legs
OPXLIBRIS
The Pack-Asses
of Privilege
BY
PHILIP W. FRANCIS
PORTLAND, OREGON
Published by the Author
1911
'7*
Copyrifht, 1911. by Philip W. Francis
USHONa t CO., FINHTIRB, MKTIANO, 0*.
Knowing this, that never yet
Share of Truth was vainly set
In the world's wide fallow;
After hands shall sow the seed,
After hands from hill and mead
Reap the harvests yellow.
Whittier.
265461
To THE DEAR CHUM
Whose invincible cheerfulness, loyalty,
helpfulness and faith have made this work
possible, this book is affectionately dedi-
cated by her husband.
Introduction
|T is doubtless true that the contrasts of society to-
day are neither so bold nor so distressing as the
contrasts of society in other times. Nowhere in
the United States, certainly, is there such ignorance
or such poverty as we know to have been common to the
working masses during the many centuries that elapsed
from the fall of the Roman civilization to the destruction of
feudalism by the beneficent invention of gunpowder. That
the conditions of human life, in the mass, have steadily
grown easier and happier, and with constantly accelerated
rapidity during the last hundred years or so, is, I think, un-
deniable. That this happy progress has been, and will con-
tinue to be, the work of evolutionary, and not of revolution-
ary forces is, I think, also undeniable. If I read history
aright, evolution is no less the fixed law of social progress
than of physical progress. The common good steadily
moves forward to the common better, impelled by a multitude
of interacting forces. We cannot ever all at once obtain the
common best by suddenly turning social conditions upside-
down. The law of substantial betterment is the law of
growth, of ripening, of infinite small graftings on the elder
trunk. Seed-time and harvest will not be coerced to fall on
a day. He that would reap must sow and bide in patience
6 INTRODUCTION
for the crop. First the blade, then the ear, and then the full
corn in the ear that is the law of the physical universe, by
operation of which we have ascended from mere protoplasmic
beginnings to our high, intellectual estate, and that is the law
of the social and economic world, without doubt.
This is the true optimism, that sees the good which is,
and strives with might and main to better that good, as
well as the bad which also is. A cheerful acquiescence in all
that society is and does in all its traditions, laws, customs
and habits is as stupid and harmful as the unreasonable
discontent which can see no good nor any happiness in the
world. The ultra-conservative and the ultra-radical are both
fools after their degree.
Yet while the conditions of society have improved and
do improve; while the rich distribute their riches as never
did rich men before; while on every hand libraries and
schools and hospitals abound for the use of all; while hun-
dreds of men daily put the lure of ease and gain behind
them and toil for humanity's sake in the fields of medicine,
sanitation and scientific research of every kind ; while the
workman lies softer and feeds more delicately than did kings
and nobles three hundred years ago; and while many millions
of men and women and children in this land of ours are
comfortable and happy, it needs no argument to prove that
comfort and happiness are not shared as equitably as they
should be. The total wealth produced yearly by the people
of the United States is a gigantic mass. We have run far
ahead of other nations in the race for wealth, nor does our
speed slacken. The imperative problem to which we must
INTRODUCTION 7
address our attention is the more equitable distribution of
wealth thus created among the creators. Every useful effort
toward the solution of this problem is a distinct addition to
the sum of human happiness. It is in the lively hope of solv-
ing one part and that by no means the least part of this
complex problem that I put forth this book. That this book
contains a great economic truth, which has singularly enough
been overlooked, I feel sure. That this truth will win its
way and sometime and somehow work greatly for the com-
fort and happiness of my countrymen, I do firmly believe.
It is my part to sow the seed of this new doctrine.
What the reaping will be, I cannot tell. The future is always
on the knees of the gods. Yet, looking ahead to times to
come, hope sees wide fields, yellow with full harvests, and
the reapers bringing in their sheaves with rejoicing.
The Unrecognized Law
|AN is naturally a gregarious animal, and civilized
man, with his instinctive desire for the company of
his fellows strengthened by ages of custom, always
seeks association. The necessity of mutual defense
against numerous enemies would alone, probably, account for
the foundation of cities and towns, if there were no other
cause. And the gregarious instinct would have resulted in
the founding of municipalities, had there been no necessity of
defense. But the sites of considerable towns and cities, from
the most remote times, were selected by force of the one
circumstance that controls the fortunes of communities always
the circumstance of cheaper transportation of goods. It
matters not whether the price of transportation was paid in
labor, or in barter of goods, or in money-tokens; whether
the task was hauling wine and oil and sesame and millet to
Nineveh or Babylon by boat, pack-ass or man-power, or
whether it was hauling the ore of the Mesaba Range to the
furnaces of Pittsburg the one certain determining factor
in the foundation and the growth or decay of all communities,
great or small, has always been and is now the factor of
ease or difficulty cheapness or dearness of transporting
goods. Wherever cities have been built at strategic points
commanding cheap access to considerable portions of the
globe, neither siege nor sack nor the fall of empires nor
the attacks of Time have been able to shake them from their
IO THE UNRECOGNIZED LAW
seats of opulence and power. On the other hand, let but
little easier and cheaper routes of trade be opened by a rival
community and neither public spirit, nor tradition and custom,
nor the spending of toil and treasure, can avert the sure
decay of growth and power within the walls of the once vig-
orous mart. Doubtless there are other factors of growth and
decay, but the cost of transportation is the one sole, dominant,
never-absent, decisive umpire of communal life or death.
Bearing in mind man's racial necessity of living a communal
life, and the absolute dependence of the prosperity of each
community upon transportation cost, we will soon perceive
clearly that every conceivable condition of society, every ef-
fort of man's powers nay, the very fibers and atoms, even,
of his physical and intellectual being are profoundly
affected by this controlling factor of civilized society. It is
the sap in the tree, the blood in the body. No empire, nor
Charlemagne's nor Napoleon's, is ever great enough to dis-
obey its decrees. No huddle of savages in an African kraal
is insignificant enough to escape its vigilance. By its com-
manding hand are writ the destinies of kingdoms and of men,
the fortunes of a captain-general of commerce, supplying a
hemisphere with oil and copper and steel, and the fortunes
of the peanut-vender counting his handful of pennies at the
co<rner of the street. It is the Genius of Human Society.
This generation has seen a wonderful change in the
methods of wealth production a revolution in all the tradi-
tions and habits of trade and commerce. The prophet, priest
and conquering king of this revolution is yet living. How
much the progress of the race owes to the powerful intel-
THE UNRECOGNIZED LAW 1 1
lect and enormous activities of John D. Rockefeller, no man
can say. But the debt is huge. Whether he was actuated by
?elfish motives or by public spirit, whether the means he
chose were always good or often bad, whether his profits
have been too great and his possessions too* enormous these
things are nothing here to the point. What he has achieved,
regardless of his motives or means, is the establishment, in
great part, of the business of producing wealth with the
greatest possible economy of effort. He is the Apostle of
Organization. He has taught men to combine their forces.
It is useless to shut our eyes to- accomplished facts. And
we may as well expect to see the world return to the days
of stage coaches and weekly mails as to see it return to the
commercial methods of fifty years ago. It is significant of
the practical character of Rockefeller's genius that he early
perceived and never lost sight of the dominant, all-powerful
influence of transportation cost. On that foundation-stone
rests his huge personal fortune, which is a transient thing
to be blown away with the storms of two or three genera-
tions, and also rests his enormously useful work of reorgan-
izing the methods of wealth production the utility of which,
enforcing imitation by the example of his stupendous per-
sonal success, will continue to promote the comfort and hap-
piness of millions of men when the brooding brain and the
executing hand of this remarkable man have been dust in the
winds of centuries.
Now, while it is certain that the civilized world has in
the last half-century improved its methods of wealth-produc-
tion to a degree greater than all the improvements achieved
12 THE UNRECOGNIZED LAW
by the wit of men during five thousand years of history, it is
equally certain that mankind is using in the work of wealth
distribution the same methods that generations dead em-
ployed. And as the mass of wealth produced by civilized man
is enormously greater than it once was, so the inequalities and
injustices of the methods of distribution are more clearly
apparent. A private fortune of five hundred millions pro-
vides an illumination against which the silhouettes of ragged
and hungry and suffering men and women and children loom
large, with added blackness of comparison. Out of this
contrast grows a natural, though seldom rational, discon-
tent and anger. Men see the wrong and cast about for the
means wherewith to right it. Hence the Anarchist, with
his theory of no law save the individual will, and of no wealth
in hand save that which the individual can hold by the con-
sent of all the stronger. Hence the Socialist, with his theory
of a millennium of machines, alike of iron and steel and flesh
and blood. Hence the muck-raker, seeing no farther than the
end of his nose, and often justly indignant with what he
there sees; doing some good, at times, but in the essentials
of his methods and results imitating the physician who should
treat with salves and lotions the eruptions of smallpox and
neglect altogether to prescribe for the pestilence in the blood.
And hence, too, a constantly increased mass of proposed and
actual legislation, the pitiable inefficiency of most of which
is evidenced by the fact that with every passing season there
is clamor for new laws to check the evils growing out of those
in force. It is very evident that there is an underlying
general law of economics whose energies we have not har-
THE UNRECOGNIZED LAW 13
nessed to the service of the common good, and which is so
powerful that it sets aside all the efforts making for justice in
wealth distribution.
This powerful and resistless law is the law of the cost
of transportation, which decrees that inequalities in that cost
shall be reflected, with increasing force, in every other trans-
action of society ; which decrees that the inequality of a penn}'
advantage in the cost of moving ten pounds of freight shall
result in the inequality of one acre of land selling for a mil-
lion dollars and another selling for ten dollars ; which decrees
that every inequality in transportation cost shall be faithfully
enlarged in an inequality of the grand division of produced
wealth between producing Capital and Labor, on the one
hand, and non-producing but toll-gathering Privilege on the
other hand ; and which further decrees that every advantage
of inequality in transportation cost shall go to the gain of
Privilege and every disadvantage shall be to the loss of Capi-
tal and Labor engaged in production. When this truth is
once firmly in hand, the problem of fair and economical dis-
tribution of wealth is easy of solution.
Granted the premises, and there remains but this con-
clusion :
That if society does away with all inequalities in the cost
of transportation of wealth-products, it will by this same act
do away with the increasing ensuing inequalities in land
values and the consequent everywhere increasing power of
Privilege to exact more toll from the joint production of
employed Capital and Labor.
Translated into other terms, this means the opening of
14 THE UNRECOGNIZED LAW
thousands of doors of opportunity now kept shut by specula-
tive Privilege; the employment of all available Capital and all
available Labor at higher wages for both, a huge increase in
the production of wealth and a very general diffusion of this
increase among the producers, a long era of profitable trade
activities, low land values, low rents, high interest, high
wages and wide prosperity. And while, as a corollary, many
huge fortunes would be greatly reduced in bulk with the
destruction of so much of the power of Privilege, on the other
hand it is certain that most, and I believe all of the invol-
untary and undeserved Poverty which waits on Privilege
would disappear. If fewer diamonds glittered in the palace,
more coals, on the other hand, would glow in the tenement
grates. While Mr. Astor's rent-roll might be cut in half,
many thousands of workingmen in New York, as another
result, would have more money left in their purses at the
month's end.
It is useless to flinch from the logic of the problem. If
the distribution of the total wealth production is now unfair,
then some are getting too large and some too small a share.
If the removal of inequalities in the cost of transporting
wealth will bring about an approximately fair distribution
of the total wealth produced, then those now getting too large
shares will get less, and those getting too small shares will
get more. The theory of economic distribution now presented
has neither any vindictiveness towards the master of Privi-
lege nor any sentimental feeling for the servant of Poverty.
It stands for something higher than either anger or pity.
It stands for Justice.
The Solution of the Problem
|HE solution of the problem of fair distribution of
wealth among the wealth producers which I have
to offer is this:
Compel all common carriers, by law', to transport to and
from all railroad points and ports of call for vessels, within
the boundaries of the United States, like goods and commod-
ities, of like bulk and weight, for a like charge, irrespective
of length of haul.
That is to say, for example, that while the common car-
riers may charge more for transporting a ton of wheat than
a ton of coal, they shall not charge either less or more for
transporting a ton of wheat ten miles or a thousand miles, and
so with every other class of goods and commodities. I shall
call this the Law of the Common Rate and hereafter, in the
course of this argument, for convenience's sake, simply the
Common Rate.
This is a radical and innovating proposal which I
make and involves changes in the economic order more mo-
mentous than any mere readjustment of freight tariffs. I
shall endeavor to prove that with the Common Rate in
operation land values would tend automatically to permanent
equalization ; that both the "unearned increment" and the new
wealth daily created by the activities of Capital and Labor
would be automatically distributed fairly among the wealth
producers; that high speculative land values and high rents
in cities would fall and that the earning capacities in small
1 6 THE SOLUTION OF THE PROBLEM
towns and farming communities would be greatly increased ;
that the congestion and undue pressure of population at
certain points would be done away with, checking the
injuriously rapid growth of the great cities to the benefit of
the whole country ; that an immense number of agricultural,
mining and manufacturing opportunities would be automat-
ically thrown open for the profitable employment of Capital
and Labor, thus increasing interest and wages at the expense
of idle speculative capital and rent, and enormously adding to
the national stock of usable wealth ; and that a general lower*
ing of the cost of living and a general increase of the profits
of Capital and Labor actually engaged in producing wealth
would take place all over the country, and that this seeming
paradox would be automatically accomplished by the destruc-
tion of high speculative selling and rental values of land
at favored points, by bringing the products of all Capital and
Labor exerted on land into all markets on equal terms. This
is an ambitious program. I trust I shall not fail in carrying
it out.
Since this argument is addressed to the plain people, and
not to the doctrinaires, I shall take no nice pains with the
use of economic terms. The meat of the nut is the thing to
be got at. How the shell is cracked is a matter of small
moment. Yet for a proper understanding of the argument,
it is necessary to state some of the definitions and axioms
of Political Economy, and this I shall do as briefly and
plainly as I can.
Labor is the exertion of men's powers, mental or
physical.
THE SOLUTION OF THE PROBLEM I ^
Capital is saved wealth.
Wealth is any desirable thing produced by the exertion
of Capital and Labor upon Land.
Land is the earth its soil, minerals, waters, air, vege-
tation all the raw material of the globe on which we live.
The share of the wealth produced that Capital gets is
called Interest.
The share of the wealth produced that Labor gets is
called Wages.
The share of the wealth produced which Capital and
Labor must pay for the privilege of exerting themselves on
Land is called Rent.
The source of all human Comfort and happiness is
wealth. Religion, literature, the sciences, the arts, the
homely necessities of daily living, all are dependent upon the
constant production of wealth, since without wealth there
would not only be no human enjoyment, but not even human
life. Every individual has wealth in some quantity. The
paper upon which I write is wealth. So is the lead pencil
I am using. If it be only a club with which to kill game
or to beat his enemy, still the most destitute savage has
wealth of a kind. Excessive accumulation of wealth by an
individual may not add to his happiness and may multiply
his sorrows. But where wealth is distributed in some sort
among many individuals composing a society, then the more
wealth that society possesses the more comfortable and happy
will its members be. The more houses, furniture, factories,
railroads, telegraphs, breadstuffs, meats, fruits, delicacies and
wealth of such kind a community has, the better will its
1 8 THE SOLUTION OF THE PROBLEM
members be sheltered, clothed and fed, and the healthier and
happier they will be. The more bibles, hymn-books, church
publications and church buildings and like wealth a com-
munity has, the happier will its religious folk be. The more
libraries, books, magazines, newspapers, colleges, schools,
theaters, paintings, sculptures, music and the like wealth
a community has, the more happy will its intellectual folk be.
Of course, in asserting wealth to be the source of all human
happiness, I use the term in its economic sense. It is common
to restrict the word to meaning only great riches; or, worse
yet, much money. So is understanding darkened.
Now, it is only wealth in use that affords happiness.
The consumption of wealth is not only a necessity of life,
but it is also a performance vitally useful to the promotion
of human happiness. We once had, and perhaps have still,
a school of economists who attempted to serve mankind, after
their lights, by teaching them how to live with less variety
of food and with less of many other comforts and luxuries.
It is hard to contemplate such stupidity with tolerance. The
most desirable thing for any community of men is the desire
for more comforts, more luxuries, more spending, more con-
sumption and the power to gratify this desire by more profit-
able production. No man lives too comfortably, too lux-
uriously. The trouble is that too many do not and cannot
live comfortably and luxuriously enough. Wealth consump-
tion not destruction is as useful a performance as pro-
duction. "There is he that scattereth and bringeth increase,"
says the Book. Idle wealth is unprofitable wealth. Nations
should spend wisely to get wisely. Dynamic wealth, wealth
THE SOLUTION OF THE PROBLEM 1 9
in motion, in use, in process of exchange and transformation
that is the source of comfort and of more wealth.
It follows that the fairest distribution to Capital and
T.abor of the wealth they create jointly will result in the most
widely diffused consumption of wealth and the consequent
most widely diffused happiness possible, among the greatest
possible number of persons and this, I take it, is the only
true function and sole end of government and society.
It is practically certain that in a country where Capital
and Labor are so balanced in power and intelligence as they
are in the United States, where the organizing and executive
abilities of a Rockefeller and a Carnegie are faced by the
executive and organizing abilities of a Gompers and a Mitch-
ell, and where the final appeal of great issues is not to sole
Caesar but to many ballot boxes in such a country, I say, it is
practically certain that in the long run the gains of joint
effort would be pretty fairly divided between producing
Capital and Labor, if these two alone were concerned in the
division. Before approaching the consideration of this, as
well as of other present day problems, it is well to rid one's
self of many of the conceptions of current economic doctrine,
because these dry-as-dust theories are built upon imagined
conditions of life that now do not exist, if, indeed, they ever
had any existence outside the study-walls of the amiable
gentlemen who formulated them. At any rate, the most care-
less observer knows that we live in a world totally different
from that inhabited by our ancestors a hundred years ago.
And yet one can hardly fail to be struck by the unvarying
tendency of the text-book writers to plow the same old
2O THE SOLUTION OF THE PROBLE(M
ground, garner the same old straw, thresh out the same old
chaff of terms and definitions. We are called upon to per-
petually renew our acquaintance with the same five tailors
who must make the same five coats for the same five sheep-
raisers, and other gentlemen equally ancient and equally over-
worked. And as a result of this curious dwelling in an abstract
world of primitive conditions, we find the Statics of Wealth
discussed in ponderous volumes, and the really live, momentous
questions of the Dynamics of Wealth the laws of move-
ment, distribution, consumption dismissed with a vague
paragraph or not touched at all, or else treated of in an
academic manner that has no earthly interest for the plain
man of the farm, the shop or the street. Hence, probably,
the vast and wandering ignorance of our political news-
papers and men. Hence, too, probably, that late exhibition
of lofty intelligence evidenced by the Congress of the United
States in undertaking to make two blades of grass grow
where but one grew before by building a higher fence
around the pasture lot. We shall now see how little able
the chief economic doctrinaires have been to recognize the
source of the power of Rent to levy increasing toll on the
industry of Capital and Labor.
