The original of tliis book is in 
 tine Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924031246261 
 
Cornell University Library 
 arVl3344 
 Regulation, 
 
 olin,anx 
 
REGULATION 
 
 BY 
 
 W. G. BARNARD 
 
 REGULATION PUBLISHING CO. 
 
 SEATTLE, U. S. A. 
 
 1913 
 
CoPYRiaHT, 1913 
 
 By W. G. BARNARD 
 
 Copyright, 1913, in Great Britain 
 
 Written in the early part of the year igi2; 
 MS, revised in the fall of the same year. 
 
 PBBSS O* 
 
 THE VAIL-BALLOU CO. 
 
 BIHGHAHTOH, N. Y. 
 
CONTENTS 
 
 CHAPTEE PAGE 
 
 I Inteoduction 1 
 
 II The Four Tactoes in Pbice 6 
 
 III The Doctrine of Free Land 11 
 
 IV Substitution 14 
 
 V History of Wage Regulation in Austraua, New 
 
 Zealand, and England 16 
 
 VI Recent Comment Upon the Regulation of Prices 29 
 
 VII The Quantity Theory of Monet 34 
 
 VIII The Multiple Unit and Steady Prices .... 37 
 
 IX Regulation 44 
 
 X The Labor Problem 73 
 
 XI The Problem of Unemployment .78 
 
 XII The Problem of the Trusts 86 
 
 XIII The Land Problem 94 
 
 XIV The Problem of Vast Private Fortunes . . .102 
 XV The Problem of the High Cost op Living . . .104 
 
 XVI The Money Problem 106 
 
 XVII The Tariff Problem Ill 
 
 XVIII Other Remedies Considered ....... 121 
 
CHAPTEE I 
 
 INTEODUCTION 
 
 There are eight politico-economic problems before the 
 people to-day. They are: (1) labor, (3) unemployment, 
 (3) trusts, (4) land monopoly, (5) vast private fortunes, 
 (6) high cost of living, (7) money, (8) tariff. 
 
 None of these problems are new; some are very old in- 
 deed, having existed in one form or another since the days 
 of the earliest form of social organization. The labor 
 problem had its birth when, in some prehistoric time, a 
 man first agreed to labor for another for hire. The won- 
 derful changes that have occurred during the past century 
 have aggravated conditions, making old problems more 
 serious and developing new ones, and presenting old prob- 
 lems in new and more threatening forms. 
 
 And because these problems are old and have resisted 
 all efforts to remedy, many are inclined to regard them as 
 natural conditions, "according to the very nature of 
 things," incurable. 
 
 Because many remedies have been offered the people and 
 considered by them, yet no important improvement in 
 these conditions has occurred, many are inclined to re- 
 gard as useless any effort that is made to-day to find a 
 solution for these problems. 
 
 Ifo greater achievement should be looked for in the 
 political world before we enter upon an era of political 
 progress than occurred in the mechanical world before the 
 beginning of the era of mechanical development. 
 
 The great achievements in the progress of the world 
 have not been accomplished by the slow process of un- 
 
 1 
 
3 EEGULATION 
 
 aided iadividual effort, but by the concerted efforts of 
 the greatest men of the time, the efforts of each individual 
 being stimulated by and receiving impetus from the efforts 
 of all the others laboring at the same time in the same 
 field. It is this imity of interest and purpose of the 
 greatest minds of the time that creates what is termed; 
 an era in the progress of the -world. 
 
 The most important remedies that have been offered 
 the people and considered by them in their effort to find 
 a cure for the politico-economic conditions or problems 
 that I have enumerated are: (1) tariff reform, (2) 
 money reform, (3) anti-trust legislation, (4) special 
 taxes (income tax, inheritance tax, corporation tax, etc.), 
 (5) single tax, (6) socialism. 
 
 Which one of these remedies, or what combination of 
 these remedies, can be said to be an adequate remedy, 
 definite and complete in detail, suited to the times and to 
 the temper of the people; a remedy that is not only 
 adequate but one that the people would be willing and 
 ready to accept if they were brought to understand ? 
 
 I have no patience for the man that, having offered the 
 people his favorite remedy, condemns them for being blind 
 and actuated by self-interest in political matters because 
 they refuse to accept his remedy or possibly to listen to 
 him at aU. The fault is more likely in the remedy than 
 in the people. I believe a remedy will be found and ap- 
 plied that win cure every one of the conditions or prob- 
 lems that I have enumerated. Such a remedy must 
 possess two essential qualities, adequacy and- acceptability; 
 it must be adequate and it must be acceptable to the people. , 
 Men are inclined to look upon the failure of a political 
 movement that they regard as being in the interest of the 
 people, as an indication of a selfish unwillingness on the 
 part of the people to sacrifice their individual interest for 
 
INTEODDOTION 3 
 
 the public welfaxe. I am inclined to regard every such 
 failure as an indication of a fault in the remedy proposed. 
 
 It was a comparatively small incident, the invention 
 of the steam engine and the development of steam power, 
 that gave the world a new era, the most wonderful in its 
 history, the era of mechanical development. 
 
 The world may give birth to a new era before the old 
 has passed away. I believe we are standing on the thresh- 
 old of a new era, a greater era, a more wonderful era than 
 the mechanical era whose achievements it has been our 
 privilege to observe. This era will be one of political 
 progress. It will be ushered in by the discovery of a 
 remedy for the politico-economic conditions or problems 
 of the time, a remedy that is scientific, adequate, complete 
 in detail, suited to the times and to the temper of the 
 people, and acceptable to them. 
 
 The world to-day stands in need of the discovery of 
 such a remedy and of the political, economic, and social 
 developments that would follow, to a greater extent than 
 it stood in need of the steam and electric train, the steam- 
 ship, the cotton gin, the harvester, the sewing machine, 
 the telephone and telegraph, the Hoe press, the typesetting 
 machine, the automobile, and wireless telegraphy at the 
 beginning of the mechanical era. Yet the inducement 
 held out to men of imusual ability by the need of the 
 people for mechanical conveniences and labor-saving ma- 
 chinery caused the greatest minds of that time to be con- 
 centrated upon the development of mechanical science 
 as soon as the development of mechanical power had opened 
 the way. The greater need of the people for a solution 
 of the politico-economic problems of the day will cause 
 the greatest minds of the present time to concentrate upon 
 politico-economic problems just as soon as a discovery is 
 made that will open the way, giving assurance to those 
 
4 REGULATION 
 
 who cannot read such message in the dimmer writings 
 that serve to guide us now in the study of these prob- 
 lems, that a remedy for these conditions exists in the world 
 just as electricity existed through all the ages before man 
 harnessed the clouds; that it remaias for men but to dis- 
 cover and apply it. The people are conscious of their 
 Heed of such a remedy ; they are anxious for it. And when 
 it has been found and the people have come to know it, 
 it will not be necessary to force them to accept it; there 
 is no power in the world that could prevent them or de- 
 lay them in accepting and applying it. 
 
 I have no patience for the man that talks of a class 
 struggle. There can he no class struggle unless it he to 
 promote class legislation; and, when a scientific remedy is 
 found, it will not he of the nature of class legislation. 
 
 More than ninety-eight per cent of the people of the 
 country desire a scientific solution of present problems and 
 would be benefited by the application of such a remedy. 
 Could there be a continued struggle between ninety-eight 
 per cent of the people, constituting one party, and two 
 per cent of the people, constituting another? A remedy 
 that meets with the approval of only a small part of 
 the people is very likely, to be imscientific. 
 
 Political thought may be divided into three classes, 
 skepticism, idealism, and optimism. 
 
 The skeptic judges the future by the failures of the 
 past; the optimist, by its achievements. The idealist fails 
 to find a remedy suited to the present and devotes himself 
 to the consideration of remedies that he regards as suited 
 to some future generation. 
 
 The optimist looks into the future and reads a prophecy; 
 the skeptic looks only at the past and the present. The 
 optimist believes that greater things can and will be done 
 
INTRODUCTION 5 
 
 in thie future than have been done in the past. The skeptic 
 can only read the future by the past, and regards as im- 
 possible anythiag that the past has attempted and failed 
 to do. 
 
 The optimist believes these problems have never been 
 solved because the right remedy has never been found and 
 iBcientifically applied. The skeptic believes these prob- 
 lems can never be solved because they never have been 
 solved. 
 
 The optimist believes there exists in the world a nat- 
 ural remedy for every one of our economic problems, just 
 as electricity existed .through all the ages before man dis- 
 covered it; that the people need only to discover or recog- 
 nize this remedy and apply it; that when they have dis- 
 covered it they will find it suited to the conditions of 
 the time, not dependent upon ideal social conditions or an 
 ideal citizenship, — a present-day remedy for present-day 
 problems. It is to the optimist that the world must look 
 for aU progress. 
 
 The purpose of this book is, first, to create in the mind 
 of the reader a greater optimism, a belief in the exisi>- 
 ence of such a remedy, and, second, to take him ia a search 
 for it. 
 
CHAPTBE II 
 
 THE FOUK FACTORS IN PRICE 
 
 There are four factors in the division of production: 
 (1) land rent and raw material, (3) labor or wages, 
 (3) interest, (4) profits. There are four corresponding 
 classes between which the production of the country is 
 divided: those who receive the part of production that 
 represents lajid rent and raw material, those who receive 
 the part that represents labor or wages, those who re- 
 ceive the part that represents interest, and those who 
 receive the part that represents profits.^ 
 
 iThe reader must distinguish between the terms land rent, 
 raw material, wages, interest, and profits as used by economic 
 writers generally and as used in the commercial world. The 
 above statement is true whether the terms are used in the one 
 sense or in the other. 
 
 Many writers include raw material in the term land or 
 land rent, while they exclude from this factor those elements 
 that are in a strict sense either wages or interest. The man 
 in business does not ordinarily make this distinction. If ho 
 buys a tract of land and later sells it, he does not say, I have 
 received so much for the land, so much for my time spent in 
 examining and purchasing the land and negotiating the sale of 
 it, so much as interest on my capital invested. 
 
 The term wages, as used by many writers, includes wages of 
 management, that is, compensation for the services of those who 
 engage in business. In this the practice of the commercial 
 world is divided. 
 
 The term interest, as used by ^any vrriters, includes any 
 element in what is commercially termed either land rent, raw 
 material, or profits that is, strictly speaking, interest; while 
 they exclude from what is commercially termed interest those 
 
 6 
 
THE FOUR FACT0E8 IN" PEIOE 7 
 
 Every commodity is composed of four elements: land 
 rent and raw material, labor or wages, interest, and profits. 
 
 If we could acciirately determine the relative importance 
 of these elements in the price of a giiren commodity, 
 then the price paid for such commodity could be divided 
 into four definite parts, representing the cost to the pur- 
 chaser of each of the four elements in the commodity. 
 
 The total amount of money paid out by the people dur- 
 ing a given time is paid out by them for commodities, 
 rents, wages, and services that are composed of these 
 elements, and if we could accurately determine the 
 
 elements that, strictly speaking, are insurance or compensation 
 for risk (this element is observed in the high rate required 
 where the security is poor) and wages (which element is ob- 
 served in the higher rates required where the loaner is com- 
 pelled to devote time and labor to examining or caring for the 
 security). 
 
 The term profits, as used by many writers, excludes in- 
 terest and wages of management. Profits, as thus defined, 
 is composed of two elements: first, insurance or compensation 
 for risk, and, second, pure profit. This latter element is the 
 incentive that impels men to engage in speculative business en- 
 terprises. If, in the aggregate, this element of pure profit does 
 not exist, men will retire from business and put both their labor 
 and their capital upon the market, and wages and interest rates 
 will fall until there is again a margin of pure profit to induce 
 men to engage in business rather than to loan their capital and 
 work for wages. In the use of the term profits the practice of 
 the commercial world is divided. It is used by some in its eco- 
 nomic sense, by others to include wages of management, or 
 interest, or both. If I were to buy a stock of merchandise, store 
 it for a year, then sell it in a lump sale, I would, probably, 
 deduct interest upon the capital invested in the stock, but no 
 wages, before computing my profit; if, however, I were to en- 
 gage in the retail business and thus dispose of the stock, I would, 
 probably, deduct a reasonable compensation for my time and 
 labor, but not interest upon the capital represented, before com- 
 puting my profit. 
 
 The logic of an argument cannot be aflfected by the terms em- 
 
8 EEGULATION 
 
 relative importance of these four elements in the total of 
 the things paid for by the people, we could then divide 
 the dollar into four parts and observe the proportionate 
 size of these parts; we coidd observe the ratio between the 
 part of the dollar that represents land rent and raw ma- 
 terial, the part that represents labor or wages, the part 
 that represents interest, and the part that represents profits. 
 
 Our study will be largely a study of these factors, and 
 more particularly of their ratio. We shall find that a 
 healthy condition of our social and industrial life de- 
 pends upon the maintenance of a natural ratio between 
 these four factors, just as the health of the human body 
 depends upon the ratio of the component elements in the 
 blood. 
 
 While nature has made a wise provision by which the 
 blood is fed the different elements in the proportion in 
 which they are needed, in the economic world the propor- 
 
 ployed, as long as their meaning is clear and well understood. 
 I shall use the terms land rent, raw mnterial, wages, interest, 
 and profits in their commercial sense. 
 
 In this chapter, in which the discussion is purely theoretical, 
 the term rww material means material in its natural state — 
 upon which no labor has been performed. In Chapter IX and 
 following chapters, which contain a discussion of a practical 
 application of economic theories and principles, the term is used 
 in a less restricted, less definite, i. e. in a commercial, sense and 
 includes all products that are of such nature that it would not be 
 practical in commerce, in fixing a price upon them, to resolve 
 them into their four component elements. 
 
 I define wealth as "all and only such objects as both have 
 utility (i. e., fitness to gratify human desire) and can be ap- 
 propriated in exclusive possession, and, therefore, exchanged." I 
 include land. 
 
 ProdMCtion is that part of the wealth of a country or other 
 political or economic division that is being created or pro- 
 duced at the present time, as distinguished from wealth that 
 has been produced in the past. 
 
THE FOUR FACTORS IN PRICE 9 
 
 tion of these four vital elements— their relative size or 
 importance, their ratio, the ratio of the four factors in the 
 division of production, of the four factors in price, of the 
 four parts of the dollar — is not determined by natural 
 needs or requirements, but by influences and conditions 
 that have no regard for the natural ratio. We shall learn 
 that the conditions or problems that we shall study are 
 due to the fact that these vital elements do not enter into 
 the lifeblood of commerce in their natural ratio. 
 
 It is possible for one remedy to cure all economic condi- 
 tions or problems that are caused by an unnatural ratio 
 between these four factors, provided it will cure this con- 
 dition, that is, provided it will afford a means by which 
 the ratio between these four factors can be regulatedl 
 and a natural ratio between them maintained. Eegulation 
 is the only remedy that has ever been offered that would 
 solve the politico-economic problems by regulating in a 
 natural and scientific way the ratio or proportion of these 
 four factors in price or in the division of production. 
 
 Let us make a brief and simple analysis of a common 
 commodity, in order to observe the presence of these four 
 elements and the form in which we find them. Let us 
 take for our study a plain oak chair. 
 
 An oak tree, standing in the forest, is felled; the log is 
 drawn to a mill and sawed into lumber; the lumber is 
 shipped to a furniture factory and made into chairs; the 
 chairs are shipped to a merchant, who puts them in his 
 stock; a clerk sells you the chair; and it is delivered to 
 your home. 
 
 Let us look first for the element of land rent and raw 
 material. In the tree standing in the forest we find an 
 example of raw material. It is the gift of God to man; 
 like the coal in the ground, man has had no part in its 
 creation or development. The sawmill, the railroad, the 
 
10 EEGDLATION 
 
 factory, and the store occupy land and are constructed of 
 raw material. 
 
 It required labor to fell the tree, to saw the log, to ship 
 the lumber to the factory, to work the wood and make the 
 chair, to' ship it to the store, to put it in the showroom, 
 to sell the chair, and to deliver it to your home; it re- 
 quired labor, also, to construct the sawmill and the ma- 
 chinery it contains, to build the railroad and to produce 
 the materials of which it is constructed, to build the furni- 
 ture factory and to construct the machinery it contains, 
 and to build the store and the dray in which the chair 
 was delivered to your home. 
 
 Capital is invested in the timber, in the logger's ma- 
 chinery and roadways, ia the sawmill, the railroad, the 
 factory, the store, and the dray. It matters not whether 
 the capital belongs to individuals engaged in business, 
 or is represented by stock or bonds, or is borrowed upon 
 mortgage. Those who own this capital, whether entre- 
 preneur, stockholder, bondholder, or mortgagee, axe en- 
 titled to and receive interest upon their capital. 
 
 The one that owned the laoid on which the forest stood; 
 made a profit when he sold the tree to the logger; the logger 
 made a profit upon his operation of felling the tree andj 
 delivering it to the miU; the ovmer of the mill made 
 a profit upon the operation of sawing the log into lum- 
 ber and loading the lumber upon a car; the owners of 
 the railroad, the owners of the factory, the retail mer- 
 chant, -each made a profit; those who made the saw with 
 which the tree was felled made a profit, as did those who 
 buUt the mill, those who constructed the machinery of 
 the mill, those who built the railroad, those who produced 
 the material of which the railroad was constructed, those 
 who built the furniture factory and the machinery it con- 
 tains, those who built the store, and those who built the 
 dray. 
 
CHAPTER III 
 
 THE DOCTEINB 05 FREE LAND ^ 
 
 XI) God has given the land to the people of each 
 generation in the same right in which he has given it to 
 the people of every other generation.^ 
 
 (2) The people of the first generation came npon the 
 earth possessed of an equal right to the free use and en- 
 joyment of the land. 
 
 (3) The people of each succeeding generation have 
 come upon the earth possessed of the same natural right 
 as the people of the first generation. 
 
 (4) The people of each generation have the right to 
 make laws governing themselves. The right to govern 
 IS derived from the consent of the majority of those gov- 
 erned. The majority have the right to make laws gov- 
 erning aU the people of their generation. 
 
 (5) The people have no right to make laws restricting 
 the rights and liberties of the people of future generations. 
 
 (6) The rights and liberties of the people of the 
 present generation cannot be denied them because of the 
 laws, acts, or customs of the generations past. 
 
 The people of the present generation came upon the 
 earth possessed of an equal natural right to the free use 
 
 lit is important that the reader be familiar with the prin- 
 ciples upon which the Doctrine of Free Land is based before 
 reading Chapters IV and IX. The paragraphs of which this 
 chapter is composed are taken from Chapter XIII, "The Land 
 Problem," and appear in that chapter also. 
 
