let taxes accumulate against it until
they amount to more than the fee is worth.
The estate of a lessee is technically called in the law,
an estate for a year, or from year to year, or for
§ 89 a] Law of Real Property.
79
years. An estate for a single year or
Mmfw^m. ^rom vear to vear» hardly carries the same
rights as an estate for years, but usage
varies a good deal in the different states. Generally
the rights, so far as not specified, would be inferred
from the length of the term. A long term would imply
the tenant's right to make material changes; while in a
short term, the tenant could not make material changes,
and would not be apt to, tho he would generally have
a right to proper use of wood, and to gather a crop that
he had planted, even if it were not ripe when his estate
terminated; tho if his estate were for a single year, he
would not be apt to plant one that would mature too
late. A lessee has a right to use the estate as his own,
unless he is restricted in the lease. Otherwise he may
use woods and mines, gather crops, remove and alter
buildings, and construct new ones, tho of course if
his lease is very short, he would not naturally do all
these things. Yet he cannot destroy a wood entirely,
but may use only what fuel or timber can reasonably
be spared from it. Nor can he destroy anything else
so as materially to lessen the value of the property. If
he did, he would "commit waste", as the lawyers call it,
which would subject him to paying damages, and might
forfeit his lease.
If he puts up a new building, he cannot claim its value
when his interest terminates, unless by agreement with
the owner of the fee — the landlord.
89 (a) Repairs ^e lanc*lord neec* not make repairs unless
a ' 9 r*' so stipulated. Otherwise the tenant must
make enough repairs to return the property in as
good condition as he received it, "ordinary wear and
tear excepted".
The tenant need not repair after a fire unless he
wants to, but he must continue to pay rent, unless
otherwise agreed. There is generally a special agree-
ment, however, that the landlord shall repair unless
reconstruction is necessary, in which case the lease shall
come to an end.
The lessee can transfer his interest to another tenant,
8o
The Protection of Rights.
[§896
oo unless the contrary is stipulated, tho
83 oy. Subletting. , , . ir ^ r '
he still himself remains liable to the
landlord. If the tenant does not pass on the money
to the landlord, the landlord can eject the subtenant,
but if the subtenant wishes, he can guard against that
by paying the landlord direct.
89 (a. Terminable If a tenant for a year continues on into
ity, notice. a second year without anything being said,
he can continue for the whole of it, and must if the
landlord wishes. To prevent that, notice must be given,
under the old rule, six months before the end of the
year; now, generally three months, tho people are not
very particular as to the exact day or week.
An estate for a month follows the same general rules
as an estate for a year.
90. Rights under The rights of an estate for years belong
life estate. aiso to an estate for life — either for the
tenant's life or for the life of another person. In the
latter case, if the tenant die before the other person,
the other person would not enter into possession, but
the tenant's heirs, or anybody appointed in his will,
would enjoy the estate during the life on which it was
conditioned.
In addition to the estates already mentioned, there
are estates terminable at the pleasure of either party —
91. Under estates called estates at will, which carry hardly
a1*111, any privileges but occupancy. There are
some other infrequent estates that it takes something
of a lawyer to understand.
Besides the various recognized estates,
. ppu enances. ^ere are certain privileges sometimes at-
taching to land, either by grant or prescription (82 k),
and going with it when it is transferred, even without
being named more specifically than under the general
title of "appurtenances." They are generally in the
nature of rights over neighboring land, such as rights
to pass or carry pipes or wires over it, or to take wood
or game or fish from it, rights of way, of drawing water,
and of "antient light" — Tight not to be obstructed by
building (abolished by statute in New York and some
§92 c]
Law of Real Property.
81
other states) ; and among appurtenances are also gen-
erally included rights to use party walls, and rights
over adjoining highways and waters. These rights
generally 4 'go with the land", as the air and sunlight
do, tho for safety's sake, grants should generally name
the land and its appurtenances.
Appurtenances very often accrue by prescription,
especially rights to "antient light", rights of way, and
of drawing water.
92(a). Party*** walls arc yeTY frequent in cities
' where a few inches in the width of a
room may be valuable. A person building puts half
his wall on the land of an adjoining neighbor, under
agreement that the neighbor may insert his beams on
the wall and use his side of it. Usually a price is
agreed upon for this, which should be looked up in
searching title, as the conditions, if registered, follow
the land, whether expressed in the latest deed or not.
The adjoining owner need not always pay: for he
may be so uncertain whether he will want a wall of
just the character proposed, that while he is willing,
on the chances, to have the wall partly on his land, he
will take no farther risk. Yet, for the sake of gaining
space, the builder may be very glad to put it there
without any compensation for its use. Neither side
can tear it down without the consent of the other, but
either can add in any way that does not damage the
other.
92 (b). Land beside When land abuts on roads in built-up
roada- districts, the road sometimes belongs to
the municipality, but in rural regions generally, the
owner on each side owns to the middle, and is entitled
to anything growing on his side. The public have right
of passage over the road, but only so long as they
keep it in passable condition. If it is not properly
kept up as a road, the use of it reverts to the owners.
92(o. Land by Regarding streams, each riparian owner
water. m owns to the middle, and unless the stream
is navigable, the riparian owner has the sole right to
fish in it opposite his bank. Regarding an owner
82
The Protection of Rights.
[§ 9*c
on a bay miles wide, or on the borders of the sea, the
laws of different states vary very much. In Maine and
Massachusetts, for instance, a riparian owner on tide-
water holds to average low-water mark. But in New
York, on the other hand, he owns only to the ordi-
nary high -water mark; the state owns from there for
three miles out — as far as a cannon would carry at the
time the right was determined; and beyond that, the
sea is everybody's.
As to rights to bathe from the shore of any water, and
to land on it, nobody has a right on another's land;
so of course the question cannot arise at all where the
law is as in Maine and Massachusetts; and where the
law is as in New York, the question can arise only
regarding the space between high and low water, which
belongs to the state. The state often grants control
to the riparian owner. Otherwise the rights so far as
fixed at all, largely rest on local custom, and are not
yet generally clearly determined by courts or legisla-
tion. Ordinarily, whoever pleases will go on the strip
after shell-fish, tho he cannot cross another's land to
do it, but must go by boat from some place where he
has a right to keep a boat.
Wharves for shipping, in some states, are generally
owned by municipalities, and some wharf privileges
are sold or leased to private parties for permanent use,
while some are retained for the general benefit, usually
on the payment of fees. In other states, as the riparian
owners control to low-water mark, landing and wharf
privileges generally spring from private titles. On the
great lakes, the 44 navigable stream " rules prevail, not the
tide-water rules, the riparian owner owning to the middle,
but the public having the right to navigate and fish.
The casual landings of people boating for pleasure, or
merely touching to land a passenger or a package, are
not generally taken account of; and along shores and
banks generally, if the privacy of owners is not unrea-
sonably disturbed, they are not apt to object to others'
landing. If they do object, the rights are the same as if
the trespasser had come by land.
§ 93] Law of Real Property.
83
93. Restriction,. A. *.£ &Ti eStEte *S &™tef subj^t to con-
ditions or restrictions of any kind — such
as not building on certain portions, or not carrying on
offensive trades, or using only for dwellings, or a limited
number of dwellings, the restrictions follow it during
the whole estate originally granted, even if the estate
be a fee simple; and the records should be searched
for such restrictions, just as for mortgages, judgments
or any other encumbrances. Restrictions can lapse
under the Statute of Limitations (82 k) as even the
ownership itself can, if somebody successfully acts
counter to it for twenty years. So, if somebody acts
counter to a restriction, for twenty years, without any-
body attempting to enforce the restriction, nobody can
enforce it thereafter. There are exceptions, but we
have not space to go into them: of all products of the
human mind, the Law is the most immense and the
most complicated — so complicated that there is probably
no rule without exceptions. That is one reason why
a person should be very slow to act in a serious matter
without the advice of a good lawyer.
Now that we have some notion of the complexities
of interests in land, it is natural to inquire whether
it seems inevitable that transfers of them must involve
so much delay, trouble, expense and risk of bad title;
and it is pleasant to know that, just as the cumbrous
forms which deeds had reached have been remedied,
so remedies have been found for the other cumbrous
usages. But the remedies have not yet been universally
adopted, because usages which have been evolved
through such a long past, have their roots tangled up
in so many things, that it is hard to eradicate them with-
out wide disturbance. In some places, some proposed
land reforms cannot be adopted without amending
constitutions. Moreover, social affairs generally are
so complicated that before any comprehensive measure
is tried, it is hard to tell how it is going to work. There
is no more certain mark of folly than a glib cocksure
plan to remedy a social difficulty. Wise people are very
slow to substitute innovations for evolutions. Yet we
84
The Protection of Rights.
[§93
must not stick in the mud for lack of trying to get out.
94. TheTorrens The best method of land transfer yet
System. suggested, appears, on the whole, to be
what is known, from its originator, as the Torrens
System. It was first used in Australia in 1856, then
spread into the neighboring British possessions, into
British America, and into Great Britain itself, and has
lately been enacted in Illinois, Ohio, Massachusetts,
and (for some counties) Minnesota.*
Its principal objects are to save the delay and expense
of frequent searches of titles, and the losses from uncer-
tain or imperfect titles. This is effected by granting
certificates of title under the guarantee of the state.
Different states arrange different details, but the
proceedings are something like this: any person claim-
ing an estate in a piece of land (at least the absolute
ownership, — a fee simple: the minor estates are not
always directly provided for, but are indirectly), can
go to the proper authorities (they vary in different
states), asking for a certificate of his title. The officers
search the records, and make out a description of the
title as it then appears, stating in whom the fee stands,
and in whom stand any claims, such as dower, mortgages,
judgments, estates for life or years, etc. Then they
issue notice by advertisement to all persons claiming
any rights in the estate, and by mail to all whose addresses
are known, calling upon them to present statements of
their rights within a given time. At the end of that
time, they judge all these rights, and complete their
statement of. the title according to the rights which
they consider established. If anybody contests any of
their judgments, the case is given to a court, from whose
decision lies a right of appeal to a higher court, whose
decree is final ; and then a certificate of title embracing
all the rights is recorded. The certificate may state that
an unencumbered fee simple rests in one individual ; or
the certificate may vary so far as to indicate a fee vesting
* The first enactments in Illinois and Ohio did not fit the
constitutions of those states. In Illinois a second enactment
has been made which promises success.
[§94
Law of Real Property.
85
in several persons, and a variety of rights vesting in
several other persons. But such as it is, the certificate
states the authoritative title of the property, which
can never again be questioned. Duplicates of the cer-
tificate are given to persons having rights in the property.
The chief advantages of these certificates are that
while under previous usage, if anybody wants to sell
any rights he may have in a piece of real estate, or
pledge them for a loan, the title has to be searched, at
an expense of money which may be greater than a loan
will justify, and at an expense of time which may lead
to his bankruptcy before the value of his rights can be
ascertained; but with the modern certificate, he can
show his rights at a glance, and an expert can appraise
their value very quickly. Moreover they are guaranteed
by the state, and therefore not open to any question, as
rights in real estate under the usual registry system
always are.
If the officers make some mistake which does injustice,
the Massachusetts plan is that the title, as certified,
cannot be questioned (except, of course, for fraud),
but if anybody can prove himself wronged without any
fault or carelessness of his own, he is made good through
an insurance fund which is accumulated from a trifling
percentage (one-tenth of one per cent.) of the value of
each piece of property certified, which is paid when
the certificate is granted, and also whenever the prop-
erty passes by descent or will.
The expenses of searching title and preparing the
certificates do not come out of the general taxes: so
people who own no land do not have to pay them for
the benefit of those who do; charges are made for
preparing the certificates, but they are generally no more
than that of an ordinary search of title, and they are paid
once for all ; while under the old system, as much gener-
ally has to be paid every time a piece of property is sold
or mortgaged — sometimes a dozen times a year.
In Massachusetts, the holder of any certificate whose
interest is less than the fee, is prevented from raising
money fraudulently, by having a mortgagee's duplicate
86
The Protection of Rights.
so stamped; and when the mortgage is paid, it is given
up and stamped *r canceled". A similar arrangement
can be made, of course, when certificates are issued to
holders of other interests, tho there are not always
provisions for such issue.
But as a title good to-day may not be good to-mor-
row, sales and encumbrances coming after the certificate
is issued are effected by just the same documents as
before, only the first principle, of course, is that no
change in the rights to the land takes effect before it
is recorded in the certificate and its duplicates. Where
ownership of the fee is changed, a new certificate is
issued, and the old one stamped "canceled To use
an imperfect certificate with intent to defraud, is made
subject to heavy penalties, and anybody purposing to
accept a certificate can compare it with the original at
the recorder's office in a few minutes, for a trifling fee,
instead of waiting a month to get the title searched,
and incurring heavy expenses.
Titles by prescription (82 k) cannot be obtained under
the Torrens system (in Massachusetts, at least) against
a title that has been certified under this system, which
seems, on the whole, a just provision, tho it may well
be questioned.
In states adopting the new system, getting a register of
property under it, is made voluntary, and interested
persons generally apply for certificates only when they
sell or mortgage, or grant estates for years. Thus
the labor is spread over time enough to make it quite
practicable.
If mortgages, leases, etc., should make the certificate
of an active piece of property, unwieldy, there seems
nothing to prevent \he owner applying for a new cer-
tificate with all the dead changes left out, and simply
showing in whom the rights vest at date.
CHAPTER VIII.
PERSONAL PROPERTY.
Evolution of Rights in It.
Having traced the evolution, protection and transfer
of rights to Property in Land, we come to treat in
detail of the similar features of the Personal Property
developed out of the land. In our first summary (51,
51 a) we found the agencies that develop personal prop-
erty to be Land, Labor and Ability.
Labor generally means effort of any unattractive
kind, but here I mean the work of a man's body.
When we were speaking of the monkey picking the
fruit, we called the third factor "intelligence", but
" intelligence' ' is not broad enough to cover the ground:
judgment, knowledge, forethought patience, honesty
and a host of other qualities are needed now, and we
sum them up under the name of Ability.
The differences in men are so marked, then, as to
divide them into two classes — men without much ability,
who perform the manual labor, and men with great
ability, who tell the others what labor to perform.
Under such a classification, as under others in all sciences,
the divisions overlap somewhat, but they will do very
well for our purpose, if we bear in mind two of the
particulars in which the classification falls short.
95. Product varies The first is that many laboring men, tho
whh ability, guided more or less by the ability of other
87
88
The Protection of Rights.
[§95
men, have ability of their own. Tho a common laborer
has usually but little ability, and shows it by getting
only a dollar a day, an average mechanic has much
more ability, and shows it by getting two or three dol-
lars a day ; while a small number of mechanics of con-
siderable ability, get as high as even ten or twenty
dollars a day.
As Mr. John A. Hill said in his notable circular to
his men (reprinted in The World's Work for February,
1906) during the printing strike: "Those of you who
know me, know that I am inclined to pay more than
the scale to good men, or grant them other privileges
that amount to the same thing."
An illustration of what labor guided by its own
ability, can do, was afforded in the truckmen's strike
in New Haven in 1903, when some thirty Yale stu-
dents took the places of the strikers, as a lark. They
were found, despite their inexperience, to do more
loading and unloading than twice as many truckmen.
But men of such ability do not remain truckmen, but
are soon guiding the labors of other men.
In successful businesses, the workmen are nearly
always under the guidance of men of vastly greater
ability, who get many times as much as the workmen.
The second qualification to bear in mind if we treat
the industrial world as divided into men of labor and
men of ability, is that, in England at least, the laborers
are fast learning to be their own guides. Cooperative
industries carried on by the workers themselves, made
wonderful progress during the latter part of the nine-
teenth century.
The rewards of ability vary much more than those
of manual labor. When you yet up into the ability
that can guide the labor of others, men vary much
more than they do when the ability is only enough to
guide one's own labor; and in the long run, the re-
wards vary somewhat with relation to the ability, tho
the men of the very greatest inventive ability, like the
creators of the steam-engine, the telegraph, the power
loom, the cotton-gin, the reaping-machine, and other
§9S«]
Personal Property.
89
great inventions, who influence the labor of nations
and generations, never reap a tithe of their own pro-
duction; while on the other hand men of administra-
tive ability, like Stewart and Vanderbilt, whose work
is mainly in handling other men, and whose work lives
but little longer than they do (except in their families'
fortunes) reap a much larger proportion of their pro-
duction.
Practically, a man's ability is determined by the
value of what he produces; and in the long run, despite
the poor pay of some of the inventors, most men are
paid accordingly.
MM A: s^kin^. Proof ?f £ow w*ge* Yai7
product of tit* with ability, is given in Brassey s Work
toutt Laborer,. ^ Wages » He says that he found wages
the world over regulated by the amount of ability; he
got the same labor for the same amount of money in
one part of the world as in another. If he paid ten
cents a day in India, it took ten men to accomplish
the results that it took one to accomplish in countries
where he paid a dollar a day. In May, 1905, the
manager of the Corbin estate in Greenville, Miss.,
reported that in cotton he could make $5 with Italian
labor where he could make $1 with negro.
The difference did not lie in muscular strength. Even
in mere picking or shoveling, a man of ability will accom-
plish more than a man of much less ability and more
strength: it is more a matter of ability than of
strength — of intelligence in work, including energy and
faithfulness, which are considerable elements of ability.
We shall find, as we go on, that false reasoning,
especially regarding convict labor and protective tariffs,
is often based on a false assumption that a day's work
is the same thing from one wage-earner as from another,
in one country as in another, and at one price as at
another: so we may as well consider some more illus-
trations of the utter falsity of any such ideas. In
Canada, Brassey found English labor at 5s. 6d. cheaper
than Irish at 3s. 6d.; in England, 3s. 6d. cheaper than
is. 6d. in Ireland, or than 5d. in India. In a stone-
90
The Protection of Rights.
[§ 95 «
quarry in France, he paid Englishmen 6 francs a day,
Irishmen 4, and Frenchmen 3, and found the English-
men the* cheapest of the lot. General Walker * says
that the English cotton-spinner is paid twelve times as
much as the East-Indian, and yet undersells him in
his own market; that an English weaver tends two
or three times as many looms as a Russian, and that
the English looms run faster. Brassey says that three
English railway navvies do the work of five French
ones. It is universally known that American laborers
surpass those of the rest of the world in efficiency —
strength, intelligence, and saving, as much as they
do in pay. In France it takes forty-two men to do
the work at an iron-furnace, that in England is done
by twenty-five. English farmers on the shores of the
Hellespont prefer to give Greeks £10 a year rather
than give Turks £3 . Women in English cotton-factories
get about 13s. a week, while French, German and
Belgian women get about 8, and Russians about 2 J;
and the English labor is the cheapest. In different
parts of England itself, agricultural wages varied from
9s. per week to 16s., and the 16s. laborers were the
cheapest. Mr. Atkinson says ("Facts and Figures ") :
"With one dollar's worth of labor . . . here with
labor-saving machinery, we can buy the day's hand-
work ... of Russia, Italy and Asia."
In view of such startling facts, no wonder that
there is a constant conflict between Labor and Ability,
* Political Economy. Advanced Course. General Walker's
"The Wages Question", Chapter III, should be read on this
and collateral topics.
General Walker farther quotes various authorities to the
following effect: an English wood-sawyer will do the work
of thirty-two East-Indian ones. He gets but about eight
times the pay. An English laborer does and receives about
twice as much as an Irish one. Tho provisions are cheaper
in Russia than in England, it costs six to eight times as much
to mow an acre of hay in Russia as in England. It takes
twice as many hands to do most kinds of factory work in
France and Germany as in England. In Belgium a handprints
from one hundred and sixteen to three hundred pieces of cloth
a day, in England the average is one thousand.
§97 a1
Personal Property.
9i
96 Difflc It of esPeciaUy as many even claim that the
tdjurtingftljrhts men who do the hand-work make every-
MdUborb thing and ought to have everything. Let
us, then, try to ascertain how the respec-
tive property rights of Labor and Ability are
evolved. It is plain enough how Labor increases pro-
duction, but outside of the ability of the individual
laborer, it is not so plain where Ability first begins to
increase it. That most important step takes place
wherever one man wisely tells another what to do. A
97. General common laborer cannot dig a ditch straight
Functions of without a person of superior ability to
Ability show him how; or he can't go into a wood
and chop down the trees that ought to be taken, with-
out somebody of superior ability to mark them for
him — he cannot even remember them unless they are
marked, but will chop down the wrong ones.*
Such a laborer is but the primitive man,
fzJ^memf^M1" tho evolved up to a certain disadvan-
Mefwdence. ta&e* ^he savage man *s generally able
to get his food from hunting and fish-
ing, and to make his simple clothes and shelter. But
the so-called civilized man, especially in villages and
cities, has not generally the woods and streams to resort
to, and is not accustomed, like the savages, to make
his own raiment and dwelling. Therefore, as a rule,
the moderately evolved man, unless a higher evolved
man initiates an enterprise and gives him a chance
to take part in it, cannot get his own food, clothing
and shelter, and is unable to find anything to do.
The man of only average ability, if he is out of a job,
does not get another, before the man of more than
average ability offers him one. Until then he is apt to
sit down and fold his hands, and complain that he has
not tools and material, and could not find a customer
* The author once took an excellent woodchopper into
some pleasure-grounds and pointed out a dead tree to be cut
down. Near it stood a beautiful live one. After the employer's
back was turned, the chopper cut the live one and left the dead
one standing.
9a
The Protection of Rights, [§ 97 a
if he had, etc., etc. And for all this, he blames the rest
of mankind: not himself and Iris maker. But another
type of man, tho vastly rarer, goes and puts in the
first load of coal he finds lying on the sidewalk, or
shovels off the first bit of snow he finds unremoved, or
in summer mows the first lawn that needs it, or takes
some other of the thousand jobs lying around for some-
body to do. This man, however, is soon an enterpriser,
while the other man is always a wage-earner, and
blames the enterpriser for it. It would be well if
everybody should read Sill's little poem "Opportunity "
and B tinner's little story "Zadoc Pine". Both are
admirable and enjoyable as pieces of literature, and as
instructive as they are delightful.
9Kb). Things material thing made by man is
made to embody simply the embodiment of an idea. The
thoughts. value of the thing depends mainly on the
value of the idea; and as industries have advanced, the
ideas have more and more been contributed by excep-
tional men, and embodied by ordinary men.
There is hardly a thing made for wages, from pins to
palaces, that is not simply a putting into form, by
many men, of ideas furnished by a few. Everything
turned out in the factory is of a shape and size that
somebody else tells the laborers to make. The laborers
on every railroad are simply building a line laid out,
in direction, grades, width, material, by somebody else;
building stations located and designed by somebody
else; making locomotives and cars designed by some-
body else with wonderful ingenuities and conveniences
invented by somebody else; and when the road is
finished, running trains at hours and rates of speed
devised by somebody else.
Take away the few men of ability, and none of these
things could exist; take away an equal number of
laborers, and the things would exist all the same.
97 (o. Averages Now ability is rare. There is a law
and Aunty. Qf nature, first brought prominently for-
ward in regard to human relations by Galton, that of
a given number of things of the same kind, the most
§97*1
Personal Property.
93
will cluster around the average, and become rarer as
they depart from the average. So it is with men:
of a hundred, probably eighty will have ability enough
to produce only the equivalent of the minimum wages
— for comparison's sake, say a dollar a day; ten out
of the hundred can produce, say, two dollars; four,
four dollars; three, ten dollars; two, twenty dollars;
and possibly one, fifty dollars. If you want to find a
hundred-dollar-a-day man, you will probably have to
look into a group of a thousand men; to find a Van-
derbilt, you will need a generation; for a Watt or an
Edison, a century; for a Euclid or a Newton, ten or
twenty centuries; and for an Aristotle or a Spencer,
half of human experience.
Galton represents the facts graphically by a target
where the shots are naturally thickest at the center, and
scattering toward the edges. For our purpose, the
representation would be better by a horizontal band
of dots, with the dots thickest along the space represent-
ing the average, half way from the top to the bottom
of the band, and growing thinner toward the upper
and lower edges. Then a few should be scattered above,
to indicate men of special ability; and a few below, to
indicate men of special stupidity.
97(d). The lower Now the men below the average of
depends on the ability have done their best only under
higher, ^e guidance of the men above it. The
workmen have needed their foremen, the foremen have
needed their employers, the employers have needed
the Watts and Edisons, the Watts and Edisons have
needed the Euclids and Newtons, and the Euclids and
Newtons have, unconsciously perhaps, needed the whole
environment of thought shaped by an Aristotle or (to
shift the matter more toward the future) by a Spencer.
And it is not well to forget, as an essential of even
material well-being, the moral atmosphere created by
a Gautama, or a Christ.
But to come back to our daily experience.
97 (e). "Finds In the higher walks of industry, the man
WQrk-" of ability finds the work for other men to
94
The Protection of Rights.
[§97«
do : they go to him for work, and unless he 1 ' gives work ' \
they remain among "the unemployed".
97 (f). increaata He increases product by organizing men
product. Gf comparatively little ability so that they
can produce what is wanted, and produce more of it,
carry more and exchange more than they could if left
to themselves. He decides what enterprises will pay,
undertakes them, gets together the capital for them,
and often invents machinery and industrial processes.
97(g). Saoea He effects economies, often, if he is a
waste. man 0f sufficient ability, by abandoning
enterprises before they run at a loss. Moreover, as
Labor, unless guided by Ability, either on the laborer's
own part or that of his manager, is simply the mere
physical effort of the animal or the savage, it is apt to
be wasteful, and often destroys more than it produces.
In most cases, unless the superintendent of the laborers
has enough ability to set them making the proper
things, the proper way, they produce less than nothing,
by spoiling material and producing articles that will
not sell for what they cost. The 4 4 bargain-stores' ' con-
tain many things not worth as much as the materials
and wear of tools (not to count the labor) that it took to
make them. On the other hand, Labor guided by Abil-
ity makes nearly everything it touches worth more than
it was before.
The man of ability, however, generally does more than
conduct the processes ; he generally organizes the enter-
prise from the beginning. Because he undertakes the en*
terprise, he has sometimes been called the undertaker,
and some people who do not like that word have taken
a French equivalent, entrepreneur, but English is good
enough for us, and we will henceforth call him the enter-
priser, as probably has been done more than once already.
98. Detailed Func- As already intimated, the enterpriser
tlons of Ability. has first to decide what enterprise will pay;
and that is the most difficult task of all. A market may
reach to the remotest corners of the world, or may be
restricted to a fastidious class in a few great cities, or
may depend on unaccountable shifts of fashion, or on a
§99]
Personal Property.
95
million mysterious causes : yet the enterpriser must know
98 (a). Prophtsy- what the market wants, and how much.
inqwanu. No other man, perhaps, so needs the
genius of the prophet. It is no wonder that only one
man in thousands has it to any marked degree.
98 (b). Raising After the prophet has determined what
capital. to do, unless he has enough money of his
own (which is seldom the case, in the industries so big as
to supply us most cheaply) he must get other people to
put in their money. The capacity to find them and to
make them trust him, is one great and rare element of
Ability.
98 (eh At the Next, if he wants a factory, he has to
work8' decide on the building and machinery that
will pay, and see them well and economically constructed ;
to buy the material in the best market and at the most
favorable time, sometimes getting credit if he thinks
it wise to buy more than he has money to pay for at
the time; to get together the men, using great judgment
of human nature in getting honest and capable foremen
and accountants; to see that the men are properly
organized, as already explained (and he has, by the
way, to keep this in mind in getting up his factory
and machinery) ; then he has to manage the men and
their strikes and labor-union troubles.
98 (d). Outside of Outside of his works, he must determine
tns works. from day to day just what styles of his
product are apt to strike the coming tastes and fashions,
and when and of what kinds to make big lots and
small ones; to make his product known by wise and
economical advertising; to find the best market for it,
both in time and place; to know whom to trust and
whom to press for money, and how to keep his trade;
and then he has to collect the money. All this time
he has to see to his accounts and taxes, and if he can,
occasionally get a little time to eat and sleep and
recreate himself.
Such is the view generally entertained by
o?tho0|krlterprlser. competent people, of what the enterpriser
has to do. The view generally entertained
96
The Protection of Rights.
by other people, however, is that, as he seldom soils his
hands, or uses any tool but a pen, he has nothing to do,
but is a mere drone living on money that really belongs
to the people who do the hand-work. Because the
captain of industry does not actually use a tool, any more
than a military leader actually uses a weapon, most of
the people who cheered Dewey on his return from
Manila are ready to say that a captain of industry is
entitled to none of the results, because the work is all
done by his men. The truth is that they would have
been as powerless without him, as a fleet without its
Dewey, or an army without its Grant.
100. Division of The most noticeable process by which the
,abor' enterpriser increases and cheapens pro-
duction is by the effective division of labor. In mak-
ing almost anything, there are a good many processes.
If one man performs them all, he will not be as skilful
in any one of them — as able to do that one nearly as
often in an hour, or as well, as if he practises that one
alone. Besides, if he effects a dozen, he will lose time
in changing from one to another. Hence it is a great
aid to production, to have a factory big enough to
have separate men for separate processes. But if
there are a dozen processes, that does not necessarily
mean a dozen men: some processes would take more
time than others, so the man doing the quick ones
would need more men doing the others, to keep up
with him; or possibly in a small factory it would be
cheaper to have some man do more than one process:
that would of course depend upon the size of the fac-
tory, and it would also depend on the ability of the
manager: unless he decided wisely how to portion out
the work, he would have too many men for one process,
and too few for another, and so throw everybody's
work out of gear. If the men decide this themselves,
each man would want to do what he liked best, and
he could not know as much about the other men's work,
and what the material and the total result aimed at
would require, as a man whose business it should be,
while doing nothing special himself, to watch it all,
Personal Property.
97
and rqake all work together. Even where workmen
have owned an establishment together, they have had
to make a leader and obey him, and generally to pay
him more than any of the workmen got (118). When
101. Few men can comes to watching it all, there are few
conduct large men that have the ability, even if they
enterprises. could have the opportunity: most men
who try management make a botch of it (120). As a
matter of fact, of the men who try to perform the duties
of the enterpriser, the vast majority fail.*
The general reason that very few men are fit to
conduct a large business, while so many men con-
duct small ones, seems to be that for a large business,
the preparations have to be made for months — some-
times years, ahead. The little businesses that buy
from the large ones, can buy from one day to the next,
and need only take from day to day, or even from
hour to hour, what they see that people want. More-
over, as a large business cannot have the enterpriser's
eye everywhere at once, he must leave much of the
supervision to lieutenants who themselves have ability ;
and the capacity to search out and select good lieuten-
ants is rare, especially in combination with the other
rare powers that an -enterpriser needs.
102. Ability out- What has been said in regard to organiz-
slde of tangible ing factories — producing tangible goods, ap-
p ct plies equally to organizing stores and rail-
roads and steamships and hotels and all other forms of
industry. It used to be a jocose way of describing a
man of little ability, to say: 41 He can't keep a hotel."
Unless there were men who could organize something
bigger than a stage-coach, we should have to go in
* Mr. Joseph H. Walker of Worcester, Mass., lately found
on investigation that of every hundred men in business in that
Elace in 1845, sixty-seven were out in i860. Out of seventy-
ve manufacturers in 1850, only thirty left business with any
property, and only six of the sons of the seventy-five had any
property. In 1 860 there were one hundred and seven manu-
facturers, and only sixty left business with property. There
had not been time for many deaths: so failures are the only
explanation. (Wells, "Recent Economic Changes.")
98
The Protection of Rights.
[§ ioa
stage-coaches; unless there were men who could or-
ganize something bigger than a sloop, we should have
to go in sloops; unless there were men who could or-
ganize the big shops, we should have to run all over
the cities to get what we want from a variety of little
ones, and then should not have as wide an assortment
to choose from, or be able to get what we could find,
at as low a price.
103 "The Great *n stores an(* railroads, etc., where
Industr"' cheap- there cannot be much division of labor,
ens product. ^e cheapening is effected by making the
industries large: in most industries, the more you do
of a thing, the cheaper you can do it. A bookkeeper
can make a figure 9 as cheaply as he can make a
figure 1 ; a wheelbarrow can carry a bushel of potatoes
as cheaply as it can carry one ; a locomotive can take
a dozen cars in a train as cheaply as one; a man of
ability can turn out or handle a thousand pieces of
goods easier than a man of no ability can turn out or
handle one. Stewart, the first great shopkeeper in
New York, as compared with all previous shopkeepers,
is said to have saved the people who shopped with
him ten per cent. Commodore Vanderbilt, by cheapen-
ing freights from the grain-raising and flour-milling
regions of the West, is estimated to have saved every
man on the seaboard a dollar on each barrel of flour
that he bought.
104. Enterpriser's Th^ fortunes of men of ability are
Income not at ex- usually only a small portion of what they
pense of Labor. create and gave {qt Qther people If the
inventor of the steam-engine were alive and could have
half that he has saved for and bestowed on other people,
probably no one country in the world would be rich
enough to pay what all countries together owe him.
105. invention and Let us look into this matter of inven-
Evoiution. tions a little more closely: we shall have
to refer to it more than once. What do we really mean
by 4 4 the inventor of the steam-engine"? The fact is
that no one man ever invented any great thing. The
word inventor is generally used in any particular country.
§ io6]
Personal Property.
99
for the last man in that country who took the last im-
portant step in the evolution of any great invention.
When you try to find out who invented the steam-engine
or the telegraph, for instance, from a book — especially a
schoolbook designed to teach patriotism, if it is an
English book, you will be apt to find the credit given
to an Englishman ; if a French book, to a Frenchman ;
if a German book, to a German; and so on. The
explanation is not so much that patriotism goes wide
of the truth, as that, in each process, so many elements
enter, that it has taken a long time to evolve them; and
that during this long time, the whole civilized world
has learned about them, and people in all countries
were apt to take the final step at about the same time
— or rather a variety of steps which accomplish the
result.
But whether we call each important apparatus giv-
ing us the control over the powers of Nature an evolu-
tion or an invention, it is the product of ability.
106. Labor abounds Now which produces most of the wealth
In poorest countries. 0f the world, Nature, Labor or Ability?
Generally Nature holds out more wealth to the poorest
savages than to the richest people on earth, because the
wealth of the savage's country is yet untouched; but
the savage has not the ability to develop it. Labor is
more abundant amid the famines of China and India
than amid the wealth of Europe and America, but the
Chinese and Indians have not the ability to guide it.
So, as places with the most natural wealth and the most
labor are the poorest, and those with the most ability,
even tho their natural wealth be partly used up, are
the richest, the difference between the rich peoples and
the poor ones must depend upon ability.
From the point of view of civilization, then, the
men who make inventions and organize industry
secure us all that we have in advance of the people
whose industries are small. If there were no great
inventors and organizers of industry, the civilized world
would have to go backward to the condition of people
like the Chinese and East-Indians, who have little inven-
IOO
The Protection of Rights.
[§106
tion or organized industry, and the world would have
to stay there until men of ability should arise.
But tho our discussion must deal principally with the
agencies which give all men, in proportion to their
means, the largest variety of utilities at the lowest
price, I should be very sorry to be understood as claim-
ing that result as alone constituting civilization. The
civilizations of Greece and Japan show us much to
desire, and yet they have been characterized by a noble
simplicity that suggests the question whether our greater
number of appliances may not divert too much of our
attention from more important things.
107. The enter- Now we come to a hard question,
prfser must nay When the product is sold, is it at all'cer-
good wages. tain that the enterprisers will give the
employees their correct share? In other words, are
wages generally fair? Of course the share is generally
given before the collection is made — a lump sum is
agreed upon. There is no way of making each man's
sum exactly equal to his share in production; but in
the long run, wages must reach an average that is fair,
and probably more than fair: the able laborer gets
more than the unable one everywhere (95 a).
The reason is not only that men of ability so increase
the product that they can afford to pay more than the
laborers would produce alone, but because all men so
much prefer to be employers rather than employed,
that they will pay all they can afford, and more, rather
than be driven out of doing business for themselves.
Therefore, except in times of unusual depression, there
are employers actually bidding more for labor than they
can really get back from it. They can bid high because
men of little ability are constantly saving or inheriting or
borrowing capital. This they fritter away in bidding
for labor to conduct enterprises that are beyond them.
Yet while men of little ability pay more for labor than
they can make it worth, men of great ability can make
it worth more, and therefore, in average circum-
stances, bid it up in competition with each other to
Personal Property.
101
the point where they are left only a reasonable
profit.
But in times of depression, when there
HoiSi**?*** are not as rnany jobs as there are men,
men who need places often take work
for really less than they produce; yet probably not
oftener than employers pay more than the market will
return, rather than shut down.
So much for the services that an enterpriser, when
he has ability enough to succeed, renders to the com-
munity and to his workmen. Now if he pays his men
108. Where a^ t^iev Pr°duce, or more, of course he
Ability's reward can get his reward only out of product
does come from. that WQuld nQt exist unless hig abyity
called it into being. True, he does not make or even
handle a thing with his own hands, but he enables other
men to make or handle two, or perhaps a hundred
and two, where they could otherwise handle only one.
He gets his reward by making more things with a given
amount of plant, labor and material. Moreover, where
there is a big supply, things are always cheaper than
where there is a scant supply.
But Vanderbilt and Stewart did not make things,
yet in one sense they did make things-in-New-York
that otherwise would have been things-in-Minnesota, or
things-in-Belfast. There is a difference in value between
a thing-in-New-York and a ching-in-Minnesota. If
there are more barrels of flour in Minnesota than people
want, and not as many in New York as people want,
people in New York will give more for them than people
in Minnesota. The man who carries them, adds to
their value, and if he carries them cheaply, people in
New York can afford to pay him a profit for carrying
them. So with linen between Belfast and New York,
and in short with all articles moved by commerce.
It is a very prevalent fallacy that those
I2t 'Jby hud! who do not affect the mechanical or chem-
ical qualities of an article, "produce noth-
ing". This is but an extension of the fallacy that the
enterpriser produces nothing, because he does not put
102
The Protection of Rights.
[§ 109
his hands to his product. The value of an article
depends upon its capacity to satisfy a need: so every
man who touches an article toward placing it where
it is more needed, must add to its value — must really
"produce" the added value. So of course to a still
greater extent, must a man who organizes transporta-
tion and exchange.
To go a step farther, the bankers and promoters who
finance these agencies, add to the value of the articles
handled; and to take other steps, so do the govern-
ments which regulate all finance and industry; so do
the armies and navies which defend the country; and
now, to take it to a higher issue, so do the thinkers
and writers who promulgate the correct mechanical and
economic principles on which roads, machinery, vessels
and warehouses should be built; and farm-
Sfi^S^mlS. inS' mininS» manufacturing, transporta-
tion, exchange, banking, promoting, gov-
erning, and fighting be conducted. Still another step :
the promulgation of incorrect principles of finance and
taxation probably destroys more value than earth-
quakes, eruptions and wars. The silver agitation about
1890 was estimated by David A. Wells to have de-
stroyed values to the extent of a thousand million
dollars, and the greenback currency of the civil war
probably destroyed as much, and we shall see farther
evidences of destruction, when we come to consider
taxation.
To take a step higher still: economic
on1so\.andemo3S?d and political principles and moral prin-
ciples shade into each other, and are often
identical; so, for that matter, do mechanical principles
and moral principles: 4 4 an honest job" is a phrase of
very wide and just application. It ought to be easy
then to realize that the promulgators of sound morals
and the inspirers of good conduct — the good preachers
and orators and writers, also create value in material
things — probably more value than all other classes of
men put together. Probably if all that has been accom-
plished in the world by Christ, Confucius and Gautama,
§112]
Personal Property.
not to speak of Aristotle, Bacon and Spencer, could be
blotted out to-morrow, much the greater part of the
value in material things would be destroyed. An ade-
quate explanation of how this would come about, would
carry us farther afield than this treatise can go; but
some hints that will help the competent student to work
the matter out for himself, have already been given,
and if he will keep the subject in mind, he will find it
full of such hints. Some very specific ones are given
in paragraphs 330-330(6). He can start now with the
reflection that with the current morality swept away,
his own pocketbook and the coat on his back would be
vastly less safe, and therefore vastly less valuable, the
next time he leaves his study, and even while he reads
this in his study.
It hardly need be said that the pay of
dteWbuffon.xeS °f the various contributors to the value of
goods is very unevenly distributed, and
one is sometimes tempted to believe that those who
contribute most, get least. Certainly the august beings
who rule the centuries from their tombs, knew little
material splendor; and certainly the men at the other
extreme who can do nothing but what they are told,
and do that poorly, get a share of the good things of
life, which, tho small, is larger than their own production
— vastly larger than they could get if left to themselves.
And paradoxical as it seems, and in illustration of the
old saw that extremes meet, is the fact that in recent
times, the other portion of the business world that has
been notoriously getting more than its share of produc-
tion, is at the other end of the line — not the enterprisers
who are immediately associated with labor — not the
"captains of industry " at the factories and stores or
even on the great public works like the railroads and
steamship lines, but those who determine what great
public enterprises are needed, and gather up the scattered
units of capital from all over the country or all over
the financial world, into masses big enough for the great
enterprises — the promoters of the railways and trusts —
the bankers and the officers of the great insurance com-
104
The Protection of Rights.
[§ 112
panies and other financial corporations. In their prin-
cipal developments, the functions of these collectors of
the general capital are comparatively new, and are not
yet well regulated by competition or by law, or even
by public opinion, which is just now in a state of hysterics
over them. It has therefore been easy for the men
conducting these functions to take heavy toll on the
money of other people passing through their hands. A
heavy toll is legitimate, for the ability exercised is great;
but that ability is too often devoted to making the toll
unduly great.
113. Paradoxes of The subject, however, is now prominently
opinion. before public opinion and the law, and
reasonable regulation must in time be secured — secured
probably long before reasonable regulation will be
secured for the striking, boycotting, rioting, burning,
murdering brute who thinks that because his hands
follow the dictate of other men's brains, he makes
everything and is entitled to everything; and assumes
that his right to stop work is a right to conspire with
others to stop together, and force others to stop with
them, and so paralyze the activities on which the
welfare of all depends — of himself more than the others,
if he but had the wit to see it.
114. Why returns ^ow we reac^ t^ie verv serious question
of fabor are nearly of how it comes that the laborer seldom
xedi gets anything above the current rate of
wages, while the enterpriser and promoter may get
hundreds or thousands of dollars a day. The reason
is that things which can be found anywhere, like staple
products or common labor, are always offered for sale
in lively competition, and so the price is driven down
to pretty near the cost of production. Mere manual
labor of the pick and shovel is found anywhere, and
can live on cheap fcod and lodging: therefore its cost
is low. The more intelligent labor of the high-class
mechanic, needs a nervous system kept well by good
food, sleep and shelter, informed by some education,
and recreated by some amusement. These things cost
§ 1 1 5] Personal Property. 105
more money than the coarse laborer's living, and are not
as generally to be found: so the mechanic gets higher
wages than the mere digger; and the high-class mechanic
gets higher wages than the low-class one. Neverthe-
less, there are enough mechanics of nearly all grades to
make competition among them active (despite the
regulation of their trade-unions), and so, of course, their
labor is kept at a recognized, tho somewhat fluctuating,
market price.
Now while all this shows why Labor is
Ability vary wfdefy. restricted to its regular wages, how is it,
' when we get into entirely different con-
ditions, with the irregular and often enormous profits
of Ability? Ability is scarce: it generally does not
compete for employment, but employs itself; hence
there is no price fixed for it. Whenever it does accept
wages — as in the case of special mechanics, electricians,
chemists, etc., or upper clerks, managers, presidents of
companies, etc., the salary is a matter of special arrange-
ment, and generally is accompanied by an interest in
profits besides, not to speak of the St. Valentine's Day
check of Si 00,000, from the New York Metropolitan
Street Railway to Mr. Vreeland, its president.
What determines this varying and sometimes enor-
mous factor of profits, is that as wages and raw material
have a current market price, a given amount of them
being paid for by different men of ability, they will
get out different amounts of product, varying in propor-
tion to the different amounts of ability of the enter-
prisers ; and these will produce and market this product
at different rates of expense for plant, office expenses,
interest on capital, freight, advertising, drumming, col-
lecting bad debts, etc., etc. They will all have to sell
at pretty nearly the same price: that being fixed by
those having least talent for making good .sales and
holding out for high prices. The others will have to come
down very near to that price to get a market ; or some-
times, tho seldom, an able man may even go below the
current price for the sake of broadening his market. But
however the price may be fixed, the profits of each enter-
io6 Tlie Protection of Rights.
[§"5
priser will be the difference between his price and the cost
of producing and marketing. That difference may be
on the wrong side for those who produce least with a
given amount of wages and raw material, and are most
extravagant in office expenses, advertising, freight, etc.
Those who exercise most ability in these particulars,
will of course have the most profit. That profit may be
enormously increased if the ability is of the very excep-
tional kind that generally anticipates the course of the
market, and buys material and holds on to product
before a rise, and sells before a fall.
116. Capital's return . The capitalist, instead of being the re-
more like Labor's cipient of the lion s share, as he is com-
than Ability's. monly held to be, generally is that, only so
far as he is both capitalist and enterpriser. Otherwise,
he is only about on a par with the wage-earner. Capital
is everywhere, and there is a market rate for it, just
as for wages, tho as it does not generally need its in-
come from week to week, it is more apt to take chances
at a share of the profits than the laborer is : the laborer
nearly always (tho not always — not in fisheries, for in-
stance) commutes his share for a fixed sum regularly
paid.
As the laborer and the capitalist are so nearly in
the same boat, the unending talk of the conflict between
capital and labor is mainly a survival of words from
old conditions. In the early days of the great industry,
the capitalist and the enterpriser were generally the
same man; but even then, the struggle for shares of
product was really with him as an enterpriser rather
than as a capitalist. Nowadays when the enterpriser
is so generally merely an officer of a corporation, in
which his share may be little or nothing, and when
he is apt to be a mere borrower of all or most of his
capital, capital's share of product is nearly as fixed as
labor's, and the enterpriser is really the person struggling
to see how much he can realize after paying both.
The conflict, then, so far as there is any conflict, is
between Ability on one side, and Capital and Labor
on the other, when the enterpriser is not at peace
Personal Property.
with capital by owning most of it himself.
5Ltoti2SfwdBBOt But it is the cheapest sort of nonsense to
iabw*or * kl1,n* c^Si^m that *n our men °^ high ability
or or cap . wagte their time in trying to grind the
face of either capital or labor: able heads are apt to
be too full of making money, to bother themselves
much with petty means of saving it. The pettifogging
is carried on by a lower type of man ; altho the wisest
men make mistakes, and all men, rich as well as poor,
and poor as well as rich, see their own side too exclu-
sively.
118 Caoitai and is often supposed that if the laborers
labor powerless themselves owned the factory, or the store,
without Ability. of the steamboat, and all in them, they
could then get along without the Man of Ability. But
in the first place, they very seldom do own the estab-
lishment; and where, by saving up and putting their
money together, they have owned it, they have always
failed, unless the born Man of Ability arose among
them. Then the born Man of Ability has generally in
time got his share of the product; and until very lately
(126), he has generally ended as the owner of the con-
cern.
And he has not stolen it: without him, the thing has
generally soon been shut up. But where he has taken
hold, he has enabled the men to produce enough to
pay their wages, and sometimes more; and what was
over, was of course fairly his own production.
Outside of a few cooperative establish-
dlvision? rateS °f ments carried on by very exceptional work-
ingmen, men without a manager have not
produced enough to pay their wages. It seems to fol-
low, then, that when an exceptional establishment does
pay, the production above ordinary wages, is pre-
sumably the manager's. Karl Marx and his school
say that the manager gets this production and more
too. The modern school says that he gets less. Mal-
lock says that the workmen produce five thirteenths of
the output, and get paid for seven thirteenths. Sound
economists agree with his general position, tho he alone
108 The Protection of Rights. [§119
is responsible for his figures. But this does not mean
that if the enterpriser gets six thirteenths of what is
produced — that if every day he were paying seven
hundred men three dollars apiece, he would get eighteen
hundred dollars a day to each man's three dollars. It
means that the six thirteenths have to pay not only
profits, but taxes, insurance, rent, interest on borrowed
capital, and dividends to stockholders, if there are any.
120. Enterprisers As a matt^r of fact, what the enterpriser
generally get less generally gets out of the six thirteenths, is
than nothing. something less than nothing at all— he gen-
erally uses up all the money that has been put in the
business, and fails (101). The wage-earners get their
share first, and next the other claimants — landlord, sup-
pliers of machinery, fuel, raw material and merchandise,
and lenders of money — get what they can, and if there
is anything left (which in most cases there is not), the
enterpriser gets it.
But to the casual observer of the business world, all
this will read like nonsense. He will naturally ask: If
the money embarked in business is generally lost — if
ninety-nine enterprisers in a hundred lack the ability
to succeed, how can large industries be carried on at
all? They are carried on by the one man in a hundred,
or the one in a thousand. Until an enterpriser has
proved himself, people will not trust him with much
capital. So before much is lost by incapable managers,
they fail — competition weeds them out and returns them
to the ranks, while the capable ones survive to conduct
the large industries.
121. Handworkers We have spoken so far mainly of Ability
of special Ability. as guiding mechanics or others who
handle material things. Let us stop a moment to con-
sider other men of ability who work with their muscles.
Artists, musicians, public performers of all kinds, work
with their muscles, and sometimes those of great Ability
make thousands of dollars an hour. "Goods" are not
all of them mere material things: art, literature and
science are among the highest goods, and people pay high
for them, when of best quality, whether in music, books,
§123] Personal Property. 109
pictures, statues and beautiful houses, or fees to doctors,
lawyers and engineers.
122. Property not Property, then, is not only in tangible
all tangible. things : some of the most valuable proper-
ties are in mere rights, such as the rights to make and
sell patented inventions and (tho seldom of equal value)
copyrighted books, music and pictures. Some other
examples of mere rights that have a money value, are
that at the great fairs, the rights to keep restaurants,
rent out rolling chairs, sell papers, candy, and even
peanuts, are sold for large sums. So often are rights
to put down railways, even before a tool has been used
in the work.
Of course, to exercise ability and reap its rewards, a
man need not necessarily either guide hands, his own
or others', in producing or handling material things.
Not to speak of inventors, the lawyers and statesmen
regulate productive industry, and so add to production.
We might liken the world to steam machinery. The
steam-power — the engine, is labor; machines — like looms
and cotton-gins, are the ability that makes the power
useful ; and the lawyers and statesmen are the governors
and fly-wheels. So far as they see that justice is done,
that taxes are wise and government good, they keep
things running easily and smoothly — the power from
being wasted, and the machines from going too slow, or
so fast as to tear themselves to pieces.
123. Comoaratlve There seems to be a general impression,
©refits in different but it is a doubtful one, that business men
fields of Ability. of ability— who control material things,
are as a rule richer than the surgeons, and artists, and
lawyers, and statesmen. It is certainly doubtful
whether they are, in proportion to their numbers; many
doctors and lawyers are rich, but there are a great many
more men in business, and therefore a great many more
rich ones, and of the comparatively few men in the
fine arts and the other professions, by no means all
have much ability, any more than have men in business.
Whether as a question of causes, or as one of natural
justice, there are certainly few questions more interest-
no
The Protection of Rights.
[§ 124
ing than why a few men have most all the ability, and
therefore most all the property, while
havi great AWllty. most men have very little of either; and
it is but a superficial answer to say that it
is probably for the same reason that a few horses have
all the speed and beauty : for we do not know the answer
much better regarding the horses than regarding the
men. The causes are all a question of evolution, not
very well worked out yet.
The truths we have been considering about the shares
of the various producers, have not long been understood.
125. Discovery of The bottom ones were first clearly stated
the foregoing in General Walker s Political Economy ,
* in 1874, and since then they have been
followed up and expanded, particularly by Professor
Marshall and Mr. Mallock. It used to be believed that
what the enterpriser got, he got by having control of
the tools and materials, the store, the railroad, the
steamboat, and forcing his men to let him keep a part
of what they really produced or exchanged.
126. Ability The Man of Ability is certainly appear-
Increasing. mg oftener than he used to. A new state
of affairs is growing up in England. At last workmen
are putting their money together and enterprising their
own industries, and are rapidly developing so much
ability that they can manage themselves through direct-
ors elected by themselves. Of course they cannot all
be bosses, but they are capable of directing sufficiently
to prevent having to depend entirely on any one or
two men; and the rank and file are developing sense
enough to help their leaders instead of hindering them,
as has been too often the case before.
127. Suum That men who are mere machines — who
culque. do not economize production, have any
just title to profits from economized production — that
men who take no part in organization, have any just
claim in the profits from organization, are both prop-
ositions which, however desirable the advance of such
men's lots may be, are too absurd to promote such an
advance, or any other good thing. But such descrip-
§128]
Personal Property.
in
tions of limited function m do not apply accurately to
many men, and ought not to apply to any. As already
intimated, there is ability in varying amount, among
men who are directed by larger ability ; and the ability
of men under direction can be stimulated and increased.
Moreover, it is plain that ability, little or big, should
have its little or big share of profits.
,00 Ml , A rough and limited justice in this re-
128. Minimum , . ° , , , J,
wage and slid- gard is already reached by wages varying
Ing scale. somewhat with the productiveness of em-
ployees, but the justice is very rough and very limited.
Various schemes have been tried to improve it. Among
them have been sliding scales of wages, varying with
the profits of the business. A minimum wage (272 d,
276) is of course a necessary feature of this: for the men
cannot be expected to have any reserves to fall back
upon if the business pays no profits, and moreover, in
many such cases, they go on producing in their way,
and are entitled to their production. If the enter-
priser cannot make money out of it, that is his risk —
a risk he often takes for the sake of his men, when, in
a sense, it is no risk at all, but a dead certainty against
him. Nevertheless, in average cases, an enterpriser
sets his men to making product, from the expectation
that he will make a profit on it, and there can be no
question that so far as labor goes into that product,
the product belongs to labor, and labor is entitled to
the value from it which was commuted as wages. Hence
a minimum wage, with an advance varying with profits,
is a clearly logical scheme, at least so far as concerns
the minimum. As concerns the advance, it is logical
so far as profits are contributed to by advanced energy,
carefulness and economy on the part of the workmen;
but it is not logical so far — and that is the main dis-
tance^— as the profits depend upon initiative, organizing
ability, prophetic sense, study of the market, and finan-
ciering ability — all on the part of the employer. As soon
as a workman shows any appreciable amount of these
rare elements of ability, the question of a sliding scale
of wages will have brief interest for him : his employers
112
The Protection of Rights.
[§128
will be only too glad to use him in some higher place
where such questions do not arise, or he will himself
be able to put himself there. It would appear, then,
that the portion of profits which can reasonably be
devoted to a rising scale of wages, beyond the amount
to which the wage-earner is entitled anyhow, cannot
be a very large one.
129. No lack of ^n tne various schemes for making the
opportunity. whole establishment a vast partnership, it
will not do to lose sight of the same principles. As
the man of ability is a rare product of Nature, and
as any considerable business is fated to destruction
without him, and as he must provide his weaker
brethren with their wages, and bear whatever losses
may arise in so doing, whatever profits come out
of the concern (and as said before, comparatively few
men who essay the task, bring out any) are logically
his, except in the small degree that his men may be
able to contribute his kind of virtues. The difficulty
of their contributing them is not only in the rarity
of such virtues, but in some small degree, as business is
inevitably organized, in opportunity. But how rela-
tively small that lack of opportunity is, can be realized
only by those who, like the writer of these lines, have
been for many years anxiously watching among a group
of subordinates for the slightest gleam of business
capacity, and on finding it, in one man in scores, eagerly
setting it to fitting work; and this at least as much
from selfish motives as from desire to give another his
due chance.
The minimum wage and. the small share in profits
(and none in losses) being then the best present chance
of the man who lacks the ability to rise beyond wage-
earning, and that chance being distributed with an
approach to uniformity that but very roughly recog-
nizes differences in capacity, what can be done to give
the wage-earner a better chance? Whatever can be
done, he will do most of himself. Gen-
to embraceeit.ab,e er3L^Y ne w^ do nothing beyond furnishing
an equivalent, more or less adequate, for
§i3i]
Personal Property.
113
his wages, and will finish his life as he began it. As
the world is now organized, sometimes he will show
enough ability to attract the attention of his superiors,
and will be welcomed to such higher functions in the
establishment as he is able to perform — perhaps its
headship. Sometimes he will save his money, and
start a little industry of his own. In this he will gen-
erally fail, and revert to the ranks. In rare cases he
will succeed, and furnish opportunities to make a living
to some who cannot make opportunities for them-
selves. In rarer cases, he will furnish enough such
opportunities, and exercise enough capacity in shaping
and handling the results, as to make himself rich,
whereupon all those for whom he has provided the
opportunities, will say that he has got rich by robbing
them. Or finally, by becoming a cooperator, our wage-
earner may get the benefit of whatever ability may be
in him, and may rise without incurring jealousy. But
success in producing has so far attended very few
cooperative experiments before they had ceased to be
cooperative, and had come under the ownership of
men of ability. Yet more men of ability appear to
be developing from the ranks, and the ability of the
ranks themselves seems increasing.
As to the question of natural justice already alluded
to — does it seem right that because one man is born
very able, and another, who may be a
ofVortune^ght^ better man at heart, is not very able, the
first should be prosperous, and the second
poor? That depends upon what we mean by " right
and that again depends upon what we are using the
word for. If we are using it for our hands, the right
hand is the one most people can use best ; if we are talk-
ing about a right line, it means one that goes direct
from point to point; if a clergyman speaks of a right
action, he means such a one as his church would approve ;
a lawyer means by a right, something that the govern-
ment, or the law, will or should secure to a man; and a
philosopher would mean, an act for the greatest good
of the greatest number, or he might mean an act in
ii4
The Protection of Rights.
[§131
accord with Nature's laws. The fortunes of Peabody,
Cooper, Vanderbilt and Stewart are certainly in accord
with Nature's laws, and therefore in this sense must be
"right". As to the greatest good of the greatest
number, probably few would question regarding Pea-
body's and Cooper's; and certainly Vanderbilt's and
Stewart's resulted from work which "the greatest
number" could well afford to pay the fortunes for, if
they had had to. But they did not have to: for, as
we have seen, the fortunes would not have existed but
for the savings effected for the community, part of
which savings made the fortunes of the enterprisers.
Admitting, then, that wealth honestly acquired is
right, especially when used as Peabody and Cooper used
theirs, is the corresponding poverty right too?
Well, if "corresponding poverty" means that the
majority of mankind is poor because the minority is
rich, there is no "corresponding poverty": men of
ability while making their own fortunes, improve those
of their employees and of the whole community, in-
stead of diminishing them.
We often find things in accord with Nature's laws
that seem not for the greatest good of the greatest
number, but even to our finite vision, investigation
generally shows that they only seem so.
132. Evils have True, Nature is a hard mother to the
their uses. ineffective man. She starves him, freezes
him, often kills him, unless the effective man guides
him or saves him by charity. She fills the world with
beauty and opportunity ; but so far, she has evolved
few who care for the beauty, and fewer still who can
seize the opportunity. Harder still, perhaps, she even
takes away from the ineffective man most of anything
he may have, and passes it around, unless it is wasted,
until it reaches the hands of the effective man. Truer
words were never spoken than: "Unto every one that
hath, shall be given, and he shall have abundance; but
from him that hath not, shall be taken away even that
which he hath."
And yet Nature, by her very hardness, through forcing
§ I3«]
Personal Property.
11 S
her children to help themselves and depend for help
on each other, has evolved from the ineffective merci-
less savage, the effective sympathetic man ; and through
him she is indirectly showing to her less favored children
the mercy that she does not show directly.
Poverty and disease exist only because Nature (in-
cluding the man she has evolved) has not yet worked
entirely beyond them. Nevertheless, great numbers of
people have vowed not to help in the improvement, but
to be poor all their lives, because they thought it for
their own good, and for the good of their fellow men;
and some of them have even gone so far as to try to
make themselves sick by fasting and vigils. We can
hardly assume that there was not any truth whatever
in their ideas. But good people often do very foolish
things because they get too enthusiastic over one part
of the truth. The part here is that poverty and sick-
ness, being natural, must have some good resulting from
them, but the good is in overcoming them, not in seek-
ing them, as the ascetics used to. Some of the noblest
efforts and wisest discoveries and greatest advances of
the race have been made in overcoming poverty and
sickness. In fact, the history of civilization has been
an overcoming of disadvantages. Most of the intelli-
gence and morality of mankind have grown up through
conquering the hard conditions of Nature. All early
men were savages, man has become civilized only
through the conquests he has made. Through over-
coming Nature's difficulties, he has become brave and
strong; through hard study of her secrets, he has
become wise; and through helping others who would
not have needed help if there were no poverty or sick-
ness, he has become benevolent.
Poverty and sickness, then, do tend to develop use-
fulness, tho most modern men prefer to have their
usefulness arise from different experiences, even at the
cost of disagreeing with the early saints.
CHAPTER IX.
PROPERTY AS CAPITAL.
The sources of property rights we have so far consid-
ered, are Land (including, of course, its rent), the wages
of ordinary Labor, and the profits of Ability.
That government should protect all those property
rights — in rent, wages and profits, is a matter-of-course
too simple to discuss.
Equally of course, that government
lufed^ovem-" should protect any one honest dollar of
nent's protection rent, wages or profits more than any other
as wages. honest one, would be absurd. If a laborer
does not use up all his wages, that it should be govern-
ment's duty to protect his rights in only the portion
which he uses up, would be an idea twice as absurd as
the other. And yet many people unconsciously enter-
tain that idea. Of course if government should protect
a man's enjoyment of his wages, it should protect his
enjoyment of his savings.
If, instead of wasting his surplus wages in expensive
food or drink, or unnecessarily fine clothes, he sees fit
to save them and add to the permanent wealth of the
community in the shape of, say, an addition to his
house, or to add to the amount of cultivated land by a
garden, it is plainly government's duty to protect his
rights in them. To support the contrary would be even
more ridiculous than to support either of the previous
suppositions.
. If then, instead of enjoying his savings himself by,
say, adding to his house or garden, he sees fit to provide
116
§ i35]
Property as Capital.
117
employment for other laborers, say by building a little
factory and stocking it with tools, to doubt that govern-
ment should equally protect his rights in that, would be
the most ridiculous of all.
Supposing, then, that instead of stopping at saving
enough to build a little factory, he were in time to save
enough to build a big one, or even a railroad, it is self-
evident that government should protect his rights in that
too. To question it would be. to say that government
should protect a man while he is being of comparatively
moderate usefulness, but should desert him as soon as
he begins to be of great usefulness.
Now we have just been going over the ground through
which most rich men have become rich. The men who
are constantly grumbling that the "poor man stands no
chance" keep their eyes tight shut to the plain fact that
the vast majority of rich men started poor, and got rich
by the ways we have been describing. Not one in ten
of them inherited his money, and when he did, his
father generally began poor, and got it in the ways
described.
Yet they seldom saved all they made use
134. A man who of. As soon as a man shows that he has
can hfreTt?ney the ability to make, save and use a little
money, other people who have saved are
glad to lend him more. Money seeks just such invest-
ments.
Money thus saved, and employed in the instruments of
production, is called Capital.
The usual forms of capital are land —
consisufn. cap,tal where used for a farm, mine, factory, store,
railroad, or anything else that produces
or saves wealth; all tools used in production — includ-
ing machinery, vehicles and animals; all stocks of goods
for sale; and all wages and other expenses to keep the
industry going before the product is sold.
We first named the essentials of modern industry
as Labor, Ability and Land. But as we have gone on,
we have indicated many things besides land — such as
n8
TIte Protection of Rights.
[§i35
buildings, raw material and machinery, as equally
essential. Yet altho those things eventually depend on
the land, it is much handier to group it with them
under the name of Capital.
If capital is in land, it gets its returns in Rent. Even
if a man works his land himself, what he gets more than
the equivalent of wages, can fairly be called rent. If
R nt an en^erP"ser mres tools, what he pays for
* en ' them is often called rent. If instead of
hiring tools or land, he goes to a man whose savings are
in money, and hires that, in order that he may buy
land and tools to give workmen employment, the name
given to what he pays for the use of the money depends
upon whether he turns over a share of his profits,
whatever they may be, or pays a fixed price.
Inte t ^ pays a fixed amount for each dollar
' n eres and each day's use of it, he pays interest.
There is no reason why, if a man keeps his savings
ready to hire to others in the shape of money, he should
not get paid for the use of them, just as he is paid for
the use of them if he puts them into land or tools. To
deny a man's right to interest on his money is as absurd
as to deny his right to rent for his land, or hire for his
horse or boat or tools. Yet the world long held the
opposite opinion. But the world has had to outgrow a
great many foolish opinions, and will have to outgrow
a great many more.
In the good old times when people were
• $ury« even more foolish than they are now, all
interest on money was called usury, and the taking of
usury was considered wrong, and it sometimes is still.
But only interest above the legal rate is called usury
now, and there is not even a legal rate everywhere.
In some places people can agree on what rate they
please, but the law generally provides a rate that shall
apply to a debt in dispute or otherwise delayed, until it
is settled. Yet in places where the law fixes a rate which
138 (a) Law* can never ^gally be exceeded, such laws
against a are not generally observed. They are
useless. simply ridiculous survivals of the old
§ i3« b]
Property as Capital.
119
superstitions that prevailed before people knew much
about money.
About the end of the nineteenth century, public
opinion in New York had grown sufficiently enlightened
for the passage of the following law regarding Interest.
It leaves many, perhaps most, of the large transactions
subject to the law of supply and demand, while it con-
tinues the alleged but illusive paternal policy of pro-
tecting the man not up to large transactions.
41 The legal rate is six per cent. A corporation cannot plead
usury as a defence. The taking or agreeing to take dhy greater
sum renders the contract or obligation void, except in bottomry
and respondentia bonds and contracts. For advance of money
of not less than five thousand dollars, payable on demand: ,
made upon warehouse receipts, bills of lading, certificates of
stock and of deposits, bills of exchange, bonds, or other nego-
tiable instruments, pledged as collateral security for such re-
payment, it shall be lawful to receive or to contract to receive
and collect, as compensation for making such advances, any
sum to be agreed upon in writing by the parties to such trans-
action."
Tho the legal rate in New York is six per cent., the
actual rate in Wall Street is generally from two to four
per cent., but sometimes, for a short pinch, from one
hundred to two hundred per cent. The law, in New
York for instance, (except as modified above,) nominally
punishes taking more than the legal rate, by canceling
the debt; but practically does not punish at all. The
most law-abiding citizens do not call upon the law,
though it would enable them to get rid of their debts:
for if anybody did, he would not have to pay back the
money borrowed. But a man's promise to pay is a
more sacred thing than a worn-out law, and a man who
acted to the contrary would find it hard to borrow the
next time he might be in need.
A large part of the world has already acted more
freely than New York upon these opinions about the
mm m^p^^^V of USU1T ^ws. In England
ing from eniiqht- there has not been a usury law for over
ened communities. thirty years> &nd {n Qur mQTe progressive
states, people can contract for any rate they please,
120
The Protection of Rights.
without collateral, tho a legal rate is always provided
in case money lying in dispute is ultimately recovered.
The useless and ridiculous law is kept on some of our
statute-books, however, because the majority of voters
are too stupid to get trusted with much money, or know
much about money, and they have an idea that a legal
rate of interest enables them, if they can borrow at all,
to borrow lower than they otherwise could.
The fact is quite the reverse : they gen-
to%oh?8™don erallv. have to Pay more than the market
• rate, in order to compensate the lender for
the risk of their appealing to the law to release them from
paying back. The best opinion now is that usury laws
are a disadvantage to everybody, and to the poor man
most of all. The poor man nearly always has to pay
the legal rate, while the rich man may not be paying
a quarter as much; and when the man in good credit
can get all he wants at the legal rate or below, it is
generally impossible for even the deserving poor man
to get it below the legal rate, and often impossible for him
to borrow at all. If there were no usury laws, he would
generally be able to get money at somewhere near the
market price.
Yet in backward and ignorant countries, clever
usurers sometimes despoil the stupid people frightfully.
Such people might be better off if paternal governments
would give them usury laws. But a people professing
(rightly or wrongly) the ability to govern themselves,
should in consistency profess to be able to make their
own contracts.
139 Needs for Now let us take up a new phase of
associating capital. We have seen (100, 103) that for
Capital. community to get the benefit of
"the great industry " through cheapened product, it is
necessary to do things on a very large scale, and there
are some things that it is not worth while to do at all
unless they are done on a very large scale — railroads
and steamships, for instance. If each man in the civi-
lized world who is rich enough, were to build a railroad
§ 140 a]
Property as Capital.
121
or a steamship or a great factory or some other great
convenience, there are probably not half enough rich
men to give us all the railroads and steamships and
similar great enterprises that are needed. Even if
there were enough rich men, it would not be wise for
one to put his whole fortune into making one or two
such things : it is never wise to put all the eggs in one
basket. In fact, there are some very important enter-
prises, such as new inventions and mines and explora-
tions, and other uncertain things, into which it is very
unwise for anybody to put more than he can afford to
lose.
The capital is generally obtained for enterprises too
large or too uncertain to be undertaken by one man, or
by a partnership of two or three, by a great number
, AI of people — sometimes thousands, putting
140. Incorporations. . , • r , , , j , r
v their money together, and electing some of
their number to manage the enterprise. Judge Bald-
win * says that probably four fifths of the business
capital and of the industry of the country are now rep-
resented in such associations.
But, it may be asked: if a hundred men combine to
do a business, how would anybody want to trust them,
when to collect, say, a hundred dollars, he might have
to sue a hundred men for a dollar apiece? The law
has met this difficulty by providing that, under proper
circumstances, a number of persons may be incorporated
into one fictitious person called a Corporation, and that
the corporation may be sued, or may sue, or do business
in almost any way, just as if it were a single person.
140 (a). As affect- Moreover, if men go into business to-
ing liability. get her as partners, no matter if each puts
in only a tenth of what he has, any one of them can
run the firm into debt so that all might have to pay
out all that they have, and this while all are attending
to the business themselves every day. Therefore, if
an enterprise were proposed to be owned by a thousand
partners whose interests do not average more than a
* "Modern Political Problems." ^
122
The Protection of Rights.
[§ 140 a
thousand dollars apiece, apparently nobody would be
foolish enough to take an interest, when any one of
the thousand partners might run the concern into
debt so as to use up the whole fortune of any of the
others. Yet people have often been just that foolish.
A very conspicuous case is that of the Glasgow Bank
which failed in the seventies: partners who were not
interested more than a hundred or two dollars — some
of them women and old people and children, were de-
prived of that and of all their other means of support,
to pay the bank's debts.
After such experiences, people take the risk of these
big enterprises only because laws have been made that
the members of corporations observing certain rules to
protect the public against bad management, shall not
be liable for the debts of the corporations beyond the
amounts they have invested.
HO (b). Perpetu- In a partnership, if a partner dies, the
partnership usually comes to an end ; and
(unless careful arrangements have been made to the
contrary) the business must be sold, even if it is bought
in by the other partners and the family of the deceased.
But if there are a thousand people in a corporation,
it is not necessary to sell the whole thing out whenever
any one of them dies. The law provides that corpora-
tions shall not come to an end when one of the con-
tributors dies, but that his share shall go on, without
being entirely separated from the rest, to those who
inherit from him.
140 (0). stocks When there are numbers of subscribers,
and bonds. the shares are kept track of by entering
all the subscriptions in a book, and issuing for them
numbered certificates, called shares of stock, generally
one share for each hundred dollars subscribed.
Preferred stock is a separate portion of the total
stock, which shall be entitled to a certain amount of the
divided profits (dividends) before any are paid on
the remaining, or "common", stock. Sometimes the
dividends on preferred stock are "cumulative" — that
is : before any dividends can be paid on common stock,
§ 140 c]
Property as Capital.
"3
payment must be made for any deficiencies of previous
years below the rate prescribed for the preferred stock.
When a corporation wishes to borrow for a con-
siderable time, it generally executes a mortgage (83)
to some one party, who sells out the claim secured by
the mortgage, in portions generally varying from fifty
dollars to one thousand dollars, according to circum-
stances. These portions are expressed in documents
under seal (82 d) which are called bonds (8*3 a), and are
sold to anybody who wants them. Many of ours have
been bought by Europeans: in other words, the Euro-
peans have lent us a great deal of money.
The chief differences between stocks and bonds are:
(I) a certificate of stock declares that the holder is part
owner of property, while a bond declares that the holder
owns a claim against a property, which claim is fixed in
amount, and must be satisfied before the owners of the
property can benefit from the property; (II) bonds
have a steadier value than stocks. A piece of property
need not pay more than a hundred cents on the dollar
upon any bonds it may be liable for, and it must pay
that much if it can, and it generally can: for people are
not apt to take bonds on a piece of property for more
than a part of what it is worth. But if it turns out to
be worth barely the amount of its bonds, the stock-
holders get nothing. On the other hand, if an enter-
prise is enormously successful, the bondholders get
only the amount of their bonds, and the stockholders
get all the rest.
Stocks and bonds are both, in effect, claims against
property, either real or personal, tho the law regards
both the stocks and bonds themselves as personal prop-
erty.
People sell stocks and bonds just as they do any
other value, and the places where those of the most
prominent companies are bought and sold are called
stock-exchanges.
The prices of stocks at the exchanges become guides
in settling many civic questions. When business is
expected to be good, the prices of stocks are high,
124
The Protection of Rights.
[§ 140*
because the enterprises they represent are expected
to divide good profits — pay good dividends. Therefore
when a great question like a political campaign or a
war is before the people, the prospects of one side or
the other will affect the price of stoclcs. So when a
rise in stocks generally attends the good prospects of one
side, that must be the side which makes for safety of
property, activity of business, and high wages.
But by no means all the stocks an& bonds of cor-
porations are dealt in at the stock-exchanges. Only
those which the managers of the exchanges think of
enough importance — probably not one in ten thousand —
are put on their lists.
The small corporations are unfavorably affecting the
craving for land that some philosophers think the wisest
of all economic desires. Laborers are not trying to own
their own homes as they used to, but are putting their
savings more into all sorts of incorporated enterprises.
To sum up: the principal benefits conferred on the
community by corporations, are that they make it
possible to cheapen product by the fullest develop-
ment of "the great industry ", to carry on enterprises too
great or too uncertain for private capital, and to secure
interests in business for the benefit of the owners' heirs.
Another advantage is that their stocks and bonds
are often good investments. Yet while many are,
many more, perhaps, are not. The bonds of the suc-
cessful ones are very convenient investments for people
who have a little more money than they want to put
in a savings-bank, but have not money enough to buy
a piece of land worth taking care of, or a mortgage
on one. Those sold on the exchanges are also good in-
vestments for funds that the owner may want to use
at short notice, which is a consideration of vastly more
importance than is generally realized. Sometimes even
rich men get into trouble because their wealth is in prop-
erty that cannot readily be sold.
iai 1 ™ There never was a greater mistake than
141. Large cor- 0 ,
porations not all the very current one that the bonds and
owned by the rich. stocks of tfae corporations are all owned
§143]
Property as Capital.
"5
by rich people. The general course of the money of
people of moderate means, unless they have it invested
in their own homes and shops, or building and loan
associations, is something like this: a great deal of
it goes directly into the bonds or stocks of corpora-
tions, and much goes into the savings-banks; the sav-
ings-banks gather up the little deposits and lend them
out in large amounts, sometimes on the bonds of cor-
porations, but generally on mortgages on land; and the
sums thus borrowed are very largely invested by the
rich in the corporate enterprises which they organize.
So the fact is that, at bottom, the corporations are really
largely * owned by people of very moderate means —
especially by widows and orphans who cannot go into
business or manage real estate.
142 Irres onsl- ®° mucn ^or the advantages of corpora-
biilty of corpora- tions; now there are elements of disad-
t!ons' vantage. The chief one is that, as the
liability of shareholders is limited, and as, in the large
corporations, it is an impossibility for many shareholders
to keep close oversight, there is great danger of reckless
and selfish management. This danger also weakens the
credit of the smaller corporations.
143 Very small There are too many unimportant little
corporations undo- corporations, not only because of the
tirabie. advantages over partnership already ex-
plained, but also because some time ago people thought it
made a business look big to call it a company. But that
has been overdone: the financial irresponsibility of
the very small corporations generally makes them a
nuisance; especially as many are started for the ex-
press purpose of defrauding by the pretentious name of
a "company", and without personal liability beyond
the stock owned. The privilege of incorporation
should not be given below, a considerable amount of
capital. The evil might be apt to correct itself,
however, through the growing unwillingness of people
to trust them, if the gull-crop did not seem inex-
haustible.
126
The Protection of Rights.
[§ 144
144. Why Labor Labor generally regards corporations
hates corporations. with extreme disfavor. As corporations
do not die, and generally consist of so many people
that they are very unlike a single human being, it
has become a proverb that "corporations have no
souls ". Moreover, as corporations run most of the
very large industries, they are always most prominent
in the great labor struggles, and therefore many people
have come to dislike them, and the tendency is to tax
them unduly. Another reason why they are over-
taxed is that in order to limit their liability, they have
to publish some of their accounts, so that people will
know how far to trust them; and the tax-collectors
are thus better able, as they are generally disposed, to
tax them for all they are worth. They cannot do this
as readily to private concerns that do not have to pub-
lish their affairs.
This unfriendly attitude toward corporations, is to
be deplored when it extends to corporations con-
ducted fairly: and those large enough to cheapen pro-
duction through "the great industry" generally are.
So far as they are unjustly interfered with, their ability
to cheapen things is impaired.
145. Danger of There is danger in their being very
Monopoly. large, because they are apt to become so
great as to run into monopolies. The word monopoly
comes from two Greek words meaning "one" and "to
sell", and it means anything which has only one owner
to sell. He of course can ask what he pleases, and so
long as people will buy, his price is not limited at all
by the cost of production.
Until Parliament passed the statute against monopo-
lies in 1624, they had been largely given to royal
favorites. American courts have always held them
illegal except for franchises for the public benefit, which
can fairly be considered to include patents and copy-
rights, and both of these are specially sanctioned by the
Constitution of the United States.
CHAPTER X.
COMPETITION, MONOPOLY AND INDUSTRIAL AND LABOR
TRUSTS.
146 Rights of The objection to a monopoly is that it
ind'to competl- deprives the public of its rights to Com-
t,on• petition.
There are two principal rights regarding competition.
They might be called the right of Competition, and the
right to Competition. Each individual has the right of
competition — the right of competing with other indi-
viduals; and the community has the right to competi-
tion— to the reasonable prices and improved qualities
of goods and service that competition brings.
The right of individuals to compete, is not a right that
all are eager to claim. Lazy people do not want to com-
pete, or rather do not want to have anybody
tuy ?nad1tubptfid.he compete with them; they hate the very
name of competition, and want the state
to try to abolish it, because it forces them to work
harder; and incapable people hate it because it drives
them to the wall. Yet if they were wise enough to look
at the question as consumers, they would see the whole
active and able world competing to make things better
and cheaper and more various for them.
To illustrate the benefits of competition, suppose that,
in a primitive community, milk is taken around in goat-
skin bags. If somebody comes along with
trat'ed^nefiU ,,,US" a tin can> everybody will get milk from him
(a), indomettie until the other dealers get tin cans. Then,
convenience, . - . ° , . . . . '
suppose somebody else brings it nicely
measured in bottles with spring stoppers, instead of
127
128
The Protection of Rights.
[§ 148 cl
slopping it into each customer's pitcher amid the dust
and heat of the street ; pretty soon everybody will take
from the bottle man until all dealers supply bottles.
In this way competition will have supplied the com-
munity with good milk in neat bottles, instead of milk
apt to sour, from goat -skin bags. But if the early dealer
had kept a monopoly, the people would still be getting
it from goat-skins. To carry the illustration a step
farther: in some parts of the country, the milkman
sits in his cart and yells or rings a bell, for the customer
to come out to him; in the other regions, where compe-
tition is lively, he jumps out himself and carries the
milk in.
, + To illustrate competition in means of
148 (b). h trawl. . , . r ,
travel: there, as in everything else, new
methods are constantly driving out old. The railway
competed with the turnpike road ; steam, the cable car,
the trolley and the automobile are competing with the
horse; and the bicycle competes with mere walking.
148 (0). in com- Perhaps the greatest revolution effected
menial traveling, competition in recent times, is the
system of commercial traveling. A generation ago
every considerable dealer outside of the great cities
had to go to them at least once or twice a year to find
out what was going on in his line, and to buy a large
stock of goods ; now nearly everything is brought to him
by samples. Moreover, as the travelers are constantly
coming to him, he need not carry nearly as large a stock
of any particular thing, and can therefore have a
variety vastly greater and much fresher, and up to the
latest improvements. Farther: in old times when the
country merchants went to the cities on their regular
buying expeditions, they were very apt to get led astray,
and leave a good deal of money that they brought home
nothing to show for. Under the new system, if they
go to the cities as often as they did before, they certainly
do not stay as long at a time.
The army of commercial travelers with which com-
petition has crowded the country, costs a great deal
more than the old system of dealers going to the cities.
§148*] Competition, Monopoly, Industrial Trusts. 129
But it costs not nearly as much in proportion to the
amount of goods exchanged : the risk of unsalable stock
is so much lessened, and the chance of getting the best
and freshest thing for the money is so much increased.
And all this has made it possible to supply more things
and newer kinds of things for the same money. That
has made new manufacturing industries possible, and
increased the demand for labor, and the supply of con-
veniences, in very many ways.
In addition to the more direct benefits of this system
of competition, commercial travelers have improved
traveling facilities in general. They enable the rail-
roads to give better and wider service than they other-
wise could, and they have also led to a great improve-
ment in the country hotels. After the stage-coaches
went out, and before the commercial travelers came in,
the country hotels got into a very bad way.
Competition greatly promotes the steadi-
tfonif pric*!u,a~ ness of business. It regulates prices, and
tMdUiuppf^!and makes their rise and fall so gradual that
people can make some preparation for
either : when goods begin to be abundant, sellers
begin to compete by lowering prices; and when goods
are becoming scarce, buyers begin to compete by
offering higher prices. To put it in more scientific
terms: prices are regulated by demand and supply.
Prices are steady when the demand for goods or labor
is just equal to keeping them in use at the prices asked.
That equality is technically called the Equation of
Demand and Supply. When the equation is disturbed
by increase of supply, competition in lowering prices
increases demand until demand and supply are again
equal. When the equation is disturbed by increased
demand, competition bids up prices and chokes off
demand until demand and supply are equal.
148 Minor That "Competition is the life of trade",
exceptions. js an pr0verb : it is of great benefit in
keeping business active, and men at work.
Yet it may not be quite fair to say that rise in prices
is always started by the demand of competing buyers.
The Protection of Rights.
[§ 148*
It always is in the great auction exchanges for stocks,
produce and real estate, where probably most of the
world's business is done. Tho of course private dealers
do not merely mark up prices of staples to follow the
great exchanges, but mark them up also on other
articles when they find their stocks running short.
149. Evils In Every good thing can be carried to an
competition. extreme, or used in a harmful way — in
fact, some people think that all evil tendencies are
merely good ones misused: accordingly, competition
is sometimes harmful. It is often called harmful in
driving out of business men who lack ability. But that
is not harmful, even to the man himself: if an unable
149 (a), suponsa- man tr*es to conduct business, he is
ing incapacity not always keeping his customers waiting,
among them. making mistakes, unable to furnish good
goods, or any goods at moderate prices (except as his
bankrupt stock ultimately gets into the bargain-stores) ;
and he is under constant temptation to cover up his
incapacity by dishonesty. His custom goes, of course,
to more able men. Yet there ought to be a place in
the world for a man whom Nature has not blessed with
business ability: some of the best of men have lacked
it. And there is a place for him under the guidance
of the man who has ability; and the man without it
is much better off there, than in stumbling along by
himself, if he only has the sense to know it; and the
community is vastly better off for his being there.
149 (b). Nor fa The notion has arisen that competition
poverty. {s a cause of poverty, because every man
who is not conducting business himself, and sees rich
men conducting it, thinks that if he were conduct-
ing business, he would be rich too. Every mechanic in
the shop blames competition for preventing his being
boss; whereas if he were, in the vast majority of cases,
he would soon be bankrupt and poorer than he is, and
the rest of the men thrown out of employment. The
minority who are really able enough to be bosses, are
not many of them prevented by competition from
§151] Competition, Monopoly, Industrial Trusts. 131
becoming bosses. They generally do it in good time.
149 <c). But waste- Yet competition is very often wasteful,
fulness is. an(| as jong as there are foolish men, it
very often will be. But as to its driving a man out of
business, that is not usually because of waste (unless
it is his own waste), but because another man can make
a profit by supplying the community at rates lower than
the first man is able enough to. But nevertheless, there
are plenty of instances of competition being carried to
the point of waste on both sides — for instance, where
advertising or drumming (both excellent things within
limits) is carried to excess, or when a man has or thinks,
he has more money than his competitor, and does
business at a loss so as to get the other's customers
away, expecting to make up his losses after his com-
petitor is driven out of business. In this way, before
people learned better, the steamboats in the West and
Southwest sometimes carried passengers for nothing,
and even threw in their meals. True, the public got the
150. Public seldom benefit of the competition, but only for
gainer by wasteful a time. After one party was driven out,
competition. &nd the monopoly held by the other> the
monopolist could put prices where he pleased. Such
business is not really competition, but an effort to kill
off competition. Legitimate competition is really
economical.
But leaving out of consideration persons who are
ruined by wasteful competition, if the public has been
accommodated at extra-low prices, they might be no
worse off if for a time they have to pay extra-high ones,
were it not that they must pay them long enough to
make up for the waste, and pay a profit on it. More-
over, unsteady prices unsettle business: nobody knows
what to count on; and prices lower than they ought
to be, get people into wasteful ways that do not stop
when prices get normal again.
151. Cooperation One is tempted to believe that the whole
and competition, community would be vastly better off
in wealth and peacefulness if competition could be re-
placed by cooperation — if instead of all struggling
132 The Protection of Rights. [§ 151
against each other, we were all helping each other. But
on considering how it is to come about, one is, as usual
when venturing very far beyond experience, mired in a
tangle of paradoxes. Competition consists largely in
the lowering of prices. This, instead of proving com-
petition a bane, shows it to be for the benefit of the
public. But on the other hand, we have seen that as
regards the competitors, competition is often attended
with great waste in drumming, advertising and ruinously
low prices. Suppose then that the men in a particular
trade get together and agree that they could make more
by helping each other than by fighting each other; and
so make elaborate agreements to regulate prices and
limit advertising and drumming, or combine all their
businesses under the regulation of a few of the principals.
This has been done in the trusts. But
152. Capital trusts, while, under them, the members of the
trade get the benefit of cooperation, the
public loses the benefit of competition. Here is our
paradox: apparently we could benefit by helping
each other, but as soon as we try it in the business
world, somebody gets hurt. Yet it is true that with
less " human nature", the trusts could both lower
prices and increase profits. Even as matters are,
it is by no means certain that they do not.- It is very
certain that during the phenomenal advance of prices in
America in the first half-dozen years of the twentieth
century, oil, the most trust-guarded of all commodities,
advanced among the least. But advances, whatever
they may be, do not negative the fact that with less
"human nature", trust-economized goods would be
the cheapest, and would prove cooperation better than
competition. So we can keep on hoping for a co-
operative world, but it is destruction to try to realize
it any faster than human nature makes the realization
practicable.
Mr. Bellamy expounded the notion of the benign
trust in one commodity, into a benign trust in all, its
functions to be conducted by the state. The benefits
that he imagined from such a system were so great
§152 a] Competition, Monopoly, Industrial Trusts. 133
that he pictured the average family as living, instead
of at the present average of six or seven hundred dol-
lars a year, at an average of some thirty thousand. The
benign trust alone is probably far beyond the range of
human vision; farther still is the degree of political
capacity essential to the public administration of one;
farther still, the political capacity to administer all;
and when, if ever, these remote ideals have been realized,
they wi}l need to be reinforced by human control of
natural forces, to a degree that still farther staggers
imagination, before the good things of this life can be
multiplied the fifty-fold that many dreamers fancy
would result from an even distribution of the present
product.
But to come back to the world we know. A trust, if
properly conducted, not only does away with wasteful
competition, but it has more of the advantages of "the
great industry " than smaller individual businesses could
have: it is getting to be an old story that the large
production is the cheap production.
152 (a). Their Moreover, the trusts save expenses by
economy. using fewer managers, clerks and buildings,
as well as by diminishing traveling and advertising.
Where the businesses to be united in the trust are con-
ducted separately, many of these items are unnecessarily
duplicated The trusts are said to have dispensed with
150,000 commercial travelers from '97 to '99, leaving
these men to go into industries supplying new comforts
and luxuries, or old ones cheaper.
But that economy is effected by driving people out
of work. That certainly is a benefit to the consumer,
if the trust gives him part of the saving, tho it is not
at the moment a benefit to the people driven out of
work. But new demands for labor are created by the
money saved through cheapened production : therefore
people thrown out of work to save that money, will
soon be at work again (331), and also benefiting, as
consumers, by the cheapened production; and the
drummers will soon be drumming again for new bene-
134
The Protection of Rights.
[§ iS2a
fits to the community,* or conferring them in other
ways.
If trusts do away with wasteful competition by crush-
ing out establishments that do not join them, there are
two sides to the question. Of course having so much
capital, and being able to produce so low under the
great industry, if it is their interest to keep prices
low enough, the trusts can run destructive opposition
to individuals: but on the other hand, after they have
driven off competition, they may get prices so high
as to encourage individual concerns to enter the busi-
ness.
As a matter of fact, these considerations have often
kept the profits of monopolies within bounds. The
weight of intelligent opinion is that but a small relative
proportion of the great fortunes has been made in
monopolized industries, but that most have been made
in industries open to anybody with the ability to con-
duct them.
The Census returns for 1900 declare that
^fyprofitabfe.ner" °f various ' 1 trusts ' ' or similar combinations,
one-third paid no dividends, and another
third paid dividends only on their preferred stock (140 c).
Notwithstanding the advantages hoped for by combina-
tion, the stocks of most trusts are, thus far, held in very
low esteem. This is largely because enormous amounts of
them were issued in excess of the actual values of the
properties combined in the trusts: in the whiskey trust,
for instance, about sevenfold. A very large share of
these excessive issues of stock often went to bankers,
lawyers, and other promoters, for their services in
effecting combinations. The great business depression
of 1903-4 was largely due to people who supposed
themselves rich in these stocks, having spent more
money than the stocks turned out to be worth.
On the other hand, some of the trusts, especially the
* The landlord of a favorite drummers' hotel told the author
late in 1900 that he had not noticed any difference in the aggre-
gate amount of commercial travel, despite the 150.000 men said
to have been thrown out by the formation of the trusts.
§ 152 d] Competition, Monopoly, Industrial Trusts. 135
older ones whose stock was not so much watered, have
been enormously profitable.
The portion of the total output of their respective
industries which has been controlled by the trusts,
has varied between sixty and ninety per cent. The
control of even sixty per cent, enables a combination
to regulate prices pretty effectually.
Probably the best brief summary of this important
topic is contained in Professor Seager's 44 Economics."
\52(e). Their mon- Inordinate prices in a trust are short-
SS2m//S1^m sighted for two reasons : first , the most prof-
itable business must generally be done
at prices low enough to enlarge custom; and second,
the only policy that justifies the existence of a trust,
is the use of its great facilities to serve the public at
prices that defy competition from smaller concerns. If
that is hard on smaller concerns, they can join the
trust, or go into some business to supply new con-
veniences or cheapen old ones. Where it is a question
of the public being served well and cheaply, it will
not do to be tender about the interests of an individual.
It is not meant from all this to intimate that, in
virtue of preventing wasteful competition between their
members, and producing by cheap processes, the trusts
are an unmixed good. As already said, they are in
danger of becoming monopolies, just as
vliid^not!"6' is an individual competitor choking off
another : and moreover, if there is no com-
petitor to force the trusts to keep low prices, they are
sometimes unwise enough to keep all the economies of
"the great industry" for their own benefit until they
find that course suicidal.
But, it may be asked, has not a man a right to set
his own price on his own property? If not, what
becomes of property rights? If one man or one cor-
poration or one trust has wealth enough to drive out
weak competitors and get hold of the entire supply
of any commodity or facility, is it not fair that people
who want it should pay the holder's price? Perhaps
The Protection of Rights.
they should if they let a monopoly get the control,
but that is just what they should not do.
Moreover, a man has not always a right to set his
own price on his own property : a man having a monopoly
of plenty of food has no right to demand
rfgtiti i doPnotyaiways a starving man's fortune for enough food
rights! monopoly to save k*m* There is a limit, then, to
property rights. As we have already
agreed more than once, there is a limit to all rights —
there is to everything we can conceive of, for that
matter: the state has a right, whenever the greatest
good of the greatest number requires it, to take a
man's property or labor at a fair price, or even his
life at no price at all, tho it usually pensions a de-
pendent survivor. The state, then, might properly
take an unjust monopoly's goods by eminent domain,
and sell them to the people at reasonable prices. But
<ti . A „ x , while the principle is right, the way around
154. State Control. . « f , 1 j i_ • \ r I-l j_ ^
is long. It would be simpler for the state
to compel the monopoly to sell at reasonable prices, or
better still, wherever the state can, to encourage compe-
tition. Laws have been enacted regulating prices of
such monopolies as railroads, water companies, etc., and
there are also two classes of what are generally called
anti-trust laws — one class providing that persons con-
spiring to unduly raise the price of goods, shall be liable
to the same penalties as persons conspiring to defraud;
the other, that corporations so acting shall lose their
charters, and trusts so acting shall be dissolved. Per-
haps these laws are yet too new to show whether there
is much good in them. So far, they have been found
very hard to enforce: partly because it is very hard
to get evidence that will fasten the guilt where it
belongs.
154 (ai By ami- Monopolies are against the common law,
Trust Laws. and [n ^0 the United States Congress (as
many state legislatures have done before and since)
reinforced the common law by a statute. The following
remarks on it in the Times of April 13, 1903, throw
much light on the subject — not the least, on the diffi-
§ 1 54° J Competition, Monopoly, Industrial. Trusts. 137
culty of getting advantages out of such laws. The
statute declared
"contracts and combinations in restraint of trade or com-
merce among the states to be unlawful. . . . Nobody had
any idea, not even its framers, that it would be used against
the railroads. . . . Up to the end of the year 1901 there had
been twenty-three suits brought by the government under
that Act. Only four of these actions attracted general public
attention. The Knight case against the Sugar Trust resulted
in 'the defeat of the government, the Supreme Court holding
that production was not commerce. The Trans-Missouri
Freight Association and the Joint Traffic Association were
actual combinations to fix rates, and the Supreme Court declared
them unlawful. In the Addyston Pipe and Steel Company
case, a particularly vicious conspiracy in restraint of trade
was broken up by the judgment and decree of the court. Taking
the twenty-tnree government suits together, the government
has lost eleven outright, has accomplished nothing in two, and
has won ten. Of the ten, four are against labor unions and
strikers. Of the remaining six, four are the suits above men-
tioned. Three other suits, that against the Northern Securities
just decided, the suit against the Beef Trust, and the suit
against the Federal Salt Company, have been brought since
the beginning of the year 1902. This makes twenty-six suits
in thirteen years — two a year. No wonder the agitators pro-
claimed that the law was a dead letter . . . the anti-trust
law has been fished up from its condition of nocuous or innocu-
ous desuetude, under which actions were brought at the rate
of two a year, to be made to-day the most conspicuous statute
in the land. . . . It is to be added, however — and the considera-
tion is an important one — that President Roosevelt's provo-
cations have far exceeded those to which his predecessors were
subjected. The Northern Securities combination was quite
the most flagrant, bold and undisguised defiance of the law
of 1890 which the country has witnessed. The Beef Trust
combination was also one peculiarly offensive to the popular
sense of right, a sense somewhat sharpened, no doubt, by the
high prices of beef which prevailed a year ago.
"The brilliant success of the proceedings against the Northern
Securities Company [a corporation formed to hold the stock
of several railroad companies, and so do away with competi-
tion between them. The government dissolved the corporation.
It is not proved, however, that the result cannot be accom-
plished in other ways], it is hoped in some quarters and feared
in others, will inspire the Administration to an enthusiastic
pursuit of other offending corporations. There are plenty of
them. Not only the coal-carrying roads, but corporations like
the New Haven Road, with its control of the Sound steamboat
lines; the Pennsylvania Railroad, which in one way or another
I3«
The Protection of Rights.
[§i54 <*
controls the Reading, the New Jersey Central, and the Balti-
more and Ohio; the Lake Shore, which controls the "Nickel
Plate", and dozens of other railroad systems, small and great,
lie open to the assault of the Attorney-General under the ex-
ceedingly broad principles of the Northern Securities decision.
There is no occasion to prove that they do restrain trade or
fix unreasonable rates. The court says that is not the question;
and the Supreme Court itself has ruled that the possession of
the power to do the unlawful acts is all that it is necessary to
prove."
The law has been invoked several times since the
quoted editorial was written, especially regarding ice
trusts, meat trusts, and railroad rebates, with the
punishment of some offenders, and probably the dis-
couragement of some abuses into which, without the
law, the trusts both of capital and labor would have
ventured. All newspaper readers know the details: so
it is hardly worth while to state them here. More-
over, Congress has passed the Railroad Rate Bill, whose
efficacy is yet to be tested, and the Meat Inspection Bill.
154 (b) capita/ While in a case that has come under
Trusts and Labor my knowledge, a number of manufacturers
ru8t8' of exceptional standing were advised by
their counsel not to agree on rates and prices, for
fear they would be haled into court for violating the
anti-trust law, the Sherman Interstate Act, and the
Donnelly Act, the members of the trades-unions all
over the country are agreeing to keep up prices, with-
out anybody paying any attention to the illegality
of it; and all this despite the laboring man's standard
claim that he, of all men, is the constant victim of
injustice!
So far as monopolies are controlled, as they nearly all
are, by corporations, the state has a right to regulate
them, because the corporations are made by the state.
When the state confers on a corporation the privileges of
limited liability, the right to sue and be sued as a unit,
and the right of continuous association of property in-
terests in spite of the death of a member, the state has a
right, of course, to name the conditions on which it
confers the benefits — the duties which must attach to
§154*] Competition, Monopoly, Industrial Trusts. 139
the rights — and prominent among these conditions, of
course, are defences against misuse of monopoly privi-
leges.
\S\(e). By fixing Probably the most frequent instance of
prices. the state thus making wise conditions, is
the regulation of railroad rates — street-car fares in
cities, mileage rates on steam roads, and freight rates
between points where there are not competing roads.
It might be wiser to force the roads to keep their prices
down, by setting a limit to the profits they shall divide :
for an arbitrary price might be less than they could
continue business at. But a danger in limiting profits,
is that the roads would prefer to earn them by a small
and easy business at high prices, rather than a larger and
more difficult business at low prices; whereas, if they are
permitted to make all they can, they may often widen
business by rates even lower than those which would
give them the profit arbitrarily fixed for them. A
road might make as much money by running a few
trains at a dollar a head, as by running more at seventy-
five cents, and prefer the smaller trouble and wear of
the few trains at a dollar. Yet it might make a great
deal more money by running still more trains at fifty
cents, but be restrained because not permitted to earn
more than it could at a dollar.
154 Byemi- One of the best instances of wise state
nent domain. interference with monopoly abuses, by
direct exercise of eminent domain, is at Niagara Falls.
The neighborhood used to be one of the plague-spots of
the earth — covered with unsightly and ill-arranged
structures, and infested by extortionate hackmen and
cheating fakirs of all sorts. The state took the land
by eminent domain, made a beautiful park of it, and
has everything well managed at reasonable prices.
154 (e> Danger of sucn state interferences may become
government tyrannical and foolish. Corrupt politi-
tyranny. cians may interfere to extort blackmail,
and at best the state cannot know all sorts of business,
and should be very slow to interfere with, or itself
conduct, any.
140 The Protection of Rights. [§ 1 55
155 Effect of eat ^e e^ect °* &reat corporations and
aggregations of M trusts on legislation is much discussed.
Xff °" Legl$" They can afford to bribe more than smaller
on' private concerns could, and get all sorts of
"protective" laws to shut off foreign competition, so
that they can impose upon the public the highest rates
the public will pay; and they can often make most
money by selling to a few at high prices, and forcing the
many to go without. The Sugar Trust is generally
believed to have bought three senators of the United
States in the Fifty-second Congress, and prevented
the passage of a reformed tariff bill which that Congress
was specially elected to pass. Tho that Congress did
pass a reformed tariff bill, it was a very lame and
doubtful one, largely owing to the obstruction of the
suspected senators. The reform did not reach the
sugar.
156. Socialism as It has been urged that we could get rid
a remedy 0f the corruption if the state itself ran
all the industries — that we could get rid of all the trusts
by making the state itself a trust that should include
them all, as proposed by Mr. Bellamy; and one argument
is that then there would be no one interested to buy
votes. But examined, this is simply a claim that it
would be better if the politicians were running the
industries themselves: so they could vote to favor
their pets without being bought — so that instead of
having the corruption funds of the corporations and
trusts ladled out to them as now, they would hold the
ladle themselves. Tho nominally the politicians would
be working the industries for the state, and not for
themselves, we have seen enough of the way they are
apt to "work for the state and not for themselves".
Moreover, business will be managed much better if
the manager is working for his own benefit, and ac-
cording to his own ideas, than if he is working for the
state, and according to its own ideas — even if there
were any way of keeping the state's ideas fixed. But,
it is urged, the manager of a corporation or a trust
§iS7] Competition, Monopoly, Industrial Trusts. 141
is not generally working for himself; yet he generally
owns a large share, while if his concern belonged to the
government, he would not own a millionth part.
157. The only Tha only effective policy, then, against
real remedies. the corruption of legislatures by monopo-
lies, seems to be to do our best to see that only incor-
ruptible men are elected to office, to perfect our laws,
and to educate people so that there will be more
chance of the corporations and trusts being managed
by men who will develop the good side for the benefit
of the community as well as of themselves. The state
must continue to make corporations and permit trusts
in some form, while at the same time it must make laws
to protect people from them; and it must do this for
the same reasons that it encourages the rearing of
citizens, when it has to make laws to protect itself
against bad ones — corporations and trusts have their
good sides just as people have.
Probably the competition in drumming and advertising
has done as much as anything else to lead, to the forma-
tion of the trusts. The success of "publicity" in some
businesses peculiarly responsive to it, has recently led to
a wasteful mania for it, and extravagant efforts of dealers
to outdo each other in it, even regarding things, like
books, of inevitably limited demand, and touching which
people make up their own minds, more or less under
expert advice. Regarding this waste and some others,
Professor Cooley indicates a remedial influence outside
of the trusts. He says * that competition grows with
capital and industrial freedom, and that it declines as
intelligence and morality on the part of the buyer grow.
These conditions of growth are plain, on a little reflec-
tion, but the reasons for decline may justify a little
explanation. When a man knows good from bad,
and follows the good when he sees it, he will be apt
to make up his own mind, and it is therefore a com-
parative waste to send a drummer or a tempting adver-
* In his remarkable pamphlet on Competition, published by
the American Economic Association.
142 The Protection of Rights. [§ 157
tisement after him. Moreover, and doubly important,
if he is an honest man in a position of trust, like that
of a commissioner of public works or education, he
is not going to choose subordinates or material on ac-
count of anybody's "pull".
Another hopeful influence that seems likely to promote
the advantages and suppress the disadvantages of com-
petition in the future, is the growing recognition of
broad self-interest and of civic responsibility. Already
there is here and there a man at the head of a great
combination who, like Pullman or Wanamaker, amid
all the errors of the struggle, shows some realization
that the best profit lies in serving the public well and
cheaply, and has some sense of duty to his fellow
men.
157 Anittu*- Probably there is justification — double
tration. justification as it recalls the bright exam-
ple of a good man, for a more specific illustration that
success is not dependent on the kind of competition
that excludes human sympathy. I have the best
occasion to know that some forty years ago, a man
very young in the publishing business had occasion
to call, on some purely commercial matter, on the
late Mr. Charles Scribner, the founder of the great
house, to whom the young man was barely known by
name. As the visitor was about leaving, Mr. Scribner
said: "When I see a young man beginning business,
it makes me recall my perplexities when I began.
It would have been everything to me if I could have
taken them to some more experienced man. I should
be very glad if you care to bring yours freely to me."
There has never been any indication that the great
business founded in that spirit is any the worse for
it, while the kind suggestion could have brought
nothing but good to the " competing" (?) business.
Certainly if that spirit actuated all the members of
each trade, the world would be a great deal happier —
and richer: the money — or let us say the force, of
which money is only the index — now wasted in com-
§ IS7a] Competition, Monopoly, Industrial Trusts. 143
petition, would be saved for making new things or
cheapening old ones. But how to bring about that
ideal state of affairs? Well, the persons most imme-
diately at hand to begin, are, patient reader, you and I.
Of course, in courtesy, I yield you the precedence.
CHAPTER XL
RIGHTS IN NATURAL MONOPOLIES.
158. Some things There is a class of monopolies which must
are Inevitably in their very nature remain monopolies,
monopolies. {n gpite of aU we can dQ
A street railroad usually remains a monopoly because
not more than one can ordinarily be laid in a street. It
is generally the same with a city's water-supply and
gas-supply, and even its sewerage, connections with
which are actually sold in some places. Perhaps, too,
it would not be straining language to say that in some
industries, the first factory built is a natural monopoly,
because while there may be demand enough to support
that one, even at a very great profit, there may not be
demand enough to justify building another.
And such city works and factories are not the only
things which are naturally monopolies. Nearly all roads,
bridges and ferries are, and so are natural objects which
cannot be duplicated — such as extraordinary mines and
springs, and picturesque works of Nature like Niagara
and the Yellowstone.
158 (a). But the Some people even go so far as to think
earth not one of that there is a natural monopoly a great
them' deal bigger than all the things we have
named put together — namely, the entire land of the
earth. But it is impossible to see why. Any one piece
of land is a monopoly: but so is any one piece of pork,
and the land in any single locality may be "cornered",
as pork or lumber or wool or anything else may; but
land generally, cannot be a monopoly, so long as no one
144
§i6oJ
Rights in Natural Monopolies.
145
party owns all of it, and people are competing with each
other in selling it, any more than anything else that is
generally dealt in can be a monopoly. Yet there are
thousands of people, and some of them very good people,
who actually think that all the inequalities in the lot
of man arise from land being a monopoly, and that the
inequalities would be removed if people paid rent to
the state instead of to landlords (66).
159 Why Railroads to retum to things which are natural
are apt to be mon- monopolies: between two places there can
opoiies. ke several railroads, why then is one apt
to be a monopoly ? Because the first one laid out is apt
to be on the best route, and there is seldom any other
route good enough to compete with it. Another
prominent reason is that the travel may be enough to
pay enormous profits on one road, without being enough
to justify building another.
159 (a). Why they ^ railroad cannot be built without gov-
need government ernment authority, because in the country,
authorization q£ course nobody can take land for a road
without government authority (78), while in a city
it would not do to have anybody who felt like it,
take possession of a street for a railroad. Some streets
would soon be so full of tracks as to be destroyed for
other purposes, and few streets would be left free from
them. Moreover, as the right to build a railroad is
valuable, the city ought to be paid for it
]paVforltd8hOUtdhy those who occupy the streets for the
purpose. The right is really a lease of
the streets, and generally a salable one.
159 (eh 80 with The rights to supply light, water, etc.,
other facilities. ancj tQ COntrol most other such things, are
in the nature of monopolies, and of course rights to use
the streets for such purposes are virtually leases too.
The rights to control these natural monopolies are
called Franchises.
While the community can sell franchises
A^erlca°belng gen- to corporations or individuals, in Europe
b^tfce go?ltidans. t^ie community generally either uses the
franchises itself, or leases then? at great
146
The Protection of Rights.
[§160
advantage; but in America, until very lately, it has
generally let the politicians and their friends make up
private corporations and settle down on the franchises
without any return whatever to the community.
This has been permitted because people are generally
too lazy, or too engrossed in their own affairs, or too
stupid, to take care of their public rights — because, in
short, they lack political ability — which of course in-
cludes political virtue, just as (despite a few conspicuous
exceptions to the contrary) business ability includes
business virtue. If the people had enough political
virtue or ability to take care of their own interests,
they could manage their franchises through their own
officers. Yet it might be just as wise under any circum-
stances to sell rights to do part of the work, as it is
for other corporations to do the same; for instance, the
railroads often sell rights to run palace- and dining-cars,
and to supply reading-matter on trains.
As a rule, when a community wishes to get a profit from
its franchises, it is best not to sell them outright once
for all, but to lease them, and only for terms of years:
because, as the city grows, the franchises
loid outright"0* be become more fruitful. As an instance of
the value of such rights, the city of Balti-
more has unusually good parks , and unusually many of
them, which are paid for and kept up by a portion of
the receipts of the street railroads. Some other Ameri-
can cities are beginning to get revenues from their street
railways and most European cities which do not run
their own, derive large revenues from the companies
which lease the franchises.
162. How natural ^OW *et US ^00^ back °f this little dis-
Mononoiies become cussion of natural monopolies, to see how
Personal Property. {ar we haye been justified in treating rights
in natural monopolies as rights of property. So far we
have been principally concerned in relation to property
rights, with their creation by the development of natural
resources through manufactures and transportation,
and with the determination of what shares of the result
should go to the Laborer, the Capitalist and the Enter-
§ 162] Rights in Natural Monopolies. 147
priser. The landlord is of course one of the capitalists.
We came to treat monopolies and trusts in these con-
nections, because they are aggregations of capital. It
is more than a mere metaphor to regard even natural
monopolies in the same way. Railroads, city water-
supplies, etc., are plainly aggregations of capital, but
each of them is both an artificial and a natural monopoly ;
a mine is perhaps more distinctly a natural one. And
yet as soon as any one of these natural monopolies, or
even a natural curiosity or beauty attracting admission-
fees, begins to pay income, it becomes capital, and
therefore its shares become personal property.
We will consider these matters more at length when
we come to Government's Promotion of Convenience.
Now let us go on to the Law of Personal Property.
CHAPTER XII. 1
THE LAW OF RIGHTS IN PERSONAL PROPERTY.
We saw (82) that the ownership of personal property
is generally transferred by mere delivery. It is seldom
registered, like that of land, because in most cases the
perishable and transferable nature of
{SwnDUweo7perb-e" personal property would make registry
tSat of Landrty and merety a nuisance; but its ownership is
sometimes registered when it passes out
of the owner's possession. For instance, if goods are
163 (a). Personal Put *n a Pu*°^c warehouse or given to an
property seldom express or freight company, or money is
registered. je£t Qn deposit, j^e article is entered in
a book, and a receipt of some kind is generally given.
163 (b). important Bonds are often registered in the owner's
kinds passed by name at the office of the company issuing
en orsement. them, and stocks always are, tho upon
being issued, they may be endorsed in blank, and pass
through many hands before being registered again.
"Endorsed" means literally 44 on-backed and usu-
ally refers to writing one's name on the back of a paper
entitling the writer to some sort of personal property.
Endorsing is generally in token that the writer parts
with the right to the value stated on the face of the
paper, in favor of whoever may thereafter hold the
paper, or of some person named in the endorsement.
If the endorsement is in favor of a particular person
named, the latter can pass the value on, by himself
writing a second endorsement. The principal kinds
of papers entitling somebody to receive value, of which
148
§ 163 c] The Law of Rights in Personal Property. 149
the value is passed on through endorsement, are bank
checks, promissory notes, stocks, bonds and warehouse
receipts for many kinds of merchandise.
As a rule, if an endorser has prompt legal notice that
the signer of the paper fails to make it good, he is
responsible that any later holder shall receive what is
called for on the face of the paper, but not in the case
of stocks and bonds. On them, an endorsement is
merely an authorization to the company to register the
certificate in a new name.
When an endorser becomes responsible, it is on the
theory that he has received an equivalent from the later
holder, and therefore is responsible to him for the value
for which that equivalent was given; the same theory
follows each transfer of the document. But in fact, an
endorser does not always receive an equivalent, unless
friendship or favor is to be so considered : for men often
endorse checks and promissory notes, and make them-
selves responsible for their payment, to enable their
makers to use them where their credit would not other-
wise enable them to.
With three exceptions (87), one has a
wl^Lwhlwer right to take one's property wherever one
wll!i'bSfon^m9 sees ft he can do so witnout violence:
otherwise the rule is about the same as
in real estate.
If a robber has put property in another person's
house, the owner must not break in or fight his way to it.
Rather than have the peace disturbed, the law prefers
that he should stand still and risk the robber's carrying
the property to a place of concealment, on the chances
of preventing that in some other way. If somebody
goes into the owner's house for it, and has it and refuses
to give it up at the owner's demand, it is then the duty
of any citizen satisfied that he has stolen it, to arrest
him, as it is to arrest anybody he finds committing
a crime.
If the robber resists, any citizen arresting is armed
with the authority of the law, and can use any force
necessary. True, the citizen could not use any force
The Protection of Rights.
[§163*
necessary to drive a man off from his land (81 6), but
his being there was not a crime. The citizen has the
duty and the power to arrest only in cases of crime —
such as murder, arson, burglary or theft.
The exceptions already alluded to, where a person
cannot peaceably take his own property wherever he
sees it, are, in a sense, not exceptions, but rather
instances (the only ones) where a thing
l*Vomeki"di?ahn'p may peacefully cease to be one's property
nU?ectith0Ut without one's receiving a satisfactory
equivalent, or at least (as in the case of
taxes or eminent domain) one declared satisfactory
by the law. These exceptional instances are money
and 14 negotiable paper" — bank checks, promissory
notes and bills of exchange. If theft or accident puts
one of them in wrong hands, and they transfer it for
"good value to a holder innocent of any wrong or knowl-
edge of wrong regarding it, the innocent holder can
recover its value from all parties who would be liable
if it had to come to him regularly. Of course this is
hard on honest makers and endorsers of such paper,
who Iosq it, or from whom it is stolen, but it would be
harder on the community if all business had to wait
for the history of every piece of commercial paper to
be investigated, as it has to wait for real-estate titles
to be investigated. As a matter of fact, the easy
transfer of rights in commercial paper is seldom hard
on anybody: for the result of the law is that people
take such good care of their paper that it is seldom
lost or stolen.
While personal property can be loaned or hired out
in an infinite number of ways, ownership of it is not
considered as enduring enough to be popularly called
an "estate", as in land; yet there can be a life estate
in some kinds of personal property, perhaps in any
kind, notably in libraries and works of art.
Like land, however, it can be mortgaged.
moriegagCedni^thout Such a mortgage is called a chattel mort-
g7ge9'apUaH8°<n. &age» an(* unless the mortgagee takes
" possession, the mortgage, like a real-estate
§165] The Law of Rights in Personal Property. 151
mortgage, is not good against creditors unless it is
recorded.
164 Pled e- ^ae difference between a chattel mort-
e gev' gage and a pledge, is that a pledge is always
accompanied with possession of the chattel by the per-
son making the loan; a chattel mortgage, if registered,
need not be.
There are millions of times as many agreements made
regarding personal property as regarding land, for
personal property is constantly traded, from the candy-
shops to the stock-exchanges, by people who never have
any land, and even professional dealers in land have
to deal many times as often in personal property, in
connection with the ordinary requirements of life
4ck d 1 These facts of course make personal
lo5. Personal oron- ,/»«■• r ^ . .
erty the great field property the great field of Contract: so
of contract. what time we can give to details of the law
of personal property can best be used incidentally to our
consideration of Contract.
CHAPTER XIII.
CONTRACT.
As an Element in Civilization.
166. Difference We have seen that men start with a right
rfg%51Jnd0Pr^Certy to appropriate things from Nature, to
rights. labor on them, and to keep the results.
But rights to prevent a person taking or holding an-
other's property are merely rights to prohibit something.
Rights to demand something— demand another's things
or labor, plainly can arise only by giving or promising
. something in return.
The modern state protects each party in his right to
demand fulfilment from the other.
167. Contract, Tne rights arising from such agreements
agreement, bargain. are technically called Rights under Con-
tract. Contract means nearly the same thing as
agreement. But etymologically, agreement means
something to the satisfaction of both parties, while
contract means merely drawn together, or perhaps
bound together, as we often say when a bargain is under
way, that the people are trying to "get together".
There is still a third word for that same thing — bargain.
But the word "contract" having been more associated
with law, has been kept more strictly to its early
meaning; for instance, it seldom has anything to do
with the profitableness of an agreement, while "bargain "
is often used to mean merely a profitable transaction.
A good contract generally means one that legally binds
152
§ 169] Contract as an Element in Civilization. 153
the parties, while a good bargain means rather one that
is profitable to one side or both. Yet each word is
used in both senses. Bargain, tho, is never used in a
general sense as one of the great foundation-stones of
civilization, as we shall see that Contract is. People
of low intelligence or low morality or both, sometimes
break contracts, on the ground that they do not yield
good bargains.
*cq r^t^ ^ A slave or serf cannot make any con-
108. Contract, oos- . , e , , J M -
tlbie only to the tracts to speak of, because he cannot de-
pend on keeping any ; he can only do what
his master says. This affects his rights to property:
for, as whatever he does is under his master's orders,
his master takes the profit or bears the loss. If there
is a loss — if crops turn out badly, for instance, the
master is supposed to take care of the slave under all
circumstances.
Whether the system is good or bad, depends upon
what it is compared with. Slavery would not be good
in a civilized community ; but savages are so much like
children that, if left to themselves, they would be more
apt to starve, and rob and kill each other, than if an
able man had absolute control to keep them in some
sort of order, and tell them what to do.
All societies that have reached civilization, have had
to pass through conditions of slavery, serfdom and
feudalage.
Many societies have long stood still, like those of
India and China — some until they could stand no longer,
and were overcome or died out. Nothing higher than a
vegetable can stand still and flourish — a society, a busi-
ness, a human being, or even a beast, must progress —
at least enough for exercise, or it will decay. It is like
a person on a bicycle — he must move or come down.
itta r««*«^ ... The way to teach a man to take care of
io9i Contract an,. , - . J , . ... <•
education in free- himself, is to leave him to take care of
dom4 himself, just so far as safety permits.
Obviously, a man cannot get ahead unless he can dis-
pose of his own labor, and in the present state of man-
The Protection of Rights.
[§169
kind, he cannot get ahead very far, in property at
least, unless he can dispose of the labor of others.
This does not mean unless he can enslave others: free-
men co6perate with a man of true ability to their own
good, as well as to his.
The difference between the modern guide of labor
and the slaveholder, is that the slaveholder, even tho
he be incapable and unable or unwilling to take good
170. Under Con- care of his slaves, can still force them
employers can6 to wor^ f°r mm- The modern employer
secure Labor. cannot force his laborer to work for
him, because the modern laborer, especially with mod-
ern facilities of travel, can contract where he pleases.
He is not shut up on his master's place, as the churls
and the villeins of England and the serfs of Russia
and slaves of America were. The civilized laborer's
power to contract, makes it necessary that his em-
ployer should treat him both well and ably. Therefore
the modern employer must be really able — capable of
guiding his men well, and deserving his position, or com-
petition will get his men away from him. And it is
becoming more the case every day, that employers
have to compete with each other to get the best labor;
and he who best guides his labor, and cares for it so as
to make it most vigorous, intelligent and cheerful, gen-
erally comes out ahead in the competition, and makes
most money.
The scientific name for the primitive state of affairs
where most men were obliged to stand still just where
they were born, is status (the Latin word for standing).
One reflecting upon the condition is tempted to suggest
the English expression "stick-in-the-mud". The condi-
171. Status versus tion where men can dispose of themselves
Contract. and their property as they please, is called
the condition of Contract. Wherever status, or "stand-
ing", is the condition, if a man is born a ruler, important
or petty, he stays one; if he is born a serf or peasant,
he stays one.
In quite primitive societies, there are examples, such
as Mahomet and Genghis Khan, of people changing
§ 172] Contract as an Element in Civilization.
their standing very much, but they were only occa-
sional men in generations: there could be only one
now and then, because they rose by controlling men, not
by contracting with them. In our day, nearly every
civilized man can contract.
The system of property-holding under
SLnd&e which Mahomet and Genghis Khan rose,
to°eSIer.a,,ev0,ve was communal (54) » w^ some slavery
* ' and hardly any Contract. There is hardly
any Contract under the communal system, because
nobody has enough estate in the land to make much
contracting with it, or its produce, possible.
The property-system under which Hildebrand and
Rudolph of Hapsburg, for instance, rose, was Feudal (55)
with some little contract. There was more contract
under the feudal system than under the communal,
because the estates in land were much longer: at the
outset of the system they were generally for life, and
rapidly became transferable and even hereditary, tho
always limited, of course, by the rights of the overlord.
The system under which Lincoln and Garfield and
Peabody and Peter Cooper rose, is of course the most
advanced of all — private ownership and contract every-
where.
We find, then, Slavery, no Contract; Communism,
hardly any; Feudalism, a little; Private Property,
Contract everywhere.
Under feudalism, the relation of each man to his
feudal superior, was apparently one of contract to fur-
nish so much military or personal service; or later, a
certain portion of the products of his land. But reflec-
tion shows that it was a contract only so far as a con-
tract can be made by one side, and that side the stronger.
As men have risen under all systems, of course there
is no system where all men stand still. In other words,
there has been no condition of universal Status or of
universal Contract. All that the facts show is that the
more Status and the more Communism, the fewer men
rise; the more Contract and the more Private Owner-
The Protection of Rights.
[§ 172
ship, the more men rise. Under the amount of Contract
in the United States, a thousand men — probably ten
thousand, possibly a hundred thousand, improve their
condition, where one does in Russia or India, or did in
mediaeval Europe or under the Turks or Tartars.
The first marked decrease of Status and increase of
Contract appears in the decline of Feudalism, which is an-
other name for Militarism, and in the increase of Private
Property. Militarism declined as civilization advanced ,
173 /Uthev *n sP*te °* *act tkat Europe is a col-
evoiye, militarism lection of camps to-day. But those camps
declines. have ensured peace in Europe since 1870:
each nation has been merely playing soldier to keep the
others from attacking it. Before 1870, there had never
been ten years without war among them.
The decline of Militarism was essential to doing away
with Status, because extreme militant conditions are
necessarily conditions of status: people
a7foi^ofastotus.ls can simply command and obey: the enemy
will not allow them any chance for divided
policy, or much chance to do business or accumulate
property. Hence it is only in civilized society that
the chief activities, instead of being warlike or militant
can be industrial. In a militant society, the men gen-
erally do what they are compelled to; in an industrial
society, they do what they agree to : so they are making
contracts all the time.
175. Fighting ver- It really is a question between a fighting
sus producing. life and a trading life, or rather a pro-
ducing life. With communal or feudal property, people
never produced enough to get rich, and the only way
people like those of India or Greece or Rome ever got
rich, was by robbing somebody else. And as a fact,
they never did get rich in the modern sense. A few
people got rich, and made a great show, and did some
fine work in art, literature and statesmanship; but the
masses were slaves.
175 <a). n,U8trat«i *fonZ communal and feudal peoples
in nations of to-day, it is about the same. There has
to-day. nQt keen mucj1 change in Russia and India
and China, for instance, except in name.
§ x 773 Contract as an Element in Civilization. 157
Japan is the greatest instance the world ever saw of
rapid growth in wealth, power and civilization; and she
is an illustration of our thesis: her progress has been
accompanied with the most rapid change ever seen of
communal and feudal property into private property,
of a general condition of status into one of contract.
In Japan, too, despite some superficial appearances,
private property and contract depended on the down-
fall of militarism: in the barbarous and feudal sense
of every man being a fighter and thinking of little but
fighting, militarism has gone. The Japanese gentle-
man does not now carry a sword much oftener than
the English gentleman, and in Japan, despite the won-
derful showing in her war with Russia, fighting is or-
dinarily as much a matter of special profession as in
France or Germany.
The spread of the institution of private
p7ropertyyi3 wsen* property, then, as distinct from communal
beiwdte! property (54) or feudal property (55), is
necessary to change a condition of status
into one of contract, because to do much contracting,
a man must have property of his very own. If the
community or the overlord owns all the real estate,
there is not much personal property to contract with.
No communal or feudal people ever got much personal
property yet, unless by pillage.
While wealth is not civilization, there never has been
any broad and high civilization without wealth. The
boasted poverty of Sparta, for instance, was accom-
panied by virtual slavery of every man to the state, and
by a general belief that skill in theft was a virtue.
As, then, wealth depends on manufacturing and
trading, we seem brought to the practical conclusion
that civilization rests on people trading freely with
177. Civilization eac^ ot^er» ano^ suc^ ls ^he *act regarding
and trade go to- all civilization except the sort built on
gether. pillage and slavery, and that sort is nar-
row and perishing. There never has been very high
civilization enjoyed by the general community, without a
The Protection of Rights.