The theory enunciated by Anderson, made more widely
known by Ricardo, and echoed by their disciples ever since,
is that the amount of this toll which can be certainly taken
is measured by the difference in the productivity o<f land. One
would not be far wrong, taking the economists at their own
word, in designating this as the Fertility Theory. Now, of
course, in a very broad sense this theory is sound. But the
THE SOLUTION OF THE PROBLEM 2 1
underlying, basic, unnoticed truth, which is hardly dignified
by ten lines of mention in as many bulky volumes, is that
the amount of this toll which can be taken from Capital and
Labor is gauged by the differences in the cost of transporta-
tion to market. I am well aware that the text-book au-
thorities recognize the cost of transportation as something
to be eliminated before reckoning final productive capacity,
but if there is one who at all recognizes the dominating,
overwhelming power of this chief factor, as everywhere ex-
emplified in these times of rapid freight transit, my reading
has failed to acquaint me with his name or work.
The one sole thing which takes from Capital and
Labor so large a portion of the wealth they create is Privilege
the ownership of portions of the earth's surface artificially
made so necessary and valuable to Capital and Labor that
they are willing to pay high rent for the use of them such,
for instance, as lands in New York or Chicago and the
artificial value which commands this toll from Capital and
Labor is 1 primarily always produced by favorable transporta-
tion rates. The first half of this truth has been iterated
and reiterated until well-informed boys of grammar school
age understand it. The second half seems not to have been
recognized at all and it is really the most important. It is
this robbery of Labor and Capital, and not the robbery of
either Capital or Labor, one by the other, that causes the
grossly unfair distribution of the billions of wealth yearly
created in the United States by the joint industry of Capital
and Labor. This is the fundamental cause oof the higher
cost of living. The public mind continually confuses this
22 THE SOLUTION OF THE PROBLEM
ownership of opportunity, this privilege of private taxation,
with the identity of Capital, and seeing so much indefensible
inequality of fortunes, is confirmed in the conviction that
Capital is continually robbing Labor, and that the two are,
as Marx teaches, natural enemies; whereas nothing is more
certain than that they are natural allies nay, twin brethren
each wholly dependent on the other for its own greatest
good. The real truth is that Rent, when nursed to its full
strength by favorable transporation rates, yokes both Capital
and Labor in its service and allows to both simply the slave's
wage of subsistence.
Even a dull man can surely understand that a nation of
ninety millions produces only so much wealth in any given
time; that the more of this product Capital and Labor have
to pay for the privilege of producing it, the less they will
have to divide; and that since the share of Capital, in spite
of theory, has become a fixed rate instead of a widely fluctuat-
ing quantity, the excess of the toll taken by Privilege will
fall most heavily on Labor. That this is the actual con-
dition, our eyes and ears tell us, and hence it can, with
confidence, be predicted that if we do away with the ex-
cessive toll levied by Privilege, in the shape of high speculative
selling and rental values of land in certain restricted districts,
we shall, to a large extent, increase the gains of Capital and
to a larger extent increase the gains of Labor and by Labor
I mean the useful productive work of all men farmers,
merchants, miners, mechanics, clerks, doctors, dentists, per-
haps a few lawyers all who perform useful functions in the
great scheme of our complex social life.
The Common Rate and Land Values
|F in the absence of any Constitutional prohibition,
the Congress were to enact and the President were
to begin to put into execution a law providing
that two 'billion dollars of taxes should be raised
annually in the United States, and that this should be done
by a system of graduated income taxation, falling lightest
on tho<se best able to pay, heavier on those next best able to
pay and so on down the line until the heaviest impost of all
fell upon those the least able of all to pay, it is probable that
armed insurrection would be only so long in coming as it
took for the people to reach for their guns.
And yet this monstrous thing is done every year, and
such is the force of ancient use and habit done not only
with no objection, but with unanimous approval.
If we use the word "rates" instead of taxes and the
words "Common Carriers" instead of Congress and Presi-
dent, there is no substantial misstatement of fact in the first
paragraph.
In round figures, the railroads will haul during the com-
ing year, 2,000,000,000 tons of freight, for which service
they will be paid in round figures $2,000,000,000. This
great tax, more than the government revenues of the United
States, Great Britain, France and Germany, the people o>f this
country all of us who eat, drink, sleep in houses and wear
clothes must pay. Nor is the tax in itself unjust. But in
apportioning the tax, the railroads will base the distribution
24 EFFECT ON LAND VALUES
of the burden upon three prime factors of computation:
classification, weight and length of haul. Now as I have
said, this third factor of rate computation is the economic
wrong which is chiefly responsible for that unfair distribu-
tion of created wealth that causes nearly all our social and
financial distresses. And evidently, the freight tax falls
lightest on hini best able to pay, and heaviest on him
least able to pay. The farmer, for example, living twenty
miles from the city market, ships his produce to, and his
purchases from that market for much less cost than does
the farmer living two hundred miles from the market. Yet
the farmer who pays the much smaller tax for the equal
service equal as far as both farmers are concerned surely
of getting the same amount of produce to market, is in every
way best able to pay, owing to the very advantages which
his proximity to market gives him. The consideration of
this point brings us at once face to face with the most im-
portant question of all the probable effect of the Common
Rate upon land values.
To my mind, by far the most beneficial first effect of a
universal like freight charges for like goods of like weight,
regardless of distance, would be the inevitable and rapid
movement of all land values, upward and downward, toward
a permanently common level. Not that absolute equality of
value would take place, of course; but a strong tendency to
equality, and permanent equality, would unquestionably set
in. It is unnecessary to go into extended argument to prove
that such an approximate equalization of land values would
attend upon an equalization of freight rates. Farming land
EFFECT ON LAND VALUES 25
twenty miles from the city in which I live, rents for $25 an
acre, and sells for from $250 to $350 an. acre, simply be-
cause it has cheap rates to and from the city. If the same
freight rates for milk, butter, eggs, poultry and garden and
orchard products were annexed to all lands within a radius
of five hundred miles from the city; it is certain that there
would be a fall in the selling and rental values of the near-
by land and a rise in the selling and rental value of the out-
lying land. The fall would be much more marked than
the corresponding rise, because the loss would be to a com-
paratively few acres and the gain would be spread over a
great many more acres. But there would be no loss to the
farming community as a whole. There would be simply a
redistribution of values among a great number of farmers.
Indeed, with the impulse given to increased production, and
the consequent employment of more consuming labor on the
farms and in the city, there would not only be no loss, but
a decided gain, by way of decreased cost of food products,
since those products could be more cheaply produced, at
better average profit, on the lower priced lands. The only
losers would be the comparative hand full of owners of high-
priced used and unused lands, lying close to the city. In other
words, Privilege would lose just so much power to tax in-
dustry, and producing and consuming Capital and Labor
would have just that much more wealth to divide between
them.
Poets are prone to sing of rural felicity and well-dis-
posed gentlemen of the pen, many of whom could not dif-
ferentiate a hay-rake from a hop-pole, are ever ready to
26 EFFECT ON LAND VALUES
demonstrate in print that the American farmer lives an ideal
life of independence, ease and comfort. But the American
farmer knows better and so does his wife. Statistics showing
enormous crops and great prices are as misleading as statistics
are wont to be. The farmer knows he grows the enormous
crops. He also knows that he does not get the enormous
prices. As a matter of fact, he is lucky if he gets one-third
of the immense sums paid annually by the consumer for the
products of the farms. The life of the farmer living at any
considerable distance from the great markets is hard, his work
is hard, his hours of labor long and his profits a niggardly
return, indeed, for the capital invested and the labor per-
formed by himself and his family. True, under exceptional
circumstances, large profits are made in farming. The raisin
farms about Fresno; the apple farms of Southern Oregon
and of the Hood River and Yakima Valley regions; the
melon farms of the Imperial Valley; the fruit and vegetable
farms in many scattered localities, have earned their owners
great profits. These are exceptions. And it is a fact that as
soon as one of these highly profitable specialized branches of
farming shows evidence of permanence of high profits, that
branch usually begins to pass from the hands of independent
horticulturists or vineyardists or vegetable growers, as the
case may be, into the hands of speculative corporate combina-
tions which soon apply the pressure of more favorable freight
rates to the remaining independent small owners.
If crops of any given kind went to every market from
every farm on even terms of freight, an intensive system of
farming small holdings would be at once possible on millions
EFFECT ON LAND VALUES 27
of acres where it is not now possible. This would operate
greatly to increase the farmers' profit and decrease his labor,
for every farmer knows that it costs less money and work
to cultivate an acre in a highly profitable way than two
acres in order to get the same gross profit. The small farm,
worked to its limit of production, is the minimum of labor
with the maximum of profit. But the small farm, is depen-
dent for its existence upon freight rates to market which it
cannot now obtain unless close to those markets. With the
Common Rate in operation, these small intensely cultivated
farms would abound, doubling and, perhaps, quintupling the
productive capacity of our farming area. Thus homes and
a comfortable living would be provided for millions more of
the population. The element of speculative value having
disappeared, large idle holdings would rapidly be cut up
into small tracts and disposed of on equitable terms to actual
users.
It is true that small tracts can be purchased now, in
many districts, cheaper than they could be, probably, if the
Common Rate were in force. But it is also true that under
present conditions one of these small tracts, in these districts,
could not produce enough profit to keep a healthy chicken
fed. Five or ten acres, located where freight rates on butter,
eggs, poultry, milk, cheese, fruits, berries and like products
are prohibitive, might produce a bare living that would sat-
isfy a Russian moujik or an Indian ryot, but which would
certainly not tempt an American to bend his back to the
work of cultivation. The living cost and the profits of the
small farmer must come largely from the profitable market-
28 EFFECT ON LAND VALUES
ing of dairy and poultry and orchard and garden products
the very things for which the consumer now pays extravagant
prices and of which the nation, with all its wealth of soil,
never has enough. The country could absorb the produce of
hundreds of thousands of such small farms. The ability to
consume would keep pace with the increased ability to pro-
duce. For it must be remembered, maugre some of the
doctrinaires, that in actual life the supply most frequently
creates the demand, that wealth breeds wealth, that pro-
duction excites consumption. If we doubled the production
of farm wealth, we would just as certainly increase to that
extent the profitable production of manufactured wealth,
with a corresponding profitable increase of all the incidental
activities of trade and commerce. No nation ever did or
ever will injure itself or suffer loss by the increased pro-
duction of wealth in any form though it is conceivable that
individuals might do themselves thus a temporary injury.
Over-production is a bugaboo, fit only to frighten children.
It has no> existence as an injurious factor in national life.
There need be no fear that if farm land values were
approximately equalized by the Common Rate, all our farmers
would rush to cultivate special crops and leave none to grow
the wheat, the corn, the oats, the barley, the hay and such
necessary and homely yields. The American farmer is no
fool. His eyes are open. He looks ahead. What is needed,
he will grow. The fact is, that with the Common Rate,
every section would grow the crops for which the soil is best
fitted and the climate most favorable, for with the artificial
restraints of unequal freight rates removed, there would be
EFFECT ON LAND VALUES 29
no inducement to do anything else. The wheat-grower, for
example, knowing that it then would cost him just as much
to ship wheat from any farm to any market, would waste
no time in looking for good wheat land close to market, but
would confine his attention to getting the best land for
wheat growing, no matter where situated. He will not care
at all whether it is in Dakota, Texas or California. So with
the corn-grower, the hay-grower, the oats-grower and every
other grower. Open all markets to all lands on the same
terms and common sense will send every man to the land
best suited to his specialty. Thus the lands would be used,
by mere force of natural selection, to the very highest ad-
vantage of which they were capable; and this, taking place
all over the country, would greatly enlarge the production of
wealth on the lands now under cultivation.
When I contemplate the estate of competence and digni-
fied independence to which millions of American husband-
men w r ould be raised by the operation of the Common Rate;
when I see, in prospect, the countless homes provided abund-
antly with conveniences and luxuries; when I think of the
burdens of ceaseless labor and hard living that would be
lifted from so many patient shoulders; of the comforts that
would be brought to so> many women, worn with hopeless
drudgery; of the literature that might then be had to en-
tertain and instruct and refine; of the fuller tables and the
happier homely firesides, I confess that my heart swells with-
in me.
The picture is no idle vision of that I am sure. Some
day the men of my country will write into their laws the
3O EFFECT ON LAND VALUES
righteous statute which will make a splendid reality of that
which is now but the hope and faith of one of the humblest
of the citizens of the great Republic. The acorn falls and
is trodden under a careless foot; the suns shine and the rains
fall and, in the times of God, a mighty oak spreads its
branches and men draw gladly to the shade and shelter of
its stately and benignant presence. And so, I have faith to
believe, will it be with the seed of this economic truth.
The Effect of the Common Rate on
City Land Values
T"1HE effect of the Common Rate upon land values in
I cities would naturally be moTe sudden and more
marked than the effect upon farm land values.
There is an enormously greater difference in the
prices of urban lands than there can ever be in the prices
of farm land ; and since one small lot in a city may be, and
often is, worth a thousand times as much as a lot of the same
size in the same city, a decided movement toward nearer
equality in these values would doubtless greatly decrease many
large private fortunes and would certainly greatly curtail the
profit of the real estate speculator. And it is probably true
that the movement toward equality would not be a move-
ment of lower values upward and higher values downward
in the great cities, but a decided fall in the values of high-
priced land in such localities, and a slight and much slower
rise in the values of land in small cities and towns. This
would be due to the single fact that the great cities are few
and the aggregate loss would be concentrated, while small
cities and towns are numerous and the corresponding
aggregate gain would be widely distributed over a great
area. But, to my mind this, while disagreeable to the rich
few, would be a happy and beneficial result to the many. And
as I have said before, the true theory of government and of
society is to seek the greatest good of the greatest number.
32 VALUES THAT WOULD FALL
The justice of the Common Rate must be measured, not by
its results upon the fortunes of these individuals or those, but
upon the fortunes of the whole mass of the people. The
question to ask and answer is not whether Landlord Jones or
Smith will be worse off or better off, but whether the whole
community, which by its presence on the spot alone has made
Landlords Smith and Jones rich, with no effort on their parts,
will be better off.
Not long ago a writer in one of the popular magazines
made a sententious statement, the full importance of which
he probably did not himself realize, but the truth of which
is certain. "Freight rates," said he, "make cities." And he
might have added, "and unmake cities." Andrew Carnegie,
in one of his entertaining books, tells how he saved Pitts-
burg's rank as a steel-making center by compelling the Penn-
sylvania railroad to grant Pittsburg freight rates to impor-
tant markets no higher than rates enjoyed by dangero-us
rivals. He won his point by a not idle threat to build a com-
peting road. There is not the slightest doubt that the small
difference in shipping a ton of steel, thus forced from a rail-
road many years ago, made Pittsburg. All our great cities
are simply the gigantic embodiment, in brick and stone and
steel, of advantages in freight rates. Thirty years ago a lot
on the principal street o<f the city in which I write could have
been bought for $25 a front foot. Today the same lot would
sell for $5,000 the front foot. Freight rates did that. Thirty
years ago a lot in the village where I was born would fetch,
perhaps, $10 the front foot. Today the same lot is worth
no more. Freight rates did that. Thirty years ago farm
VALUES THAT WOULD FALL 33
land close to this city would fetch $10 an acre; now it sells
for $500 an acre. Thirty years ago my father's farm was
worth $100 an acre. It is worth no more, if as much, today.
Freight rates raised the value in one case and kept the
value stationary in the other. It is only after carefullest con-
sideration and most laborious thinking that we can come to
a full realization of the enormous power of freight rates to
affect every condition of society and almost every action o>f
our daily lives. No autocrat, no Czar, no Caesar, ever could
hand down rescript or decree which could so nearly touch the
lives and fortunes of cities and men with irresistible pow T er,
as can our railroad tariff-makers.
The practical destruction of high speculative values of
city real estate would not destroy a penny's worth of actual
wealth. These speculative values only measure the amount
of wealth which non-producers annually take from the pro-
duction of active Capital and Labor. They do not add one
cent's worth of real wealth to the common stock. To destroy
them is only to destroy the power of Privilege to prey on
industry. It is certain that in any year, in any community,
Capital and Labor exerted on land will produce only a given
amount of wealth. It is certain that Capital and Labor can
only divide what is left of their joint product when Privilege
has taken its toll in the shape of rent. And it is certain that
the higher speculative real estate values are in that community
the more Rent will take from the joint produce of Capital
and Labor and the less produce Capital and Labor will have
to divide. Economic laws are as sure to fulfill themselves as
are the laws of the physical world. And, hence, so far from
34 VALUES THAT WOULD FALL
being desirable, high speculative real estate values are a curse
to the community. They prey, by night and by day, upon
the very vitals of prosperity.
The extravagant figures, constantly paraded with so
much pomp of advertising, setting forth triumphantly the
phenomenal rise in real estate values in this or that city, are
really pitiable exhibits, and form an unpleasant commentary
on the state of public intelligence. Lazarus, parading his
sores, and exposing with particular pride a new and rapidly
swelling tumor, would be as sensible an exhibition. The
faster the speculative values rise the faster the law of dimin-
ishing returns to Capital and Labor works, and the sure
eventual result is a city with fat landlords, lean business men
and leaner workmen. Up goes rent and down come interest
and wages. And all the time the prime necessaries of life
clothing, food and shelter refuse to fall, if they do not
actually increase in cost.
The Law of Diminishing Returns simply means that on
a given quantity of land (using the term "land" in its full
economic sense) more and more Capital and Labor can be
expended with increasing profit only up to a certain point
where profit will begin to decrease and continue to grow less
and less. As country folks put it, one cannot farm a one-
horse farm with a six-horse team and make things pay. Now,
this law applies not only to farms, but to all business; and
not only to individuals, but to communities towns and cities
in mass. The owners of real estate which has speculative
value are constantly inciting more building and the exertion
of more Capital and Labor, by urging on the increase of pop-
VALUES THAT WOULD FALL 35
ulation. The result is to increase land values and rent, of
course; but since no one can eat his cake and keep it, and
since where there is dancing the piper must be paid, the
inevitable outcome of a period of "boom" is a period of ex-
haustion with much gain to the few and much loss to the
many. Every so often the result of this thing going on all
over the country simultaneously is called a "panic"; when
we see the painful and absurd phenomenon of a great people,
equipped with the finest machinery of production, used to
have and to need wealth, with enormous harvests in field and
granary, and no visible natural reason for a wheel to stop or
a workman to cease working, sitting in national idleness and
distress helpless as a babe in the midst of abundance! The
truth is that speculative land values economic Rent have
taken so much of the production of Capital and Labor that
these two are bankrupt. They have not only given up an
enormous share of the wealth they have produced, but have
mortgaged their future production. This subject, however,
I shall not now discuss, as its importance deserves the fuller
treatment I mean to accord it in another chapter of this work.