 2 The term land includes all forms of natural wealth, all nat- 
 ural resources (forest trees, water and water power, coal and 
 minerals 'within the earth, etc.) ; it does not include improve- 
 ments m or on the land (buildings, land clearing, etc.). 
 
 11 
 
13 REGULATION 
 
 and enjoyment of the land, and this right cannot be denied 
 them because of the laws, acts, or customs of the genera- 
 tions past, to which they have not and could not have 
 given their consent. This is the Doctrine of Free Land, 
 and it is founded upon the six principles that I have set 
 forth above. 
 
 When God created man, he created the land, and he 
 created in man the necessity for the things that can 
 be secured only from the land. These are the necessities 
 of all the people, not only of the rich but of the poorest as 
 well. To put a price upon the land and exclude those who 
 cannot pay is contrary to nature's plan, against the law of 
 nature, and against man's natural right. 
 
 The poorest child has an equal right with the most for- 
 tunate to the land, and any condition precedent to the en- 
 joyment of its natural right that the poorest child cannot 
 comply with is wrong. 
 
 In every community where population is increasing and 
 the people are industrious, there is a constant increase in 
 the value of the land that is due, not to the efEorts of 
 those individuals that own and monopolize the land, but 
 to the growth and development of the community. This 
 value in the land is termed the "unearned increment." It 
 is created by society, and to society (the people collect- 
 ively) it belongs. 
 
 All value in land is created by society. The individual 
 owner cannot enhance the value of his land except as he, 
 as a member of society, contributes to the growth and de- 
 velopment of the commvinity. He may clear the land and 
 fence it, he may plow and enrich the soil, he may plant 
 trees ia the ground and build houses upon it; but he cannot 
 enhance the value of the land except as he, as an individual 
 member of society, by his industry contributes to the 
 growth and development of the community. He adds to 
 the value that society has given to the land the value 
 
THE DOCTRINE OP FREE LAND 13 
 
 that he has given to the improvements upon the land, 
 and thus makes the real estate (land and improvements) 
 more valuable. 
 All value in land belongs to society, which created it. 
 
CHAPTER lY 
 
 SDBSTITUTIOIT 
 
 Our present system of private monopoly of the land is 
 obviously wrong. It works an injustice upon those who are 
 shut out from a participation in the use and enjoyment 
 of the land, and upon all those from whom a tribute is 
 exacted by those who monopolize it. 
 
 If we were to confiscate the rights of those who are now 
 the owners of the land, an injustice would likewise be 
 done. If one man has invested his savings in land, while 
 another has put his savings in a bank, and a third has in- 
 vested his savings in a stock of merchandise, it would not 
 be just to take the land from the one, while protecting 
 by law the money in the bank and the goods of the mer- 
 chant. 
 
 Substitution, as the term is here used, is the substitution 
 of leases for a term of eighty years for the absolute, per- 
 petual, ittheritable estates in which all the land in this 
 country is now held ; to every person that now has absolute, 
 perpetual title to land such a lease would be given. 
 
 The man that provides for the future does so to provide 
 for himself and for his children. Men do not deprive 
 themselves to provide for imborn children of future gener- 
 ations. 
 
 If those who own and control the land to-day are per- 
 mitted to continue in undisturbed possession for a period 
 of eighty years, then they and their children will have free 
 use of the land. It is true that eighty years hence there 
 will be men and women living that will be sons and 
 daughters of some of those who are now the owners of the 
 
 14 
 
SDBSTITDTIOIT 15 
 
 land. The number of such persons will, howeTsr, be pro- 
 portionately very small, and, as they would have had poa- 
 session of the land during all the active part of their lives, 
 it would appear to be unwise to extend the time of such 
 lease term to more than eighty years for the benefit of 
 the few of the second generation that would then be living, 
 because of the great number that would be withheld from 
 a participation in that which is theirs by natural right. 
 
 If those who own the land to-day have not a good nat- 
 ural right; if there are others that have a right to an in- 
 terest in the land; if those who own and control the land 
 have secured it in order to provide for themselves and for 
 their children, and not for after generations; then, if 
 we can accord a measure of justice to all by sub- 
 stituting a lease right in the land for a term long enough 
 to permit those now owning it and their children to use it, 
 the circumstances would seem to well justify such sub- 
 stitution. 
 
 The value of an eighly-year estate in land is to-day 
 about eighty per cent of the value of an absolute, per- 
 petual title. However, the people are influenced so largely 
 in the purchase of land by the incentive to provide for 
 themselves and for their children, and so little by the 
 incentive to provide for their children's children and for 
 after generations, that, if all land were held under such 
 a lease and no absolute, perpetual title to land could be 
 had, the people's desire to own land would be as great as 
 now, and, therefore, at the beginning of such eighty-year 
 lease period its value would be but little affected by the 
 prospect of the termination of the owner's right in the 
 land at a time long after he had passed away. 
 
CHAPTER V 
 
 HISTORY OF WAGE REGULATION IN AUSTRALIA, NEW ZEA- 
 LAND, AND ENGLAND 
 
 The continent of Australia is divided into five states: 
 iVictoria, New South Wales, Queensland, South Australia, 
 and Western Australia. These, together with the state 
 of Tasmania, an island lying one hundred miles south of 
 the continent, and the dependency of British New Guinea, 
 compose the Commonwealth of Australia. Each state 
 has a democratic form of government, with legislative 
 bodies modeled after those of England. The dependency 
 is ruled directly by the federal government. 
 
 New Zealand, consisting of two large and a number of 
 small islands, is situated some twelve hundred miles south- 
 east of the continent. Its government is democratic in 
 form. 
 
 There is a close commercial relationship between the 
 people of Australia and New Zealand. The political in- 
 stitutions of both countries are comparatively new; both 
 have been settled and developed by English people; their 
 political and industrial conditions are similar, as are their 
 laws and political institutions. 
 
 Australia and New Zealand were the first countries to 
 enact legislation to prevent sweating,^ to determine and 
 maintain a living wage for all workers, to prevent strikes, 
 to substitute govermnent conciliation and arbitration for 
 strikes and lockouts, and to secure for the workers, through 
 
 1 Sweating is defined aa the employment of workers under one 
 or more of the following conditions: an unduly low rate of 
 wages; excessive hours of labor; unsanitary houses in which the 
 work is carried on. 
 
 16 
 
HISTORY OF WAGE REGULATION 17, 
 
 peaceable means and without the economic loss attendant 
 upon strikes, the same protection against the encroach- 
 ments of capital that the strike had previously afforded 
 them.'' 
 
 In 1890 there occurred a strike among the seamen in 
 Victoria, which spread to other trades and soon extended 
 throughout Australia and New Zealand. Industry and 
 commerce were so paralyzed that the Government found 
 it necessary to break the deadlock and effect a resumption 
 of commerce. The strike proved unsuccessful for the 
 workers, and weakened the organization and strength of 
 their unions. 
 
 So severely had the country suffered that the people be- 
 gan immediately to consider measures to prevent similar 
 disasters in the future. At the same time the labor lead- 
 ers saw the futility of attempting to improve the condi- 
 tion of labor through strikes which, in order to be effective, 
 must paralyze the business of the country and lose for 
 labor the support of a large element of the people whose 
 support is necessary for the success of such an imdertak- 
 ing. The organized labor element soon became au impor- 
 tant factor in politics both in Australia and New Zealand, 
 and has supported arbitration and wage-board legisla- 
 tion. 
 
 In 1890, the year of the seamen's strike, an industrial 
 conciliation and arbitration act was introduced in South 
 Australia, but the bill was not passed until 1894, "and 
 
 2 This brief account of the arbitration and wage-board laws 
 of Australia and New Zealand is based upon the writings of 
 Dr. Victor S. Clark, particularly the following: Labor Conditions 
 Ml 'New Zealand, Bulletin of the Bureau of Labor, No. 49, Nov., 
 1903; Labor Conditions in Australia, Bulletin of the Bureau of 
 Labor, No. 56, Jan., 1905; The Labor Movement in Australasia 
 '(1906); and upon the following British reports: Ernest Aves 
 Report (1908); and a report of the Labor Department of the 
 Board of Trade entitled Strikes and Lookouts (1912). 
 
18 REGULATION 
 
 was SO amended that when it did become a law it possessed 
 formal defects that made its provisions inoperative." 
 During the four years this bill was under discussion, some 
 form of industrial arbitration legislation was considered 
 by the parliament of every state of the Commonwealth 
 except those of Western Australia and Tasmania. 
 
 In 1894 'New Zealand passed an industrial conciliation 
 and arbitration act, which went into effect two years later. 
 Victoria passed a wage-board law in 1896. The other 
 states of the Commonwealth subsequently passed laws 
 similar either to the ^N'ew Zealand arbitration act or to 
 the Victoria wage-board law, and the laws of the Austra- 
 lian states and of New Zealand have since been amended 
 so as to combine the best and most important features 
 of these two laws. 
 
 The New Zealand arbitration law, as originally enacted, 
 provided for the division of the Colony into industrial 
 districts; the organization of industrial unions of em- 
 ployers and of workers; the organization of boards of 
 conciHation; and the establishment of a court of arbitra- 
 tion. 
 
 The industrial unions were voluntary organizations of 
 employers and of workers, respectively, engaged in the 
 same trade or branch of industry. Such organizations 
 had a corporate existence when the simple requirements 
 of the law with regard to the mode of organization and 
 registration had been complied with. Both employers 
 and workers went before the boards of conciliation and 
 the court of arbitration as responsible bodies, liable to be 
 sued for violations of the awards of the court and em- 
 powered to sue their members for dues and assessments. 
 Thus employers and workers entered into industrial 
 agreements with each other as responsible parties. 
 
 A board of conciliation was provided for each industrial 
 district. The industrial unions of employers and of 
 
HISTORY OP WAGE EEGULATION 19 
 
 workers nommated and elected an equal number of the 
 members of such boards, and these members elected a 
 disinterested party who acted as chairman. The awards 
 of the bo aids of conciliation became binding only when 
 ratified by both parties to the dispute or when neither 
 party appealed to the court of arbitration from the find- 
 ings of the board. Their awards were therefore of the 
 nature of voluntary agreements. All cases had first to 
 be brought before a board of conciliation, except that, by 
 the consent of both parties, the dispute might be brought 
 originally before the court of arbitration. The law was 
 later amended so that either party could carry its case 
 directly to the court. Boards of conciliation were seldom 
 resorted to, and the delays resulting from the amount of 
 business brought before the court modified the effective- 
 ness of the working of the law. In 1908 a new law went 
 into effect which requires all disputes to be heard before 
 conciliation councils before they can be appealed to the 
 court of arbitration. These councils are similar in their 
 organization to the wage boards of the Victoria law, but 
 are appointed for particular disputes and not to con- 
 sider all disputes arising in a given trade during a speci- 
 fied period. 
 
 The court of arbitration consists of three members ap- 
 pointed by the governor of the Colony. One is a judge of 
 the supreme court, one is appointed upon the recommenda- 
 tion of the industrial unions of employers, and one upon 
 the recommendation of the industrial unions of workers. 
 The court has power to determine all matters that may 
 be the subject of controversy between employers and work- 
 ers, including wages and hours and conditions of em- 
 ployment. Its awards are final, and can be made to apply 
 not only to the parties coming before it but to all others 
 engaged in the same trade or branch of industry. It can 
 amend its award at any time. 
 
20 EBGDLATION 
 
 Originally the law prohibited strikes only until the 
 award of the court had been made, the court stipulating 
 in the award the penalties for its violation. The law was 
 afterward amended, prohibiting strikes both before and 
 subsequent to the award of the court, and fixing severe 
 penalties for the violation of this provision. 
 
 JSTew South "Wales passed a voluntary arbitration law in 
 1892, which proved unsatisfactory. This law expired in 
 1896 and was not re-enacted. In 1901 this state passed an 
 arbitration law modeled after that of ISTew Zealand, but 
 containing more stringent provisions for the prevention 
 of strikes and with no provision for boards of conciliation. 
 
 In 1900 Western Australia passed a compulsory arbi- 
 tration law similar to that of New Zealand. It was 
 amended two years later, and continues in force. 
 
 The federal government of the Commonwealth passed 
 a compulsory arbitration act in 1904. This statute ap- 
 plies to industrial disputes extending beyond the borders 
 of a single state. It is modeled after the" New Zealand 
 law, but does not provide for boards of conciliation and 
 the court consists only of a judge of the federal supreme 
 court. The judge may appoint any justice of a state 
 supreme court as his deputy to exercise the functions of 
 the federal court. 
 
 The Victoria wage-board law was enacted for the pur- 
 pose of preventing sweating. The scope of the wage board 
 is far more limited than that of an arbitration court, the 
 boards having power to fix only a minimum wage, the 
 length of the working day, overtime rates, and the number 
 of unindentured apprentices employed. Strikes are not 
 prohibited, but the boards have performed valuable serv- 
 ices in the settlement of disputes by bringing employers 
 and employees together and to a better understanding of 
 the questions involved. A special board is established for 
 each trade. 
 
HISTORY OP WAGE REGULATION 31 
 
 The original Victoria act creating these hoards was passed 
 in 1896, the year the New Zealand arbitration law went into 
 actual operation. The original act was superseded by a second 
 law, passed in 1900, which extended the minimiun-wage board 
 provisions. This law expired by limitation in 1903, and was 
 superseded by the amended act now [1905] in force. 
 
 Minimum-wage boards are composed of not less than four 
 nor more than ten members, representing equally the employers 
 and employees in the trade under their jurisdiction, together 
 with a chairman elected by the other members, but who is not 
 one of the original members of the board. A separate board is 
 formed for each trade. The members were formerly elected by the 
 employers and employees, respectively, represented, but by the 
 1903 act they are made appointive, the governor remitting the 
 choice of members to the parties represented only in case one 
 fifth of the latter object in writing to his nominees. 
 
 The 1903 act establishes a court of industrial appeals, con- 
 sisting of a supreme court judge appointed by the governor in 
 council, with two assessors appointed by the court from nominees 
 of employers and employees, respectively. Provision is made 
 for a registrar, also appointed by the governor. The court has 
 power to amend the whole or any part of a board's decision 
 upon appeal by a majority of the representatives of either party 
 on the board in question, or of 25 per cent of the employees, or 
 of the employers of 25 per cent of the workers under the 
 jurisdiction of the board, or upon reference of the board's de- 
 cision to the court by the minister of labor. 
 
 Boards may be appointed for any factory occupation, provided 
 a resolution has been passed by either house of Parliament 
 declaring it is expedient to create such a board. A board may 
 fix either wage rates or piecework rates, or both, or may allow 
 manufacturers to fix piecework rates based on the minimum 
 wage that it establishes. A board must specify the hours for 
 which a rate of wages is fixed and the rate of pay for overtime. 
 The chief inspector of factories may grant a license to any aged, 
 infirm, or slow worker to work at less than the minimiun wage 
 fibSed by the board, provided that the number of persons li- 
 censed as slow workers in any factory shall not exceed one fifth 
 of the whole number of employees receiving not less than the 
 minimum wage in such factory, unless for special reasons the 
 minister of labor permits this proportion to be exceeded. 
 Former boards fixed the proportion of apprentices to journey- 
 
22 EBGULATIOlir 
 
 men, but the new [1903] law provides that this shall be done 
 only in case the apprentice or improver is not indentured. 
 
 The new law further defines the procedure and limits the 
 discretion of the boards in fixing a minimum wage by the fol- 
 lowing provision: "The board shall ascertain as a, question of 
 fact the average prices or rates of payment » • * paid by 
 reputable employers to employees of average capacity. The 
 lowest prices or rates as fixed by any determination shall in no 
 case exceed the average prices or rates as so ascertained." In 
 case the average prices or rates ascertained are not satisfactory, 
 the whole matter may be referred through the minister of labor 
 to the court of industrial appeals, which then proceeds to fix 
 a rate of wages, exercising the same power in this respect as 
 an arbitration court. The board is also allowed by the new att 
 to fix special wages, prices, or rates for aged, infirm, or slow 
 workers.^ 
 
 At the close of the year 1910 there were 91 wage 
 boards operating under the Victoria law, afEectiag about 
 11,0,000 employees. 
 
 In 1908 the New South Wales arbitration law expired 
 and was not renewed. A wage-board law took its place. 
 An act was also passed making to strike a crime under 
 heavier penalties than previously. 
 
 The arbitration law passed by South Australia in 1894 
 was so amended when passed that it did not prove success- 
 ful. This law was amended ia 1900 to provide for wage 
 boards, but did not become effective until again amended 
 in 1904. The first boards were formed in 1905. 
 
 Queensland passed a wage-board law similar to that 
 of Victoria, in 1908; Tasmania passed a similar law in 
 1910. 
 
 As previously stated, New Zealand has amended its 
 arbitration law so as to provide that all disputes must 
 first be heard before "conciliation councils," which are 
 composed of representatives of employers and of workers 
 
 3 The preceding five paragraphs are a condensation of pages 
 62-63, Bulletin of the Bureau of Labor, No. 56 (1905). 
 
HISTORY OF WAGE EEGDLATIOlSr 23 
 
 in the trade in which the dispute occurs and are, therefore, 
 similar to the wage boards of the Victoria law. 
 
 The federal arbitration law is still in force, as is also 
 the arbitration law of Western Australia. 
 
 Comparing the New Zealand arbitration law with the 
 Victoria wage-board law, we observe: First, the purpose 
 of the arbitration law is to prevent strikes; that of the 
 wage-board law, to prevent sweating. Second, the arbi- 
 tration court has jurisdiction over all matters that may 
 be the subject of industrial dispute; the powers of the 
 wage board are more limited, the boards being empowered 
 to determine only a minimum wage (usually, ia theory 
 at least, the lowest wage the worker can receive without 
 becoming a menace to society), the length of the working 
 day, rates for overtime, and matters pertaining to appren- 
 ticeship and slow workers. Third, but one board of con- 
 ciliation was established in each district and there is but 
 one court of arbitration for the whole Colony; while a wage 
 board is established for each trade or branch of industry 
 coming under the operation of the wage-board law, and 
 the members of each wage board have a practical knowl- 
 edge of the conditions of the trade for which the board 
 is appointed. Fourth, under the wage-board law em- 
 ployers cannot pay less than the determined minimum 
 wage, but strikes are not prohibited; while under the arbi- 
 tration law strikes are prohibited in all cases where the 
 dispute is submitted to the court by either party. 
 
 As previously stated, the tendency of recent Austral- 
 asian legislation has been to take from each of the two 
 distinct forms of industrial legislation that which is best 
 and, so, to combine the features of compulsory arbitration 
 of industrial disputes with the determination of all con- 
 ditions of employment by special boards. 
 