[§i77
great deal of trading; and the higher the civilization, the
more the trading. Then comes in the fact that there
never has been much trading without the wide preva-
lence of the institutions of private property and con-
tract, and there is no reason in sight to believe that
there ever will be; and then follows the conclusion that
a producing, trading, contracting form of civilization
is as much needed to produce from the ranks of the
common people a statesman like Lincoln, as to produce
a manufacturer like Peter Cooper.
178. Breaking Con- ^ ^is demonstrates that a man who
tracts and adfoca- breaks a contract is doing his mean little
ting Socialism. share toward bringing the world back to
the condition of status; and that a man who advo-
cates socialism is trying to put the state in the place
of the slaveholder, and so to lessen the amount of con-
tract— to make government command what people shall
do, instead of leaving them to contract to do what
they please — in short he too would get us back to status.
Here are two views on the subject that are worth
thinking over: In 19.03, Grand Master Morrisey of the
Brotherhood of Railway Trainmen said to his national
convention : " We shall see the time when we will regard
the contract-breaker . . . with as much contempt as
we now regard the scab." C. P. Shea, President of
the International Brotherhood of Teamsters, on trial
at this writing for instigating the assaults and murders
in the Chicago Teamsters' strike, said: " I do not con-
sider anything a violation of an agreement, that is done
to uphold the principles of trades-unionism."
CHAPTER XIV.
GENERAL LAW OP CONTRACT.
Now we will consider the details of Contract. Courts
do not want to use their time without reason — when*
for instance, somebody claims that there was a con-
tract when really there was none at all: so the courts
have established a test by which to determine, when
parties dispute, whether there really was a contract
between them.
179. Essentials of a To be a contract, there must be an
Contract. offer by one side, an acceptance by the
other, and a reasonable consideration why the offer
should be made and accepted.
All such considerations are found to be included
under the three categories of something to be given,
something to be done or refrained from, or natural
love and affection. The Romans included it all (except
natural love and affection) in four cases — I give to get
you to give, I act to get you to give, I give to get you
to act, and I act to get you to act.*
But the subject is not really covered by something
given or to be given, or something done or to be
done: it may include something not to be done, or,
as already said, something to be refrained from. A
has a right to do something, B offers him something
not to, A agrees. Now A does not agree either to give
or do, but merely to refrain, yet he binds B to give or
do what he offered as an inducement for the refraining.
* Do ut des, do ut facias, facto ut des, facto ut facias.
159
i6o
The Protection of Rights.
[§i79
Yet if we take "act" in the broad sense of a course of
conduct, the Romans' pat way of putting it, does cover
the idea of refraining being a "consideration". "By
a man's acts shall he be judged" — "acts" there evi-
dently includes temperance and self-restraint — refrain-
ing from certain acts, as much as doing certain others.
179 (a), niustra- Now to illustrate each kind of contract :
tiona- A offers B a dollar for a plant ; each article
is given that the other may be given. This is Roman
case I. A offers B a dollar to do a day's work. This
covers Roman case II. A offers B to do a day's work
for a dollar. This is Roman case III. And A offers B
. to do a day's work if B will take him for a drive on
Sunday. This is Roman case IV.
To illustrate the case the Roman summary leaves
out — where the consideration is refraining from doing
something: A has a lot next to B's, and proposes to
build a wall that will shut out light and air from B's
house; B offers him a thousand dollars to refrain from
doing it: A refrains: B is bound to pay the money.
It may be observed in passing (tho we shall return
to the subject again) that while it may not be right
to shut light and air out of your neighbor's house, it
may be more nearly right than it would be to keep
your own wife and children in rooms too small for them,
or to have noise or anything else from your neighbor's
windows disturbing them.
180. Natural Love To illustrate a contract where the con-
and Affection. sideration is natural love and affection:
A father agrees to do something for a son with-
out receiving anything in return. Now the law does
not enforce mere gifts, but it will hold this to be a
good contract, because it holds the natural love and
affection to be a consideration. Yet that considera-
tion seems queer, because if a father agrees to do some-
thing for a son because he loves him so much, and then
refuses to stand by it, he simply proves that he did not
love his son that much — in other words, that there was
no consideration ; all of which seems to show that where
natural love and affection is alleged to be the con-
§ 181] General Law of Contract. 161
sideration, the contract may be a very weak one; and
that where natural love and affection is strong enough
to make a contract strong, there must be love enough
to make a contract unnecessary. Yet there is a more
logical view than that the father does it because of
his own love for his child, namely, that the father makes
the contract because tlie child gives him the 14 natural
love and affection/ ' But, strange to say, I do not
happen to have known this view presented elsewhere.
Yet there is good reason, after all, why courts should
support such contracts, even if the consideration is held
to be natural love and affection entertained by the per-
son making the promise: for if a man fails in busi-
ness or dies, those who take charge of his affairs must
carry out his contracts as far as they can, while his
mere intended gifts, where there is no consideration,
may frequently be set aside. So it is more merciful to
his unfortunate family, to put his gifts to them on as
good a footing as his business transactions. Yet, tho the
courts will generally enforce contracts based on "natu-
ral love and affection", unless there is also a " good
and valuable consideration" they are apt to look with
suspicion upon them, and to set them aside if they
bear any strong indication of wronging creditors or
later purchasers for valuable consideration.
181. Promises and Of course entirely outside of any "con-
Contracts, sideration" whatever, a promise ought to
be as binding as a contract, in honor: because there
should be no honor less than perfect honor; but it is
not as binding in law, and this because, for many rea-
sons, law cannot deal with so delicate a thing as honor.
Justice is as high as law can go.
We spoke (1636) of endorsements being made, like
promises, without consideration, simply from friend-
ship or favor. The question of whether the law will
enforce them, of course cannot come up regarding the
person originally responsible on the paper: for the en-
dorsement is simply an obligation to pay, not the prin-
cipal, but third parties, if he does not. But if those
l62
The Protection of Rights.
[§181
third parties are innocent holders for value paid, the
law enforces the endorsement. Yet often the third
party — a bank for instance, is not an "innocent third
party", but knows that the endorsement is merely for
accommodation, and yet takes the accommodation paper,
just as it loans money at the market rate if it is higher
than the legal rate, because it depends upon people
to carry out their contracts without appealing to defects
in the law.
If paper has been forged, its possession for value
by an innocent third party, does not make it good,
unless the person whose name is forged can be held for
some gross carelessness. The reason is that nobody
ever undertook to pay it.
Justice requires enforcement of contracts, and not of
promises, because breaking a promise without consider-
ation, takes nothing from the other man, while break-
ing a contract takes from him whatever he does or gives
on his side, or the thought and trouble and arrange-
ments he may have been put to in making the contract,
and toward carrying it out. To illustrate: if A is under
promise to B and under contract to C, and then fails
or dies, so that both cannot be satisfied, C, who has
parted with some consideration, would suffer more
than B, who has parted with nothing: therefore the
law does what it can to protect the contract, while
it pays no attention to the promise.
But where natural love and affection is the consid-
eration, C has. not parted with anything, and yet the
law treats the case as if he had, because there would
be so much hardship if the law should require the
representatives of bankrupts or deceased persons to do
as much to keep all promises alleged (perhaps falsely)
by strangers, as to keep promises to relatives. True,
people often love outsiders more than relatives, but the
law cannot go into as fine points as that: proof is too
difficult — natural love and affection — that is, such as
it is natural, under ordinary circumstances, for all
men to have, is as much as the law can attempt to
take into account.
§x83]
General Law of Contract.
163
Le al fiction ^ *s und°ubtedly something of a fiction
. ega c on. ^Q majce 4tnatUral love and affection" a
"consideration", like money, or goods, or services, or
self-restraint, but many of the greatest improvements
in the law have been made by just such fictions (190).
For instance: where people are damaged by others in
their property and reputation, and come into court
for redress, the principle of the law is that they must
not only prove that the acts of which they complain
really took place, but they must prove that the acts
were damaging, and just how many dollars' worth;
yet if a woman proves that she has been slandered
in the dearest part of her reputation, the law brings
in a fiction that she has been damaged by the slander,
whether it fell on willing ears or not, and does not
require her to prove that she was damaged. If she
really was damaged, of course the law's assumption
that she was, is not strictly a fiction. In this sense,
fiction is a technical term meaning a general principle,
regardless of whether it is true in any one case or not.
As there is a tendency in fictions to do harm, it is a
maxim of the law that fictions must never work injustice
— that is to say: that when a judge finds that the
fiction usual in somewhat similar cases, plainly does not
justly apply to the case in hand, he must not decide
as if it did.
183. Mutuality in Now let us consider mutuality in con-
contracts, tracts. It always "takes two to make
a bargain". Contracts must always be mutual, — the
understanding must be mutual, the consideration must
be mutual, and the obligation must be mutual.
First: the understanding must be mutual. If you
say that to-morrow you will lend me a gun now in the
hands of a friend, if I will bring a written abstract of
ten pages of Spencer, and I agree to do it supposing
you mean Spenser the poet, while you really mean
Spencer the philosopher, there is no contract between
us,- for our understanding is not mutual. If either
of us finds out the misunderstanding, he should make
a reasonable effort to let the other know that there is
164
The Protection of Rights.
[§183
no contract, so that in case the abstract of the poetry
should not be a satisfactory substitute for the abstract
of the philosophy, one may not lose the trouble of
getting the gun, or the other of writing the abstract.
It would be reasonable also to see if the parties could
make the contract that one or the other intended —
either for the abstract of the philosopher; or, if the
other would not agree to that, whether he would be
willing to make the contract he understood — regarding
the abstract of the poet.
The second point necessary to the mutuality of the
contract, is mutuality of consideration — that is tojsay,
as said before, each side must undertake to give or
do or not do something, in consideration of the other
side undertaking to give or do or not do something.
For instance : if a man renders a service such as helping
a horse and wagon out of a ditch, without the owner
asking him to, or agreeing to do or give anything in
return, he cannot make the owner pay.
It seems hard not to be paid for valuable volunteer
services, and any decent man would pay. Yet to
admit the principle that volunteer services must be paid
for, would overwhelm the world with superfluous and
worthless pretexts of service — like, for instance, needless
opening of carriage doors, and sweeping of crossings
already clean.
As farther instances, suppose A tells B that he will
do something if B will do something else — that A will
cook the breakfast if B will get up and light the fire.
They are not under contract unless B says he will light
the fire, or straightway does it, and lets A know that
he has done it.
Suppose A tells B he will do something, and B there-
fore expects that he will. A has not contracted to do it,
but has merely promised.
184. Law and ^n law a contract is more binding than
Religion. a promise (as we have seen), or even than
an oath. The reason is that an oath is a matter of
religion, while the law deals only with justice. In
modern times people know that it is as much a mistake
§ 1 86 b] General Law of Contract.
for law to try to handle religion as to handle honor.
Now, for instance, witnesses need not swear on the
Bible: they can merely "affirm", if they prefer.
185. Justice and It might at first seem that in honor,
Honor* one party to a contract should complete
his side of the contract even if the other does not,
because he has promised ; but the third point essential
to the mutuality of a contract is that the obligation
is mutual. If one side fails in his obligation, that
releases the other ; and it does so in honor, because the
dishonorable have no claims upon honor. And that
is not reducing honor to the level of justice • because
to permit the dishonorable to make claims upon honor,
would be to reduce honor to injustice. Honor can
never be contrary to justice. If, then, the dishonorable
man has no claims, it might seem at first that anyone
would have a right to deceive or rob him. But tho the
dishonorable are not entitled to anything beyond
justice, they are still entitled to justice.
If one man agrees to pay another if he
llw ^"wt*5 the will kill a man or set a house on fire, and
enforce. the other agrees, there is a contract, but
dofng0r wrong' t^le ^aw wil^ not enf°rce it> because it is
against public policy : the legal maxim is :
"Men may contract, but not to do wrong." In a more
extreme case : if one party risked his life and liberty to
commit murder or arson, as there is no wrong in the
mere payment of money, honor might require the pay-
ment of even the wages of crime, but the law would not
enforce it.
186 (b) Wa era ^ ^et' t00' ^aS a^ ^e cnaracteristics of
agera. ^ contract, but the law will not enforce it,
because betting adds nothing to the wealth of the com-
munity, as a contract enforced at the expense of the
community ought to; and because the habit leads a
man to laziness and improvidence. And looking at the
mutuality of bets, in the long run they are hardly so
nearly an even thing that they can claim enforcement
even on the ground of fairness: for in the long run,
i66
The Protection of Rights.
[§ 1866
those who lose must suffer more than those who
gain enjoy. This requires a word of explanation: for
in the long run, of course, bettors' fortunes must aver-
age the same. Now assume that average to be any
sum you please — say $10,000. Then, as President
Hadley * points out, a man who loses $5,000 will lose
what his family has come to regard as essential com-
fort, and will suffer seriously, while the man who wins
will not receive anything that his habits require, but a
mere superfluity that he will be apt to waste as gamblers
almost always do. In fact, often so unbalanced are
the two sides that loss is suicide, and gain a brief
period of dissipation — evil both ways, tho dispropor-
tionate, and seldom if ever any real good either way.
If one party to an alleged contract agrees to do
something impossible — to drain the ocean or move
Mount Washington, he is not liable in damages if he
fails, because an agreement to do an impossibility is
not a legal consideration.
But if he agrees to do a reasonable or proper thing,
and fails because of accident — sickness or a delayed
train, he must pay damages: the misfortune is his,
not that of the other party.
186 (0). "The Act °f course ne can guard against acci-
of God'or the Put>- dents in his agreement, as for instance,
1 0 Enemy. carriers of goods generally guard against
the " Acts of God and the Public Enemy", meaning as
"the act of God", any convulsion of nature, like storm
or flood or earthquake, or probably a sickness not
brought on by a man's own fault; and as the act of
the "public enemy", that of any foreign force with
which we might be at war, or of a pirate at war with all
mankind. A native mob or insurrection is not in-
cluded in the legal definition.
If a man agrees to do all the work he
llif-pVese^sit?onS can possibly do, for less than will keep
him alive, he should not go on until he
dies, because it was a promise to commit suicide: that
is not legal : so he is not bound by contract. Whether
* "Economics."
§189 General Law of Contract. 167
he should go on and take his employer's money until
he can find another place, and then leave his employer
in the lurch, is not a question of contract, as there is
no contract. It is a question of honor, and is brought
up merely to help define the boundaries of the subject.
But let us take another case of doubtful
fumbhwlsdom* contracts. Suppose a man agrees to work
for enough to keep him alive, but less than
his production. It is a contract, because the law does
not assume it to be either illegal or immoral to make
a bad bargain, but only foolish; and the law cannot
attempt to cure people of folly, or guard them against
the consequences of it.
189. Contracts which People can get into contracts without
the law assumes, knowing it, just as they can get into other
scrapes, through ignorance or stupidity. This seems
not to agree with the earlier statement that there must
be a mutual understanding, but in some cases the
law assumes that there is, and will not listen to any
evidence to the contrary. For instance : if a servant
or mechanic or clerk is hired for any period — say a week
or a month, and continues on without either side saying
anything, the law assumes a contract for another pe-
riod of the same length. So if a house is hired for a
period so brief that a written contract is not neces-
sary (82 6), continued occupancy after the period, with-
out anything being said, leads the law to assume a con-
tract for a second period, and so on indefinitely.
The law also implies that any person employed to do
any service shall receive "what he has deserved",*
and also that the service shall be performed with due
skill and faithfulness. If it is not so performed, serv-
ants cannot get their wages, and would have to pay
any damages caused by ignorance and carelessness.
The' law may perhaps also be said to assume con-
tracts that money is to be paid back (on demand unless
specified) in any of three cases — when borrowed ; when
spent, either for one's benefit by another with the bene-
* Quantum meruit.
1 68
The Protection of Rights.
[§ 189
ficiary 's consent or in an emergency ; or received from
any source in behalf of another.
Similarly, if one takes any article having value, and
nothing is said about price, one must pay "what it
was worth",* and the seller cannot recover a price
beyond that.
If merchants keep an open account, a contract is im-
plied that either will pay in case the balance is against
him, whenever it is struck at the customary time.
The law assumes these contracts as involving "the
greatest good of the greatest number". They exist
only by approval of long experience.
The law makes a distinction between
• soppe. these informal contracts and formal ones.
In fact, it is sometimes hard to tell whether there is a
contract, or what the law calls an estoppel, that is,
whether one side or both are not in a position where
they are stopped (or "estopped", as the lawyers say)
from denying a contract, tho none may have been
formally entered into. For instance, in some cases of
renting and employing, if neither party had said any-
thing until after a second term had been entered upon,
a court might hold that both were estopped from denying
the existence of a contract, and would have to act just
as if there were one. There is another kind of estoppel
called "estoppel by deed" produced by putting a seal
on an instrument. After the seal goes on, the signer is
estopped from contradicting anything said in the instru-
ment. Otherwise he can contradict any statement that
the other party has not acted upon. But action by
the other party also has the effect of an estoppel.
An assumed contract or an estoppel, seems very
closely related to a fiction (182). It was said above
that "in some cases ... a court might hold" that
there was an estoppel. We were touching upon "the
glorious uncertainties of the law": tho there are a
great many exact rules, circumstances vary so much
that it is hard to tell before a case comes to trial, what
rules are going to fit it.
* Quantum valebat.
§ 193]
General Law of Contract.
169
191. Carelessness Careless people, and the people who
and Fraud. haunt the borderland between carelessness
and fraud, often get into positions where they are es-
topped from denying responsibilities that they did not
really intend to undertake.
Carelessness and fraud come pretty close to each other,
because one who is careless about what he does, is very
apt to become careless about what he says; and as
careless people are constantly getting into scrapes,
they are worse tempted than careful people to try to
lie out of scrapes. A legal maxim that covers most
cases where a man can properly be estopped from deny-
ing an obligation, is that "No man can take advantage
of his own wrong", and carelessness is a wrong.
As to fraud, some authorities claim that there is an
implied contract regarding it — that it is an implied part
of every contract that there shall be no fraud. But
that seems drawing it unnecessarily fine. The matter
seems covered by the general principle of the law —
to enforce no contract where there is fraud, and always
to give damages against fraud.
192. Fraud never Jus^ what constitutes fraud, however,
defined. the law is very careful not to say : because
human wisdom could not frame a definition broad
enough to cover all possible cases of fraud, any more
than all possible cases of any other kind; and even if
it could cover all cases of fraud heretofore known, the
ingenuity of the wicked would invent new cases not
covered by the definition, and so escape. Therefore,
the court has to determine each case. A fairly intelli-
gent court can follow the serpent's track more flexibly
than a rigid definition could.
No transaction, whether based on contract or not,
can stand after it is found to be fraudulent, provided
suit to set it aside is brought within a reasonable time
of the fraud being discovered — for agreements not under
seal, in most of our states, six years.
193. Statutes of A limit to the time is secured under
Limitations again, the statutes of limitations (82 £) which
170
The Protection of Rights.
[§ i93
were passed largely to protect innocent persons. A
long time after a piece of wrong-doing, it would be very-
easy to blackmail : for it would then be easy to manu-
facture evidence that could not be refuted.
Moreover, after many years, when the person who
perpetrated the fraud might be dead, it would hardly
be fair to have somebody coming down on his heirs.
194. Force vltlitw; Fraud is not the only condition that will
contract. vitiate a contract otherwise good: an as-
sent obtained by force or threat is no more valid than
one obtained by fraud.
«
Of course fraud and crime take up a great deal of
time of the courts, and of course the courts (not to
speak of the police, jails, reformatories and prisons)
cost the taxpayers a great deal of money. Yet if every-
body were honest, we could not get along without
courts, unless everybody were wise too : for
195. Courts needed various sorts of unwisdom often tangle up
if much,fsnorance people's rights so that thev have to go
against Fraud. jnt0 court to find out what tneir rights are.
^ifXfot Take a case of what is called in law
MeM™ 'suits 1 ' con^usi°n ' ' of one person 's materials with
ren y su a. another person's labor — a man building a
house for another, or a woman making an expensive
frock, may get it all wrong and spoil a lot of good mate-
rial, and yet suppose that it was being done right, per-
haps because the owner of the materials may have failed
to give clear directions. Again, intricate questions con-
stantly arise over the meaning and effect of old contracts,
or of provisions of wills, as well as of statutes passed by
legislative bodies ; and as somebody must put a working
construction on them, that is generally done by the
courts. Honest people are getting into disputes over
such matters all the time, and many suits are, even in
fact as in name, " friendly " — simply to get a matter
settled in one way or the other, when the parties do
not care which way. Such cases are perhaps most
frequent when people are acting for others — executors
for estates, guardians for minors, trustees for corpora-
§197]
General Law of Contract.
171
tions; and to avoid liability themselves, they must be
sure to act legally, so they need an authoritative decree
196. Contracts ^ot a^ contracts afe made by people
when parties do face to face : many are made by mail, tele-
not meet. graph and even telephone.
A man making an offer in a letter, is not bound by
it before the other party has posted his letter of accept-
ance. Most judges have decided that the acceptor can-
not revoke (say by special messenger or telegram) be-
tween posting his letter and the receipt of it by the
man who made the offer, but there have not been
enough cases tried since the telegraph came into gen-
eral use, for the subject to have been so thoroughly
argued that all judges are now agreed.
Tho the offerer has a privilege of revoking until his
offer is accepted, the acceptor should not have the same
privilege until his acceptance is received, because, for
many reasons, the general principle of law is that a
contract is made when both parties consent to the same
thing. It is of course important to fix the time of
this consent. A man may write a letter of acceptance
without being at all sure that he will post it, but post-
ing it is the last thing he can do with it, and when
he does that, it is reasonable to conclude that his
mind is then made up, and consequently, that at that
instant the parties are agreed, hence that the contract
is made, and therefore that neither can revoke. Another
argument is that the proposer has made the mail and
telegraph operators his agents (214) to receive the ac-
ceptance, and that consequently, when it is delivered
to them, it is legally delivered to him.
And yet this view does not seem so free from doubt
that it ought to be finally considered as the law. There
is certainly room for a great deal more argument, as is
shown by the fact that judges are not
evoiution.,aw ls a" yet absolutely agreed, and the only safe
way is to make a proposition subject to
the proposer receiving word of its acceptance by a
specified time.
172
The Protection of Rights.
[§i97
And doubt has certainly at some time covered
most questions that are now clearly settled: nearly
all the matters that seem very simple ones to us,
were by no means as simple to our ancestors. For in-
stance, take as simple a thing as regard for human life.
When a sovereign kills a subject who displeases him, our
ancestors, even as late as Henry VIII. — yes, as late as
James II., would have differed as to whether it was a
legal execution or a murder. But now, if our Presi-
dent or one of our governors were deliberately to kill
an unoffending man, it would be a murder; and even
as to the sheriff who hangs or electricutes a man nowa-
days, a great many people think that any voluntary
killing of a human being, except in immediate defence
of one's self or another, is wrong, and will some day
be against the law.
CHAPTER XV.
LAW OP CONTRACTS CONCERNING PERSONAL PROPERTY.
So much for the general principles of Contract ; and
as to our last few words on the uncertainty and evolu-
tion of law — that is a topic to which we shall have to
revert more than once. Now let us examine into some
of the specific laws of different kinds of contracts, be-
ginning with such an every -day matter as selling and
delivering property. It is not always as simple as we
are apt to think.
Suppose I have a horse and want you to buy him.
You say you will give me $100 for him, and will bring it
next day; and I say: "All right, I'll send him to
you"; and we separate. Suppose I change my mind.
Can you oblige me to sell him ? * No : for under the
Statute of Frauds (82 b) a contract for
198. Sale and De- over $50 (later legislation varies it in the
ral^a* gener- different states from $30 to $200) must be
any affected by put in writing, at least unless there was de-
tFraudattuie °f livery of money or something else from
one side to the other, or some other part-
performance. Here neither horse nor money was de-
livered.
Let us note in passing that the law also requires to
* While I have had to realize the failure of the dialogue form
in which the earlier editions of this book were written, it seems
so peculiarly adapted to the topics of this chapter, that I have
ventured to retain some traces of it for them.
173
174
The Protection of Rights.
[§ 198 <*
be written, or partly performed, all contracts relating to
real estate (except a lease for a year or less in New
York — in some states, three years or less), or to becom-
ing responsible for somebody else, or making a trustee
personally responsible for the benefit of a trust estate
(218), or to something to be done more than a year
afterwards, or where the consideration on either or both
sides is a promise to marry.
The law requires these formalities, because the obli-
gation of Contract is so great, and the necessity of
performing contracts, and of the law's enforcing them,
so important, that it has been found wise to make
people cautious in entering into contracts, and to
guard people from getting into them too easily. More-
over, where contracts are specially important or pecu-
liar, the law wants better evidence of their existence
and nature, than mere memory of spoken words.
Probably no statutes have ever had wider effects than
the Statutes of Frauds. But it is a most instructive
comment on the uncertainty of legislative wisdom
that many good lawyers think these statutes have en-
couraged more fraud than they have prevented.
198 (b). by Part To return to our contracts in selling
Payment. an(j delivering property : if you had given
me $5 on account of the horse, he would then be under
contract of sale, the $5 being consideration to bind
that contract. I could not then sell him to anybody
but you, and give you back your $5. Thus for personal
property, part payment will bind in the absence of
writing.
If the matter in hand, instead of a horse, were a thou-
sand bushels of oats which we had agreed upon a sale of,
and you had paid me for only a bushel, our contract
would be good for all.
If you had paid for none, but I had put a bushel in
your buggy, part delivery would be as good as part
payment.
But coming back to the horse, suppose I had been
too good-natured, and endorsed a friend's note (1636),
and were to find on my way home that the sheriff
§ 2oo] Law of Personal-Property Contracts. 175
had taken the horse to pay the note after you had
paid the $5. Is he still my horse? Yes, he was mine
198 (e) Prior Lien unc^er contract of sale. But if the entire
e . ror en. ^een <pa{d before the sheriff took
the horse, the sheriff took your horse. It would be
necessary to fix the time of both events. But that
would not be easy, and as "possession is nine points
of the law M, the outcome would probably be that the
sheriff would hold the horse, and I would have to
return your money.
Should the horse be killed while in the seller's pos-
session, it would be the buyer's loss only if title had
actually passed — if, for instance, either party had said,
without contradiction, words to the effect that it was
the buyer's horse, and that the seller had a claim on
the buyer for the rest of the money. But until such an
arrangement is definitely made, or until the horse is
delivered, it would still be only a contract of sale.
But the buyer has a first claim on him for any
money he may have advanced before getting posses-
sion.
Such a claim is usually called a lien, which means in
law a right to sell property to recover some claim
against it. Next to mortgages and judgments, the
most frequent liens are those of mechanics against
things — especially houses, that they have made or
repaired.
Now to return to the horse-trade. Suppose the horse
had been paid for, but there was not time to make a good
delivery before the sheriff took him, how
199. No one can sell is the buyer to get him? The law would
moretltlethanhe ^ h[m tQ the buyer> wherever he is
The sheriff can only sell whatever title the
seller had in him, and after he was paid for, the seller
had none.
That would of course be hard on the man who had
bought him from the sheriff, but he would have a right
to get back the money he had paid the sheriff.
200. Possession If tne $IO° nac* Deen paid, the horse
and ownership. would be the buyer's property, as against
176
The Protection of Rights.
[§ 200
all previous claims, except a registered chattel mort-
gage (163 e), even tho he remained with the seller.
If he burned up in the stable before the seller had
time to deliver him, it would be the buyer's loss, but
the seller could probably still collect insurance on him,
if he had any, because policies generally cover 44 goods
sold and not delivered", but if the buyer had paid,
and the seller should collect insurance, he would have
to pay it to the buyer.
But suppose farther that the seller had paid some
bills with the $100 on the way home, and the sheriff
had said: "Well, if you've just sold this horse for
$100, show me the money: I'll take that", and upon
the seller's failing to show the money, the sheriff had
said that he did not believe the seller had sold the
horse at all, and the sheriff had taken him and sold
him. He would still be the buyer's horse, no matter
in whose hands the sheriff might have placed him, and
the buyer would have a right to take him wherever he
could find him — not to take him by force, however:
because, as already said, no man can legally use force
except in self-defence, or in arresting for crime: in
201. Owner must otner cases» ne must appeal to the law.
not secure posses- The buyer could enter another man's
sion by force. stable to get his horse, but only without
force. If force is used, it must be by due process of
law.
Suppose the seller had not paid the bills with the
hundred dollars, and when the buyer sent for the horse
and found him gone, he were to prefer the money to
the horse with the trouble of following him up through
the sheriff's hands, and so he were to ask for the hundred
dollars back, would the law give it him? Perhaps
the seller ought to, as he would have got the buyer into
the scrape, but the law would not. The buyer could
reasonably try to get his horse, but it would be absurd
to try to get the seller's money. It is now the seller's
hundred dollars, and it was the buyer's horse that the
sheriff took.
§ 202 a] Law of Personal-Property Contracts.
177
202. Delivery and ^ t^le se^er ^ad na(* time, before meet-
acceptance complete ing the sheriff, to send the horse to the
ownership. buyer's stables, tho the buyer had not paid,
the horse would have been the buyer's, and the seller
would have had a good claim against the buyer for $100.
202 (a). Dethery The same would have been the case if
toageni or carrier the seller had given the horse to the ser-
gow^' vant or any other agent of the buyer
before the buyer paid for him.
If the seller had started him for the buyer's stable by
the seller's own servant, and the sheriff had met him, he
would, unless paid for, still have been the seller's horse.
We have seen then that the ways in which the transfer
of ownership of personal property can be effected, are
by paying for it, or delivering it on the buyer's premises,
or other premises named by the buyer, or delivering
it to him, or to a person properly acting for him.
Accordingly, in shipping goods, they become the
buyer's upon his paying for them, or upon delivery
to a carrier named by him, or to any common or public
carrier, unless he had ordered a different one. Probably
there would be an exception to the last rule in cities
where dealers generally deliver the goods they sell, and
sometimes do so by public carriers. Probably a court
would hold that a dealer in goods usually delivered at
the house, is bound to deliver at the house unless he
warns the buyer that they go at his risk.
Upon delivery of unpaid-for goods, tho the seller no
longer owns them, he has in place of them, a claim on
the buyer. He should not deliver them unless he
thinks the claim is practically worth more to him than
the goods.
If the buyer named one carrier, and the seller de-
livered to another, the goods would be the seller's until
the buyer received them, unless it was impossible to
deliver them to the buyer's carrier, and the seller had
used proper diligence to get as good a one as possible
in his place.
In such a case, however, if the goods had been un-
i78
The Protection of Rights.
[ §202 a
reasonably delayed or damaged or overcharged for
freight, the buyer would not be bound to receive them.
He would, however, be bound to pay the charges of a
carrier he did not select, unless excessive; if excessive,
he would have the choice of refusing the goods or of
claiming the excessive charges from the seller.
203. Conditional Suppose the buyer had not seen the
•a|e- horse, but had only said: " I like your
description so well that if he comes up to it, I'll take
him", still he could not be the buyer's before he had
accepted him, even if the seller's groom delivered him,
and the buyer's groom accepted him, unless the buyer
had given his groom special authority to judge and
accept him. But if, after hearing the seller's descrip-
tion, the buyer, without seeing the horse, had said:
"All right, I'll take him", he would have had to keep
him unless he was ready to say the description had not
been just.
If the buyer had said: "I'm going away, but I'll
come and see him within a month", and the seller had
said: 44 All right, I'll keep him for you", it is a com-
plex question whether the seller would have been under
contract to keep him. What really passed between the
204 0 tlon parties was that the owner gave an option,
p on' and the question is how much that option
was worth. If it was worth more than $50, the agree-
ment to keep the horse, and agreement to go and see
him, do not make a contract, without writing or pay-
ment on account. We must distinguish between an
option and a contract of sale. Now an option has value :
one party has all the advantage, and generally he should
pay for that advantage. He can buy or not : if values
change, it is a case of heads, he wins; tails, the other
loses. But in a contract of sale, the chances are even,
if other things are even: for change of value before the
contract is completed, is as apt to be on one side as
the other. Accordingly, the mere right to buy goods if
wanted (or leave them alone if not wanted), is often
matter of bargain and sale — quite possibly more often
than goods themselves, especially in some classes of
§ 206] Law of Personal-Property Contracts . 179
goods. In grain, perhaps the option sales amount to
more than the sales of actual goods. The same may
be true of some stocks.
Suppose there had been a defect in the
mwtKdMSd.1 horse- Was the seller bound to tell of it?
If questioned, he must answer honestly,
if he answers at all. But he has a perfect right to say:
"There is the property ; judge it for yourself." Here ap-
plies the maxim of law: "Let the buyer look out for
his own interests."* This applies specially to horse-
trades, but also to all trades where the buyer has full
opportunity to examine. Some very honest people often
refuse to say anything about their wares — especially
their horses (For now and then, perhaps, a man can
sell a horse without losing his honesty), because they
fear that there may be defects of which they themselves
are not aware.
Yet the principle of refusing to disclose a defect
when it is known, is not good, but it is like something
discussed before: it is more in the field of honor than
in the field of law. It would be very hard to enforce
laws requiring it, and it is unwise for the law to attempt
more than it can do: because failure is very apt to
lessen the respect in which it is important that the
law be held.
But there are cases in which a man is bound to tell
the whole story: an employee or a person acting for
another in any capacity, is always bound to tell his
principal all essential facts. For instance, if a gentle-
man sends his coachman to look at a dealer's horse,
the coachman is bound to tell all he finds, while the
dealer is not.
A seller also, if he warrants his wares,
206. Warranty. mustj m self.defence| tell how far he war.
rants them. Whether the contract of sa^le implies a
contract of warranty, is a very complicated question.
In ordinary cases, the two contracts are separate, and
* Caveat emptor.
i8o
The Protection of Rights.
[§206
extra price is often paid for warranty; but in danger-
ous cases, like drugs and food, the courts would prob-
ably imply warranty with sale. Of course, as often said,
the law insists that there shall be no fraud, but cannot
always insist on things being usable for the purposes that
they are sold for. That point opens up an enormous
number of mixed and delicate questions. Probably
the farthest the law could go in any case, would be to
punish fraud if proven.
A large and interesting class of contracts closely
allied to warranty, includes those of suretyship — guar-
anteeing that the responsibilities of another
• ureys p. person shall be performed. This, of course,
includes endorsement, which we have already treated
(163 6). Even where one has had no real interest in a
piece of negotiable paper, if he puts his name on the
back of it, the law assumes a right in any subsequent
holder, on giving prompt legal notice, to claim its value
from him. He becomes surety for it.
An endorsement is in writing; but if, in our horse
case, the buyer had said that his finances were not in
good shape, and a friend standing by had said: " Well,
if it turns out that he can't pay you, I'll help him and
see you made good," the speaker would not have been
bound. Under the Statute of Frauds (82 b) any "con-
tract to answer for the debt, default or miscarriage of
another", must be in writing, and signed at least by
the party who may have to answer.
Suretyship and warranty shade into
. nsurance. another large class of contracts embracing
all kinds of insurance. Fidelity insurance is especially
like suretyship, but also fire, marine, accident, life,
plate-glass and all the rest, are of course of the nature
of warranty; but the warrant extends, unless otherwise
agreed in the policy, not necessarily to the full amount
of the policy, but only to the value of the property
at the time of loss. Hence the desirability of keeping
the policy small, or having it declare that the amount
insured for shall, in case of loss, be taken as the value
of the property. Life-insurance companies, however,
§ 209 a] Law of Personal-Property Contracts. 181
aire always liable for the full amount of their policies.
Bailments ^e come now to ^e wide questions of
a men s Bailment, from the French baillcr, to de-
liver. That is the law term for placing movable prop-
erty in the possession of somebody not the owner, or
for the relations arising from such placing of any prop-
erty. It will be noticed that that is different from the
delivery which changes ownership. In bailment, the
owner and receiver are called, respectively, bailor and
bailee. Now suppose in our horse case, the seller had
delivered the horse to a railroad company, and they
had failed to deliver him to the buyer: if he had been
killed by an accident on their road, they would have
had to pay the seller for him, unless the accident was
caused by "the Act of God or the Public Enemy".
Very early the law made common carriers responsible
for the acts of highwaymen, because they were so
often in collusion with them (202 a). We are defence-
less against 4 4 the Act of God", but the owner would
have a chance of recovering the horse's value if he
were taken by the public enemy: for in the case of
war, if the government were to get an indemnity, it
would perhaps pay such private claims; and in the
case of riot and insurrection, the citizen has a good
claim against the state for not preventing the trouble
or suppressing it before damage is done.
For any other matter sent by freight or express, the
company's liability would be the same as for the horse.
The liabilities of common carriers are
l^kinia0ofdgo^at the same for all sorts of property, except
that they are not responsible for deteriora-
tion in perishable goods like meat and fruit, unless
there is special agreement regarding time of delivery.
They can protect themselves by charging different rates
for articles that differ in durability or strength, and
they may perhaps altogether refuse extra-hazardous
articles — like dynamite, tho they do not if they can get
paid enough.
Probably if a railway company sells a ticket presum-
182
The Protection of Rights.
[§ 209 a
ably for a particular train, it is bound to provide a
seat. This would hardly hold, however, where a num-
ber of tickets are sold to be used at pleasure — com-
mutation tickets for instance. A passenger who can-
not find a seat in a common car, may take one in a
parlor-car or a sleeping-car without extra payment,
until one in an ordinary car is vacant.
209 (b). "Common A "common carrier " is a carrier for pay,
Qamer" defined. Qf virtually anything that offers.
If one travels and checks his trunk, whether the
company is liable for any amount of value in the trunk,
is a very doubtful case, and has often been decided
each way. The weight of the decisions now makes the
companies liable for ordinary non-business baggage, even
up to the outfits of sportsmen, and most elaborate cos-
tumes of ladies.
Handbags are at the risk of owners, so would be
valuables not properly constituting personal baggage in
trunks.
The carrier's responsibility for horses is weakened
(tho not always destroyed) by their being in charge of
the owner or his agent.
209 (o. Limiting Confusion in the law has resulted from
Liabtiiti without differences of opinion as to whether a com-
eontraot. pany can relieve itself from liability by
printing on tickets (as it always does) that its liability
shall be restricted to a certain amount. While that
cannot make a contract unless the passenger agrees
to it, the companies' lawyers claim that in accepting
the ticket, he does agree. The question ought to be
settled by statute, but probably the companies influ-
ence the legislatures not to settle it in one way, and
fear of constituents prevents the legislatures from
settling it the other way.
If the passenger has not even read what was printed
on the ticket, the companies claim that one takes the
ticket on his own risk, and ought to read it — in short,
that the ticket is a sort of bill-of-lading.
209 (d). Biu-of- A bill-of-lading is a carrier's receipt for
Lading. goods. These were issued long before
§ 209 f] Law of Personal Property Contracts. 183
passenger-tickets were — even when people used to
travel only by horse and carriage; so the law of bills-
of-lading was evolved and settled long before there
were any passenger-tickets. A man consigning goods
to a carrier is bound by anything on his bill-of-lading
that is not against the law; therefore, if he is wise,
he will know what is on it before accepting it. Per-
haps the judges would decide that passenger-tickets
are to be put on the same footing as bills -of -lading,
were it not that when a queue of people is waiting
before a ticket-window, and the train is soon to start,
it would not do for each one to have to read his ticket
before accepting it. Moreover, as railroads are chartered
for the public convenience, they should not be per-
mitted to restrict it needlessly by their one-sided
alleged contracts. The general tendency of the courts,
however, is very properly in favor of the shipper, as
the companies are too apt to act as masters of the
situation.
««« Now take another case of one party's
209 (e). Hiring, -u-v,. r . . , ^ JA
responsibility for returning the property
of another: if the railroad company were hiring the
horse, and paying for the use of him instead of carrying
him somewhere for pay, it would still be responsible
to return him unless prevented by the act of God or
the public enemy: he becomes for the time of hiring,
the company's horse, and it undertakes to return him
(or his value) when the time of hiring is past.
If while he was hired, a thief had taken him from
the stable, the hirer would have to find him; or if the
hirer could not find him, or if the thief drove him to
death, the hirer would be responsible to pay.
209 (fh The Law There is an exception to this responsi-
does not require bility, where, at the time of hiring, some
impossibilities. condition exists making it, in the nature
of things, impossible to return the hired article — for
instance, if, when the horse is delivered, he has a mor-
tal disease that carries him off while he is in the bailee's
hands. But if he catches grip while in the bailee's
stable, that is the bailee's risk.
The Protection of Rights.
[§ 209 /
If he is vicious and runs away and kills himself, if
the bailee could prove that he was habitually vicious,
the bailee would not be responsible; and if the bailor
knew it (as in that case he presumably would), the
bailee could even get damages for any harm the horse
might do him.
If he is burned up, that is the bailee's risk, too, but
of course bailees can insure against it, or bailors can
when bailees are not reliable.
The same principle of liability holds for all sorts of
property, if left for the bailee's use.
209 Bailment If anything is received without pay—
without consid- solely for the bailor's convenience — for in-
eration. stance, jewelry or a picture that one does
not want to store with ordinary furniture, the bailee is
under no responsibility, except for the grossest careless-
ness. Similarly, if, as is often the case, an express com-
pany deadheads a private package for a man who gives
the company much business, the company is responsible
only for gross negligence : there has been no considera-
tion making a contract to deliver safely. But if, for
instance, a bailee had borrowed a horse, the bailment
would have been for his own benefit, and he would have
been responsible — as responsible as if hiring, and more
responsible in honor, as the owner gets no benefit ; and
accordingly, a judge and jury would be more apt to
throw all the points against the borrower.
209 Liability Suppose the borrower had gone off for a
of innkeepers. driving tour, and stopped at a country inn,
the landlord putting the horse in his stable. Would
his responsibility to the borrower be the same as the
borrower's when the horse was in his stable? Prob-
ably it would be stronger. Generally an innkeeper's
responsibility for the property of his guests has been
the same as that of a common carrier: perhaps, tho, it
may be doubted whether this responsibility would ex-
tend to the stable.
Yet while the early law made by the decisions of the
judges, was as stated, many statutes have been made by
legislatures to exempt the landlord from responsibility —
§ 209 i] Law of Personal-Property Contracts. 185
for instance, for jewelry and valuables unless these are
specially put into his hands, provided he gives notice
to that effect. In some states, to relieve himself of
responsibility, he must put such things into an iron
safe. Perhaps this general tendency to relieve him
of responsibility would influence judges as far as the
stable.
Approximately, the innkeeper's responsibility indi-
cates the responsibility of all other bailees for pay, tho
as he was one of the earliest bailees, and as in early
times the law could take much less account of circum-
stances than it learned to in the course of its evolution,
the law is rather harder on the innkeeper than on most
bailees.
The rigor of the common law with innkeepers arose
from its having taken shape at a time when innkeepers
were apt to be in collusion with highwaymen and other
thieves.
The innkeeper is also obliged to keep his place in
sanitary condition and furnish wholesome food.
209 (i) Pted e Suppose the owner of our horse had
e g*' borrowed fifty dollars, and had left the
often-aforesaid horse as security : he is not for the time
as much at the risk of the lender of the money (called
the pledgee) as he would be if he hired or even borrowed.
As a pledge, the lender must return him in good order,
if he will permit ; but if he gets sick and dies, the pledgee
is not responsible, as he would be in hiring. It must
be admitted, however, that horse cases are harder than
most other cases: a horse is more apt than a load of
stone, for instance, to get sick and die, and the diffi-
culty of horse cases is one of the reasons why I have
used them. More changes can be rung on a horse
than on a load of stone.
Courts hold people regularly receiving pledges, such as
pawnbrokers and stockbrokers, to very strict accounta-
bility, yet if a horse dies, or anything goes wrong with
other perishable property in a bailee's hands, even when
hired, and the judge were to tell the jury that in strict
law the bailee was responsible, and that they must fix
i86
The Protection of Rights.
[§ 209 i
the value, they would be apt to fix it pretty low. The
situation is one of the many where "the glorious uncer-
tainties of the law" are specially uncertain. But yet
there is a general principle that runs through it all, and
209 (J). General wnicn would influence both judge and
principle of ua- jury. The law of bailment has been
tiuty of Bailee*. evo\ye(^ frorn such varying circumstances
that, in many departments, it has hardly settled down
according to principles. It seems tending, tho, to
make the liability — the amount of care required from
the bailee, vary with the advantage he derives from the
bailment : if he gets no advantage, as in taking to accom-
modate the bailor, he is responsible only if he is grossly
negligent; but if he gets an advantage, as in borrowing,
or hires an advantage worth paying for, as in ordinary
hiring, he must take good ordinary care, and that
will not always save him ; but when we come to bailees
who make their living from their bailments, such as
common carriers, innkeepers and holders of pledges,
they must take all possible care, and even then they
are not always safe in case of loss.
210 Tender Where a . party admits that he owes
en er' something, but there is a dispute about
the amount, it is wise promptly to make a tender of
what he thinks he ought to pay. Otherwise he could
not claim the performance of any of the agreements
that his opponent hesitates about ; and in some states,
if a seller tries to back out of a contract for goods,
and the buyer makes him a tender, the goods become
the buyer's property at that moment, even despite the
seller's wish, and only the amount to be paid remains
to be adjudicated.
Moreover, if the court should decide that more was
owed than had been tendered, if no tender has been
made, the debtor would have to pay interest on any
sum the court decides due, and the costs of the suit.
If a tender has been made, the debtor would not have
to pay interest up to the amount tendered, or any costs,
unless the court should decide more owed than the tender.
§ 2 1 1 ] Law of Personal-Property Contracts, 187
But in some cases the acceptance of any tender has
been held to discharge the debt.
A check is not a legal tender. The check
mon(By'in.,ndgof might not be good. Pennies are legal
tender only up to twenty-five cents. Sil-
ver small change is not legal tender for over ten dol-
lars. Silver dollars are legal tender for any amount,
in the absence of contract to the contrary. Silver
certificates might be expected to be legal tender only
for public dues. Gold English sovereigns are the best
money in the world, but foreign money is not legal
tender. Legal tender in America is only American
money — copper, nickel and small silver only in the
small amounts stated, and gold coin, silver dollars
and government legal-tender notes in unlimited amounts,
tho contract can be made against all but gold.
The reasons why some kinds of money are legal ten-
der, and others not, are: that a debtor should not
be able to force a creditor to take a cartload of copper
for a thousand-dollar debt, or a cartload of silver for
a ten-thousand-dollar one, if the creditor has not been
wise enough to contract against either; much less should
he be obliged to take a check that it is possible the
bank may refuse. So it is necessary for the law to
determine what he shall take. This is done by Con-
210 (t). Deter- gress, of course : as the Constitution gives
mined by Congres: Congress the sole power to coin money, it
alone can say what is money.
The Supreme Court has virtually decided that the
power to coin money includes the power to print paper
money, or at least that the power to raise money in-
cludes that of raising it by issuing legal-tender notes;
but many of the best lawyers still think it does not.
211. Contractual A minor is incapable of • making con-
Disabliitles. tracts, except for necessities. Formerly,
and perhaps still in some states, married women can-
not contract, and everywhere idiots are unable to.
If, for instance, a minor's doctor recommends him to
ride horseback, and he refuses to pay for a horse he
i88
The Protection of Rights.
[§2II
has hired, a jury would have to decide whether, con-
sidering his health and circumstances, the horse could
be called a necessity. Should the jury agree that the
212. Some limits norse was a necessity, as there was no con-
of Quantum tract (the hirer being a minor), the owner
aeat* still could recover for the hire, on the
ground that anybody who supplies a minor with a
necessity, may recover 4 'what it was worth" — Quantum
vaiebat (189). This principle of quantum vaiebat is
not applied only to supplying minors altho they can-
not contract, but it applies when anything really making
212 (a). Enrich- an 44 enrichment " is supplied, even by mis-
ment take. Tho in ordinary language a minor
or anybody is not 44 enriched " by riding a horse, he is
in the legal sense, if it does him good. Even if it does
not, he would still have to pay for it, if good judges
had recommended it.
But if he had been supplied with something harmful,
as too much whiskey, for instance, the seller could not
recover.
The question of quantum vaiebat is constantly aris-
ing where things have been furnished not under con-
tract, but by mistake. Once money was paid an English
admiral by mistake. He went on a long spree with it,
and successfully defended a demand for its return,
on the ground that it had not 1 4 enriched* ' him any.
There are many good judges however, who doubt if
that was good law.
If an owner who had agreed to sell anything, wanted
to back out on the ground that there was no contract
because the buyer was a minor, probably the courts
would not excuse him if the minor sued through a
guardian for enforcement. The principle would seem
to be in accordance with the maxim that 4 4 no man has
a right to take advantage of his own wrong". The
seller in the supposed case, being of age, is presumed
to know what he has, and has not, a right to do. He
has no right to contract with a minor (unless for a
necessity, under his health and circumstances) and
§213] Law of Personal Property Contracts. 189
therefore cannot take advantage of his being a minor,
to set aside the contract.
But suppose for some reason which we need not
take the trouble to invent, a minor wishes to set aside
a contract, has he not been as wrong to go into it as
the adult: so should he have any more right to set it
aside? The law is pretty decided that he
SStoSjwJjf.'0" should. It is the special province of the
law, so far as it can, to protect the weak.
The minor is in special danger of being led by adults
into unfair contracts, so he rightly has the power to
set them aside. The adult, on the other hand, is left
to take care of himself, and is all the better for the
responsibility. True, as already said, the law cannot
attempt to discriminate between strong men and weak
ones, but it can tell the difference between people over
twenty-one years old, and those under.
CHAPTER XVI.
LAW OF CONTRACTS FOR PERSONAL RELATIONS.
. enc If A, being away from his stable, sells
gcncy' a horse to B, and on coming home is met
by his groom, who says: "Here's a hundred dollars
that I just got from C for that horse you told me to
sell, and he has taken him away", whose horse he is
depends upon whose horse he was when the groom
sold him to C If A had sold him to B before the
groom sold him to C, he was B's. A could not give C
any title to him that A did not have himself. But
if A's man had sold him to C before A sold him to B,
A had no title to sell B.
214 (a). Author- ^'s man COVL^ giye B as good a title as
ued acts bind A had, if A had made him his agent to do
principal. &Q .{ A nQt said tQ gub_
stantially: "Sell that horse when you can get $100 for
him", but had only said substantially: "I think I'll sell
that horse when I can get Sioo for him", he had not
made the groom his agent to sell the horse, and no
agent can do more than he is authorized to do, unless
the principal has, carelessly or otherwise, given the
third party good reason to believe that the agent had
the necessary authority.
Again, suppose A had given instructions to sell the
horse for $100, and the groom had given C an option
(203) on him for a month. A's instructions did not
give the groom the right to tie the horse up for a month,
so that A could not take a better price, unless the
groom was sure of the sale at the end; or perhaps
190
§ 2i4 c] °f Contracts for Personal Relations. 191
for that long, even if he was sure, because the horse
might get sick or die meanwhile.
But if A had said: "Do anything you please with
him that will put me to no expense, but don't bring
me less than $100", that would probably have given
the groom a right to give an option, if he honestly ex-
pected that it would lead to a sale: yet it was rather
risky. Most courts would probably hold such an
option good, if the consideration for it were good.
214 (t>h Agent If the consideration for the option on
liable for exceed- the horse was held to be good, and the
ing Me authority. wefe ^ becauge
the agent had exceeded his authority, the remedy
could only be through damages by suing the agent —
if he had enough to pay with: a principal can be sued
only for what he has authorized an agent to do, or
that which through negligence he had permitted his
agent to assume authority to do, after having placed
the agent in a position in which he might deceive the
public.
214 Principal As already intimated, an agent can do
bound aieo bu acta all that his principal has given a third
third party has , ., x . , . . " -
good reason to be- party good reason to believe the agent
tieae authorized. has been authorized to do: for instance,
if A had said to C so lately that A could not be rea-
sonably supposed to change his mind: "I always let
my man buy and sell my horses as he thinks best: I'm
so buried in my books that I don't attempt to know
anything about the stable'" — if A said that, he would
be estopped (190) from denying it to C, after C had
acted on the faith of it.
Nor is the principle of estoppel the only one or the
main one, that forces a man to abide by the authorized
acts of his agent.
Now in the horse case, suppose A was not the real
owner, but merely the agent for the owner, and the
owner disapproved A's selling him, whether the court
would enforce the sale, would depend, as already said,
upon whether the owner had led the buyer to believe
that A had the authority; or if not, upon whether A
192
The Protection of Rights.
[§2I4C
had exceeded his authority, or whether, merely, the
owner had changed his mind after giving A authority.
A principal is always bound by the act of his agent,
unless the agent exceeds his authority.
214 Agency There is also Agency by necessity. A
through necessity. wjfe an(j children are a husband and
father's agents to supply the family with necessities
according to his means, and so can render him liable;
or if in accident a bystander takes the place of a dis-
abled agent, the principal is liable for consequences.
Should a man running a launch become ill, and a pas-
senger take the wheel, if he wrongly ran down another
boat, the owner of the launch would be liable, tho he
had not engaged him. It is an old maxim of the law
that he who does an act through another, does it him-
self.*
214 (e). Agent can- ^ t^ie owner °f the horse had said:
not make am, "Sell him for $100", and the agent had
profit for himself. done ^ &nd gQt he have
no right to keep the difference: an agent is simply his
principal's self, as far as business between them is
concerned.
To leave horse-trading for a moment, suppose an
agent were sent to buy a piece of land on which the
principal was going to make an improvement that
would greatly raise the value of land in the neighbor-
hood, and the agent bought some neighboring land on
speculation himself. He could not keep it if his prin-
cipal wanted it at the price. An agent in a transac-
tion simply represents his principal in everything con-
nected with it. It would be the agent's duty to tell
his principal about the neighboring land: so far as
everything connected with a principal's business is con-
cerned, an agent's mind should be simply his princi-
pal's mind, and his pocket his principal's pocket.
Should an agent receive bribes to buy from particular
people, the law would give them to his principal, and
in some cases would punish the agent. Cooks and coach-
* Qui facit per altum, facit per sc.
§ 2i4 g] Law of Contracts jot Personal Relations. 193
men acting as agents for the purchase of supplies, often
take commissions on them, and pay high prices, and
waste much in order to profit by needless purchases.
All this they are frequently tempted into by com-
peting dealers. The act is criminal in both parties,
and the dealers being generally the more intelligent,
deserve double blame. Employers who would rather
endure the loss than take the trouble to prevent it,
nevertheless owe it to the community to ferret out
and prosecute such cases. Occasional examples made
of them would obliterate a great and growing abuse.
If an agent known to habitually represent a prin-
cipal, buys a thing at a higher price than the principal
has authorized, the principal is bound, tho of course
with right to recover from the agent. Hence on mis-
trusting or discontinuing a purchasing agent, it is very
important to give notice to people who have known
him in that capacity.
214 <f). ne aupe- ^ not seldom happens that agent and
riorja generally principal are both responsible. We can
/table. imagine many cases where the other party
to the contract might in reason sue the agent, and
then the agent sue the principal, or vice versa; but
it is a maxim that "the law abhors litigation", and in
most such cases, the judge would order the first plain-
tiff to sue the last defendant direct. This fact and
the fact that the principal is generally "good" for
damages, while the agent generally is not, naturally
make the custom as it is. "Let the superior answer"*
is good sense and good law. But there is another prin-
ciple of law working in the same direction: under the
maxim already quoted — that whoever does a thing by
means of another, does it himself, the agent is regarded
somewhat as a mere involuntary instrument, and there-
fore not responsible.
A principal is responsible for his agent's
2H(9h even for j • t -a • r
wrong done in wrong-doing, if it occurs in course of any-
oo^sb of routine thing that the principal has authorized
his agent to do, but not in anything the
* Respondeat superior.
194
The Protection of Rights.
[§*i4g
agent does outside of his authority. For instance, a
servant was throwing snow from the roof of a house
in New York. He had not given any notice to passers-
by, and killed a man. The master had to pay damages
to the man's family. Note in this case that it was not
necessary that the master should specifically order the
servant to throw off the snow. Agents such as ser-
vants and employees generally, have certain regular
and ordinary duties; whatever they do in direct con-
nection with those duties, their employers are respon-
sible for. That may be hard on a man who, through
bad luck, gets hold of a careless or wicked servant,
but it is the master's bad luck, and not the victim's.
But servants are hardly a question of luck. The law
does well to hold a man responsible for care in selecting
his servants or any other agents. An employer of many
men could do great harm in being careless whom he
sets to shoveling snow from roofs, or driving horses
through the streets, or running elevators or engines.
214 (h). which At first it may appear that if the agent
Jfe™*g*Vr%*yUf' does wrong, it would be fairer to sue
requires. him than to sue the principal. But it
would not generally be fairer to the sufferer, because
generally the agent is the man of inferior ability, and
therefore of inferior wealth. But if he has any money,
the sufferer may sue him if he prefers. People often
employ brokers and commission merchants for the
very purpose of keeping themselves in the background.
In such a case, the other party to the deal must take
his risks with the agent. The agent is personally liable
when he does not disclose his principal.
If an agent employs subagents, he is usually respon-
sible for them — a contractor doing work for another
man, is generally responsible for his workmen.
214 (i). Both prin- Yet if one makes another his agent to
uSb1elndwarlZ- commit a murder or robbery, the respon-
d<>ing. sibility does not slip past the agent and
rest entirely upon the principal. In all wrong-doing,
agent and principal are both responsible, where the
agent acts under instructions.
§215] Law of Contracts for Personal Relations. 195
214 <j). Classes of Anybody appointed by another to do
agenu. anything for him, is his agent to do that
thing; generally attorneys, commission-merchants, bro-
kers, auctioneers, salesmen, clerks, domestic servants,
and any employee — so far as concerns what one was em-
ployed to do: anybody, in short, who does anything at
the order or request of anybody else, is his agent, tho
agents are generally employed to contract, while serv-
ants seldom are.
215 P rtnershi ^ partner is more than an agent for the
. a ners p. Qt^eT partner or partners : in dealing with
outsiders, each partner has all the powers of an owner.
These powers are limited of course to the partnership
business. A man may be partner in several concerns:
of course his partner in only one, would not control
anything in another.
But in case of disagreement among the partners of
any firm, a firm can limit a partner's authority by giving
notice, and anybody having such notice would deal
with a partner at his own risk.
But when partners disagree, and a person dealing
with them has had no notice, when one partner has
spoken, the rest must abide by what he has said. If
he runs them in debt, each one is liable to the full
extent for everything any one partner may do in rela-
tion to the partnership property. So inclusive is this,
that if A owns say one tenth in a partnership property,
and B owns the rest, and B is rich in other things
while A has nothing else, A can run into debt for a
lot of worthless things, and B will have to pay for
them. This presupposes of course that the two appear
before the world as partners, and the worthless things
are sold to them in good faith for the partnership
account. It is very foolish, then, for a rich man to
take a poor cne into partnership, unless he knows
him very well: for ordinarily a man's whole estate
is at his partner's mercy.
Yet a limit to the liability of any partner can be
made by advertising the amount that he has put in, and
196
The Protection o] Rights.
stating that the liability is limited to that amount.
The method varies in the different states, however,
and a lawyer should be consulted.
To constitute a partnership, people must be asso-
ciated in continuous business for the purpose of making
money. An unincorporated club or a joining of forces
for a specific job not taking a long time, does not con-
stitute a partnership.
When partnership is dissolved, the liability of each
partner for the others' acts, is terminated by notice
of dissolution, to people with whom the firm has regu-
larly dealt, and by newspaper advertisement to others.
216 Service *n sc^ent^c language, almost any act
erv ce. fast one does for the satisfaction of another
is called a service. Pleading a case or singing a song
is in that sense a service. For that matter, the law
calls all persons servants who are in the employment
of others for salary ; the President himself is sometimes
called the servant of the people.
In a contract for any sort of service, from that of a
bootblack up to that of the highest artist, for any
period — say for a week — the employee is bound to give
good service and good behavior for a week, and the
employer is bound to give decent treatment and honest
pay for a week. If either defaults, it releases the other,
and the defaulter is of course liable for damages. Yet
among employers and servants both, there is a good
deal ot ignorance and stupidity about this matter.
216 (a). Discharge There are no* a few employees of all
for cause stops pay kinds who think they can be lazy and
for rest of term. disagreeablef and still get their pay— even
going to the point of asking pay for the full time
agreed upon, when they have been deservedly dis-
charged before it had elapsed. In such a case, it is
always a good citizen's duty to fight even petty injus-
tice, rather than yield because yielding is less trouble.
Only in that way can the public idea of justice be
kept high.
§ 216 c] Law of Contracts for Personal Relations.
197
But of course in quarrels between em-
wnhoJiic^8e%9re ployers and employees, the employees are
rfow»ofc0r cauae' ky no means always in the wrong: em-
ployers sometimes maltreat servants, or
discharge them when they really are not to blame.
In such cases the employee's right is to get wages for
the full time agreed upon, even if no service is rendered
for the portion of it after the discharge. But it is the
duty of an employee to try to get work, even if wrong-
fully discharged, and any salary received for service
during the contractual period, must be applied in reduc-
tion of the claim on the employer. The same prin-
ciples hold between mechanics and clerks and agents
and their employers, as between domestic servants and
their employers.
According to the general principle already given, if
the servants in a house, or mechanics in a factory, are
paid by the week, and one of them is found to slouch
or scamp his work, the employer is not bound to keep
him the full time, nor can the delinquent claim wages
for the full time under the contract. The contract
means honest work for honest dollars: if he does not
render the work, he is not entitled to the dollars.
If the employer turns him off Wednesday for cause,
the law does not suppose that he might have worked
honestly Thursday, Friday and Saturday. The law
always judges people by their records: even if a man
with a good record commits a crime, the law is more
merciful to him than to a man with a bad record.
216 fo. Both ^ an employee's record is good, but an
bound for the en- employer finds he does not need him as
re erm. long as he contracted for, it is the em-
ployer's loss: he should engage for only practicable
terms.
If the employee is offered higher wages to leave a fair
employer before his term is out, he is bound to stay
his term. In the absence of special agreement, the
term is usually the period for which payment is made —
day, week, month, year: the special customs of the
trade may affect the question. If a servant leaves
198 The Protection of Rights. [§ 216 c
without just cause before the end of the term, he is
not strictly entitled to any pay on account of that term,
tho the judge would probably give him a quantum
meruit (189), but if his departure had caused his em-
ployer serious inconvenience and loss, the judge would
probably deduct part or all of the quantum meruit to
make the employer good, or might even award him
damages.
The case of the servant leaving, just cited, might be
a very important one: for instance, if he were an expert
engineer or electrician or life-insurance actuary, whose
place it might not be easy to fill.
217. Remedies for If contracts for service are broken in
Broken Contracts, essential particulars — not merely in for-
mal ones, the law will either issue an injunction against
the employee leaving, if his staying were desired by
the employer (not a very likely case, at least in the
lower grades), or the law would give damages, or, if
the case admits, combine both.
If the contract is not for personal service, but, we
will say, for manufacturing goods, or building a house,
the court would probably order "specific performance",
as well as give damages for delay: it tries to meet
the wishes of the aggrieved person, as far as justice
will permit.
We have now gone through the principal kinds of con-
tracts, which are Sale, Warranty, Surety, Insurance,
Bailments, Agency, Partnership and Service.
CHAPTER XVII.
LAW OP SOME QUASI-CONTRACTUAL RELATIONS.
Now we come to a set of relations including those of
the various kinds of trustees who manage property for
the benefit of others. These relations sometimes arise
under contract, and sometimes by mere appointment
and acceptance. We can, however, see something like
a contract in the latter case: there would seem to be
consideration on both sides — giving the position with
its emoluments (if any) on one side, and the perform-
ance of the duties, on the other. Accepting a position
is certainly undertaking to perform its duties. Accord-
ingly, for symmetry's sake, perhaps we may call these
relations quasi -contractual ones, altho that term does
not apply in strict legal usage: under it they are gen-
erally called fiduciary.
218. Trusteeship in A trustee of property is not merely a
general. representative of another person or party,
as an agent is : he really owns the property for a longer
or shorter time, but owns it for another's benefit.
The principal classes of trustees are directors of cor-
porations (who are trustees for the stockholders);
assignees of bankrupts; administrators of estates when
there are no wills; executors of wills, guardians of
minors, and trustees without special names, who may
be appointed for hundreds of purposes.
If a trustee does not pay over what is entrusted to
him, or take reasonable care of it, he is liable to have
his own property sold to make up any losses. He is
i99
200
The Protection of Rights.
[§219
219 Safe uards a*so ^a^e to prosecution for "Breach of
aegu s. Trust", which is a crime punishable with
imprisonment. This crime is perpetrated vastly
oftener than inexperienced observers have any idea of,
especially regarding the property of women and children ;
but it is very often hushed up, because it is peculiarly
apt to happen between friends and relatives — trustees
naturally being selected among them.
The best defence yet evolved against breach of trust,
is making a "Trust Company" a trustee, instead of an
individual ; tho probably it is best to associate with the
company, an individual friend of the "cestui que trust",
as the beneficiary is called. Then instead of one man
secretly yielding to temptation, it would generally
be necessary for all the officers to yield together, with
the knowledge and connivance of each other.
220. Assignees of An important class of trustees are the
Bankrupts. assignees of bankrupt estates. When,
through misfortune (or oftener through lack of economy
or energy or some of the other qualities essential to
ability), a man's debts exceed the value of his property,
it is almost useless for him to go on in his own way,
because he is apt only to make things worse. It is
usual then to declare him bankrupt (bench-broken, from
an ancient custom in the Italian exchanges of breaking
the bench of a banker who had gotten into such a situ-
ation), and for him, either voluntarily or through the
action of a court, to assign his property to a trustee
who will dispose of it and pay the creditors such por-
tion of their claims as it will yield. After the settle-
ment, such as it is, is made, the assignee gives an account
of it to a court, who, unless there is evidence of fraud
on the part of the bankrupt, discharges him from farther
liability.
220 (a). Justice At first sight, this may not seem fair to
of discharging the creditors; but it is a great deal fairer
ankrupts. t^an letting the bankrupt go on making
worse ducks and drakes than before, and so insuring
§221 a] Law of Some Quasi-Contractual Relations. 201
that the creditors' shares would be smaller still. On
the other hand, if the bankrupt's bad condition were
temporary — the result of some special misfortune, in
case he is relieved of so much of his debts as he is not
at the moment in condition to pay, he can take a
fresh start with lighter burdens; and if he really has
ability, there is nothing in his bankruptcy to prevent
his paying his deficit when he makes money enough
to, as indeed happens in an occasional case. But
if a man lacks ability, it is best that his creditors should
take the property he holds, and he find the place for
which Nature made him, under the guidance of some
man who has ability.
We now come to trustees for the estates of deceased
persons. At the outset we must note a difference in
the ways real estate and personal property are disposed
of at the owner's death.
221. Administrators. If n° is le,ft makinS J different diS-
Devoiution of intes- position, the real estate, subject to dower
tate estates. Qr courtesv rights (82 g), at once becomes
the property of the heirs, while personal property is
held in trust by somebody appointed by the court,
called an administrator, for the payment of funeral
expenses and debts, and then for the division of any
balance that may remain, among the relatives or others
entitled to it.
This does not imply that a family must live off the
real estate until all the debts are paid: there might be
real estate in litigation that could not be used in years.
In such cases, the court makes from the personal prop-
erty, such allowances for the support of the survivors
as the estate seems to justify, and even leaves some-
thing to the discretion of the administrator.
221 (a). Rights of Rights of inheritance, when there is no
relatives 0; intes- will, vary in the different states; but gen-
tat08' erally, rights of dower and courtesy being
allowed for, the real estate at once, without any for-
mality, vests equally in the heirs. "Heirs" is really a
technical term, meaning the persons who take real estate
202
The Protection of Rights.
[§ 221 a
when there is no will. They are the nearest blood-rela-
tives of the same degree — children or the descend-
ants of deceased children if there are any ; if not, parents
if there are any; if not, sisters and brothers or the
descendants of deceased ones if there are any; and
so on, out to remote degrees of relationship. The
children of a deceased person who would take if living,
divide equally the share that the parent would have
had. Of personal estate, husband or wife usually
takes a third, or a half where there are no living de-
scendants; and the rest is divided like real estate.
222. Executors. When there is a will, matters are settled
w,,s' up by one or more persons usually ap-
pointed in the will, and confirmed by the court, called
executors. There is a very great advantage in this: a
man who has accumulated and managed property is
apt to be a much better judge of who would better
manage it for his family, than a court who knows nothing
about it, and is apt to appoint as administrators near
relatives who may lack the necessary business qualities.
Sometimes a testator forgets to name executors, or
those he names may not survive him. In such cases,
the court appoints administrators with the will attached.
The usual essentials of a will good in law, are that it
shall be in writing, state the testator's desires clearly,
and be as simple as possible. If it is intended to give
a wife property to take the place of her dower rights,
it should clearly say that the property is given in
place of dower (or to a husband, in place of
courtesy); it should name all persons naturally apt
to inherit, even any that it may intend to cut off,
so that they will not be supposed to be over-
looked; it should be dated, and state that the
testator revokes all other wills previously made by
him; and it should be signed in presence of two
witnesses not otherwise named in it, who them-
selves sign a statement written on it that it
was signed in their presence, pronounced by the
testator as his (or her) last will and testament, and
that, at the testator's request, they have signed it
§ 222 a] Law of Some Quasi-Contractual Relations. 203
in his (or her) presence, and in the presence of each
other. They should also append their addresses.
If it is not said in the will that it revokes all pre-
vious wills, and a previous one is found, the early one's
provisions must be carried out so far as they can be
without upsetting provisions of the new one. For in-
stance, if the new will names bequests to A, B and C,
and an old unrevoked will is found, leaving bequests to
E, F and G, if there is money left after A, B and C are
paid, E, F and G will be paid, or paid pro rata as the
money holds out, and these payments would be at the
expense of such persons as would otherwise have the
money under the last will.
If a will is known to have been made, but cannot be
found, if it can be proved that the testator did not
destroy it, and wished it enforced '(for instance, if it
was accidentally destroyed after his death), and if any
of its legal provisions can be satisfactorily proved
(which they seldom can be) , they are carried out. Other-
wise the estate is divided as if there had been no will.
If after making a will, a man sells a piece of property
named in it, the person to whom he has left it can get
no equivalent: the will is to that extent of no effect:
so people naming special pieces of property in wills,
must be careful afterwards. A better way, unless there
is reason to the contrary, would be to name only sums
of money, or shares of the estate.
In some states, marriage or the birth of a child, after
making a will, sets aside the will, it being assumed that
it would be the testator's wish that the new member
of the family should be provided for, which of course,
would be done by treating his estate as if he were
intestate.
Theoretically, a man can leave property to whom he
pleases, tho if he passes over those who would naturally
be nearest and dearest to him in favor of others, it
would make it easier for those neglected to prove him
of unsound mind, so that his will would be set aside.
222 (a), who can- Under the English law, and still in some
not make witia. states, not only are wills of persons of un-
204
The Protection of Rights.
[§ 222 a
sound mind set aside, but also those of boys under
fourteen and girls under twelve. In most states, how-
ever, the ages have been raised to eighteen and sixteen.
Until lately, under the law of England, and perhaps
still under that of some of the backward states, mar-
ried women cannot make wills.
222 <b>. Restric- There are also some other restrictions
tions on alienation, regarding what the law will or will not see
carried out in a will. The experience of ages has shown
that it is against " the greatest good of the greatest num-
ber "as the philosophers say, or against "public policy"
as the lawyers say, that land or capital should be kept
in hands that cannot or will not use it properly, and
so made more difficult of attainment by people of
ability who will get the most out of it, and manage it
so as to afford the most employment and product for
their fellow men; and it has also been realized that it
is against public policy that the accumulation by com-
pound interest of enormous properties should put so
much power in any set of hands as to make them dan-
gerous to the community.* For these reasons the law
will not give efficacy to any disposition of property
which will delay its passage into new hands for many
generations. So it is very important in making a will
leaving property in trust for the benefit of children or
descendants more remote, not to run up against any
of the laws affecting alienation. There are several of
these, varying in different states, and much complicated
by decisions under various circumstances : so it is wise
to consult a lawyer whenever trying to tie up property
for anybody's benefit, or for that matter in making any
will whatever. And it may well be remarked in passing
that it is very unwise to put off making a will until
one's deathbed is reached. Not everybody dies in bed;
and for those who do, the time is apt to be deferred,
rather than hastened, by the consciousness that one's
* This well-established principle of law is now attracting the
attention of those who consider it necessary to curb the power
of the trusts, and to limit the accumulation of excessive fortunes.
§ 222 c] Law of Some Quasi-Contractual Relations. 205
affairs are as well adjusted as one can make them. In
England, it is the drift of the law to let property be
tied up at least during any existing life. Once a trust
for the benefit of all the testator's grandchildren was
maintained until the death of the last of eight grand-
children who were alive when the will took effect. But
more grandchildren born after the will took effect, got
no benefit from the trust after the last of the earlier
grandchildren died. Yet of course the later ones par-
ticipated in the division of the estate that the law
then required, but the case would probably not have
received the attention it has unless other persons were
living who had to share with them to their disadvantage.
But there is an American illustration in a direction
nearly opposite. The American law tends to restrict
alienation only during the longer life of one of two living
persons who must be designated in the will. Hence
when a testator tried to create a trust for the benefit
of four living granddaughters, it was declared void
because he had designated more than two, during the
life of the surviving one of whom the trust should last.
222(c). Deaf sea for Notwithstanding all this, property can
lio^ftible'uaea ^e tied up for educational or charitable
c or a e uses. uges ag \ong as one pieases> an(j the benefit
of such things as hospitals and schools can be restricted
to particular kinds of people. Yet a testator could not
endow an elegant domain with homes and schools whose
use should be restricted to his descendants forever,
because it would be a plain attempt to evade the law.
Of course the determination of whether any such scheme
is an attempt to evade the law, is one of the things
that judges are for: they are all the time stopping at-
tempts to evade the law. Such a case could hardly
escape the attention of the courts, because as soon as
the time should come for proving such a will, or later,
when the legal time should come for dividing up the
property, there would probably be people entitled to
inherit, who would apply to the courts for their rights.
It is not likely that all of a testator's family would have
died out: there would be a distant relative somewhere.
2o6
The Protection of Rights. [§ 222 c
If not, the property would escheat to the state any-
how.
When all bequests have been paid, if anything is left
over, it is divided as the law would have divided the
whole estate if there had been no will.
223 Guardianshi ^ minor child does not at once become
ua ans p. ^e owner of his share of a parent's estate.
He holds the legal title, but the management of it, in-
cluding the signing of all papers relating to it, is gen-
erally done by his guardian — a person approved by the
court, often the surviving parent, tho the guardian is
generally named in a will.
After the testator's death, the will must be proved
genuine before a court whose province it is to attend
to the interests of widows, orphans and other bene-
ficiaries from the estates of such persons. If there is
no will disposing of an estate, application for admin-
istrators must be made by the parties in interest.
On first learning that courts appoint
batt'Courts!* Pr°" administrators or executors , people are very
apt to ask: Why should a court come
bothering in the private affairs of a family when it
loses its chief member or any member? To begin with,
a will is often questioned, and somebody must pass on
its validity. Then the estate of a deceased person is
not merely an affair of his family. The richest man
owes some debts — probably the richer he is, the larger
they are. Moreover, as we have seen, a man of great
ability is called upon to help manage the affairs of a
great many people — as guardian, administrator, and in
the various other forms of trusteeship. His relations
to all these people, not to speak of those to his family,
often give rise, after a man's death, to a great many
questions, and civilization has never been evolved very
far without its being found necessary to have special
officers, and even special courts, to see that justice is
done in all these connections. Nor is the multitude
and complexity of these relations the only reason why
courts should supervise the management of the estates
of deceased persons. Those for whose benefit the
§ 226] Law of Some Quasi-Contractual Relations. 207
estates are settled — especially children when they
grow up, might not be satisfied, and might make claims
on a guardian, or on the executor of a will, or the ad-
ministrator of an estate where there is no will. If such
trustees act under the advice and supervision of a court,
their acts cannot be successfully questioned.
225. Trustees for Minor heirs are, of course, not the only
defectives. persons whose property is cared for by
somebody else. Generally a court appoints somebody
to care for the property of lunatics, drunkards and
spendthrifts who have families dependent on them.
oo« r«..*...n„ And there are still reasons of an op-
226. Court super- » , , \ ,
vision of Trustees posite nature why trustees generally should
in genera. ^ wa^ched over by the courts. Persons
having the interests of others in charge are not neces-
sarily all superior to ignorance and temptation. The
courts supply them with the experience of ages, and
tend to guard them against wrong-doing of all kinds.
The judges tell them under what circumstances they
may sell or mortgage real estate (unless unlimited power
has been conferred in a will) and what sorts of invest-
ments they may make ; and also require accounts of
their proceedings.
Yet all these methods are not any more efficacious
than other human inventions are : hence the desirability,
as before stated, of a will naming executors who can
be trusted, or associating a trust company in the man-
agement of the property.
When the task of any of the trustees we have been
describing is done, they can be made safe from future
trouble by taking their accounts before the proper
court. After the court has approved them, the trustees
are free from all liability, unless later there is evidence
of fraud.
CHAPTER XVIII.
PERSONAL PROPERTY.
Schemes for Distributing it more Evenly.
(I) Scamping, Forbidding Work, Destroying Product,
Anarchism, Communism.
Now we have some idea of the agencies by which
property is evolved and distributed and protected, and
we knew before we studied these agencies, that the dis-
tribution is very unequal — that the mass of mankind get
very little compared with a few favored ones, and are
naturally much dissatisfied with what they get. But
we have studied to very little purpose if we have not
come to a realization that the inequality is more of
Nature's making than of man's, and that roughly speak-
ing, and with a wide but decreasing margin of excep-
tion, the men loudest in objections generally get what
they loudest claim — namely, get what each man pro-
duces— that, still roughly speaking and with a wide
margin for exceptions, those who get little, produce
little; those who get much produce much; and that
he who would get more, must produce more.
But we also know that this is a slow and, to most
men, virtually an impossible way; and that conse-
quently the world is full of schemes for doing it in
other ways. Some of these we will now examine.
227. Poverty has First, however, let us realize that altho
no causes. a great deal of speculation has been spent
on the causes of poverty, there is no cause of poverty.
Wealth only has causes; but ignorance, stupidity, lazi-
ness and misfortune of course obstruct the causes of
208
§ 228]
Personal Property.
209
wealth. In early times all people were poor, even to-
day every child is Lorn with nothing, and of course he
has nothing until he produces it himself, except as it is
given him from the production of others. Unless he
produces much, or somebody produces much for him,
he never has much. Poverty lasts until the causes of
wealth are effectively put in action.
We have seen the conditions under which civilized
man evolves his rights in personal property, to be
initiative energy, discretion, frugality and the other
virtues which we sum up as Ability.
Of course there are other ways to wealth, such as
luck and inheritance. But supposing them frequent
enough for poor men generally to build any hopes on
(which they are not), there is a characteristic of wealth
got in those ways, which detracts very much from its
usefulness. It is generally very fleeting: "Easy come,
easy go", and "Twenty-five years from shirt-sleeves to
shirt-sleeves",* are proverbs that have grown up from
general experience.
And yet the lazy and stupid, and even the perversely
ingenious, are constantly nursing schemes for making
everybody rich in defiance of the ways Nature has
decreed, just as ignorant people are constantly trying
to invent perpetual-motion machines, and to make
water run up-hill by its own weight. We have already
touched some of these schemes as affecting rights in
real estate, but similar questions come up in connection
with the products of labor, and we shall see in time
that they come up in regard to money and taxation.
Let us now examine the most prominent of the schemes
for diffusing property without diffusing Ability to pro-
duce it.
The one probably in most general use is
Ufa Scamping "making more work". Workmen often
think that they can make more work by
* Mr. Walker, of Worcester, whose investigation has already
been alluded to ( 10 1, note), found that of the sons of the one
hundred and seven manufacturers in his city in i860, only seven
had property, or had died leaving property, up to '89.
2IO
The Protection of Rights.
[§ 228
scamping their work or neglecting it — that if a job is done
so poorly as to need doing two or three times, there
will be just so much more demand for labor; or that if a
man does only half as much work in a day as he reason-
ably might, two men will get a day's work out of a day *
* From the New York Times, April 24, 1900 :
"The Crime op Mrs. Derrick. — A headstrong and unman-
ageable woman perpetrated a crime against the new social
order in a Lowell carpet-mill the other day, by doing more work,
and earning more money than the laws of the Carpet- Weavers'
Union allow. The details of the shocking affair are set forth in
a despatch to our neighbor the Sun:
" 'Lowell, Mass., April 21. — Three hundred weavers employed
by the Lowell Manufacturing Company, one of the concerns in
the Bigelow Carpet Company, are on a strike because one of
their number, Mrs. Jessie Derrick, persists in turning more
work off her loom than is permitted by the regulations of the
Carpet- Weavers' Union. The union has decided upon a maxi-
mum product of two and one-half pieces, but Mrs. Derrick has
her loom speeded up so high that she can turn off three pieces
a day. On account of this the union sent word to the agent #
of the company and asked that he compel her to reduce her
production, but he refuses to stop the woman from earning
all the money she is able to. . . .'
" Mrs. Derrick explains that her loom was not 'speeded up'.
Not at all. It was her energy and quickness and willingness to
work that wrought the mischief. Back of it all very likely lay
the necessity of earning more money to support those depending
on her for food. . . .
" Other carpet-weavers in the Bigelow works are as capable of
getting off as much work as she, but as the union has decided
it is unwise for them to do so, they all comply with the rule
limiting the maximum product of each operative to two and a
half pieces.
" The dead level of triumphant inferiority cannot be main-
tained and the comfort of the incapable and the lazy safeguarded
unless the two-and-one-half -piece rule is enforced."
From the Chicago correspondence of the New York Evening
Post, Nov. '99:
" A short time ago a Chicago man, in moving a dresser, broke
off a gas-jet which projected from the wall in his bedroom. He
plugged the broken pipe and took the fragment to a gas-fitting
supply house, intending to buy the short piece of pipe and attach
it himself. When he asked for it the salesman said:
4 ' 4 Are you a journeyman gas-fitter ? '
" ' No', said the customer, 'I'm a shoe-dealer. What's that
got to do with buying gas-pipe ? '
§ 228]
Personal Property.
211
That certainly would promote the general good, if
the world can be made richer by producing less wealth.
But its effect even on the laborers themselves is
disastrous.
First: the scampers keep themselves out of jobs;
Second: when they get jobs, if all scamp, tho each
scamper gets paid for his false work, he has to pay for
the false work of other scampers; Third: in the long
" 'A whole lot', said the salesman; 'I can't sell you that sec-
tion of pipe unless you have a working card from the gas-fitters'
union.'
" 'But I want this pipe for my own house, and I'm going to
put it up myself, protested the householder.
" 'That's the very trouble said the clerk. 'You'll have to go
and hire a journeyman gas-fitter to put that pipe on, I can't
sell it to you.'
*' And the householder was forced to hire a gas-fitter, at $3.75
a day, to come and do the work.
" There was a quantity of old iron piping in the basement of a
. building, which the contractor sold to a second-hand dealer. The
man drove his wagon down to the place and started to load it
himself with the old pipe. He was stopped by a member of
the Steam-fitters' Union, who told him he must employ mem-
bers of the union to handle that pipe or they would call out all
the union men of the building. He had paid for the stuff, and so
he had to hire two men at $4. 50 a day to load his wagons with
the pipe. . . .
"The Plumbers' Union has laid down the precise amount of
effort which may be expended and branded one day'. There
is a walking delegate in each ward whose duty it is to visit
each job and check up the work, and any plumber found working
longer than the rules allow is liable to a fine.
" In one case the stonework on a building was all completed
except the keystone of the arch over the main doorway. An
opening had been left for it, and the workmen were arranging a
block and tackle to hoist it into place, when a walking delegate
appeared and demanded whether the men engaged in the
work were members of the Hoisting Engineers' Union. He was
told that they were not — they were members of the Bricklayers'
Union and the Stonemasons Union and several other unions,
but the hoisting engineers had been overlooked. At once he
ordered the work on the building stopped until a hoisting engineer
appeared to haul that forty-pound piece of stone up to its place,
and all the work came to a standstill until the proper man was
found.
" A lather of ordinary speed can put up sixty bundles of laths
212
The Protection of Rights.
[§ 228
run, the scamper lessens the general demand for labor,
and of course his own wages.
228 (a). Keeps the *n illustration : a man in New York
scamper out of wanted to put a trunk-lift from his cellar
j0 *' to his garret. Some steam-heating fix-
tures in the cellar were in the way. At that time, the
steam-fitters had a very strong union, and it was said
to be the policy to "make work " to a very extraordinary
extent. Consequently steam-fitting in New York cost
several times what it did in most other places, and the
estimate for the alteration in question was so high
that the owner concluded not to put in the lift: moral,
"making work" cost the steam-fitters a job, and cost
the lift-makers a job too.
Another illustration: in the nineties, no first-class
mason in New York would do a job of plastering in
less than three coats, while excellent jobs were done
elsewhere in two. At length came a quarrel between
in a day. The rules of the union limit him to twenty-five.
That makes the job last longer, and as the lather is paid by the
day it keeps him at work more than twice as long. The plaster-
ers who come after him can work no faster than the laths are"
put up, therefore his job is extended to twice its length by this
simple rule.
"And now conditions have reached such a stage that the
opposing forces are face to face and measuring each other's
strength. The contractors and builders have warned the unions
that January 1 will see a general shut-down unless rules, hours,
and other conditions change. If that 'lockout' comes, no
man can say where it will end."
When it does " end", it will be interesting to figure the profits
the laborers have directly made through this form of scamping,
not to include what they themselves will have paid out for
scamped gas- fit ting, steam-fitting, plumbing, hoisting and
lathing.
After the foregoing was in type, the results appeared. From
the New York Evening Post's Chicago correspondence, Dec. 16,
1900 :
" The Building Trades Council ... is rapidly nearing its end.
... It had more than 30,000 members. . . . Now it has about
10,000, and [pending withdrawals] will reduce it to 7000. . . .
The loss to the men in wages by permitting the unprincipled
leaders ... to prevent them working has been in the vicinity of
$2,500,000."
§ 228 C]
Personal Property.
masters and men, and at least one of the masters told
why he had declined to do two-coat work: the trade-
union would not let its men work on jobs of less than
three — one-third of most plastering jobs was pure waste,
including those on the buildings for which the plasterers
themselves were paying rent ; and moreover many jobs
must have been lost in all the building trades, as was
just shown in the steam-fitting and dumb-waiter trades.
228 (b). He gets But wnen tne scamper has to pay other
omy one profit but scampers, other scampers have to pay
pays many. him: so it may appear as broad as it is
long. But he gets paid for his own work at first hand,
while most work that he has to pay for, must pass
through many hands before it reaches him, and he
must pay toll to them all, and this toll is based on the
scamped cost. Manufactured articles cost the consumer
many times what the manufacturer gets for them.
Hence, if the hands through which the article passes,
scamp their work, the consumer has to pay not only
for the scamped work of the first producer (as he gets
paid for his own), but also for the toll of every set of
hands through which it passes before reaching him.
Scamping lessens not only the demand for particular
jobs, but also for labor in general. Work only half
done, or done at half speed, costs twice as much as
228 (c). Cannot ^ properly done — in fact more than twice
'Za^e? unless900* as muc^« because n°t only is half the labor
ear9ne'dUn "* wasted, but generally some of the mate-
piecework. rfaL Therefore, not only is the public un-
able to pay for as much of it, but it cannot, in the long
run, enable an employer to pay high wages. And if
laborers return less than a paying product for their
wages, the capital employing them must in time be
used up, the employer's business diminished or destroyed,
and the demand for labor be just that much less.
In order to make paying by the piece a good remedy
against men spreading their work over too long a time,
one would have to invent a remedy against scamping
the pieces in order to get more pay in a given time.
As a matter of fact, the highest order of work is done
214
The Protection of Rights.
[§ 228C
"by time", and the lowest order "by the piece". A
house done by "days' work" will generally bring more
than one done by contract; and the better orders of
mechanics, the world over, work by the day.
Putting the thing in the broadest way, if all men
only pretended to work, the result would of course be
that nothing would be produced, and no man would
have anything.
229. Pretending The philosophers who believe in ' ' making
and forbidding labor. WOrk " by scamping it, have not stopped
at scamping. Thornton * gives a case where they tried
mere pretending. A lot of stone-cutting had been done
contrary to trade-union rules, and the union made the
bosses pay men for standing idle over it with their tools,
as long as it had taken to cut it. Thornton wrote forty
years ago. In our progressive age, the papers are full
of similar instances.
The schemes to rob somebody — even other laborers,
for the benefit of labor, include the seizing of work that
naturally belongs to somebody else, and making the
community pay the waste of the unnatural arrange-
ment. Of this class are laws requiring stone-cutting
to be done in cities where the stone is used, and at
city prices, instead of at the quarries at country prices.
Such a law regarding some public buildings in New
York City, was pronounced unconstitutional in 1901,
at an important saving to the city.
The Supreme Court of Indiana, in a decision that a law
was unconstitutional which obliged counties, cities and
towns to pay at least 20 cents an hour for unskilled
labor, held that cities, counties and towns have as much
right as anybody else to contract for labor at the
lowest market price. The proponents of the law hoped
to establish a rate for labor generally : as if the matter
could be lifted away from the law of demand and
supply, otherwise than by disguised "charity".
Even more absurd than the foregoing proceedings, is
the securing of business to the nation at the expense
of the nation. Such a proceeding was the regulation
* On Labor.
§ 229] Personal Property.
that all material to be used in making the Panama
Canal^ should be bought in the United States, and
when possible be transported over railroads in the
United States — both steps regardless of whether the
goods or the transportation would cost the people of
the United States more in the United States than else-
where. The first of these absurd provisions was revoked,
and restored in answer to the clamor of the protection-
ists. At the time of this writing the second has been
revoked, and there has not yet been time to restore it.
Protective tariffs, we shall see later, tend to become
of the same class.
Of course, in the long run, such wastes must be dis-
tributed over the community, and if they were the rule,
the wasting laborers would have had to pay back for
them, all that they got for their own waste. No rule is
good for anybody unless it is good for everybody. But
that school of philosophers has not even stopped at
scamping* and pretending work: they go so far as to
forbid it part of the time, as in the celebrated case of
Mrs. Derrick (228, note).
This matter is important enough to justify adding
one more extreme illustration. Early in 1906 the
following resolution was introduced at the United
Mine Workers' convention in Indianapolis, and referred
to a committee:
RESOLUTION No. 107.
Whereas, The practice of many of our members, working
tinder favorable conditions in various parts of this country, of
making six and seven dollars per shift is detrimental to the
best interests of our organization as a whole; and,
Whereas, This has a tendency to make it harder for us to
obtain an advance in wages at our convention; and,
Whereas, The average miner is unable to make $3.50 per
shift; therefore, be it
Resolved, That this convention place a restriction of $3.50
per shift, clear of all mine expenses, on all miners working at
the face.
Presented by Local Union No. 99, Belleville, 111.
A. L. Wright,
T. J. Hitchings,
Scale Committee. Delegates.
2l6
The Protection of Rights.
[§229
The Times, in commenting on this resolution, quotes
Archbishop Keane:
4 ' The man who slights his work and gives his employer less
than he agrees to g^ve is a thief, and any labor union that
upholds him in this slighting of work is a school of thievery."
The willingness of a trade-union committee to receive
and refer such a resolution as that, demonstrates the
body to be under the dominion of a degree of short-
sightedness that it must take generations to cure; to
be far below the control of reason; and in exigencies, to
be susceptible to no other control than the unflinching
power of the state. To temporize by anything short
of that, is simply cruel.
If reports are to be believed, the Australasian cases
of the early nineties, surpass even these. There labor
was scarce and food cheap, and a man could make
enough to live on by working half the day. The in-
capables would not let the capables do more than
half a day's work. One must either soldier all day or
go home when he had done as much as a slouch usually
does in a day. Capable men began leaving the colony
on account of it. But the demonstration of the
absurdity was shown when the policy had stopped
some industries and depopulated some villages, and
some of the leaders and "walking delegates" were in
jail for conspiracy.
But since these conditions were stated, they must
have cured themselves: for nothing is said regarding
them by the most recent writers. In fact, there is
some reason to believe that the testimony on which
they were based (tho it appeared in a high quarter —
the correspondence of TJie Nation, unless I am mis-
taken— or I should not have accepted it) is exaggerated,
and that the conditions were partly due to industrial
depression and financial stringency. Dr. Clark * goes
so far as to say that while such statements may apply
to particular localities and occasions in Australasia,
* The Labor Movement in Australasia, by Victor S. Clark, 1906.
Personal Property.
2JJ
"Ca' canny" and restriction of output are not remark-
ably greater in Australasia than in Great Britain and
some parts of America. Yet I let the original state-
ments stand, with these qualifications, as an illustra-
tion to the inexperienced reader of the difficulty of
getting correct information on subjects where there
is so much controversy. We shall see plenty more of
such illustrations.
230 " Shutting After all, it may be asked: where is
down" a different the difference between laborers restricting
ctse* work, and manufacturers restricting pro-
duct? The manufacturer generally restricts volun-
tarily, while the laborer is often forced to it — a direct
interference with the Right to Work ; if several manu-
facturers shut down, they all share the loss: if the in-
competent limit the labors of the competent, the first
gain at the others' loss. For the manufacturer, the
public decides the question by refusing the goods; for
the laborer, the question is decided irrespective of the
public needs — the public may be suffering for the labor,
but must go unsatisfied in order to enable the incom-
petent to get higher wages. The manufacturer's slow-
ing up (in legitimate cases) is to prevent waste : restrict-
ing labor regardless of cases, in most cases is waste.
Even scamping, pretending, and choking-off labor
have not been enough for the philosophers : they have
often gone to destroying. The papers are full of in-
231. Destruction st^nCleS' , As. three }n ™27' th? St°ne"
as an aid to polishers union made all the workmen m
Production. the Hotel gavQy Jn New York Stop work
until the polish was rubbed off some marble mantels
that had been polished near the quarries instead of
by the New York union. In 1906 and for some years
earlier, in most American printing offices, the men
who set advertisements, would not use electrotype
plates sent by advertisers, before they had set up a
copy and destroyed their work. At a meeting of
glass-blowers' unions in Terre Haute in 1905, their
national officers were instructed to "get out a circular
to be sent to all labor bodies asking them to get their
2l8
The Protection of Rights.
[§231
families and their friends to break all bottles before
throwing them away." Those bottles were the prop-
erty of the brewers, bore their owners' names blown in
the glass, were subject to reclamation wherever found,
and their contents had been sold on the understanding
that the bottles should be returned. The resolution of
the glass-blowers was a deliberate invitation to destroy
other people's property in order to make work for the
glass-blowers.
People often falsely reason about a good many other
things as they do about scamped work. In advocating
not only scamped work, but some kinds
rfminy ZcSSiyS of taxes (464) and cheap money (362)
no&fn<?ieth,ng °Ut anc* a^ ot^er schemes for enabling a man
" to get something for nothing, people forget
that schemes to get something for nothing are also
schemes to make somebody (and themselves as often
as anybody) pay something for nothing. This is in-
evitably the case of all wages artificially made higher
than the natural equation between supply and demand
(148 d).
233 People irener- That ^act 1S so often lost sight of because
all v' consider only people generally think that high wages
Income, not outgo. cover the whole question of prosperity.
Men of average mind seem able to think of themselves
only as producers, not as consumers. They do not
seem able to reflect that they have to pay out money
as well as to get it in, and that if other people's wages
are higher than the value of the things produced, they
themselves have to pay out something for nothing when
they pay those wages, and have also to pay middle-
men's profits besides, while they themselves only receive
something for nothing, without any middlemen's profits.
In point of honesty, scamped work is exactly on a
level with false weight or scant measure or an irre-
deemable light dollar. It is a scheme to make a man
pay for a day's work without furnishing it to him.
Now let us look into some of the other schemes than
scamping work, which have been regarded as superior to
§ 234] Personal Property.
219
Nature's scheme for enabling men to get rich. At the
bottom of them all, more or less disguised, is (as we saw
regarding real estate [65-740]) the idea of govern-
ment withdrawing its protection from property rights,
so as to give those who have been too stupid or lazy
or shiftless to accumulate any property of their own, a
chance at that of other people.
MM . The most extreme proposition of this
234. Anarchism. , . , . , , v , v 1f
kind is to do away with government itself,
so that a man who has no property of his own can
help himself to the property of other people.
How long property would be produced under such
conditions, the advocates of them do not say. There
are some who want to do away with government, who
still want property rights respected, but they do not
tell us how they are going to get them respected : they
want everybody to respect them voluntarily, and to be
models of virtue all around — voluntarily. They say that
it is a disgrace to a man to have to be compelled; and
so*it is, but all the same, a good many will not behave
themselves unless threatened with that disgrace.
The form of insanity that wants these self-contradic-
tory things — often a murderous insanity, often only the
gentle mooning of certain poets, novelists and aesthetes
who make themselves ridiculous in attempting the
sterner sort of intellectual work — is attributable to
the same source as most other forms of insanity — the
abuse of a good thing. Government is a good thing,
but it is often overdone. Those who have been unjustly
oppressed by it often become incapable of seeing any-
thing but evil in it, or in authority of any kind.
It need hardly be added that those who are afflicted
in this way are called anarchists.
As they seem to be getting more troublesome, there
is growing interest in ways of suppressing them. Rea-
soning of course can produce no effect. Violent repres-
sion seems to succeed no better, but a perfectly logical
way has been suggested which may be worth trying:
if a man wants to get rid of government, rid him of it,
withdraw government protection from his person and
220
The Protection of Rights.
[§234
property, if he has any (which is not likely), and give
him a chance to work his theories out in practice.*
Tho government would not protect him, it could con-
sistently restrain him, because in withdrawing its de-
fence from him, it would not give up anybody's right
of self-defence; and should the anarchist attack per-
son or property, the victim would have a right to all
the defence he could muster, including that for which
he, unlike the aggressor, would not have abandoned his
right to appeal to government. There is not enough
argument for Anarchy, to admit of its finding a place
in a sane mind, so we need not discuss it any farther.
Another class of dreamers are willing to retain govern-
ment, but want to do away with property rights.
This class includes communists and socialists.
Anarchists, communists and socialists claim that
poverty is due to existing social arrangements rather
than to the incapacity of many people, and the claim
is true so far as bad social arrangements impede the
operation of the causes of wealth. To upset the social
arrangements as they propose, would be very well if
234 (a). Badness of ^Vld^ nad ever proved any other arrange-
Pn7tlriuegw^°nlass ments better. But nothing is more difii-
0} proposed "*** cult than to tell in advance how a social
changes. arrangement is going to work. Those we
have are the best we have tried, and it has taken a
good many thousand years to get them even as good
as they are now. They have improved so slowly, be-
cause human nature improves slowly, and all social
machinery has to be worked by human nature.
noe . , The communists propose to substitute
235. Communism, r , 1 . j r , • 1 ,
for the present order of property rights,
having government make an even division all around,
* The author, while believing this remedy original with him-
self, of course supposed it probably original with a good many
others. He first proposed: it in The Forum soon after the
Carnot assassination, and on repeating it in The Review of
Reviews soon after the McKinley assassination, he received a
copy of a similar proposal that had been made by Judge Arn-
quist of Wisconsin.
Personal Property.
221
so that those who have saved nothing can have a share
of what other people have saved.
235 (a). $1,200 At a superficial glance, it seems as if
apiece. a scheme, if it could succeed now,
would add vastly to human happiness. But it could
not unless it produced more things : for we would have
only a little more than twelve hundred dollars apiece:
that being the average wealth in the United States in
1900. To divide it evenly would not increase the hap-
piness of those who have less, as much as it would
diminish the happiness of those who have more.
235 (b). sudden ^nd even ^ a division were to give
wea/th'a doubtful sudden wealth, sudden wealth is not apt
Musing. ^Q ^ use(j we\\ certainly was not at
the British coal-mines when a sudden rise in the price
of coal gave the colliers a sudden rise in wages, and
many of them spent the money in feeding their dogs
on tenderloin steak, and smoking pipes with two bowls
and one mouthpiece.
True, the rich do not always use their money well,
any more than the poor suddenly getting it, always
use it badly. It is only a matter of probabilities either
way: there is no universal rule with so complex a
machine as human nature. It is simply the general
fact that a man who gradually makes his money, is
almost certain to use it better than a man who gets
it suddenly; and it ought to be superfluous to point
out why.
Yet it would undoubtedly be well for people to
have more, just as fast as they can make it: for that
will be no faster than they are apt to use it well —
and there is hope, as we have said more than once
and shall give facts for later, that the ability to pro-
duce it * and to use it, are fast being evolved together.
* The wealth in the United States, is reported by the Census
to have increased as follows. Wc shall find evidence later
(Chapter XXIII) that the poor have received a larger proportion
of it than the rich. In 1850, it was $308 per head; in i860,
$514 ; in 1870, $780; in 1880,1850 ; in 1890, $1039; and in 1900,
$1236.
222
The Protection of Rights,
[§ 235 b
But must each man himself produce unaided all he
can have? Not by any means: inventors and or-
ganizers are constantly enabling other people to pro-
duce more. Consequently a laborer in a civilized
nation has more than a king in a barbarous one ; but
men seldom appreciate what they have, when others
have more.
Not only would communism fail to
i^aumTwhu^1^^ everybody rich, even for a moment,
but what wealth (?) it did give the very
poorest, would all soon be either frittered away, or
back again in the hands of Ability. As said before, the
machinery has to be worked by human nature : at the
outset, communism would make the lazy and shiftless
profit at the expense of the energetic and saving; while
after the outset, the shiftless would, just as now, soon
waste what they had, not only in extravagance but in
foolish schemes, and want a new division; and there
would then be less to divide: the shiftless would have
235 (d). and then already used up their share ; and com-
there would be munism would have taken away from
less than now. Ability all temptation to produce more
than it could keep — that is to say, more than the
average; and would take from frugality all temptation
to save more than the average.
235 (w)'UhM0%ning" To carry out any scheme of communism,
nboeHy. ° government would of course have either to
rob the present means of production — factories, mines,
etc. — from those who have produced and saved, or to
buy them under eminent domain (78).
As to eminent domain, of course the communists
differ among themselves, as people advocating ideas
that do not hold together, inevitably must; some
advocate eminent domain, while some go so far as to
say that all property is robbery — that people of ability
and frugality have stolen from those who lack them,
and that the community, in taking all the land and
mines and factories and railroads without pay, would
only take possession of its own.
But even government's exercising eminent domain
§235/1
Personal Property.
223
over everything, and paying for it, would leave things
just as they are. Everybody would get paid for what
he has, and be taxed all he has, to pay it.
A practical difficulty not yet stated, is
oflfeaith Cannot 6? how to divide up a ten-thousand-dollar
MwdertXed- house» or building-lot, or diamond or
picture or statue, so as to give each person
his twelve hundred dollars. If an attempt were made
to give each a share in the diamond, for instance, it
is hard to tell what ten of them could do with it. They
probably could not hire it out to some vain woman
each night: for, as nobody would be worth more than
$1,200, no woman could pretend the diamond to be
hers. As to the picture and statue, perhaps they
could be exhibited, if enough people worth only $1,200
apiece would pay to see them. But as to the house
and building-lot, nobody could afford to live in the house
or even to make it over into a tenement; and nobody
could afford to build on the lot, unless under a syndicate
arrangement. People who object to corporations are
generally the very ones who would make it necessary
for everything worth over $1,200, to be run by a cor-
poration.
There appears, then, to be no escaping the general
conclusion that civilization rests largely on things that
cost more than a thousand dollars apiece, and which
cannot be divided, or even used to any advantage when
held in shares; and that these things are the prizes
which Nature holds out to men of great ability, to
stimulate them to do all they can to invent and organize
and regulate, so as to increase and cheapen things for
the public good. Consequently, if you want to intro-
duce Communism, you must begin by wiping civiliza-
tion out. In short, Nature did not make this for a com-
munistic world, but as one where wealth is the first
condition of effective industry and the highest art, as
well as the legitimate stimulus to invention, energy and
capacity, and their legitimate reward.
But that is, of course, a hard conclusion for the men
lacking in invention, energy and capacity; and among
224
The Protection of Rights.
[§ 235/
the many ways proposed for making them as well off
as anybody, there are many which do not involve the
impossibilities of Communism, altho they all have im-
possibilities of their own.
CHAPTER XIX.
PERSONAL PROPERTY (CONTINUED).
Schemes for Distributing it more Evenly {Continued).
(II) Socialism.
236 Socialism Chief among the schemes for giving
oc a sm. jazy incapable the rewards of the
industrious and capable, without attempting to divide
everything, is that of merely putting all industries
under the control of government, and dividing up
product equally, and thus giving the poor an equal
share in the profits. This is Socialism.
The idea at least does away with the objection to
dividing up or holding-in-common things which would
be useless if divided up or held in common, and it at
least glozes over the objection to putting the capital
of the frugal directly into the hands of the shiftless:
it wants merely the product given to them. It pro-
poses, instead, to put the capital in the hands of the
politicians, and have them give the shiftless an even
share of the product — so far as the politicians make
any — and do not keep it for themselves. That would
at least divide up among the poor the profits now
wasted by the rich, if the politicians were honest, and
if the profits were to be produced. But as profits
depend on Ability, and Ability needs them to stimu-
late it, if you take them away from Ability, to divide
up among those who lack Ability, it is pretty hard to
see who is going to produce them. But at least every -
225
226
The Protection of Rights.
[§ 236 a
body would get wages : there would be no unemployed.
But nobody would get as much wages as
9ouuaJot1rS^a now- As soon as Ability flags, demand
for the labor for which Ability finds work,
must flag, and wages must fall; invention must flag;
production must flag, and the world must grow poorer.
If government is to keep the demand for labor con-
stant, the question is: who is to pay it from decreased
production ?
Ability might be stimulated to increase production
by giving it high office in superintending government
00c /#o w# industries, but to only a limited extent in
236 ( oh Impractl- * . J
oabiuty of pouti- any condition can we foresee, and for two
em management gQO(j reasons> We now seldom pay govern-
ment officers salaries that honest men, unless already
well off, can afford to accept ; and as long as the base
and ignorant are permitted to vote, and so often elect
the base and ignorant to office, the best men could not be
put in office as often as necessary, even if we were
wise enough to pay them properly. So far, even those
who can afford it, do not always take office when it
is offered them, because of the humiliating obligations
to the bosses that office sometimes imposes. The great
difficulty even now is to get government officers who
can and will do even the simplest things honestly: it
is one of our great misfortunes that the men capable
of guiding industry cannot often enough be got into
public office of any kind.
If, then, we had to depend for the good conduct of all
our industries, on the combinations of circumstances
where good men can get office and will take it, those com-
236 (o Losses to binations so seldom occur, that, altho
education, charity there are many good and patriotic men in
and liberty. office, too often, instead of having the best
brains competing with each other, as now, to supply
our wants cheaply and in great variety, we should have
to put up with what men capable only in politics, might
provide.
There is nothing in the socialist argument that because
government already secures (if it does) fairly compe-
§ 236 e]
Personal Property.
227
tent managers for a few natural monopolies, it can secure
them for productive industries, because monopolies
yield results with much poorer management.
The same is true of the argument from government's
securing more or less competent managers of education,
including the museums, and gardens of botany and
zoology. In fact, the managers have been very seldom
secured by any pure democracy — especially by ours,
which has no aristocratic traditions. Our managers for
such institutions are most all secured by close private
corporations, and no such managers aim at cheap pro-
duction, or even great financial results for themselves:
they do their work mainly from love of it and for per-
sonal development.
236 (d). Forcing One of the schemes of socialism is to
Abmty. force ability to guide labor, just as it is
to force the laborers to work. But while a man can be
forced to work in some sort of fashion with his body,
there is no forcing him to do his best with his mind.
He can only be tempted.
4 4 Well, then", some socialists ask, 4 4 why not pay
men of ability large incomes to serve the public ?" But
that they get large incomes now, is what most of the
socialists complain of. Yet now the men of ability are
not sure of the incomes; if they were sure of their
incomes as salaries, they would no longer have a stimulus
to do their best. Yet to give them, instead of salaries,
large, but necessarily uncertain, shares of production,
would be to give them just what they are getting now,
and just what the socialists want to take away from
them. Should real socialism come in then, it can only
come in by reducing the production of Ability.
236 re;, neargu- *n answer to this, it may be urged that
mem from expert- government has already been building
ence' nouses for the poor, supplying them with
water and light, and making boots and clothes for armies
at a saving; that a great many people sadly lack these
good things and most others ; and that all the things
made by private enterprise are often made at wages that
228
The Protection of Rights.
[§ 236 e
afford but little comfort. But what has been done in
housebuilding and gas and even water, has not yet been
shown to have been successfully done. We must not
forget that agitation has already been strong in England
— the very headquarters of 4 'municipal trading to
drive government back toward its old functions of pro-
tecting rights.
When things have been supplied by
2undirtahennJhtn government for the army and navy, and
l°JSnrcTAomer!U (t^o *n a ^ess degree) *n tne case of gas
and electric light, there was a certainty of
the customer. The government stood ready to take
the clothes for the army and the light for the streets;
and the producer made army and navy supplies only
to the government's order. There was no call for
some of the rarest and most difficult powers of Ability
— finding custom, avoiding bad debts, and anticipat-
ing just what and just how much the market is going
to require. True, if nobody but the government
produced anything for the people, government would
be sure of its customers. But no more customers
would have the money to pay then than now, and those
having it might like a choice of shops, and even of articles.
They might not like to dress in Tammany style. Be-
sides, we do not all dress in uniform, and it is only in
uniform that government has yet succeeded as a tailor.
236 (g). Private The government could of course have a
inttiathe essential great many shops and styles, but if they
to variety. were all under the management of Tam-
many Hall, they would be apt to be the sort of shops
that prudent people avoid; and altho the government
officers would not nominally be conducting the shops
for their own profit, and tho some really might not, we
know from experience that too many would.
Government could still leave the private shops open,
but only if it courted failure. Managers chosen by
Nature to control political pulls, could never compete
with those chosen by Nature to manage industry.
There is no argument that they could, in the fact that
government railways and tramways are often operated
§ 236 ^] Personal Property.
229
side by side with private ones: for all have monopolies
of their own routes. To succeed in competitive business,
236 General government would have to take away the
gouernment pro- citizen's power to purchase anywhere he
duction attacks . , K , .F . J . . ,
Property, Contract pleased, just as the extreme municipal
and charity. traders are beginning to do in England now.
This would not only deprive him of the benefits of Com-
petition, but of two other institutions that men have been
laboring upon through all civilization, and upon which,
in fact, all civilization rests: I mean Private Property
and Contract. With them would go production itself,
all education of a higher grade than government pro-
vides, and the very possibility of charity.
The scheme would upset the institution of Private
Property, because private property is simply one of the
consequences of ability. Other things even, a man will
have as much of one as of the other; tho of course
other things are not always even, because an able man
may deliberately devote his abilities to something that
he knows will not pay much, and sometimes "accidents "
come in. Still, any system that denies ability free
swing, at once attacks the right to create property.
The system would attack Contract, because if the
state is the only employer of Capital, Ability and Labor,
of course any one of them has to accept what employ-
ment the state gives, on the state's own terms. No one
of them has any more opportunity to contract, on terms
satisfactory to itself, than the veriest slave born to re-
main in his status.
The scheme attacks Charity, those who advocate it
would say, by doing away with all needs of charity;
but those who oppose it say that there would be more
need of charity than now, because there would be less
production ; and there would be no surplus of wealth in
anybody's hands to be willingly spared for charities and
the higher education. The idea that people with the
moderate incomes that all would then have, would con-
sent to be taxed for such things, is of course advanced,
but is too absurd to be worth discussing.
230
The Protection of Rights.
[§ 236 i
236 Oh Futility of ^ government paid in bonds for the
attempting it by present means of production (there is not
eminent domain. money enough to pay)| bonds must beaf
interest, and even if government management should
produce the interest (which it probably would not),
where would be the gain in government simply working
the industries, and paying away all the production above
wages (if any), in the form of interest on the bonds,
to the same people who now work out the interest
for themselves ? Of course people generally would then
236 (J). Effect on get all that the industries might produce
laborers. over an(j above the interest on the bonds,
but after wages and interest were paid (assuming that
they would be paid), the surplus would not.be enough
to be worth considering. The wealth that the socialists
are after could not reach them in that way any more
than it does now: for the simple reason that no more
would be produced than now (if as much), and, as the
census reports of present industries show, even if pro-
duction were kept up to the present standard, an even
division would not yield an average of much more than
two dollars a day for each wage-earner, even putting the
managers and their shares in with the rest.
But advocates of the scheme say there would be
more, because they think that under socialism, most
men, having so much more interest in the production,
would work that much the harder. But there seem
to be a good many men who, if they were
M6i£i'neA8lremtum sure °f sharing the product, as in the
Paris public shops, and under the English
poor law (34), would not work at all. Unless a boss
has the power of discharge, it is hard to see who is
effectively to tell the workman what to do to make
his work count.
In Paris the government officers did not have the
power of discharge, but if they have, what becomes of
the socialism? Men could not be forced to work pro-
ductively, and even if that were possible, it would be
only by bringing the free citizen back under the slave's
lash.
§ 236 m] Personal Property.
231
236 ui would de- Moreover, government would have to
stroy freedom. ten people how and when they should
work — a man would no longer be able to choose where
he should work and what he should work at, and what
he should take for his work, nor where he should buy
and of what producer he should buy: for there would
be but one producer — the enormous government trust.
The whole thing would be a slavery more minute than
any yet devised. There is no control as senseless as that
of a majority. The scheme of socialism is that each shall
be the slave of all : this in spite of the fact that civiliza-
tion had been made by able men choosing work, doing
it, and directing it, in their own interest. Even if they
have had to direct slaves, it was the masters who made
the civilization, not the slaves. True, the laborers in
Greece and Rome were slaves, and those countries
managed to cut a very decent figure, but the voters were
not slaves.
236 (mi The un- But in our present state, socialism is
employed. counted upon to dispose of the terrible
question of the unemployed, and to give everybody
good wages, but many people have not the ability to
earn good wages. Then the socialists ask: why not
have government give good wages anyhow? You
admit that government should promote the general con-
venience in many ways : why not in the most important
way of all — give what it has become the fashion to call
a "living wage"? Ought not everybody to have a
decent living? Yes, if he can earn it; and of course
everybody ought to be able to earn a decent living,
just as everybody ought to be decent. But unfortu-
nately, not everybody is; and we have already seen the
effect of the attempt to give everybody decent wages,
under the English poor law, and in the French public
workshops (34). It is better a thousand times to receive
charity direct than disguised as unearned wages. That
step would fatally lower the standard of industry and
— what is far worse — the standard of morality: one is
frank mendicancy, the other is disguised robbery.
232 The Protection of Rights, [§ 237
237. Names Social- Enthusiasts for any specific panacea
Ism and Indl- t1 , r j
viduailsm. naturally invent a name for it, and then
gravitate into some one name for all methods out-
side of it. As soon as the two names are contrasted,
they give an impression of1 equal weight in the re-
spective ideas which they connote. But this impres-
sion is very misleading. Thus while the disciples of
Hahnemann (if there are any real "high dilutionists "
left) apply the term homeopathy to their doctrine, in
the apparently balanced term allopathy they include
all the doctrines that have been accumulated outside
of their own. On one side, the word homeopathy in-
cludes only one idea on the subject; but on the other
side, the word allopathy includes all the experience of
the human race. The same is true of the words
socialism and individualism. To the superficial, they
appear to represent two ideas that balance each other;
but the fact is that socialism expresses a mere theory,
and represents no experience whatever; while individ-
ualism stands for the whole of human experience on
the subject. Socialism has never been tried, all the
progress of mankind has been made under "individual-
ism". Greater and faster progress may be possible
under socialism, as it may be under any scheme that
any theorist proposes; but there is no experience to
prove that it will be, while every atom of experience so
far, goes to prove that it will not. It must be con-
ceded, however, that the proof is not absolutely con-
clusive, any more than is the proof that two and two
will not sometime make five, or that men will not some-
time live forever. It may even be farther conceded
that in vast periods of time, there may be possible
changes in human nature that may make socialism
possible. There are even some grounds for conceding
that there are visible factors working in the direction
of such changes in human nature, and this concession
may be made even in face of the facts that while these
words are being written, the New York papers hold
circus advertisements attracting people to see a young
woman and an automobile turning somersaults in the
§237 a]
Personal Property.
233
air, the attractions of the performance being enhanced
by calling it 11 The Dip of Death". But no more than
all this can reasonably be conceded, and even these
concessions leave no room to think of socialism as
workable under any conditions so near as to be of
any practical interest to any living man.
There have been a considerable number of people,
from Ruskin and Tolstoy down, whose emotion and
imagination are far in excess of their information and
reflection, and who jump in fancy to the realization
of the socialistic dreams, without studying what founda-
tion Nature has provided for them ; or if a foundation
is possible, how long must be taken to evolve it.
This word socialism has lately come into
VllSSi S££lam such verv frequent use (and abuse) that it
calls for a little more consideration. In
a long-past-midnight discussion between the present
writer and an eminent professor of sociology, and an
eminent speculative writer on Utopias, the last two of
whom call themselves socialists, all three found them-
selves agreed that government ownership of monop-
oly franchises, and regulation of their operation by
lessees for limited terms, is all that can reasonably
be advocated under present conditions. The two
"socialists" then claimed that their interlocutor, in
agreeing with them, admitted himself a socialist. His
counterclaim was that they, in agreeing with him,
proved themselves not to be socialists ; whereupon the
two agreed between themselves that they needed a new
word to indicate their real position; and an ineffect-
ive resort was made to the Greek dictionaries. If new
labels are to be found for all the different positions
held by those now included under the label socialism,
all the dictionaries will be worked pretty hard; and
probably names for the modern ideas will have to be
constructed from the modern languages.
The fact is that the word socialism is now made
to do duty for' nearly every hoped-for cure of the
defects of society — indeed for nearly every dream, how-
234
The Protection of Rights.
[§ 237 a
ever wild, of better conditions. Nearly every unedu-
cated or unevenly educated person who is dissatisfied
with existing conditions, calls himself a socialist, and
many call themselves so on account of some opinion
that may be anywhere from a belief that poverty is a
bad thing, up to a conviction that if the state owned
and administered all the means of production, poverty
would disappear. Between the extreme positions, are
at least the following stopping-places, some of the
occupants of any one of which, like to call themselves
socialists, and discriminating labels for each of which
may be desirable: I. The state should regulate much
23Kb). At least more thoroughly the use of all natural
three meanings, monopolies, including the municipal fran-
chises— waterworks, trolleys, lighting plants, etc. II.
Municipalities should not part with the fees of their
franchises for these things, but only lease them,
so as to control them more effectively, and get
the benefit of the unearned increment. III. Munici-
palities— or the state — or the nation, should operate
the franchises as well as own them. Now many men
who hold the doctrines up to this, point, would warmly
disclaim the name of socialist, and probably very few
persons entitled to speak with authority would apply
that name to any step short of government going be-
yond the farthest of these points, to a fourth — beyond
the natural monopolies, and appropriating the means of
production which are not naturally monopolistic.
238. Socialism In this fourth use of the term, socialism
against competition, means taking out of the fields of com-
petition the things wherein competition is possible —
depriving the world of the initiative and energy that
competition breeds — of what has been well called 4 'the
life of trade". While up to this point, government ac-
tivity certainly should increase with government ability
— in other words, with political intelligence and morality,
beyond this point government interference with what
we ordinarily mean by " industries would be inter-
ference with what has raised society above the stage
of mere militarism.
§ 240] Personal Property. 235
To the claim that socialism could have
foHndividuaHsm?6 raised society, and have raised it better,
one answer is that it never did; and
another answer is that no considerable body of pro-
fessed socialists have ever agreed on the details for
working out any consistent scheme by which they them-
selves claim that it ever could. On the contrary, they
are always quarreling among themselves. Moreover,
there is no reasonable doubt that the best results of
what various men claim could be attained by the variety
of schemes which they call socialism, are being more and
more attained through the only process of which the
world has had experience — through individual capacity
competing for private property, and voluntarily apply-
ing an increased portion of private property toward the
results that all good socialists and all good men desire.
240 Socialism and Most of the people who believe in so-
Magic an iilustra-" cialism (whatever they may mean by it)
tion* attribute to it the power to produce these
results by some sort of magic. For instance, after the
San Francisco earthquake, the New York Times con-
tained the following interesting letter:
How Earthquakes and Fires would Lose Their Tbrror
under Socialism.
To the Editor of The New York Times:
In the first place such a horror would not be possible under
established Socialism, for every building constructed by and
for a socialist system of society would be fire-proof, and in a
great measure earthquake-proof. Cheap, flimsy, crowded, in-
flammable, and unsafe constructions would find no place in a
city built for use and not for profit.
Given, however, present conditions, but with Socialism just
adopted as a National system, the disaster at San Francisco,
aside from the irreparable loss of life, would simply mean
that each of us throughout the co-operated Nation had suffered
a loss equivalent to a few hours of our productive labor. The
whole resource and energy of the Nation would be aroused to
replace San Francisco in a grander, more beautiful condition than
ever before. The haunting fear of want that now oppresses
thousands that were accounted well-to-do citizens would not be
present. Thousands whose lives arc shipwrecked by this
calamity, and whom the most generous aid possible under
236
The Protection of Rights.
[§ 240
capitalism cannot restore to hope and happiness, would, in a
few weeks, recover their full former condition. With hope
assured, they would rebuild their city on lines of beauty and
safety, drawing on the surplus wealth of the co-operated Nation
for all labor and materials required. In that new city none of
the dives, traps, or squalid quarters which are now wiped out
would ever be replaced. With no incentive for greed, graft
or unjust gain the city of the Golden Gate would arise the
gem of the Pacific Coast. The temporary loss, in all except
the loss of life, would result in lasting gain by affording the
opportunity to build the City Beautiful. Private land titles
would not obstruct the public welfare, and the lesson would be
worth all the fearful cost. Capitalism, with all its generous
impulses, now temporarily aroused, cannot succeed as Socialism
would do.
This is a wider extension of socialism than I remember
seeing proposed before. All the earlier propositions that
I have seen, seem to have indicated that all the property
of relatively small communities — states at the utmost,
should be owned by all the citizens in common, irre-
spective of who devises it, produces it, or preserves
it. There seem to be fatal objections to even that
scheme, among them its mad injustice; but the
objections do not appear to have deterred this writer
from proposing to have all the property in America
owned collectively by all the people in America — a
scheme that would involve difficulties of administration
so far beyond any now faced, as to be simply unimagi-
nable.
241 Present Possibly the writer did not realize how
agencies toward far, under the despised agencies now at
tame ends. work, the losses of San Francisco actually
are distributed. For instance, not to speak of the
subscriptions for relief, eighteen millions of the losses
are to be paid by insurance companies in the little city
of Hartford alone. And the stock of those companies
is by no means all owned in Hartford, but is distributed
through the whole country. Considerable of the insur-
ance thus distributed is in England: so the socialist's
dream of our all being "members of one another" is
already realized through the sordid channels of self-
interest, more widely even than in his dream: for that
§242]
Personal Property.
237
stopped at the borders of our own land. Moreover,
such sharing of each other's losses — and gains too, is
constantly increasing.
Yet his completed picture is at least a beautiful one.
No one can doubt that the results of his prophecies are
desirable, but how are they to be attained any faster
than we are slowly approaching them now? The only
indication given in the letter is that "socialism" should
be "adopted as a national system" — apparently that
Congress should pass some sort of a law, or that some
sort of a constitutional amendment should be passed,
to the effect that everything shall be owned by every-
body, share and share alike; and that everything shall
be done for everybody by everybody else, combined as
the state; and that nobody shall have anything or do
anything for his selfish self alone. When this law or
constitutional amendment is passed, nobody shall be
selfish or grasping, or inclined to hide away anything, or
do scamped work, or disobey any laws that may there-
after be enacted.
Then the men with capacity enough to direct building
operations, will be made more honest and capable by
depriving them of their property and rewards, and
paying them the same that the men they direct are paid.
They are going to be more careful, energetic, resourceful
— in short, build better buildings, because they can get
no direct benefit from building better buildings.
Some people who call themselves socialists would say :
4 4 Oh no ! They must be paid in proportion to what they
accomplish." But that is just what the world has been
trying to bring about for several thousands of years, and
has come a great deal nearer to bringing about during
the past century or two than ever before ; and it is just
what nine hundred and ninety-nine 44 socialists" in a
thousand do not want: they want everybody paid the
same, no matter what each accomplishes.