The marked fall in speculative land values would un-
questionably check the excessively rapid growth of population
which is now so characteristic of our American cities. This
will seem an evil result to some, but to the student of men
and affairs it will seem, I think, a benefit of high importance
to the nation. The congestion of population in a few great
centers, which is the work of advantageous freight rates
they being the cause, as high speculative real estate values
are primarily the effect of increased population is a problem
36 VALUES THAT WOULD FALL
to which the nation must address itself with thoughtful con-
cern. Our cities grow too fast in proportion to our national
growth. To> recruit the armies which march through their
streets the rural communities are robbed of their best youth
and their wisest age. Into the hoppers of these enormous
mills of activity are poured the brains and energy of the land.
Nor is the grist that comes out altogether good. Excessive
individual riches and much poverty; political and business
methods which skate continually on the thin ice of dishonesty,
if not criminality; a very general lowering of tone these
are unquestionably some of the results of life today in great
cities. Now, it is as true as when the Teacher said it that
man does not live by bread alone. Character is above dollars
as a national asset. We Americans have an inborn faith in
our ability to achieve anything material that can be achieved.
We face the problem of subduing nature to our needs with
alert optimism, and as will as readily undertake to remove
mountains as mole hills. And this is well. Otherwise, the
buffalo might yet be cropping the grass of the prairies and
the Indian lighting his camp fire in the passes of the Rockies.
But if we go on from achievement to achievement, from
triumph to triumph, and keep not fastheld the righteousness
as well as the valor of our fathers, what shall all its gains
avail the Republic? Surely, as it was said of olden time, it
shall profit a nation nothing if it gain the whole world and
lose its own soul.
The physical body to remain sound in health demands
balanced food, balanced exercise of its powers and an undis-
turbed equilibrium of the mechanical and chemical processes
VALUES THAT WOULD FALL 37
of its atoms. This equilibrium is as necessary to the health
of states as of individuals. And this equilibrium the excessive
growth of our cities, at the expense of the small towns and
rural districts, continually disturbs. The results are a loss
of possible productive power, an undue concentration of Cap-
ital and Labor in restricted territories, the gain of great
wealth by some non-producers at the expense of great loss
by many producers. A careful observer cannot fail to see
this evil cause resulting in these evil effects everywhere in
the land.
This evil has not escaped the eyes of good men. At
present there is an earnest effort on foot to return the surplus
of this urban population to the country. "Back to the land"
is the watchword of those in this work. The purpose is
undoubtedly good and the work, in a measure, a benefit.
But it remains true that as long as the attractions of the city
continue to be greater than the attractions of the country, so
long will men of ambition and energy desert the farm and
the village for the great town. The moment we begin to
equalize the opportunities for gain in the village and in the
city, that moment will Capital and Labor and population
begin to diffuse themselves over wider areas and the natural
equilibrium of things be restored. And this necessary funda-
mental equalization of gainful opportunities the Common
Rate will bring about automatically. The rising of tomor-
row's sun is not more sure.
The Effect of the Common Rate on Towns and
Villages
|N THE foregoing chapter, I asserted that the fall in
speculative real estate values and the check of the
growth of population in those cities, would be
accompanied by a slower, but sure, rise in the
real estate values of small towns and farming districts,
as well as in an increase of population at such points.
Let us now go into an examination of this matter,
which certainly is one of importance, for the fundamental
argument for the Common Rate is that it will diffuse the
wealth constantly being created more equally among those
creating that wealth. The contention I have in view all the
time is that the first great cause of so much poverty in the
midst of so much wealth-making is the unfair distribution of
wealth brought about by unequal transportation charges,
which gave artificial and grossly unfair values to* real estate
in certain limited districts. I have tried to show that the
result of the Common Rate would be a fall in these values
in those districts, and I think it is equally certain that the
values taken away from unduly favored points will not be
destroyed and lost, but will be distributed over the whole
country and among the whole mass of capital-providers and
workers.
"Rent," says Ricardo, "is always the difference between
produce (i. e. the market value) obtained by the employment
of two equal quantities of capital and labor (on land).
4O VALUES WHICH WOULD RISE
Whatever diminishes the inequality of produce obtained from
successive portions of capital (and labor) employed on the
same or new land, tends to lower rent, and whatever increases
the inequality necessarily produces an opposite effect and
tends to raise rent."
Since we see that in our times the productivity of land
that is to say, the market price of its product is depen-
dent upon freight rates to market, it follows, if the Ricardian
law be sound (as it is) that the equalizing of the freight
rate would destroy the inequality of produce (except natural
inequality of fertility, which in modern days is a factor of
no great importance) and so would everywhere lower rent.
This would bring about automatically, as I have said, a
decided fall in high speculative land values, markedly in the
great cities and an eventual widely diffused rise in land
values in small towns and farming districts. But this rise
would come about slowly, since the operation of the Com-
mon Rate would make so much more land and so many more
manufacturing opportunities available for the employment of
Capital and Labor, that Capital and Labor would every-
where be sought by Land, and not Land by Capital and
Labor. This would cause a long period of low rent, low
speculative values, and high interest and high wages, accom-
panied, of course, by great trade activity and wide-spread
prosperity.
The beneficial effect upon the trade and growth of the
small towns and villages would be very marked. The village
merchant would be able to buy his stocks as cheap as the city
merchant. With less rent to pay he could certainly sell as
VALUES WHICH WOULD RISE 4!
cheap as the city man. He could make a substantial reduc-
tion in nearly all lines to his customers and still have good
profit. This would result in increased quantity of goods
bought of him, and the ability on his part to carry larger and
better assortments of goods. The village farmer, mechanic
or manufacturer, enjoying equal markets with the farmer,
mechanic or manufacturer near or in the city, would have
larger profits and higher wages, and more wealth to exchange
for goods. This increase in farm and village opportunities
for gain, would result in keeping at home and attracting back
home the hundreds of thousands of men who are now
crowded into the great centers of population by lack of oppor-
tunity to do well in their native rural districts. And so the
rural districts would grow in population as well as in wealth.
And as population makes increase of land values, the steady
annual increase of these values would be distributed all over
the country among the whole people. How beneficial this
diffusion of capital and labor engaged in wealth-making
would be to the railroads themselves is evident, but that sub-
ject I shall treat of at some length later.
"The destruction of the poor," said the Wise King, long
ago, "is their poverty," and in the modern world this saying
is sharply accentuated, not only in the case of individuals, but
also in the case of communities. Everywhere we see those
least able to pay, paying the highest prices for necessaries. In
the populous cities, the poor, who buy fuel by the sack, food
by the dime's worth, clothing little by little, and a home in
the shape of one or two miserable rooms, pay a much greater
price than the rich do for the same quantity of necessaries.
42 VALUES WHICH WOULD RISE
In a measure this holds good of small communities. They
pay more for the same goods than the people in large cities
do, though the people in large cities have to pay a much
greater tax in the shape of higher rents added to the cost of
goods. But on the other hand, since the large cities are made,
by favor of the railroads, the distributing centers for the
goods that go to the small communities, these again must pay
a tax on added cost of local freight charges, and a share of
the city shippers' high rents. Add to this the greater propor-
tional cost of carrying on many scattered business enterprises
than of carrying on one great city business, and the result is
as stated the people in small communities pay more for the
same goods than the people in great cities.
Now, the moment the Common Rate was put in opera-
tion this condition would vanish. For^once the city and vil-
lage are put on equal terms as to freight, the factor of high
rents in the city and low rents in the village will overcome
the factor of greater economy in operating business on a large
scale instead of a small scale, and the prices of goods every-
where would tend to come to a common level. This condi-
tion, of course, would react upon the excessively high rents
in cities, but the final result would be a nearer equalization
in rental values and in selling prices of goods everywhere.
This would bring about a constant steadiness of market
prices, a very great benefit to producer and consumer f\ I am
inclined to think that this steadiness of prices and easy and
equal access to all markets would have the curious effect of
putting the gentlemen who gamble with the necessaries of
life in the exchanges of New York and Chicago and other
VALUES WHICH WOULD RISE 43
cities practically out of business. The only opportunities
these men have to rob their stupid victims are afforded by
the fluctuations of prices of cotton, wheat, oats, etc., and
while these fluctuations are artificially excited by the gentry
who rig these games, the calculations that bring them about
are all, in the last analysis, based on the freight cost of get-
ting a certain portion of the crops to market. But however
that may be, the opening of all markets to every farmer and
every small manufacturer or merchant, would unquestion-
ably put the millions of our people who live on farms and in
small communities on such a basis of prosperity as they have
never enjoyed.
It is to this great body of American citizenry that I
make my appeal. Long residence in great cities has not
resulted in admiration of all the influences surrounding life
in those centers. With much that is fine, there is much that
is debasing. Side by side with a few thousand successful rich
men are many thousands of those who, in the homely phrase
"just get along" and cheek by jowl with these are many thous-
ands of the ignorant and vicious the rag-tag and bobtail of
Europe and Asia, the tenement workers, the sweat-shop
slaves, the saloon keepers, prostitutes, macquereaux and their
protectors among the politicians and police. These infamous
and festering sores on the body politic spread their poison
through all its veins and arteries. With less of outward cul-
ture and refinement than the dwellers. in cities, it is true
nevertheless that the sound, healthy mass of American citizen-
ship is in the country. There, in the villages and among the
fields, dwells the final hope of the nation. There yet is to
44 VALUES WHICH WOULD RISE
be found the breed of men whose fathers knelt behind the
rail-fences at Bunker Hill; who met with an equal bravery,
whether in blue or in gray, in the shock of arms on Gettys-
burg's famous field. And there must the Republic seek her
strong help when beset by foes within or without.
As this is written a newspaper lies at hand a shameless
journalistic prostitute which gloats in huge type over the
fact that the city in which it is printed has just turned out
of office a scholarly and upright Mayor, and a Board of
Supervisors composed of honest and intelligent citizens, to
make room for a noisy and vicious demagogue and an accom-
panying crowd of ex-prizefighters, ward-heelers and scum of
that sort. For three years a little band of public-spirited
citizens have given freely of their money and time and effort
to cleanse that city of its shame and corruption, and their
reward has been a torrent of falsehood, abuse and vitupera-
tion of almost inconceivable malignity; and this, too, poured
out, not alone by the low habitants of the slums, but by
editors, lawyers, bankers and business men suborned by
powerful interests whose rascality was in danger of justice.
What we see in San Francisco, in Philadelphia, in Chicago,
in St. Louis, in dozens of cities, justifies the belief that our
cities contain too many poor and idle that they grow too
fast for their own and the national good. To break up the
tendency of our people to flock to these centers and to make
the decent, orderly, clean life of the farm and country town
more gainful and more attractive is a work to which the best
intelligence and the most unselfish patriotism may well bend
their utmost effort.
The Effect of the Common Rate
on Manufacturers
|HE most striking change in the American life which
has occurred within the memory of men not yet
old, is the almost total disappearance of the small
manufacturer and the independent mechanic. When
men now of middle age were boys, even the smallest village
had its wagon-maker, its harness-maker, its shoe-maker, its
cabinet-maker, and the like independent mechanic-manufac-
turers. In the process of the country's growth in wealth and
population nothing would have been more natural than the
growth of these small manufacturing shops into larger ones,
employing more apprentices and journeymen, and adding
their share to the general increase of local activity and local
wealth. But we have seen no such growth take place. On
the other hand, we have seen all this multitude of small man-
ufacturing enterprises perish. Single wagon factories, located
two thousand miles away, devour whole forests of timber
annually and ship the finished product back to the region
where grows the timber ; single shoe factories in New Eng-
land take the hides of the Western cattle and return the
shoes across the continent to the consumer ; even the beef and
mutton of distant states must go alive to one or two monopo-
lies in Chicago or Kansas City and be shipped back dressed
to the region from which it came before the local butcher
46 BIG SHOPS AND LITTLE ONES
can sell the meat to his townsmen. Every form of manufac-
turing has been concentrated in a few hands and located in
a few centers. This concentration is due solely to one cause
the possession of favorable freight rates. To the legal
advantage given certain manufacturing interests by the factor
of distance haul were added the illegal advantages, which
the unscrupulous were always ready to buy, of secret rebates.
But without any secret rebates, the same result would have
occurred, in less aggravated form, by the action of the dis-
tance haul factor alone.
It may be urged that the possession of improved machin-
ery, the economy of large production and the power of sales-
manship possessed by the great factories are the true reasons
for their possession of monopoly. The obvious reply is that
in the beginning the great factories had none of these advan-
tages, because they themselves grew from small beginnings.
Granting the factor of business acumen and enterprise as nec-
essary to success, it is still certain that among all the thousands
of men in business no three or four or a dozen men possessed
to themselves a monopoly of acumen and enterprise. No,
an advantage, legal or illegal, in freight rates, either on raw
materials or fuel or the finished product, spells the secret of
success in the case of every monopoly. Take shoes, for
instance. There are five million people on the Pacific Coast
who wear shoes. There are thousands of cattle to provide
hides. There is bark in plenty for tanning the leather. If
there is a shoe factory in all this region three times the
size of France I am not aware of its existence. Why is
there none? Because it would not pay to manufacture
BIG SHOPS AND LITTLE ONES 47
shoes. Why would it not pay? Because the New England
manufacturers, in order to hold the market would sell
cheaper than a manufacturer here could sell. 'How is that
possible? Because the Eastern manufacturer with cheaper
rates on fuel, machinery, much of the raw and all of the
finished product, can reach such a greater population in the
East that be can, in a pinch, sell to his Pacific Coast trade
at a loss long enough to put a local factory out of business,
and despite this loss, earn a profit on his gross business.
It is not that the New England manufacturer can ship to
Pacific Coast customers cheaper than a Pacific Coast manu-
facturer could, but that he can ship to and from all populous
Eastern regions cheaper than the Western competitor can.
So that, fundamentally, the control of the whole country's
trade is given to the Eastern shoe manufacturers because they
have the freight rate advantage in the most populous half
of the country. The same principle works in every line of
manufacturing.
jNow, then let us suppose that the freight rates on fuel,
machinery, hides, tanned leather on everything that goes
directly or indirectly into the making of a shoe as well as
the rate on shoes, were flat rates, regardless of distance. The
manufacturer on the Pacific Coast or in Texas, or in Florida,
could meet the manufacturer in Massachusetts, for instance,
on equal terms in every city, town and village in the United
States. The battle then would be one of business skill and
quality of goods. Is it not evident that the monopoly of the
shoe trade would pass from a few hands to many, and that
independent shoe factories would spring up and make interest
48 BIG SHOPS AND LITTLE ONES
for Capital and wages for Labor all over a great territory
where such an industry is now unknown?
The great factories would by no means have to close
their doors. Their monopoly would be ended, that is all.
And they would have to meet real competition. If they con-
tinued to hold trade it would be by the natural healthy
means of the best goods for the lowest price. And this
would mean cheaper shoes for the American people. As a
result of the general increase of business activity in all lines
and the general increase in the profits of capital and labor,
there would be an increased buying power, which the shoe
trade would beneficially feel, and it is quite certain that the
established factories would find a profitable bulk of business,
while new competitive factories were growing up elsewhere.
It is true that a given quantity of business can only be
divided into so many quantities of certain size, but the
contention for the Common Rate is that it would make an
enormous increase in the quantity of business to be divided.
My belief is, and it is not one carelessly formed, that this
single factor would double the wealth-consuming power of
the United States in ten years.
The more wealth a people produce, the more they
can and will exchange. Business is the exchange of wealth
for wealth wheat for shoes, for instance. Of course,
we translate the transaction into terms of money, but money
is only the medium of exchange a mere convenience of trade
and not wealth in itself. A man naked and alone on a
barren island, with neither food, water nor shelter, would
be abjectly poor if he had a million dollars in currency.
BIG SHOPS AND LITTLE ONES 49
Wealth is of no account except for enjoyment, and nearly
all enjoyment is dependent on exchange. Men exchange
capital and labor for wealth. When wealth is plentiful it
is cheap. Less capital and less labor buy more wealth, or,
as we say, Capital earns higher interest and Labor higher
wages. High interest and high wages are always the twin
benefits which come with increased wealth production. It
is remarkable how many persons there are who fail to see
this plain economic truth. Nothing is more certain or more
true. Conversely, when wealth is scarce, it is dear, and less
wealth buys more capital and labor, i. e. dividends are lower
and wages lower. That is the exhibit of so-called panic
times curtailed wealth production, decreased dividends,
lowering of wages. The trinity are inseparable.
It is certain that increased wealth production benefits
Capital and Labor and, of course, makes trade active. In
common talk, the more we make, the more we have; the
more we have the more we buy and the better we live.
It is remarkable how pithily the common maxims express the
laws of Political Economy. The workman says to his
mate "There are too many men in town for the job."
He states the Law of Marginal Supply and Demand with
exactness. He says of the merchant who is moving heaven
and earth to increase his business: "That fellow is work-
ing to raise his rent." Which is an accurate characteriza-
tion of the "unearned increment." It is a pity so many
economic writers are afraid to express themselves with equal
clearness, common sense and pithiness.
The effect of the Common Rate then, on. manufacturing,
5O BIG SHOPS AND LITTLE ONES
would be a very great increase of demand for manufactures
and the establishment all over the country of small local
manufactories to meet this increase. Localities possessing
natural advantages, such as water-power, convenient coal or
raw materials, and which are now debarred from making
use of these advantages by prohibitive freight tariffs, would
become the seats of profitable industries, employing the home
folk and increasing home trade and values. --There are
thousands of such potentially capable localities. The manu-
facturers now herded in the cities in order to get the best
freight rates, would be free to scatter in search of more
naturally advantageous sites, and cheaper rents. This would
bring about a decided fall in city rental values an unmixed
public good, since a fall in such values simply means that
idle Privilege gets less and Capital and Labor get more of
the wealth the two produce. There would be a fairer and
a much more widely distributed apportionment of profits.
The excessive growth of the cities would be to that extent
so much more retarded and the growth of the small towns
and the attendant rise of country land values that much more
accelerated. The consumer would buy cheaper, and produc-
ing capital and labor would have more profit, because con-
sumers and producers would share between them the share
of the profit which speculative land values now take in the
shape of excessive rent.
It will be observed that with whatever form of activity
or line of business we begin our examination, we always
find the outcome of the Common Rate to be a wider distri-
bution of production, an increase of production, an increase
BIG SHOPS AND LITTLE ONES 5 I
of demand, a decrease of cost to the consumer and an
increase of profit to the producers, Capital and Labor. And
this is uniformly so, because the present unequal and unsatis-
factory economic conditions in every line of human production
and consumption are due to the impost levied on all activity
of Capital and Labor by speculative land values in the
shape of Economic Rent; and these speculative land values,
again, are, at present and for many years to come, made possi-
ble by the inequality of transportation rates.
A disease may declare its presence in a hundred different
patients by a hundred different symptoms, but the physician
knows the cause is identical in all cases. If he is a wise
physician he treats the cause. Our political doctors have
been plastering boils and putting hot water-bags to cold feet
and administering tablets for sick stomachs and treating the
symptoms of the body politic with local remedies for years,
and the body politic is still sick. Some day the common
sense of the nation will administer a remedy for the disease
itself.
