THE LIBRARY 
 
 OF THE 
 
 NEW YORK STATE SCHOOL 
 
 OF 
 
 INDUSTRIAL AND LABOR 
 
 RELATIONS 
 
 AT 
 CORNELL UNIVERSITY 
 
Cornell University 
 Library 
 
 The original of this book is in 
 the Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924002687386 
 
The People's 
 Money. 
 
 A Brief Analysis of the 
 Present Position in America, 
 
 With some Observations on the 
 World-Organisation of Labour. 
 
 By 
 
 JOHN W. de KAY. 
 
 COPYRIGHT 1913 
 
 By JOHN W. DB KA.Y, 
 
 I^ONDON : 
 EFFINGHAM WILSON, 
 54 Thrbadnekdle Street, E.C. 
 ffWVvT 
 
The People's Money. 
 
 A Brief Analysis of the Present Position 
 in America, 
 
 With some Observations on the 
 World - Organisation of Labour. 
 
 THERE is an increasing feeling through- 
 out the United States that there has 
 developed in recent years a power 
 with which the Government is unable to 
 cope, and which is beyond the control of 
 the public. The steps by which this power 
 has been centred in the hands of a few men 
 are little known or understood by the public 
 at large, and the vast majority of the 
 American people have no part in them, 
 except that they are victims of a system by 
 which they are legally robbed, and by which 
 (if it is not stopped) they will be politically 
 enslaved. There has been widespread 
 inquiry, which has sought to get at the root 
 of this hitherto undefined evil. It has been 
 considered that the banking system in 
 America was the basis upon which this evil 
 was founded. 
 
There has been a vast amount of legisla- 
 tion for the control of banks and banking, 
 as a means by which the great aggregations 
 of capital in the United States might be kept 
 within reasonable bomids. 
 
 The difficulty with all of the inquiry and 
 all of the legislation is that it has failed to 
 measure the scope of this aggregated capital 
 or to take adequate account of the means 
 by which it has been concentrated. 
 
 Though not generally understood, it is 
 a fact that the centralised control of capital 
 through banks represents but a single unit 
 in a huge system, and that the banks have 
 been only one of the instruments employed 
 to enable a relatively small number of men 
 to gain a control which is almost inconceiv- 
 able in its scope and power over the fortunes 
 and the destiny of the commercial Ufe of 
 America. 
 
 I^egislation, in order to be effective and 
 in order to remedy to any considerable 
 extent the grave conditions existing in 
 America, must be more fundamental. 
 
 It is sound so far as it goes, to prescribe 
 the conditions under which banks may loan 
 their resources against the securities of cor- 
 
3 
 porations, but legislation, in order to be of 
 practical value, must go deeper than this. 
 It must establish a new basis upon which 
 securities may be created. 
 
 I go so far as to say that no system of 
 banking laws can be devised to remedy 
 existing conditions unless they are a part 
 of a broad national system which deals 
 with the formation and conduct of all 
 important enterprises. 
 
 Private individuals in America organise 
 banks and trust companies because they 
 can through these banks and trust companies 
 utilise their capital to a better advantage 
 than by using it as private banking-houses. 
 This is due chiefly to the public belief that 
 through a system of Government regulation 
 and control there is an added element of 
 safety which does not exist as regards 
 private banks. On the whole there are 
 fewer failures of private banking-houses 
 than of either National or State banks. 
 But this is due chiefly to the fact that pri- 
 vate banks are not as a rule the depositories 
 of large sums of the people's money, but are 
 rather principally devoted to finance outside 
 of banking and to the placing of securities 
 
4 
 
 of public corporations. The element of 
 security which Government control is sup- 
 posed to afford is one of the large factors 
 in obtaining for organised banks the deposits 
 of the general public, and these deposits, 
 which are in normal times the principal 
 strength and resource of all banks, become 
 in times of trouble their chief peril. 
 
 In the great financial centres of America 
 the relatively few men who a century ago 
 would have been private bankers have now 
 created the leading National and State 
 banking institutions in all of these financial 
 centres. 
 
 It frequently happens that the real owners 
 of these banks do not appear either as 
 officers or directors, but they exercise their 
 control over these banks through men whom 
 they have selected to carry out their 
 policy. 
 
 These real owners of the banks are fre- 
 quently engaged as prominent private 
 bankers in New York and elsewhere. They 
 undertake, as private bankers, the placing 
 of great issues of securities with the public, 
 and they use in these issues, directly and 
 indirectly, the money of the people entrusted 
 
5 
 
 to the National and State banks. The 
 broad principle which I wish to make clear 
 is that the ^ evils attendant upon the con- 
 centration of wealth cannot be remedied by 
 mere legislation designed to control National 
 and State banks. 
 
 The part, great and important as it is, 
 which is played by the National and State 
 banks in furthering the plans of a few men 
 in the United States is relatively small when 
 considered in connection with the larger 
 questions involved. 
 
 If these larger questions are not dealt 
 with, banking legislation will be futile. 
 
 If a number of private individuals were to 
 establish, for example, in New York, a 
 private bank with capital and surplus equal 
 to the leading National bank in New York, 
 and if this private bank had as its partners 
 the same men who constitute the board of 
 the leading National bank in New York, 
 they could not, through their private bank, 
 obtain for themselves more than a very small 
 fraction of the benefits which they now 
 obtain through incorporating a part of their 
 resources into a National bank. It is for 
 this reason, chiefly, that they organise a 
 
National bank. 
 
 ,In tHs National bank they have con- 
 stantly on deposit not only, large sums 
 belonging to the commercial commmiity, 
 but also funds belonging to thousands of 
 banks throughout the United States. 
 
 If these thousands of banks were to de- 
 posit their money in a private bank it would 
 not be considered as " reserve " under the 
 National Bank Act, and therefore it would 
 not be deposited with a private bank. 
 
 There is in the United States a National 
 bank with five milKon dollars of capital, 
 which has on deposit with it upwards of 50 
 million dollars of money belonging to some 
 thousands of other banks throughout the 
 United States. This bank is, I beheve, con- 
 trolled by that small group of men which 
 dictates the financial pohcy of America. I 
 do not say that this bank is not sound or 
 that it is not well managed, but I cite it 
 merely as an illustration of the means by 
 which a few men [with the investment of a 
 relatively small amount of money, may be 
 placed in control of the people's money to 
 the extent of from 16 to 50 times the amount 
 of their own capital involved. It is the 
 
principle upon which these institutions may 
 be created, and the use to which they may 
 be put in the creation of public companies 
 that is subject to criticism. Men of re- 
 sources and power organise National banks, 
 not primarily because they are in favour of 
 the present system, but because they can, 
 through this channel better than through 
 any other, keep under their control, not only 
 the resources which they invest in the 
 National bank, but the great resources, by 
 way of deposits, of the people's money, 
 which, under the American system of 
 banking, they could not secure in any other 
 way. 
 
 This being, as it undoubtedly is, the 
 position, it must follow that no legislation 
 which is directed to the control and super- 
 vision of banks can be effective as a solution 
 of the great problem in which banking con- 
 trol is only one of the important parts. 
 
 I propose to indicate the broad lines 
 along which I believe it is necessary to 
 proceed in order that Corporation business 
 and banking may be placed upon a sound 
 basis as regards their relations to the 
 whole people, and without violence to the 
 
8 
 
 just interests of any part of the people. 
 
 The theory of this legislation must be 
 that it shall not be designed for tiie purpose 
 of transferring the power now in the hands 
 of a few men into the hands of another 
 class of men, but rather that it is legislation 
 passed by a Government of the people and 
 so conceived that it shall be, legislation for 
 the people. It should be so designed as 
 to effectually prevent the present or any 
 future group of men from doing what they 
 are now able to do — ^namely, it should > 
 prevent the confiscation of liie resources 
 of the masses by making it impossible to 
 create a security which represents nothing , 
 and exchange that security for what is the 
 equivalent of accumulated toil. 
 
 I believe that, as the great resources of 
 production, manufacture and distribution 
 are now to an extent generally unrealised 
 in the control of institutions created by 
 the State, it is within the power of the 
 people who constitute the State to enact, 
 without violence and without hate, mea- 
 sures which are founded upon such broad 
 principles of justice as will give to every 
 member of society a fair equivalent for 
 
what he contributes to the welfare of 
 society and that they will give neither 
 more nor less than this. 
 
 It is useless to say what is being said 
 every day by able and prominent men 
 throughout the country — ^that the roads 
 which lead to power are, under our present 
 system, open to aU men. The truth is 
 rather that in every society there are only 
 a very small number of people capable of 
 commanding or of using power, and, so 
 far as the vast majority are concerned, for 
 all the practical purposes of their hves, the 
 roads which lead to power are and wiU for 
 ever be closed. Legislation enacted by 
 the people must deal with people as they 
 are, and must recognise that what is 
 wrong if obtained by a few men would be 
 equally wrong if obtained by many men. 
 It is the lot of the majority of men that to 
 a greater or a less extent they must be 
 controlled by other men. But we have 
 given the ballot to the people, and we are 
 imder a Government where numbers are 
 intended to be supreme. 
 
 It has been the purpose of the few to 
 combine while they have kept the many 
 
10 
 
 divided. 
 
 The great majority of men who do the 
 real work of the world are content to have 
 peace and a chance to labour, and, measured 
 by a rational standard of living, they are 
 satisfied with what in reality is a small part 
 of the wealth they create. 
 
 Modem machinery and competition have 
 tended to make men only so many units 
 in a great system, [and through modem 
 corporations the individual has been ab- 
 sorbed and lost. But the time is coming 
 when a few men will no longer be able to 
 allocate to themselves and to their machines 
 an arbitrary and undue part of all pro- 
 duction while they distribute to the pro- 
 ducers of that wealth a mere fraction of 
 what they produce. 
 
 There is no greater fallacy than to say 
 that men are created equal, but all men, 
 regardless of the inequality of their natural 
 endowments, have the right to work, and 
 with it the right to receive a fair propor- 
 tion of the result of that work. 
 
 It is too much to expect of human nature 
 that the natural helplessness of the many 
 wiU ever cause the few to voluntarily deal. 
 
n 
 
 with them, not as competitive units in a 
 vast machine, but rather as men who have 
 the right to live, to labour and to play. 
 
 What has been heretofore denied to the 
 people as a whole may be obtained by them 
 through the power now in their hands, 
 if that power is exercised for the purpose 
 of sound and effective control over those 
 institutions which, under the authority of 
 the State, have been organised and devel- 
 oped on Hnes which in principle are unsotmd 
 and in operation unfair to the whole people. 
 
 I wotdd Hke to be able to make jt clear 
 to the masses of men that they have, by 
 dividing their power over what are really 
 minor matters of government, failed to 
 avail themselves of the use of that broad 
 power which is in their hands for the 
 enactment of measures which are funda- 
 mental to nations as a whole, and which 
 vitally affect the chief interests of the 
 great body of voters wherever they may be 
 located and to whatever party they may 
 belong. 
 
 I shall deal with National and State 
 bsmking, and with corporations, and under 
 these headings indicate the remedies which 
 
12 
 
 the people mjy apply to solve the great 
 problem of their generation, and by which 
 they may bequeath to posterity a new 
 heritage. 
 
 I have said somewhere that life insurance 
 is love's tribute to death, but to the real 
 rulers of America, who are enthroned in 
 New York, life insurance means that the 
 gathered millions of the American people 
 are so much more power in a few hands, 
 enabling them to extend their control to 
 the farthest comers of the banking world 
 in America, and to so increase their power 
 that no great business can be carried on in 
 America without their sanction. Yoti 
 must pay tribute to Wall Street if you 
 would develop the resources of Texas and 
 Dakota. 
 
 It is not necessary to deny to capital 
 the right to name its price, but the great 
 danger to American business and to the 
 free institutions of this country is that a 
 small group of men have, by the adroit 
 use of the opportunities afforded by our 
 new civilisation and our vast resources, 
 so centred in themselves the financial power 
 of the country that they are able to fix 
 
13 
 
 terms which can prevent any individual 
 enterprise on a large scale. 
 
 What I propose to show is that property 
 and integrity combined have the right to 
 credit, and that when the banking institu- 
 tions of a country fall into such lines that 
 a small group of men in a single city in 
 that country have the power to prevent a 
 man of integrity, ability and resources 
 from obtaining any credit, the people must 
 establish an institution which, upon sound 
 lines, will be unable to discriminate against 
 any man. 
 
 It is the boasted glory of the United 
 States that it is a free cotmtry, but there 
 is no country in the world in which men are, 
 beyond a certain point, less free. It has 
 been impossible for the people of the United 
 States to establish a Parcel Post because it 
 would interfere with the abusive monopoly 
 now enjoyed by Express Companies, which 
 are controlled in Wall Street. You can 
 send a package by parcel post from London 
 to New York and across the United States 
 to San Francisco, a distance of more than 
 seven thousand miles for less than it costs 
 to send that package by Express one 
 
14 
 
 hundred miles in the United States. 
 