We already have laws in most cities
laws and Smef.1" f°r moderately secure building; but in
spite of them, much crazy building goes on.
But our socialist seems to think that if we pass a law
The Protection of Rights.
[§ 242
requiring many times the care from builders that is
anywhere required now, if we will merely include it
with a lot of other laws under the label "socialism",
people are going to obey the laws better; and that
if these laws remove all reward of care, such laws will
secure the care.
Or can our writer intend to go so far as to imply that
if the wisdom of Leland Stanford and his trustees had
been replaced by that of the average building commission
which universal suffrage would provide ; and if the name
socialistic were given to such commission, it would turn
out better work than Stanford and his trustees did.
After the great Baltimore fire, wise and generous
people hoped to " rebuild their city on lines of beauty
and safety", but the majority, who consisted of stupid
and selfish people, prevented all but a moiety of the
schemes from being carried out. Now it would be
interesting to know how long, on an average, the social-
ists think it would take the stupid and selfish people
who constitute the majority of the inhabitants of
San Francisco and of all other places yet discovered
outside of socialistic dreams, to pass a set of laws, even
under the label of socialism, that would really "rebuild
their city on lines of beauty and safety " more effectually
than it is going to be built under present laws ; and how
much longer it would take them to get the laws carried
out after they had passed them.
All the ingenuity and morality that San Francisco
has been able to muster, have been trying for half a
century to get rid of the city's " dives, traps and squalid
quarters " ; but Chinatown has gone on burrowing under
itself, and then under its burrows.
"And there would be no incentive for greed, graft
and unjust gain", says our prophet under the inspira-
tion of socialism. All over the world, since even long
before Christianity came, good men have been legisla-
ting against "greed, graft and unjust gain", but these
things continue. If the ingenuity and morality that
have been fighting them, had labeled their efforts
socialism, would they have had an access of magic
§243]
Personal Property.
239
power? Or would they have had to change the char-
acter of their efforts? If so, why didn't they? Because
they had not enough wisdom or conscience? How long
then will it take to acquire enough wisdom and con-
science to work socialism, assuming that enough of both
may sometime be within human attainment? And by
what methods are the wisdom and conscience to be
attained, other than the preaching, teaching and general
discipline of life, that have given us our present modest
supply of those desirable qualities. Would labeling
ourselves socialists create them? Would the label be
more effective than the label " Christian* ' has so far
been? Would the label give "Capitalism with all its
generous impulses, now temporarily aroused' ', a more
chronic amenability to those influences? And could
the label be effectively put on "Capitalism", if by that
word is meant the capacity which accumulates capital,
without materially impairing its effectiveness?
In short, is the word socialism as used in the letter,
anything more than a name for a dream so far beyond
any means of realization, as to make it of no interest,
except as an ideal, to any living being; and a dream,
like most dreams, full of inconsistencies that make it
only dreamable — not thinkable?
243. Another I* mav De worth while to spend a few
specimen. minutes with one more of the latest of
these philosophers.* He sums up his preface by
r.sserting that the capitalist must learn that socialism
"demands the right, nothing more or less than the
right". As if the problem of the ages, only gradually
approaching solution, and never quite to reach it, were
not simply what is "the right"!
He says: "The gateway of opportunity has been
closed, and closed for all time. Rockefeller has shut
the door on oil . . . and Carnegie on steel." As if
these two men had not probably set more young men
on their feet than any two men in history!
* Jack London: War of the Classes.
*3&
The I
requiring many tir
anywhere required
with a lot of oth<
people are going
if these laws rem
secure the care.
Or can our wt
if the wisdom r
been replaced 1
which univers:
socialistic wer
out better w
After the
people hope
and safety*
and selfish
schemes f
interestin
ists thin1
Who C07
San Fr
outsidr
under
their
than
muc-
out
/
ha
ce .
ii
//.c „:.-;i;
,7i ri'.i^'.gibie and rs*-#'r~. ..
demand zxttrs «r.v »:/. r i
\
§ 243] Personal Property.
239
power? Or would they have had to change the char-
acter of their efforts ? If so, why didn't they ? Because
they had not enough wisdom or conscience? How long
then will it take to acquire enough wisdom and con-
science to work socialism, assuming that enough of both
may sometime be within human attainment? And by
what methods are the wisdom and conscience to be
attained, other than the preaching, teaching and general
discipline of life, that have given us our present modest
supply of those desirable qualities. Would labeling
ourselves socialists create them? Would the label be
more effective than the label " Christian" has so far
been? Would the label give " Capitalism with all its
generous impulses, now temporarily aroused", a more
chronic amenability to those influences? And could
the label be effectively put on "Capitalism", if by that
word is meant the capacity which accumulates capital,
without materially impairing its effectiveness?
In short, is the word socialism as used in the letter,
anything more than a name for a dream so far beyond
any means of realization, as to make it of no interest,
except as an ideal, to any living being; and a dream,
like most dreams, full of inconsistencies that make it
only dreamable — not thinkable?
243. Another It maY be worth while to spend a few
specimen. minutes with one more of the latest of
these philosophers.* He sums up his preface by
asserting that the capitalist must learn that socialism
"demands the right, nothing more or less than the
right". As if the problem of the ages, only gradually
approaching solution, and never quite to reach it, were
not simply what is "the right"!
He says: "The gateway of opportunity has been
closed, and closed for all time. Rockefeller has shut
the door on oil . . . and Carnegie on steel." As if
these two men had not probably set more young men
on their feet than any two men in history!
* Jack London: War of the Classes.
240
The Protection of Rights.
He says: "The proletariat will possess itself of the
government . . . and run the business of the country
in its own interest." As if one man in a score could
run business at all, and as if he would not keep a
reasonably careful eye on his own interest rather than
that of the country!
He says: "The working-class is no longer losing its
strongest and most capable members. There men
denied room for their ambition in the capitalist ranks
remain to be the leaders of the workers." As if the
leaders of the capitalists were not now more from the
working-class than ever before!
He farther says : 41 Either the functions of private cor-
porations will increase till they absorb the central govern-
ment, or the functions of government will increase till
it absorbs the corporations." Either the inroads of the
sea will increase till it covers the land, or the waste
from the land will increase till it fills up the sea. Both
sets of propositions seem to mean something, but, like
the phrase of the irresistible ball striking the impene-
trable wall, they mean nothing.
§*4. Need and A favorite expression of the ideals of
esert. socialism is: "From each according to his
ability, to each according to his need"; and if desert
were generally measured by need, a beautiful expres-
sion it would be. But the melancholy fact is that,
despite many exceptions, desert generally varies in-
versely as need — the deserving are not generally needy,
and the needy are not generally deserving. Change
the expression to "From each according to his ability,
to each according to his desert", and you have a
very intelligible and respectable ideal, and one toward
which all the ages have been stumbling, and toward
which every wise philanthropy, every good law, every
enlarged communication, every facilitation of supply
and demand meeting each other, every honest trade
and every honest job, are leading up; and from which
every enervating and confusing dream, every disguised
robbery, every pauperizing charity, every unworkable
§ 245] Personal Property.
241
statute, every obstruction of demand and supply, every
dishonest trade and every scamped job, are keeping us
back.
Try to reach the ideal by any shorter cut, try to
determine each man's desert by anything but the re-
sults of his efforts, and who is to make the decision —
a committee of Tammany Hall, or of a legislature, or
of Congress, or of the labor trusts, or of the capital
trusts? In regard to the very needy, it has long been
attempted by government charity, by hospital and prison
boards, by committees of churches, and by charity or-
ganizations. So far it has been very imperfectly done,
but no man has yet proposed any hopeful organization
for doing it faster. It is going to be done better — im-
perceptibly better to-morrow than to-day, a trifle better
next week than this week, perceptibly better the next
decade than tins decade, and noticeably better — better
with even a much greater difference, this century than
the last century ; as it was vastly better the last century
than the century before. And all this betterment is
to come from improvement in the agencies we know,
and from better ones evolved from them. But it is to
be less rather than greater, because of all revolutions at-
tempted by unreasoning sentimentality, and rallied
under phrases that inflame the imagination, but fall
to pieces when searched for coherent meanings or prac-
tical policies.
245. Hlge-pressure Regarding the attempt to give govern-
progress. ment more to do, the socialist says that
the old ship of state under the orthodox sixty pounds
of steam, is carrying us forward too slowly — that it is
but mathematics that if we square the pressure, we
will double the speed. Give her 3,600 pounds, and we
shall go forty miles an hour where we now go twenty.
The sober, student says that long before we get up to
3,600 pounds, the whole thing will be blown to flinders.
And while the socialist is dancing around and calling
for his 3,600 pounds of steam, the inventor and educator
and sane philanthropist are evolving a quadruple-ex-
pansion engine to take us the forty miles. But the old
242
The Protection of Rights.
[§ 245
ship of state is not built for speed: she is a burden-
carrier, loaded down with the faults and imperfections
of the average man.
246 Socialism Apparently, the only way of making the
when possible, will socialist scheme work, is making voters so
be needless. intelligent that they will elect only the
best men, and making the best men so unselfish that
they will work for others as well as they work for them-
selves. On that basis, as it has taken some ten thou-
sand years of recorded history to get us up to the
present Senate of the United States, possibly ten
thousand more might give us a governing body that
could work socialism, but when people are able to
work socialism, they will be able to take care of them-
selves without it.
Human affairs are so involved with each
clvflizatfonWeb °f °ther that Spencer very justly compares
them to a web. You cannot lift a single
strand without power enough to lift the adjoining
strands ; and you cannot lift a strand very far, without
power enough to lift the whole with that strand.
CHAPTER XX.
PERSONAL PROPERTY (CONTINUED).
Schemes for Distributing it more Evenly (Continued).
(Ill) Trade-union Coercion.
In times of peace, the forefront of politics is apt
to be occupied by schemes of magic betterment. So-
cialism and the schemes springing from trade-unionism
are now competing for that position. It is not prac-
ticable to give the former any farther treatment here.
Regarding the latter, of all the impracticable schemes
for equalizing the distribution of production, the one
which is now probably deluding more people than all
others, is Labor-Union Coercion to raise wages higher
than the demand for goods and services will pay.
As justice can be reached only through
8*p8n'iyConarbon t^ie natural flow of supply and demand, to
obstruct either by any sort of coercion,
is to go counter to natural law, and going counter to
natural law is one of the best definitions of immorality.
But tho this principle is very simple, the application
of it is often far from simple : every event is the result
of many forces, and it is seldom that one force can
be justly considered without reference to the rest.
There is nothing more in accord with natural law
than respect for life, and yet often respect for natural
laws, involves disregarding life. For instance: regard
for one's own life often calls for disregard for the life
of another. So circumstances sometimes arise when
243
244
The Protection of Rights.
[§ 248
morality requires a disregard of the natural flow of
supply and demand. But those circumstances are
probably all "exceptional and abnormal. At the time
of the San Francisco earthquake, the equation of sup-
ply and demand would often have required prices for
food and water that even the consciences of the sellers
would not permit. In that case, however, and in most
similar cases, the short supply and the excessive de-
mand did not result from human volition; and in the
case of taking another's life to defend one's own, the
conjuncture does not result from the volition of the per-
son taking the extreme course. Indeed, it is probably
safe to say that all situations which justify action that
is ordinarily reprehensible, are forced upon the actor by
outside conditions — usually by the reprehensible con-
duct of another. On this principle it is probably true
that action counter to the natural flow of
offymaeiMlfSneL supply and demand is sometimes justifiable,
but only when some natural catastrophe
has already interfered, or when some unwarrantable act
of man has made the case one of self-defence.
Ordinarily justice can float in only on
?u4PVKnbor?nd fluid competition, and until both sides pro-
mote fluid competition instead of obstruct-
ing it, justice will be impeded. Some employers try
artificially to increase the supply of labor by making a
given amount of money pay so large a number of men that
they cannot have needed food and comfort, and by get-
ting men to work so many hours that they cannot have
needed rest and recreation. Trade-unions came into
being to artificially limit the supply of labor, as a defence
against such employers. But having found that some-
times wages can be increased, hours shortened, and condi-
tions improved by strikes, the unionists have jumped to
the false conclusion that they generally can, and have
gone on striking in season and out of season, until lately
they have lost more from idleness during strikes than
they have gained between them. They have at the
same time made serious inroads on the capital of the
employers from which their wages come, and on the
§ *5° 61
Personal Property.
245
capital of the community which calls for their work.
They have also reasoned that, as a strike, to be
efficient, must be close, it is justifiable to bring out-
siders into the union by any means whatever.
The idea regarding wages is a fallacy, and that
regarding coercion of non-unionists is a mistaken and
immoral assumption.
ocn xu As wages are represented in cost of prod-
250. Wages neces- , 0 ^ 1 ■ 1 ,1
sariiy limited uct, they cannot go higher than the commu-
for p?JuS.and *s w^^nS to Pav- Neither can they be
or pr u materially raised by diminishing capital's
share of product: for the capital in any trade made
unprofitable by excessive wages, would first seek a
more profitable investment; failing that, a more prof-
itable country; and failing that, would tend to be
consumed, as not worth saving. In any one of the
cases, wages cannot stay at a point where they drive
capital out. So with Ability, if wages get too high
to leave Ability's profits in proportion to its degree,
it will forsake the industry, and the laborers will be
"out of work".
250 (0), by com- The attempt to raise wages above the
petition, normal can only succeed, even for a time,
for but a part of the men, and must leave some unem-
ployed. As Professor Laughlin well said in an ad-
dress before the Citizens' Industrial Association of
America :
4 ' It means always and inevitably, the existence of non-union
men, against whom the unions must constantly wage war.
Under this system, high wages for some within a union can
be maintained only by the sacrifice of others without the union.
In short, the union scale of wages can be kept only by driving
all other competitors from the field. The monopoly is only
artificial, not real. . . .
"But if all laborers were unionists, the situation would be the
same, as regards supply, as if there were no unions. . . . Then
the rate of wages for all in any one occupation can never be
more than that rate which will warrant the employment of
all — that is, the market rate. . . .
"Obviously the union rate can be maintained only by limiting
the supply of labor to members of the union and by driving
out the non-union competitors. Consequently, the "inevitable
246
The Protection of Rights.
[§ 250 b
outcome of the present policy of many labor organizations, is
lawlessness, and an array of power against the State. Having
only an artificial monopoly of labor, their purposes can be
successfully carried out only by force and intimidation."
250 (oh by inoen- Moreover, high wages tempt to labor-
tion- saving invention. This is well illustrated
by the discovery of the New York bricklayers in the
summer of 1905, that the substitution of concrete for
bricks was taking away their means of livelihood.
These bricklayers had one of the strongest of unions,
and had driven their nominal wages up to four or five
dollars a day. Their real wages for a year or two had
not been much over half their nominal ones: for the
nominal ones had been obtained through the notorious
building strikes with their accompanying idleness. In
the spring of 1905, after the city's long deprivation of
builders, the demand for them was ravenous, and
the bricklayers expected a season of unprecedented
prosperity. But paying high wages had set builders
to experimenting, and to discovering that a dollar-and-
a-half laborer with a supply of cement and small stone,
could mix and pour into moulds more wall in a day
than a five-dollar laborer could lay with bricks.
Invention, then, puts a limit to possible wages, as
effectually as does the choking of demand that high
wages must cause, or the competition of labor attracted
from trades where wages are lower. The disregard of these
unescapable facts by the unions has cost them dearly.
Yet the unionists may acknowledge the force of what
has been said, and still doubt if they have at the time
reached the possible limit of wages. They are doubly
ready to doubt it when they consider the wealth in other
hands; and as they are not inclined to the slow and
arduous ways that placed it there, and do not often
possess the ability to take those ways, they are naturally
prone to the strike. But of late they have so often
exercised it only to demonstrate its fallacy — to reach
through times of privation a scale of wages so high that
the public will not pay it — that they must be getting
some inkling that the method is fallacious.
§ 252] Personal Property. 247
The other assumption of the unions —
tbli tfttt*" that any method— picket,boycott, violence,
murder, is justifiable to keep the union
close, hardly requires discussion. The few who sup-
port it on any basis of professed reasoning, assume that,
as the state holds the property and even the life of the
citizen subject to sacrifice for the greatest good of the
greatest number, the trade has the same moral right
over each of its members. The alleged justification —
offered in various forms — for these attempted infringe-
ments on liberty, is the greatest good of the greatest
number, but at best that can only mean of "the greatest
number " in the trade in question; and their good is
avowedly sought through price? enhanced at the ex-
pense of the greatest number of the community (258 a).
Here should be most carefully and thoroughly realized,
what was briefly touched upon before: first, that the
principle of "the greatest good of the greatest number"
can be applied only to actually "the greatest number" —
the whole community — which the greatest number of a
minor section can never be; and, second, that the ascer-
tainment and securing of what is the greatest good of
the greatest number, tho it has taxed all the wisdom
of all the ages, has even yet been only approximately
attained; and that so far as it has been attained, it is
expressed in the existing body of laws made by all for all.
252^Aimed ag*fost So much for the principles involved . Now
aandorpub?ic.p °yer' to come to details. Trade-union coercion
is threefold: It is directed primarily against the enter-
priser, through strikes and boycotts; but secondarily
against the laborer, to prevent his giving the benefit of
competition to the enterpriser, or incidentally to himself
when he happens to be unemployed : the union wants
nobody competing with it, and therefore tries coercion
to get all men to belong to it, and to stand idle when
it is idle. And third, the coercion is directed against
the public — to compel public opinion to endorse labor's
contentions, by stopping transit, coal supplies, food
supplies, and other necessities and conveniences.
248 The Protection of Rights. [§ 253
253. Coercing the As to coercing the employer: the time
employer. during which the laborer can stand idle
without a loss that is serious or fatal, is much shorter
xhan the time during which the enterpriser can — the
laborer cannot afford to wait for a good bargain, while
the enterpriser can. The union therefore tries to in-
crease the laborer's ability to wait, and to diminish the
employer's ability to wait. This is often done by
making the settlement of a difference depend not on
the employer doing without the laborer with whom he
differs, but doing without any laborers at all.
Now there can be no objection to any peaceable
efforts necessary to secure to labor the full benefit
of the natural demand for labor. They become ob-
jectionable only when they deprive the employer of
the full benefit of the natural supply. If a laborer
thinks that demand for labor justifies higher wages,
it is perfectly legitimate to test the question by leaving
the work, and seeing if the place can be filled at the
tk Qtiir price. But when the test is attempted
z:>4. The btrike. by &u the men stopping work together, it
is not made by the natural flow of supply and demand :
the natural flow would be for each man to take work
elsewhere, when tempted by a natural demand in the
shape of higher wages elsewhere. This would not in-
volve stoppage of the business : the question could thus
be tested without shock or material loss on either side.
But there are obstacles to this ideal test, obstacles
often so great as a change of the laborer's residence.
These obstacles would prevent his getting higher wages
elsewhere, unless the wages were enough higher to
justify the expense and inconvenience of whatever
change might be involved. This expense and incon-
venience may readily be greater than would be involved
in a strike, and the laborer's rights might be better
conserved by waiting until enough men were discon-
tented to unite in a strike. But not only is the strike
against whatever rights the employer may have to get
the question of higher wages settled gradually without
stopping his works, but strikes are in many instances,
§ 255]
Personal Property.
249
perhaps in most, forced by a minority, or undertaken
by men who are not discontented, but who only act
in sympathy with a strike elsewhere.
Conversely, the employer cannot be expected to carry
on work at prices that are not profitable, and an entire
stoppage of the works may be as much to his interest
sometimes, as at other times a strike may be to the
interest of the men. But ordinarily it would be in the
course of nature for him to try to reach a lower scale
of wages gradually, rather than proceed to a lockout,
and both incur idleness himself, and deprive his men
of their means of subsistence.
Thus in both directions, the rights of master and
man often connect. Men with reason and morals can
generally settle their conflicts by discussion and com-
promise, but beasts can settle them only by war; war,
however, is justifiable only as a last resort, and strikes
and lockouts are war.
Lockouts, however, play but a small part in indus-
trial troubles. The U. S. Bulletin of Labor for Sep-
tember, 1904, shows that from 1881 to 1900 inclusive,
there were over twenty times as many strikes as lock-
outs, and the employers lost over five times as much
by strikes as by lockouts. In the five years 1 896-1 900,
the strikes increased to over thirty to one lockout;
and the ratio of loss increased three and a half fold;
tho if the years 1895-1899 were taken, it would show
a fall in strikes to about fifteen to one lockout. In
view of the facts, then, we may reasonably continue to
confine our consideration to strikes.
In all the coercion, the justice of the case has been
obscured by many things — most perhaps by what seem
to be the plain facts that a man has a right to stop
work when he pleases, and to buy or not buy where
he pleases; and that what one man has a right to do,
any number have a right to do together.
255. Conspiring to But in all strikes and boycotts there is
stop work. more than the exercise of the mere right
to stop work or stop buying. What leads to all the
outrages is conspiring to stop work or stop buying.
The Protection of Rights. ~ ■ [§ 355
Even granting to the individual the fullest right to
do either, there still remains serious question of his
right to enter into conspiracy with other men to do it
together, when they unduly prejudice the rights of
others — when, for instance, not to speak again of private
wrongs, they bring an industry — especially a public
utility, to a sudden and disastrous standstill.
Moreover, even leaving out the many cases when the
men are ordered out against the real wish of the majority,
or because some other men have struck, and considering
only the cases where men strike because they really
want to, does each man stop work when he pleases, or
do the discontented stay at work after they have
become discontented, in order that all may quit work
together, to the greater inconvenience of the employer?
Such a course is admittedly a conspiracy to injure the
employer, and the right to take it is seriously questioned,
even by the law. Similarly, of course, with the boycott
coercion.
256. other coer- Beginning with occasional and often
clons« entirely justifiable demands for higher
wages and shorter hours, the unions have gradually
added limitation of apprentices; limitation of a ca-
pable man's output co that of an incapable man; re-
fusal to handle material from previous non-union pro-
ducers, or material coming from other shops, or mate-
rial not prepared in their own city, before they have
duplicated it and destroyed the duplicate; and hosts
of other regulations of their employers' business. The
employers have yielded point by point until the de-
mands have reached the logical conclusion of that
for the "closed shop" — closed to all but union men,
and that the foreman shall be a union man chosen
by the men, instead of by the man who pays his wages.
In 1906 the Typothetae of New York thus stated a
situation that is by no means restricted to their trade:
"The employer cannot put his own son to work at the
machinery in his own composing-room until that son, after four
years' probation, swears allegiance to the union, subscribing to
an oath that puts obedience to the union above his duty to
§257] Personal Property.
family, church or state. The employer cannot hire or dis-
charge his own men; they must be hired or discharged by a
foreman, who must himself be a member of the union. An
employer cannot operate the keyboard of a machine that he
has paid for, or set his own type ; he is not allowed any repre-
sentation in his own composing-room. The composing-room
is controlled by a union foreman, assisted by a union chair-
man elected by union men, the chairman's duty being to
see that neither the men nor the foreman shall for one moment
forget any of the numerous restrictions which the union has
placed on the running of the shop."
In the last analysis, the object of the unions has been
to break down the laws protecting private property —
factories, stores, mines, transportation agencies, in
order that they, instead of its owners, may control
it and derive from it what revenue they please. This,
it need hardly be pointed out, is one of the forms of
confiscation grouped under the general term Socialism.
Even if they were to succeed in their contention, noth-
ing can be more certain than that, if the property
were without the guidance of the superior minds which
created it, the returns from it would fall off, and the
revenues to the workman would diminish, and in
many cases — in all, if the principle were carried out
to its .logical conclusion — would cease altogether.
At this point, the employers have decided to resume
control of their own businesses, and to run the "open
shop" — shops open to whom they please to engage, on
terms satisfactory to their own side as well as the
other — and the parties are in the midst of a disastrous
conflict. There can be but one end to such a conflict.
Some weak employers in the printing trade have yielded
for the moment, because they could not afford to stop
work; but the strong ones are holding out simply
because they must. The question is simply whether
they shall control their businesses or give them up.
The laborers cannot afford to have them given up.
257 Misieadln Most of the discussion of strikes in the
statistics of "g later literature of the subject, of course
strikes. en(js w^ the censtls of 1900. Based on
the facts up to that time, Professor Adams says:
252
Tlie Protection of Rights.
[§257
' ' In the Final Report of the Industrial Commission (page 864)
it is pointed out that although on the average of the twenty
years 1 881-1900, about 330,000 persons were thrown out of
employment annually by strikes and lockouts, this number
constituted only about 3.36 per cent, of the persons employed in
industries affected by strikes. The actual time lost by strikers
in this period amounted to about 194,000,000 days. However,
'spread over the whole period, this loss amounts to very much
less than one day per year for each adult worker. In other
words, the workmen of the United States have lost less time
from strikes and lockouts than from the celebration of the
Fourth of July or any other legal holiday. . . .' Similarly, on
the basis of the figures of the Department of Labor, Mr. Mitchell
calculates that the immediate loss traceable to strikes amounts
to only about 3 cents per month for each inhabitant."
Now the madness that ruled the unionist world from
1900, the last year considered in the foregoing para-
graph, to 1906, when these words are written, would
make that paragraph,* if applied to the more recent
* Professor Adams deduces from a table of strikes from 1 881 to
1 900 some conclusions that are strange to find in a book usually
as reliable as his. One is that unionism has tended to lessen the
number of strikes. In support of this he deduces the fact that
in '86-90 there were 4358 union strikes, while in '96 to iooo
there were but 4175. But I find that the same table shows that
in '8i-'90 there were 5669 strikes, which in '91-1900 rose to
8,788, and even that his five years '86-'90, containing 4,358
union strikes, were followed by five years, '9i-'95, containing
4.613.
Moreover, in the two periods he selects, he compares the
non-union strikes with the union strikes, with the showing
that the union strikes decreased four per cent., while the non-
union strikes increased ten per cent. But if he had taken the
two decades that I have taken from the same table, these
figures would have been that union strikes had increased fifty-
four per cent, (instead of diminishing two percent.), while non-
union ones had increased but thirty-five per cent. Since 1900,
the statistics are not available, but no observer can doubt that
the facts have been even vastly more in the direction that
my comparison of the two decades shows, or that the unions
have fomented strikes to a degree that seems to mean nothing
short of the madness of those whom the gods wish to destroy.
Of course it is not to be supposed that Professor Adams
deliberately selected fractions 01 each decade which happened
to support his theory, and yet a glance at his table reveals the
showing of the whole twenty years to be startlingly counter to
that of the two periods he has selected.
§ 253]. Personal Property. 253
period, the wildest nonsense — a fact which it is impor-
tant for writers to point out as long as current facts
and previous facts continue in such direct contra-
diction— probably until the census of 19 10 shows the
conditions of the last six years, and, it is to be hoped,
the subsidence of them. Favorable symptoms of the
subsidence are the rise of the employers' unions and
citizens' industrial unions, a great decrease of strikes
since 1903, and the falling off, in 1904, of the member-
ship of the trade-unions, which is not yet made up,
despite the subsequent full employment and high
wages.
258. Coercing the As to coercing the laborer: there is no
laborer. question that the trade-union would be
more efficient as a monoply, and that it has a right to
persuade men to make it a monopoly. But equally is
there no question that it has no right to add violence
or intimidation to persuasion, or that the unions have
at last become so used to artificially limiting the supply
of labor, have become such adepts in it, and have de-
rived such advantages from it (tho largely illusive ones),
that they have got in the way of doing it under un-
justifiable circumstances, and by unjustifiable means.
Among the means, as already said, is the use of
coercion to limit the number of apprentices. Such a
policy, even among shipwrecked sailors struggling for
a raft too small to hold them all, is not easily
regarded with patience, and when it is persistently pur-
sued by men already supplied with the necessities of
life and not a few of its luxuries, its cruelty and selfish-
ness are beyond excuse. Its absurdity is often on a
par with them: for instance, in several trade-unions —
notably in the typographical ones, it has now got to
the point where a father cannot teach his trade to
his son in his own shop, without the consent of the
union ; and it need hardly be pointed out that if limita-
tions were practiced by all trades, more of the com-
munity would be reduced to the position of labor too
unskilled to be organized — of that pitiable residuum
*S4
The Protection of Rights.
[§258
"the unemployed which is drawn upon only when
nothing better can be had.
On the other hand, some trades, as in the printers'
strike of 1905-6, have forced employers to teach the
trade to so many outsiders, that many of the strikers
themselves, on wanting work after the strike has failed,
find their trade overcrowded.
Appreciating the value of unity of action, whether
the cause be right or wrong, the unions have stopped
at no crime in the effort to secure it. Not content
with the savagery of pushing apprentices off the raft,
the unions are given to boycott, violence and murder,
to coerce men to stop work against their will; and
all these steps are habitual in quarrels not their own;
and in strikes entered upon when the employers have
done no wrong. The Chicago Tribune claims to have
statistics showing that in the United States from 1894
to 1904 inclusive, there were three times as many
murders committed in riots to coerce laborers, as in all
other riots put together.
The unions have set no limits to the ends they hope
to attain by coercion of laborers. Reason and justice
require that, other things even, the lowest bidder should
258 (a), ne obtain work. The unions wish to elimi-
Labor Trust. nate all bidding among laborers. They
have made the euphemism of ''collective bargaining",
and claimed a mass of virtues for it — correctly claimed,
if their own side alone is to be considered. But no
human ingenuity can extract from the phrase or the
idea, anything but an absolutely close labor "trust":
that is precisely what all trusts are made for — collective
bargaining — eliminating individual competition. This
is not saying, however, that trusts — whether labor
trusts or capital trusts, necessarily merit condemnation;
but it is characteristic of the low intelligence which
must accompany low productive power, to exalt the
labor trust while condemning the capital trust.
Each labor union is trying to form a trust controlling
its branch of labor, and the American Federation of
Labor is a trust trying to include them all. To deny
Personal Property.
*55
this would be so absurd that many of the members
frankly confess it; and while other trusts have the
decency at least to profess to lower prices, the members
of the labor trusts all confess, at least indirectly,
that their object is to advance prices. Few if any of
them have the intelligence to realize that all labor
trusts but each man's own, are advancing prices against
him, and that even his own advances the price of such
of its commodities as he uses. As so often said already :
they do not think as far as their outgo, but only as
far as their income. Their ideal "collective bargain-
ing" is that there shall be but one bargainer on their
side, and that the laborer shall be taken at his price
or not at all, even if babes go without milk, and the
whole community without meat and coal. While the
unionists cry out most bitterly because the capital
trust is only "one bargainer", while they are the most
bitter denouncers of the capital trusts* destruction of
competition in things which unionists realize that they
themselves use, they are ready to override everything
to destroy competition in labor. While they denounce
the Standard Oil Company and the American Steel
Company for absorbing outsiders through business com-
petition, they themselves habitually try to absorb out-
siders by the bludgeon.
In trying to limit the right to work and to contract —
the right of demand to seek supply, and of supply to
seek demand, in a free country, they are attempting an
impossibility — without freedom to work, freedom to
contract, and freedom to compete, no country can be
free: the condition of the workman must be simply
that of the slave, and the slave of the worst tyrant
known — a wrong-headed majority.
259 Coercln ^s to Coercing the Public, everybody
the 'oubii? "g knows illustrations enough, but some will
The union label. help tQ a clearer understanding of the
rights of the situation.
A scheme of the labor trust has been to coerce the
public from buying any goods not bearing the union
The Protection of Rights.
label. It has tried the scheme in many ways calling
for the same charity that we give to children when
they do things whose enormity they do not realize.
One is the ingenuous step of demanding legislation
to enforce the scheme, — a step which no capital trust
would be either so bold or so innocent as to attempt.
Perhaps it was a step more ingenuous still, when a
labor trust began interfering with education by noti-
fying publishers that union influence would be used
to drive out of the Boston schools any books that did
not bear the union label. The tendency of such a
policy is of course to lead people of independent spirit,
wherever possible, to avoid using goods with the union
label. I have even known a case where a person
who responds with considerable freedom to circulars
asking for aid for deserving charities, has ceased pay-
ing attention to those which bear the union label. To
an obvious criticism, he responded that, whatever
those bearing the union label might deserve, there
were enough not bearing it, to justify concentrating
on them all the money he could give.
And yet with all the claims for the union label, the
highest New York court in 1906 would not sanction a
requirement of it in the contract for the public printing
of Onondaga County, pronounced the requirement
' ' against public policy and unlawful", and said that
"the Board with just as much propriety, so far as its
legal right is concerned, might have permitted only
Baptist or Unitarian printers to enter the bidding list".
The decision is very full in citation of supporting cases.
The following paragraphs from the New York Times
of May 12, 1906, may cast some farther light on the
alleged right to coerce the public into endorsing a
labor contention, by stopping work:
"When the strike of the Funeral-Drivers' Union
Hlustratloru &ot un(^er wav yesterday, New York witnessed
such scenes as the city never before saw.
14 Several funerals were abandoned by strikers when the dead
were between the church and the grave.
§ 260] Personal Property.
257
"Of 103 funerals that had been set for yesterday in the city
only 23 were finished. The carriages of some of those were
stoned by the strikers or their sympathizers.
" Farrell's funeral was set for one o'clock. Several carriages
and a hearse had been drawn up to the door, when a walking dele-
gate from the union ordered the drivers to go back to the livery
stable. They went back. Th.n came the news that the livery-
stable owner had ten other funerals, and had been obliged
to sign the agreement. The carriages returned to the house of
mourning, but came back with flying colors. On the heads of
the hearse-horses were two red, white and blue flags, and on
the bridles of each of the carriage-horses tiny flags signified a
victory for the funeral-drivers. The mourners protested, de-
claring that the funeral procession with the flags would look
like a west-side chowder club. But with the union's flags
flying at the heads of the hearse- and coach-horses the funeral
went on to the cemetery. "
In another case "The Rev. Father John C. Henry . . . was
delivering a eulogy on the dead man when there was a com-
motion at the church door. ... A committee from the striking
union had called the driver of the hearse and ordered him to take
his hearse back. . . . The coach-drivers were ordered back. too.
Leaving the body and the mourners in the church, the hearse-
driver and the coach-drivers drove away. The sexton . . . went
about notifying the mourners of the situation and telling them
to remain in their pews until matters could be straightened
out. . . . The police reserves from two precincts were sent to
see that the strikers did not again interfere with the funeral.
Then Undertaker Hagan hitched one of Undertaker Slevin's
horses to an undertaker's wagon, and returning placed the
body in the wagon. The immediate relatives of the dead
man accepted the offer of a private carriage that had taken a
party to the funeral, and then followed the body to Calvary
Cemetery. The rest of the mourners went to the cemetery
in trolley cars, after this funeral had been held up for two
hours.
"In another case, up in the Bronx, the body was put in a
milk-wagon and driven to the cemetery, while the mourners
rode in surreys and grocery wagons."
In another case 4 A large number of the striking funeral
drivers assembled opposite the Ogle home at 8 o'clock. The
police reserves were sent for, and drove the strikers away.
. . . Four men appeared carrying the coffin on their shoulders
and followed by the mourners, who walked.
* 4 Dr. Guilfoyle granted an extension of the burial permit in
the Weaver case, so that the body could be held at the house
until to-day. The law forbids the holding of a body more
than four days. . . . The Weaver family, like others in mourning
for their dead, were compelled to sit up another night with
their dead relative.
The Protection of Rights.
[§ 260
"The funeral of Antonio Le Grabier . . . was headed off by
a committee of strikers, who ordered the hearse-driver ancl
the coach-drivers to leave their seats. They pulled up, leaving
the coaches and hearse in the roadway. ..."
In another case " Striking drivers ran out and tried to drag
Undertaker Lumoro from his seat on the hearse. Policeman
Gleason, one of the guards, ran at the strikers with his club and
drove them away. The funeral then proceeded, . . . but still
followed by the mob of striking funeral drivers and their
friends.
"At the ferry the mob threw sticks and stones at the hearse
and coaches. The mourners climbed out of the carriages and
took refuge in the ferry-house.
"A man asked Dr. Guilfoyle to hold the body of his child for
another day. He said the child had died of measles, and that
the undertaker told him the body would have to be taken to
the cemetery in an express wagon.
" 'My wife is very ill', he saki, 'and she vows she will not
permit anyone to place our child in an express wagon. If I
can get a permit to hold the body for twenty-four hours more,
it will be the means of probably saving the life of my sick wife.'
"Dr. Guilfoyle granted the permit.
"It was said at the Health Department that if an attempt
is made to-day to hold up funerals the police will be called on
to make arrests under Sections 314 and 315 of the Penal Code.
Section 314 provides that any person who detains a dead human
body on any demand is guilty of a misdemeanor. Section 315
says :
" • A person who, with or without authority of law, obstructs
or detains any person engaged in carrying or accompanying
the dead body of a human being to a place of burial is guilty
of a misdemeanor.' . . .
"Dr. Guilfoyle said the strikers yesterday had held up the
funeral of a person who died from diphtheria. This was a
serious matter, he said,, as the body had been held over the
twenty-four-hour limit without the Health Department's per-
mission."
The right to stop work! Has anybody
stop worit.r,ght t0 a right to anything which will lead to such
barbarities as these, or such as may be read
of in connection with a large proportion of all
strikes ?
Undoubtedly, other things even, any man has a right
to quit work when he pleases. But plainly there are
cases where other things are not even. I cannot treat
this important subject better than I have done else-
§ 262] Personal Property.
*59
where,* and I will therefore use again the passages
with slight modifications.
In any contract for work, even if terminable without
notice, certain things which it is superfluous to express
in the contract, are always understood. One of those
things is that neither party shall wilfully use the relation
between the two, to the damage of the other, or of any-
body else. Nobody would say that a workman whose
business it is to connect water- or gas-pipes has a
right to quit work the moment he has tapped a main,
without making his connection or stopping the leak;
nobody would claim that a surgeon has" the right to
stop work after he has cut a man's leg off, before stop-
ping the blood and putting the stump in order ; nobody
would claim, indeed, that an actor, having gathered
his audience together, has a right to stop in the middle
of the play, even if he returns half the entrance -money.
... No fair-minded person can fail to see that railway
employees have no right to quit work while trains of
passengers, animals, or perishable freight are likely to
be delayed ; and as the welfare of the whole community
depends not only upon trains being carried to their
destination, but upon their being regularly run at their
usual intervals, it also follows from the same considera-
tions, that no railway employee has a right to quit
work under any ordinary circumstances without giving
notice reasonably sufficient for the procuring of a sub-
stitute if one can be had, or for making some reasonable
arrangement if one cannot. And in all cases, the
laborer's right to stop work is limited by the rights of
others to have their interests put in safe or reasonably
complete condition before the laborer leaves them.
262. The com- The parties to this question are no longer
munlty's defence, merely the employer, the striker, and the
possible man glad to take his job, but there is a fourth
man who is of vastly mere importance and power than
any of them, and who, as soon as he becomes fully
* " Sturmsee third edition, pp. 409-12.
260
The Protection of Rights,
alive to his rights, is going to settle them in a way
that will brook no cavil or resistance. This fourth man
is the average citizen — agglomerated as the community
at large. In the United States, he represents to-day
over forty million adults (including his wife) and over
eighty million people, including his children, whose
milk supply (not to speak of the family food and fuel,
and his convenience of passing between house and
business) has been held up a little too often by the
mere convenience or whim of some two million persons
belonging to .the trade-unions. If his rights had been
violated because of the necessities of these people,
or of crying injustice inflicted upon them, he would
have felt sympathy and patience. But they have been
too often held up, not by men quitting old jobs and
seeking new ones, as discontent and opportunity arose,
but by conspiracies, for poor reasons, to stop work and
make others stop work, together.
There has been a principle upheld among Anglo-
Saxon people for a good many hundred years, tho
suffered to lapse into occasional desuetude, that men
conspiring to do a thing unobjectionable if they do
it separately, but working harm to the rights of an-
other or of the community if they do it together, are
guilty of a criminal act; and the community is rapidly
being forced into a disposition to visit on such crim-
inal acts, their proper penalties. The work has begun
already.
263 Socletv a?^ressi°ns a* last have forced
organizing ' combinations not only among the em-
ln self-defence, pioyerSj but among new forces that are
irresistible — those of the community in general. Few
labor unions can see beyond their own ranks; they
forget that their exactions must be met not merely
by their employers, but by all who use the product,
including even members of other unions.
In 1 901 the first Employers' Association was formed
in Dayton, Ohio. Before that time employers had
quite generally sought to profit by each other's troubles,
instead of uniting against all unjustifiable trouble.
§*63]
Personal Property.
261
In 1 901, an Employers' Association was organized in
Chicago, and many other cities soon followed suit.
About the same time street-car operatives had been
making serious trouble in Montana, and miners doing
the same in Colorado. Remembering the Vigilance
Committee of San Francisco, the people organized
similarly, many workmen, even, being on the side of
law and order. Nearly four hundred of these associa-
tions have grown up and are now combined in the
National Citizens' Industrial Association "for the pro-
tection of the common people", which publishes a
valuable organ, 44 The Square Deal". It includes the
National Association of Manufacturers, comprising some
three thousand firms and corporations, whose organ is
"American Industries"; and also the powerful "Anti-
Boycott Association". Thus the intelligence, capital,
and rights of citizenship of the country are at last
arrayed against the excesses of the unions, and by or-
ganized appeal to the law, have obtained important
decisions against them ; * have prevented much class
legislation; and are disseminating valuable education.
The National Association of Manufacturers has estab-
lished free employment bureaus to give independent
laborers work which strikers have refused.f The
* " In three fourths of the Chicago strikes, injunctions have
been secured restraining strikers from interfering with non-union
men, on the ground that it was a conspiracy to prevent work.
Hence the anti-injunction bill which the American Federation
of Labor has tried hard to put through Congress. This bill, in
the opinion of Mr. James M. Beck, chief counsel of the American
Anti-Boycott Association, 4 legalized conspiracies ' between
unions, but made it impossible to enjoin them." {From an
article in the Chicago " World of To-bay" by Mr. Isaac F.
Marcosson)
t " Nearly every strike ending in a victory for the open shop has
been followed by the establishment of a labor bureau. The union
men call it a black-list agency, because it keeps a check on a man's
record. The National Metal Trades Association furnishes a good
example. It runs open shops. Any man of good character want-
ing a 30b in the metal trades can apply there and in four out of five
cases he secures work free of charge. The secretary investigates
the man's record. All the facts about him are put on a card
which is kept in a permanent card catalogue. In this way
The Protection of Rights.
[§ 263
employers ' organizations, in nine tenths of the cases
which they have taken up, have established the open
shop, where the unions have tried to destroy it.
264. Educational Great as has been the immediate eco-
Results. nomic value of all this experience, its
educational value must be greater still. Both are indi-
cated in the simple fact stated before, that while in 1903
there were in Chicago 1,300 strikes, in 1904 there were
but 800. Unless all strikes are wise and justifiable, it is
reasonable to presume that the falling off in 1904 was
in the class of those that would not have been so, while
the number that did take place is apparently large
enough to include virtually all that could have been
wise and justifiable; and more workmen are apparently
learning not to strike wantonly, while they still re-
tain the spirit to maintain their rights.
Thus the unionists may have lately begun to learn,
that after all there is no more magic in coercion than
there is in the other nostrums for getting much by
the man who produces little; and they are learning
it, as the uselessness of the other nostrums has had
to be learned, at frightful cost to themselves and the
community.
If more of such teaching is needed, it may get so
far that the twenty million men who are not in the
habit of striking, may outvote the two million who
the disturbers are kept out of the shops. Last year the Chicago
labor bureau of the metal trades had 4,850 applicants and
3,000 men got jobs.
"Bureaus in different cities kept in touch with one another.
If a man applying in Kansas City lies about the reason why
he left a job there, he is sure to be found out if he applies in
New York. If a strike is threatened, for instance in the New
York metal trades, a central secretary can send a telegram to
every labor-bureau secretary, asking him to rush men to New
York. In twenty-four hours a hundred boiler-makers would
be on their way from Kansas City, St. Louis, Chicago, Cincin-
nati, Philadelphia and a dozen other places.
"These bureaus have made leaders cautious about calling
men out. Formerly they called a strike and then considered
the grievance. Now they consider the grievance first." (M ar-
oosson, op. cit.)
§ 264 <*]
Personal Property.
are. All strikes have been declared criminal by statute
before now. Even in Australasia, "the Paradise of
Labor", the mere attempt to foment one is subject
to heavy penalties (291), and if the proportion of them
which unquestionably are criminal even under our law,
should again increase as rapidly as they were increasing
before people began the checks just described, all
strikes may be declared criminal again, and strikers
reduced to depend only on verdicts of not guilty where
the strike is justifiable, just as such verdicts are found
in the rare cases where killing a human being is justifiable.
. ™ Probably the workingman would be
264 fa). The com- J , & T -
munity'8 defence the gainer if they were. In the modern v
wni defend the world, the undisturbed laws of competition
workman. WOuld probably take better care of him,
than, in his recent mad attempts to overcome those
laws, and in his subservience to his walking delegates
and Sam Parkses, he has succeeded in taking of himself.
But probably he will not drive society to any such ex-
treme. Other agencies are opposing his errors, and he
is coming to recognize them and, it is to be hoped, to
be the gainer in consequence.
If the justifiability of such strikes as those of the
last few years had had to be passed upon by judges
and juries, few of the hurtful strikes would have been
undertaken, while the laborers would still have felt
free to enter upon those deserving of public sympathy,
* and therefore likely to be of real use. If all unionists ap-
preciated as well as those of Australasia seem to (278 a) ,
the advantages sure to accrue to them from such legal
regulation of strikes as would prevent the unjust and
foolish ones — especially those incited for mere leaders'
graft, the unionists would be the first to agitate for
the growing improvements in the law.
The demagogues and corruptionists in the unions
oppose arbitration agreements and all other means of
avoiding strikes. On the other hand, nearly all the
good and wise leaders, and there are many of them,
do all they can to avoid strikes, as suicidal. Many
honest but stupid men look upon the union as nothing
264
The Protection of Rights.
[§ 264 a
but a machine to strike with, while the fact is that
some of the most successful unions, whose men actually
receive far more than the average amount of wages,
have seldom struck at all. Considering how the unions
have lost wages and membership during the recent
saturnalia of strikes, it is not unthinkable that unless
the strikes disappear, the unions must. If they stick
to their legitimate function — like that of the German
army for the last thirty-five years — of powerful pro-
moters of peace, letting all who would impose on the
workingman know that they have not to deal with
individuals, but with an army, not much imposition
need be feared. They have rushed into their excesses
because they had only individual employers and unpre-
pared communities to impose upon. Now that the
employers and the communities have begun to marshal
their forces, the unions will soon find unjust aggression
hopeless, but will receive all the more sympathy when
their complaints are just.
CHAPTER XXI.
PERSONAL PROPERTY (CONTINUED).
Schemes for Distributing it more Evenly (Continued).
(IV) Labor and tlie Law.
I will now attempt to give some idea of the general
attitude of the law regarding labor conspiracy and
coercion.
Of the laws enacted by legislatures and
and Civfc Law,Law pronounced by judges and by priests, such
as work, are only statements of natural
laws; and anybody trying to reform society by some
fanciful scheme counter to natural law, will soon find
himself in opposition to some law of the state rooted
deep in human experience. The trade-unions are
already in pronounced opposition to the laws of both
Nature and the State, as is shown not only by individual
violations of the law, but in the general attitude of
the unions. To carry out their systems, they have
found it necessary to exact from their members a
pledge of fealty to the union superior to their fealty to
church and state, to prohibit them from entering the
militia which protects the established law, and to
agitate for the abrogation of injunction, which is one
of the most important features of the established law ;
they have procured the enactment of many impossible
statutes, which are of course falling to pieces under the
scrutiny of the courts; and they frequently publicly
admit that they hold themselves superior to . the law,
265
266
The Protection of Rights.
and that they cannot succeed without going beyond it.
After President Roosevelt told the unionists at Chicago
in 1905 that there would be no discrimination in favor
of either side, the President of the Chicago Federation
of Labor said: "The President deals a death-blow to
organized labor" . . without discrimination, we are just
where we started. What we have been fighting for is
union labor to the exclusion of all others. " In other
words, they had been fighting to override the laws pro-
tecting the non-unionists' Right-to-Work, and every
man's right to join the union or not at his free will.
Their avowed and acted policy is that, if society will
not see their most trivial demands granted, society
shall suffer the most serious consequences. In short,
just as the ignorant, seeking for shorter cuts to fortune
than industry, frugality, inventiveness and the other
effective sources of wealth, have lately tried, with con-
spicuous failure, to set aside the natural laws which
control land, money and industry, so they are now
attacking not only the statute laws which they them-
selves have approved, but the venerable system of Anglo-
Saxon common law which has grown out of the experi-
ence of the ages, and which is by many, and those proba-
bly the wisest, regarded as the greatest achievement
and most important possession of the human race.
Probably existing laws are adequate to the situation, at
least so far as the unions have not effected the repeal
of the common law which has protected the liberties
of English-speaking people since English was first
spoken. Altho the common law has always been re-
garded mainly as the defence of the poor against the
rich, many people have been surprised to find in it equal
elements of defence of the rich against the poor. An
impression has become widespread that vox populi is
not always vox dei, and that the voice of the trade-
unionist is not always even the voice of the people.*
* An instance instructive in many ways, not least regarding
the frequent boomerang effect of legislation, is afforded in this
connection. No portion of the community was more active
than the trades-unions in the agitation which led to the Sher-
§ 26s <*\
Personal Property.
267
However, conspiracies of laborers to obstruct and even
to destroy the business of employers who would not , and
often could not, concede to their demands, have grown
so frequent that, like the violence of primitive com-
munities, they have come to be regarded as justifiable;
and American legislatures have even passed statutes
admitting a right to strike. But the courts are taking
different ground.
265 (a). The Law The legality of a number of men doing
of conspiracy. together what each may do separately, was
treated by Justice Harlan, in the U. S. Supreme Court,
Arthur vs. Oakes. He said:
"An intent upon the part of a single person to injure the
rights of others or of the public is not in itself a wrong of which
the law will take cognizance, unless some injurious act be done
in execution of the unlawful intent. But a combination of
two or more persons with such an intent and under circum-
stances that give them, when so combined, a power to do an
injury they would not possess as individuals acting singly, has
always been recognized as in itself wrongful and illegal. '
Nearer up to date, in 1906, the Pennsylvania court
of first resort (whose judgment was confirmed by the
higher court) in the Purvis Boycott case, said:
**The defendants contend, however, that what they did in
concert was simply what each might have done for himself,
acting on his own initiative, and that their concerted action
was not, therefore, unlawful.
* ' I do not understand such to be the law of our state. There
man Anti-Trust Act. This act makes criminal every com-
bination in restraint of trade between the states. It was
primarily aimed against abuses among the railroad companies
and the great shippers. It has now been applied by the courts
to boycotts and similar combinations interfering with the
business of any establishment sending goods outside of its
own state, and the mere notification of their criminality peace-
fully resolved the teamsters' boycott against the Kellogg
Switchboard Co. in Chicago, the freight-handlers' boycott against
the meat-packers, and other boycotts in other places. The
unions, dissatisfied with the laws they advocated for others,
when applied to themselves, are now agitating for repeal.
268
The Protection of Rights.
[§ 265 a
is, under some circumstances, a potency in numbers of which
the law takes notice. 4 Men often do [illegally] by the combina-
tion of many, what severally no one could accomplish, and
even what when done by one would be innocent. There is a
potency in numbers when combined which the law cannot
overlook when injurv is the consequence. . . " Morris Run
Coal Company vs. Barclay, 68 Pa. 173.
Then was quoted a previous decision, in Patterson vs.
Building Trades Council, 11 Dist. Rep. 500:
" 4 All the authorities of this state go to show that while the
act of an individual may not be unlawful, yet the same act
when committed by a combination of two or more, may be
unlawful, and therefore actionable.' "
The court went on:
" The authorities above cited indicate clearly that the doctrine
of Bohn Manufacturing Co. vs. Hollis, 54 Minn. 223 and 40
A. S. R. 319, that 4 What one man may lawfully do singly, two
or more may lawfully agree to do jointly', is not the doctrine
of the law of our own state. Neither, indeed, does it seem to
conform to elementary principles. The efforts of one, by rea-
son of their very puniness, may be such that the law will take
no notice of them: 4de minimis lex non curat.' But when, with
increasing numbers, the individual effort has grown into an
avalanche of power, can it still be said that the law will not
notice it because the individual contributions thereto are
small ? With us the law takes notice of the cumulative power
of increasing numbers."
The same point was sustained by Judge Knowlton of
Massachusetts when he said:
" An act which can be done in legitimate competition by one,
two or three persons, each proceeding independently, might
take an entirely different character both in its nature and its
purpose if done by hundreds in combination."
Similar ground was taken regarding the whole ap-
parently innocent class of rights which include stopping
work at will; choosing one's shopmates; buying where
one pleases ; peaceably arguing with another man regard-
ing choice of places and times for working, buying and
selling; etc., etc., when the United States Supreme
Court said:
§ 265 ^] Personal Property.
269
" No conduct has such an absolute privilege as to justify
all possible schemes of which it may be a part. The most inno-
cent and constitutionally protectee! of acts or omissions may be
made a step in a criminal plot, and if it is a step in a plot, neither
its innocence nor the Constitution is sufficient to prevent the
punishment of the plot by law."
The general principle was thus illustrated by Hon.
Daniel Davenport, Counsel to the Anti-Boycott League,
in an address before the Citizens' Industrial Association
of America, in 1905:
* 4 Suppose half a dozen men in my town are bakers ; I go to
one of them. . . . He may say to me: 'You do not belong to
my church, or you do not belong to any church. ... I do not
want to sell you any bread unless you join the church.' He
has a perfect right to do that. And so, if I go to each of the
other five, every one of them has a right to say that he will
refuse to sell to me ; but if those six men have combined together
and agreed not to sell me bread, in order to make me do some-
thing, for instance, to make me join the church, that is a con-
spiracy, and every act they do to carry out that conspiracy is
unlawful, by reason of the fact of its being a step in the plot.
4 'That principle has been laid down by the Supreme Court of
the United States in a case that arose in the State of Wisconsin.
It has been emphatically laid down by the courts of Illinois, and
it has, within a few days, in cases that we have been connected
with in the State of Massachusetts, been recognized and applied."
Other decisions to the same general effect are too
numerous and too various to recount. Occasionally
some demagogic judge who cares more for Labor than
for Law, or some petty magistrate who does not know
the law, turns up with a decision in the opposite di-
rection, but the weight of the law is now past question.
The bearing of these decisions on the right to strike
is obvious — that men have no right to attack another
man's property or business because they once helped
in it, and threw up their jobs because they ajid
their employer could not agree; and that conspiracies
to strike, picket and boycott are such attacks.
265 (bi The A strike is questionable also on the second
"Comer" again, ground that it is an artificial damming up
of the supply of labor : so it is open to the same objec-
tion with an artificial cornering of goods.
2JO
The Protection of Rights.
[§2656
For these considerations, the common law — the de-
cisions of judges have not seldom been against there
being any such thing as a right to strike. The Eng-
lish courts, whose example has largely influenced
ours, have held from time immemorial that it was
criminal conspiracy for workmen to unite to raise
wages and shorten hours, and Parliament has passed
statutes to the same effect. These acts were repealed
in 1824, and later there have been statutes declaring
that no combined action could be criminal in a trade
dispute unless it were criminal when committed by an
individual. But there is a growing sense that this is
going too far. As already shown, there are many de-
cisions of courts, English as well as American, that acts
which can work no injustice when performed by an
individual, may work great injustice when performed
by many men at once.
265 (oh Malicious A long-established principle is that
tnunt. strikes are criminal if undertaken with
malicious intent. The range of malicious intent, how-
ever, is not yet very thoroughly defined. It seems to
have been sufficiently determined whether there is an
element of malicious intent in holding up the transit
of food or fuel of the whole community in order to
secure some relatively minor convenience or concession
for a few.
265 Labor- In Massachusetts, strikes are illegal
taoing machinery. when directed against labor-saving ma-
chinery. In 1895 tne Supreme Court issued an in-
junction against the masons building the Harvard
Medical School, stopping work because the contractors
were using labor-saving machinery to form the arches.
Labor-saving machinery is so clearly demanded by the
greatest good of the greatest number, or "public policy
that it is strange that this act of the judges should be
regarded as something of a novelty.
265 (e). no open Strikes are illegal when directed against
*hop> the open shop. In the Chicago Typothetae
Case, in 1905, the injunction prohibited "from attempt-
ing to prevent by threats of injury or by threats of
§26SA]
Personal Property.
271
calling strikes, any persons from accepting work from
or doing work for such complainants." And there are
hosts of decisions to the same effect.
265 (f). "immtdt- Many of the judges who admit the right
til wm£thet™d to strike, limit it by an important pro-
*^'*«. vision — that legally to conspire to strike, a
man must have an "immediate interest" in the object
struck for. It is widely held that a man has enough
immediate interest in increased wages or decreased
hours to justify his conspiring to strike for them, but
it is also widely held that in a strike to compel the dis-
charge of a non-union man, or the reinstatement of a
union man, the strikers have no such " immediate in-
terest" as to prevent the strike being an illegal con-
spiracy. For the same reasons, sympathetic strikes are
now quite generally held to be illegal conspiracies, a
man having no such "interest" in another establish-
ment or another trade working beside him — on a build-
ing for instance, not to speak of a trade in another
part of the country, as to justify his striking because
the others have struck.
265 (g). Prof. The following additional causes enumer-
Adams' summary. a^e(j Professor Adams render strikers
liable to criminal indictment:
" Hindrance and delay of the United States mail, persuasion
of others to obstruct the mails or interstate commerce generally,
inducement or coercion of one person to boycott another, the
coercion of the public generally to adopt certain measures, and
probably the violation of labor contracts. It need hardly be
said that in most of these cases the combiners hope to benefit
themselves ultimately. But if, in the chain of intermediate
means, there is an illegal act such as intimidation of a 'scab', or
if the ultimate benefit is remote, trivial or indefinite, while
the injury is the immediate object sought, the combination
becomes illegal."
265 (f>). Collet- A recent injunction against a strike
tng taws. on the Wabash road was dissolved because
it did not appear that the intending strikers contem-
plated an "illegal act". If tying up a railroad is not
yet an illegal act, the tendency of the law shows that
272
The Protection of Rights.
[§ 265 h
people are becoming awake to their rights at a rate
that will soon make it one.
Yet despite these decisions of the courts, Pennsyl-
vania has a statute justifying any strike whatever that
union rules may sanction Consequently nothing that a
trade-union sanctions can be an "illegal act"! But
the Supreme Court of the state takes a different view.
On March 19, 1906, in the Purvis case before referred
to, it said:
4 4 In attempting to justify their conduct the appellants allege
authority for it in the act of June 16, 1891, P. L. 300. While
that act provides that they may devise and adopt ways and
means to make rules, regulations, by-laws, and resolutions of
their order effective, it sanctions no rules, regulations, by-laws
or resolutions to commit wrong, and if it attempted to do so
by authorizing the appellants to interfere with the absolute rights
of the appellees, the legislation would be a dead letter, for the
legislature cannot abolish the Declaration of Rights."
And on the other hand, Illinois has a statute as fol-
lows:
' 'Sec. 158. If any two or more persons shall combine for the
purpose of depriving the owner or possessor of property of its
lawful use and management or of preventing by threats, sug-
gestions of danger or any unlawful means, any person from
being employed by or obtaining employment from any such
owner or possessor of property, on such terms as the parties
concerned may agree upon, such person so offending shall be
fined not exceeding $500, or confined in the county jail not ex-
ceeding six months.
"Sec. 159. If any person shall, by threat, intimidation or
unlawful interference, seek to prevent any other person from
working or obtaining work at any lawful business on any terms
he may see fit, such person so offending shall be fined not
exceeding $200."
But either way, as already intimated, legislative acts
are apt to become dead letters, because they are much
influenced by ignorant clamor; the body of the com-
mon law which has grown up from the decisions of
trained judges, has a tendency to put the right of
striking with the right of revolution — counter to law,
justifiable only in the absence of other remedies for
§266]
Personal Property.
273
unbearable ill — a right to be handled, not recklessly,
as is the present fashion, but only in the gravest need,
and to be tested only by results.
265 ra Duty of Under this view, whether, in any special
district attorneys. case> a strike should be justified as a revo-
lution, should depend on public opinion, as represented
by a jury. There need be no fear that any jury will
favor capital as against labor, and there can be little
doubt that in the absence of conflicting statutes, when-
ever it shall appear that any public utility is paralyzed
by a conspiracy, it is a district attorney's duty, however
much it has been neglected, to investigate the con-
spiracy, and if he feels warranted, to propose the indict-
ment of the conspirators. While, as already said, public
opinion could be depended upon for all reasonable
leniency, no one who has seen, for instance, many thou-
sands of the population of New York City deprived of
their usual means of reaching business and returning
home, by the conspiracy of a much smaller number of
railroad employees, can have much doubt of what pub-
lic opinion in such a case will eventually be. The rights
of the public are not going to be left forever under the
dictation of labor leaders, or even of trade-union con-
ferences, and there cannot be many years before public
opinion will demand statutes perhaps like those 01 Aus-
tralasia (278 a. ft.), to protect public rights against them.
So much for the general attitude of the law regarding
strikes.
266. The work- As to the specific end of coercing men
man's freedom. jnt0 unions, the attempt to make all men
in a trade join the union was declared in 1905 by Chief
Justice Knowlton of Massachusetts to be against pub-
lic policy, because it was an attempt to create a monopoly
of labor in that branch. Many other judges have held
the same.
In the same decision, Judge Knowlton allowed dam-
ages against a trade-union officer for forcing an em-
ployer to discharge a non-union man.
In New York a statute prohibiting an employer from
274
The Protection of Rights.
[§ 266
making non-membership of a union a condition of em-
ployment, has been declared unconstitutional. But on
the other hand, Professor Seager* says:
"The Court of Appeals of New York State, in branding as a
conspiracy the effort of a union to secure the discharge of a
non-union man, used the following language: 'Public policy
and the interests of society favor the utmost freedom in the
citizen to pursue his lawful trade or calling, and if the purpose
of an organization or combination of workingmen be to namper
or restrict that freedom, and through contracts or arrangements
with employers to coerce other workingmen to become members
of the organization and to come under its rules and conditions,
under the penalty of loss of their position and of deprivation
of employment, then that purpose seems clearly unlawful and
militates against the spirit of our Government and the nature
of its institutions 't But a few years later % the same court,
looking at the same question more from the point of view of
labor unions, decided that a strike for a similar purpose was
lawful, on the ground that the object sought was not the injury
of the non-union employee, but the preservation of the union.
So long as there seemed to be no malice in the action, and
violence and intimidation were not resorted to, it was held
that the incidental injury to the non-unionist could not render
it a conspiracy.
"This reversal of opinion illustrates fairly well the difficulties
which American courts encounter in their efforts to apply the
common law of conspiracy to labor cases, and
267. The law chaotic, explains why they arrive at such diverse con-
clusions as are shown by the authoritative decisions of the
courts of the different states. It would be a great gain if the
whole question of the nature of conspiracy in connection with
trade disputes could be settled by statute in the United States
as it was in Great Britain by the Act of 1875."
Uniformity could not be hoped for in state legisla-
tion. But perhaps a model for state legislation could
* This chapter is largely indebted to the chapter on the
Legal Regulation of Labor in Professor Seager's " Introduction
to Economics" and to Professor T. S. Adams's chapter on
Labor Laws in "Labor Problems". With those two admi-
rable and up-to-date works in hand, it would be worse than
superfluous for the author of a brief summary like this, to ex-
plore the entire ground again. For a fuller treatment, the
reader is strongly advised to consult those works.
t In Curran vs. Gallen, 152 N. Y. 33 (1897).
% In National Protective Association vs. Cummings, 170
N. Y. 315 (1902).
§268]
Personal Property.
275
be hoped for in a United States statute regarding a con-
spiracy to interrupt commerce between the states.
Truly, the law has as yet handled labor questions only
in a very wobbly way. Professor Seager says else-
where :
"There is scarcely a regulation, from a simple restriction on
the age at which children may be employed to the provision
that men may work only eight hours a day in specified industries,
that has not been declared unconstitutional in certain sections
of the country, only to be upheld as a legitimate exercise of
the police power in others."
The vacillation and uncertainty of the law have been
great in America, not only because of the fact that
each of forty-odd states has its own set of laws, but
by the decisions of an elective judiciary seeking the
labor vote, and by statutes passed at Labor's demand.
Yet the natural evolution of law is unquestionably toward
the increased protection of the right to work by those
who want to work.
Slow as the law has been, it has now reached a secure
and consistent position against the picket and the
boycott.
268. Picketing As to picketing, the courts, with prac-
uniawfui. tical unanimity, are taking very decided
ground that it is an unlawful invasion of private rights.
The early injunctions against picketing were quite
generally on the ground that the common law is against
enticing away a servant or an employee, unless possi-
bly to secure an advance or prevent a decline of wages.
This of course would not permit picketing in a sympa-
thetic strike or a closed-shop one, or one resulting from
a discharge of hands. But later, very strong general
ground has been taken against picketing as tending to
disturb the peace.
Judge McPherson, sitting in the United States Cir-
cuit bench for the Southern District of Iowa, on the
5th of July, 1905, said:*
* From an address of Hon. T. J. Mahoney before the Citizens'
Industrial Association of America, Chicago, November, 1905.
276
The Protection of Rights.
[§ 268
14 'There is and can be no such thing as peaceful picketing
any more than there can be chaste vulgarity, or peaceful mob-
bing, or lawful lynching.
" ' A portion of this language was adopted and amplified in an
opinion of the Appellate Court of Illinois, handed down on the
3d of October, 1905, the court saying:
144 "The picket system once established, the intimidation,
assaults, slugging and bloodshed followed as naturally and
inevitably as night follows day. There can be no such thing as
peaceful, 'polite and gentlemanly' picketing any more than
there can be chaste, 'polite and gentlemanly' vulgarity, or
peaceful mobbing or lawful lynching.
" 4 "It is idle to talk of picketing for lawful persuasive pur-
poses. Men do not form picket lines for the purpose of con-
versation and lawful persuasion. . . . Its use is a form of unlawful
coercion." '
44 After Judge McPherson had filed the opinion referred to,
the managers of the strike abandoned the use of the word
'picketing and adopted that of 'reporting', the pretense being
that their acts could possibly be justified by changing «the name,
but the character of the work done by the 'reporters' was iden-
tical with that formerly performed by the 'pickets'. . . . The
system being the same under a different name, deserved and
received from the court the' same condemnation that had previ-
ously been visited upon picketing."
One of the latest decisions comes from the United
States District Court sitting at Milwaukee, and is thus
reported in the New York Times:
''Milwaukee, June 17," [1906]. — " In a sweeping injunction
United States Judge J. V. Quarles forbade the iron-molders*
unions and sixty-one individual members from in any way in-
terfering with the business of the Allis-Chalmers Company.
"The strikers are enjoined from impeding, hindering, obstruct-
ing or interfering with any of the business of the company, and
from entering the grounds or premises of the complainant
against its wish. They are enjoined from compelling or attempt-
ing to compel or induce by use of threats or intimidation of
any sort, or by fraud or deception or violence, any person to
leave the employment of the plaintiff company, and also from
attempting to persuade the employes of the company to break
their contracts and leave the employ of the plaintiff.
"Judge Quarles further commands the striking molders to
desist from congregating at or near the premises of the company
with the purpose to intimidate or obstruct, surround or impede
any of the employees of the plaintiff. The order further pro-
vides that the defendants are not even to go to the homes of
§ 269]
Personal Property.
277
any of the employees for the purpose of persuading them into
leaving the Allis-Chalmers Company. "
Similarly, an injunction in the Connecticut Superior
Court, June 27, 1906, restrains the union from "per-
suading or cajoling" the complainant's employees to
leave work.
In the Typothetae case in Chicago in 1905, the court
enjoined picketing not only at the factory,
but " about or near /any place where their employees are lodged
or boarded, for the purpose of compelling, inducing or soliciting
the employees of any of said complainants to leave their ser-
vice; . . . from attempting by bribery, payment or promise
of money, offers of transportation or other rewards, to induce
the employees of any of said complainants to leave their service."
The early decisions against picketing have generally
been not only against enticing the employee away, but
also on the ground that it engenders violence. The
later ones evidently consider the fact that it is an
unjustifiable conspiracy against the right to carry on
business.
As to the liability of unions and their
bHlty fo?damages. .members, for damages in strikes and boy- -
cotts : in the last quarter of the nineteenth
century, while the English law took the direction of
tolerance toward strikes, it took a counter-direction
regarding the liability of trade-union funds for dam-
ages inflicted in consequence of union action. It had
been held that as the unions were not corporate
bodies they were beyond the reach of suits, and that
their members could only be reached as individuals.
The drift of opinion counter to this position became
decisive in i9oi,when the House of Lords held in the
celebrated TafT-Vale case that the unions' funds were
liable, and as there is no limited liability without in-
corporation (154 a), this decision would probably make
each member liable for the total amount of any damages
that might be granted against a union. The damages in
this case were ^ 23,000. The English unions are now
278
The Protection of Rights.
trying hard to have the effect of the decision annulled
by statute — one of the typical unionists' attacks on
the law.
In the United States there are already several de-
cisions in the same direction: for example, the funds
of the Waterbury, Conn., unions were attached for
damages resulting from violence in the street-railway
strike of 1903, the houses of the Danbury boycotters
are under attachment, and so are the bank accounts of
the men in Rutland, Vt., who interfered with their
employers getting help in 1903.
For stopping work, by master or man, to the unrea-
sonable detriment of others, it is very probable that
the law will soon clearly see the reasonableness of
damages: inasmuch as for leading others to stop work,
damages have already been granted.
There is an important consideration which I cannot
express better than I have already done in an earlier
work,* which I will therefore venture to quote again:
Damages under such circumstances could generally
be collected from only one side — if the capitalist is
in the wrong, the laborer has an easy remedy; if the
laborer is in the wrong, the capitalist has virtually
none. This is one reason why employers do not always
contract with their employees for a reasonable notice
from either side before severing their relations. And
at best, the law is a slow and imperfect remedy, tho
the best we have. Not the least of the advantages that
would come to society from an increased proportion of
property-holders, would be increased faithfulness to
contracts, from fear of damages. This being absent,
269 (a) wade- nowever» m order to put the two sides on an
meanor'as a equality in contracting, the violation of a
substitute. labor-contract might be made a misde-
meanor subject to imprisonment. Such a law would guard
the poor man against the rich man more effectively
than a money penalty, which the rich man could afford
to disregard; and it would guard the rich man against
* Op. cit.
§ 270]
Personal Property.
279
the poor man, by the only penalty which could be en-
forced. Such a law would have the merit that under
it, juries could be depended upon to treat the poor
man at least as justly as the rich. This point deserves
the careful consideration of all who feel an interest
in the improvement of the law.
270. Some sum- The Alabama statute prescribes as un-
made* °f the ,aw« lawful the following acts :
"A conspiracy between two or more persons to prevent any
person, firm or corporation from carrying on any lawful busi-
ness within the state, or for the purpose of interfering with
the same.
" The loitering of one or more persons about a place of busi-
ness for the purpose of inducing others not to buy from, sell to
or have business dealings with a person, firm or corporation, or
to picket any works or place of business for the purpose of
interfering with its business.
"The printing or circulation of 'any notice of boycott, boy-
cott cards, stickers, dodgers or unfair lists, publishing or
declaring that a boycott or ban exists, or has existed, or is
contemplated', or publishing the name of any public official or
judicial officer upon any blacklist, unfair list or other similar
list because of any lawful act or decision of such official.
" The use of force, threats or other means of intimidation
to prevent any person from engaging in any lawful occupation.
" For any person, firm or corporation to maintain a blacklist
or to notify any other firm or corporation of the names thereon
to prevent the person so named from receiving employment **
Vice-Chancellor Pitney of New Jersey summed up
the law in 1903:
" First — That all sorts of laborers may lawfully combine and
form unions for their mutual benefit, and that they may use all
lawful means to promote their own interests, being careful in
so doing not to infringe on the rights of others.
" Second— One lawful means to that end is the refusal to
work on terms offered by the employer.
" Third — An unlawful means is to hinder or prevent others
from working for an employer under such terms as they shall
see fit.
" Fourth — One means of such hindering and preventing is in
various ways to render it either difficult or uncomfortable for
such willing workmen so to work. This is an unlawful means.
" Fifth — Another unlawful means in common use to hinder
or prevent willing employees from working, and to compel
28o
The Protection of Rights.
[§270
employers to accede to terms which they would not other-
wise adopt, is the boycott in its various forms."
271 Iniunctionf. Injunctions have been issued against
njunc ons. a^og^ every form of boycott palpable
enough to recognize, and damages have been awarded
in several cases.
The Anti-Boycott law in Wisconsin was enforced
in so comparatively inoffensive a matter as two news-
papers refusing to print advertisements from the
patrons of a third which had raised its rates higher
than theirs, unless at the same rates. As bearing on
such innocent acts as stopping buying and stopping
working, which are at the root of strikes and boycotts,
Mr. Mahoney said in the address already quoted from,
that the courts
4 no longer hesitate to grant injunctions which shall not only
prevent the perpetration of assaults and the destruction of
property, but shall equally protect the peace of mind of willing
employees, and give security from injuries and interference with
the rights of employers to carry on their business. . . . The
courts are equally in accord in exercising the necessary right
to punish for contempt those who insist upon violating the
injunctive orders. There was a time in the not very remote
past when much outcry was raised against trials for contempt
being conducted by the court instead of by a jury, but . . . the
spectacle was all too frequent, of a jury acquitting men whose
guilt was more than abundantly established. '
But this does not warrant agitation for doing away
with injunctions, but only for doing away with the
judge's power to punish under them without a jury.
A bill for the purpose is now before Congress. That,
however, is not what "Labor" wants: it wants its own
sweet will free from the interference of either judge or
jury.
Yet even where the injunctions have not held, they
have been of value in giving both sides time to stop
and think. But the unions have got so much in the
habit of forcing their own way, regardless of all law,
that, altho they are constantly seeking injunctions
against their employers, they are very bitter toward
Personal Property.
281
injunctions when issued against themselves, and have
sought to have statutes against granting any injunctions
at all in labor disputes. This has a show of fairness
because it would appear to apply equally to both sides.
But the show is specious (altho it seems to have deceived
the President of the United States while the proofs of
this book were being read) : because the employers are
in a small minority and hardly ever resort to violence.
Granting the short-sighted view of the unions that any
lasting good can come from violence, they can well
afford to endure the little violence the other side is apt
to attempt, if they can have free swing for their own
habitual lawlessness. On this subject of injunctions I
again resort to some earlier expressions.*
There is one form of anarchism so specious that it
has deceived many good men. It proposes to do away
with government, by doing away with a little at a time;
and its present object of attack is what it is pleased to
call 'government by injunction'. Now injunction takes
the place, in government, of the ounce of preventive.
It is better to prevent lawlessness than to punish it.
Injunction is merely the exercise by a judge, of the
authority to prohibit an act, not necessarily itself pun-
ishable at law, which he believes likely to lead to acts
which are punishable at law, and no sane man can
doubt that the proper exercise of this authority effects
a great saving of public peace and safety. The injunc-
tion has been abused, as has every feature of the law:
judges are but human, but no sane man claims that
that fact should do away with the law. Those who
object to injunctions are (many of them without know-
ing it) in precisely the same condition as if they objected
to the punishment of the actions which injunctions are
issued to guard against, while a large majority of those
who object to injunctions, object simply because injunc-
tions prevent their having their own way; and they
object on the same grounds on which they object to
the police and militia as well as to the courts — it is
*Op. cit.
282
The Protection of Rights.
[§ 271
simply the objection to all authority — it is the spirit of
anarchy.
The assumption by Labor that of right it owns every-
thing, can alone account for some of its claims. The
most extreme of them, perhaps, is illustrated in the
bill advocated by Mr. Gompers, the president of the
American Federation of Labor, which would prevent
United States courts from issuing injunctions in any
contention between employers and their men, unless
to guard some property or right against damage that
could not be made good, and then (here is the extreme
claim) the bill goes on to provide that "for the pur-
poses of this act, no right to carry on business of any
particular kind at any particular place, or at all, shall
be considered or treated as property, or as constituting
a property right."
This of course is an almost laughably disguised
scheme to obtain from legislation a right to destroy
such property at will, through the picket and boycott,
which the courts have abundantly declared counter
to American liberty. The two million labor-unionists
are simply claiming absolute control over the rest of the
American people.
At the meeting of the National Civic Federation in
December, 1906, the counsel for the American Federa-
tion of Labor argued that the laborer's right in his
labor is just the same thing as an employer's 4 4 right
to carry on business of any particular kind at any
particular place, or at all". He challenged discussion
of the point, and said that he had always found dis-
cussion of it evaded. The claim seems to me very
much like a claim that because a man's body is made
up of cells, a cell is the same thing as a man. In +his
connection, however, the fallacy lies in the fact that
no laborer ever yet sought the protection of a court
for his property in his Right to Work, unless it was
for protection from the very men against whom the
employer too seeks protection for his Right to Work —
his right to carry on his business. Therefore the very
identity in the two properties, be it real or fanciful,
§ 272 a]
Personal Property.
283
which the Federation of Labor claims, is an argument
in favor of the very court protection of both which
the Federation seeks to paralyze in the case of the
employer's right — a very pretty example, it seems to
me, of the reasoning on which* all labor coercion is
based. There is probably no more remarkable instance
of the madness which can be produced by a brief period
of successful aggression before the aggrieved have time
to organize for defence. The counter-organization has
begun, however, and the madness seems to have reached
the pitch where it indicates the intention of the gods
to destroy. But if this could mean the permanent
destruction of labor organizations, it would be deplorable.
Yet the present organizations will be destroyed if they
cannot be reformed. There will be better ones in
either event, and it is not yet proved that they must be
new ones.
272. Regulation , J*?*11* n™ ^ l™> ^la*™ of
of wages hours labor s attempts at coercion, let us devote
and conditions. a WQrd tQ its general attitude regarding
the regulation of wages, hours and conditions.
Professor Adams, who certainly will not be accused
of unfavorably representing Labor's side, says: *
272(a). The labor " In the United States . . . the history of
trust again, labor legislation is one long tortuous record of
special protection to the working classes, secured by subtle
limitation and frank disregard of the doctrines of free contract,
and by class legislation. . . . Labor organizations are specifically
exempted in a number of states from the operation 01 the anti-
trust acts (altho such exemption has been held to annul the
whole law) ; and in their practical execution the anti-trust laws
have been directed against combinations of employers in re-
straint of trade rather than against the combination of employees
which are equally in restraint of trade."
Of Labor laws in the United States, Professor Seagerf
says:
" There are both state and national laws that directly further
the monopolistic ambitions of trade-unions. The state of Penn-
♦ Op. cit. t Op. cit.
284
The Protection of Rights.
[§ 272 a
sylvania has a law requiring men who wish to become master
miners to work as helpers for a certain period and to pass
then a state examination. New York state has similar laws
in reference to plumbers and horseshoers. The [alleged] pur-
pose of such statutes is of course to insure a certain degree
of proficiency on the part of workmen who perform these
important services, but that they assist trade-unions in their
efforts to control the supply of labor in their trades is beyond
question. A Federal law which operates in the same direction
is that prohibiting the entrance into the country of workmen
under contract of employment. It might appear on general
principles that the immigrant whose reputation at home was
such that he could secure a contract of employment from an
employer in this country, would be a better citizen than the
immigrant who was attracted only by the vague hope of better-
ing his condition, but this view disregards the special interest
of those with whom the newcomer would compete for employ-
ment. . . . He enters the country as a non-unionist, or 'scab'.
. . . The law which prevents such resort to the foreign labor
Of course such utterly irrational laws cannot stand,
and never would have been passed if the community in
general were as well organized (as it is rapidly becoming)
against favoritism in legislation, as the unions are or-
ganized for securing it; or even if capital were not so
engrossed in securing special privileges from legislation,
that it seldom spares attention to general legislation
affecting its general rights, but is content to rest upon
its power to take care of them when exigencies arise.
Professor Seager farther says :
212(b). Protecting "The Supreme Court of Colorado declared
against himself. men employed in the mining and smelting
industries on the ground that if such a law was calculated
to protect the health or morals of anybody, it could only
be of the very man whose work was restricted, and that
the legislature had no right to restrict freedom of contract for
the benefit only of the persons whose libcrtv was thus limited;
and yet the Supreme Court of the United States had declared
in upholding the constitutionality of an identical statute pre-
viously passed by the state of Utah, that the legislature bad
the right to protect an individual even 'against himself, on
the ground that ' the state still retains an interest in his welfare
the laborer
unconstitutional
§ 272 c] Personal Property. 285
no matter how reckless he may be', and that when 'the individual
health, safety and welfare are sacrificed or neglected the state
must suffer'. M
Following out the idea of "protecting the laborer
against himself Professor Seager turns to another
decision of the United States Supreme Court, which
" affirms the propriety of labor laws on the general ground that
employers and employees are unequal in bargaining power.
'The former naturally desire to obtain as much labor as pos-
sible from their employees, while the latter are often induced
by fear of discharge to conform to regulations which their
judgment, fairly exercised, would pronounce to be detrimental
to their health and strength. In other words, the proprietors
lay down the rules, and the laborers are practically constrained
to obey them. In such cases self-interest is often an unsafe
guide, and the legislature may properly interpose its authority.'
Finally, it affirms the principle already quoted, that in the
exercise of its police power the legislature has the right to
protect a man even against himself "
This principle may be regarded as established law.
New York goes so far as to "protect a man against
himself" by punishing attempts at suicide — which,
paradoxically, puts a premium on the success of the
very act it prohibits. There is a point at which this
doctrine would involve the most enervating paternal-
ism— a point at which the individual must take the
consequences of his own acts. On this point Professor
Seager says :
41 In Great Britain and the United States the notion that the
legislative power should not be used to regulate hours and
conditions of employment has been abandoned by most thought-
ful persons, but the prejudice against any interference with
wages, like that practiced in New Zealand and other Australian
states, remains nearly as strong as ever. There is, of course,
good ground for this distinction. Hours and other conditions
272 (c). Wages of employment affect directly the health and
unlike conditions, vigor of the working classes, wages only indi-
rectly. Moreover, workmen are less mindful of their own inter-
ests in connection with hours and sanitary arrangements than
in connection with wages. Making all allowance for these
considerations, many thoughtful persons still believe that,
under certain circumstances, notably those found in connection
with the sweating system, the regulation of wages must also
286
The Protection of Rights.
[§272*:
t>e undertaken by the government if serious evils are to be
corrected. It is sometimes argued that the law cannot fix the
rate of wages, but this is contrary both to reason and experience.
The law cannot fix both wages and the number of persons who
shall be employed at those wages, but it can declare that no
one shall be employed in given trades unless paid certain
minimum wages, and enforce its decree."
272 (d). The lining And here fpllows an admirable utterance
wa9*- regarding "the minimum wage", which
should not be confused with that favorite topic of the
sentimentalists "the living wage". A great deal has
been written to the effect that it is an employer's
duty to give an employee enough to live upon decently,
whether the employee earns it or not. But this sick-
ening absurdity should not prevent the reasoning stu-
dent from giving attention to the following considera-
tions.
41 The result may be an addition to the number of dependents
who are 'unemployable' at the wages fixed because too ineffi-
cient to earn them, but it may be better and cheaper for society
to support such persons in almshouses than to permit their
competition to hold the wages of great sections of the popula-
tion down to a starvation level. In order to mark off the
dependent from other classes the state may find it necessary
itself to fix a standard by which the ability of the individual
for independent self-support may be determined. Without
desiring to advocate the establishment by law of standard or
minimum rates of wages for the sweating trades, the author
wishes to insist that this policy merits the same unprejudiced
consideration as is now accorded by intelligent people to pro-
posals for restricting the employment of children or women, or
for requiring the use of safety appliances in connection with
dangerous trades."
212(e), Toomucn ^ » h*rd to tell just how far the law
care enervating should take care of a person, and how far
and against liberty. he bfi left tQ take ^ q£ himself^
Certainly in countries where the government is very
paternal, the mass of the people are apt to be very
childish. And yet it is generally agreed that the law
should prevent cruelty to children and even to animals —
that it should limit the hours and sanitary conditions
under which children and women, and sometimes even
§ 272 e]
Personal Property.
287
men work; and as already illustrated, many claim that
it should even protect a man against himself if he
seeks to do excessive and dangerous things. But this
can be carried to the extent of infringing upon liberty.
This danger in protecting him from other dangers, some-
times leads to strange results. For instance: acci-
dents from ill-guarded machinery and from laborers
working when too exhausted to be cautious, annually
destroy more than twice as many lives in the state of
New York alone, as were destroyed on our side in the
Spanish war, not to speak of the larger number maimed
and crippled. These accidents are more frequent in
the last weary hour of work than during the rest of
the day. Yet there are laws requiring machinery to
be protected, and against the working of men — espe-
cially on railroads — longer than their attention can
endure. But when suits for damages have been brought
under these laws, the courts have sometimes declared
them unconstitutional, as depriving a man of the liberty
to work when and where he pleases, while the facts
were that his "liberty" was only Hobson's choice —
working as ordered, or throwing up his job. It seems
as if such statutes ought to be penal as against the
employer: then the " liberty" of the laborer would not
be reduced to the miserable alternative of running the
risk which the employer should obviate, or temporarily
abandoning the means of supporting himself and his
family.
It may be remarked in passing, that, on the other
hand, employers are frequently subjected to injustice
in connection with accidents. Juries often mulct them
for injuries to employees which are the fault not of the
employers, but of other employees.
Just as this goes to press, word comes of an interesting
and suggestive decision to the effect that in a "closed
shop" the laborer loses his right of action against
his employer for damages resulting from the fault of a
fellow workman, because the employer has not been
un trammeled in his choice of workmen, and of course
as the workman in the closed shop is inevitably a mem-
288 -
Tlie Protection of Rights.
[§ 272 e
ber of the union which has circumscribed the employer's
choice, he shares the responsibility for the shop being
closed, and cannot "come into court with clean hands",
a requisite which equity demands.
Statutes protecting the community from diseases bred
in tenements and sweat-shops have often been set aside
on grounds similar to those stated above — that it is part
of a man's "liberty" to work where he pleases. It
is a very difficult question how far the state has a right
to interfere with the liberty of the individual — his
liberty as a child to stay away from school, as child
or man to break down his health by overwork, to expose
himself to dangerous chemicals and machinery, to buy
(or sell) dangerous medicines and intoxicants, and to
get drunk and beat his wife.
272 (f). Extremes This question has arrayed some of the
and the medium. best m{nfe against each other. At the
extremes of opposition are the anarchist, against the
state's having any rights at all; and the ultramontane
who would have the state, as merged with the church,
regulate the minutest functions of the individual con-
science. Probably the safe and reasonable limit lies
at the state's right of self-defence. The whole com-
munity suffers from anybody's ignorance, ill health,
mutilation, drunkenness, brutality; and has a right
to guard against any such conditions becoming suffi-
ciently widespread — directly, or by way of influence
on popular conscience and sensibilities, as to cost the
state more than it would cost to keep the evil within
bounds. What shall be done against any particular
self -inflicted evil, is of course for legislators to deter-
mine, but their first inquiry should be, not how great
an evil it may be to any particular man: for that is
his own business; but how great an evil is it apt to
be to men in general : and that alone is their business.
CHAPTER XXII.
PERSONAL PROPERTY (CONTINUED).
Schemes for Distributing it more Evenly (Continued).
(V) Remedies on Trial.
273. Industrial There can be no reasonable doubt that
war'and industrial all the decisions alluded to in the preceding
chapter, and many more, are steps in a
process by which industrial war is to be replaced by
industrial law, just as, in civilized nations, private
war has been replaced by private law, and interna-
tional war is being replaced by international law. In
addition, however, to the evolutionary steps so far
indicated, some revolutionary experiments are under
way.
274. Legal experl- Three legal remedies for conflicts over
ments in distribution, from which much is hoped,
Australasia. are now actuaiiy on ^al jn Australasia,
and only in Australasia. They are (I) state competition
with monopolies, (II) the fixing of a Minimum Wage,
and (III) Compulsory Arbitration.
Australasia being so remote, specially illustrates
the universal unreliability of testimony on controverted
subjects. Sentimentality and the equally unreason-
ing antagonism which it tends to arouse in the prac-
tically disposed, seem to make it almost impossible
for observers of social experiments even to see cor-
rectly, not to speak of reporting correctly. The latest
writer on Australasia, Dr. Victor S. Clark,* is conspicu-
* "The Labor Movement in Australasia."
289
290
The Protection of Rights.
[§274
ous by the degree to which he has risen superior to
these influences. He finds both good and evil in the
minimum-wage commissions and arbitration courts,
but does not find that either or both of them have
introduced the millennium.
The interest as well as the importance of the subject
justifies a special chapter, whose material I have, with
the author's kind sanction, largely drawn from Dr.
Clark's work.
These experiments being as yet (1907)
MnJtobedll'coJirt- restricted to Australasia, have worked only
co/d°ttio™r,can *n an exceptionally homogeneous com-
munity, in which British stock with its
broad-minded love of fair play largely predominates.
Among the original convicts, many were high-minded
persons transported for purely political offences; and
much of the later colonization has consisted of large
religious organizations possessing capital, character
and culture. The amount of convict stock to-day is
not worth considering.
Dr. Clark says :
"The consciousness of national Idnshlp ... is greater than
in America, and for this reason communal sympathies are more
active. . . . Production is confined largely to raw materials
which are exported, and consumption is supplied by manu-
factured goods made in other countries."
[The inference that wages raised by legislation will
not greatly affect prices of articles bought by the
voters, seems contradicted later.]
"The government, in supplying transport service for the
inflow and outflow of these commodities, has become the
largest employer in the colonies. . . . The custom of appealing
to the government to decide industrial disputes to which it is
a party, makes it easier to recur to the same authority to fix
labor conditions in private employment. . . . Forty-seven per
cent, of the people reside in cities of not less than four thousand
inhabitants, as compared with thirty-seven per cent, in the
United States. The average concentration of working popula-
tion is therefore greater in those countries, and the labor
element has better opportunities for organization. . . . The
§ 275 a] Personal Property.
291
difference in the wage of skilled and unskilled workers is much
greater in our own country, where the common laborer is
usually either a negro or a foreigner. This variation of wages
in the United States, parallel with national and race lines, lessens
solidarity of sentiment and class consciousness among work-
men."
Mr. Sidney Webb has said:
"Australian politics and Australian governments are very
far from perfect, but their faults and their virtues are utterly
unlike the faults and virtues of America."
For all these reasons, how the Australasian experi-
ments would work among the mixed population of the
United States, or especially among the almost entirely
foreign population of some regions — and those gen-
erally the most troublesome regions — and how, more-
over, they would work under our almost exclusively
private control of industries, Australasian experience
gives little indication.
275. State compe- The °f tn^se remedies on trial —
tltlon with monopo- state competition with monopolies, may
,lc,> be dismissed with a few words. Dr.
Clark devotes to it but a sentence, tho one enthusiast
who has discovered in it a panacea, devotes an article
in a recent periodical.* The simple facts are that
before there were any monopolies thought of, various
Australasian communities, for the sake of aiding immi-
gration and land development, started most of the va-
rious industries which will be described later. The
government's credit being better than
?ng eS^uu.t9nd' ^hat °* individuals, and it wishing to aid
in opening up the new lands, it borrowed
money to lend to farmers. This of course brought
the rate of interest down, and may be considered to
have been competition with monopoly of capital, if
such a thing could exist. Of course the indirect effect
of other government enterprises has been similar, and
* Everybody's, September, 1906.
392
Tlve Protection of Rights.
[§ 275 b
275(b). in some it may be possible that the Australasians
industries. have saved more in keeping prices down,
than they have spent in taxes to pay deficits on gov-
ernment industries. It is even supposable that in any
community where there is enough political virtue to
conduct government enterprises honestly, it may be
worth while to pay the deficits apt to result from their
inevitable inefficiency as compared with private enter-
prises, for the sake of guarding against monopolies.
It is even supposable that Australasia, with her homo-
geneous British stock, her comparative freedom from
the demoralizing glitter of superfluous wealth, and
her other exceptional conditions, may possess the
degree of political virtue needed to curb monopoly
by government competition. But nothing has yet
been done for the mere sake of that result ; and should
its slight indirect accomplishment so far, encourage
to successful direct efforts, their success could prove
nothing for a community like ours, overwhelmed with
debased immigration, and corrupted by the spectacu-
lar temptations of misplaced superfluous wealth.
Z76. The Minimum As to the minimum wage, already men-
wage. tioned (in 272 d, which the student is
advised to re-read in this connection), in Australasia,
the idea has been worked out, according to Dr. Clark,
as follows:
1 4 The problems presented by sweating and Chinese compe-
tition were so complex and required so much detailed regula-
tion that the direct intervention of Parliament was likely to
prove cumbersome and ineffective. Therefore authority to
deal with these questions was delegated to subordinate bodies,
called minimum-wage boards . . . and composed of men
having practical knowledge of the industry under their juris-
diction. . . . Their functions do not exceed in principle those
exercised by railway commissions in America — with the impor-
tant reservation that they affect private as well as public and
quasi-public industries. The Victorian Parliament . . . gave
the boards authority to prescribe a minimum wage for em-
ployees in certain classes of establishments. This authority
was granted in order to remedy a special evil — a wage so low
276 (a). Against that it threatened the common interest of
sweating. society in maintaining a standard of living
§ 2j6d]
Personal Property.
293
among all classes sufficient for healthy social progress. . . . The
average profits of manufacturers are no higher when sweating
is rampant, than when a fair wage is paid. . . . The better
276 (b). Sought by employers rather courted some provision that
good employers. freed them from the competition of less scrupu-
lous men of their own class. Moreover, tho the determina-
tions of wage boards are legislative acts, in essence amendments
to the factory law, they preserve in some degree the form of
a voluntary agreement. The boards who pass them are com-
276 (e). How posed of an equal number 01 delegates from the
regulated employers and employees in the trade in question,
under a non-partisan chairman, and their decisions arc fre-
quently compromises, formally not unlike collective bargains
made between trade-unions and employers. . . . They are
required to ascertain as a question of fact the average wage
paid by reputable employers, and are forbidden to fix a mini-
mum higher than the average wage as thus determined. The
boards are also allowed to fix special rates of pay for aged,
infirm or slow workers. . . . Employers have applied for
eleven of the thirty-eight boards established."
The Arbitration Courts, to be described later, seem to
be rapidly taking over the functions of the Minimum
Wage Boards, with results not quite contemplated by
the originators of either.
276 (d). Not ' ' When the court prescribes a minimum equal
always effective.' to or above the average wage previously paid,
the employer may meet this change by two different policies.
In order to keep his payroll down, he often lowers the pay of his
more competent hands, to compensate himself for the higher
rate he is obliged by law to give his poorer workers. ' ' [Or, second,
New Zealand] "statistics indicate that in probably a third of
the occupations regulated by the court, the maximum wage
does not exceed the minimum fixed by the award. The greatest
variation usually occurs in industries requiring the highest
degree of skill. In such industries the employer, in order to
maintain a gradation of wages among his workmen, usually
discharges his less efficient employees.
"Slow workers, who arc not a negligible clement in the in-
dustrial army, then become a social problem. They form
from ten to twenty per cent, of all workmen, and their distress
is an evil greater than ordinary unemployment. Some manu-
facturers in Victoria dismissed sixty or seventy hands as soon
as the minimum wage went into effect in their business. The
labor party proposes to remedy this evil by old-age pensions. To
absorb her surplus labor, New Zealand has undertaken great
public works, paid for from loans. Western Australia has until
294 The Protection of Rights. [§ 2j6d
recently possessed a growing field of employment In the newly
discovered gold districts. New South Wales and Victoria have
not enjoyed these exceptional conditions, and in the latter state
especially, the problem of the slow worker has been serious."
276 (e) Recru- Even something like the sweat-shop is
deacence of the beginning to appear — not the healthful
aweat-ehop. hand industry of earlier times :
" Slow workers thrown out of employment by the minimum
wage sometimes open shops in basements and attics, where
they make goods which they peddle directly to retail dealers,
or sell to factories at prices lower than the ordinary cost of
manufacture. This has occurred in boot and harness trades,
and to some extent in cigar-making. However, only a few
industries lend themselves to this process of dispersion. No
handworker can compete with the products of power machinery.
" Testimony as to the influence of the boards upon sweating
and Chinese competition varies. Both continue to exist in
Melbourne. I have seen large bundles of clothing going out
of factories, to be made up by contractors who were evading
board determinations. Few, if any, strikes have occurred
where wage determinations are in force.
276 (fh Excep- "All the Australasian laws give the regulating
tiona allowed. authority power to fix a lower rate of pay for
slow, aged, and infirm workers; but this is not a sufficient
remedy. Employers refuse to receive slow workers in their
shops, because they slacken the pace of other workmen. More-
over, the formalities required to securer slow-worker permits
embarrass both employee and employer.
" Therefore, state regulation of industry places a burden upon
the weaker members of society."
Apparently, then, one effect of state regulation of
wages, even in its short experience, is just what the
American trade-unions are working hardest against —
it is concentrating industry and leaving the slow work-
man in the lurch.
276 (g). High And to the concentration of industry
prices resulting, threatening to develop into the trust, to
unemployment and to the sweat-shop, are added high
prices which nullify a raised income to those who have
it, and are a hardship to those who have not:
"All regulations restricting the freedom of employers in con-
ducting their business probably add to the cost of production.
§ 276*]
Personal Property.
295
. . . Therefore industrial regulation increases the cost of
living. . . . The Secretary of Labor in New Zealand says that
'It has helped to minimize any advance in the workers' wages'."
276 (*>. Bolstering Already efforts are in progress to bolster
up needed. Up a pQiiCy from which so much was
hoped, but which even now, in these important respects,
seems a failure. Already loom up the usual artificial
remedies to remedy a remedy.
" The wage-earner is the direct beneficiary of the minimum
wage; the farmer pays the increment to the cost of production
resulting from laws and awards, directly to his own nands, and
indirectly in a higher price for commodities. . . . The farmer
cannot recoup himself by adding to the price of his produce,
for that is determined in the London markets. . . . The farmers
of New Zealand and Victoria, where the rural classes are rela-
tively the most influential, have already organized an active
campaign in opposition to the labor party. Likewise the fac-
tory operative whose manufactures are exported, or meet the
competition of imported articles, cannot employ an arbitration
law to raise his nominal wa^es without lessening employment
and defeating his own end of social betterment. But he, like
the farmer, must pay the increased price for local services and
products which stich a law occasions, and thus his real wage is
lowered by the very legislation that was devised for his welfare.
" The discretion of the judge checks many economic evils
that might result from state regulation of industry. The in-
crease 01 prices is beyond the court's control. . . .
" Parliament was asked officially to remedy an evil by which
'the advantages bestowed by progressive legislation are grad-
ually being nullified and will eventually be destroyed . A
similar demand has been made in Victoria, where it is claimed
that so long as the government fixes wages, it should also fix
prices [which, outside of a few monopolies, no government has
teen able to do in all recorded time]; for the free manipulation
of the latter may render ineffective any regulation of the former.
The same suggestion has been voiced as a future possibility by
the leader of the labor party in New South Wales.
276 (I). Points to " The responsibility of the state for a living
state employment wage, logically leads to the responsibility of the
and socialism. state for employment at that wage. If these
two functions of government are generally recognized as moral
duties, and are realized in political action, the result is state
socialism. . . . Broader knowledge and profounder study than
have yet been devoted to this subject are required to give us
conclusions of value."
296
The Protection of Rights.
[§ 277
The provisions for "slow workers" cer-
aS'nat^raMawr tainly look as if the law had begun in an
effort to rise superior to Natural Law, and,
as always happens in such a case, were being perforce
tinkered back into conformity with Nature. This gives
a very discouraging outlook for the working of the
Minimum Wage scheme, but while all caution should be
used not to go counter to Nature, it should never be for-
gotten that Nature's processes, when ascertained, can
be aided by human intelligence and sympathy, and
that in social affairs, experiments are as justifiable as in
mechanics and chemistry. But extravagant and explo-
sive experiments are foolish in all. More in regard to
the experiments of the Minimum Wage will appear as
we discuss the functions of the Arbitration Courts.
A decreed and enforced wage can make employers
prefe* to stop business, or can make employees prefer
to beg; but it can never secure the payment of wages
materially different from what would be secured by the
laws of supply and demand acting in a medium of fluid
competition. The only legitimate function of Arbitra-
tion Courts (but it includes many others) is to keep
competition fluid. This will give them enough to do,
and give them glory enough if they do it. In doing
it, they inevitably do all the rational work that Minimum
Wage Boards can do, which fact is abundantly proved
by the ease with which the courts are absorbing the
functions of the boards.
278. The Arbitra- Regarding Arbitration Courts, as Aus-
tion Courts. tralasia, like the United States, is made
up of a number of commonwealths passing most of
their own laws, there has been a variety of experience,
which now includes experience under a general law
for the whole colony.
Unlike America, where the immigrants have brought
in a large element of Latin imagination and German
sentimentalism, Australasia has little imagination, senti-
ment or theory, but a very large element of hard-
headed British common sense, and circumstances pecul-
§ 278 a]
Personal Property.
297
iarly favorable to its exercise — a homogeneous British
community, plenty to do, a minimum stupid and venal
vote, a British respect (which far suq^asses our alleged
one) for education and experience, and (partly in conse-
quence) a salutary scarcity of the ranter and the dema-
gogue. The curse of the relations between Labor and En-
terprise has been that poisonous product of rank democ-
racy. He thrives on struggle: arbitration has no place
for him; he is opposed to it. His attitude is that the
relations between employee and employer are those of
irrepressible conflict over the product. Mr. Gompers,
the present successor of the long line of failures at the
head of American Labor, has said: "It is a fight."
But it is a fight in which, as a fight, Labor can never
have any permanent success, for the simple reason that
as fast as Labor develops honesty and brains, the bulk
of them insensibly drift to the other side, in the ranks
of the employers. The employers who were not drawn
from Labor's ranks are too few to be worth taking into
account. While the labor-leaders fatten on conflict,
for the men there is no visible hope quicker than their
slow advance in productive capacity, and the slow
increase of fluidity in competition, of justice and of
sympathy, unless that hope be compulsory arbitration.
The hard-headed Australasians seem to have real-
ized all this, and never to have had any use for Mr.
Powderly or Mr. Debs or Sam Parks or Mr. Gom-
pers with his "fight". After a few strikes that were
passing zephyrs in comparison with some that those
men have stirred up, the community in general, ap-
parently including a large proportion of the working-
men, did not propose to have any more fight. They
278 (a), started to began with asking the two sides to arbi-
preoent strikes. trate, and giving them facilities, and when
that scheme would not work, they forced them to arbi-
trate. The general motive of the arbitration laws was
to protect the community and the men's families from
the follies of strikes. There seems to have been no claim
made that the men were not at liberty to damage merely
themselves.
298
The Protection of Rights.
[§ 278 a
It will help the reader to understand the development
of the courts, to be reminded again that the colony is a
federation of states somewhat like the American union.
Of these, on the continent of Australia are five, namely,
Western Australia, South Australia, Queensland, New
South Wales (capital, Sydney), and Victoria (capital,
. Melbourne). Something over a hundred miles south of
the continent, lies another state, Tasmania, and some
twelve hundred miles east of Australia, and a little
south, is still another state, New Zealand. On the
eastern side of the continent are the continental states
New South Wales and Victoria, nearest to New Zealand,
which share with it the leadership in population, wealth,
and activity in social experiment. A little care in
memorizing these simple facts will be of service as we
proceed.
The first Australasian experiment of note in Com-
pulsory Arbitration, was New Zealand's Industrial
Arbitration Act of 1894, much expanded in 1900 and
adopted in its main features by Western Australia and
New South Wales.
279. Ineffectiveness . E?OT*S haVe been ™*<\ in al™°st *VCTy
of Voluntary civilized state to reconcile labor disputes by
Arbitration. boards for voluntary conciliation, such
boards being often established by legislation. In cases
of little importance their awards have been often
accepted; in cases of great importance, seldom. Presi-
dent Roosevelt's coal-strike commission recommended
statutes authorizing governors to appoint "commis-
sions of compulsory investigation" with full power of
calling witnesses and examining them under oath, when
labor disputes threaten serious disadvantage to the
community. The mere reports of such commissions
would do something to settle disputes, without com-
pulsory arbitration. Nevertheless after several seri-
ous and disgraceful strikes in Australasia during the
earlier nineties of the last century, Mr. Reeves, the New
Zealand Minister of Labor, made a very thorough study
of all that had been done anywhere by way of arbitra-
tion and conciliation, and concluded that for the award
§ 2So a]
Personal Property.
to have any effect, it must be compulsory, or at least
that nothing worth while had been accomplished where
the award was not compulsory, a main difficulty being
that it was very hard to get either the party with the
weak reasons, or the one with "the heaviest artillery",
to go into court.
280 The first ^° m x^94 ^ceves before the
Compulsory Arbl- New Zealand Parliament a Compulsory
tratlon Act Arbitration Act. It begins to look as if
this step in the little parliament of an island in the
Pacific, which to the vast majority of the civilized world
is little more than a name, may yet be regarded as
one of the most important of the world's pieces of
constructive legislation. I am not prepared to suggest
that it probably will, but I suspect that it not improbably
may. This suspicion I have reached after a very full
"faith in its impracticability, based on a priori con-
siderations, followed by a study of its actual results,
including those of similar acts in Australasia which
have sprung from it.
Among a great many wise and careful details, the act
provided that the court should be appointed by the
Governor General, and consist of a Judge of the Supreme
Court, a representative of workingmen to be chosen
from a list submitted by them, and a representative
of employers similarly selected.
Operatives could appear before the
w?yUnhl!^9nlZ9C 'court only through their unions. This not
only to avoid petty disputes, but because
all troubles worth avoiding have hitherto come from
unions. If any men are in danger of losing their chance
in court, the law requires unions to admit members
freely, and but seven men are required to form a union
where none exists.
Employers could appear individually or in organiza-
tions.
The tendency was to favor unionists as against non-
unionists, because the former must bear the brunt of
the contentions. Non-unionists could not go into court,
300
The Protection of Rights.
[§ 280 a
and consequently could not hale their employers into
court, but they were free to strike.
The court could decide or dismiss any question brought
before it, and there is no appeal.
Powers of summoning witnesses and getting expert
advice are similar to those of courts in general; even
additional members of the court could be elected in
special cases.
Books of account could be called for, but examined
only in secret. Yet rather than produce their books,
employers have sometimes come to an agreement with
their men — and in one case at least, an agreement which
was renewed.
Mr. Lloyd, who wrote in 1890,* and from whom most
of the facts regarding the Arbitration Courts up to his
time, have been taken, says:
4 It is a curious phenomenon of antipodal public opinion that
America is being swept by waves or opposition on one side
of society to trade-unions and of opposition on the other side
to unions of capitalists, while in New Zealand the people and
the government favor the fullest organization of both.'
This raises the interesting question whether with
courts in which to fight out their differences, the two
extremes of the industrial world might not keep each
other's excesses in order, without the rest of the com-
munity being troubled with either.
280 (bi Could dia- Objectors to compulsory arbitration mis-
miaa trivial claims, trusted the tendency of the workmen to
appeal to the courts on worthless grounds, and to
expect from them impossible results. This fear has
been to some extent justified; but men will not risk
strikes for reasons as worthless as some that lead them
to seek arbitration. Yet certainly in many cases, arbi-
tration takes the place of strikes, and is vastly pref-
erable to strikes.
Many students of such matters — prob-
280 (oK Damages. {% WQuXd be safe tQ sav most__ among
whom I confess myself to be one, believed that the
* "A Country without Strikes", by Henry Demarest Lloyd.
Personal Property.
301
compulsory courts would be ineffective, mainly on the
ground that nothing could be recovered when damages
were given against people who had nothing. But our
expectations have been confounded, in that there have
been no occasions to decree very serious damages.
Occasions for great damages, like strikes, boycotts and
arson, have been taken care of by the preventive ounce
of argument and adjudication, rather than by the cura-
tive pound of damages.
280 (d). Faithful Another objection was that men may
acceptance of be compelled to work, but cannot be com-
decreea. pelled to work efficiently. Yet a good
deal of efficient work has been done under the coercion
of the lash ; and a good deal more under the coercion
of the stomach ; and the coercion of a respected court
where one has been fairly heard, hardly seems more
repugnant than that of an unsuccessful strike, espe-
cially as bitterness has seldom been engendered in reach-
ing the conclusions of the courts.
As it has been objected : "You cannot collect damages
from the poor and you cannot force them to work well
if they do not want to," so it has been objected: "You
cannot make men conduct business under conditions
which they consider unfair." Yes, you can: they
would rather put up with considerable injustice than
have their capital and their brains lie idle. But they
need not be irked with much injustice or even with
any, under compulsory arbitration: all these objec-
tions have been against extreme possibilities, which,
with capable and well-meaning courts, have seldom
occurred, and as the courts grow in experience, are
occurring more seldom.
Mr. Reeves wrote to the London Times:
11 Why assume that the awards of a competent tribunal will be
intolerable to one side or the other? It is likely enough, nay,
certain, that all awards must be disagreeable to somebody,
but intolerable is a word which presupposes that awards are
likely to be made which will involve one side or the other in
ruin, or drive it to desperation."
302
The Protection of Rights.
[§ *8o*
280 (e). compe- Another objection was that you can-
tence of court* in not fix wages by law ; and it was well
business affairs. [( yQu tfy ^ fix them CQunter ^
natural law. But the object of the court has been to
ascertain from very thorough investigation what wages
naturally should be, and so decree them. Probably
the job is generally better done in that way, than
through a strike or a lockout.
It has also been urged that you could not get prac-
tical business wisdom out of a court. But the world
has been doing that for a good many centuries, and
that, too, before, as in Australasia, business men were
made members of the court, with power to call in others
as need might arise.
280 (f). Effect on The New Zealand law left the parties to
strikes. fight it out if neither of them cared to go
into court, but they have generally preferred to go
into court. Yet since the problematic law went into
force in 1895, there has been among the men subject
to it (the public railroad employees in the strike of
1903 were not), no labor disturbance which an Ameri-
can would dignify by the name of a strike. But Dr. Clark
tells us that
'* Even before the New Zealand act was passed, the relations
of employers and employees in that colony were normally so
harmonious that it is difficult to show positively that the
industrial peace at present prevailing is due to legislation. In
New South Wales and Western Australia strikes of some con-
sequence have occurred in defiance of the court."
280 r ) spread of ^ut as kindred ^aws were enacted in other
the court* and un- states of the federation, and finally in
expected activity. i904 a general jaw for the whole federa-
tion, they have been obliged to go into court, but their
doing so has seldom been wTith any reluctance. This is
not the place to recount the differences in these Acts
and their results. We have room only for such details
as characterize at least the majority of them.
The Conciliation Boards in existence when the Act
was formed, were not disturbed by it. Moreover, the
court has a right to create minor boards of conciliation
§ 28ot]
Personal Property.
303
and arbitration. An appeal from them to the Arbitra-
tion Court was of course allowed. Mr. Reeves ex-
pected them still to settle seven-tenths of the cases
(probably relying on the coercion latent in the appeal),
and one of the believers in the court, probably for the
same reason, said that it would not be used once in
twenty years. Up to 1900, instead of being restricted to
a tenth of the cases, it had settled two -thirds of them.
280 (h). Both aides ^n unexpected development was a tend-
arrtutged cases to ency for employers to arrange with their
nf*r' men to get cases before the courts which
would bring decisions controlling dishonest and sweat-
ing competitors. This effect was similar to that already
noted in the case of the Minimum Wage Boards — in fact,
seems to be another illustration of the tendency of the
Arbitration Courts to assume the functions — indirect
as well as direct — of those boards. Thus men who
wanted to cut wages in order to cut prices, have often
been restrained. The wisdom of the court has un-
doubtedly prevented this from being a serious damage
to legitimate competition, yet on the other hand, its
effect on prices has probably not invariably been for
the good of the whole community, as already indicated
regarding the Wages Boards, and as will farther appear
later.
The courts provide rates "for superior, average and
inferior men. No one can be employed for less than
the average, except, as has been already explained, men
not competent to earn the average, and the rate paid
them must, if questioned, be sanctioned by the local
Board of Conciliation".
The success of such an arrangement, should it con-
tinue, would seem to illustrate how a law that cer-
tainly never would, and hardly could, be voluntarily
obeyed in spirit by those upon whom it is enjoined,
can be helped into a working condition by a court
well adapted to the requirements of the situation.
280 (i). courts Experience has abundantly shown that
trM to follow all the successful minimum-wage fixing
the mar et must at best resolve itself into a declara-
304
The Protection of Rights.
[§ 280 i
tion, by an honest and painstaking authority, of what
conditions point to as the natural rate of wages, and
this certainly is a great deal better than a determina-
tion of them by boycott, arson and murder. Mr. Lloyd
quoted an anonymous commentator to the effect:
14 Compulsory arbitration docs not attempt any interference
with the 'law of the market'. On the contrary, it gives the
'law of the market ' for the first time a full chance to work. It
brings the 'law of the market' into full and free discussion.
Fixing by law' is an odious phrase. How about fixing
prices by the fiat of a corporation or a capitalist, or by bayonets,
or by starvation or intimidation? Here, 'law' means debate:
the lack of it means destruction for the men. The law does not
dictate or fix wages, but merely decides in a dispute between
two different views of what wages should be. 'Law' fixes
creditors' shares in bankruptcy, lowers Irish and Scotch rents,
fixes the price of ferries, railroads, the salaries of state officials,
rate of taxation."
280 (]). court's As already said, the first court, in New
power of initiatim. Zealand, could be put in motion only by
one of the parties to a controversy. But the present
usage empowers a court to take up, of its own motion,
any apparent industrial abuse. But even under the
primitive practice, Mr. Lloyd was hopeful enough (He
has often been accused of being too hopeful) to say :
" Trusts like those now coming into favor in England, such
as that of the bedstead-makers of Birmingham, in which the
masters and the men have united to fleece the public, would
not be very promising subjects for compulsory arbitration."
He continues :
280 (k). Question "Another objection often made is, that in
of overcrowding. conseqUence of the law, industry is disturbed
by the frequency of disputes ; but when I looked into the number
of cases before the court, I found that there had only been about
fifty in five years, about one case a month. . . . This, too, it is
only fair to remember, is the number of disputes at the beginning
of the administration of the law. Every decision that settles
questions makes precedents that will prevent other disputes
from being brought forward."
This is one of Mr. Lloyd's optimisms. In the half-
dozen years since he wrote, things have moved fast,
§28l]
Personal Property.
and, as will be shown, experience has not altogether
continued the rosy look which the experiments bore
nearer their dawn. But while unanticipated difficulties
and abatements have arisen, enough success to justify
the experiment still seems possible. But there is
abundant evidence that the courts have been some-
times overcrowded, and that too by questions so trivial
that they have sometimes refused to consider them.
He himself quotes a "labor member" of one of the
boards to the effect:
"Agitators foment disturbances to bring the masters before
the court. It is suspected sometimes that even members
of the Conciliation Board, who are paid for the number of days
they sit, do the same thing. But which is worse, that agitators
should foment arbitration, or foment strikes?"
The effect of compulsory arbitration has been pecul-
iarly happy on the condition of women workers. Even
if Mr. Lloyd's paean in his chapter 44 A New Song of
the Shirt" was pitched some notes too high, there is
no doubt that a paean is justified.
281. Aspects h The following passages throw much
1890. light on the case, or at least on one side
of it, as it looked about 1890.
"The subject came up one day in a group at the club in
Wellington. One of the critics of the law quoted triumphantly
from a letter of Lord Thring's: 'Is it conceivable that at the
close of the nineteenth century either masters or men would
submit to such a tyrannical judicial interference with their
liberty?'
41 'Forfive years', replied one of the New Zcalanders, 'masters
and men have been submitting. They may not be satislied.
Where anywhere are there satisfied capitalists or laborers?
Where is there an employer who would not like to pay less,
where the workingman who would not like to get more? But
they are all at work, though not satisfied. In New Zealand
it is proved that the Arbitration Court can make decisions
which both sides would rather accept than to quit, as they
always have the right to do '. "
And now a word on one of the excesses of theory
which the Arbitration Courts have stimulated. Mr.
Lloyd stated it in perfect good faith, as follows:
306
The Protection of Rights.
[§ 982
" The New Zealand court has but just touched
waces \nd prices m decisions on tne most important principle
° p ' at issue in the regulation of wages — whetner
wages must follow prices or prices wages. Must wages be
dependent on prices necessary to market commodities, or must
these prices be dependent on the wages necessary to maintain
the people in decent comfort ?
" The workingman's mind is evidently moving to the latter
position. Several of the greatest strikes of recent years, like
the English coal strike of 1893, and the strike in Lord Penrhyn's
quarries, have had the 1 living wage' for their inspiring principle,
and this new position of the workingmen in those strikes
received the open support of some of the most influential mem-
bers of Parliament, newspapers, and even capitalists of Great
Britain.
' 4 This doctrine seeks to make true the fiction of John Stuart
Mill that wages are determined by the standard of living among
the workingmen. What John Stuart Mill said was the law 01
wages, the workingmen are seeking to bring about. The New
Zealand law, the moment that this new political economy that
prices must follow wages invades the bench, can be made a
powerful instrument in reinforcing the workingmen."
This is no more or less than one of the raise-yourself-
by-your-bootstraps notions of which we see so many:
somebody has got to pay those wages, and nobody has
an unlimited store to pay them with.
Some of Mr. Lloyd's final conclusions in 1890 are
worth quoting, partly as bases for comparison with
later writers.
" There is only one Compulsory Arbitration law
Joncluslons lny!900. *n the world- ™* that has been in operation only
four years and in an isolated country, and we
must not generalize too freely. Similar laws might operate
differently in different countries. . . .
" Strikes and lockouts have been stopped.
" Wages and terms have been fixed so that manufacturers
can make their contracts ahead without fear of disturbance.
" Workingmen, too, knowing that their income cannot be cut
down nor locked out, can marry, buy land, build homes.
" Disputes arise continually, new terms are fixed, but in-
dustry goes on without interruption.
" The country is more prosperous than ever.
" Compulsion in the background makes conciliation easier.
" Compulsory publicity gives the public, the real arbitrator,
all the facts of every dispute.
" Peaceable settlement with their men has been made possible
§28S]
Personal Property.
307
for the majorities of the employers who wanted to arbitrate,
but were prevented by minorities of their associates.
" Humane and law-abiding business men seek the protection
of the law to save themselves from destruction by the competi-
tion of inhumane and law-breaking rivals,
" The victory is given as nearly as possible to the right instead
of to the strong, as in war.
" If the American people have any lessons to learn from these
experiences of New Zealand, they can be trusted to learn them.
The object of the writer has not been to enforce his views,
but to present the facts of an interesting social experiment, on
which the public could, if it chose, build views of its own.
"Of course, 'our circumstances are different Our circum-
stances have not been so different but that they have developed
the same evils. Perhaps they may develop the same remedy.
" And as for the isolation, that is a fortunate incident for the
weak, but the United States has a nobler kind of isolation in
its might and wealth. It can stand alone for any cause it
chooses to espouse."
At this point we turn more definitely to
fn8i4903.r' Reevei Mr. Reeves,* the father of the New Zea-
land Arbitration Act, whom future ages
may perhaps give a high place among the contributors
to the welfare of mankind. His attractively written,
instructive and interesting book of course is from his
point of view, but it seems to be admirably candid. It
appeared some three years later than Mr. Lloyd's, when
Mr. Reeves's revolutionary Act of 1894 had been work-
ing eight years, and had become the parent of others.
285. Claims con- He tells us that from 1895 to I9°° under
tlnued success. the Act, factory hands in New Zealand in-
creased from 30,000 to 49,000, and export trade grew
from 1894 to 1 901 nearly 50%; factories from 1896 to
1 901 nearly 30%, and total wages paid nearly 60%
(which seems to indicate an advance of nearly 20%
in the rate of wages), and manufacturing output grew
in the same time about 80%.
There had been but half a dozen strikes up to 1903.
Half of these were among government employees, who
did not come under the authority of the court, and
nearly all were settled by voluntary appeal to the court.
* Reeves, William Pember: State Experiments in Australia
and New Zealand, 2 vols.
3o8
The Protection of Rights.
In 1900, when propositions to thoroughly revise the
act were before the legislature, only one man spoke un-
favorably of it.
286. Judge Back- In I9°I New South Wales was medita-
house's testimony, ting a similar act, and sent Judge Back-
house, a cool, able and experienced man, to investigate
the working of the court in New Zealand (1,200 miles
off, over seas). His conclusions were:
" The Act has prevented strikes of any magnitude, and has,
on the whole, brought about a better relation between employers
and employees than would exist if there were no Act. It has
enabled the increase of wages and the other conditions favorable
to the workmen which, under the circumstances of the colony,
they arc entitled to, to be settled without that friction and
bitterness of feeling which otherwise might have existed; it
has enabled employers, for a time at least, to know with cer-
tainty the conditions of production, and therefore to make
contracts with the knowledge that they would be able to fulfil
them ; and indirectly it has tended to a more harmonious feeling
among the people generally, which must have worked for the
weal of the colony. A very large majority of the employers of
labor whom I interviewee! are in favor of the principle of
the Act. One only did I meet who said out and out, 'I would
rather repeal it and have a straight stand-up fight', while
another was doubtful whether the present condition was better
than the pre-existing. The first, in a letter, has since con-
siderably modified his statement."
Mr. Reeves thinks this "too roseate a view of the
feelings of employers."
In 1 90 1, Judge Backhouse's report was followed by
a Compulsory Arbitration Act in New South Wales;
one was passed in Western Australia in 1902, and one
for the whole federation in 1904.
These Acts differ much in detail, which of course
cannot be entered into here, but they are a necessary
and far from unattractive study for any one wishing to
promote the substitution, anywhere, of law for war.
287. The courts to The New South Wales Act does not
keep the peace. make it necessary for either party to a
quarrel voluntarily to go to court before the court can
act: the registrar may call the parties into court, and
this on the grounds as stated by Mr. Wise, the framer of
§289]
Personal Property.
309
the Act, that "combatants who are bringing an industry
to a dead stop should be regarded as brawlers in a street
who check traffic with their quarreling : they should be
made to move on."
Mr. Reeves says:
288. Details by "It will be urged, doubtless, that until some
Mr. Reeves. body of men has doggedly, or perhaps violently,
refused to obey a compulsory award and been forced to the
knees by legal process, the strength of the Act will not have
been thoroughly tested. Might it not, however, be urged that
the true strength of the Act is being shown by the absence of
such incident? Docs not the growth of a habit of peaceful
acceptance of decisions hold out the best hope of ultimate
success for the system ?
" Passing from objections, it is safe to say that the experiment
seems on the way to prove several useful points. First, it shows
that trade-unionists may be persuaded by the logic of experience
to prefer arbitration to conflict, and that their unions may grow
ana prosper in consequence. Next, that the compulsory deci-
sions of a state tribunal may be quite as just and moderate
as those of a private conciliation board, and that obedience to
them need not mean ruin to an employer, or cruel hardship
to work-people. Next, the working ot the Act has not strangled
industry or fettered enterprise ; trade and business have steadily
improved under it. Lastly, instead of it being found impossible
to assert the Arbitration Court's authority, there is no serious
difficulty in enforcing its decisions; indeed, the enforcement of
awards, which is assumed by English a priori critics to be out of
the question, has, so far, been found in practice to be by no
means the most troublesome part of the work of industrial
arbitration."
In 1903, Mr. Reeves left the laws in the following
condition :
" Though not yet twelve months old, Mr. Wise's Act has already
ceased to be the newest arbitration law in the colonics. The
West Australians, finding their Act of 1900 defective, decided
not to amend but to repeal it. Accordingly, in February 1902,
they displaced it with a new enactment which followed more
closely trie New Zealand model. It is noteworthy that, despite
the example of New South Wales, this statute makes provision
for boards of conciliation."
289. Dr. Clark In Next, in 1006, Dr. Clark * takes up the
1906 not quite so narrative. He wrote when the courts
optimistic. were of course much more developed,
* Op. cit.
The Protection of Rights.
[§ 289
and I shall quote from him farther details of their
constitution and working in their developed shape,
as well as the latest results, which are not in all
respects quite what the earlier writers counted on.
As the brief quotations cannot do justice to his fuller
exposition, I shall emphasize an occasional point by
italics not his. The reader's patience is invoked for
some repetitions arising mainly from comparisons with
earlier conditions, and from the increased number and
variety of the courts.
As now constituted, the Arbitration Courts have all
290. Courts now the powers of ordinary courts, and their
have legislative decisions are not subject to appeal unless
power* their interpretation of the act creating
them is in question. They have also legislative power:
" The general intent of the law is to give the court power
to settle every point that might cause a strike or lockout.