The Effect of the Common Rate on Mining
JINING is the third of the three prime industries of
men. It is a very great industry in our country.
Upon coal and iron are founded the bulk of manu-
facturing enterprises and the greater business of rail-
road construction and maintenance. Upon copper we
depend for the transmission of electric energy and the per-
formance of a host of minor duties. Upon gold men agree
in believing, at least, that they are dependent for exchange
tokens. Silver, lead, zinc, tin, quicksilver, antimony, nickel,
mica, asbestos, marble, gypsum, limestone, phosphates, borax,
soda, talc, fullers' earth these are some of the many min-
erals indispensable to modern industries. Oil fills a very
large field of usefulness. Beyond doubt the business of min-
ing is equal in importance to the business of agriculture
or that of manufacturing. Let us now consider what broad
effects the Common Rate would produce in this necessary,
extensive line of wealth production.
For several years the writer has himself been interested
in the mining business, with the result of accumulating a
fat experience and a slim pocket-book, and his ventures in
more lines than one, over a territory reaching from Alaska
to Mexico, have brought him into contact with many men
engaged as owners, operators, promoters and prospectors of
a multitude of mining enterprises. Speaking from this plat-
form of practical experience, he is certain that neither agricul-
54 BETTER LUCK TO THE MINER
ture nor manufactures are so directly and as it were, at
first hand, absolutely dependent for permission to exist upon
freight rates as are any and all mining businesses. The
legitimate mining promoter and when I speak of mining
promoters I refer to a very useful class and not to the gentry
who periodically unload wagonloads of wild-cat stocks on
the gullible Eastern public the legitimate promoter, before
he approaches the probable investor, will inform himself as to
the size of his vein or deposit, the percentage of mineral the
rock carries and dozens of other items of inquiry, but he
knows that the first question he will have to answer will
be: "What's the freight ?" Until that question is answered
acceptably, it is useless to produce maps, analyses, assays,
mill tests or engineer's estimates. It is never "What have
you?" but always, "What will it cost you to haul to market?"
The average investor knows no more of the true theories of
Political Economy than the average banker knows of the
real law of money, which is a very negligible quantity of
knowledge, indeed ; but it takes no other knowledge than
that acquired in the school of hard knocks to make the mining
investor certain that success or failure depends first and
last on the cost of transporting his machinery to and his
product from his mine.
In the very nature of things the great majority of
mining deposits are located at considerable distances from
the railroad centers where favorable freight rates are to be
had. Manufacturers can be herded at convenient strategic
points, and large agricultural territories are apt to enjoy some
advantage of proximity to transportation centers. But the
BETTER LUCK TO THE MINER 55
mine is usually in a remote district. Its output is subject
to a long haul. Many of the Western roads, if not openly
hostile to mining enterprises, certainly are slow to grant
payable rates. And the margin between the rates under
which a few favorably situated mines can operate and
the best possible profit is so narrow that hundreds and
thousands of really valuable mines, less favorably situated,
are forced to lie undeveloped. This is true even of such
useful products as iron, oil and copper. Not infrequently,
too, there are "inside interests" in both manufacturing and
transportation corporations which are benefited by the produc-
tion of one group of mines and averse to the development
of other groups, which may have the natural advantage of
situation ; and here the freight rate is brought into play as
a staff for the feet of the one and the club for the head
of the other. But whether fairly or unfairly used, the mining
business depends from first to last wholly upon the cost of
getting to market. It is at once the breeding mother and
the abject bond-slave of the railroad.
I am persuaded that all industries would be benefited by
the adoption of the Common Rate. But I am also per-
suaded that no great group of industries would be so instan-
taneously benefited as would the mining group. With an
equal cost of transporting machinery and an equal cost of
transporting ores, regardless of length of haul, millions of
capital and thousands of men would hurriedly be put to work
in the mountains of Colorado, Montana, Utah, Wyoming,
Idaho, Washington, Oregon, California, and New Mexico.
Gold, silver, copper, lead, iron and coal would pour in
56 BETTER LUCK TO THE MINER
abundant streams from the mine mouths that are now closed.
The increase of wealth production and of buying power
among those engaged in agriculture, manufacturing and
trade, which would contemporaneously take place, would
provide markets for the increased products of the mines,
and the needs of the capital and men employed in this
revival of the great basic industry of mining would again
provide markets for the produce of the farm and factory.
It is impossible to say how far-reaching and how great the
effect of a great revival of the mining industry upon all
other industries would be, but it would be very far-reaching
and very great beyond a doubt. And that the adoption of
the Common Rate would thus stimulate and revivify this
industry, any man fairly acquainted with the business of
mining will agree.
The Effect of the Common Rate on
Common Carriers
|N THE preceding chapters I have sketched, in out-
line and with broad strokes, purposely omitting
much detail, the effects which the Common Rate
might reasonably be expected to produce upon
speculative land values; upon Privilege tolls in the shape
of rent and unearned increment; upon the conditions of city,
town and farm life; and upon the profits of Capital and
Labor productively employed in agriculture, manufacturing
and mining and the kindred activities of trade. This I
may be allowed to call the opening argument in the case
of the People of the United States vs. Privilege, Based on
Freight Favors; and I call this the opening 'argument
because I have followed the practice of the lawyers, who first
outline their case in general terms, and afterwards introduce
specific facts in evidence to support the argument. This
\*Lole book I ask to have regarded as precisely such an
opening address. Specific facts and evidence in abundance
are certainly not wanting, but I prefer to leave their presenta-
tion to a later day in the trial of this great issue which has
now begun, but assuredly has not finished. And as a part
of this same opening argument, in the same general way,
massing conclusions instead of segregating a multitude of
facts, let us proceed to consider the probable effect of the
Common Rate upon the business of the railroads them-
selves. And first, let me say that certainly the water-carriers
58 THE BEE AND THE HONEY
must come under the same laws; and at another time their
case will be discussed; but at present, since jthe great
majority of the people do their shipping in cars, this argu-
ment will deal with the railroads as if they were the only
common carriers of importance.
I have no sympathy with demagogic denunciation of
railroads. I am of the West. A boy, I knew its prairies
when the buffalo cropped the bunchgrass and the Indian
was an odoriferous and unpleasant reality. Mine own eyes
have seen a mighty wilderness blossom and fruit under the
hand of the husbandman; have seen the camp-fire of the
trapper give place to the smoke of the farm-house chimney,
and the hunting pasture of the useless savage made the
homesteads O'f millions of thrifty and happy folk. And all this
incredibly wonderful West exists solely because across the
plains, the streams and the formidable mountains the
Captains Courageous of Transportation graded and bridged
and tunneled and laid their lines of tie and rail. Doubt-
less in those formative and turbulent days, when gigantic
prizes were to be gained or lost by craft and violence, when
foolish and often vindictive legislation was met with any
weapon at command with bribery, evasion or defiance
these men did many things that were evil. But they did
more that was good. The evil has much of it perished with
them, but the good they wrought stands up a colossal fact,
a towering monument to their high, adventurous valor
and their intrepid faith in themselves and the future. The
men who put their lives and the men who put their treasures
into the building of our American railroads deserved their
THE BEE AND THE HONEY 59
rewards of power and money, and their successors deserve
their full, fair share of the wealth thus created and being
created. If it were in my power to fix such a Common
Rate for service as I advocate, neither bond-holder, nor stock-
holder, nor railroad chief, nor employe should suffer loss of
profit or wage. Surely the bee deserves to eat of the honey
he has brought home to the hive.
The gross revenue which American railroads will derive
from freight business during the coming year will be, in
round figures, about two billions of dollars, and for this
revenue they will haul, over an average distance of one
hundred miles, about two billion tons of freight. Now, I,
for my part, would be cheerfully willing to allow the rail-
roads a gross payment of tw T o and a half or even three
billions of dollars for this same service, if they would
perform it under the regulations of the Common Rate. The
gross gain to be won by Capital and Labor from Privilege
would over and over offset the extra net profit of the
railroads. And the extra net profit of the railroads would
perhaps not even then be the full share of the gain rescued
from Privilege, and fairly due to the enormous capital and
numerous labor employed in the useful productive function
of transportation by rail.
It is a certainty that the great increase in agricultural,
manufacturing, mining and trading activity will be followed
by a corresponding increase in freight shipments. Now
there is a seeming paradox known to all railroad managers:
that is, the ability to haul freight under certain conditions
below cost and still make money by the operation. It is
60 THE BEE AND THE HONEY
on the principle which actuates the shrewd merchant when,
at the season's end, he sells the odds and ends of out-of-style
goods for less than cost, counting any money got as so
much better than throwing the goods out. So a railroad,
having its fixed charges and its freight trains to be moved
anyway, can earn money by getting additional tonnage at
less than the average cost of haul. The engine and engine
crew and train crew must go anyway, and the money got
for freight that otherwise would ;not be shipped is so
much gain. This frequently happens, and the reason is that
none of our roads is worked to its full capacity. There is
not one which could not haul more freight over its rails
if it were sure of being offered the freight so as to prevent
car-shortage. With new farm acres being cultivated, with
new mines being worked, and new manufactories starting
and old ones increasing output to meet the new conditions
'of business, there would be a tonnage offered which would
tax every road to its limit of energy; and this extra tonnage,
as railroad men know, is the source of profit.
An almost certain result of the compulsory adoption of
the Common Rate would be the combination of all lines of
rail and water transportation either in a gigantic pool or
an actual consolidation of ownership, directed by depart-
ment chiefs, responsible to a governing body. Of course,
a change in the laws would be necessary to the legality of
this desirable end, but in order to put the Common Rate
in force other changes than this must be made. Politicians
and statesmen have been busy for centuries hampering the
natural developments of trade and commerce, but it is satis-
THE BEE AND THE HONEY 6l
factory to know from the mouth of history that the laws
of economic growth are always too strong, in the long run,
to be held in subjection. People and rulers alike stumble
in wrong paths, but sooner or later Economic Law takes
both alike by the ears and sets their faces in the right
direction. We may be quite sure that a complete standard;
ization of all rates will lead to a consolidation of all trans-
portation corporations, and that people will have seen the
wisdom of such a proceeding by the time it is necessary.
In order to put the Common Rate in force this general
legislation would be necessary:
1. A statute compelling all common carriers to charge
a like rate, neither more nor less, for hauling a like weight
of like goods and commodities, regardless of the length of
the haul.
2. A subsidiary statute providing that the common
carrier to whom the shipment is offered shall forward that
shipment by the quickest practicable route over its own and
connecting lines; and compelling the acceptance and expedi-
tious forwarding of the shipment by the connecting line or
lines, without any other than the fixed initial common
charge to the shipper.
The classification of freight, the rates to be charged
and all similar decisions should be left to the experienced
intelligence of the railroad chiefs. Self-interest is a suffi-
cient guarantee that they would not make rates too low
to pay good revenue nor too high to prevent revenue. And
the laws of the land should be so amended as to encourage
the common carriers to pool their managements and so
62 THE BEE AND THE HONEY
get for all the thousands of security-holders a practically
level share in the profits to be made by the roads. For if
the Common Rate is to be the benefit it should be to all
business and all wealth producers, we will then have to get
ourselves into the attitude of wanting the railroads to make
good profits.
The economies in the clerical, tariff-making and freight
soliciting departments, possible under the operation of the
Common Rate, would be a very large item of net revenue
to the railroads. And the disappearance of the con-
stant friction with individual shippers over classification,
alleged favors and other causes of protest and ill-feeling
would be a great gain, financially and morally. The sus-
picion, dislike and frequent hatred directed against the rail-
roads is appalling in bulk. Unreasonable these sentiments
often are, but with reason or without, this condition of the
public temper is a very real source of discomfort and loss
to railways. Almost invariably, the bad feeling is due to
either an actual or fancied injustice in freight charges to
actual or fancied discrimination. This attitude of suspicion
and hostility could not exist with the Common Rate every-
where in force. An era of mutual goodwill between shippers
and carriers would naturally begin. And this would be no
small advantage to the railroads. Divorced from politics,
as they would be and railroads are only in politics because
originally forced there in self-defense and relieved of any
fear of popular dislike or. legislative disaster, the roads could
and would address all their energies to the great task of
getting the wealth of the nation to the markets.
THE BEE AND THE HONEY 63
I am well aware that the tremendous readjustment of
values and business problems I advocate could not possibly
take place without losses in some directions, and heavy
losses among the speculators in land values. But I confess
that I am unable to see how the holders of railroad securi-
ties, or the revenues of the roads, could be affected, even
temporarily, in any other than a beneficial way. A meas-
ure which would permit the railroads to increase their
gross revenues by millions, while enabling them to institute
wide economies in executive and clerical work and in the
operation of trains loaded to hauling capacity, and at the same
time doing away with the necessity for hateful and expen-
sive and demoralizing political alliances and warfares, seems
to me to come carrying in its hands benefits so immense
and so happy that they far outweigh all objections, whether
well or ill taken. No man can be more fully persuaded
than I am that the fair profit of the capital and labor
employed in the great business of transportation is an absolute
essential of national prosperity. There is not one single
activity to which the brain and hand of civilized man turn
themselves, no matter how enormous or how insignificant
that activity may be, which is not intimately dependent for
profit upon the prosperity of the carriers. It is the recogni-
tion of the basic importance of this factor in modern life,
as the regulator of all values and all profits, that perhaps
distinguishes this treatise from any other.
The Common Rate and Business Panics
|HE United States has lately experienced a panic, to
use the expressive common term. So far as surface
appearance went, it was a money panic alone, and
an unnecessary panic. The crops were abundant.
Seed-time and the summer had gone and the harvests had
not failed. The nation was at peace, within and without.
No enemy threatened her gates, and there was no murmur
of domestic discontent within her walls. The captains and
the privates of the allied army of Capital and Labor answered
cheerfully and confidently to the reveille in all the multitu-
dinous camps of industry. A bank failed here, a trust
company there, and precisely as a few cowards have been
know to stampede thousands of brave men, with arms
in hand, and send them scurrying out of the battle in head-
long, shameful fear and rout, so the whole array of money-
owners were stampeded in a wild, ludicrous and disastrous
scramble for hiding-places. Everybody ran to hoard his
currency or gold the bankers first and far in the lead.
The last possible dollar was withdrawn from use and put
out of sight in bank-vaults, safe deposit boxes and old cans
and stockings. These were the exasperating phenomena
easily seen ; and so far as my reading goes, the unanimous
opinion of the public prints is that it was indeed a money-
panic, a mere senseless exhibition of fear, with no real excuse
for occurring. This belief is wrong and arises from a lack
of knowledge of the real cause of panics.
You may, indeed, succeed in frightening a nation, just
as you may frighten an army. (But no- mere bugaboo of
66 THE CAUSE OF PANICS
fear will keep an army or a nation frightened for any
length of time. The armed host that keeps on running
does so because something more than mere fear is thundering
at its fugitive heels, and a nation that is in business distress
for months and years must look for another cause than the
momentary scare of bankers and trustees. The cause of the
last panic is identical with the cause of every panic. And
the panic would surely have come, with all its distressing
features, if bankers and trustees were lions instead of sheep.
What then, is the cause of these recurring periods of
commercial disaster we call panics? These plagues of the
business world return again as regularly as the physical
plagues which once recurrently carried death and woe through
the streets of the capital cities. The superstition and igno-
rance of our fathers looked upon these visitations as direct
manifestations of a very choleric Divinity, and scarcely
dreamed of any future escape from Omnipotent wrath,
slaying its tens of thousands. The better sense of today
knows that just plain dirt slew the victims. Civilization
no longer cowers in dread of the pestilence. It is rid o<f
that horror. And the one difficult achievement was to
ascertain the cause. The rest was easy. So it is with
these plagues of business. The first thing necessary is to
ascertain the cause of them. And assuredly they have a
cause. No phenomenon appearing with considerable fre-
quency and with identical features is any creation of chance.
The panic comes because at some time and in some way,
during times of prosperity, we make things ready for the
coming of the panic. Now, what is it that we do? What
THE CAUSE OF PANICS 67
is the cause producing all this wreck of enterprise, industry
and fortunes?
This is the cause: During the prosperous years Privi-
lege Ecomomic Rent, if the term pleases better progres-
sively takes larger and larger toll from the total wealth
production of Capital and Labor, until a time comes when
Capital and Labor can no longer pay the increased toll and
earn profits. Then Capital and Labor cease, in a large
measure and over wide regions, to employ themselves until
such time as the rent toll is reduced. The interim is a
season of acute panic and subsequent convalescence.
We see what happens in flush times. Speculative land
values rise with great rapidity. On the outskirts of every
city and town, speculators are platting additions and selling
the land which cost them last week a thousand dollars an
acre at a price this week of five hundred dollars for a
twenty-five foot lot. Inside the city and town limits prices
soar, to use an expressive bit of slang, like balloons. Every-
body with cash or credit to spare, rushes to buy and boost
prices in order to reap speculative gains not real earnings.
Farm lands share in the general speculative rise. Every-
where the price of land goes up beyond the reasonable,
conservative limits of healthy earning power. What then?
The unhealthy growth of speculative values not only attracts
masses of active capital to pure idleness in the shape of non-
income-bearing real estate, but it also begins to feed vora-
ciously and disastrously upon working Capital and working
Labor in the way of universally increased rent. Now,
it is certain that Capital and Labor can only pay just so
68 THE CAUSE OF PANICS
large a share of the wealth created by them for the oppor-
tunity of working (which is what they do when paying
rent), and when the inflated land values reach the point
where they must have more toll than Capital and Labor
can pay, there is a smash. There must be. Inflated rent,
and with it inflated land values, must be reduced or produc-
tion by Capital and Labor must cease, for these two will not
work without profit, and excessive rent demands the whole
profit which the three have hitherto shared. Speculative land
values, to the extent to which they are speculative and not
sound, tumble faster than they rose. Meantime credits have
been extended all over the country on these false values.
Their fall destroys confidence in securities and sends the
bankers scurrying to draw in and hoard all the money which
they can compel or cajole into their vaults. The panic is on.
I have purposely avoided technical exactness in this
short examination, but it can be proven with mathematical
exactness, and in strict conformity to all the canons o<f the
most orthodox economic teachers, that the father and the
mother of Panic is speculative land value, engaged in extor-
tion of the product of working Capital and Labor. Now
the solution which I have to offer for the fair distribution
of all wealth production will put an end to this extortion
by speculative land values, and consequently, if I have been
hitherto right in the argument, will do away with the
seasons of business distress to* which our people seem to have
resigned themselves with as little wisdom as did our fathers
to the visitations of the pestilence. I affirm, with the utmost
confidence, that the United States need not see a business
THE CAUSE OF PANICS 69
panic in a century, if its people will resolutely use the
simple and effective means of the Common Rate to bit and
curb the cause of all panics.
Very few business men think to the root of things.