 The telegraph monopoly is another pro- 
 duct of Wall Street, which takes its huge 
 toll from a patient people in a free country ! 
 There was a popular demand for Post Office 
 Savings Banks, and a law establishing them, 
 was finally passed by Congress, but it was 
 so cleverly devised in the interests of bank- 
 ers, rather than to serve the people, that it 
 is of little practical value. It is surrounded 
 by such stupid restrictions and limitations 
 as to prevent its general use. That is as 
 the bankers intended it should be. 
 
 It has been the history of all people that 
 they have lost their freedom through the 
 institutions of their own making, and the 
 American people have set up institutions 
 in this country which have already taken 
 away from them the freedom of individual 
 enterprise on an extended scale, and which, 
 unless they are altered, will take away 
 their pohtical freedom. 
 
 The man who has power to make or 
 destroy the credit of another man has as 
 much absolute power over that man as 
 the feudal lord had over his slave. If 
 you have the power to take away the means 
 
15 
 
 by which a man may live you have the 
 ultimate power over that man — ^namely, 
 the power of life and death. 
 
 The business of the world is done on 
 credit. The transactions not based upon 
 credit are probably a fraction of i per cent. 
 
 Broadly speaking, the banks of a country 
 are the great creditors in that country. 
 By far the largest part of the resources 
 of every bank are the moneys which the 
 people have entrusted to that bank. 
 
 A study of the reports issued by the 
 American banks will show that practically 
 the whole of the loans and discounts of 
 every bank are funds which belong to their 
 depositors. They are loaning other people's 
 money, not their own. 
 
 This is a well-founded reason why all 
 possible safeguards should be placed upon 
 their transactions. They might be willing 
 to risk their own capital, but they must not 
 take undue risk with capital which is not 
 their own. It was upon this theory that 
 the National Banking lyaws were enacted, 
 and it is this principle which has been the 
 dominating factor in the State supervision 
 and control of State and private banks. 
 
i6 
 
 lyike many other meastires which seem to 
 be sound in theory, they do not work out 
 in practice. Hand in hand with measures 
 which will safeguard depositors there must 
 be such a sol;d basis for credit as wiU 
 protect the borrower from discrimination 
 and abuse, and since no system can be 
 devised as regards National, State, or 
 private banks which can require them to 
 extend credit where for personal reasons 
 they may not wish to do so, the people must 
 estabUsh a great central bank vmder the 
 safeguards and for the purposes I shall 
 hereafter set out. 
 
 I know of an institution in one of the 
 leading cities of America which has fixed 
 and Uquid assets of upwards of seven milhon 
 dollars. It is an institution owned and 
 controlled by practical men. A quarter 
 of a century ago they started on a small 
 scale, and by a combination of talent and 
 integrity they have developed a business 
 of inter-State importance. The president 
 of the institution was invited to become 
 a director in one of the leading National 
 banks in his city. As a director in this bank 
 he objected to the large lines of credit 
 
17 
 
 . . extended to the president of the bank. He 
 pointed out that the loans involved a 
 great element of spectdation, that they 
 were made in respect of enterprises out- 
 side the legitimate range of the bank's 
 activities, that the money so employed 
 was needed in the community, and that the 
 loans should be reduced. From the stand- 
 point of good banking the objections of 
 this director seemed to be sound, and his 
 position a reasonable one. 
 
 The concern with which this director 
 was connected had large lines of credit with 
 important banks in New York, Philadelphia, 
 Boston and elsewhere. Soon after he had 
 objected to the course being pursued by 
 the local bank, the outside banks began to 
 call the loans in which he and his company 
 were interested. The means employed to 
 discredit and, if possible, to destroy this 
 director were simple and effective. His 
 enemies used the office of the Comptroller 
 of the Currency of the United States. It 
 is weU-known that the National Bank 
 Examiners appointed by the Comptroller 
 of the Currency are clothed with ample 
 power, which they may and sometimes do. 
 
i8 
 
 exercise arbitrarily and unjustly. In this 
 particular instance the local National Bank 
 Examiner intimated that the local banks 
 must call the loans of the director in 
 question. In widely . scattered sections of 
 the United States other National Bank 
 Examiners expressed a similar view con- 
 cerning the paper of this director. The 
 mischief had been done in the Comptroller's 
 office in Washington, and the boycott was 
 complete. In the meantime matters in 
 the local bank were coming to a crisis, and 
 the pubHc became aware that there were 
 serious differences among the directors, 
 and that these differences might involve 
 the stability of the bank. The loo-dollar 
 par shares of this bank stood in the market 
 at about 500 dollars per share. The director 
 under discussion was the largest single 
 stockholder in the bank. The pubUc began 
 to withdraw their money, and the bank 
 lost several million dollars of deposits. 
 The value of the shares decreased about 
 one-half. 
 
 The terms upon which the local Bank 
 Examiner would permit the bank to con- 
 tinue business were that the directors 
 
»9 
 
 should charge off a large part of the bank's 
 surplus, and that he (the local Bank 
 Examiner) should be made president of 
 the bank at a salary of 25,000 dollars a 
 year. 
 
 I have given prominence to this incident 
 because the principle involved strikes at 
 the root of the free institutions of America 
 and menaces the personal Hberty of every 
 business man -in the cotmtry. 
 
 It is too weU established to need reitera- 
 tion here that the theory upon which Nat- 
 ional and State banks are created is that 
 the men of local prominence throughout 
 the country, being familiar with the 
 resources and standing of individuals and 
 companies in their locality, are the best 
 possible judges as to the extent to which 
 they are entitled to credit. In the instance 
 above cited the important National bank 
 referred to was, through the arbitrary 
 power at his disposal, placed under the 
 control of a clerk from the Comptroller's 
 office. I am advised that this clerk had 
 been drawing a salary of about 5,000 
 dollars a year. In his new position he 
 draws 25,000 dollars a year, and it would 
 
20 
 
 seem that he was hardly qualified, either 
 by his experience or training or know- 
 ledge of the local conditions, %to occupy 
 the position which he forced the bank to 
 give him. This is one side of the evil of 
 the present system. 
 
 From causes which are too fundamental 
 to be removed by legislation, it will not be 
 possible to obUterate abuses where the 
 exercise of discretion and arbitrary power 
 are involved. It is therefore, imperative, 
 that a bank shall be created to which, with 
 aU due allowance for the abuse of power, 
 the people may have recourse from the 
 evils involved under the present system. 
 
 Another grave defect which has been 
 found to exist in actual practice is that in 
 nearly every community this power, sooner 
 or later, falls into the hands of men who, 
 through their wish to monopolise the 
 various lines of business, are able, by the 
 interlocking of directors, to cripple or 
 destroy any individual or institution in their 
 locality, and they have the power to effec- 
 tively prevent the success, upon a large 
 scale, of any new institution which has not 
 previously made terms with them or in- 
 
21 
 
 terested them in its success. 
 
 When the individual is thus attacked 
 locally, and he obtains outside support 
 from banks in various parts of the country, 
 the banking interests which seek to destroy 
 his credit have immediate recourse to the 
 machinery of the Comptroller's office in 
 Washington as to National banks, and 
 through the State Banking Departments 
 as to State banks, and by the means of 
 this machinery they are able to call his 
 loans throughout the country and prevent 
 him making fresh ones. He has one of 
 three alternatives left : — 
 
 First, sell the control of his business to 
 the men who have destroyed his credit and 
 become their employee. 
 
 Second, discharge his current HabiHties 
 through the reduction of his working stocks 
 and other quick assets, or 
 
 Third, endeavour to finance his opera- 
 tions in Europe. 
 
 As to the first, aU men of spirit refuse 
 to accept it. 
 
 The difficulties in the way of adopting 
 the second course are so munerous and fund- 
 amental as to make it generally imprac- 
 
22 
 
 ticable. If he curtail his lines of credit to 
 customers below the established normal 
 basis his customers are forced to place their 
 business elsewhere. If, as another alterna- 
 tive, he reduce his stock in hand and his 
 raw material in process of manufacture, 
 he must reduce his output and as the basis 
 of his manufactured cost is determined by 
 the volume of his output, if he takes this 
 latter course he would soon find himself 
 unable to produce his product on a basis 
 of competitive cost, and gradually his 
 position and business are lost. 
 
 If he takes the last course that may be 
 open to him, and seeks his capital in a for- 
 eign country, the chances are ten to one 
 against his success. When he presents his 
 business, say, in London, the London 
 institution (if the business appeals to it) 
 makes inquiries of its New York corres- 
 pondent, which, ninety-nine times in a 
 hundred, is one of the well-known New 
 York banks. In the ordinary course if 
 the inquiry is made in such a way as to 
 indicate that the London inquirer will be 
 to a great extent governed by the New 
 York reply, the New York bank is naturally 
 
reluctant to take any responsibiKty. 
 
 Assuming the most favourable conditions 
 to exist in New York, and that the New 
 York bank is not governed by any ulterior 
 or personal motive which would cause it 
 to make an unfavourable report without 
 inquiry, this New York bank wiU inquire 
 of its correspondent in the locality where 
 the industry is situated. Usually this 
 local correspondent is the leading bank. 
 Sometimes the New York bank may have 
 two or more local banks as its correspond- 
 ents. It asks each bank for an expression 
 of its opinion as to the standing and 
 resources of the concern in question, and 
 as to whether it is entitled to confidence 
 and credit. I do not go so far as to say 
 that in every case the local boycott is 
 unjustified, but I believe it will be agreed 
 by aU men of affairs and experience that 
 in the great majority of instances this local 
 boycott exists for reasons which may not 
 involve, or reflect upon, the resources of 
 the institution or the standing of the men 
 who control it, and that the inability of 
 the institution to obtain the local credit 
 to which it is entitled may not be founded 
 
24 
 
 upon a legitimate or bpna fide reason. 
 
 The report, therefore, which the local 
 bank makes to its New York correspondent, 
 and which the New York bank in turn 
 passes on to London, is of such a nature that 
 in due course, the l^ondon house sends an 
 intimation to the effect that it is unable 
 to entertain the business. 
 
 The financial section of every great city 
 is a ' whispering gallery,' and whether it 
 be London, Paris, Brussels, or Berlin, 
 there are only a small number of houses 
 which are either willing or able to finance 
 important American undertakings. In pre- 
 senting his business to a second house in 
 any of these cities the American is boimd in 
 honour to say that it has been under the 
 consideration of a given house, and that, 
 for reasons which he does not know," it has 
 been decUned by it. In the majority 
 of instances this is sufficient to prevent 
 the business being done in Europe — and 
 thus the arm of the local boycott has been 
 long enough to reach around the world. 
 
 Behind the simple paragraphs in the 
 metropolitan newspapers of America in 
 which amalgamations are announced, and 
 
25 
 
 the appointment of receivers are noted, 
 there is the long unpublished struggle 
 which I have outlined above, and through 
 which many of the best men in America 
 have been brought to ruin. I know that 
 in bringing this about, men have worked 
 in accordance with their n3,ture, and that 
 you cannot change this nature. 
 
 It is not necessary to discuss the men 
 who have acquired this power, and who 
 use it as they do, but rather to point 
 out how the abuses of such power in the 
 hands of any group of men may be imme- 
 diately minimised and ultimately abolished . 
 
 It is probable that many generations 
 will pass before society is established upon 
 a basis that wiU require every man to 
 render to society a fuU equivalent for what 
 he receives. 
 
 When the present devices are no longer 
 practicable, there will be new methods put 
 into effect to enable a small minority of 
 society to dictate an xmjust distribution of 
 the product of all toil. 
 
 When over-capitalisation, adulteration 
 and the rental system are all abohshed there 
 will be other means employed to permit the 
 
26 
 
 few to control the fortunes and the lives 
 of the many. 
 
 In the nature of things this is inevitable. 
 I hold no optimistic view that exact 
 justice and the broad principle of equality 
 can, or ever will be established among 
 men. But there is between the conditions 
 of the present and even an approach to 
 those better conditions of the future a 
 vast chasm of wrong and injustice, which 
 may, without wrong or injustice, be bridged. 
 
 The fundamental defect with nearly all 
 " reform " legislation is that it seeks to 
 transfer from its present hands into other 
 hands the machinery through which this 
 injustice and these wrongs are made pos- 
 sible, instead of aiming to abolish it alto- 
 gether. 
 
 It will, I believe, be generally conceded 
 that if B is given the power and the oppor- 
 tunity which are to-day in the hands of A, 
 he will use them as A has used them. 
 
 His course may differ in one or another 
 way, but its effect will broadly be the same. 
 
 The nature of man will not change. It 
 is the same yesterday, to-day and for ever. 
 What have changed, and will never cease 
 
to change, are the relations which the 
 members of society bear to each other, 
 and to the aggregate. 
 