 Where the unions are not permitted to strike to enforce 
 their demand for a "closed shop," some of the laws have 
 
24 EEGDLATIOHr 
 
 permitted the court to grant preference of employment to 
 members of trade unions, but tbis does not ordinarily 
 work a bardship upon either employer or employee, as the 
 law requires such unions to accept, for a small fee^, all 
 applicants that are workers in the trade. 
 
 A law providing for the establishment of wage boards 
 was passed in England, October 20, 1909, and went into 
 effect, January 1, 1910. 
 
 The law designates four trades to which the act shall 
 apply, and provides that the Board of Trade may, sub- 
 ject to the approval of Parliament, apply the act to 
 any trade "if they are satisfied that the rate of wages pre- 
 vailing^in any branch of the trade is exceptionally low, as 
 compared with that in other employments, and that the 
 other circumstances of the trade are such as to render the 
 application of this act to the trade expedient." 
 
 The trade boards, as wage boards are termed in this 
 act, are composed of an equal number of representatives 
 of employers and workers, and of members appointed by 
 the Board of Trade; the latter shall be less in number 
 than one half the representative members of the board. 
 The Board of Trade shall appoint the chairman of the 
 board. 
 
 Trade boards shall fix minimum rates of wages for time- 
 work and may also fix general minimum rates of wages 
 for piecework, and these rates (whether time or piece 
 rates) may be iixed so as to apply universally to the trade, 
 or so as to apply to any special process in the work of the 
 trade or to any special class of workers in the trade or to 
 any special area. 
 
 The determinations of the trade boards shall not have 
 full effect until six months after notice of same shall have 
 been given and such determinations shall have been ap- 
 proved by the Board of Trade. 
 
 Trade boards are permitted to fix special piece rates 
 
HISTORY OF WAGE REGULATION 25 
 
 for infirm or slow workers where no general piece rate 
 is applicable, or to exempt them from the operation of 
 the time rate determinations if the work is of such a 
 nature that a piece rate wiU not apply. 
 
 "A trade board may establish district trade committees 
 consisting partly of members of the trade board and partly 
 of persons not being members of the trade board but repre- 
 senting employers or workers engaged in the trade and 
 constituted in accordance with regulations made for the 
 purpose by the Board of Trade and acting for such area 
 as the trade board may determine." 
 
 "A trade board may refer to a district trade committee 
 for their report and recommendations any matter which 
 they think it expedient so to refer, and may also, if they 
 think fit, delegate to a district trade committee any of 
 their powers and duties under this act, other than their 
 power and duty to fix a minimum time rate or general 
 minimum piece rate." 
 
 A writer in The Outlook in June, 1911, stated that 
 the act then affected at least 400,000 workers. 
 
 The "Coal Mines (Minimum Wage) Act, 1913," was 
 passed in England as a result of a strike among the coal 
 miners, and became a law, March 29, 1913. This law ap- 
 plies only to "workmen employed underground in coal 
 mines (including mines of stratified ironstone)," and dif- 
 fers in detail from the Trade Boards Act, 1909. It pro- 
 vides for the organization by the Board of Trade of a wage 
 board, in the act known as a joint district board, in each 
 of the twenty-two districts into which the country is by 
 and for the purpose of the act divided. The law pro- 
 vides that if it appears that a general district minimum 
 wage rate is not "applicable in the case of any group or 
 class of coal mines within the district, owing to the spe- 
 cial circumstances of the group or class of mines," special 
 rates for such group or class of mines, either higher or 
 
36 EEGULATION 
 
 lower than tHe general district rate, may be fixed. The 
 purpose of this clause is to permit certain mines to be 
 worked at less than the general minimum wage rate, where 
 it appears that they could not be profitably worked if the 
 general minimum rate were paid. In this the law dif- 
 fers from all other minimum-wage laws, which provide that 
 a minimum wage rate, when established, shall apply to all 
 workers in a given trade withia a district, and this fea- 
 ture of the law will be severely criticised by many people. 
 
 On February 29, 1912, a strike occurred among the coal 
 miners of the British Isles whereby a million miners were 
 thrown out of employment. The situation was described 
 by an English paper as the most menacing since the com- 
 ing of the Spanish Armada. Trade became paralyzed; 
 the fires in England's factories were extinguished; 
 trains could not be moved. A million workers in other 
 trades became idle. The Coal Mines Act was passed by 
 Parliament, and became a law, March 29th, just one month 
 after the strike went into effect, and work was resumed; 
 the greatest industrial dispute in the history of England 
 had been settled quickly and without violence. 
 
 We find, then, that England, after a careful study of 
 industrial conditions at home and the working of indus- 
 trial arbitration and wage-board laws in Australia and 
 New Zealand, passed a wage-board law in 1909 without 
 serious opposition; that after observing the working of 
 the law for more than two yesirs, the principle of a mini- 
 mum wage determined by wage boards was extended to 
 one of the most important industries in that country; and 
 that within a little more than two years after the original 
 law went into effect, the most serious industrial dispute in 
 the history of Great Britain was brought speedily to a close 
 by the application of this remedy. 
 
 This legislation is new, and no one can yet assert that it 
 will prove whoUy adequate, or that no change will be re- 
 
HISTORY OF WAGE EEGDLATION 27 
 
 quired. Moreover, it does not prohibit strikes, and the 
 coal miners may again resort to strike in an effort to im- 
 prove their condition. However, I am confident that a 
 proposal to repeal the wage legislation of England would 
 be opposed by a majority of the people of every party; 
 and the miners know that, should they strike, they would 
 receive little sympathy from the people, now that the law 
 provides a peaceable means for the settlement of wage 
 disputes. Without the sympathy and moral support of 
 the public, the minefs could not hope to win in a strike 
 that would interrupt the industries and commerce of the 
 country. 
 
 In the early part of the year 1911 a bill was passed 
 by the legislature of Massachusetts providing for the ap- 
 pointment of a commission to investigate industrial condi- 
 tions in that state and report upon the advisability of en- 
 acting wage-board legislation. The commission made an 
 exhaustive report, January, 1912, and recommended a law 
 providing for the establishment of wage boards to fix a 
 minimum wage for women and minors in the poorly paid 
 industries of the state. In June of the same year the legis- 
 lature passed a bill that differs from the one proposed by 
 the committee in that the determinations of the boards can- 
 not be enforced by law. 
 
 By a vote of the people of Ohio,* September 3, 1912, 
 the constitution of that state was amended as follows: — 
 
 "Laws may be passed fixing and regulating th« hours of 
 labor, establishing a minimum wage, and providing for the 
 comfort, health, safety, and general welfare of all employees; 
 and no other provision of the constitution shall impair or limit 
 this power." 
 
 Canada enacted industrial conciliation legislation in 
 1900, 1903, 1906, and 1907. The Industrial Disputes 
 
 4 The vote was 353,588 for and 189,228 against the amendment. 
 
■28 REGULATION 
 
 Investigation Act of 1907, the principal act now in force, 
 provides tliat in certain occupations (public utilities, in- 
 cluding municipal service corporations, transportation 
 companies of all kinds, and occupations subsidiary to trans- 
 portation, and also coal and metal mines) it shall be 
 unlawful for workmen to strike or for employers to lock 
 out until after application has been made for a special 
 board to investigate and report upon the matters in con- 
 troversy and such board has been appointed by the Gov- 
 ernment and its report has been published. The work- 
 ing of the law has been favorably commented upon, and 
 there seems to be little opposition to it and no probability 
 of its repeal. 
 
CHAPTEE VI 
 
 EECENT COMMENT UPON THE EEGDLATIOK 01" PRICES 
 
 A notable series of editorial articles appeared in The 
 Outlook, June 3, 10, 17, and July 29, 1911, from which I 
 quote. 
 
 THE STAITOARD OIL DECISION— AND AFTER 
 IThe Outlook, June 3, 1911.) 
 
 * * * As construed by the Supreme Court, the Anti-Trust 
 Law accomplishes a certain amount of good, and it has been 
 a good thing to obtain the decision that has been obtained against 
 the Standard Oil Company. But as a means of effectually grap- 
 pling on behalf of the whole people with the problem created 
 by what are commonly called trusts — ^that is, of enormous com- 
 binations of corporate capital engaged in inter-State business — 
 the Anti-Trust Law is radically and vitally defective, and any 
 effort to strengthen it would be worse than futile, and would 
 result only in prolonging the time during which the corporations 
 will escape control of the kind demanded in the interests of the 
 people. The Anti-Trust Law was framed on the theory that it 
 was possible to turn back the wheels of progress in industrial- 
 ism, and in an age of combination to put a stop to the combina- 
 tions under which business was carried on. While, as I have 
 said, the Anti-Trust Law as now construed does accomplish a 
 certain amount of good, it was out of the question that, framed 
 as it was in such a spirit and with such a purpose, it could 
 achieve in any but the smallest degree what its framers hoped; 
 and any effort to achieve this purpose simply by making the 
 law more stringent will result either in nothing or in changing 
 the situation for the worse. 
 
 The Inter-State Commerce Law was framed on precisely the 
 opposite theory. It was framed on the theory that certain 
 monopolies — for every railway is, because of its very nature, 
 to a certain extent a monopoly, or has a, certain monopolistic 
 tendency — ^because of their tremendous power as business entities 
 
 29 
 
30 , REGULATION" 
 
 and of the impossibility of the individual man grappling with 
 them on even terms, should be rigidly supervised and controlled 
 by the agent of the people as a whole, that is, by the National 
 Government. We are as yet very far from having achieved the 
 best possible results under the Inter-State Commerce Law, but 
 we have steadily improved both the law and its administration, 
 and are accomplishing far more for the control of those monopo- 
 lies called railways under the Inter-State Commerce Law than 
 is now being accomplished, or can by any possibility be accom- 
 plished, in the way of control of other business monopolies by 
 the Anti-Trust Law or any alteration thereof. 
 
 What is urgently needed is the enactment of drastic and far- 
 reaching legislation which shall put the great inter-State busi- 
 ness corporations of the type of the Standard Oil Company, the 
 Sugar Trust, the Steel Trust, and the like, at least as completely 
 under the control and regulation of the Government in each and 
 every respect as the inter-State railways are now put. To break 
 up the Standard Oil Company, as the recent decision has broken 
 it up, does a certain amount of good; but it does not do any- 
 thing like the amount of good that would be achieved from the 
 standpoint of the public if the proper Governmental body were 
 given the same supervision and control over it as the Inter- 
 State Commerce Commission has established over certain of the 
 railways of the country. It may well be that in the end Gov- 
 ernment control of these great inter-State corporations may have 
 to go much further than is indicated by the present Government 
 control over the railways; but, in any event, the only possible 
 satisfactory method of dealing with these great corporations of 
 a monopolistic trend which are not railways is to follow the 
 lines along which the Nation has gone in dealing with those 
 of them which are railways, altering and developing the policy 
 as conditions and events shall justify. Our prime object must 
 be to have the regulation accomplished by continuous adminis- 
 trative action, and not by necessarily intermittent lawsuits. 
 
 THEODORE ROOSEVELT. 
 
 SHALL THE GOVERNMENT LIMIT PRICES? 
 (The Outlook, June 17, 1911.) 
 
 Last week The Outlook, in its comment on the tobacco deci- 
 sion of the Supreme Court, said that control of corporations by 
 lawsuit had been shown to be inadequate, and should be dis- 
 placed by control through a Federal Administrative Bureau 
 
COMMENT UPON THE EEGULATION OF PRICES 31 
 
 which should be authorized, among other things, to regulate 
 prices. A few years ago such a proposition would have been 
 scouted as out of the question by any great leader in industry; 
 yet, as that editorial statement was going to press, a leader of 
 one of the greatest industries in the country was publicly saying 
 the same thing. Ex-Judge Elbert H. Gary, chief executive offi- 
 cial of the United States Steel Corporation, was testifying before 
 a committee charged with investigating the so-called Steel Trust. 
 In the course of his testimony Judge Gary said, "We must come 
 to enforced publicity and Governmental control." Thereupon, the 
 following colloquy, as reported in the press dispatch, took place 
 between him and members of the committee: — 
 
 "Do you mean Government control of prices?" 
 
 "Yes. I mean just that. The Steel Corporation would be 
 glad if it knew where it stood. We want to be free from dan- 
 ger, free from criticism by the public. If we had some place we 
 could go to and say. Here are the facts and figures of our prop- 
 erty, our cost prices; tell us what we have a right to charge— 
 if we had some such Governmental body, we would be glad to 
 avail ourselves of the opportunity. Corporations have no right 
 to ignore public questions and public interests.'" 
 
 "Do you mean that co-operation is bound to take the place of 
 competition, and that co-operation must be regulated by the Gov- 
 ernment?" 
 
 "I mean just that." 
 
 It is clear from Mr. Gary's testimony that his experience aa 
 the executive head of one of the greatest industrial organizations 
 in the world has convinced him that a law merely punishing 
 corporations and their managers for practices tending to monop- 
 oly is unjust alike to the public and to the Gorporationa— 
 unjust to the corporations because it does not enable them to 
 know what kind of combination is legitimate, and unjust to 
 the public because it does not, as a matter of fact, prevent com- 
 binations that are illegitimate. • * * 
 
 GOVERNMENT CONTROL OF PRICES 
 CTfte Outlook, July 29, 1911.) 
 In a speech a,t Duluth last week the Attorney-General of the 
 United States committed himself to the opinion '(which The 
 Outlook has repeatedly expressed, and which Judge Gary, the 
 head of the Steel Corporation, has advanced) that, in order to 
 eontrol great aggregations of wealth, the Government would find 
 it advantageous, and might find it absolutely necessary, to exer- 
 cise oyer industrial organizations the same power of regulation 
 
32 EBGULATION 
 
 that it now exercises over inter-State railways. This idea, which 
 is not new to Outlook readers, but which was reiterated by 
 Mr. Eooaevelt in his editorial on "The Standard Oil Decision — 
 And After," in The Outlook for June 3, which was set forth 
 with more elaboration in an Outlook editorial in the issue for 
 June 10, and which in substance has been repeated in The Outlook 
 more than once since then, is evidently not so impracticable and 
 visionary as some would believe. At least, it is regarded as 
 reasonable by both the industrial leader and the learned lawyer. 
 The futility of attempting to regulate monopoly by lawsuit was 
 suggested when Mr. Wickersham said: "The Federal Department 
 of Justice is not organized or equipped to maintain constant 
 supervision and control over business organizations. It deals 
 only with cases of violation of the law. The activities of an 
 administrative board or commission would be directed to pre- 
 venting such violations and in aiding business men to maintain 
 a continued status of harmony with the requirements of law." 
 Mr. Wickersham frankly accepted Government control of prices 
 as a possible factor in any such regulation, He noted that as 
 Congress had provided means for preventing discrimination and 
 unreasonableness in the prices charged for inter-State transporta- 
 tion, so it might establish a similar legislative rule with respect 
 to the prices of commodities which are the subject of inter-State 
 commerce. He pointed out, therefore, that Government control 
 of the prices of commodities was not so much a new principle 
 as the new application of an established principle — ^namely, "that 
 when property is used in a manner to make it of public conse- 
 quence and affects the commimity at large, it becomes clothed 
 with a public use and may be controlled by the public for the 
 common good." That this is not confined to questions of trans- 
 portation, but is applicable to other kinds of service, he indi- 
 cated by saying: "In the early days in some parts of the country 
 statutes were enacted to regulate the business of millers and 
 the rates they might charge for grinding. At that time it was 
 a matter of public concern that every farmer should have the 
 right to have his corn ground at a reasonable rate. So," he 
 added, "to-day the conduct of the great commerce on staple arti- 
 cles among the States is become a matter of public consequence, 
 and the courts have upheld legislation regulating it and pre- 
 scribing some of the conditions under which it may be carried 
 on. To require, as one of these conditions, that prices for com- 
 modities dealt in in inter-State commerce must be reasonable 
 
COMMENT UPON THE EEaULATION OF PRICES 33 
 
 only involves a new application of the same principle." • * • 
 The main point, however, was that stated at the beginning, that 
 regulation of corporations will be adequate only when it is car- 
 ried out by means of administrative control. This fact is fully 
 recognized in the case of any such natural monopoly as a rail- 
 way. It is equally true when applied to monopolies which arise 
 not so much from the nature of things as by the force of events. 
 
CHAPTER VII 
 
 THE QUANTITY THEOKT OF MONBT 
 
 AU modem economic writers agree that when an in- 
 crease in the volume of the currency occurs without a cor- 
 responding increase in the volume of business, the value of 
 money will depreciate and the prices of commodities will 
 rise; when a shrinkage occurs in the volume of the cur- 
 rency without a corresponding shrinkage in the volume of 
 business, the value of money will rise (its purchasing power 
 will be increased) and the general level of prices will fall ; 
 that, while the price level is affected by other influences, a 
 fair control of the value or purchasing power of the dollar — 
 of the general level of prices — could be maintained by a 
 regulation of the volume of the currency, increasing the 
 circulation when prices show a tendency to fall and con- 
 tracting the circulation when prices are rising. 
 
 Professor Parsons says: — • 
 
 "The value of money, that is, the general level of prices, can 
 be controlled by controlling the volume of the currency. Prices 
 can be made to rise by increasing the volume of money in cir- 
 culation, and prices can be made to fall by decreasing that volume. 
 
 "Some writers appear to think that the volume of money has 
 no relation to prices. They say that the volume of money may 
 increase very much without aflfecting prices, while on the other 
 hand prices may rise or fall through the movement of credit 
 without any change in the volume of legal tender money, and 
 from these facts they conclude that the money volume has no 
 controlling influence on prices. But this conclusion is not justi- 
 fied by the premises. A given movement of the money volume 
 may not always cause prices to move any more than gravitation 
 will always cause a body to fall, or than an electric current 
 will always cause a trolley car to move. It depends upon the 
 circumstances of the case hoto much current will be required 
 before the car will move, and how much change in the money 
 volume must be made in order to cause a movement of prices. 
 
 34 
 
THB QUANTITY! THEORY OF MONET 35 
 
 If population and business are growing as fast as th« money 
 volume, or if people accustom themselves to using more money 
 in doing the same business, paying cash more frequently and 
 relying on credit less, there may be a large accession to the money 
 volume without a rise of prices. • • * 
 
 "There is no precise quantitative relation between money move- 
 ment and price movement because of the interference of other 
 forces; neither is every price movement due to money movement. 
 The truth is simply that a suffioient movement of the money 
 volume will cause a movement of prices, and that when a price 
 change is produced by another cause a sufficient counter move- 
 ment of the money volume will cancel the change. • * * 
 
 "The conclusion that the money volume has a determining 
 influence upon prices is simply one application of the law of 
 supply and demand, and is affirmed by all the leading economists. 
 
 "Professor Alfred Marshall, the highest living English author- 
 ity in political economy, says : 'I accept the common doctrine that 
 prices generally rise, other things being equal, in proportion to 
 the volume of money. » • * I include paper money.' 
 