They have not the time. Much money-getting calls for
the incessant use of a man's faculties, and much thinking
is painful and tedious labor. Each occupation is useful, but
no man can successfully engage in both. The man who
has neither the training nor the time to think much, must
necessarily take his opinions at second-hand. I think it
is fair to say that the business men of this country do so
usually obtain their opinions, and usually, also, from the
newspapers and popular magazines. Unfortunately the
newspapers and too many of the magazines are not much
given to sound thinking. They are written almost entirely
by reporters the finest crop of reporters ever grown under
any sun alert, witty, entertaining, mostly honest. But they
are first, last and all the time reporters, no matter if they
be called editors, special writers, commissioners or what not.
To hold the mirror up to current events, to be the exquisite
reflection of the passing show, that is the achievement aimed
at, and admirably accomplished. But if one were to inquire
where to go in the field of popular publication that he
might find independent thought and sound exposition of
basic laws of social evolution, I for my part, would be at
a loss to answer. This is not said in either scorn or
irritation. It is a statement of facts, as I believe the facts
to be. Naturally, then, the business men of the country,
in the mass, are not able to fathom the reasons for such
7O THE CAUSE OF PANICS
phenomena as panics. And not knowing the reasons, and
seeing the regular recurrence of the phenomena, they very
generally look upon these disasters as inevitable, and come
to expect their arrival with the resignation due to an act
of Providence.
The psychological effect of this general assumption of
helplessness in the business mind, acting through so many
millions of individuals, is decidedly bad. Instinctively,
though often unconsciously, the men engaged in production
and commerce occupy their bases and formulate their
plans of campaign with this factor always in view. It has
become axiomatic with business men that for some reason
we are bound to have about so many years of flush times
and then so long a period of depression, and this results in
a feverish haste to do the last possible dollar's worth of
business while the sun shines and to run with the utmost
haste at the first sign of a cloud in the sky. There is
no question that this state of mind is injurious to business
as a whole. An essential to the successful conduct of a
nation's, as well as of an individual's business affairs, is an
abiding confidence. We often hear it said, and truly, in
times of depression that confidence has been destroyed. But,
of course, they err who propose this loss of confidence as
the cause of the depression. The lack of confidence is an
effect, not a cause.
This general, uneasy, injurious fear of panics to come
will not be eradicated from the business mind until panics
are themselves eradicated; and panics will not be eradicated
until the cause of panics is eradicated. If during the years
THE CAUSE OF PANICS 7 I
of good times we busily sow the wind, we assuredly will not
fail to reap the whirlwind. And as I have pointed out, the
wind which produces the panic whirlwinds, is speculative land
value. As each business year grows better, as trade and pro-
duction take hope and exert all effort, this vampire feeds
fatter and fatter, until it has again succeeded in draining its
victims, and drops off to wait their recuperation. A regularly
recurring evidence of the truth of this proposition is furnished
by the fact, evjdent to the dullest eye, that panics are imme-
diately preceded always by exaggerated real estate "booms."
It should be borne in mind that I speak only of specu-
lative land values a sound, healthy increment of land values,
provided that increment were generally diffused over the
country, can produce no disaster. The increment of value
arising from use of land, and not as a direct or indirect result
of transportation and market favors, is one of the healthiest
elements of national prosperity. With the Common Rate in
force, the legitimate and widely diffused continuous increase
of land values would be a blessing, since it would not be the
reward of speculation, but of use. As land values are now
increased, spasmodically and in favorable spots, they are a
curse to Capital and Labor, a blight on all productive industry
and a benefit only to the gambler.
I use this word gambler advisedly for in its analysis
speculation in land values is exactly on all-fours with specu-
lation in stocks, race-horses, cards or roulette wheels. In
ordinary transactions honest, faithful business men buy and
sell and exchange for mutual profit each one exchanging
the thing he needs less for the thing he needs more. That is
72 THE CAUSE OF PANICS
the essence of fair trade and sound business. But the man
who buys land to sell on a rise in a day, a week or a year,
with no added improvement, simply bets with the seller on
the future market. He gambles in the same way that the
man gambles who goes long of United States Steel or Amal-
gamated Copper or wheat, oats or cotton. There is no pos-
sible element of usefulness to the community in either trans-
action, and the morality is neither any worse nor any better
than the morality of betting that one horse will lead the rest
to the wire, or that the openers in your hand will beat the
other fellow's five cards.
Now, it is pretty plain that money used in real estate
gambling does not produce anything, does not add an ounce
to the national wealth-production. All the capital so em-
ployed is perforce withdrawn from useful production, and
just by that much is the production and the consumption of
wealth, and the profits of all the Capital and Labor employed
in carrying production to the consumer in short, all agri-
culture, mining, manufacturing and trade injured by being
deprived of the co-operation of this capital. The gambler is
never a producer. He must have victims to provide the
money for the game. And in this huge real estate gambling
game, unlike every other gambling game, the ones who pro-
vide the winnings are not the players, but the unwilling on-
lookers. Increased rent tolls, levied on all forms of industry,
and increasing with every successful bet on land values, pro-
vide the winnings of the game. Legitimate business pays the
stakes and is not even allowed to hold cards in the game.
Primary Causative Power of Transportation
Rates
HJBTLESS many who will be ready to agree that
gambling in speculative land values is the cause of
panics, and who can even see that a rise in specu-
lative values faithfully means loss of profit to work-
ing Capital and Labor, will be apt to think it a far-fetched
conclusion that inequality of transportation charges is at the
bottom of the whole trouble. They will honestly doubt that
an equalization and standardization of rates can possibly end
the gambling and abolish the special privileges upon which
the power of Rent to seize the goods of Capital and Labor is
founded. Let us look a little further into this proposition.
Let us see something more of the actual workings of this all-
permeating, all-controlling force of transportation cost.
Within the last seven years [this is written in 1910]
there have been built in the lower part of the Borough of
Manhattan, New York, twenty-six buildings, none of which
is less than two* hundred feet, or eighteen stories in height,
and some of which tower to an altitude of six hundred feet.
These buildings contain a rental area of 5,000,000 square feet,
or about 116 acres, of perhaps the most costly space in the
world. Now, what has made the profitable erection of these
buildings possible? What has made it practicable to rent
floor space a tenth of a mile above the ground? One sole
thing the invention of the passenger and freight elevator
74 DEUS EX MACHINA
vertical transportation of persons and goods. Take away
this transportation service and the upper stories oi these sky-
scrapers would be left to the bats. Is it far-fetched to class
elevator service with transportation in general ? Well, these
up and down lines in the twenty-six buildings mentioned oper-
ate one hundred and sixteen express passenger cars and the
same number of freight cars, a total of two hundred and
thirty-two cars, running four thousand, five hundred miles
every eight-hour day, and transporting six hundred and fifteen
thousand passengers daily. It is estimated that the vertical
lines in New York City alone are equipped with twelve
thousand freight and nine thousand express cars, and that
they transport annually two thousand million passengers. A
service of that magnitude is emphatically entitled to rank
high in the list of such services, and might well excite emo'-
tions of envy in the heart of many a horizontal railroad
manager.
\The striking feature of these up and down transporta-
tion lines is that they furnish service free to all alike. But
if by common consent they were all to charge a small fare
for service, that would affect the rental capacity of the build-
ing as a whole, but would have no effect at all on the com-
parative rent charges of floor and floor. These would rise or
fall together. Suppose, however, that the up and down service
were free to the tenth story and cost one cent above that. A
penny is a small coin, but it would create a great disturbance
in this case. Rental values of the upper floor would rapidly
fall, and if the location of 'the building were particularly
desirable, so that enough tenants must perforce do business
DEUS EX MACHINA 75
there, the pressure of demand for space on the lower ten
floors would create a rise in their rental cost. Nothing can
be more certain than this is exactly what would happen if the
transportation service showed an inequality of charge to the
amount of one small cent. That toll of one cent would alter
all the relative values of the different floor-spaces, would
greatly affect the ground and building values, and would
touch the fortunes of every soul doing business in that build-
ing some to gain, some to loss, some to bankruptcy. Is it
not clearly reasonable to conclude that in the large world of
industry outside one building, where unequal freight tariffs
actually do exist, the same workings of cause and effect occur?
The reader may depend upon it that they do. It is amazing
that the all-powerful effect of this supreme factor in the
dynamics of wealth has been completely overlooked by the
students and teachers of economy and statecraft.
The power of a transportation device which permits
buildings of forty stories to be erected and rented profitably
on a small lot not only greatly magnifies the selling and rental
value of that lot, but of all other lots favorably located for
the renting of so much floor space. The up and down car
service in our twenty-six buildings has then not only increased
the rental value of the lots built upon, but the rental value
of hundreds of lots not occupied as yet by sky-scrapers. The
increase in the value of ground rent is faithfully reflected in
the rise of building rent, and the increase of speculative land
values. And every rise in rent exaction and speculative land
values is another tax levy on working Capital and Labor.
The owners of Privilege benefit, of course, and so does that
76 DEUS EX MACHINA
capital which has been removed from productive work and
hidden away in land bought not for use but for speculation.
It is a gross injustice that non-producing capital should
earn more than producing capital. This may be a gain to
the individual, but it is a loss to the whole industrial com-
munity, and the community is foolish to permit it. Under
modern conditions production of wealth the necessary and
good things of life can only take place on any scale by the
joint efforts of Capital and Labor, and every bit of capital
removed from active production takes away an equivalent
power of production from so much labor. Now, it is com-
mon sense that capital tied up in idle land, waiting a rise in
selling values, produces nothing. So far as production and
consumption industry of all kinds are concerned, that cap-
ital might as well be buried in the sea. It performs not one
single useful service for the common good. And since it
does get gain while thus lying idle and useless, it is apparent
that it really gains by preying on useful, busy capital and
labor. For it adds nothing to the common national stock of
wealth, and it can only get gain from those who are adding
to that stock. II would like to see any possible refutation of
these conclusions. If two and two make four, then a man
who does nothing and lives well is a parasite; and capital
which does not work and add to the common stock of produc-
tion and at the same time takes wealth from that stock is a
parasite. What is that to me, or to you? Well, I work
to help produce wealth ; you, perhaps, add your capital to my
work, so that both may better help produce wealth. You
and I take the ordinary risks of life. Each after his ability,
DEUS EX MACHINA 77
we perform the duty of a man and a citizen. When this
other idle, useless capital, lying in wait for a gambling win-
ning, wins wealth, it takes some of the wealth your capital
helped to produce and my labor helped to produce. It is a
thief. And since it is everywhere getting continual gains it
robs you and robs me without ceasing, and robs all business
and all industry until it brings about the periodical national
bankruptcy we call a panic.
Now, what tempts men to take capital from active, use-
ful work and put it into idle land-holdings?
The expectation that land values will rise fast, and show
more gain than capital can earn at the work of production.
Does this happen?
It does.
What makes these land values rise in this way?
The pressure of population.
What causes this pressure? Is the United States so
small in extent that it cannot afford room for all its people
to work in?
By no means. There is land to spare. There is land
enough in one single state good land enough to support in
comfort all the people of the United States.
Why, then, the pressure which exaggerates land values?
Because it is directed upon certain limited territories.
What makes these territories so much more desirable ?
Easier and cheaper access to markets.
Is this access a natural advantage?
Not at all. It is an artificial advantage.
What produces this advantage artificially?
78 DEUS EX MACHINA
Inequality of transportation rates, which are based
primarily on length of haul.
What would happen if freight rates were equalized?
The artificial advantage enjoyed by certain restricted
territories would disappear. High speculative land values
and rents would fall.
Why?
Because the pressure of population would disappear.
Why?
Because Capital and Labor could exert themselves with
equal profit over so much vaster territory.
What would happen to the millions of dollars of capital
now tied up in idle landholdings, waiting a rise in speculative
land values?
Some of it would be badly hurt. The rest of it would
get busy.
The underlying cause of all the varied phenomena of
speculative land values, non-producing capital getting more
gain than working capital at the expense of working capital
and working labor, high rental costs, low interest and low
wages, unemployed men and idle lands, recurrent business
panics, you then say, is the sole factor of inequality in trans-
portation cost?
I do.
But it seems such a small cause for such a tremendous
effect.
Well, the scientist tells me that half a million of the
bacilli of consumption can hold a caucus on the point of the
lead pencil I hold in my hand, and that I cannot conceive the
DEUS EX MACHINA 79
smallness of one member of the colony. Still, I know that if
he found a congenial lodging in my lungs that it would mean
sickness and death to me, considerable money to the doctor,
some to the undertaker, a few thousands loss to the insurance
company, a fee to an administrator, and directly and indi-
rectly several hundred persons, in all parts of the habitable
globe, would be more or less out of pocket or in pocket
because a thing that I have to buy a powerful microscope to
see at all, got into a lung. It is not the size of any cause that
gives it importance. It is the greatness of the effects of
which it is the seed, and without which those effects could
not come into bearing and fruit.
Men are prone to look upon an effect immediately caus-
ing the final effect, as the real cause, when in truth this first
effect is only one in a chain reaching back to the prime cause.
They are not trained in Bacon's method of affirmatives and
negatives. For instance, in the case of our twenty-six build-
ings, one might urge that they could not have been con-
structed without the invention of steel-skeletons, which is
true, and another might claim that such edifices would be
impossible without glass, and so on through a long list, and
then each one ask: Why not attribute the credit of the con-
struction to any one of these causes? The reply, of course,
is that without these things the buildings could not have been
erected; but that while with them the buildings could be
erected, they never would have been but for the elevator.
Men erect buildings for profit, and it takes no wisdom to see
that the upper thirty stories of a forty-story building would
never be rented if the only way of ascending from the ground
8O DEUS EX MACHINA
was by stairways. /There were steel and brick and glass
used before men dreamed of office buildings higher than Trin-
ity's spire. The elevator was not one of the many necessary
things it was the one thing that made tenancy and profit
possible in lofty buildings.
It is this proneness to mistake a cause which is itself only
the effect of deeper cause, for the primary cause, that gives
rise to so much stupid legislation. Thus we hear it repeated
that tariffs are the mother of trusts, when it is absolutely
certain that if every tariff was abolished, just as many trusts
would flourish and just as many new ones spring up, so long
as inequalities in transportation rates exist. This sort of
feeble thinking, too, is responsible for the widespread notion
that protective tariffs make a country prosperous by keeping
out foreign-made goods, and enabling it to ship more wealth
out abroad than it ships in from abroad a fallacy so stupid
that the mere assertion of it is sufficient commentary on the
intellectual caliber of the utterer. By the same wisdom, all
that a city need do to outstrip all rivals is to get the railroads
to refuse to transport goods to it and handle only goods it
ships out. The one proposition, stripped to its final analysis,
is on all-fours with the other. It is a shame to find such
childish unreason as this masquerading as statesmanship. Pro-
tective tariffs by which sweet-sounding name is meant pro-
hibitive tariffs are not indeed the primal cause of trust
monopolies though they lend power to such monopolies
but they are efficient agencies in maintaining those artificial
inequalities of market cost which unequal freight rates breed.
Unquestionably, with a system of prohibitive tariffs and with
DEUS EX MACHINA 8 1
our present system of freight rates varying with distance,
the nation has continued to grow richer. And it is true that
there are men able to read and write who point to this fact
as a justification of both economic schemes. The same lucid
reasoning was employed by the friends who implored the
man with the gout not to> attempt a cure, because during all
the years he had suffered with this interesting complaint he
had steadily grown richer.
It would be difficult for the most exuberant fancy, the
most powerful imagination to picture the height of riches,
power and productive capacity to which this splendid nation
might now have risen, had it enjoyed since the close of the
Civil War free room for the play of its enormous creative
faculties, unhampered by the clogs of prohibitive tariffs and
the far greater economic crimes committed against Capital
and Labor by Economic Rent. With trade free to seek all
its natural avenues at home and abroad, and every form of
production meeting in every domestic market, far or near,
on precisely even terms; with the pressure of population dif-
fused and the natural increment of land values spread over
the whole vast area of the states had these been the condi-
tions of forty years agone, above what a mighty, puissant,
prosperous and happy people the dear Flag would now stream
its triumphant folds!
The Farmer and the Common Rate
class of citizens would quicker perceive the bene-
fits bound to inure to them from the adoption of the
Common Rate than would the farmers. To every
man occupying soil in the useful and noble work of
husbandry, this act of common justice would come with its
hands full of blessings. Nor am I able to see how this great
class of highly deserving men could then well help rising to
that plane of dignity and prosperity which the singular use-
fulness of their calling entitles them to occupy.
The average American farmer is a fine example of the
natural, wholesome union of Capital and Labor in productive
effort, for he employs his own capital and his own labor.
When he owns his farm in fee simple, he also embodies in
himself the function of landlord and receives himself the
economic rent that is to say, he retains the amount he would
otherwise have to pay for the use of land equally as good as
his own. At first glance it would seem that the farmer of
his own land would therefore be little interested in a measure
avowedly aimed at high rental values. But it is only neces-
sary to think a little more to perceive that the farmer is not
only a producer and seller but also, like all other honest
workers, a buyer and consumer; and that, both in selling his
products and buying other products in the market, his trans-
actions are affected by the rental values of the great market
centers. He more than any other producer pays toll, coming
and going, to the favored city landlord. For it should never
84 THE TOLL THE FARMER PAYS
be forgotten that while the pressure of population raises rental
gains to extravagant heights in certain restricted districts
only, these gains are not paid entirely by the inhabitants of
those districts, but by everybody, everywhere. The high
rents paid by the manufacturers, commission dealers, ware-
house men, and wholesale and retail merchants in the great
market exchange centers, are faithfully reflected in lower
prices for the farmer's product and higher prices for the things
he must buy. The difference in each case must be taken by
the exchange agent, be he who he will, in order to pay the
high rent and retain a living profit. Single store-rooms in
the city of Portland rent for more money per year than three
good farms would sell for, and this rent is not all paid by
the people in Portland. No, indeed ; every farmer in Ore-
gon whose beef, mutton, poultry, eggs, milk, hay, wheat,
oats, fruits, berries, produce of any kind, finally reach this
market, helps to pay these high rents. If he will but consider
this truth until it is clear to his understanding, he will then
readily see that a measure which will knock down these high
speculative rental values (and the Common Rate will surely
do so) , is bound to make the net profits of the farm larger.
And it follows, that if his net profits are larger, something of
increased value will add to his land, no matter if that land
be situated a thousand miles from the city. As a matter of
fact the inevitable outcome of the adoption of the Common
Rate must be to diffuse the land values and rental values
around city centers over the whole area of the United States,
including of course, farm lands. This is the desirable result,
in the train of which the general good is to follow.
THE TOLL THE FARMER PAYS 85
It need not be feared that the cost of living will neces-
sarily increase because the profits of farmers will increase.