[The government employees were not subject to compulsory
arbitration, and] a strike, in 1903, tied up the transportation
of Victoria. This disturbance was accompanied by incidents
that would have rendered the strikers liable to penal punishment
in America, and would have been discountenanced by our
trade-unions. Trains were deserted by their crews wherever
they chanced to be when the strike began, stranding passen-
gers and perishable merchandise in out-of-the-way places, and
endangering life and property. The public answered this
challenge to its authority by a strike law more
strlkesfWS ag drastic than any legislation ventured by Ameri-
cans in the most acute crises of their civil war.
This law imposed a penalty of nearly five hundred dollars or
twelve months' imprisonment for engaging in a strike on govern-
ment railways, and made men liable to arrest without warrant
or bail for advising a strike orally or by publication, or for col-
lecting funds for the support of strikers, or for attending any
meeting of more than six persons for the purpose of encourag-
ing strikers.
41 Arbitration acts derive their authority from the police
powers of government. They are measures to prevent industrial
disorder. . . .
" The New Zealand law prohibits . . . strikes and lock-
outs . . . while proceedings relating to the dispute are pending,
and for a sufficient time beforehand to allow either party to be-
gin proceedings if he so desires. . . . The new federal Act pro-
hibits strikes and lockouts unconditionally, without regard to
whether they are begun prior or subsequent to giving an award.
§ 29S] Personal Property. 311
"The [New Zealand] law prohibits strikes and
292. Current lockouts among workers and employers in
K;«frf&mpa" related industries. Parliament has defined all
tnetic strikes, building trades as related industries. The court
may extend this provision to other groups of employments.
Consequently if an award has been given in the bricklaying trade,
for instance, the mortar-mixers or the hod-carriers cannot tie
up that trade by a strike, although unwilling to lay their case
before the court.
"A second contingency bringing parties in-
293^ And makes voluntarily under the act, is where an award
IJiiSL HkM?Jn has been 8iven in their industry limited to
adjoining districts. ?ome Qther £ortion of the cokmy TJhc cmployers
or workers subject to the award might be injured in such in-
stances by the competition of employers or workers in the dis-
tricts not subject to its provisions. If so, they may have the
award extended to establishments in the competing district.
The purpose of this extension is not to prevent strikes, but in
equalizing competition they are incidentally prohibited."
This provision has been abused by starting a strike
in one jurisdiction where a certain decision may be
expected, in order to make the decision effective in
an adjoining jurisdiction where it probably could not
be obtained.
294. Awards As was to be expected, the stringent
evaded. control of the Arbitration Courts is often
and easily evaded. Dr. Clark gives an illustration :
"A service may be embodied in a commodity, and trans-
ferred as an element or quality of a material object. To illus-
trate concretely, an arbitration court may fix a day rate to be
paid to saddlers, and a piece-work rate for every operation of
making a saddle; but its jurisdiction does not extend to regu-
lating the sale of the leather, saddle-tree, and other materials
out of which a saddle is manufactured, or to the sale of a com-
pleted saddle. Therefore, a manufacturer may sell these ma-
terials to a workman, and the latter may sell the finished
product to the manufacturer at a higher price than the materials
cost, but at a l^wer price than the cost of making prescribed
by the court plus the cost of the materials."
Regarding the immediate effects of the decisions, he
says:
"It is impossible to give an arbitration court
conditions1 *° a course *n technology with each new set of
proceedings. . . . The court's decisions seldom
3ia
The Protection of Rights.
[§ *95
adapt themselves perfectly to working conditions, and continue
to be a chafing shoe upon the feet of industry.
" A dispute before a court is less serious than a strike. . . .
But these suits occasion expense and loss of
296. Danger of time, and check industry so far as they render
over-regulation. uncertain future conditions of production. There
are single employers in Australia who work under as many as
seven awards. The total effect of having these disputes con-
stantly at issue — and they may await decision a year or more —
resembles that of an agitation for tariff revision in the United
States.
'Litigation is multiplied, because workmen will bring a case
before the court where they would not risk a strike. So great
is this evil that the court in New South Wales has recently
adopted the policy of giving artificially created disputes no
standing in fact. It has been proposed to require the consent
of a large number of workers to start a dispute. But these
are palliatives, not remedies. . . .
297. Promotes cen- "Uniform conditions of employment favor
tailization of either the big or the little proprietor more than
Industry. his competitor. . . . Large merchants and man-
ufacturers are said to have entered into collusive agreements
with their employees to secure orders from the court detrimental
to their smaller competitors. . . . Consequently, an economic
tendency of industrial regulation is to centralize industry."
The very result that all the fierce agitation against
trusts in the United States is seeking to overthrow!
To this significant objection from the worker's
side, Dr. Clark adds:
"As the average workers are in a majority and
298. And uniform- control the unions, . . . their influence alone
Ity of wages. shapes the policy of the arbitration authorities
from the side of the workingmen. This influence
secures conditions of employment that discount exceptional
ability, and deaden the enterprise of more ambitious workers. . . .
The value of their potential excess of service is thus lost to them-
selves and the community. . . . [The court] cannot reverse the
laws of gravity and enable the working people to raise them-
selves by their bootstraps to a higher economic plane. Its
orders must conform to economic law, or be speedily rendered
ineffective by contact with stubborn facts. Consequently, awards
ultimately become mere formal statements of average condi-
tions of employment."
299. But so mini- In other words, the courts and Minimum
mizes oppression. Wage Boards have wrought all these evils,
§ 3°i]
Personal Property.
3i3
and their decisions might appear to the superficial to
amount to nothing after all. But that would be really
a superficial view: for it is by disturbing " average
conditions of employment" — which means the average
flow of supply and demand — that injustice is wrought.
If a court can conserve average conditions, it accom-
plishes a great deal.
"The chief economic benefit workers derive from them [the
courts] is that they render conditions of production sufficiently
uniform in different establishments to keep unfair employers
from obtaining a competitive advantage by oppressing tneir
employees. Although the court's influence upon the average
economic condition of the working people may be unimportant,
it can effectively prevent unwholesome inequalities in their
condition. . .
Now he comes to the fundamental difficulty in all
arbitration (268):
"An arbitration law does not, however, rest
300. Only one side equally upon employers and employees, be-
can pay damages, cause the former are held to its strict observ-
ance by their financial responsibility, while
workers can. evade many of its provisions. In minor matters,
the sanction behind the court's orders, so far as it applies to
workmen, will always remain to a large extent a moral one.
"But possibly this appeal to the honor and
301. But moral civic responsibility of the worker is a more
effective. ° adequate influence in favor of industrial peace
than harsher measures. These laws do appear —
in spite of the occasional defiance of their orders — to increase
the law-abiding spirit. The public opinion of workingmen sup-
ports their observance as a matter of principle. Whether the
strike as an instrument for enforcing labor demands falls into
absolute disuse or not, this spirit is a social gain."
And he repeats that the courts have diminished
strikes and sweating (despite a somewhat inconsistent
showing made' earlier [276 e]) and child and female labor,
and hours of work — the first two certainly a direct gain,
the last two, results that attend the progress of civiliza-
tion everywhere.
The effect of the Minimum Wage Boards on prices
(276 g) is continued by the Arbitration Courts, and
more schemes in palliation or offset are arising.
314
Tlie Protection of Rights.
[§ 302
302. Continued "But in time the people who are not em-
high prices and ployers or wage-earners, especially the rural
palliatives. population, may resent paying high prices for
services and commodities, in order that employers and employees
may enjoy state-protected privileges. A popular demand may
then arise for more regulation, for some method to protect
the rights of the consuming public — the farmer, the professional
man, and the person of small property. This might manifest
itself first in laws to control prices, already suggested [and
commented upon (276 A)], or for the state housing of citizens —
cently inaugurated as a remedy for conditions caused in part
by arbitration awards in New Zealand — or for the erection
of state industrial establishments to compete with those reafoing
a large profit under tariff protection and award control.
The Paris workshops again! tho, it must be ad-
mitted, with side issues — state housing and state
competition with monopolies, which have aroused the
enthusiasm of many people who rejoice in old expe-
dients with new faces — especially when they do not
know them to be old.
Elsewhere Dr. Clark says:
' 4 No error could be more pernicious than to assume that
these laws have fully justified themselves by economic and
social results. . . . The coming story of the labor party will
be a record of failure as well as success. . . . Nevertheless it has
won to its main proposals the support of all political parties, and
of the great mass of the people. None of the parties now opposes,
compulsory arbitration or old-age pensions. ..."
Perhaps it would have been wiser to say, instead
of "now opposes", yet opposes. For I have already
quoted passages abundantly showing that opposition
is brewing, tho it has not yet become strong enough
to appear in the platforms of any party.
And now we have reached a set of considerations
beginning to diverge from the merely economic:
303. Courts con- ' ' When an award is under litigation workers
sider cost of living, often support their claims by testimony as
and profits and to house rent and the cost of staple household
all conditions. articles. Tite principle of a lh4ng wage is
thcrejore fully established in arbitration precedents. The
judge usually follows the theory that such a wage is a first
§ 306] Personal Property.
315
charge upon an industry, to be imposed if the business is to
continue in operation. . . . Dividends and other evidence of
the earning power of a business are admitted as having a bearing
upon an equitable wage for employees. The court thus fixes
the share of the profits of an industry which the worker shall
enjoy. . . . The court has considered such questions as the
speed at which machines are to be run, the number of men to
be employed to a machine, and whether men working in the
open air, or their employer, shall decide when it is too wet to
labor.
304. Startling dec- " The cn*ef justice of New South Wales said
laratlon of court's of the act : 1 // deprives the em player of the conduct
powers. of his own business, and vests the management in
tlie tribunal formed under the Act.' "
The laws of two of the states
305. Supports the " expressly state that the court shall have power
closed shop — con- to give unionists preference of employment,
optionally, though this is not mandatory'. In Western
Australia a similar clause was defeated by the protracted oppo-
sition of the upper house of Parliament. In the federal law
the power is granted conditionally, but it is required that the
union shall not engage in political activity while enjoying
preference, and that this privilege shall be given only when,
in the opinion of the court, a majority of the workers in the
occupation regulated by the award approve of the claim for
preference. The court in New Zealand has established its
right to prescribe that non-unionist workmen already em-
ployed when the award goes into operation shall join the union
as a condition of retaining their positions. On the other hand,
the court usually provides that the union shall have preference
only so long as it admits any applicant of good character to
membership, upon payment of moderate fees fixed by the
court. . . . The stronger organizations had enforced the closed
shop in Australasia before the court was established, and
refuse to relinquish what they consider a vested right. They
further claim the privilege of raising the issue in court, because
it is a recognized issue in strikes. The men also assert that
preference is just, because only unionists incur the expense,
and the odium with employers, of securing awards, and are
liable to penalties for breaking the awards.
_ .. . " The most important objection to granting
SandclaMffs- Prefcrence to unionists arises from the organic
lation by courts. " connection between the unions and the political
labor party. Preference to unionists is prefer-
ence of employment to members of a political organization."
After learning all this, it is startling to find that
316
The Protection of Rights.
[§306
" The proportion of the whole population in such unions
varies from a trifle over three per cent, in New Zealand to
nearly seven per cent, in Western Australia."
And does not all the foregoing mean class legislation?
Dr. Clark seems to think it does:
4 ' So at present the government orders business to be con-
ducted according to the demands of particular classes. The
interests of classes rather than of the public are consulted.
"American judges hold that the legislature cannot make
laws affecting the interest of a particular class — set apart from
the whole body of citizens. These decisions have prevented
laws in favor of or against members of trade-unions, and might
apply to prevent compulsory preference of employment even
to members of a quasi-public society like an industrial union."
The Arbitration Courts have, as already said, many
legislative privileges :
"As a lawmaker, the court is the mark of virulent and par-
tisan criticism, and its orders are subject to the same public
comment and discussion as other legislative or administrative
acts, while in its purely judicial capacity it receives the respect
usually shown to a dispenser of justice. ... In an important
mining case ... a newspaper commented editorially upon the
merits of the issues involved. The paper was warned that it
rendered itself liable to punishment. . . The
frJdomof the press, f^om of the press is thus curtailed by ap-
plying to a legislative body protective canons
of law devised to procure \ininfluenced and unimpeded channels
for the administration of justice.
" However, in response to practical considerations, arbitration
laws are evolving toward a separation of judicial and legislative
powers. . . . Breaches of awards are prosecuted under an
action of mixed civil and criminal character, and the defendant,
if convicted, is adjudged to pay costs, and an additional sum
partaking of the nature both of a fine and of an award of
damages. Such a 'penalty' is made payable directly to the
plaintiff."
Dr. Clark, it is very important to realize, has shown
that the effective administration of the law seems to
require proceedings that attack what have heretofore
been considered the foundations of civilization, and that,
like the attempts to secure equal fortune to unequal
men, give an impression that to justify such risks,
§ 309] Personal Property.
3i7
the advantages of compulsory arbitration need to be
almost incalculably great. Dr. Clark next gives still
more startling testimony to the same effect:
308. And "the " Wherever compulsory arbitration is in force,
obligation of the court finds it necessary to annul or modify
contracts". existing contracts of service, against the will of
the parties, tho these contracts are not in themselves illegal.
"An industrial agreement is a contract approved and sanc-
tioned by the court, and might therefore be supposed to enjoy
special immunity from alteration. In Western Australia the
court has held that it cannot modify an industrial agreement
without the consent of all the signatory parties. But elsewhere
the court has amended these contracts, or substituted awards in
place of them. . .
All this would not be tolerated under the Constitution
of the United States, which does not permit any state
legislature even, not to speak of any court, to pass
a law annulling the obligation of contracts.
" Tho a legislature might declare certain classes of contracts
in the future illegal, no law could be made so sweeping as to
deprive all citizens of the right of making individual contracts
of service, without causing a revolution in our [American] sys-
tem of jurisprudence that would encounter the veto of the
higher courts."
But Dr. Clark has more to say:
" Compulsory arbitration and private contract are in the
widest sense contradictory. Their mutual opposition continu-
ally creates new problems for legislators. . . . These laws revive
the old historical struggle between contract and status. They
reverse the process of evolution of private rights in European
and British law."
Does this mean simply a relapse toward barbarism?
The reader new to the question is advised to read again
Chapter XIII before continuing.
The attacks on Freedom of the Press and Freedom
of Contract, are accompanied by another attack on what
have been supposed to be the bulwarks of liberty:
" R*val umons have occasioned some of the
ttsemblv. most bitterly contested issues under the arbi-
tration laws. The bogus union, formed by a
3i3
The Protection of Rights.
[§ 309
small group of employees disaffected with the existing organi-
zation, with the connivance of employers, and used to defeat
or hamper the operation of the law, has been the subject of
parliamentary investigations in New South Wales. Therefore
the state is forced, in its increasing control over labor societies,
even to limit the right of free association among workingmcn.
. . . The total effect is to make the condition of status more
rigid."
Next we come to something perhaps more startling
still:
" The Australasian legislator has not been restricted in
enacting arbitration laws by constitutional limitations such as
exist in the United States. ... In most [of those] states no
power exists to create a tribunal with the right,
by fury. without a trial by jury, to punish misdemeanors,
* J impose a fine of nearly five thousand dollars,
or even as a last resort to imprison offenders."
Is this Good-bye to trial by jury? Australia is pro-
gressive. But the experiment is new, and conditions
are difficult.
311. Attacks on But Australasians did not know where
Mttfpw- they were going.
"The colonies did not enter on this legislation with clear
foresight and purpose. The form and effect of these experi-
mental statutes were not pondered with the care devoted to a
revolutionary programme. The proposer of the New Zealand
law stated in the debates upon the bill, that a vast majority
of the disputes coming before the authorities would be settled
by conciliation, without recourse to the court. The function
of the latter body was not regarded as legislative, but as purely
judicial — or rather as also conciliatory. The purpose of the
law was to bring men to a voluntary agreement. It was to
further, not to annul, the principle of private contract. . . .
The development of this legislation, however, has been in
another direction. . . .
" Workingmen have applied for nearly all the
312. New conditions, awar(js granted in New Zealand and Australia,
unexpected results. Thdr demands whcn they file an application
before the court, are not guided by past conditions. . . .
Therefore the court is obliged to make orders covering many
points for which no precedents exist .... Statutory or custom-
ary law is not at hand to guide its decisions, and so must be
§314]
Personal Property.
3*9
enacted. But a new body of legislation . . . requires constant
amendment to correct the contradictions and omissions that
reveal themselves in practice. The legislative activity of the
court is consequently stimulated from two directions, by the
increasing demands of workers for better terms of employment,
and by appeals from both parties to have conditions previously
imposed made more workable.
" The divergence between the original theory and purpose
of industrial arbitration, and its present development, is over-
looked or disregarded. The final effect of this new institution
upon private law and theories of government is not considered,
because the popular attitude toward this legislation is oppor-
313 Yet all tunist and practical. But the labor party,
admitted to be which is tUe most active supporter of industrial
progress toward arbitration, fancies that it is a step touard state
socialism. socialism."
314. Has experl- And these steps toward state socialism
dSl!m atwa?0* are over what a labor agitator in other
with Liberty and connections would be apt to call "the
Progress? prostrate bodies" of trial by jury, of free-
dom of the press, of right of assembly, and of contract;
and are of course steps back toward status! The conten-
tion that state socialism and status are synonymous
terms, seems receiving a startling confirmation from
experience, even before state socialism has become mat-
ter of experience.
After I first read, as a whole, the foregoing con-
densation from Dr. Clark's book, I wrote to him that
I did not before know what a terrible indictment of
government control of industry the book contains.
That the extracts turned out an indictment was due,
however, to no will of mine. I tried to be as fair to
both sides as he is.
Either the indictment is terrible, or the experience of
thrice ten centuries through the whole world, has been
shown to be foolishness, by ten years of experiment on
three islands in the Pacific. And this remains true,
even if the right of trial by jury is, as many sober
thinkers suspect, outgrown in a fairly democratic state;
and even if contract, like many other invaluable insti-
tutions, is capable, in abnormal conditions, of working
injustice. But surely its abnormal conditions should
320
The Protection of Rights.
never be approached with a hand less cautious and
reverent than the ideal surgeon's — or the ideal jurist's.
These most weighty considerations show plainly that
in Australasia the thunder is rumbling. But as yet no
bolts have fallen; Dr. Clark says:
315. No business " The evidence does not show a general
disasters yet. setback from government regulation of in-
dustries. The investment of foreign capital may have been
checked by the novelty and uncertainty of this legislation, but
local capital has been found to meet the demand of growing
enterprises. The impression the country makes upon a visitor
is not that of a land where industry is paralyzed and business
stagnated, but rather the reverse. Permanent and costly
buildings are being erected in the larger cities, public improve-
ments are going forward, the wharves are crowded with shipping,
the railway service is fully occupied. . . . There are few
evidences of excessive unemployment. To a person studying
conditions in Australasia, the economic argument that a country
will be industrially ruined by state regulation is not convincingly
demonstrated. But this does not prove or disprove the ad-
visability of the laws embodying these experiments: for the
argument in question is too general to be valid. The prosperity
or depression of a country's business rests upon a broader
basis than an industrial arbitration act."
Yet our author goes on to show what
?np^sEpeP^ has been claimed before, that state regula-
tions have not yet been tried under ad-
verse conditions, but have been acting only in a period
which other causes made one of great prosperity.
" Since the passage of the oldest of these laws, the Victorian
Minimum Wage Act, federation has been accomplished, and a
national tariff with free trade throughout the Commonwealth
has been substituted for a local tariff and free trade only within
the borders of the colony. This enlarged market has caused a
great expansion of manufacturing. The exportation to other
states of the federation of twenty-four classes of locally made
articles increased over one hundred and forty-seven per cent,
during the first two years after the national tariff went into
effect. . . . This has stimulated the demand for factory opera-
tives and raised wages in many skilled occupations."
Yet one is not surprised to learn that
§319]
Personal Property.
321
317. Disagreement " The economic effects of government rcgula-
as to prospects. tion of industry are still a matter of controversy
in Australasia. . . . The contention that the capitalist is
benefited by having wages fixed and other conditions of em-
ployment determined by a government authority, is some-
times supported by plausible arguments; but it is contra-
dicted by the attitude of most employers toward these laws.
As a body, they oppose compulsory-arbitration and minimum-
wage boards. . . . JProbably the influence — good or bad — of
state regulation upon the prosperity and development of
industries has been exaggerated. . . . Indeed state regulation
applies to the industries that are the main source of national
income only to a very limited extent."
318. Increased But whatever may be the gains or
fealty to law. losses through the Australian labor legis-
lation, even if the tinkering and expensive bracing it is
already demanding, shall tinker and brace it into some-
thing else, or out of existence, one effect of it should
be viewed in America with special hope and honor:
for as Dr. Clark says:
"It is a law-abiding agency, and the forces that in other
countries threaten to disrupt society, serve, in Australasia, only
to strengthen social bonds."
Yet this does seem a little difficult to reconcile with
what he expressly asserts of class legislation ; restriction
of freedom of the press, of assembly, and of trial by
jury; and interference with contract.
But the dispassionate doctor's valedictory is:
"But if state regulation clearly fails to benefit wage-earners,
the country will probably return to free private administration
319. The equlllb- °* industry. The essential fact is that the fres-
rlum unstable. cnt condition is unstable."
Knowing the policy of a set of doctors plainly not
of his school, he adds:
"The workers are still confident that state regulation does
help them, and will continue to do so. Therefore the limited
experience with compulsory arbitration up to the present, sug-
gests the possibility of a further development toward state
socialism."
Like protective tariffs, and stimulants and narcotics —
322
Tlie Protection of Rights.
[§3i9
when the amount in use is proved ineffective, give more!
320. The latest As these pages are about to leave my
w<>rd' hand, there comes through a correspond-
ent of the London Times one of those messages, ex-
treme on one side or the other which constantly ema-
nate from Australasia.
As quoted by the New York Times, the correspond-
ent makes out that
"Neither party is really satisfied with the state of things
in New Zealand; both parties are, in fact, extremely cUs-
satisfied. The Australian Minister for Agriculture, returning
from a visit to New Zealand, has reported that he found the
Arbitration Act ' working to great advantage.' The Secretary
of the New Zealand Federation of Employers tells the cor-
respondent that the employers do not agree with this view.
The workmen, according to this authority, are 'assailing the
employers, threatening to ignore the Act altogether, and to
return to their old methods; there has never been any greater
friction in labor matters than at the present time.' From the
employers' point of view the Act has not made for better work
or for improved methods, and it has not fostered trade. On
the other hand, it has seriously increased the cost of production.
This increase has been such that in those articles which New
Zealand might be expected to export, such as clothing, woolens,
timber and coal, she is unable to take advantage of her natural
facilities. 'The history of the court has been increased impor-
tations and decreased local output.' . . . The Seamen's Union
and the Otago Trades and Labor Council have in turn de-
nounced the court."
But despite frequent casual statements
Hkei aTfahure ^e tms> anc^ despite the deep shadows
eyas a ure. ^ Clark's thorough and dispassionate
study, we are by no means forced to the conviction
that the threatening aspects of government regulation
must lead to its complete overthrow. The dangers are
almost inseparable from so young an experience, and
there seems to be no unescapable reason to fear that they
are due to anything more than the excesses of youth,
or that they cannot be remedied as experience accu-
mulates.
As shown, most of the decisions have been in favor
of the men, because the market has been steadily rising.
Then if the principle of compulsory arbitration shall
§ 322 a]
Personal Property.
323
turn out to be the colossal blessing to mankind which
its friends claim, and which its enemies seem growing
less inclined to dispute, the fact that it "happened"
to be started at the beginning of many years of in-
creasing prosperity, will be classed with such facts
as Rome's unification of the civilized world when
Christianity appeared — facts which, whether called
" Providential* ' or by any other name, even the phi-
losopher is tempted to accept as proofs of an order and
beneficence in the universe wider than our everyday
conceptions are apt to rise to.
322. Gains In pros- What is to be the effect of compulsory
perlty may carrv arbitration on a falling market, yet re-
through adversity. mains to be ascertained. But the work-
men have already had the discipline of eleven law-
seeking and law-abiding years, to educate them to
respqet the law when it goes against them.
Of course the enthusiasts are tempted, in face of
abundant other obvious causes for Australasia's prog-
ress during the last decade, to attribute it too largely
to compulsory arbitration; but it would be a blind
opponent indeed who would give that no place what-
ever among the favoring agencies.
Laborers everywhere of course expect that every new
expedient is going to give them much more wealth than
they produce, and they resort to each expedient to the
absurd degree that is already troubling the Australasian
courts. But that, tho one of the greatest of their
troubles, seems sure to remedy itself.
Probably nearly all the excesses are due to trying
to make the courts do too much. But it is far from
proved that they can do nothing. To have virtually
abolished strikes, and made the labor world law-abiding,
is to have done a very great deal, and a great deal
that we in America sorely need. We have already
indulged in a good many futilities by way of voluntary
arbitration, and a few successes, mainly in Massa-
chusetts. But for labor's own sake, we
V2rt¥h<wg9.rica need something stronger. Despite the dem-
agogues who, honestly or dishonestly, make
The Protection of Rights. [§ 322 a
their living by fomenting Mr. Gompers's " fight",
strikes will not be tolerated much longer in America.
The intelligence of the industrial world, and the com-
mon sense of the world in general, is but just organized
against them. But the Citizens' Associations who pro-
pose to have regularity in their transit and supplies,
and freedom from riot, arson and murder; and the
Industrial Associations who propose to have Enterprise
regulate enterprises, are spreading at a rate beside
which the spread of labor organizations was at snail's
pace. Possibly the demagogues, for the sake of hold-
ing their leadership, may fight compulsory arbitration
until, as once in England, strikes may be abolished by
law without arbitration to fall back upon. But apparently
compulsory arbitration will come sooner or later: it
is difficult not to have faith that the habit of seeking
law, and understanding it, and abiding by it, which the
labor world of Australasia is being trained in,* will
ultimately save its arbitration courts from such fatal
excesses as now threaten, and make them an example
that the rest of the wrorld will be glad to follow as fast
as institutions can be adapted to it.
CHAPTER XXIII.
PERSONAL PROPERTY (CONTINUED).
Proved Methods for Diffusing it more Evenly.
The coolie of China, the ryot of India,
|«ir£r>grWS,n the feUah °f Egypt, the peasant of
Russia, are in a condition not very
different from that of virtually all mankind a few-
thousand years ago, and that our own ancestors had
not got very far beyond a thousand years ago. When
we compare them with the present population
of Japan, civilized Europe and civilized America,
we realize that over a large part of the world, pow-
erful agencies have long been at work for the bet-
terment of man's estate. A little thought must con-
vince us too that the betterment has been greater
among the masses of mankind than among the few
at the head. The average man's condition is now
nearer that of the exceptional man, who is forced to
respect his life, liberty and property, than was the con-
dition of the feudal retainer who held all these things
at the mercy of his lord.. In the essentials of a healthy
existence — food, clothing, shelter, sanitary surround-
ings, hospital facilities, education, the average man
to-day is vastly nearer the favored man than he was
not merely thousands of years ago, but centuries ago —
yes, decades ago. Since the middle of the last century,
there have rapidly accumulated figures which prove
that even in that comparatively insignificant period,
the progress is not, as might have been expected, corre-
spondingly insignificant, but very significant indeed.
325
326
The Protection of Rights.
tS 323
The agencies that have thus been distributing the
good things of life, are of course innumerable, and the
study of them is too recent, even could it possibly be
adequate, to reach a very thorough knowledge of them.
But we know some of them wrell enough to enable us
to promote their efficiency.
Before proceeding, however, to such detailed con-
sideration as we can give them, it is wrell worth while
to pay some attention to the general facts which prove
that there are enough agencies whose efficacy has been
proved, to render foolish all headlong confidence in the
untried quack stimulants which are constantly suggested.
But first let us realize that wrhile we would like every-
body to get rich in a generation, there is no way to
bring it about: Nature has settled the matter in her
own way: there is not ability to produce enough.
The annual production of the country averages less
than $250 apiece, and, as we have seen, the accumulated
wealth is but about $1,200 apiece.
324 Diffusion of ^ more general diffusion of wealth, then,
wealth depends on must wait for a more general diffusion of
diffusion of Ability. ability to produce it. As already said,
wealth is Nature's prize to stimulate energy, fore-
thought, temperance and honesty — in a word, Ability.
Yet the man without ability gains much from the
general progress of invention, and General Walker
seems to claim * that he gains it all except a little of
the inventor's share ; but the doctrine is not generally
accepted to that degree. Mr. Atkinson, however, quotes
Bastiat with approval to the effect that "in proportion
to the increased quantity and effectiveness of capital,
the aggregate share of the annual joint product of labor
and capital falling to capital, is increased absolutely, but
diminished relatively. On the other hand, the share
falling to labor is augmented both absolutely and rela-
tively." The laboring man does plainly gain much:
for his cottage to-day contains many comforts that the
home of the rich lacked half a century ago.
♦ "Political Economy", Advanced Course, §§ 326-36.
§ 325]
Personal Property.
327
In 1903 the Massachusetts Bureau of Labor Statistics
issued a bulletin showing that of 45,780 persons in the
state who had retired from business with a competency
for the rest of their lives, 1,076 were laborers. Yet
the world is still divided up among a small proportion
of rich and a large proportion of not rich.
But the proportion is growing more
tend toVri$e?C8 favorable to the poor. When we were dis-
cussing the relations of labor and ability
(pp. 92-3), we took note of Gal ton's generalization that
most men tend to be about average, and that the depart-
ures from average tend to be relatively few. From this
it is obvious that most men's incomes must be about
the average — some $650 a year in America in 1900,
and that those who have more, grow fewer and fewer
as the incomes increase. Such is the condition at
any given time, but there is a vastly wider generaliza-
tion than Galton's, which, with the exception of that
of evolution, is probably the most tremendous gener-
alization yet given to the mind of man. I refer to
Spencer's Law of Equilibration, which includes a
corollary that under evolution, averages have a ten-
dency to rise, and, in their progress, to include the
individuals of the grades originally above them. Under
this principle, if the dots in the supposed graphic
representation suggested in the passage on page 93,
could rise, the lower ones would, according to the law,
rise faster than the upper ones, and the space occupied
would continue to become narrower until in time all
the dots would be concentrated on a line considerably
higher than the original central horizontal line of the
system. This new heavy line would represent all men
having attained equality of ability, and consequently
of fortune, and on a higher plane than any men occu-
pied at the start. No civilization has yet been long
enough to attain such a result, and it is vain to specu-
late whether any civilization ever will be. But the
evolution of each civilization has been toward such a
result, tho it has been reversed when the dissolution
of the civilization set in. If, then, a nation is still
The Protection of RigJits.
in the process of evolution, not yet having entered
upon that of dissolution — if, for instance, the United
States has not, as many fear, lost the preponderance
of capable voters which started her evolution, and has
not come under a government of incapable ones, which
must initiate dissolution —if the country is still progress-
ing, it is inevitable that the lot of average people should
be improving, and that a larger portion of the people
should be included among the average. For at least
the fifty or sixty years for which the statistics are of
account, they show these conditions to have prevailed;
and there is enough general evidence from history, to
indicate them to have prevailed, on the whole, among
civilized peoples, since the dark ages.
326. Diffusion In- Not only is the whole world grow-
creaslng. mg richer, but the wealth is becoming
more evenly divided. The trade-unions, despite their
frightful mistakes, have undoubtedly enabled the
laborer to get more of the benefit of the laws of com-
petition, as we have seen, and they are making him
more of a thinking man — in the last decade, by making
him a great deal more trouble to think about, but at
the expense of being more of a discontented man.
But discontent is a good tiling, rightly used. It is the
parent of effort.
While "rich richer, and poor poorer"
and'poor n'Sofer/'ls has all the authority of a proverb, the
countries'" clvi,ized authority of a proverb is often very poor
authority. This one simply illustrates
how a slick phrase takes hold of people. There is
probably no greater error in economics, and yet
none more generally believed. The facts are over-
whelmingly against it. In the United States wages
have risen an average of sixty-eight per cent, since
i860, and have nearly doubled since 1840. (On re-read-
ing, I find this apparently self-contradictory, but take
the figures at, say, 100, no, and 200, and it will be
found more than workable.) Even as late as 1880
the census gives the yearly average nearly $100 below
that of 1890 — $346.91 as against $444.83. The com-
§327]
Personal Property.
329
parison cannot be relied on as exact, but the correct-
ness of its general showing is certain.
Prices have not risen with wages. They have gone
down some eight per cent, since i860. Leaving out
luxuries, Professor Mayo-Smith * says that the ^por-
tion of family expenses directly affected by the price
of commodities was as 94.4 in 1891 compared with 100
in 1880 and of two hundred commodities in most
general use, Mr. W. M. Grosvenor has computed that
a dollar in 1885 would buy a quarter more than a dol-
lar would buy in i860: and the Maine Bureau of In-
dustrial Statistics reported that in 1887 a dollar would
buy as much of the mechanic's usual food-supply as
$1.20 would in '82, or $1.30 in '77. This was, of course,
probably due to cheapened transportation from Western
wheat-fields and cattle-ranches.
In the early years of the twentieth century, for which
statistics are not yet available, strikes have made a
great increase in nominal wages, and a great increase in
idleness. Both the wages and the idleness have had
to be paid for in a consequent increase of prices, but
this is obviously temporary. Later it will be consid-
ered more in detail.
The hours of labor average ten now; in i860 they
averaged eleven; and in 1840 nearly eleven and a half.
The proof of all these paradoxes up to 1894, is given
in one of the most elaborate economic investigations
ever made. It was carried on in 1892 and 1893 by a
Committee of the Senate, whose reports of facts fill
half a dozen large volumes. This report does not seem
to need any backing up: for it is a mass of tables
of carefully gathered facts; but it happens to be thor-
oughly backed by other investigations here and in
other countries.
Some of the others here are that wholesale clothing
dealers report a great increase in average size and
♦ In "Statistics and Economics", to which important work
I am indebted for several other points and facts in this chapter,
I am glad to find some of my own previous conclusions rein-
forced by his figures.
330
The Protection of Rights.
[§3*7
quality of clothes demanded, which shows that the
people are better fed and exercised and better off. To
come to reports of state authorities, in Massachusetts
from '50 to '80, agricultural wages advanced fifty-six
per cent.; from '6o to '83, general wages advanced
over twenty-eight per cent., and from '6o to '85, those
of mechanics twenty-five per cent.* In Connecticut
from '60 to'87, men's wages advanced in the principal
factories forty-three per cent., and women's fifty-seven,
while their dry goods and carpets cost them more than
a third less, but provisions about a tenth more. In
i860, a laborer on the Erie Canal got fifteen cents a
cubic yard for shoveling dirt; in 1889, he got fifty
cents. From 1831 to 1880, wages of cotton-spinners in
the United States increased eighty per cent., while the
price of cotton cloth decreased sixty per cent., and
the average consumption per head doubled. More-
over, pretty much everywhere the proportion of opera-
tives in the comparatively safe and agreeable and high-
paid processes, has greatly advanced.
About 1890, a Massachusetts machinist said, pub-
licly, in speaking of the state of affairs in 1842:
"The wages of a machinist in shop were Si to $1.25 a day:
one nabob of a pattern-maker received the great sum of $1.50.
They went to work at five o'clock in the morning, and worked
till 7:30 at night, with an hour for breakfast and three-quarters
for dinner. It was several years before we obtained eleven
hours a day. It has now been ten hours a day for twenty-
five years or more, and we grumble at that, tho we get more
than twice the wages we did forty years ago ; and we are hoping
to get the same or higher pay for working eight hours. I know
the condition of the machinist is better than it was when I
first joined the guild; he has better pay, better houses, better
education, better living. For my part.'l don't want any more
of the good old times. The present time is the best we have
ever had, tho I hope no the best we shall ever see." (Quoted
in Wells.)
* Most of the facts in this and the next two paragraphs are
taken from "Recent Economic Changes" by the late David A.
Wells — a book that no one interested in the general welfare
can afford to leave unread.
§327]
Personal Property.
33i
In Massachusetts for the period 1829-31 the pro-
bated estates under $5,000 were 85.6 per cent, of the
whole, in the period 1889-91 they had fallen to 69.5
of the whole, while those over $50,000 had risen from
13.4 per cent, of the whole to 27 per cent, of the whole.
In Great Britain from 1840 to 1890, the number of
estates subject to succession tax increased twice as fast
as population, while the average amount per estate
had not increased at all. In an article in the Royal
Statistical Society's Journal for June, 1895, Mr. Bow-
ley gave figures indicating that "money wages in-
creased 40 per cent, from i860 to 1891, and considering
the increased purchasing power of money, real wages in-
creased 92 per cent. The eminent English authority,
Mr. Giffen,* says that during the last half of the nine-
teenth century (that is, beginning earlier and continu-
ing later than Mr. Bowley's figures), the average of
wages in England nearly doubled, while the working
hours have decreased one-fifth. When he first stated
this, it was so generally doubted that he repeated his
investigations with the same result. f Mr. Mulhall
♦ Giffen, Robert: Progress of the Working Classes in the
Last Half-century.
fSir Lowthian Bell, Mr. George Lord and Mr. James Caird
have given facts in support of Mr. Giffen. (Wells.)
Mr. W. H. Mallock, after an elaborate investigation in the
British Census reports, the details of which are given in his
" Classes and Masses", states the following conclusions: " People
who are in want of the bare necessities of life ... if, whilst
their own poverty remains the same, the riches of other classes
increase, do, in a certain sense, become worse off relatively. . . .
But this unfortunate class . . . has grown less and less numer-
ous relatively to the entire population." This class "is not in
any sense a sign or product of our modern industrial system.
A similar class existed before that system ... and that system
has relatively reduced and not increased its numbers . . . and
the real problem ... is not how to interfere with the existing
economic tendencies, but how ... to bring the residuum under
their influence." "The poor" (except those who have nothing
at all) "are getting richer; the rich, on an average, getting
poorer . . . and of all classes in the community, the middle
class is growing the fastest." Since 1830 the population has
Increased "in the proportion of 27 to 35; the increase of the
332
The Protection of Rights.
said that in England a laborer who got two hundred
pence for a given amount of work, from 1 821 to 1848,
got two hundred and eighty-five pence for the same
work from 1880-83, while in the later period one hun-
dred and seventeen pence bought as much grain as one
hundred and forty-two did in the earlier period. In
regard to beef, the showing was still more favorable.
This cheap food was America's gift to the mother
country. In 181 5 there were 100,000 paupers in Lon-
don. At the rate of increase of population in 1875,
there should have been 300,000. There actually were
less than 100,000.
section in question [the middle class] was in the proportion of
27 to 84." "The middle class has increased numerically in
the proportion of 3 to 10; the rich class has increased only in
the proportion of 3 to 8."
"From 1850 to 1881 the working classes have increased by
about 15 per cent., whilst the middle classes have increased by
more than 300 per cent." "The incomes of those with less
than £600 have increased on the average something like 4
per cent., . . . while the incomes of ninetecn-twenticths " of
those who have over £1,000 a year "have decreased on an
average over 7 per cent." "Landed incomes have not in-
creased, but decreased by 14 per cent, in England, and by 13
per cent, in Scotland." The total income ofthe millionaires,
if divided among the population in equal shares, would
yield each inhabitant a dividend of one shilling a month".
3 4 The working classes have increased in wealth far faster than
any other class in the community." "In 1880 the income of
the working classes was (all deductions for the increase of popu-
lation being made) more than equal to the income of all classes
in 1850." In 1 88 1 there were seven thousand windowless
cabins occupied by families in Scotland; by 1891, these had
"almost disappeared ; the one-roomed dwellings with windows
have decreased 25 per cent.; the two-roomed dwellings have
increased by 8 per cent., and the three-roomed and four-roomed
dwellings by 17 per cent.". "The smaller businesses, instead
of being crushed out, are increasing more rapidly than the
population." * ' There is an increase of 1 5 per cent, in the school-
teachers; ... of 21 per cent, in the butchers, which showr
the general increase of meat consumption; ... of 26 per cent,
in the doctors; and ... of 53 per cent, in the persons who
professionally minister to amusement." "The computed
capital of the Post Office Savings Banks ... in ten years has
very nearly doubled itself."
§327al
Personal Property.
333
In France from '53 to '83 wages advanced some
sixty per cent., and in the principal occupations of
women (outside of domestic service), they nearly
doubled.
In Germany, labor statistics are not as easily within
our reach, but income-tax statistics prove the same
thing. In Prussia, from 1876 to 1888, Dr. Soetbeer
(quoted by Professor Mayo-Smith) finds that the pro-
portion of income-tax payers with their families, to
the whole population, had increased about 22 per
cent., that is from 2.3 per cent, of the population
to 2.8 per cent., and that the classes which had in-
creased at the most rapid rate were those with incomes
of over $500. And altho the most rapid increase of all
had been in the class with incomes of over $25,000, the
average incomes of that class had decreased, thus show-
ing both that more people were getting rich, and that
the rich were not getting richer.
One fact general over all highly civilized countries
shows that the details we have been going over, must,
on the whole, be correct. It is that the consumption
of food has been increasing faster than population.
This cannot mean that the rich eat and drink more:
for they ate and drank all they wanted before: so it
must prove that the proportion of those who can eat
and drink freely is increasing.
Most of the foregoing discussion of wages and prices
was published in 1901. Almost immediately there-
after some strange conditions began to show themselves
in the United States and to increase until at this writing,
in the spring of 1907, they seem to have passed their
culmination.
The first of them was a run-up in prices of com-
modities, following the general inflation of industrial
properties through trust promotions. This inflation
327 (a). Pendulum collapsed in 1903, but cotemporaneous with
twinaa' backward it there had been a twofold inflation of
in 1 03. wages — one resulting from the inflation of
prices, the other from the greatest trade-union activity
ever known. The unions had discovered a new panacea
334
The Protection of Rights.
[§ 327fl
in the closely organized strike, and proceeded to apply
it as vigorously as silver inflation or a protective tariff
or any other panacea had ever been applied. Much
of the advance of wages from this cause was of course
purely nominal — it was obtained through the expensive
idleness of the strikes, and followed by much more idle-
ness or unemployment, because people wrould not or
could not pay the scale of wages reached. But the
country being at peace, there being no money-heresies
in the air, the tornado impending from the tariff being
as yet no bigger than a man's hand, the crops being
good, and Europe wanting them; gold production being
large; the quadrennial business disturbance of the
presidential election being more nearly settled by a
foregone conclusion than usual — all these influences
made the period one of prosperity so great as to encour-
age the prosecution of the enterprises which had been
held up by the high prices of labor. This was espe-
cially true of house-building, and the various forms
of engineering construction. The accumulation of these
undertakings lias made an exceptional demand, for the
time being, until at last most of the labor thrust into
idleness by the new prices, has been set to work.
When this dammed-up rush of new enterprises passes,
and San Francisco is rebuilt, probably there will be a
counter-revolution in wages, as, in fact, there has
already been in some trades where there has been no
previously dammed-up rush of activity, and, more espe-
cially perhaps, where the employers have at last met
organization with organization. But all these excep-
tional disturbances may in some particulars make
the preceding figures for the rise of wages and fall of
prices during the preceding half century, look insig-
nificant for the moment. Yet in considering whether
they can still be accepted as conclusive indications
of the advance of the general welfare, the exceptional
and probably temporary character of the remarkable
fluctuations of the past five years (1 901 -1906) should
be carefully borne in mind.
And yet in spite of them, the United States Labor
§3*7 <*]
Personal Property.
335
Bureau report for 1906 shows that the average wage-
earner is working shorter hours than ever before, that
he is receiving more pay for the short-hour week than
he formerly received for the long-hour week, and that
the increase in his average wage has been so great
that its purchasing power has risen, notwithstanding
the increase in prices of many commodities.
From 1894 to 1905 the average wage per hour in-
creased 21.5 per cent., while the average hours worked
per week decreased 3.9 per cent. The average wage-
earner, working shorter hours, earns 12.9 per cent, more
per week than in 1890.
The average price of food, weighted according to
the average family consumption in the families of 2,567
workingmen, increased 9.8 per cent, above 1890. Not-
withstanding this increase, the average wage hour
would purchase in 1895 8.1 per cent, more food than
in 1890. Still more important has been the increase
in the number employed, amounting to 42 per cent,
over 1894 and to 40.9 per cent, over 1890. The com-
bined effect of the increase in the average wage and
in the number employed, was to increase the total
amount paid in wages per week by 65.7 per cent, above
1894 and 59.1 per cent, above 1890.
The total cost of living shows a larger increase in the
purchasing power of an hour's wage than is shown by
the price of food alone, for while there has been a gen-
eral advance in commodity prices, the average cost of
living has not advanced in proportion to the cost of
foods.
Manufacturing establishments, especially the larger
concerns, have been able to introduce economies that
have to some degree offset the greater cost of labor
and materials. One of the most important factors in
moderating the advance in commodity prices gener-
ally has been the decline in the cost of transportation —
a cost that enters into the selling price of practically
every commodity. The average freight charge per
ton per mile for 1905, as reported by the Interstate
Commerce Commission, shows a decrease of 18.6 per
33<*
The Protection of Rights.
[§ 3«7 a
cent, as compared with 1 890. The figures for 1906, when
put in shape, will show a still further reduction.
This rapid decline in the average cost of transpor-
tation has been made possible by the expenditure of
hundreds of millions of dollars for the betterment of
tracks and road-beds, the elimination of grades and
curves, and the purchase of more powerful engines and
larger cars. This work will continue on an unpre-
cedented scale for some years to come if it is not inter-
fered with by radical legislation. But the threat of it
is already making trouble. Yet the roads in trunk-line
territory alone planned for the expenditure of not less
than $400,000,000 in 1906 and 1907, and all over the
South existing lines are being improved and extended.
Dun's tables show that the cost of living per capita
in i860, before the civil war, was $16.87 niore than in
1905. For the sixteen years 1880 to 1895, inclusive,
the average yearly cost was $101.65. For the ten years
1896 to 1905, inclusive, the average was $81.52, $20.13
less than for the earlier period.
The preceding discussion has contained
dllt,o!i fnToulI6' many statements of the decrease of hours
of labor, accompanied by rise in wages.
It is inevitable, then, that the production per hour has
increased. This is due to improved management,
labor-saving machinery, and increase in the ability
of the laborers. This latter has been both a cause and
an effect: better wages and better conditions of living
increase intelligence and working power. Of course a
man working but one hour a day wTill produce very
little, and a man working twenty-four hours a day
will soon produce nothing. In what number of hours,
day by day, will he produce most? Experience seems
to indicate that in the general run of work, the happy
medium is about eight. And strange to say, this seems
to be the experience when the wrork is merely tending
a machine: it will be so much better tended and kept
in so much better order.
The question of the eight-hour day is an exceedingly
§3*7fe]
Personal Property.
337
interesting one, and can be studied to good advantage
in Mr. John Rae's book " Eight Hours for Work".
There is no space for its detailed discussion here. Only
Mr. Rae's general conclusions can be given. He sup-
ports them with a great array of facts.
Of course there is a great difference in trades. There
are virtually none in which a reduction from the old
working day of twelve or even fourteen hours, has not
been attended with increased production; and of those
trades where a farther reduction from ten hours to
eight has been considered worth trying, the experiment
has been successful in the vast majority of cases.
The vigor of the operatives, their prompt attendance,
their care and attention in their work, their care of
their machinery, their speed in little repairs and in
shiftings, have not only generally kept up the output,
but in a very large proportion of cases, have actually
increased it.
The men have lost much less time from illness, and
been put to much less expense for medicine, special
diet and physicians' attendance. They have spent less
for drink to overcome or solace their fatigue, and of
course have suffered less from the consequences of drink.
As a result, crime has fallen off.
They have spent their increased leisure better than
they did their scant leisure. Gardening, gymnastics,
outdoor sports in their season, and reading and attend-
ance at schools and lectures in the indoor season, have
increased enormously; and with them of course, book
clubs, reading-rooms and lyceums. All this has in-
creased intelligence, which has increased production.
It is not to be confused with the misuse of sudden
comparative wealth, which is spoken of elsewhere.
The old fallacy that "the profit is in the last hour"
was suspected before the shortening of hours was tried,
and when it was examined into, statistics proved that
the last hour, so far from being the most profitable,
was the hour in which occurred most of the expensive
accidents to machinery, of the spoiling of material,
and of the injuries to laborers, not to speak of most
33»
The Protection of Rights. 1 [§ 327 b
of the expense of lighting, and a greater proportionate
expense of heating in the colder hours of morning and
evening.
Workmen have been increasingly willing to pay for
shorter hours through a reduction of wages, but the
rule has been that even where production fell off before
things were adapted to the new conditions (which it
by no means always did), as soon as the adaptations
were effected, rising production increased wages until
in time they have in many cases, probably in most,
become higher than before the reduction of hours.
Foremen and the enterprisers themselves have
abundantly testified that — perhaps most important of
all — their own efficiency and the ease and effectiveness
of handling their men, have benefited as much as the
efficiency of the men.
One good result expected from the change has not
been realized, but that very fact is a virtual demon-
stration that the change has not diminished produc-
tion. It was expected by many that the hours taken
from production would have to be restored by taking
in a corresponding number of the unemployed. Many
computations were published which proved to the sat-
isfaction of those who made them, that unemployment
of the willing would virtually cease. The expectation —
unfortunately from one standpoint — has not been
realized; but — fortunately for the proof that reducing
hours has not reduced production — the proportion of
the unemployed has remained about as before.
The skeptical reader is urged to study the facts on
which all these generalizations rest. Mr. Rae speaks of
a book on the subject by Mr. Sidney Webb and Mr.
Horace Cox. I have not considered it necessary to
consult it, as it is said, on the whole, to support Mr. Rae.
He also quotes an opinion of Mr. Jevons that the
reduced hours are simply a result of the increased
prosperity of the working classes — that they work less
time because they can afford to. This factor must
undoubtedly enter into the case, but one reason they
can afford to work fewer hours is that they can do
§3*8]
Personal Property.
339
as much or more in the fewer hours, and their increased
prosperity enters but very indirectly into their better
care of their machinery and their own persons, and the
improved use they make of their leisure time.
I find a report worth mentioning, tho I am unable to
give the authority, that among the cigarmakers 51 per
cent, died of tuberculosis prior to the inauguration of
the eight-hour work-day. Seventeen years after the
eight-hour day took effect this percentage had been
reduced to 23 per cent.
An instance much later than those given by Mr. Rae
has just come from the Austrian coal and lignite mines.
In 1902, the daily working hours there were reduced
from twelve to nine. In 1904, the average production
per man per shift was higher than in 1901, by 6.6 per
cent, in the coal mines, and by 9.9 per cent, in the lig-
nite mines.
328. Increase in ^ mav we^ ^e asked if » until the recent
wagw and decrease brief and exceptional period in America,
in other prices come , . \ , « 1
largely from prices the world over not having risen, and
Capital's share, still wages having risen, and the laborers
having worked less time, where the increase has come
from. Much of it has come out of Capital's share of
product. The census reports of 1880 to 1890 show that
during the decade, the amount of wages paid in the
country increased 131 per cent., while capital increased
but 121 per cent., and value of product but 69 per cent.
In England Sir Robert Giffen computes that from 1843
to 1882 capital increased no per cent., and wages 145
per cent. Fifty years ago, yes, thirty years ago, capi-
tal in New York itself brought seven per cent., now it
hardly brings four. In many of the Western states, it
brought ten or fifteen, where now it brings six or seven.
A similar reduction has taken place through the civilized
world. This falling off of from a third to a half in
capital's share, contributes largely to the increase in
wages. True, the exceptional business activity in 1 904-6
has increased the demand for capital, but this cannot be
considered permanent : the very cause of it is increasing
340
The Protection of Rights.
[§328
capital at a rate that must lower interest as soon as,
in the rhythmic course of things, the wave of activity
passes.
329 and from La- Ability benefits by reduction of the
bor's increased interest rate, and in it must be included
Ab,llt*' the increased ability of the laborers. Their
increased wages have come from increased productive
power, in ingenuity, carefulness and steadiness. The
enterprisers have been bidding for improved labor as
fast as labor would improve itself; and the best enter-
prisers* bid highest. Of course the less they must pay
for the use of capital, the higher they can bid.
But of course a great deal of the improvement is
due to the abilitv of the enterprisers and inventors.
Processes are greatly improved, and so are transpor-
tation and organization. In 1890, transportation alone
cost, per unit, in America but about a third of what
it did even so lately as 1860, and, moreover, forests and
mines and productive arable land have been opened
much faster than population has increased. Regarding
the share the enterpriser gets, Professor Mayo-Smith
thus summed up the evidence of the statistics : 44 There is
scarcely any doubt that it is falling. Production on a
large scale, enormous investments of fixed capital, and
increased competition, compel the entrepreneur to put
up with a smaller reward." Since 1873 "the laborer
has conserved or improved his position by the main-
tenance of, or even advance in, wages; the landowner
has lost by falling rents; interest has fallen; and profits
have been reduced to a narrower margin Later
he says: "This progress has been due primarily to the
abundance of capital, which, on the whole, works for
the benefit of the laboring classes in two directions —
by competing for labor-force and thus raising wages,
and by cheapening products and thus making wages
go further."
The trade-unions have helped raise wages so far
as they have increased the laborer's ability, and that
§ 330] Personal Property.
34i
is very far. But so far as they have interfered with
the Right to Work, and encouraged the various forms
of scamping, of course they have diminished produc-
tion, and, inevitably, retarded the advance of wages:
for wages have got to come out of production.
Probably the men who get their living out of the
unions, would insist that the unions had secured for
Labor a large portion of product to which it was justly
entitled, and which, before the unions, it did not get;
and on the other hand, probably many men who have
suffered from the unions' mistakes, would say the unions
had wasted more than they had secured. Both ex-
tremes would be wrong. The unions have unquestion-
ably done something, tho the decrease of interest on
capital, and the increase of ability in inventors, enter-
prisers and the laborers themselves, has plainly done
so very much that it is absurd to claim that the unions
have done the lion's share. Moreover, when we see
that the establishments that make most money usually .
pay the highest wages, it becomes plain that the com-
petition of enterprisers for the best labor, must, inde-
pendently of the unions' influence, have brought wages
nearly, if not quite, as high as the enterprisers can
afford to pay.
Certainly the evidence we have been going over,
proves that there is some better way to diffuse the
good things of this life, than to reduce their production
by communism, socialism or scamping.
We saw the bad effects of scamped
?u3$i<!naSf Hwestyf" work on the laborers themselves (228 a-c),
tho they seldom suspect it. The dis-
appearance of scamped work alone would make an
enormous difference in what the wages would buy.
Moreover, the mistakes of the unions cannot forever
overcome the economic laws which entitle an honest
workman to better wages than a dishonest one, just
as an honest merchant gets better credit than a dis-
honest one. People are occasionally much impressed
when a dishonest man succeeds, and think dishonesty
apt to succeed; but when an honest man succeeds, it
342
Tlic Protection of Rights.
is so much a matter of course that people do not notice
it. There is much reasoning of that kind: people are
often so much impressed by what is unusual, and so
little impressed by what is usual, that they constantly
overrate the frequency of the unusual, and underrate
the frequency of the usual — the very fact that a thing
is rare, makes them believe that it is frequent, and
vice versa. In spite, then, of an occasional rich rascal,
there seems reasonable ground for belief that most men
who get rich, get rich honestly: the criminal classes are
certainly not the rich ones.
330 (a), which The cheapness of goods is very much
makes everybody's affected by the cheapness of getting them
money go farther, tQ ^ CQnsumer> and that jg affected
by the honesty of all dealers who handle them, as well
as of everybody engaged in transportation — cartmen,
railroad people and steamboat people. And strange
as it may at first appear, the cheapness of goods is
affected by the honesty of people who never see
them at all. The rates at which the farmers and miners
and manufacturers can produce, and the railroads carry,
and the merchants exchange, are all affected by the
cheapness with which their banking business can be
done, and the stocks of the companies dealt in; and
that cheapness is of course affected by the honesty of
the bankers and stock-brokers and their employees.
In the great business of Wall Street, in many classes of
transactions easy to recollect, the brokers rely on each
other's mere word for millions, and so the great expense
of time and money for written contracts is saved. In
banks, as a matter of fact, the signatures of checks are
not examined very much : to examine them closely, the
expense for officials would have to be doubled. Obvi-
ously, then, a bank or a stock exchange could not have
been run as cheaply as it is now, in the days of thieving
Sparta, or even in those of Shylock; in fact, in less
honest times, modern industries simply could not have
been run at all: with less honesty, the enormous com-
plexity and rapidity of modern exchange was simply
impossible. Even outside the producing, exchanging
§33i]
Personal Property.
343
and banking world, the cheapness of goods is affected
by everybody's honesty: the producers, exchangers and
bankers have got to depend on engineers and architects,
lawyers and doctors, and if those men must be paid for
dishonest work in addition to real work, the expense of
it must find its way back to the commodities and
services that everybody uses. In fact, the whole
working world is so bound together that where any part
of it goes wrong, all the rest has got to share the expense.
There is still another portion of the community whose
honesty affects the price of everything that everybody
uses. The honesty of the government is important to us
llnei?' in*ffoCwn- eveiTw^ere- Every taxpayer must not
meat, only pay his own direct share of all official
thievery and carelessness, but even those who do not
realize that they are taxpayers, must pay in rent, and in
what are called indirect taxes, which are levied on many
goods in the hands of manufacturers, importers and
wholesalers and added to the price when they reach the
retailer.
331 and from Next to increased honesty, the most
creating and 5uo- noticeable agency in diffusing wealth is
plying new wants, increased variety of production. Tele-
phones, bicycles, automobiles, electric lighting and
electric railways, and the hosts of other new things mean
constant new demand for labor, resulting higher wages,
and at the same time, new facilities of exchange or
production, with resulting variety and cheapness of
product. Fortunately, man is a creature — the only
one we know — of constantly increasing wants. Those
who have money to pay out are always more ready to
pay it for labor on new things, than for superfluous or
wasted labor on old ones : so there is no need of indus-
trial suicide by scamping.
This labor for the* new things of course comes out of
more wearing and disagreeable pursuits (327, end of note
from Mallock).* But as there would be no such pursuits
♦According to the United States census, from 1880 to 1890,
those in the laborious pursuits of agriculture and the laborious
and dangerous ones of mining- and fisheries, had decreased from
344
The Protection of Rights.
unless the demand for them were very strong, they must
have been kept going when labor has left them : that has
been possible by labor-saving machinery. Of course,
331 (a) mainly as M)0r leaves the disagreeable pursuits for
through labor- more attractive ones, the deserted pursuits
§auing machinery. ca]{ douWy for iabor-saving machinery, and
are doubly ready to reward the inventor. Farming, for
instance, tho healthful, is lonely and laborious. Within
a generation or two, inventors have given the farm
machinery that has released a large part of the farm-
hand labor and sent it into the towns. The labor thus
released lias done more than merely find employment
without slowing up the earlier kinds of labor. It has
made so many new things that it has kept the other
mechanics on the jump to make enough old ones to
exchange for them. That is to say, the desire for new
things — telephones, bicycles, automobiles, mechanical
piano-players, talking-machines, has made people work
all the harder to buy them.
But machinery often releases labor, and still increases
supply. The world easily gets fitted to the increase of
supply, because competition to sell the increased supply
lowers prices so much that people soon use more goods
of the same kind, or save enough money because of their
lowered price, to use more goods of other kinds.
But, it may be asked : How does all this "make work "
and do away with reason for scamping? Is it not as
broad as it is long — new things call for labor, labor-sav-
ing machinery releases it, and the amount of employment
is just the same as before? The answer is that in most
cases, labor-saving machinery cheapens goods so that
several people can buy, where one could before; and
this increases demand for the old goods, so that makers
of them soon want back some of their old laborers whom
46 per cent, of the whole number of persons laboring, to 39.6
per cent. In domestic and personal service, there had been a
decrease from 20.1 to 19.2 per cent. While in the more desirable
pursuits, professional service had increased from 3.5 per cent,
to 4.2; in trade and transportation, from 10.7 to 14.6; and
in manufacturing and mechanical industries, from 19.6 to 22.4.
§33^1
Personal Property.
345
machinery discharged, and often more laborers still.
001/1.1 Yet while the introduction of labor-
33l (a), which, .
tho of some harm saving machinery has always been a
attheout8*t, blessing to workmen so far as they were
consumers, in the early days of "the great in-
dustry" introduced by steam, it threw so many out
of employment that they had very little to consume.
Steam-power did not directly lead to the change.
More directly it was due to inventions like Arkwright's
loom, Whitney's cotton-gin, and Stephenson's locomo-
tive. But they could come only after other men of great
ability had provided the steam-power. But however
the great industry came, it suddenly produced so many
more goods with so much less labor, that great numbers
of people were thrown out of employment until the world
got fitted to the new state of affairs. Not only was time
needed for invention to supply new occupations, but
there was scant communication and travel to get labor-
ers new places: so the distress was very great. Many
people thought that inventions were a curse ; and work-
men, and even sentimental philanthropists, often de-
stroyed machinery.
The effect of these circumstances was that for a time
the poor were getting poorer from lack of employment,
and the rich richer from the profits of the machines.
This started the cry of "the poor poorer, and the rich
richer" which became one of the stock expressions of
Marx, Lassalle and their school, and is echoed, despite
• all new facts, to this day.
The old facts were even so bad that Marx promulgated
an alleged "bronze" (generally quoted as "iron") law,
that wages will always be the lowest on which wage-
earners can subsist — a law often quoted by agitators
to-day, and approved by audiences with money in the
savings-banks.
But in the modern world, increased
domof wynli*'' communication and travel enable labor to
circulate freely in search of new employ-
ment when machinery disturbs old employment, and
346
The Protection of Rights.
[§ 33i*
workmen are not now opposed to machinery as generally
or as bitterly as they once were. Many of them more or
less clearly realize three things, especially the first — that
a cheapening of most things increases demand so much
that often as many producers are needed with machines
as without them ; second, that even if that does not turn
out to be the case, the discharged people are apt to
get work in making some new product or cheapening
some old one ; and third (tho it is realized more faintly
than the rest) that the laborers themselves enjoy the
cheapening of product, just as the rest of the com-
munity does.
So much for what the general progress of the world,
outside of the man himself, can do for him. But even
now, things do not always adjust themselves promptly
enough to save the poor man the choice between getting
nothing at all, and getting half what he produces. His
only protection against being forced to take what he
can get, is not to be poor; and he can help being poor
by putting away something whenever he
weaithAh7mseifCures can sPare Then he or his union can
L . sav to anvbodv who wants to hire: "If
332 (a), by fore- - , - . - . „
han.ieJn^s vou won t give what we really produce,
apainst hard ^ WQrk at ^ yQU
any chance to make profits/' Yet a man
would better take a little less in bad times, than go
unemployed, especially as, in one sense, he cannot pro-
duce as much in bad times as in good. Of course a
cloth-mill can run out just as many yards of cloth in
bad times as in good, but it will not have the chance
to run out as many, because most things will not sell
for as much, and some will not sell at all.
At first it looks as if it should make no difference to
a man if his own product falls in price when other things
332 (b). in which fall too» an(* that if ne only gets one dollar
tfe^tend toCkee!" Wl1Cre lie USCC^ to £et tWO, but Can buy
tip? while those of twice as much with that dollar, he is just
luxuries fall. as weU Qfi Rut when prices fall in bad
times, they do not all fall together. When people have
§ 332 c]
Personal Property.
347
to economize, they cut off the things they can easiest
do without : so prices of those things fall ; but the prices
of things a man must have, keep up pretty well, and for
them he must pay two dollars where he paid two before,
even if he gets but one dollar for the sort of things he
produces himself. Now those things that a man can
do without, are a larger portion of what is produced,
than generally realized. Civilization consists almost en-
tirely in things (and thoughts) that a man can do with-
out. The savage has all that a man must have. Even
take tobacco and whiskey — not that they are civiliza-
tion, but they are things that people can do without,
and yet they cost the country more than bread and
meat put together. So, plainly, there must be other
things that people give up easier than tobacco and
alcohol. For instance, people can generally be com-
fortable for a time without new clothes or new furniture,
or repairing and painting, or giving parties.
When business is slow, as it is in luxuries in hard
times, people compete for customers by lowering prices,
and when times are good, people want so many more
things, that the supply is apt to be a little short, and
they compete for them by bidding higher prices.
And now we come to the great and terrible question:
What can he who has not the ability to produce much.,
do for himself?
332 (o. Bu cum- The first step toward a reasonable answer
oating Ability. js to realize that the question is partly
one between him and the God who made him as he is;
and it is also partly a question between him and him-
self: for unless a man is an idiot, he can do something
to cultivate ability. Ability consists largely in knowl-
edge, foresight, self-control and energy — a man can edu-
cate himself, think ahead, fight laziness, and control
all desires that tempt him to seek a small present enjoy-
ment at the expense of a greater future one. All this
covers taking care of his health : for if he educates him-
self in the most necessary knowledge — that of his own
body, and does not sacrifice the future to the tempta-
348 The Protection of Rights. [§ 332 c
tions of the present, and is not lazy, he does take care
of his health. There is not much danger from over-
work; but there is much danger from overworry under
the name of overwork.
333. Poverty sei- As a matter of fact, it is next to im-
dom blameless. possible to find a man suffering from
poverty, if he is educated, forehanded, self-denying
and energetic. It is only in cases of very exceptional
misfortune, that distressful poverty is not a man's own
fault.
But people want something more than to be merely
above distressful poverty. And there is hope of a
man born poor, cultivating so much ability that he can
make himself very comfortable indeed. Most of the
rich men were born poor.* Of course it is
men* bor? poor! ^arc^ to te^ ^10W mucn °f their ability was
born in them, and how much cultivated,
but it is certain that more of their spare time went into
studying their work instead of playing, and that more
of their early sixpences went into the savings-bank
instead of the beer-pot than was the case with most of
the men who did not rise. This is by no means counsel-
ing that nobody should have any recreation while he is
voung and poor. But the best recreations
dep5Jeteeait^ cost m^h money; books, music,
swims, and walks in the parks and fields
and under the stars, are within everybody's reach, if
they only would cultivate a taste for them. One should
consider not his youth alone, but his whole life — how he
will have the best time by and large. In youth, the
* Mr. Walker (101 and 227, notes) found that in '78 there were
one hundred and seventy-six men conducting ten leading kinds
of manufacture in Worcester, and only fifteen of them were the
sons of manufacturers, and all but the fifteen began as journey-
men. (Condensed from Wells.)
The author once got a city audience of workmen to announce
what proportion of their employers began as journeymen.
Nearly all did Tho such facts are too generally known to
require proof, they are not taken into account by those who
argue "rich richer, and poor poorer".
§336] Personal Property.
349
wiser men have invested work and study and savings
which have brought them compound interest later ; while
those who have indulged themselves unduly while young,
had no rewards to reap later, unless sickness and poverty
are rewards.
336. Wise phiian- Nothing can answer the purpose of a
thropy necessary more general diffusion of ability and
to civilization. honesty, not even a more general diffusion
of human charity: because Nature's law is that a man,
to accomplish anything, must take care of himself.
But charity can help if it takes the right directions,
while it must hinder if it takes the wrong ones. The
wrong ones are indiscriminate giving to those who
would consume without producing, as the Communists
and Socialists propose. The right ones are giving in
directions that tend to develop ability. The plainest
of those is educating the ignorant, and relieving the
sick and hungry, especially such as are apt to try to
produce for themselves when they are well enough.
The sick and hungry who are not able to produce for
themselves — the constitutional paupers, it seems settled
that somebody else should take care of when their
relatives cannot. It is often asked : Why should worth-
less people be taken care of at all? Would it not be
better to let them die and get rid of them? That is
Nature's way, and is it not better to follow Nature?
That might seem the common sense of it, but when
Nature evolved human intelligence and human sym-
pathies, she started a way with the unfortunates and
incapables different from her old way of letting them
starve; and, somehow, all the nations, like India and
China, that do let their worthless people die, do not
succeed in being worth very much themselves; while
nations like Italy and Spain that go to the opposite
extreme, and give freely to beggars who could make
a living if they would, do not come out so very much
better. With them it is not so much a question of
helping the unfortunate and incapable, as of encourag-
ing the lazy. Such countries, of course, are full of
beggars, and do not get on as well as the countries
The Protection of Rights.
n 336
where everybody has to produce what he lives on if
he is able to.
336 (a), it should After finding objections against all the
continue on pre*- revolutionary social changes that have
ent nnea. hecn proposed to help the poor, there seems
nothing to do but what we are doing now, only doing it
as much better as we can : civilization has been working
at the problem some thousands of years, and must have
learned something. Apparently all we can do for the
lowest type of man is to wash him, doctor him, massage
him, feed him, exercise him, make as much of a man
of him as we can, educate him without devoting as
much time to the most artificial spelling in the world
as to some decent handicraft, and then turn him loose,
if he is fit to turn loose, to be farther strengthened by
the discipline of the world.
As to the higher type of unemployed, the deserving
and capable, there are seldom nearly as many of them
as sympathetic people generally suppose. Most of the
unemployed do not want to be employed. The "great
problem of the unemployed" is generally only one form of
the great problem of the useless and incapable, and with
the improved adjustments of industry, it is becoming
more and more so every day, or would be if strikes were
restricted to reasonable cases. Yet there constantly are
deserving men whom the shifts and accidents of trade
are throwing out of employment. The effort should
be to tide them over, of course, but (more effective
still, tho, like all reform, slow) to educate them so that
they will more often anticipate the shifts and accidents
of trade. But not everything can be done by educa-
tion. There are often highly educated doctors, lawyers,
engineers, architects with nothing to do, yet education
docs help men: the educated generally have more fore-
thought than men less fortunately brought up, and so
are apt to have something laid up for a rainy day. For
all classes of those who have nothing laid up — who if
they ever had anything, have exhausted it, the Charity
Organization Societies and Labor Bureaus are doing
§ 336 Personal Property.
excellent work — better than any government ever did
or is apt to do.
We cannot remedy at once all the defects that the
wisdom of the whole world has vainly attacked for a
good many thousand years. But we cannot afford to
throw over all it has succeeded in doing, in favor of
imaginative untried schemes, especially if they do not
hold together any better than those we have already
examined.
Of course the ideal is a philanthropy
(on "thne1* entire*y spontaneous, but there is one con-
thatcaLot^orh. dition where government should take one
man's property and give it to another:
spontaneous philanthropy may not always be within
reach, tho it is generally where a little sense can find it;
but government is always at hand, and may properly
support a man who really cannot support himself and
has no relatives who can support him.
While caring for the unemployed is very apt to mean
caring for the deliberately idle, caring for the unemploy-
able is already recognized as among the functions of the
civilized state. And this care of the unfortunate should
not be restricted to those barely able to keep them-
selves alive, but should be extended, as far as it can be
without doing more harm than good, to those unable to
keep themselves decently alive. Human nature has not
yet been universally, or perhaps generally, evolved
beyond the point where the strong will take advantage of
the weak; and it seems as legitimate for the law to pro-
tect the weak from robbery under the form of bargains,
as from robbery under other forms. Of course the diffi-
culty of doing so without lessening freedom of contract
and a saving sense of personal responsibility, is very
great, but the law's cautious experiments toward it
should be steadily continued, and more caution still
should be used against the acceptance of quack panaceas.
Under our civilization, government protects without
charge against violence and theft, and also assigns counsel
to an alleged criminal if he is unable to pay for it ; but
to obtain disputed rights, a man must pay for counsel
loo ignorant to avail themselves of it.
There is a limit on what government ca
for such purposes : it should not take enou
lazy people trying to protect themselves, or
able people from producing.
We have paid much atte
theiiw?v,nc6 of hopeless absurdity of some
for helping the poor man t
law is far from useless to help the less fort
of mankind. All good laws help everybo<
the recent appeal to law by the strong agai
bined aggressions of the weak, the evoh
has been toward the protection of the i
the strong. But there is a great differe
laws to prevent oppression, and laws to
more than he can produce, at the expense
else. Such laws, so far as they can be mi
would simpLy oppress the somebody else,
a man is living in luxury and idleness an<
a little oppression for the benefit of less forti
337 M Cannot fUght be good for him, if it "V
ditcriminaf *#- for the law to begin oppr
tvnp.opi.. ^thout going farther and op
wrong people.
338. Benevolence . Not only does there seem to t
does not prevent ac- in history to show that a reas
cumulating wealth. passion for suffering, even if t
comes from a man's own weakness and faul
§ 339] Personal Property.
353
the richest men are benevolent, and get rich and stay
rich, in spite of all they give away.
At first it looks as if it might be safe to take away from
a man all that he might have over a reasonably good
living, but it would stop the usefulness of such men as
Vanderbilt and Stewart just at the time when they are
giving employment to most people, and doing the most
to make everybody's money go farther. Even if a man
is getting rich by the sort of speculation
339. Speculation. whkh .g about same ^ fobt)erv> jt
would be impossible for the laws to select the kind of
speculation any better than the laws against fraud can
select it. Yet there is good reason to hope that the laws
can gradually be improved.
But there is much more honest speculation than
fraudulent speculation, and it saves the community a
great deal of money by anticipating changes and pre-
paring for them. It is like springs on a wagon.
If speculation is by deceit and monopoly, of course
all ill-gotten gains should be restored, but it is not so
plain that they should be confiscated to public use
if the robbed person cannot be identified ; and success-
ful new laws to make it easier to prove gains ill-gotten
than the present laws do, can be only, as the present
laws are, the product of slow growth.
It is often asked : If a man is not active either in pro-
duction or speculation, but is merely living on a for-
tune which may have been justly earned, but in fact
was not earned by its possessor at all — for which he
never gave the community any return, why not relieve
him of that excess which does him no good, and put it
where it will do some?
• The law could not go into such fine questions as the
amount of good it does him, or he does with it. But
even suppose the question "lumped": if a man spends
a great superfluity even in the best of the selfish ways —
in fine decorations and other works of art, rare books,
and all that, why not let the community take that
money and spend it for the same things, so that many
354
The Protection of Rights.
[§ 339
men would enjoy them, instead of one man and his
friends?
340. Law cannot F™ one rcaf°n' the community would
regulate wealth probably spend it very badly. Tammany
wlsely' taste, and even Congressional taste, are not
good, and even that of the Army of the Tennessee regard-
ing statues has been questioned.
There is, however, a better reason, al-
li?aiyze AbfutT ready partly given. Such fortunes, even if
wisely devoted to the public good, would
not begin to benefit the public as much as do many of
the efforts of enterprisers which would not have been
called forth if the enterprisers could not leave their for-
tunes to whom they please. Enterprisers would be apt
to stop in mid-career, if going on involved accustoming
their children to habits of living which they could not
hope to keep up. When a great enterpriser is at the
height of his powers, his ambitions for himself are apt
to be satisfied. His usefulness is kept up to increase
the share of his production which he can leave to
those he loves.
When we were discussing the general principles of
rights and duties, we concluded that there is a certain
balance in things. And it would seem to require that
341. Duties of while the world is at work, every man
wealth, should do his share: and as a man who
has great powers or great opportunities, gets much
more from the world than mere government conveni-
ence and police protection, — much more in the way of
honor and ease than his money pays for, he conse-
quently owes the community something more than
merely his share of the ordinary taxes.
But while we admit that the great enterpriser does
his share of the world's work when, in addition to pay-
ing his taxes and being reasonable in his charities, he
finds work for his less able fellow men, and conducts
his enterprises honestly and liberally; the rich man
who is not an enterpriser certainly has his duties too,
especially in a country suffering, like ours, from having
in political office too few men who are so rich that they
§ 342]
Personal Property.
355
"can afford to be honest". A few such men are too
utlc9 modest (wisely so, in some instances) to
(a. npo a. ta^e office, but most of them prefer to
amuse themselves, all of them hate to associate with
the low type of politician we sometimes elect, and — per-
haps the strongest reason of all — our people are not
fond of electing rich men of leisure, unless they started
in the ranks; and even then, in too many cases, unless
the candidates are ready to pay for it. They should
not pay for it, because there is enough bribery of bosses
and of voters already. True, to be useful in politics,
a man need not necessarily take office: he can study
politics and public men so as to know good from bad,
he can support the good and oppose the bad, and help
educate the people to do the same.
341 (b) in charity tnere are other ways than politics
and education or in which a man of leisure can reciprocate
even in sport. wftat the community is doing for him —
there are all sorts of charitable and educational and
artistic institutions, and necessities for new institutions,
that need his time even more than they need his money.
If the best he can do and all he can
mOT'perulilrfy'ob.011 do» is to amuse others while he amuses
iMous of public himself — in horse-races, yacht-races a*nd
similar amusements, he cannot be regarded
as useless, even if he does not avoid the palpable danger
of such sports. But compared with other countries,
America does not get her share of service in politics,
charity, education, public improvements, the arts, and
even amusement, from her men of leisure: in older
countries, such duties are matters of course in the edu-
cation of the more fortunate classes. But here, as we
are all free and equal and govern ourselves, our need
of a class to attend honestly and energetically to politics,
is much greater than the need in the older countries:
we govern ourselves very badly. Tho the Old World
sometimes sends us a Carl Schurz, a Godkin or a Franz
Sigel, we are still the dumping-ground for its refuse
population; and we have no class of hereditary poli-
ticians and men of public spirit, and no long and
356
The Protection of Rights.
[§ 342
wealthy past sending us a rich inheritance of charita-
ble, educational and artistic institutions. The Ameri-
can man of leisure who satisfies himself by merely giving
money, neglects his other duties, and devotes himself
to mere selfish sports and luxury, is just as much more
blamable than the European one, as our civilization is
younger and less developed than the European one.
A man, rich or poor, anywhere, who does
rich,maneaM n0t ^° ^S *a*f snare °^ *ne world's work,
"dependent". is simply one of 41 the dependent classes " —
he depends on others while giving no ade-
quate return. His money may be in one sense an ade-
quate return, but unless he made it himself , he is merely
dependent on the man who made it, whether that man
be alive or dead. Dependence does very well for
women and children, but it is disgraceful in a man.
No American has surpassed in wisdom or benevo-
lence, the one who summed up this whole subject of
the distribution of wealth in the following winged
words :
"Wealth brings with it its own checks and balances.
The basis of political economy is non-interference.
The only safe rule is found in the self-adjusting meter
of demand and supply. Do not legislate. Meddle,
and you snap the sinews with your sumptuary laws.
Give no bounties; make equal laws; secure life and
property, and you need not give alms. Open the
doors of opportunity to talent and virtue, and they will
do themselves justice, and property will not be in bad
hands. In a free and just commonwealth, property
rushes from the idle and imbecile to the industrious,
brave and persevering." — Emerson.
BOOK IK
THE PROMOTION OF CONVENIENCE.
CHAPTER XXIV.
PRELIMINARY SURVEY.
So much for government's protection of rights. We
saw that its other general function is the promotion of
the people's convenience. Yet while we have been dis-
cussing the state's relation to rights, it has come in
our way to touch upon some conveniences — when we
were treating of natural monopolies, we mentioned
roads, bridges and ferries, railroads through country
and city, water and gas supplies, sewer connections,
and the development of extraordinary mines, springs
and scenery.
As we know, some of these things are objects of
attention by all civilized governments. So are many
other conveniences — chief among them, money, educa-
tion, postal service — which in Europe often includes
the carrying of telegrams and packages — surveys and
maps of the country, harbors well dredged, protected
and docked; lighthouses, coast life-saving stations,
parks, museums, libraries, almshouses, asylums and
hospitals. The things enumerated in this paragraph are
provided by all civilized governments. Some govern-
ments also provide superintendence of public health,
electricity, gas, public baths and lavatories, pawnshops,
357
3S«
The Promotion of Convenience.
concerts, lectures, houses for the self-supporting poor,
and cemeteries.
These things are not generally gratuitous, however,
even in the sense that taxes pay for them: persons
using money, railroads, mails, harbors, water, light,
cars, ferries, houses, and cemeteries for their dead,
generally pay for them directly.
A century ago, hardly any government took care of
any of the things named, except money, roads, light-
houses, harbors, and, in a very limited way, mails and
parks. Even then the parks were hardly public parks:
they were rarely more than the pleasure-grounds of
rulers and rich people, occasionally thrown open to
the public. The great parks which everybody can en-
joy at all times were almost unknown.
Regarding some of these conveniences, great differ-
ence of opinion prevails as to whether government
should supply them, or leave people to do it for them-
selves. As to those that all civilized governments
supply, we may as well consider debate closed, at least,
as regards the wisdom of government supplying them.
But even of them, there are some on which there is
great debate regarding what kind and how much,
especially regarding money, treatment of the defective
classes, roads in their new forms of railroads and street
railways, and sundry minor matters.
CHAPTER XXV.
MONEY.
General Considerations.
We can begin with a topic that has, at least, one
easy side. Of all the items enumerated, probably the
earliest supplied by government, and the one where
government agency is most taken for granted, is money.
The use of our spending any time now on money ques-
tions may be doubted, as it may be claimed that
the Act of March, 1900, (not to speak of the elec-
tions in November of that year and in 1904,) dis-
posed of them all, as far as this country is concerned.
344. Reasons for But Mr. Bryan's followers did not seem to
studying money, think so, nor does the Honorable Tom
Watson. Money questions will never stay disposed of, as
long as the vast majority of mankind are of low produc-
ing power and low intelligence. So long, men will try
to better their condition by tricks with money, land-
tenure, government control of production, frequent
strikes — all of the old schemes to get something out
of nothing, but with hosts of new faces.
Moreover, another reason why the Act of 1900 did not
finally settle all the questions, is because it did not
touch them all, as we shall see.
For three reasons, it is very important for the citizen
to understand the government's relation to money.
First, because meddling with money questions by the
ignorant has caused this country and most countries
some terrible disasters — this country, perhaps, worst
359
360
Tlie Promotion of Convenience.
[§ 344
of all, because here the ignorant have most to say.
Second, because money questions come more directly
home, literally to each man's pocket, than any other
questions which government affects. Third, because,
for that very reason, people are apt to suppose they
know all about money questions, and are therefore less
apt to leave them, than questions of the post-office,
the coast-survey and lighthouse board, and the admin-
istration of war and justice, to be settled by people who
really know.
Even the administration of justice is hardly a more
important government function than issuing money.
True, justice is more important in a general sense than
money: but nothing works more against justice than
ignorant tampering with money. Money touches every
man, while not one man in fifty ever gets into court;
and when he does, he soon finds that he does not know
anything about law. But nearly every man has a
little money, and so seems to think he knows all about
that; and apparently, if he has none at all, he is still
more apt to think he knows all about it.
345. Barter and Now, to begin with the simplest aspect
Money, of the subject, if there were no money in
the world, and a farmer wanted a hat, and his wife
a frock, and his child a pair of shoes, he would trade
off for them at the store a load of potatoes or any avail-
able thing he might have. The usual name for such
dealings is barter. It is customary only before people
become civilized enough to have money. Yet the
farmer might go around long before finding a shoe-
maker who wanted just potatoes enough to pay for a
pair of shoes, and a hatter who would take just potatoes
enough to pay for a hat, and a dry-goods man wTho
wanted just potatoes enough to pay for a frock. More-
over, as the city storekeepers do not generally bother
with such dealings, the farmer might spend a wreek.
perhaps, without finding one who would. They wrould
all laugh at him for asking them to.
Still, of course all this trouble would be necessary
§ 347] Money — General Considerations. 361
only if we had no money. Now as we have money
the farmer naturally takes his potatoes where they buy
potatoes, and then takes his money where they sell
shoes or hats or frocks. So the mere fact that we
have money, would save him as much troble as,
probably, his potatoes cost. On considering this
in regard to all sorts of dealings, one gets some idea
of the very great usefulness of money.
346. Swindling by Suppose, tho, that our farmer got paid in
money. poor money? then he could not do any-
thing. But as any man giving another poor money de-
ceives him and robs him, what is to be thought of a
man who tries to make all the money in the country
poor? Plainly that he would attempt the greatest fraud
that can well be conceived of, and do a frightful deal of
harm. And yet at the height of what we Americans
fondly believe to be the highest civilization yet attained,
many well-meaning men have attempted that gigantic
fraud, from ignorance; and many others from dishonesty.
347. Kinds of I*1 the United States we use many
Honey, kinds of money — paper, gold, silver, nickel
and copper. The Chinese, Spartans and a good many
other nations have had iron money. The American
Indians used wampum for money; and they also, "as
well as our New England ancestors, used discs of shell.
The fur-traders near our northern borders, and many
other people, have used skins. Tobacco too has been
used, and so have wheat and corn; and in Africa,
cattle and even slaves have been used as money, and
called live money, as distinct from other kinds, called
dead money.
We give all these things the same name — money.
Now all things that can have a name in common, must
have at least one quality in common, but they need
not look alike, any more than all things we call food
look alike. The very different things we call food,
can all be eaten, and will all help keep the body
alive.
362
The Promotion of Convenience.
[§34»
•348. Qualities of So a^ tne things that have been called
all money. money, have the quality in common that
wherever one of them is used as money, people will
give nearly all other things for it.
But some people will give nearly all other things for
a check on a bank, or a promissory note. Yet they are
not money, because people generally will give other
things for money, while for checks and notes, other
things will not be given by people generally, but only
by people who know all about the checks and notes,
and have confidence in them.
Another difference is that if a check or a note turns
out at any time not to be good, the person who last
received it usually has a right to demand that the per-
son who paid it shall make it good: that is one reason
for wanting to know if the person signing is solvent.
But if money is what it appears to be when it is paid,
the debt is discharged once for all. If, for instance, a
bank breaks, or a government is overthrown, those who
have any of its money cannot require the people from
whom they received it, to make it good to them. Of
course counterfeit money is not included in this condi-
tion : counterfeit money is not money at all — not even
bad money, any more than a portrait is a person. But
real money may turn out bad: government notes are
real money, but they would be worth no more than
paper if the government did not pay them. So a silver
dollar of the present weight is real money, but it would
be worth but fifty cents if the government would not
give a gold dollar for it. So bad money can be legal
tender, and a man be legally obliged to take it: the
treasury notes now in circulation are not good money,
because they are not expressly payable in gold, yet
they are legal tender; and bad money was made legal
tender all through the civil war, and for years after it,
until in 1879 government made the money good by
being ready to give gold for it.
When a creditor accepts a legal tender
MLWaiaTeKy (210-2 [o/>) the debtor is legally free from
farther liability, even if the money should
turn out bad, unless it is counterfeit.
§ 3S21 Money— General Considerations. 363
Now we are ready to pack our characterizations of
money into a portable definition:
350. Definition Money is anything for which substan-
reached. tially all the people in a community will part
with anything tliey are willing to dispose of, and which dis-
charges forever tlte debt for which it is received.
Broadly considered, money is simply power con-
veniently arranged in units. A hundred dollars is a
hundred units of power controlling most of the things
that men generally care for. After men have enough
money to satisfy all material and aesthetic wants, they
crave more because they want more power. The great
bankers often control the policies of nations. But
it should not be forgotten that the great philosophers
control them more often, and for centuries after the
bankers are dead.
Usually the most noticeable difference
buys less than good, between good and bad money is that for
' anything they have to sell, people want
more bad money than good money. For instance, when
our New England ancestors began using discs of shell
for money, at first people would take a few of them as
pay for ordinary purchases; but soon, so many discs
were made that nobody would sell a thing for any amount
of them. The same way during our great civil war:
people North wanted at one time nearly three green-
back dollars for a thing that they would take one gold
dollar for, and people at the South wanted a hundred
Confederate paper dollars for anything they would sell
for one gold one, and at last they would not sell things
for the paper dollars at any price. But people sell
the same thing now for a United States paper dollar
that they will sell for a gold one.
These great differences in the value of
L5n2:P ™fj" paper dollars have arisen because the
value of paper dollars depends upon the
chance of getting gold ones for them. A note of a govern-
ment or of a bank has no magic about it, any more than
the note of an individual, even tho the government
364
The Promotion of Convenience.
[§35*
note does have more pictures over it, and the pictures
do fool the ignorant. It is but a piece of paper contain-
ing a promise to pay, and all its value beyond that
of the pictures, is in the reliability of that promise.
Now you can get a gold dollar for a paper one at any
moment. During the civil war you could not, and it
was very uncertain when you could; and the value of
the paper dollar varied with that uncertainty until at
times it was but forty cents in gold. The uncertainty
was greater regarding a Confederate paper dollar than*
a Union one: so the Confederate dollar was generally
worth less than the Union one, and finally it became
certain that you never could get a gold dollar for a
Confederate paper one, and the paper ones were worth-
less.
Tho a paper dollar is money, people often prefer a
gold one, not merely because a paper dollar will soon
wear out, but especially because, if a paper dollar
should not be useful as money, it cannot be put to any
other use worth a dollar. It would only be used as a
picture, generally a pretty poor one, or as paper pulp to
make new paper, and it is not worth a tenth of a cent
for that purpose; while the gold in a gold dollar can
be put to a thousand uses, any one of which is worth a
dollar — in short, a gold dollar is worth a dollar, and a
paper dollar is worth nothing except as a promise to pay
a dollar; and hoiv much that promise is worth, depends
upon how likely it is to be kept.
353, Flat Money, Money of no intrinsic value is called
Token Money. fiat money: fiat is the Latin for let it be.
Fiat money is money only because the government
says: "Let it be money." It is also sometimes called
token money, just as a gambler's counters are tokens
to be redeemed in money valuable in itself.
354. Redemption Money valuable in itself, which redeems
Money. fiat money or token money, is called re-
demption money. A gold dollar will be taken almost
anywhere for about the value of so much gold, because
somebody near at hand can use it as so much gold.
§ 354] Money — General Considerations. 365
But a paper dollar will not be taken at full value in a
country where it was not issued, because nobody can
use it there for anything but old paper, and it must
be sent home for redemption. If you were in London
with a pocketful of greenbacks and nothing else, you
could not buy anything until you had hunted up a dealer
in foreign money, and sold him your greenbacks at
enough discount to pay him to send them here and
get the gold back. Even if you had American gold
instead of greenbacks, the shopkeepers would not
generally take that, but you could find ten people who
would, to one who would take greenbacks. Only a
few special dealers would buy the greenbacks; almost
any banker or large shopkeeper would take the gold,
tho at a discount, but a very trifling one compared with
that on the greenbacks. Within a block, somebody
would be ready to put the gold into the melting-pot and
use it for making jewelry or gilding or something of
that kind; or the English mint would take it and coin
it into their money. But nobody could do anything
with the greenback except send it to America and wait
for the gold, and pay expenses both ways. Therefore,
paper money never could be quite as good as gold
money for foreign trade.
CHAPTER XXVI.
MONEY (CONTINUED).
Some American Experience.
355. How paper As already said, during the civil war,
money cheated greenbacks became worth only forty cents
creditors. on a d0uar| and a result was that if,
when the war broke out, a man owed a dollar pay-
able in two or three years, he could then make his
creditor take forty cents for it. That was just what
hosts of people did, and what hosts of people, during
the Bryan campaigns, wanted to do; and still want to
do, by getting a chance to pay irredeemable silver dol-
lars where they have borrowed gold ones. During the
war, the transaction was somewhat disguised by the
pieces of paper being marked as worth dollars, and
people began taking them before they began to depre-
ciate. Moreover, it was not the fashion to speak of
them as going down in value, but of gold as going up;
and what was more important, people endured it all
cheerfully, so as to enable the government to use the
bad money to carry on the war. The government made
bad money, partly because most of our rulers at
that time had had little occasion to study finance,
and knew no better. Government needed money at
once to pay the expenses of the army. So, rather than
incur the delay and expense of borrowing, they thought
it the simplest thing to issue promises to pay, which
were our present greenbacks or their ancestors.
As this money was legal tender, and people had to
366
§ 357] Money — Some' American Experience. 367
take it, a little explanation may be needed to show
how it could get bad. People did not need to sell
355 (a), and things for it unless they got their own
raised prim. prices. Therefore, as government kept
on making more of it, and people began to lose con-
fidence in it, they put up prices, including the price
of gold, so that a man who wanted a gold dollar to
356. " Never mind Pay a debt in Europe, soon had to pay
"rope." for it over two dollars and sixty cents in
greenbacks.
357. Effect of *n the vears *93 anc* *94 depreciated
money not payable silver made a difference to the American
,n g0,d' people of a seventh of all their property
— three times as much as the civil war cost —
about ten thousand million dollars — nearly a hundred
and fifty dollars to each man, woman and child in the
United States. True, many men, women and children
never had a hundred and fifty dollars, but a good many
of them might have had it in wages, in those years,
who did not get it because our money was not good
enough for all foreign purposes. But of course refer-
ence was made only to the average loss — some men
lost millions, many men lost thousands, nearly every
laborer in the land lost heavily in wages, but perhaps
a few people lost nothing, and some even gained — a few
largely.
Notwithstanding that for more than twenty years
before '93, you could get a gold dollar for a paper one
or a silver one, our money was not, during those twenty
years, what it should be abroad or even at home, as
the events of '93 abundantly demonstrated. Wise
people were afraid that in a short time they could
not get a gold dollar for a paper one or a silver one,
and ran business at very low pressure in consequence.
The fear existed because very few of our paper dol-
lars were actually made by law payable in gold: most
of them were payable either in silver or in "coin",
which is either gold or silver; and there got to be so
many of these dollars out, that people began to fear
that if any mishap like a war or a panic should reduce
368
The Promotion of Convenience.
[§ 357
the government's revenue, it would not have gold
enough to be able to pay such paper dollars in any-
thing but silver. Moreover, none of the silver dollars
were made by actual law payable in gold, and per-
haps we might not have been able to get gold enough
to pay them if they were.
Our silver dollar is only token money (353). It really
contains only fifty cents' worth of silver, and if our
paper money were redeemed only in it, and it were
not redeemed in gold, our silver dollars might easily
go the way the greenbacks went during the civil war.
We are really saddled with two kinds of doubtful money.
358. Why the There is only fifty cents' worth of silver
sliver dollar has in the silver dollar because when the
depreciated. amount was settled upon, silver was worth
much more than now — the amount put in the dollar
was worth about a gold dollar then. But since then,
especially from '79 to '93, the production of silver has
been greater than that of gold, and the price has come
down with a run. Not only has the increased amount
lowered the price of silver, but there has also been a
great decrease in the uses for it. For some time pre-
vious to the publication of this edition, it has been
rising, but not enough to materially alter the conditious
herein stated.
When there is a great deal of anything, or people
have little use for it, it is cheap — what people cannot
use, they will sell low.
The great decrease in the uses for silver was mainly
due to a large part of the world abandoning its legal-
tender quality for large sums. Soon after the uniting
of the German states into an empire in 187 1, the empire
wanted to make a new uniform money system to take
the place of the old differing systems of the various
kingdoms, and it concluded to make people pay their
large debts only in gold. So a vast amount of old
silver coin was thrown out of use, and put upon the
market merely as silver. The effect was the same
as if a corresponding weight of silver table service had
been thrown on the market : silver became so cheap that
§ 360]* Money — Some American Experience.
369
soon Belgium, Holland and France stopped the yearly
increase of their silver money, which they had been
making for a long time. That left still more silver in
the general market. They did that to keep out of the
very scrape that we ran ourselves into by not doing it
— by having so much depreciated silver coin on hand
in 1893 that the danger of not being able to redeem
it in gold brought on the terrible financial panic.
In 1873, some of our own wisest statesmen, antici-
pating the wisdom of France, got a law passed discon-
tinuing the use of silver for payments above five dollars.
But that did not throw much old coin on the market,
because we were not using much. But our example
added force to the examples of France and Germany.
In June, '93, India, the greatest silver-coinage country in
the world, stopped coining silver, the price went lower
than ever before, and that helped precipitate our panic.
359. Why coins When the price of silver came down so,
were not made our government did not put more of it in
heavier. ^ dollar, so as to keep ft worth a gold
dollar. It is always hard for government to do a new
thing, because so many people have to get together
and agree, and in this case people interested in silver-
mining opposed using twice as much silver for a dollar,
altho it would have increased the demand for their
metal. For one reason, they thought it better to work for
the repeal of the law passed in 1873, which had dimin-
ished the use of silver as money, and so had diminished
the demand for their product. Therefore they wanted
silver again made legal tender for all debts, large and
small; and in spite of all we have seen, they succeeded
in recovering again for their light-weight dollar, the
legal-tender power that had been taken away in '73.
In '78, they got a law passed making the light-weight
360. American Re- dollarS leSal tender> and requiring the
monetization in government to coin from $2,000,000 to
'78 and '90. $4,000,000 worth of silver bullion a month.
The smaller sum alone was coined, resulting in an aver-
age of about $2,500,000 in money. Government received
these dollars for taxes, but was not under obligation to
370 The Promotion of Convenience. "[§ 360
redeem any not needed for taxes. In 1890 the coinage
was made to depend, after July 1st, '91, solely on the
government's need of money, but the treasury was obliged
to buy four million five hundred thousand ounces of
silver a month, whether it coined the silver or not, and
to issue "treasury notes " in exchange for it. These too
are receivable for all public dues, and are legal tender,
but they are redeemable only in silver dollars, which are
also legal tender. Making coin worth but fifty cents,
legal tender for a dollar, would be swindling creditors
just as badly as they were swindled by the forty -cent
greenback during the civil war, if the coin was worth
only fifty cents; but it is token money (353) for a dollar,
and as long as redeemable, is of course worth a dollar.
But, as already said, it may not always be redeemed.
Whatever silver had to be coined » was not put into
dollars heavy enough to be each worth a dollar,
partly because people generally did not know the dan-
gers of light coinage; and some who did, would gladly
have risked them, and have exposed the whole coun-
try to them, for the sake of selling their silver. So
they professed to attribute the panic to thousands of
other things; they even hired pamphleteers, speakers
and newspaper writers to befog the people and make them
clamor for "cheap money for the poor man" — a light-
weight legal-tender dollar rather than one of full value.
They could get enough people to vote
?ooiinJtherig?^a!It. for such a thing because majorities are nat-
urally ignorant on new questions, and in
this case they were fooled by the argument that cheap
money is good for the poor man, because he can get
more of it for a given amount of labor. Many people
were led honestly to believe this an advantage; but
also many owing debts hoped to pay them in light-
weight dollars, which, if the government would not
redeem them, could be had for fifty cents' worth of work
or product. They did not see that if one man gets the
cheap money easier, other men get it easier too; in
other words, the man has to pay it out easier — just as
much easier as he gets it. So he gains nothing.
§362] Money — Some American Experience. 371
On the other hand, all creditors lose; and for every-
body, it works like such schemes as scamped labor (2286)
or mistaken taxation (464). All those who produce
goods at first hand, like farmers and miners, get money
easier only for their own work, but they have to pay
it out easier for all work which they buy, with its
added cost in reaching them through many hands.
As an illustration, suppose that, under cheap money,
a copper-miner wants to buy a copper kettle. True,
he gets an inflated price for the amount of copper in it,
but he has to pay back the same inflated price for
that amount of copper, and, in addition, to pay inflated
prices for carrying the copper to the smelting-furnace,
rolling-mill, kettle-factory, wholesale dealer, retail
dealer, and at last to the user himself. Moreover, he
has to pay inflated prices for every mechanic and
exchanger who touches it on the way. Inflated cur-
rency not only always inflates laborers' wages, but
inflates the half-dozen profits on everything on its
way from the farmer or miner or lumberman, through
the manufacturer up to the retailer, so that when
the laborer takes his inflated wages to buy his supplies,
he finds the supplies inflated vastly more than his
wages are. Hence the people who agitate most for
rag money and light money, are the very ones who
would suffer most from it: a laborer gets an inflated
price for his own one process, and has to pay inflated
prices for a dozen. The case is something like that
of scamped labor (228 b).
If cheap money makes all these people pay more
than they get, it is not easy to determine precisely
who makes the excess — whose is the profit.
362 Whoorofits *n ^e case °^ s^ver» apparently some
bv light-weight of it would have to go to inflated wages
silver? £Qr silver -miners, because owners of
mines would bid for more of them; and certainly
much of it goes to their employers and the money-
changers— just the very people that a dishonest voter
would think he was going to cheat by paying his debts
in cheap money. The employer who pays out a thou-
372 : The Promotion of Convenience. [§363
sand dollars a day, would seem likely to benefit more
by cheap money than the man who pays out only two
or three.
The debtors who can cheat most with cheap money,
are not, after all, generally the poor and ignorant. That
is another place where the latter fool themselves or
are fooled. The people in debt are of course those
363. The poor are who. have the ProPertY» intelligence and
not the debtor character needed to get credit. But that
class* class has not furnished most of the votes
for cheap silver: most of the votes for cheap money
and for all other attempts to make something out
of nothing, come from the ignorant and irresponsible
people who are always in poverty, and always ready
to listen to any deceptive promise of a short cut out
of it, like socialism or communism or magical taxation
or trade-union coercion or cheap money.
Another argument that got votes for making light-
weight silver dollars legal tender, was that silver is
naturally the money of the poor because it is cheap,
and gold the money of the rich. There is no truth in
oc. , this, nor would it be of anv consequence
364. nor the class . . . _ . . , - 1 ,
that handles least if it were true. It is simply an appeal to
g0,d' blind prejudice. As a matter of fact,
while poor people have to buy for cash, people rich
enough to have bank accounts usually buy on monthly
or quarterly account, and usually pay those accounts
and all considerable debts with checks, and their small
ones in silver change; it is quite probable that they
do not use as much gold as people a shade worse off.
Now that we have considered the mak-
oP93Thepanlc m% °f silyer> legal tender again, and coin-
ing more of it, and the dangers of doing
so, let us see how all that brought about the panic
of '93.
The silver which the government was forced to buy
(360), was paid for either in notes from the treasury,
which were promises to pay "coin", and which the
government might redeem in silver; or in certificates
§ 3^5 b] Money — Some American Experience.
373
that the treasury had received and would pay back
silver dollars. These were also paid for any silver
that people might be tired of carrying around. These
notes and certificates were not good money, but for
the time they served the purpose, because even if the
government paid silver dollars for them, it was ready
to pay the silver dollars in gold. The trouble was
that there got to be so many of the treasury notes
and silver certificates, that people grew afraid that
the government would not long be able to pay gold
for the silver dollars which the paper represented.
365 (a). Begins The ^rst noticeable effect was that
with alarm in people in Europe who owned our bonds
Europe. an(j stocks, got frightened lest soon they
might not be able to get gold for them, and began to
send them here for sale. Those "people in Europe"
had invested money here with our corporations, to
build railroads and open mines and do many other
things, or had lent us money to carry on the War for
the Union. When they got frightened lest they should
be paid in silver, and sent the stocks and bonds back
again to be sold, a large part of the money paid to
the brokers for the bonds was treasury notes and silver
certificates. These would not be taken in Europe: so
importers went to the treasury for gold. People here
soon began to join in the fear of the foreign bond-
holders that government could not continue to pay
gold, and, remembering the war experience with the
greenbacks, began to expect that the silver dollar
and most of the government paper money would fall
in value, so that a man with a dollar due him could
really get but fifty cents.
365 (o). Busintsa This made business dull, loans difficult
suffers, an(j money scarce. A large share of busi-
ness is done on borrowed money and credit sales, and
people were afraid to lend a dollar or give credit for
one, when there was a large chance of getting only
fifty cents back. This led to the stopping of many
works, shutting of many mills, and dullness among the
dealers. All this threw many people out of employ-
374
The Promotion of Convenience.
[36S D
ment. True, the bankers and merchants could have
lent gold and sold goods tinder an agreement to get
back gold, but people will not bother with such details in
365(c). Kansas ordinary transactions, and moreover, the
tries a 'new wag state of Kansas once declared such agree-
of "Meed n9. ments illegal, and other states might do
the same: so people did not like the risk. Moreover,
when business is bad, people who really want to pay
back just what they get, may not be able to.
365 Hoarding Not only was business dull, but money
begins. was scarce. Many people getting money in
hand, did not put it in business or in the banks, where
it could be lent out, but locked it up. They were
afraid that the banks might be able to get back only
light-weight silver dollars where they had lent gold
ones, and would break; and people also feared that
if they did not put the money in banks, but bought
property, if business got disturbed by poor money, the
property might shrink in value so that they could
not get the money out again.
It is by no means exclusively the
™¥the£o\bank* money of the rich that goes if the banks
fail. A large part of all the money in
banks, is in the savings-banks, and that is almost entirely
the money of the poor (141).
Popular fear for the safety of banks and investments
grows with what it feeds upon, until it becomes a
regular panic, when people are so afraid of a fall in
prices, that they begin to throw away their stocks and
bonds for anything they will bring. In the panic of '93,
people threw away their stocks and bonds at great
sacrifices. The President called a special
Ito^m'PiT* session of Congress, and, after great trouble,
got enacted a law repealing the require-
ment passed under the previous administration, that the
treasury should buy four million five hundred thousand
ounces of silver a month.
The absurdity of the repealed law has been strikingly
illustrated in the fact that notwithstanding the increase
in population and business — the latter especially after
§366] Money — Some American Experience. 375
1903, the supply of silver that the government had
accumulated before it stopped buying in 1893, obviated
the necessity of buying any more for the mints until
August, 1906.
Tho that silver was lying idle in the treasury, in a
sense it was not idle: for, being paid for in notes of the
treasury, it was a guarantee for these notes (378). But
its fluctuating price made it a very unsteady guarantee,
and each month's purchases of silver increased the notes
and, consequently, the danger that they could be
redeemed only in the silver. Such uncertain banking
showed our government to be controlled either by
lunatics or by men who would stop at nothing to sell
their silver, and this did as much to hurt our credit, and
lead the Europeans to sell our securities, as did the
mere fear that the treasury could not pay gold for all
its notes.
Stopping the silver purchases stopped the panic. In
spite of the blows business had been stunned by, within
three months people, from their hoards, increased the
money in the national banks ten per cent., not to speak
of what went into savings-banks, state banks and private
banks; but even after President Cleveland stopped
the panic, business did not revive for a year or more,
until he had been obliged to buy gold at heavy rates
to pay government notes with, and pay for the gold in
government bonds, and had satisfied people that he
would do so whenever necessary. Then factories started
up, wages increased, wheat and cotton advanced in
price, and everything looked hopeful.
Yet it was frightfully expensive for
hlaJycoit^ President Cleveland to redeem the token-
money with gold bought by government
bonds. But he did it because the notes were out,
366. Government and Congress was not wise or honest
Banking. enough to pay them off and burn them up.
Consequently when anybody wanted gold for foreign
shipment or the arts, instead of going to a dealer for
it, and paying a little commission, he went to the govern-
ment and got it without commission — that is to say:
37&
The Promotion of Convenience.
t§ 366
at the expense of all the people. In other words, it
was at the expense of the people that the greenbacks
were kept in circulation, in order that government
might do, without charge, the business of the very
"goldbug" that the ignorant voter so hates.
The law does not directly oblige the government to
do all this brokerage business. But it was not avoided,
because it was much less expensive to do it than it would
have been to repeat the panic of '93. We have had to
pay for letting people who had silver for sale, fool
ignorant voters into the belief that if they would only
use half the value of silver that they did of gold, in a
dollar, they could have twice as many dollars, and all
of them just as good.
The hopefulness occasioned by Mr.
367. "16 to 1." Cleveland's policy, continued until the
silver men again began to agitate for the
presidential election of '96, and to demand unlimited
coinage of a legal-tender dollar, whose weight should
bear, to that of a gold dollar, the ratio of 44 16 to 1
This they made their campaign motto. The ratio of
actual value was about 32 to 1. Fear of the success
of this scheme made things dull again. Its defeat
restored confidence, and the country entered upon the
greatest period of prosperity it has ever known — one
that even the Spanish and Philippine wars could inter-
rupt but for a moment. But even the defeat of the
silverites in '96 did not restore confidence immediately,
because the treasury gold for redeeming silver dollars
remained for some time scant; and the laws were so
indefinite that the government might be thrown upon
a silver basis by any great financial disturbance, such
as those Mr. Cleveland had issued bonds against. People
felt afraid to invest dollars worth gold, in enterprises
that might pay them only dollars worth silver. So
business continued dull until 1898. Then the enormous
mechanical genius of our people had been gradually
enabling us to send Europe many manufactured articles
cheaper than they could be made there. Altho our
§ 369] Money — Some American Experience. 377
high tariff makes prices here higher than in Europe,
many of our manufacturers are selling to Europe at
low prices, because they must compete there. Yet they
sell here at high ones, because the tariff shuts out
European competition, and puts the difference collected
out of our people, into the manufacturers' pockets.
All this is despite the elaborate theory worked out
when we were treating of distribution — that competi-
tion and weak producers keep prices down, and it well
illustrates one beauty of "Protection": to the extent
of the duty, and at the expense of the rest of the people,
the government "protects" the manufacturer from the
necessity of competition, and the danger of incom-
petency; but at the same time it "protects" (?) the
public from the advantages of competition (146-148 d)
and makes us more open to the dangers of incompetency.
368. Improved ^ut to return to our light-silver-dollar
trade balance experience. Business confidence began to
supplies gold. appear again in 1898. Despite the danger-
ous state of the law, two causes sent us enormous
quantities of gold : our manufacturers had begun to sell
increasing quantities in Europe, and we had enormous
crops in '97 and '98 which a scarcity in Europe compelled
people there to pay us high prices for. These agencies
filled our treasury so that it seemed safe against any
accident in sight.
But suppose our crops were to fail for a couple of
seasons, and Europe were to have good ones, or find
good ones in Asia, Africa or Australia ; and suppose, too,
that Germany, with her splendid technical education,
were to drive our manufacturers out of Europe, our gold-
369. But that supply would probably run down to the
cannot be depended point where Mr. Cleveland had to sell bonds
unon' to increase it, and we might be rushed again
to the brink of national bankruptcy — or over the brink.
But we have now a defence against that, in the Act of
March 19, 1900, which declares it to be the country's
policy to pay gold, and provides by legislation the
means for doing it which Mr. Cleveland took the respon-
sibility of providing himself. Yet tho that act declares
378
The Promotion of Convenience.
[§ 3^9
it the policy of the country to keep all its money on a
par with gold, it does not prescribe any method for
doing so, or put the responsibility for doing so on any-
body's shoulders ; it leaves room to pay in silver, current
expenses of the government averaging over $1,500,000
a day, and 8700,000,000 bonds, principal and interest,
and fastens no responsibility to redeem that silver
on anybody. A secretary of the treasury could do it
if he wished, or he could find abundant pretexts for
not doing it. A President could order him to do it or
not to do it. What is of more importance: any declara-
tion of Congress can easily be set aside by a future Con-
gress, if elected by the people to do so. Despite the
Act of March, 1900, the Democratic nominations later
in the year threatened as much as those of 1896. They
distinctly interrupted business, but the enormous re-
vival after their defeat, shows that at least the people
able to conduct business, at last understand the matter.
The election of 1900 confirmed the'favorable outlook,
and in that of 1904, money questions were no longer a
distinct issue. But they are apt to crop up again, espe-
cially when the hard experience we have recounted grad-
ually drops out of memory. The silver craze was not
the first time that people have attempted to get rich in
some such way, nor will it be the last. The ignorant
are all the while trying some such decep-
370^Ught-welght tive scheme for getting rich by magic.
Mwscheme! "° Soon after the war, when it was proposed
to pay off the greenbacks, and even when
the confidence that they would be paid had brought
them back to even value, from a value of forty gold
dollars for a hundred greenback ones, there were still
people who objected to having the greenbacks paid,
and wanted enough more issued to fill evey man's
pockets. There was no explanation of how these
people expected to get the greenbacks into every man's
pockets, or of why they would not be as well off if they
would set to work and get a corresponding amount
of gold into their pockets. Work did not enter into
their calculations. They had a thousand schemes, all
§ 370] Money — Some American Experience. 379
of which disguised some plan for really making the
government give greenbacks to all who wanted them;
and of course they did not realize that doing so would
make the greenbacks as worthless as the Colonial and
Confederate money.
CHAPTER XXVII.
M O N E Y (C O NTINUED).
Needs for tlw Future.
Despots have sometimes made themselves rich by
debasing the currency and making the people take
it at full value; but not often, if ever before, have a
people thought, like many of ours, that they could get
rich by debasing their own currency. Of course the
best safeguard against all such schemes among the
people, is not to have ignorant voters. But probably
371. The best not many men in America — white men at
safeguard. least — will ever be deprived of their votes.
So our only way of having no ignorant voters is to
educate them so there will be no ignorant. What most
needs to be taught about money, is that there is no
way to make a dollar good for a hundred cents' worth
of anything else, but by putting a hundred cents' worth
of something into the dollar itself, or by being ready
at a moment's notice to give a hundred cents' worth
of something for it. These methods are not equally
convenient: for it is much easier to handle considerable
amounts in paper than in coin, or to handle a silver
dollar holding only fifty cents' worth of silver, than to
handle one twice as heavy.
Nor are the two methods equally safe. Silver prob-
ably deceives more. Perfect safety lies in having the
full value in the dollar itself: then no misfortune or
foolishness or rascality can depreciate it. After all, there
380
§ 374]
Money — Needs for the Future.
38i
372. The safest is no absolutely safe material for money,
money- because new discoveries may reduce the
value of gold itself; but gold is the safest there is,
and safe enough for ordinary practice. But, as already
suggested, that would make handling large sums so
inconvenient, that the world is agreed to sacrifice ideal
safety for real convenience.
Balancing the convenience of paper money or light
silver money, against its dangers, what is the best
money depends on a good many things. Silver has
373 Paper better some intrinsic value, which the paper has
than light-weight not, and it has vastly more durability;
8ilver, but on the other hand, the lack of dura-
bility in paper does not count for much, as it is easy
to issue a new note for a spoiled one. But the very
fact that silver has some intrinsic value, confuses igno-
rant people, and even tends to make them dishonest.
Paper is really much more honest money than silver:
nobody can take it for anything which it is not. The
use of it in this country has brought great losses and
disasters, but the country has learned a great deal
from them. The people could not long have been fooled
with paper as they have been fooled with silver.
Paper has not brought any trouble in England in
recent times; but there, ignorant people are much
more under the influence of people of education than
they are here, and England has no paper money under
twenty-five dollars.
Probably if there had been no green-
?a^ge!?Hs!y ,n backs under twenty-five dollars, most of
the people who made trouble about them
after the war, would have known so little about them
that there would have been no trouble. Even if the
money-schemes for making everybody rich, are started
for selfish reasons by able men, and even if such men
are able for a time to fool a few other able men new
to the subject, the schemes depend for their principal
following upon the people who have too little judg-
ment to see twenty-five dollars often. The only thing
to make our paper silver certificates safe under all
382 The Promotion of Convenience. [§ 375
probable conditions, is to put a dollar's
Oliver ce!?ifica?es. worth of silver into the silver dollar, and
call in all those which contain less. Simply
to take away its legal-tender character, would con-
tract the currency and destroy confidence, so that
many people could not get money enough to pay their
debts, and much bankruptcy would follow. It would
contract the currency by two temporary strictures:
first, people would be slow to accept silver dollars or
silver certificates : so they would go to the treasury for
redemption. Next, as the treasury is not at all likely
to have enough other money to redeem them, it would
have to pay out bonds to meet part of them, and the
currency it would take in place of bonds would make
just that much less for business use, until it should
be paid out again. It would destroy confidence, be-
cause, the treasury gold supply being gone to redeem
the silver currency and certificates, the treasury would
be in the condition of a man without money in his
pockets or in bank. He might need it before he would
have time to borrow it, and, if everybody knew his
plight, would probably have to borrow at heavy ex-
pense, as Mr. Cleveland did.
To redeem the silver currency in new legal-tender
greenbacks, would meet most of the difficulties, if
government had gold on hand to pay the greenbacks
as wanted. But there is a difficulty that it would not
376. Objections meet: the use of greenbacks keeps the
to ail government government in the banking business, and
notes" as long as it is, the money system of the
country is under the control of politics, and subject
to the attacks of the politicians which have kept busi-
ness disturbed for over forty years, since government
went into that business during the civil war.
Yet government can be got out of the banking busi-
ness without diminishing the volume of money, and so
contracting the currency. The notes of private banks,
properly regulated, could replace the government notes,
and there is no objection to the government continuing
to coin money (if it coins only honest money) as the Con-
§ 377 <>]
Money — Needs for the Future.
383
stitution requires: so it is only necessary to provide
for that portion of the money which is not coin, or,
at least, not honest coin. The government mints can-
not supply all the money needed, for several reasons:
377. Yet coin in- m tn© first place, prices depend on the
sufficient, amount of money in circulation, and are
now fixed on a basis of much more money than the
coin ; to get back to coin by retiring the other money,
even gradually, would contract prices so that a corpora-
tion having to pay a million dollars' worth of bonds fifty
years hence, would find a million dollars of its assets, at
present values, fallen to probably a third of that price,
while its debts would not have shrunk at all : that means
inability to pay them. But instead of getting down to
the coin we have, why not let government coin more, as
fast as it retires light silver and its other bad money?
Because the demand for so much more gold would
raise its price, so that the farmer and manufacturer
and miner and laborers of all kinds would have to
give more of their products to enable the government
to get gold — taxes would rise. Another objection
317 (a) and resulting from, or at least closely con-
ineiastic, nected with, the last, is that currency
only in coin is very inelastic. It is impossible to buy
much gold, especially suddenly, without raising the
price (that is to say: making it exchange for more
of other things) ; and conversely, it is of course impos-
sible to throw much onto the market, in coin or in
any other shape, without lowering the price (that is
to say : making it exchange for less of other things) :
so it would be very hard to keep a coin currency just
equal to the varying needs of business.
Moreover, an exclusively coin currency is extravagant.
To have enough gold for active times, would mean
to keep it idle in inactive times, and so lose interest
377 and eats on it. Business requires an elastic cur-
up interest. rency: while Nature and men are taking
their winter rest — no crops produced, little building
and mining, little travel — there is little business, and
little currency is needed. In the spring, as things
384 The Promotion of Convenience. [§ 377 b
wake up, more is needed, and as fall approaches,
and the farmer has to pay labor to gather his crops,
and the dealer has to pay the farmer, and the rail-
roads and merchants are busy with the crops, a great
deal more money is kept in use. A mere coin currency
cannot expand and contract to meet these conditions.
An exclusively coin currency, then, is open to many
objections that can be met only by a paper cur-
rency. And yet the burden of our song has been
that a paper currency is dangerous. But it is not
dangerous if the people generally can be made to
070 P . realize that it is: because then it would
378. bood paper , , f .
currency pref- be taken care of. A paper currency is
erable" safe if its promise to pay is certain; and
dangerous only if, as in the civil war, it cannot be
redeemed in coin when required.
Beside the reasons already given for not letting the
coin go into use at once, instead of keeping it to redeem
the paper, is the very important one that experience
has shown that it is safe, even in ordinary banking, to
let out four dollars of paper for every dollar of coin in
hand. If people know that the banker has a reason-
able amount of coin and other value to meet the paper,
not all of the paper would ever be presented for redemp-
tion at once. People are like the Dutchman who got
frightened and went to the bank for his money. As
soon as it was offered him, he told them to keep it:
"Yen you got him, I no vant him: ven you don't
got him, I vant him."
It is not meant to imply that it is safe for a bank
worth a hundred thousand dollars to issue notes for
four hundred thousand: nobody should have out obli-
gations greater than assets, but rather considerably less,
to leave a margin for accidents. But if a bank has out
four hundred thousand of notes, and no other obliga-
tion, it can safely keep all of its property above one
hundred thousand, in marketable bonds or good com-
mercial paper or any other good "quick" (i.e., quickly
sellable) security that will pay it interest. If it can
lend four hundred thousand dollars, and get interest
Money — Needs for the Future.
385
on it, by keeping one hundred thousand dollars idle
in its vaults, that one hundred thousand will really
be earning fourfold interest; and that, with the in-
terest on the three hundred thousand in securities,
makes the bank get interest on seven hundred thousand
while it has a capital of only four hundred thousand.
Out of this, however, it must pay expenses, and unless
it manages well, it may have no profit after all.
It may very naturally be asked: Why then should
not all the people participate in this advantage, in the
shape of lowered taxation, by keeping the government
in the banking business of issuing notes? For the
same reason that, as we saw (236 6, 236 c),
gJSimmLit?* fr°m government should not be put in the
manufacturing business. It would leave
to politicians with pulls, the work that should be done
by men fitted for it by nature, and put in place by
natural selection; and it would take away from the
community the enormous advantage of having its
banking done by such men under the stimulus of com-
petition and personal reward.
A word more regarding the elasticity of the paper
currency. Of course the bank must lend this cur-
rency in order to get interest on it. When the country
is very busy, people will borrow it all; when business
is dull they will not need it, and will pay their maturing
notes, and the bank will have to take its currency back.
Then, of course, it fails to gain interest on it, and on
its idle coin too ; but the paper costs nothing.
380. Essentials of Notwithstanding all that has been said
banknotes. "Wild- in favor of a non -government paper cur-
cat" money. rency, the country has tried private bank-
notes, and found them wanting. But this was largely
because they were issued on the authority of individual
states, and especially of some of the newer states,
where political organization was very primitive, and the
regulations were primitive and primitively enforced.
If anybody proposes to put paper in general circulation,
it is essential that it should be done under conditions
3«6
The Promotion of Convenience. 1 [§ 380
to protect against general harm. Under the imperfect
conditions alluded to, a great many notes were spread
over the country without enough coin and other assets
behind them to make them safe ; and many of the notes
from the poorer and more provincial banks were so
poorly engraved and printed that it was easy to counter-
feit them. As a result, nobody knew whether most of
the money offered him was good or not. People were
constantly getting "stuck" with bad notes, as they
sometimes are with pewter coin. It became worth
while to issue frequent pamphlets — 44 Banknote Guides ",
44 Counterfeit Detectors", etc., etc., and every shop-
keeper had to keep one, and before accepting money
that he did not know well, turn to his pamphlet for
description and advice.
One of the good things blown by the ill winds of
the great civil war and its depreciated greenbacks,
was the disappearance of the old 44 rag money": they
blew it out of circulation. Everybody understood a
greenback, it was the same thing the country over —
well made (even if ugly) and hard to counterfeit. Tho it
was worth at one time but forty cents on a dollar, people
knew what it was worth without turning to a 14 Guide"
or "Detector", and soon it drove the private rag money
out of existence. That, by the way, was an apparent
(but only apparent) contradiction of the famous 44Gresh-
am's law", that the worse money always drives out
the better. But it cannot be gone into farther here.
To summarize our conclusions regarding the country's
needs. In the first place, there is always a need of
plenty of money — more even, when business is brisk,
than all the gold coin in the country. In the second
place, it should be supplied under regulations from the
United States Government, not the state governments,
so that the money will be the same throughout the
country.
The regulations should be: first, secure
a8sounrsystaem.of tnat noD°dy not of proved character and
ability can start a bank of issue; second,
that no more notes shall be issued than there are good
Money — Needs for the Future.
387
quick assets (377 b) on hand for redemption of, at least
one fourth of which assets shall be gold coin ; third, that
these notes shall conform to some good definite standards
of workmanship — perhaps that they shall be provided
by government; only, as we have seen and shall see
further, we need to be very cautious in what we trust
government to provide ; (The mere mechanical furnishing
of these notes would not, of course, be "going into the
banking business fourth, that a limit for ordinary
issues shall be fixed, and all beyond that limit taxed
so as to force their retirement when not really needed;
fifth, that each bank shall have arrangements for
redemption at several centres, so as to facilitate retire-
ment; sixth, that government examiners shall visit the
banks unannounced, at frequent intervals, to see that
the regulations are complied with; seventh, that such
penalties shall follow infringement of regulations as to
make infringement extremely improbable.
There are those who favor a single central bank
of issue, as is virtually the case in England; but that
does not seem adapted to our large country, and there
are other objections which cannot be gone into here.
Humanity is not wise enough and careful enough yet
to make us sure that any arrangements are going to
work perfectly; but under those suggested, the law of
demand and supply would probably keep the currency
as nearly adjusted to requirements as anything is at the
present stage of human progress. If there were not
enough, the demand for more would make profits great
enough to tempt more people into issuing it; and if
there were too much, the portion uncalled for would be
retired, and the capital behind it be turned into things
in more demand.
Under present arrangements the bank
elastlcBcurren°cy?n cannot issue more, because when there is
a demand for more, the only thing back
of our present banknotes is United States bonds,
which are admirable as far as they go, but they do
not go far enough — there are not enough of them, and
they pay very low interest; besides, if a bank wants .
3«3
The Promotion of Convenience.
[§ 382
to enlarge its circulation now, it must go through an
enormous amount of red tape, including buying a lot
of government bonds, and sending to Washington for
notes, and waiting till they are engraved. While all
this is going on, a panic could wreak destruction. It
would therefore be well to substitute for United States
bonds, all securities in the country that an able commis-
sion (best, perhaps, appointed by the banks themselves)
should pronounce safe for the purpose (they would
not be a very large proportion of the whole), such
commission to revise its list at frequent intervals, and
banks to shift their securities accordingly.