 We have sought to prevent men from 
 taking by violence the property of other 
 men, and as regards open violence and 
 petty larceny we have succeeded. But 
 we have not succeeded in preventing men, 
 through perfectly legal means, from appro- 
 priating to themselves the life-savings and 
 the life-earnings of millions of other men 
 against their wiU and without their con- 
 sent. 
 
 We do not find any difficulty in putting 
 a man in prison if he steals a loaf of bread 
 when he is hungry, but we find great diffi- 
 culty in putting a man in prison if he steals 
 a railroad because he wants more money 
 and more power. 
 
 The difference is that petty larceny is 
 illegal and the grand larceny is legal. We 
 should make the grand larceny impossible 
 and the petty larceny unnecessary. 
 
 Since nearly all of the principal business 
 of the world is done by corporations which 
 derive their existence from the State, the 
 solution lies to a great extent in a proper 
 
28 
 
 control over organised capital. 
 
 I intend to indicate the broad lines along 
 which this control may be eflFectivel> 
 exercised in such a manner as to avoid 
 unjust interference with capital or unrea- 
 sonable restrictions upon individual en- 
 deavour. 
 
 The adoption of measures which wiU 
 give effect to the following plan would go a 
 long way toward the solution of the 
 greatest question of this age : 
 
 My suggestions are, briefly : — 
 
 I. — ^AU corporations in the United States 
 should be licensed by the Federal Govern- 
 ment. Under the theory by which the 
 union of our States has been established 
 there are practical and well-founded diffi- 
 culties in the way of restricting the right 
 of the separate States in the exercise of 
 their present control over State affairs, 
 and it may be that the great businesses 
 which at present control the inter-State 
 commerce of the country would not seek to 
 avoid a rational control by the Federal 
 Government. If in practice it should be 
 found that companies doing an inter-State 
 business were able to thwart the wUl of 
 
29 
 
 the nation, I would so amend the Constitu- 
 tion of the United States as to deprive the 
 separate States of their right to grant 
 charters to companies transacting an inter- 
 State business or which are a unit in or a 
 part of a larger company, which transacts 
 such business. 
 
 Undoubtedly earnest objection will be 
 raised to a plan which, in its e£fect, places 
 in the power of the Federal Government 
 the great centralised control and domina- 
 tion which I believe it is entitled to exercise 
 over public corporations. There are many 
 sotmd answers to this objection, and one 
 of such answers is that under the theory 
 of our government the people are supreme, 
 and that no permanent injustice can be 
 inflicted through the machinery of Federal 
 control except with the consent of the 
 people as a whole. 
 
 If the enlarged powers which I would 
 confer upon the Federal Government should 
 be abused, the remedy for this abuse is in 
 the hands of the people, whereas under the 
 present system of corporation control the 
 people as a whole are without any remedy 
 or power of control. 
 
30 
 
 I believe that, broadly, the people can 
 be relied upon to legislate for the benefit 
 of the aggregate, in the same manner that 
 we must expect the few to endeavour to 
 protect the interests of the few. 
 
 II. — ^The Federal licence should be gran- 
 ted from year to year — say, from March 
 ist to March ist. 
 
 III. — ^All private individuals or unincor- 
 porated firms transacting a yearly volume 
 of business above a fixed minimum should 
 be required to incorporate such business 
 in order to bring them under effective 
 central control. Congress should prescribe 
 the form of the application to be made in 
 respect to each of such corporations seek- 
 ing a Government licence. This form 
 should be so comprehensive in the scope of 
 its questions as to exhibit the true position 
 of each company and give the details of 
 its capital and trading accounts. It should 
 be certified under oath by the president and 
 a majority of the board of directors of each 
 company. 
 
 The Government should reserve the right 
 to require specific replies, under oath, 
 to any questions which might be raised 
 
31 
 
 through an examination of the company's 
 report, and, if not satisfied with the course 
 pursued by the company, the Government 
 should decline to grant an extension of the 
 company's right to carry on its business. 
 
 rV. — ^The basis of the organisation of 
 each company to be submitted to the 
 Government, and approved by it prior to 
 the formation of the company. 
 
 Each company to be required, before it 
 is authorised to begin the transaction of 
 its business, to issue a prospectus, in which 
 all of the facts in regard to the formation 
 of the company shall be fully set out. The 
 prospectus must contain the names and 
 addresses of everyone who has had to 
 do with the formation of the company, 
 and the nature and extent of the interest 
 which he has acquired or agreed to acquire 
 in the company, and what he is paying for 
 it. 
 
 Every corporation should be prohibited 
 from issuing any stocks, bonds, debentures, 
 or other certificates of interest or obliga- 
 tion, except for actual cash, at par. 
 
 AU agreements having to do with the 
 formation of the company to be set out in 
 
32 
 
 a schedule in the prospectus, the efEect of 
 each agreement being stated in the prospec- 
 tus, and a copy of all of such agreements 
 to be open to public inspection for one 
 clear week in the dty where the company- 
 is organised or where the issue of its securi- 
 ties is being made, and a certified copy of 
 all of these agreements and contracts to 
 be filed with the Department of Corpora- 
 tions of the Federal Government. If an 
 understanding has been arrived at that A 
 or B is to subscribe for a certain interest 
 in the company, and to pay for this 
 interest in cash, and that this cash is to 
 be subsequently repaid to|A or B for pro- 
 perty to be acquired from A or B, the nature 
 of such property and thejprice at which 
 it is being acquired|are to be set out in 
 the prospectus, together with a statement 
 from A or B as to the amount which this 
 property has cost him. This prospectus 
 and information to be pubUshed in fuU 
 in one or more of the leading newspapers 
 in the city in which the company is 
 organised or in which its securities are being 
 issued. Each director of the company to 
 be personally responsible for the accuracy 
 
33 
 
 of every statement in the prospectus. 
 
 I would prescribe that, regardless of the 
 State in which the company had been 
 organised, it should be required before the 
 issuance of its securities, and before it 
 began to transact any business, to place 
 all of the documents above mentioned 
 before the Department of Corporations of 
 the Federal Government with an applica- 
 tion to the Federal Gk)vermnent for a 
 Federal licence to commence business. If 
 the Federal Government decline to grant 
 this licence, I should allow the corporation 
 to proceed with its business, but would 
 require that the communication of the 
 Government in declining to grant the 
 requested licence should state clearly the 
 ground upon which it declined, and all 
 of the correspondence on the subject should 
 be published in the prospectus. 
 
 With the safeguards above set out, the 
 public would be able to determine for 
 itself whether this refusal of the Govern- 
 ment to grant the licence was based upon 
 a defect which should prevent the public 
 from becoming interested in the securities. 
 I would give the company the right to 
 
.34 
 
 subsequently apply to the United States 
 Court for an order requiring the Govern- 
 ment to issue this licence, and I would 
 give either the Government or the Company 
 the right of final appeal to the Supreme 
 Court of the United States. 
 
 Under the Companies' Act in Great 
 Britain it is necessary to set out in the 
 prospectus some of the information above 
 indicated, but this information is usually 
 set out in such a way that the public is 
 unable to understand it. If, however, 
 this information were submitted to the 
 Department of Corporations of the Federal 
 Government, the experts in charge of the 
 Department would be able to detect the 
 weakness in the organisation of the pro- 
 posed company, where this weakness under 
 the present system is unobserved by the 
 investing public. 
 
 In any subsequent year, if the Govern- 
 ment for any reason decided to withhold 
 the company's licence to do business, the 
 question should likewise be submitted to 
 the Court, and its decision should be final, 
 and in the meantime the company should 
 be allowed to carry on its business without 
 
35 
 
 the Federal licence. If the ruling of the 
 Department was sustained by the Court, 
 the company would be restrained from 
 further transaction of its business until it 
 had met the requirements of the Govern- 
 ment and obtained its licence, or had met 
 the requirements laid down by the Court. 
 Owing to the great amount of controversy 
 that would inevitably arise, it might not 
 be practicable for these questions to take 
 their course through the existing tribunals, 
 but since the carrying out of these measures 
 would constitute one of the great functions 
 of the Government, there might be set 
 up special tribunals, created as the existing 
 tribunals are created, for the sole purpose 
 of dealing with the questions which these 
 measures would raise. 
 
 I have reason to know that in 1911 repre- 
 sentations were made to the Government 
 of Canada in regard to the conduct of one 
 of the great corporations of Canada which 
 required, in order to carry on its business, 
 that the Government of Canada shovild 
 extend its charter, and I am aware that 
 the Government of Canada, instead of 
 granting the customary extension of this 
 
36 
 
 charter for a period of ten years, granted a 
 temporary extension to July ist, 1912, 
 and subsequently granted a further exten- 
 sion to July ist, 1913. I believe that as 
 a result of the representations made to 
 the Canadian Government measures will 
 be enacted by that Government to prevent 
 the recurrence of the abuses heretofore 
 practised, and that these measures will 
 be enacted before or concurrently with the 
 further extension of the company's charter. 
 I refer to this incident because in the 
 ordinary course it might be very difficult 
 for the Government of Canada to give efiFect 
 to what it may consider necessary as meas- 
 ures to remedy the evils complained of, 
 and that perhaps the chief power of the 
 Government in this instance arises from 
 the fact that only by the passage of an 
 Act extending the charter of the Canadian 
 institution is this institution able to con- 
 tinue its business. Under the charter 
 granted to this institution it was assumed 
 that by an Act of recurring legislation, to 
 be passed in the ordinary course, the char- 
 ter of this institution would be from time 
 to time extended for ten-year periods. 
 
37 
 
 But the point which I wish to make is that, 
 because aflSrmative action on the part of 
 the Canadian Government was from time 
 to time necessary to perpetuate the charter 
 of this company, there was placed in the 
 hands of the Canadian Government the 
 broad power to decline to extend this 
 charter unless in the judgment of the 
 Government this extension carried with it 
 measures for the adequate protection of 
 the public. 
 
 It may be very diflScult to remedy by 
 legislation those specific abuses of the 
 general powers conferred upon corporations 
 where it would not be diflficult to apply 
 this remedy through refusal to extend 
 the licence in instances where power had 
 been abused. 
 
 I have now to deal with the remedy 
 for the abuses mentioned arising through 
 the centralised control of existing banking 
 institutions in the United States. This 
 remedy would take away the power of one 
 man to destroy the business and credit of 
 another man, and, taken together with 
 the measures set out as safeguards in the 
 formation and conduct of companies, it 
 
38 
 
 would put the banking power and the cor- 
 poration profits of the whole of the United 
 States upon a sound basis as regards the 
 millions who have created the existing 
 wealth in this country, and who are to 
 create its future wealth. It would raise 
 the basis of individual and company credit 
 to such a solid plane as to for ever remove 
 the possibility of an individual or an institu- 
 tion being denied the resources to conduct 
 their business if they are entitled to such 
 resources. 
 
 I would create a great central bank, 
 which would not have the power to loan 
 its resources to anyone who did not have 
 security, but which would also be unable 
 to refuse to loah its resources to any one 
 who did have security. I am aware that 
 the personal element involved in the control 
 of property may well be regarded as the 
 chief basis for a loan against such property, 
 and also that in special circumstances it 
 may be sound banking to loan money to 
 men who have no property. I would leave 
 these special circumstances to be dealt 
 with as they are now dealt with, and I 
 would estabUsh a central bank — ^to be 
 
39 
 
 controlled by the people — for the purpose 
 of affording credit to men who possess 
 property, but who, for one reason or another 
 may be deprived of the credit to which they 
 are entitled by this property. 
 
 The currency reform plan recommended 
 to the people of the United States by the 
 Aldrich Committee would, if it had been 
 adopted, have had the effect of further 
 concentrating the money resources of the 
 country under the arbitrary control of a 
 small group of men whose present domina- 
 tion of these resources constitutes one of 
 the chief perils to America. The organisa- 
 tion of a central bank, as proposed by that 
 committee, would in practice extend the 
 existing grave defect by which to-day the 
 credit of some of the most important and 
 soundest concerns in America does not 
 depend upon either their resources or the 
 stability and intelligence of their manage- 
 ment, but upon the caprice of a local banker 
 who, through the present organisation of 
 money, is given the power to extend his 
 otherwise inconsiderable influence to the 
 remotest part of the world. It is well 
 known that practically the loaning power 
 
49 
 
 of every financial institution of the United 
 States is somewhat less than the deposits 
 of the money of the people in the banks of 
 the United States. It is dear, therefore, 
 that it is through the control of the people's 
 money that a few men have acquired and 
 retain their vast power in America. 
 
 This same statement as regards the deposits 
 and the loans of banks in the United States 
 
 ■ applies with almost equal accuracy to 
 every country in the world. 
 