The cost of living is now too high, altogether too high, and
yet farmers are not making extravagant profits. The mil-
lions of capital anxiously looking for profitable employment
are not madly rushing into agriculture. The cost of living
and the comparatively high gross not net returns of the
farmer are due to high speculative rental values which con-
tinually prey upon the producer and the consumer alike. I
may be tedious in iteration of this statement, but it is a truth
which must be understood by our people, before they can act
intelligently to rid themselves of the evil. We may resort
to every political makeshift under the sun, to high tariffs or
low tariffs, income taxes, corporation taxes, railroad regula-
tion, cheap money, "new nationalism," or what not of the
hundred and one shallow, catch-penny devices of so-called
statesmen, and to what use, so long as any addition to the
earnings of the nation's working capital and working labor
is regularly and automatically taken away by the non-produc-
ing thief speculative land and rental values? If a burglar
comes every night and robs my safe of all but just a dollar,
of what earthly difference is it to me that some "statesman"
shows me how I can put a few extra dollars in my safe each
day? Now, this is strong language, but, my countrymen,
this is exactly what is being done to you every day of every
year. It is a bitter commentary on the intellectual ability
of the men who offer themselves as guides and teachers of the
people our political writers, Senators, Representatives
conceding them to be honest and of good intention, that none
86 THE TOLL THE FARMER PAYS
of them sees this truth, lying plain to the sight as a big stone
on a traveled highway. For it is the truth, and no wit of the
most cunning sophistry can disprove it. It may be reviled,
and men who embrace it may be subjected to all the abuse
that malignity can find in its hateful vocabulary, but there it
stands, serene, immovable and not to be denied.
I do not mean disrespect to rulers and those we have
placed in authority over us. I was taught to pray for them
when I w r as a child, and advancing years have made me cer-
tain that they are very proper subjects of heartfelt petitions.
The simple fact is we are all too apt to be dazzled by the
glitter of high place, forgetting that the places are always
there to be filled, and if there are no great men on hand we
must, perforce, put small ones in the seats of the mighty. An
emphatic lesson of history is that all governments, monarchical
or republican, are simply the expression of the average opinion
of the governed. The functions of legislation are in essence
limited. Statutes which are in harmony with the higher
laws of political economy are never harmful. Statutes which
controvert those higher laws are always mischievous. And
the whole story of government for a thousand years is one
of almost constant interference with the economic laws. Yet
in each generation the men engaged in that mischievous and
absurd work were looked upon with respect and even awe.
Certainly, I am not opposed to government. But I refuse
to be at all dazzled by ignorance or error, no matter in what
pomp of apparel or of place they appear. We have had Presi-
dents, for instance, who were great men one, the greatest
man in all the tides of time honor and reverence to his
THE TOLL THE FARMER PAYS 87
deathless name and fame! and we have had Presidents who
with difficulty attained to respectable mediocrity. The point
I wish to emphasize is that those who see the truth as it is
here presented, do not permit themselves to be browbeaten
from its acceptance by any mere show of superior wisdom,
or by the sound of great names. Think for yourselves.
It seems to me that the men to whom this chapter is
specifically addressed the farmers ought to be peculiarly
independent in thought and action. The life of the farm is
not apt to impart many of the outward graces of dress and
manner which the life of the city nurtures, but there is no
avocation under the sun which is so well calculated to make
strong, right-thinking, understanding men. I want the
farmers to take this proposal of a Common Rate seriously,
to talk it over in their meetings, to discuss it at the store, to
think it over at home. If it spells prosperity for the millions
of you men, it spells prosperity for the rest of us. Your
profit is our profit, for your profit will come by binding hand
and foot the robber who robs us.
Think to yourself what it costs you to send the stuff
you have to sell to market. Maybe, you haul only a few
miles to the nearest railroad station, but your real, actual
market is the place where your product finally lands, whether
in San Francisco, Chicago, New York or Liverpool and
you pay the freight. You may think you do not, but you do.
It comes out of the price you get from your product. Con-
sider now what your farmer competitor pays, who lives one
hundred, two hundred, a thousand miles closer to market.
Consider that the tariff has built no wall about your industry
88 THE TOLL THE FARMER PAYS
and that you compete in world markets. Then ask yourself
this: Is it fair, is it justice, that I plow and sow and reap
and do all the work to raise a crop that my fellow farmer
does, and get less for my work? Not only that, is it fair
that I pay more for my plow, for my machinery, for my
family's and my own clothing, furniture, groceries, hardware
and such other things than the other fellow; does who gets
more pay for his work? And, finally, is there any justice
or reason in both of us getting less than we should for our
crops and paying more than we should for our necessities,
because the landlords in cities a thousand miles away raise
rents with each substantial increase of population? Ponder
these questions. Get hold of the truth firmly. Then hold
it fast and do your duty to yourself and to your country.
My own personality is nothing I am but one of nearly
a hundred million plain citizens. I am quite certain that all
wisdom did not appear at our house when I was cradled and
that it will not die when I do. I am well aware that there
are many men from whom I can learn much, and learn
thankfully, in any department of human knowledge. And if
I assume a dogmatic tone in the discussion of this proposition,
it is not, I hope, due to arrogance of disposition or of thought,
but to a profound conviction that I have hit upon a great
and vital truth, and an earnest desire to have my countrymen
see that truth. I was born in a little rural community a
farmer's village. I know the farmer's life at first hand I
know how different it is from the picture of poetical fancy
and if it is to happen to me to be first to propound an econ-
omic truth which shall eventually relieve the farmer of the
THE TOLL THE FARMER PAYS 89
injustice which he knows he suffers from, without perceiv-
ing the thing that robs him, the few years that will fulfill
the span of life for me would be filled with very great happi-
ness and thankfulness.
You men who feed and clothe the nation ought to tire
of being objects of prey for parasites. You ought to tire of
sweating to pay tribute to capital which does no* useful work
and to the rapacity of a non-producing, idle and utterly use-
less class of speculators. You ought to remember that you
are not only free men, but that you are the majority of free
men in a free country where votes count. If you will not
help yourselves, God will not. He has more deserving
cases to look after.
For the Consideration of Single Taxers
BODY of citizens who should quickly and clearly
understand the immense importance of the Com-
mon Rate is that intelligent, earnest, thinking class
which accepts the teachings of Henry George.
They will see at once that I take his theory of Rent to be the
sound theory. He was a very great man, and in the fullness of
time will come to his rightful high place in the estimation of
mankind. But in spite of the hopes, and even the claims,
of an invincible optimism, the doctrine of the Single Tax
has made headway slowly in this country. I think this
is due to several causes. ,For one thing the doctrine,
carried out to its logical application of the confiscation of all
private ownership in land, is opposed to the unbroken tradi-
tion and custom of civilized men; tradition and custom
which had their birth so far in antiquity that history knows
nothing of the date. To upset custom and tradition so
venerable and so universal is a task that will require many
more years. Again, an understanding o-f Mr. George's
teaching requires an intellectual training which most men
have not. To the multitude it is a hard doctrine. I remem-
ber when Judge James G. Maguire ran as the Democratic
candidate for Governor of California, he was bitterly de-
nounced on account of his well-known Single Tax views,
and the chairman of the State Press Committee of the oppos-
ing party an excellent, but extremely narrow man, with no
92 IN THE HOUSE OF FRIENDS
trace of original thinking capacity in his make-up sent
broadcast over the state the assertion that Mr. Maguire pro-
posed to levy all the taxes on the farmers and the foolish
man actually believed his own assertion. The other can-
didate was a lawyer of considerable repute, and he made the
same statement, and he, too, believed it! These are but two
of countless examples of the utter inability of the average
citizen to understand the Single Tax. Now, we live in a
world through which progress must make its way with pain-
ful slowness, here an inch, and there an inch forward. For
my part, I am an opportunist. A half loaf of bread looks to
me much more desirable than no bread at all. The Common
Rate is easier of understanding to the multitude than the
Single Tax; and it will perform, in great part, the func-
tions of that economic measure. Its adoption, I believe,
would hasten the adoption of Mr. George's plan, for both
strike at the same evil and address themselves to the achieve-
ment of the same end. Comrades in a common cause, they
march, to the drums and fifes of the vanguard of the Army
of the Common Good, against the common enemy. It is a
righteous war, men and brethren, in which we are enlisted.
Let us go up to the battle shoulder to shoulder, loyal and true
comrades-at-arms.
I have asserted several times, and I re-assert, that there
is no actual pressure of population upon our lands nothing
but an artificially created pressure brought to bear upon a
very small portion of those lands by a system of unequal
freight tariffs. For how can ninety millions of people bring
any pressure of over-population upon a billion acres of cul-
IN THE HOUSE OF FRIENDS 93
tivable soil? There are now in actual cultivation in the
United States about four hundred million acres of land.
There are enclosed as farming land about four hundred mil-
lions more, not actually producing. And there are of un-
classified lands, a large portion of which are cultivable under
modern conditions, more than a billion acres. The average
of production over the area actually farmed is ridiculously
small. For instance our wheat lands average about thirteen
bushels to the acre ; those of France twenty bushels ; those of
Germany, twenty-eight bushels; those of England, thirty-
one bushels. As a matter of demonstrable fact, without any
other scientific knowledge than we now have, the cultivable
lands of the United States are capable of supporting a popu-
lation of six hundred millions; and it must not be forgotten
that science is only spelling its primer lessons, and splendid
as its achievements have been, they are to the triumphs to
come only as a rushlight to the sun in full radiance. I have
no manner of doubt that our descendants will see a billion
people living in this country, in the midst of such wealth and
material comforts and conveniences as we now no more dream
of than did our fathers dream of steamships, railways, electric
cars, lights, telephones, telegraphs, automobiles, aeroplanes,
and the thousand and one other gifts of science which to us
are commonplace. The agriculture of the future will be as
different from the agriculture of the present as an American
plow is different from the crooked stick with which the hus-
bandman once scratched the soil in seed-time.
I think it is evident that there is not now and will not
be for generations any natural pressure of population upon
94 IN THE HOUSE OF FRIENDS
the lands of the United States. And yet a pressure of popu-
lation does exist and manifest itself in speculative land values,
and in Rent which eats up the honest profits of Capital and
Labor, and so fathers and mothers nearly all our economic
ills. It is evident then, again, that this pressure must be
artificially produced, and if that is so, and the cause is not
natural and a part of the operation of inflexible natural law,
it can be removed. What is the cause? Lack of land?
But we do not lack land. No, it is, so far as this country
is concerned surely, the restriction of the very profitable use
of land to comparatively small districts, in which, by their
very smallness, land speculation is enabled to play the same
part it plays in small countries. This restriction is brought
about by the manipulation of transportation costs. Not all
the riches of all the trusts and speculative owners combined
could maintain the high speculative selling and rental values
of the city and rural acreage they actually control, if all the
available acres of this vast country were brought into compe-
tition with theirs in every market on equal, level terms.
We are apt to grossly over-rate the comparative propor-
tions of the nation's actual and potential wealth and the for-
tunes of very rich men. Persons will often speak of Mr.
Rockefeller's or Mr. Morgan's ability to buy up the whole
country. As a matter of fact, Mr. Rockefeller could not
pay the hay bill of the country for a year, nor the corn bill
for six months. It would bankrupt him to pay a half-year's
bread bill. The barn-yard hen produces more wealth in a
year than three fortunes of the size of Mr. Rockefeller's
produce profits. Mr. Rockefeller's, Mr. Morgan's and Mr.
IN THE HOUSE OF FRIENDS 95
Carnegie's fortunes united would not pay the freight bill of
the nation for twelve months. The entire capitalization of
the Steel Trust, the Oil Trust and the Copper Trust, at
market prices, would not buy the produce of the American
farms for any ninety average days. In the light of these
facts it is clear that no man or combination of men could
maintain speculative land values for their benefit, if the
whole immense area of the country could be brought into
approximately equally profitable use. The necessarily more
equal diffusion of tax burdens, automatically resulting from
the more equal diffusion of land values, would make it un-
profitable to hold large tracts out of use, in expectation of a
rise in selling price, because that rise under the new condi-
tions would be so slow, on account of being so general, that
capital could earn more by being put to the work of useful
production than it could, as it now does, by lying non-pro-
ductive and preying on production. I can see no escape from
these conclusions, and if not all his fiery enthusiasm and indom-
itable optimism looked forward to achieving, they are in sub-
stance and in great part the ends to which Mr. George de-
voted his zeal, his eloquence, his efforts and his undeniably
great and original mental powers.
Therefore, I earnestly invoke the careful and deliberate
consideration of the proposal of the Common Rate by those
intelligent and thoughtful men and women who hold to and
propagate the doctrines of Henry George. I ask them to
consider the practicability of this economic proposal ; the ease
with which it can be understood by plain men ; the fact that
it shocks no ancient prejudices and comes in conflict with no
96 IN THE HOUSE OF FRIENDS
deep-rooted traditions and customs; the fact that it can be
put in operation with no change in any of the governmental
or social machinery with which the people are familiar ; the
fact that it will powerfully appeal to the farmer, the laboring
masses and the smaller business men and manufacturers of
the country and considering these things and the inevitable
effects upon speculative land values, I ask them if any believer
in Mr. George's teachings can lend himself to more useful
work than the propaganda of the Common Rate. And
speaking thus, I speak as a friend in the house of friends, for
as I was not among the slowest to believe in his teaching
and doctrine, so I shall assuredly not allow myself, while
I live, to be among the tardy ones to voice an unshaken
respect for the patriotism, the devotion, the services and the
genius of the great man who gave to the world the "Progress
and Poverty."
Some Quotations That Seem Pertinent
|T may not have escaped notice that I indulge in
few quotations from "authorities." Truly, I care
little for them and consult them seldom. Let each
man think for himself and Truth will find her own
voice. But I intend that this shall be largely a chapter of
quotations, by which I desire to show the really helpless con-
dition the railroad men are in, the power of habit to blind
men's eyes to the remedy for troubles they clearly discern,
and the effects that rates based on distance have on different
localities, according to the testimony of the rate-makers. I
especially ask the consideration of small business men retail-
ers of merchandise in the interior towns and villages to
those quotations which particularly affect them. And I ask
them to bear in mind that these are not my statements, but
the utterances of men who confess that they see no remedy
for the ills they plainly see. In one sense, these quotations
lack sequence. In another they do* not, for they all state
evils which the Common Rate, I confidently affirm, would
remedy.
First as to discriminations in freight rates, I quote from
the utterances of railroad presidents :
President Galloway: "We do not do these foolish
things (rate discrimination) from choice. I will say that
they are just as bad and foolish and stupid as can be, but
98 THE WISDOM OF THE WISE MEN
what are we going to do about it? We have built up these
big shippers and now they control us."
President Ripley: "The situation is remediless. I
think it always will be."
President Hill: "Discrimination will always exist. We
have to discriminate."
President Fish: "Tell me how to enforce the ten com-
mandments and I will tell you how to stop discrimination."
President Stickney: "We do not make rates on cattle
and meat products. The packers make rates."
It is noticeable that none of these railroad men defends
discrimination or even desires it. The tone of each one is
the tone of a man disgusted with the situation, but feeling
utterly helpless to remedy it. It is these discriminations
which enable big shippers to put smaller men out of business
with certainty and dispatch. It will be noticed, too, that
the railroad presidents admit that they make small or no
profit from the business of their dictators. In fact, in the
course of the very public hearing in which these statements
were made, President Ripley, of the Santa Fe, one of the
most powerful railroad systems in the world, declared em-
phatically that the Meat Packers' Trust compelled his road
to haul every pound of their beef at a loss to the road, and
that he was powerless to help himself. Where do the roads
get the profit then, which they must have in order to continue
doing business? Let us see what others say men who can
suggest no remedy, but see the facts men not at all hostile
to railroads, but anxious to put railroads in the most favor-
able light.
THE WISDOM OF THE WISE MEN 99
Hadley Railroad Transportation; page 119: "The
points where there is no competition are made to pay the
fixed charges."
Parsons The Heart of the Railroad Problem, page 219:
"The railroads make whatever rates are necessary to get busi-
ness on the through routes, and compel the rural districts to
pay rates high enough to make up for the low rates on
through traffic."
Senator Dolliver In the United States Senate: "Every
village and interior community in the United States has a
just grievance against the railroads on account of the dis-
criminations against them in favor of the larger cities."
Parsons Heart of the Railroad Problem: "Thus every
small town and every small shipper and farmer has to pay
tribute to big centers. The effect is to build up the big
cities at the expense of the country."
Ibid (this in reference to the low through rates for
which the interior small shippers must make up being per-
mitted by the Interstate Commerce Commission on the
ground that the railroads must meet water competition) :
"The seacoast is robbed of its water transportation and the
interior pays the bill. It pays the cost of the coast trans-
portation."
And now this choice wisdom of the august Interstate
Commerce Commission :
"The men who build a city in the interior cannot
expect to get as reasonable a rate as the men who build their
city on the shore of the sea; but the difference should be
reasonable."
IOO THE WISDOM OF THE WISE MEN
I think our grandchildren will likely suspect me of hav-
ing forged this exquisite bit O'f wisdom, worthy of Bottom or
Dogberry in happiest vein, but it is all down in black and
white, plain for any man to see, in the printed decisions of
this admirable body of economists.
And now let me quote from an address made in March,
1905, by Federal Judge Peter S. Grosscup, a man notor-
iously favorable in all his rulings to great corporations of
every kind railroads as well as Standard Oil: "Any dif-
ference in rates permitted by law, even though based on the
bulk of the tonnage handled (the learned judge is trying to
say, any favors given to big shippers at the expense of little
shippers) is a direct and effective blow by the nation itself
at the principle that every man, whatever his business size,
shall be given equal conditions and equal opportunity."
This, of course, is exactly what the Common Rate
would insure to all men, engaged in any kind of production,
whether by the employment of capital or of labor, or of both.
The learned judge could not have more clearly defined the
scope, action and righteousness of the Common Rate if he
had known all, instead of nothing, about it. And now in
this connection another bit of economic wisdom from the
Interstate Commerce Commission, which is like the peace
of God, in that it passeth all understanding. Several rail-
roads had joined in making a common flat rate on milk
shipped in cans, regardless of distance, and the milk shippers
nearest to market, being deprived of a most profitable advan-
tage, protested. The case is known as the Essex Milk Pro-
THE WISDOM OF THE WISE MEN IOI
ducers' Association versus Railroads, and this is the finding
handed down by the Interstate Commerce Commission:
"A blanket rate on milk on all lines of the Delaware
& Lackawanna road, New Haven road, Reading, Erie, New
York Central and West Shore and other roads, regardless
of distance, viz. : 32 cents on milk and 50 cents on cream per
can of 40 quarts, is unjust to producers and shippers of the
nearer points. There should be at least four divisions of
stations the first extending forty miles from the terminal
city ; the second covering a distance of sixty miles and ending
one hundred miles from such terminal; the third covering
the next ninety miles ; and the fourth covering stations more
than 190 miles from the terminal." (The italics are mine).
The Commission then proceeded to fix a scale of rates
so graduated that the freight cost of forty quarts of milk
would be three cents higher in each district than in the
district immediately next nearer to the terminal market.
With the decisions and law findings of the Interstate Com-
merce Cbmmission, of course, this work has nothing to do,
but the assumed economic bases of its remarkable conclusions
are fair game though this is a merry term to- be applied to
such painful exhibitions of mental obtuseness. For, in the
great name of common sense, what possible "injustice" could
be done to one body of dairymen by the roads hauling other
dairymen's milk to the same market for the same charge?