 "Pres. F. A. Walker, the highest authority on this side of 
 the water upon the question of finance, writes (Sec. 218, Polit. 
 Econ.) : 'Mr. Ricardo has rightly said that, by limiting the 
 supply, any degree of value can be given to the money of a 
 country, be it of gold and silver, or of paper,' giving us in a 
 single sentence his own conclusion and that of Eicardo, whom 
 he calls 'the most illustrious writer known to monetary science.' 
 
 "Professor Sumner (Hist. Amer. Currency, p. 221), speaking 
 of irredeemable paper, says; 'The whole story which precedes 
 goes to show that the value of a paper currency depends on its 
 amount. At the time of issue, or during a war in which the 
 issuer is engaged, it depends in some degree on his credit; but 
 when it settles down in peace as the normal medium of exchange, 
 its value comes to depend purely on its amount. This amount, 
 of course, is relative to the requirements of the country for the 
 purpose of performing its exchanges.' 
 
 "David Hume says in his Essay on Money: 'It is the pro- 
 portion between the circulating money and the commodities in 
 the market that determines prices.' 
 
 "John Stuart Mill says (Polit. Econ. iii, 8, Sees. 2, 3; and 
 iii, 13, Sec. 1): 'The value or purchasing power of money de- 
 pends in the first instance on demand and supply. * •* * In 
 point of fact, money is bought and sold like other things, wheit 
 
36 EEGDLATION 
 
 ever other things are bought and sold for money. Whoever sells 
 corn, or tallow, or cotton buys money. Whoever buys bread, 
 or ■wine, or clothes sells money to the dealer in those articles. 
 • *. * If there were less money in circulation in the com- 
 munity and the same amount of goods to be sold, less money 
 would be given for them, and they would be sold at lower 
 prices. * * * That an increase of the quantity of money 
 raises prices, and a diminution lowers them, is the most ele- 
 mentary proposition in the theory of currency. * * * The 
 immediate agency in determining the value of money is its quan- 
 tity. If the quantity, instead of depending on the ordinary mo- 
 tives of profit and loss, could be arbitrarily fixed by authority, 
 the value would depend on the fiat of that authority. The quan- 
 tity of a paper currency not convertible into the metals at the 
 option of the holder can be arbitrarily fixed, especially if the 
 issuer is the sovereign power of the State. Wherefore, the value 
 of such a currency is entirely within the control of the Gov- 
 ernment.'" ^{Bational Money, pp. 100-101.) 
 
 Some writers, recognizing the fact that a steady price 
 level, a dollar of a fixed and unvarying purchasing 
 power, is one of the greatest economic needs of the people 
 of the country to-day, have advocated that our money 
 system he revised to provide for a board that would observe 
 every change ia the price level and advise the Secretary 
 of the Treasury, who would expand and contract the 
 volume of the currency so as to maintain a fixed price level 
 and a dollar of constant value. 
 
 It would appear, however, that if the volume of the cur- 
 rency were regulated by the demand for money, so that 
 there would always be enough money in circulation to 
 supply the needs of the commercial world and never more, 
 such a regulation of the money volume would not assure a 
 steady price level. If this is true, the converse must also 
 be true: if the volume of the currency were so regulated 
 that the value of the dollar and the general level of prices 
 would remain constant, the volume of such currency would 
 not be always equal to and never in excess of the demand 
 of the commercial world. 
 
CHAPTER VIII 
 
 THE MULTIPLE UNIT AND STEADY PRICES 
 
 The value of a commodity is its power to command other 
 commodities in exchange. The price of a commodity is 
 its power to command money in exchange. The value of 
 money is its power to command commodities in exchange. 
 
 Therefore, when the price of commodities generally or 
 averaged rises, the value of money falls, for it will com- 
 mand less of commodities in exchajige. When the price 
 of commodities falls, the value of money rises, for it will 
 then command more of commodities in exchange. When 
 a rise in prices occurs it is useless to ask whether money 
 'has depreciated or the values of commodities have advanced. 
 The important fact is that a change in the ratio between 
 the value of money and the vaJue of commodities generally 
 has occurred: money will command less of commodities 
 and therefore has depreciated; commodities will command 
 more money and therefore have advanced. 
 
 If money were a commodity possessing only those at- 
 tributes or qualities of commodities such as wheat and 
 wool, then if A promised to pay B one hundred dollars 
 in a year and at that time paid B the hundred dollars, 
 no one could possibly find fault with the transaction. But 
 money possesses attributes that other commodities do 
 not possess, and it is only because of these attributes or 
 qualities that the people accept it in exchange for com- 
 modities and services. 
 
 The people cannot use money to satisfy their wants — < 
 they cannot eat it or wear it or build houses of it — and 
 they could not exchange it for useful things did not those 
 
 37 
 
38 REGULATION 
 
 with whom they trade know that they could, in turn, 
 exchange it for other commodities and services. The 
 people would not accept money in exchange if it did 
 hot possess the quality of being generally acceptable. 
 They might accept flour, sugar, or coal in exchange for 
 commodities and services, even though they did not have 
 assurance that they could exchange them again for other 
 things. Money differs from other commodities in that 
 it must be generally acceptable before it has any consider- 
 able value. 
 
 Money is a measure of value. If A agrees to work for 
 B for a year for value, it is essential that the amount 
 or value of his compensation be expressed. It might be 
 agreed that he would work for so much wheat, or for so 
 much wool, or for certain quantities of a variety of com- 
 modities, but, for the convenience of both employer and 
 employed, the compensation is expressed in a unit in 
 which the values of all commodities are expressed, and 
 A is paid in a commodity that is exchangeable for all 
 commodities. The unit is the dollar, and the commodity 
 in which A is paid is money. It is essential that this unit 
 be a constant and unchanging measure of value, as the 
 yard is of extension, the pound of weight, the bushel of 
 capacity. It is apparent that if A borrowed one hun- 
 dred bushels of wheat from B and promised to return one 
 hundred and five bushels after the harvest, if the capacity 
 of the bushel measure was reduced before the harvest bo 
 that, although A fiUed the measure one hundred and five 
 times for B, yet B received less wheat than the hundred 
 bushels loaned to A, a system that would permit such 
 change in the capacity of the bushel measure would defraud 
 B, would hamper men in their dealings with each other, 
 and would have a demoralizing influence upon industry 
 and trade. Likewise, if the measure had been increased 
 ijx. size between the time the debt was incurred, wd 
 
THE MULTIPLE UNIT AND STEADY PEIOES 39 
 
 the time of its fulfillment, then A would have had to re- 
 turn to B more wheat than had heen contemplated by 
 them when the seed was loaned to A. 
 
 Money affords a means of storing value or power of 
 purchase. Did it not perform this function it would not 
 be generally acceptable. If it represented a value that 
 had to be used or consumed at once, it would be like ripe 
 bananas or summer eggs. No workman would accept a 
 load of ripe bananas in exchange for a month's labor, 
 though he might accept five tons of coal, which he could 
 put away and use at some future time. When money is 
 depreciating, when the prices of commodities are advanc- 
 ing, the savings of the people, when represented by money 
 on hand or in bank, are constantly diminishing. It is 
 essential that the dollar be constant in value — in purchas- 
 ing power, in command over commodities in exchange. 
 
 Professor Andrews says: "Increase in the value of 
 money robs debtors. It forces every one of them to pay 
 more than he covenanted — not more dollars but more 
 value, the given number of dollars embodying at date 
 of payment greater value than at date of contract. De- 
 crease in the value of money robs creditors, necessitating 
 each to put up, in payment of what is due to him, with 
 a smaller modicum of value than was agreed upon." 
 
 When the dollar is depreciating, when the prices of com- 
 modities are rising, the wages of the workers must ad- 
 vance proportionately or they suffer a loss and do not re- 
 ceive compensation of the value agreed upon. They can- 
 not, as a rule, secure such increase in wages without 
 making a strong demand upon their employers. When the 
 dollar is appreciating, when the prices of commodities are 
 falling, the wages of the workers must reduce or else the 
 employer will, suffer a loss and the workers will receive 
 compensation of more value than was agreed upon; but 
 every effort upon the part of employers to effect a reduc- 
 
40 EEGULATIOH 
 
 tion in wages is resisted by the -workers. Every effort 
 either to increase or reduce the wage scale results in a strife 
 between employer and employed, and this condition ag- 
 gravates the labor problem, the greatest political, economic, 
 and social problem before the world to-day. 
 
 The need of a dollar of constant value, a dollar that will 
 at all times exchange for the same amount of commodities 
 and services generally, is apparent. 
 
 Such a dollar can be secured only by adopting as the 
 basis of our money system a multiple commodity unit, a 
 unit composed of all commodities, rents, wages, and serv- 
 ices that are important factors in the total consumption 
 of the mass of the people. Such a imit would be com- 
 posed of certain definite quantities and amounts of cer- 
 tain definite kinds and qualities of all such commodities, 
 rents, wages, and services. Each commodity would ba 
 taken in quantity or amount in the proportion or ratio to 
 the total of the unit that the total consumption of such 
 commodity bears to the total consumption of the country. 
 Likewise, the amount of each rent, wage, and service that 
 would enter into the unit would be determined by its im- 
 portance as a factor in the total consumption. The total 
 price of the given quantities and amounts of the given 
 kinds and qualities of the commodities and services ^ com- 
 posing the unit would be determined, and this total would 
 not change but would remain the same at all times. It 
 would be possible for the prices of the various commodities 
 and services of which the unit would be composed to 
 fluctuate, that is, the ratio of the value of each such 
 commodity and service to the value of the other com- 
 modities and services of which it would be composed to 
 change, yet the total remain the same. 
 
 1 For convenience, I here use the term commodities and serv- 
 ices to mean "commoditieSj rents, wages, and services," and it 
 is used in this sense wherever it occurs in this book. 
 
THE MULTIPLE UNIT AND STEADY PRICES 41 
 
 The prices of commodities and services within the unit 
 would fluctuate as natural conditions would require. It 
 is important, therefore, that each commodity, rent, wage, 
 and service that enters into the unit be an important fac- 
 tor in the total consumption of the mass of the people, 
 and that the quantity or amount of each commodity, rent, 
 wage, and service taken to form the unit bear the same 
 ratio to the total of the unit that such commodity, rent, 
 wage, or service bears to the total consumption of the 
 country. Otherwise those commodities and services that 
 are large factors in the total consumption of the people 
 might be advanced in price, those commodities and serv- 
 ices that are small factors be reduced, and the unit 
 remain in balance, that is, the total price of the given 
 quantities and qualities of the various commodities and 
 services of which it would be composed, remain unchanged ; 
 yet the cost of living of the people would have advanced, 
 for the things they commonly use would have been ad- 
 vanced and the things they seldom buy would have been 
 reduced. If a ten per cent advance in the price of 
 sugar could be offset by a ten per cent reduction in the 
 price of champagne and the unit thus kept in balance, it 
 is apparent that the balance of such a unit might be 
 maintained yet the cost of living of the people be greatly 
 increased, the purchasing power of their dollar be greatly 
 depreciated. 
 
 If the unit was made up of those commodities and 
 services that are important factors in the total con- 
 sumption of the mass of the people, and each commodity 
 and service was taken in the proportion in which it enters 
 into the total consumption, then an advance in the price 
 of sugar would be offset by a corresponding reduction in 
 the price of one or several equally important commodities, 
 and the reduction in the price of such commodity or com- 
 modities would be sufficient exactly to offset the ad- 
 
43 EEGULATION 
 
 vance in the price of sugar, so that the dollar in tiie 
 hand of the worker would command just as much of eom- 
 modities generally or averaged as before, and would have 
 exactly the same purchasing power at all times. 
 
 Such a unit as I have described might be called a dollar. 
 It is evident that if such a unit, were called a dollar and 
 made the unit of our money system, it would be neces- 
 sary to provide some mechanism by which such dollar 
 could be made always to command the given amounts and 
 qualities of the commodities and services of which the 
 unit would be composed. This being accomplished, the 
 dollar would have a constant value^ a fixed purchasing 
 power. If such a unit were constituted a million-dollar 
 unit, then a million dollars would always command the 
 given quantities and qualities of the various commodities 
 and services of which it would be composed, never more or 
 less; a mOlion dollars would always have the same pur- 
 chasing power, and a dollar would likewise remain con- 
 stant in value. 
 
 It would not be difficiUt to devise a means by which the 
 ratio between the value of commodities averaged and th& 
 value of the dollar could be maintained without variation. 
 Writers have suggested that the multiple imit be used as a 
 means of observing and measuring fluctuations in the pur- 
 chasing power of the dollar, and that the currency be 
 expanded and contracted from time to time to such extent 
 as should be required in order to maintain a fair degree of 
 constancy ia the purchasing power of the money. 
 
 In the following chapter I have outlined a plan by 
 which a multiple commodity unit can be established and 
 made the actual imit of a money system (not simply a 
 thing by which the fluctuations in the value of the dollar 
 can be observed and measured) and its total price main- 
 Ijoned the same at all times. The constant price total of 
 the unit — ^its balance — ^would not be maintained by a 
 
THE MULTIPLE UNIT AND STEADY PEICES 43 
 
 regulation of tlie volume of the currency. The currency 
 would be regulated in volume, expandiag and contracting 
 ■with the expansion and contraction of industry and com- 
 merce, so that there would always be enough money in 
 circulation and never more. Such a money would be 
 constant in value, unvarying in its purchasing power. 
 
CHAPTER IX 
 
 KEaUtATION 
 
 I propose: — ■ 
 
 That the people declare their right to the land; that 
 they declare the title to aU the land to rest in the people 
 collectively — ^in the Government. ; 
 
 That wherever in so doing the people take from any 
 person, firm, or corporation the fee-simple right or title 
 to land, they give to such person, firm, or corporation, in 
 lieu thereof, a lease to such land for a term of eighty 
 years, reserving to themselves the right to put such re- 
 strictions upon the use of the land as may be expedient in 
 order to prevent waste of resources, and the right to 
 regulate the prices to be charged by such lessees as land 
 rent and for raw material. 
 
 That the people adopt a multiple unit money system, 
 and that the National Government issue a paper money 
 as the only form of money except coin of small denomina- 
 tions made of an inexpensive material. Such money to 
 be not in the form of a note, not a promise to pay some- 
 thing on demand or at some future time, not convertible 
 into gold or silver or commodities upon demand or at 
 any future time except as it would be used in the settle- 
 ment of debts in the usual course of business. The Gov- 
 ernment to agree that it will accept this money in the pay- 
 ment of all taxes and duties and for all public dues of 
 every nature, and to guarantee that this money will be 
 accepted at par by all the people for commodities and 
 services and in the settlement of all debts. 
 
 That the Government retire all money now in cir- 
 
 44 
 
REGULATION 45 
 
 dilation, giving such money issued upon a multiple com- 
 modity base in exchange. That it sell the gold, thus re- 
 ceived in exchange for such money, to the people at the 
 market price. 
 
 That the country be divided into districts. Each state 
 might constitute one district; or several states might be 
 included in some districts ; or districts- might be formed 
 with new lines drawn with regard for soil and climatic 
 conditions, products, occupation of the people, etc.; or 
 two, three, or four different divisions of the country into 
 districts might be made, so that the districts of the four 
 different kinds of district boards hereinafter described 
 would not coincide. 
 
 That the people provide for tlie election of district land 
 boards, district wage boards, district profit boards, and 
 district money boards; likewise, for the election of a na- 
 tional land board, national wage board, national profit 
 board, and national money board. 
 
 That the national land board, acting with the assistance 
 and advice of the district land boards, fix a tariff of 
 maximum prices of raw materials and maximum land 
 rents, the prices and rates varying in the different districts 
 as conditions would require. 
 
 That the national wage board, acting witli the assistance 
 and advice of the district wage boards, fix a tariff of 
 minimum wages, the rates varying according to the nature 
 of the work and in the different districts as conditions 
 would require in order that aU the people be justly dealt 
 with and that the people of one district be not favored 
 over those of another. 
 
 That the national wage board, acting with the assist- 
 ance and advice of the district wage boards, regulate the 
 hours of labor in the various trades and industries so 
 that the work of the country will be divided among all 
 the people and' none need be idle. 
 
46 EEGULATION 
 
 That each district wage hoard determine what part of 
 an ordinary day's work each slow worker in its district 
 is able to perform, and that each slow worker be per- 
 mitted to work for such part of the determined minimum 
 wage, except where a piece rate is applicable. 
 
 That each district wage board arbitrate all industrial 
 disputes arising within its district where the business 
 of the employing party to the dispute is conducted wholly 
 within the district. That the national wage board arbi- 
 trate all other industrial disputes. 
 
 That it be unlawful to strike, to threaten to strike, to 
 lock out, or to threaten to lock out. 
 
 That the national profit board, acting with the assist- 
 ance and advice of the district profit boards, fix a tariff 
 of the maximimi profits that may be charged by all that 
 engage in gainful pursuits, the rate varying according to 
 the nature of the business and in the different districts 
 as conditions would require, and the maximum profit that 
 may be charged in the rental and sale of real estate.^ 
 
 That all profi.t in excess of the maximum profit per- 
 mitted by the tariff of maximum profits issued by the 
 national profit board be forfeited to the Government. 
 That nothing be forfeited because of increase in the value 
 of real estate (land and improvements), except that all 
 profit derived from the rental or sale of real estate in ex- 
 
 iThe terms land rent, raw material, wages, interest, and 
 profits are here used in their commercial sense. The elements 
 of -which each of these factors would he composed would vary 
 in the different trades and would be determined by expediency 
 and the practice generally prevailing in each trade. To illus- 
 trate: in some trades interest would be reckoned as an element 
 in profits; in others wages of management would be so reck- 
 oned; in others both of these elements would be included in 
 profits; while in others neither of these elaaents would be so 
 included. 
 
EEGDLATION 4'? 
 
 cess of the naaximitm profit permitted by the tariff of 
 maxinmin profits be forfeited to the Grovemment. 
 
 That the national money board, acting with the as- 
 sistance and advice of the district money boards : — 
 
 (a) Establish a multiple monetary nnit, this -unit 
 to be composed of every commodity, rent, -wage, and 
 service that is an important factor in the total consump- 
 tion of the mass of the people, the commodities, rents, 
 wages, and services being taken in quantities and amounts 
 in the proportion in which they enter into the total con- 
 sumption of the coimtry, the kind or quality of each com- 
 modity, rent, wage, and service to be certain, and the 
 total price of the unit to be determined. 
 
 (b) Determine each week the price total of the unit ac- 
 cording to the prices generally prevailing throughout the 
 country, that is, determine the total price of the given 
 quantities and amounts of the given kinds and qualities 
 of the commodities, rents, wages^ and services composing 
 the unit; furnish such information to the other national 
 boards and to the district boards throughout the country, 
 and publish such reports. 
 