 The remedy which I propose is needed 
 perhaps more in the United States than in 
 any other country ; but I beUeve that its 
 broad value to every country wiU be at 
 
 once apparent. 
 
 To-day the money deposited by the 
 people of the United States in the banks 
 of the country brings them an interest 
 return which varies from nothing at aU 
 up to a maximum of 4 per cent, on deposits 
 left for a considerable and specified length 
 of time. 
 
 In times of unrest in the United States 
 the evil of our present system is vastly 
 exaggerated, and again has the effect of 
 increasing the power and the profits of a 
 
41 
 
 few men in liie financial centres of America. 
 
 The great financial panics of recent years 
 in the United States have been precipitated 
 by the gambling in Wall Street when the 
 general condition of national prosperity 
 and the expansion of national wealth made 
 such panics unnecessary and unjustifiable. 
 
 When the investors of the country become 
 uneasy and sell their securities, and gen- 
 erally withdraw their cash from the indus- 
 tries of the country, they for the most part 
 deposit this cash with the leading banks. 
 The men in control of these banks use this 
 money to manipulate the value of all 
 securities in America and to take for them- 
 selves the benefits of the depreciation which 
 they have caused in all classes of securi- 
 ties, and they have manipulated this depre- 
 dation and taken advantage of these 
 conditions by using the money entrusted 
 to them by the people. When matters 
 have reached their lowest state of depres- 
 sion the financial manipulators begin to 
 raise the prices of the various stocks and 
 bonds which the inside interests have, 
 with the money of the people, controlled 
 on small margins, and by loans from the 
 
42 
 
 banks which they dominate. These inter- 
 ests sell back to the people the stocks and 
 bonds which they frightened the people 
 into disposing of, and the huge difference 
 in price goes to further augment the riches 
 of those who have controlled the people's 
 money, and who, by the use of that money, 
 have not only worked untold injury to the 
 country, but have appropriated to them- 
 selves a substantial part of the identical 
 money which the people entrusted to the 
 banks. 
 
 I was the owner of a considerable amount 
 of the shares of a well-known New York 
 National bank, which was not then con- 
 trolled by the so-called Money Trust. This 
 bank was a sound commercial institution, 
 doing an old-fashioned banking business, 
 and declining to place its resources at the 
 disposal of the Wall Street gamblers. The 
 bank preferred to pursue the sounder 
 course of legitimate banking and loan its 
 depositors' money to established mercan- 
 tile and manufacturing concerns who were 
 its customers. I saw the stock of this 
 bank beaten down in one day from 340 
 dollars per share to 200 dollars per share, 
 
43 
 
 although the institution was, and, so far 
 as I know, now is, one of the soundest 
 and best-managed banks in New York. 
 
 It would retjuire volumes to tell the 
 story which is woven around the abuse of 
 the banking power in America. There are 
 hundreds of men and institutions whose 
 fortunes and reputations have been ruined 
 in every chapter of that long unpublished 
 story. I do not believe that anyone 
 will seriously urge that the grave defects 
 which exist should not be definitely reme- 
 died, and I beheve if the inside informa- 
 tion which is possessed by a few men were 
 reaKsed and understood by the people at 
 large, nothing could restrain them in their 
 demand that an effective remedy should be 
 forthmth applied. 
 
 I have followed as closely as possible 
 the various remedies which have from time 
 to time been proposed. These remedies 
 have invariably been either entirely fanci- 
 ful and unworkable, or they have been 
 cleverly devised plans to further augment 
 (and NOT to remedy) the existing evil. 
 
 The Government bonds of the United 
 States are held as the sole guarantee of the 
 
44 
 
 currency of all National banks. These 
 bonds are purchased from the Government, 
 and the Government regularly pays the 
 interest on them to the banks. The bank 
 then issues its currency to the full par value 
 of all such bonds. It then loans that cur- 
 rency to the people. The effect of this 
 transaction is that as soon as the bank has 
 purchased, say, one million dollars or any 
 other sum of Government bonds, for which 
 it has paid shghtly more than par, it 
 deHvers those bonds back to the Govern- 
 ment and receives National bank notes 
 for the full par value of such bonds. 
 
 The resources of the bank are, to that 
 extent, invested in a sound security, upon 
 which the bank will perpetually draw its 
 interest, and practically the whole of the 
 purchase price has been handed back to 
 the bank in the form of currency. In the 
 aggregate this discrimination in favour of 
 the bank as against the individual holder 
 of the bonds costs the people millions of 
 dollars a year, but this defect is the 
 slightest and least ftmdamental of all the 
 defects involved in our system of banking. 
 I have referred to it only because there is 
 
45 
 
 involved in my remedy the continued use 
 of this basis of national currency. The 
 obligation of the people, as represented by 
 their Government, constitutes in our pre- 
 sent money system, the sole asset back of 
 aU National bank notes. 
 
 I would propose that Federal legislation 
 be passed which would give public accoun- 
 tants the position of direct responsibility to 
 the Federal Government. I would provide 
 that aU firms, corporations and banks 
 who are the borrowers of money should be 
 regularly examined and reported upon by 
 public accountants. I would apply a rigid 
 civil service test among the qualifications 
 required of public accountants. I would 
 make it obhgatory that the qualifications 
 prescribed by the Federal Government 
 should be shown to exist before the Govern- 
 ment issued a Ucence to any accountant, 
 and that without this Ucence no account- 
 ant would be qualified to act. 
 
 I would create a Federal bank, which 
 would reserve to itself the sole power to 
 issue aU paper currency, and I would pro- 
 vide that this currency could be issued up 
 to the par value of all of the gold, silver 
 
46 
 
 and Government bonds held and owned 
 by this Federal bank, and that it could 
 issue paper currency to the amount of 
 50 per cent, of its bills receivable. Since 
 this bank would at once become the real 
 centre of the banking power of the United 
 States, I would provide that the election 
 of its directors should be carried. out in 
 the same manner as we now conduct the 
 election of the President of the United 
 States. 
 
 I would have one director to represent 
 each of the States of the United States, 
 and I would provide that not less than 
 25 of such directors would be necessary to 
 constitute a quorum of the board. 
 
 I would make tlie President or the Vice- 
 President of the United States the ex- 
 officio president of the bank, with the 
 casting vote. 
 
 I would provide that the term of service 
 of these directors should be as to one- 
 third for four years, one-third eight years, 
 and one-third twelve years. 
 
 I would distribute equitably throughout 
 the United States the four, eight and 
 twelve year directorates, so that there 
 
47 
 
 would always be on the board from every 
 section of the United States directors who 
 were familiar with the affairs of the bank. 
 
 I would provide that, if at a meeting of 
 the board the whole of the minority of such 
 meeting dissented from the decision, even 
 if that decision had received the approval 
 of the president of the bank, the minority 
 should, by unanimous request, be able to 
 refer this decision to the final determina- 
 tion of the Supreme Court. 
 
 As already suggested, a new tribunal, 
 to be called the Supreme Court of Commerce 
 of the United States, might be created. 
 
 I would pay a salary of not less than 
 25,000 "dollars per annum to each of the 
 directors of the bank. And no director 
 would be permitted to hold any other 
 position or to be a director or officer of 
 any corporation, and the bank would be 
 prohibited from making any loan'^to any 
 institution in which any director was 
 interested. 
 
 Any director who did not attend meet- 
 ings of the board at least once a month 
 would forfeit his seat on the board. 
 
 Provision should be made that any 
 
48 
 
 director could at any time be removed by 
 the people whom he had been elected to 
 represent. This removal and the choice of 
 his successor to be effected by an election 
 held for that purpose. 
 
 I think it wUl be clear from the trend 
 of my suggestions that I have sought to 
 establish a great central bank, to be owned 
 and actually controlled by the people, and 
 I hope to be able to show that if this were 
 done, the man who owns cattle on the 
 prairies of the West, or cotton in the fields 
 of the South, or grain in the bins of the 
 North, or who owns wire and nails in Pitts- 
 burg, or silk in the looms of New Jersey, 
 or wool in the factories of Massachusetts, 
 or who has a stock of merchandise in any 
 city or village in America, would have a 
 place where, against this security, he would 
 have the right to ask for, and the assur- 
 ance of receiving, the financial accommoda- 
 tion to which his assets entitle him. He 
 would be no longer at the mercy or caprice 
 of his local banker, or of any other banker. 
 
 He would have his books and accounts 
 examined by a chartered accountant, quali- 
 fied and licensed in the manner above 
 
49 
 
 suggested. He would attach the report of 
 this chartered accountant to his appKca- 
 tion for a loan, and, if requested to do so, 
 he could supplement the report of the 
 accountant by the report of a Hcensed 
 appraiser, who would certify to the value 
 of his fixed assets, which in the ordinary- 
 course of business would be outside the 
 scope of an auditor's report. 
 
 There would be Hcensed appraisers, who 
 would possess the qualifications prescribed 
 by the Federal Government. They would 
 be in the employ of the Government, and 
 prohibited from accepting fees or employ- 
 ment from private individuals or corpora- 
 tions. 
 
 In estabhshing this central bank, and 
 fixing the basis upon which the fvmds of 
 the institution should be loaned, care would 
 be taken to establish a percentage bor- 
 rowing right, which would bear proper 
 relation to the following factors : — 
 
 1. The net surplus of fixed assets over 
 funded liabilities — such as bonds, stocks, 
 etc. 
 
 2. The net surplus of accounts receiv- 
 able over accounts payable. 
 
50 
 
 3. The net market value of the unchar- 
 ged quick assets. 
 
 4. The net earnings of the corporation 
 during the precedmg penod of one, three, 
 five and ten years ; or, in the alternative 
 since the company commenced business. 
 
 5. It will be urged that two companies 
 with the same assets and the same liabili- 
 ties and the same dividend record might 
 require and be well entitled to receive 
 largely different borrowing facilities, owing 
 either to the difference in the business 
 involved or to the difference in the locality 
 where the same businesses were concerned ; 
 but the broad principles could be well 
 estabhshed by a classification of the various 
 businesses somewhat along the lines of 
 their present division for credit purposes. 
 
 I would not seek to supplant either the 
 large or the small banks throughout the 
 country, except that I would enact different 
 regulations as regards their loans on Stock 
 Exchange, grain and provision transactions. 
 I deal with this under another heading. 
 
 The central bank would be so organised 
 and conducted that no one with property 
 could be deprived of the facilities of credit. 
 
51 
 
 and no one without property could obtain 
 credit from the coitral bank. 
 
 In so far as the local banks could and 
 did meet the requirements of their customers 
 they would not need to have access to the 
 National Institution of credit, the purpose 
 of which is not that it shall do the banking 
 business of the country, but rather that it 
 should be the great safeguard of public 
 credit and the refuge of every man who is 
 entitled to credit but who, from one cause 
 or another, is tmder the present system 
 unable to obtain that credit. 
 
 I am aware that when the demand for 
 money exceeds the supply of money, there 
 is no way under our present system of 
 banking by which the banks as a whole, 
 or separately, can increase their cash re- 
 sources through the use of their bills 
 receivable. In the ordinary' course the 
 smaller banks endeavour to so increase 
 their cash resources to meet special con- 
 ditions by re-discounting their biUs receiv- 
 able ; but ultimately this facihty of re-dis- 
 count depends upon Wall Street, and if 
 Wall Street wants the money to use in the 
 manipulation of stocks, it makes the re- 
 
52 
 
 discounting by out-of-town banks imprac- 
 ticable either by refusing such re-discounts 
 altogether, or by asking a prohibitive rate 
 of interest. It will, I think, be conceded 
 that if the present laws governing banks 
 were to be modified so as to permit the 
 issuance of currency against bills receiv- 
 able the broad credit requirements of the 
 country as a whole would not be assured, 
 unless the use of this elastic measure was 
 placed in the hands of a great people's 
 bank, organised under the safeguards I 
 have indicated, and having the sole right 
 to issue paper Currency. The farmers of 
 the country require greater banking facili- 
 ties. The majority of farmers purchase 
 machinery and supplies on long credit from 
 neighbouring merchants. This is expensive 
 and unsatisfactory. When the farmers are 
 able to borrow money the interest-rate is 
 frequently too high. The restricted credit 
 of the farmer lessens his productive capacity 
 and increases the cost of all production* 
 This burden of increased cost falls at last 
 upon the consumers who are the wage-earn- 
 ers of the country. 
 There is no safer security than that 
 
53 
 
 offered by farmers, but our banking 
 system has developed along such lines 
 that the local banks find it difficult to 
 extend the large lines of credit locally re- 
 quired by farmers, and the ability of these 
 banks to obtain assistance from the financial 
 centres of America depends upon the caprice 
 of Wall Street. 
 
 It is easier to obtain a loan against a 
 certificate of watered stock with nothing 
 but organised ingenuity behind it, than it 
 is to borrow money on the solid products of 
 the soil. Through the Central Bank the 
 credit requirements of the farmers could 
 be met at a comparatively low rate of 
 interest. 
 