I confess that I, for my part, am utterly at a loss to compass,
even in imagination, the processes of any human reasoning
that lead from such a premise of plain, ordinary, everyday
justice and square-dealing to such a fearfully and wonder-
IO2 THE WISDOM OF THE WISE MEN
fully fantastic conclusion. Here are the railroads leading
into the great market of the country attempting to give every
man in the dairy business, anywhere on their lines, a fair and
level opportunity with every other dairyman to set his milk
down in the market place at exactly the same cost giving
him, again to quote Judge Grosscup, " whatever his business
size, equal conditions and equal opportunities" and the
Court of Last Resort in transportation matters finds that this
is an injustice. Why it is enough to make common sense
throw a fit. And it is precisely the country-wide application
of this absurd, illogical I was about to say, abominable
economic injustice to all freight transactions that makes you,
Mr. Farmer, Mr. Small Merchant, Mr. Little Shipper, Mr.
Busy Capital and Mr. Working Labor, get up early and
sweat through a long day for the profit of the "producers
and shippers of the nearer points" to quote the Honorable
Commission.
And here a pertinent quotation from a matter-of-fact
statistical work, Noyes' American Railroad Rates: "The
statistics show that while freight rates on an average, fell
about 50 per cent in 30 years, local rates have, on Eastern
roads, not fallen off; and on Western roads, where they were
much higher, about 10 per cent."
Which is to say, that the small towns and rural dis-
tricts must pay 'high freights in order to build up the big city,
enjoying low rates thus creating gigantic speculative land
values that make a few square inches of city land worth
more than an acre of a fertile farm.
And now some instances, which are but epitomized
THE WISDOM OF THE WISE MEN IO3
quotations from historical and statistical works of recognized
standing, to show the far-reaching effects of a freight rate
to the disadvantage of one point and the benefit of another.
The soil and climate of Italy are well adapted to the
cultivation of Indian corn. At one time, says D. A. Wells,
Indian corn was extensively grown in Italy, but about 1880
the corn grown on the then cheap lands of the Mississippi
Valley obtained transportation rates which enabled it to be
sold in the Italian markets cheaper than corn could be brought
to those markets from Lombardy and Venetia, where wages
were but one-third American farm wages. This condition
resulted in the emigration, in the year 1885 alone, of 77,000
Italian laborers to the United States. Note that this was
the pressure of population being diffused by action of a
freight rate favoring a larger territory.
According to a United States Consular Report in 1886,
the speculative selling and rental value of land in Germany
had fallen to one-half the values of 1871, because cheaper
freight rates were enabling the wheat-growers of the United
States, Canada and Argentine Republic, to land wheat in
Germany cheaper than it could be grown there on lands de-
manding the former high rents. Here we have the factor
of a few cents in the bushel, difference in a freight rate on
one single commodity, destroying in a dozen years half the
rental value of an empire with most beneficial results to
Germany, as can easily be seen by anyone who reads her
history since that period with seeing eyes.
The opening of the Suez Canal, as is well-known, had
almost revolutionary effects upon the trade and commerce
104 THE WISDOM OF THE WISE MEN
and agriculture of Europe. A curious isolated effect shows
the extraordinary power of a freight rate to lower rent values
and diffuse pressure of population. Previous to that great
event, rice culture flourished on the Italian peninsula, and
rice lands brought the owners large income from their tenants.
But with the cheaper canal transportation, Indian rice came
into European markets. The Italian rice lands could no
longer earn any profit for the capital and labor employed in
cultivating them and pay the high rents. Two results rapidly
occurred a lowering of rent and an emigration of laborers
to less crowded lands in America.
Such instances could be multiplied into a thousand
volumes, to prove by historical facts the dominant power of
transportation rates to make and unmake all speculative land
values. A powerful illustration, on a gigantic scale, is at
hand for anyone who will consider the relative status of
speculative land values in our own country and in Manchuria.
Manchuria possesses a temperate climate, a soil of great
richness, a favorable strategic location among world markets,
an immense wealth of precious and useful minerals. Her
wheat lands yield nearly twice the average yield of Dakota
lands, and it is estimated that all these lands could produce
annually five hundred million bushels o>f wheat. There is
nothing wanting in Manchuria to make it as wealth-pro-
ductive as the richest territory under our own flag, except
what? Population? Capital? Labor? No. Transportation
railroads. Population, employing capital and labor upon
the rich land opportunities is of course necessary, but popula-
tion will not come to do this thing until transportation first
THE WISDOM OF THE WISE MEN IO5
comes. And here let me remark that it is the peculiar dis-
tinction of our great American railroad construction chiefs
that they first saw this truth and acted upon it. Until the
advent of such truly great men as Henry Villard and James
J. Hill, upon the stage of world activities, transportation
facilities had crawled in the slow wake of population, rudely
and painfully diffusing itself along lines of natural communi-
cation rivers, lakes and stretches of level country affording
passage to -the wagons and ox-carts. With that large imagina-
tion which is the hall-mark of constructive genius, these men
put transportation where it belonged in the van of popula-
tion. They built railroads across thousands of miles of un-
inhabited lands, ending at seaport villages. The result is
history, splendid history the most splendid history man has
ever made. Now, when another Villard or another Hill
shall do for Manchuria what has been done for Western
America, the same results will follow a rapid increase of
agricultural population, a rapid rise in selling and rental
values of farm lands ; a concentration and congestion of popu-
lation at the market points most favored by freight rates;
an accelerated and enormous rise in selling and rental values
of land at these points, and the whole phenomena of the
earlier high profits of capital and labor being gradually ab-
sorbed by speculative land values and rent. And all this
towering edifice will rest on the one sole foundation stone
of inequalities in freight transporation rates. If there is any
possible escape from this conclusion, I would be humbly glad
to be enlightened upon the subject. For I can see none,
nor do I believe there is any.
The Power of a Rate Illustrated
N illustration, on a very large scale, indeed, of the
power of transportation rates to affect, for good or
for ill, the lives and fortunes of an entire people is
found in the recent history of the Kingdom of
Spain. The annals of that brave and capable people for three
hundred years have been one long tragedy a tragedy which
no good man can contemplate without pity and compassion.
The victims of a heartless, greedy and stupid tyranny, both
political and ecclesiastical, generation after generation of
Spaniards have been born and lived and died in mediaeval
conditions unknown to any of those European States over
which once the valor and capacity of Spain's soldiers, seamen,
scholars and traders spread the terror and renown of her
formidable name. For centuries, under the incubus of super-
stition and misgovernment, the people of the Iberian Penin-
sula have been sunk in sloth, in poverty and in an almost
incredible ignorance of the progress of mankind. At the
close of the Nineteenth Century, the Spaniard was still the
Spaniard of the days of Philip and Elizabeth. The husband-
man still furrowed the earth with an implement little differ-
ent from that used by the Moors. The transportation lines
and equipments of a great part of the kingdom were still the
bridle-paths and the mule trains. Still the royal tax-collectors
levied impost on every conceivable product of industry, and
still a horde of cowled monks and friars swarmed in the land
IO8 THE LUCK OF A NATION
and exercised the authority of the Middle Ages. Spain was
a gigantic and mournful anachronism.
Twelve years ago, either an accident or a crime in the
harbor of Havana, brought this ancient and decrepit kingdom
face to face, in the arena of war, with the United States. It
was a pitiable spectacle much such a spectacle as would be
furnished, could we see some suddenly resurrected knight of
old, in armor clad, riding full tilt at a battery of rapid-fire
gatlings. There could be but one result, and the guns of
Dewey and Sampson spoke only a foregone verdict of victory.
The conclusion of the war saw Spain stripped of her colonies,
without a fleet, with a bankrupt treasury and a sullen and
disheartened people. The day the treaty of peace was signed,
the best of the Spanish bond issues sold on the bourses and
exchanges for 49 cents.
Ten years from that day the same bonds sold for 90
cents; the foreign trade of Spain had increased twenty per
cent; the mines of Spain, long renowned for their potential
wealth, were being worked with feverish activity; great
stretches of idle land were being brought under cultivation ;
the vineyards and olive groves were being extended, and an
exhibition of a new spirit, totally unknown to that country,
of hopefulness and energy was everywhere so much in evi-
dence as to excite the comment of all intelligent travelers.
What brought about this happy and beneficent change?
What Jin rubbed the rusty lamp of Spain's long-forgotten
luck and enterprise?
Now, mark. Out of the annual revenues of $216,000,-
ooo an enormous sum to be raised among a people so poor
THE LUCK OF A NATION I(X)
the government by some unusual and happy visitation of com-
mon sense, set aside a subvention for lines of steamers. This, of
course, was giving the Spanish exporter and importer an ad-
vantage in transportation rates across seas over those peoples
served by unsubsidized lines. In ten years, Spain had built
up an importing and exporting trade with the Argentine
Republic of $18,000,000 annually; with Uruguay, of $13,-
000,000; with Paraguay, of $3,000,000; with Mexico, of
$6,000,000; and in spite of the total loss of an annual ex-
porting and importing trade with Cuba and the Philippines,
amounting to $70,000,000, had actually gained in the total
amount of her annual over-seas business the great sum of
$30,000,000. A bit of sensible legislation, in the midst of in-
credible government stupidity, gave Spain a transportation
advantage over rivals for the trade of the thinly settled Latin
American countries, and with the waving of this magician's
wand, her people rose from the exhaustion of defeat in war
and the handicaps and miseries of clerical and aristocratic
tyranny, and took on such energy and such prosperity as
neither they nor their fathers had known in three hundred
years of national life. If Spain can retain this advantage for
her ships and traders, her industrial and moral regeneration
is as certain as the rising of the sun.
I challenge any man to lay finger on one single other
cause of this new birth of energy and hope in Spain. I
affirm that all the people of Spain have won for themselves in
ten active and happy years, from the increase of the fortunes
of the more opulent to the additional coppers in the muleteers'
pockets, is directly due to the dominating and fructifying
IIO THE LUCK OF A NATION
power of a freight advantage indirectly obtained within these
ten years by a single wise act of legislation. The people
of Spain are hard taxed and still very poor, but the money
taken from their earnings to buy the freight advantage, is
money well spent.
I do not intend to* be dragged into any controversy over
protective tariffs and ship subsidies though protective
tariffs seem to me the maddest freak of human unreason ever
exhibited for the amusement of the laughing Gods. But with
this example provided by Spain in mind, I cannot refrain
from saying that if we were to lay out in the purchase of
ocean transportation advantages one-tenth of the two thou-
sand millions of dollars which we annually pay to the bene-
ficiaries of prohibitive tariffs, the increase in our world's trade
would go far to make up the gigantic loss incurred by our
submission to> this other economic robbery. In paying a ship
subsidy, we get on a national scale the rebate advantage, by
the unscrupulous use of which so many colossal private for-
tunes have been piled up. We buy openly and with no
wrong, a freight cost advantage, and anyone who* has done
me the compliment to follow my argument thus far will see
that any nation using this advantage to the limit of its resist-
less power, will leave its trade rivals behind in the race for
supremacy. If this nation were deliberately to take, annually,
from its treasury enough millions to permit our own vessels
to carry ocean freight cheaper than the vessels of any other
nation, the American flag would fly thick in every port of
call in the world ; and if the choking hand of the protective
tariff were forced from the throat o>f commerce, American
THE LUCK OF A NATION III
trade would dominate the world. For no wit of man can
devise any successful defense against the irresistible might of
the most favorable transportation charge.
I think that the Japanese are the least sentimental and
the most logical and acute people on earth. They are using
this powerful weapon of freight cost advantage, bought out-
right with subsidies, to conquer the commerce of the Pacific,
and their victory is being won as rapidly and completely as
were their astounding military triumphs over the armies and
fleets of Russia. If we do not soon awake to some sense of
the dominance in all human affairs of this Law of Favorable
Rate, Japan will have us on the hip. She is playing with us
for a far more gigantic stake than she wagered with Russia,
and she is playing with her eyes open and we with our eyes
shut. The few millions with which she buys her freight
advantage would not have paid a month's cost of her great
war perhaps not a week's cost and the triumph she will
achieve, if our stupid folly persists, will be such commercial
dominion and empire as not even Napoleon proposed to
achieve.
It may be said that this has little to do with the Com-
mon Rate. I reply that it has every thing to do with such
an argument. For the Common Rate is advocated to destroy
freight favors at home, because they build up the fortunes of
the favored ones in spite of any and all resistance; and the
favorable rate is advocated abroad, because it will, just as
certainly, build up the fortunes of a nation as of an indi-
vidual ; and while at home I am for favors to none and
112 THE LUCK OF A NATION
fair opportunity to all, in the great commercial war of the
nations I am for my own people and my own flag.
We are potentially the richest and most powerful people
ever grouped together in all the tides of time. Skill, en-
ergy, raw material, exquisite machinery, executive force, a
working class of unexampled intelligence and initiative,
courage, optimism nothing of the elements of might and
dominion are wanting. And yet, when the trumpets are
calling the nations to the bloodless war for trade dominion,
we run to hide behind walls of protective tariffs, skulk like
cowards who hang on the rear of battle to rob the helpless.
Our battleships fare forth with all the courage and blithe
dare-deviltry of our race, and no man dreams that they will
turn from fight. But our commercial fleets hide in domestic
ports, and sneak but occasionally into the harbors where goes
in and out the world's trade.
My hope and faith in the operation of the Common
Rate is that by the very exuberance and pressure of the trade
prosperity it would create at home, we would be forced to
throw down the senseless bars we have put up between our-
selves and the world and take our victorious place in the van
of the nations. Statesmanship that takes the thousand-year-
old tactics of China as its model of wisdom is a thing which I
believe five years of the Common Rate w T ould knock on its
stupid head.
We taught Spain a useful, though painful lesson. It is
not incredible that we may learn a profitable lesson in turn
from one of her gallant and successful efforts to redeem her
fortunes during the past decade.
The Common Rate Would Standardize Prices
THINK it needs no argument that the Common
Rate would standardize the selling prices of all
commodities and goods everywhere. That must be
evident at a glance to anyone. With every seller
of wool and cotton and silk and thread and buttons and
needles and sewing machines meeting every other seller and
buyer of these things in any and all markets on level terms,
it is as certain as anything can be that the buying and selling
price of any grade of clothing will be the same everywhere.
So with foods. So with everything men buy and sell. Prices
would find their level as automatically as does water. I take
it that there will be no denial of this proposition.
Now it seems to me that with prices thus brought to a
fixed level, all business would enjoy a feeling of security
of capital invested, and permanence and certainty of profit,
that it never has had and cannot now possibly have. A busi-
ness failure under such circumstances could hardly occur,
were the most common prudence used. And even a bank-
rupt's stock of goods would lose little of its value as a
security for the creditors. For it would certainly find a mar-
ket somewhere at the prevailing price level, minus, perhaps,
one additional freight charge assessed at the Common Rate.
The element of chance in business success today is the
luck or ill-luck in guessing at future fluctuations in prices.
Essentially this is as much a gambling element as is the guess
114 WHY LIVING COSTS MORE
at the winning throw of the dice or the lucky number in a
lottery. A good guess, when buying, makes the merchant
a winner ; a bad guess makes him a loser. And this gamble is
forced upon him willy-nilly. He has no option. He must
take the chances of the future market price every day, or go
out of business. Now, any element of gambling chance in
business is a bad element, because whoever takes gambling
chances of any kind must have a losing streak occasionally,
and may have too many for his safety. True, in the long run,
business men can usually balance losses by greater gains, but
the uncertainty is always there, and to provide against it a
general slightly higher selling price is asked than would be
if all losses and all profits could be accurately forecast.
Again, the losses and gains in the fluctuations of prices
good times and bad times are not sustained equally by all
parties to the transaction. Rent, which takes so large a por-
tion of the wealth exchanged in business, shares in all the gains
and stands none of the losses. It is the first thing to go
up when business begins to show good earning power, and it
never comes down when business shows loss, unless forced
to do so by widespread virtual bankruptcy of all business
that is, in times of severe panic depression. And then it
lowers its toll as reluctantly and slowly as it possibly can.
While the victim has a drop of blood left, the vampire clings
to him. Now, when a man sits in a gambling game, with the
understanding that he provides the stakes, and pays all losses
himself, and divides all winnings with an onlooker, he can
tell very easily before he begins to play, how he will come
out at the end. These are homely illustrations, but I think
WHY LIVING COSTS MORE 1 1 5
they will make my point clear. Fluctuations: in buying and
selling prices hurt Capital and Labor engaged in producing
and trading, and benefit Rent. That can be accurately dem-
onstrated theoretically ; and in actual business life every man
engaged in buying anything except land values, knows from
experience that it is true.
Again, fluctuations of prices, which cannot be accurately
forecast, shorten credits and so curtail business power. Evi-
dently, less credit can be extended on the security of a stock,
the future market value of which is uncertain, than on a
stock which has a permanent level value. Whenever there is
a margin point of possible speculative loss of value, the
creditor always assumes it to be the lowest possible, and
bases the amount of credit he will extend on the assumption.
But with prices standardized and on permanent levels, the
marginal credit point would naturally be near the standard
level of values. The business man could thus at all times
know his capacity to obtain credit, and this assurance would
enable him, with confidence, to extend his lines to his full
capacity and do more business and earn more profit than he
now can. For no business man need be told that credit is
capital and that an enlargement of credit is equivalent to
an enlargement of his buying cash on hand. This enlarge-
ment of credit among millions of men doing business every-
where in the United States would add enormously to the
working capital of the nation, thus enabling the employment
of a corresponding amount of labor, and the creation of a
fresh consuming power to use up the new and old wealth. In
plain American, business would be better and better. Of
1 1 6 WHY LIVING COSTS MORE
course, there are elements of business success which cannot
be bought or sold or brought under rule. They go with
the personal equation. Sagacity, kindliness, executive force,
appreciation of public tastes all these things are powerful
factors and all are part of the man. I do not claim that a
standardization of prices would make all business men equally
successful or prevent all failures. God, not freight rates,
makes men. But I do claim that such a standardization
would present equal opportunities to all and no' man can
ask, or ought to ask more than that. A square deal all
around, and may the best man win that is the manly
American sentiment.
Putting buying and selling prices on permanent levels
would be another form in which the Common Rate would
pare the claws of Rent. Experience shows us that no matter
how violently prices fluctuate, they invariably tend to settle
on slightly higher levels. Deep down at the root of things,
this is because, as I have pointed out, Rent takes the win-
nings of a rise and refuses to pay the losses of a fall in
prices. As a matter of common experience, the prices of all
the necessaries of life have risen at least fifty per cent in a
few years. This has been accomplished by a series of gradual
rises to higher levels, accompanying price fluctuations. Now,
I ask the merchant if he is making fifty per cent more profit
on sales of these necessaries, and of course he says he is not
and he says the truth. I ask the farmer if he is making
fifty per cent more profit, and he says he is no>t. The
manufacturer says the same thing. They all speak the
truth. Yet the consumer is paying fifty per cent more.