Then to get the notes into circulation, it would only
be necessary for any man who has the securities, to
take them to bank and borrow banknotes on them
up to within a reasonable limit of their face value;
then when his need 16 over, he could take the notes
back and get his securities.
Commercial paper of high quality would not be
available to base the notes on, even tho there is more
of it when business is brisk, and less when business is
slow, because it would be very difficult to be sure that
such paper, when offered, was for actual goods sold;
and an elastic currency would lead to inflation of values
unless it were carefully limited to a basis of actual
property. So far as currency might be based on
accommodation paper, it would, of course, be pure
inflation, and might go on until it should collapse
like an exploded balloon. But even if it were based
on genuine commercial paper, the producer of raw
material might get currency on the note given him
by the manufacturer, the manufacturer might get it
on his jobber's note, the jobber on the retailer's, and
the retailer — a grocer, for instance, on the consumer's;
so the same raw material might originate currency
four times — on the notes received by the banks from
the raw-material man, the manufacturer, the jobber
and the retailer; value added by the manufacturer
might originate currency three times — on his jobber's
note, and the retailer's and the consumer's; the job-
§ 3^3 al Money — Needs for the Future. 389
ber's service, twice; and the retailer's, once — an aggre-
gate of ten issues of currency where there would be a
sound basis for only three actual values accumulated —
the raw material, the manufacturer's, the jobber's.
It seems therefore that a safe issue of currency based
on commercial paper would be practically impossible.
The retailer's note could not represent a value to
base currency on: because even if the goods in con-
sumers' hands are not — like food, actually destroyed,
their commercial value as a basis for currency, is gone
as soon as they are in consumers' hands. Even if
they endure, like furniture or jewelry, they at once
become "second-hand".
383. The farmer's In the foregoing analysis, by the way,
needs the farmer's demand that he shall have a
chance too, as well as the "bloated bondholder" —
that currency shall be issued based on his farm, not
merely on coin, or even on bonds that can be sold at a
moment's notice on the stock exchanges, is counter to#
the requirement that the currency shall be based on
quick assets. His land, or even a mortgage on it,
cannot be sold for full value at a moment's notice, if
there should be a run on the bank to redeem its notes
in gold.
This brings up the serious question of how to sup-
ply the demand for money in thinly-settled regions
where there are no banks — where, according to stories
we hear, a man sometimes rides around a whole day
in a vain effort to get a fifty-dollar bill changed; and a
man on being asked if he could change a
ofi,?&S!L,yM9 ten-dollar bill, answered : "I never had so
much money in my life, but thank you for
the compliment, all the same." In the first place,
the reason for lack of money in such regions, is
generally (not always) the same as for the lack of it
anywhere else — the people have not the wealth to base
it on, or the ability to make the wTealth — in fifty-dollar"
bills which they cannot change, or in any other shape:
the regions are generally poverty-stricken, and the
39©
The Promotion of Convenience.
[§ 383 <*
attempt to give them plenty of money by putting a
bankful of it among them, would do no more good
than to put a bankful among the New York tene-
ments: the people cannot get the money unless they
have something to exchange or pledge for it. Even if
the farmers wanted to mortgage their farms to a new
bank, often they could not do it, because the farms are
often mortgaged already.
Still, there are places where people really have
good farms and crops, but not enough money for ordi-
nary needs. But it would be odd if such regions had
the resources to establish banks, and the need for
them, and still went without them. So their demand
for banks still looks like one more form of the cry that
assumes so many forms — for government to supply
money to those who cannot supply themselves.
383 (b). Remedy ^et tnere are P^CeS to which it WOUld
for legitimate be well for banks elsewhere to send
needs' branches. That is actually done in some
countries — in Scotland and Canada, for instance: a
city bank will get a country storekeeper to start a
little branch, supplying him with money and elaborate
instructions based on experience; and such a branch is
often a very good thing for everybody concerned.
Apparently the serious want is in places too small
for even our new banks with $25,000 capital. Little
agencies seem to be still wanted. A few of them wisely
distributed undoubtedly would silence all reasonable
calls for "more money
Two things can be done to facilitate that — enable
banks, by law, to establish branches; and take off
the taxation — from small ones at least. The general
government does not get enough from bank taxation
to make it worth bothering with anyhow. It is one
of the pottering taxes that ought to be cleared out of
the way. It yields only a half of one per cent, of the
national income.
CHAPTER XXVIII.
PUBLIC WORKS.
• Extra-Municipal.
So much for Money. Probably the next item of
popular convenience evolved by government, and one
over which government care is almost equally taken
for granted, is roads of some sort; but as already inti-
Roads mated, the kind and degree of care that
' oa s' government should take of the new forms
of roads — railroads and city railways, is open to much
debate.
Regarding the immense importance of roads, there
is a very early and very authoritative piece of testi-
384 ra;. As spread- mony. The Romans were the greatest
ing civilization, road-builders and — a very suggestive fact
in the connection — the greatest spreaders of civilization
the world ever saw before our own race took hold.
The proconsul who was probably the most famous
advancer of Roman civilization in barbarous regions,
when asked what was the first thing he provided a
new country with, answered: " Roads "; "And the
next thing?" "More roads "; "And then?" "Still
more roads."
As the importance of roads bears on many civic
questions, we will consider them more fully than some
other topics which at first seem nearer the centre
of civic relations. The Romans, in carrying out this
principle, put roads through most of continental
Europe west of Russia and south of Scandinavia, and
39i
everybody has had to give some da\>
road -ma king, or furnish a substitute,
degrees commuted into money, just as
was (56a), and road-makers were hired
ment, as soldiers were.
Passage was generally free over roads
as cities grew up, both in the old home ai
ment not only itself improved roads bet
also chartered private corporations to
these roads, tolls were generally ch*
Romans were the best road-makers an
nations, it may be interesting to note
are unquestionably "our noble selves
was our expansion over great tracts c
before good roads had time to grow up,
habit of putting up with poor ones. 1
wanted better things, improvement h
blocked by bad organization and corrui
ment.
3SA(o). BadAmeri- Government road-makin
can organization. sidered established. But
ganization has been left too much to
Outside of unmistakable city and villa;
possibly inside of them), it should be a
and it is far from certain that it shoul
tional function. Evf»rv imnort.a nt. rna,
§3«S]
Extra-Municipal Public Works.
393
much as do the people of more populous adjoining
towns. Moreover, the poor road-making thus forced
on the poor towns is not confined to them alone, but
tends to become the standard for their neighbors.
These difficulties are more effectual with us than
with other civilized nations, because our ancestral spirit
cf local independence — our desires to govern our home
affairs ourselves, our objection to submitting them to
the more remote state and national governments, is so
strong that many consider it the very basis of Anglo-
Saxon liberty. Even in such a town as Concord, Massa-
chusetts, quite possibly the most enlightened rural town
in the world (and consequently one of the most wealthy^
part of a magnificent boulevard intended to run from
one end of the state to the other was bitterly opposed
because: "This town has always been able to manage
its own roads."
Yet while Anglo-Saxon local independence obstructs
roads so much, England has splendid ones, because our
English cousins are more thickly crowded; their roads
are older than ours; and they are near such good ex-
amples in France and Switzerland. Relative wealth
cannot affect the matter much as regards our older
and richer states: for they are rich enough; but our
national wastefulness and extravagance have a good
deal to do with it. Few things are more wasteful and
extravagant than poor roads: in any ordinary civilized
region, they waste more, over and over again, in horse-
flesh, wagon-wear, and time of man and beast, than
good roads would cost.
Tolls are not generally charged now, tho there are
some survivals. But in most cases governments have
abandoned the tolls on their own roads, supporting them
by taxation, and have also acquired the private toll-
roads by eminent domain, and thrown the toll-gates
open.
The experience in this regard with bridges has been
about the same as with roads ; yet the
r geS' greatest and newest of the great bridges —
394
The Promotion of Convenience [§ 385 a
those between New York and Brooklyn, tho built by
the city governments, still take toll. But there is
prospect of its speedy abolishment. Yet at first sight,
it does not seem fair that the vast majority of the resi-
dents of the Greater New York, who do not use the
bridges half a dozen times a year, and hundreds of
thousands of them who do not use them at all, should
pay as much as those who use them twice or oftener
every day. But the argument carried out with stern
logic, would put a toll-gatherer at every bridge in the
country, and very few people want that done. As long
as each man has a right to the free use of such a general
and important public convenience when he wants it, as
long as the cost for each person is a trifle, and the
indirect benefit to every person, whether he uses it
or not, is great, the question whether one man wants
it more than another, is one of those trifles which the
law does not bother itself with.*
iw6nershlsu,a00era R°ads and bridges in a sense operate
tionners 'p' pera" themselves, but now it is time to take
special note that as we come to facilities requiring
operation, there are three relations which government
can occupy toward public facilities — regulation, owner-
ship and operation, and neither of the first two involves
a later one. It is especially important to keep in mind
the last two as distinct: much mischief is done by
confusing them. There is a wide and intelligent senti-
ment in favor of government ownership of franchises,
especially in cities, in order that their unearned incre-
ment, often very large, may go to the people instead
of private monopolists. And there is even a more
intelligent, and consequently, of course, less wide
sjentiment that under the universal suffrage pervading
American and French cities alone, the operation of
the franchises is a task too heavy for the political
capacity. During the Hearst campaign which dis-
* De minimis non curat lex.
§ 387 a] Extra-Municipal Public Works.
395
graced New York City in 1905, the cry of his sup-
porters was "municipal ownership", while what they
really meant was municipal operation; and the confu-
sion of terms drew to their ranks and even their ticket,
many of the foggy-minded sentimentalists who are
too ready to sympathize with any cause containing
a grain of wheat, tho its main constituents be
chaff.
387. Ferries and We shall reach more definite applica-
docks" tions of the principles just enumerated
as we go on. Let us begin by noticing that ferries
require infinitely more management than roads and
bridges. Yet government has operated them several
times in Great Britain, and occasionally in Germany,
but very seldom in America. In 1904 London took
over the Thames steamboats. By 1906 they showed
a heavy loss. Of the government ferries, some are
free and some are not. Boston charges for one, but
runs it at a loss. Glasgow makes a big profit on hers.
The one over the Thames at Woolwich is supposed to
perform the service that bridges do higher up the
stream, and like them is free. In 1905 New York took
over the Staten Island ferry, but so far with very un-
387 (ai Municipal satisfactory results. If reports the world
and Private over can be relied upon, there is nothing
contracts. exceptional in the showing of government
extravagance given by the following figures from the
New York City statistician in 1906, and showing the
monthly salary items of the ferries run by the munici-
pality, in comparison with those for the ferry under
private management at Thirty -ninth Street, Brooklyn,
and the one run in New York Harbor by the Pennsyl-
vania Railroad Company. It is claimed that the munici-
pal ferryboats are so much larger as to require some
officers that the Railroad Company's boats do not. The
city employs three crews a day; the Railroad Company,
two. I am not. however, advocating that method of
economy: for the indications are strong that it does
not result economically.
396
The Promotion of Convenience.
r?f„ 30th St. Penna.
Uty- Ferry. R. R.
Captain Si 37. 50 $135.00 $130.00
8uartermaster 100.00 None 55. 00
cckhand 60 . 00 5 5 . 00 49 . 50
Porter 5 5 . 00 40 . 00 49 . 50
Engineer 125.00 120. 00 120.00
Assistant engineer 1 2 5 . 00 None 82 . 50
Oiler 90.00 None 77.00
Water-tender 100.00 None 66.00
Fireman 90.00 65.00 66.00
Attendant 50.00 None None
Mate 75 .00 None None
Ashman 76.00 52-5° 49-5°
The franchises (1 59 c) of American ferries have not
generally been given away. Even in New York, where
the exceptionally valuable street-railway franchises
were once given away freely, the ferry franchises have
usually been sold for terms of years to the highest
bidders. Docks in Liverpool, Glasgow, Hamburg and
many other European cities, have been splendidly and
profitably provided and cared for by the local govern-
ments. In the United States they are generally inferior,
tho they are rapidly improving. We shall see some gen-
eral reasons for this inferiority later; but at best, docks
are used by so small a portion of the people that they
are not under as general criticism as most municipal
conveniences (389 /, 392 c), and their management is
therefore peculiarly liable to be stupid and corrupt.*
N°w to come to the modern modifica-
388. Railroads. tion of roads_the railroads.t Regarding
them, it is not fair to compare the United States as a
whole with any other great nation exclu-
urJce^nAmerfca s*ve °^ *ts co^on^es» because most of the
and England. United States is very thinly settled. If we
consider only the parts of our own country
* Treating ferries and docks as extra-municipal may need
defence, but so would treating them as municipal.
t In treating this subject, I have been under great obligations
to Professor Daniels' "Elements of Public Finance", and to
Professor Seager's Economics, tho not as great as, perhaps,
the concurrence of our views would indicate.
§ 3«8 b]
Extra-Municipal Public Works.
397
as thickly settled as other civilized countries, the five
greatest nations in the order of the frequency, speed
and comfort of their railroad trains, unquestionably
would be: the United States, England, France, Ger-
many, Italy. The order with reference to degree of
private ownership would be very nearly the same:
in England and the United States, the ownership and
management are virtually entirely private. In France
the government owns part of the roads, and leases them
to private companies, who run them; in Germany,
where the government attends in a paternal way to
more things than government does in any other great
nation, it both owns and runs nearly all the railroads;
and so also in Italy until the government leased its
roads to private companies — partly because it recog-
nized the roads as sources of political corruption.
388 <b) itai ^e Italian leases, after twenty years s
y' fell in in 1905. A bill came before Parlia-
ment to have government resume the running of the
roads. It was backed by the employees, who believed,
from the traditions of the previous government control,
that they would have an easier time under it than under
private companies. This belief was probably correct,
but it virtually asserts the greater efficiency of private
management. In support of the bill, there was of course
fermented a popular idea that the private managers were
making too much money, and giving too little for what
they got. Such an idea of any existing institution, of
course always pervades the party of discontent.
The matter was settled by government undertaking the
operation. If it were not for the apparent impossibility,
alluded to more than once in this volume, of getting
unbiased testimony on such a subject, the result of
this action on the part of the government would be
plain in the following letter to the London Times:
"Rome, Oct. 23 [1906]. — The government ownership of rail-
ways in Italy continues a menace to the life and limbs of those
compelled to travel in this country. Another serious accident
occurred yesterday, a passenger train running into a goods
39»
The Promotion of Convenience.
[§ 3886
train near Turin. Sixteen passengers were hurt. The engine
driver, station agent, and pointsman are in hiding.
" It would seem that the discipline of railway servants leaves
something to be desired, and this no doubt is a factor in the
general disorganization, of which complaint is made in all
parts of the country.
"Apart from all question of danger in railway traveling, Italy
is made so wretchedly uncomfortable that visitors may well
pause to consider whether the pleasure of being in Italy is worth
the misery of being in Italian trains."
388 (O. Germany. *he G^rman experience is really the
only one great enough to justify compari-
son with ours. If we compare only the portion of
the United States whose population is something like
as dense as Germany's, in that portion we surpass
Germany, partly because of the great inventiveness
of the American people, partly because of their greater
tendency to move about, and their having more money
to do it with, but mainly because of the fact that
American railway officials are in the business to make
all they can out of it, and are stimulated by fierce
competition between themselves and between their
roads. Yet the American roads are falling off in
efficiency because of trade-unionism among the men,
and the interference of banking interests in the manage-
ment. Still, the Germans are behind us because their
railway officials are government employees at salaries
not apt to be changed, and with all the routine indiffer-
ence that everywhere characterizes the government
employee with nothing to lose and nothing to gain.
The fares, tho about the same in money as ours, are
twice as high, compared with oilier things, as they are
in the thickly settled portions of America, and the
trains do not run half as often.
At the Railway Congress in Washington in 1905 the
German Ambassador said: "We do not recommend
that you follow our example in the national ownership of
railways." He probably meant the national operation:
the ownership is a much more hopeful proposition.
The government operation in Germany has failed in
the particulars (among others) which our people, the
§ 388 d] Extra-Municipal Public Works.
399
President at the head, are clamoring for government to
remedy here — in securing dissimilar rates under dissimi-
lar circumstances — between long and short hauls, be-
tween competing and non-competing points, between
land and water competition, and between small custom-
ers and large customers.
An important point of comparison is the proportion of
trunk lines opening up a variety of villages between
central points, on the continent of Europe, as compared
with England and America. In the countries of govern-
ment roads, there is usually but one trunk-line between
important points. In England and America, there are
usually several, each opening up its own line or towns
and villages, and all forcing each other, through com-
petition, to the utmost economy and efficiency.
Regarding comparison in charges for service between
government roads and private roads in the same state,
statistics are scarce and somewhat unreliable, because
of the confusion between passengers of different classes,
and because it is next to impossible to tell what a gov-
ernment road really costs the people : fares may be eked
out by taxation.
American experience in government management
amounts to very little.
388 (di Gouem- The city of Cincinnati owns the Cincinnati
ment operation Southern Railway, but leases it to a
in America. private company.
The state of Missouri has had a little experience with
railroads. Governor Folk is reported to have delivered
himself substantially as follows on the day in 1906 after
Mr. Bryan, at his home-coming reception in Madison
Square Garden, had announced himself in favor of gov-
ernment operation of the railroads:
"Mr. Bryan's proposition for the taking over of railway lines
by the national and state governments would be met with no
acceptance in his [Gov. Folk's] state, where the experiment
had been tried and found wanting.
4 4 Missouri had pledged her credit in subsidizing the lines . Prac-
tical paralysis of traffic during the civil war forced defaults of
interest payments on the bonds. Under the terms of the char-
ters, whenever such default was made the state was empowe red
4oo The Promotion of Convenience. [§ 388 d
to seM the lines to the highest bidder, or to become itself the
proprietor under the liens it held as guarantor. In this way
all of the lines became the property of the state, with the
exception of the Hannibal & St. Joseph, now a part of the
Wabash system.
"The state's mode of operation was for the governor to
appoint a general superintendent or manager. Such appoint-
ments were of course political. One of the first was that
of J. T. K. Hay ward of Hannibal as general superintendent of
what was then called the Platte County Railroad. This was
very near the close of the war, when the ravages of armies had
ceased, commerce was reviving, and confidence returning. Traf-
fic along these lines was increasing rapidly.
"Yet every month showed a deficit in the finances of every
line except the Hannibal & St. Joseph. Loaded down with
political appointees lacking both railroad experience and natural
efficiency, the [government] road was such a continuing burden
to the state that, by a legislative act of March 17, 1868, a
private corporation which was willing to take it off the hands
of the state and extend it far enough to reach the Iowa and
Kansas lines was relieved of all financial liability under the
original charter, the state assuming the entire bonded debt with
the interest then accumulated.
"State Senator Woerner, a Democratic member of the
joint committee appointed to investigate charges of collusion
in the sales, said, in a special report, that the state would be
making a good bargain to donate the lines to any responsible
parties who could extend them and operate them without
cost to the taxpayers.
"While the lines were the property of the state they were
not, of course, assessed for taxation. Immediately after the
sales assessments began, and extensions, improvements and
betterments of all sorts have increased these assessments steadily.
This year the ten trunk lines traversing Missouri, eight of
which are outgrowths of the lines sold by the State in the sixties,
are assessed for $34,000,000.
"It is impossible to see how Missouri could ever have stag-
gered from under the debt of $31,735,840, without this source
of taxation."
388 <e). African r Despite the frequency, speed and com-
construction less fort ot the trains on American railroads
thorough, where population is dense, they do not
surpass the European roads as roads: they are not,
on the whole, as carefully built, or as safe to the passen-
gers or to the people among whom they pass. That,
too, is probably influenced by the relations between
the roads and government. Governments are more in
§ 388 g] Extra-Municipal Public Works. 401
the way of looking out for the rights of the people in
general than private corporations are, and are less apt
to consult economy; moreover, if a man gets killed in
Europe, a government loses a possible soldier, and it
cannot spare soldiers: for all these reasons, a European
government would be more apt than the American to
put a bridge where a railroad crosses a driving-road,
and to go through a town above the streets or under
them. This has actually been vastly more the practice
abroad than here. Our murderous grade-crossings are
388 (f) andind- a^most unknown in Europe, and where
dtntaiiu less they occur, there is more precaution and
careM of safety. by dosing gates than Qur peQple
would stand. In England the construction of the
roads, especially in the way of elevated tracks going
through cities, and possibly at grade-crossings, is per-
haps not as thorough as in Germany ; in other respects
the care for the public safety compares favorably.
Government ownership, however, is not necessary to
secure that. Good government can secure it, whether
it owns the roads or not ; it does secure it in England ;
and government is, on the whole, improving in doing
it here.
388 (9). Freight The great difficulty regarding rates of
diacriminations. fare ari<| freight in America is the same,
probably, as with privately operated roads everywhere:
through rates between great cities served by several
lines of roads, or by a water line as well as a railroad
line, have naturally been lowered by competition, some-
times below the paying point. The roads have to
make up for it by higher rates for the intermediate non-
competitive points. Of course they are as apt — even
more apt, to get these local rates above reason, than to
get the through rates below reason. Hence discontent
that sometimes overlooks the difficulties of the roads,
and hence grangerism and the call for government con-
trol (154 a) or even government operation.
The roads have been led into the golden-goose-killing
operations of destroying the profitable part of their
business by driving population from non-competitive
402
The Promotion of Convenience.
[§388g
points to competing ones. Mr. Stickney* says that
between 1870 and 1890, in Illinois, Wisconsin, Iowa
and Minnesota, the former class decreased in population,
and the latter increased.
Besides discrimination between points, there has been
a more arbitrary discrimination between goods, and
through this means, as well as directly, between per-
sons.
And yet despite all complaints, just and unjust, the
U. S. Bureau of Labor reports a large decrease in the
cost of transportation while the complaints have been
loudest.
388 (fi). conaoii- Of course all the complaints are used as
dation and arguments by the advocates of government
competition. roads. As to government operation affect-
ing competition, the argument is the same as the argu-
ment for trusts (152): the enormous waste of competi-
tive advertising between competing roads, and the fre-
quent duplication of management — several able men
doing work which, if the roads were under one man-
agement, could be done by one able man, with clerks
in the place of the others — the other able men being
released to increase and cheapen other production or
develop new conveniences (331). But all this is not
necessarily an argument for government ownership,
but only for consolidation; and then come in all the
monopoly arguments against that. But those argu-
ments hardly have the best of it, as anyone knows who
has taken frequent journeys over routes parceled out
among several little roads, with their conflicting con-
nections, delays at junctions, and retail rates; and over
the same routes after the little roads have been con-
solidated, their connections and ticket-books unified,
and their rates brought to the wholesale standard of
big enterprises. But to return to the general rate
question. General extortion is charged, but, on the
*'*The Railroad Problem", p. C2, quoted in Daniels on
Finance.
§388**] Extra-Municipal Public Works. 403
whole, unreasonably: our freight-rates, despite our
vast uninhabited stretches, are far the lowest in the
world; and in our thickly settled regions, our passen-
ger-rates compare very favorably with all others;
and moreover both rates are steadily declining. How
much of this is due to government regulation, and
how much to the inevitable action of competition, is
very hard to determine.. With us government regu-
lation is in its infancy, and has made mistakes. It
has not yet always succeeded in getting its rates ad-
hered to, and, as it has greatly insisted on rates in
proportion to distance, regardless of competition at
certain points, it has prevented the roads holding each
other to agreements regarding competitive places which
might enable them to be easier on non-competitive
places.
388 (0. Constitu- The state's right to regulate the roads
ttonaj questions. arises from the fact that the roads are the
creatures of the state. Whether the state owns them
or not, they are natural monopolies, and with us exist
only by the use of the state's right of eminent domain:
so the state has the right to prescribe the conditions
of their existence (1 54 b).
But suppose a road is built without any under-
standing regarding rates, or, for that matter, with an
understanding, it is a question whether the state has
then a right to impose new r^tes. It has been claimed
that the conditions under which a company builds a
road, constitute a contract with the state; and the
Constitution of the United States (Art. II, Sec. X)
provides that no state shall pass a law impairing the
obligation of contracts. But under the Constitution
(Art. I, Sec. VIII) the United States has the right
to "regulate commerce between the several states",
and can probably pass laws under that provision which
would help remedy the difficulty. As to the individual
state, it is a question whether the constitutional pro-
vision affects a state's relation with its citizens, or the
relations of citizens with each other: for instance, each
man holds his land from the state, and yet the state
404 The Promotion of Convenience. [§ 3881
can take it from him by eminent domain. But emi-
nent domain was an established institution before any
American state was; it is part of the original under-
standing— the unwritten constitution, and therefore
tacitly exempted from interference by later laws; and
it looks as if a corporation in receiving a charter, had
to admit certain rights as held in reserve by the state
for the public good. Moreover, for a long time past,
most charters have been granted subject to amend-
ment or repeal.
If the charter creates a virtual monopoly, of course
the case for the state's right of amendment is all the
stronger. But a city is not a state, and if a city makes
a contract with a street-railway company for a rate
of fare, that is clearly a contract, not of the state with
its citizens, but of citizens with citizens: the state
cannot interfere there; the Constitution of the United
States clearly forbids.
388 u>. Taxation Yet if the railroad is taking too much
of franchises. money from the people, the state could
amend most any recent charter, or both the state and the
city could tax the franchise, unless something in the state
constitution might forbid. There is a good deal of agita-
tion now for state legislation making the right to tax
all franchises perfectly clear. New York passed a law
to do it in 1899. Nevertheless, taxing a franchise, either
by the city or by the state, does not cover the whole
case, especially (as we shall see more particularly later),
as taxation for any purpose but the raising of revenue,
is very doubtful policy. Moreover, it is conceivable
that if fare and freight were made expensive, and then
the money taxed away from the roads, enough might be
got to run the whole government, and yet it would be
solely at the expense of those using the roads, and all
others would escape taxation. Perhaps, tho, those who
do not use them, directly or indirectly, are so few and
pay so little in taxes that, as in the case of bridges, the
question concerning them maybe regarded as one of the
trifles that the law does not take into account.
§ 388/]
Extra-Municipal Public Works.
388 (hh corpora- The fair adjustment, then, would seem
Hon graft and to be to keep charges at the point where
potitna graft. ^e roads can make a fair return on capital
and pay about the same rate of taxes that other property
does. That assumes, however, that the railroads can
all make money enough to do all those cheerful things ;
but in the last decade of the nineteenth century, most
of the American railroads were bankrupt. They had
been built faster than business had grown to support
them, and very often the men spending the stock-
holders' money incorporated themselves as " construc-
tion companies" and "car companies", and then paid
those companies enormous prices to build the roads
and equipments.
It does not follow, however, that the roads would
have been more prosperous if they had been govern-
ment institutions. Probably, however, their officers
would not have been less so, for as governments run
things in America, the politicians in charge of such
public works as we have, are not generally supposed
to suffer from lack of prosperity.
388 a). American There have been several efforts to regu-
attempts at gov- late the prices charged by the railroad
ernnentregulation. monopolies The chief Qf these in Qur
country are the Rate Bill of 1906, not yet tested at
this writing, and the Interstate Commerce Act of 1887,
which is thus summarized by Professor Seager:*
" (1) Discriminations between persons, places and commodi-
ties were prohibited, and railroad officials granting discriminating
rates were made liable to fine and imprisonment; (2) railway
rates for interstate traffic were required to be just and reason-
able, and any rate not just and reasonable was declared to be
unlawful, and valid ground for a suit for damages by the
injured party; (3) railroads were required to publish their rates
and to change them only on public notice; (4) they were pro-
hibited from charging a higher rate for a short haul than for
a long haul over the same line and under similar circumstances,
unless authorized to do so by the Interstate Commerce Com-
mission; (5) pooling contracts between railroads were prohib-
ited. The act also created an Interstate Commerce Commis-
* Op. cit.
406
Tlte Protnotion of Convenience.
[§ 3887
sion to consist of five members and to be responsible for its
enforcement and the investigation of cases of alleged violation.'
The act has been found defective in
"the attempt to prohibit, at one and the same time, dis-
criminations and pooling. Experience has shown conclusively
that competition between railroads involves discrimination.
Competition in the railroad business means in practice making
special rates to attract special traffic. But experience has
snown with equal conclusiveness that agreements between
railroads designed to put an end to competition can only be
maintained when supplemented by pooling contracts. So
long as the proportion of freight which each road is to secure
depends upon its activity, the self-interest of railroad managers,
or their credulity acted upon by the misrepresentations of
unscrupulous shippers, will make discrimination in rates almost
inevitable. The law undertakes to enforce two lines of policy
which will not run together so long as different railroads act as
carriers for the same territory."
The amendments made and authoritatively proposed
in the act, as well as its judicial interpretations, for
which there is no space here, are also well summarized
by Professor Seager. Upon the success of the Rate Bill
and the Interstate Commerce Law, with such amend-
ments as they may receive, probably depends the
question of whether the railroads and public utilities
generally throughout the country, can well be left
under private management with government control,
or whether they shall be bought and operated by the
government.
But it will naturally be asked : if govern-
lessf7in*8sofC~ ment regulation has accomplished so little,
government regu- and if government operation would save
arfumenplet0 the wastes of competition, why not avoid
government the questions that reputation has not suc-
operation. * i «,i 1
cceded with, and come at once tb entire
government operation? But it is by no means cer-
tain that government's efforts, tho not accomplishing
all they aimed at, have been useless in leading toward
the increasing lowering of rates ; and unfruitful as the
attempt at regulation has been, the attempt at the
§ 388 m] Extra-Municipal Public Works.
407
vastly harder task of operation would probably be
equally unsatisfactory. There are two hundred thou-
sand people in the civil service now. The corruption
involved in dealing out these places is still, despite
all the efforts of the civil-service reformers, among the
chief obstructions to good government. The railroads
employ four times as many men as the civil service;
to make all these men government employees would
make the corruption sixteen times as great. Their votes
would simply make the tail wag the dog: instead of the
government managing the roads, the roads would man-
age the government. The present trimming for the
"labor vote" is nothing compared with what would
grow up for the consolidated railroad vote (400 h).
Many people think that even now the railroads run
the government — especially the state governments.
But as long as the roads are in various hands, their in-
terests are different, and they pull in opposite directions.
Make a body of millions of placeholders whose interests
are identical ; if they would not have their own way in
railroad management and everything else, to a degree
that competition prevents anybody from having it
now, it could be only because politicians no longer
stand in dread of voters. The Italian experience may
not be conclusive, but it is at least suggestive.
The officers of the roads in such cases, in America,
would be "favorite sons'' and "men with pulls". The
genius for railroad management that now fills most of
the presidencies and superintendences with men who
began at the brakes, would have to give way to the
genius for political pulls; the roads, the shippers and
the passengers would suffer accordingly; and the tax-
paver would have to meet the deficits.
The effect on railroad salaries probably would be
what it has been on telegraph salaries in England. As
soon as government control took the pressure of com-
petition off, salaries advanced, deficits began, and the
taxpayers had to settle them.
Rates would be governed by political favoritism in-
stead of the exigencies of business.
408
The Promotion of Convenience.
[§ 388 m
The experience of our Canadian neighbors is valuable
in this connection. The London Economist states that
the lines the government has built in Canada are located
to foster constituencies, not trade; there was much
corruption in the contracts ; the roads have been run as
political machines ; much improving has been done for
the sake of giving contracts to political allies; cost of
operating has been higher, and number of employees
greater, than on private lines; on account of political
pulls, unfit employees are retained, and favorable rates
are given to friends of the administration; politicians
back enormous claims against the railways; and un-
businesslike competition to help political favorites has
injured private roads.
388 (n). "Labor" The effect of government operation on
under government strikes is one of the most important points
operation. ^n ^c whole discussion. Of course a rail-
road is not like a factory, where Labor and Ability can
have their quarrels without making the public suffer:
if the factory stops, the public can get unmonopolized
goods at some other factory, or for a time from the
stock in the shops. But if there is a strike on a railroad,
the public must simply do without the service until
matters are adjusted, and at great loss of money and
convenience. This certainly gives the public, as rep-
resented by the state, a right to prevent quarrels be-
tween Labor and Ability from stopping the cars (32).
Government operation would certainly simplify this
matter. We do not hear of many strikes in the post-
ofiiecs: but they are much simpler affairs, and require,
in large part, a higher type of Labor. But if each rail-
road employee were a government servant, resistance
to regulations, or refusal to work, would be flat rebellion,
and then there would not be as much question of sup-
pressing it by force as there is about suppressing strike-
riots now.
It is impossible to tell what the majority of the
advocates of government operation of the roads really
want : at one moment they seem to be calling for gov-
§ 3^8 p] Extra-Municipal Public Works.
409
eminent control, not only in railroads but in all industry ;
and as soon as government sends police or militia, or
even injunction, to enforce control, they are crying out
against the tyranny of it.
There is much difference of opinion regarding state
operation of the railways in New South Wales, but
there is no difference in the opinion that the great
strike of 1903 was better handled by the government
than it could have been handled by a private company.
But there happened to be a strong government, which
probably would have backed up a private company
with all needed efficiency. A weak government would
have had a weak result in either case.
388 (0). improve- There seems to be no just reason,
unSlr private however, why private managers of rail-
controi. roads should not contract with their men
for definite periods of service or definite notice before
quitting, and especially not to interfere with other
men taking their places. But the unions probably
would not let the men make such contracts, and if
the men were to make them, they have no estates at
peril for damages, in case they break them. There is
a great deal of honor among the men — enough to sus-
tain many of them in any sacrifice to their unions;
but that very feature of their honor tends to prevent
it sustaining contracts with the companies. Yet that
is not true of all classes of employees. The locomotive
engineers naturally must be men of more ability than
most other unionists, and they quite generally stand
by their agreements.
There has been a great deal of talk of government's
protecting the public by declaring conditions upon
388 (pi Gooern- wh*ch Labor must accept employment
ment control of under public franchises, just on the same
private operations. grounds that it declares conditions upon
which Ability must operate the franchises. The propo-
sition certainly seems fair. Its details are simply to
make it the law that anybody accepting such service
shall give some stipulated notice before quitting work,
shall not interfere with anybody taking his place, and
410 The Promotion of Convenience. [§ 388 £
shall be subjected to imprisonment (fines are of no use
against people who have no money) for violation or
evasion of the law. There are now of course general
laws against violence and destruction of property, and
occasional timid laws against interfering with the Right
to Work, but probably there is no law against a laborer
who is really a public servant, quitting his place with-
out notice. Such laws, however, would not be counter
to the XV. Amendment of the National Constitution
prohibiting involuntary servitude, because the men
would enter upon the obligations voluntarily. But
undoubtedly the labor agitators — especially those who
make their living out of strikes — would in the first place
bitterly oppose such laws ; and if the laws were carried,
would try to dissuade men from taking service under
them. But such laws are so manifestly fair and in a
good direction, that it is certainly worth while to
attempt them.*
* As a safeguard in such matters, Professor Adams recom-
mends that franchises granted to public-service corporations
and industries with a "public use" shall contain the following
points :
"Conditions of employment to be fixed for annual periods,
some time in advance, by collective bargaining between repre-
sentatives of the employers and employees, as provided in the
Victorian Wage Boards (described on his page 496). Where
either side refuses to elect representatives, or the representatives
refuse to elect a standing arbiter or arbiters, such officials
to be appointed by the governor or by the courts.
' ' Employment in such industries or service to be by individual
enlistment or contract for a protracted period, sav three months.
Employers and employees to post bonds for tne faithful per-
formance of all agreements. The bond of the employees to
be accumulated by retaining a percentage of their wages, as
is done in the trade agreement between Wichert and Gardiner,
of Brooklyn, and the Independent Union of Shoe- workers of
Greater New York and Vicinity.
"Strikes, picketing and boycotts among such employees to
be punished as criminal conspiracies, and special protection
to be afforded the employer in case of strikes, by police, militia
and injunctions.
"Lockouts to be declared illegal, with provisions for the
appointment of a receiver for the industry when its operation
is discontinued."
§ 389] Extra-Municipal Public Works. 411
Whatever may be the way out, it is as certain as
anything in the future of society can be, that the
public will not long endure such inconveniences as it
has lately been put to by railroad strikes; not to
speak of the coal strike and the beef strike; and that,
government operation or not, the law will inevitably
take a more comprehensive hold on the matter, and that
any man having any employment at all, will have to
recognize some duties that he now ignores. (Compare
the treatment of the subject in Chapter XX.)
wtVidaZT' In the United States, cities, states and
politics. aven the nation have given "goverment
aidM for building railroads, the smaller governments
generally by money, and the states and the general
government by land granted to the company out of
the public domain, which the company could sell or
mortgage. In Europe, "state aid" consists more fre-
quently in the state building and running the railroads.
England can hardly be said to give any aid at all: for
the landholding interests in Parliament are so powerful
that England does not give the roads the full benefit of
eminent domain ; but they have virtually had to buy
their rights of way for whatever landowners hold out for.
Nevertheless, they compare favorably in financial results
and facilities to the public, with roads owned by gov-
ernment elsewhere.
It seems plain from our long consideration, that
which is the better plan depends on the degree of civili-
388 M. ne con- zation . As far as the world has got , the best
elusion. present means, as between government and
private initiative, of developing railroads, seems to be to
leave the building and running of them to individual
initiative, as it is here and in England, with cautious
government aid when really desirable, and to improve
the government regulation of them.
In point of time, the conveniences gov-
MlexPp°res$0.ffice ernments probably began supplying next
after money and roads, were post-horses.
412
Tlte Promotion of Convenience.
[§ 388
They were supplied on the roads as early as Assyria.
The postal system, like roads, was evolved for military
reasons: the supplies of post-horses along the roads
was begun for the transmission of military orders.
389 (a), ctty At first sight, there appears to be a good
versus country, deai Qf ebbing Peter to pay Paul in the
modern postal service — making the cities pay for the
remote regions. But there is really not as much as ap-
pears at first sight : for tho three quarters of the expense
of the postal service of our whole country is in trans-
mission; in thickly settled regions, probably more than
two thirds is in collecting and distributing, and less than
one third in transporting. Even if the^hickly settled
regions entailed more expense in transporting too, the
Peter-and-Paul system would still be amply justified.
We can all well afford to be taxed for such an agency of
civilization as the mails. But in some respects it has
gone beyond bounds.
389 (b). favoritism r B? a perversion of the American demand
to papers and tor the diffusion of intelligence, the govern-
periodicais ment is now losing some $12,000,000 an-
nually in carrying advertisements attached to magazines.
This it does at a cost of five cents a pound where it
receives but one cent. Most of this money goes to sub-
sidizing a business outside of the legitimate periodicals
that has grown up in consequence of the subsidy, and
which consists of mere pretexts of periodicals, contain-
ing no literature or information of any value — what
there is is mainly the product of scissors and paste-pot
— the whole sandwiched between its own weight, and
sometimes more than three times its own weight, of
advertising pages, these latter largely devoted to worse
than useless things, and often to abominations.
The circulation of the class of periodicals read by
those who will peruse these pages, amounts to less than
one tenth of one per cent, of the circulation of those
which the government spends this money in carrying;
and the circulation of the periodicals of an humbler but
still respectable and useful character, constitutes not one
tenth of one per cent. more. The rest pander only to
§3»9*1
Extra-Municipal Public Works.
413
low tastes, while the government subsidy upholds them
in competition with the periodicals that offer respectable
matter, and limit themselves to respectable advertise-
ments. Virtually all of the worthless and worse than
worthless class has grown up under the government sub-
sidy, to the indirect loss of the better class, and at the
direct expense of the whole community.
Every dollar paid for postage-stamps contains a
contribution of eighty cents toward these subsidies. If
it were not for this waste in subsidizing the lowest
class of periodicals, our Post-Office could sell letter-
stamps for half a cent, and postal-cards for a quarter of
a cent, and realize a surplus in place of the present
regular deficit.
Such subsidies can be realized only by large circula-
tion, and the most effective means of obtaining large
circulation, of course is low price. So far, the two
offset each other, but the large circulation attracts
heavy advertising, and through it the benefit of the
subsidy is indirectly realized. The five- and ten-cent
magazines actually cost for paper and printing more
than the subscribers pay. The deficit and an enormous
profit are paid by the advertisers, and the advertising
pays this enormous profit because the government
carries it at a fifth of what it costs to do the service.
Where the Post-Office charges $100 to carry 100,000
two-page circulars, it will carry 100,000 copies of them
paged in a magazine for $2. The publisher will get, at
usual rates, $166, out of which he must pay the deficit on
his sales to subscribers. Leaving this out of account,
his gross profit on each leaf (two pages) of advertising,
per 100,000 copies (for printing and paper cannot be
over $12) is $154. Loss to the government $10.
Postmaster-General Smith said in 1901 : " In the case
of hundreds of such publications, whenever the publisher
expends $1000 in his venture, the government spends
not less than $2000 in carrying on that publisher's
business." One publisher sends annually nearly 5,000,-
000 pounds through the mails, at a net loss to the
government of close to a third of a million dollars.
414
The Promotion of Convenience.
[§ 389'
389 (o. compared The United States is the only great nation
with other that runs its Post-Office at a loss. In
countries. most other civilized countries, the rates
on periodicals are the same as on books. Great Britain
publishes about 4900 periodicals; 40,000 new ones
were admitted to our mails in the years 1903-5. These
periodicals of ours kill books. In 1902, Germany pub-
lished 354 separate books to the million inhabitants;
France, 344, Russia, 85 ; the United States, 81. Spain
alone of the alleged civilized countries, published less
than we did — 66.
Meanwhile these little spurts and spasms
tolteratu?™"9* °* literature sold at less than it costs, are
unfitting the American people for any
reading which demands and repays sustained attention.
The people are giving up the book-reading habit, and
taking to magazines instead. Since the population of
the country has been doubling, the bookstores have
decreased to one-third.*
389 re). QoVem- r That carrying mails is a government
ment uersve pri- function, is established beyond reasonable
vate enterprise. discussiorL But in considering what other
matters are to become government functions, it is
worth while to bear in mind three considerations
regarding its running of the Post-Office. First: this
heavy waste of money and of the possible popular ca-
pacity for improving reading, would be impossible if the
mails had been carried by private industry for profit.
Second : mails (for distributing circulars) are carried in all
considerable cities by private industry in successful
competition, regarding both prices and efficiency, with
the national Post-Office. Third: if the mails were
carried by private corporations, there would be redress
for failures. This paragraph is written in the country,
where regular communication with New York is im-
portant. For four days out of the last five, mails that
* For most of the facts in this exposition of our postal policy,
I am indebted to articles by Col. C. W. Burrows in respectively
Construction (Pittsburg) for June 10, 1905, and the Yale
Review for February, 1906.
§ 39°] Extra-Municipal Public Works.
415
were due in the morning have not arrived until evening,
and there is no redress.
In 1906 the United States government, after printing
postage-stamps for fourteen years, returned to the
habit of getting them from private companies, because
they could make them cheaper.
In Europe, the post-offices are not confined as nearly
as ours, to handling written and printed matter: they
generally do everything that is done by our express
companies. But that state service is not as good, on
the whole, as the service of our express companies.
It is slow and unaccommodating, and apparently the
rush of American express business would swamp it
utterly. Moreover, on the Continent, they do not do
even their work with letters and papers as well as ours
is done.
389 (f). Beat 0ur PeoPle write vastly more letters
where people than any other people, and so they watch
watch it most the post-office closer (387, 392 c), and de-
mand higher efficiency*
390. Telegraph. ^he European and Australasian govern-
ments do the telegraphing entirely. Their
services compare very favorably with ours in apparent
cheapness, but not in actual cheapness. The difference
is paid, like our postal deficit, out of the government
budget — ultimately the taxes, of course.
Despite the importance of our government's mail
service, it probably would better not go into telegraph-
ing. One reason is that the people generally would
not watch telegrams as they do letters : fewer people
send telegrams. A better reason is that the private com-
panies on the whole probably do it cheaper. As already
said, the English government, and probably the others, do
it as we do our post-office, at a deficit; and the demand
for telegraphic service is not, like that for mail service,
of such infinite importance to the education of even
those who do not use it much, that it would be wise
to do it at the expense of the taxpayers.
* Regarding the Post-Office, see also p. 418.
4i6
The Promotion of Convenience.
[§ 39o
Some of the important tendencies of government
control of industries were so well and so entertainingly
summed up in a Washington letter to the New York
Evening Post during the great coal strike, and carry
so much instruction regarding the conditions of govern-
ment work inevitable in the present stage of political
capacity, that it is well worth while to give space to
some extracts. A word has been changed here and
there for the sake of the connection.
" Suppose the government were in the coal-mining business,
how would the employees be selected?
" They would be appointed on the patronage, or influence,
basis, by quotas according to States ana Congressional districts.
Then, after the followers of those in political control had been
given positions, the coal-mines would be put into 'the Classified
service', to insure a life position practically for the favorites
thus selected.
" How would their services terminate?
"By death. Age or incapacity would not serve as a disquali-
fication; sympathy for the needs of an employee would prevent
his severance from the pay-roll, and any civil pension or retire-
ment fund would be dismissed as un-American.
" What would be the rate of compensation?
"In the higher grades of work, too low to obtain the right kind
of men. And yet it would not be safe to make the compensation
adequately high, as this would mean a correspondingly enhanced
prize for the political heelers. In the lower rounds of the
ladder, however, the compensation would always be consider-
ably more than in private employment.
' 4 How would the work of mining be supervised ?
" There would be permanent and efficient employees, bearing
the title of 'deputy somebody' or 'administrative assistant
this', who would get moderate salaries, and upon whom the
real responsibility would rest. Above them would be a class of
supervisors, politicians, at about twice the salary, changing
with the administration of the Federal Government, and
knowing little or nothing about the business.
" What would be the relation of the government mines to
- machinery, and progress in mechanical appliances?
" One of non-intercourse.
" Who would look after the details upon which economical
administration rests?
" Nobody. It would be unfair to assign any man with a
political future to so unpopular a position. Hardly any
economy of administration in a mill or a mine can be suggested
which does not hurt somebody's feelings or intrench upon
personal profit or interest.
§39o]
Extra-Municipal Public Works.
417
"What would be the relation of the mine employees to
politics ?
"They would organize into a union, and employ lobbyists
to intimidate Congress into raising their salaries, extend their
vacations, and procure for them various privileges.
44 How would the mine get its supplies?
"On contract competitive bids where honest men were in
charge of the administration. Otherwise the specifications
would go out so worded as to throw business into the hands
of friends who happened to possess certain articles, or to hold
an agency or monopoly on them. Then the price would be
made whatever the traffic could bear.
" How much would it cost to mine coal under these circum-
stances ?
44 From two to three times what it costs now.
44 Would the American consumers, then, be charged $20 a,
ton for coal?
44 By no means; they would be charged $6 a ton, and the
rest of the cost would be made up through general taxation,
the methods of bookkeeping employed being such as to disguise
the operation.
44 How would the public view such a management of the coal-
mines ?
44 With supreme satisfaction. The labor unions would like
it, because they would have complete control there as against
disputed control in outside employments. They would cite
the anthracite mines as a great example, upon the basis of
which they would ask to have the wood-chopping industry of
the country absorbed by the Federal Government. Politicians
would like it because it would give places and positions which
they could control. The Sunday-school weeklies would teem
with illustrations of the heroisms of Uncle Sam's servants in
the coal-mines. Congressional oratory would exhaust itself in
eulogies of the ability of the government, and of the orator's
own party, to meet great questions, to do things, to accomplish
something, and to leave carping and criticism to outsiders and
Mugwumps. Those who had failed in private business would
especially derive satisfaction from the thought that, in an
enterprise in which they were stockholders, the Morgans and
the Wanamakcrs were being distanced. The patriotic people of
every class and condition would rejoice in the reflection that
whatever the United States did was done right. The stray,
solitary man who challenged this view would be almost ostracised.
It is better to be a patriot than a pessimist.
44 Would the operation of these mines lead to application of
the same principle to the management of beef-raising, or of
selling groceries?
44 Undoubtedly. The United States, with its unbounded
resources, is rich enough to carry the load of wasteful pro-
duction in a considerable number of industries.
4i8
The Protnotion of Convenience.
[§ 39o
'^GOVERNMENT MANAGEMENT IN OTHER LINES.
" Not an answer has been given which is not sustained by an
abundance of experience in the present dealings of the United
States Government. We have a printing-office here of 4000
employees, whose lack of modern machinery and other appliances
of economical production is such that the printer's art would
look backward with a vengeance were all the publishing busi-
ness of the country put on a similarly socialistic basis. The
control of the labor unions there is absolute. Uniformity of
work and wages is practically complete. Its employees, selected
on the spoils basis, have been given permanency by 'civil-
service reform'. Not a bureau of the Federal Government,
within present recollection, has been established on any other
basis. The census clerks were thus employed, and civil-
service reform only comes in at a late date to act as an em-
balming agent. The rural free-delivery service has afforded to
the spoils system a grand debauch, and yet the present Presi-
dent is a good friend of the merit system. Civil-service reform
was never healthier than now, and still its practical conquests
have been small.
" The Post-Office Department shows some wonderful results
in the way of celerity, security, and certainty wherever it has
clung to the coat-tails of private enterprise, as in the fast mail
trains of our competing railroads, and in its belated employ-
ment of pneumatic tubes. Wherever it has done things itself
it has done them badly. It was chased for years by the invent-
ors of canceling-machines, until finally, surrounded and over-
come, it most reluctantly surrendered. The private manager
would have chased the canceling-machine, just as Commodore
Vanderbilt offered a prize to anybody who would invent the
brake he needed.
" No student of postal affairs can take seriously the deficit
of record. The actual one, with the free rent of millions upon
millions of dollars' worth of property, owned and cared for ana re-
paired out of the general funds of the government, would be
worth while. A score of items enter into the calculation which
prevent the postal deficit from being regarded as more than a
pleasant fiction of the Department. The letter-carriers are to-day
welded into a union, and have sent one of their number, accora-
ing to current report, to California to try to defeat Congress-
man Loud for reelection, because he had opposed an increase
in their salaries. The organization does not suggest that there
is any lack of competent men at the present rates, but merely
deems its proper salary that which through political manipula-
tion it is able to get. And still the post-office is the great
American idol.
" The government receives ninety-three cents a pound for
carrying your letters and postal cards. A private concern
§39o]
Extra-Municipal Public Works.
419
could afford to pay millions a year for the monopoly privilege
of carrying letters at half the present rates. The Department is
* squealing ' all the time because it has to carry the newspapers
so cheap — a cent a pound — and yet the express companies,
those boasted monsters of monopoly and watered stock, are
competing in certain ranges of territory for that very business.
It is too bad that Australasia is so far away that its pitiable
and dreary experiments in state socialism may not be more
readily available for our guidance."
CHAPTER XXIX.
PUBLIC WORKS (CONTINUED).
Municipal *
391. Street Rail- I*1 street-car accommodations, America
leads the great nations immeasurably.
And yet America did not have the first electric cars.
391 (a) Evolution Germanv hac* ^e fast* but America has
00 °n' introduced them much the fastest of all
the countries. Germans wait for their paternal govern-
ment to take care of them, and governments move
slowly; Americans see chances to make money, and
take care of themselves promptly. Germany's having
the first electric cars did not result from her being
the European leader in street railways. Great Britain
was the leader, especially in Scotland. In municipal
391 (b). Municipal operation, too, she was the leader, but
ffTn 'in waa" *n a qualified wav » like that of the French
little on Continent, railroads (388 a). In 1899, in Scotland,
m America none. two-thirds of the street railways were
owned by the cities, and leased to the companies oper-
* In this chapter my obligations to Dr. Albert Shaw's two
volumes on "Municipal Government" are so many that to
acknowledge each one would require including his name in
nearly every page. I am also indebted for much recent informa-
tion regarding the United States, to Professor Zueblin's 41 Ameri-
can Municipal Progress", and to the Proceedings of the Na-
tional Municipal League, especially the volume for 1906. This
organization well deserves the support of every good citizen,
and its future volumes may be expected to be mines of valuable
experience and suggestion. Their usefulness has been increas-
ing at a geometrical rate.
420
§39i b]
Municipal Public Works.
421
ating them; and in England and Ireland, one-third.
As said before, it is very important to keep in mind
the difference between municipal ownership and
municipal operation. The first is almost universally
approved; the second very widely questioned.
At first Parliament forbade the cities to operate
their roads. In 1882 one city — Huddersfield, was per-
mitted to operate its railways. Since then, up to 1899,
about twenty cities have obtained the right, and as
the companies1 leases are now rapidly falling in, many
more are applying for it. Towns owning electric
plants were particularly anxious to use them on their
railroads, before, in 1899, there began a violent opposition
to "municipal trading" as they call it (400 hy 414 a).
Sometime since, London began operating the trams
in the Southern section. The results have been dis-
astrous. The net income for the year ending March 31,
1906, was but a tenth of that from the Northern sec-
tion, operated by a private company: there appears to
be abundant evidence of graft — a thing until lately
almost unknown in London.
Virtually all the European cities get large revenues
from the street railways, even when they do not run
them themselves. The Hamburg railways pay more
to the city than to their stockholders.
There is little, if any, municipalization on the Conti-
nent. But minute regulation for frequency of cars,
plenty of seating-room, etc., is almost universal. There,
however, political regulation is easier, and more people
live in the cities where they work, and even in the same
buildings, than in Great Britain or America. Therefore
there is not as great need of street railways or as great
crowding of them. But if our people were to get more in
the way of living near their businesses, probably it
would not relieve the frightful overcrowding and dis-
comfort of the street railways: for the companies
would simply run fewer cars; they would not run any
more cars than they could run at a big profit, until
they were compelled to.
This of course is an argument for the cities taking
422
Tlie Promotion of Convenience.
the roads by eminent domain, and operating them,
but that ought not to be necessary. The cities could
compel decent accommodations from the companies,
if the art of politics and the quality of the suffrage
were up to it : it is done in many places in Europe (426-
426 b). Already some charters here have made one hope-
ful condition for safety — that the employees shall have
enough time for sleep. Our companies have inspectors
391 (O, Need of constantly walking along their lines or
constant govern- riding short distances in their cars, to see
ment inspection. ^ m conducted in the interest
of the owners. Why should not the people have similar
inspectors to see that things are conducted in the interest
of the people — that cars are run with reasonable safety,
cleanliness, politeness and frequency — not as at present,
from the Madison Avenue line in New York down through
most lines in the United States, just infrequently
enough, even in slack hours, to keep the cars over-
crowded ? Mayor Cutler of Rochester asks the authority
to appoint a Commissioner of Public Utilities who shall
supervise them all, and receive all complaints, with
power to call for papers and accounts, investigate under
oath, and redress all grievances.
Some answers to the question in the preceding para-
graph are not far to seek: one is the slowness of legis-
latures and city councils in providing the statutes and
ordinances obviously required for the public conven-
ience— a slowness aided by corruption from the com-
panies. Another reason is the probability that even if
the laws and the inspectors to help enforce them were
provided, the inspectors would be bought off. When
the government is unable to provide even this moderate
regulation of the roads, what of its capacity to manage
them entirely?
391 (d). Municipal In America, until very lately, most of
adding /* * the cities simply gave away the franchises.
America, Chicago's street railway franchises are
easily worth $75,000,000, and the city never had any-
thing from them. Even during the early years of
this century, Mayor Arkbridge of Philadelphia ignored
§39i e]
Municipal Public Works.
423
a responsible offer of $2,500,000 for privileges which
were subsequently given to existing companies. Yet
the companies had before turned all the streets their
tracks went through, from cobblestones to asphalt.
Baltimore in i860 sold her franchises for a fifth of
the fares. Later it was reduced to nine per cent.
The proceeds take care of all the parks, and have
already bought several new ones. Cincinnati, Provi-
dence and Richmond receive five per cent, of the fares.
Some other cities get revenue from the roads in vari-
ous ways, and the tendency to do so is becoming
general.
391 (e). Ownership The United States has as yet no munici-
in America. paj operation. Up to 1907 the only notice-
able cases even of municipal ownership, were Boston's
ownership of her subway, and New York's ownership
of the Brooklyn Bridge railway, both of which the
cities leased to the operating companies. But New
York has loaned her credit to a private company
to build the subway, which, after a long lease, is to be
accepted in payment of the loan. It is claimed that
the Boston subway is paying interest on its bonds, and
has a surplus for a sinking fund that will pay off the prin-
cipal before the debt matures, leaving the city the valu-
able source of revenue free of all liability. Early in '99,
Detroit was preparing to buy all her street railways.
But the courts had already waked up some opposing
amendments of the state constitution that were passed
when the state had heavy losses in the infancy of steam-
railway building. Unless the constitution is again
amended, these render government ownership impos-
sible. Yet the city has lately taken possession of the
tracks of a new company, with threats to destroy them;
and the matter is before the courts. In Cleveland in
1899 the problem was enlarged by a great and destruc-
tive strike, with dynamite and boycott of people riding
in the cars.
Since 1897 Cleveland has been making a fight for
a three-cent fare. The old combine running the
street railroads, and running them well, has fought
4*4
The Promotion of Convenience.
[§ 39i *
the matter up to the United States Supreme Court.
Mayor "Tom" Johnson has at last developed an inde-
pendent company running on one street at a three-cent
fare, and himself acted as motorman on the first car.
He fought for this line through twenty-five injunctions,
and the twenty-sixth that is now impending in the
Supreme Court. If he gets the decision, he will spread
the new line into regions now monopolized by the old
company. He forced the old company for a time to
sell seven tickets for a quarter, and to give a very high
class of accommodation, but the five-cent fare has
just been restored.
San Francisco lately took a line whose franchise had
expired, but the voters refused to operate it.
The voters of Seattle in 1906 refused to authorize
bonds for building municipal car-lines.
There are two main reasons alleged in favor of
municipal operation.
391 (f) Argument First, it is generally realized that mon-
f or municipal opolies will be run for the benefit of the
operation. owners, and it is claimed that the only way
to have them run for the benefit of the public, is for the
public to do the running The weak point in that reason-
ing is that here in America, with our large ignorant and
venal vote, the public is generally run by the politicians,
so that if the monopolies are nominally run for the
benefit of the public, they will really be run for the
benefit of the politicians.
391*7;. American In *905. Mayor Dunne of Chicago, who
and European had been elected to municipalize the street
conditions. railways, got an expert, Mr. Dalrymple,
over from Glasgow, to get the benefit of his experience.
His opinion regarding municipal operation in America
underwent some changes during his stay among us.
When he arrived, he said:
' ' I see no reason why Chicago, or any other city in this country,
should not be able to own its street railways and to run them
with as much success as we have achieved at Glasgow. I ad-
mit that the proposition at Chicago is a much larger one than
the one we had to tackle, but at the bottom it is the same. . .
§391*1
Municipal Public Works.
42 5
"The people of Glasgow would not go back to the old days
of private ownership tor anything in the world. I am not
saying that a company could not do as well by the public. I
know, in fact, that it could,' but it would be doing so with a
somewhat different end in view. For a company has always the
shareholders to consider. And I have to admit that you will
find people in Glasgow to-day — quite influential people, too —
who say that the streetcar service is not profitable."
After he had become acquainted with our democratic
ways, he said:
"To put street railroads, gasworks, telephone companies,
etc., under municipal ownership would be to create a political
machine in every large city that would be simply impreenable.
These political machines are already strong enough with their
control of policemen, firemen, and other office-holders.
"If, in addition to this, they could control the thousands of
men employed in the great public-utility corporations, the
political machines would have a power that could not be over-
thrown. I came to this country a believer in public ownership
[operation?]. What I have seen here, and I have studied the
situation carefully, makes me realize that private ownership
[operation?] under proper conditions is far better for the citizens
of American cities. '
Chicago is, in 1907, in the very safe position of having
from the legislature power to own street railways, but
none to operate them.
Nevertheless, it is to be considered
391 (hl eiasgow' that in the report of the Glasgow
tramways for the year ending May 1, 1905, prepared
by this same Mr. Dalrymple, it is stated that
"the total revenue was £764,790 and the working
expenses £387,167, which leaves a profit of £377,623 or
13.6 per cent, on the capital expenditure of £2,763,381."
These facts are quoted by a writer to the New York
Times in January, 1906. He adds:
"Deduct both interest on capital, £59,906, and sinking fund,
£46,919. Also deduct the local taxes, which have been in-
creased from £2,485 to £38,316 per annum since the city
took over the lines, and the £5,434 exacted by the Imperial
Government as income-tax on the profits, besides the £25,000
paid to the city chest as a rental for the streets, and remember-
ing that out of revenue the lines were kept in a perfect state
426
The Promotion of Convenience.
of repair, there was left a surplus absolutely net of £202,038,
7 per cent, on the capital.
"The Tramways Committee is so ultra-conservative and so
anxious that its rich profits shall not be raided too fast for
'the parks and popular free music' that it puts a part of this
surplus down in the books as 4 permanent-way renewals fund
ana depreciation', tho it has provided beforehand both for
upkeep and sinking fund.
4 4 The truth is that the municipal street railways are so fabu-
lously rich that the managers are afraid in some cases to let the
people know all at once what gold-mines they have got, lest
they should lose their balance and abolish fares altogether.
Mr. Bellamy, the able General Manager of the Liverpool system,
told me in September that on their lines they pay off yearly
10 per cent, of the real capital cost, tho the city has increased
the average length of the 2 -cent stage 240 per cent, since it
acquired the lines, and has reduced the average fare 40 per
cent., a gain to the traveling public of $1,500,000 a year. 'The
fact is, Martin', he said, 4 the financial position is so rosy that
we dare not expose it fully. We are accumulating a surplus
which will make us impregnable to all the assaults of fortune,
and then we shall bring down fares with a rush.' "
391 a). Great There is much evidence on the other
Britain versus side, as will be seen later. But the con-
Amenca. Q^ ey[^ence does no^ seem to forbid
the belief that municipal tramways have succeeded
in Great Britain. But if there were no conflict at
all, it would still be far from proved that similar
success would attend their operation in the United
States at our present stage of political evolution. Great
Britain, unlike us, has a restricted municipal suffrage, no
confusion of national with municipal politics, almost
entire freedom from municipal graft — at least until
something like it has begun to appear in connection with
municipal trading; and a set of social conditions under
which cooperative trading has grown to great success,
and even cooperative production has reached some re-
spectable success — neither of which evidences of coopera-
tive capacity have our people ever succeeded in demon-
strating. Farther evidence on the British conditions
will be given later.
Mr. Dalrymple's expert opinion, however, loses sight
of the distinction between ownership and operation,
and does not necessarily preclude municipal ownership.
§ 39i k]
Municipal Public Works.
427
The fact seems to be that if politics were sufficiently-
advanced to own and operate the roads, it would be
sufficiently advanced to regulate them without owning
and operating. In Washington, where Congress can do
anything with the roads that it pleases, and where local
graft is too small to control Congress, they are run very-
well.
The efforts of Mayor Head of Nash-
391 (j). NashuM: ghow what gQod gov^me^ with.
out operation, or even ownership, can accomplish.
About the opening of the century the street-railway
company claimed a perpetual franchise. After a
bitter and expensive fight in the courts, he got them
to agree to sell out at any time after twenty years
should have elapsed, at a prescribed method of
valuation, after a year's notice; to pay the city ten
thousand dollars for failing to keep the streets through
which they passed in condition during the litigation;
to give the city a park costing $125,000; to pay the
city two per cent, of their gross income till it should
reach a million dollars a year, and three per cent there-
after; to spend a million and a half dollars in rehabili-
tating their" plant, which had been permitted to run
down during the preceding three years; to give uni-
versal transfers; to run all cars under a central shed
where transfers could be facilitated; and to keep the
street between their tracks and for two feet outside,
in as good condition as the city keeps the rest of the
streets. The company spent a million more than was
stipulated, has enabled the city to keep up its parks
and buy more (it had none before the agreement) ; has
given good service; and its securities have more than
doubled in value.
In Rochester the Board of Health has
391 (k). Rochester. forced the rajiways to provide good cars,
and has prevented freight-cars from running during
the crowded hours between 6 a.m. and 8 p.m. In that
city there were a great many franchises unused, but
held onto in order to keep competition out, as are
many municipal franchises of all sorts in England.
428
The Promotion of Convenience.
[§ 39i *
One strong reason for municipalization is a very sound
argument for ownership, but hardly touches on opera -
391 a). The "in- ^on- ^ *s tnat» as the cities grow, the
crement" in business of the roads increases, and more-
franchiaea. Qver .t increases without a proportionate
increase in the expense — no greater managerial ability is
needed, and cars are less and less apt to run partly
filled; in this way, there rolls up a sort of double
"unearned increment" (74) of which the public should
have the benefit.
It may be asked : why is the public any better entitled
to this unearned increment than to that on land? For
the very reason that each landowner is entitled to the
increment on his own land. There is no question about
the public being the owner (unless it has given it away,
or sold it, as to the purpose) of the land on which the
street railway runs — of the instrument which produces
the increment; and as, when that instrument is a
natural monopoly, the enthusiasm and competition of
individual ownership cannot be applied to it anyhow,
there is no need for the public ever to part with it.
On the other hand, without the enthusiasm and com-
petition of individual ownership in ordinary land, we
would never have got beyond the barbaric conditions
universal among peoples where private ownership of
land does not exist (75).
Should ^s secur*ng t^ie unearned increment of
ffaJe^birtnot* *" the franchises to the public, much is to be
^li'JlnL^aZiV said in favor of the recent English method,
one management. r i at -»r 1 t <
and that of the New York subway, under
which the city retains the ownership of the roads, or at
least of the franchises (it may not be necessary for the
city to build the roads), and leases them to companies.
That seems to be better suited to our degree of political
development, even tho England may be ready for the
farther step of the cities operating the roads themselves.
Retaining a share of the receipts, as Baltimore, Cincin-
nati, Providence, Nashville, Richmond and an increas-
ing number of other cities do, is only one form of lease.
There is a reason for the public sharing in profits
§39i n]
Municipal Public Works.
429
'rather than receipts: sharing receipts, regardless of
whether a profit were realized or not, would discourage
making new roads; besides, as already shown, profits
increase faster than receipts. There is an apparent
reason the other way, in the fact that bookkeeping can
juggle profits; but it ought to be easy to guard against
that.
To encourage companies to make the roads even if they
had to give them up in time, the rent could be made
low because of the reversion, just as in other leases,
or the lessor could have the option of paying for the
lessee's improvements or renewing his lease.
As stated in several cases before, it is desirable that
the roads of any city should all be under one control,
to save duplication of roads and managers, and also
to facilitate transfer tickets. But that need not
involve the city's running them. In Germany each
city's roads generally belong to a single company, but
the city regulates them very well indeed.
True, the single management prevents the public hav-
ing the benefit of competition in fares, but the pub-
lic could not very well have that, anyhow, unless more
than one road runs through a street, tho of course there
is room for some competition in parallel streets. Low
391 (n). Rates of fares can be secured, not only by govern-
*are' ment regulation, but also by the tendency
of a broad-minded management like that of the Metro-
politan Traction Company in New York in its earlier
years, to see its own advantage in inviting large business.
That management, however, has fallen off terribly since
it was a new broom. Moreover, low fares are often
secured by the general influence of those vast indis-
tinguishable agencies which go to make up habit and
popular opinion. The fares in Columbus are seven for
25 cents, and in Rockford twenty-five general tickets, or
fifty school tickets, for $1, and on one line in Cleveland,
three cents.
In Glasgow and probably some other places, they
have "zone" fares, starting very low for a mile from
43 o The Promotion of Convenience. [§ 391 n
the centre, and then increasing mile by mile, until
they run up to ten cents. The result is that the work-
men do not go to the country, but remain huddled in
the zones of cheap fares.
391 fo). Deterio- Altho I have tried to state the situation
rating 'private fairly, the reader in favor of municipal
seruice may com- ■/ . * A . *•« , ,r«
pel municipal operation of street railways will probably
experiment. assume that I have made the best case
against it that I could. And now (1907), six years
since I made most of that case, I am bound to confess
that regarding the rapid-transit roads of my own city
of New York, I am much less opposed to the experi-
ment of municipal operation. In stating this, I shall
probably at least be held free of the charge of saying
it without a realization of the enormous risks of the
experiment. When I made my case, the great
monopolies controlling the roads were newly organized.
They were more than suspected of holding their fran-
chises in consequence of great political corruption, and
they were on their good behavior. Moreover, as already
said, they were new brooms. Since then they have
had time to grow careless and indifferent, Tammany
is again in power, and apparently there is no agency
to curb their shameless and (it may perhaps be hoped)
short-sighted avarice. To swell their profits, they have
introduced obstacles in their system of transfers, and,
in order to operate only crowded cars, have steadily
diminished the number of them in slack hours, and of
those continuing beyond points — such as the Grand Cen-
tral Depot and the 86th Street car-barns — where many
passengers disembark, thus forcing many changes and
waits. At points where it was once easy to find a car
with an empty seat, nearly every passing car now con-
tains many passengers holding on to the straps; the
passenger who once had a good chance for a seat, is now
often lucky if he can get a foothold on the steps or the
running-board , the tracks are so poorly cared for, and
left unsanded, that on going up hill the slipping cars are
passed by people on foot ; and the motormen frequently
Municipal Public Works.
43i
pass would-be passengers on the few occasions when
the cars are not full. Early in 1907, the companies
claimed that many men were laid off by sickness. A
motorman told me that the men were playing sick
to get a chance to hunt up better jobs, and concluded:
"This road has gone onto the bum." The day when
this is written, I read Dr. Clark's statement that in
Australasia, a government that did not provide decent
railroad accommodations could not hold office. True,
"they manage these things differently in France" (and
Australasia), but despite the influences controlling elec-
tions in New York and America generally, the abuses
of many of our city railroads have reached the point
where any change of management stands a good chance
of being a change for the better; and even if one should
turn out for the worse, it would at least bring with it
much valuable education. The corruption of all gov-
ernment agents by the railway corporations is so great,
that it may make all attempts at mere government
regulation farcical, and perhaps the corruption in gov-
ernment operation would be no greater.
M(p).8om.otner A?1d.17?t be/°re ^ .haVe tHed a11 the
experiment**: possibilities of regulation, we should not
BirabiefirBU ke driven to the extreme of municipal
operation. The recommendation already made of
more commissions for the regulation of private man-
agement, might be tried for cities, as it has been fbut
none too effectively) tried for states; and the powers
and duties and emoluments of the commissions that
exist, enlarged so as to enable them Cif they will) to
hold the roads up to the greatest practicable efficiency.
The commissioners would probably best be elected by
the people. The state railroad commissions, which
have not been elected by the people, have generally
been mere creatures of the railroads, and often appointed
at their recommendation. Yet the work of railroad
commissions is easily open to the judgment of the
people and, if they were elective, to prompt punishment
for dereliction. That it might be prompt, the term of
office should be annual, with indefinite eligibility to
432
The Promotion of Convenience.
[§ 39i P
reelection. If such commissions always fail, the only
remaining experiment seems to be government operation.
It should be remembered that under any system of
mere government regulation, the responsibility is
divided between the railway corporation and the govern-
ment; while under government operation, the respon-
sibility would be upon the government alone, and the
issue would be clean-cut. That it would be as effective
and permanent a remedy as the out-and-out advocates
of municipal operation generally believe, I do not dare
to hope; .but the logic of events is converting many
opponents into advocating it, at least as an experi-
ment. Meanwhile, I let my arguments against it
stand as they were originally written. They attempt
to show the dangers of the experiment, and there is
some slight chance that they may fall under the eyes
of a person here and there who may have some little
influence in guarding against those dangers. And
behind it all, I have a misgiving that the result of the
experiment, if it is tried before the arguments find
their natural way to oblivion, may after all only con-
firm their validity.
392. Waterworks. ^e come now to Government's rela-
tions to waterworks. We find them in
many of the ruins of early civilizations, especially the
Roman; and we find the waterworks themselves in
many primitive civilizations of our own day, in Asia
and Africa; and we know that all these were or are
government works, because under the conditions before
modern civilization, cooperation was never equal to
such work.
In modern Europe, especially in the more paternal
states, municipal ownership is the rule. In America,
waterworks were generally begun by private com-
panies, but the tendency has been more and more for
the municipality to buy out the companies or start its
own works. In the first half of the nineteenth cen-
tury, most of the works were private; at its close,
probably most of them were public. The size of places
§ 392 ^] [Municipal Public Works. 433
has affected the question materially: the little works
of small places have been more readily constructed bv
private capital. The works in cities of over 30,000
are generally municipal. A peculiarity about water-
392(a). why m W0I*ks favors this, tho the waste and cor-
for municipaifza- ruption in building government water-
twn' works have often been frightful ; but after
they are once built they require little management,
and so afford little field for corruption.
Yet while water-supplies have sometimes been well
and economically managed by cities, much — probably
most of the New York work, has consisted of enormous
swindles.
But on the other hand, early in 1900, a gigantic
corporation loomed up in possession of all the water-
rights affecting cities of the lower Hudson valley, in-
cluding New York itself. This attained the proportions
of a natural monopoly, and public opinion was strongly
in favor of the municipality forestalling the monopoly.
The scheme was laid away at least for the time.
392 (b). Health Waterworks ought at least to be under
questions, t^e absolute control of a Board of Health
that cannot possibly have any financial interest in them :
lately Philadelphia and Passaic were full of typhoid
from their water-supplies, and in Philadelphia, long after
the remedy was plain, it was impossible to apply it,
•because rivals who wanted to benefit by the work, got
the politicians at loggerheads about it.
Many cities are sorely perplexed over the purity of
their water-supply. Before Pasteur discovered bacteria,
it was quite the custom, as in Chicago, for waterside
cities to empty their sewage into the water to whose
position they owed their existence, and then, unless the
water was salt, pump it back to drink. After Pasteur
taught them where their typhoids came from, they ran
their sewers, where practicable, a mile or two farther
out, and drank a higher dilution. They are now learning
that this will not do, and are struggling with questions
of inland supply, deep wells, filtration plants and sew-
age disposal. Probably the best and cheapest solu-
434
The Promotion of Convenience.
[§ 392 b
tion of the question is one that political capacity has
not yet risen to. Laws might be passed (in fact some
have been passed, but neglected, in New York, for in-
stance,) to prohibit the pollution of fresh water (or of
salt either, where bathing can be harmed), and requiring
the rational and even profitable disposal of sewage that
the soil is crying for ; but it would be very optimistic to
expect the enforcement of such laws before people be-
come more intelligent and law-abiding. A minor diffi-
culty would be that sometimes states would have to
concur to protect the confluents of a watershed lying in
both. Such laws would be very interesting experiments,
however, and perhaps not more hopeless than most
attempts at betterment by statute.
392(c). Municipal Waste is a frequent evil. Recently in
management Liverpool, it was found that two thirds
naturally wasteful. q[ ^ water tfae ^
out again through leaks and taps needlessly left open.
This is probably about the case in the vast majority
of American cities to-day, at least where meters are not
used. Under private management, the company would
be taking care of its own supply: now the politicians
take care, and characteristically poor care, of the public's.
Yet while private companies are apt to do better
work and at less cost for actual service, it cannot be
denied that in any sort of service, their interests may
sometimes conflict with the interests of the com-
munity: they may render less service than the com-
munity needs, as was shown in the lack of salt-water
mains for putting out fires when the San Francisco
earthquake broke the fresh-water mains from the in-
terior. The water-supply was the affair of a private
company which had obstructed providing a supply
for fires from the bay.
Waterworks are, of course, generally a natural
monopoly — competition which involves more than one
pipe-line in a street, is not practically possible, even
in large places because of the large size of the mains;
and has not been at all frequent. Moreover, when it
is, it is a frightful nuisance from frequent tearing up
§ 393 a]
Municipal Public Works.
435
of the streets. On the whole, then, municipal water-
works are to be approved, despite municipal cor-
ruption, and largely for the same reason that makes
the Post-Office a success: everybody watches (387,
389 /) the water-supply, and if it is bad, complains
and votes against the government.
Gasworks are cheaper to build than
393. Ug tng. waterworks, and, perhaps for that reason,
are not as generally municipalized: so competition is
more frequent in gas than in water: two or three com-
panies frequently having gas-pipes in the same street —
a condition facilitated by their pipes being much smaller
than water-mains.
393 (a), craves ^e argument for municipal ownership,
municipalization then, is not as strong as for water, espe-
leas than water. pecjaUy when we consider that gas is not
used by everybody, and requires more management
than water after the works are erected. Cities not
making their own gas generally charter more than
one company. In America, of course, they charter as
many as can bribe the authorities, tho fortunately
some of the authorities cannot be bribed. In Europe
generally, people do not have their streets torn up by
more than one company, and they regulate the prices
and quality of the gas produced by that one. Ham-
burg has even leased her own works to a private cor-
poration, but she keeps her hand on that corporation.
In all of Germany there is but one city (Frankfort)
chartering more than one company, and gas is higher
there than anywhere else in Germany.
The experience regarding municipal ownership of gas-
plants, corresponds with the conditions just given.
Paternal Germany leads off, of course, with a majority
of the big cities owning gas-plants. The smaller cities,
as in the case of waterworks with us, (and apparently
the world over), do not municipalize gas as generally
as the large ones. Great Britain, notwithstanding it
is, among European nations, at the other extreme from
Germany as regards paternalism, nevertheless comes
43<*
The Promotion of Convenience. [§ 393 a
next with proportion of municipal gasworks, they being
about one in three, and certainly increasing.
Glasgow and several other Scotch cities, likewise
some German cities, light the courts, halls and stairs
of tenement-houses with gas, and Glasgow makes the
owners pay for most of it. Some cities, tho, spend
as much for it as in lighting streets — this on the prin-
ciple, of course, that a light saves a policeman.
Despite England's lack of paternalism, she comes
next to Germany in municipalizing gasworks. Public
opinion demands them in both those countries more
generally than in the rest of Europe, there being a
larger proportion of people given to reading, who
want abundant light, and who can afford to pay for it.
393^; cheapened Apparently municipal ownership has
by it in some cheapened gas in Great Britain and Ger-
piaces in Europe. many It .g suppHed as Iow ag
twenty-five cents, while in America it is often above
a dollar. But it may be even yet too early to be sure
that it is not cheapened in Great Britain and Ger-
many by an increase of taxation. In London at the
time of writing, the gas is very bad.
Whether we would better adopt municipalization on
the chances, we can tell better after we have attained
decent government. If most of our present city govern-
ments were giving us gas for fifty cents, they would
be adding more than another fifty cents to our tax-
bills, by corruption in the works.
We have not had much experience in that sort of
finance in America, in connection with gas, because
there have been few municipal plants. - But the book-
keeping for gas and water and electricity has been
393 (c). American' something fearful and wonderful in the
tuTiZZfnTy* direction of trying to show a profit. Pub-
diacouraging lished reports are very unreliable. The
mayor of Philadelphia lately reported a year's profit
of Si 60,000 on gas, while a Massachusetts committee
investigating Philadelphia experience for their own
guidance, reported a loss of $1,000,000.* The gen-
* Daniels, op cit.
§ 393 dl Municipal Public Works.
437
eral American experience in municipalities operating
gas-plants, has been very slight: people are too afraid
of the political rings, and the rings can get too much
out of the existing companies for letting them alone.
A few towns have bought their local gasworks within
the last score of years; but on the whole, people do
not trust universal-suffrage government far enough to
want to disturb, in its favor, the existing state of
affairs. Richmond and Philadelphia have long had
their own works, but tho Philadelphia has owned hers
for more than half a century, she has lately leased
them to a private corporation, municipal management
being a failure, probably owing to corruption. The
lease fell in in 1905, and was renewed for seventy-
five years, by a corrupt government on terms that the
community would not stand, and the government was
ousted in consequence. Toledo, after ten years' use
of a municipal natural-gas plant, leased it to a private
company at a rental insufficient to pay interest on a
seventh of what it cost, and finally sold it at a tenth
of its cost. Corruption was suspected in both transac-
tions.
By 1905, the lighting of New York had become so
monopolized that, at the time of this writing, many
citizens who distrust that city's capacity to manage an
industry, think a municipal lighting plant would be
better risked than a continuation of existing conditions.
And the same condition is rapidly developing regarding
the surface railways.
393 (d). Peculiar There seems no doubt that the Rich-
caw in Richmond. mondf Virginia, public gas-plant had more
than paid for itself over twenty years ago, has paid
into the city treasury over $300,000, has reduced the
price of gas from $1.50 to $1.00, and has furnished
free gas for streets and public buildings, worth $500,000
more.* All of which proves much municipal political
capacity in Richmond, but unfortunately does not prove
it anywhere else.
* Zueblin, op. cit.
43»
The Promotion of Convenience. [§ 393 d
Since the foregoing paragraph was written, the Rich-
mond bookkeeping has been proved fallacious, the
works have been proved to have been run at a loss,
and to need renovation. But I let the paragraph stand
as one more illustration of the uncertainty of evidence
in these matters.
393 (eh other In Cleveland the gas company pays into
American cities, the cjty treasury 6 J per cent. — Professor
Zueblin does not say whether of receipts or profits —
probably not thinking it any more worth looking up
than I do. The people have just voted against
municipal electricity.
Until this year, 1907, Hamilton, Ohio, was very
proud of her municipally operated gas and electric
plants. The state auditor now reports that from
Jan. 1, '03, to Jan. 1, '06, $35,000 dead claims had
accumulated, and a debt of $13,431; that the adminis-
tration was
"marked with evidence of mismanagement, extravagance and
unbusinesslike methods . . . the employment of inexperienced
men [with pulls?] to superintend important work where both
mechanical and electrical skill were necessary . . . cost of
production at times exceeded the schedule rates charged for
the service. ..."
Stubs and original memoranda of various kinds were
missing, there was a shortage in the secretary's accounts,
and the surety bonds of many officials had not been
renewed in years. In the words of the report:
"Officials, ex-officials, prominent citizens and others were
enjoying free service; while these accounts were duly charged
on the books, apparently no effort had been made toward
their collection or adjustment. Several individual accounts
ranged from one hundred to eleven hundred dollars."
It need hardly be reiterated that the truth as to the
success of gas municipalization so far, is hard to get at.
In Chicago, for instance, chartered accountants claim
that the municipal gas-plant has been running at a loss,
while the mayor claims that it has been running at a
profit.
§393/1
Municipal Public Works.
439
Dr. Bemis (quoted by Professor Zueblin) says that all
the municipal gas-plants are succeeding. It is edifying
.to have such definite information regarding the Phila-
delphia one (which Professor Zueblin, after quoting
Dr. Bemis, says "was the football of politics . . .
over half a century"), not to speak of those of Rich-
mond, Toledo and Hamilton — so edifying as to give
some impression of the quality of the information
regarding the others. Other authorities say that the
desire of the authorities to make a good showing,
combined with bad systems of bookkeeping, make it
impossible to tell whether they are succeeding or not.
In short, there had been no magic in municipal
operation to make it different from the operation
previously quite general in American cities.
Professor Zueblin states that "in Great Britain . . .
over 100,000,000,000 cubic feet are consumed by half
the number of people that consume 50,000,000,000 in
this country". This he attributes to municipal opera-
tion. Whether it is at the expense of the taxpayers
he does not say, perhaps because nobody knows yet,
tho there is a growing suspicion that it is, — and Pro-
fessor Zueblin plainly thinks that it ought to be !
393 (f). Oenerat Cities can do something for the gas-
considerations. supply without owning it : they can keep
it up to standard and regulate prices — the German cities
and many others do that without needing competition
(393 a) • Some of the German cities have their gas tested
every day, but that is probably more than many of our
cities could do with any confidence in, the test.
Besides the argument (which may not exist) of cheap-
ness of gas and water, if people think it is cheap, or get
their supply at a fixed price, as is generally often the
case with municipalized water, they will use more, and
that is good for them. Moreover, for light, a munici-
pality is sure of at least one very valuable customer —
namely itself. Some Continental cities use nearly
quarter of what is made, but that looks as if the people
did not use as much privately as the English, or even
our people, do.
44°
The Protection of Rights.
[§ 393 £
393 (g) £/«*• As to electricity, no existing state of
tricity. affairs had to be disturbed to municipa-
lize it: so our people have municipalized it much more
generally than gas. Yet the results are doubtful.
Duluth claims to have saved its people in seven
years $631,000 in reductions of rates on water and gas,
and to have accumulated and invested in extending
the systems, $121,000.
Detroit claims that in the ten years ending with
June, 1895, she lit her streets at $1 less per arc light
per year than Buffalo, and paid out of profits for a
million-dollar plant.
Logansport, Indiana, claims to have provided the
people with good electric light at a moderate price
since 1894, to have had all city lighting in streets and
public buildings free, and to have paid out of proceeds
$100,000 for increase of plant.
Jacksonville, Fla., claims to have, during about
eleven years preceding 1906, reduced prices of elec-
tricity to citizens, 75 per cent., and paid out of profits
for $365,000 worth of plant, plus interest on such bonds
as were issued at the start.
On the other hand, after trying the municipal electric
street -lighting plant for eighteen years, the people of
Easton, Pa., are demanding that the city councils
abandon it and procure lighting from the private cor-
poration. Mayor March, who advocates municipal
ownership when it can give efficient service, has declared
that the condition of the streets of the city through
defective lighting is dangerous from a police point of
view and unbearable from the point of view of the
citizen, and favors private service.
Offers have been made by private corporations at
$15 a year less per lamp than it now costs the city for
the service which is causing constant complaint. It is
estimated that the city has thrown away for several years
from $4,000 to $5,000 a year in maintaining the plant.
"Mayor March says: "If we intend to continue light-
ing the city by our own plant, we must run the plant
as a private corporation would run it, not only with
§ 393 g]
Municipal Public Works.
441
economy, but also by constantly repairing and renewing
the machinery to keep up its efficiency. This has not
been done. I feel that public opinion will insist upon
the streets being lighted by a private company because
the public, as well as I, believe it can be done for far
less expense than it is being done by the city."
Select Councilman David W. Nevin says: "In my
opinion the operation of municipal plants amounts
merely to the creation of a number of places to be
filled by local politicians. These men get salaries, but
have no interest in the plants as long as they continue
their 'pulls' and hold their jobs/'
That same Mayor Head of Nashville whose experi-
ence with the city railroads was given, proved again
in relation to light what municipal regulation without
even ownership, may accomplish. By judicious work
in the legislature he got the gas company to reduce
its price from Si. 50 per thousand feet to $1, and its
stock has risen from ninety cents to a dollar and a
quarter.
• He says * that when he began building a municipal
electric plant, the existing company reduced its rates
from eighteen cents to twelve, and made many con-
tracts at six. He ultimately took over the street-
lighting from them, and did it the first year twice as
freely as they had the preceding year, at a cost of
$33,500, as against their charge of $49,270.
In 1 90 1 the aldermen of Worcester, Mass., found that
in all the cities from which they could get reliable data,
the cost of electricity from municipal plants averaged
3.4 cents per lamp-hour, while Worcester was paying a
private corporation 2.8.
In 1906, Alexandria, Va., sold for $3000 an electric
plant which had cost $17,000, four Indiana cities were
looking for customers for theirs, and Cleveland had
voted against Mayor Tom Johnson's recommendation
to make one. On the other hand, many American cities
were claiming success for municipal electric-lighting
* Proceedings of National Municipal League, 1906.
393(h). Eiec- But not everybody us
tneity versus gas. far> not nearly as many" a
justification, then, for municipalizing i
obvious. But it is incomparably the
and economizes police expenses, and
the electric light has rendered many a
great police care failed to. Municip
purposes would, then, perhaps be just:
measure, and possibly private supply
along with street supply.
393 «). Major — Rearing on the com
Darwin on utuitiu considered, and one — hot
rtwrffftMM. be considered later (43I
Major Leonard Darwin's "Municipal '
1903) shows that from March 31, 181
1902, municipal waterworks, gasworks
kets and some minor undertakings
ducted at apparent profits, while elec
and wash-houses, burial-grounds, world]
harbors, piers, docks and quays, have t
apparent losses. But he does not co
entirely reliable, and his general atti
American experience confirms — that tl
bookkeeping is, very naturally, to thro
in favor of profit.
'P'horo "hoc Kpoh rt crr\r\r\
§ 395]
Municipal Public Works.
443
business to manage decently, of which I have knowl-
edge. How, then, about the fitness of the governments
to undertake it. It is doubtful whether its real usefulness
is wide enough to strongly justify government being
burdened with it ? But there is no doubt that it is essen-
tially a monopoly: for competition seems next to im-
possible, because every user wants to reach every other
user, and the service would be almost useless if split
up among several companies. Therefore if government
ever becomes fit to control this most difficult of con-
veniences, the telephone might properly be among the
first undertaken.
Now as long as there is private competi-
395. Tearing up tion in water, gas and electric conduits
streets. Tunnels r n i • j • x • j.
for pipes, wires, etc. of all kinds, it is a great nuisance to
doubly or trebly tear up the streets to
enable several companies to construct and repair their
conduits, and it not only is ugly and obstructive to
travel, but it spreads malaria. It is too late to effect
all the economies that were once possible, by combining
into a trust all the companies dealing in any one of the
commodities, as now is frequently done with new ones,
because the competing companies have already torn
many towns to pieces, and wasted a great deal of money
in duplicating each other's works. But any trust that
may be made, need not continue using all the pipes,
and tearing up to keep them in repair; but if it does
not use all, it would have to tear up for new connections
to replace the discarded ones; and so far as it does
not use all, there would have been just that much
waste.
For gas and water both (not to speak of sewerage,
electricity and pneumatic tubes) there is everywhere a
most painful need for a central combination to put
all the conduits in each street into one good tunnel,
abundantly large and convenient, where they could be
placed as needed, and taken out and repaired without
the inconvenience, waste and sickness always due to
disturbing the streets. Some of the London underground
444
The Promotion of Convenience.
[§ 395
railway tunnels carry pipes and are, on the whole, success-
ful in it. Paris has a pipe system in some of its sewers.
It is not as complete as it might be, but very admirable
as far as it goes. Paris puts the gas-pipes and electric
wires under the sidewalks instead of the roadway.
Milan in its splendid new Via Dante has galleries under
the sidewalks and right by the houses, for everything
except the sewerage: that goes under the roadway
as usual. New York has lately built a few "pipe
galleries" in connection with the subway railroads, but
of course not as many as there ought to have been, and
the specifications for the new subways require them
throughout.
As the concert of action necessary for pipe galleries
cannot be had from half a dozen independent companies
squabbling over each of the conveniences, pipe-gallery
or tunnel companies may be chartered, but by the time
a city needs them, the then existing gas and water com-
panies would fight against moving their own pipes:
so after all, the only way to get the best results would
seem to be for the city to own all the interests (it need
not operate any) or at least the tunnels or galleries, and
compel their use. For the government to take the
whole lot by eminent domain, and fix them up right,
once for all, would certainly be the best solution — for
any government fit to do it without the frightful waste
and corruption of most government work in American
rifles. Tunnels would probably cost American tax-
payers many times what they ought to, but they might
be worth having at the price, or for reasons of health,
at almost any price.
Most American cities let companies use their streets
for pipes and wires without paying for the privilege;
most European cities get large revenues from them:
so probably, without municipalizing so far as to have
the cities do the work of the companies, it might be
well to make municipal tunnels, and charge the com-
panies for the use of them.
Kansas City gets ten cents per foot per year for the
privilege of laying down conduits for wires.
§397]
Municipal Public Works.
445
396. Advertising One very novel and useful source of
s,?ns' revenue, in Berlin, comes from regulating
advertising signs. The city keeps them in good taste,
and gets seventy thousand dollars a year for the privileges
of them. Of course such a proceeding is still far beyond
our political capacity.
397 Summar Professor Daniels ("Public Finance",
ummary. Edition of 1 899, pp. 277-9) admirably
summarizes conclusions on the topics of this chapter
as below. Up to 1907 the aspects of the case are not
materially changed, tho farther developed, as we shall
see in the next chapter.
"A careful sifting of the evidence presented on both sides
seems to establish the following conclusions as highly probable :
(1) The price charged by private companies for the supply of
water exceeds by twenty-live to forty-three per cent, the
price charged by municipal waterworks; (2) the cost of the
water-supply by municipalities probably exceeds the cost
incurred by private companies, tho how far the increased cost
augments general taxes it is difficult to say ; (3) while the price
of gas in England under both systems is markedly less than the
price of gas under cither system in the United States, the rate
of reduction in gas prices in the United States since 1870 seems
to have been more rapid than in England; (4) the cost of pro-
ducing gas has probably been less under private than under
public management. ... It is practically certain that muni-
cipalities have paid more than private companies for labor both
in England and in the United States. *This failing', says Pro-
fessor Bemis naively, 'if it be a failing, is quite common in
public works. Many consider it an advantage for public works
thus to set the example of good wages.' Our complacency on
this score might perhaps be just if the example set by our
public works were uniformly an example of good wages for
good work. When, as is so common, the practice of our public
works amounts to high pay for the inefficient service of party
hacks, the 'advantage' of such a policy is more than dubious.
(5) The price charged for gas by public companies in England
appears to be less by seven or eight per cent, than the charge
made by private companies, but no such general assertion can
be made with respect to the United States; (6) public electric-
light plants in this country cannot be said generally to furnish
electricity at a lower cost or price than private companies.
The evidence rather tends to show that the advantage lies with
private companies, especially as long as electrical apparatus is
446 The Promotion of Convenience. [§ 397
evidently In the transitional stage. (7) Local transportation
has been undertaken by several British municipalities with
varying success. In this country it is as yet untried. When
all circumstances are taken into consideration it would appear
that our transportation service is not only immeasurably more
efficient than the British tramway service, but that the charges
for distance traversed are really less in the United States
than upon the most successful of municipal lines in Great
Britain."
CHAPTER XXX.
LATEST ASPECTS OP GOVERNMENT OPERATION.
Most of the preceding treatment of the problems of
municipalization was written in 1900, tho I have tried
to bring its details up to date. As to general conclu-
sions, those of Professor Daniels were stated in 1899.
These words are written late in 1906. On searching
for evidence of what has happened during the inter-
vening time, I have been surprised to find how scant
and conflicting it is. Two things are plain — the efflores-
cence of municipalization up to 1890 has met with a
serious blight; and the testimony on the subject is
colored by that difference between men
^Jiifan"!81' Md which bears the names of Plato and Aris-
totle, but which began long before them.
The idealists find municipalization triumphant, the men
of facts find no sufficient evidence that it is.
In Great Britain, the advocates of municipal operation
say that the statistics abundantly prove its success.
The opponents say that they do not. Professor Daniels
doubts whether "any real financial profit whatever has
399. Major Darwin emerged". Major Darwin* thinks that
to 1903. " the net result to the nation will be neither
a considerable financial loss nor a considerable financial
gain". The report of the Parliamentary Committee
already alluded to shows little confidence in the statistics
either way, saying: "The auditors are not accountants,
* Op. cit. The most detailed work yet given to the subject.
447
448
The Promotion of Convenience.
[§399
and are not, in the opinion of the committee, properly-
qualified to discharge the duties which should devolve
upon them." Major Darwin supports most of the con-
victions already set forth.
"In the United States . . . the balance of advantages and
disadvantages tells heavily against Municipal Trade. ... In
England, Municipal Trade is more likely than private enter-
prise to introduce corruption. ... As regards gasworks, the
results have been shown to be faulty. . . . No material gain
or loss has directly resulted from Municipal Trade, altho taxa-
tion is now being increased thereby. . . . The arguments are
telling strongly against Municipal House-building. . . . Local
authorities are advancing too rapidly in the paths of Municipal
Trade."
He agrees with Lord Avebury's opinion that so far
"There can indeed be little doubt that there are fewer work-
men's dwellings now than there would have been if the muni-
cipalities had not built any. ... As regards house operations,
a particularly strong case can be made against this work being
largely entrusted to municipal employees ; that it would "be
most unwise to base our policy for the future on the hope of
any financial benefits to either consumers or ratepayers from
Municipal Trade " ; that " as regards ordinary competitive trades,
the case for municipal trade in fact breaks down utterly";
that "the logical thing to do would be to establish a separate
elected body for the management of such enterprises, the
number of votes to be given by each voter being solely based
on the amount of the rates paid by him" (an approach to the
recommendations of the Tilden Commission in New York), and
that "Local Authorities in England . . . have gone too far in
certain directions in their acceptance of socialist ideas." He
quotes John Stuart Mill to the effect that "the reasons in favor
of leaving to voluntary associations all such things as they are
competent to perform, would exist in equal strength if it were
certain that the work itself would be as well or better done by
public officers", the reasons being "the mischief of overloading
the chief functionaries of government with demands on their
attention, and diverting them from duties which they alone
can discharge, to objects which can be sufficiently well attained
without them; the danger of unnecessarily swelling the direct
power and direct influence of government, . . . and the inex-
pediency of concentrating in a dominant bureaucracy all the
skill and experience in the management of large interests, and
all the power of organized action existing in the community ; a
practice which keeps the citizen in a relation to the government
like that of children to their guardians, and is a main cause
§ 400] Latest Aspects of Government Operation.
449
of the inferior capacity for political life which has hitherto
characterized the over-governed countries of the Continent."
400. Municipal ^he very ^atest contributor of British
operation, retarding experience is Professor Hugo R. Meyer.*
eveopment t^es^s is that municipal operation
retards and limits the supplying of facilities, in fact
often prevents them. This he illustrates by the general
facts that Great Britain, where that system exists much
more widely than with us, has proportionally about
one-quarter the street-railway facilities, one-third the
electric-lighting facilities, and less than one-quarter the
telephone facilities that are enjoyed in the United States,
where these matters have been left to private initiative.
Glasgow, the banner city of municipal railways, has,
in proportion to population, but one-third the facilities
of Boston, and, distance being considered (only relatively,
Glasgow has no distance, the roads not going far from
the center), the fares are, in labor cost, much higher'
than those of Boston. In consequence of the backward-
ness of these industries, Professor Meyer claims, 120,000
British people have missed opportunities of employment,
and been forced to emigration or unemployment; and
that so far as electric machinery is concerned, England
has lost her old place as one of the world's chief sources
of supply for mechanical apparatus.
Professor Meyer seems to prove that the facts (of
which there can be no question) result from the cause
to which he attributes them. The most obvious and
incontrovertible of his arguments is that a city owning
a plant for any purpose, must attack itself to introduce a
new one or a substitute; while, if a plant is owned by a
private company, a competing company feels no tender-
ness for it. Private companies not only find in compe-
tition their very reason for existence, but are notoriously
readier than government bodies to adopt improvements :
the Boston Elevated Railway Company, according to
* " Municipal Ownership in Great Britain" (1906), a work to
which 1 am greatly indebted.
The Promotion of Convenience.
[§ 400
Professor Meyer, "scrapped" four equipments of motors
in twelve years. The effect of this consideration in
making the British cities owning gas-plants, oppose the
introduction of electricity, is shown in the figures
already given. Another obvious consideration is of
course the comparative slowness of all government
operations, as compared with those impelled by self-
interest. Mr. Farrar, for nearly twenty years Secre-
tary of the Board of Trade (quoted by Professor Meyer),
said in 1883:
"All experience shows that whilst capital will always . . .
support a new invention, if there is prospect of success, there
is no such active motive power on the part of governing bodies;
they take up a thing when it is done, but they are not persons
generally willing, nor perhaps are they the best persons, to take
up a new invention."
The claim that leaving government to
tEl?m$ig2??' tn supply facilities, often means not supply-
ing them at all, is proved by many in-
stances where municipalities have obtained from
Parliament (which in such matters virtually performs
the functions of our state governments) powers to do all
sorts of things, in order to keep private companies from
doing them, and have not done them at all. When a
municipality has parliamentary sanction to undertake a
matter of the kind, no other agency can do it within the
limits. In October '99 over a hundred local govern-
ments which had obtained such sanctions were not using
them, and of course not permitting anybody else to do
the service.
Professor Meyer also cites several instances of the
Association of Municipal Corporations and the Associa-
tion of Urban District Councils, blocking schemes for
supplying large territory with light and power at the low
rates possible only to large operations, because of fear
that the companies would underbid the municipalities.
Yet in several cases the districts thus deprived of cheap
supply, contained municipalities which had no supply
at all. A striking instance (I forget whether I found it
§ 4oo c] Latest Aspects of Government Operation. 451
400 (b). English m Meyer) is the killing by the municipali-
municipaiization ties of a private scheme to light some thir-
obitructiu: teen hundred square miles very cheaply
from the coal-fields, while of the whole thirteen hundred
square miles, under four square miles were lighted by
the municipalities themselves. This recalls what we
have seen of townships obstructing American through
roads (384 c). These associations were even including
in the tax-bills, the expenses of agitating to deprive the
taxpayers of the benefit of competition. The attitude of
the municipal governments regarding all private initi-
ative, is like the jealous opposition of the ignorant classes
to "capital" and "corporations". For example, in
1905, Bethnal Green, a London borough of 130,000
inhabitants, had no light. Its representative in Par-
liament did not want it "at the mercy of a dividend-
earning company", as it was "notorious that the
United States" municipalities were. In the House
400fc;. stran- °* Commons in 1900, Mr. Macdona said:
giing p'rioaf " There is a feeling in the country that the
interpriae. municipalities are organizing themselves
into a gigantic monopoly with a view to strangling pri-
vate enterprise." Aldermen Bussey of Poplar (169,000
inhabitants) said before a committee of the House of
Lords in 1905, that his town "would not take current
from a company at a lower rate than the town could
supply it", tho the company offered it at a third less.
In this debate, so eminent a man as John Burns con-
tributed the specimen of Labor logic that cheapening
the current would increase the number of the unem-
ployed. •
When existing companies go to Parliament for re-
newed charters, or for increased facilities of any kind,
the municipalities often oppose power to increase capi-
tal to extend tracks or conduits, and thus force the
companies to sell out to them cheap; and then for
the private policy of expansion, comes the municipal
policy of sitting still. Professor Meyer quotes Mr.
Leigh, counsel to the Speaker and chairman of Com-
mittees of the House of Commons, as saying in 1900:
452
The Promotion of Convenience.
[§ 400 £
"Municipalities never invented or initiated anything, either
with regard to tramways or gas or electric lighting, and yet
when a company has become flourishing, they have been rather
forced in a corner to sell their undertaking. . . . [The munici-
palities] have not come in for the purpose of helping . . . when
a gas undertaking has been badly carried on, but they have
pounced upon gas companies when they were paying their full
dividend."
It is not surprising, then, that Professor Meyer
has to admit that "in the year 1898-99 all but 48 of
the 222 municipal gas-plants of the United Kingdom
paid the interest and sinking-fund payments properly
charged against them ". He repeats the well-known
fact that the alleged low rates of the British city rail-
ways are only for narrow centers and narrow zones
around them, and calls attention to the consideration
that municipalities, with the universally recognized
inertness of such bodies, are very slow to extend their
lines, and thus leave a frightful degree of overcrowding
in cities of a grade that, with us, are not overcrowded
appreciably. \
400 (d). Fran- The leading obstruction to private in&tia-
chUes too short. tjve j^g been a too eager demand Vor
municipal ownership. The law of 1882 denied electrrtc-
light companies sure possession of their plants for more
than sixteen years, at the end of which time the munrV
cipalities had the privilege of buying. This of course
made enterprisers very slow to risk furnishing the
facilities. The slow development under such a system
led to a new law in 1888 postponing the privilege of
purchase to the end of forty-two years. Bach bill
allowed for shorter terms under special circumstances.
Tramway companies were similarly hampered by too
great eagerness for municipal ownership, purchasing
privileges varying from fourteen to forty-two years.
Permission for cable power was at first given only for
periods of seven years. All were farther hampered by
sundry restrictions of detail.
I wrote, some pages back, that virtually nobody
opposes municipal ownership, but I had nut then read
§ 4°og] Latest Aspects of Government Operation. 453
Professor Meyer's book, and learned that these ex-
400 owner- aggerated efforts to apply the principle
ship loaded with had made him an opponent of it root
operation branch; but apparently municipal
ownership in Great Britain practically means municipal
operation, and the trouble begins there. There are very
few good principles where too eager enthusiasm cannot
be as harmful as absolute neglect.
Results ^*ie resu^ °^ *he British policy was
in number of that in 1888 there were two electric-lighting
Td^hones. Plants at work-in England; in Germany,
under an unduly grasping policy of muni-
cipal ownership like that of England, there were fifteen;
in the United States there were five hundred and seventy-
four. When, in 1888, the privilege of compulsory pur-
chase by the municipality was limited in England to
forty-two years, private companies began work at once,
and were very largely bought out by municipalities on
mutually satisfactory terms. Yet with all the municipal
operation, the light is not yet in nearly as large a pro-
portion of places, or used by nearly as large a propor-
tion of people, as in the United States.
The British policy regarding the telephone has been
the same as regarding tramways and light. The
government deliberately paralyzed the telephone in its
earlier years, to protect the government-owned telegraph,
just as the municipalities paralyzed electric lighting to
protect their gas-plants. The result is a proportional
use of the telephone not over -a fourth that in the
United States.
400 (g). "Poii- The associations of municipal govern-
ti08-" ments have great power in Parliament,
and block nearly all efforts of private initiative. With
the greater openness of our legislatures to politics,
the conditions here, with municipalities widely operating
the franchises, would be worse.
The matter is eating out the old purity of English
municipal government, and reducing it toward the level
of ours. The number of laborers in municipal employ
454
The Promotion of Convenience.
[§ 400 ft
400 (k). English has of course been enormously increased
municipalization by the municipal tramways, electric com-
dangeroua to the J r , J ,U, t ,
purity of govern- panies, gas companies, etc. These laborers ,
ment. ^ike ourS) are casting solid votes for the
administration in power, while the administration
is open to the corruptions which big salary lists have
injected into our own politics * (388 m). Local politics
mans public works by favoritism. The Lord Provost
of Edinburgh said to the correspondent of the Chicago
Tribune (I am still following Professor Meyer): "So
long as the road is under municipal management, there
is always a temptation to provide employment in some
way for political hangers-on. . .
Professor Meyer quotes several eminent Britons to the
effect that the employees of the various municipal plants
are already exercising a dangerous influence in politics.
Some publicists propose that they shall be disfranchised,
* I am largely indebted for English experience to an important
letter from Mr. Robert P. Porter in the New York Times tor
October 31, 1899, and to a friend from Glasgow whose family
has furnished the city at least one provost, and who tells me
that objection to municipal trading is rapidly growing, because
of the corruption it breeds. The latter sends a copy of the Glas-
gow Herald which says: "The citizens of Glasgow may again
congratulate themselves upon having had a narrow escape.
By 28 votes to 17, they have been saved from embarking on the
perilous enterprise 01 Municipal Banking." He also writes,
September 8, 1900: "Our rulers are emulous to become bankers
as well as purveyors of water, light, power, telephones and
much else, and owners of a tramway system. There is a
growing sense of danger in Glasgow, due to rapidly increasing
taxation occasioned by the enterprise of our city fathers. Two-
pence on the pound of rental has just been added to the rates,
and with increasing municipal liabilities there is prospect of
further rise. Meantime our streets are badly paved, and are
like to remain so as long as our rulers find they can gain greater
distinction by proposing banking schemes than by attending to
the streets. The lighting of the city is also not good. Lighting
costs money and docs not bring glory." The "glory"
sought for by the "city father", seems to be rapidly becoming
simply the glory of voting conveniences to the proletariat at
the expense of producers.
The side against municipal trading was also presented by Lord
Avebury in the Contemporary Review for July, 1900. He was
answered by Mr. Robert Donald in the next number.
§ 4°°/] Latest Aspects of Government Operation. 455
on the same ground that regular soldiers are disfranchised
in most countries civilized enough to have a suffrage.
Whether the municipal employees will be worse than our
exploiters of franchises, remains to be seen. But we
at least get the facilities to a degree that Great Britain
is not within sight of.
Professor Meyer claims that municipal plant generally
costs more to build than private plant. Some other
observers claim differently. That municipal wages tend
to surpass others, is matter of notoriety, even in the
United States.
Professor Meyer wisely concludes that
" Industrial progress comes not from the
400 0), Leaves people at large, wnether acting as individuals
out th9 able man. or in the corporate capacity of state or city.
It comes solely from a comparatively small body
of men of unusual imagination, daring, power of persuasion
and executive ability. Those men see, or believe they see,
possibilities of development and new ways of doing things,
where the average man sees naught but the possibility of failure.
They have the courage of their convictions, as well as the
power to infuse that courage into others — the possessors of the
capital without which no new idea and no invention can be
tested and developed. Finally, the men in question have
executive ability, which is the power to plan, and the ability
to select the men who can be trusted with the execution of their
plans."
From the chaos of statistics regarding municipal
trading in Great Britain, two facts stand out in un-
questioned clearness. Taxation and debt have enor-
mously increased. Advocates claim that assets have
been gained to offset the debt, and advantages to offset
the taxation. Many judges of high and passionless
authority deny both statements, and there is much
evidence that while assets are carried in the accounts
at cost, they have been permitted to deteriorate into
comparative ineffectiveness.
The English elections of 1906 and 1907
\^u&n^it/^^ overwhelmingly against municipali-
zation.
456 The Promotion of Convenience. [§ 401 /
After this book was in proof, there appeared
.Mr. Robert P. Porter's 44 Dangers of Municipal Owner-
ship". It deals mainly with Great Britain, and rein-
forces with much interesting and instructive detail, the
argument of Professor Meyer. It also makes a very
important and, so far as I know, new contribution to
t 01. Russia and the discussion, in a demonstration that
ociallsm. Russia, the most backward of the Euro-
pean nations (perhaps excepting Turkey), is the most
forward in socialism — that the corrupt bureaucracy
which is chaining Russia in her backward and tragic
position, is simply made up of the politicians who are
controlling, socialist fashion, a large part of the indus-
tries which, in progressive countries, are left to private
initiative and competition.
Against this consideration it may be urged that the
bureaucracy of Russia is based on hereditary privilege,
and that a bureaucracy based on universal suffrage
would not be open to the same objections. If universal
suffrage has not provided equally bad bureaucracies in
New York, Philadelphia and Chicago, the difference is
not great enough to upset the argument.
I should be glad, if space and other circumstances
justified, to give the reader many citations from Mr. Por-
ter's work, but they are not absolutely essential to the
discussion as already laid down, tho an examination
of the work itself will amply repay the trouble. At
the rate facts and arguments regarding many of the
civic relations have been accumulating in recent years,
nothing but the daily newspapers can keep up with
them. Books, however, can give fundamental prin-
ciples and general tendencies more effectively than the
more ephemeral publications can.
402. Australasian The experience Of Australasia * is inter-
experience, esting and instructive. But Dr. Clark
says it is less instructive than the European. Yet a
summary of his statement of it may be yielded in
* These points on Australasia arc mainly condensed from
Clark, op. cit.
§ 404] Latest Aspects of Government Operation. 457
deference to those who think otherwise, as well as to
its distinctive interest.
403. Conditions Those colonies inherited from the mother
unpricedentediy country a highly developed civil service,
avora e. an(j themselves evolved even a more cen-
tralized government. Most of the large share of local
services performed in America by unsalaried officers, is
performed in Australasia by permanent civil employees
who hold their places for life. Thus the country was
in a position for handling government industries, far
in advance of ours.
Australasia was the first great civilized country to
come into being after the railway and the telegraph
were in use, and it was therefore very natural for her
governments to build and operate them, as it was natural
for earlier governments to build common roads. More-
over, Australasian governments could borrow money in
London to do this, cheaper than native individual
capitalists could. The people did not want London
syndicates exploiting the country, and all this pointed
to government doing the work instead of private enter-
prise. This, however, has not prevented much similar
work by private enterprise since, in face of the fact that
the government was first in the field — a suggestive
symptom of the oft-proved superiority of private man-
agement to government management, at least so far as
concerns economy , energy and efficiency. Another symp-
tom is the fact that nearly all the government railroads
404. Government are 11111 at ^ie exPense °f ^e taxpayers, at
railroads run at a the rate of $66,000,000 for the decade
,oss' 1894-1904, not to speak of $40,000,000
taxes that could have been expected from private lines
in the same period, if paid at American rates. Says
Dr. Clark:
"Private railways thrive in the shadow of preponderating
government systems. Private and public street railways are
operated harmoniously in the same cities, or in neighboring
towns and states, and neither drives the other from the field."
The government rate in Australasia is three cents a
458 The Promotion of Convenience. [§ 405
mile for long rides on railroads, as against
amon Tcl^ii2e%he$t our two cents'» an<^ there is an annual
p!op!Sfcjv ze expense for government in New Zealand
of $38 per capita as against $21 in the
United Kingdom, $18 in France, $10 in Germany and
$8 in the United States.*
406. Vice of And yet this is an excellent place to
statistics. warn the young student with an illustra-
tion against the characteristic vice of statistics — they
generally can state but one fact, while the real situation
consists of many; and to get at the whole truth, many
statistics should be combined. This of course is done
in many of the tables. But so far as I have examined,
I find no serious effort to make a comparison of the total
cost of government per capita in various countries.
The figures I have given are only for the national
governments, and it is plain that the expenses of the
national government in the United States do not cover
many matters that are attended to by other civilized
national governments, but here are attended to by the
state governments. Probably there is no great nation
which leaves so large a part of its activities ta its
subdivisions, unless it be Germany; and, suggestively
enough, in the cases cited, Germany, despite her gnNat
military and (recently) naval expenses, appears next
economy to the United States. New Zealand, on tha
other hand, being a colony, is exempt from many of\
the usual items of national expenditure, tho probably
subjected to much that is with us borne by the separate
states. And yet — and as again illustrating the com-
plexities apt to be hidden under very simple figures — in
the United States, the expenses of the state govern-
ments are so small as compared with those of the national
and local governments, that they do not affect the matter
much, after all; while in England, and probably in
Australasia, the general government bears many ex-
penses— for instance, some connected with education
* Reports of speeches of Sir Joseph Ward, Premier of New
Zealand, in the United States in June and July, 1906.
§ 408] Latest Aspects of Government Operation. 459
and the constabulary — that here are borne by the local
governments.
The reader will then probably conclude, as the writer
long since did, that the value of statistics is qualitative
rather than quantitative — that tho they generally show
tendencies, they seldom give their actual force.
407. Telephones ^he PUDnc telegraphs and telephones
and coal-mines at do not pay interest on the investment in
a l0*1, Australia, though they have recently done
so in New Zealand. But the rates are lower than in
the United States. New Zealand operates two govern-
ment coal-mines which are new experiments and ran
$10,000 behind on their interest account in 1905.
Yet notwithstanding the deficits on Australasian
public enterprises, the confidence of capital in the re-
sources of the country is such that, as already said, the
government can borrow at good rates, which have, on
the whole, been growing more favorable.
408 Government Australasian government being the
success in mone*- great landlord, and being able to borrow
lending. money better than anybody else there,
promoted settlement not only by building railroads and
telegraphs through its lands, but also by loaning to
settlers money for improvements. This experiment,
tho of no direct financial interest to us, is worth recount-
ing as a remarkable object lesson against the vulgar
impression that trading results only in good to one party,
and that of course the sharper party. The governments
lend the settlers money for land and improvements, and
so benefit them; the governments borrow the same
money from the British bankers, pay them remunera-
tive interest, and so benefit them; and the govern-
ments make a margin of about one per cent, between
what they pay and what they receive, and so benefit
themselves.
"The prevailing rate of interest on real-estate mortgages
fell from seven to five per cent. — or the level of the government
rate — during the first ten years the law [for government loans
to landholders] was in operation. Bankers in New Zealand
460
The Promotion of Convenience.
[§408
interviewed as to the effect of the law, spoke of its results with-
out disfavor, seeming to think that it might have stimulated
business. . . . Private banks and savings institutions are able
to place their funds securely and profitably in spite of govern-
ment competition."
"There has been no exigent demand for state
ance r" insurance. or tnc system would surely have
extended beyond New Zealand during the thirty-
six years it has been in existence in that colony. South
Australia, with a state commission and export department, has
also one of the largest cooperative farmers' commission com-
panies in the Commonwealth, which does a business for its
members five times as great as that done by the government,
tho in more varied lines."
Dr. Clark sums up his views :
"A conclusion reached by an outsider as to
neMtivel M the utility of government ownership, from the
° ' experience of Australasia, must be so largely
qualified as to be almost negative. Public railways, telegraphs
and land banks have succeeded. [The author must mean
succeeded in pleasing the majority — especially the non-tax-
payers: for he himself shows how they have not succeeded
financially.] . . . An outside observer, unless a faddist on gov-
ernment ownership, would probably come away from Austral-
asia with a feeling that, after all, this issue is less important —
as affecting the social and economic welfare of the people —
than those who theoretically discuss the subject suppose.
Government ownership docs not bankrupt the state, deaden
private enterprise, and kill prosperity; neither does it bring
a nation into an industrial millennium with a bump.
' ' The average wage-earner ... in exchanging
demoralized? private for state employment sacrifices no indi-
vidual freedom. Independent or self-employing
workers, on the other hand, usually have property interests that
make them averse to social changes ; and they have something
that they probably value still more, . . . that is, their power of
self-direction. ... A man who has been his own boss . . .
resents the restraint of official supervision. This sentiment
is widely diffused among the more prosperous working people
of Australasia. The experience of democracy, in Australasia
as well as America, goes to show that the personal interest
of a public captain of industry would lie in conciliating his
employees, at the expense if necessary of the whole body of
citizens. . . . As a natural consequence of this, the investigating
commissions of Parliament have found that public are more
expensive than corresponding private undertakings, and that
men do not work as well for the state as for private employers.
§ 413 al Latest Aspects of Government Operation. 461
Nothing illustrates the last fact more significantly than that the
usual term among Australasians for an easy-going pace of
working is *the government stroke'."
c #. || • Among Mr. Reeves's arguments* for en-
4iz. somefaiiacies. larging the functi0ns of the state is: "Mis-
takes may be made, but we can restrain the state.
Trusts and combines we might not be able to control/ '
It would be interesting to poll the citizens of New York,
Philadelphia and Chicago, and a good many other places,
on this question. But as to the state, it is the incon-
testable fact that it is possible in a single day (tho
only after a hard-fought campaign) to 4 4 turn the rascals
out". But it is equally incontestable that they have
always got back again. One is tempted to believe
that in a given state of human nature, one method, in
the long run, does about as well as another, and that
the only advance that can be made permanent is in
human nature itself. But this skepticism regarding
methods should be guarded against. Because of some
defect of detail, the best methods often fail when first
tried; but something is learned at each attempt, even
be it no more than what to avoid in future.
Another equally striking and equally questionable
remark of Mr. Reeves is that " newspapers criticise the
public service in a way which they will not or dare not
criticise private enterprise. State management, there-
fore, carries with it the great guarantee of publicity.' '
With this statement, compare the notorious difficulty of
getting correct accounts of state enterprises, from Aus-
tralia or anywhere else.
413. The latest Notwithstanding that the American ex-
American experi- perience of government operation is com-
ence' paratively trifling, it has already been
abandoned in several cases in addition to those already
413 (a) Omaha £Pven- ^n I9°5» tne c*tv °f Omaha for the
a ' m ' first time in sixteen years, elected a Demo-
cratic administration, because the Democrats promised
* Op. cit.
462
The Promotion of Convenience. [§ 413 a
municipal operation. A special letter to the New York
Times thus related the experience: k j
"The Democrats promised municipal ownership of just
about all the public utilities, even down to advocating that the
city own the railroad switch-tracks in the wholesale districts
and rent these tracks to the different railroads. . . . Omaha
went wild over the idea. . . . After the election the cost . . .
began to be counted. The Board of Engineers . . . made a re-
port that just doubled the price the city was willing to pay for
the water system, and the water company went into court to
compel the city to pay. . . . When the taxpayers saw that
they would be compelled to pay more than $6,000,000 for prop-
erty which they had expected to get for $3,000,000 there was
a howl from them.
"Immediately afterward it was found that the fund on which
the municipal asphalt plant was expected to keep running all
the summer was exhausted in July. . . . Then the city market -
house scandal opened up afresh. This was the first effort of
Omaha to go into municipal-ownership business. . . .
"A big house was erected on one of the principal streets at a
cost of $12,000, altho almost any contractor in the city would
duplicate the building for $5,000. Then the Council made
stringent laws forcing the commission men to move into the
market-house. Two of them did so. . . . The others ignored
the order. After a month or so the two . . . moved out and
the doors were closed.
"And so, between the market-house scandal, the asphalt
works, the three-million-dollar overcharge in the waterworks
plant, and the failure of the City Council to take any steps to
rescue the city from the muddle it has gotten into, taxpayers
are afraid of indulging any further in municipal-ownership ideas."
So far as American experience goes, the last important
testimony was gathered and discussed at the meeting
of the Political Science Association in Baltimore, Decem-
ber 26 to 29, 1895.* The discussion was of "The Case
for Municipal Ownership", but Operation was certainly
meant, as there had not then developed any serious
opinion against Ownership. The proponent of "the
case for" announced its triumphant success in America,
413 (b), a weak but cited in evidence only the electric-light-
ahowing. jng piaT1ts of Detroit, Chicago and Alle-
gheny; sundry markets and docks which require vir-
* These reports, made as listener, I have checked from the
"Proceedings".
§ 413 d] Latest Aspects of Government Operation. 463
tuaily no ' operation", and where, in the nature of the
case, private operation is virtually unknown; the Cin-
cinnati Southern Railway, which is not municipally
operated at all, but leased to a private corporation;
and the water-plants of some half-dozen cities where
water runs down hill under municipal supervision (some
of them, cities like New York and Boston, being cases
where water has been acting that way, undisturbed by
these new questions of municipal operation, for over
fifty years). The failures and wastes were not embraced
in his schedule.
Then he proceeded to show, very cor-
4\3(o. ne strong rectly, that the strong men of the cities
man will control J' , to
under any system, now control them through the public-
service corporations; and to prove con-
clusively that if there were no public-service corpora-
tions, the strong men would not control the cities
through them. He omitted, however, to prove that
if the strong men did not control in that way, they
would not control at all. So far as experience has been
accumulated, they always have controlled ; and so far as
the future can be judged from the past, they always
will control, until there shall be so much advance in
the strength of weaker men that all men will be strong,
and democracy will be a fact as well as a name. At
present, however, the weaker men are not paying much
attention to developing their strength, but are absorbed
in schemes for massing what strength they have, to get
more conveniences at the expense of those who are
already stronger.
The same speaker at the Baltimore
fnViliuhe°geT,y meeting brought up as an argument for
municipal operation, the demonstrated
and established argument against it — that "monopoly
is always indolent". Apparently he failed to realize
that there can be no other monopoly as nearly im-
pregnable as a government monopoly. He claimed that
the destruction of private operation would be the de-
struction of privilege. Apparently he had never heard
of Tammany Hall or the privileges enjoyed by Tweed
464
The Promotion of Convenience.
[§413^
and Croker and their fellows, even with municipal
operation of all the franchises far beyond their
grasp.
He made a number of other claims which, like the
claims generally made for extension of government
functions, rest on about equally strong foundations
with those cited. He even supported his contentions
by the statement that "transit, light and water . . .
next to rent . . . are the heaviest item in the domestic
budget*
When the ' ' Case for Municipal Ownership" (Opera-
tion was meant all the time) is thus put before the
representative Political Science Association of America,
farther discussion hardly seems called for.
In answering the proponent so fully cited, Professor
Daniels said that the statistics so far gathered — in the
report of the American Commissioner of Labor (1899)
and in the Census Bulletins for 1890 — do not " settle
even remotely the disputed question"; that govern-
ments do not pay salaries to attract the best talent
away from private corporations; and that he thinks
that the solution of the whole topic lies in reforming
politics before giving over franchises to political opera-
tion; and in the meantime, having the ownership of
them retained by the cities, and the operation leased to
private enterprise, for either fixed sums or percentages
of receipts or profits.
413 (e). our pn- Professor Rowe called attention to the
toMeftSan0' surprise foreigners feel at the enterprise,
Europe's. initiative and liberality for improved
methods, of our public-service corporations ; which indi-
cates that those of Europe leave more room to desire
government operation than ours do.
Several other speakers followed with a quite general
agreement that municipal officers are tempted to make
dangerously favorable showings for municipal operations,
by allowing too little for repair and renewal ; that Euro-
pean experience is immature and uncertain, American
experience vastly more so, and European conditions too
different from American to afford any guidance.
§ 413/] Latest Aspects of Government Operation. 465
413 (f). Democracy The proponent for Municipal Operation
on trial. ^id makc one statement in various forms,
which is incontrovertible, and which justifies a little
emphasis. He said: "The question is not so much,
Do we believe in municipal ownership?" (Operation.)