 (c) Meet each day with members of the national land 
 board, national wage board, and national profit board and 
 so advise and govern the actions of these boards that, 
 in revising their several tariffs or schedules from day to 
 day, they make their revisions in such a way that the 
 price total of the unit will be the same at all times. 
 
 (d) Call in all money now in circulation, and issue 
 therefor paper money issued upon a multiple commodity 
 base as hereinbefore described. Issue such money from 
 time to time and in such amounts as may be required. 
 
 (e) Establish Government loan offices in the principal 
 cities and towns throughout the country; these to be under 
 
48 EEGULATION 
 
 the supervision and control of the national money board, 
 assisted in the supervision and in the examination of se- 
 curities and accounts by the district money boards. 
 
 (f) Fix a maximum rate of interest that may be 
 charged for the use of money, the rate varying according 
 to the nature of the security and in the different districts 
 as conditions -would require, and loan money at any time, 
 in any amount, to any person having good and sufficient 
 security of any kind, at a rate slightly higher than such 
 maximum rate, so that the people will apply to the 
 Government loan offices for loans only during periods of 
 money scarcity and vrill immediately repay such loans 
 vrhen the period of money scarcity is over. 
 
 That the national money board ascertain from time to 
 time the approximate amount of the money of this country 
 circulating in other countries; and that the Government 
 purchase interest-bearing securities from time to time in 
 such amounts as shall be required in order that it hold se- 
 curities at all times of an amount not less than the amount 
 of its money circulating in other countries. 
 
 That whenever it is necessary to increase the perma- 
 nent circulation, money of the required amount be 
 issued and placed in the treasury of the Government, and 
 the regular revenues of the Government be reduced so 
 that the surplus thus created will disappear; that as 
 long as there is a surplus in the treasury, such money be 
 loaned on call or short time, in order that the money of 
 such new issue be placed immediately into circulation; 
 that the money thus loaned by the Government (and 
 therefore placed in temporary circulation) be called in as 
 fast as the reduction in the regular revenues would make it 
 possible to do so without increasing the amount of money 
 in the treasury. 
 
 That if it should be necessary at any time to decrease 
 
EEGULATION 49 
 
 the permanent circulation, money of tlie required 
 amount be taken from the treasury of the Government 
 and canceled or destroyed, and the regular revenues of 
 the Government be increased enough to replace such money 
 canceled;, except, however, that, if the money of this 
 country that had been circulating in other countries should 
 flow back into this country, and if, in consequence, it 
 should be necessary to reduce the volume of the currency, 
 then the Government sell securities of such amount as 
 shall be required and cancel or destroy the money received 
 for the securities sold. 
 
 That the circulation be temporarily increased by aU 
 loans made by the Government to the people through the 
 Government loan offices, by issuing new money to the 
 amount of all loans made; and that such money be re- 
 tired from circulation when such loans are repaid. 
 
 That a national bureau of accounts, for the examination 
 of accounts and the detection of frauds, be established, 
 consisting of several chief examiners, and of a supervisor 
 and several examiners in each district. That all that en- 
 gage in business be required to keep accurate books of , 
 account and preserve all invoices and vouchers, and that 
 retail merchants be required to mark the price upon all 
 goods in their stocks. That the bureau of accounts have 
 the power to establish such rules for the keeping of ac- 
 counts, invoices, and vouchers as shall be necessary to 
 facilitate the examination of accounts and the detection of 
 fraud. 
 
 That whenever commodities are imported, the cost of 
 such commodities, freight added, be ascertained; the price 
 the importer would have had to pay for the same com- 
 modities if produced at home and bought upon home 
 markets, as determined by the tariffs of the several boards, 
 be ascertained. If the cost of the goods imported be 
 less than the price the importer would have had to pay 
 
50 EBGULATION 
 
 for the same goods produced at home and bought upon 
 home markets, then a duty be charged equal to the dif- 
 ference, so that goods imported will cost the importer 
 the same as goods produced at home and bought upon 
 home markets. 
 
 Under present conditions the worker may receive an 
 advance in wages, yet fare more poorly than he did before ; 
 the money-loaner may receive a high nominal interest 
 rate, yet be unable to purchase as much with principal and 
 interest when the money is returned to him as he could 
 have purchased with the principal at the time the money 
 was loaned. There is no absolute, unchanging standard 
 by which the people can measure the degree of their 
 prosperity and determine definitely the effect of political 
 changes upon their material condition. 
 
 Political issues and economic problems are intricate and 
 complicated; many are presented to the people in such a 
 way that they cannot fully comprehend them. Because 
 of the haze surrounding trifling political issues, politicians 
 have been able to magnify the importance of such issues 
 and keep the attention of the people centered upon prob- 
 lems the solution of which could not afford any im- 
 portant relief. 
 
 Under Eegulation the worker would have an absolute, 
 unchanging standard by which he could measure the 
 degree of his prosperity, and he could not fail to note any 
 change that might occur either for better or worse; he 
 could accurately compare his condition at any time with 
 his condition at any other time. The dollar would have 
 an unchanging purchasing power, and as long as his in- 
 come remained the same there could be no change in the 
 amount of necessities and luxuries it would provide. 
 
KEQULATION 51 
 
 Every change in Ms income -would indicate, unmistakably, 
 a proportionate change in his material welfare. 
 
 Political issues would be of a simple character and 
 would pertain to things of which the people have intimate 
 knowledge. Political issues could not be obscured or 
 magnified ; the people could not be worked into a ferment 
 over issues of no vital importance ; the people could not be 
 confused or led astray by the studied eloquence of poli- 
 ticians. 
 
 Under Eegulation the issues would be : Shall those who 
 control the land receive either more or less? Shall the 
 workers receive either more or less ? Shall those who con- 
 trol the money of the business enterprises of the country 
 receive either more or less? Shall those who engage in 
 business receive either a larger or a smaller profit? 
 
 Any increase or decrease in the part of the production 
 of the country that either class would receive would be 
 clearly indicated by a correspondiag change in the rates 
 of the published tarifEs of the several boards; and any 
 change iu the price or rate of either land rent, raw 
 material, wages, interest, or profits would mean an 
 actual change in the part of the total production the cor- 
 responding class would receive, to the extent indicated by 
 such change in the price or rate. 
 
 The following objection will be raised. You have said 
 that Eegulation would determine and maintain a natural, 
 just, and equitable ratio between the part of produc- 
 tion those who own the land would receive, the part 
 the wage-earners would receive, the part that would 
 represent interest, and the part that would represent 
 profits. Yet you propose that the people elect by a ma- 
 jority vote men that shall constitute the various boards, 
 and that these boards determine such ratio. You have 
 said that when a scientific remedy is found, it will not be 
 
53 EEGDLATION 
 
 of the nature of class legislation. If tliese boards are 
 made up of men chosen by the vote of the majority of the 
 people, will they not legislate in favor of the majority? 
 vrill they not determiae and maintaia such ratio between 
 the four parts of production as will be in the interest 
 of the mass of the people by whom they are elected? and 
 vnll not the minority be unjustly dealt with? — ^wiU not 
 the determinations of such boards be of the nature of class 
 legislation? Could a ratio that is natural, just, and 
 equitable be maintained when such ratio would be de- 
 termined by a vote of the majority of the people? You 
 have said that when a scientific remedy such as we are 
 looking for is found, it wiU. not require for its success 
 an ideal citizenship, a composite citizen'' that is alto- 
 gether wise, honest, and just, but that it will be of such 
 nature that it will operate successfully under social, moral, 
 and educational conditions such as exist at the present 
 time. Does not Eegulation suppose an ideal state of so- 
 ciety in which the composite citizen is infallible in his 
 judgment in political matters, honest, and free from the 
 influence of self-interest? 
 
 Fully ninety-eight per cent of the people of the coun- 
 try suffer more or less to-day because of the laws and 
 customs of the time which give to two per cent of the 
 people far more than their just share of the country's pro- 
 duction. The people regard our present system of land 
 monopoly and the control of our vast commercial enter- 
 prises by a few, who pay the smallest wage for which 
 they can secure workers and charge the highest price for 
 commodities and services that the people can be forced to 
 
 2 The composite citizen is an imaginary person possessing in- 
 telligence, moral character, and discretion in political matters 
 in a degree equal to the average intelligence, moral character, 
 and discretion in political matters of all the citizens of the 
 coimtry. 
 
EBGULATION 53 
 
 pay, as natural and Just, or at least as being according to 
 laws and customs to which they or their fathers have given 
 consent. The Ninety-eight regard as unnatural, unlawful, 
 unethical, any attempt to wrest from the Two any part of 
 their large share. And so the Two continue year after 
 year to make this division of the products of the labor of 
 the Ninety-eight. They could not continue such division 
 of production for a single day without the moral sup- 
 port of the Ninety-eight, who maintain the laws and 
 institutions of the land that protect the interests of the 
 Two and divide the production of the people. Yet the 
 Two feel secure in the enjoyment of these rights, con- 
 fident that the Ninety-eight will continue forever to main- 
 tain and defend the laws, customs, and institutions of the 
 land that divide the production of the people, giving 
 a large share to the Two and a small share to the Ninety- 
 eight. 
 
 The contention, then, that if the people are given the 
 power to make laws and rates that will determine the 
 part of the production of the country each class of the 
 people shall receive, the workers, the great majority of 
 the people, wiH make laws and rates unjust to the small 
 minority of the voters that constitute the class whose in- 
 terests are opposed to those of the majority, is refuted 
 by facts with which every reader is familiar. 
 
 While the people are actuated largely by self-interest in 
 their dealings one with another, history and the observa- 
 tions of every reader will prove that in political matters 
 and in all matters in which the people act collectively, the 
 majority wiU always support that policy that they be- 
 lieve to be ethical, fair, and right. Would the leaders 
 of any political party dare appeal to the people to 
 endorse a political measure, admitting it to be unjust 
 or wrong, because it would be of profit to the class to 
 
54 EEGULATION 
 
 whom they look for support? No. They would know 
 full well tiiat it could not succeed unless they could so 
 present it to the people that it would appear to them to be 
 fair and right.* 
 
 The lawless element constitutes a small part in the mass 
 
 sMany readers will, upon first thought, take exception to 
 this statement. This will be due partly to a misunderstanding 
 of my statement, partly to a misapprehension of the facts. 
 
 It will be said. The majority of the people of each district 
 have always supported whichever tariff policy would best pro- 
 mote their private interests; in 1896, when free silver was an 
 issue, the majority of the people in the silver producing and in 
 the debtor districts voted for the measure, while the majority 
 of the people in the non-silver producing and creditor districts 
 voted against it. These statements are, with important ex- 
 ceptions, true. It will be argued from these and similar facts 
 that the majority of the people will always support the policy 
 that will best promote their private interests without regard for 
 right or justice. 
 
 As long as there is doubt in the minds of the people as to the 
 justice of a cause, they will either support or oppose it as it will 
 best promote their private interests. No sane man will support 
 a cause that is against his private interests if he is not sure that 
 it is right. 
 
 Ever since the tariff became an issue, men that have held the 
 confidence of the people have advocated a protective tariff, while 
 others equally deserving of the confidence of the people have 
 opposed such a policy. Likewise, during the free-silver cam- 
 paign of '96, men that held the confidence of the people supported 
 the measure, while men equally deserving of their confidence 
 opposed it. It was to be expected, therefore, that the mass of 
 the people, confused and uncertain as to which side was right in 
 each of these issues, would support whichever policy would best 
 promote their private interests. 
 
 My contention here is that, for instance, had the advocates 
 of a protective tariff admitted that it was unjust or wrong 
 — had all the voters believed that a free-trade policy was right 
 and just — the majority of the voters in every district would 
 have endorsed a free-trade policy, and that this principle will 
 apply in the case of the free-silver or any othsr issue. 
 
EBGULATION 55 
 
 of the people. Those who demand that right be done 
 to all in the making and enforcement of our laws con- 
 stitute so large a part that no political measure can suc- 
 ceed that is manifestly unjust. This element constitutes 
 a heavy ialance wheel, and this balance wheel is the 
 safeguard of the nation. It is important that we under- 
 stand its influence and its power. 
 
 Most people are actuated largely by self-interest in their 
 dealings one with another. As long as competition among 
 indlTiduals is keen, and those who are unsuccessful in 
 the struggle must suffer want, and those who have pro- 
 vided abundantly for the day must still make provision for 
 the morrow, this self-interest will continue to be manifest. 
 Under a wise economic scheme that would assure every 
 man that is willing to work that he need never fear abject 
 poverty, men would be less selfish than they appear to be 
 to-day. As the economic conditions of the country im- 
 prove, the composite citizen will develop morally and in- 
 tellectually ; and as the people that compose the balance 
 wheel of the nation grow morally and intellectually and 
 become less selfish, this heavy balance wheel will become 
 more and more efficient, a greater power for right and 
 justice in the land, a greater protection for the few against 
 the selfishness of the many. 
 
 What is a natural, just, and equitable ratio between the 
 part of production that shall go to those who control the 
 land, the part that shall go to those who labor, the part 
 that shall go to capital as interest, and the part that shall 
 go to the entrepreneur as profit? How can such ratio 
 be determined? 
 
 The ratio between the four parts of production, if a 
 natural, just, and right ratio be maintained, will change 
 constantly. We cannot revolutionize society in a day. 
 Many conditions existing to-day in the social and indus- 
 trial world are the result of habits of thought deep seated 
 
56 REGULATION' 
 
 in thie minds of the people of this generation, which will 
 be transmitted in a diminishing degree to those of the 
 future. The efficiency of the workers, their ideals and 
 standards of living, their needs and requirements, are 
 gradually rising. The natural ratio is not an arbitrary 
 thing. An instrument to determine it must be sensitive 
 to every change in the condition of the people of each of 
 the four classes; the hand upon its dial must be actuated 
 by the heart throbs of the people; it must be sensitive to 
 every desire within the hearts of the mass to rise to higher 
 intellectual and industrial conditions; it must know and 
 feel and understand the conditions of all the people. 
 
 The heavy balance wheel of the nation, which is com- 
 posed of people of all classes, of all walks of life, of all 
 parts of the nation, who comprehend the condition of the 
 people of all classes and feel the pulse of the commercial 
 world, will feel and know instinctively when and where a 
 change in the ratio is needed; it will act justly, and the 
 ratio that it ■will maintain will be natural, fair, and just to 
 all. In no other way can the determination of a natural 
 ratio be accomplished. 
 
 The essential attributes or qualities that good money 
 must possess are: — 
 
 (1) It must be generally acceptable without exception. 
 It must be good for the payment of all debts public and 
 private, and all the people must be wUling to accept it in 
 exchange for commodities and services and in the settle- 
 ment of all debts. 
 
 (2) It must be constant in value or purchasing power. 
 It must at all times exchange for the same amount of com- 
 modities generally, not of some one commodity but of all 
 commodities averaged. It must command exactly the 
 same amount of commodities at the time a debt is 
 paid that it did at the time the debt was created, the exact 
 
REGULATION 57 
 
 amount that was contemplated by both debtor and creditor, 
 or else either the one party or the other will be defrauded. 
 
 The money in which the workers are paid their wages 
 should command the same amount of commodities at all 
 times. If its purchasing power is diminished, the worker 
 is defrauded and is compelled to demand an advance in 
 wages. If its purchasing power is increased, the employer 
 suffers a loss and enforces a reduction in wages. Every 
 such change in wage scale results in friction between em- 
 ployer and employed and is destructive of the friendly re- 
 lation and mutual imderstanding that should exist be- 
 tween these two important classes. 
 
 It is important that the people be permitted to enter 
 into long-term contracts whose terms are expressed in 
 money, such as life insurance policies and long-term leases, 
 without danger of loss to either party by reason of a 
 change in the value of the money. The proceeds of a life 
 insurance policy should exchange for exactly the same 
 amount of commodities (not of some one commodity, but 
 of all commodities averaged) as was contemplated by 
 both the insurer and the insured at the time the policy 
 was taken, no matter how long it may have run. 
 
 (3) It must be elastic and regulated in volume, so 
 that there will be enough money in circulation at all times 
 to meet the demands of the commercial world and never 
 more than is required. Money cannot be constant in 
 value if the demand for it is greater at one time 
 than another, that is, if it is scarce at one time and 
 plentiful at another. Money lubricates the wheels of 
 commerce and causes them to run smoothly. It is not, or 
 should not be, a commodity, but something to facilitate the 
 exchange of commodities. The whole life and purpose of 
 the industrial and commercial world is the production and 
 exchange of commodities. If the money supply is inade- 
 quate, it is as if the water supply of a canal through which 
 
68 EBGULATION 
 
 many ships are waiting to pass is inadequate to fill the 
 locks quickly. 
 
 (4) It must be difficult to counterfeit. A good money 
 must be one that cannot be easily imitated. To counter- 
 feit the money that the law says shall be accepted in 
 the payment of all debts is to work an injustice and a 
 fraud either upon some innocent person or upon the Gov- 
 ernment. The quantity of a currency that is easily coun- 
 terfeited cannot be regulated without a great loss to the 
 issuer in the retirement of such counterfeit money. 
 
 (5) Least essential, yet important, it must be made 
 of the most inexpensive material and must be produced 
 by the most inexpensive process that will give the people 
 a money that is durable and difficult of imitation. 
 
 Under Eegulation the price of labor and of all com- 
 modities, rents, and services would be determined and 
 would be expressed in dollars of constant value. An em- 
 ployer would know that a certain number of dollars would 
 always command a certain amount of certain commodi- 
 ties, rents, or services, or a certain amount of a certain kind 
 of labor. Likewise, the worker would know that a certain 
 number of dollars would always purchase a certain amount 
 of such commodities and services as he required. Em- 
 ployer and employee and the people generally would, there- 
 fore, accept such money without hesitation. Such money, 
 with a definite, unchanging purchasing power, would be 
 preferred by all the people to any other form of money ; in 
 fact, there would be no other money. Since such money 
 would buy all commodities in American markets and settle 
 all debts public and private, due and payable in this coun- 
 try, and would be constant in purchasing power, the people 
 of other countries would accept it and would probably 
 prefer it to their own depreciating money until such 
 time as their countries should adopt a similar money 
 system. 
 
EEGULATION 59 
 
 As long as we can purchase a definite amount of com- 
 modities averaged with a thousand dollars, the amount 
 that can be purchased with a dollar wiU remain constant, 
 its command over commodities wiU not change. So, if 
 we establish a multiple commodity monetary unit, made up 
 of certain fixed quantities of all common commodities and 
 services, the total price of which is one million dollars — ■ 
 a million-dollar multiple unit — and a million dollars will 
 at all times purchase the certain given quantities of all 
 these commodities and services, — then a million dollars 
 of such money will always and at all times have exactly 
 the same purchasing power, and a dollar will always pur- 
 chase the same amount of commodities generally or 
 averaged. 
 