 The farmers of the country are borrowers 
 of hundreds of millions of pounds sterling, 
 and they could profitably use hundreds of 
 millions additional which they are now un- 
 able to obtain. 
 
 The Central Bank could hold the farm 
 mortgages and issue its two, five and ten 
 
 year debentures against them, and could 
 
 carry the farmers' requirements under 
 
 present conditions at less then five per cent. 
 
 per annum and in an unlimited amount. 
 
54 
 
 There is and has been open to the stock- 
 man special facilities when his borrowing 
 requirements have outgrown the capacity 
 of local banks. These facilities consist of 
 loans made direct by Hve-stock commission 
 firms, which advance money, on the paper 
 of the stockmen. The commission firms 
 discotmt this paper in the banks of Chicago 
 and other packing-house centres elsewhere, 
 but these banks are more and more involved 
 in the great money system of the country, 
 which is dominated by Wall Street. This 
 avenue of credit is, therefore, Uke all others, 
 frequently curtailed, and sometimes prac- 
 tically closed through the operations in 
 Wall Street, and thus the credit to which 
 the cattleman is entitled is in the last 
 analysis influenced to a great extent not 
 by any conditions connected with the 
 hve-stock business, but rather by Wall 
 Street manipulation. 
 
 When these operations do not interfere 
 with the placing of the paper of the cattle- 
 man, and his facilities are imrestricted, 
 there are stiU objections to the present 
 system of ioans through commission houses. 
 Some of these objections are that they 
 
55 
 
 involve the payment of commissions, as 
 well as liberal interest on the money bor- 
 rowed, and the owner of the live stock is 
 compelled to market and sell his Hve stock 
 through the commission house which dis- 
 covmts his paper. In many instances this 
 live stock could be dealt with more satis- 
 factorily to the stockman if he were given^ 
 a freer hand. The stockmen of the country 
 pay an unnecessary tribute of many miUions 
 of dollars a year, which might be done 
 away with through the establishment of 
 the Central Bank, and the money which they 
 require to properly conduct their business 
 would be available when wanted and at a 
 minimum rate of interest. They could no 
 longer be compelled to market their stock 
 when it suited the wishes of the Hve stock 
 banks which are controlled by the packers. 
 
 I would establish a new basis for Stock 
 Exchange transactions, and for all dealings 
 in the great staple products, such as cotton, 
 com, wheat, and all classes of provisions. 
 
 I would require all Stock Exchange houses 
 and boards of trade and provision firms to 
 conduct their business under licence from 
 the Federal Government. I would place 
 
56 
 
 all stock exchanges and boards of trade under 
 direct Federal Government control and sub- 
 ject them to rigid inspection. I would ap- 
 point National Examiners to periodically 
 inspect their books, the same as the Govern- 
 ment now does in regard to National banks. 
 
 I would prohibit all dealings on margin,^ 
 either in stocks, bonds, grain, cotton or 
 provisions. I would require that the buyer 
 of any of the above must pay for them in 
 full, and that the seller must deliver the 
 stock, bond, or commodity sold. In order 
 that this might not be evaded through the 
 loaning by banks to favoured customers of 
 90 per cent, of the amount involved, I 
 would prohibit the loaning of more than 
 60 per cent, against any transactions, either 
 in stocks, bonds, grain, or provisions. And 
 I would require weekly settlements in full. 
 
 It is impossible to calculate the harm 
 which is involved in the present specvda- 
 tion on Stock Exchanges and Boards of 
 Trade throughout the country, and it is 
 likewise impossible to estimate the great 
 benefits which would result to the country 
 as a whole if this gambling were made 
 impossible. I wotild enforce these regula- 
 
57 
 
 tions by effective measureSj one of which 
 would be that any violation of the law would 
 involve the withdrawal of the right to do 
 business in respect to the firm and the 
 bank concerned. 
 
 I intend in a subsequent book to deal 
 with the broad question involved in a more 
 just distribution of the product of all 
 labour, and I shall endeavour to show that 
 there is a sound and equitable solution of 
 the existing controversy between capital 
 and labour. 
 
 It win, I believe, be apparent that if the 
 reforms that I have here suggested were 
 put into effect they would go far toward 
 dissolving the differences which now exist 
 between capital and labour. 
 
 It will be urged that these reforms, which 
 make " watered stock " and colossal for- 
 tunes impossible, wiU do away with the 
 incentive which is to-day the motive power 
 behind the establishment of the great insti- 
 tutions and industries of the country, but 
 I hope to be able to show conclusively that 
 the great drawback to individual endeavour 
 on a large scale in America would by my 
 system be removed, and that such jindi- 
 
58 
 
 vidual endeavour would be enormously 
 stimulated. 
 
 It does not seem to be generally realised 
 that the harm which results through the 
 present system of over-capitalisation has 
 only begun when the over-capitaUsed secu- 
 rities are sold to the public. The evil 
 involved in the creation and sale of securi- 
 ties which do not represent either property 
 or human toil is a small evil compared with 
 the greater ones which attend the evolution 
 of this system. 
 
 I will take,* by way of illustration, the 
 formation of a company with a capital 
 stock of 100 million dollars. This company 
 is formed to acquire the assets of other 
 companies. These assets may be worth 
 30 million dollars. The whole of the 100 
 million dollars of capital stock is issued in 
 acquiring the various institutions in such 
 a way that the stock is technically paid up. 
 
 A portion of this 100 njilLions is distri- 
 buted among the small factors in the 
 combination, and the control finds its way 
 to the dominating factors and to the 
 financial house which is behind the amalga- 
 mation. The combination then makes an 
 
59 
 
 issue of first mortgage bonds and preference 
 stock in an amount greatly in excess of the 
 value of the properties being amalgamated. 
 These bonds and preferred stock are either 
 sold to the pubhc and the cash price paid 
 over for the property acquired, or they 
 are delivered to the people interested. 
 Subsequently, through manipulation in Wall 
 Street, practically the whole of this in- 
 flated capital is worked off upon the invest- 
 ing public. The inside interests retain a 
 sufl&cient amount of the common stock 
 to ensure their continued control of the 
 business, and in the majority of cases they 
 have succeeded in withdrawing the actual 
 capital which they had involved in the 
 enterprise. 
 
 By means which are perfectly legal, and 
 through the employment of which men have 
 obtained colossal fortunes and vast power 
 and eminence, 30 or 40 miUion dollars have 
 been wrongfully taken from the investing 
 public in the single instance cited. This 
 is the beginning of the evil involved in 
 the present system. This corporation em- 
 ploys thousands of people, and the product 
 of their labour is to a great extent ievoted 
 
6o 
 
 to the payment of dividends upon this fic- 
 titious capital. 
 
 Through the mill of Wall Street a few men 
 take by improper means the earnings which 
 to a great extent should have remained in 
 the pockets of the men who earned them. 
 The producer of the raw material sold to 
 this company, and aU of the men employed 
 in such production must pay their toU ; 
 and, on the other hand, the consumer, 
 who is Ukewise a labourer and a victim 
 ©f the same conditions is compelled to pay 
 a higher price for the products of this com- 
 pany than he would have paid if there 
 had been no necessity for the company to 
 €am dividends upon fictitious capital. 
 If the evil of the present system did not 
 go farther than to take away from investors 
 hvmdreds of millions of dollars a year with- 
 out giving them proper security or value for 
 their money it would stiU be one of the 
 greatest evils affecting the present genera- 
 tion ; but when its further power to 
 appropriate the earnings of present and 
 future generations is considered it becomes 
 a matter of gravest pubHc consequence. 
 
 It may be contended that when a com- 
 
6i 
 
 pany is able to declare dividends upon 
 fictitious capital it has justified its capitali- 
 sation as regards its investors. This is, 
 however, unsound in practice, because, 
 while a company may be able (by econo- 
 mies effected through amalgamation and 
 by its temporary monopoly acquired in a 
 given Hne) to earn and pay reasonable 
 dividends on its fictitious capital, it is not 
 creating a reserve of tangible assets which 
 would to any considerable extent put 
 capital resources behind securities which 
 were not in the first instance issued against 
 tangible capital assets. If it succeeds, in 
 special instances, in making good its 
 watered capital through undistributed 
 earnings, it is taking the people's money to 
 repair an evil which should never have 
 been created, and is putting that money 
 into the pockets of a few men who have not 
 given to society any equivalent for what 
 they have received. The adoption of my 
 system would make this quite impossible. 
 The position is, generally, that if the company 
 is called upon to meet changed conditions, 
 which may arise from one of many causes, and 
 its earning power is temporarily interfered 
 
62 
 
 with and its condition becomes critical, 
 practically the whole of the capital invested 
 in its ordinary and preferred stocks is 
 wiped out. From any point of view, 
 whether- it be as an investor in its inflated 
 securities, or an employee, or a producer 
 of raw material, or a consumer of finished 
 products, one or aU are in the course of the 
 career of such a company bound to con- 
 tribute a huge sum of money, which ultim- 
 ately finds its way into a few hands, and 
 for which no adequate return has been, or 
 ever can be, given. The capital of the rail- 
 way companies in America is watered to 
 the extent of hundreds of millions of dollars. 
 The initial evil which resulted from the 
 creation of this watered capital has been 
 followed by a greater evil which has re- 
 quired every passenger carried and every 
 pound of freight moved in America to pay 
 direct toll of scoresof millions of dollars yearly 
 into the mill of watered stock. This stock 
 once created continues to levy its tribute 
 upon generation after generation of the 
 American people. It must be clear that if 
 this evil did not exist or were to be done 
 away with, the result would be better wages 
 
63 
 
 to the employees of railway companies and 
 cheaper and more efficient service to the 
 people as a whole. There is no objection 
 to be raised against the collection of 
 passenger and freight tariffs which are ade- 
 quate to provide a proper return upon the 
 actual investment employed, but the evil 
 consists in the ability of any class of men 
 to collect for themselves huge sums of 
 money by way of dividends on capital 
 which was never invested. • 
 
 It would not be diflScult for me to give 
 specific instances where one or all of these 
 evils have been involved, and where ' the 
 loss to the American public is so enormous 
 that it could not be computed in hundreds 
 of millions of dollars. The broad principle 
 which I want to make clear is that, as we 
 require of labour a doUar of tangible value 
 before we pay that dollar, we must obhterate 
 the means by which any man can create 
 securities which he is able to exchange for 
 dollars, vmless the securities are issued 
 against the tangible product of toil and in 
 an amount which does not exceed the 
 actual value of the property against which 
 they are issued. 
 
64 
 
 Some of the provisions as to publicity 
 and information for public prospectuses 
 which I have outlined, above are already- 
 embodied in the laws of Great Britain and 
 are required of all public companies formed 
 under British law, but the remedies which 
 I have suggested go farther in. their scope 
 toward the protection of the pubUc than 
 any legislation heretofore enacted or sug- 
 gested for the control of pubUc corporations. 
 
 Theprospectusinformation required by the 
 Companies Act is generally so set out that not 
 one investor in a thousand ever understands 
 the information disclosed in a prospectus. 
 If, however, these prospectuses, and the 
 information which I would require public 
 companies to give, were placed in the hands 
 of a competent Government Committee, as 
 above outlined, this Committee would 
 have no difficulty in so safeguarding the 
 formation of public companies under my 
 plan as to make it impossible to carry 
 through more than a very small percentage 
 of the enterprises which are now foisted 
 upon the people. 
 
 In every community, if a prospectus is 
 supported by certain names, thepubUc do 
 
65 
 
 not examine or inquire into the details, and 
 it is because of this that individuals seeking 
 to establish any important tindertaking are 
 sooner or later under the necessity of making 
 terms with a comparatively small number 
 of men, whose vast fortunes and immense 
 power have been acquired through their 
 ability to control and appropriate to them- 
 selves the fortunes and the labour of their 
 fellow men. 
 
 In nearly every instance where an enter- 
 prising man seeks to establish a business of 
 great magnitude which he expects to per- 
 sonally develop he would like to see that 
 enterprise founded upon sound lines rather 
 than to see it issue huge sums of fictitious 
 capital ; but unless ' he is prepared to 
 create inflated stocks and issue them as 
 bonuses to promoters, brokers, issuing 
 houses and others, he is unable to enlist 
 their support, and without this support he 
 is unable to establish his business. 
 
 Under my system, if he had a sound 
 business which he wanted to estabHsh on 
 conservative and sound lines he would be 
 able to go direct to the people, and to give 
 to the people fuU security and value for 
 
66 
 
 their money. The mere fact that his 
 plans and his security had received the 
 sanction of the Federal Government would 
 be a sufficient aegis under which he could 
 create his business without introducing 
 •the intermediaries who are to-day largely 
 responsible for the losses incurred through 
 investment in stocks and bonds. 
 