44 The question is: Do we believe in democracy?"
That is it exactly, and well, stated. It would be better
stated, however, as: Do we believe in democracy to the
extent of municipal operation? To that question, prob-
ably the answer of the sanest students would generally
be something like : So far as helping water run down
hill, we do. So far as streets and sewers, we believe in
democracy's ability to make, repair and clean them —
very badly; but for abundant reasons, democracy may
be the best available agency. So far as transit, light
and the other franchises, the case is yet to be proven:
where government has done them best, democracy is
unknown (426,426c); but even there, testimony, and
even experience, conflict a good deal, while in America,
the only country but France where democracy plays any
part in municipal affairs, there is virtually no experience
at all.
The proponent for Municipal Ownership also said
that it "is the struggle of democracy seeking to divorce
itself from a privileged class". It is that, and more.
As long as the differences in men are as great as now,
the few will inevitably enjoy privileges that the many
cannot know; the many are constantly striving for a
larger share of what the few produce, not to speak of
what some of the few filch from all. Yet beyond a
moderate degree, it does the weak no good to get the
things the strong have made: for they cannot handle
them. To determine where that moderate degree is,
regarding municipal franchises, is now matter of
experiment. But municipal operation has not its rela-
tively largest following among those who intelligently
believe that, in even a moderate degree, it will be an
economy, or who care anything about economy. Much
its largest relative following is among those who merely
look forward to ultimately getting transit, light, heat
466
The Promotion of Convenience.
[§413/
and all other good things without paying for them;
not among those who expect municipal operation to
reduce their taxes, but among those who pay no taxes
at all.
♦13 (g). some At the same session of the Political
interesting ex- Science Association, a distinguished mem-
penencee. jjvjng ^n a \yestern university town
said to a member living in an 'Eastern university town :
44 I'm not prepared to advocate municipal operation
everywhere, but it's just the thing for us where I live:
for the university runs the town."
"Yes", answered his friend, "just the thing — as
long as the university runs the town. I thought so a
few years ago regarding my town, but the university
doesn't run the town any more: Labor has been assert-
ing itself."
"Oh, well, we have no labor troubles."
"You will have, if you have any labor. We too had
'no labor troubles'. But the agitators heard of our
deplorable condition, and sent the 'organizer ' to remedy
it. Since then our little town has had proportionally
as many strikes and as much idleness and suspended
work, as the proudest cities. But the unions have not
been content with this. They wanted to go into politics :
they want to rule everything now, you know, and
think they can do it. Well, cheap light and free
whiskey gave them a rallying-cry. They made a black-
smith mayor. He began building an electric-light
plant without the assistance of the professor of elec-
tricity, and turned the professor of engineering off the
board of public works, and the professors of the medical
school off the board of health; and put in his friends
from the ranks of ' Labor '. So you see the university no
longer runs the town. Within five years, your university
won't run your town. I'll take your opinion of municipal
operation then."
Since the foregoing conversation, some other facts
worth noting have taken place in the Eastern university
town. Building, which was expected to be very lively
§413 Latest Aspects of Government Operation. 467
in the following spring, was very dull. Some say the
unions had forced wages too high. Some say that
capitalists hesitate to invest as freely in a town run
by its present authorities, as they did in a town "run
by the university
In searching the mass of literature on the subject,
one finds two characteristics pervading the arguments
in favor of municipal operation, and a statement of those
characteristics seems to sum up the situation. One
413 (h). fallacious is that the evils of the established system
reasoning. are enumerated, and the claim made re-
garding each, that the proposed system would cure it.
The other is that ideal conditions are enumerated,
and the claim made that the proposed system would
effect them. Both claims are virtually gratuitous.
There is not enough, experience to support either.
One argument advanced by Professor Zueblin, leads
to a point that calls for expansion. Because govern-
ments have been very ineffective in inspecting and con-
trolling the operation of municipal utilities by private
interests, he advises that they should undertake the en-
tire management. How the honesty and capacity for
entire management are to be found in organizations
that cannot muster enough of those qualities for effect-
ive criticism and regulation, he does not state. But
as he does state his ideal, it may be well to state a more
modest, and therefore more nearly realizable, one
already hinted at. It is already the fashion, when
413 a) Desirabii- a^uses become unbearable, to appoint
itu of publicity more or less special commissions, such
andcommiss.ons. ag the Interst-ate Commerce Commission,
the Standard Oil and the Beef and Insurance Com-
missions to look into them and suggest remedies.
Even in their spasmodic, lax and inchoate and rudi-
mentary manifestations, all the commissions have
been more or less useful, some of them very useful.
But permanent commissions regarding permanent mat-
ters, like the various state railroad commissions, are
468
The Promotion of Convenience. [§ 413 i
also desirable, tho too apt to lapse into innocuous desue-
tude. Yet the mere publicity their examinations have
given to abuses, does a very great deal toward rem-
edying them. Is it not reasonable, then, to expect and
strive that these spasmodic agencies shall be greatly
improved, and that from them shall be evolved perma-
nent commissions for the constant and more skilled
and more effective inspection and control of all public
utilities — not only those, like the railroads, tramways .
and street pipes, that are, in the nature of things,
monopolies; but also those, like the oil and beef in-
dustries, that under business combination have virtu-
ally grown to be monopolies?
This certainly seems the next stage in
otie8th"ifo5~ improvement, and a stage that may be on
fiwhinptart!cabie. tne wav toward government operation of
the franchises naturally monopolistic, and
effective exaction of justice from businesses only arti-
ficially monopolistic. It is not impossible that justice
can be exacted only by methods which shall keep all
non-government business, like oil, coal and beef, open
to competition. But there is probably more reason to
hope for success regarding private enterprises, from
the wider diffusion among men of ability to compete —
from the rise of more men of organizing capacity, than
from government regulation. There is room for both
influences, and no reason why they should not work
together. A third agency should not be lost sight of
— many men who are not often run away with by their
imaginations believe that there is a rapid increase in
knowledge of civic affairs and sense of public responsi-
bility, and hope much from them.
414. Summary and On the whole, then, the drift of experi-
conciuslons. ence regarding municipalization seems to
be that in all matters which involve tearing up the
streets, honest municipalization would probably be
much better than private control, even if the control
were competitive: but also, alas, that honest munici-
palization is generally so far out of sight in America,
§ 414 a] Latest Aspects of Government Operation. 469
that probably present evils are much less than such mu-
nicipalization as we could get in most places at present.
Lecky declared that "the New York Commission of
1876 [the Commission appointed by Governor Tilden in
1875] probably understated the case when they declared
that more than half of all the present city debts in the
United States are the direct results of intentional and
corrupt misrule". There is nothing like this in Eng-
land; and yet, despite much difference of opinion, the
leading authorities there do not wish farther to trust
their municipalities with the conduct of such utilities
as can be cared for by private enterprise.
Leaving out such matters as gas, electricity and the
telephone, which are not quite natural monopolies,
whether it would be wiser for the government to take
all the natural monopolies under its own charge, depends,
as already said, on the degree^ of civilization. Probably
early in '99 most students would have said that Great
Britain and Germany had already attained the degree
of civilization necessary; but the verdict would probably
be different now. In England ' ' municipal trading" has
more than doubled municipal indebtedness,
taxation Pleased and nearly doubled municipal taxation,
uoSZuwfiu' wnile population has only increased about
a quarter, and the municipalities have
nothing to show for the debts, in proportion to their
amounts, especially as plant had generally been suffered
to become antiquated, instead of being kept up to the
mark, as it must be kept under private competition.
Moreover, it is claimed, the people are not getting,
in return for their increased taxation, conveniences at
all in proportion to the increase, especially as people are
paying for most of the conveniences as used, tho un-
doubtedly, in many cases, at lower apparent rates than
those charged by the private companies, the rest being
generally made up by taxation.
The effects of municipal obstruction and supineness
on opportunities for capital and labor, have been made
too plain to occupy us farther; but what must they be on
47©
The Promotion of Convenience. [§ 414 b
414 (b). English inventive talent ? That is perhaps the most
municipalization serious question in the whole situation. The
obstructive, eape- ^, . , ,
ciatiy to invntiif case is plain enough in such instances as
tatsnt. those just cited ; but there is a general con-
viction that governmental bodies can never be expected
to be on the lookout for new inventions or opportunities
with the keenness forced by private competition. Presi-
dent Hadley says that : 4 1 Tho half the railroads and nine
tenths of the telegraphs of the world are in government
hands, all the large improvements of method in these
lines have been made under private enterprise.' ' As
natural monopolies cannot have the benefit of compe-
tition, if they are left to municipal development, double
care is needed to see that they are developed; but first
that they are not forced to municipal development until
experience and politics are more advanced than a
good many enlightened people believe they generally
are yet, even in England.
As to the general character of municipal
SUwJitrtUlt^0" labor, before Colonel Waring came, and
since Colonel Waring died, we have most
of us noticed " the man with the hoe" cleaning streets
under ordinary American administration, and we know
the contrast between him and the laborer who is keenly
watched in private competition. This is especially
noticeable when New York's snow and ice is being
cleaned away. So, also, are noticeable the crowds of
laborers at work on trifling bits of snow and ice that
might as well be left for the sun. Even in Australasia,
the standard expression for slow and pottering labor is
"the government stroke."
One safeguard worth considering against the dangers
of municipalization, has been pretty obvious in the
course of our discussion. So far as private enterprise
is left free to come in when government work is shabbily
done, the possibility of its coming might have some
effect in holding government work up to the mark.
But we have seen that one of the marked effects of
municipalization in England is to shutout private enter-
§414^] Latest Aspects of Government Operation. 471
prise, even from wider areas than municipalization cov-
ers. On the other hand, government work, even when the
threat of private competition is desirable as a corrective
of it, may often be desirable as a guard against monopo-
lies— monopolies that even votes cannot reach, and that
can defend themselves from the stimulus and restraint of
competition. Private enterprise and municipal enterprise,
like all human enterprise, have both their merits and
their dangers. The dividing line seems to be that of
natural monopoly. Where the benefit of
?™t/on'</S cannot be had, it is mainly a
^iSffitf* question of the purity of politics whether
the government would better take hold;
but where private competition can be expected to give
the people the usual benefit of keen enterprise and low
prices, government should be kept out. It is doubtful
if any large community among us is yet civilized enough
to municipalize much wisely, tho from one point of
view we are owr-civilized for it: our suffrage is too
advanced (426-426 c).
Municipalities do not manage such affairs as well as
private corporations, because the officers of private
corporations are elected only by those who have money
directly at stake; while the officers of cities are largely
elected by people who pay no taxes and have no money.
It is probably too late to ask why people are per-
mitted to vote in matters where they do not have
to stand the consequences. But they are permitted,
and revolutions do not often go backwards. The only
remedy that now seems practicable is to help such people
get ahead so that they too will have something at stake.
414*,. Municipal fe touched one argument for munici-
xation as training pahzation when we said that everybody
in citizenship. wouici complain of poor water and poor
postal service : some people think that if people were de-
pendent on government for more of their conveniences,
they would take more interest in government and
reform it. The idea is not impossible, but it is so very
472 The Promotion of Convenience. [§4140
uncertain, that it will not do to trust much to it before
knowing more about it. It is indeed an argument for
going into municipalization, but going slow. It should
be tried tentatively: for if carried to an extreme, it is
simply like the older panaceas which, when analyzed,
are merely disguised schemes for robbing the rich to
help the poor, and are generally accompanied by the
belief that if the plan were carried out to its widest ex-
treme, some improvement in the lot of the poor would
result — a belief that is generally an utter fallacy.
'The argument that public utilities conducted at tax-
payers' risk would lead the taxpayer to greater attention
to his public duties, can appeal, in New York City for
instance, to only one voter in ten: for only that pro-
portion are taxpayers. The argument would of course
carry more weight in communities where the proportion
of taxpayers is larger.
The situation is a good deal like that of the mother
who did not want her boy to go into the water before
he knew how to swim : if she meant that he should not
go in all the way — that he should wade, and not plunge
where it was over his head, she was a very sensible
woman.
CHAPTER XXXI.
PECULIAR AMERICAN MUNICIPAL DIFFICULTIES.
415. American American municipal operation is exposed
municipal corruption to peculiar dangers. The government of
many American cities has long been among the most
corrupt — quite probably the most corrupt, in the civilized
world; and since the civil war, the general government
of the United States has been in danger of falling into
the same condition. Let us consider a bit of history
which may make it easier to understand our peculiar
conditions.
416. New York In New York shortly before the year
In 1870, 1870, an enormous amount had been
done in the way of public improvements. It was then
found that for a long time nearly everything bought for
city use, and nearly all work done on the streets, parks,
aqueducts and public buildings, had been charged to
the taxpayers at many times its cost, and the difference
stolen by the chief officials. From what portion of
the taxes was actually paid to workmen, they had
been made to pay back a part to the men who employed
them, as a condition of getting and keeping their places.
In the same way, the persons receiving these contribu-
tions, had to pay the officials just above them, and so
on up to the highest officials of all. The money so paid
came out of the taxpayers, because the work was really
done for only what the workmen were able actually to
keep for themselves. The rest could have been saved
if it had not gone into the pockets of the politicians.
When the state of affairs was discovered, the govern-
473
474
The Promotion of Convenience.
[§ 4i6
ment was overthrown, a great many of the criminals
fled, and the chief one, William M. Tweed, who had
been the most powerful man in any city in the civilized
world (unless that includes Russia), was put in prison,
where he died.
The cure was not permanent. By
416 (a), in 1894, thingg were found to be just ^ bad>
but principally by different methods. The officials
helped demagogues and sentimentalists to get a law
passed enabling corrupt officials to pay the city laborers
more than the same class of laborers could get elsewhere.
Then the officials made the laborers hand over the differ-
ence.
New schemes of plunder in controlling
416 (». in 1898. pubUc works> were devised in New York
after the election of 1898. The department whose duty
it is to regulate buildings for strength and safety against
fire, was made to favor certain materials in preference
to others; and the politicians and their families were
found to be largely interested in the manufacture of
these materials.
What would have been the situation if the same
politicians had been required to build a large number
of houses for the poor?
417. City works ^e legrislattire was corrupt too. Each
are the plums of political party in the whole state was
urtan^hticlans un(^er the management of corrupt men
u anpoi cans. made the politics of city and state
work together for their profit. The legislature shared
the corruption of the city, because there is so much
public work done in cities, that the possible spoils are
very rich: therefore corrupt politicians in the legis-
lature are always ready to join the corrupt politicians
of the cities in seeking them. This is an added objec-
tion to increasing the number of things done by the
cities.
418 The city monev collected by taxing munici-
contrasted with palities, large and small, is over three
the nation. quarters as much as that collected for the
government of the nation as a nation, including all
§ 42°] Peculiar American Municipal Difficulties. 475
civil and diplomatic officers, army, navy, lighthouses,
harbor improvements, and national works of every kind.
Moreover, the local taxes represent by all odds the
more "swag": politics has been kept out of the navy,
and until lately almost out of the army, and out of
many other departments of the national government.
In them, appointments have not been generally made
by 44 pulls", but have been made with reference to fit-
ness.
419. Contractors Much plundering can easily be pre-
ln office. vented by imposing heavy penalties on
public officers who are financially interested in municipal
works. Simple as this is, many people do not see the
point. It is frequent for the leading contractor of a
village to be an officer regulating the public works,
his mechanical experience being considered worth
having. The charters of some cities provide against
it, but the wrong-doing officers can cover up their
tracks. ^
420 National Under American local governments, it
parties in local is specially easy for politicians to profit
s' from public work, because the good people
of localities are so ready to divide according to their na-
tional parties, that it is hard to unite them solely on ques-
tions affecting the localities. Meanwhile the bad people
keep together to plunder. The good people divide
from a desire to keep their party organizations active
for national questions. There is no means by which
the corrupt politicians (and occasional honest but
stupid ones) fool the people more and plunder them
more, than by leading them to carry national ques-
tions into city politics. As an illustration: between the
civil war and the Spanish war, the principal national
questions were between protection and free trade, and
between good money and bad money. Those who
supported the first of each were Republicans, the others
Democrats. Now, in virtually every city, town and
village in the land, when people wanted officers to
476
Tlie Promotion of Convenience. [§ 420
care for their streets, water, sewerage, health, police
and petty courts, they selected these officers, not with
reference to the work they were to do, but nominally,
at least, with reference to their opinions on the tariff
and on silver. Soon after the Spanish war, local
officers began to be selected with reference to "im-
perialism".
The same things account for this ridiculous state of
affairs, that account for most ridiculous states of affairs
in politics — first, of course, ignorance and venality;
then some defects in organization; and mainly, as is
so often the case, an outgrown situation kept alive by
interests that have become established under it. When
our national government began, its tender and pre-
carious life was the one absorbing object of public
interest. Cities were small, and many of the things
now attended to by their governments, unknown. The
one object of political faith was national party, and fidel-
ity to it was put on a par with honor and religion. This
spirit is not dead yet, especially among the stupid and
ignorant majority, and it is kept alive there by the party
managers who find their profit in it.
Moreover, the Fathers gave us a special legacy in the
Constitution itself, which helps bring the national parties
into local politics. The election of United States senators
by the legislatures, forces the national
eau8ed,iyPmretl!o<i parties to struggle for possession of each
^natoir1"9 U'8' state legislature; and therefore, as long as
state and city functions are so mixed that
the legislature takes a considerable part in city affairs,
so long must the national parties be interested in city
matters.
Once the national parties are in state politics, every
question of local policy naturally gets under the wing
of one national party or the other. For instance, a
liquor law or a Sunday-closing law has got to be carried
out by the local police and magistrates; or an idea in
education — such as Bible-reading in the schools, or the
prevention of truancy, has got to be carried out by the
§ 4206] Peculiar American Municipal Difficulties. 477
local school superintendents. So the party taking up
any one of these measures must not only control the
state legislature, to get its law enacted; but to get it
enforced, must control the local magistrates and police,
or superintendents of education. Therefore so far as
these officers are appointed by mayors or village presi-
dents, and confirmed by city councils or village boards,
so far must the parties advocating the measures,
struggle for the election of those local functionaries.
If all those minor local officers were state officers, and
mayors and city councils had nothing to do with them,
the parties advocating measures which the officers must
administer, would still struggle to get the officers.
But if they were state officers, either they would be
appointed by the governor : so the state parties need not
run any candidate but the governor; while the mayors
and city councils, etc., would run on purely local
questions; or if such state officers were not appointed
by the governor, they would appear only in state elections,
and not in the local elections, which it is a growing
custom to hold distinct from the state elections : hence
they would no longer tempt the national parties into
nominating and working in the local elections.
But as long as the local spoils 'are so rich, they will
be temptation enough for the national parties, even if
the other temptations were removed. But certainly
the more we reduce temptations, the more we reduce
the time that it will take to evolve wisdom and honesty
superior to them.
When our national party managers have the imper-
tinence to make hack nominations for local offices,
sensible people sometimes make nominations of their
own. But then the party bosses generally unite to
defeat the non-party candidate. In the old days of
party election-booths, once when there was a non-
partisan ticket in the field, I myself saw Republican
ballots dealt out from Democratic booths.
420 (b). corrupts The subordinating of local questions
both national and to state and national questions, has never
oca pot tea. benefited state and national questions.
478
The Promotion of Convenience.
[§ 4206
On the contrary, the mixing of local and state politics
with national politics, has led the corrupt politicians,
for the sake of local spoils, to just so much stronger
efforts to control the national parties. The practice
works harm in both directions.
All the great reform victories in the cities have been
won by wise people voting together in local matters,
without any regard for their national politics.
420 (c). Paradoxes It is interesting and variously sugges-
of Democracy. tive that of the three principal schemes
wherein the founders of our democratic national gov-
ernment dared not trust to democracy — the election
of president, the election of senators, and the appoint-
ment of the Supreme Court, one is a dead letter, one
a live evil, and only one a success ; and in that one — the
appointment of the Supreme Court, the suffrage acts so
remotely that the voters and even the politicians hardly
take the matter into consideration at all.
But after all, must we wait to abolish the interference
of national parties in local elections, till every voter is
intelligent and honest .enough to vote independently in
local matters, or until we can amend the Constitution
of the United States, or devise other machinery to vir-
tually elect senators by popular vote? Or can we do
something toward divorcing local from national politics
short of amending the Constitution or some parallel
device?
421. Civil Service Professor Goodnow * suggests that the
Reform as a temptation to interfere would be dimin-
remedv' ished by lessening party control over
municipal offices, through increasing the proportion of
offices filled only by appointment, and also those that
can be filled only upon examination, and whose tenure
is permanent during good behavior. Long tenure of
office is nearly universal in the cities of Europe, especially
in the working staff. A German burgomaster is a pro-
* "Municipal Problems."
§ 422] Peculiar American Municipal Difficulties. 479
fessional expert who generally holds his place for life,
except where one in a smaller city makes a reputation
that leads to his being called to a greater city.
Professor Goodnow also suggests some-
tlws'tMhSsUti, thing perhaps more easily effected,— sepa-
Jocai^unctlons to rating state functions and city functions,
6 0041 * as far as possible, just as already in some
states, state and city elections are separated. This
would lessen the number of matters — such as street
railways and gas and water companies, which the
state legislature can control; and on the other hand,
would take away from local administration and give
directly to state administration , more matters of purely
state policy, such as the care of the defective classes,
including education, the liquor traffic, the administra-
tion of justice, and the preservation of the peace. On
one side, the state could attend entirely to those things
which it would naturally attend to if there were no
such thing as a city. On the other side, the city
could attend entirely to those things which exist solely
because the city exists. If the state were entirely
rural, and there were no local governments, the state
government would care entirely, as it now does partly,
for the preservation of order, the administration of
justice, and the care of the defective classes, including
the education of the immature. When a city grows
up, it brings the new needs of elaborate laying-out and
paving and lighting of streets; of railways on, over or
under them; of water-supply and sewerage; of regu-
lation of buildings; et cetera. Let state and city
each care for its own. City children have to be edu-
cated, and city poor and insane cared for, as do country
ones, but it is properly a state function. So do city
quarrels have to be adjusted in court, and city criminals
restrained and punished, just as country ones do, but
these too are properly state functions.
An additional reason for the state keeping control
of all functions not necessarily a part of the evolution
of a city, is that corruption grows in city governments
faster than in state governments (417), especially in
480
The Promotion of Convenience.
[§ 422
things that do not, like streets, water, etc., come under
every citizen's notice.
422 (a) Education c^v^s^on *s not Quite ^ clear as
a . uca on. seems There is hardly sufficient his-
torical warrant to call education, for instance, a state
function — in America at least, tho there is in Prussia
and France, and (tho only comparatively recently) in
England. But in America, local provision for schools
was well under way before the localities were consoli-
dated into states, and education has been mainly a
local matter ever since, with more or less supervision
and assistance from the state. Perhaps the state rela-
tion to it is growing, at least in the development of
state universities by the newer states; and there are
state superintendents in several states: even in so old
a state as New York, there is a state officer called
the Superintendent of Public Instruction, with very
large supervisory and advisory powers regarding the
local schools, and there is a strong tendency to enlarge
his powers. Toward the close of the last century, con-
siderable agitation of the subject was going on in New
York, because of the usual corruption of city govern-
ment invading the school boards : so although America
began with local public education, state public educa-
tion may, after all, be the logical thing; and if it is,
of course, evolution tends toward it.
422 (t) Ponce Police, again, like education, have held
0 ce' a double position. In France and Ger-
many a state police is a matter of course; and even
in England, despite the tradition that strong local
government is the very basis of Anglo-Saxon liberty,
the police were made a national body by Sir Robert
Peel (hence the name "peelers") with great improve-
ment in the maintenance of order ; and half the expense
of them is contributed by the nation. Massachusetts
has had satisfactory experience in the same direction,
and the corruptions in the cities of New York state, as
well as the fact that maintenance of order is logically
an ancient function of the state — of the chief law-making
§ 423] Peculiar American Municipal Difficulties. 481
power, have led many thinkers to advocate a state
police there.
The administration of justice, as well as the main-
tenance of order, is a state function already, but in
cities, generally only so far as concerns the upper
courts. Many cities have courts for small cases —
inside of a thousand or two dollars, which are not part
of the state judicial organization. Most judges, even
of state courts, are elected in localities, and the police
magistrates in the cities are generally appointed by the
mayors. It would probably be an improvement to
make them all state officers. It might be difficult for
New York City, for instance, to have its affairs so largely
administered by people sent from Albany; or Chicago,
by people from Springfield; but the men need not be
sent from the state capitals, any more than the officers
of the post and revenue and United States courts are
sent from Washington. Their being state officers is
merely a question of how they are put into office, and
to what heads they are responsible: not of where they
lived before taking office.
American local governments are more
in^onfuXgfoca!"6 corrupted by national politics than those
and national of other advanced nations. In England,
^° c$* local nominations by the national parties,
instead of being the rule, are the rare exception, tho
unfortunately there are signs of their increase, largely
depending upon the fact that Parliament takes the
place of our state legislatures in determining what
4 'municipal trading" a city can undertake. Yet so far,
not half the municipal offices are even contested, and
probably half the elections are reflections for good
service. Here the parties contest every election, and
generally give an inexperienced man his "turn". In
most of the cities of the continent of Europe, the sys-
tem itself hardly admits of such a thing: for a con-
siderable part of the municipal legislature is elected by
special members of the community, eminent for knowl-
482
The Promotion of Convenience.
[§ 423
edge or ability, who would not think of national politics
in the connection (426 6).*
Aside from the method of electing sen-
cin wealth aiS^" ators, there are other peculiar causes of po-
mota carelwsness. utical corruption in American history and
character. Our early government was
founded by an exceptional set of people, among whom a
working democracy was not inconceivable. Thus, tho
they were far from beginning with a system of universal
suffrage , that system gradually grew up ; but the increase
in our ignorant classes has made it a very different thing
from what the fathers expected. Moreover, the United
States, being a comparatively new and thinly populated
country, has such vast masses of untouched wealth in
its mines, such vast tracts of cheap forest and arable
land, and such immense opportunities to trade in the
products of all these, that the people are all engrossed
in making money, and give less heed than Europeans
must, to saving it. Tweed said that nobody in New
York would stop to protect a dollar from the politicians,
as long as he was left another dollar to trade with. His
remark was something like the truth. Not only in
New York, but throughout the country generally, it is
the disposition of the people to neglect their govern-
ments and let them fall into the hands of corrupt men,
and to carry their differences on national questions
into home politics, until the taxations and oppressions
become too heavy to be borne ; then the people arouse
themselves and make a change, and then gradually
relapse into the bad ways again.
But with all the carelessness of American cities,
their debts are not always larger than those of European
cities. But the European cities have something to
show for their debts that ours have not — city ownership
of street railways, docks, gasworks, markets, abattoirs,
improved tenements, lodging-houses, baths, assembly-
* On these points and on the composition of European
municipal governing bodies, Shaw is invaluable.
§ 425] Peculiar American Municipal Difficulties. 483
rooms and other things — many of them, even the ceme-
teries, sources of income. Our debts to a large extent
represent merely the stealings of our politicians.
One other national characteristic that keeps our
municipal administration poor, is our proverbial good
nature. We do not " kick" enough. So wise a man
as Herbert Spencer blamed us for this. Perhaps we
are so sure of our more important rights, that we are
careless about mere conveniences. If we would make
it a duty to complain of cars not stopping, or being
overcrowded, and of sanitary violations, etc., we would
make a vast improvement. A poor fellow in a tenement-
house might get himself into trouble if he complained
of his landlord, but in Paris for instance, the health
authorities invite all people to mail them unsigned
complaints.
Even if our capable people were less careless of
their political duties, there may not be enough such
people to make much direct difference, but they could
effect considerable through watchfulness and influence,
tho perhaps not through votes: for the ignorant are
more and more crowding into the cities,
425. Co^PtjjlJ of especially seaport cities ; and in New York
guise ofncharity. at least, Tammany is organized to corrupt
them by charity, on the old plan of "bread
and circuses" that helped destroy Rome. It has an
agent in every district where the poor crowd, whose
function it is to befriend them in all possible ways.
That may be a good use to make of the spoils, but
only a small portion of them go that way. It is simply
a plan to use up a little in order to get more. The
reform element really spends vastly more money for
the benefit of the poor, than the political organizations
do — all the vast charities of the cities are supported
by people who generally vote against the corrupt
machines. But that fact is not felt by the poor man:
the charity of the political machine comes to him in
the name of the machine, and what is of perhaps even
484 The Promotion of Convenience. [§ 425
more consequence, it comes through a jolly sympa-
thetic neighbor of lus own class, who knows him person-
ally and drops in at his home. The great charitable
institutions naturally render their services in a more
or less routine way, through strangers, and from offices
more or less remote.
The people who actually support the real charities,
might use a part of their funds as Tammany uses a part
of its funds. But they do not do it, partly because
they are too busy making more funds, but mainly
because, after all, it is not honest to work politics
under the mask of charity. They are, however, in
manv cities, carrying their benevolence and educating
influence right home to the poor through the various
"settlements" started by the universities, and now
taken up by many other agencies.
426. Non-taxpay- There can be no reason or justice in
•rs voting permitting people who do not pay taxes to
vote away the property of those who do. In the Euro-
pean cities, however wide the suffrage may be in
national matters, probably not half the men vote for
city officers. In Great Britain, the Low Countries,
Germany, Austro -Hungary and Italy, such an absurdity
as universal suffrage for city officers is unknown (except
in the comparatively rare cases where a non-taxpayer's
educational qualification prevents his voting being
absurd) ; and it is in those countries that cities are best
and most fully developed, and do most for the health
and happiness of the very people who are not permitted
to vote. The remarkable showing already quoted for
Jacksonville, Florida, has been effected only under the
Australian ballot, which virtually imposes an educa-
tional qualification. That fact is full of meaning re-
garding whatever favorable showing may have been
made in Australia itself. Even in the villages of New
York state, and in Texas at least, nobody can put a
locality in debt for public improvements, without a
vote of the taxpayers. It is the older practice, indeed,
to have improvements voted only by taxpayers. It
§ 426 c] Peculiar American Municipal Difficulties. 485
looks as if the other practice had been worked into
existence, as cities increased, by the politicians expect-
ing to secure the spoils of the cities through the care-
less votes of those who have nothing at stake. •
But there is a reason, tho not necessarily a good one,
why the practice of the New York and Texas villages
cannot be carried into the cities: the taxpayers of
the towns and villages can easily vote on each appro-
priation, like officers' salaries and ordinary running
expenses, that is not a mere matter of routine; but
it would certainly be much more difficult to have that
done in the more complex improvement of the cities.
A very authoritative substitute was proposed in 1875
426 roJL wden *>Y * velT emi^ commission appointed
Commission's pro- by Governor Tilden of New York. It
posed remedy. reported in favor of each city having a
Board of Finance to be elected by taxpayers alone,
who should regulate all expenditures. But reasonable
and ingenious as the measure was, it could not be
carried. Of course the politicians did not want it:
it would spoil their trade: so they raised the cry that
it was against universal suffrage. It was against the
absurdities of universal suffrage, of course, but not
against its legitimate claims. Those claims are sim-
426 (t». Local Vhr *^a^ eveiT man shall vote for the
suffrage rights officers who protect his life, liberty and
differ from others. legitimate pursuit Gf happiness. Paying
the officers who attend to conveniences, and deciding
upon spending money on them, are other matters, which
can be vastly more safely and reasonably left to those
who must do the paying, and who therefore have proved
that they can handle money wisely. If such matters
were so left, the poorer man would be all the surer of
good officers to protect the other set of rights which
are as much his as anybody's.
This is the plan in the cities which lead
fo\V suffrage**!! the world in administration, convenience
*h™"~9°oerned> and care for their poor— in Great Britain.
Germany, Austro -Hungary and Italy.
Even taking the extreme view that a city should be
486
The Promotion of Convenience. [§ 426 c
largely a charitable institution, it is not very sound
policy to let a charity -institution be run by the bene-
ficiaries.*
As to France, those who know Paris under universal
suffrage, and knew it before, say that it has deteriorated.
In Germany, Prussia lets only taxpayers vote for city
councillors, and (as is quite generally the case in Europe)
the councillors elect the executive officers — burgomaster,
etc. The suffrage arrangement by no means ends with
letting only taxpayers vote. A graded list of tax-
payers is made, beginning with the one who pays most.
Those who pay the first third of the taxes, elect one
third of the council, and those who pay the second and
the third thirds of the taxes, respectively elect the other
two thirds of the council. Taking Berlin's election of
'93 as an illustration, the three portions of the council
were elected respectively by 2 per cent., 1 1 per cent., and
87 per cent, of the taxpayers. As an indication of the
faithfulness of these respective classes of taxpayers to
their civic duties, of the wealthiest class, 46 per cent,
went to the polls; of the middle class, 37 per cent.;
* The following extract from Collier's is worth quoting :
" * Idiots Vote in New York.' This is no joke. It Is an
illustration of the importance of ballot forms. The feeble-
minded, who could not manage a Massachusetts ballot at all,
are as good as anybody in New York. In 1900, when McKinley
and Roosevelt were the Republican nominees, we happened to
enter into conversation with an idiot friend, who may as well
bear the name of Jerry. Handing him a sample ballot, we asked
him how he intended to cast his vote. He made a cross under
the eagle, and, in spite of attempts to confuse him, insisted
that he was voting the Republican ticket. 'Who is running on
that ticket ? ' we next inquired. 4 Teddy and Matinny '
(McKinley), he replied. 'What is Teddy running for?' 'Oh,
Teddy, he run for President.' 'And what is McKinlev running
for?' Jerry thought a moment. 'Matinny running for mayor,
ain't he?' Continuing our instructive intercourse, we asked
him if he approved of trusts. He did, and we asked then what
he understood by trusts. Jerry smiled. 'When you go to the
store, you get trusted,' he replied. Jerry, in our opinion, is in
many respects a typical New York elector — an extreme case,
perhaps, but illuminating. Should the ballot not be arranged
to meet the requirements of a somewhat more intricate intelli-
gence ? "
§ 426 e] Peculiar American Municipal Difficulties. 487
and of the poorest class, but 26 per cent. To be fair, it
may be probable that the less wealthy classes were so
poorly represented because they felt their influence was
so slight. • But if so, they would do well to meditate the
parable of the talents. To be equally fair, it is possible
that they stayed away because they are not as capable
as more able men, of appreciating the reasons for going.
That arrangement is not restricted to the Prussian
cities. Vienna has something like it, but it is not popular
— at least among people who want to spend other
people's money.
The actual experience of having the non-
426 where taxpayer vote regarding city expenses, is
^"taMe^careof. that so far from the non -taxpayers' votes
beinj necessary to secure them proper
accommodations in cities, there is no sort of question that
throughout the civilized world they get best accommoda-
tions— education, parks, baths, gymnasiums, concerts,
where they have fewest votes; and where they have
most votes, they elect most people who steal the money
that ought to be devoted to the voters' benefit, and
alienate moneyed people from city improvement.
As between the leading cities of the leading nations,
which, at the beginning of the century, spent most
money per citizen, those where suffrage was universal —
Paris and New York, each spent more than London,
Berlin or Vienna. But in the last three, unquestionably
the people were best taken care of. The money, then,
must have been stolen by officers elected by voters
unfit to exercise the suffrage.
e America *kere seems small chance in our
can in}iy Improve country of taking the suffrage away from
wLtTercZiroi7.!t the ignorant and shiftless for their own
good — not as much perhaps as there is
of curing their ignorance and shiftlessness. Those at
least are things that anybody can begin on any day,
and it is hard to tell how to raise the suffrage tests.
Our need of easy ways of getting good men into
office is almost equalled by our need of easy ways to
438
The Promotion of Convenience.
[§ 4*6*
get bad men out. A promising one has lately been
introduced in Los Angeles, and is under consideration
elsewhere. Under it, any elective municipal officer
may be removed, and an election held for a successor,
upon a petition containing verified signatures and
addresses of a quarter as many citizens as voted for
him. A similar law is now under agitation in New
Jersey.
This long history seems to prove what we had already
reasoned out on general principles — that in America,
at least, we would better move very cautiously in
increasing our kinds of public work. Public works
are the great source of public spoils. If we were to try
to have at public expense all the good things that the
best European cities have, we should simply succeed
in throwing more food to political corruption, and thus
to a large extent spending our money without getting
what we spent it for.
If all good citizens were alive to their political
duties, those duties would not demand much care on
the part of each. The community would then be pretty
sure to take the ounce of preventive where it now has
to pay for the pound of cure ; and it would moreover be
saved the heavy taxation between the times when the
preventive ought to have been applied, and the times
when the cure must be.
427. Universal It may reasonably be noted here that the
Impiief6 indiflS- advocates of universal suffrage must logic-
ism, ally be advocates of laissez-faire. Those
who claim that a given man is able to take care of the
state, cannot logically claim that he needs the state to
take care of him. If he is unfit to take care of himself,
he must, in all reason, be unfit to take care of the state.
Yet logical sequences can only follow one line of factors,
and there may be in the situation many other factors.
When the general line of motion of a stone or a solar
system is once determined, to get the exact line, many
contributing factors must be investigated. Yet general
principles — those that hold "other things even" — are
§ 427] Peculiar American Municipal Difficulties. 489
constantly of value in general reasoning. And this
general idea of the logical relations of democracy and
laissez-faire may often serve to guide one's opinions
regarding democracy, or regarding laissez-faire. If you
want government to perform a wide range of difficult
tasks, let stupidity have as little to do with govern-
ment as possible. If you want stupidity to have a
large control in government, give government an in-
versely small range of duties.
CHAPTER XXXII.
RECREATIONS AND OTHER HELP TO THE LESS FORTUNATE
CAPABLE.
428. Museums and Now to leave mere 4 4 practical" conve-
Libraries. niences, and turn to agencies of recreation
and help. So far as municipalities provide them, they
are of course subject to the difficulties already in-
dicated ; but in some countries where universal suffrage
has not yet been the rule long enough to "get in its
fine work", government manages museums and libraries
very well. In Germany, government even runs the
theatres well; but in France under the Republic, the
Paris opera has become a good deal of a botch, despite
government patronage.
In America, these things generally have been kept as
far away from universal suffrage as possible. The offi-
cials for museums and libraries are nowhere elected, tho
in many places appointed by the mayors. The great
museums in New York, however, are, fortunately, pri-
vate corporations ; and so with the great library bene-
factions of Astor, Lenox and Tilden; yet the city pro-
vides the buildings for nearly all. So too, in other
cities, most of the great benefactions of Peabody and
Carnegie and their like are in the hands of private
trustees. That rule has not been universal, however:
in Boston, for instance, the Public Library, tho under
city control, has been a brilliant success. But Boston's
interest in library matters is almost unique.
429 Parks ^s to Par^s : our German fellow
a 8' citizens have plenty of private ones, for
picnicking and dancing and concerts, but private enter-
490
§ 43<>]
Recreations and Assistance,
491
prise never did create a large one: all the private ones
in New York could be lost in a corner of Central Park,
not to speak of the newer public parks ; and the same
is true of the ratio of private parks to public parks
elsewhere. Land for large parks cannot well be had
without eminent domain: so they must be government
institutions.
In Europe, parks have generally been well managed.
So they have in Boston and a few more of our cities.
In New York it has been a constant, and not always
successful, fight to keep ignorance and corruption from
injuring them; and much similar experience has been
had elsewhere in America.
The best way yet devised to take care of them is
by putting them under commissions to be selected,
directly or indirectly, by artists, architects, engineers
and other competent persons outside of politics. In
New York, there has lately been great improvement
made by having the artistic and engineering and Natural
History societies appoint some of the park officers.
There is also a Fine Art Commission appointed by the
mayor, whose advice is often sought, and who can veto
the designs and sites for public structures selected by
the other bodies. This heads off the ignorance of the
sort of managers dependent on universal suffrage.
There is a strong economic argument for abundance
of parks. It has gradually become plain that large
tracts, especially city slums, can be taken and, with
good management, partly turned into parks and boule-
vards, and the whole expense paid by selling off the
rest for building-sites. This has been done in many
cities, especially in Europe.
430. Clearing Improving the dwellings of the poor,
$lum8' however, has not been done solely in this
way. In most of the leading European cities, and a
few American ones, the miserable, crowded, tumble-
down, fire-trap quarters have been cleaned out, better
streets put in, and healthier and safer houses put up,
often with a profit on the whole transaction. Private
enterprise also has generally gone in and put up better
492
The Promotion of Convenience.
[§ 43o
buildings, tho very frequently they have been business
buildings rather than better lodgings for the poor; and
therefore the poor have, to a considerable extent, been
merely driven to other slums. Yet certain it is that
if the very worst slum is cleaned out, its occupants
will be forced to one less bad, and their habits will
receive at least a temporary improvement. In America,
little more in this way has been done by municipal
governments than occasionally putting a new broad
sunny street through a slum, or widening an old street
in it. There has lately, however, been a great increase
in plans for such improvements.
Plainly, such work cannot be left to private compe-
tition: while it would be possible for individuals or
private corporations to rebuild all the houses they could
get possession of, possession of an entire district for
the purpose of rearranging streets, would be impossible.
Land for a new street is virtually a natural monopoly :
for some of the owners of houses, hoping to benefit by
improvement, or for other reasons, are sure to hold
on to their own against every power less than govern-
430 (a). Possible ment- Therefore under all ordinary cir-
oniy under eminent cumstances, nothing can make such im-
doman. provements properly and thoroughly but
the one thing that can control a natural monopoly —
eminent domain.
430 (b) Graft To° often» generally perhaps, such im-
provements in America have been political
jobs: the politicians have, in advance, bought up the
property to be benefited, often below its value, at rates
established by themselves under eminent domain; and
then on getting possession, they have sometimes turned
around and got new valuations for damages, and col-
lected them from the municipal treasury. On the
whole, the schemes have, with us, too often been mere
wholesale robberies of property-holders by the politi-
cians, with some half-way advantage to the poor, and
some incidental advantage to the community in general.
European experience in the same lines has been that,
as a rule, street-openings have not been attended
§ 43°]
Recreations and Assistance.
493
with as much corruption as here, tho there was a
remarkable exception when Napoleon III. made over
Paris.
430 (O. Thenega- Something has been done by way of
tioe iide. housing the poor in several of the British
cities, Glasgow having taken the lead ; and somewhat less
in Germany and France. There has been an improve-
ment in health and character, and those who favor
"municipal trading" claim that, on the whole, the
buildings return a fair interest on the money invested.
So much for the positive side. On the negative
one, it is admitted that in Glasgow itself the houses
do not quite return their interest, and that in London
more people are driven out of the old buildings than
the new ones can accommodate, and forced into quarters
worse than the old. The new buildings are really
fitted for a higher order of tenants, and some of them
who would pay more than the rates charged, are actu-
ally crowded away. In other words, the enterprise has
been made a charitable one rather than a business one,
and that, to the detriment of those dispossessed to
make room for the new buildings. Private builders
have stopped making accommodations for the poor:
they will not compete with government charity: so, it
is claimed, the very poor are worse off than ever. As
to the sanitary and political aspects of the case, now
the landlord — the municipality, is his own sanitary
supervisor — nobody else to watch him; and his reelec-
tion depends on his own tenants : so he is not apt to be
very rigid with them.
In face of the European experiences, we seem still
less ready for success, at least in many of our large cities
where it is most needed. In them, and in many of the
small ones too, the government is so corrupt that the
less it has to do, the better. Moreover, in house-building
at least, tho not in street -opening, there is room for
infinite competition.
For Boston, the legislature has recently voted build-
ings for the poor that must have so many good qualities
that the poor cannot pay the necessary rent ; and building
494
The Promotion of Convenience.
[§ 43o
for them was at a standstill in the latter part of the cen-
430 (dh success tury- In New York> Mr- Gould's company
under private and some smaller ones have provided vastly
enterprise. improved houses at a reasonable profit,
both in town and in the suburbs, and are having very
great and growing success. Some, however, have done
it at a loss ; and at least one who offered a special private
entrance to each apartment, found that the people
preferred the sociability of the old common halls, despite
its evil features. The use of bathtubs for coal-bins has
become one of the standard humors of the subject.
431. Housing the But some American local governments
P°°r' have done something more directly for the
housing of the poor, than taking property by eminent
domain — especially in New York, where the conditions
are worst, a good many laws have been enforced toward
securing from the landlord, proper light, ventilation,
drainage, and safety from fire.
Some objection has been raised to this work on the
ground that it was interfering with liberty of contract.
Light, ventilation, drainage and safety all cost money:
if a man wants to hire a cheaper place without them,
why, it has been asked, interfere with his liberty to do
431 (ai community^0] Liberty, like every other good
should regulate it thing, can be run to an extreme. No man
in self-defence. shonld be at iiberty to build or occupy a
house which may start a pestilence through the whole
community. If a man is so poor that he cannot afford
to live in a better one, and if he will not leave the
city (64 a, 646), it will be better for him, and cheaper
for the community, for it to exercise its rights of
self-defence, and put him in the poorhouse at once.
The conclusion on the whole matter seems to be that
in America, at least, the government would best require
good sanitary conditions, and leave the rest to private
enterprise and philanthropy.
432. Personal con- Jfe 'iaVe g°°d PUbHC bathS'
veniences, army while they and other sanitary conveniences
outfitting, etc. «n European cities are far in advance of
§ 433]
Recreations and Assistance.
495
ours. Some European cities have provided public wash-
houses for laundry work, and Glasgow has even taken
in washing, because the women did not use the public
wash-houses enough to make them profitable. In view
of this, with their usual consistency, the socialists who
have wanted the government to do everything, are
objecting because government competes with the
washerwomen.
We come now to another class of government func-
tions, and one whose appropriateness for government
there is, probably, less dispute about. Until we reached
the question of clearing out the slums, we had touched
only matters in which the whole community is directly
interested — questions of convenience that come home
direct to almost every man, and where, as a rule, people
can help themselves. But in the worst slums, we struck
for the first time the class of people that need help. We
have already admitted that everybody is interested in
having city pest-holes cleared out. Similarly, every-
body must be interested in having all those helped who
need help ; so that (to put it on the lowest ground) they
433 Economy and s^a^ not spread disease and be led into
civilization both pauperism and criminality. It is cheaper
require charity, tQ haye people helped to help themselves,
than to increase the sanitary force, police force, and
hospitals and courts and jails.
We have seen before, for that matter (336), that
civilization apparently depends upon the burdens of the
unfortunate being borne by somebody else. Now shall
they be borne by more able people, as individuals, or by
the state? At first sight, it seems as broad as it is
long: for as the able people pay the taxes, it seems to
make no difference whether they give the money direct
or through the state. But it does make a difference —
all the difference in the world, and for at least three
433 (a\ preferably good reasons. The state does its coarsest
from indiuiduata. work but poorly, and its finest work —
the care of its unfortunates and defectives, it does
abominably. Therefore the less of that work that it
496
* The Promotion of Convenience.
[§ 433 *
has to do, and the more of that work that can be done
by the exceptional men and women of the able classes,
the better.
, It may well be asked: why should not government
do the work by calling these exceptional people in to
administer its charities and education? But too
often in America it will not: for the reasons already
given time and again. In America what little decent
management of government charities there is, is either
undertaken, as in Massachusetts, by state officials
working without pay (who are very hard to get), or is
forced on paid officials by the criticisms and aid of
volunteer private associations like the New York Chari-
ties Aid Society. In the leading cities of Europe,
as a rule, the best people are called in by the govern-
ments, and in large numbers, to administer the chari-
ties. But those cities, outside of France, are not under
universal suffrage; and France has not yet got very
far into the habits universal municipal suffrage breeds.
The second reason why government is unfit for the
work is that the tendency of government administra-
tion is to run into socialism, communism and all other
forms of robbery of the minority by the majority.
The third reason is the killin g of the spirit of spon-
taneous individual sympathy, from which, as is abun-
dantly proved, and with increasing clearness every day,
more is to be expected than is possible from govern-
ment charity.
Nevertheless, the most aid to the needy is supplied by
the most advanced governments. As civilization begins,
none of its conveniences are supplied by the govern-
ment: the government attends only to defence and
justice, "and precious little of that." In mediaeval
434. Hospitals and Europe, schools and hospitals were first
asylums. supplied exclusively by the churches, and
are in Turkey to-day; and in Catholic -countries, except
perhaps Austria, there is now a larger proportion of
them supplied by the churches than in Germany,
England and America.
In Protestant countries, schools and hospitals are
§ 436j
Recreations and Assistance.
497
supplied both by private beneficence and by govern-
ment.
The ideal principle seems to be that government,
which is the affair of all, should not undertake anything
not needed by all. But we do not all use hospitals
and asylums, and certainly not jails, and yet we all
need that they should exist: so if private enterprise
does not supply them, we have to depend on govern-
ment.
Regarding hospitals and asylums, it will not do to
say too confidently whether government's share in
them is increasing or decreasing. It seems most probable
that in America, private gifts and bequests for them
are gradually moving government's activity more and
more into the background. In Europe, especially in
Great Britain, the cities have lately been very active in
improving them, and placing them in beautiful grounds.
In Edinburgh, at the time of writing, there are not
enough patients to fill the hospitals.
In Glasgow, they have even gone so far as to provide
a municipal boarding-house for families whose homes
have to be disinfected after sickness.
435. Relief to Indl- Relief for the poor has followed the same
vidual Poor. course as the hospitals and asylums. Pri-
vate beneficence is sparing government much need of
increasing its activity in poor relief; and what is better
still, various private organizations for helping people
to help themselves, are even reducing the numbers of
the poor, by turning them into the well-to-do, so redu-
cing the need of government care of them.
There is a peculiar situation in Great Britain and
Ireland. The poor-law boards are not strictly part
of the government, but are elected separately, and
administer funds which are supplied both by govern-
ment and private benevolence.
436 Pawnsho s Pawnshops throughout the continent
awns ops. Q£ £ur0pe> are generally government in-
stitutions. In England and America they have been
498
The Promotion of Convenience.
[§ 436
conducted merely as private businesses until, about
1895, the "Provident Loan Society a purely philan-
thropic organization, was started in New York to serve
the poor cheaper than the pawnbrokers did ; and it has
grown rapidly, and similar schemes are springing up.
The arguments for government pawnshops are that
they do not make extortionate charges, and are a
great aid to the police in tracing stolen property.
437. Savin«-banks. Governments providing pawnshops have,
'with the exception of Belgium and Hol-
land, also provided savings-banks — in fact, the banks
have been to some extent evolutions from the pawn-
shops, and in many countries are still connected with
them. Oddly enough, paternal Germany has no Postal
Savings-Bank, while all the other civilized European
nations, have, except Switzerland. We have not, but
we seemed on the brink of starting one about the
beginning of the century.
In England and America, pawnshops and savings-
banks are both private, except the English Postal
Savings-Bank. In countries where both are private,
there is a very great difference in the character of the
two — greater in America, perhaps, than elsewhere.
Here the pawnshops (except those of the Provident
Loan Societies) are not prominent features in any way,
while the savings-banks are among the great institutions.
438. Lodging- As to lodging-houses, had it not been
houses. for the recent boom in British munici-
palization— which is showing startling symptoms of
collapse (400 b, h, 414 a, b) — it would have been true
that, as with pawnshops and savings-banks, lodging-
houses also have been most freely provided by those
governments, Germany at the head, which try to have
toward the people a father's relation, of beneficence as
well as of control. Republican France has fewer than
Germany, and most of them are partly supported from
private funds. In this regard Great Britain has been
doing much to surpass the Continent. Glasgow has
§ 439] Recreations and Assistance.
499
the lead. She not only provides separate lodging-houses
for men and women, but even has one for families (434).
A small charge is made, and it pays a good interest
on the investment. In America, homeless wanderers
are permitted to sleep in the police-stations, but lately
our people, whose habit it is, beyond that of all other
peoples, to help the unfortunate to help themselves —
and make the shiftless do it, have begun a most impor-
tant device in that direction. There are already several
places more or less like the Charity Organization Society's
woodyard in New York, that will give supper, lodging
and breakfast to anybody sawing his stint of wood;
and they are often able to help applicants who appear
deserving, to regular employment. There are also' a
laundry and sewing-rooms for women, on the same
principles.
438 (a). Throw These institutions have thrown much
tight on street- light on street-begging. They are partly
begging. supported by the sale to the benevolent,
of tickets directing applicants to them. These are
bought and given by the purchasers to persons apply-
ing to them for charity. Such a ticket seldom finds
its way to woodyard or workroom, which proves that
beggars will seldom work if the chance is given them.
439 Labor bureaus There are government schemes for find-
a or ureaus. work for those who need it. The
paternal governments — Germany at the head again —
generally provide labor bureaus. England provides
them through the "Board of Trade", a half -govern-
ment and half -commercial body; and in America,
they took their start in connection with private chari-
table associations, tho the recent agitation of "Labor"
for paternal governmental care, has led to the opening
of labor bureaus (and making places in them for the
politicians) by several cities. A fruitful illustration of
"politics" was given in the Chicago labor bureau in
'99. They refused to give any information to em-
ployers whose men were on strike.
Some good, however, has been done in America by
The Promotion of Convenience. [§ 439
government labor bureaus. Up to the close of the
last century, Ohio and Illinois had state bureaus which
had done enough good to the laborers, or the politicians,
or both, to encourage Maryland to start one; and there
was talk of having a chain of such bureaus all over
the Union, which would help more idle labor to places
where it was needed — 44 a consummation devoutly to be
wished." The new associations of employers have
lately started a great many as reservoirs of labor to be
drawn on in strikes.
As to government itself furnishing actual employ-
ment, outside of its legitimate need for labor on public
works: somehow it does not work well. There is
always a boom in government work when there is a
boom in other work: probably because then the offi-
cials feel like everybody else — encouraged to go ahead,
while they feel the effect of dull times in the converse
way. It has often been proposed to have government
work specially active in dull times when many men
would otherwise be out of employment. France tried it
in the public workshops after the revolution of '48, and
made a frightful botch of it (34). More success has been
had, especially in Germany and America, by lending
people plots of land to work on their own responsibility.
This has the advantage over the French system, that the
laborer cannot get wages unless he earns them.
440. Insurance. Idleness before old age has been insured
against only through the trade-unions and
other organizations, but nearly all the nations of Europe,
and also Australasia, have taken some steps regarding
insurance against want in old age. Where premiums
were demanded, it has, so far, not been found easy to
make the workmen pay up. Numerous German cities
have helped out the sickness and accident funds of
many of the workmen's societies, and Germany is now
trying to get a portion of their wages devoted to in-
surance against the idleness of old age, by having that
portion reserved when wages are paid. She does this
under the partial disguise of making the employer pay
§ 441] Recreations and Assistance. 501
the insurance — as if he would pay that, and also pay
as high wages as otherwise — which of course he will
not. Denmark gives a pension out and out. Ger-
many and Italy add about an equal amount to whatever
the beneficiary may have secured for himself. Some of
the Australasian states supplement any income (or no
income) that the beneficiary may have, by enough to
bring it up to a fixed amount, which of course encourages
everybody to spend as he goes.* So far as old-age
pensions can be provided for by insurance during the
active period of life, they are in every way desirable;
but if they come as gratuities, they are, of course, a
premium on shiftlessness, like the Australasian schemes.
There is danger of their becoming, like a good many
other Australasian schemes, one of the sentimental fads
for giving people perfectly able to take care of them-
selves, something they do not earn.
Insurances against idleness, illness and old age, are
by no means the only insurances the governments have
undertaken. In Berlin, even fire-insurance is a govern-
ment function, and is made obligatory on all property
owners. The same has been proposed in London.
Some of the Australasian states have begun life-insur-
ance. Here our sailors have long had to contribute to
the marine hospital fund.
441. General con- We have nOWt S°ne ™5T about all of
elusions regarding government work for helping the needy
charity. ^e\p themselves. One general truth re-
garding it appears pretty plainly: Germany — the place
where the people grumble most against government —
where the desire for socialistic change is most important,
is the place where government attempts most for the
people; and the United States, where people are, on
the whole, the best satisfied, is where government does
least for them. Yet the needy are not worse cared for
* For a good treatment of this subject see the Review of
Reincws for July 1900, pp. 95-97, and the books on Australasia
already cited.
502
The Promotion of Convenience.
[§ 44i a
under our policy than under the opposite policy.
441 (a) Mutual Apparently our people, left to themselves,
help better than do for each other, including their poor, as
government help. much ^ if ^ government
succeeds in doing for any other people.
It may be asked whether in Germany the socialistic
agitation may not be the cause of the government's
activity in charity, rather than the effect: so that if
our people agitated more, government would effect
more. Probably not: because in Germany the govern-
ment's activity in charity began before the discontent
became so great.
Another principle seems to peep out in our examina-
tion, or at least an expansion of the same principle.
First we saw that in early times, charity was not politics,
but religion. Now we see that in the nations politically
most advanced, charity, tho no longer exclusively
religion, is more effective than ever before, and still is
not politics — or at least is politics in a less degree than
in nations under more primitive political institutions.
While a large proportion of the private support of
charity still comes from religious people, it does not
come in the old ways: in America there is no state
441 (b) The church, and in England not half the
church', the state, people belong to one. Religious people
the Philanthropist nQw administer a large and increasing
portion of their charities through secular bodies, and
the care and subscriptions come more from a desire
for their fellow man's present welfare, than for the
donor's own future welfare. The new motive, however,
is yet worthy to be called a religious one: the founder
of the most advanced religion preached no motive
more earnestly. But its action in the modern secular
world is a very different thing from its action through
the mediaeval priesthood.
Do we propose, then, to do away with all govern-
ment charity, and depend on private charity alone?
Surely government cannot promote the general con-
venience in any more general or more necessary way
than by charity, or apparently in any more wasteful
§ 44i c] Recreations and Assistance. 503
and less effective way. The fact that an end is good,
is no proof that any one way to it is the best way,
or even a good way. We should not be as prophetic
as those who favor restricting us to either government
charity or private charity. The question is too com-
plicated to judge from anything but experience as it
accrues. We have both kinds with us, and both kinds
seem to result from an entirely natural evolution. The
government charities cannot well evolve any faster than
governments improve, at least to the point of keeping
charities 4 'out of politics" by securing unpaid charity
officials; and the private charities cannot evolve any
faster than human sympathies and ability improve —
any faster than men grow rich, and rich men grow
philanthropic, both of which growths have lately been
very rapid. The only plain things to do, are to improve
government and improve human nature, so that all
charities may improve.
And now let us descend from the statesman, the
priest and the philanthropist, to that very common-
441 (c\ The place individual the taxpayer. Although
taxpayer, js natural to mention sanitation in
connection with works for the general convenience, it
really is part of the machinery for the protection of
rights: it concerns taxpayers as well as non-taxpayers,
and the questions of devoting to it the powers of
government are not to be limited to considerations of
pecuniary profit. The same is true even of some forms
of charity. Under health we may include freedom
from the darkness and dirt of the soft-coal smoke.
All these questions of cleanliness and light and quiet
have their aesthetic side, and so are connected with
the question of parks and museums. If taxpayers
should bear the burdens of the first group, why not
of the second? The question, however, is not as diffi-
cult as at first it seems : for probably the taxpayers use
the latter luxuries so much more than the non-taxpayers
do; and the luxuries, of the parks at least, do so much
for the health of those non-taxpayers whose illness
g04 The Promotion of Convenience. [§441 c
would threaten all with infection, that the taxpayer
can well afford to pay for them. Paradoxical as it
may seem, it is probably true that the taxpayers are
often more in favor of such expenditures than the non-
taxpayers. I was present once at a meeting in a small
city to decide whether to buy land for a park. A
demagogue who is a small taxpayer, rallied his cohorts,
not half of whom were taxpayers, and defeated the
scheme. His argument was: 44 Mr. So-and-so and
Mr. So-and-so and Mr. So-and-so let us drive through
their places : what more park do we need? " Yet all the
Messieurs So-and-so were in favor of the park, tho
they would have had to pay more for it than all its
opponents put together, and tho they had parks of
their own.
Whatever opinion may be held of the right of the
non-taxpaying majority to luxuriate in gaslight at
the expense of the taxpaying minority, and whatever
may be thought of the right of the badly-placed and
badly-informed majority to secure sanitary conditions
and medical help at the expense of the well-placed
and well-informed minority, let us go a step farther
and realize that there can be no question that it is
to the interest of the minority that the majority should
have the sanitary conditions at least.
It is not easy to determine just how far 44 we are
members of one another", but it is plain that we are
far enough to make it to the rich man's interest that
his poor neighbor should not be spreading infection,
that his poor employee should be in health good enough
to earn his wages, that none of his neighbors should at-
tack his health by foul drainage, foul smells, and foul
noises, and that the expense of raising his poor neigh-
bor beyond the habit of spreading such, is an expense
for the rich man to welcome.
The question regarding libraries is a little like that
regarding parks and museums, and a little more like
that regarding sanitation. But altho there can be
no doubt of the ultimate effect of the library in pro-
tecting the property and liberty not only of the rich
§44i d\
Recreations and Assistance.
man but of the poor man who is less able to protect
his own, it must be admitted that the "little learning"
which has so far been disseminated among the non-
taxpayers at the expense of taxpayers, has been pre-
eminently the "dangerous thing": for, so far, it has
only awakened among the non-taxpayers dissatisfaction
with their condition, without yet affording the enlight-
enment necessary to discriminate the glittering short-
cut quack remedies for it, from the sober and arduous
real ones.
The most effective settlement of the issue between
the taxpayers and the non-taxpayers would be such
an increase in the number of the taxpayers as to put
them in the majority. On the part of the present tax-
payers, every effort toward that end through public
education and liberal business, is a noble form of en-
lightened selfishness.
The moral effects of such agencies are to be regarded
as well as the physical and financial ones, as are also
those of the more impressive laying-out of cities and
grouping of public buildings, now happily receiving
increased attention. That noble spaces and beautiful
architecture tend to expand and chasten the minds of
all who gaze upon them, there can be no question.
Neither can it be questioned that the mere economies,
not to speak of the higher satisfactions, of living in a
community of broad-minded and honest people, can
justify liberal expenditure on the part of those who
pay the taxes, and tend to increase the number of
them — a result which, we are constantly reminded from
each successive point of view, is the best security for
an orderly and happy community.
441 (d). Many tm- But it is an open question whether
?a°wl?afnotat parks, boulevards, and fine arrangements
expense. of public buildings are at the expense
of the taxpayers. The experience is quite general
that the value of near-by property is increased by
them more than they cost, and it is now proposed
as a regular policy for cities in exercising eminent
506 The Promotion of Convenience. [§ 441 d
domain for those purposes, to take enough more land
than immediately needed, to make its sale at the
increased values compensate the expense of the im-
provement itself. Unless this is done, the unearned
increment goes into private hands, except so far as it
is secured to the city by the increased assessments on
the adjoining property. Probably the old method of
taking only the property actually devoted to the im-
provement, makes more room for graft than the more
modern method of taking adjoining property too : under
the new method, politicians would probably find it more
difficult to buy for an advance. The community in
general would be more apt to secure the advance.
The question whether the advances near parks and
boulevards are apt to be great enough to pay not only
for the land taken, and its improvement, but also
provide a fund for its maintenance, is not as well
settled regarding the last particular as regarding the
others; but regarding the annual expense, there is no
complaint worth considering from those who pay it,
and certainly none from those who do not.
But in considering these subjects, it is most important
constantly to bear in mind that the only men who really
are non-taxpayers are tramps, jailbirds, inmates of
asylums, or dependents on their friends. Everybody
who pays rent, pays taxes; every servant who lives in
his employer's house, gets less wages than he would
if no taxes were paid on that house. Let the sentence
stand as expressed, so that I may tell the young student
that it again illustrates the complexity of the subject.
Before I had finished it, I reflected that, as we shall
see hereafter, taxes are not diffused or even levied with
mathematical justice, and that servants' wages are regu-
lated by dozens of agencies, some of which may counter-
act the effectiveness of that of taxation. " Every " is
a word that writers on social subjects should use spar-
ingly. Of the taxation question, however, my young
friend will probably see all that he wants later.
CHAPTER XXXIII.
THE DEFECTIVE CLASSES.
As we have already seen (227), there is no cause
of poverty. Every man is born absolutely poor.
Wealth alone is caused. Yet there must be some
reason why people suffer from poverty rather than
cause wealth. Temporary poverty may result from
temporary misfortune, sickness and accident (we
442. The persist- have already discussed the means of
entiypoor. helping such cases), but some people are
always poor — give them work and they dp not keep it;
help them up and they slip back, all from sheer incapa-
city— physical, mental or moral, — to produce enough
for comfort. "Physical" will generally describe it, if
in "physical" is included a defective nervous system.
It is legitimate to inquire what duties in the way of
taxpaying, these incapable people perform, that give
them rights to have taxes spent upon them. Our
whole system is built up on the principle that the
citizen has no rights if he does not perform the cor-
responding duties ; and to deprive him of the rights if he
does not perform duties, is the only way to make him
behave himself. Yet a baby or a lunatic apparently
performs no duties, and still the state secures to a
baby or a lunatic, rights to life and property. What
becomes of our whole system, then? The answer is
that the state can be generous if it wants to, just as a
parent can. Nor does it all end in generosity: the state
needs citizens — sometimes even to the extent of paying
bounties for large families: so it is well for it to pro-
tect the babies.
507
The Promotion of Convenience.
[§ 442 a
But it does not need incapables and lunatics too,
and the question why they should not be left to die
442 fa). Neglect °ut' haS had a g1*** deal °f Very Pr0"
incr eases the found discussion. Leaving out sentiment,
number. an(j ^e chance that a habit of neglect-
ing them would soon discipline us to let some starve
who ought not to, One sufficient argument seems to be
that they will not ''die out" when you leave them to,
but that in countries where they are neglected most,
they increase most. Then there is the argument that we
glanced at before: states which do not take care of
their incapables, do not get ahead as well as states that
do. China and very backward countries generally let
them starve. Civilized Europe and America take
care of them. It is a very mysterious business: per-
haps it will not do even to say that such people are
of no use: for some very fine types of character seem
to be developed by taking care of them. Yet that
result does not seem to have uniformly followed political
control of charitable institutions — in America at least:
there have been a good many frightful abuses and
scandals.
Private institutions are more nearly free from such
than the government ones. Yet government alms-
443 The Insane nouses and poorhouses may be considered
e nsane. ag estakHshed beyond debate. But when
the nervous defects mentioned amount to positive in-
sanity, the care of the insane is left to private initiative
in India, Turkey and China, and it was in Christendom
pretty nearly to the middle of the nineteenth century.
In Christendom before that, the poor insane were left
at large, or caged away somewhere in the cellars of
the poorhouses, and the rich insane were cared for at
home or in private asylums conducted for gain. Since
then, there have been some considerable asylums built
from private benefaction, as well as government asylums
everywhere as needed. Probably the general in-
crease of government asylums during the last half-
century sprang largely from government's increased
protection of the citizen from violence. Moreover, the
§ 444 °] The Defective Classes,
increased realization that criminality and insanity are
closely allied, increased a tendency to send delinquents
to asylums and reformatories rather than to prisons.
Prisons should be more like asylums.
444. The criminal. Ag ^ intimated> it has become estab-
lished that criminals are only a kind of lunatics. True,
some of them are very intelligent, but so are some of
the people in insane* asylums — outside of a few special
weaknesses — and directions of the wind and phases
of the moon. This is worth looking into carefully.
There are few things in which the state is farther be-
hind the scientific world, than the treatment of all sorts
of defective people, criminals especially; and every citi-
zen needs to get the best ideas that have been reached
on the subject, and to do what he can to bring the
state up to them.
A criminal has no passions that other men have not,
unless it is the passion for goodness that inspires some
rare souls. Then criminals do not sin merely because
they have the passions that all men have — for gold or
love or power, or even revenge; but because they lack
the qualities that in better men keep the same passions
under control.
444 (a). Generally Among these restraining powers; the first,
defective. perhaps, is a capacity of realizing conse-
quences. The savage and the criminal live only in
the moment. When lying or thieving or killing is
the immediate way out of a difficulty (and they have
so little forethought that they are generally in diffi-
culty), they prefer it to a slower way, and have none
of the evolved man's shrinking to overcome.
Criminals generally are found to be even physically
less sensitive than normal people: they tattoo them-
selves to a degree that normal people cannot stand;
they do not shrink as normal people do from the sight
of blood; generally speaking, they are indifferent to
losses — of money, keepsakes, opportunity, friends, rela-
tives, their own children; they do not themselves know
enough of pain to be deterred by sympathy with others
The Promotion of Convenience.
[§4440
from inflicting it. In a word, they are defective, just
as lunatics and chronic paupers are. Anybody who
has sat in a criminal court can see that, with rare
exceptions, they are smaller, weaker and stupider than
ordinary men. The best science declares that they
should be treated as other defectives are.
In detail: the best science begins with Mrs. Glass's
famous recipe for cooking hare: "first catch your hare"
— first catch your criminal — be sure you have got a
criminal. If you catch a boy who for the
itA<do€3>notwrong first time has yielded to some strong temp-
£/w/25/r<rt* a tation, do not send him to jail to keep
company with past-masters in crime, and
be taught by them — do not make your criminal in that
way. After you have scared him so that he will not do
it again unless he has a strong natural bent that way, or
rather a great lack of the qualities that would prevent
his doing it again, let him go. If he has the lack,
and does do it again, then send him where he will be
treated for a cure — to some reform school where he will
be trained in regular ways, and taught self-control and
some honest industry, and, perhaps most important,
where he will be cured of the physical defects that are
almost always found in » criminals. And especially do
not let him out until you are satisfied that the treat-
ment has been successful. Hearty approval is due
the "Children's Courts " which have done so much to
keep juvenile offenders away from the criminal educa-
tion of the jails, and start them toward worthy lives.
444 (a. ne tnd*- If the offender appears to be made over
terminate sentence. ajj right, and is let out, and goes bad again,
repeat the process. By that time, tho, the authorities
should be pretty well convinced that he cannot be cured,
and should not let him out at all unless he gives over-
whelming proof that he has been cured. If he cannot be
taught and cured, keep him till he dies.
Sentencing a criminal for a definite length of time, is
now regarded by all authorities on the subject, as absurd :
there is no reason to suppose that the judge can tell
how long it is going to take to effect a cure, or that if
§ 444 d\ The Defective Classes. 511
half a dozen men are sent up for the same time for the
same crime, it is going to take just the same time to
cure any one as to cure any other.
A still stronger objection to a sentence that can
terminate before a man is cured, is that nearly all the
worst crimes are committed by men who are turned loose
from prison simply because their "time is up", without
any reference whatever to whether they are fit to be
at large. As most criminals are insane, it is correspond-
ingly insane to attempt to draw a hard-and-fast line
between them and other madmen, either in diagnosis
or treatment. Nobody thinks of committing an ordi-
nary lunatic for a definite period.
444 (d). Cheaper • The svstems of punishment that we
to keep rounders have inherited, were not based on any
permanently. idea q{ curing the criminal. They were
based on the old idea of retaliation, and on the some-
what better one of deterring others. Until recently,
the criminal was not even regarded as defective or
diseased, but rather as "the natural man". Now that
he is proved to be the wnnatural man, the indeterminate
sentence is the only thing to fit the new discovery, and
it should be indeterminate in fact as well as in name.
The criminal should be released as soon as he is cured,
but kept until he is cured.
It may seem an extreme idea that criminals should
be supported in dignified retirement at the expense of
honest people, but there seems no other way, except
to " remove M them, which we will consider later.
The idea of support at the expense of the state is
quite the rule among the criminals themselves: generally,
as soon as they have served time on one charge, they get
themselves sent up on another. Most do it, however,
from sheer absence of self-control. Every penitentiary
contains men serving their tenth or twelfth term. It
would be cheaper to keep them steadily after their
third, and save the community from their later depre-
dations and the expense of their arrests, trials and
carriage back to prison.
S 1 2 The Promotion of Convenience. [§ 444 d
New York already has a law that when a man has
been demonstrated an habitual criminal, the courts
can control him in many ways that they have not the
power to do in the case of ordinary criminals.
444 0, Prison There are certainly some honest persons
iaoort wj1Q agree with the criminals in thinking
that prisoners ought to have a life of ease at the expense
of the 'state. The trade-unions, the country over,
object to prisoners being made to earn their own living,
on the ground that they would be competing with
honest labor. Their competition would really amount
to very little. Somewhere about one person of every
five hundred old enough to earn a living, is in prison.
Of course if their competition actually lowered the price
of labor in proportion to their numbers (which it could
not begin to: for they are inefficient), it would reduce
wages but one fifth of a <?ent on a dollar. But what the
idleness of the prisoners actually does, is that, as the
community has to support the prisoners, the wage-
earner pays his share of keeping them in idleness. He
may think that he does not, because he generally pays
no taxes. But as we shall see later, taxes distribute
themselves so that the wage-earner who may pay none
directly, actually does pay them indirectly, in increased
prices of nearly everything he uses — from his house to
his matches; and he also probably pays taxes by
getting less wages than he would get if the man who
pays the wages paid less taxes.
The wage-earner resists setting the prisoners to work,
because he thinks and knows very little about what
affects his outgo, and thinks very much, tho still
knowing very little, about what affects his income.
His only thought is to keep wages high; he does not
reflect that everything which raises wages, except the
efficiency of the worker, must raise prices too. Per-
haps the spasm of high prices and high nominal wages
occurring about 1905-7 may lead to a little reflection on
the relation between them.
As between the unions and the prisons, a unionist
makes one kind of goods; the prisoners could make,
§445]
The Defective Glasses.
say, a dozen kinds that the man uses. Assuming him
to reason correctly that if he prevents their making
the gbods he makes himself, he keeps up his own wages,
he nevertheless pays the higher price for the dozen
kinds he does not make, with enterprisers' and middle-
men's profits thrown in, while he gets the benefit of
the higher first cost of only the kind he makes himself.
We treated this fallacy before (228 b), when we con-
sidered the efforts to raise prices by scamping work or
lazing, and to make every man rich by making money
poor (361). This time, the laborer does not laze him-
self, but he wants other people to laze, which affects
him as a consumer. We shall meet the same fallacy
again when we come to taxation.
445 Euthanasia Grave consideration has been given,
u anas . w^ \ong be given, to the question
whether it would not be cheaper and safer and better
in all ways, even for the incurable criminal himself,
and also for the other hopelessly insane, to turn on
the gas in his room some cold night when the windows
are shut, or end the sad and repulsive problem of his
life in some other painless way — euthanasia, as the
Greeks called it. Two reasons are urged against it:
the responsibility of deciding what people to favor
with it, is too great to trust our politicians with; and
familiarity with the infliction of death, even if done
secretly and decently, is too apt to brutalize the sensi-
bilities of the public. True, government decides now
on whom to kill, but it decides with a stupidity more
colossal, if possible, than it shows on any other question,
unless that of "the illiterate voter". As a rule, it
kills for but one crime, and in that connection does
not attempt to consider the question of a man's re-
claimability at all. How, then, is it in any shape to
decide the very delicate question of whether, on the
whole, a variety of offences point out a man as irre-
claimable or not? Moreover, under the present
power of the boss, it might be exceedingly dangerous
to enlarge government's power of inflicting death.
Si4
The Promotion of Convenience.
[§445
It might not take long to virtually, if not nominally,
get back to the old ways where the death-penalty was
freely used in mere political conflict. It does seem
hard, however, that when people are ready to waste
thousands of the best lives in the community in trifling
wars, they cannot be educated up to destroying a few
hundred pestiferous lives for the sake of ridding the
world of insanity and crime.
But it is probable that by the time the
^ifsafdtthwtf to cominunity *s educated that far, it will be
w°ilfnot neeflthem!8 educated beyond criminality — there will
be no criminals to treat. Euthanasia is
like the other short-cut remedies — not only for crimi-
nality but for uncongenial marriages and poverty and
most of the evils that afflict society: by the time
people are educated so. as to be fit to handle euthanasia,
free divorce, communism, socialism and the rest of the
short-cut remedies, they will be educated beyond the
infirmities of health and temper and judgment that
make the criminality and the unhappy marriages and
the poverty.
What we have said regards only the
dwth uVa penalty0, scientific question of disposing of incurable
criminals without waiting for them to
commit what are now called " capital" crimes. But
there has been much question also about the advisability
of the death-penalty for the capital crimes. Capital
punishment has been done away with in Michigan,
Rhode Island, Wisconsin, Iowa and Maine, and in 1906
they were agitating its abolition in Vermont. Iowa and
Maine restored it, but in Maine at least, the restoration
is virtually a dead letter.
The civic arguments (the religious ones are outside
of our present studies) in favor of the death-penalty
for murder, arson, etc., are that nothing else is so effi-
cient as a preventive of such crimes, that life -sentences
cannot be enforced, and that so far as they are enforced,
they crowd the jails with people that it is more expen-
sive to keep than to hang. The arguments against it are
§447]
The Defective Classes.
that it brutalizes the community — to such an extent
that statistics do not prove capital crimes less frequent
where the death-penalty exists ; that statistics also prove
juries less apt to convict in face of that penalty, even of
the minor degrees of crime not involving the death-
penalty : and so criminals are more apt to go free ; that
it shuts the eyes to the whole great question of reforma-
tion; that it forever prevents the correction of a mis-
take in the conviction of an innocent person; and,
finally, Carlyle's argument that the worst use you can
put a man to is to hang him — in short, that capital
punishment is not only brutal but stupid. There can-
not be much doubt of its brutality, but brutality is
sometimes necessary, even at the hands of as good
men as Gustavus Adolphus and George Washington;
but stupidity never is. As to the stupidities which
statistics do not touch : first as to reformation. There
is certainly more chance, in one sense, of reforming a
murderer, than of reforming most other criminals,
because other criminals are not apt to be taken hold
of in earnest at their first offence, while a murderer,
tho it be his first offence, is reasonably sure to be.
But moreover and most important, there are so many
more possible motives for killing than for most crimes,
that there is a proportionally wide chance of its being
committed by a reformable person; it may even be
a rough form of justice, while few other crimes can
be. Probably most life-sentences are for killing,
and yet the report of the New York superintendent of
prisons, for 1895, says that of the life-term prisoners
who have been released during the past thirty-five
years, less than one per cent, have again committed
crimes. Everybody knows that those discharged after
serving short sentences for minor crimes, are nearly
sure to err again. But on the other hand, killing
ordinarily requires more insensibility to suffering than
minor crimes do, and therefore is proportionally apt
to be the work of a defective person. As a rule, the
murders are not committed by Peter Ibbetsons
As to Carlyle's argument, an average man is variously
51 6 The Promotion of Convenience, [ § 447
figured to be worth, to an average community, ten times
as much as a horse, and convict labor is generally-
figured as worth about a third of average labor. So
the murderer, if no meaner brute than convicts in general,
is, at best, worth (if the trade-unions will let him work)
not more than six hundred dollars; and with all the
usual fuss and fees, it costs more than that to kill him.
But on the other hand, it costs more still to keep him
alive: so Carlyle's argument is worthless. And if, as
in many cases, probably most, the murderer is an out-
and-out defective natural-born criminal, it is certainly
cheaper to kill him than to stand the chance of his
getting out again ; but^even then, it would seem sensible
to test his quality first, if science and politics were
advanced enough to do it.
The whole question sums up like so many others — as
long as people are brutal and stupid, they must do some
brutal and stupid things. War — with either guns or
tariffs, lynch-law and capital punishment are really
all of a piece : there is no question of their frequent neces-
sity now — there are times and places when to do without
some one of them, is to do worse. Yet so far as we
advance justice and science, so far we work for the
disappearance of them all.
We may have been a little irregular in considering
the care of the criminal as among society's functions
for the general convenience, when it is really a matter
of protecting against him the community's rights to
property, safety and life. But we have had more than
one occasion to realize that no system of classification we
can make, will group all the matter to be considered, in
hard-and-fast divisions. Of course the criminal could
properly have been considered when we were treating
of protecting rights; but perhaps, after all, to include
him with the other defectives whom society treats for
the general convenience, will help us realize his true
position and true needs.
CHAPTER XXXIV.
the young; education.
And now we come to a more cheerful topic, even
tho it regards another class of those who, begging their
pardon, are defective and cannot help themselves — the
young.
As affecting the sphere of government, we need to
inquire whether when they lose their relatives, or their
relatives do not care for them, they are generally
cared for, in the most advanced states, by government
or by private institutions. Perhaps the care of orphans
Nurture remains with the churches more than any
* u ure' other form of charity — probably largely
because each church wishes to make sure of retaining
them in its own membership. Moreover, the state is
also often saved from their care by the fact that many
persons who have raised themselves from a childhood
of needy orphanage to a manhood of wealth and be-
neficence, have endowed orphan asylums. The two
causes have done much to limit the need of govern-
ment activity in this respect.
cj *« But beyond government's limited care of
449. Education. -, -ij ? , ^ . r
the children who do not receive care from
relatives or private beneficence, its relation to the edu-
cation of children in general, presents some strange
paradoxes. The two civilized governments which have
been most active in it are probably the most paternal
and the least paternal, Germany and the United States.
The paternalism of course accounts for Germany, but
for this strange outcrop of paternalism in the United
517
The Promotion of Convenience.
[§ 449
States, we have to look back to the facts that the
early settlers, especially of New England, contained
an exceptionally large proportion of people who appre-
ciated education, and that they realized, while the
government was taking shape, that universal education
was a necessary safeguard against the dangers of uni-
versal suffrage. These dangers they did not them-
selves generally incur: for they generally held to
property qualifications, as well as educational ones.
449 (a), The ////t- But in the idea that education is neces-
•rafooter. sarv to ftiQ voter, their descendants are
inconsistent to a degree of absurdity before which even
ridicule itself is paralyzed : while on one hand we in-
sist that the voter must be educated, on the other we
devise ballots with emblems, so that they can be voted
by people who cannot read.
449 ft). Unusable There are signs in the two countries
education. which lead in education, that even so good
a thing as education may be overdone; or at least,
lately there have been very portentous signs, espe-
cially in Germany, that it can be done very much
out of proportion. While, as is generally known, Ger-
many's splendid technical education is spreading her
manufactures over the world, she is having trouble with
many men educated in the old-fashioned literary,
gossip-historical and would-be-philosophical way, who
can find nothing to do. Her paupers, and especially
her suicides, are being largely increased from this class.
Other governments, too, despite some recent improve-
ment, are spreading too much education of a kind that
is not needed, and which on that account is perhaps
doing more harm than good. The infection has spread
even to Greece — perhaps because she is busier with her
glorious past than with her needy present.
449 (o. Usable Most boys are to be mechanics, farmers
education. an(j tradesmen; and all are to be voters:
they should be educated as such, instead of having the
education that was established hundreds of years ago
for priests, and in nations where nobody voted. There
is knowledge enough that can be useful in the factory,
§449<i
The Young; Education.
the farm, the counting-house and at the primary meeting,
in debates with neighbors, and at the polls, to take up
• many times the years that our boys can give to school.
The European cities have a much wiser policy than
ours in this regard. They usually have excellent schools
to teach the arts most generally practiced in the cities—
everything from ship-building to carpet-designing, de-
pending on what the city is interested in.
449 (d) Practical Yet °^ course ^ *s not desirable that a
education no foe boy should grow up merely a business and
to poetry. political machine. But a man who knows
any subject well will find the borders of it touching
everything else. Every science and every art are fringed
with poetry: read Kipling's "MacAndrew's Hymn" and
Patrick Henry's speeches.
As to the girls, most of them are to keep the homes
and rear the families of men of moderate means : so it is
absurd to educate most of them for ornaments of the
homes of the rich. If there is no poetry in the kitchen
and the nursery, there is no poetry in Burns or in
Rafael's Madonnas.
449 (e). Pauper- In some places there has been a tendency
ization. to expand education into pauperization.
Beginning very sensibly with medical care to prevent
contagion, and sending public vehicles for the children
in bad weather, to prevent colds, they have gone on
to providing them with thick shoes, then with thick
clothes (or thin ones as needed), and then with lunches ;
and at the present rate, we can look for schemes to pro-
vide them with watches to tell when it is school time.
The objection to providing the poor ones with at
least the necessary things, is that while it would do
good in a few instances, it would do harm in more.
Already parents perfectly able to take care of their chil-
dren, are, as experience proves, only too ready to throw
the burden on the state; and the whole scheme shows
itself to be one of those, like socialism and the money
tricks, for national pauperization. As soon as the state
undertakes to go beyond taking care of defective paupers,
those who can earn a living begin to depend on the
520
The Promotion of Convenience.
.[§ 449*
state, to shirk work, to seek to rob by taxation, and so
to choke off benevolence.
Where the matter has been left to private initiative,*
much has been done to render poor children fit to go to
school. In Paris and several other large French cities
there are societies of benevolent people called " school
treasuries" (caisses des fcoles) who help poor children
to most of the good things we have been talking about,
and many more ; but they take good care, as our Charity
Organization Societies do (and as no government
organization will in our time), to find out where help
should be given, and where it should not; and not to let
the other children know who the dependent ones are.
But all that is voluntary benevolence, not the act of a
lot of American political heelers spending money seized
by mere brute force of votes.
Those French societies, however, are not entirely sup-
ported by private benevolence : the cities subsidize them ,
as some American cities subsidize libraries, * 1 settlements",
etc. (a doubtful policy) ; but at bottom they are volun-
tary, both in their workers and in their subscriptions.
449 (f) stated question whether education itself is
responsibility well within the province of government, or
established. should be left entirely to private initiative,
may perhaps be considered as having passed beyond the
area of discussion. There is no sense in gainsaying the
course of evolution — it has moved education, along with
charity, from the church to the state. That the govern-
ment ought to supply elementary education for those
whose parents cannot supply it, or cannot be made to,
is generally admitted by all but some members of one
church. That one church wants to have its religious
doctrines impressed in education. It claims that as the
state cannot do that for each sect, no one should be
obliged to pay for state education if he would prefer to
educate his children otherwise.
449 (g). Parents Religion, however, is not the only con-
snouid pay when si deration pointing the same way. The
abl9' state is supplying education without cost
§ 4S°1 77** Young; Education.
to children whose parents are able to supply it. All
the arguments hold against it which hold against social-
ism; moreover, proper education is the most difficult,
delicate and expensive work human beings have to do ;
government, especially in America, has vastly more to
do, of even much coarser work, than it can do well;
hence many parents prefer private schools, and claim
that they themselves should not be taxed to educate,
in the public schools, children of other parents who
are able to pay the full cost.
But as everybody should pay for those whose parents
cannot, a practical division could be made by having
taxpayers who send their children, pay for them di-
rectly, and by having the other children paid for out
of the taxes. This would still make the taxpayers edu-
cate the children of the poor. This is done in Great
Britain. All children must be paid for. Those whose
parents cannot pay, are paid for by the Guardians of
the Poor. Pains are taken, as by the French societies,
to prevent the charity pupils being identified. The Hol-
land system is somewhat similar.
450. The higher So much as to elementary education,
education. \\re have already touched upon govern-
ment and the higher education, when we spoke of the
education that most boys and girls need. To give the
higher education to the ordinary run of minds, even if
they could assimilate it, is as great folly as to train
ordinary horses for racing. But tho the state needs all
its best minds at their best, badly enough to well afford
to educate them, it is very certain that the state is not
the best agency to educate them to their best. More-
over, after the state has got them through the grammar
school — certainly through the high school, those wor-
thy of farther education can be trusted to find the rest
of the way themselves: there is money waiting in all
the colleges for poor students who have the pluck and
talent to make their higher training worth while.
Besides waste and pauperization, supplying the higher
education is ordinarily too delicate work for govern-
522
The Promotion of Convenience.
[§ 45° a
ment. When so many of the leading universities are
450 (a), Not well naving trouble to find fit presidents, we
conducted bu hardly want the choice restricted to men
political pane. with pulls While paternal Ger-
many is sometimes said to have the finest universi-
ties in the world, the statement is open to some ques-
tion. Kaiser Wilhelm has caused the dismissal of more
than one professor whose doctrines he did not like ; but
despite that, in his universities the instruction is not
paid for by the government, or even prescribed by it
to the same extent as in our American state universi-
ties. On the contrary, the students sit under what pro-
fessors they please, and the professors are largely paid
by the fees of the students attending their courses,
instead of by fixed salaries out of a general fund, as
in nearly all our universities.
tu-m. It is verv hard to tell whether the
450 (o). The state, •>
the church, the course of evolution seems toward or away
philanthropist. {rom government providing the higher edu-
cation: the conditions are very mixed, especially in
Europe. In American experience, some question may
arise between the state universities and the denomi-
national universities, and more can arise between the
state universities and the private undenominational
universities. This cannot be entirely due to circum-
stances: Harvard and Yale were evolved before the
state universities, but Johns Hopkins and Cornell and
Chicago were not.
On the whole, the state universities have borne up
wonderfully under the usual danger of interference by
ignorant and selfish politicians. Speaking generally,
they flourish best in comparatively new regions. That
suggests, of course, that until a community has pro-
gressed far enough in wealth, culture and philanthropy to
build up great universities on foundations independent
of the state, it seems on the whole very fortunate to
have the state do what it can to remedy the deficiency.
But that should not be taken as a finality in a new com-
munity, and still less is it proved ideal in an old one.
CHAPTER XXXV.
GENERAL CONCLUSIONS ON THE SPHERE OP
GOVERNMENT.
This is about all we have time to consider in detail
regarding government's promotion of the general con-
venience. Now, at the cost of some repetition (which
the pressing importance of the subject may justify) let
us sum up.
The supplying of conveniences by government appears
to be a natural evolution, being, on the whole, con-
siderably farther advanced in the highly evolved nations
than in others. The objects first coming und^r govern-
ment care are generally the natural monopolies — like
streets and roads, with the rails and pipes that maybe
laid in them ; and other matters too large for #indi-
viduals, or, in some cases, for private corporations.
Street railways, waterworks, lighting works have all
been carried out by private enterprise, but as they are
naturally monopolies, they have tended to become ex-
tortionate, and the communities have sometimes been
driven to assume them in self-defence: even the steam
railroads have needed legislative regulation of rates.
Yet there has been grave doubt of the wisdom of
government's providing anything but national defence
and the protection of rights. From very
J?dcffivl?mfm early times, this has been perhaps the
most prominent question dividing stu-
dents of government. Yet there is a growing realiza-
tion that when wise men differ, both are apt to be
right. Aristotle, the first systematic writer on politics,
himself took both sides. Those who have held what
523
524 The Promotion of Convenience. [§ 451
is sometimes called the restriction theory, are finding
it harder and* harder to draw the line. They have
about all admitted the necessity of government money,
mails, roads, harbors, lighthouses, surveys, almshouses,
health boards and many other things ; and have thought
it well that government should provide that no one
need starve or freeze, or even go grossly ignorant or
dirty.
The main objections urged against government under-
taking so many things, have been, first, that people
helped too much by government, lose the tendency and
the ability to help themselves; second, that the more
government has to do — the more money it has to spend,
the more danger of its becoming corrupt and tyrannical ;
and third, that even where fairly honest, it is apt to be
unprogressive, obstructive and expensive. On the first
objection, it is to be said that there is very little experi-
ence to learn from: governments have not anywhere
been doing most of these things long, and some of the
governments that have done most of them, have long
been doing other things, such as keeping up a very
rigorous and minute police control, which would alone
account for any lack of independence there may be
among their peoples.
The situation of the leading countries in these re-
spects looks paradoxical. We have our merits as a
nation, and so far we have municipalized least among
the great nations. Up to about 1885, when railroads,
pawnshops, hospitals and schools had been the main
conveniences cared for by government, the order of
the other nations in degree of municipalization, prob-
ably would have been Germany, France and Great
Britain. But more recently the increase of municipal-
ized street railways, water, gas, electricity and poor-
man's homes, has probably put Great Britain, espe-
cially Scotland, at the head; and the independence
452. Municlpanza- anc^ initiative of these various peoples
tion'increases with stand in about the same order with the
cr^S«dwinthepol?co municipalization of public works. With
control. reference to minute police control, these
§ 45 2 al The Sphere of Government. 525
countries would probably stand in the reverse order.
There is no evidence that municipalizing so many
things has done any harm to the character of the
people, but it is early yet to judge.
Now as to the second objection — the temptation to
corruption and tyranny. It is hard to tell what experi-
ence shows. As a matter of fact, in Great Britain and
^ithagood%caf9a Germanv> where they have probably the
government. best local governments, there is most
municipalization; and in America, where we have
unquestionably the worst local governments, there is
least municipalization.
Regarding the third objection, Professor Meyer's con-
clusions and the others given in the same connection,
will be remembered, and there seems to be nothing to
controvert them.
The English experience seemed all one way, up to
the late nineties, when, as we have seen (400 h), a great
reaction set in which was overwhelming in the elections
of 1906. Perhaps reaction may only be needed to cor-
rect abuses incidental to new experience, and perhaps
municipalization may progress all the more.
But as between good government and municipaliza-
tion, probably both are cause, and both effect. There
do seem to be some faint indications (tho far from
enough to prove anything) that the more government
has to do for the people, the more likely are the people
to take care that it shall be done right (387, 389 /,
392 0-
As a matter of fact, there has recently been a great
increase in the number of things done by government,
and a widening of the field allowed to government by
the restrictionist philosophers.
While these two things have been increasing, there
has been an increase in a third thing which may account
for increase in the first two — the art of government has,
on the whole, been growing. The conclusion, then,
would seem to be that, as we have so often said before,
what government can wisely attempt, depends on the
government. The municipal governments of England
526 The Promotion of Convenience. [§ 452 a
can wisely do things that the municipal governments
of the United States cannot; and those of the United
States can wisely do things that those of Turkey cannot.
453. Necessary If everybody needs a thing, that is no sign
"mlts* that government should supply it when
people can supply themselves. Everybody needs food,
clothing and shelter: yet we have seen abundant reason
why government should not supply them to those who
can supply themselves.
It may be asked whether, if government were to supply
them, and make people pay for them, the pauperization
objection would come in; and whether, on the prin-
ciple that the big industry cheapens product, govern-
ment could not, by doing it all, do it enormously cheaper
than it is done now. But the big industry does not
453 (a). Effectto* necessarily cheapen product, unless it works
industry require under competition : only then will all poor
eompetftion. management be weeded out , and prices kept
down. If favoritism appoints poor management under
competition, it will be weeded out: because the best
competitors will inevitably drive the poorest out of
business. That may be hard on the poorest com-
petitors, but not as hard as it is on the whole community
for them to stay in.
We may grant, then, that universal demand for
a thing that can be supplied by competition, is not a
reason why government should supply it, even if the
consumers pay for it. But regarding things that
cannot be supplied under competition — the natural
monopolies, the argument is entirely different. Tho
453 (b) Mainly government would not have competi-
determinea by tion to stimulate good management and
natural monopoly. cheapness f private control would not either ;
and private control would have more inducement to
keep prices up: therefore there seems a chance that
an ideal government, when attained, might manage as
well as private control, and would supply more cheaply.
But even the ideal government should charge, because,
as not everybody needs the product of all the natural
monopolies, people should pay in proportion to what
§ 453 c] The Sphere of Government. 527
they use; and they can only do that direct, not in
the way of taxes. Yet people do not pay only as they
use them, for roads, bridges, streets and street lights,
museums and parks. But they do pay as used, for most
ferries, some bridges, postage, car-fare, water and
domestic gas and electricity.
453 to. Tax for They pretty often pay for water in the
VeTw^'uHJ'"1' way °* taxes» Dut there is a reason why
charge for others they should: for everybody needs it. Tho
as used. tkey ^Q not pay £Qr eac|1 gauon when de-
livered, as they do for each postage-stamp: in a great
many places they do not even pay by meter; but
where they do not, they generally pay by the number
of outlets, or the size of buildings, or some other pro-
portional adjustment.
There is much agitation for providing not only water
but many other things — even street-railway fares, and
for that matter, steam -railway fares, free to everybody.
It begins with agitation for low fares, and then grows
to demand for free transit for " Labor" to and from
work ; and so becomes really of the same piece with the
agitation for making lunches and clothing free to school
children, and in fact, everything free to everybody.
Nothing could be more desirable, if there were any
way of producing things without material, plant and
labor; but there seems no way of getting them free.
Yet the non-taxpayer, of course, wants to increase
the cheap things and the free things provided by
government, and cares nothing for the taxes necessary
to do it.
There is no fatal objection to government supplying
"free", matters of natural monopoly, that virtually
everybody uses, like roads, streets and street lights,
and a few other natural monopolies, like some bridges,
which, tho many people use seldom, are of the greatest
importance when needed, and which could not pay for
the expense and trouble of collecting fares. Govern-
ment should also care for, and collect for the use of,
important natural monopolies which are of frequent,
tho not universal use. This, of course, provided the
5^8
The Promotion of Convenience. [§ 453 c
state of politics will enable government to manage them
without undue corruption.
454. The funda- The whole question is whether the people
mental question. have the political capacity to secure the
profits of monopoly facilities for themselves, and use
more of the profits than private owners are apt to, for
keeping the facilities up to the mark.
As to whether this has yet been done anywhere, the
testimony, as we have seen, is quite conflicting; but
there is little conflict in the testimony that it has not
been done under universal suffrage; and the weight of
testimony seems almost equally strong that on the whole
it has been best done in Germany, where the municipal
suffrage is most in the hands of the ablest people (426 c).
But in Germany, while the street-railway fares, for in-
stance, are often but from a third to a half of ours, with
a commutation system besides, generally deficits have
had to be made up from the taxes. But people must
pay for things or be pauperized ; and where there is not
a natural monopoly to make competition difficult, they
would get them better and cheaper under private com-
petition than from government. So far as government
455. Government miSht tTT t0 supply them, just so far the
service outside of stimulus of competition which has evolved
izl0ngPto people10™ " civilization, would be withdrawn, the essen-
and officers. tial features of civilization would begin to
disappear, and we would start back toward a condition
of status and savagery.
To sum up our summary : there appears to be a plain
line where the best government must ultimately stop —
just where it will interfere with private competition and
the rewards of Ability, both of which stimulate Ability
to provide goods and facilities in greater variety, reli-
ability and cheapness than political management could.
And it is most important to remember our oft-repeated
lesson that the more power government officers have to
do things for the people, the more power they have to
do things for themselves; and in any civilization yet
evolved, officials are apt to use such powers for their
own profit, and to the robbery of the people.
BOOK III.
TAXATION.
CHAPTER XXXVI.
GENERAL CONSIDERATIONS ON TAXATION.
A fundamental essential to both general functions of
government — protecting rights and (with due caution)
promoting convenience, still remains for us to con-
sider. It is raising the money to pay expenses.
456.T.x«n?tth. Taxes are not the government's only
only source of means or securing money. But they are
revenue. only ones we can consider in detail.
In addition to them, a little of its income comes (I) from
sales — of public land for instance, or of monopolized
products — like tobacco in France and Italy, tho that
is really a form of taxation; (II) from fines: in bar-
barous times and places this is an important and much-
abused source of revenue; (III) from fees of sundry
officers, and (IV) from assessments laid on property
for neighboring improvements, such as streets, sewers,
parks, etc. But these all amount to little compared i
with the revenue from taxation.
Tho raising revenue is of course merely incidental
to the main functions of government, we are by no
means to conclude that it is less important than the
others. It does more to make history than any other:
5*9
53°
Taxation.
[§ 457
457 Interest and °luestioriS °f taxation have probably done
Importance of more to cause civil wars and to overthrow
the subject. empires, than all other agencies com-
bined. A few instances among many are the wars in
England under the Stuarts (tho it is a frequent mis-
take to attribute them mainly to religious differences),
our war of separation from England, and the French
revolution. That revolution overthrew the French
monarchy, and bad taxation rotted out the Roman
empire. Even to our own civil war of 1 861-5 tne
question of "protection" contributed not a little.
And yet young people generally regard questions of
taxation as dry and uninteresting, probably because
they have never felt the shoe pinch themselves: they
do not realize that they are themselves paying many
taxes in enhanced prices of the things that they buy
with their pocket-money or allowances, and that those
sums are probably less than they would be if it were
not for the taxes paid by the persons supplying them.
Still less do young people realize, if they are restricted
in their amusements, or even in their food and clothes,
that taxation has anything to do with it. What
taxation has to do with it, is just what we are going to
wade through many pages to explain. It cannot be
put in a sentence.
It is plain enough that one cannot spend in amuse-
ments, food and clothing, what is spent in taxes; but
it is not so plain, tho it is as true, that a very large
part of what is spent in taxes, especially in the United
States — more especially here than in England, France
or Germany — might just as well be spent in amuse-
ments, food and clothing, and the government be all
the better for it. I hope that is paradoxical enough
to arouse a curiosity that may help us in our "many
pages" .
Now what makes taxation so important ? Many men
458. Everybody never have occasion for government's pro-
pays taxes. tection from violence or robbery, but sub-
stantially every man is taxed, whether he knows it or
§ 46o]
General Considerations.
not. Taxation takes, on an average, one twelfth of
the earnings of each American citizen, and this even
if he owns no property to be taxed. He is taxed
if he eats sugar or wears wool: they are taxed, and
he has to pay more for them on that account. The
same is true, directly or indirectly, of most other
things that he uses — some authorities think of every-
thing that he uses, tho he does not pay on one thing
in a thousand directly to the tax-collector; in fact,
comparatively few men ever pay taxes directly at all.
Yet, as we shall see more fully later, it would be a
great stimulus to good citizenship if everybody did:
for then everybody would realize the interest that he
has in economical government — would have that very
realization whose general absence from the young
student has been deplored. We will look later into
the question of how taxes are shifted from the man
who first pays them, on to others.
459. Rates In The American pays about eight and a
different countries. haif per cent, of his income in taxes; the
Belgian a little over six; the Englishman about seven
and three quarters; but the Frenchman, with his big
standing army, eleven; and the Italian lately, with his
wasteful colonial fighting and domestic discords and
scandals, fifteen or sixteen. This estimate includes all
taxation — local, state and national. In even dollars,
Mulhall says, the American has lately paid about 15;
the German, 17; the Frenchman, 20; the Briton, 29;
the Australian, 32; and the New-Zealander, 45. The
last three are spending enormously on municipal opera-
tion. For national taxation, Mr. Atkinson estimates
("Facts and Figures/' 1904) that the American pays
about $6.50 per person, while Great Britain, France,
Germany and the Netherlands pay from $12 to $18.
460. Methods Of course the way taxes are collected
Influence rate largely determines the expenses of collec-
tion. The difference in the systems of taxation prob-
ably makes more than the differences of percentage of
Taxation.
[§ 460
income taken, against us as compared with Belgium
and England: for with our ordinary small military
expenses (omitting the pension scandal and the Span-
ish and Philippine difficulties) and our colossal re-
sources, a wise system of taxation ought to make
our rate far the lightest in the world.
Aside from the system of taxation affecting the rate,
it affects general well-being in other ways, almost with-
460 (a), andmor- out hmit. A bad tax system is a power-
aiity. prosperity. fn\ foe of popular morality — some people
peace, stable gou- , . , . r 1 *«r F
ernment, and even think the most powerful. You can tax
health and life, fl00d or pestilence into a community, or
you can tax them away. You can tax an industry out
of existence, and throw the workmen into idleness and
want; on the other hand, you can, in a sense, tax an
industry into existence — by taxing a competing industry
out. How taxes can make and unmake industries,
produce revolutions, and rot empires, is perhaps fairly
plain, but that remark about flood and pestilence may
need explanation. There was once a tax on quinine
that limited its use by the poor; and our high tariff
has kept out Canadian lumber to a degree that is
stripping woods from many places where they are
needed to prevent the snow from melting too fast in
Spring, and flooding the rivers. Raising the revenue
from improper sources has brought these evils upon us,
and raising it from proper sources would tax the evils
away.
Taxation affects morality by tempting people into
dishonest and even violent practices to avoid it. That
is not simply an objection to all taxation. As we shall
see, some forms of taxation tempt to dishonesty much
more than others. Adam Smith says that bad tax-
laws "tempt persons to violate [them] who are fre-
quently incapable of violating those of natural justice,
and who would have been in every respect excellent
citizens, had not those laws made that a crime which
Nature never meant to be so".
Taxes affect the movements of Capital and Ability.
§ 462] General Considerations.
533
If you happen to be a socialist or a communist or
460 am/mot»- P°Pulist' 0r °ther SOrt °f an " ist "
menu of Capital opposed to accumulations of Capital dl"
and Abmty. the leadership of Ability, you can (if you
have your own way) tax them away from any com-
munity. On the other hand, if you are so little of
that sort of a "friend of humanity" that you think
Capital and Ability good things to have, you can
attract them to your state by tax-laws wiser than
those of other states. To attract Capital and Ability
permanently, laws must be wise: because the attempt
to attract them by unwisely favoring them at the
expense of the poor and stupid, will be certain, in the
long run, under free institutions, to awaken reactions,
like those in the granger states in the last decade of
the nineteenth century, which drove Capital and
leadership awav, and left people starving for lack of
them.
461. Taxation and The money for government expenses
civilization. has by no means always come out of the
people. The primitive idea generally was to get as
much as possible out of the stranger, and that idea is
not quite dead yet. The great nations of antiquity
paid a considerable share of their expenses from plun-
dered provinces; Arab tribes from time immemorial
have levied tribute on caravans; the robber barons of
Germany taxed the traveler; even down to Spain and
Cuba, not to speak of the United States, Porto Rico and
the Philippines, nations have miljced their colonies;
and one of the arguments of high-tariff advocates to-day
(tho a disputed one) , is that the stranger pays the tax.
When tax-money cannot be got from the stranger,
but must come out of the people, the best method of
raising it depends, like all other questions of government,
upon the character of the people. The most intelligent
knowledge comes from comparison. With a primitive
462. Opposite people, in places like early Russia or
methods illustrated. Turkey, an approved way has been simply
534
Taxation.
[§ 462
to tell each man his share, being sure to make it big
enough, then to get three or four prominent delinquent
taxpayers, jab a sharp pole upward through the body
of each, and plant them in a row where every one
is sure to see them. Such an evidence of the prompt-
ness and thoroughness of the government, inspires a
confidence among the people that brings in the taxes
with great success.
While that seems a very simple way, it might not be
a good one in America, tho it really would be less painful
in the long run than some of the present ways. But
the people fail to realize that fact, and would be apt
to embarrass the collectors.
The national government's settled way, up to the
war with Spain, and the way that we are rapidly
returning to, as the war is becoming paid for, was just
at the opposite extreme from the Turkish. Instead of
impressing the matter unpleasantly on the people's atten-
tion, it was to try to collect the taxes without people
generally knowing anything about it — to make taxation
unobserved,
" Like the bat of Indian brakes
Whose pinions fan the wound it makes."
There is good authority for that plan. The great
Colbert said that the true way was to tax so as to
pluck the most feathers with the least squealing.
463. Direct and The names given to the system which
Indirect taxes. attempts to tell each citizen clearly just
what he is to pay, and to the system which tries to get
it out of him without his knowing it, are Direct and
Indirect.
Direct taxes are those which are paid in the first
instance by the person getting the benefit of the thing
taxed — such as those on real estate, accumulated
property, income, inheritances and business transactions,
including some of the stamp-taxes.
Indirect taxes are those paid on property which the
§463]
General Considerations.
535
payer does not ordinarily expect to use, but to sell,
and whose taxes he is expected to add in the price
to the consumer. These also include many stamp-
taxes.
The person on whom a direct tax is laid, has no
choice about paying it. He must pay or be sold out.
Sometimes indirect taxes need not be paid before the
goods are sold, the goods meanwhile being left 44 in bond "
under government control; and nearly always the con-
sumer of the articles taxed, who generally has to pay
the indirect taxes in the price of the articles, can do
without the articles if he sees fit, or substitute some-
thing not taxed, unless everything he must have is
taxed. But even then, he can do without taxed
luxuries, if he sees fit.
Not every tax falls into one of these categories and
not into the other, any more definitely than things
generally fall exclusively into any classes that human
ingenuity tries to put them into. In fact, so little can
a legislator foretell whether some taxes are going to
prove direct or indirect, that some writers, especially
on the continent of Europe, make different definitions,
and some there, and even here, propose that the terms
shall be abandoned. We have not space to go into that ;
we may as well stick to the definition we have started on,
and try to understand its weak points as well as its
strong ones. To illustrate: when a man lives in a large
house, the tax he pays on it is direct, of course. But
then suppose he takes boarders, of course he has to
charge part of his tax to them ; and the part paid through
him by the boarders is indirect. He rents his whole
house to somebody else. Of course he has to get
interest, and taxes besides. The tax then has become
entirely indirect, if his tenant really pays it, as in effect
he probably does, tho there is a little doubt on that
subject, which we will touch on later. Now a man
imports a thousand cigars, expecting to charge to
customers the duty imposed by the tariff, that tax is
plainly indirect. But a traveler brings a thousand
cigars which he expects to smoke and give to his friends;
536
Taxation.
[§463
the duty he pays is of course direct. A man distils
a barrel of whiskey and pays the excise tax, which he
charges to his customer; the tax is indirect. He con-
cludes not to sell the barrel, but puts it in his own
cellar; the tax is direct, of course. A druggist puts
an eighth-of-a-cent stamp on a bottle of medicine; the
tax is indirect if he charges his customer; but as he
cannot well charge an eighth of a cent, the tax is
probably direct. If it is a two-cent stamp, he prob-
ably charges it, and the tax is indirect. He puts a
two-cent stamp on a bank check. The tax is direct.
464. Shifting We have at least seen that sometimes a
of taxes. tax that seems direct can be shifted on to
somebody else, and that he sometimes has to pay for it
in increased proportions, as for scamped work (228 6) or
for cheap money (361) or for the maintenance of idle
prisoners (444 e). Now how do we determine whether
a tax is going to be paid by the person on whom it
is first laid, or passed on to somebody else? In the
same way (and with perhaps about the same cer-
tainty, in the present state of our knowledge) that
we foretell storms — by studying the subject. It is
simply a question of motion and friction. M. Thiers
likened the diffusion of taxation to the diffusion of
light, but he forgot that light is not subject to friction:
the motion of taxation is: for tho the first man will
pass it on if he can, the later men will prevent him if
they can. S metimes one side will win, and sometimes
the other. Sometimes the payment will be shared more
or less along the line: for instance, the drug manufac-
turers did not pay for stamps for the Spanish-war tax
upon such patent medicines as were in the dealers' hands
when the tax was imposed: the dealers put them on,
and sometimes charged them to their customers, and
sometimes did not.
Generally speaking, whether the person on whom a
tax is first laid, will be apt to pay it rather than shift
it, is really a question of whether it is going to cost
the producer or the middlemen more than the tax is
§4643]
General Considerations.
537
worth, to make the consumer pay it. There is the
natural tendency for the man who first pays it, to
shove it on to the next man, and so on to the con-
sumer; but generally the producer, or even the dealer,
will pay the tax rather than advance price so as to
curtail his market to a degree that will more than offset
the tax. This is especially the case where, as in patent
medicines, for instance, there is a usual retail price.
• There is a broader distinction still, as to which in-
direct taxes will be shifted. Those that consumers
are most apt to pay, are of course, other things even,
those most apt to be shifted; and those which con-
sumers are most apt to pay, are those on things which
everybody must have, like matches; and those on
things which the rich will have, like champagne.
When the producer or importer really pays the tax
and passes it forward, as it were, through the whole-
saler and the retailer to the consumer, all those pec pie
naturally try to get a profit for handling it. But com-
petition sometimes leads them to pay the tax itself,
instead of throwing it upon the consumer. Yet generally
before the tax was imposed, competition has brought
the less able producers' profits as low as they are apt
to remain: so they contain no margin to pay a tax.
But even then, the able producers with large margins
of profit, may sometimes pay the tax, which will of
course drive the less able producers, who cannot pay
it, out of business.
464 (a). Need of Obviously, everybody ought to be free
free competition. t0 compete by paying a tax if he wants
to, rather than shift it to his customer. This is vir-
tually part of the fact that all should be able to
compete in prices, both for their own sake and the
public's. One very important principle of taxation
springs from this fact — that all competitors should be
taxed alike. For instance, as linen and cotton compete,
it is unfair to tax linen unless you tax cotton, or cotton
unless you tax linen ; so it is unfair to tax serges unless
you tax cheviots, goatskins unless you tax calfskins;
horses unless mules, railroads unless steamboats, rye un-
53»
Taxation.
[§ 464 a
less oats , and so on through all competing things . Yet
it is impossible to do this fairly: each thing is com-
peted with by too many others — more than a tax-
law can follow: therefore taxation should be, as far as
practicable, restricted to the things least subject to
competition, like real estate and franchises. This fact
regarding real estate and franchises is very important, '
for additional reasons which will appear later.
It seems generally taken for granted that taxes ought
to distribute themselves throughout the community,
and it has been declared that they will so distribute
themselves, until they are finally paid by the consumer.
But it has also been declared that they will all finally
find their way back to the land, because everything
has its origin there. In fact, pretty much every con-
ceivable shifting has been declared and denied. The
truth is that the subject is so enormously complicated
that we do riot yet really know much about it. There
is a widespread feeling, however, that a given amount
of taxes, like a bump or a blow, does less harm the more
widely (and therefore thinly) a given amount of con-
cussion can be spread ; and, as we shall see, it is certain
that almost any tax is spread more widely than at first
appears. A good general proof of this, is that, other
464 (b). Prices things even, in any given civilized nation,
highest where the prices of commodities are generally
taxes are highest. highest where taxeg are highest— higher in
small cities than in the country, and in large cities than
in small ones. These higher prices of commodities
represent the cost of the streets, lights, etc., which
make the commodities easy of access (and therefore
justify keeping a large variety), and, alas! they also
represent the cost of the political corruption which
gathers around municipal work.
A melancholy proof of this last point, Americans
must own up to: New York is probably the most
expensive city in the world, and our other cities, in
proportion to their sizes, generally follow pretty close
on its heels.
CHAPTER XXXVII.
INDIRECT TAXES.
Now to come to the details of the taxes levied by
our benevolent national government in the manner of
our amiable friend the vampire. The principal ones
Excise are taxes on articles manufactured here,
• XC8e* which are called excise; and taxes on
imported commodities, called duties, the whole list of
duties being called the tariff.
An illustration of excise is in the fact that Scotch
whiskey smells of smoke. Long ago the British govern-
ment put a heavy excise tax on the manufacture of
whiskey, and so it sold for a very high price. This led
many people into making it secretly, so as to get the
high price without paying the excise. Many of these
secret stills were in the mountains of Scotland, and
Ireland too ; and to prevent the smoke from betraying
them to the excise officers, it had to be shut in and con-
densed on the premises, and some of it used to get into
the whiskey. But smoky whiskey is made by well-
known distillers now, because some people got to like
it, and it was found that creosote, which is a name for
condensed smoke, has some good medicinal qualities.
Since the civil-war tax was put on whiskey, there have
been some secret mountain stills in the mountains of
Virginia, North Carolina and Tennessee. There are
some even now, and even in New York City now.
Government thinks it worth while to collect taxes on
such little stills as could be hid in the mountains,
because if they did not, such stills would be sure to
539
S40
Taxation.
[§ 46s
increase in size and in numbers, and sell at low prices,
so as to make it impossible for the lowland stills, which
pay the taxes, to continue doing so. It has been more
troublesome to collect taxes from the little stills than
from the big ones — not only to find the little stills, but
to collect the taxes. The distillers have often murdered
the excisemen.
Now in such cases, it might be fair to suppose that
if the lawless people were not resisting the tax-gatherer,
they would be trying to make money in some other
way just as bad. But nevertheless if taxes were ar-
ranged so that people could not make money by evad-
ing them, there would be one less temptation to evil-
doing.
Excises are by no means laid on the liquor traffic
alone. They are generally laid on tobacco the world
over. During our civil war they were laid on almost
all kinds of production, and even during the Spanish
war they were restored on many drugs, and on perfumes
and chewing-gum.
They are burdensome on industry and commerce.
Moreover, they are constantly tempting manufacturers
to misrepresent to the tax-collector the value of the
goods they handle, and evade the taxes, at the expense
of those honest enough to pay them. For these rea-
sons they were taken off from nearly everything but
liquors and tobacco as soon as possible after the civil
war and the Spanish war. Yet it would not do to
conclude, from the objection to these taxes, that such
taxes ought never to be levied. There is likely to be
some good in methods that have been used so often.
It is the amount of the tax that leads to the misrep-
resentation, smuggling and outlawry. Such taxes are
harmless in those respects when not large enough
to make it very profitable to evade them.
465 (a). Taxes may Excises have even a good side, so far
limit dangerous as they keep the liquor traffic within
pursuits. bounds; and tariffs have, so far as they
prevent illegitimate foreign competition. Excises have
probably done more good in regulating the liquor traffic
§466 a]
Indirect Taxes.
54 1
than they have done harm in leading to illicit dis-
tilling. The trouble in handling the liquor traffic has
only come from going to extremes, and disregarding
the facts of human nature. When the excise on manu-
facturing has been reasonable, it has been collected
without trouble — that, in fact, is the test of its being
reasonable; and on saloons, it has also been possible
to collect license taxes high enough to limit the num-
ber, and prevent temptation being offered to the weak
at every turn.
There are taxes besides those on distilling, that lead
« to outlawry and murder. Duties have
466. Duties. j J , r ,
made smugglers, many of whom were
ready for any crime; and where, as is often the case,
the boundaries between countries have been mountains,
it has been easy for the smugglers to live there and hide.
They have grown very wild and lawless, and besides
smuggling, have often run illicit stills.
Yet duties have done a great deal of good to offset
this evil. By increasing the expense of foreign goods,
466 (a), encourage they enable the domestic producer to com-
home production, pete wjth them more successfully. That
is well for the producer, and sometimes for the con-
sumer. While he has a right to buy in the cheapest
market, the home market, when its manufactures are
fairly established, is naturally the cheapest for all
goods adapted to the climate and resources of a
country.
In new countries, and sometimes in the new indus-
tries of old countries, a tariff even on goods that can
be produced cheaper at home, is often of the very
greatest use. When, under either of these circumstances,
an enterpriser is trying to establish an industry that
already exists in another country, the foreigner, for
the sake of keeping his monopoly, is very apt to sell
even below what his goods cost him, just as we saw,
when we were considering competition and trusts,
that people often do in other situations (149 c). Then
when he has prevented the success of the new industry,
542
Taxation.
[§ 466 a
of course he can return to high prices, and is apt to get
unfairly high ones.
But when the foreigner makes prices unfair, tho the
home producer may be able to compete with him, he
will not want to, if he can keep the tariff high enough
to shut out the foreign goods, or make the prices of them
higher than his own. In this case the consumer loses the
benefit of competition.
There is often another consideration besides the
establishment of young industries, making a high tariff
desirable. A nation is sometimes put to it as a measure
466 <*»• Tariff of self -defence — when another nation lays
wars. a high tariff on some important production
of the first nation, and seriously disturbs existing indus-
try, especially when such a step is taken, as it too
often is, from mere spite and desire to injure. Then a
tariff simply becomes a weapon of war, offensive or
defensive. The " reciprocity treaties" that have been
talked about as if they were great inventions, are sim-
ply treaties of peace. A notable instance of "tariff
war" arose when, some years ago, the Italians levied
a very high duty on French wines, which had previously
enjoyed in Italy a large market, that of course now
suffered seriously. In the hope of forcing the Italians
to open the market again, the French levied a corre-
sponding duty on Italian silk; this led to a retaliation
on the other side, until it all resulted in great suffering
to both parties, and little good, if any, to either. A
treaty has at last been made which restores industrial
peace. Altho the Italian wine-maker and the French
silk-maker each could get prices higher by just so
much as the tariff limited foreign competition, each
had to get the prices out of his own people: so the
country could not be benefited; and moreover, the
rise in prices limited the dealer's sales and the con-
sumer's enjoyments. He is the one always neglected
in artificial finance, either in taxation or scamping or
labor restriction.
France seems about to put a prohibitive duty on
cottonseed-oil — an American industry absorbing more
§ 466 c]
Indirect Taxes.
S43
than $50,000,000 yearly. Italy is considering the same
step, and Austria has already taken it. American pro-
tectionists are threatening a retaliation against French
red wines. Thus there seems a prospect of two noses
being cut, off to spite two faces, and the two more men-
tioned (not to speak of others) are already gone. That
our commerce would breathe more freely with all the
noses in place, is counter to protectionist doctrine.
Because Russia exempts from excise, such of her beet-
sugar as is exported, we, under the Dingley Act, put
an equivalent duty on it. So used had we become to
performing such acts of aggression ourselves without
eliciting a murmur from the victims, that we were
quite astounded when Russia put a prohibitory duty on
our sugar. She was our best customer for it, taking
$10,000,000 a year while we imported less than $25,000
worth of the sugar for which we struck her.
Beginning with our civil-war tariffs; our hand has
been against every man, and every man is at last pre-
paring for defence. So far have our aggressions gone,
that at last there is talk of a European tariff league
against us, and, league or no league, the effects of one
are rapidly being wrought.
France has already put a protective duty on our
bacon. Germany has been on the point of making
a tariff which must hurt us heavily, and at this
writing commissioners are over there trying to find
some way of continuing to eat our cake and have it.
Other countries are preparing similar defences against
us.
The advocates of high tariffs claim that the foreigner
pays the tax, and so he does, so far as he can afford it —
466 (O. ne for- *n cases where (first) adding the tax to the
•igner sometimes price would drive the imported goods from
pays the tax. ^ market, and (second) where the pro-
ducer could not make up for the loss by gains in other
markets; then he might bear a portion of the tax by
reducing prices. But that the foreigner does not
generally pay it, seems proved by the facts under every-
body's eyes — that the prices of protected goods are
544
Taxation.
[§ 466 c
high, and that the consumer actually does pay those
prices. And it is plain that there is no "protection",
unless it makes the imported goods high, and enables
the domestic manufacturer to sell his competing goods
high.
The contrary statement has nevertheless deceived a
good many people; but even if, after all, it is correct,
how does it help France, to make Italy pay a lot of
her taxes, if Italy makes France pay an equal lot of hers ?
But suppose one country can get ahead of the other:
so it could if it went in with an army and took the
money. Either way would simply be a case of might
making right. There is no more justification for the
thing in morals than there is in common sense.
^>e(rfcknarty 110 American can sav t^iat & *s
M^rience. never right or sensible for a nation to
take a step which may lead to a tariff war. When we
were a British colony, and after, the efforts of British
manufacturers to keep their monopolies here were
merciless. Nobody here could begin making goods
which the British competitors would not undersell at
any loss. When the Revolution broke out, we were in
the pitiful condition of being dependent on the enemy
for nearly every manufactured article that we could
not make in our own households — including, of course,
the articles most needed to carry on the war. The war,
of course, operated as a barrier to English competition,
and our people made heroic efforts to do without such
manufactured goods as they could not make themselves.
The makeshifts of that time must have had a great
deal to do with the development of Yankee ingenuity.
466 (e) From the After the war, Hamilton, the first Sec-
Revotution to the retary of the Treasury, realizing that the
cimi war. people must be slowly accustomed to tax-
ation for national purposes, concealed his in a moder-
ate tariff for revenue only. The English manufacturers,
of course, tried to recover their monopolies. Our
people were nearly all farmers, and naturally wanted
their manufactured goods as cheap as possible; and
§466/]
Indirect Taxes.
545
for the moment, cheap goods of course meant English
goods. But distance put English goods at some dis-
advantage, and inevitably some manufactures began
to develop here; it was not until 1816, however, that
they became important enough to secure a protective
tariff. Then a considerable one was put on, which
was increased in 1824. But by 1832 people (espe-
cially in the South, where there were no manufac-
turers) began to realize that our manufacturers had
grown strong enough to take care of themselves, and
were making undue profits at the expense of men
who were not manufacturers, by charging for domestic
goods as high prices as the tariff made necessary for
imported ones. Consequently, it was arranged that
duties should gradually decrease until 1842. But by
that time, the manufacturers had rallied enough sup-
port to the doctrine of protection, to again increase the
tariff, and it was kept moving up and down, as one
party or the other got control, tho it never got very
high until money was needed to carry on the civil war.
466 (f). 8incethe During the civil war, the tariff was made
cm war. verv ^gh solely for the sake of revenue.
But after the war was over, and people with suffi-
cient intelligence began to think that they would
again like cheap goods and more goods that could
not well be produced here, they found that during the
war, powerful manufacturing interests had grown up
under the tariff, and now were ready to do anything to
retain their profits. All idea of protecting only indus-
tries that needed it and could ultimately justify it,
has been abandoned. There are fifteen hundred
articles in the tariff, of which fourteen hundred yield
no revenue at all, but only enable American manu-
facturers to keep their prices at the tariff rate. Of the
remaining hundred articles, only about twenty-five
yield revenue enough to be worth keeping on the list.
The most frightful corruption ever known in our poli-
tics has been the result. Congress has been largely
made up of the manufacturers themselves and their
agents, and it is generally believed that the Senate
546
Taxation.
[§ 466/
itself was bought by the Sugar Trust in '94. Each indus-
try has struggled for all the "protection" it could get,
and has agreed to vote protection to other industries
on condition of getting their votes in return. The
high tariff made the revenues enormous, and then the
manufacturers' party, rather than reduce the tariff,
recklessly threw the revenues away, partly in waste-
ful river and harbor improvements in localities where
commerce did not justify them, but mainly in giving
war-pensions to hosts of people who had no reasonable
claim, to get their help to keep the dominant party in
power.