 Since the prices of commodities and services generally 
 would be determined and would be expressed in such 
 money, the purchasing power of the dollar and the general 
 level of prices would not depend upon the quantity of 
 money in circulation. The quantity of such currency 
 would be determined by the demand or need of the com- 
 mercial world, and the interest rate would remain fixed 
 and invariable. 
 
 We find, then, that the money of Eegulation would 
 'possess the first three attributes or qualities of good money, 
 acceptability, constant purchasing power, and elastic and 
 regulated volume. 
 
 All writers appear to agree that, with present methods 
 of manufacture, coin can be more easUy counterfeited and 
 requires less skiU to imitate than does paper money 
 such as our gold and silver certificates and national bank 
 notes. 
 
 Professor Parsons quotes Del Mar as follows: "The 
 silk threaded distinctive fibre paper, the water marks, the 
 printing in colors, the highly artistic vignettes, the 
 geometrical lathe work, the numbers, the signatures, and 
 
60 EEQULATIOIT 
 
 other mechanical safeguards of the modern paper note 
 render it far more difficult to imitate than coin." 
 
 Forty-eight dollars will buy enough silver to make one 
 hundred silver dollars of standard fineness. The silver 
 ia such a counterfeit dollar would be identical with that 
 of the Government's coin, and the simpler process by 
 which it is produced makes the counterfeiting of the sil- 
 ver dollar more inviting to the criminal than the imita- 
 tion of our paper money. 
 
 By substituting paper for gold and silver, the Govern- 
 ment would secure all the precious metal in circulation in 
 this country. It would sell the gold, thus received in ex- 
 change for its paper, to the people at the market price. 
 The people would use this gold in the settlement of 
 foreign debts as long as other nations continued to use 
 gold as the basis of their money systems, thus further 
 depreciating the value of gold upon the market, making 
 it easier for the people of this country to secure gold with 
 which to pay debts due in other countries. This deprecia- 
 tion of the gold money of the world and the advantage 
 it would give to the people of this country in dealing with 
 the people of gold-using countries would hasten the time 
 when the multiple monetary system would be adopted by all 
 commercial nations. If such fall in the value of gold and 
 the depreciation of the money of gold-using countries and 
 the stability of our own medium would cause the people of 
 other countries to prefer our money to their own deprecia- 
 ting currency, the flow of our money into other countries 
 would cause a further depreciation of their money due to 
 the increase in their circulation, and would result in a fur- 
 ther advance in prices in such countries. The use of our 
 money in foreign countries would be of benefit to us and 
 would be a strong power in preserving peace between this 
 and all other nations, as will be hereinafter explaiued. 
 
REGULATION 61 
 
 By the substitution of paper for gold money, the labor 
 now expended in the production of gold would be saved, 
 and thousands of men now engaged in mining gold 
 would be employed in work beneficial to society. Eegula- 
 tion would solve the problem of unemployment, and the em- 
 ployment of these men in other occupations would not 
 result, as it would now, in an increase in the number of 
 unemployed, but would tend either to decrease the hours 
 of employment for all the people or to give to all more of 
 the comforts and luxuries of life. 
 
 We find, then, that the money of Eegulation would pos- 
 sess the fourth and fifth attributes of good money, it 
 would be difiicult to counterfeit and it would be pro- 
 duced of an inexpensive material and by an inexpensive 
 process. 
 
 What would be the eifect of the multiple unit monetary 
 system that you propose upon our commercial rela- 
 tions with foreign countries? Could we buy in foreign 
 markets ? Would our money be accepted in foreign coun- 
 tries in the settlement of debts? Could we maintain an 
 independent money system if our money was better than 
 that of foreign countries, circulated freely in foreign 
 countries, and was at a premium there? Would not such 
 foreign demand for our money create a money scarcity at 
 home, or require an overissue, or cause our Government 
 to create too great a liability? 
 
 This country's supply of gold is more than one fourth 
 of the gold supply of the entire world. If we discontinue 
 the use of it as money and throw our gold upon the other 
 gold-using countries, it will increase their supply of gold 
 more than one third. This would result in a further 
 depreciation of gold and a further appreciation in the 
 prices of commodities in gold-using countries. 
 
 International balances are settled to-day, not with gold 
 coin but with gold bullion. The people of this country 
 
63 REGULATION 
 
 could contimie to pay their foreign debts in bullion just 
 as they do now. With the further depreciation of gold, 
 the people would profit by such mode of settlement, and 
 would undoubtedly prefer to pay their foreign debts in 
 depreciating gold rather than in a money of constant 
 value. But the question that we are now considering 
 is. What would be the effect of the payment of our foreign 
 debts in the money that I propose, and the circulation of 
 such money in foreign countries? 
 
 All important commercial nations buy large quantities 
 of various commodities in American markets. American 
 money would settle the bills for such purchases and would 
 be easy to transport. Therefore, American money issued 
 upon a multiple commodity base, having a constant pur- 
 chasing power, exchanging at all times for the same 
 amount of commodities generally, would be accepted in 
 all countries; and since their moneys would be constantly 
 depreciating, American money issued upon such multiple 
 base would probably be preferred by the people of such 
 countries to their own sinking currency. For, should they 
 be paid a debt in their own gold money and deposit it in 
 a bank or otherwise hold it for a time, the money would 
 shrink from day to day, and when they would attempt to 
 purchase commodities with it they would find that it 
 would command less of commodities generally than it 
 would have at the time they received it. 
 
 The greater the extent to which our money would go 
 over to other countries, the greater would be the deprecia- 
 tion of their money — the greater the advance in the price 
 of commodities, the greater the dissatisfaction of the people 
 of such countries with their gold money system, the greater 
 their political unrest. 
 
 No matter to what extent our money would circulate in 
 other countries, no money stringency could occur at home ; 
 prices and interest rates would not be affected. When 
 
REGULATION" 63 
 
 other countries would adopt a similar money system and 
 that part of our money that had been circulating in such 
 countries would flow back into this country, no oversupply 
 could occur ; prices and interest rates would not be affected. 
 The GoTcrnment would issue money from time to time to 
 take the place of its money circulating in other countries, 
 and would purchase interest-bearing securities of an equal 
 amount. When money that had been circulating in other 
 countries would flow back into this country, if an over- 
 supply should be thus created, then the Government would 
 sell securities of the required amount and the money re- 
 ceived for the securities sold would be canceled or de- 
 stroyed. 
 
 The Government would receive interest upon an amount 
 approximately equal to the amount of its money circulating 
 in other countries. This would be equivalent to the peo- 
 ple of other countries paying interest to the Government 
 upon its money circulating abroad. The Government 
 would, therefore, derive a revenue from the circulation of 
 its money in other countries. 
 
 The fact that American money issued upon a multiple 
 commodity base would circulate freely in all countries, 
 especially until such time as they should adopt a similar 
 money system, would not hamper in any way the operation 
 of the multiple monetary system in this country nor prove 
 in any way a menace to the people. I believe all other 
 commercial nations would, however, be compelled to adopt 
 a multiple system. 
 
 The adoption of such system by any country and the 
 circulation of its money in other countries would be the 
 strongest power that could be found to promote peace be- 
 tween it and all other nations. If America were on a 
 multiple basis and our money were circulating in large 
 quantities in England, France, Germany, and throughout 
 all Europe, our money being valuable in foreign coun- 
 
64 EEGULATION 
 
 tries only because it would settle bills for goods produced 
 in America and bought in American markets, the threat 
 of any nation to engage in a war with this country, thus 
 hampering our production and interrupting our commerce, 
 would meet with immediate opposition upon the part of 
 every commercial interest in every country throughout the 
 world where American money had found its way. 
 
 How could the prices of the various commodities and 
 services of which the multiple unit would be composed, 
 fluctuate as natural conditions would require, yet the price 
 total of the unit remain the same at all times? 
 
 The price of a commodity or service is a comparison of 
 its value with the values of all other commodities and ■ 
 services; it is the expression of the ratio of its value to 
 the values of all other things. 
 
 It matters not what the price of a commodity, expressed 
 in dollars and cents, may be, as long as its ratio to the 
 prices of all other things is correct. 
 
 The multiple unit would be composed of all commodities, 
 rents, wages, and services that are important factors in 
 the total consumption of the mass of the people. It would 
 not matter, therefore, what the price of any one of the 
 items of the unit would be, as long as its relation to the 
 prices of all the other items was correct. 
 
 Let us suppose, for convenience, that a thousand-dollar 
 unit was established (the unit would, of course, be much 
 larger) ; that after the revision of the prices of the items 
 of the unit for the week was completed, the unit was totaled 
 and its total price found to be $1033.64. The price of each 
 commodity, rent, wage, and service of which the unit 
 would be composed might then be multiplied by the frac- 
 tion 1000/'1032.64. The prices of all the items of the 
 unit would then be in the same ratio or proportion as 
 before, and the total would be $1000. 
 
EEQULATION 65 
 
 This method of maintaining a constant price total of 
 the unit is presented in order that the reader may under- 
 stand what I have said in the three paragraphs that 
 precede it. Such a method would not be practical, how- 
 ever, for it would necessitate a slight change each day in 
 the price of every item of the unit. 
 
 The method that I have proposed for accomplishing 
 the same result is as follows : that members of the national 
 money board meet each day with members of the national 
 land board, national wage board, and national profit board 
 and so advise and govern the actions of these boards that, 
 in revising their several tariffs or schedules from day to 
 day, they make their revisions in such a way that the price 
 total of the unit will be the same at all times. 
 
 To the hurried but thoughtful reader it may appear 
 that, while I propose to establish a tariff of minimum 
 wages, a tariff of maximum prices of raw materials and 
 maximum land rents, a maximum interest rate, and a 
 tariff of maximum profits, yet in my discussion I assume 
 that these schedules or tariffs would be absolute; that 
 men might pay more than the minimum wage, or charge 
 less than the maximum price for raw material or land 
 rent, or charge less than the maximum rate of interest, 
 or charge less profit than the maximum profit permitted 
 by the tariff of maximum profits; that the price level 
 would be thus affected, and, therefore, that a constant 
 price level could not be maintained. 
 
 It would be folly to propose to establish absolute sched- 
 ules or tariffs and to prohibit men tO' pay a higher wage, 
 or to charge less for raw material, land rent, or interest, 
 or to charge less profit. The price level would be 
 slightly affected in this way; but the fluctuation thus 
 caused would be so slight that it would be perceptible 
 only to the money board, which would have superior 
 
66 EEGULATION 
 
 facilities for observing the price level and measuring all 
 changes. 
 
 The tariffs of the several boards •woiild be revised from 
 day to day as conditions would require, and members of 
 the national money board would meet each day with mem- 
 bers of the other national boards and so advise and govern 
 the actions of these boards that they would make their re- 
 visions in such a way that the price total of the 
 monetary unit would be ezactly the same at all times. 
 
 You have said that all increase in the value of land is 
 created by society, and to society (the people collectively) 
 it belongs. Under Eegulation, would not those who woidd 
 control the land during the eighty-year lease period receive 
 a benefit from the increase in the value of the land due to 
 the growth and development of the community? 
 
 No. The decrease in the value of the lease estates in 
 the land, due to the constant decrease in the length of 
 the lease period, would be suflScient to offset the increase 
 in the value of the land due to the growth and develop- 
 ment of the community. 
 
 The following question will occur to the thoughtful 
 economic student. The wealth of the country may be 
 divided into three classes: first, land; second, the ma- 
 chinery of production and distribution, commonly termed 
 productive machinery; third, the wealth that is neither 
 land nor productive machinery. Eegulation would remedy 
 the wrong that is done the people by reason of the un- 
 natural, unjust, and inequitable division of the wealth 
 that is land and of the wealth that is productive ma- 
 chinery; but would it remedy the wrong that is done 
 the people to-day by reason of the unnatural, unjust, and! 
 inequitable division of the wealth that is neither land 
 nor productive machinery? 
 
EEGULATION 67 
 
 The present unnatural, unjust, and inequitable division 
 of this class of wealth is due to the private monopoly of 
 the land and an unnatural, unjust, and inequitable division 
 of production. 
 
 Eegulation would restore the title to the land to the 
 people and would efEect a natural, just, and equitable di- 
 vision of production. 
 
 As the private monopoly of the land and an unnatural 
 and unjust division of production has resulted in an un- 
 natural, unjust, and inequitable division of the wealth 
 that is neither land nor productive machinery, so a re- 
 turn of the title to the land to the people and a natural, 
 just, and equitable division of production would result 
 in a natural, just, and equitable division of the wealth 
 that is neither land nor productive machinery. 
 
 Might the people fail to attain the object of Eegulation 
 on account of the inefficiency or dishonesty of public offi- 
 cials? 
 
 This is, indeed, an important question and one that we 
 should ask when considering any proposed remedy for 
 the political ills of the nation. 
 
 Under Eegulation each district wage board would con- 
 sider and make recommendations to the national wage 
 board in matters pertaining to the wage scale applying 
 within its district. Each member of each district wage 
 board could promise the people before election to support a 
 certain definite policy, and the people could know at all 
 times whether or not he was keeping his promise. For in- 
 stance, he might promise to support the existing wage scale, 
 or an increase in wages in certain trades and a decrease in 
 wages in certain other trades. The vote upon each pro- 
 posal to alter the existing wage scale would be recorded, 
 and the people of the district could learn from the records 
 of the board whether or not he had kept his pre-election 
 
68 EEQULATION 
 
 promise. The same in general may be said of the members 
 of the national wage board and of the members of the land 
 and profit boards. 
 
 The national money board would, with the advice of 
 the district money boards, determine the interest rates 
 of the country; but, as the money would have a constant 
 value, the interest rate would remain quite constant, and 
 the principal duty of the national money board would be 
 to ascertain each week the market prices and prevailing 
 rates of the various commodities and services of which 
 the multiple monetary unit would be composed, and 
 publish the same. If the prices and rates shown by such 
 reports were not the true prices and rates prevailing during 
 the given week, the people would have incontrovertible evi- 
 dence that the members of the national money board were 
 inefficient or corrupt. 
 
 Members of the national money board would, also, meet 
 each day with the members of the other national boards 
 and so advise and govern their actions that they would 
 make their revisions of the several tariffs in such a way 
 that the price level or the value or purchasing power 
 of the dollar would remain the same at all times. If the 
 total price of the fixed quantities and amounts of the fixed 
 kinds and qualities of the commodities and services of 
 which the multiple monetary unit would be composed 
 should be either greater or less than the fixed total of the 
 unit, the people would know that those whom they had 
 elected as members of the national boards were inefficient 
 or corrupt. 
 
 The national money board would, also, increase or 
 decrease the volume of the currency from time to time 
 as conditions would require. If money should become 
 scarce the people woidd apply to the Government loan 
 offices for loans. The degree of such stringency would 
 be shown by the reports of the Government loan offices, and 
 
EEGULATIOlf 69 
 
 if a money stringency should long continue the people 
 would know that the members of the national money 
 board were ineflBcient. If money should become so plenti- 
 ful that it could not be readily loaned at a fair rate and 
 such condition should long continue, the people would like- 
 wise know that the members of the national money board 
 were inefficient. 
 
 The dollar would have a constant purchasing power, and 
 an increase in the wage scale would mean that the workers 
 would receive a larger part of the wealth or production of 
 the country. A reduction in the wage scale would mean 
 that the workers would receive a smaller part of produc- 
 tion. Likewise, an increase or decrease in land rents 
 or in the price of raw material would mean that the class 
 that controls the land would receive a proportionately 
 larger or smaller part of production. An increase or de- 
 crease in the interest rate would indicate a proportionate 
 increase or decrease in the part of production the interest- 
 receiving class would receive. An increase or decrease in 
 the rates of the tariff of profits would indicate a propor- 
 tionate increase or decrease in the part of production the 
 profit-receiving class would receive. 
 
 Would men be able to evade the law? Would Eegula- 
 tion fail as a remedy because of fraud in the keeping of 
 books of accoimt? 
 
 The following are the most important eases where it 
 might appear that fraud could be practiced: (1) fraud as 
 to amount of material used, (2) fraud as to cost of ma- 
 terial used, (3) fraud as to price paid for merchandise, 
 (4) fraud as to amount of labor employed, (5) fraud as 
 to wages paid employees, (6) fraud as to cost of rents, 
 (7) fraud as to cost of interest, (8) fraud as to amount 
 of profits, (9) fraud as to cost of construction, (10) fraud 
 in the price charged by retail merchants. 
 
70 EESULATION 
 
 All those engaged in business ■would be required to 
 preserve invoices and vouchers and to keep accurate books 
 of account, and the bureau of accounts would have power 
 to prescribe the manner in which such accounts would 
 be kept. It would be required that the selling price of all 
 goods in retail stores be marked upon the goods, and that 
 the original stock numbers remain upon them so that in- 
 spectors could easily determine the cost of such goods 
 from the invoices. 
 
 Inspectors would from time to time examine the ac- 
 counts of all those engaged in business. These inspectors 
 would be under national supervision, and the accounts and 
 invoices of a firm in any part of the country would be 
 compared with the accounts of those with whom it did 
 business, no matter where located. 
 
 If the books of a firm showed more material received 
 than was actually received, their accounts would not agree 
 with the accounts of those from whom such material was 
 purchased, or else the accounts of the latter would show 
 an excess profit; for, if their books showed considerably 
 more material produced with a given amount of labor and 
 fixed expense than was actually produced, their books 
 would show a greater profit than would be permitted by 
 the tariff of maximum profits.* 
 
 If the books of a firm showed a greater price paid for 
 
 4 Men might gell material or merchandise at a less profit than 
 that permitted by the tariff of maximum profits; money-loaners 
 might accept less than the maximum interest rate; the landlord 
 might charge a lower rental than that permitted by law; their 
 books and invoices might be made to show the maximum price 
 or rate charged, and the difference between the maximum price 
 and the price actually charged be given to the buyer, borrower, 
 or tenant, so that their profits would be greater than would 
 appear upon their books and would possibly be in excess of the 
 maximum profit permitted by law. The profit permitted by the 
 
EEGULATION HI 
 
 material or mereliandise than was actually paid, such ac- 
 counts would not agree with the accounts of those from 
 whom such material or merchandise was purchased, or else 
 the accounts of the latter would show an excess profit. 
 
 Fraud as to the number of workers employed could be 
 easily detected, as inspectors would come unexpectedly and 
 would count the number of persons found working. 
 