 It may be broadly accepted as a settled 
 rule among the great banking and issuing 
 houses of the world that they only identify 
 themselves with the issue of such securities 
 as they believe the public will ultimately 
 absorb. It is clear, therefore, that all 
 obligations incurred by the foimders of 
 public companies are incurred upon the 
 theory that the financial burden imposed 
 by those obHgations will be transferred from 
 them to the people. 
 
 I hold that the chief evil, from the point 
 of view of the investor and of the pubUc at 
 large, arises from the necessity of paying a 
 relatively small group of men for assuming 
 an obligation which need never exist if under 
 proper Government regulations a system 
 were devised to enable the founder of public 
 companies to deal direct with the people. 
 
67 
 
 The relatively small ntimber of men who 
 are able to transfer their responsibility 
 from themselves to the people have the 
 power to do this through the control 
 which they exercise over the money of the 
 people. 
 
 I wotdd do away with these expensive 
 and unnecessary intermediaries. The people 
 as a whole are the ones who have the money 
 to2,irivest, and I would institute such a 
 system as would enable them to invest 
 with the minimum of risk. 
 
 Let us suppose that in the great staple 
 article of meat the same lax methods were 
 in force for the protection of the public 
 as prevail with the securities of public 
 corporations. The practical effect as re- 
 gards meat would be the same as it now is 
 as regards securities. To illustrate : — 
 
 The purchaser of meat in any shop in 
 America is assured under the present system 
 of Government inspection and control that 
 the meat offered is pure. He does not need 
 to purchase it from A, who has an eminent 
 standing in the community, or to refuse to 
 purchase it from B, who may have no stand- 
 ing, because he knows that through an 
 
68 
 
 adequate system of Govemirient inspection 
 this meat has passed all the necessary tests 
 at its point of origin. If this were not so 
 lie would feel compelled, if he were able to 
 do so, to go to a certain shop which gave 
 a moral guarantee to the product, and 
 purchase it at a greatly increased price. 
 He would do this not because the meat was 
 better, but because there was a certain 
 personality behind it which ought at any 
 rate to be a guarantee of its purity. He 
 would in this way be practically com- 
 pelled to pay a very high price for a nominal 
 guarantee which, through the present 
 system of Government control at its source, 
 he is able to obtain without any cost what- 
 soever. Through this system A and B are 
 placed upon an equal footing as regards 
 the public, and the success of each becomes 
 a matter of personal ability. 
 
 I contend that the same broad principle 
 holds equally true as regards securities, 
 and that it is entirely sound and practic- 
 able to so control the issue of these securi- 
 ties at their point of origin as to fix the 
 basis of general security in such a way 
 that it will no longer be necessary to 
 
69 
 
 pay a large part of all capital investments 
 in order to obtain the favourable sanction 
 of "A" or "B," since the basis of the 
 security to the public has been passed upon 
 by the people's Government at a purely 
 nominal cost to the people as a whole. 
 
 Many and grave evils have attended the 
 inevitable development of organised busi- 
 ness. From a system which was bounded 
 by the exchange of one article for another, 
 and into which neither currency nor credit 
 had entered, we have reached a point where 
 the world's business is conducted through 
 a system of book-entries in which either 
 paper or credit has become the token of 
 barter and exchange. 
 
 The defect of all legislation which has 
 sought to control and regulate this business 
 is broadly that we have failed to reahse 
 that you cannot enact effective legislation 
 which seeks to in any way change the nature 
 of man, and also that you cannot stop by 
 any kind of legislation the logical outcome 
 of the vast forces which are set in motion 
 by the activities of man. 
 
 We must not legislate against trusts 
 upon the theory that trusts are^wrong, but 
 
7° 
 
 rather upon the theory that through fierce 
 competition they have become inevitable,' 
 and in principle are sound. We must use 
 the immense machinery which has been con- 
 structed by human ingenuity and human 
 toil in such a manner as to make it a great 
 agency for the betterment of humanity. 
 
 I believe it will be generally accepted 
 as good reasoning to say that commercially 
 the amalgamation of industries is sotmd. 
 I hold that it is necessary, inevitable, and 
 bound to continue, and that more and more 
 it will result in the elimination of every- 
 thing which takes its toll between the 
 producer and the consumer. 
 
 The aim of the legislation of the future 
 should be, not to seek to prevent the 
 utmost development of what we now call 
 the trusts, but rather to endeavour to 
 prevent the wrongs which are associated 
 with the 'formation and conduct of these 
 trusts and to thereby do away with the 
 grave evils which attend their development. 
 
 The great, and I believe the most vital 
 defect of organised capital and industry 
 to-day is that by the use of the power which 
 the people have placed at the disposal of 
 
71 
 
 the strong, it is possible for men to reap 
 where they have not sown. I would so 
 change the conditions under which capital 
 could be put to efiEectiveuse that it would 
 not be possible for any man to gather the 
 fruits of another man's toil. 
 
 We have not yet arrived at such a state of 
 moral development that we consider this 
 to be a moral wrong. I,ittle by Kttle the 
 masses of mankind have achieved more and 
 more power, and in the exercise pf this 
 power they are constantly seeking to bridge 
 the great chasm which exists between 
 the few who control the wealth and the 
 resources of the world, and the many who 
 are the victims of that control. The legis- 
 lation which they have enacted has proved 
 ineffective and futile and the aim they 
 have sought has not been realised. 
 
 Shorn of all of its pretence of justice and 
 of aU of the broad human motives which 
 are claimed to be the basis of its legislation, 
 the aim of this legislation has been to 
 transfer to B the power which has been 
 acquired by A* 
 
 We look back across the centuries at the 
 feudal system, and say that it was wrong, 
 
72 
 
 but the remedy for the feudal system was 
 not that the power which one man enjoyed 
 should be transferred to another man or 
 to many men, but that the feudal system 
 itself should be abolished. 
 
 We look back upon slavery and we under- 
 stand that the solution of the problem 
 of human slavery did not depend upon 
 changing the position of the master and 
 the slave, but rather upon giving effect 
 to the broad principle of justice that all 
 men ought to be free. 
 
 The solution of the great problem of 
 industrial slavery does not lie in taking the 
 power now enjoyed by a few men and giving 
 it to a larger number of men, but rather in a 
 broader adjustment, through which wage- 
 slavery will be abolished. In the most 
 enlightened country in the world (England) 
 the people have sought to estabhsh some 
 measure of equalising the great wealth 
 which becomes the subject of bequest 
 through wiUs, but the solution of that prob- 
 lem does not lie through increased death 
 duties. Behind the great fortunes which, 
 are the subject of this legislation Ues the 
 fundamental evil of landlordism. The 
 
73 
 
 remedy for this evil is not that a vast 
 estate accumulated through the collection 
 of rents should pay a tax of 2s. in the £, 
 but rather that the rental system should 
 be abolished. 
 
 It may be urged that the remedies which 
 I propose are so fundamental that they 
 strike at the root of the present basis by 
 which all business is established and all 
 fortunes are accumulated, and I admit that 
 this is so. 
 
 I hold that the solution of the great 
 problem involved in the acquisition and 
 control of wealth must be a fundamental 
 solution, which for the future will eflFec- 
 tively control, on a broad basis of human 
 justice, all acquisition and the control of 
 all wealth. 
 
 Recognising the failure of legislation, the 
 great army of industrial slaves throughout 
 the world have organised trade unions. 
 These unions have their definite value, and 
 have, no doubt, obtained better conditions 
 for labour and higher wages for their mem- 
 bers ; but upon the broad line of obtaining 
 the undeniable rights of the people involved 
 the trade unions have not succeeded. One 
 
74 
 
 reason why they have not succeeded is 
 that, in the vmiversal sense in which 
 capital is organised, labour is not organised. 
 
 The united mine-workers of a given 
 country may declare a strike, and the out- 
 come usually is that, after a few weeks of 
 idleness, their resources being exhausted, 
 they resume work with their conditions 
 slightly bettered, if at aU, and in many 
 cases their strike only results in loss of 
 wages and defeat. 
 
 The men who control the industries and 
 the middlemen who distribute the product 
 MAKE USE of the strike for increasing the 
 price of the commodity, and transferring 
 to the people as a whole the economic 
 burden > involved in the strike. 
 
 If the production of an important staple, 
 such as coal is at issue, the consequences 
 of the strike extend to aU branches of 
 industry, to the immediate detriment of 
 all^labour employed. 
 
 The effect of this is generally that, 
 instead of recognising the cause of the 
 strikers as a part of the larger cause of all 
 labour, the labourers who are affected 
 by the strike seek to bring pressure upon 
 
75 
 
 the strikers, and it is through this division 
 of interest that their fight is always lost. 
 
 I beUeve that within ten years after 
 the operation of the system which I have 
 outlined the necessity for strikes would 
 disappear. In the meantime there is, 
 broadly, only one basis upon which these 
 strikes would be bound to succeed, and 
 that basis is that the members of every 
 trade union, controlling as they do the 
 bulk of aU industrial labour throughout 
 the world, should consider that for pur- 
 poses of offence and defence they are ONB, 
 and that until, through a better-organised 
 society, they are protected without the 
 need of strikes, they will, if a strike is 
 declared, be as one man in support of 
 that strike. 
 
 In 1912 there was in Great Britain a 
 general strike of aU. coal-miners. The 
 number of men who went out under this 
 strike order was approximately, 1,800,000. 
 Counting on the general average of five 
 being represented by each man, this strike 
 directly involved nearly one-fourth of the en- 
 tire population of Great Britain. On account 
 of the strike the resources collected by 
 
76 
 
 the contributions of the miners through a 
 long period of time were paid out to sup- 
 port in a most miserable way the striking 
 miners and those dependent upon them. 
 The general effect upon the public was 
 that the mine-owners, jobbers and retailers 
 of coal increased their prices to such an 
 extent that they were enabled not only to 
 dispose of large quantities of theretofore 
 practically unsaleable coal, but they com- 
 pensated themselves for the cessation of 
 work in the mines. 
 
 After this strike, the miners returned 
 to work under conditions which left the 
 settlement of their differences to various 
 commissions, and which, in most cases, I be- 
 lieve, left the miners either as they were 
 before or in a worse condition. The general 
 pubhc of Great Britain was put to enormous 
 expense and inconvenience and many of 
 its manufacturing industries during the 
 period of the strike were compelled either 
 to suspend operations altogether, or to 
 curtail their output and discharge a portion 
 of their men. This condition extended 
 to the railways and to nearly all industrial 
 enterprises. The forces of organised society 
 
77 
 
 were brought to bear upon the strikiug 
 miners and the result was not satisfactory 
 to the miners. 
 
 I do not presume to say that the miners 
 had or did not have sufficient reason for 
 declaring a general strike, but what I 
 would poiat out is that the remedy which 
 is in the hands of organised labour is a 
 remedy which can only be exercised, tmder 
 the present condition of society, at great 
 personal sacrifice to the labourers involved. 
 And it must be assumed, therefore, that 
 the expedient of a strike would be resorted 
 to only when it was not only justified, but 
 when the men involved had become pre- 
 pared to make sacrifices for it. The future 
 strength of organised labour must depend 
 upon aU labour organisations making com- 
 mon CAUSE with one another. 
 
 I am aware that there are many unselfish 
 and able men devoted to the great task 
 of organising and directing labour, but I 
 beheve that the vast untested power of 
 labour can only be realised through a wider 
 organisation than labour has ever known. 
 It may be that the reforms which are pro- 
 posed in my remedy can only be brought 
 
78 
 
 about when organised labour forces society 
 to accept them, and, if this is so, the first 
 great step to bring about that better era 
 in the world must come through the 
 
 EFFECTIVE ORGANISATION of the LABOUR 
 OF THE WORLD, 
 
 I wotild like to see a man with the vast 
 genius of Napoleon dedicate his Ufe to 
 this cause — to the end that when in the 
 deliberate judgment of a great section of 
 organised labour in any part of the world 
 there was a wrong to be righted, that 
 single organisation would have the solid 
 support of every labour organisation in 
 the world. If in 1912, when 1,800,000 
 Englishmen declared a strike in the coal 
 mines, as the best means within their power 
 to better their condition, this strike had 
 been supported by a general strike, which 
 involved 50,000,000 men throughout the 
 world, there would have been no solution 
 of that strike except a solution which con- 
 ceded the broad principles for which the 
 men contended. 
 
 Capital knows its power. Broadly, it 
 is effectively organised. lyabour does not 
 know its power and it is not effectively 
 
79 
 organised. The control of both capital 
 and labour can still be exercised by the 
 whole people in an equitable solution of 
 the great human problems involved. 
 
 It is not too late to adopt sound and 
 constructive measures which will prevent 
 a further aggravation of existing conditions 
 and which would in another generation go 
 far toward the solution of the vast differ- 
 ences which we are now seeking to settie 
 by force. It may be that this remedy can 
 be employed in time to save an experience 
 which would stop the wheels of the world's 
 industries and bring the great questions 
 involved to a point where they must be 
 adjusted under universal pressure or dis- 
 posed of by violence. 
 