466 (g). indu»- The war had kept manufacturing within
trial effects. bounds, despite the war tariff; but when
peace and prosperity returned, and even increase of
the tariff with them, there was a wild rush into the
protected industries. The country became glutted
with manufactured goods that could not be sold. The
great panic of '73 was attributed to this over-produc-
tion. Meanwhile, although some manufactured goods
necessarily fell in price, many agricultural products —
notably wheat, remained as high as ever. The pro-
tectionists, suffering from overdoses of their stimulant,
cried, like the victim of alcohol, for more of it. The
orgy reached its height in 1890, when the McKinley
bill made an increase in the tariff so far beyond any
rhyme or reason, that the people at last got their eyes
open, and, in the election of '92, swept the tariff party
from power.
466 (h). Both But that by no means disposed of the
parties corrupted, matter. The corruption then began to at-
tack the Democratic party, which had not even the
excuse of professed principle, for continuing the enor-
mities. That party, as soon as in power, prepared,
in the Wilson bill, a new tariff bringing the duties
somewhere nearer reason; but, as already intimated,
three of the party's senators refused to vote for it unless
it gave protection to the Sugar Trust; other interests
refused that protection unless they themselves were
granted protection; and so the new party in power,
§466i]
Indirect Taxes.
547
although it lowered some of the duties, failed to give
the reform which it was elected to give. *
The Republicans, since their restoration by the
election of '96, have not entirely restored the duties
lowered by the Wilson bill. Their experience with the
McKinley bill has kept them cautious.
But as already said, a protective tariff is an act of
aggression against the trade of other countries. It is
wonderful how long and patiently our aggression of this
kind against other manufacturing nations,, has been
borne. But they are at last turning against us, and
the merited destruction of the system by reciprocity
treaties or dual tariffs, is onlyva question of time, and
probably not much time.
Raw materials, as a rule, have advanced materially
in price since about 1890, but manufactured goods, in
which American ingenuity is a large factor, have shared
little in the advance, and have in many cases declined.
A notable instance is that hides are nearly fifty per cent,
higher, while boots and shoes are a little lower. The
conclusion is that with the tariff taken off to cheapen
raw material on the one hand, and on the other to lead
foreign markets to seek our manufactured goods in
exchange for their own, our prosperity would be greatly
promoted. And even now many manufacturers are
selling in foreign markets at prices less than the tariff
enables them to charge at home. In 1905, the congres-
sional elections showed a large increase in the demand
for free raw materials from manufacturers.
466 Tariffs In the foregoing account, the term
tend to expand, "manufacturers" has been generally used
to indicate the supporters of the tariff, because they
were the principal actors. But the fact is that when
there is a tariff on manufactures, those not manu-
facturers rush in for " protection' ' too. No matter how
wise such a tariff at its inception, it not only stays
after it becomes harmful, but always spreads till it
does become harmful. Not only must the fanner's
crops, and even his eggs, be "protected", but the pure
548
Taxation.
[§ 466*
bounty of Nature in forests and mines, must be, until,
as already stated, artificial prices, which everybody
using wood must pay, sweep off the forests, and bring
down the floods, while right across the Canadian border
are endless forests that now answer no human need.
466(/;. Protection A protective tariff is alleged to raise the
and wages. wages of the laborer. It does so about
as much as it does those of the hen when eggs are
"protected". The laborer's employer, like the hen's
owner, alone gets the benefit. This is proved by specfic
facts abundantly cited already (95 a); and by the
general fact that in the long run wages depend on ability,
not on juggling statutes. And it is because of his ability,
not because of the tariff, that the American mechanic's
wages are the highest in the world. Moreover, a pro-
tective tariff brings little new capital into the country
(only in cases where it makes foreigners establish
plants here) and the wages of labor of any given degree
of ability are determined mainly by the amount of
capital that enterprisers can use for wages, and the num-
ber of men among whom the wages are divided. Note
the expression : ' * laborers of any given degree of ability ' ' .
The higher the ability, the larger the share of capital
ready to pay them, and the fewer the men to share it.
Even if protection did increase wages, there is no
question that it increases the prices of what the wages
buy. But we always have with us that old folly of
the wage-earner thinking only of what he gets, not of
what he spends.
Protection brings capital out of other pursuits into
the protected manufactures; but it must also bring
more laborers to divide it among, as the capital could
not be used without labor. The tariff simply diverts
money and labor from one pursuit to another. That
indeed is one of the professed objects. The protec-
tionist claims to improve on the distribution of labor
indicated by blind and unaided Nature.
It is claimed that the protected manufactures attract
foreign labor. But it is hard to see how th.^t ^an
§466*]
Indirect Taxes.
549
increase American wages. Attracting foreign labor is
just what protectionists claim that they do not want
to do, and of course insist that they do not do. They
have even put on such prohibitions to keep it out, that
the law has had to settle whether a foreign musician or
even a foreign clergyman could land on 'our hospitable
shores, and while we complain of the inhospitable recep-
tion of travelers by some savages, we put Chinamen in
jail for no crime but being among us.
When countries have raised their tariffs, there has
been no lasting advance of wages not reasonably attribu-
table to other causes, and when countries have lowered
their tariffs, there has been no lasting decline of wages
not attributable to other causes. The recent spurt of
protectionism in France, Germany and Italy has made
no sudden rise in the wages of mechanics; and under
virtual free trade, English mechanics have had their
proportion, and probably more, of the advance in wages
general during the last half -century.
466 (k). Numbers But assuming for a moment that pro-
concemed. tection does benefit all engaged in the pro-
tected industries, and that it does not do so at the expense
of the community ; it is still worth while to consider what
portion of the population of the United States is bene-
fited by protected industry. Under the census of 1900,
there were but a little over six per cent.* of the people
* There were about 29,000,000 engaged in gainful occupations.
Of these about 22,000,000 were included in agriculture, fisheries,
mining, professional and personal service, trade and transpor-
tation. Of the remaining 7,000,000, about 1,800,000 were
blacksmiths, butchers, builders and heavy lumber workers, with
whom of course there can be no foreign competition, and of the
remaining 5,200,000, less than one third were in pursuits really
open to foreign competition. But as there was only about a
third of the population at work, it is fair to presume that tho but
about one third of the 5,200,000 workers, as above, were affected
by the tariff, each of them had two others — women or children
or old people, dependent upon him: so industries supporting
about 5,200,000 were affected by the tariff, or a little over six per
cent, of the whole population. In preceding editions of this
book, the non- working dependents were not taken into the
calculation, and it was based on the census of 1890. The two
Taxation.
[§466*
at work in the United States, who were directly affected
by the tariff, while the remaining ninety-four per cent,
of the people were paying prices enhanced by the tariff
on the immense product turned out through machinery
by the six per cent.
Mr. Atkinson says that of 29,000,000 at work, only
1,000,000 are directly affected by the tariff.
I have said "the remaining ninety-four per cent",
but that does not tell the whole story: the six per
cent, themselves have to pay enhanced prices for all
the protected goods, even each mechanic for those he
works on himself.
The wages of the six per cent, are not any higher,
other things even, than the wages of the ninety-four
per cent.: so the profits resulting from the manufac-
turer being able to get tariff prices, must partly go
into the pockets of the enterprisers, and are partly
wasted in the depreciated prices of manufactured goods
that come with the occasional gluts which high tariffs
always cause. Outside of monopolies, however, they
are probably not as great as the advocates of the sys-
tem claim.
466 (i) Qtut* A glut is an excess of production beyond
*' what people can consume, or beyond what
they have other productions to exchange for (466 g).
Nothing gluts an industry oftener than duties so high
as to shut out foreign competition, and so not only to
tempt too many people into producing a certain thing,
but to draw people away from making the things that
would exchange for it. As people sell and buy for
money, they do not, at first sight, appear to exchange
things with each other. But as we saw when we dis-
cussed money, money is but a means of making the
censuses show the proportions to be about the same. True,
there are tariff rates on most articles produced by the farmer,
fisherman and miner, but as those articles are often perishable,
and generally cost more to bring from elsewhere than to produce
here, there is virtually no foreign competition to 1 ' protect " those
producers from.
§ 466 n]
Indirect Taxes.
S5i
exchanges quicker and easier. Nobody sells anything
for money because the money itself is of any use to
him: he only wants it to pay for other things. It is
aptly called a "medium of exchange" — in the middle
between the thing parted with and the thing acquired.
But to go back, people get glutted goods cheaper
than goods of which there are not too many; but
they get them cheaper only after they have paid, at
times when there were no gluts, more than the differ-
ence, in prices enhanced by taxes — more than the differ-
ence, because besides what they get back in low-priced
goods, they have to pay the enterpriser's profits when
he makes any profit — and he makes profits large and
often, or he would not be standing the loss from occa-
sional gluts, or making his enormous payments to
the campaign funds of the party which keeps up the
protective system. The consumers have to pay these
campaign expenses in the long run, and have to pay
duties on such foreign goods as the protective system
leaves room for them to buy, with the expenses of col-
lecting those duties, and probably in some instances
with profits on those duties, and threefold profits at
that — to the importer, the jobber and the retailer. We
have seen how these attempts to make money by jug*
glery succeed, in scamped work (228 b) and poor money
(361) and idle prisoners (444*) and indirect taxes gen-
erally (464).
466 (mi Effect On trusts, the influence of a protective
on trusts. tariff is very bad for the public interest.
It deprives the public of the benefit of competition
between the foreigner and the trust. So if the trust
covers the whole home production of a "protected"
article, people's only control over its prices will be in
doing without its products. Moreover, the labor trusts
are just as eager for "protection" as the other trusts,
and have obtained laws shutting out skilled and able
immigrants whom the country as a whole greatly needs.
466 (n). con- The conclusion, thent in regard to raising
elusions. taxation by tariff duties, is that it is at
Taxation.
[§ 466 n
best a weapon ; that in young countries it may be salu-
tary as a weapon of self-defence ; that in all countries,
as a weapon of self-defence or even of industrial war,
it may at times appear necessary, just as any other
weapon sometimes may be; but that in a mature
country at peace, it is most dangerous and pernicious.
Our national government adheres to so
AmVr°cJ%ium? bad a method, largely as a matter of
course, from historic habit, as already
indicated (466 e), but especially for two reasons: (I)
because, as the national government has charge of all
our relations with other nations, and as, consistently
with that, the Constitution prohibits the separate states
from levying duties on imports or exports, that field
of taxation is left specially open to the national gov-
ernment. And (II) the Constitution (Art. I, Sec. II)
provides that "all direct taxes shall be apportioned
among the several states according to their respective
numbers Now the value of property is not at all
"according to their respective .numbers": there are
rich states and poor states having about the same
population. Suppose two states equal in population,
but one five times as rich as the other: then if govern-
ment wanted to collect the same amount of direct tax
from one as from the other, each man in the poor state
would have to pay five per cent, of his property where
each man in the rich state paid one per cent, of his.
This makes it virtually impossible for the national
government, under the Constitution, to impose some
of the direct taxes so that people will submit to them,
or ought to submit to them ; and therefore the govern-
ment is driven to the indirect taxes. But these are
really more just only so far, of course, as they are put
on things that a man can comfortably do without if
he pleases.
466 (pi Expert feeling tna* our national system is
opinion on wrong, is strong among substantially the
American method. q£ trajned students of the
subject, and their opinion is not less valuable than
§ 4671
Indirect Taxation.
553
if they paid a heavier share of taxes : for taxes, especially
indirect taxes, come proportionally hardest on people
of moderate fortune, as we shall see more fully later,
and they are quite apt to know best where the shoe
pinches.
The government has already imposed some direct
taxes — such of the stamp-taxes as are direct, and the
income-tax during the civil war, when people were
ready to submit to almost anything to save the Union.
But when the same thing was tried in 1894, the Supreme
Court decided that it was a direct tax, not "apportioned
among the several states according to their respective
numbers".
467 Stem taxes ^ ^as Deen f°un<i desirable to insure
mp- es. payment of duties and excises by
something farther than the usual precautions in collect-
ing the taxes. To many things — especially packages
of tobacco and cigars, kegs of beer, bottles of wine and
spirits, and packages of patent medicines, all of which
are favorite subjects of duty and excise, it has been
found well to affix stamps showing that the tax has
been paid. Unstamped goods offered for sale can then
be seized.
Some things pay both tariff and excise : each box of
imported cigars now bears a duty stamp and an excise
stamp ; and for some time after the Spanish war, each
bottle of imported wine or spirits, after paying duty,
bore an excise stamp also.
As already said, some of the stamp-taxes are direct,
and we are now discussing only indirect taxes, but
there is not much to be said about stamp-taxes any-
how, and we may as well have done with them here.
They have been carried farther than as mere vouch-
ers for indirect taxes on merchandise, where the buyer
of the goods often pays for the stamps. Governments
often sell stamps which have to be put on legal instru-
ments and commercial papers, such as deeds, notes of
hand, bank checks, telegrams, passenger-tickets, etc.
This was done in America for the civil-war tax and the
554
Taxation.
[§ 467
Spanish-war tax ; and in most European countries is a
permanent thing — mainly for armies in expectancy of
war.
Whether those stamp-taxes are direct
l£i(MifS£dir9at OT ^direct depends upon where the stamps
are put. On checks and documents, usually
they are direct, tho the telegraph and express com-
panies have sometimes succeeded in shifting them to
their customers.
Now in this sense, whether a stamp-tax (outside of
being a voucher for excise) is a good one, Americans
think depends somewhat on who imposes it — as do
the merits of all taxes, for that matter. It was per-
haps the chief cause of our separating from Great
Britain, but when we have imposed it ourselves during
war, we have paid it cheerfully.
It is a pretty good sort of tax in so far as it is pretty
sure to be paid by most of those fairly subject to it,
and very sure not to be paid by those who are not;
but it yields comparatively little, is a daily bother to
business men, and, of course, is somewhat in restraint
of trade, and for that reason cannot well be pushed to
467 (b) often a verv lar&e amount. So (carefully re-
mereiy'a petty membering that we are not now consider-
nuisance. stamps on peculiar merchandise, and
on stock transactions, both of which directly trouble
but comparatively few people, and the latter of which
contain a large element of gambling) a stamp-tax is
generally a pestiferous little nuisance,* which those
who pay enough of it to be entitled to be heard, would
rather pay double, in a lump sum, for the sake of get-
ting rid of.
It is then to be regarded as one of the taxes
worth serious discussion, only as petty nuisances are
worth serious discussion. It is not to be compared in
* Mr. Dingley expected his new internal-revenue system,
devised for the Spanish war, to yield about $210,000,000 an-
nually. Of this, he expected only $15,000,000 to come from
stamps on checks, telegrams and express receipts, which are
bothering people at every turn.
§467 b]
Indirect Taxation.
555
importance with the other taxes we have considered,
and are to consider — especially for a rich and peaceful
nation not obliged to exploit every possible source of
revenue.
The preceding paragraph was written in 1900. A
sufficient comment on it is that virtually all of the
stamp-taxes have since been repealed.
CHAPTER XXXVIII.
INDIRECT TAXES (CONTINUED).
General Conclusions.
468. Indirect taxes Indirect taxes, as now administered in
expensive to pay the United States, are generally much more
and to collect. expensive to collect than direct ones.
And as intermediate profits sometimes follow indirect
taxes (464, 466 /), they are apt to be more expensive to
pay, as well as to collect, than taxes which can be paid
direct.
As the United States taxes have been laid in recent
years, collection of the excises costs about half as
large a percentage of them, as collection of the duties.
From 1870 to 1890 the tariff yielded more than the
excises — about double. A few years later the results
were reversed.
468 (a). Hard on Indirect taxes are not gauged in pro-
thepoor. portion to people's ability to pay: as
generally administered, they fall unduly upon the
poor, and do vastly more than all the injustices in
distributing the product of labor, toward making "the
rich richer and the poor poorer", tho even they with
all the other agencies, are not able to accomplish the
result. To get enough out of such taxes to make them
worth while, a large portion of them must be placed on
the necessities in universal use. These absorb all a
poor man's income, while most of a rich man's income
goes in luxuries, and it is no privation for him to pay
taxes on them; and moreover, the portion of his in-
556
§468 6]
Indirect Taxes.
557
come which he does not spend, indirect taxes cannot
touch at all. This is an argument, as we shall see more
clearly later (470**), for taxing such portion of incomes
as is not spent in necessities.
Taxes are generally made very heavy on the rich
man's luxuries (as, if there are indirect taxes at all,
they ought to be), yet he has his choice whether to in-
dulge in those luxuries or not, while the poor man has
no choice whether he will use taxed necessities or not.
True, there is no excise on most things produced at
home, but he cannot get along with those alone, and if
he could, there is a tariff on nearly all the correspond-
ing foreign productions — on drugs and sugar and
woolens, for instance — for the avowed purpose of en-
abling the American producer to charge that much
more : so the poor man has to pay higher prices to the
American manufacturer, in many cases where he does
not pay the American government.
A68(b). stimulate Indirect taxes, then, are hard on the
corrupt legislation. p0or compared with the rich. And there
is another social division apt to result from the indirect
system: Indirect taxes set off a portion of the com-
munity with interests against the community as a
whole: for they give manufacturers powerful induce-
ments to influence legislation for their own benefit, at the
expense of the rest of the community.
As a peculiar advantage in resisting reform, such
interested parties have the cry of 4 * vested interests".
When factories have grown up under a system of tariff
and excise, even when changed circumstances make
the system bad, the attempt to change it is naturally
met by the cry that legislation ought to respect " vested
interests ' ' . So it ought , to a reasonable degree , especially
in taxation. Some writers go so far as to say that a
bad system is apt to be better than a good change.
But the moral is that, as changes so upset industry, it
is doubly important to make taxes so wisely that they
will stand.
Yet those directly interested in the tariff, do not
always go on this principle. On the contrary, they are
558
Taxation. . * [§ 468 b
constantly changing it on speculation. Since 1862, the
tariff has been changed some twenty-five times, all
but once at the instance of some of the protectionists who
had " little games " of their own to play.
468 (oh Fail to Indirect taxation lessens the citizen's
stimulate interest interest in good .government. Under it,
m gouernment. the citizen cannot know .what he is pay-
ing to the government, or whether it is' more or less this
year than last. He has no plain direct experience, in his
own person, of economy or extravagance in government,
and therefore has only a hearsay interest in working
for honest and competent government.
The government of the United States has increased in
cost to each citizen from $4.44 for the year 1884 to
$7.14 for the year 1904. During both of Cleveland's
terms, the cost was less than in the terms preceding
and following his. If the taxes had been direct, is it
likely that the people would have permitted such an
increase? When, as in New York City, only one man
in twenty-five pays any direct taxes, it is no wonder
that the government is extravagant.*
* Speaking on this subject in the House of Lords in i860, the
Earl of Derby said that "by making the whole revenue of the
United Kingdom depend upon direct taxation the pressure
would be so odious that wars would be avoided, because no
party would incur the odium of carrying them on". (Wells.)
In England, the treasury gets but five sevenths of what
consumers pay. Some good authorities put it as low as three
fifths. In Prussia it costs four per cent, to collect direct taxes,
and twelve per cent, for indirect. The Frenchman pays not
only the tax, but one fifth of the cost of his goods is wasted
on collection expenses and intermediate profits. But to find
the extreme of this waste, we must come to the United States.
In 1846 the Secretary of the Treasury estimated that the
government got $27,000,000 from duties, while the people
paid $44,000,000 in increased prices of the articles taxed. In
67-8, a leading authority in the New York Constitutional Con-
vention, expressed the opinion that the consumers paid the
dealers and manufacturers at least half as much again as the
amount of the tax. About 1883, Mr. Springer stated in Con-
gress, as the result of a careful examination, that during the
§468d]
Indirect Taxes.
559
One feature of this consideration has been pointed
out to me by Professor Trent. The novelty and pro-
priety of the suggestion tend, did not his work in his
later field prevent, to make one regret his abandonment
of Economics. He points out that the indirect tax-
payer has no such evidence to give him the standing
in court that the direct taxpayer has, if he wishes to
exercise his right to sue a public officer for misappro-
priation of taxes.
468 (d). why my Yet in spite of all these objections to
are popular. indirect taxes, they are popular with many
people, and for the reason that we have many other
governmental institutions — the weaknesses of human
nature. Most men do not know anything about indirect
taxes, but pay them without even knowing that they
are paying taxes. Men do not pay most of their taxes
at the government offices: they pay the indirect ones
at places which they object less to going to — the gro-
cer's and, too often, the bar-room. That is the main
reason why they prefer indirect ones. Yet if wise
statesmen were to take pity on them and give them
the cheaper direct taxes, they would reciprocate by
turning the wise statesmen out of office. There is not
a community in the world with sense enough to pay all
of its taxes directly. Colbert (462) realized that where
taxation is concerned, men are generally geese, and wise
statesmen treat them as such.
All this indicates that the ways of collecting taxes,
utterly irrespective of their amount, might make a
great difference in the contentment and happiness of
the people. Yet it is difficult to collect them In the
twenty years preceding, the people of the United States had
paid in consequence 01 indirect taxes, but over and above the
taxes themselves, more than eleven billions of dollars, of which
the government had not received a dollar.
As one instance showing how much manufacturers have
profited by systems of indirect taxation, in 1883 the match-
manufacturers objected to the removal of a tax of one cent
per package, and when the tax was removed in spite of them,
the price fell a cent and a half a package. (Condensed from
Wells.)
Taxation.
[§ 468 d
ways that will really hurt least in the long run. Taxing
is a sort of surgical operation anyhow, and the way
that really costs the patient least, may be the most
painful for the moment.
Taxes can be made easier if paid in instalments, rather
than in lump sums, and the indirect tax is of that kind,
but, as already said, it is the most expensive, tho the
one the vast majority ot people most willingly pay. A
few cents a pound when one buys tea and coffee, or a
little increase in the cost of something that many men
are ready to pay as high for as beer and whiskey, seems
a small matter (especially as men generally do not stop
to think about it at all) compared with what the same
amount of taxes would seem if they and other ' indirect
taxes were all presented in a lump sum, once a year,
in, for instance, the shape of a government claim against
a man's house.
But as it is, there is a tax-claim against every man's
house, if he has one, or against his landlord's if he
has not. But that is just so much the more reason
why, if that claim were increased by diminishing his
indirect taxes, he would want to turn out the govern-
ment increasing it, and bring in one that would appear
to tax him less. And there is something more substan-
tial than mere appearance in favor of the indirect sys-
tem, or a combination of the two : men with little fore-
thought or little property (and the two are apt to mean
nearly the same thing, and moreover, the vast majority
of men are of that kind) would be sure to be found
lacking the means to pay their taxes if all were pre-
sented in one big bill, while they manage to pay them
a trifle at a time, in increased prices of their purchases.
Some claim that so far as people realize them, in-
direct taxes do encourage saving, but that seems rather
fine-spun. A considerable lump sum is a more effective
argument than a charge of small-shot petty sums. Prob-
ably nobody ever yet lessened his total expenditure on
account of taxation — refused the thing he had the
money to pay for, because part of its price represented
§468?
Indirect Taxation.
a tax. If he could not afford it, the tax did not make
him less apt to spend his money in something else, or
more apt to put it in the bank.
468 <•). Summary To sum up the case for and against in-
for and against, direct taxes : they are apparently so easy to
pay that it is quite probable that no country is yet
civilized enough to get along without them. But prob-
ably, as people grow wiser, such taxes will ultimately
disappear,* because they keep the payers blind to the
extravagances in government, are corrupting to people
and rulers, and tho the paying is comparatively easily
done, they are really the most expensive of all taxes
to collect, and the hardest of all taxes on the poor.
* From 1 84 1 to 1896, the proportion of the Imperial Revenue
of Great Britain coming from indirect taxes, fell from 73 to 52
per cent. This was accompanied by a great increase in the
consumption of things used by the laboring classes. (Wells.)
CHAPTER XXXIX.
INQUISITORIAL DIRECT TAXES.
Income and Inheritance Taxes.
469. Direct taxes ^e come now to tne taxes generally
divided Into Inqulsi- called direct. There is one broad line of
torial and Obvious. distinction that we may as well follow in
treating them: some of the objects are seen of all men,
while others cannot be got at without prying into pri-
vate affairs.
If you have ever waited on an American dock (Euro-
pean custom-houses are not half so bad) to have your
baggage examined, you probably think that we have
considered some of the prying taxes already.
But, as remarked more than once, the human mind
cannot often make any classification that does not
overlap — probably because there are no hard-and-fast
divisions in Nature. Probably we cannot do better than
group the direct taxes into Inquisitorial and Obvious.
Now to begin on the first group, and from a point we
are already a little acquainted with: the promotion of
saving is not the only good reason for taxing the
things that enter into a man's consumption. There
are a good many reasons why the rate at which a man
is willing to spend on himself and his family, should be
the rate at which he should spend for the general good.
But the more a man must spend on his family, the less
he can afford to pay in taxes. A way around has been
found in the direct tax on luxuries that a man can
do without — horses, carriages, billiard-tables, pianos,
562
§ 47° b]
Inquisitorial Direct Taxes.
5<*3
watches, jewelry, etc., etc. But on the other hand,
watches, jewelry and many such things are easily
concealed, the taxes are not only inquisitorial, easily
lied about and expensive to collect, but they yield too
little to justify a capable people in fooling with
them.
470 income-tax ^ we cann°t> then, approve of many
. ncome- x. q£ ^e taxes on a man's outgo that we
have so far considered, can we say anything better for
a tax on his income ? It would be at least direct enough,
and as it could not very readily distribute itself, we
would at least know whom we were taxing. Moreover,
the income-tax would avoid some injustices inherent
in other taxes: a man would have to pay only on
470(a). Fails onty *lis successful operations, where he could
on successes and afford to, and not on his failures. On the
actios property, Qther ft dealer t()
and excises whether he makes a profit on the goods
or not.
Moreover, a man would have to pay only on property
returning income — not on idle property. But not all
people consider that a merit: the Henry George school
thinks idle real estate the best possible object of taxa-
tion, as tending to force the landlord to improve. That,
however, is a frightfully stupid scheme, at least when
put in so extreme a way: for the money to improve
the real estate would have to come out of some other
mode of production where it is probably more needed,
as proved from the fact of its already being there.
The scheme is simply one to rob Peter to pay Paul, like
nearly every other scheme to affect industries by taxa-
tion. We will consider this subject farther when we
come to the taxation of real estate.
Now it seems very desirable that each man should
pay according to his ability to pay. All the authorities
470 fb> and is agree on that; and a man's actual income
proportioned to each year, if he earns it himself, is probably
ability, keJ3t test Q£ ability to pay ; and if he
does not earn it himself, taxing it is probably the best
564
Taxation
[§4706
way to secure his contribution to the common good,
as he makes none by producing.
We seem, then, to have at last reached the ideal tax.
But it is too ideal for this imperfect world. The assessors
470 (O. Like ail have to depend on the taxpayer's statement
'ZpilSZmJF™' of the amount of his income : they can never
w** know the facts for themselves. So, as long
as human nature remains as it is, there will never be an
income-tax, any more than there will be a tariff- or excise-
tax, which will not be a swindle of the taxpayer scrupulous
enough to tell the whole truth, for the benefit of the
taxpayer unscrupulous enough to conceal it. All these
inquisitorial taxes — direct or indirect, that would pry
into people's private affairs, put a premium on lying,
and make the truth-teller pay the liar's taxes for him.
There are at least two taxes that people cannot evade,
but they can evade some easier than others — income-
tax, inheritance-tax and personal-property tax easiest of
all.
Perhaps if dishonest men do not make a clean breast
to the assessor regarding such matters, that should not
prevent honest men from doing their duty. But very
conscientious men might question, and, as a well-known
fact, do seriously question, whether it is their duty
to pay all the personal and income and inheritance
taxes of the community, and let the rascals go scot-free.
The result in practice is that, despite an occasional
exception, men who scorn to evade any other obliga-
tion, unhesitatingly evade the inquisitorial taxes. A
striking illustration of this is nothing less than that,
as Mr. Wells says, "a high court . . . has recently
decided that 'perjury in connection with a man's tax-
lists does not affect his general credibility under oath.' "
The premium on roguery is certainly higher in an
income-tax than in duties and excises, just as the
income-tax represents the profits of a year, while a duty
or an excise concerns but a single transaction, and lying
is unquestionably easier regarding income. Stamps and
customs inspections have made evasion very difficult
regarding tariffs and excises.
§47°/]
Inquisitorial Direct Taxes.
565
The public has no right to know a man's
HgVtaVprlSaol income: it would make it harder for the
taxpayer to get through times of depres-
sion, and send the leeches after him all the thicker in
times of prosperity. People dealing with a man are
entitled to know his claim to credit, in a general way;
but it does not follow that the rest of the world is
entitled to know: tho if they were perfectly wise and
good — would not strike a man when he is down, and
overcharge him when he is prosperous, there might
be no objection to their knowing. But as the world is
far from perfectly wise and good, considerable privacy
is necessary to safety and comfort.
Yet where the good of the state is concerned, the
right of privacy must give way. Sometimes even the
right to life has to. But opinions differ as to whether
an income-tax, rather than some other taxes, is for the
good of the state. This very fcivasion of privacy is
one of the reasons why it is not.
470 (e). Generally Taxing incomes tends to double taxa-
doubtes taxation. tjon an<[ double taxation is even pro-
hibited in some constitutions. If a man pays taxes on
real estate, stock in trade, bonds, stocks, etc., and then
pays again on the income they bring him, he certainly
pays twice.
470 (f) Aaiiiua- ^ *s a standard question whether, if
trating progressive people will tax incomes, they should bear
taxat on. a§ heavily on a little one as on a big one —
tax it the same percentage. The arguments both ways
are very strong. The strongest perhaps is that a man
with ten thousand dollars can easier spare a given per-
centage— say five per cent., having ninety-five hundred
dollars left, than a man with ten hundred dollars can
spare five per cent., having but nine hundred and
fifty left.
Yet to do as some propose — tax the big incomes so
heavily as to leave all net incomes equal, would be
neither practical nor just.
If a man is used to spending ten thousand a year,
it would certainly be harder on him to cut his scale
566
Taxation.
[§47°/
down to nine hundred and fifty dollars, than it would
be on the thousand-dollar man to cut his scale down
to nine hundred and fifty. But then arises the ques-
tion whether it ought to be harder, and that is too
big a question to be settled here.
The next important argument in favor of a pro-
gressive income-tax is that it tends to make men stop
work after they have got enough, and give young men
a better chance. The whole community would benefit
by that, if the older men would use their leisure for
the benefit of the community, in charity and politics;
but it is not at all certain that they would. If their
tendency to do so is increasing, that would be an in-
crease in the argument for a progressive income-tax.
But the argument fails because it is an argument for
increasing the difficulty of men reaching a competence
to retire on and devote themselves to the public good:
if the progressive tax* would stimulate men to retire,
it would to the same degree make it hard for them
to get enough to retire on.
470(g). Discrim- In some countries they do not levy the
ination of sources, income-tax on wages or profits, but only
on interest and rents; and this certainly removes the
objections a stage farther off: the tax no longer ob-
structs earning, but only saving.
It would not be well to tax interest the same as rent
(472 /), because, as population grows, and people crowd
together, rents tend to increase; while as capital in-
creases, the rate of interest tends to decrease.
There is still more to be said in favor of exempting
wages and profits, and taxing rent and interest: it
would tend to set men to producing, ^vho would other-
wise be living in useless indolence upon what their fathers
470 (h). As equal- had made. It would also tend to equal-
tzing fortunes. {ze men »s fortunes. But that is attainable,
and probably desirable, only as you can equalize men.
Certainly the way to attain it is not to clog the able
man, but to help the weaker one. It might help him,
to largely decrease his percentage of taxation if you
could do so by slightly increasing the percentage
§47°/]
Inquisitorial Direct Taxes.
567
on the larger income of able men. But as nearly as
we can get at the figures, there are so many more people
with small incomes than with big ones, that if you
wanted to halve the taxes of people with less than one
thousand dollars a year, instead of increasing richer
people's taxes "a slight percentage", you would have
to more than double them — multiply them by about
two and a half: and if you wanted to halve the taxes
of people with less than four thousand dollars a year
(the income that the law of 1894 tried to exempt),
you would have to multiply the taxes of those with
more, by about four. Mr. Godkin figured that the
result of dividing all English incomes of over $15,000
among the community at large would be that each person
would be richer by about four cents a day.
470 a) As offset- A progressive income-tax could be
ting injustice in made to offset the injustice in some other
other taxes. taxes — of the indirect taxes on necessities,
for instance (468 a), but only very roughly. Yet, if we
are to have a system of bad taxes to balance each
other's badnesses, as most of the ordinary taxes —
especially the duties and excises, come easier on large
incomes than on small ones, a heavier tax on large
incomes would tend to make things even. That may
be the best we can do at this stage of evolution: and
of course we have considered the progressive feature
only on the assumption that we are to have an income-
tax, bad or not.
Now if we have it, does the state give anything in
return to justify making it progressive? No: as a
470 (J) Out of man s income increases, the state does no
proportion to more for him, in proportion, than it does
state's services. his incQme jg gmall> but rather
less in proportion. The protection of the rich man's
life, liberty and pursuit of happiness really calls for less
from the state than does the protection of the poor
man's. The rich man lives where he is less subject to
attack from violence or disease, he is less subject to per-
secution, and is in a better position to take care of
himself in every way, than is the poor man: so the state
568
Taxation.
[§47o/
has to do less for him merely as a man. From this
point of view, then, there is no justice in the state
taxing a man more in proportion, while its service to
him grows less in proportion. As already stated, the
ideal is to tax in proportion to his ability. The attempt
to tax beyond that is only one manifestation of the
constant effort of those who can produce little, to get
along at the expense of those who can produce much.*
This is practicable and desirable only through philan-
thropy, not through spoliation. We already have
needed to touch that question, and will need to consider
it farther, later.
Meanwhile, in spite of the arguments just given,
some very good writers say that the notion that taxa-
tion should be gauged by the service rendered, is rather
out of date, and they give one very good reason — that it
is impossible to gauge what the state does for men:
to civilized man, the state is simply a condition of
existence, like air or water — in a sense, all civilized
men owe it everything, and there are no degrees in
everything. "In a sense", as just said, the argument
is good. But it cannot upset the other side: questions
of justice come in regarding even the distribution of air
and water. Yet undoubtedly, a man with more money
than he can reasonably use, should do more in propor-
tion for the community, than a man who has only what
he can reasonably use, or less. But justice is one thing
470 (h). Taxation and human charity another. If the com-
Nmitaofim. munity tries to rob the rich for the benefit
of the poor, under the cover of taxation, it simply at-
tacks whatever tendency the rich may have to give
voluntarily. When one thinks of the increasing mil-
lions g?ven year by year to charity and education —
more, probably, in America than in any other country,
it is easier to see how such taxation might close pocket-
books more than it would open them. As an illustrative
case: when the income-tax of '94 was enacted, one of
* ' ' The theory of progressive taxation is a vestige of the old
prejudice that regarded wealth as ... a sort of theft from the
rest of the country." (Menier, quoted by Wells.)
§47©/]
Inquisitorial Direct Taxes.
569
the journals gave an instance of a benevolent man
who said: "Oh well, if they want to take it by force
I'll simply deduct it from my charities. "
But if all taxes are, in that sense, "taken by force":
why should a man propose to deduct that one from
his charities, if he did not deduct others? Because
that one was not levied on an even basis to all men.
No one with an income of less than $4,000 was called
upon to pay it.
Yet looking at the matter solely from the standpoint
of the poorer people: if through taxation they help
themselves to the accumulations of the great producers,
cannot they very well afford to do without their bene-
factions ? Doubly No : the less secure the enterpriser
470 (i) Taxing *s °* results °f his enterprise, the more
away business apt he is to stop producing, and stop em-
and benevolo ploying labor— in other words: the more
taxation attacks accumulations, the less those able to
accumulate and to help other men to accumulate, will
care to. We realized this principle even when we
were talking of taxes laid on all alike, but of course it
would be vastly more effective when taxes are laid with
special force against what people can manage to do
without: then the great producer would discharge his
hands as soon as he had money enough.
The other consideration alluded to, against the com-
munity helping itself to the accumulations of the rich
rather than waiting for their voluntary benefactions,
is that it would embitter the feeling of those able to
help, against those who need help ; and this is destructive
of the best interests of all concerned. Where willing-
ness to help is changed into reluctance to help, and
embittered reluctance at that, it is safe to say that
the ablest part of the community would find plenty of
ways to avoid helping. Communities who have begun
to alienate their wealthy people, have found them
traveling off to wiser communities, and taking their
wealth with them. Ohio has not made much by
driving the Standard Oil Company out of the state, or
Massachusetts by driving out the headquarters of the
57°
Taxation.
[§ 470 1
Bell Telephone Company. Neither has a certain Swiss
canton by driving one of its wealthiest citizens to
America. True, the first two of those things were
net done by taxation, but by foolish legislation; it
may as well have been taxation, tho, as anything else.
The trouble would not stop at emigration, however,
and much less at bitterness on one side: that is sure
to engender bitterness on the other side; this reacts
again, and so on interminably, until we reach the
Roman social wars, and the French Revolution, with
the destruction of everything the community values.
470 (mi character- They have progressive income-taxes in
istio of militarism. some leading European states now, and
there are much more active signs of social war there
than here. Those nations are full of socialism, and
the only logical conclusion of socialism, if it is pushed to
its logical conclusion, is, as Spencer declared, social war.
470 (nh Heaviest The American experience is that during
on those least able the civil war, the income-tax, tho clearly
to bear it unconstitutional (4660, 466/), was re-
ligiously paid by most widows, orphans and patriots;
and profanely laughed at by many other people. Per-
haps half of what the law called for was paid. The
tax of '94, there being no war on, was declared uncon-
stitutional by the Supreme Court. There have been
income-taxes in some of the states, of which only one
or two survive as fruitless relics of an ignorant but con-
fiding past.
As a matter of fact, among the other leading nations,
income-taxes are actually associated to-day, on the
whole, with the militant grade of civilization, tho
Switzerland has them, and Russia and France have
not. If the support of immense standing armies
were not forced upon England, Germany and Italy, the
income-tax would probably not be needed or tolerated
by them.
In Italy the tax pays a little smaller proportion of
the revenue than in England; but Italy is so poor that,
just or unjust, the tax is felt to be a stern necessity. In
Germany it has yielded very well, but through despotic
§470
Inquisitorial Direct Taxes.
methods of collection that Americans would never endure.
In Switzerland the Canton de Vaud has adopted it under
its progressive form, and is already driving away
capital and industry. It does not amount to anything
in the rest of Europe. In France and Russia it does not
exist as a national tax.
In England, where it works better than
£)tf«affWMrty. anywhere else but Germany, the income-
tax supplies only one sixth of the national
revenue; and altho, the world over, people without
any incomes to tax are of course fiercely agitating for
income-taxes, the weight of intelligent opinion, while
acknowledging their ideal justice, is against them, as
practically a great injustice. Its abolition was among
the unfulfilled promises of several Gladstone adminis-
trations. Gladstone, who by an unprecedented com-
bination of economic insight, training and experience
was better able to judge an income-tax than any other
man who ever lived, said: 41 It does more than any
other tax to demoralize and corrupt the people. " And
even his chronic opponent Disraeli agreed with him on
this topic so far as to say: 14 The odious features of
this tax cannot be modified." Thorold Rogers said:
" Every chancellor of the exchequer has condemned it
in principle and [from necessity] followed it in practice."
In the face of such authority, the knowledge and
the motives of anybody favoring an income-tax as
other than an emergency measure, can hardly both
be above suspicion.
471. Inheritance- The same can justly be said of Inheri-
taxeSi tance-taxes. They can easily be avoided
by gift before death, and even when they are not, they
are not only open to all the objections against the
other inquisitorial taxes — as putting premiums on lying,
but, unless they are restricted to collateral inheritance,
they are at the expense of the widow and the orphan
at the very time they lose the husband and father
whom they have depended upon to meet their expenses.
Moreover, the widows and orphans pay more than
57*
Taxation.
[§ 4*i
their share of such a tax, because they are not as able
liars as other inheritors — in fact they are generally
represented by executors or administrators who will
not lie for them at all.
But inheritance-taxes are not all imposed on the
widow and orphan. Sometimes there is no immediate
family to inherit, and except when collateral heirs have
47! (a), collateral been dependent on the decedent, the col-
wot very lateral inheritance-tax is among the less
objectionable, objectionable of the inquisitorial taxes.
A man is apt to feel more free with a sudden windfall
than with slow and laborious gains — more apt to pay
a tax on it without lying, and better able to afford it.
47! (b). Conciu- The entire tax, direct and collateral,
*,on8- never yielded much, and it is doubtful if
it ever will yield enough to justify bothering the com-
munity and paying the collectors. Sometimes when
a very rich man dies, the figures look large, but comparing
the total with the total of taxation, they are insignificant.
The New York Evening Post in June, 1906, said:
"Inheritance taxes are the favored remedy just now for the
ills of aggregated wealth, and the Massachusetts Labor Bureau
has done a timely service by bringing together in its May
bulletin the facts as to the present status of the inheritance-
tax in this country. Only thirteen of the States and Territories
are now without a tax of some sort upon inheritances. But at
present these taxes constitute neither a means for the dispersal
of swollen fortunes, nor an item of much importance in the
public revenues. New York State, which collected $5,010,434
in 1905 from the estates of 5,431 decedents, stands far ahead of
the rest. The only other State which receives so much as a
million is Pennsylvania, with $1,677,185 for 3,600 decedents.
The whole amount collected, the country over, seems to be
somewhat more than ten and one-half million dollars. So, in
the collection of a tax which everybody believes in, the year's
actual returns for thirty-two States and Territories woula only
keep New York City going for a month."
CHAPTER XL.
INQUISITORIAL DIRECT TAXES (CONTINUED).
Personal-Property Tax.
Now assuming that a man produces his own income,
and reflecting that the business processes on which
stamp-taxes have been collected, are also generally pro-
ductive, there remains one objection common to all
the taxes but the inheritance-tax, that we have so far
considered: they are taxes on production, and there-
fore tend to obstruct it, and to restrict the community's
prosperity.
472. Personal- Yet instead of taxing production, to tax
property taxes. only property already accumulated would
discourage saving, but perhaps no more than the taxes
we have already considered, discourage producing; and
it would not be all the time bothering people while they
are trying to do their work, as do most of the taxes we
have so far considered. A direct tax on accumulated
property, then, would seem better than any tax that
we have discussed, and in some respects it is, but we
shall find some in which it certainly is not.
Then let us consider accumulated property under the
usual two divisions of personalty and realty.
472(a), uncertain Now not all taxes on personal property
of diffusion. are incapable of diffusion. Of course all
taxes tend to diffuse themselves and become indirect: any
man, whether a landlord, a money-lender, a manufacturer
or a mere exchanger, will naturally charge his taxes
to his customers if he can: so personal property per-
manently used in business (as well as that produced
573
574
Taxation*
[§ 472a
to be immediately exchanged, which we have already
considered) can often pass on its taxes to the consumer.
A man using machinery or keeping a livery stable,
for instance, can generally take the taxes on his plant
into account when he fixes his prices (464-464 b) . Com-
petition will not always prevent him charging in his
taxes. Some writers are very fond of reasoning that
it will, but it is hard to see why competition should pre-
vent his charging in his taxes, any more than his in-
surance or even his clerk-hire. So far, then, as the
man paying such taxes can be like the man paying
duties and excises — a sort of buffer to pass them on
easily through the community, it seems eminently prac-
ticable to tax personal property.
But there are grave questions of its ideal
}L2w«Urtt!° justice. It is very apt to make the same
property pay taxes twice. At first sight
it seems plain that if a man enjoys a fortune in such
personal property as stocks, bonds, promissory notes,
mortgages, etc., he ought to contribute just as much
to the government as a man with an equal fortune in
real estate. But th'e fact is that he would contribute
even if he were not directly taxed, and that if he is
directly taxed, he contributes, to some extent, a second
time, either for himself or somebody else: for stocks,
bonds and mortgages are only bits of paper showing that
a man has an interest in property that already pays taxes
wherever it may be located. The property of all cor-
porations, including, of course, their real estate, is
taxed. So far, however, as earning power or " good-
will" is represented in stocks and bonds (and that is
sometimes very far), it is apt to be taxed but once.
Corporations generally pay taxes before declaring
dividends, and therefore some states are wise and just
enough not to tax stocks; and there is a growing ten-
dency to abolish taxes on all the mere evidences of
indebtedness just alluded to.
Moreover, a man owning only personal property, is
apt to pay a real-estate tax anyhow : if he sleeps or eats
§ 47 2C] Inquisitorial Direct Taxes.
575
or does business under a roof, and pays for the right,
he really pays part of the taxes of the men who have
real estate. Unless the man who appears to pay the taxes
on any building, uses it entirely himself, or it stands
vacant, he does not (as we shall see later) really pay all
the taxes, any more than a man who first pays a duty
or an excise: the tax usually distributes itself, and is
really indirect. As a rule, tenants of buildings really
pay the taxes on them: so it is not true that unless
they own real estate or pay personal taxes, they pay
none at all. For this reason, among many others, the
argument that fairness requires taxing personal property,
does not amount to nearly so much as it seems.
There is still another very great danger of duplication.
Everybody knows where real estate is, and there it is
taxed. But there is an old principle that personal
property follows the owner, which breeds a tendency to
tax bonds, promissory notes and other evidences of
credit at the residence of the creditor. There is a con-
flicting principle, however, that they should be taxed
at the situation (technically the situs) of the property
on which they are based. This often leads to their
being taxed in both places. There is a case of a
Western lady in Massachusetts, cited by Wells, which
covers more than one point we have been going over.
She wanted to be in an educational town, and helped
its tax-roll by building a fine house. Her personal
property was held by a trustee in Indiana, and taxed
to him there. But it appears to have consisted largely
of bonds on property in another state, where it was
taxed again — that being the only place where it should
have been taxed at all. When she had got comfortably
settled in Massachusetts, she was requested to pay a
third time there — a tax on her income. She said:
"This will, if enforced, be a decree of my personal
banishment from the state as effectual as that which the
state formerly launched against Roger Williams and the
Quakers " (470 /, 470 o, 472 d).
M2(o. Effect on Suppose there are two townships side
prosperity. by gj^e, one of which taxes personal prop-
576
Taxation.
[§47**
erty, and the other does not. Other things even,
the effect, as between them, will be that, as personal
property — farm-tools, cattle, machinery, merchandise,
of course will prefer the township where they are
not taxed: one town will grow richer in personal prop-
erty, and the other grow poorer (470/, 470 o, 472 6).
That will benefit the richer town, as far as taxes are
concerned, even if personal property is not taxed,
because the employment of all this personal property
on the real estate, in developing farms, factories and
commerce, will be an influence to make the real estate
more valuable — will develop wealth that can pay more
taxes. Moreover, as the chances to develop this wealth
will attract more people from outside, their competition
for land will also raise its price. So, for twofold rea-
sons, the taxes can best be raised from the land, with-
out taxing and driving away the personal property
which has made the real estate valuable. The value
of real estate usually depends upon bringing and using
personal property upon or near it. That is true even
of a mine, especially under modern conditions. You can-
not work one without tools, and under modern condi-
tions you cannot often work profitably without very
good tools — chemical as well as mechanical: if you do,
your competitor, who works with them, will get out
more minerals for the same money, and undersell you.
But it may be asked : how can Wall Street property
be valuable on this principle: there is no farming or
mining or manufacturing and merchandising there?
There is certainly merchandising: for the railroads and
many mines and industrial establishments are sold,
partly or entirely, over and over again there, every
year; and if making a bankrupt affair into a paying
one (or sometimes, alas! a paying one into a bank-
rupt one) or making a big effective concern out of
several little ineffective ones — if making any of these
things, is manufacturing, there is certainly manufac-
turing done there. Take out of Wall Street the money,
shares and bonds, dealt in and reorganized there,
unless you brought in some other personal property to
§ 47 2 d\ Inquisitorial Direct Taxes.
577
take their place, the real estate would not be worth as
much as a poor farm of the same size, and could not
pay as much in taxes.
Mr. Ensley * summed up the bearing of these facts
on taxation by saying : 4 ' Never tax anything that would
be of value to your State, that could and would run
away, or that could and would come to you." In other
words, never tax any movable property.
472 (d). Personal As to t^ie practicability of collecting taxes
property hard to on personal property: except machinery,
find or appraise. merchanclise an^ farm products, most of
such property is very hard to find. Money and all sorts
of securities are seldom seen by anybody but the owner.
Taxes are not paid on any bonds to speak of; a
striking evidence is shown in the prices of bonds and
stocks. Stocks, as said before, are not always subject
to taxation, the taxes being paid by the companies
before dividends are declared, while bonds are subject
to a taxation which, if paid, would absorb from a third
to a half of the income they yield: yet while there is
a difference in the prices of stocks and bonds, there is
no such difference as there would have to be if the
taxes on bonds were actually paid. In other words:
people owning them, do not generally confess the fact
to the assessors.
Moreover, all these things are changing hands so
constantly that unless an impossible army of appraisers
attends to them all at the same instant, many of them
must be appraised at different times in different hands.
Even if public lists of personal property could be
had and kept, like those of real estate, the assessors
could appraise well, only stocks and bonds sold at the
exchanges, and the simplest sort of tools and produce,
like the farmer's. In regard to a great factory or a
great merchant's stock, or a rich man's furniture and
pictures, the assessor is no judge of values. He usually
tries to get at them by making the taxpayer give a
list of his property and its value. The effect of this
* " What Should be Taxed, and How it Should be Taxed."
S78
Taxation.
[§ 47* <*
method on both nonest men and rogues is almost as
bad a premium on lying as the income-tax: rogues —
and not very great rogues at that — evade it, and honest
men have to pay the rogues' share. Nay, as already
illustrated, in this regard, men honest in other regards
often play the part of the rogues.
Lying is far from the only way of avoiding taxation
of personal property. In the comparatively few cases
where cities still try to tax it, the rich city man makes
his "legal residence" at his country home, where taxes
are light, and even makes that country home in some
other state, if his actual state taxes personalty more
rigorously than some neighboring state. Corporations
do likewise (470 /).
If we were to cease the folly of trying
Vutiolhhaand directly to tax personal property, we
rtZw™ °f natu~ would not tnus throw all the direct taxes
upon real estate: there would still remain
the other direct inquisition-taxes, and the franchise-
taxes, not to speak of the indirect taxes — if we think
indirect taxes better than direct taxes on personal
property, incomes and inheritances; but that is very
doubtful. As to franchises, we will consider them
later.
The real-estate owners most given to considering
such subjects — the great financiers and real-estate
owners of the cities, almost all favor abolishing taxes
on personal property, and this in spite of such a step
tending to throw the burdens over upon real estate.
Their position is that not only is the personal tax a
bad tax, but that if the fifth (roughly speaking) of the
total taxation which is now collected from personal
property, were added to the four-fifths now collected
from real estate, they would not as a rule have to pay
any more than they pay now, but simply pay it all out
of one pocket instead of some out of the other. The
entire abolition of the personal tax is seriously proposed
not only by virtually the ablest business men, but also
by virtually all of the best writers and commissions.
§47*<l
Inquisitorial Direct Taxes.
579
Even the practice of most of the intelligent world
regarding personal taxes, has come to be such that they
are fast disappearing from intelligent communities.
They have been abandoned in Europe, except as in-
volved in income-taxes.
The census of 1900 gives the real property of the
United States at about thirty-nine billion, and the
personal at about twenty-six billion, the personal
being, then, two-fifths of the whole. Real estate
being so much more in evidence, this is undoubtedly
an underestimate of the personalty, and most of the
personalty is in the cities. Yet in New York, Cin-
cinnati and San Francisco, tho probably more per-
sonal property than real estate is owned in all of
them, but one-fifth of the state and local taxes is now
collected from personal property. In some cities less
than one-fiftieth is. In the most advanced places, no
effort whatever is made to make lists of personal prop-
erty, or to disprove any statement any taxpayer may
make regarding it.
The latest word on the subject is the report of the
New York Commission in January, 1907. It uses the
following language regarding the personal-property tax:
The personal-property tax is a farce. " It falls inequitably
upon the comparatively few who are caught. The burden it
imposes upon production is out of all proportion to the revenue
it produces. It is time the situation was faced squarely and
the tax in its present form abolished.
14 So far as the personal-property tax attempts to reach in-
tangible forms of wealth, its administration is so comical as
to have become a by- word. Such a method of collecting
revenue would be a serious menace to democratic institutions
•were it not so generally recognized as a howling farce.*1
The Commission states that the yield of the personal-
property tax in New York City is less than $3,000,000
out of $28,000,000, while nobody doubts that the per-
sonal property of the city exceeds in value the real
estate.*
* In Connecticut from 1855 to 1885, the personal property
listed for taxation fell from one-tenth of the taxable property of
S8o
Taxation.
[472 •
The attempt to tax personal property directly, sur-
vives most actively outside of the cities, and in states
that have few cities. And yet, the farmer serves his
own interest very poorly by resisting the removal of
the tax. He may or may not be more honest than the
city dweller, but his neighbors know his affairs better,
the state to one-thirtieth. In '89 a law was passed providing
that owners of securities who would register them should be
taxed but one-fifth of one per cent, instead of the two and a
half before levied. The first year brought out twenty-two
millions that had not appeared before.
In 1866 Cincinnati paid about equally on realty and per-
sonalty: in '92 realty paid three and a half times as much as
personalty.
In 1868 in Boston realty paid about half as much again as
personalty: in '90 it paid over three times as much. Of six
hundred million bonds of corporations outside the state known
to be held in Boston in the nineties, only forty-five million were
taxed, and nearly all of that belonged to estates of widows,
In Jersey City in '92, personalty paid one-thirteenth; in '70
Brooklyn reported over one-eleventh personalty; in '93 little
over one-thirtieth, and nearly two-thirds of that from corpora-
tions; in '93 but one and one-half per cent, was personalty.
In the states of New York, Wisconsin and Georgia, the
attempt to enforce the laws taxing personalty is gradually
being abandoned.
States with listing laws fare little if any better than states
without. In 187 1 California made very stringent laws taxing
personal property. Some of the effects were very funny.
According to the assessment reports, butter, wool and honey
were no longer produced in counties full of cows, sheep and
bees, nobody lent or borrowed any money, and in fact two-thirds
of that previously in the state disappeared. In five years
San Francisco paid on only one-third of the money and two-
thirds of the other personal property that she had paid on
before.
From 1885 to 1893, Ohio had a most stringent listing law, and
yet the county containing Cincinnati paid less than one per cent,
of its taxes on personalty. In 1892 the people had $190,000,000
in bank and listed but $38,000,000. The counties containing the
five chief cities had $128,000,000 in bank and returned less
than $7,000,000. while the rural counties where the clamor for
personal taxation is always loudest, had $70,000,000 in bank
and paid taxes on nearly half of it. This state of affairs led
to the appointment of a very able commission who reported
that "the tax upon personal property makes farmers pay from
§47**]
Inquisitorial Direct Taxes.
and a larger share of his personal property is in things
like crops, animals and farm machinery, which he can-
not conceal or successfully underestimate. It is there-
fore more difficult for him to evade the tax than for
his city neighbor to. In consequence statistics show
four to seven dollars where people in large cities fay one", and
they called the system "a school of perjury", aading: "It im-
poses unjust burdens . . . upon the farmer . . . all of whose
property is taxed because it is tangible; upon the man who is
scrupulously honest; and upon the guardian, executor and
trustee, whose accounts are matters of public record."
A tax commission of New Hampshire in 1876, after speaking
of the "corrupting and demoralizing influence" of attempting
to tax personal property, "frankly admit that they are unable
to frame any law to which a free people would submit, or should
be asked to submit, that will bring this class of property under
actual assessment more effectually than it now is".
An Illinois commission in 1886 asserted that the existing
system 4 ' is debauching to the conscience and subversive of the
public morals — a school for perjury, promoted by law".
A Connecticut commission in 1887 reported that "the results
of an investigation of nearly three years into the workings of
our tax system have brought us to the conclusion that all
items of intangible property ought to be struck out of the list.
As the law stands it may be a burden upon the conscience of
many, but it is a burden on the property of the few, not because
there are few who ought to pay, but because there are few
who can be made to pay".
A West Virginia commission in 1884 asserted that "the pay-
ment of the tax on personalty" (in the state) "is almost as vol-
untary, and is considered pretty much in the same light as dona-
tions to the neighboring church or a Sunday-school".
In Massachusetts the most intelligent officials admit that
their system is a comparative failure.
Wells (from whom the foregoing is condensed) calls the sys-
tem one "which powerfully contributes to arrest and hinder
natural development, to corrupt society, and is without a
parallel in any country claiming to be civilized ". And he says
elsewhere : ' ' There is not a single economist or financier of note
. . . who upholds the system. '
Seligman says : " In recent years in both England and France
the necessity of raising increased revenue has drawn especial
attention to the subject of local taxation; but in neither of
these two countries has any prominent writer or speaker advo-
cated the direct taxation of personal property, or even alluded
to the subject except to scout the very idea of such a proposi-
tion."
Taxation.
[§ 472/
472 (fh Showing that in the states where the farmers have
of statistic*. kept up active attempts to tax personal
property, they generally pay most of the personal-
property taxes themselves, while city people avoid them.
If the farmers did not pay personal taxes, they would
have to pay more on their farms, it is true, but not
as much more as they now pay in personal taxes:
because the present city personal-property tax, which
the farms would then help to pay, is relatively much
smaller than the rural personal-property tax, which
city real estate would then help to pay.
The objections to the personal-property tax are not
yet understood throughout the country generally: If
they were, the tax would be abolished. In many
places people are still working away at all sorts of
hopeless devices to get personal taxes fairly and fully
paid. The favorite remedy for the difficulties of the
tax, proposed by those who favor it, is one worthy of
the other features of the tax — "pub-
tp afoonah,hl' licity " — the pet remedy for malfeasance in
/MUsVend.^ a °ffice- This is an acknowledgment that
the tax does its best to make scoundrels.
This publicity is sought by putting lists of personal
assessments in the newspapers. But that is the same
sort of invasion of privacy that is one of the reasons
against the income-tax. And it has no effect: there
are too many respectable delinquents (470c): but peo-
ple who advocate foolish things, always have to carry
them out by foolish methods.
472(h). "Homo- As scorning foul blows, even against
geneity" fallacy. fou\ things, we may as well note here a
fallacy regarding these inquisition-taxes which has been
urged against them by high authority, and we may as
well guard against weakening our case by its use. It
has been urged, especially against the personal-property
tax and the income-tax, that neither can be fairly laid,
because personal property or income is not " homo-
geneous* ' — a jaw-breaking way of saying that the
things which make up either, are not all produced in
§472 *]
Inquisitorial Direct Taxes.
583
the same way — are not of the same kind, and conse-
quently cannot fairly be taxed in the same way (470^).
As an illustration: personal property may be, for in-
stance, machinery, which constantly deteriorates, or
interest-bearing securities which, despite occasional
fluctuations, tend on the whole to advance: because
as the rate of interest has been gradually decreasing,
securities yielding a given rate have gradually become
worth more. Income, too, may proceed from either of
these sources — one much more reliable than the other,
or from personal effort, which, it is contended, ought
not to be taxed at all, as interest or dividends ought.
The fallacy is in restricting the objection, to taxes on
such things: it holds against even the land-tax itself.
Land is as various as almost anything else — it is used
for a million purposes, and for none at all; it deterio-
rates— the best tobacco lands of Cuba are exhausted,
and there is no known way of restoring their peculiar
virtues; it appreciates — in many a place where, fifty
years ago, it could not be given away, it is now worth
millions an acre. No class of subjects for taxation can
be homogeneous. Taxation has to be done "by and
large" — it is one of the cases where "The law cannot
take note of trifles" .
472 d). Effect on Tho the world (at least the thinking
corvorationa. part Qf it) admits that the taxation of
individual personalty is a failure and a wrong, yet
when the property belongs to a corporation, many think
that it can be taxed wisely. Perhaps it can be more
wisely than the personal property of individuals can,
altho corporations can hide their personal property,
and lie about it, as easily as individuals can. But as
corporations are under direct government control,
appraisers can examine their books and get a knowledge
of their affairs more readily than they can those of private
parties: so their property can be taxed more exactly.
But that it a poor reason for doing it — for putting
them at a disadvantage as compared with individuals.
It only affects their personal property anyhow: for
S»4
Taxation.
[§ 472 i
their real estate cannot be taxed more readily than
anybody's else. So their case is simply 'one more
illustration of the injustice always springing from
taxing personal property.
472 i}u coast of Much of the clamor for taxing corporations
pnjudic*. comes from the less intelligent employees
of corporations — of railroads and the like, who have
had strikes and similar troubles with the corporations,
and so comprehend all corporations in an unreasoning
hate. This rage for taxing corporations has done much
harm — it has obstructed many an important enter-
prise, and it has even led the poor in some states to
tax their own little savings in the savings-banks, because,
forsooth, savings-banks are "corporations".
Yet there is a sound basis for the demand
tngjiLcM8*^S to tax corporations, so far as the demand
wlrponMonV discriminates between corporations con-
trolling public franchises, and those engaged
in ordinary business. But of course there is no more
reason for heavily taxing an ordinary business conducted
by a few men incorporated, than if the same men were
partners. It is true that they do get some special privi-
leges from the state (140-1406) and impose some little
special labors upon it; but these are generally paid for
by special fees, and should hardly be included among
objects of taxation. But as to the franchises of
corporations, we have already seen good reason for tax-
ing them, altho they do falsely seem at first sight to be
personal property, as their value is represented in bonds
and stocks; moreover, as these bonds and stocks are
constantly sold in public, their value is easy to get at.
But getting at the real value of franchises is not as
simple as it appears : doctors disagree a good deal about
it, tho it can undoubtedly be done. As there is a grow-
ing tendency to grant franchises only on condition that
they can be bought back by the government at a valu-
ation, importance is to be attached to an ingenious
scheme for getting at their value and at the same time
ensuring their proper taxation, which has been pro-
posed by Mayor Cutler of Rochester. It is that the
§ 472*]
Inquisitorial Direct Taxes.
price to be paid, in case the community buys them
back, shall be the sum on which they are paying taxes.
A franchise is not really personal property, even to
the extent that we saw (140 c) stocks and bonds are:
it is always in some way or other inseparable from the
land. We will farther consider franchises then, in con-
nection with the land, in the next chapter.
CHAPTER XLI.
OBVIOUS DIRECT TAXES.
I. The Realty-Taxes in General.
We seem now to have considered, and found ill
suited for the purpose, every important object of taxa-
tion except the most obvious of all — the one object
that cannot be hidden or carried out of jurisdiction, or
successfully lied about. It is Real Estate.
473. Objections to Yet there are merits of some of the other
Realty-taxes. taxes which a tax on realty must lack.
Real estate is more apt to lie unproductive than most
other kinds of property. And moreover, a tax on it
cannot have the ease of the indirect taxes, or, perhaps,
stimulate saving quite as they and the other taxes on
consumption do.
473(a). mtr Among primitive peoples, the realty did
history. not pay any tax, at least directly as a tax:
in fact, hardly anything like a tax had been evolved —
or for that matter, anything, like what we now know as
government. But in the tribal stage, there are generally
contributions of produce from real estate, for the sup-
port of the chief; tho as everything is supposed to be
his, such contributions are more like rent than taxes.
In the communal stage, too, a share of produce has gen-
erally been collected for government, but as the land
belongs to the community, this contribution, too, is
rather by way of rent than tax. In the feudal stage,
the sovereign still owned the land: so anything that
was said on account of it, was strictly rent, tho he
586
§ 473 c] Obvious Direct Taxes.
587
devoted some of the proceeds to his wars, and perhaps
to the few other matters of public interest then existing.
After the nobles began to get the fee of the land, of
course what the owner in fee simple (88) paid the
government, he paid as taxes. Among our English
ancestors, the first germ of a fee simple, was the first
germ of a tax in the modern sense — when Henry II.
accepted scutage in lieu of military service (56 a). On
the other hand, in France, under the old regime, up to
the Revolution, the nobles owned most of the land,
but paid no taxes.
The actual taxation of land, then, as distinct from
rent to the sovereign, certainly appears to be a com-
paratively modern institution. That would appear
473 (bi incidental to indicate that the tax on land is more
tohighciuMzation. civiHzed than earlier taxes, or than even
the ingenious indirect taxes — especially so far as the in-
direct taxes were started in various countries by the
representatives of the people, to get a tax that the nobles
would have to pay. This must have been very often
because the nobles had all the power and all the land,
and would not let taxes be laid against the land. The
land-tax must to that extent be a later evolution, and
really one of the marks of liberty and progress.
473 (oh Question Now let us see if that idea is supported
of diffusion. DV other facts. We have already said
that direct taxes tend to diffuse themselves and become
indirect. Of course they are least apt to diffuse them-
selves on the things where it is the hardest for the
first payer to pass them on to somebody else ; or where
there is least temptation to do so. And the least
temptation to try to pass them on, is of course with
things whose range of prices is so great that the cus-
tomer can readily avoid the tax by putting up with
cheaper things. Now the one absolutely essential thing
that varies most in price is land: some of it is worth
nothing at all ; some of it sells for hundreds of dollars
a square foot.
Then if a new tax is put on land which is farmed,
588
Taxation.
K 473 d
473 (d). Vi*w8 of the old economists — Adam Smith, Ricardo,
economic. john Stuart Mill and others, said that the
man occupying it would naturally seek some land cheaper
by at least the amount of the tax — he might even go to
land worth substantially nothing. But the new econo-
mists say that a man naturally stays at home — that
473 (9). fact competition between pieces of land is not
nraua theory. perfectly fluid, but on the contrary is
subject to a good deal of the friction we have spoken of
before (464) ; that often a man would be apt to be pre-
vented from going to a piece cheaper (by the amount
of the tax) than the one he occupies, because of the
expense of moving, or by already having buildings and
other things to suit him, or by habit, the attraction of
old associations, and a thousand other possible considera-
tions. The idea that a man will always move where he
can save money by it, presupposes, as all merely economic
laws do, that the competition between the two matters
in question is purely one of price. But that is not gen-
erally the case. Other considerations always come in
and make more or less friction in the working of any
economic law, just as they do in any physical law, — so
much friction, in fact, and so many forces not counted
upon, that sometimes the law does not work in its
expected direction at all — or that the result may even
be counter to the direction of the disturbing force under
consideration, instead of the expected direction.
A striking recent illustration of how these two
opposing tendencies laid our leading authorities by the
ears is that Professor Seligman, intent on the tendency
to free competition, says substantially, with the old
economists : of course the tenant moves unless the land-
lord pays the tax: so the tax is not distributed, and any
opinion that it is, is "so very superficial as scarcely to
deserve a refutation". Mr. Wells, on the contrary, in-
tent upon the friction that prevents free competition,
says that the tenant will pay the tax for the sake of
staying, and that in fact the consumer will generally pay
the tax for what he wants. So Professor Seligman's
expression made the disciples of Mr. Wells feel sad.
§ 473 g] Obvious Direct Taxes. 5S9
If a tyro might venture an opinion where doctors
disagree, both are right and both are wrong, as usual in
such disagreements. As a matter of fact, sometimes
real estate rents only for the current interest on its
selling price (or less), and some rents for that interest
and taxes. There is such an immense variety of land,
with such an immense variety of improvements, that
it is very hard to tell what it will rent for. As a mat-
ter of fact, if a man hires a room in a hotel, he need
not necessarily pay his share of the landlord's taxes:
the landlord may make profit enough on other items
to pay the taxes himself. It wilf depend upon what
competition he has to stand, and can stand.
Nor would it necessarily be easy for a manufacturer,
for instance, staying in his old place, after a new tax
is levied, to charge the tax to his customers. Some of
473 (fh effect* on his competitors would be apt to move to
producer: save the amount of the tax, and so be able
to keep their prices down; and this would force those
not moving to keep their prices down — in other words :
to pay the tax themselves, and not try to shift it on
to their customers. The manufacturers with profitable
monopolies, or those able enough to produce low and
make large profits, would simply have their profits
diminished, but would be able to stand it. Those,
whether they moved or not, not able enough to make
profits in excess of the tax, would be driven out of
business.
That would diminish the supply of goods, and so of
course raise prices to restore the equilibrium of de-
mand and supply (148 d, 148 e). This advance in price
would of course save some producers who otherwise
would be forced out of business, and would help pay
the tax for all producers; and as the advanced price
comes out of the community, that portion of the tax
would be distributed after all.
473 (gh stimulate People might work a little harder, or
production. invention and business faculty bestir them-
selves a little more, to create new productions and
cheapen old ones, so as to pay the tax. Such results,
S9o
Taxation. # [§ 473 g
especially in the way of labor-saving inventions, have
sometimes followed new taxes. So far, then, as the
public bestirred themselves to pay the increased prices
for the productions from the taxed realty, the tax
would be shifted; and the tenant, too, could deny him-
self and improve his methods for the sake of paying
some of the tax. What was not paid by these means,
the landlord would have to pay.
We will take it as proved, then, that in the general
run of cases, tho a realty-tax cannot be entirely dis-
tributed, it must be to some extent. But before we
pass on, let us summarize by what agencies: by the
friction of moving, which will obstruct the producers
saving the tax by getting cheaper quarters, and so
lead them to charge it to their customers as far as
they can; by the restriction of product (and conse-
quent raising of prices) which will arise from the tax
driving out of business men not able enough to save
the tax by cheap production; and by stimulating the
efforts and ingenuity of all concerned, consumers as
well as producers, to increase their ability in order to
meet the tax.
Now can realty evade its taxes, or, whether shifted
or not, has somebody got to pay them? Real es-
tate is, of all things, the most certain to pay its
473(h). Sure to taxes. It cannot, like most personal prop-
bepaid. erty, be hidden when the assessor comes
around; nor, if the owner does not pay, can realty,
like most personal property, be sent out of reach of
the collector who will want to sell it and collect the tax.
ma), and easy As to the assessor's ability to value the
to aaaesa, two kinds of property justly : many kinds
of personal property are of extremely uncertain value,
which cannot be determined even by the owner
himself. On the other hand, realty is known and
observed by the whole community, and a list of it is
easily and usually kept open to everybody's criticism.
In New York City, the lists are now printed, and ob-
tainable by anybody: so, other things even, the valua-
§ 474] ». Obvious Direct Taxes.
tion put on a piece of real estate cannot often be very
far from what people in general would consider fair.
Even political pulls, which often wipe out a man's
personal tax, cannot so readily affect his realty-tax.
473 (j). and cheap- The realty-tax is much the cheapest
est to collect. Q{ au taxes to collect. A large part of
the expense of collecting other taxes, is in paying
men to find the things taxed, and to decide what they
are worth.
473 (k) ah owners ^ *s wor^n while to reflect that if the
must always pay realty-tax could entirely distribute itself,
part of it, real-estate owners could not even then
make other people pay it all. If each owner of
realty could charge all its taxes to his tenants or
customers, he would himself have to pay the charges
of other real-estate owners in everything he bought,
except his sea-food; and even in that, he would have
to pay his share of the taxes on his fishmonger's shop.
473 a), summary To sum UP the comparison of a realty-
J or and against tax with the other taxes we have been
thereal-estatetax. OTnsidering: ft does not involve double
taxation, as do taxes on stocks, bonds, mortgages and
other obligations; it does not tempt to concealment
or evasion, as do duties, excises, income-tax, inherit-
ance-tax and personal-property tax — all the vampire
and inquisition taxes; it does not put the principal
burden on the poor, as do the vampire-taxes, or put
it on the honest, as do the inquisition-taxes; the
property to be taxed can be more fairly valued than
most other kinds, and cannot be hidden or wasted
like most other kinds; the tax is sure to be collected,
despite any amount of bankruptcy and dishonesty ; the
tax does not, like duties, excises and income-tax, dis-
courage production; but it does discourage saving, at
474 Real estate ^east m Da(Uy-governed countries where
under poor gov- the taxation is ruthlessly oppressive,
ernment. There, a man would at least put his sav-
ings into property that he could hide from the tax-
gatherer, rather than in the kind of property that is
hardest to hide. Even if that did not discourage saving
592
Taxation.
[§ 474
in such countries: as the savings are not put in real
estate, the demand for real estate is so small that its
value is low, and taxation is less fruitful in consequence.
The government of many American cities — notoriously
New York — has at times been so bad that many wise
men hesitated to buy real estate there.
Even the real-estate tax, then, has not the merits
of the indirect taxes. But indirect taxes have not the
merits of the real-estate tax. The merits of the indirect
taxes are only the merits of being adapted to very short-
sighted people, tho perhaps most people are short-
sighted. A way to combine at least some of the ease
of payment of indirect taxes, with the certainty and
reasonableness of real-estate taxes, is to make the
latter group payable if the payer prefers, in small in-
stalments. Something in that direction is done in some
places already.
Our history contains a striking testimonial to the
certainty and fairness of taking realty as the basis
of taxation. In the original Articles of Confederation of
475. Opinion of tne States, it was provided (and to return
the Fathers. to the provision would probably be the
greatest improvement that could be made in our policy
to-day) that each state should contribute to the National
treasury in proportion to the value of the land " granted
to or surveyed for any person . . . and the buildings and
improvements thereon". Whether the tax was to be
actually raised from the land, was left to each state to
determine: the Articles of Confederation only ordered
it apportioned among the states according to the land
and improvements. And that is what taxing real
estate would substantially amount to at almost any
time and place : the amount of realty a man might own
would simply be an index to what taxes he should pay —
an index of his ability to pay taxes, which modern writers
all say should be the basis of taxation. But this
index would of course not be perfect, neither is any
other that assessors can get at: what they fondly assume
to be his income, probably least of all. With realty as
§476]
Obvious Direct Taxes.
593
an index, the owner would not necessarily pay from
the income of realty, but from whatever income he
might have. He might be occupying the realty himself,
or it might be lying idle. Altho the provision for
apportionment according to land values was not re-
enacted in the Constitution, that fact does not necessarily
show that the constitution -framers differed from their
predecessors: for during the Revolutionary War, taxes
were gathered largely from duties and excises: there-
fore, in the Constitution, such taxes seem to have been
taken for granted as a matter of habit.
476 E uaiization *^ne ^^cu^y already experienced in
qua za on. jeVyjng a state tax on the realty of the
counties separately, would have to be overcome in
levying a United States tax on the realty of the several
states — the very troublesome difficulty of * 4 equaliza-
tion' ' — that is: making each locality bear its just pro-
portion of the general burden of the state. No such
difficulty arises regarding local burdens : for the money
is spent where it is raised. But when a whole state
is taxed to pay for a state-house at the capital, state
prison, asylums, legislature, executive, judiciary, etc.,
if one locality pays, say, one per cent, of its property,
it is not fair that another locality should pay two
per cent. This difficulty arises because the appraisers
are nearly everywhere local officers, and those of each
locality try to appraise low, so that their locality will
be sure not to pay more than its share of state and
county burdens. This is generally the reason why
real estate is appraised at but a third or a half of its
market value ; perhaps too, it explains much indifference
in " getting at" personal estate. Till lately, the chief
remedy in use was to have for each county a "board
of equalization", made up of officers from various
sections; but this is cumbrous and not very effective.
There are quite generally laws that everything shall be
appraised at its full value, but they are not usually
effective either. And to have state assessors for
state purposes, county assessors for county purposes,
594
Taxation.
[§476
and local assessors for local purposes — to do the work
three times, would be very cumbrous and expensive.
476 (a). Remedies Other remedies proposed are to have
proposed. different objects taxed by the different
governments. In New York there is quite a general
sentiment for reserving the general property-tax (mean-
ing real estate and personal property) especially for
local use ; franchises, depending on their nature, for both
local and state ; the inquisitorial taxes (except that on
personal property) — income, succession, etc., for the
state, and it has lately been decreed in some places, to
reserve taxation on mortgages for the state. Excise
and duties are already virtually for the nation. At pres-
ent, the thing tends to work itself out as indicated, but
making the personal-property tax local, and reserving
the other bad taxes for the state and nation, does not
make any of them good taxes, or promote broad
patriotism.
I said "at present" because many people think there
is a growing tendency in people's minds, as there cer-
tainly is in natural law, for all inquisition and vam-
pire taxes to disappear (468 e). But if they ever do,
it will be a long time hence, and would involve amend-
ments to the constitutions of most of the states, and
(for national taxes) of the United States (466 o) : those
constitutions require taxation of all " property". But
if the bad taxes disappear, the equalization difficulty
would settle itself: assessment for all the governments
could be done by the national officials, who could be
appointed by the central authority, instead of depend-
ing on votes, and so being subject to local bias.
A simpler way of equalization, and a very promising
one, was lately enacted in Connecticut. It makes each
locality responsible for state taxes in proportion to the
amount raised for local taxes. This not only removes
the temptations to wrong assessments, but also pro-
motes local economy. *
One consequence of assessors not wanting to alienate
the voters, is that they generally assess the property
of non-residents too high. This is guarded against in
§478 <*]
Obvious Direct Taxes.
595
England by permitting a man to vote in all places where
he owns property. There are many other reasons for
this — more, apparently, than against it.
II. Varieties of Realty-Taxes.
So far, we have discussed merely the general topic
of taxing real estate. But there are several ways of
doing it. The principal ones that our people now
have under consideration, we may say amount to four.
First is the general present method of
|ingieRfaxlv tax' taxing all the realty — land and improve-
Xpproprfatlorf-tix. ments» without regard to whether other
things are taxed or not. This we can
properly call realty-tax. Then there is a second propo-
sition, supplementary to the first, that there shall be
only one single tax levied, and that that shall be on
realty (including, if we please, the land devoted to the
operation of franchises). This is the proper "single
tax", and we would better reserve the name for it.
Then, third, is the proposition that the land shall be
taxed separately from the improvements; this and
each of several others have been called single tax: so
to distinguish, perhaps we would better call this the
separated tax. Then the fourth proposition, which
may be applied to any one of the preceding three, is
to tax all the value of the realty away — virtually to
appropriate all the land for public use. This also has
been called single tax, but as that term has lost mean-
ing by being applied to so many things, we may as
well call this one appropriation-tax.
As we have considered the first — the realty-tax in
general, let us go on to consider the three proposed
modifications of it.
Henry George was by no means the first to advocate
that it should be a single tax. As early as the close
of the seventeenth century, John Locke
m'^^o^ taught that all taxes ultimately were dis-
tributed, and gravitated to the land, and
59<S
Taxation.
[§ 478 <*
might as well be put there in one single tax, as by a
troublesome and expensive indirection. Nearly a hun-
dred years later, his ideas were taken up by the physio-
crats, and they have had many advocates since.
Of any attempted tax on commodities, Locke said:
"The merchant will not bear it, the laborer cannot,
and therefore the landlord must." The fallacies in
this reasoning, as regards the merchant, are that the
merchant often will bear it, at least in part, as a matter
of competition, and also when an even price is usual
and important, and when the tax is too small to justify
going to a higher price (464). As regards the laborer:
by the laborer, Locke apparently meant the producer,
as distinct from the exchanger (whom he called the
merchant). Now the producer includes not only the
laborer, but the enterpriser and the capitalist: these
later people certainly can bear the tax; and even the
laborer (at least in our day, if not in Locke's) certainly
can bear some of it, and does in excises, tariffs, and rent.
Locke's opinion remained undisputed,
478 m waipoita. however> until Sir Robert Walpole, about
1733, wanted to increase customs duties. Then he took
ground just the opposite of Locke's: among his argu-
ments was that the duties were no harder on people
in general than a land-tax, because consumers of all
commodities have to pay the land-taxes. The reason-
ing was that, as everything people want comes from
the ground, the landlord can make all who use anything
pay his taxes.
This reasoning was full of fallacies. In the first place,
it is no more the entire truth that everything that
people want comes from the ground, than it is that
everything is made by Labor with a big L. Either
statement ignores what value is added to raw material
or to big-L-Labor by the labor (with a small 1) of a
Vanderbilt, or an Edison, or a Michelangelo.
But after we recognize the enormous increases of value
effected by Ability (or labor with a small 1, if you
prefer), Walpole is not right, even then: people can
decline to use some of the things at the enhanced price
§ 478*]
Obvious Direct Taxes.
597
that the landowner's taxes would impose: so he will
have to pay at least that portion himself until, and
unless, it finds its way to other things.
478M. Diffusion On this principle if a man is rich and
on different grades wants to live on Fifth Avenue, and is ready
of property, tQ £Qr jt> he is no^ apt to gQ anywhere
else to save taxes. On the other hand> if a man is
poor and wants a farm, he may be forced to go down
a grade for the sake of saving taxes.
The rule in regard to the distribution of real-estate
taxes, seems, then, to be that fancy property, for which
people are ready to pay fancy prices, probably can
shift its taxes much more readily among such people,
than can other property among people who seek it
largely with an eye to economy — except of course such
people as have already touched bottom — and cannot
find any property poorer than they have.
We saw something like this before (464) — that a tax
can be shifted most readily upon those who will have,
and those who must have. So the realty-tax, while
desirable on the whole, is probably harder on average
property, than on the best and the worst. And there
is no doubt that under the single tax, agricultural land
would, on the whole, be at a disadvantage as compared
with city land: for city land has the monopoly value
of a spot favored by situation and connections, while
agricultural land, except for the local truck-garden,
poultry and dairy business, is more nearly in competition
with all the land in the world.
It is important to note, however, that the worst
property in cities is not generally owned by the poor.
The rich generally own large quantities of it, and rent it
to the poor at higher rates, in proportion to its value,
than they can get for better property: that fact of course
adds force to the theory that its taxes are shifted. On
the other hand, in a country township, probably the
taxes on the farms and ordinary houses could not
distribute themselves, while if it happened to be a
favorable region for hotels and summer- villas, probably
the taxes on them could distribute themselves, at least
598
Taxation.
[§ 473'
so far as to the tenants. Nevertheless in such a neigh-
borhood, the majority of voters would probably be
short-sighted enough to oppose the single tax on real
estate, and try to tax also the stocks, bonds and mort-
gages held by such of the villa residents as voted there.
In short, the position would be just the reverse of the
city. The single tax would not be so desirable on the
whole, and yet its absence would be harder on the
holders of the superior property — even tho that is the
very property that would have most of the tax to pay,
if it were enacted.
478 (d). Loeai op- Because of these differences and para-
tion in taxation, doxes, it has been wisely proposed to let
each local government — village, township or city, settle
its own method of taxation — to have " local option" in
taxation.
> This certainly would be wiser than having each
legislature pass uniform laws for the entire state, even
if they would do so in accord with the ideas of the most
intelligent people. But at best, taking the "ideas of
the most intelligent people" is something that legisla-
tures are nearly certain not to do ; and the question is
too new for the most intelligent people to be sure that
any one scheme would work well in all places. Some
great cities, and perhaps some great states, have, it
is true, virtually been brought under the single tax by
the pure operation of natural laws (472*?, 472/), but
it is too early, without farther experiment, to say
what is best at this stage of evolution, for the rural
regions generally.
The fact is that Nature and human nature determine
a great many questions before legislatures get their
eyes open to them, and often contrary to what legis-
latures are able to see. Local option in taxation, for
instance, is already in quite frequent operation, while
very few people realize that it is, and while the letter
of the law is against it. Despite the laws taxing per-
sonal property, in practice New York City exempts at
leact four fifths of its personal property. And in cities
§ 478^]
Obvious Direct Taxes.
599
generally, a much smaller proportion of personal prop-
erty is taxed than in the country — sometimes less than
two per cent. In the township of Fulton lately, two asses-
sors levied outside of the village, and one in the village.
Those outside listed all the pianos, guns and even fish-
poles; while the one in the village did not (officially)
find a gun or a piano there. When it comes, as it cer-
tainly will, to legalizing such local option, the best
opinion is not in favor of permitting localities directly
to create their own systems of taxation: for generally
they would do it worse than even the legislatures. But
it seems wise to enable them to give the sanction of
law, with its regularity and consistency, to the exemp-
tions which they already know all about, and practice
with unjust irregularity.
478 (e) Effect of ^ *s important to try to determine what
aingie tax suddenly would be the effect on landowners of sud-
impoaed, denly stopping all other taxes, and coming
to a single tax on real estate. As a realty -tax can only
partially distribute itself, at first sight it seems as if all
landlords would at once be made poorer by the undis-
tributed portion of the tax. At second sight, so far as
stocks represent shares in landed property, that sort of
personal property would have to pay in either case : be-
cause the profits from which the dividends are paid,
would be lessened by the amount of the tax. But
other forms of personal property would not have to
pay: so realty-owners might not have to pay materially
more than they now pay (472 c). But to take a third
sight, the realty-owners really pay pretty nearly all
now. As a rule (tho there are many exceptions), people
who own the realty, own pretty much everything else.
As nearly as we can tell, nine tenths of the personal
property taxed, is owned by those who own the land:
so the change would mainly be paying to Peter what is
now paid to Paul, less the expense of employing Paul
to collect it. And Paul costs an enormous deal that
would then be saved — not only the whole custom-house
system, and most of the tax-machinery — national, state
6oo
Taxation.
[§ 47* •
and local, but also whatever the middleman's profits
may be (464), and the waste there certainly is, on all
the indirect taxes.
Taxation, as we have seen, is really already restricted
to real estate, to a degree that very few people begin
to dream. Yet some people reason that if it were sud-
denly nominally restricted to real estate, there would
be a great rush to sell real estate, and prices would have
to fall fearfully to restore the equation of supply and
demand (148 d). It certainly has not worked that way
where real estate has been gradually becoming the prin-
cipal object of taxation, as it has in nearly all advanced
communities. But if the shifting of taxes to real estate
were hastened by a sudden enactment, there, might be
a panic, tho as real-estate owners are of the most intelli-
gent and instructed classes, they probably would realize
all we have been considering, and, if some forced sales,
others would be glad to pick up the bargains and sustain
the market.
To propose the single tax, then, is not to propose a
revolution, but merely to recognize and promote an
evolution that in the most advanced communities is
already nearly accomplished, and can be fully accom-
plished without any serious disturbance.
478 (f). Expert- The single tax has been tried in Austral-
ence- asia, and they have even gone as far as the
separated tax: and, as already said (472 e), the single
tax has been tried approximately in New York and
many other places. As already intimated, the people,
in many of our cities at least, like it as far as they
have approximated to it, and the Australasians find it
very satisfactory. Yet the fact that it seems to be
liked so far as tried, does not necessarily prove that
it would be liked everywhere: it may prove only that
it has been tried where conditions are favorable to it,
and that where it has not been tried, conditions are
not favorable. In spite of its being popular in the
cities, our people away from the cities do not even
comprehend it. The farmer thinks first of his land,
§479]
Obvious Direct Taxes.
60 1
and not of his cattle, crops, machinery, and tools; and
he thinks, often wrongly, that if all taxes were col-
lected from the land, his share would be increased.
The way of reconciling these different opinions is by
local option.
It is not universally proposed in our day by the advo-
cates of the single tax, that the tax should cover all
the real estate. Some favor what we have agreed to
479. Separated tax ca^ ^e "separated" tax, on the land
on land exclusive alone, and not on improvements, because
of Improvements, taxing improvements discourages people
from making them — from building, draining, etc. It is
for the interest of the whole community that all rea-
sonable improvements should be made, and yet a man
must risk getting from a quarter to a third more
gross income out of a building, if it is taxed, than if
it is not.
New York City has taken the first step toward the
separated tax by appraising (tho not yet taxing) land
and improvements separately.
Under a system drawing all the taxes from the land,
in many cases the separated tax would be more than a
mere suggestive stimulus to improvement: for in some
cases it would almost force people to put up more build-
ings, so as to get revenue from the buildings.to pay the in-
creased taxes on the land. But sometime back (470 a)
it was said that that was a stupid scheme, because the
money would have to come from other investments
proved better by the fact of the money being in them.
This fact prevents unimproved real estate being the
best possible object of taxation : for it could not always
find capital for improvements. In other words, some
unimproved real estate is useless, and should not be
taxed. It is one thing to encourage possible improve-
ment, but another to demand more improvement than
could pay, and punisji the landlord for not making it.
Unimproved land, even when worth improving, is not as
apt to rent for interest and taxes, as improved land,
because taxes on buildings are more apt than those on
602
Taxation.
[§ 479 <*
A7o/„i Runn^nm tne land, to diffuse themselves: a tenant
479 W. Buildings M : - , , ,
diffuse taxes mors can easily find cheaper land, but cannot
r«a<///0 tAoii /an</. nearjy as easiiy fin(i a cheaper or more
suitable building: buildings for a given purpose do not
vary in price nearly as much as land, and the build-
ing generally costs much more than the land, tho not
always in big cities or on favorable corners.
Roughly speaking, the taxes on buildings used in
production, are paid by the consumer of the goods
produced, because manufacturers cannot compete with
each other very much in expense of buildings, and
therefore (roughly speaking always) must charge new
building taxes to their customers, or get along with
less profit, or (if they cannot do that) relinquish business.
Now it certainly does look as if a large portion of
real-estate taxes must be diffused to tenants and their
customers. But suppose the buildings were for the own-
er's occupancy only, relieving them from taxation would
479 (b). Neuerthe- give still more encouragement to build
snLlr^lTfm-ax (or, rather, less discouragement) than now.
prooement. Personal occupancy under the separated
tax, is, in fact, the strongest case in favor of building:
because if the building were taxed and used unproduc-
tively — as a home, for instance, by the owner — he could
not distribute the tax: therefore relieving him of the
tax would be a special encouragement to build a home —
a very desirable thing for hosts of reasons. The capital
for increased house-building could well be diverted from
less desirable investments; and so far as it might be
borrowed, there is nothing that encourages saving among
people in general, like the desire to pay such a debt,
and own one's home free from it.
Another argument for the separated tax is that,
as the land is made already, the separated tax can-
not discourage making it; but improvements in a
sense really do make it — that is, they add to the value
of the land itself as distinct from the improvements —
sometimes almost create the value. So to exempt the
improvements from taxation would help to add value to
the land.
§48o]
Obvious Direct Taxes.
603
But it is a question, already touched on, whether,
if the tax were taken off from buildings, those who
own land alone without improvements, could stand
adding the tax to the land. This is a different ques-
tion from that of taking all taxes off personalty and
putting them on realty. In communities where land
can be had for the asking, taxes taken off buildings and
distributed over all the land wTould have to be paid dis-
proportionately by the poor: for in such communities,
much of the wealth is in buildings, and to exempt them
would increase the taxes on unused land. On the other
hand, if, instead of taking off taxes from buildings and
improvements, they were taken off personalty, the
owners of unused land could devote the saving to its
taxes or improvement.
480. Approprla- Now we come to the appropriation-tax.
tion-tax. as to its morality : so far as the tax can-
not be diffused, it must rob all present holders of their
land. That was considered when we discussed property
rights (66-7S).
Considering that question settled, then, if such a tax
produced more money than government needed, it
would be regrettable, as it would encourage wasteful
legislation. That could not be cured by lowering the
rate, without the tax ceasing to be an appropriation-tax.
But if tax of the entire rental value does produce an
excess, it is proposed by the advocates of the tax to
devote the surplus to public works, and give it to the
poor. When we discussed government's promotion
of convenience, we seemed to see good reason to believe
that if superfluous money were devoted to public works,
it would be mainly wasted; and to give it to the poor,
would, as history proves, simply increase the number
of the poor (47): receiving money that is not earned,
makes people slow to earn any. The state takes care
of the incapable already. To take care of the ca-
pable would tend to make them incapable. But aside
from all this, while the state has a right to take money
for its general purposes — which benefit those from
604
Taxation.
[§480
whom it takes the money, as well as the rest of the
community — to take money from one man to give it
to another who can support himself if he must, is robbery.
As to taxing what is called the unearned increment
of land, we considered that too when we were discussing
the general question of rights of private property in *
land (74, 74 <*).
The appropriation-tax, then, seems to merit no far-
ther discussion.
III. Rental-Value Tax.
Some time back (475), we spoke of the Articles of
Confederation making real estate, irrespective of its
own immediate product, a guide or index to the amount
481. Rental-value °* taxes tnat should be paid. There is
Tax is on con- also another connection in which it has
sumption. so serve(j — as a guide in taxing consump-
tion, through a tax on the rental value of the tax-
payer's dwelling, the tax to be paid by the occupant,
whether he owns the dwelling or rents it. This tax
has been approved because a man's dwelling is, despite
many exceptions, a very fair guide to his rate of ex-
penditure, as well as to his taxable ability. Such a tax
on what a man consumes, encourages saving, as already
said. Moreover, his rental valuation can be fairly fixed,
and cannot be concealed or effectively lied about : there-
fore the tax offers no premium on dishonesty, as do all
the other taxes on consumption that we have considered.
(a). Not a real- The rental-value tax is not really a real-
*8tate tax. estate tax. If a man paid the usual realty-
tax on a house and lot, and rented it for a residence to
another man who paid the rental -value tax we have
been talking about, the government could not be con-
sidered as collecting twice on the property: for the
tenant's rental-value tax is not put on the property,
as the property cannot be sold to collect it. The rental-
value tax is really a personal tax, the amount of which
is determined by the payer's rental, and is really
intended to tax his general expenditure. Yet a New
§48ic]
Obvious Direct Taxes.
605
York commission in 1907 reported in favor of making it
a lien on the property!
If the owner himself lives on the property, then the
property can be sold to pay his rental-value tax, but only
as any other property — even personal property — could
be sold to pay any tax levied on him. There is no
reason why the particular piece he lives on, rather than
any other piece he may own, should be sold to pay his
rental-value tax or any other personal tax: therefore
481 (b). Not doubh the rental-value tax is not a duplicate tax
taxation. on ^e dwelling, any more than any part
of a man's property is a double tax on the rest: all
his property is subject to sale for any one of his taxes,
if the part on which that one is levied does not yield it.
It has been objected that, for instance, a rich bachelor
living in a hall bedroom should be taxed in something
more than rental value of his dwelling. His real estate
will be taxed, of course, but beyond that, it is clear
that attempting to get at exceptional and abnormal
cases does not pay for the trouble. A rich man living
meanly would be almost sure to conceal all of his wealth
that he could, and not unlikely to lie about it.
But suppose a man lives in two houses at different
seasons, as so many people do now, or even three or
four: it is a question whether his rental- value tax should
be gauged by the one where he votes from, or whether
he should pay a rental-value tax on all. Of course he
would be apt to vote from the cheapest, and a man
ought to be willing to pay for his luxuries. But a family
does not use materially more in the way of clothes, food
481 (0). should be an(* drink, jewelry , or hosts of other things,
on one residence for having three or four houses, than for
only' having one; and not only are country
houses good things for keeping great producers up to
the best working condition, but it is a good thing
for country regions that people who make money in
the cities, should spend some of it in the country. City
people owning country houses should pay for the lux-
ury, but not pay unduly, so as to discourage a practice
so much for the general good.
6o6
Taxation.
[§48irf
It is an interesting and instructive question whether
the rental-value tax would be shifted. A man looking
for a house would certainly be apt to say to a landlord:
"If I live in this house, I must pay such and such a
rental-tax. I won't take it unless you deduct that."
481 (d) Shiftin Then the landlord might say: "I must
' "9' wait for another customer." In fact, it
would be a case of demand and supply ; if houses were
plenty and tenants scarce, it would go one way; if
tenants were plenty and houses scarce, it would go the
other way. The tenant has to pay the tax, and the
question of his getting a house high or low is an outside
question, just as it is outside of whatever gas-bill or coal-
bill may be involved in running the same house. The
authorities seem at last agreed on this: there has been
a good deal of fog over it, but it is pretty well cleared up
now.
The rental-value tax seems to have all the merits we
have sought for in a tax, and none of the defects we
have found. It is also a good one in practice: wherever
tried (probably longest and widest in England) it has done
very well.
IV. Franchise-Tax.
aqo u„- „u„. Now we have left to the last, the con-
482. Has the char- . , . , r i • ! r .
acteristics of a sideration of one class of objects Of tax-
real-estate tax. ation — franchises, which we briefly com-
mended many pages back: we saw (1596, 159 c) that
they are peculiarly just objects of taxation, because
they are usually, in their very nature, really public
property; and in getting all they yield beyond a rea-
sonable profit to their promoters, the public is usually
but getting its own.
Our general study has shown us still more reasons
why franchises are good objects of taxation : they can-
not be hidden or lied about as successfully as most
personal property, or as incomes and inheritances: for
there are so few of them that it would cost govern-
ment very little thoroughly to investigate their ac-
counts. True, the managers of franchises spend a great
§482]
Obvious Direct Taxes.
607
deal in corrupting public officers, but probably no
amount of taxation could make them spend much more'
in that way than they do now.
The verdict of experience regarding taxing them is
that it is done in most countries where universal suf-
frage does not provide legislatures that the corporations
can buy ; and it is found to be in all respects a good
tax. The tendency to use it is increasing rapidly.
A franchise-tax is a real -estate tax after all, and has
all the merits of one. The New York legislature so
decreed in 1890, and it is plainly so if we take into
consideration the special value of the real estate for
the purpose of the franchise. But of course it would
not do to tax a railroad's long line as if it were to be
used for farming: or the long strip occupied by a gas-
pipe, as if it were to be used to build a house on: each
gets its value, just as other real estate does, from the
size, shape and location that fit it for its purpose:
it would not do to tax a Wall Street corner according
to its value for residence purposes, or a Fifth Avenue
lot according to its value for stockbrokers' offices, or
either for its value for farming; any more than it
would do to tax a farm for its value for building jewelry-
stores.
In fact, then, the chief value of a franchise consists
in its ownership of its peculiar real estate, or of peculiar
privileges connected with peculiar real estate.
No matter what the shape of the real estate used,
may be, it is generally more valuable for its purposes ,
than all the rest of the corporation's property. As
Mr. Shearman points out, as soon as a street railroad
gets its franchise, it generally bonds it for many times
what its rails and rolling-stock cost. So it is with gas-
lines and water-lines and franchises generally.
CHAPTER XLII.
DOUBLE TAXATION.
483. Taxation of Suppose a real-estate owner gives a
mortgages. mortgage. Should government tax the
mortgage in the hands of the man who holds it ?
Plainly not, if government continues to
f&liJrtfEEi tax the land its full amount: the mortgage
created no new value, and for this reason,
New Jersey, Idaho and probably some other states
exempt mortgages altogether, and New York has just
passed a law imposing on them Only a small recording
tax. If the government taxes the mortgage, and taxes
the land as much as before, it taxes on more value
than before, without there being any new value to
pay the tax; in other words, it would be taxing some
of the old value twice, which, in several states, is uncon-
stitutional.
At first glance it appears that the land is not worth
to its owner as much as before, but it really is, unless
and until it is foreclosed: he still retains the use and
income of it, and therefore is in as good condition,
so far as concerns the land, to pay the tax as he was
before mortgaging.
But now he has to pay the interest on his mortgage
too. But also the mortgage has brought him the money
to earn that interest, and, he thinks, a profit besides,
or he would not have made the mortgage.
Then he should pay taxes on the money too, if the
money is taxed: he alone has it in possession and
use to earn the taxes with. He has in possession and
608
§ 483 c1
Double Taxation,
609
use all the real estate and all the money, and of course
should pay all the taxes.
483 m an* oaiue . The very bottom principle of sound taxa-
atone should be Hon, ts that the taxes shall be paid by the
taxed. person holding the property which produces
the wlterewithal to pay them. That is really "taxing at
the source
We seem to have made out that the mortgagor has
everything concerned, and such is the case. The
mortgagee has nothing but a claim. He cannot earn
anything to pay taxes with that. He has parted
with his money, and it is the business of the man who
has that, to make it earn its taxes, as well as its
interest.
But here is the mortgagee in receipt of an income.
Should not he pay taxes on that? The question de-
pends upon whether the source of the income has
already paid its taxes (470 e). We have just seen that
it ought to, as everything that pays taxes ought to,
through the party that makes it earn them — 41 at the
source".
But suppose the mortgagee is taxed, as he very
often is, who should pay the tax?
It is perfectly plain that nobody should. But where
somebody is made to, the question of who, is gen-
iioo/.i u^^m erally made as broad as it is long, because
483 (c), mortgagor J °' .
generally pays tax in states where mortgagees are taxed, the
ndirecty. mortgagor generally has to pay the mort-
gagee a rate high enough to cover ordinary interest plus
the tax. Mortgagors have to pay six per cent, in Ver-
mont, where mortgages are taxed, while, till lately,
they have had to pay but four or five in New York,
where the law taxing mortgages was a dead letter.
There was a new enactment in 1905, however, which
wrought great hardship and obstructed improvement,
and, as already said, it was repealed in 1905. Mortgage
taxation is sometimes called "as broad as it is lorfg",
but it is more than that : for in Vermont, California and
other states where mortgages are taxed, the mortgagor,
theoretically at least, has to pay not only his high
6io
Taxation.
[§ 483 c
interest, but also on the full valuation of the real estate,
just as before the mortgage, and yet again on the
money in his hands, or on whatever he may have invested
it in. But the number of states where that occurs is
diminishing: for the victims of course take part in the
general evasion of personal -property taxes, and people
are becoming alive to the injustice of it. Hence, more
and more of the states which tax mortgages, are deduct-
ing them from the valuation of real estate.
483 (*). Mortgage S°me people are deceived by the rea-
*ot properly hai soning that a mortgage is an interest in
Estate. rea| estatCj ancj fairiy taxable as real es-
tate, and in fact, mortgages and real estate have logic-
ally and historically (83) enough features in common
to deceive a good many persons. But as long as the
mortgagor is in possession, the mortgage is only a
right to acquire an interest in the real estate if the loan
is not paid.
483 (e). in differ- It sometimes happens that a man living
ent states. jn a state where personal property is taxed,
owns a mortgage on a piece of property in another state
— it may be on a piece of private property, or it may
be the bond of a corporation, and the mortgage is taxed
in the state where the property is ; and suppose that the
owner of the mortgage, living in a different state, is
also taxed on it as personal property. Some help for
this state of affairs may have been recently given by
the United States Supreme Court in holding that a state
can tax only property, business and persons within its
borders. Yet the first state can hold that the mortgage
is within its borders, and the second state can hold that
the man is within its. More help is in people gradually
realizing that as long as a state looks for revenue from
all personal property owned by its residents, no matter
where situated, victims of such laws are apt to move
to more modern states. It is perhaps as much to save
money as to spend it, that so many millionaires from
all over the country move to the city of New York,
where, despite the law which works the most outrageous
§ 483/]
Double Taxation.
611
injustices on women and children, there is really little
taxation of personal property in the hands of men who
can take care of themselves.
Of course if a man owns mortgages in California, and
likes to enjoy his wealth in New York, he should pay
taxes there for the privilege ; and he cannot avoid paying.
Taxes on most things he buys, and on the stores they
come from, will inevitably be shifted to him, as is
proved by the high prices of everything in New York.
Of course he could also be made to pay rental-value tax,
if New York were yet wise enough to use that tax. We
saw something like this when we were discussing indirect
taxes on personalty (464) — that a tax can be shifted
most readily upon those who will have, and those
who must have.
If a man in a state where personal property is taxed,
owns stock of a bank in another state, he is apt to
have to pay on it twice: the bank pays once, and he
often pays again.
It is plain how a state can collect taxes from resi-
dent corporations, but it is not so plain how it can
collect on a mortgage when the mortgagee lives in
another state: for he does not own the land. As
already explained, it is unscientific as well as unjust,
to collect on it at all, but if the blunder is made, the
state can collect on the mortgage just as it collects
on the fee simple (88) of the same land when the owner
lives in another state. But if it collects taxes on
the mortgage by selling the land, it would compel the
mortgagor to pay the mortgagee's taxes or lose his
own equity of redemption (83). That is remedied, in
Massachusetts, California, Colorado and New Zealand —
483 (f). Letting bv letting the mortgagor pay any taxes
mortgagor pay outstanding when his interest is due, and
mortgagee's tax. deduct them frQm the interest. Altho,
as said above, he would have to pay a rate of interest
high enough to cover those taxes; at worst, if the sys-
tem were made consistent all around, by taxing the
mortgage value but once, he would not have to pay,
6l2
Taxation.
[§ 483/
as he sometimes does now, on the mortgage, on the
money in his hands, and on the full fee of his farm,
but only on the equity of redemption.
483 Conciu- Our conclusion, then, is that if the holder
*ion' of land owes a debt which can be definitely
collected from that land, he should pay the full taxes
as long as he has the use of it. Jf the creditor is taxed
on the claim, the debtor will generally have to pay that
tax too, in which case his land should be exempted
from payment, to the amount which is the subject of the
claim. Hence, until the world outgrows the taxation
of personal property, the simplest way with mortgaged
.property, is to have the mortgagor pay only on his equity
of redemption. It might be more logical to offset the
mortgage debt against his personal property — against
the mortgage money which he received, but he may not
have any personal property : he may have borrowed the
mortgage money to pay a debt, or may have invested it
in more real estate, or may have made ducks and drakes
with it.
But as affecting the ability of the landowner to pay
the tax, why should we exempt him if his liability is
on a mortgage, and not exempt him if his liability
is on a mere note? A good many states deduct all
debts from personalty assessed. But if they do not,
they have "got to draw the line somewhere". A good
place to draw it, is at what is so definitely a man's that
he can sell it. If his land is mortgaged, he can sell
only the equity. If it is not mortgaged, he can sell
the whole of it, regardless of his creditors, tho he may
owe fifty times what it will bring. If all of A's property
is a piece of real estate, and B holds A's note, but not
a mortgage, that note can be collected by a forced sale
of the real estate, just as a mortgage could, but it is
not so sure an interest in the real estate: because if it
484. Why tax were a first mortgage, it would be as good
mortgages and not as an actual ownership of the land, against
notes? all other possible creditors, and would
probably be worth its face; but if it is a mere note,
forty-nine other creditors might have just as much
§ 486]
Double Taxation.
613
interest in the real estate, and not one of the whole
ffty be able to get five per cent, on his claim.
Yet there is no subject in taxation about which
there has been more quarreling and more diverse prac-
tice. As already said, some states, in making up tax-
schedules, permit the deduction of all a man's debts
from all his personal property, but all collect rigidly on
the full value of his real estate, whether mortgaged or
not; Massachusetts allows no deduction of debts from
personal property, but does not tax mortgages twice.
And there is reason for not exempting debts, beyond
the necessity of "drawing a line somewhere". In the
states where debts are exempted, it is astounding how
many debts in proportion to their assets, some of the
financial magnates have about listing time, while
widows and orphans often have no debts at all.
485. Tax all record- There is a very simple principle which
source" anddeduct wou^ reduce this chaos to uniformity,
them fromnvaiueoCf without going to the length of the single
property. tax — a wav s^ort Gf driving taxpayers into
a modern state to get rid of these old-fashioned double
taxations. It is to become a modern state, and tax
only what is of record, and tax it against the recorded
owner. This is one application of the celebrated
maxim to "tax at the source". Then, if the thing
taxed is a lien on any property, of course that property
should be pro tanto exempt. But the question would
be avoided by not taxing liens.
486. Multiplied Probably the most general form of
taxation, especially multiplied taxation, is the excises on
y exc ses. manufactured articles. Raw materials are
often taxed, and then the goods taxed again in each
set of hands they pass through: for instance, trees may
be taxed as standing timber, as logs, as planks, as
strips for making spools or awl-handles, and as spools
or awl-handles. Iron may be taxed as ore in the bed,
as ore at the furnace, as pig, as bar, as extra-tempered
fine small steel, as jackknives, or as watch-springs, and
in each one of these forms, after being taxed at the
614
Taxatioti.
[§ 486
factory, it may be taxed again in wholesalers' hands,
again in retailers' hands, and again in consumers'
hands. Moreover, should it stay in any of these hands
over a year, it may be taxed again, and in consumers'
hands taxed every year till it rusts. Verily, manifold
are the ways of taxation of personal property! As
long as "mankind is a fool" (to quote Carlyle) — or at
least American mankind (no other civilized mankind
is enough of a fool to attempt the direct taxation of
personal property), the only remedy is to 4 4 tax at the
source" — tax it at the factory, and then stop.
But what factory — logging-camp, sawmill, turning-
mill, spool-factory, or where? At each one, if you
want to: each one adds a new value beside which
the old value is often not worth considering. But do
not tax the completed product again in the hands of
dealers or users. If the tax on iron-ore is paid over
again in a watch-spring; or that on logs, in a spool,
the amount of material is so trifling that it makes no
appreciable difference. It is only in connection with
the duplication up to the finished product, which is
serious, that this sort of tax is generally worth noticing.
Not all cases of duplicated or multiplied taxation
are equally objectionable with those we have considered;
some are even generally approved — such, for instance,
as taxes on things that people are in danger of using
too much of, like liquors and tobacco. There are
generally excises on their production, and duties on their
importation, and additional taxes on dealing in them.
There is still another justification for this sort of du-
plicated taxation, that there is not for taxing mort-
gages. The excise-taxes quite generally distribute
themselves, while those on real estate, whether on fee
or on the mere possibility of an estate, which is secured
by a mortgage, may not distribute themselves as readily.
CHAPTER XLIII.
SUMMARY AND CONCLUSIONS ON TAXATION.
Now among the various kinds of taxation that we
have considered, with the glaring objections to the
worst, and the perplexities, inconsistencies and occa-
sional injustices of even the best, certainly there is not
one alone which can be depended upon, at least until
487. Perfect taxa- human nature improves Taxation is
tion not for Imper- after all mamlv a matter of psychology :
feet people. it must be adapted to the people. Sources
of revenue run all the way from lotteries to land — the
semi-barbarian at one end, and a civilization not yet
fully realized at the other. A wise system of taxation
must consider the weaknesses of human nature, and
also the various complexities arising from the fact that
men often own property under governments different
from those they live under.
488. Vamplre-taxes As duties and excises distribute them-
needed now. selves so generally, and are paid with so
little inconvenience, it is generally necessary, in the
present state of human nature, to use them. But
they should be used with great simplicity, to save
expense in assessing and collecting; with great caution
against corruption by interests seeking "protection";
and mainly on luxuries, so that the poor man will not be
paying taxes on everything he buys. Yet it is eminently
desirable that the poor man have an
ri?v(atle Tfax moy interest in keeping taxes low, and such in-
Mimateiy replace terest is not kept very wide awake by a
vampire-tax: one object of such a tax is
615
6r6
Taxation.
[§ 688 a
to keep the interest asleep — its "pinions fan the wound
it makes
Yet of course it is not desirable to take away the
vampire-taxes, and depend on others that are even
worse: a small minority of citizens have any real estate;
and income, succession or personal -property taxes are
poor substitutes for even vampire-taxes: the fire is
worse than the frying-pan, as remarked at least once
before in these discussions. But if a man does not own
real estate, he pays rent, and the rental-value tax will
keep him much more alive to his political duties than
the vampire-taxes can, besides being a better tax in
every other way.
Until we are educated up to doing without the vam-
pire-taxes, we can learn from England in using them.
She selects a few articles — mainly luxuries on which peo-
ple will readily pay most, and confines the duties and
excises to them; and it works very well. The trouble
is that the number of duties and excises cannot be
kept small: all interests clamor for protection in the
tariff; and in every exigency, a finance minister (in a
country civilized enough to have one : we are not) tends
to clap on a new excise. One cannot read far into the
subject without meeting the Dutchman's thirty taxes
in a plate of soup. Yet there has been some improve-
ment since his day, in countries like England, where
legislators are generally chosen from the educated
classes, and have read the world's experience.
Except in young countries, or in tariff wars, the tariff
should be only on articles that cannot be produced at
home: this prevents a number of interests from cor-
rupting legislation, and trading 1 * protection " with each
other.
489. Inquisition- In spite of the possible necessity of
taxes Intolerable, tolerating indirect taxes because of the
weaknesses of human nature, tariff-taxes and excise-
taxes have not only the faults of the vampire-taxes,
but those of the inquisition-taxes too; and when duties
become "protective", they become oppressive in the
bargain. Protection is the very worst form of taxa-
§ 49° al Summary and Conclusions.
617
tion. While income, inheritance and personal -property
taxes are thoroughly inquisitorial, corrupting and im-
practicable, yield relatively little, cost much to collect,
and so should never be used except in dire necessity, if,
then, they are nevertheless better than protective taxes.
490c The remote Now after making all these concessions
,dea1, to the hard facts of human nature, let us
seek a little glimpse of the ideal — of what may ulti-
mately come, as human nature improves. We have
seen that Evolution seems to tend to establish, to the
exclusion of others, taxes on the land, including those
on franchises. If land should be taxed more than
other things, the tax would be paid from the rent
and the profits of managing the labor upon it, not from
the wages of the labor: wages must be kept up to
the market rate, or labor would not go upon the land:
so must the profits of ability, for the same reason.
If the tax were so heavy as to eat into wages and
profits, the land would be abandoned unless the taxes
were lowered. The taxes, then, must, in the long
run, come out of the rent. Now we have seen that
the rent comes from the bounty of Nature — from suffi-
490 (a). Nature cient fertility, or special fitness for other
pays some taxes, use> ^o gjve a retUrn above wages and
profits. Then, in the very last resort, the bounty of
Nature pays the tax on land.
A franchise-tax is paid by something very like the
same thing. As we have already seen, the value of a
franchise is mainly in its real estate; and anyhow, what-
ever an enterprise pays above wages and ordinary profits,
must in the long run come from some unusual advantage
that is enough of a monopoly to prevent Ability rush-
ing in to compete for the profits. Now, nobody
consciously creates those monopolistic profits of an
ordinary franchise: as we have seen, the profits of a
railway or water company, for instance, constantly
tend to increase, long after wages and ordinary busi-
ness profits are paid, by the mere clustering of people
who simply mind their own business, without paying
6i8
Taxation.
f§ 49oa
the franchises in question any attention but that of
use. As intimated before, so far as any human effort
is concerned, the excessive profits of such franchises
are as much a bounty of Nature, as the rent of land is.
It seems plain, then, that the evolution of taxation
seems to have been toward restricting it to land and
franchises, and that such taxes are paid by the bounty
of Nature.
But the question arises whether enough could be
got from these sources. It is pretty hard to tell
490 andean from what other sources many taxes ulti-
ma//, mately come now; only we get them in
such devious ways that the friction and labor of getting
them are a frightful burden.
490 (O. a quea- Prof essor Seager (Introduction to Eco-
tionabte objection. nomics) says: "The more intelligent and
the more social the population becomes, the keener will
be its appreciation of the common needs, and the larger
the fiscal requirements of the government which minister
to such needs, but these again have no connection with
the size of the rent-fund." His boldness in denial
should perhaps check me from boldness in assertion.
Proof either way is not possible, but I am ready to rest
the case on the assertion that "the more intelligent and
the more social the population becomes", ttie greater
inevitably will be "the size of ilxe rent-fund", and vice
versa, each being both cause and effect. From his bold
assertion, he deduces very logically that "the contention
that a tax on rent would by itself meet all of the require-
ments of government at all times may thus be dis-
missed as visionary ", while from my assertion I deduce
just the opposite, tho what I would deduce regard-
ing times and place generally, there would be needless
temerity in asserting of all.
My deduction, however, is backed up by the facts that
in many communities of all kinds, urban and rural, the
tax on personal property has, for many reasons and in
many ways, been virtually abandoned ; and that those
communities have never found any difficulty in getting
needed revenue from the land and its improvements;
Summary and Conclusions.
619
and this has succeeded in so many and so various
communities, that there are many reasons for believing
that it could succeed in virtually all. It is true, however,
that the taxes raised as above described, have never
included those for our national government. The ques-
tion whether they too could be included in the system,
is outside the range of experience, and will be answered
by each thinker in accordance with his convictions on
collateral points.
490 (*). The future In regard to the future of taxation, all
of taxation. this opens up a bright vision. If taxes
enough for all needs could thus be paid from the bounty
of Nature (and there seems reason to think they could),
we would be rid of the nuisances of custom-houses; of
the injustices, business uncertainties and unutterable
corruptions of the Protective System ; of the duplica-
tions, petty annoyances, restraints and impediments
to business in all excise and stamp taxes; of the
obstructions to business occasioned, and the perjury
invited, by all personal, succession and income taxes;
of the obstacles to development of the country, in all
taxes on buildings and improvements ; of the aid to the
niggard's saving, and the obstruction to elegant living
and generous hospitality involved even in so good a tax
as that on rental value; and of the army of place-
holders necessary to collect all these taxes.
The ideal seems to be to tax no human effort or its
results, but to pay the expenses of government from
the bounty of nature.
And yet, despite the obvious truths just recounted,
ignorance and habit so befog tax commissions generally
that instead of applying their ingenuity to getting the
taxes onto the land, they generally spend their time
monkeying (I use the word deliberately) with the old in-
quisitorial and vampire schemes, and devising new forms
of them. An honorable exception to this, in one particu-
lar, was indicated in the minority report of the New York
commission before alluded to: it recommended a " hab-
itation*' tax — a better name for the excellent " rental-
620
Taxation.
[§ 49° d
value" tax of England. But as already said, the com-
mittee boggled its recommendation by wanting the land-
lord to collect and pay it over, altho the landlord, as
such, has, in principle, nothing whatever to do with
the tax beyond owning the property which determines
its amount.
490 (e). No hard. True, the land-taxes would come out of
*hip to landowner*. that portion Qf the bounty of Nature
which has been secured by the landowners, but as
already shown (472 e, 472 /), taking taxes from it,
instead of from personal property, would not make
nearly all the difference to those people, that at first
sight it seems to : generally, they would be merely paying
from one pocket instead of several, and it looks as if the
proceeding, while doing them little, if any, harm,
would be vastly to the advantage of the community In
general. The vast increase of the tax return that
could properly be had from the franchises, would tend
to keep down the burden on the landowner. Consider-
ing that, and the vampire and inquisition taxes which
owners of ordinary real estate already pay in addition
to the realty-tax, and the expense of collecting them,
it is probable that the ideal system would materially
reduce their present burdens. At all events, as
already said: many of the landlords, including the most
intelligent portion, seem ready to have all taxation
derived from their real estate. They want the direct tax
on personal property removed, they are generally op-
posed to income and succession taxes, and not a few
of them are opposed to tariff and excise taxes.
490 (f). Amorti- And yet it is true that each tax put on
zation. a piece of real estate, lessens its selling
value. The tax is amortized, as they call it — deadened
— into the value of the real estate. A tax of $5 a
year, for instance, would amortize the value of the
estate about a hundred dollars, as it is 5 per cent, income
from a hundred dollars. But as real estate in the set-
tled portions of the country has been paying a larger
and larger share of the taxes for a long time, in many
§ 49° g] Summary and Conclusions. 621
places its tax burden must be pretty much amortized
already. And yet the value of real estate seems to
advance, on the whole, faster than amortization has
pulled it down — and especially in the very places where
it pays the largest share of the taxes.
It looks as if this process is to go farther — as if
people, as they get wiser, are going to throw off more
and more of the stupid taxes, and real estate will have
to bear more and more, except as franchises relieve it.
But will real estate become valueless in conse-
quence? It certainly has not, so far; and as every-
thing that benefits the community benefits real estate,
it seems probable that the removal of the stupid taxes
will benefit real estate even more than wise taxes will
harm it, the difference being made up in economy of
collection, and other economies.
The effect of the apparently-coming system on the
poor man's taxes, would be that instead of paying, as
490 <g). a boon now, indirect taxes on nearly everything
to the poor. uses> he would simply have to pay no
taxes at all, except as the real -estate tax should distrib-
ute itself as far as him. It could not help affecting
his wages favorably, because business, being relieved of
tariffs, excises, stamps, and taxes on plant and goods,
would flourish better; the demand for labor would con-
sequently be better, and so work would be steadier and
wages higher.
But the argument which has led up to this bright
picture, may seem to yield the claim of Henry George
that government has a right to take all economic
rent by taxation. Yet it really does not: for noth-
ing in it involves government taking more than its legiti-
mate needs. George claimed that it should take all,
and use the excess over legitimate needs, in pauperizing
the community. In addition to that disastrous effect,
would be the one probably equally disastrous, of destroy-
ing all the advantages which we have seen to be inherent
in private ownership of land, and which we have also
seen that some of the loudest of the alleged followers
of Henry George also make the same claim for.
622
Taxation. ^ [§ 490 A
Yet a sole dependence on real-estate and franchise
taxes is open to one very serious objection that was
raised against indirect taxes : unless a man
c?ujlhtiiHc°t!zen!' owned land or shares in a franchise cor-
poration, his stake in economical govern-
ment would seem to him even less than under a system
of purely indirect taxation. Under that, he may not
know he is taxed; but under our new ideal system, he
would not be taxed at all, except so far as real-estate
taxes may be diffused to him. The best way to meet
this difficulty would be to encourage and help each man
to own at least his home, and meanwhile to bring in the
best of the other taxes we have examined — the rental-
value tax — to make every voter pay a tax according to
his rate of living, whether he lives in a palace or an
attic — to make him realize that he has a stake in the
government, if it is but a dollar a year.
True, there are numbers of sovereign American citi-
zens whose vote counts as much as anybody's, who
never have as much at a time as a dollar to pay a tax
with. Perhaps it is time to have their vote stop
"counting as much as anybody's" — to have them stop
disposing of other people's money: for the frightful
wastes and stupidities in our taxation are largely due
to their votes.
491. Causes of Of course the adoption of a system of
delay, taxation promising so much good, is ob-
structed by the same ignorance and stupidity which
49Ua;. ignorance obstruct most good things. Moreover, the
and seif-seeking. SyStem does not promise much immediate
good to the owners of franchises, and they own most
of the legislatures. Of course landowners would favor
the single land-tax still more if they were sure of liberal
franchise-taxes to lessen their own. But many land-
owners, especially the fanners, will obstruct it anyhow,
until they understand it better. It is also opposed
by a stronger and better organized and more interested
element than the farmers or, perhaps, the franchise-
owners, namely, the manufacturers. They spend enor-
mous sums in keeping up the so-called protective system.
§ 49lb]
Summary and Conclusions.
623
49U&;. in the u. 8. But there is a firmer obstacle than even
conttitution. tjie protective system, to the national
government taxing land.
As we saw (4660), the National Constitution op-
poses it, and it is probably harder to amend our
National Constitution (Art. V) than even to get rid of
the protective system. Yet constitutional amendments
are possible, with the growth of wisdom, and some-
times in spite of it. Moreover, a tariff system is not
necessarily a so-called "protective" one, as Great
Britain has shown, tho it is very hard to prevent its
becoming so.
The great hope for the future is in more education —
moral as well as economic. It is sad, tho, that so
much of it must still come, as perhaps the most valu-
able education generally does, through struggle and
waste.
CHAPTER XLIV.
GENERAL SUMMARY AND CONCLUSIONS.
We have merely touched the outlines of
dusfoMTSrdinS" t^ae complicated questions we have treated :
the Civic foiitioni. the discussion of them has run into
libraries, and is increasing at a geometric
rate. Then we should expect them to be handled
by the half-educated men who compose the majority
of our legislatures, just as they have been handled
since the debt for the civil war increased their diffi-
culty— with probably less wisdom and more corrup-
tion than in any other nation among the great powers.
The only remedy is to increase the
fo9r3ex^rtin.uestions respect for knowledge, and the scorn of
corruption, and to get legislatures in the
way of leaving such questions to expert and faithful
men, even if, as they even now are sometimes wise
enough to, they have to call upon commissions chosen
outside of their own members. As we saw (420), it
is becoming more and more the custom to leave matters
requiring expert knowledge, in the hands of expert com-
missions; and it is becoming recognized here and there,
as indicated by John Stuart Mill, that the ideal govern-
ment toward which society seems tending, will consist
mainly of a number of bodies of experts acting under
a central administration distinguished for judgment and
executive capacity, rather than for expert knowledge.
Probably the large miscellaneous legislative assemblies
will eventually disappear. Already their sittings begin
to the regret of the intelligent, and end to their relief.
624
§ 494 b] General Summary and Conclusions. 625
In some places where the sessions of the legislatures
were once annual, they have already been made biennial ;
and so great an authority as the late Mr. Godkin favored
their entire abolition.
494 Evolution of Let us supplement our detailed atten-
the Civic Relations, tion to the Civic Relations by a review
of the ground we have been over, and a few general
conclusions that cover it all.
From ancestors very low in the scale of being — igno-
rant, improvident, lazy, unmoral and solitary, have
been evolved civilized men — with knowledge, fore-
thought, energy, morality and the inestimable advan-
tages of civil life. But we seem to have as yet reached,
at best, a very humble stage of the evolution, and that
best has been reached by but few: the vast majority of
mankind are still, by comparison with the few in ad-
vance, ignorant, improvident, and (the worst of them)
lazy, dishonest, and even solitary — their hands against
every man, and every man's hands against them.