 Eegulation would assure work for all, and there would 
 be no reason for any of the people to conspire with an 
 employer to violate the law and work for less than the 
 minimum wage provided by law for their protection. 
 
 The amount charged upon the books for rents would 
 have to agree with the accounts of the landlord, and if ex- 
 cessive woidd show an excess profit to him. 
 
 Interest rates would be determined, and excessive rates 
 could not be charged without detection. 
 
 The accounts showing cost of construction of railroads, 
 telegraph lines, buildings, factories, etc., could not be 
 padded. What I have said regarding accounts with 
 material, wages, etc., will apply here, so that the 
 original cost of a railroad, telegraph line, building, or fac- 
 tory constructed under Eegulation could not be shown 
 upon the books to be in excess of its true cost, nor could 
 interest be charged upon a greater capital than that 
 actually required. 
 
 If a manufacturer or merchant charged either con- 
 siderably more or considerably less than his competitors, 
 his accounts would be closely scrutinized by the inspectors. 
 
 tariff of maximum profits would, however, be fixed at rates that 
 would not permit the people to do a profitable business at a 
 considerably lower rate; the price the consumer would pay for 
 such commodity or service would not be in excess of the deter- 
 mined maximum price; and only those who were party to such 
 fraud would suffer, the one party giving a part of his legitimate 
 profit to the other. 
 
73 REGULATION 
 
 The prices of goods in retail stores would be examined 
 by the inspectors and the merchant's profit could not be in 
 excess of that permitted by the tariff of maximum profits. 
 
 Under Regulation there could be no fraud in the sale 
 of merchandise. Goods would have a definite value, and 
 none could sell for a greater price. 
 
CHAPTEE X 
 
 THE LABOK PROBLEM 
 
 In our study of the labor problem we may divide the 
 people into two classes. One class is composed of those 
 who receive the part of production that represents 
 wages paid to labor; the other is composed of those who 
 receive the balance of production — ^the part that repre- 
 sents land rent and raw material, interest, and profits. 
 These classes are commonly called labor and capital. 
 
 The labor problem. is the greatest problem before the 
 people to-day. I have said that there are eight problems, 
 yet this problem embraces the others in its scope. We 
 cannot study the labor problem without considering the 
 problems of unemployment, trusts^ land monopoly, vast 
 private fortunes, high cost of living, money, and the tariff. 
 
 The labor problem may be stated thus : What part shall 
 the workers receive of that which they produce? 
 
 The labor problem is not only the greatest problem be- 
 fore the people, but it is also the oldest. The condition 
 that has created it is the existence of the two distinct 
 classes, labor and capital, the interests of each, being opr 
 posed to the interests of the other. 
 
 The labor problem has increased wonderfully in im- 
 portance during the past half-century. This change is 
 due to the following causes : — 
 
 First. That division of production that gives a small 
 part to labor and a large part to the other three classes 
 of which the population is made up. 
 
 Second. Because of the unnatural ratio between the 
 part of production labor receives and the part the other 
 
 73 
 
74 EEGDLATION 
 
 three classes receive, the workers are unable to secure and 
 consume all that their labor produces above the part 
 the other three classes consume. A "surplus" is thus 
 created, and men are idle. 
 
 Third. That division or distribution of employment 
 whereby a part of the people are permitted to work, while 
 others are denied employment. 
 
 Fourth, The growth and development of those large 
 aggregations of capital engaged in the industries of pro- 
 duction and distribution, popularly called trusts. These 
 great corporations have largely displaced the small pro- 
 prietor and the individual worker in the work of produc- 
 tion and distribution, causing a great increase in the 
 number of employed and a great decrease in the pro- 
 portionate number of those who employ — ^greatly in- 
 creasing the number that are compelled to sell their labor 
 upon the market and greatly reducing the number of 
 those to whom they can ofEer their labor. 
 
 Fifth. The introduction of modern machinery and the 
 development of modern methods of production and dis- 
 tribution. A large part of the work of production and 
 distribution is now done with the aid of machines that 
 the individual worker cannot own, and that he could 
 not operate by himself if he did own. Thus a large part 
 of the workers of the country are dependent upon an op- 
 portunity to work with machinery that is owned by a class 
 that is proportionately small. 
 
 Sixth. The tendency of the times toward the combining 
 together of those who have a common interest, resulting 
 in the liaes between the two classes becoming more clearly 
 drawn. To-day a few trusts with a common interest in 
 the labor market employ so large a part of the workers of 
 the country that, without a strong organization of the 
 workers, they could control the labor market and dictate 
 the wage scale, not only of those whom they employ but 
 
THE LABOK PEOBLEM 75 
 
 o{ all the workers in the country. The organization of 
 the workers is, perhaps, more nearly complete than that 
 of the employing iaterests. 
 
 Seventh, The increasing scarcity and the constant ad- 
 vance in the price of land, which excludes a large part of 
 the people from the land and gives them no choice but to 
 work for those who control the land and the machinery 
 of production and distribution. 
 
 Eighth. The constant change in the value or purchas- 
 ing power of the dollar, requiring a constant readjustment 
 of the wage scales of the country. When the dollar is 
 depreciating — ^when the prices of commodities are advanc- ' 
 ing — the workers are compelled to demand an increase 
 in wages; when the dollar is appreciating — ^when the 
 prices of commodities are falling — employers are com- 
 pelled to enforce a reduction in wages or else suffer a loss. 
 Every such effort on the part of either employer or em- 
 ployed to effect a change in the wage scale results iu a 
 strife between these two classes. The constant recurrence 
 of wage disputes has caused both classes to lose patience 
 and each to regard the other as unreasonable ta its de- 
 mands. 
 
 Ninth. The vast fortunes of the few; their display 
 of wealth; the invention and introduction of modern lux- 
 uries which, as the people become more accustomed to them, 
 they come to regard as necessities ; the better education of 
 the working class; the constant suggestion of better con- 
 ditions; — these conditions have caused the ideals of the 
 laboring class to rise higher year by year; they are con- 
 stantly desiring and demanding better conditions for 
 themselves and for their families — ^better wages, shorter 
 hours, better conditions of employment, better educational 
 oppoitunities, better homes, more of the comforts and 
 luxuries of life. And these conditions have caused a con- 
 stant increase in the efficiency of the workers. 
 
76 REGULATION 
 
 The results of this strife between these two classes, be- 
 tween capital and labor, are familiar to every reader. It 
 has resulted in a stronger organization of each class, 
 in strikes and threatened strikes, lockouts and threatened 
 lockouts, acts of Tiolence, the destruction of property, the 
 loss of wages, and the hampering of business operations. 
 The result is therefore a great economic loss to society. 
 
 The labor problem is the problem : What part of the pro- 
 duction of the country shall the workers receive? What 
 shall be the ratio between the part of production 
 that shall go to the workers and the balance — ^the part 
 that shall go to those who control the land, those who con- 
 trol the capital invested in the machinery of production 
 and distribution, and those engaged in the industries of 
 production and distribution? It is the problem of the 
 ratio between the part of the dollar that shall represent 
 wages and the part that shall represent land rent and 
 raw material, interest, and profits. 
 
 Eegulation would solve the labor problem. 
 
 Eegulation woidd assure all an opportunity to work and 
 all a just division of production. 
 
 Under Eegulation a natural and just ratio would be 
 maintained between the part of production that would go 
 to those who control the land, the part that would go 
 to those who labor, the part that would go to those 
 who own the capital invested in the machinery of produc- 
 tion and distribution, and the part that would go to those 
 engaged in the industries of production and distribution. 
 
 In the preceding chapter I have answered the ques- 
 tions: What is a natural ratio in the division of pro- 
 duction? How can it be determined? Would the acts of 
 the majority be fair and just to all? I will not, there- 
 fore, discuss these questions here. 
 
 Under Eegulation there would be no strikes; the wages 
 of the people and their hours of labor would be deter- 
 
THE LABOE PROBLEM 7'? 
 
 mined by boards elected by the people, and labor disputes 
 that are now settled by strikes and lockouts would then 
 be settled at the polls. 
 
 Among the conditions that have created the labor 
 problem I have named imemployment, trusts, land 
 monopoly, the constant change in the purchasing power of 
 the money, and the vast private fortunes of the time. 
 Eegulation would cure each one of these conditions. These 
 conditions are discussed in chapters that follow. 
 
CHAPTEE XI 
 
 THE PEOBLEM OP UNEMPLOYMENT 
 
 Since society has created a condition that makes em- 
 ployment as necessary to the existence of a part of the 
 people as the air they breathe, upon society rests an obliga- 
 tion to guarantee to every man an opportunity to labor 
 and be self-supporting. 
 
 The people have no more right by their laws and cus- 
 toms to permit a part of the people to work and to deny 
 this right to others than they have by their laws and cus- 
 toms to give to a part of the people the right to the use 
 and enjoyment of the land and to deny the same right to 
 others by fixing conditions precedent to their entering 
 upon the land that a part of the people cannot comply 
 with. Under primitive social conditions this condition 
 of dependence of a part of the people upon others for 
 their very existence, this need of employment, did not 
 exist; it is an artificial condition created by society. 
 
 No improvement of any consequence can be had in 
 present economic systems and present conditions without 
 displacing thousands of surplus men from various occupa- 
 tions and pursuits. Any scheme offered as a remedy for 
 present conditions that does not provide a solution of 
 the problem of unemployment is fundamentally wrong. 
 
 The following extracts are from articles appearing in 
 TTie Outlooh and Charities during the year 1908 : — 
 
 "In New York City the number of men and women out of 
 work the past winter, who ordinarily are employed in gainful 
 occupations, is estimated at not less than 200,000, and there 
 are those familiar with the conditions who believe that the 
 
 78 
 
THE PROBLEM OF DNEMPLOTMENT 79 
 
 number is largely in excess of these figures." — The Outlook, May 
 23, 1908. 
 
 "A conservative estimate of the whole problem • * * indicates 
 that there are at present in the city [Chicago] not less than 
 75,000 men out of employment, upon -whom there are dependent 
 not less than 150,000 women and children." — Charities, February 
 8, 1908. 
 
 "Fifty per cent of the coal miners of the Pittsburgh dis- 
 trict were out of work from December to July. That means 
 almost 20,000 men, excluding the Connellsville district. At the 
 present tune, usually the busiest season of the year, thirty per 
 cent of the miners are unemployed, while those at work are 
 on part time. 
 
 "Unemployment has lost the Mechanics' Union half of its 
 lodges, while its power is completely gone. A majority of its 
 former 3,000 members have been out of work for a year. Iron 
 moulders to the number of 1,500, constituting almost two thirds 
 of the skilled men of the trade, have been out of work since 
 last November. One third, or about 500 boilermakers, are now 
 idle. * * * 
 
 "Of the six or seven hundred transport workers employed on 
 the rivers around Pittsburgh, over ninety per cent are idle, and 
 have been the greater part of the year. Over 200 union printers 
 were out of work during the first half of this year. As many 
 more non-union printers were unemployed. * * * 
 
 "Of the 5,000 union carpenters in the Pittsburgh district from 
 sixty to sixty-five per cent are now idle, while those who work 
 have had their wages reduced. * » * Three fourths of the 
 bridge and structural iron workers were idle for eight months, 
 beginning in October, last year." — Charities, November 14, 1908. 
 
 "Experience has taught us that periods of unemployment are 
 accompanied by the moral deterioration as well as the physical 
 breakdown of many of our workers. Viewed from the social 
 rather than the individual point of view, the effects of unem- 
 ployment result in an enormous cost to society. * * * That 
 there has been an increase of crime and in the number of crim- 
 inals because of unemployment the past winter, the records of 
 courts and jails and penitentiaries bear all too convincing proof. 
 In New York City, for illustration, in the short space of tune 
 
80 EEGULATION 
 
 of three months, as many as eight hundred and fifty penniless 
 and homeless persons voluntarily appeared before its magis- 
 trates and were committed to the workhouse. » * * With 
 the passing of winter the physical necessities of the unemployed 
 population as regards food, clothing, and shelter have lessened, 
 but at the same time many who somehow have come safely 
 through the winter are in a deteriorated physical condition, 
 with the probability that they will continue to add to the num- 
 ber of the sick and diseased and dependent. Also of importance 
 is the fact that many have exhausted not only their savings 
 but their eieiit."— The Outlook, May 23, 1908. 
 
 The subject of unemployment may be divided into two 
 parts, actual unemployment and contingent unemploy- 
 ment or the danger of or fear of unemployment. 
 
 The extracts that I have quoted set forth the serious- 
 ness of the condition of actual unemployment during a 
 period of business depression. There is never a time in 
 this land of industry when there are not able-bodied men 
 ■willing to work that are unemployed. At the time of this 
 •writing (February, 1912), during a period of normal busi- 
 ness conditions, the newspapers are frequently confirming 
 the report that there are thousands of destitute unem- 
 ployed in all the centers of population and industry of 
 the country, and the conditions at home are not worse 
 than those in England and in other European countries. 
 
 Unemployment is due to the existence of a supply of 
 labor in excess of the demand of the industrial world. 
 When such condition exists, not only those suffer who 
 are out of work, but all those who are employed feel the 
 influence of the oversupply. Those who are able to secure 
 work must accept the terms offered by employers, for they 
 know that others are anxious to take their places. Men 
 attempt to underbid each other for an opportunity to 
 work. Those who are employed axe harassed by the fear 
 of losing their positions. 
 
 Thus we find that, because of the existence of the unem- 
 
THE PROBLEM OP UNEMPLOYMENT 81 
 
 ployed, all those who work suffer because of the condition 
 of contingent unemployment, and that this is in itself 
 a grave problem affecting the independence of the people. 
 
 The causes that produce the condition of unemploy- 
 ment are: — 
 
 Pirst. An unnatural and unjust ratio between the total 
 production and the part of production that labor re- 
 ceives — ^between the dollar and the part of the dollar 
 that goes to labor — so that the people are unable to 
 buy with their wages all that they produce above that 
 which the other three classes consume, and what is termed 
 an oversupply is created. Even with our modern methods 
 of production, there has never been a time when the people 
 have created more than they have had need of. 
 
 When the relative size of the four parts of the dollar 
 representing land, wages, interest, and profits, is out of a 
 natural and just proportion, so that the part that repre- 
 sents wages is smaller than it should be — ^when the wages 
 of the people are small in proportion to what they pro- 
 duce — ^then the people cannot buy back with their wages 
 that which they have created, not even so much as they 
 have need of; an oversupply is declared to exist; manu- 
 facturers curtail their production; employers lay off a part 
 of their employees; and a surplus of labor is created. 
 
 Second. The monopolization of the land has caused too 
 large a part of the people to seek employment in the cities; 
 too small a part are engaged in agricultural pursuits. Be- 
 cause the land is difficult of access, because the poor man 
 cannot easily secure land and engage in agricultural pur- 
 suits, too many of the people are dependent upon an op- 
 portunity to work in the building trades, in factories, 
 stores, and offices, which results in an oversupply of labor 
 in these trades. 
 
 Third. The immobility of the population. Thousands 
 may be idle in the New England manufacturing towns, 
 
83 REGULATION 
 
 yet the scarcity of men in the harvest fields of the West 
 be so great that crops are lost for want of harvesters. The 
 factory workers are not inured to the heavy labor of the 
 field and the life would be strange to them, nor can they 
 afford to leave their homes and travel across the continent 
 in order to secure a few weeks' work. We must at all 
 times, so far as possible, provide work in the factories 
 for the factory workers and upon the farms for the agri- 
 cultural class. 
 
 Fourth. During periods of industrial depression and 
 financial panics the number of unemployed is very large 
 and the condition far more serious than during periods of 
 normal business conditions. The causes of industrial de- 
 pressions and financial panics are : — 
 
 (a) The inability of the people to buy with their wages 
 that which their labor has produced. This is caused, as I 
 have already explained, by that distribution of wealth or 
 division of production that gives too small a part to labor 
 and too large a part to the three classes of which the bal- 
 ance of the population is made up. 
 
 (b) A scarcity of money. This may be due to the 
 demands of the commercial world expandiag without a 
 proportionate expansion of the currency, or to a contrac- 
 tion of credits without a proportionate expansion of the 
 currency, or it may be due to a concerted action on the 
 part of a few that control a large part of the money of the 
 country, in withdrawing money from circulation, 
 
 (c) Speculation in stocks and commodities and the 
 failure of speculative business enterprises has always been 
 an important cause of financial panics. This condition 
 has not only been a direct cause of panics, but it has also 
 made the effect of the panic worse and has always pro- 
 longed its duration. 
 
 (d) Periods of business depression are preceded by 
 periods of unusual industrial activity and general pros- 
 
THE PEOBLEM OF UNEMPLOYMENT 83 
 
 perity. During such times the workers are encouraged to 
 buy land far in excess of the amount for which they are 
 able to pay, agreeing to pay the balance in installments or 
 assuming a mortgage for the unpaid portion of the pur- 
 chase price; many of the people mortgage land in order 
 to secure money with which to engage in business, or to 
 invest in more land. When the industrial depression or 
 financial panic overtakes them and many are unable .to se- 
 cure employment and the wages of those who are employed 
 are reduced ; when the price of land is falling ; when money 
 is scarce and interest rates are high and creditors are de- 
 manding prompt payment in order that they may meet 
 their own obligations; — ^then the demand for money is 
 increased and the condition of the people made far worse by 
 reason of their having bought land far in excess of that 
 for which they were able to pay. 
 
 Under Eegulation periods of industrial depression and 
 financial panics would be unknown. 
 
 (a) The ratio between wages and land rent and raw 
 material, interest, and profits would be so regulated that 
 the workers would be able to buy with their wages all 
 the production of the country except the part the other 
 three classes would consume. There would therefore be 
 no overproduction. 
 
 (b) There would be no scarcity of money. The money 
 of Eegulation would be elastic, expanding and contract- 
 ing to meet the requirements of the commercial world ; the 
 Government would stand ready at all times to loan money 
 in any amount, upon any kind of safe security, at a fair 
 interest rate; the "money trust" would be broken. No 
 matter how much money a few might control and withdraw 
 from circulation, the money of the Government would 
 flow from an inexhaustible fount and would stand at a 
 fixed level. 
 
 (c) Under Eegulation there would be no speculation 
 
84 EEGULATIOIT 
 
 in stocks and commodities. Because of the regulation of 
 the four factors in price, stocks and commodities could not 
 be sold at more than a normal profit. "Wildcat" com- 
 panies could not exist, and the stocks of corporations could 
 not be watered. Stocks would not fluctuate in value as 
 they do now; speculation in stocks would be destroyed; 
 and the buying of stocks would be a safe investment for 
 the people. Stocks would be worth their market price 
 unless due to mismanagement of the business of the cor- 
 poration or to natural conditions that may cause the fail- 
 ure of a business enterprise, such as floods or crop fail- 
 ures. Under Eegulation a company with a million dollars 
 of assets could only issue a million dollars of stock, nor 
 could it make its books show assets in excess of their true 
 worth. 
 