 The great defects which I have outlined 
 and the remedy for these defects are world- 
 wide. It may be that in the United States 
 the people still retain sufficient direct 
 power to solve these questions by just 
 and sound legislation which wiU accept 
 present conditions as they are and seek to 
 remedy them on the lines I have in- 
 dicated, or upon better lines if they can 
 be found. 
 
8o 
 
 It may also be that the people have 
 already lost this power. The majority of 
 men take their opinions from other men. 
 Few are able to do any thinking for them- 
 selves, but the wants of the milUons are 
 simple wants, and they have earned a 
 larger share in the prosperity of their time. 
 They are convinced that this is so, but they 
 are divided in their opinion as to how this 
 result may be attained. It is the business 
 of organised society to keep them divided ; 
 so long as they are divided they are power- 
 less. United they would at once be irre- 
 sistible. 
 
 While legislators are discussing remedies 
 and passing futile laws, the toilers of the 
 world should organise. They should estab- 
 lish, not a Brotherhood of I^ocomotive 
 Engineers, but that Universal Brotherhood 
 of Man. They are men first, and engineers, 
 miners and artisans last. Their cause is 
 a common cause. Their fight is a fight for 
 hfe and all the weapons are in their hands. 
 
 No one wiU doubt that if the American 
 locomotive engineers were to confine their 
 organisation to the State of New York they 
 would be helpless. Their present relative 
 
strength lies in the fact that their organisa- 
 tion reaches from the Atlantic to the Pacific 
 and from Maine to the Gulf. 
 
 The next great step for them to take is 
 to make their organisation W0Ri<D-wrDE, so 
 that when the trains of the United States 
 are without engine-drivers, the trains of 
 every country in the world are likewise 
 without engine-drivers. I/Ct this apply to 
 every branch of organised labour, and 
 when a national strike is declared in one 
 cotmtry in any given line of industry, let 
 that strike be world-wide and extend to 
 every industry. 
 
 I believe in organisation, and if organ- 
 isation in one industry upon a scale which 
 includes the whole of that industry in a 
 nation is sound it is not complete until 
 it includes that industry throughout the 
 world. 
 
 Strikes are not inaugurated on a national 
 scale until, as a rule, aU methods of nego- 
 tiation and diplomacy have failed. When 
 they are inaugurated they are the labouring 
 man's last appeal but one. This appeal 
 will be effective when it is universal and 
 not before. 
 
82 
 
 When a few thousand men strike, one 
 or another means may be adopted to 
 minimise the effect of that strike. But 
 if all organised labour throughout the 
 world should ever resort to a strike, it 
 would be necessary to settle with that 
 labour upon its own terms. And these 
 terms would be so vast and so different 
 from any terms ever proposed by labour 
 that they would stand out as the supreme 
 event in the history of mankind. 
 
 It will be urged that while the locomotive 
 engineers might have a grievance which 
 justified a general strike of engineers, the 
 conditions surrounding one or all other 
 trades tmions did not justify a strike. But 
 the broad view should be that the cause 
 of one union man is a common cause 
 which is the concern of all union men. 
 The grievance which one union has to-day 
 another may have to-morrow, and there 
 is no line of industry which does not have 
 its legitimate and basic grievance. 
 
 I do not say that this grievance is due 
 to any abuse of power in the hands of any 
 class of men, but rather that it is due to 
 the inevitable use which will be made of 
 
83 
 
 that power in the hands of any class of 
 men. I say that, acting in accordance with 
 the laws of their nature, a few men have 
 obtained an mireasonable and an mi just 
 control over the masses of men. It is 
 natural that they should be jealous of 
 this power, and it is reasonable to expect 
 that they wiU relinquish it only when they 
 are compelled to do so by a power which 
 is greater than- theirs. ' 
 
 They proceed upon the theory that they 
 have the right to prescribe the conditions 
 under which they will employ men without 
 taking into account the great fundamental 
 truth that aU men have the right to be 
 employed, and that the necessities of all 
 men compel them to work. 
 
 Upon the broad basis of human justice 
 among men, the time is coming when the 
 majority of men wiU determine what pro- 
 portion of their earnings shall be given 
 to a relatively small number of men who 
 direct their labour, instead of conceding 
 what is now practically conceded, that 
 these few men may levy their toll upon 
 mankind. 
 
 In the evolution of industries the great 
 
84 
 
 businesses are passing through a highly 
 competitive system of production and dis- 
 tribution. I do not think it has been made 
 sufficiently clear, as is, in fact, the case, 
 that the burden of this competition has 
 been borne almost entirely by the wage- 
 earners of the world. The capital employed 
 in this competitive evolution has always 
 required a fixed return, and this return 
 required by capital has in its general 
 trend increased through a steadily-advanc- 
 ing interest and dividend rate. 
 
 When in the course of events it becomes 
 expedient or necessary to' terminate this 
 competition the result is effected through a 
 combination of the competitive interests 
 under one control. Broadly, the effect of 
 tibis combination should be to decrease the 
 price of the product to the consumer, 
 increase the price of the raw material to 
 the producer and raise the wages of all 
 people retained in the employment of 
 the combination. 
 
 If in actual experience this were the 
 result of the consolidation of industries 
 there would be no legislation required to 
 effect a just distribution of the product 
 
85 
 
 of all toil. It has been shown times with- 
 out number that the effects of these con- 
 solidations, instead of being what they 
 SHOUi,D be, as above outUned, have been 
 to reduce the value of the raw material, 
 maintain or decrease the estabUshed wage 
 and increase the price of the product to 
 the public. 
 
 By protective legislation and the control 
 of the resources of banking and credit the 
 men who have dominated these vast organi- 
 sations have been able to appropriate to 
 themselves the huge sums which in justice 
 belong to those whose labour has produced 
 the raw material and created it into a 
 finished product. 
 
 I again repeat that you cannot by any 
 form of legislation change the operation of 
 the great human instincts of mankind, 
 but you can by sound legislation so govern 
 the use of the |resources which have been 
 created by mankind as a whole as to make 
 the appropriation of those resources by 
 the few impossible. 
 
 Side by side with the consolidation of 
 capital has been the great evolution in the 
 organisation of labour ; but experience 
 
86 
 
 has shown that, while capital has been able 
 to combine so effectively that it could force 
 the acceptance of its view, the organisa- 
 tions of labour have lacked, and still lack, 
 the coherence which is essential for the 
 enforcement of their view. 
 
 It may be taken that for all offensive 
 and defensive purposes the capital of the 
 world is well organised, and the control 
 is so central and effective that it has been 
 able to defy the worl4. 
 
 There is in all of the great progressive 
 coimtries of the world far-reaching legis- 
 lation being put forward, having for its 
 purpose the more effective control and the 
 wider distribution of wealth. 
 
 Some .of this legislation is proposed by 
 the representatives of the great aggregations 
 of capital for the sole purpose of extending 
 the present system and postponing the time 
 when any effective control may be reahsed. 
 This legislation is interpreted to the people 
 by a Press which is controlled by capital, 
 and it is supported by people whose asso- 
 ciations and interests prevent them from 
 seriously considering the adoption of the 
 remedies which the present state of society 
 
87 
 
 demands. As to the majority of all of the 
 remainder of the proposed legislation which 
 is seriously put forward to remedy existing 
 conditions, it would, if carried out, effect 
 a transference of the evils from one class 
 to another class, instead of curing those 
 evils. 
 
 There is nothing which cannot be accom- 
 pUshed by the effective organisation of the 
 wage-earners of the world, but this organi- 
 sation must be fovmded upon the broad 
 principle that the power which is to-day 
 unfairly centralised in a few hands is to 
 be taken out of those hands, not for the 
 purpose of transferring it to; another class, 
 but for the broader purpose that it shall 
 not exist save under universal participa- 
 tion and veto. 
 
 The first great result of a imiversal organ- 
 isation of wage earners would be to do 
 away with the present destructive mihtary 
 system. • If the money which is at present 
 being wasted on Armies and Navies were 
 to be employed in developing the natural 
 resources of the various nations involved 
 it would give permanent and profitable 
 employment to every idle man in the world. 
 
The time has come when the wage- 
 earners of the world can and should put an 
 end to the military programme of all nations. 
 
 Instead of submitting to the increased 
 burdens of militarism, while useless con- 
 ferences are held at The Hague and petti- 
 fogging lawyers are occupjdng the time of 
 the world's Parliaments with futile dis- 
 cussions about arbitration and peace, the 
 wage earners of the world should do away 
 with militarism. 
 
 The miUtary budgets of the great 
 European powers are destined to inevitable 
 increase. Germany, Russia and France 
 will make huge additional ^military appro- 
 priations. Great Britain is seriously con- 
 sidering compulsory service, and the various 
 colonies of the British Empire are being 
 drawn into the Imperial naval program. 
 The money and the men must be supplied 
 by that vast body of patient toilers who do 
 not want to fight, who have everything to 
 lose and nothing to gain by war, and whose 
 life- toil is being absorbed in a mad course 
 which only the wage-earners can end. It 
 is only through a world-\yide orgiinisation 
 of these men that the military peril which 
 
89 
 
 is world-wide and imminent can be dis- 
 posed of. 
 
 I shall, in a subsequent book, show how 
 this result may be attained, and that the 
 solution of militarism is in the hands of 
 the unorganised toilers whose will may be 
 made supreme. 
 
 There should be formed a Brotherhood 
 of the World's Wage-earners and they 
 should say that before being Americans or 
 Britons or Frenchmen or Germans, they 
 are men, and that broadly, all their wants 
 and hopes and interests and problems are 
 one, and that there can be no sufficient 
 reason given to them for inciting the 
 common people of one country to make 
 war upon the common people of any other 
 country. 
 
 When there is a possibility of a European 
 war the gold in Europe goes into its caves 
 and hides to await the outcome. The 
 toilers are sent to the front to risk and lose 
 their lives in a struggle from which neither 
 they nor their descendants can ever hope 
 to gain anything. No matter which side 
 wins — the masses always lose. 
 
 The trouble with the world's wage- 
 
90 
 
 earners is that they are divided, and that 
 their time is entirely occupied in a struggle 
 against want. Because they do not receive 
 what they are entitled to, and only a small 
 part of the wealth which they create, they 
 must, in order to live at all, devote the 
 whole of their time to their toil. They do 
 not have time either to read or to think, 
 and they never have time to play. 
 
 It is they who constitute both the Church 
 and the State, and they are bullied by the 
 former and enslaved by the latter. They 
 are, in the more enlightened countries, 
 given the right to vote and they are told 
 that all power rests with them. 
 
 It is true that all power is in their hands, 
 but it is equally true that they do not 
 use it and that they do not know how to 
 use it, and the one chance which organised 
 capital now has of perpetuating its present 
 outrage upon the masses is that the masses 
 be kept overworked, underpaid and dis- 
 organised. In five years from to-day the 
 wage-earners of the world might be so 
 organised that they could not only secure 
 the peace of the world for ever, but they 
 could emancipate themselves and all of 
 
9' 
 
 the generations that are to come. 
 
 To every generation is given the power 
 to enslave itself or to free itself, and the 
 problems of future generations can only be 
 solved by those generations in their turn, 
 but this generation has the opportunity 
 to emancipate itself, and in doing so 
 it could bequeath such vast power to 
 aU future generations that mankind as a 
 whole might be from now on for ever free» 
 
 You cannot meet the obligations which 
 devolve upon the millions of the future, 
 but you can remove the grevious handicaps 
 under which those millions may live. 
 
 The grea;t nations of the world have 
 created debts which they can never pay, 
 and the interest upon which will for hun- 
 dreds of years be a drain upon labour. It 
 does not require any argument to show , 
 that this burden falls at last upon the wage- 
 earners. 
 
 There is no wealth which does not come 
 out of the earth, and the earth will not give 
 of its wealth except to the ones who toil. 
 If to-day the people who are considered 
 rich contend that they pay a heavy toll 
 towards this waste of wealth, and that they 
 
92 
 
 are prepared to continue to pay this toll, 
 the answer is that before they paid it 
 they collected it from the creators of 
 all wealth, who are the wage-earners of 
 the world, and that in reality they only 
 pay out a small part of what they collect. 
 
 The condition of the masses of the people 
 throughout the world is a suflicient testi- 
 mony to the patience and endurance and 
 patriotism of the masses. The masses can 
 always be trusted. I do not know of any 
 instance in which they have plotted against 
 their country, but I know of many instances 
 in which the few have been willing to give 
 their support and their capital to causes 
 which were against their cotmtry. 
 
 Capital will go where it is paid tolgo, 
 but men wiU only fight when they believe 
 they are right. 
 