The control of the means of happiness — largely
included under the name of wealth, is of course, despite
exceptions, mainly in the hands of the few possessing
knowledge, forethought, energy and honesty.
494 (a), and of Very naturally those who do not possess
their problem* wealth, want it; and such of them as can
exercise the virtues which produce it, generally
get it: most of those who have it, have produced
it for themselves, tho a few have inherited or stolen
it from the producers. But the unfortunate majority
who lack the wealth-producing virtues, naturally wish
to get the wealth without exercising the virtues —
to make water run upward without supplying the
power — to get something out of nothing; and so
they, and many half -reasoning sympathizers, have in-
vented all sorts of impossible schemes of the perpetual-
motion order, for accomplishing that result.
494 (b) Rapld Recent times have been preeminently
accumulation of the times of nostrums : for the average
nostrums. hag been ^ q{ ^ sodden
626 General Summary and Conclusions. [§ 4946
ignorance and indifference of a century ago, into some
conception of better conditions, some hope of obtaining
them, and abundant readiness to attempt any way of
doing so that may dazzle his attention. He has been
given a vote, too, and, tho he generally has no more idea
of what to do with it than if it were a spectroscope, he is
very full of the idea that with it he can work miracles.
While he is often averse to taking from those who have
more, unless he disguise the process, even to himself,
by some sophistry, he is very ready for any scheme
under such disguise ; and his recent 44 little learning " and
the wide diffusion of it, has spread many sophistries and
schemes based on them.
Yet the sympathies must be dull which do not give any
response to his efforts. It seems very hard that to
only one man in many should be open the enjoyment
of art and literature and refined society ; but it is surely
better that they should exist for the few than that
they should not exist at all; and such, so far, has been
Nature's way. But through the human agents she has
evolved, she is spreading these advantages at a rate
which has lately increased to astonish us, and which,
it is perhaps not too much to say, must in a time that
we can foresee, include all men. There is overwhelming
evidence in schools, libraries, settlements, legal-aid
societies and other benefactions, that the more able
men do respond to the need of the less able, and are
eager to aid them in all efforts that are reasonable and
htfpeful. Indeed, efforts that are foolish, hopeless,
even destructive and suicidal, have engaged the support
of many of the well-to-do whose sympathies are stronger
than their intelligence.
495. The Labor Impatient as cool reason may be with
Tnjst- it all, there is something pathetic about it:
for many of the enthusiasts are as sincere in their
faith, and as ready to sacrifice themselves for it, as
any other fanatics have ever been for theirs.
496. The labor un(^er a^ these theories is a ques-
auestion a real ques- tion rooted in much deeper soil than the
ilon for real reason shallow inventions of the dreamer and
§497] General Summary and Conclusions. 627
the quack. The " labor question" is a very real strug-
gle for shares of a product that must be divided, and a
struggle that will last as long — which will probably
be very long indeed — as men are too near-sighted to
see the broadest self-interest in the general interest. #
In this real struggle, the unreal remedy must dominate
the vulgar mind — the remedy, as so often said, of get-
ting wages higher than the equation of supply and
demand. That the trade-unions have done great ser-
vice, and may yet do great service, in keeping wages
up to the point of equation, is undoubted; but they
have lost all sight of that intention, and think only of
forcing wages to any height attainable through any
means, no matter what bruises, what fatal over-
strains, and what falls may result.
497. Aggression Originally combined against the em-
begets aggression? ployers' aggressions, the workmen have
themselves become the aggressors. The employers are
now combining against the workmen's aggressions,
and soon will be in renewed danger of becoming the
aggressors themselves. Meanwhile, the community in
general is combining against the aggressions of both,
and in that combination are even some of the com-
batants on both sides: so clearly can men see the
wrong in others' acts which they are blind to in their
own. The waste on both sides is frightful, but it must
gradually force a recognition that the wisest policy for
both sides is to facilitate the operation of supply and
demand, instead of opposing it; and to help each other
instead of hindering each other. With this recog-
nition, must gradually emerge conditions under which
wages will be so high that the productive power of the
men will be at its best; and so low that labor and its
resulting commodities can be obtained, by laborers and
all, as cheaply as our control of Nature's forces permits.
Society will gradually obtain its rightful control of
natural monopolies, and secure that no artificial
monopoly of either labor or capital shall stand in the
way of the general good — that no monopoly of either
mines or miners' labor shall stop the supply of fuel;-
628 General Summary and Conclusions. [§ 497
that no monopoly of either food or food-producing
labor shall limit the supply of food ; that no monopoly
of either any good thing or the labor supplying any
good thing shall limit the availability of that good
thing. The strength of one of the opposing forces
# will continue at times to force conditions too far one
way, then the other force will drive them too far the
other way; but those wielding the forces, and those
affected by them, are fast learning through bitter
experience, where the points of reason lie, and the
movements beyond them on either side must gradu-
ally grow less and less.
Meanwhile the mistaken schemes not only obstruct
the production of wealth, and make money flow in
the wrong direction — from the poor to the rich, rather
than from the rich to the poor, but they befog the
popular intelligence, and obscure the fact that, so far
as happiness comes from anything but a clear con-
science, a contented mind and a loving heart, it comes
from knowledge, forethought, energy, honesty and the
political freedom which can be had only from civic
enlightenment and the strict performance of public
duty: thus the mistaken schemes are among the chief
obstacles to the improvement of government.
497 fa). Evolution Among beasts and very primitive men,
of vices in gov where there is no wisdom and no patriot-
ernment. .gm^ government {s Qf course that of the
strongest. Later, cunning plays some part; and, in
time, higher forms of wisdom come in, and those pos-
sessing military and civic ability gradually share in the
government. But lately the need of capacity in direct-
ing government, has gradually been ignored, because of
reactions against tyranny, because of sentimentalism,
and of competition between parties for popular votes.
While on one hand, as we have seen, public education is
maintained at enormous expense on the ground that
an ignorant man is not fit to vote, on the other hand,
demagogues vie with each other in devices to enable
.men who cannot even read, to cast the ignorant vote on
§ 499 al General Summary and Conclusions.
629
which the demagogue depends; and many sentimen-
talists not intentionally demagogues cooperate with
them. In the extreme instances — America and France,
suffrage has become universal: the incapable majority
now exercise the power, except as a capable minority
can influence them ; and consequently the governments
(especially many of the local American ones) are vastly
more stupid and corrupt than those of the other nations
anywhere near the same intellectual and moral plane in
other respects. Undoubtedly some believed that in
the ballot — the standard of liberty, there was magic to
enlighten and convert all who touched it. But experience
has not increased the belief. And now that standard
has been flung into the ranks of the enemy, and there
it stays.
498. Improve suf- How to rescue it, seems an almost in-
"*8e* soluble question. Possibly it can be done
by making those incapable of appreciating it, incapa-
ble of holding it; certainly it could be done by mak-
ing more of those holding it, capable of appreciating
it. Yet the question does not even present itself to
the increasing number of those who dream of a per-
fect world of imperfect men. But in spite of them,
the question is constantly demanding solution, and if
Spencer's expectations regarding socialism (31 a) are
realized, the solution will only be reached through
blood. But such pessimistic fears are not inevitable.
Already a reaction back to limited suffrage has been
forced upon some of our states, and there are a good
many indications that that reaction will spread. But,
better still, there is a degree of attention paid to the
Civic Relations that was not dreamed of a generation
ago; and this is especially the case in the universities,
whence the education must inevitably filter downward.
499. Evolution not Notwithstanding all discouragements, we
ill negative. mav recognize many other grounds for
(Sre%lnJeatth~ hope. The very desire for wealth, de-
beneficiaj. spite all the evils it has brought, has done
more to evolve the virtues which produce wealth, than
all other agencies put together; and also, by a strange
630 Gc.icral Summary and Conclusions. [§4990
paradox, the absence of wealth has done as much to
evolve, in both rich and poor, virtues nobler than even
those which create wealth — sympathy, generosity,
philanthropy. Let us reflect, too, that the difficulties
of good government have been equally powerful in
developing the other civic virtues.
I confess that, having started with a
gJeforel^ienZ9' faith that progress can be hoped for only
Vrlteltllggi** through the struggle for existence and the
survival of the fittest, this appearing to be
the only course supported by natural law, I have come
to realize that with the evolution of intelligence and
sympathy, standards of fitness to survive have mate-
rially changed, and that the struggle for existence has
materially changed with them. Now the struggle of
brute force has become a struggle of intelligence, and
even a competition in honesty and amiability: the
wide industry of commercial traveling is largely a
competition in amiability and personal agreeableness ;
the business houses that can most be depended upon,
are those which oftenest succeed. With complexity of
industry has come interchange of function, and with
that, even sometimes a competition in mutual ser-
vice: for instance, the hotels do what they can to
help the railroads and amusements, while the rail-
roads and amusements do what they can to help the
hotels. The vast majority of people have long got the
very best in their lives, not by struggling with all others
for food and shelter, but by mutual support. As soon
as the family was evolved, the struggle was suspended
between the members of it, and turned into that mutual
support. This process soon embraced the clan, and
then spread into the tribe and nation. Very early,
the benefits of security and order were obtained by
supporting, not struggling against, rulers, generals and
priests. And as literature and art and science and edu-
cation are evolved, the original contribution to sup-
port the ruler is distributed among a great mass of
government officials, and among diplomats and students
§ 499 d\ General Summary and Conclusions.
631
and teachers of political science; while the contribution
to support the priest is likewise shared by those students
and teachers, as well as by authors, actors, musicians
and other artists of all descriptions. And while the
reflective student will realize that members of these
groups still are condemned to the struggle for existence
among themselves, that struggle is virtually only on
the fringes of the groups — among the members whose
claim to positions in the groups is doubtful; and he
will also realize that even this struggle is not "red in
tooth and claw", but a competition as to who shall
discover the best truth, or teach it best, write best,
sing best, act best, paint best.
499 (c). wisdom Even in the world where the food and
and sympathy drink come from, the survivor is not the
gaining control. strongest brutef but the wisest and often
the gentlest and kindest man, to provide for whose
material wants is often the very salvation of men better
fitted than he to survive in the merely physical struggle.
On the other hand, through the reciprocation of this
man, the world is progressing, in spite of its being
sometimes held back by his using his superior intelli-
gence to despoil others. But generally he uses it to
devise work for them, to organize them, to get the
most possible out of them by caring for them, not by
consuming them; to dispose of the product so that
they can get the greatest variety and amount of goods
in exchange; and to share with them the surplus which
his talents secure, in better housing and means of recre-
ation, instruction and entertainment.
How far these shall be his voluntary gifts
*ltbV'forc*d.can administered under his direction, and how
far the cost of them shall be taken from
him and administered by the state, is a complex and
difficult question. As a fact, however, whether they
come by taxation or by gift, they come from him.
The question is how to get the most of them out of him.
They will not come at all if he is discouraged from
producing the wherewithal. There is no other source
of them under heaven but him. Tax him in the hope
632 General Summary and Conclusions. [§ 499c*
of dividing his large share of production, in the shape
of government gratuities, among those who produce
less, and you discourage his production; banish him
by taxation, as he has already been banished from
more than one place, and the place reverts to primi-
tive conditions: probably his energy cannot be sup-
pressed by robbing him, but will simply be driven else-
where. But withdraw his guidance in any way, unless
he appear again, in a new incarnation of the divine,
those he guided revert only to primitive production.
499 (e). n^r Yet it is for him, and for those whose
necessary cr**d. studies fit them to act with him in the
shaping of wise policies, to dwell on the old old truth
illustrated in all forms and stages of human evolution,
that the only wajr for the strong and wise to make
their own prosperity and opportunities secure, is to
make the state which protects them, a state of en-
lightened, thrifty, virtuous, and therefore prosperous,
happy and contented people.
INDEX.
(References are to pages.)
Ability (see also capital; en-
terpriser; wealth), a source
of property, 42, 44 ff.; private
property in land stimulates, 49 ;
required in farming, 55; de-
fined, 87 ; product varies with,
87, 105; wages vary with, 89,
105, 340, 541; conflict between
labor and, 90; functions of, 91
fL; and averages, 92; finds
work, 93; increases product, 94,
100; saves waste, 94; outside
of tangible production, 97; re-
ward of, 101; cannot afford to
grind labor or capital, 107;
capital and labor powerless with-
out, 107 ; of handworkers, 108;
comparative profits in different
fields of, 109; few have great,
no; is increasing, no; politi-
cal, lacking in America, 146;
essential to securing free labor,
154; how affected by com-
munism, 222 ff.; by socialism,
225 ff. ; forcing, to guide labor,
227; powers of, 228; private
property a consequence of,
220; and desert, 240; affecting
diffusion of wealth, 326; how
cultivated, 347; should not be
paralyzed by law, 354; move-
ments of, influenced by taxa-
tion, 532
Accidents, protecting labor-
ers against, 287; and closed
shop, 287
Accommodation Paper, 162
Act of God or the public
enemy, 166, 181, 183
Adams, T. S., on strikes and
lockouts, 251, 252 n., 271, 274ft.,
410; on labor laws, 283; on
public franchises, 410 n.
Administrators, 201
Advertisements, government
loss in carrying, 412
Affirmation and oath, 164
Agency (see also agents) by
necessity, 192
Agents, 190; liable for ex-
ceeding authority, 191; cannot
make any profit for themselves,
192; liable with principal in
wrong-doing, 193; superior gen-
erally liable, 193; responsible
for subagents, 194; classes of,
tent (see also con-
tract), 152
Aid, government, for building
railroads, 4 1 1
Alabama, unlawful acts in,
279
Alexandria, Va., electricity
in, 441
Alienation of estates, 204
America, all property in,
owned collectively by all the
people, 236
American Federation of Labor,
254, 261 n., 282
American Steel Co., 255
633
634
Index.
Amortization, 620
Anarchism, 219; remedy for,
proposed by Judge An.quist
and the author, 220
Anti-Boycott Association ( ee
also boycotts), 261
"Antient Light", 80
Anti-Injunction Bill ( ee also
injunction), 261 n., 282
Anti-Trust Law of 1890, 136
ff.; difficulty of getting ad-
vantages out of such laws, 137;
and the railroads, 138
Apprentices, limiting number
of, 253
Appropriation-Tax (taking
whole value of land), 595, 603
Appurtenances, 80 ; party
walls, 81; land beside roads,
81; land by water, 81
Arbitration, compulsory , 297
ff.; and private contract con-
tradictory, 317, 318; step to-
ward state socialism, 319; vol-
untary, ineffective, 298, 323
Arbitration Act, first compul-
sory, and its effects, 299 ff.;
H. D. Lloyd's conclusions, 306;
in New South Wales, 308, 309;
in Western Australia, 309; dam-
ages in , 3 1 3 ; latest word on , 3 2 2
Arbitration Courts, V. S.
Clark on, 289 ff., 309 ff.; keep
competition fluid, 296; in Aus-
tralasia, 296 ff.; and closed
shop, 315; and freedom of the
press, 316; and "the obliga-
tion of contracts", 317; and
the right of assembly, 317; and
trial by jury, 318
Aristotle, 93; created value
in material things, 103; first
systematic writer on politics,
523
Arkbridge, Mayor, of Phila-
delphia, cited, 422
Arkwright, Sir Richard, in-
fluence exerted by his loom, 345
Armies produce value, 102
Army Outfitting, etc., govern-
ment its own customer, 228;
private initiative essential to
variety, 228; by government,
494
Arnquist, Judge, and anar-
chism, 220
Assignees, 200
Assistance of poor: see rec-
reations AND ASSISTANCE
Asylums, 496
Atkinson, Edward, on taxa-
tion, 531; on the tariff, 550
Attainder, 35
Australasia, laborers restrict-
ing work in, 216; the "Para-
dise of Labor", 263; unionists
of, 263 ; state competition with
monopolies, 291 ; fixing of mini-
mum wage, 292 ff.; sweating in,
292-294; compulsory arbitra-
tion, 296 ff.; taxation in, 457;
government success in money-
lending, 459 ; utility of govern-
ment ownership, 460; "the
government stroke" in, 461,
470; old-age pensions in, 500;
separated tax and single tax in,
600
Austro-Hungary, suffrage for
city ollicers in, 484, 485
Avebury, Lord, on municipal
trading, 448, 454 11.
Averages, and ability, 92;
tend to rise, 327
Backhouse, Judge, on New
Zealand Arbitration Act. 308
Bacon, Roger, created value
in material things, 103
Bad Times: see hard times
Bailments, 181; on different
kinds of goods, 181; "common
carrier" defined, 182; Umiting
liability without contract, 182;
bill-of-lading, 182; hiring, 183;
limit of responsibility, 183;
without consideration, 184; lia-
bility of innkeepers, 1 84 ; pledge,
185; general principle of lia-
bility of bailees, 186
Index.
63s
Baldwin, Judge, on incorpo-
rations, 121
Ballot, Australian, 484 ; ma^ic
in, 629
Baltimore, revenue from
street-railway franchises in,
takes care ot all the parks, 146,
423,428; rebuilding of, after fire,
238
Bankers, produce value, 102,
103 ; control policies of nations,
363
Banknotes, essentials of, 385
Bankrupts, assignees of, 200;
justice of discharging, 200
Banks, savings, 374, 498;
need of small, 390; effect on
politics of branch, 390 ; taxation
OI, 39°, 584
Barbarian's idea of liberty, 33 ;
of property rights in land, 45
Bargain (see also contract),
I5«> l67.
Bargain-Stores, 94, 130
Barter and money, 360
Bastiat, quoted, 326
Baths, public, 494
Beef Trust, government suit
against, 137
Belgium, labor in, 90; rate
of taxation in, 531
Bellamy, Edward, his scheme,
140
Bell Telephone Co. forced out
of Massachusetts by taxation,
569, 57°
Bemis, Prof., on municipal
gas-plants, 439; on high wages
in public works, 445 n.
Benevolence (see also char-
ity; wealth), of the rich, 352;
no bar to accumulating wealth,
352
Berlin, regulation of adver-
tising signs in, 445; electoral
franchise in, 486; fire-insurance
obligatory in, 501
Bets, 165; President Hadley
on, 166
Bill-of-Lading, 182
Bill of Rights, 35
Birmingham, trust of bed-
stead-makers of, 304
Bonds (see also stocks), 76,
122
Books, number published in
civilized countries, 414; killed
by periodicals in the U. S.,
414
Bookstores, decrease in, in
the.U. S., 414
Boston, school-books, 256;
municipal ferry in, 395; mu-
nicipal ownership of street rail-
ways in, 422 ; Public Library of,
490; parks of, 491 ; housing the
poor in, 493 ; personal-property
tax in, 580 n.
Boycotts, 28, 104, 247 ff.,
410 n.\ Anti-Boycott Associa-
tion, 261; and Sherman Anti-
Trust Act, 267 n.\ damages
in, 277; injunctions against,
280
Brassey, Thomas, on work
and wages, 89
Breach of Trust, 200
Bribery, of legislature, 140;
remedies, 141; of agent, 192
Bricklayers and use of con-
crete^ 246
Bridges, 393
Brooklyn, personal-property
tax in, 580 n.
Brooklyn Bridge, toll on, 393;
municipal ownership of rail-
way,423
Bryan, W. J., the money
question and followers of, 359;
favors government operation of
railways, 399
Bunner, H. C, cited, 92
Bureaucracies provided by
universal suffrage, 456
Burgomasters, German, 478
Burns, John, labor logic of,
Burns, Robert, cited, 519
Burrows, C. W., on postal
policy, 414 n.
636
Index.
California, personal-property
tax in, 580 n.; taxation of
mortgages in, 609, 611
Canada, labor in, 89; banks
in, 390; railroads built by
government in, 408; lumber
kept out by high tariff, 532,
548
Capital (see also ability;
enterpriser; wealth), enter-
priser raises, 95; its return
more like labor's than ability's,
106; powerless without ability,
107; entitled to protection
equally with wages. 116; de-
fined, 117; needs tor associa-
ting, 120; incorporating, 121;
furnished America by Europe-
ans, 123; effect of great ag-
gregations of, on legislation,
140; increase in wages has
come largely from, 339; move-
ment of, influenced by taxa-
tion, 532, 533
Capitalism and socialism, 239
Capital Punishment, 172, 514,
Capital Trusts, 138, 254, 255
"Captains of Industry", 38,
Carelessness, a wrong, 169;
vast American wealth and good
nature promote, 482
Carlyle, Thomas, on hanging,
515
Carnegie, Andrew, and the
gateway of opportunity, 239;
benefactions 01, 490
Caveat emptor, 179
Cestui que trust, 200
Chancery Court, 47
Charity (see also housing the
poor; recreations and as-
sistance), 30, 350, 351; should
be reserved for emergencies, 30;
should help poor to help them-
selves, 57; impossible under
socialism, 226; general govern-
ment production attacks, 229;
effective only where wisely
directed, 340 ; communistic and
socialistic idea of, 349 ; Charity
Organization Societies, 350, 499,
520; present lines enough, 350;
good only for those unable to
work, 351; education of the
poor, 351 ; province of the law,
352; duty of the rich, 354;
corruption of voters under
guise of, 483; economy and
civilization require, 495; uni-
versal suffrage as affecting, 496 ;
general conclusions, 501
Charles I., principal statute of
limitations passed during reign
of, 74
Charles II., principal statute
of frauds passed during reign of,
69
Charters for railways, 404
Chattel Mortgages, 150
Checks, 362 ; not a legal ten-
der. 187
Chicago, site of, sold for a
song, 59; strikes in, 26m.;
labor bureaus in, 262 n.f 499;
Typothetac case in, 270, 277;
street-railway franchises in, 422 ;
power to own but not operate
street railways, 425; gas-plant
in, 438
Children's Courts, 510
China, labor most abundant
in, 99; primitive society in,
153; little change from condi-
tion of status, 156
Christ, laws of Nature enun-
ciated by, 23, 114; moral atmo-
sphere created by. an essential
of material well-being, 93;
created value in material things,
102; and the motive for charity,
"Christian", the label, 239
Cincinnati, owns a railway,
399; revenue from street-rail-
way franchises in, 423, 428;
personal property tax in,
580 n.
Citizens' Associations, 324
Index.
637
Citizens' Industrial Associa-
tions, 245, 269
City Government (see also
municipalization; suffrage),
Civic Relations, all-important,
1; defined, 4; general conclu-
sions regarding, 624; evolution
of, 62c
Civics, evolution in. vii; de-
fined, 4; distinguished from
"political relations", 4; not as
exact as mathematics, 10;
questions determined by prices
of stocks. 123
Civilization, comes from work,
26 ; affected by land-tenure, 49,
563; proportion of private
owners increases with, 5 1 ; would
retrograde without inventors
and organizers of industry, 99;
of Greece and Japan, simplicity
of, 100; what constitutes, 100;
history of, an overcoming of
disadvantages, 115; affected
by contract, 152, 229; mili-
tarism declines with advance of,
156; rapid growth of Japan in,
157; wealth essential to, 157;
affected by trade, 157; by
socialism, 158; the web of, 242 ;
"rich richer and poor poorer"
not true under, 328; consump-
tion of food increasing faster
than population under, .333;
consists in things that a man
can do without, 347; wise
philanthropy necessary to, 349;
affected by money, 359 ft.;
by roads, 391; dangers menac-
ing American, 473; affected by
charity, 495, 502; government
service outside of monopolies
detrimental to, 528;. realty -tax
incidental to, 587 ; evolution of,
625
Civil-Service Reform a remedy
for party control over municipal
offices, 478
Civil Suit illustrated, 1 5
Clark, Victor S., on Austral-
asian arbitration courts, 289 ff .,
309 ff . ; on Australasian experi-
ence with municipalization, 456
ff.
Class Legislation, 316
Cleveland, and three-cent fare,
42 * ; gas company in, 438
Cleveland, President, stops
the panic of '93, 374 ff.
Closed Shop, 250; accidents
and, 287; arbitration courts
and, 315
Cnut's feudal system, 47
Coal-Mining Business, U. S.
government in, 416; New Zea-
land in, 459
Coercion, trade-union, 243 ff.;
false justifications for, 247;
threefold, 247 ff.; striking, 248;
conspiring to stop work, 249;
other forms of, 250; no magic
in, 262 ; law's regulation of, 263
Coin, currency only in, inelas-
tic and extravagant, 383
Colbert, J. B., his theory of
taxation, 534, 559
Collective Bargaining, 254, 255
Collectivism and individu-
alism, 523
Collectors of the General Capi-
tal, 104
Colorado, eight-hour law in,
284
Combinations, 134
Commercial Paper, 150
Commercial Travelers, 128;
improvements effected by, 128;
vast number thrown out of
work by trusts, 133
Commissions, desirability of,
467
Common Carriers, 182
Communal Land, 45 ; deaden-
ing influence of, in India, 45 ; in
Russia, 45, 62
Communism, in land, 45;
contract under, 155; defined,
219 ff.; $1,200 apiece, 221;
necessarily ephemeral, 222; in-
638
Index.
volves robbery, 222; wealth
often destroyed when divided,
223; against Nature, 223 ; char-
ity under, 349
Companies (see also corpora-
tions), 125
Competency, laborers retiring
with a, 327
Competition, 39, 127; hated
by the lazy and stupid, 127; in
domestic convenience, 1 27 ;
benefits illustrated, 127 ft.;
in locomotion, 128; in com-
mercial traveling, 128; effects
industrial revolution, 128; ef-
fects steadiness of business,
129; the "life of trade'*, 129;
evils, 130 ff.; cooperation and,
131; sometimes wasteful , 131,
132, 142, 549; public seldom
gainer by wasteful, 131; trusts
a remedy for wasteful, 132;
consists in lowering prices, 132 ;
Professor Cooley on . 141;
Charles Scribner cited, 142;
socialism against. 234; equaliz-
ing, 3H'» stifled by "protec-
tion", 377; effect of govern-
ment ownership of railroads on,
402 ; effective industry requires,
526; taxation and, 537
Concord, Mass., boulevard op-
posed in, 393
Conditional Sale, 178
Conduct, good, inspirers of,
create value in material thinrs,
102
Conduits for water, gas and
electricity, 443
Confiscation, 251
Confucius, created value in
material things, 102
Confusion, 170
Connecticut, increase of wages
in, 330; personal-property tax
in, 579 n.
Consideration (see also con-
tract), under statute of frauds,
70; defined, 159 ff.; in bail-
ments, 184
Conspiracy, to stop work, 249;
labor, 265 ff.; law of, 267 ff.;
Judge Harlan on. 267; Judge
Knowlton on, 268, 273; U. S.
Supreme Court on, 268; Daven-
port on, 269 ; district attorneys'
duty, 273; Prof. Seageron, 274,
Constitution, U. S., not the
final word of human wisdom,
viii; Bill of Rights in the, 35;
amending, 478 ; obstacle to bet-
ter system of taxation in, 623
Constitutional Law: see law
Contract (see also contracts
FOR PERSONAL RELATIONS *, CON-
TRACTS CONCERNING PERSONAL
PROPERTY; QUASI-CONTRACTUAL
relations; sale), rights, 40;
value of established forms, 72;
ersonal property the great
eld of, 151; rights of, dis-
tinguished from property rights,
152; as an element in civiliza-
tion, 152 ff.; definition, 152;
possible only to the free, 153;
an education in freedom, 153;
only able employers can sec ure
labor under, 154; status versus
contract, 154, 158, 317; freedom
and private property evolve
with. 155; Morrisey on contract-
breakers, 158; law of rights
under, 1 59 ff . ; essentials of , 1 59 ;
illustrations, 160; natural love
and affection, 1 60 ; promises and
contracts, 161; fictional, 163;
mutuality, 163; three points
necessary to, 163-165 ; law and
religion, 164 ; justice and honor,
165; what contracts not en-
forceable, 165 ff.; law imposes
self-preservation, 166; con-
tracts which the law assumes,
167; estoppel, 168; carelessness
and fraud, 169; statutes of
limitations, 169; force vitiates,
170; waste through dishonesty,
170; when parties do not meet,
171; law does not require im-
I;:dex.
639
Eossibilities, 183; remedies for
roken, 198 ; principal kinds of,
198; general government pro-
duction attacks, 229; obliga-
tion of, 317 ; Australasian arbi-
tration attacks, 317 ; may some-
times work injustice, 319
Contract Labor, 284
Contracts concerning Personal
Property, law of, 173 ff.; sale
and delivery, 173; possession
and ownership, 175; no one
can sell more title than he has,
175; owner must not secure
possession by force, 176; de-
li vtry and acceptance com-
plete ownership, 177; condi-
tional sale, 178; option, 178;
when defects must be disclosed,
179; warranty, 179; surety-
ship, 180; insurance, 180; bail-
ments, 181; tender, 186; con-
tractual disabilities, 187; some
limits of quantum rah oat, 188 ;
the law protects the weak, 189;
verbal, in Wall Street, 342
Contracts for Personal Rela-
tions, law of, 190 ff.; agency,
190; partnership, 195; service,
196; remedies for broken, 198
Convenience, promotion of, a
function of government, 6,
357 ff-
Cooley, Prof., on competition,
141
Cooper, Peter, his fortune in
accord with Nature's laws, 114 ;
his rise, 155, 158
Cooperation and competition,
Cooperative Enterprises, 107,
Corporations, 121; rapid new
development of, in the U. S.,
50; liability, 121; perpetuity,
122; stocks and bonds, 122;
cheapen product, 124; not all
owned by the rich, 124; irre-
sponsibility, 125; small ones
undesirable, 125; great indus-
tries mostly controlled by, 126;
hated by labor, 1 26 ; overtaxed,
126; danger of monopoly, 126;
state control, 136; made by
the state, 138; corruption funds
of, 140; effect' of personal-
property tax on, 583; cause of
prejudice, 584 ; taxation of fran-
chise and non-franchise, 584
Corruption funds (see also
monopolies; municipal dif-
ficulties; protection; pub-
lic works; pull; taxation;
trusts), 140 ff.
Cotton-Gin, industrial change
effected by, 345
Cotton-Spinners, increased
wages of, 330
County Government, 10, 16
Courtesy and Dower, 72, 201
ff .
Courts under local, state and
national governments, 15 ff.;
needed against ignorance as
well as against fraud, 170;
probate, 206; supervising trus-
tees, 207; children's, 510
Cox, Horace, on eight-hour
day, 338
Creosote and Scotch whiskey,
539 .
Crime and pauperism among
children of divorced parents, 2
Criminals (see also defec-
tives), generally poor, 342,
509; generally defective, 509;
one wrong step docs not dem-
onstrate a criminal, 510; the
indeterminate sentence, 510,
511; most criminals insane, 511;
cheaper to keep rounders per-
manently, 511; habitual. 512;
prison labor, 512; capital pun-
ishment, 514; life-term pris-
oners, 515 ; taxation for main-
tenance of idle prisoners, 536
Criminal Suit illustrated, 16
Currency: see money; paper
money
Customs: see tariff duties
640 IfU
Cutler, Mayor, of Rochester,
on need 'of government inspec-
tion of street railways, 422
Dalrymple, , of Glasgow,
on municipal operation in
America, 424
Damages, for trespass, 68;
for broken contracts, 198; in
strikes and boycotts. 277, 278,
301; in arbitration law, 313
Daniels, Prof., on railroads,
396 ff.; on municipalization,
445, 447, 464
Darwin, Major Leonard, on
municipal trading, 442, 447, 448
Davenport, Daniel, on con-
spiracy, 269
Death-Penalty: see capital
PUNISHMENT
Debs, E. V., cited, 297
Debts, city, Lecky on, 469
Deeds, 70; seal on, 71; es-
sentials of, 7 1 ; value of es-
tablished forms of , 7 2 ; delivery
of, 76; fraud in, 78
Defectives (see also crimi-
nals), 349, 507 ff.; trustees for,
207 ; the persistently poor, 507 ;
the insane, 508; the criminal,
509; euthanasia, 513; educa-
tion the only remedy, 514; capi-
tal punishment, 514 ; the young,
517 ff-
Delivery and Acceptance, 177
Demand and Supply, 129; in
labor, 244
Democracy, on trial in muni-
cipal operation, 465; para-
doxes of, 478; relations of, and
laissrz-jair:, 489
Denmark, old-age pensions in,
Depression, business, of 1903-
4, 134
Derby, Earl, on indirect taxes,
558 n.
Derrick, Mrs., "Crime" of,
210 n.
Detroit, municipal ownership
of street railways in, 423; elec-
tricity in, 440
Dewey, Admiral, as an enter-
priser, 96
Dingley, N., and the Spanish-
war tax, 554 n.
Dingley Act and Europe, 543
Direct Taxes (see also income-
tax; inheritance-taxes; per-
sonal-property tax; realty-
taxes; taxation), 534, 562 ff.;
inquisitorial, 562 ft., 573 ff.;
income-tax, 563 ff. ; inheritance-
taxes, 571; personal-property
taxes, 573 ff.; obvious, 586 ff.;
realty-taxes, 586 ff.
Disease, good resulting from,
115; statutes protecting com-
munity from, 288
Dishonesty responsible for bad
government, 7
Disraeli, on income-tax, 571
Distribution, paradoxes of,
103
Dividends, cumulative, 122;
limiting, 139
Divorce, its effect on children,
2
Docks, 396
Domesday Book, 48, 73
Donald, Robert, on municipal
trading, 454 n.
Donnelly Act, 138
Double Taxation (see also
mortgages), 565, 608 ff.; of
mortgages, 608; tax liens and
deduct from valuation, 613; re-
sult of excises, 613
Dower and Courtesy, 72, 201
ff.
Drummers: see commercial
travelers
Duluth, water and gas in,
440
Dunne, Mayor, and Chicago
street railways, 424
Duties: see rights; tariff
DUTIES
Dwellings for the poor (see also
HOUSING THE POOR), 491
Index.
6ai
Easton, Pa., electricity in, 440 ;
Mayor March on, 440; D. W.
Nevin on, 441
Economics, bad, destruction
in, 102
Edinburgh, hospitals in, 497
Edison, Thomas A., cited, 93
Education {see also recrea-
tions and assistance), the
poor helped by, 350; leisure
classes should promote, 355;
local versus state control, 480 ;
state and private, 517 ft.;
illiterate voters, 518; in Ger-
many, 518; usable and un-
usable, 518; what is needed,
518 ; policy of European cities,
519; practical, not foe to
poetry, 519; pauperization
through, 519; " school-treasu-
ries" in France, 520; state's
responsibility, 520; parents'
duty, 520; elementary, in Eng-
land, 521; in Holland, 521; the
higher, 521; political pulls in,
522; state universities versus
private, 522 ; the great hope for
the future, 623
Eight-hour Day {see also work-
day, shorter), 336 ff.; in Utah
and Colorado, 284; Supreme
Court and, 284; John Rae on,
337; Horace Cox and Sidney
Webb on, 338; effect on cigar-
makers, 339
Ejectment, 68
Electoral Franchise: see suf-
frage; UNIVERSAL SUFFRAGE;
voters
Electricity, municipalization
of, 440; versus gas, 442 ; plants
in England, Germany and the
U. S, 453
Emerson, R. W., on the dis-
tribution of wealth j 356
Eminent Domain, 64; in
monopoly abuses, 139; at Ni-
agara Falls, 139; under com-
munism, 222; under socialism,
230; clearing slums under, 492
Employees {see also labor;
railroads ; service), rights and
duties of, 28, 196 ff.; accident
insurance of German, 30, 500;
power to contract, 154; in-
crease in, 339
Employers, rights and duties
of, 28, 196 ff.; often pay too
high wages, 100; competition
among, 1 54; coercing of, 248 ff .;
associations of, 260 ff.
Endorsement, 148 ff., 161
England, Poor Law in, 29,
230, 231; laborers in, 89, no;
churls and villeins of, 154;
wages in, 221, 332; increase of
estates in, subject to succession
tax, 331; improved condition
of working classes in, 331 n.;
paupers in (London), 332; pos-
tal savings-banks, 332 n., 498;
roads in, 392 ; government ferry
at Woolwich, 395; railroads in,
397, 401; municipal gas-plants
in, 435 ; opposition to municipal
trading in, 469 ff.; suffrage for
city officers in, 484, 485 ; labor
bureaus in, 499 ; rate of taxation
in. 53 1 ; free trade in, 549 ; waste-
fulness of taxation in, 558 n.\
division of incomes in, 567;
income-tax in, 571; multiple
voting in, 595; rental-value tax
in, 606; taxes luxuries mainly,
615
"Enrichment", 188
Ensley, Enoch, (quoted by
Wells,) on taxation of movable
property, 577
Enterpriser {see also ability;
capital; wealth), and wage-
earners, 92, 103; defined, 94;
prophesies wants, 95; raises
capital, 95; at the works, 95;
outside the works, 95; popular
view of the, 95; effects division
of labor, 96; often fails, 97;
J. H. Walker quoted, 97 n.;
his income not at expense of
labor, 98; must pay good
642
Index.
wages, 100-1; fallacy that he
produces nothing, 101 ; rates of
division of product, 107; gen-
erally gets less than nothing,
108 ; Mayo-Smith quoted, 340
Entrepreneur: see enter-
priser
Equilibration, law of, 327
Equity of Redemption, 76,
611, 612
Erie Canal, wages of laborers
on, 330
Escrow, 75
Estate (see also real prop-
erty), life, 72, 80; technical
meaning of, in land, 78; restric-
tions, 83 ; in personal property,
150
Estates at Will, 80
Estates for Years, 78, 79; re-
pairs, 79; subletting, 80; ter-
minability, 80; notice, 80
Estoppel, 168
Euclid, 93
Euthanasia, 513
Evils have their uses, 114
Evolution, in civics, vii ff.;
of property rights, 42; of
hereditary feudal relations, 47 ;
of private ownership, 48; of
rights in personal property,
87 ff.; invention and, 98; a
question of, no; simultaneous
in freedom, private property
and contract, 155; the law is
an, 171; of road-making, 392;
single tax an, 600; of taxation,
617 ff.; of civilization, 625; of
government, 628; not all nega-
tive, 629 -
Exchange, right of, adds to
value, 40
Excise, 539; secret stills, 539 ;
objections, 540; may limit
dangerous pursuits, 540; more
than twice as good a tax as
the tariff, 556; multiplies tax-
ation, 613
Executive, 13
Executors, 202
Experts, ideal government will
consist of bodies of, 624
Ex post facto Laws, 3 5
Express Service, 412; by
European post-offices, 415
Failures. J . H . Walker on, 97 n.
Fares, low, Mayor Johnson
and, 424; how to secure, 429;
in Columbus, Rockford and
Cleveland, 429; in Germany,
528; zone, in Glasgow, 429
Farm Colonies, 53
Farming, dearth of laborers,
54; needs ability, 55; machin-
ery in, 344
Farms, abandoned, 54
Federal Salt Co., government
suit against, 137
Fee Simple, 78, 587, 611
Ferries, 395
Feudal System, 46, 153; ad-
vance on communism, 46; in
the Saxon kingdoms, 46; under
Cnut, 46; guardianship, 47;
disposal in marriage, 47 ; under
William the Conqueror, 47;
Domesday Book, 48; evolu-
tion of private ownership under,
48 ff.; scutage, 48; leases for
labor, 48; money commuta-
tion of labor leases, 48; con-
tract under, 155 ff.
Fiat Money, 364
Fiction in Law, 163
Fiduciary denned, 199
Finance, incorrect principles
of, destroy value, 102
Folk, Governor, quoted, 399
Food, increase in price of, 335
Forgiveness a law of Nature,
23
Fortune {see also wealth), ex-
amples of change of, 97 n.,
209 n., 348 ft.; inequality of,
113; right use of, 113 ; excessive
fortunes, 204 n.
France, public workshops of,
29, 30, 500; land laws in, 51;
labor in, 90; increase in wages
Index,
643
in, 333; roads in, 393; rail-
roads in, 397; suffrage in, 486;
theatre in, 490; housing the
poor in, 493; "school-treasu-
ries" in, 520; rate of taxation
in, 531; levies retaliatory duty
on Italian silk and cottonseed-
oil and bacon, 542, 543; pro-
tectionism in, 549; wasteful-
ness of taxation in, 5 j8 n.
Franchise, Electoral, (see also
suffrage; universal suf-
frage; voters,) 473 ft-
Franchises, 145; seized by
politicians, 145 ; should not be
sold outright, 146; value of,
in Baltimore, 146; operation,
ownership, regulation, 394; in-
crement in, 394, 428; of ferries,
395; taxation of. 404, 584;
government control of private
operation of, 409; Prof. Adams
on, 410 n. ; in Chicago, 422 ; too
short, 452
Franchise-Tax {see also real-
ty-taxes), 606 ff.
Frauds, statute of, 69; in
land transfer, 78, 84; in con-
tracts, 169 ; never defined, 169 ;
in consideration, 173, 174
Free assembly, etc.: see lib-
erty
Freedom (see also liberty),
contract and private property
evolve together with, 155; so-
cialism would destroy, 231
Freedom of the Press (see also
liberty) curtailed by arbitra-
tion courts, 316
Free-Food Depots, 31
Galton and the law of aver-
ages, 92, 93, 327
Garfield, J. A., rise of, 155
Gas, 435; craves municipali-
zation less than water, 435;
cheapened by it in some places,
436
Gautama, moral atmosphere
created by, an essential of mate-
rial well-being, 93; created
value in material things, 102
Genghis Khan and the com-
munal system, 154, 155
George. Henry, theories of fol-
lowers ot, 58, 563; advocates
single tax, 595, 621
Georgia, personal-property
tax in, 580 n.
Germany, employees' acci-
dent insurance in, 30, 500;
labor in, 90 ; income-tax statis-
tics of, 333; new money sys-
tem in, 368; government fer-
ries in, 395; railroads in, 397;
municipal gas-plants in, 435;
extension of street lighting in,
435; burgomasters in, 478;
suffrage for city officers hi, 484,
485; vote of taxpayers in, 486;
runs theatres well, 490; hous-
ing the poor in, 403; labor
bureaus in, 499; ola-age pen-
sions in, 500; unusable educa-
tion in, 518; protectionism in,
549; income-tax in, 571
Giffen, Sir Robert, on wages,
33i
Gladstone on income-tax, 571*
Glasgow, failure of Bank,
122; municipal ferries in, 395;
docks in, 396; report of tram-
ways, 425 ; municipal gas-plants
in, 436; extension of street
lighting in, 436; railway facili-
ties and fares in, 449; objec-
tion to municipal trading in,
454 n.; housing the poor in,
493; public wash-houses in,
495 ; lodging-houses in, 497, 498
Glass-Blowers, making work
for, 217
Gluts (in manufactures), 546,
550
Godkin, E. L., as a citizen,
355; on division of English
incomes. 567; favored aboli-
tion of legislatures, 62 c
Golden Rule a law of Nature,
23
644
Gompers, Samuel, anti-in-
junction bill advocated by,
282; his "fight", 297, 324
Goodnow, Prof., on reform in
municipal politics, 478; on
separation of state and local
functions, 479
4 * Goods" not all material
things, 108
Government (see also mu-
nicipal difficulties; munici-
palization), general functions
of, 5 ff., 8; illustrated, 5;
classified, 5; results of bad, 6;
responsibility for bad, 7; good,
requires effort, 7 ; geographical
divisions, 9 ff.; departments,
13 ff.; sources, 14; protects
workingmen, 28; landowners
best guardians of, 52 ; produces
value, 102; control of trusts
and monopolies, 136; danger of
tyranny, 139; production by,
attacks variety, 228; and pri-
vate property and contract and
charity, 229; by injunction,
281; honesty of, affects prices,
343 ; aid to deserving poor, 351 ;
in manufacturing and banking
business, 375, 385; notes, objec-
tions to, 382; may pass law
impairing obligation of con-
tracts, 403; railroads managed
by, 406 ff.; railroad vote in,
408; municipalization, 451, 524
ff. ; production by, attacks initi-
ative, 451. 470; state functions
and city functions, 479; army
outfitting, etc., by, 494 '» admin-
isters charities poorly, 495; and
the death-penalty, 5*13, 514; in
education, 520: proper sphere
of, 523 ff.; individualism and
collectivism, 523; cost of, in
different countries, 531; sta-
bility influenced by methods of
taxation, 532; indirect taxes
prevent criticism of, 558; cost
of, per person in U. S., 558;
affects real-estate values, 591;
ideal, 624; vices in evolution
of, 628
4 1 Government Stroke ' ' in Aus-
tralasia, 461, 470
Graft, and socialism, 238; cor-
poration and political, 405, 492 ;
in London, 42 1
Great Britain, gas consumed
in, 439; street railways, electric
lights, and telephones in, as
compared with trie U. S., 449;
municipal gas-plants in, 452
"Greatest Happiness" Prin-
ciple, 22, 27, 63, 64, 113, 204,
247, 270
"Great Industry": see in-
dustry
Greece, simplicity of civiliza-
tion of, 100 ; busy with her past,
518
Greed and socialism, 238
Greenback Currency of Civil
War destroyed values, 102, 366,
378; versus gold, 365
Gresham's Law, 386
Grosvenor,W . M . , on prices, 329
Guardianship, feudal, 47; at
present, 206
Habeas Corpus, 37
Habitation Tax (see also ren-
tal-value tax), 61 g
Hadley, President, on betting,
166; on improvements in rail-
roads and telegraphs, 470
Hahnemann and the home-
opathists, 232
Hamburg, docks in, 396; gas-
plants in, 435
Hamilton, Alexander, revenue
tariff of. 544
Hamilton, O., lighting plants
in.438
Handworkers, claims for, 90,
95, 108
Happiness (see also pursuit
of happiness), principle of
greatest 22, 27 ; state's relation
to, 41 ; not dependent on wealth,
I 348; causes of, 628
Index.
645
Hard Times, forehandedness
against, 346; effect of, on
prices, 346
Harlan, Justice, on con-
spiracy, 267
Head, Mayor, of Nashville,
and street-railway companies.
427; experience with gas and
electricity, 44 1
Hearst, W. R., and municipal
ownership, 395 •
Help: see charity; housing
the poor; recreations and
assistance
Helpless: see defectives
Henry, Patrick, cited, 519
Henry H., scut age imposed
by, 48, 587
Henry VHI., regard for hu-
man life in time of, 172
High Prices and palliatives,
Hildebrand and the feudal
system, 155
Hill, John A., and printing
strike. 88
Hiring, 183
Holland, suffrage for city
officers in, 484
Home, importance of the, 2;
right to a, 53
Honesty, raises wages and
credit, 341; lowers prices, 342;
of government affects prices, 343
Honor and justice, 161, 165
Hospitals, 496
Hotels improved by com-
mercial travelers, 129
Hours of Labor (see also
work-day), 329
House-Building, 493, 494
Housing the Poor, 491 ff.;
community should regulate it in
self-defence, 494 ; but not neces-
sarily undertake it, 494
Idiots vote in New York,
486 n.
Idleness, insurance against,
500
Ignorance responsible for bad
government, 7
Illinois, labor bureaus in, 500;
personal-property tax in, 581 n.
"Imperialism' and politics,
476
Improvements, land occupi-
er's rights in, 60; should be
voted on by taxpayers only,
484 ff.
Incapables (see also defec-
tives), 349
Incomes, statistics of British,
Income-Tax, impossibilities
not required by law, 183; Prus-
sian statistics of, 333; de-
clared unconstitutional by Su-
preme Court. 553, 570; defined.
563 ; falls only on successes and
active property, 563; propor-
tioned to ability, 563; pre-
mium on lying, 564; violates
rights of privacy, 565; gener-
ally doubles taxation, 565; as
illustrating progressive taxa-
tion, 565; discrimination of
sources, 566; as equalizing for-
tunes. 566; progressive, 566;
as offsetting injustice in other
taxes, 567; out of proportion
to state's services, 567 ; taxa-
tion versus benevolence. 568;
taxing away business and benev-
olence, 569; characteristic of
militarism, 570; heaviest on
those least able to bear it,
570; and social war, 570; ap-
proved only as a necessity, 571 ;
Gladstone and Disraeli on, 571
Increment: see unearned
INCREMENT
Independence, civilized man
loses the savage's, 91
India, communal land in, 45;
labor in, 89, 99; primitive
society in, 153; little change
from condition of status in, 156
Indirect Taxes (see also tariff
duties; excise; stamp-taxes;
646
Index,
taxation), 534, 539 ff., 556 ff.;
excise, 539; duties, 541; stamp-
taxes, 553; general conclusions
on, 556 ft.; wasteful, 556; hard
on the poor, 556; corrupt legis-
lation, 557; prevent criticism
of government, 558 ; why popu-
lar> 559; summary for and
against, 561; poor substitutes
for, 616; how England uses
them, 616
Individual, society's control
of the, 1 fE.; liberty of the, 288
Individualism, all the progress
of mankind made under, 232,
235; socialism and, 232; uni-
versal suffrage implies, 488 ; and
collectivism, 523
Industrial Associations, 324
Industrial Regulation pro-
motes centralization of indus-
try, 312
Industries, politicians run-
ning, 140; government control
of, 416 ff.
Industry, the Great, cheapens
product, 98; early days of,
106; essentials of, 117; de-
veloped by coqx>rations, 123;
economies of, 133-135; venal
legislation and, 140; intro-
duced by steam, 345 ; effect on
labor, 345; on economic doc-
trine, 345 ; requires competition,
526; as affected by taxation,
532
Inheritance-Taxes, 571; col-
lateral. 572; Evening Post
quotecl, 572
Initiative, private, essential
to variety, 228
Injunction, Anti-Injunction
Bill, 261 «.; against boycotts,
280; judge's power to punish
under, 280; government by,
281
Injuries (sec also accidents),
protecting laborers against, 2S7
Injustice, citizen's duty to
fight, 196
Innkeepers as bailees. 185
Inquisitorial taxes (see also
direct taxes), 562 ff . ; in-
tolerable, 616
Insane, care of, 508 ; criminals,
509 ff.
Insurance of employees
against loss of work and acci-
dent, 30, 500; in general, 180;
against idleness of old age, 500
Insurance Companies, officers
of, 103; and San Francisco
earthquake, 236, 339
Intelligence, growth of , 1 1 5
Interest (see also usury),
defined, 118 ; legal rate of, 118;
law in New York regarding, 119;
reduction of, 339
Interstate Commerce Act,
Prof. Seager's summary of, 405
Intestates, devolution of es-
tates of, 201 ; rights of relatives
of, 201
Invention and evolution, 98
Inventor reaps only small
proportion of his production, 88 ;
defined, 98
Investment, unwise, 121
Ireland, labor in, 69; secret
stills in, 539
Italy, beggars in, 349; rail-
roads in, 397, 407 ; suffrage for
city officers in, 484, 485; old-
age pensions in, 501; rate of
taxation in, 531; levies high
duty on French wines, 542;
protectionism in, 549; income-
tax in, 570
Jacksonville, Fla., electricity
in, 440; and the Australian
ballot, 484
James II., regard for human
life in time of, 172
Japan, simplicity of civiliza-
tion of, 100; militarism in,
1 5 7 *. great advancement of,
157
Jersey City, personal-property
tax in, 580 n.
Index.
647
Jevons, W. S., on shorter
work -day, 338
Johnson, Mayor Tom, and
three-cent fare, 424
Joint Traffic Association, 137
udgments, 74
Judiciary (see also courts),
13 **•
Jury, trial by, Australasian
arbitration attacks, 318; pos-
sibly now outgrown, 319
Kansas tries a new way of
"bleeding", 374
Kansas City, conduits for
wires in, 444
Keane, Archbishop, on slight-
ing of work, 216
Kipling, Rudyard, cited, 519
Kitchens, public, 30
Knowlton, Judge, on conspir-
acy, 268, 273
Label, union, 255; and Bos-
ton school-books, 256
Labor (see also ability; capi-
tal; enterpriser; labor-
saving machinery; labor
trusts ; scamping work ; trade-
unions; wages; work), in
production, 42, 87, 89; Brassey
on, 89; in various countries
compared, 89; Italian versus
negro, in the U. S., 89; con-
flict between ability and, 90;
enterpriser regulates division
of, 96; enterpriser's income
not at expense of, 98; abounds
in poorest countries, 99; re-
turns of, nearly fixed, 104;
powerless without ability, 107;
rates of division of product,
107; hates corporations, 126;
evil effects of scamping, 209 ff.;
piecework, 213; pretending and
forbidding, 214; Thornton cited,
214; in Australasia, 216; de-
struction as an aid to produc-
tion, 217; as affected by com-
munism, 220 ff.; by socialism,
230; a corner of supply of, 243,
269; demand and supply in,
244; coercing the laborer, 253
ff.; and the law, 265 ff., Par-
liament and, 270. 277; Prof.
Adams and Prot. Seager on
labor laws, 283; protecting
laborer against himself, 284;
against accidents, 287; laborers
retiring with a competency,
327; hours of, 329; rise in
wages, decrease in hours, 335;
increasing ability of, 340 ; effect
of machinery on, 344; under
government ownership of rail-
roads, 408 ; labor logic of John
Burns. 451; in English mu-
nicipalities, 454; municipal,
470; prison, 512; aggressions,
627
Labor Bureaus, 26m., 350,
499
Labor-Contract, violation of,
278
Laborers: see employees;
labor
Labor Question (see also la-
bor), the leading question of
the time, iv ; a real struggle, 627
Labor-Saving Machinery,
strikes against, 270; increases
production, 336; creates and
supplies new wants, 343 ff.;
effect on economic doctrine,
345; attitude of workmen to-
ward, 346; as many producers
needed with as without, 346;
product cheapened by, 346
Labor Trusts (see also tradv.-
unions), 138, 254 ff., 283, 551,
626
" Labor Vote " the, 407, 454
Laissez-faire, democracy and,
488, 489
Land (see also communal
land; farm colonies; farms;
feudal system; landowners;
land-tenure; private prop-
erty; real property; un-
earned increment), source
648
Index.
of raw material, 44; evolution
of private ownership, 48; wide
dissemination of private own-
ership in America and France,
51 n., 52 ; advantages of private
ownership exaggerated, 52 ff.;
people who clamor for every-
body having it will not go to
it, 53, 54; many of the rich
have little or none, 54, 57;
valuable only to able men, 55;
proposed reversion to govern-
ment ownership, 55 ; government
taking, by robbery, 56; 4 4 un-
earned increment' , 57 ff.; du-
ties of ownership breed rights,
59; increases in value with
growth of population, 60; rent,
60, 118; importance of private
property in, 62; rights in.
limited, 63; the source of all
other property, 68; as capital,
117; not a monopoly, 144;
agricultural, at a disadvantage
under single tax, 597; sepa-
rated tax on, exclusive of im-
provements, 601 ; buildings dif-
fuse taxes more readily than,
602
Landowners, number of, in-
creases with civilization, 5 1 ;
best guardians of government,
52; most thrifty citizens, 52;
pay most of the taxes, 56;
robbery of present, advocated,
56; taxes no hardship to, 620
Land-Tax, mark of liberty and
progress, 587; the ideal system,
617 ff.
Land-Tenure (sec also evo-
lution; FEUDAL SYSTEM", LAND;
real property), source in
America, 48; similar among
peoples of same grade, 49
Lassalle, F., and labor-saving
machinery, 34^
Laughlin, Prof., on high
wages, 245
Law (sec also agents; as-
signees; administrators; ap-
purtenances; bailments;
bankrupts; bets; contract),
common, statute, administra-
tive, 22, 65 ff.; defined, 65;
four principal sources from
which evolved, 65 ff.; constitu-
tional, 65 ff.; protects owner-
ship, 68 ; affecting transfers, 69 ;
of England prevails in U. S.
where not in conflict with
statutes, 70; maxims of, 77,
163, 165, 169, 179, 188, 192, 193,
394, 405; against usury, 118;
against trusts, 136; promises
not as binding as contracts in,
161, 164; and religion. 165;
contracts that will not be en-
forced by, 165; imposes self-
preservation, 166; but cannot
provide wisdom, 167; con-
tracts which arc assumed by
the, 167; an evolution, 171;
possession nine points of the,
175; does not require impos-
sibilities, 183; protects the
weak, i8q; abhors litigation,
193> judges people by their
records, 197; badness of pres-
ent, docs not prove goodness
of proposed changes, 220; no
magic in laws, 237 ; natural and
civic, 265 ff.; of conspiracy,
267 ff. ; industrial, 289; protect-
ing the weak and foolish even
against themselves, 351 ; a lux-
ury of the rich, 352; cannot
discriminate between people,
352; cannot use wealth wisely,
354; docs not bother with
trifles, 394
Laziness responsible for bad
government, 7
Leases, 77
Lecky, on city debts, 469
Legal Aid Societies, 352
Legislation, effects of corpo-
rations and trusts on, 140;
class, 316
Legislatures, 13; in local
government, 16; corrupted by
Index.
649
trusts, 140; Nature and human
nature before, 598; abolition
of, favored by Godkin, 625
Lessee, 78 ff.
Liberty, "eternal vigilance",
7, 35; Anglo-Saxon principles
of. 11, 35; rights to, 32 ff.;
limits, 32; barbarian and civ-
ilized, 33; curtailed by others'
rights, 33; duties balancing
rights to, 34; state's right to
restrain, 34; in the U. S. Con-
stitution, 35; free press, free
assembly, 36; the man with a
"pull", 37. 142, 407, 408, 522;
freedom of opinion, 38; laws
threatening, 38; and pater-
nalism, 286; of individual, 288
Libraries, 490, 504
Liens defined, ! 7 5 ; taxing, 6 1 3
Life, right to, 25 ff.; the
state's claims, 25, 136: hu-
manity's claims, 25; profes-
sional claims, 25; duty to risk,
25; regard for, in time ol
Henry VIII. and James II.,
172; at present, 172; influ-
enced by taxation, 532
Life Estate, 72, 80
Life-Insurance in Australasia,
46Q, 501
Lighting, 435 ff.
Limitations, statutes of, 74,
169
Lincoln, Abraham, rise of,
Liquor Traffic, limitation of,
by taxation, 540
Literature, damage to, in the
U.S., 414
Liverpool, docks in, 396;
wastefulness of water-supply in,
434
Livery of Seisin, 69
Living, right to a, 54 ; cost of,
335,. 336
Living Wage, 231 286, 306,
314; and state socialism, 295
Lloyd, II. D., on compulsory
arbitration, 300, 304 ff.
Loan Society, Provident, 498
Local Governments, overlap-
pings of, 9; functions, 10,
17 ; municipalization, 451, 525;
national parties and, 475-478;
strong, the basis of Anglo-Saxon
liberty , 480 ; best in Great Brit-
ain and Germany, 525 ; worst in
America, 525
Local Option in taxation, 598
Locke, John, single-tax the-
ory of, 596
Lockouts, 249, 410 n.
Locomotive, industrial change
effected by ,34 5
Lodging-Houses, 498
Logansport, ind., electricity
in, 440
London, municipal operation
of trams in, 42 1 ; gralt in,
421; pipes in railway tunnels,
443; nousing the poor in, 493
London, Jack, and socialism,
239 ff.
Loom, influence of, upon
"the great industry", 345
Los Angeles, removal of elec-
tive municipal officers in, 488
Lower depends on higher, 93
Luck, as a way to wealth, 209
Lunatics: see insane
Luxuries, prices of, first to
fall in hard times, 346; Eng-
land taxes mainly, 615
Machinery, Labor-Saving : see
LABOR-SAVING MACHINERY
McKinley Tariff Bill, 546^
McPherson, Judge, on picket-
ing, 275
Mahomet and the communal
system, 154, 155
Mahoney, T. J ., quoted, 2 7 5 n.,
280
Maine, Bureau of Industrial
Statistics of, on cheapened food-
supply, 329
Majority, wrong-headed, worst
tyrant known, 255
* 'Making Work , 2 1 2, 2 1 7, 2 18
Index.
Mallock, W. H., on wages'
share of product. 107, no; on
improved condition of working
classes, 33 m.
Managers, of government in-
stitutions, 227; of political
pulls versus managers of in-
dustry, 228
Marcosson, Isaac P., quoted,
261 n.
Marriage {see also home)
feudal disposal in, 47
Marx, Karl, 107 ; rich richer
and poor poorer", and his
14 bronze law 345
Massachusetts, Torrens sys-
tem in, 84; increase of wages
in, 330; improved condition
of machinists in, 330 n. ; pro-
bated estates in, 331 ; police in,
480; and the Bell Telephone
Co., 569, 570; personal-property
tax in, 581 n. ; taxation of
mortgages in, 611
Master and Servant (see also
service), 196 ff.
Mayo-Smith, Prof., on "un-
earned increment", 61; on
prices, 329; on profit. 340
Meat Inspection Bill, 138
Metropolitan Traction Com-
pany, broad-minded manage-
ment of, 429
Meyer, Hugo R., on muni-
cipal operation in Great Brit-
ain, 449 ff., 525
Michelet, J., on effect of pri-
vate property in land, 51 n.
Milan, pipe-galleries under
sidewalks of, 444
Militarism, decline with bar-
barism, 48. is6 ff.; effect of
Wars of the Roses upon, 48;
a form of status, 156; in
Japan, 157; income-tax char-
acteristic of, 570
Mill, John Stuart, proposes
government ownership of land,
55; on law of wages, 306; on
overgovcrnment, 448; on real-
ty-tax, 588; on the ideal gov-
ernment, 624
Mine Workers, United, re-
striction of output, 215
Minimum Wage, and sliding
scale, in; versus living wage,
286; Prof. Seager on the, 286;
in Australasia, 292
Minors, contractual disabili-
ties of, 187 ff.
Missouri, experience with rail-
ways, 399
Mitchell, John, on loss due to
strikes, 252
Money (see also paper money;
silver), government affects
worth of, 8 ; government manu-
factures, 9; can be hired by
the man who can use it well,
117; when to be paid back,
168; legal tender, 187; power
to print paper, questioned by
many lawyers, 187 ; not much
of it essential to enjoyment,
348 ; reasons for studying, 359;
general considerations on, 359
ff.; Tom Watson on, 359; bar-
ter and, 360; swindling by,
361; kinds of, 361; qualities
of, 362; legal tender of bad,
362; definition, 363; bad buys
less than good, 363; value in
paper, 363; fiat money, 364;
token money, 364; redemption
money, 364; some American
experience, 366 ff . ; paper money
cheats creditors, 366 ; and raises
prices, 367; "never mind Eu-
rope", 367; effect of money
not redeemable in gold, 367;
depreciation of silver dollar,
368; why coins not made
heavier, 369; American re-
monetization in '78 and '90,
369; cheap-money fallacy, 370
n.; the rapacious fooling the
ignorant, 370; who profits by
light-weight silver?, 371; poor
not the debtor class, 372; ror
the class that handles least
Index.
gold, 372; the panic of^ 93,
372 (see also panic of '93);
government banking, 375;
"sixteen to one", 376; im-
proved trade balance supplies
gold, 377; light-weight silver
money no new scheme, 378;
poor, one of the social pana-
ceas, 378; money questions no
longer a distinct issue, 378;
needs for the future, 380 ff.;
best safeguard, 380; gold the
safest material, 381; paper
better than light-weight silver,
381; safety in large bills, 381;
no absolutely, saf e material for,
381; only safe silver dollar,
382; objections to all govern-
ment notes, 382; yet coin in-
sufficient, 383 ; good paper cur-
rency preferable, 384; but not
from government 385; essen-
tials of banknotes, 385; "wild-
cat" money, 385; essentials of
a sound system, 386; rag
money, 386; basis for elastic
currency, 387; no safe cur-
rency based on commercial
paper, 388; farmer's needs,
389 ff.; cheap, 536; a medium
of exchange, 550; superfluous,
603
Money-Lending, government
success in, 459
Monopolies (see also compe-
tition; corporations; trusts),
126. 132 ff. ; statute against,
in Parliament, 126; American
courts and, 126; objection to,
127; limit to property rights,
136; state control, 136; against
common and statute law, 136;
law of 1890 against, 136; diffi-
culty of getting advantages out
of anti-monopoly laws, 136;
controlled by corporations, 138 ;
state interferences with, 139;
natural. 144 ff., 526; why
railroads are, 145; franchises,
145; become personal property,
146; state competition with,
201; and privilege, 463; the
iaeal field of the state when
practicable, 468; municipaliza-
tion a defence against, 471;
government regulation of natu-
ral, 526, 627; government ser-
vice outside of demoralizing,
528; social and artificial, 627
Moral Atmosphere created by
Gautama, 93; by Christ, 93
Morality, growth of, 115;
sound, promulgators of, create
value in material things, 102
Morrisey, Grand Master, on
contract-breakers, 158
Mortgages (see also land;
REAL PROPERTY), 70, 76, 1 23;
chattels, 150; double taxation
of, 608 ff. ; a debt, not a value,
608; mortgagor generally pays
tax indirectly, 609; not prop-
erly real estate, 610; in differ-
ent states, 610; mortgagor pay-
ing mortgagee's tax, 611; why
tax mortgages and not notes?,
612
Mulhall on wages in England,
33i, 332; on taxation, 531
Municipal Corruption, Ameri-
can, 473
Municipal Difficulties, Ameri-
can, 473 ff. ; New York in
1870, 473'. m l894, 474; city
works the plums of politicians,
474; New York in 1898, 474;
national parties in local affairs,
475 ff. ; this partly caused by
method of electing U. S. sena-
tors, 476; bad mixing local
politics with state and national,
477; civil-service reform as a
remedy, 478; Professor Good-
now on separation of state and
local functions, 479: educa-
tion, 480; police, 4S0; Ameri-
ca alone in confusing local and
national politics. 481; Ameri-
can wealth ana good nature
promote carelessness, 482 ; debts
652
Index.
of municipalities, 482; cor-
ruption of voters under the
guise of charity, 483; pro-
letariat voting, 484; Tilden
Commission's proposed remedy,
485; local suffrage rights differ
from others, 485
Municipalities, English, dog-
in-the-manger policy of, 450;
obstructive, 451 ; strangling pri-
vate enterprise, 451. 470
Municipalization (see also mu-
nicipal difficulties), best
where people watch it most,
396,415,435; °f railroads. 420
ff. ; of waterworks, 432 ; of gas-
works, 435, 436; Prof. Daniels
quoted, 436; in New York, 437 ;
of electricity, 440; of the tele-
phone, 442 ; tunnels for pipes,
wires, etc., 4/13; of advertising
signs, 445; Piatonists and Aris-
totelians on, 447; obstructive,
451; especially to inventive
talent , 470 ; dangerous to purity
of government, 453; objected
to in Glasgow, 454 English
elections against, 455; leaves
out able men, 455; Australa-
sian experience with, 456 ff.;
summary and conclusions, 468 ;
in England municipal trad-
ing increases taxation with-
out proportionate results, 460;
desirable only as defence against
monopoly, 471; as training in
citizenship, 471 ; least in United
States, 524; increases with inde-
pendence, 524; decreases with
police control, 524; increases
with good local government,
525; necessary limits, 526;
mainly determined by natural
monopoly, 526
Municipal Operation, of trams
in London, 421; two reasons
for, 424; Great Britain versus
America, 426; deteriorating
private service may compel,
430; latest aspects of, 447 ff. ;
in Great Britain, 447; retards
development, 449 ; municipal
ownership loaded with, in Great
Britain, 452; in Omaha, 461;
Political Science Association on,
462; a question of democracy
on trial, 465 ; has its largest fol-
lowing among those who pay
no taxes, 466; in a university
town and a labor town, 466;
fallacious reasoning, 467 ; taxes
increased with, 531
Municipal Ownership (see also
municipal operation), Hearst
and, 395 ; Prof. H. R. Meyer on,
449 ff.
Municipal Trading (see also
municipalization), opposition
to, 421; Major Darwin on,
442, 447, 448; Lord Avebury
on, 448, 454 n.\ Robert Donald
on, 454*1.; taxation and debt
increased by, 455, 469; Parlia-
ment and, 481; housing the
poor. 493
Murders and trade-unions, 254
Museums, 490
Names, no magic in, 237
Napoleon HI. makes over
Paris, 493
National Association of Manu-
facturers, 261
National Citizens' Industrial
Association, 261
National Government, 11, 18;
in local politics, 475, 481
National Metal Trades Asso-
ciation, 261 n.
National Municipal League,
420 n.
Natural Law and civic law,
265 ff.
Nature, laws of, 23, 114;
when an over-indulgent parent,
26; a hard mother to the in-
effective man, 114
Navies produce value, 102
Necessities, prices of, tend to
keep up in hard times, 346
Index.
Need and desert, 240
Negotiable Paper, 148 ff.
New Hampshire, personal-
property tax in, 581 n.
New South Wales (see also
Australasia), state operation
of railways in, 409
Newton, Isaac, 93
New York City, instances of
scamping work in, 212; the
stone-polishers' union and the
Hotel Savoy, 217; street-rail-
way strike in, 273 ; ferry fran-
chises in, 395; municipal own-
ership of street railways in,
423; subway in, 423; frightful
swindles in connection with
water-supply of, 433; munici-
palization of lighting plant and
surface railways, 437 ; only one
voter in ten a taxpayer, 472 ;
municipal difficulties in, in
1870, 473; in 1894, 474; edu-
cation in, 480; police in, 480;,
management of parks in, 490;,
Fine Art Commission of, 491;
housing the poor in, 494;
Provident Loan Society in, 498 ;
Charity Organization Society
in, 499; most expensive city in
the world, 538; secret stills in,
A 39; only one man in twenty-
ve pays direct taxes, 558; per-
sonal-property tax in, 579,
580 n.\ bad government of, an
obstacle to real-estate invest-
ment, 592; equalization of
taxation in, 593; single tax in,
600; separated tax in, 601;
rental-value tax in, 604; tax-
ation of mortgages in, 609
New York State, interest law
in, 119; labor laws of, 284;
punishes attempts at suicide,
285; accidents to laborers in,
287 ; idiots vote in, 486 «.
New Zealand (see also Aus-
tralasia), adjustment of labor
troubles in, 299; first Com-
pulsory Arbitration Act, 299;
Judge Backhouse on, 308; gov-
ernment coal-mines in, 459;
.state life-insurance in, 460;
j old-age pensions in, 501; tax-
ation of mortgages in, 611
Niagara Falls, neighborhood
of, improved by state, 139;
a natural monopoly, 144
Non-taxpayers, who are, 506
Non-unionists, their right to
work, 266; immigrants enter
U. S. as, 284
Non-voters, where best taken
care of. 487
North Carolina, secret stills
in» 539 e . . „
Northern Securities Co., gov-
ernment suit against, 137
Nostrums, rapid accumula-
tion of, 625
, Notes: see promissory notes
Oath, 164
Obligation of Contracts, 317
Obvious Direct Taxes: see
j direct taxes
Ohio, labor bureaus in, 500;
and the Standard Oil Co., 569;
personal-property tax in, 580 n.
Old-Age Pensions, 314, 500,
501
Omaha, government opera-
tion in, 461
Open Shop, 251, 261 «., 262;
strikes against, illegal, 270
Opinion, paradoxes of, 104
Opportunity, no lack of, 112;
able to embrace it, 112
Option, 178, 191
Organizers of transportation
and exchange produce value,
102
Orphans, care of, 517
Orphans' Court, 47
Output, restriction of, 215
Overwork another name for
overworry, 348
Panaceas: see social pana-
ceas
654
Index.
Panama Canal, material to
be used in building, 215
Panic of '93, 372 ff.; begins
with alarm in Europe, 373;
business suffers 373; Kansas
"triesa new way of "bleeding",
374; hoarding begins, 374;
the banks and the poor, 374;
Cleveland stops the panic, 374 ;
but at heavy cost, 375
Paper Money, 361 ff.; cheats
creditors, 366; raises prices,
367; better than light-weight
silver, 381 ; safety in large
bills, 381; objections to all
government notes, 382; good
paper currency, 384
Paris, public workshops in,
30, 230, 231; tunnel system in
sewers of, 444; gas-pipes and
electric wires under sidewalks
of, 444; deteriorating under
universal suffrage, 486; opera
a botch, 490; corruption at-
tending street openings in, 493 ;
charity schools in, 520
Parks, 490, 5°5
Parks, Sam, 263, 297
Parliament, power to change
constitution, 66; people can
change at any time, 66 ; statute
against monopolies, 126; and
labor, 270, 277; empowers mu-
nicipalities to supply facilities,
450, 451; and municipal trad-
ing. 48 1
Partnership, 121, 195
Part Payment, in contracts,
174
Party Walls, 81
* Passaic, bad water-supply of,
433
Pasteur and bacteria in water,
433
Paternalism, 285; too much,
enervating and against liberty,
286
Paupers, children of divorced
parents, 2; in London, 332;
constitutional, 349, 507; neg-
lect increases the number, 508;
wastes and stupidities in taxa-
tion largely due to votes of, 622
Pawnshops, 497
Peabody, George, his fortune
rightly acquired, 114; his rise,
155; benefactions of, 490
Peel, Sir Robert, police made
a national body by, 480
Penn, William, fairness of
his purchase of Pennsylvania, 58
Pennsylvania, purchase of, by
Penn for a few beads a fair
bargain, 58; labor laws of, 284
Pensions, old-age, 314, 500,
501 ; and the tariff, 546
Personal Property (see also
ability; capital; wealth),
evolution of rights in, 42, 43,
87 ff.; denned, 67; transfer of,
69; law of, 148 ff.; seldom
registered, 148; passed by en-
dorsement, 148; can take one's
own wherever found 149; own-
ership can be lost without
neglect, 150; can be mortgaged
without registry, 150; agree-
ments made regarding, 151;
the great field of contract, 151 ;
law of contracts concerning,
173 ff.; transfer of ownership
°h *77'» quack schemes for
distributing rights in, 208 ff.;
remedies on trial, 289 ff. ;
proved methods for diffusing
rights in, 325 ff.; four fifths
exempt from taxation in New
York, 598
Personal-Property Tax, 573
ff. ; uncertain of diffusion, 573;
tends to double taxation, 574;
effect on prosperity, 575; Wells
quoted, 575; personal prop-
erty hard to find or appraise,
577; a premium on lying, 578;
views of authorities, 578; op-
eration of natural laws, 578;
abolition of, proposed, 578;
in New York, 579; statistics,
579 n.\ "publicity" a foolish
means toward a foolish end, 582 ;
4 • homogeneity ' ' fallacy, 582;
effect on corporations, 583 ff. ;
abandoned in many places. 618
Personal Relations, law of con-
tracts for, 190 ff.
Philadelphia, bad water-sup-
ply of, 433 ; municipal manage-
ment of gasworks in, 436, 437
Philanthropy, wise, necessary
to civilization, 349
Philosophers control policies
of nations, 363
Physiocrats, single-tax the-
ory of, 596
Picketing, 28, 282; unlawful,
275, 410 n.; Judge McPherson
on, 275; J udge Quarles on, 276
Piecework, 213
Pipe-Galleries, underground,
443
Pitney, Vice-Chancellor, quot-
ed, 279
Platonists and Aristotelians
on municipalization, 447
Pledges (for loans), 151, 185
Police, 480
Political Science Association,
testimony on municipal opera-
tion, 462 ff.
Politicians running industries,
140
Politics, and "civics", xi, 4,
5; duties of rich men in, 355;
only "self-made" rich men en-
couraged to go into, 355; ef-
fect of branch banks on, 390;
in municipalization, 451; city
works ana, 474, 485; national
parties in local, 475 ff.; America
alone in confusing national and
local, 481; under mask of
charity, 483; in Chicago labor
bureau, 490; tariff the cause
of frightful corruption, 545;
pensions and, 546
Poor Class, get larger propor-
tion of wealth than the rich,
221 «., 331 n.\ not the debtor
class, 372; nor the class that
lex. 655
handles least gold, 372; super-
fluous money given to, 603
Poor Law, the English, 29,
230, 231
Porter, R. P., on municipal
trading in England, 454 n.f
456
"Possession nine points of
the law", 175
Postal Savings-Banks, 332 n.,
498
Post-Office, 411; favoritism
to papers and periodicals, 412;
in the U. S. run at a loss, 414;
government versus private en-
terprise, 414; C. W. Burrows
on postal policy, 414 n.; stamps
from private companies, 415;
best where people watch it
most, 415; Evening Post quoted,
418
Poverty (see also charity;
education; recreations and
assistance; wealth), cause of,
61, 208, 220; good resulting
from, 115; seldom blameless,
348 ; constitutional paupers,
349» 5°7; government aid, 350,
351
Powderly, T. V., cited, 297
Prescription, rights by, 74
President, election of the,
478
Prices, regulated by demand
and supply, 129; advance of,
in America, 190 1-6, 132; in
oil, 132; low prices alone justify
trusts, 135; law of. 136; trade-
unions agreeing to Keep up, 138 ;
fixing, 139; decline since mid-
dle of nineteenth century, 3286!.;
decrease comes largely from
capital's share of product, 339;
and from labor's increased abil-
ity, 340; and from diffusion of
honesty, 341; effect of labor-
saving machinery, 344 ff. ; in
bad times, 346, 347; paper
money raises, 367; under high
tariffs, 377 ; affected by amount
656 Inc
of money In circulation, 383;
and high taxes generally, 53 S
Principal, authorized acts
bind, 190; responsible for
agent's wrong-doing, 193
Printers, strike of, 88, 251,
254 ; making work for, 217
Prisoners: see criminals
Prison Labor, 512
Privacy, 565
Private Property, 40 ; limited,
40; evolution of rights of, 42;
sources, 42; evolution of, in
land, 48 ; stimulates ability, 49 ;
increases with civilization, 5 1 ;
in land, effect of, 51**.; ad-
vantages of, in land exagger-
ated, 52 ; all schemes to abolish,
are retrogressive, 62; of uni-
versal importance, 62; evolves
with contract and freedom, 155;
essential to advance beyond
status, 157; general govern-
ment production attacks, 229
Probate Courts, 47, 200
Product, destroying, 217;
cheapened by labor-saving ma-
chinery, 346
Production, not all by hand,
101; large, is cheap, 133; not
commerce, 137; increase in,
3^6; rising with shorter work-
day, 338, 339; variety of, dif-
fuses wealth, 343 ; decrease in,
in bad times, 346
"Profit in the last hour",
fallacy of, 337
Profit-sharing, municipal, 422
Progress in the betterment of
man's estate, 325; made under
individualism, 232, 235; high-
* pressure, under socialism,
241
Progressive Taxation, 565
Proletariat, politics and the,
484, 485
Promises versus contracts, 161
Promissory Notes, 76
Promoters of railways and
trusts produce value, 102, 103 ;
heavy toll taken by, 104; and
combinations, 134
Property, Rights of, (see also
personal property; private
property: real property,)
40 ff . ; barbarian 's idea of . espe-
cially in land, 45 ; not all tangi-
ble, 109; as capital, 1 16 ff.; lim-
ited, 136
"Protection" (of industries)
(see also tariff duties), 377,
544, 547; effects of the Civil
War on the tariff, 545; wages
under, 548; numbers concerned,
549; who benefited by, 549;
gluts, 550; effect on trusts,
551; labor trusts eager for, 551;
conclusions, 551; causes of
American system, 552; the
tariff changed twenty-five times
between 1862 and 1890, 558;
results of, 616; injustice and
corruption of protective sys-
tem, 619; manufacturers and,
622
Providence, R. I., revenue
from street-railway franchises
in 423, 428
"Providential" Facts, 323
Prussia, Dr. Soetbeer on in-
come-tax statistics of, 333 ; cost
of collecting taxes in, 558 n.
Public, coercing, 2 5 5 ff.
Publicity, desirability of, 467
Public Policy, 204, 270
Public-service Corporations,
Prof. Adams on, 410; Prof.
Rowe on, 464
Public Utilities* Commissioner
of, 422
Public Works (see also muni-
cipal difficulties; munici-
palization; railroads; roads;
street railways', water-
WORKS), extra-municipal i 391
ff.; roads, 391; bridges, 393;
ferries and docks, 395; rail-
roads, 396; post-office, 411;
telegraph, 415; municipal, 420
ff.; street railways, 420; water-
Index.
657
works, 432; gasworks, 435;
electricity, 440 ; telephone, 442 ;
tearing up streets, 443; tun-
nels for pipes, wires, etc., 443 ;
advertising signs, 445; sum-
mary and conclusions on mu-
nicipalization of. 468 ff., 523
ff. ; city works the plums or
Eoliticians, 474, 485 ; and supcr-
uous money, 603
"Pull", the man with a, 37,
142; in railroad management,
407; in education, 522; in tax-
ation. 591
Pullman, G. M., and civic
responsibility, 142
Pursuit of Happiness, right to
work, 26 ff. ; rights to the, 39 ff. ;
a general name for many rights,
39; restricted, 39, 40, 63
Quantum meruit, 167
Quantum valebat, 168; some
limits of, 188; enrichment, 188
Quarles, Judge J. V., on
picketing, 276
Quasi-Contractual Relations,
law of, 199 ff. ; trusteeship, 199;
assignees, 200; safeguards, 200;
administrators, 201 ; devolution
of intestate estates, 201; ex-
ecutors, 202; wills, 202; guard-
ianship, 206; need of probate
courts, 206; trustees for defec-
tives, 207 ; court supervision of
trustees in general^ 207
" Quick " Securities, 384
Rae, John, on eight-hour day,
Rag Money, 386
Railroad Rate Bill, 138, 405,
406
Railroads {see also eminent
domain; right of way; street
railways), German employees'
accident insurance, 30; right of
way, 64; right to build often
sold before work is begun, 109 ;
service improved by commercial
travelers, 129; and anti-trust
law of 1890, 138; Railroad
Rate Bill, 138, 405, 406; rates
regulated by law, 139; setting
a limit to profits they shall
divide, 139; why monopolies,
145; streets taken for, 145 ; in
United States, 396 ff.; in Eng-
land, 397, 401; in France, 397;
in Germany, 397 ff. ; in Italy,
397, 398, 407; superior service
in England and America, 397 ;
Bryan favors government oper-
ation of, 399; Roosevelt and,
399; relations between govern-
ment and, 400, 401; American
construction less thorough than
in Europe, 400; and inci-
dentally less careful of safety,
401 ; grade-crossings almost un-
known in Europe, 401 ; freight
discriminations, 401; consoli-
dation and competition, 402;
freight and passenger rates
comparatively low and steadily
declining, 403, 405; consti-
tutional questions, 403; char-
ters for, 404; taxation of fran-
chises, 404; regulating charges,
405; bankrupt railroads, 405;
unsuccessfulness of government
regulation not complete argu-
ment for government manage-
ment, 406; "labor" under gov-
ernment operation, 408 ; in Can-
ada, 408 ; Canadian experience,
408 ; government aid and regu-
lation, 411
Ramapo scheme of water-
supply, 433
Raw Material a source of
property. 42; derived origi-
nally from land and sea, 44
Real Estate: see real prop-
erty
Real Property {see also deeds;
land; private property; re-
alty-taxes), rights to, 40 ff.,
44 ff.; early conditions, 44;
under feudal system, 46; title,
658
Index.
how acquired, 59; occupier's
rights in improvements, 60;
law of rights in, 65 ff. ; defined,
67; laws protecting ownership,
68; damages for trespass, 68;
right of ejectment, 68; trans-
fers, 69 ff. ; contracts of sale,
69, 70; deeds, 70, 76, 77, 78;
life-estate, 72; dower and cour-
tesy, 72; registry, 73, 77; title-
search, 73; judgments, 74;
prescriptions, 74; title insur-
ance, 74; clouds on title, 75;
delivery of deed, 76 ; mortgages,
76; bonds, 76; equity of re-
demption, 76; leases, 77 ; fraud-
ulent transfer, 78; technical
meaning of "estate", 78; es-
tates for years, 78, 79; life-es-
tates, 80; estates at will, 80;
appurtenances, 80; riparian
owners. 8 1 ; restricted estates,
83; idle, 563; taxation re-
stricted to, 600; some unim-
proved, useless, 601
Realty: see real property
Realty-Taxes (see also appro-
priation-tax; single tax;
separated tax), in genera},
586 ff. ; objections, 5S6; his-
tory, 586; incidental to high
civilization, 587 ; diffusion, 587 ;
views of economists, 588; fact
versus theory, 588; effects on
producers, 589; stimulate pro-
duction, 589; sure to be paid,
590; easy to assess, 590; cheap-
est to collect, 591; all owners
must always pay part, 591;
summary for and against, 591;
opinion of the Fathers, 592 ;
equalization, 593; varieties, 595
ff. ; realty-tax proper, 595;
single tax, 595, 506; separated
tax, 601: appropriation-tax,
603; rental-value tax, 604; not
a real-estate tax, 604; not
double taxation 605; should
be on one residence only, 605;
shifting, 606; franchise-tax, 606 ;
virtually a real-estate" tax,
606
Reciprocity Treaties, 542, 547
Records, law judges people by
their, 197
Recreations and Assistance
(see also charity; education),
490 ff.; general government
production attacks property,
contract and charity, 229; mu-
seums and libraries, 490 ; parks,
490; clearing slums, 491 ; hous-
ing the poor, 494 ; personal con-
veniences, 494 ; army outfitting,
etc.. 494, 495; economy and
civilization both require cnarity,
495; hospitals and asvlums,
496; relief to individual poor,
497; pawnshops, 497 ; savings-
banks, 498 ; lodging-houses,
498; Charity Organization So-
ciety, 499; labor bureaus, 499;
insurance against idleness of
old age, 500; general conclu-
sions regarding charity, 501;
mutual help better than gov-
ernment help. 502; the Church,
the State, trie philanthropist,
502; taxpayers and, 503
Redemption-Money, 364
Reeves, W. P., father of first
Compulsory Arbitration Act,
298, 299; quoted, 301, 307 ff.;
arguments for enlarging func-
tions of state, 461
Registry (of real estate), 73;
rights of third parties, 77
Regulation, government, of
monopolies in America, 405, 406
Relief, public, (see also char-
ity,) 30
Religion and law, 164
Rent, 60. 118
Rental-Value Tax (see also
realty-taxes), 603 ff. ; on
consumption, 604; not a real-
estate tax, 604 ; New York and,
604 ; may ultimately replace
vampire-taxes, 615; Prof. Sea-
ger on, 618
Index. 659
Representative defined, 17 prescription, 74; value of some
Reputation, right to, 41 intangible ones, 100; to de-
Respondeat superior, 193 mand versus to prohibit, 152
Revenue: see taxation Riparian Owners, 81
Ricardo, D., on realty-tax, Roads, land beside, 81; in
588 general, 391 ff. ; as spreading
Richmond, revenue from civilization, 391; evolution in
street-railway franchise in, 423, our race, 392; bad American
428; municipal gasworks in, organization, 392; local inde-
437 pendence obstructive of good,
"Rich richer and poor 393; splendid English, 393; tolls
poorer", 345, 556; not true in oni>30J
civilized countries, 328 Robbery, government taking
Right, the adjective, defined, land hY, 5^; schemes of, by
II3 taxation, 568, 604
Right of Way (see also ap- Rochester, street railways in,
purtenances), railroad 64 427 _ „ ,
Right to Work (see also Rockefeller, J. D., and the
scamping work; strikes; gateway of opportunity, 230
work), defined, 26 ff.; and Rogers, Thorold, on income-
trade-unions, 26; subject only ta^b 57 1
to the state, 26; interferences, Romans the great road-build-
28, 38, 214; duties condi- ersj39i «
tioning/ 28; strikes, 28: boy- Roosevelt, Theodore and
cott, 28; involves rights of unionists, 265; and iniunc-
property and exchange, 40; tions, 281 ; his coal-strike com-
limitations, 40, 255; involves mission, 298; and the rail-
right to contract, 40; and to roads, 390
reputation, 41; government .Rowe> P™f-> on pub.ic-ser-
protection,' 41, 409; non- vice colorations, 464
uniomsts'/266; property in, 282 , Rudolph of Hapsburg and the
r,. u. ' , r- a * ~ a ' . feudal svstem, 155
Srmncnt, 6: 'citizen's, regulated JSSS&EZ*$s,i!\ A
by nation in two fields, 11; im- constitution, 66: labor
pose duties ai; moral and ln go; not much cnan(red from
legal, 22; classified, 23; rights of status x,-6. most
measured by duties a law of f rf , socialism, 456; tax-
Nature . 93; and duties imply ation m and t'h*5Dlngley
each other, 23, 507; to life, 15 . . ' 3'" e '
ff ; to work, 26 n 4.0; to %jo{ Ind
liberty, 32 ft.; Bill of, 35; to J *D
pursuit of happiness, 39 ff.;
to real property, 40 ff., 44 ff. ; Sale, contracts of, for real
of property, 40 ff., 44, 109, estate, 69, 70; and delivery,
116 ff., 136: under contract, 173; as affected by statute of
40, 152 ff., 159 ff.; to rep- frauds, 173; by part payment,
utation, 41; to a home, 53; 174; under prior lien, 175
to a living, 54; in improve- Salvation Army's Farm Col-
ments, 60; of way, 64; by onies, 53
66o
Index.
San Francisco, earthquake in,
235, 244, 434; and street rail-
ways, 424; personal-property
tax in 580 n.
Savings, protection of rights
in, 116; of laborers now put
into provident societies in-
stead of homes, 124
Savings-Banks, 332 n., 374,
498; taxation of, 584
Scamping Work, 200; 41 The
Crime of Mrs. Derrick' , 210 n.\
further illustrations, 210 n.;
keeps the scamper out of jobs,
212; scamper gets only one
profit but pays many, 213: and
cannot long receive good wages,
213; piecework. 213; pretend-
ing and forbidaing labor, 214;
no need of industrial suicide by,
343; and taxation, 536
Schurz, Carl, as a citizen, 355
Scotland, Glasgow Bank fail-
ure, 122; improved dwellings of
the poor in, 332 u.f 493 ; branch
banks in, 390; municipal gas-
plants in, 436; extension of
street lighting in, 436; objec-
tion to municipal trading in,
454 71. \ why Scotch whiskey
smells of smoke, 539
Scribner, Charles, spirit that
actuated, 142
Scutage (shield -money) im-
posed by Henry II., 48, 587
Seager, Prof., on trusts, 135;
on conspiracy, 274, 275; on
labor laws, 283; " protecting the
laborer against himself", 284;
on regulation of wages and
hours, 285; on the minimum
wage, 286; on rent-tax, 618
Seal (on instruments), 70, 71,
75, 123 168
Seattle, municipal car-lines
rejected by voters, 424
Securities, 122; European in-
vestments in American, 123;
quick, 384
Seisin, livery of, 69
Self-defence, state's right of,
288
Seligman, Prof., on personal-
property tax, 581 on realty-
tax, 588
Senate, U. S., ten thousand
years of history required to get
up to, 242; economic investi-
gations by, 329; method of
electing members of, bad for
local government, 476, 478
Separated Tax, on land ex-
clusive of improvements, 601
ff.; in New York, 601; build-
ings diffuse taxes more readily
than land, 602; improvement
encouraged by, 602
Serfdom, 153
Serfs of Russia, 45
Service, 164, 196 ff. ; con-
tracts for, 167; discharge for
cause stops pay for rest of
term, 196; discharge without
cause, or leaving for cause, docs
not, 197: both employer and
employee bound for entire term,
197
Settlements (University, etc.),
484, 520
Shaw, Albert, on municipal
government, 420 ff., 482 n.
Shea, C. P., on principles of
trade-unionism. 178
Shearman, T. G., on street-
railway franchises, 607
Sherman Interstate Act, 138;
unions and, 266 n.
Shield-Money, 48, 586
Ship of State not built for
speed, 241
Sickness: see disease
Sigel, Franz, as a citizen, 355
Signs, advertising, a source
of municipal revenue, 445
Sill, E. R., cited, 92
Silver (see also money), agita-
tion of 1890 destroyed values,
102; price of. rising, 368; and
the U. S. Treasury, 372 ff.;
supply of, 37s
Index.
661
Single Tax, 595; paid by
Nature, 582; Locke's theory,
595; Henry George's. 595, 621;
Walpole's, 506; physiocrats'
theory, 596; diffusion on differ-
ent grades of property, 597;
agricultural land at a disad-
vantage under, 597; local op-
tion in taxation, 598; effect of,
if suddenly imposed, 599; ex-
perience. 600 ; an evolution that
is nearly accomplished, 600;
Australasians find it satisfac-
tory, 600; boon to the poor,
621 ; why delayed, 622 ff.
"Sixteen to One" (see also
money), 376
Slavery, 153-155
Slaves of America, 154
Sliding Scale, 1 1 1
Slums, 49 1 ; clearing, pos-
sible only under eminent do-
main, 492
Smith, Adam, on bad tax-
laws, 532; on realty-tax. 588
Smith, Postmaster-General
quoted, 413
Smugglers, 541
Sociability, happiness in, 34
Social Influence and Control,
2; through the family, 2;
through public opinion, imita-
tion, education, and govern-
ment, 3
Socialism, 220 ff. ; Spencer
and, 27, 570, 629; as a remedy
for corruption and trusts, 140;
attacks contract, 158; defined,
225; would keep wages down,
226; impracticability of politi-
cal management, 226; losses to
education, charity and liberty,
226; forcing ability, 227; fu-
tility of attempting it by emi-
nent domain, 230; a premium
on laziness, 230; effect on
laborers, 230; would destroy
freedom, 231; the unemployed,
231; and individualism, 232;
a vague name, 233 ; Ruskin and
Tolstoy and, 233; four uses of
the term, 234; against compe-
tition, 2*4; earthquakes and
fires under, 235; greed and
graft and, 238; Jack London
and, 239 ff. ; capitalism and,
239; expression of the ideals
of, 240; high -pressure progress
under; 241, when possible, will
be needless, 242; living wage
and, 295; arbitration a step
toward, 319; Russia most for-
ward in, 456; logical conclu-
sion of, is social war, 570
Socialists, their hope of suc-
cess, 242; and washerwomen,
495
Social Panaceas, 201, 472;
socialism, 219 ff.; strikes, 334;
poor money, 378
Society, its control of the in-
dividual 1 ff.
Soetbeer, Dr., on Prussian in-
come-tax statistics. 333
Soup-Houses, public, 31
Sovereign defined, 12
Spain, beggars in, 349
Sparta, skill in theft a virtue
in, '57
Specific Performance, 1 98
Speculation, legitimate, stead-
ies prices, 353
Spencer, Herbert, 93; and
socialism, 27, 570, 629; created
value in material things, 103;
Law of Equilibration, 327; on
American good nature, 483
Squatters, 68
Stamp-Taxes, 553; both di-
rect and indirect, 554; often
merely a petty nuisance, 554
Standard Oil Co., 255; forced
out of Ohio by taxation, 569
Stanford, Lcland, 238
State Government, 10, 18
State Socialism and status
synonymons terms, 319
Statistics, vice of, 458; value
of, qualitative, 459
Status, 154; versus contract,
662
Index.
1 54 ; militarism a form of, 156;
why private property essential
to advance beyond, 157; state
socialism synonymous with,
319
Statute of Frauds, 69, 174,
180; of Limitations, 74, 169
Statute Law: see law
Steam, industrial effect of,
345
Steamboats in competition,
Stephenson, George, influence
exerted by his locomotive, 345
Stewart, Alexander, econo-
mies effected by, 98, 101; for-
tune of, 114; usefulness of,
353
Stickney, A. B., on the rail-
road problem, 402
Stills, secret, 539
Stock Exchanges, 123, 124
Stocks, common and pre-
ferred, 122; and bonds, differ-
ences between, 123; not all
dealt in at exchanges, 124;
for whom good investments,
124; by whom owned, 124;
civic questions answered by,
124; watered, 134; endorse-
ment on, 149
Street-Begging, 499
Street-Openings, 492, 493
Street Railways, 420 ff. ; evo-
lution of, 420; in Germany,
420; in England, 420; in
Scotland, 420; in Ireland, 421;
in Hamburg, 421; in New York,
428; municipal operation in-
creasing in England, little on
Continent, in America none,
420; municipal sharing of pro-
fits advancing in America, 422;
government inspection of, 422;
reasons for municipalization,
424; in San Francisco, 424;
increment in franchises, 428;
should be leased but not sold,
and each city's under one
management, 428, 429; public
should share in profits rather
than receipts, 428
Strikers (see also strikes),
government suits against, 137
Strikes (see also scamping
work), 104, 244 247 ff., 411;
when justifiable, 28; "The
Crime of Mrs. Derrick", 210 n.\
truckmen's, 88; printing, 88,
251, 254; Prof. Adams on,
252. 410: leading statistics
ot, 252; non-union compared
with union, 252; decrease of.
since 1903, 253 : funeral-drivers',
256 ff.; in Chicago, 261
when illegal, 263, 270, 271;
avoiding, 263; right to, 267;
against labor-saving machinery,
270; street-railway strike in
New York, 273; and arbitra-
tion courts 297; coal-strike
commission, 298; in Austral-
asia, 298, ^07, 323; damages
in, 301; in America, 324; in the
twentieth century ? 329; "sym-
pathetic", immediate interest
and the, 271, 311; conflicting
laws on, 271 ff. ; effect of com-
pulsory arbitration on, 302; as
affected by government owner-
ship of railways, 408; railway,
in New South Wales, 409
Struggle for Existence ceasing
to be a brute struggle, 630
"Sturmsee" quoted, 259, 278,
281
Subways, 443, 444
Succession Tax in England,
33i
Suffrage (scj also voters;
universal suffrage), limita-
tion of, 4S4 ff.; in Europe gen-
erally, 484, 485; plan of TiTden
Commission, 48^; in Berlin, 486;
local rights differ from others,
4S5; limited local, in all well-
governed cities, 485; elevating
the, 487; should be improved,
629
Sugar Trust, Knight case
Index.
663
against, 137; and the Wilson
Bill, 140, 546
Supply and Demand, 129
Supreme Court, on conspir-
acy, 268; and eight-hour law,
284; affirms propriety of labor
laws, 285; appointment of, 478;
income-tax of '94 declared un-
constitutional by 553, 570;
and taxation, 610
Suretyship, 180
Surrogate's Court, 47
Sweating in Australasia,
292-294
Switzerland, roads in, 393 ; in-
come-tax in, 57 t
Taff-Vale Case, 277
Tammany, 430, 463; organ-
ized to influence voters, 483
Tariff: see tariff duties;
PROTECTION
Tariff Bill, defeated by Sugar
Trust, 140, 546; McKinley,
546 ; Wilson, 546
Tariff Duties {see also pro-
tection), effect on prices, 377,
541; encourage home produc-
tion, 541; tariff wars, 542; the
foreigner sometimes pays, 533,
543; a weapon of war, 542;
our hand against every man,
543: early American experi-
ence, 544; from the Revolu-
tion to the Civil War, 544;
since the Civil War, 545; in-
dustrial effects, 546; both par-
ties corrupted, 546 ; tariffs tend
to expand, 547; an act of
aggression, 547; on raw mate-
rials, 547 ; protection and wages,
548; numbers concerned, 549;
gluts, 550; Atkinson on the
tariff, 550; effect of protec-
tion on trusts, 551; conclu-
sion on protection, 551 ; causes
of American system, 552; ex-
pert opinion, 552; should be
only on articles that cannot be
produced at home, 616
Tariff League, European,
against the U. S., 543
Taxation (see also direct
taxes; double taxation; in-
direct taxes; personal-prop-
erty tax; realty-taxes), a
function of government. 6;
taxes paid mostly by land-
owners, 56; incorrect principles
of, destroy value, 102; of
franchises. 404: in Austral-
asia, hignest among civilized
people, 457; increased, in Eng-
land by municipal trading
without proportionate results,
469; local taxes more than
t.ircc -quarters of the national
474; of commodities univer-
sally used, 527; general con-
siderations, 520 ff. ; not the
only source 01 revenue, 529;
interest and importance of the
subject, 530; in history-making,
$30; everybody pays taxes 530;
increased with municipal opera-
tion, 531; Atkinson on, 531;
rates in different countries, 53 1 ;
methods influence rate, 53 1 ;
and general well-being, 532
taxes affect movements ot capi-
tal and ability, 533; civiliza-
tion and, 533 ; opposite methods
illustrated, 533 ; men gener-
ally geese in questions concern-
ing, 534, 559; direct and in-
direct taxes, 534; shifting of
taxes, 536; scamping work
and, 536; for maintenance of
idle prisoners, 536; important
principle of, 537; need of free
competition, 537; prices high-
est where taxes are highest.
538; raised by tariff duties a
weapon, 551; ideal, 564; tax-
ing incomes tends to double,
565; progressive, 565; as affect-
ing benevolence, 568; schemes
of robbery by, 568, 604; per-
sonal-property tax tends to
double, 574; taxes not paid on
464
Index.
bonds, 577; abolition of per-
sonal, proposed, 578; corpora-
tions, 583 ff . ; franchises should
be taxea, 584; equalization,
593; local option, 598; re-
stricted to real property, 600;
double taxation, 608 ft.; of
mortgages, 608 ff. ; at the
source, 609, 613, 614; bottom
principle of, 600; U. S. Su-
preme Court ana, 610; excises
multiply, 613; taxing liens,
613; summary and conclu-
sions, 615 ff.; perfect, not for
imperfect people, 615; vam-
pire-taxes needed now, 615;
rental- value tax may ultimately
replace them, 615; inquisition-
taxes intolerable, 616; the re-
mote ideal, 617; Nature pays
some taxes, 617; and can pay
all, 618; evolution of, 618;
the ideal, 619; future of, 619;
single tax no hardship to land-
owners, 620; amortization, 620 ;
single tax a boon to the poor,
62 1 ; how to include all citi-
zens, 622; wastes and stupidi-
ities, in, largely due to pauper
voters, 622; causes of delay,
622 ff.; ignorance and self-seek-
ing. 622; in the U. S. Constitu-
tion, 623
Taxpayers, in New York, 472,
c<;8: suffrage riphts of. 484 ff.;
Tilden Commission's plan, 485;
graded in Germany, 486; and
recreations, 503; increase in
their number the best security
for an orderly and happy com-
munity , 505; many improve-
ments not at taxpayer's expense,
505; Prof. Trent on indirect,
550
Telegraph and government,
Telephone, municipalization
of the, 442
Tenant, 70 ff .
Tender, 186; kinds of money
in, 187; determined by Con-
gress, 187 ; bad money as lejal,
362
Tennessee, secret stills in, 539
Texas, suffrage in, 484
Theatre in Germany and
France, 490
Thiers, L. A., on diffusion of
taxation, 536
Things, made to embody
thoughts, Q2 ; value of. depends
on value of idea embodied, 92
Thinkers produce value, 102
Thornton, W. T., on pretend-
ing to work, 214
Tilden Commission, 485
Title, search of, 73; insur-
ance, 74; clouds on, 75
Tobacco, tax on, 539
Token-Money, 364
Toledo, O., gas-plant in, 437
Tolls, 392; now generally
abandoned 393; still taken on
East River bridges, 394
Tolstoy and socialism, 233
Tools a form of capital, 117
Torrens System (ot land trans-
fer), 84
Trade and civilization go to-
gether, 157; improved balance
of, supplies gold, 377
Trade-Unionists, proportion
of, to population in the Tj . S., 27,
260; attacks on law, 278; pro-
portion of, in New Zealand and
Western Australia, 316
Trade-Unions, and the right to
work, 26; and "greatest happi-
ness " principle, 27 ; competition
among mechanics active despite
regulation of, 105; government
suits against, 137; agreeing to
keep up prices, 138; C. P. Shea
on principles of , 1 7 8 ; coercion of
bosses, 214 ; secure the incom-
petent higher wages, 214; coer-
cion by, 243 ff.; falling off of
membership of, 253; typograph-
ical, 253; murders and, 254;
funeral-drivers', 2 56 ; promotion
Index.
665
of peace, legitimate function of,
264 ; when in opposition to laws
of Nature and the state, 265 ;
and Sherman Anti-Trust Act,
266 n. ; liability for damages,
277, 278; permanent destruc-
tion of, deplorable, 283; influ-
ence in raising wages and in-
creasing intelUgencc, 340; of
railroad employees, 408 ; honor
among members of, 409 ; versus
prison labor, 512; service in
keeping wages up to point of
equation, 627
Transfer of Land, 69: effect
of fraud, 78; the Torrens sys-
tem, 84
Trans- Missouri Freight Asso-
ciation, government suit against
*37
Transportation, organizers of,
102; decline in cost of, 335
Trent, Prof., on indirect tax-
payer, 559
Trespass, 68
Trustees : see quasi-contrac-
tual RELATIONS
Trusts (see also capital
trusts; labor trusts), 132:
' 4 human nature" and, 132 ;
Bellamy and the benign, 132;
public loses benefit of competi-
tion in, 132 ; who gets benefit of
codperation in, 132 ; their econ-
omy, 133; not generally profit-
able, 134; effect of inordinate
prices on, 135; not an unmixed
good, 135 ; control of output by,
135 ; Prof. Seager on, 135 ; state
control of, 136; laws against,
136; Beef Trust, 137; corrup-
tion of legislatures by, 140; Bel-
lamy's proposition, 140; in
Birmingham, 304 ; effect of pro-
tective tariff on, 551
Tunnels, for pipes, wires, etc.,
443; municipal, 444
Turkey, without a constitu-
tion, 66; taxation in, 534
Tweed, W. M., and munici-
pal corruption, 463, 474, 482 ff.
Unearned Increment, 57 ff.,
506; claimed for the poor. 60;
not characteristic of land alone,
6b; Prof. Mayo-Smith on, 6i ;
paying rent on, cause of poverty,
61; of franchises, 394, 428; of
street railways, 428
Unemployable, caring for the,
286 351
Unemployed, 231, 254, 350,
4 Unfortunates, 349
Unionists: see trade union-
ists
Unions (see also trade-
unions), employers' and citi-
zens' industrial, 253
United States, corporations in.
50 ; in process of evolution or ot
dissolution?, 328; loss to, in
carrying advertisements, 412;
books in, 414; paternalism
in, 5 1 7 ; government of, increase
in cost, 558
Universal Suffrage (see also
taxpayers; voters), bureau-
cracies provided by, 456; grad-
ual growth of, in the United
States, 482; for city officers
almost unknown in Europe ,484 "»
legitimate claims of, 485 ; Paris
under, 486; logically implies in-
dividualism, 488; as affecting
charity administration, 496; ef-
fect of, 62 q; reaction back to
limited, 629
Universities, state, 480, 522;
attention paid to the civic rela-
tions in, 629
Usury, 118; laws against,
118, 119; disappearing from en-
lightened communities, 119;
laws hard on borrowers, 120
Utah, eight-hour law in, 284
Value, producers and destroy-
ers of, 102; values depend on
666
Index.
sound morals, 102; should be
taxed, 609
Vampire-Taxes: see indirect
taxes
Vanderbilt, Commodore, econ-
omies effected by, 93, 98, ioi ;
fortune of, 114; usefulness of,
353
Vaud (Switzerland), progres-
sive income-tax in, 571
Vermont, taxation of mort-
gages in, 609
Vested Interests, 557
Vienna, suffrage in, 487
Village Government, 17
Virginia, secret stills in, 539
Voters (see also suffrage;
universal suffrage) - ignorUnt
and dishonest, 78, 226, 380.
ci8; city officers largely elected
by non-taxpaying, 471; cor-
ruption of, under guise of
charity, 483; proletariat, 484,
485; rights 01 taxpayers as,
484 ff. ; Tilden Commission's
plan, 485; accommodations se-
cured by non-taxpaying, 487 ;
America can only improve igno-
rant and shiftless, 487; non-
resident, over-assessment of
propcrtv of, 593
Vreeland, H. H., gets St.
Valentine's Day check for $100,-
ooo, 105
Wage-Earner (see also labor),
and enterpriser, 92, 103; better
chance for, 112; two dollars a
day for each, 230
Wagers, 165
Wages (see also labor;
scamping work), vary with
ability, 89; Brassey on, 89;
General Walker on, 90; often
in excess of production, 100;
in bad times, ioi/ 346, 347;
returns of labor nearly fixed,
104: those of ability vary
widely, 105; rates of division,
107; minimum wage, 111; as
capital. 117; piecework, 213;
only income, not outgo con-
sidered, 218; could not rise
under socialism, 226; living
wage, 231, 286, 306, 314; trade-
union coercion to raise, 243;
Prof. Laughlin on, 245 ; limited
by demand for product, 245 ; by
competition, 245; by inven-
tion, 246; and prices, theory
of, 306; T S. Mill on law of,
306; uniformity of, 312; rise
since middle of nineteenth cen-
tury, 328; in the United States,
328; machinists' wages in 1842
and to-day, 330; in Great Brit-
ain, 331; W. H. Mallock on,
331 ft. ; inflation of, 333, 627;
rise in, 335; increase at ex-
pense of capital, 339; and
also of ability, 340; and from
diffusion of honesty, 341 ; how
influenced by trade-unions. 340;
protection and. 548; service of
trade-unions in keeping up,
627
Walker, F. A., on differences
in laborers, 90; first to clearly
indicate shares in production,
no; on diffusion of wealth,
326
Walker, J. H., on business
failures, 97 «., 209 n.
Walking Delegates, 216
Wall Street, actual rate of
interest in, 1 1 9 ; verbal contracts
in great transactions of, 342;
merchandising and manufac-
turing in, 576
Walpole, Sir Robert, single-
tax theory of, 596
Wanamaker, John, and civic
responsibility, 141
War, industrial, and indus-
trial law, 289; civil, most fre-
quently caused by taxation,
53o
Ward, Sir Joseph, on taxes in
Australasia, 458
Index.
667
Waring, Colonel, and mu-
nicipal labor, 470
Warranty, 179
Wars of the Roses, effect upon
militarism, 48
Waterworks, 432 ; why fit for
municipalization, 433; sewage
pollution, 433; municipal man-
agement naturally wasteful, 434 ;
a natural monopoly, 434
Watson, Tom, on the money
question, 359
Watt, James, 93
Wealth {see also capital
fortune; money; wages) ver-
sus poverty, 113; no broad and
high civilization without, 157;
ways to, 209 ; suddenly acquired
a doubtful blessing. 221; in-
crease of, in the United States,
221 «.; often destroyed when
divided, 223: diffused only by
diffusion of ability, 326; diffu-
sion increasing, 328; "rich
richer and poor poorer" not true
in civilized countries. 328; in-
crease in wages in tne United
States, 328; in Great Britain,
331; W. H. Mallock quoted.
331 «.; increase in wages ana
decrease in other prices come
largely from capital's share, 339 ;
and from labor's increased abil-
ity, 340; and from diffusion of
honesty, 341; and from creat-
ing and supplying new wants,
343; rich men generally born
poor, 348 117; cases cited by
General Walker and the author,
348 hnppiness not depend-
ent on, 348; law cannot dis-
criminate between rich and
poor, 352: many stay rich de-
spite giving away much, 353:
cannot be used wisely by the
community, 3 54 ; duties 01,354,
ff.; useless rich man a depend-
erx^y 356; Emerson on the dis-
tribution of, 356; the poor not
the debtor class, 372; nor the
class that handles least gold,
372; acquiring, by magic, 378,
in the hands of the few, 625;
628; desire for, beneficial, 629
Webb, Sidney, on Australia
291 ; on eight-hour day, 338
Wells, D. A., on silver agita-
tion of 1890. 102; on "Recent
Economic Changes", 330; on
indirect taxation, 558 n., c6i n.;
on perjury in swearing on taxes,
564; on progressive taxation,
568 n.\ on multiplied taxation,
574; on personal-property tax,
581 n.; on realty-tax, 588
West Virginia^ personal-prop-
erty tax in, 581 n.
" Wildcat "^Money, 385
William the Conqueror and
the feudal system, 47, 48
Wills, 202 ; who cannot make,
203; restrictions on alienation,
204; devises for educational or
charitable uses, 205; must be
proved genuine, 206
Wilson Tariff Bill, 546
Wisconsin, anti-boycott law
in, 280; personal-property tax
in, 580 n.
Wisdom and sympathy gain-
ing control, 63 1 ; cannot be
forced, 63 1 ; necessary creed of,
632
Wise, , framer of New
South Wales Compulsory Arbi-
tration Act, 308
Woodyard, Charity Organiza-
tion Society's, 499
Woolwich, Eng., government
ferrv at, 395
Worcester, Ma^s. boycott in.
28; examples of change of for-
tune, 97 n., 209 n.\ electricity in,
441
Work (see also right to
work), right to, 26 ff. ; life and,
26; society's alleged duty to
provide, 29; able man finds,
93 ; scamping. 200 ff. ; piece-
work, 213; forbidding, 214;
668
Index.
slighting, 2 1 6; "right to stop,
Work-day, Shorter, (see aho
EIGHT-HOUR DAY,) JeVOTIS Oil,
338; production rising with,
3*9 ; in Austrian mines, 339
Workers, slow, provisions lor,
296
World, a perfect, 620
Writers produce value, roi
Yale Students and truckmeo'a
strike SS
Yellowstone Park, a natural
monopoly, 144
517 ff-
Zuefalin, ProtM on municipal
progress, 420 fT- on manage-
ment of municipal utilities, 467
CAMBRIDGE . MASSACHUSETTS
U . S • A
ON THE CIVIC RELATIONS
By HENRY HOLT
(A Third and Much Enlarged Edition of
"Talks on Civics")
NOTICES OF THE EARLIER EDITIONS
" The author is well qualified for the work that he has undertaken.
He is thoroughly informed, he is a clear thinker, and he writes in
a plain and forcible style. It is an ambitious design — to declare
the whole duty of a citizen — but it is carried out with as much
success as could reasonably be anticipated; perhaps with more
success than any similar attempt has attained. . . . We can heartily
recommend his book to young and old as containing a social
philosophy of the best kind; animated with the spirit of benevo-
lence as well as justice, free from cant and from fallacy, and practi-
cal because based on experience. Even those who do not accept all
its conclusions will be benefited by observing how they arc
reached. To put such a book in the hands of an intelligent boy
will do much to make him a good citizen." — The Nation.
"The honcstest piece of work we have seen in many a day, and
fascinating in its frankness and aptness of illustration. . . . Every
decent citizen, or every man who wants to become one, ought to
read it and to think about it." — Educational Review.
"A good many matters of both government and law are pre-
sented in an exceptionally lucid manner." — The Dial.
"A unique contribution to our politico-economic literature.
His novel method has enabled him to utilize a great body of fresh
and important data." — The American Monthly Review of Reviews.
"Acceptable and attractive to young people, although the book
may be profitably and entertainingly perused by older readers. . . .
He has carried out his work with great skill and marked ability,
and has made an important and valuable contribution to the litera-
ture of civics. . . . The author has succeeded admirably in his
selection of material, as well as in his treatment of the questions
involved." — Army and Navy Register.
"The volume is a valuable one, suggestive, clear and interest-
ing."— N. Y. Tribune.
TALKS ON CIVICS — continued
" A book likely to attract attention and to find readers. • • • Always
readable and usually interesting." — N. Y. Times.
"To bring the questions of political economy down from the
realm of the abstract and apply them to every-day life is no mean
task. To make them interesting is a triumph. We wish that
every citizen of the Republic would read the book." — Life.
"The book is able and useful, and will be found valuable by all
readers, as well as by young people for whom it is specially de-
signed."— Presbyterian Banner, Pittsburg, Pa.
"Young people who are anxious to have a just conception of
government and citizenship can hardly do better than obtain this
book. The author is a man of rare insight in his special field and
possesses a hearty sympathy that his readers will find most win-
some and helpful." — Baptist Union,
"Tf one could only get the voters to read, mark, learn, and in-
wardly digest a book like this the most vexing problems of our
government would be solved. If anything will popularize civics,
it ought to be a book like this." — Churchman.
"Vivacious, vigorous and comprehensive." — Congregationalism
"The chapter on trusts and monopolies is eminently sane and
free from any vagaries of economic thoughts. The talks on tax-
ation, which compose the third book, are comprehensive and clear
and discuss the problems involved from every point of view.
This volume can be unhesitatingly recommended to every young
man. It ought to be in the hands of every student of law as a
preliminary work, which will lay solidly-built foundations for his
professional study of the law of real property, the law of personal
proj)erty, the law of contracts and all matters of national, State
and local government. . . . The civic philosophy informing the whole
work is of the soundest quality." — Philadelphia Press.
"Very entertaining In the highest degree practical, useful,
instructive and edifying." — Buffalo Commercial.
"A most useful, readable and intelligent review of a compre-
hensive field of politico-economic and sociological study." — The
Chicago Evening Post.
"A book which will be extremely useful and instructive to the
intelligent American youth; it will solve many difficult problems."
— Chicago Banker.
HOUGHTON, MIFFLIN & CO.
BOSTON AND NEW YORK
BY THE AUTHOR OP •< CALMIRX."
STURMSEE: Man and Man. Third Edition.
"Characters fairly well denned and interesting, instead of mere
pegs for opinions/' — The Dial,
"The people in the book . . . have (for Utopians) an appeal
remarkably human, and not merely human but romantic —
after a curiously sublimated fashion of romance. . . . Glimpses
of real men and women." — New York Times.
"The women of the story are delightful creations." — Liverpool
(England) Post.
THE SOCIAL ATTITUDE.
"Much study of his fellow man, and more particularly of his
unfortunate fellow man, has not embittered him. On the contrary,
he preserves a gentle heart." — Yorkshire (England) Observer.
"There is social sympathy of the broadest kind." — The Dial.
"The ideal man of affairs as he is suggested in this novel, may
never arise, but if he does, this world wuT be a much better one to
live in than it is now." — Boston Saturday Evening Gazette.
"There is no denying his intent to be fair." — Chicago Record'
Herald.
"For those who care for national growth and the best influences
to uplift society, the book is a call of import." — Denver News.
"Has the welfare of the laboring class at heart." — Milwaukee
Wisconsin-
THE STORY.
"... It is perfectly natural to wonder how space has been
found among such a mass of economic matter for the love-story —
for there is really a love-story, a pretty one. The feat has, how-
ever, been accomplished. . . ." — San Francisco Chronicle.
"Contains too good a quality of fiction and too interesting a series
of discussions to be condemned because these elements are mixed.
"It is seldom that any writer with as broad and balanced an
interest in the abstract philosophy of life, possesses also so facile
a creative gift and so entertaining a power of narration." — N. Y.
Life.
"Of course the social questions have the best of the book, but
even so, there is enough of dramatic action and human interest
left for two or three ordinary novels." — Cincinnati Enquirer.
"With all its drawbacks of form, it is a story and a good story
at that. Contains some good love-making and three fascinating
women." — Robert Bridges in Collier's.
"Succeeds, even better than did Bellamy, in interlacing a story
with the purpose." — Montreal (P. Q.) Herald.
"Seldom has the usefulness of the novel as the vehicle for a
Sreachment in sociology been so fully demonstrated." — Brooklyn
)aily Eagle.
BT THE AUTHOR OF " OALHIBE," •
5TURM5EE: Man and Man. Third Edition.
"Rises at times to a rare degree of dramatic interest." — Toronto
Globe.
"So full of incident and character drawing and vivid conversa-
tion that it moves without a pause in the interest." — Chicago World
To-Day.
"The novel is one of the ablest upon which we have happened
for a long time." — London (England) Illustrated News.
"The double romance, beautiful and fitting, winds its way in
shade and sun through the book." — N. Y. Christian Advocate.
"Two beautiful love stories of compelling interest." — Phila-
delphia Book News.
"Really charming love-making." — The Dial.
"You'll hardly find an vw here, by the ways a fairer or more
interesting exposition of the nature of that society [of New York],
its vanities, insufficiencies, absurdities; how it evolves and renews
itself; why people want to be in it; how they get in or stay in*
how it spoils some; and how, in spite of vulgar show-folk and
spenders whose names are mostly in the papers, it stands in the
aggregate for something of value." — New York Times.
"A story of more than common interest runs through the volume
... so that to the reader who reads only for amusement, the book
will prove attractive. But it is those who read for instruction
and profit who will be the greatest of beneficiaries." — Boston
Transcript.
"One can imagine a very considerable clientele not usually
addicted to novel-reading, finding these earnest and sometimes
rather long-drawn-out discussions on the rights and duties of man
both fascinating and inspiring." — Glasgow (Scotland) Herald.
"One must have sound intellect in order to appreciate it, there
being nothing trivial and commonplace about it. — Albany Times-
U nion.
" The author launches into deep waters where he is not at heme."
— The Academy.
" Chaotic mass of words." — St. Paul Disjxitch.
"The style juvenile, ungraceful, and ccnrmcnplace." — The Book-
man (London).
" Dull to a degree ... he is a dull dog." — Edinburgh Scotsman.
" Shadowy personalities of certain so-called men and women." —
Charleston Neios and Courier.
" A book which leaves a bad taste in the mouth and a sickening
feeling at the heart. That such complacent brutality as that with
which the author invests some of his characters — invariably those
of cultivation, means, and social position — can exist in the modern
world, bodes worse for the world's peace than all the prevalent graft
and corruption." — The Independent.
BI THE AUTHOR OF "CALMIRK."
STURMSEE: Man and Man. Third Edition.
THE PHILOSOPHY.
*' Never, in any volume of scientific sociology, or of sociological
fiction, has there been such a fair and copious review of the almost
innumerable recipes for the alleviation of the inequalities of human
life. . . . There is a tremendous deal to be said for the ideas em-
bodied in the pages. ... I can advise all seekers of solitary
mountain heights to take it with them. For. the book is in itself
a sort of mountain height, and from it one may look down upon
the world as it is with fresh-beholding eyes." — Chicago Tribune.
"A singularly ripe and balanced conception of 'the whole duty
of man/ as seen in the light of the evolutionary philosophy . . .
exposes with keen and merciless logic the weakness of the various
socialistic panaceas." — The Dial.
"To those who will delight in fresh and forcible thinking applied
over a wide field of human relations, we warmly commend it. . . .
A man of strong individuality and character, a thinker who is in
earnest, shrewd, unflinching. He chooses to conceal his identity,
but we imagine that there must be many of his countrymen to
whom it stands revealed in the grasp of these pages. There cannot
be many men with the personality and the experience necessary for
the writing of them." — London (England) Illustrated News.
"The product of a mature brain, a sound logical faculty, and
wide reading." — N. Y. Evening Post.
"There is a 'bigness' about his work which is greatly attractive."
— Albany Times- Union.
"Powerful. . . . Everyone must gain from the patient perusal
of this able and thoughtful work . . . has that atmosphere of acute
independence that savours of genius." — Leeds (England) Mercury.
"The book is long, but once the reader grasps the problems that
the author is striving with, he wonders at its brevity. . . . Few
will put it aside feeling that it has not taught them some lesson."
— New Orleans Picayune.
"There is a cosmopolitan air about the book, a breadth of scientific
knowledge, that seem to point to some distinguished scholar or
professional man rather than to any of our well-known novelists
as the author." — Chicago World To-day.
THE STYLE AND CONSTRUCTION.
"The ordinary didactic novel is dull, but this story is so full
of incident and character drawing and vivid conversation that it
moves without a pause in the interest." — Chicago World To-Day.
"Handling a serious and weighty subject in a fashion that is free
from heaviness of style or monotony of narration." — Brooklyn Daily
Eagle.
BY THE AUTHOB OW "OAT.MTBK."
5TURMSEE: Man and Man. Third Edition.
"It is almost inconceivable that a book of this kind should be
able to hold the attention of the general reader, yet one ventures
to say that such will be the case four times out of five."— Chicago
Inter-Ocean.
"Construction of a high order." — Cincinnati Enquirer.
"Singular charm of style." — Northern Whig (Great Britain).
"He manages his material with admirable strength and grace."
— N. Y. Christian Advocate.
"It will be read for the charm and culture of the mind that is
reflected from page to page." — Albany Argus.
"Puts red blood into what would otherwise be a lifeless image."
— Cincinnati Enquirer.
"Delightful sense of humor." — Yorkshire (England) Observer.
"Written with brightness, humor, the brilliant touch-and-go of
converse." — Albany Argus.
"The dialogue is at once sprightly and thoughtful. One may
open the book almost anywhere and read a dozen pages with
pleasure." — The Churchman.
"It is rare to find in a story such delightfully clear yet pene-
tratingly subtle conversation." — N. Y. Christian Advocate.
"One cannot but feel amazed at the interesting manner in which
the writer carries on his discussion of the affairs and movements
of life in America." — St. John (New Brunswick) Globe.
"A genius." — Congregationalist.
"Filled with witty dialogue and biting aphorisms." — Robert
Bridges in Collier's.
"The author has demonstrated his ability to write equally well
both fiction and philosophy." — New York Tribune.
"No end of delicious banter and conversational by-play." — Dial.
THE CHARACTERS.
"Careful and vigorous delineation of concrete individualities.
Singularly thoughtful and brilliantly conversational characters." —
N. Y. Tribune.
"The people . . . are drawn to the life, and converse as those
in their positions would do in all likelihood." — Boston Saturday
Evening Gazette.
"The men and women have striking originality and undoubted
charm." — Robert Bridges in Collier's.
"Powerfully drawn character types." — Boston Transcript.
"One cannot but feel amazed at . . . the analyses which he
makes of individual types." — St. John (New Brunswick) Globe.