WHY LIVING COSTS MORE 117
Where does the excess cost go? In whose fingers does it
stick? It goes to Rent, speculative land values the idle
capital in that sure-thing game it gets it all. During the
last few years the selling price of a lot in your city has
likely doubled several times. You can point out property
which has risen in value from $100 to $1,000, possibly
$5,000 a foot. You could have leased that lot ten years ago
for $200 a year. Now a lease would cost you $10,000 a
year. There is where the extra cost of everybody's living
has gone. The little capital originally buried in that lot has
never worked an hour since. It has not added a cent's work
to the total stock of production. It has not helped consume,
has not bought, sold or employed labor or exercised one
single useful function of any kind ; and yet it has earned more
money than your equal capital and all your labor honestly
and usefully employed during those years. Do you see now
who gets the profits of continually increasing cost of living?
Do you see what Rent does to Capital and Labor? Well,
when the Common Rate knocks these speculative land values
on the head and Rent ceases its mischievous robbery, the
cost of living will rapidly fall; the prices of all necessaries
will be much lower, and yet the producer and the trader
will have more net profit for the work of their capital and
labor. The business man's and the farmer's and the manu-
facturer's gross gains will be decreased, but their net gains
will be increased. And when the Common Rate has thus
reduced Rent extortion and reduced prices of products to
common levels, those levels will strongly tend to be per-
manent over long periods.
1 1 8 WHY LIVING COSTS MORE
I appeal to any thinking business man, engaged in use-
ful, honorable, productive trade in which class land specula-
tors do not belong to say if the lowering of Rent robbery,
the safety and security of business, the increase of credit, and
the increase of profit would not result in general prosperity
to the whole nation, and in long continued prosperity, un-
disturbed by the terror and ruin of recurrent panics.
This is the good the Common Rate has to offer you
men, and it lies in your own choice whether to accept it or
to reject it.
Personal Talk to Business Men
T the risk of being tedious, I want to drive this
question of rent tribute a little deeper into the
minds of you business men. To tell the truth,
you are the class hardest to teach political sense.
I dislike to say so, but it is the truth. The farmers and
mechanics are much better posted. They read books and
publications dealing with economic laws and talk these things
over among themselves in private and public gatherings,
while the extent of your reading is usually the pages of a
popular magazine and the news columns of the daily papers
an immense amount of amusing chaff. You take your
political and economic opinions at second-hand from men
who are very unfit to deal intelligently with such topics.
This is not flattering to you, but it happens to be the fact.
And yet, from your very position in society and the extent
of your acquaintance and activities, you exercise a tremendous
influence on the social fortunes of the nation. Your lack
of even rudimental economic knowledge is not due to any
lack of intellect or natural parts. Those you have in abun-
dance, but you apply them, and all your time, to the daily
problem of profit and loss, and so narrow your field of in-
formation. You are perfectly bully in your way but your
way is not broad. It nearly always runs straight from bed
to Dollartown and back to bed. I fear you may resent this
plain speech, because I know you think you are shrewder
1 20 A BIT OF PLAIN TALK
and wiser than you are. If you were wise and shrewd you
would not be straining your credit and employing all your
capital and working long days for the profit of another lot
of chaps who do nothing. And that is exactly what you are
doing by the hundreds of thousands. You are working for
the gambler, the land speculator, the fellow who collects
ground rents.
It may be not amiss to say that here and elsewhere,
when using the term Rent, I mean always and strictly
ground rent. The part of the rent you pay which is collected
by the building you are in, is a perfectly fair and legitimate
wage of the useful Capital and Labor which put the building
there. This portion of the rent remains stationary. The
portion of the rent you pay to the ground the building
stands on, in just so far as it has risen above its first value,
is the portion you pay to idle capital and speculation. This
is the rent which is always rising, with every fresh exertion
on your part. This is the thing that gets your profit.
Let me give you an illustration of the workings of idle
capital and ground rent drawn from every day real life.
Not long ago a lot was bought by a man I know for the sum
of one hundred thousand dollars. He bought the lot of a
man who paid five hundred dollars for it twenty years before.
The lot during all that time laid unimproved. The new
owner expended two hundred thousand dollars in erecting
a building to be let to business men. Quite an ordinary,
usual transaction, you see.
Now in the first place, in considering this transaction,
we see at once that there was a profit in the hand of the
A BIT OF PLAIN TALK 121
first lot owner of $95,500, less the tax he paid during oc-
cupancy. Twenty years before he had buried five hundred
dollars in that lot buried it just as certainly as if he had
tied it in a sack and hid it in the ground. It was just so
much capital withdrawn from useful work. During all
those twenty years, in his capacity as lot owner he had not
done one single thing to help improve his city, had
neither bought nor traded nor employed labor or other
capital. It so happened that the buyer, to get the purchase
money in hand, sold industrial securities in the sum of
$100,000, which had netted for a long period about 5 per
cent. He had actively employed a capital of $100,000 for
twenty years in useful, generally beneficial work, assisting
labo>r to create wealth the honorable enterprise of a good
citizen. The total earnings of his $100,000 capital for
twenty years were taken by that little $500 buried for twenty
years in the unimproved lot an idle parasite. That is
perfectly clear, is it not? Well, that's when speculative
land value began to rob industry.
And now comes in the business man's punishment. Of
course, when the new owner had expended $200,000 in build-
ing, and handed over $100,000 to the successful real estate
gambler, he had an investment, perfectly legitimate so far
as he was concerned, of $300,000, on which he must have
profit. Assuming a gross rental of $30,000, the business men
renting stores and offices in that building must pay $10,000
annually, or 33 1-3 per cent of the total rent, as ground rent.
They are paying back to the new owner the $100,000 which
he was compelled to hand over to the idle and useless land
1 22 A BIT OF PLAIN TALK
gambler. The rent of every man in the building is one-
third higher on that account. That is clear, isn't it ?
Now, mark again. The erection of that building stim-
ulates business in the locality. Other men desire to erect
buildings and there is a more imperative demand for land to
build upon. Naturally, land prices are quick to rise in the
neighborhood. With all this stimulus, an adjoining lot in
five years sells for $200,000. What occurs? The owner of
the $300,000 lot and building now values it at $400,000,
and he every naturally proceeds to raise his tenants' rents
until he has a gross return O'f $40,000 annually. Fifty per
cent of the rent, the business men in the building pay, is
now paid as ground rent. The actual building rent remains
stationary. The constant rise in business rents is due solely
to the constant rise in ground rents and with every fresh
exertion of capital and labor he makes, the business man
helps to raise his own rent by raising the speculative value
of land. Now, was I wrong in saying that you are not
nearly the shrewd, wise men you think you are?
The only way the business man can keep even with the
gambler in land values is to become to some extent a gambler
in land values himself, and thus the capital he would use in
useful wealth-production is depleted to- the damage of the
whole nation.
Now, then, it is ground rent which constantly rises and
so takes the profits of industry. This ability of ground rent
to increase its demands is due to the pressure of population
on certain spots to the forced desire of too many men to
occupy too little ground. And this pressure of population
A BIT OF PLAIN TALK 123
arises from the concentration of a marginal excess of popu-
lation at those certain spots by the compelling power of
transportation rate advantage.
Speculative land values are not excessively high because
a city happens to be large, but because it always has just an
excess of population. It is the margin, just as in business, one
man's anxiety to reduce a surplus stock by price-cutting,
brings down everybody else's prices till the surplus is sold.
All values of all kinds fluctuate in accordance with this
marginal law.
Do not be deceived into the belief that the only tribute
you pay to ground rent is the sum you hand over monthly
to the landlord's agent. If that were all you could take care
of it. But ground rent gets at your profits in a hundred
ways in increase of goods cost, in increased maintenance
cost, in decrease of customers' buying power. I will tell
you how to measure your individual forced tribute to ground
rent with considerable accuracy. Set down how much stock
you could buy for ten thousand dollars five years ago. Then
set down how much you could buy of that stock for ten
thousand dollars at present prices. The difference between
the buying power of the money then and the buying power
of the money now will be the amount you have paid, in one
way or another to ground rent, on every ten thousand dollars
of your capital in trade. And this will be exclusive of what
you have actually paid in monthly cash rent to your landlord.
That difference represents the amount ground rent has
taken from you indirectly. Of course, you have got a great
part of this back by constantly raising the price of your goods,
124 A BIT OF PLAIN TALK
but you had to pay part, and your customers had to pay
the rest you getting less net profit and they getting less
goods for their money. Your customers have to help you
pay your ground rent tax, and you have to help pay the
ground rent tax of every one you buy from or trade with,
wholesalers, jobbers, transportation companies, manufac-
turers, fellow-retailers, butchers, bakers, doctors and lawyers
ground rent gets you at every turn. Now, you must see
that is so, if you have the mental capacity to reason quite
simply. The question up to you for an answer, business
men, is, do you want this state of things to continue? Do
you want to keep on paying this tribute in increasing amount
as long as you live, and your children after you?
You can put an end to this theft of your profits, to this
robbery of your industry. The measure of the thief's power
to rob is the speculative value put on his land by a marginal
excess of population at certain points, which, in turn, is placed
at those points by the law of favorable rates, and which
would be automatically dispersed and diffused by the Com-
mon Rate.
Do you ask if the adoption of the Common Rate would
not create a great disturbance in business values, bringing
about loss to many merchants? For a short time, yes. But
it would bring compensating gains with it. And if it did
not, is it not better to suffer one spasm of depression and
loss than to lose day and night, with no hope of relief, until
the regular panic comes around to ruin all business? Would
you not rather undergo a short, painful operation, than to
A BIT OF PLAIN TALK 125
carry about with you a cancer eating away your life every
hour?
You business men ought to be ashamed, intelligent as
you naturally are, to be so ignorant of economic laws as
you are, to know so little as you do. I am not talking to you
on sentimental grounds. I make no appeal tx> your public
spirit, your charity, your patriotism. I'm talking the prosaic
language of dollars and cents. I am trying to enlist your
attention to what is happening to your cash registers and bank
balances. Surely that topic ought to be worth some mental
exertion on your part. It does seem almost hopeless to talk
to men who complacently agree to being robbed by such
monstrous absurdities as protective tariffs, for instance. But
I know you have sense enough to see things right if you will
only take the trouble to use your eyes in looking around
you.
The Wage -Workers' Stake in the
Common Rate
|LL that I have said in this argument for the Com-
mon Rate must appeal to the common sense of
you men and women who sell your labor for wages.
Upon your shoulders falls the ultimate heaviest
burden of the ground rent toll. In proportion to your in-
comes, you are by far the largest consumers of market stuffs.
And every time your slender purses are opened, ground rent
takes a penny here and a nickel there, and strips you of the
net profit of your wage. You must be allowed to subsist,
that you may be strong to work well, and it is only at this
subsistence limit that ground rent robbery ceases.
The half-baked economists of the cracker box and street
corner stand tell you that Capital robs you of your wages.
This is the talk of a fool who cannot distinguish the dif-
ference between Capital and Privilege. Capital is robbed just
as fast as you are, and the worst that can be said for it is that
it tries to, and sometimes does, shift the greatest activity of
the common burglar in your direction. But the common
burglar always comes back and gets at Capital's profits, too.
Ground rent does not cut the amount of your wages
down. That would be too coarse a method for such an
accomplished thief. It simply increases the cost of every-
thing you buy. Your wages is the part of the joint product
which you get in the division of product between Labor
and Capital, and as ground rent pays not a cent of this, and
means to rob both producers, it cares not at all whether you
128 THE WORKERS' STAKE
get high wages or not. Whether Capital takes the lion's
share or Labor gets it, makes no difference to the thief who
can, and will steal from both impartially.
Let me tell you where your wages go, and what makes
the rent of your poor rooms higher and the cost of coal,
flour, clothes and all necessities higher and higher every
year. You ask the boss at the factory or the store or the
office where you work, how much more the land the building
stands on is worth this year than it was one, two, or five
years ago>. Subtract the former value from the present and
you will see just where your wages go. The land has pro-
duced nothing not even a potato yet the owner has reaped
thousands of dollars from it. Somebody had to earn those
dollars and pay them to him. In this case, your name is
Somebody. You and your fellows all belong to the Some-
body family. Can you see this? It's as plain as a pikestaff,
if you look steadily. The more your wages, reckoned in
money, the more ground rent you pay. For you naturally
increase your wants and your purchases as you have more to
spend, and every purchase pays toll to ground rent. It is
everywhere and always busy. It takes toll out of the baby's
milk-bottle and out of the cost of the grandfather's coffin.
It robs the cradle, the home, and the grave with an impartial
and unerring hand.
Now if you wage workers would vote in the Common
Rate you would vote away the power of this thief of labor's
wage. The wages you get would buy you more necessities
and more comforts and they would rise in amount. The
enormous wealth you now make and turn over to land
THE WORKERS STAKE I2Q
speculators would remain in your own hands to use or ex-
change. With every tumble in the extravagant values of
city lots, your chance to buy a lot and a home would come
nearer and just that much money would stick in your posses-
sion to be applied to the purchase.
Men and women, fellow-workers, I speak to you the
words of soberness and truth. The apparently simple thing
I propose to you will bring you a thousand fold more than
all your organizations can possibly bring you and your or-
ganizations have done much very much for you. But the
utmost your organizations can do is to force a fair division
between you and Capital. They cannot lay a straw in the
way of ground rent, coming to rob you after the division
between you and Capital has been made.
I am not going to talk to you the common street patter
about hunger, nakedness and want, because I am talking to
American workingmen and workingwomen and very few of
them are either hungry, naked or wretched. On the con-
trary, I know of no more inspiring sight than to rise of a
morning and see the great army of labor marching through
the streets to the day's work, battalion after battalion of
fine, hearty, intelligent fellows, regiment after regiment of
women and girls, well-dressed, well-fed, hundreds upon
hundreds of them bright enough and sensible enough to fill
any position in life, from the White House to the glove-
counter. It is just because our workingwomen and work-
ingmen are such a superior class that they should have and
should insist on having all that their highly skilled and
intelligent, efficient labor adds to the common wealth. Better
I3O THE WORKERS STAKE
clothes, better furniture, more books, theaters, balls, en-
joyments and luxuries these are their just rights. I do not
appeal to them to ask for bread. I want them to have cake,
and plenty of it.
My ideal of an American workingman and working-
woman is not the type of the thrifty French peasant, setting
aside todays's soup-meat for tomorrow's dinner, but a man
and woman producing in an hour of superior labor more than
the French peasant saves in a week, and spending the wealth
so produced for all the comforts and luxuries of life obtain-
able. We can live but once here on earth, and the proper
way to live is the happiest way possible to any of us. Wealth
in use is the only wealth doing any good. More consumption
induces more productfon, and so the wheel of ' trade and
fortune goes merrily around. He who spends freely within
his means, and lives in the most comfort to himself and
family, performs the part of a sensible fellow and a good
citizen, and is acting in accordance with the soundest econ-
omic law. Instead of curtailing spending and having, the
true aim of a wise people is to increase their ability to pro-
duce and to spend and to have. There are foolish books
written to prove that a man can exist on twenty cents a day.
The camel can also go seven days without a drink. But
who wants to be a camel ?
Our present system of political thought is protection and
paternalism run mad. We must not be permitted to hear
naughty words, or to pass a brewery door, or to read things
unfit for childish ears. Instead of breeding robust men and
women, unafraid amidst temptation and innocent with wis-
THE WORKERS STAKE 13 1
dom, we are to breed a race of mollycoddles, who are never
to see anything to tempt their feeble virtue. In trade, the
same foolish politics prevails. We must not let the English-
man or Frenchman or German come inside the walls to buy
and sell. Instead of meeting the strangers like men, and
being taught by necessity to beat them at every stage of the
game, the government must shield our manufacturers from
these rude and terrible fellows' attacks incidentally charg-
ing the police costs to the rest of us. In domestic affairs,
in the matter of profits and wages, we must leave things as
they are for fear something might come out of the dark and
get us if we tried new plans. That is the essence of the
political wisdom you wage-workers have expounded to you
daily and* hourly by solemn jackasses in Congress and out.
Now, I appeal to you workers to have done with this
folly. Let us stand up like men and women of good courage,
and look our problems in the eye, and grapple with them.
Let us look this scandalous robber, Ground Rent, in the face
and hit it. Let us fight for our own hand, vote for our own
good, take what is our own, and spend it as we please,
and in so doing, we shall find that not only we, but all our
fellows in our dear country shall rise to higher planes of
living, to higher planes of thought, to higher planes of
strength and courage and happiness, to higher planes of man-
hood and womanhood.
To you, workmen, to you, workwomen, to you, to you,
the Common Rate with its common justice and common op-
portunity, means emphatically the splendid dawn and the
bright day of the Common Good !
The Conclusion of the Whole Matter
far as this little book is concerned, my work is
done. The task is finished. The appeal is made.
It has been a labor of love and I have faith to
believe it will bear fruit.
It has been now nearly four years since this truth I
have anxiously tried to set forth clearly, first dawned upon
me. Since then I have read much and observed and medi-
tated more, and this meditation and observation and study
have but served to ripen conjecture into firm conviction. The
theory of the Common Rate is the theory of Common Justice.
It is the Square Deal. It is neither a makeshift nor a tem-
porary palliative of economic trouble. It is a radical, per-
manent, powerful force for good. With one hand it strikes
down greed and with the other it lifts up industry. It offers
interest to useful Capital, and wages to useful Labor, and
bids Privilege keep hands off. It is the friend of all who do
their part in the business of producing the world's necessities
and comforts, and the foe of all who fatten by speculating
on the profits of better men's exertions.
The life of one human being is a small thing, and
whether it be happy or wretched cannot be a matter of con-
cern to many. But the long, sequent life of humanity is a
very great and wonderful thing, and all that goes to make
it happy or wretched is of concern to each individual. The
economic sins of the fathers are visited unerringly upon the
134 THE CONCLUSION OF THE MATTER
children, and the economic righteousness of the fathers,
equally brings good gifts to those who live after. The great
thinkers and the great writers have always been prone to
exalt the mystical and intellectual, and give small heed to
the homely and practical things of life. Yet to me, the
genius and sense of Bacon are as admirably exhibited in
stuffing a dead chicken with snow as in the composition of
one of those incomparable Essays. It is a fine and useful
thing to write a living poem or a beautiful tale, but I can
see fineness and usefulness of effort in the invention of a
bread -mixer that saves weary hours of toil to tired women,
or in the skill that turns the waters of a mountain stream
upon the desert lands. If beauty has its use, so use has its
beauty.
Therefore, I make no apology for earnestness of speech
in presenting the homely and commonplace topic of a freight
rate. For from that homely and common root, hidden in
the common ground, spring the trunk and branches of our
varied and wonderful social life. The happiness of many
millions living and many, many millions to be born, is no
light topic, and the pen was never yet pointed which could
invest such a subject with too much earnestness of phrase
and diction.
And so, little book, fare forth on your errand !
UNIVERSITY OF CALIFORNIA LIBRARY
BERKELEY
Return to desk from which borrowed.
This book is DUE on the last date stamped below.
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