 I hope in a subsequent work to show that 
 one of the immediate effects of a universjj 
 organisation of wage-earners would be to 
 do away with the mediseval systems of 
 protective tariff and the artificial barriers 
 which legislg,tors have erected in restraint 
 of trade. 
 
 It is impossible to calculate the general 
 
93 
 
 advantages whicli will result when every 
 market in the world, becomes the free market 
 for every product of labour. 
 
 There is throughout the world an extra- 
 ordinary political and social unrest. It is 
 not directed against a particular form of 
 government, because, while it is resulting 
 in the estabUshment of republics, where 
 Kings and Emperors have long held sway, 
 it is, in the most democratic countries, 
 seeking expression in ways which are not 
 less revolutionary and which in their eflFect 
 may be more far-reaching. 
 
 This new movement is the hand of des- 
 tiny. It has laid hold upon the existing 
 institutions in every part of the world, 
 and this hold will not be loosened until 
 the way to freedom and to justice has been 
 found. 
 
 The ultimate power is in the hands of the 
 people, and they can by organisation give 
 effect to this power. On the way to this 
 achievement they must take the steps which 
 give them control over elected officials and 
 the power to recall such officials. They 
 must also do away with the great evils 
 which attend our system of executive 
 
94 
 
 appointments. 
 
 The important appointive positions in 
 the Government Service should be under 
 Civil Service regulations, and should not be 
 in any way dependent upon politics or 
 changes in the administration. 
 
 The United States is far behind the 
 principal European nations in respect both 
 to its diplomatic and consular service. 
 These positions should not be political. 
 
 Our Republic carries with it the great 
 defects of its immense virtues, but there 
 has developed in recent years a tendency 
 of absolutism in the executive office in 
 America which needs to be jdealt with 
 drastically. 
 
 The system of selecting post-masters for 
 the smaller towns has proven a success, but 
 when the position becomes important and 
 is accompanied by a suitable salary it 
 should be filled as a similar position in a 
 great business would be. 
 
 A company in which the responsible 
 positions were held by men who entertained 
 the same political views as its president 
 rather than by the men who were most 
 suitable, would be likely to fail. 
 
95 
 
 The difference between a private com' 
 pany and the Government is that the 
 mistakes of the Government are met by 
 increased taxation and new bond issues, 
 while with a private company its mistakes 
 are usually dealt with by a receiver. 
 
 I am aware that the great positions in 
 the Government are, on the whole, held 
 by the best men in America, but t^e point 
 I wish to emphasize is that they are occupied 
 by men who, for the most part, are without 
 any experience in the work to which they 
 are called. 
 
 Their appointment depends upon their 
 politics, their service to their party, and 
 upon local influences which have no bearing 
 upon the qualifications of the appointee. 
 
 I do not doubt that the president of the 
 United States endeavours so far as is con- 
 sistent with the purposes of his party to 
 appoint the best available men for all 
 positions, but it will not, I beUeve, be 
 denied that generally speaking the pohcy 
 of every new president is shaped to a great 
 extent in such a way as to promote by all 
 consistent means his re-election as presi- 
 dent, and the perpetuation of his party in 
 
96 
 
 power. 
 
 In a republic there are valid objections 
 to the re-election of any man to any 
 great ofl&ce of trust or power. I would 
 extend the presidential term to eight 
 years ; the congressional to six ; the 
 senatorial to twelve years ; and all Gov- 
 ernors of States to eight years. I would 
 make all ineligible to re-election. I would 
 substitute in place of primaries and con- 
 ventions in which candidates are nomina- 
 ted, a direct nomiaation by the people in 
 order that subsequently in the election the 
 people would not be compelled to choose 
 between two candidates, neither of whom 
 ihey wish, but rather that the nomination 
 of the candidates having been effected by 
 popular ballot the people would be able in 
 the election to vote upon candidates of 
 their own choosing. At present candidates 
 are nominated through the manipulation of 
 State and National conventions. 
 
 I would subject all appointments to Civil 
 Service tests and make the tenure of all office 
 holders subject to the efficient discharge 
 of their duties, and the rank which they 
 might attain limited only by their own 
 
97 
 
 abilities as shown in the various positions 
 through which they might be promoted 
 up to the principal appointment within 
 the gift of the Government. 
 
 I would draw a definite line of distinction 
 between the qualifications demanded of 
 an Felective position and those required 
 by persons appointed by elected officials. 
 The former may depend upon pubUc sen- 
 timent which exercises its right to select its 
 representatives, but the latter must not in 
 any way depend upon public sentiment. I 
 have no doubt that the taint of the desire 
 for re-election or re-appointment is respon- 
 sible for a great part of the administrative 
 evils existing under our present system. 
 
 We have sought in the creation of our 
 Supreme Court to follow a course which 
 would give to every member of that distin- 
 guished tribunal the largest possible measure 
 of independence and freedom of action. We 
 have made the position one for life, and 
 the salary adequate. I would apply this 
 broad principle to all public service which 
 is subject to executive appointment while 
 drawing the most distinct possible line as 
 regards all service which is elective. It is 
 
98 
 
 only a step from two to three terms as 
 president, and only one more step from a 
 third term to a life-presidency. From that 
 stage to dictatorship is a brief span. 
 
 That our system which makes re-election 
 a goal for aU successful candidates has not 
 brought us to disaster is due in a large 
 measure to the type of men who have filled 
 the great diective positions vmder our 
 Government. But the time may well 
 come when, throtigh the use of the machinery 
 designed for re-election, we see estabHshed 
 a dictatorship in America. I would not 
 urge a radical change in our poUcy for the 
 sole purpose of guarding against this con- 
 tingency, but rather because every step 
 taken in the direction of making such an 
 event impossible is also a step towards a 
 more rational and independent administra- 
 tion of our pubUc affairs. If it were certain 
 that the danger which I have indicated 
 was too remote to ever arise, it still remains 
 true that for the single purpose of obtaining 
 the best possible service that can be secured, 
 the changes suggested are far-reaching and 
 sound. 
 
 If we assume, what is probably true, that 
 
99 
 
 the men who occupy the great elective 
 positions in America are for the most 
 part the ones who have attained distinction 
 in their life work, and who have a sincere 
 wish to render the most effective service 
 to the State, we must agree that they 
 should be given the most ample oppor- 
 tunity of rendering such service on an 
 impartial basis which has for its aim 
 the soundest administration which can 
 be obtained. In this view aU of our 
 elected officials start their service under 
 the great handicap of party and personal 
 interest designed to secure their succes- 
 sion in power. When this handicap is 
 removed, by making re-election impossible, 
 these officials wUl be free to pursue a 
 course which has for its only object the 
 good of their country and the efficiency 
 of its public servants. 
 
 Until re-election is made impossible the 
 public will not be able to command the 
 best service which its chosen representa- 
 tives can give. 
 
 I am not in favour of any programme 
 which will do violence to the vast iustitu- 
 tions which are the monuments of toil. 
 
100 
 
 I would USE those institutions. And, ia 
 so far as that larger destiny of mankind 
 is to be achieved, it must be realised through 
 peaceful organisation, and a universal re- 
 fusal to participate in any form of violence. 
 
 The result for the common people when 
 they appeal to force is that they merely 
 CHANGE MASTERS. I would have them by 
 peaceful means, through a world-organisa- 
 tion, become their own masters. 
 
 No one denies that capital has the right 
 to prescribe the conditions under which it 
 may be employed. I^abour also has this 
 right. The difference between capital and 
 labour is that, through organisation and 
 through the ability to temporarily remain 
 idle, there is given to capital the power to 
 enforce its terms, while labour, through 
 its disorganisation and through the insistent 
 human necessity, which requires employ- . 
 ment, has been unable to enforce its terms. 
 
 In the widest sense, wealth is the pos- 
 session of property which can be used, and, 
 save for a very Umited amount of property, 
 there is no use for the money of the world 
 except in conjunction with the labour of 
 the world and by employing such labour. 
 
lOI 
 
 The hundreds of millions of pounds 
 sterling which are distributed annually 
 as interest and dividends can only be pro- 
 duced by the toil of millions of men, 
 without whose labour it would be impos- 
 sible to use capital or earn interest and 
 dividends ;and, apart from the grfeat human 
 reasons involved, it is economically right 
 that capital and labour should be partners 
 and that their interests should be one. 
 
 To a limited extent they are now part- 
 ners, and in a small degree it is recognised 
 that their interests are one ; but the 
 arrangement is in reality a partnership in 
 which the real producers of aU wealth are 
 given only a small part of what they pro- 
 duce. 
 
 I would alter this partnership by peaceful 
 means. The few men who own the capital 
 could not and would not do the work which 
 is necessary to be done to employ or use 
 that capital. It is necessary that this work 
 should be done by the masses of men who 
 have no capital, and it remains for these 
 men to so organise as to enable them to 
 prescribe the terms under which they will 
 do their share. 
 
102 
 
 The problem involved for the masses is 
 not a local or a national problem. It is a 
 world problem. It cannot be met by local 
 or national means, it must be met by world- 
 wide means. 
 
 Organised labour in various countries 
 is seeking through what may be termed 
 " local legislation," to better and strengthen 
 its position, but if we are to learn anything 
 from the experience of the past, we will 
 understand that the only basis upon which 
 this problem may be solved is through a 
 world-wide organisation which does not 
 need to appeal to legislative assemblies 
 for its protection, but which through its 
 own might is able to settle its terms with- 
 out legislative interference. Capital does 
 not appeal to legislation. It dictates its 
 terms. 
 
 Labour must so organise that it has ti. 
 power to make these terms fair terms. The 
 resistance which labour is now able to offer 
 in any line is brief and localised, whereas 
 if it were world-wide it would be irresistible. 
 
 It is not within the scope of this brief 
 analysis to minutely discuss the steps by 
 which the capital and labour of the world 
 
103 
 
 have arrived at their present positions. 
 There are profound reasons why a few men 
 now have, and have always had, the 
 control of the masses of men and of the 
 wealth of the world. 
 
 These reasons are buried in the depths 
 of human nature. It is not likely that they 
 will ever change. The few are destined to 
 rule and the many to be ruled. It is to 
 arrive at a more just basis for the exercise 
 of this rule that we must direct the enor- 
 mous and unused power of the masses. 
 
 It is poor advice which leads the wage- 
 earners of the world to believe that by any 
 form of laws or any devices of organisation 
 they can take the place and do the work 
 of the few. 
 
 By the operation of vast natural laws, 
 which wiU always transcend all human 
 legislation, this is and forever will be, 
 impossible, but I am convinced that there 
 are new realms of human freedom attain- 
 able by the masses on well-founded and 
 incontestable Hues. 
 
 By tedious steps the masses have removed 
 many of their most monstrous shackles. 
 They have asserted their freedom of thought 
 
104 
 
 and of speech. They are emeiging out of 
 the darkness of ages of mental and moral 
 slavery. Their larger emancipation is to 
 come. 
 
 It wiQ be the logical effect of the great 
 causes and the natural result of the 
 va'jt forces which have impelled them 
 to seek for decision and power within 
 themselves. It is through the organised 
 expression of their individual determina- 
 tion to be free that they must find the way 
 to freedom. 
 
 Nothing is to be destroyed. I^et no hand 
 of violence be laid upon any of the institu- 
 tions of our time.. They afford the most 
 potent machinery by which mankind may 
 become free. They are too useful to be 
 misused, too enormous to replace, and 
 too well suited to human needs to be 
 disregarded* 
 
 They are the people's institutions. 
 
 They are the common property and the 
 common heritage of all men. They mark 
 the steps of man's glorious march across 
 time. They are the imperishable tokens 
 of his grandeur; they are the children of 
 his devotion and his genius: They are for 
 
I05 
 
 his use, and the larger use of the millions 
 yet to come. They belong to those millions, 
 and it is for this generation to bequeath 
 them to posterity as a cotnmon heritage. 
 
 We will pass on to posterity our vast 
 burdens. 
 
 We will bequeath to future generations 
 the accumulated obligations and the im- 
 mense glory of our age. They must deal 
 with the problems which we failed to solve 
 and the evils with which we are temporiz- 
 ing. They will inherit the noble institutions 
 and the immense burdens which are the 
 result of centuries of man's struggle to be 
 free. 
 
 Our mistakes will |survive us, but it 
 is possible for us to take such advantage of 
 our opportunity that the generations to 
 come will be clothed with a new power 
 which will enable them to deal with the 
 result of these mistakes on the basis that 
 the institutions of man belong to mankind 
 as a whole, and that the toilers may inherit 
 the earth. 
 
Joth August, 1912. 
 
 PRINTED AT THK FIXANCIER PRIimNG WORKS, 
 DEAN STRKBT, FETTER LANB, M)KDON, K.C. 
 
Cornell University Library 
 HG 2481.D4 
 
 The people's money .A brief analysis of t 
 
 3 1924 002 687 386