 (d) Under Eegulation speculation in land would be 
 done away. During the eighty-year lease period land 
 values would be determined by the rental fixed by the land 
 board and the length of the unexpired part of the eighty- 
 year lease term, decreasing in value as the length of the 
 term of the lease would reduce each year. During the 
 eighty-year lease period there would be no fluctuation in 
 land values; the people would not be tempted, as now, by 
 the possibility of making a fortune from an increase in 
 land value. At the close of the lease period the entire 
 and absolute title to the land would revert to the Govern- 
 ment. 
 
 Thus we find that Eegulation would destroy all causes 
 of periods of industrial depression and of panics, and 
 that panics could not occur under Eegulation. 
 
 Eegulation would solve the problem of unemployment. 
 
 First. It would provide a means by which a just di- 
 vision of production would be effected. Under Eegula- 
 tion the production of the country would be divided be- 
 tween the four classes in a ratio that would be natural, 
 
THE PROBLEM OF UNEMPLOTMENT 85 
 
 just, and equitable. The wages of the workers wotild 
 permit them to secure all the production of the country 
 except the part the other three classes would con- 
 sume, and there would be no production in excess of the 
 people's ability to buy and consume. 
 
 Second. The land would be easier of access. 
 Land rents, both in the cities and in the agricultural dis- 
 tricts, would be regulated and reasonable. The people 
 would be protected against exorbitant charges of those 
 who control the raw material of the country. 
 
 Third. The work of the country would be divided 
 among all the people so that all that were willing could 
 work and participate in the distribution of the wealth 
 created by the people. 
 
 Fourth. There would be no panics or periods of in- 
 dustrial depression. 
 
 Eegulation would assure all an opportunity to work and 
 all a just division of production. 
 
CHAPTBE XII 
 
 THE PROBLEM OF THE TRUSTS 
 
 Within the memory of the people to-day, industrial or- 
 ganizations with large capital began to enter the various 
 fields of production and distribution in competition with 
 the individual and the small concern. Then was born a 
 new problem, the problem of trusts and monopolies. The 
 trust has been an important factor in the progress of the 
 industrial world. 
 
 The term "trust" was originally applied to a holding 
 company, that is, a corporation organized for the purpose 
 of holding a controlling interest in the stock of a num- 
 ber of corporations. The main purpose of the organiza- 
 tion of such holding company was to secure united action 
 on the part of the several corporations thus controlled. 
 The main object of such united action was the regula/- 
 tion and control of buying prices, selling prices, and out- 
 put or production of the commodity or commodities in 
 which the several corporations thus bonded together dealt, 
 or the regulation and control of certain business within a 
 certain district and the fixing of rates and wages, as in the 
 case of railroads and telegraph companies. 
 
 The people were not inclined to make a technical dis- 
 tinction between different companies on account of tech- 
 nical differences in their charters or in their modes of or- 
 ganization, where their objects, methods, and effect upon 
 economic conditions were clearly identical. The people 
 came, therefore, to apply the term trust to aU in- 
 dustrial organizations whose object was to regulate prices 
 or to regulate or restrict production or supply, whether, 
 
 86 
 
THE PROBLEM OF THE TRUSTS 87 
 
 according to the technical form of their organization 
 and charter, they were holding or trust companies or sim- 
 ple corporations. 
 
 A trust, as the term is used to-day, is an industrial or- 
 ganization with large capital whose purpose is to regulate 
 the cost of production, to regulate and restrict production, 
 and to regulate the price of commodities, or to regulate 
 the cost of and the price of service. 
 
 A monopoly is an industrial organization that enjoys 
 freedom from competition in carrying on the business for 
 which it is organized. 
 
 Pew, if any, of the monopolies to-day are absolute, and 
 the term is applied to large corporations that have so 
 far destroyed competition that they are able to control 
 markets and fix buying and selling prices, or fix the rates 
 charged for service. 
 
 Originally the purpose and efEect of a trust was to bind 
 together a number of concerns for the sake of the greater 
 strength of the larger organization; they were not neces- 
 sarily monopolies. But to-day nearly all trusts are or- 
 ganized for the purpose of securing a monopoly in the sale 
 of some commodity or service, and the terms "trust" and 
 "monopoly" are often used together and are used almost 
 interchangeably. 
 
 While history tells of monopolies granted to corporations 
 by charters granted by kings several hundred years ago — 
 monopolies in the sale of certain commodities or in trad- 
 ing in certain districts in their foreign possessions — yet 
 the problem of trusts and monopolies has risen to its pres- 
 ent place of importance with other economic problems 
 within the memory of the people to-day. 
 
 The development of these large industrial organiza- 
 tions with immense capital, with immense plants equipped 
 with the most modem labor-saving machinery, with armies 
 
88 EEGDIATION 
 
 of employees -working under the direction of men of 
 unusual directive ability, has resulted in the production 
 and distribution of commodities with only a small fraction 
 of the labor heretofore required, or even of the labor that 
 would be required to-day if the same production occurred 
 in small factories or was carried on by companies with only 
 a small capital and a relatively small production. 
 
 The people must be brought to realize and understand 
 that every new development of the times that reduces the 
 amount of labor required to produce a given amount of 
 commodities is, or should be, for the benefit of all. 
 
 We must consider the cost of living, not in dollars but 
 in hours of labor. If, under present conditions, a reduc- 
 tion in the amount of labor required to produce a given 
 amount of commodities does not result in a decrease in the 
 amount of labor required of the people that they may 
 enjoy the same comforts as before, the fault is due to an 
 unnatural ratio between the part the people receive of that 
 which they produce and the part that represents land 
 rent and raw material, interest, and profits ; it means that 
 the part of the dollar that represents wages has grown 
 smaller and the part that represents profits has grown 
 larger; it means that it has become harder for the people 
 to buy back with their wages that which their labor has 
 produced, that a surplus is being created that the people 
 cannot buy, yet that they must consume or else remain 
 idle for a time until it has disappeared. 
 
 These large organizations have driven thousands of their 
 smaller competitors out of business and have closed the 
 door of opportunity to thousands of others that would 
 otherwise have entered their fields of operation. In so far 
 as this is due to the fact that the larger organization can 
 produce and distribute with a smaller expenditure of labor 
 than the smaller companies, this is good. In so far as 
 this is due to the practice charged against many of the 
 
THE PROBLEM OF THE TRUSTS 89 
 
 large corporations of forcing smaller competitors out of 
 their fields and then advancing prices beyond the prices at 
 which the smaller concerns would have sold the same com- 
 modities or service under competition, this means a direct 
 loss to the people. 
 
 Fewer men have been required because of the more 
 economical methods of production and distribution of the 
 larger organizations, and, since society has made no pro- 
 vision for the employment of the men thus displaced, nor 
 have the trusts which have been directly responsible for 
 their displacement, many of these men have sufEered be- 
 cause of unemployment. 
 
 The trusts own and control a large part of the land of 
 the country, land upon which railroads, pipe lines, and 
 telegraph lines are bidlt; coal, iron, and copper mines; 
 timber lands ; water and water-powers ; and large tracts of 
 agricultural lands. Pew of these organizations could 
 exist in a form menacing to the people without enjoying 
 this ownership and control, this monopoly, of the land. 
 
 Many of these trusts charge too great a price for the 
 raw material they thus control; they pay too small a wage 
 to the people they employ; they charge too great a profit 
 upon the commodities or service they sell to the people. 
 
 The trusts have exerted a powerful influence in political 
 matters and have therefore been able to secure tarifE 
 legislation in the interests of the trusts and against the in- 
 terests of the people. 
 
 We find, then, that the production and distribution upon 
 a gigantic scale, made possible under present conditions 
 only by the development of large corporations, has reduced 
 the amount of labor required to produce and distribute all 
 that is produced and consumed in this country; that this 
 should have resulted in a decrease in the amount of labor 
 performed by the people, or in an increase ia the amount 
 
90 EEGULATION- 
 
 of necessities aad luxuries their wages would buy, — ^that 
 this decrease ia the amount of labor required in the pro- 
 duction and distribution of the country should have re- 
 sulted ia a benefit to all the people. 
 We find that the trusts derive their power : — 
 
 (a) Because they are larger than their competitors, 
 have greater capital, and can produce and distribute with 
 a greater economy in labor. This production and distri- 
 bution upon a large scale, effecting an economy in labor, 
 is a condition that must be retained and made to benefit 
 all the people. 
 
 (b) Because of their power to fix, arbitrarily, buy- 
 ing prices., selling prices, and the wages of their em- 
 ployees. 
 
 (c) Because of their monopoly of the land. 
 
 (d) Because of their influence ia the fixing of tariff 
 schedules. 
 
 We find that the trusts are a menace to the people : — 
 
 (a) Because they fix arbitrary prices, that is, they fix 
 arbitrarily the ratio between land rent and raw material, 
 wages, interest, and profits. 
 
 (b) Because they employ so large a part of the labor 
 of the country that, by a united action, it is possible for 
 them to create a great surplus of labor and dictate wages 
 and hours of employment. This condition has caused the 
 workers of the country to organize in order that they may 
 deal collectively with their employers, create a monopoly 
 of labor throughout the country, and restrict the amount 
 of available labor whenever thisi may be necessary in 
 order to enforce the demands of labor against its em- 
 ployers. This has produced a constant strife between two 
 large and important classes of the people and an unstable 
 condition in the industrial and commercial world. 
 
 (c) Because they own and control a large part of the 
 land. 
 
THE PROBLEM OF THE TRUSTS 91 
 
 (d)^ Because they have power to influence tariff legis- 
 lation. 
 
 In order to find a scientific solution of the problem of 
 the trusts, we must retain the adyantages of the easier and 
 more economical, more labor-saving, mode of production 
 and distribution of the large organizations ; we must make 
 provision for the men and women that are displaced by 
 labor-saving methods of production; we must protect the 
 people of this and future generations against the monopo- 
 lization of the lan.d; we must destroy that part of the 
 strength of large corporations that they derive from a 
 monopoly of the natural resources of the country ; we must 
 regidate the price charged by them for raw material, the 
 wage paid to their labor, and the profit they may charge ; 
 we must fiz a natural, just, and equitable ratio between the 
 part of the price they charge for a commodity or service 
 that represents land rent and raw material, the part that 
 represents wages paid to labor, the part that represents in- 
 terest upon the capital invested in their enterprises, and 
 the part that represents profits. 
 
 Under Regulation the power of the trusts that is de- 
 rived from their power to fix arbitrary prices would be de- 
 stroyed. They could no longer own and control the raw 
 materials of the country and charge too high a price for 
 them, that is, charge too great a profit upon their opera- 
 tions in the raw materials, for a board of men elected by 
 the people would fix a tariff of maximum prices of raw 
 materials. They could not create an oversupply of labor 
 and secure it upon their own terms and for a smaU. wage, 
 for a board of men elected by the people would fix a tariff 
 of minimum wages by which they would be governed in all 
 their operations. They could not fix the price of com- 
 modities or service so as to allow as large a margin of profit 
 as avarice might dictate, for a board of men elected by the 
 people would fix a tariff of maximum profits by which they 
 
93 HEGULATION 
 
 would be governed. The ratio between tbe part of the 
 price of tbe commodity or service tbat would represent 
 land rent and raw material, the part that would represent 
 labor or wages, the part that would represent interest, 
 and the part that would represent profits would be fixed 
 by the people through their land board, wage board, money 
 board, and profit board; and the tariffs of these boards 
 would be expressed in dollars that would not fluctuate in 
 value, dollars that would have a fixed purchasing power. 
 
 Under Eegulation the power of the trusts that is de- 
 rived from their monopoly of the land would be de- 
 stroyed. The people would declare themselves to be the 
 rightful owners of all the land, and would substitute for 
 absolute, perpetual title to the land, long-term leases in 
 which the people would reserve the right to establish rea- 
 sonable restrictions from time to time and to fix land rents 
 and the price of raw material. After two generations 
 had passed away the people would come into the oc- 
 cupation of all the land, after which time they could grant 
 new leases to the lands upon which railroads, pipe lines, 
 and telegraph lines are built, to coal and mineral lands, 
 to water and water powers; or they could purchase the im- 
 provements upon the land and engage in operating the 
 railroads and other public utilities, the mines and power 
 plants, and in other similar enterprises. 
 
 Under Eegulation the people would not suffer or fear 
 unemployment on account of the introduction of labor- 
 saving machinery and modern methods of production and 
 distribution. The hours of labor would be so regulated 
 that there would at all times be employment for all the 
 people. The land would be easier of access, and many of 
 those displaced would find homes upon the land. 
 
 Under Eegulation the trusts could not, as now, secure 
 a tariff duty on certain commodities so high that it would 
 prohibit their importation from other countries, and then 
 
THE PROBLEM OP THE TRUSTS 93 
 
 raise the price of these commodities manufactured at home 
 under the protection of the tariff, granting little or no in- 
 crease in wages to those who are the actual producers, but 
 mainly increasing the wide margin of their profit. 
 
 Under Eegulation public opinion would not be divided 
 upon the tariff policy of the country, for there is but one 
 tariff policy compatible with the principles of Eegulation. 
 This policy is just to all and definite in detail. Under 
 Eegulation none would fear tariff legislation in the inter- 
 ests of the trusts and against the interests of the people. 
 
CHAPTER XIII 
 
 THE LAND PROBLEM 
 
 '(1)' God has given the land to the people of each 
 generation in the same right in which he has given it to 
 the people of every other generation. 
 
 (3) The people of the first generation came upon the 
 earth possessed of an equal right to the free use and en- 
 joyment of the land. 
 
 (3) The people of each succeeding generation have 
 come upon the earth possessed of the same natural right 
 as the people of the first generation. 
 
 (4) The people of each generation have the right to 
 make laws governing themselves. The right to govern is 
 derived from the consent of the majority of those governed. 
 The majority have the right to make laws governing all 
 the people of their generation. 
 
 (5) The people have no right to maJse laws restricting 
 the rights and liberties of the people of future genera- 
 tions. 
 
 (6) The rights and liberties of the people of the pres- 
 ent generation cannot be denied them because of the laws, 
 acts, or customs of the generations past. 
 
 The people of the present generation came upon the 
 earth possessed of an equal natural right to the free use 
 and enjoyment of the land, and this right cannot be denied 
 them because of the laws, acts, or customs of the genera- 
 tions past, to which they have not and could not have given 
 their consent.- This is the Doctrine of Free Land, and it 
 is founded upon the six principles that I have set forth 
 
 aJbove. 
 
 94 
 
THE LAND PEOBLEM 95 
 
 When God created man, he created the land, and he 
 created in man the necessity for the things that can 
 he secured only from the land. These are the necessities of 
 all the people, not only of the rich but of the poorest as 
 well. To put a price upon the land and exclude those 
 who cannot pay is contrary to nature's plan, against the 
 law of nature, and against man's natural right. 
 
 The poorest child has an equal right with the most for- 
 tunate to the land, and any condition precedent to the en- 
 joyment of its natural right that the poorest child cannot 
 comply with is wrong. 
 
 In every community where population is increasing 
 and the people are industrious, there is a constant increase 
 in the value of the land that is due, not to the efforts of 
 those individuals that own and monopolize the land, but to 
 the growth and development of the community. This 
 value in the land is termed the "unearned increment." 
 It is created by society, and to society (the people col- 
 lectively) it belongs. 
 
 All value in land is created by society. The individual 
 owner cannot enhance the value of his land except as he, 
 as a member of society, contributes to the growth and de- 
 velopment of the community. He may clear the land and 
 fence it, he may plow and enrich the soil, he may plant 
 trees in the ground and build houses upon it; but he can- 
 not enhance the value of the land except as he, as an indi- 
 vidual member of society, by his industry contributes to 
 the growth and development of the community. He adds 
 to the value that society has given to the land the value 
 that he has given to the improvements upon the land, 
 and thus makes the real estate (land and improvements) 
 more valuable. 
 
 All value in land belongs to society, which created it. 
 
 Forty years ago a man bought a lot in a Western town 
 
96 EEQDLATION 
 
 that has since experienced a phenomenal growth and is 
 to-day an important seaport and commercial center. The 
 lot was some distance from the business center of the lit- 
 tle frontier town, which then had only a few hundred 
 inhabitants. Old residents tell me that the pur- 
 chaser paid not more than eight hundred dollars. He 
 still owns the lot. It is now the center of the retail, bank- 
 ing, and oflSce district of a thriving city of three hundred 
 thousand people. The owner has never spent a dollar in 
 improving this land. Years ago a tenant leased the ground 
 and built a poor one-story structure upon it. This build- 
 ing stands upon the land to-day surroimded by tall modem 
 office buildings, and for thirty years the owner has derived 
 a revenue from the rental of this property. The land is 
 valued to-day at eight hundred thousand dollars. In 
 forty years the value of this land has increased from a few 
 hundred to eight hundred thousand dollars. 
 
 Who has created, or what has given the land, this 
 value? 
 
 The three hundred thousand people that have gone to 
 this Western city from all parts of the coimtry and have 
 made their homes there, that have built homes and schools 
 and mills and stores and office buildings; the three hun- 
 dred thousand people that have operated the manufactur- 
 ing industries of the city and have spent their ' earnings 
 in its stores and amusement places ; the three hundred thou- 
 sand people that have been taxed to build its miles of 
 streets and boulevards, its water and sewer systems, 
 its docks; the three hundred thousand people that 
 pass this property every day, that crowd the street cars 
 morning and night; — ^they have (treated, during the past 
 forty years, this increase of nearly eight hundred thousand 
 dollars in the value of this land. 
 
 How have these three hundred thousand people been 
 benefited by the increase in the value of this land? What 
 
THE LAND PEOBLBM 97 
 
 part have they received of the value they have thus 
 created ? 
 
 They have received no benefit whatever; they have re- 
 ceived no part of the value they have created. Because 
 they have enhanced the value of all the land in the city, 
 the merchants must pay higher rents and the people must 
 pay more for everything they buy. When those who have 
 created this value in the land desire to secure a site for a 
 home, they must pay many times more for a lot than they 
 would have paid before the increase in value that they 
 have produced had occurred. 
 
 Five years ago I could have purchased logged-ofl lands 
 from loggers and mill owners in Western Washington for 
 from four to six dollars an acre. Two years later the 
 price of these lands had advanced to from eight to fifteen 
 dollars, and to-day the same land is held at from twenty to 
 twenty-five dollars an acre. Thus the value of these. unim- 
 proved lands has doubled twice over in the past five 
 years. 
 
 What have the owners of these lands done to produce 
 this increase in value? They have done nothing to en- 
 hance the value of their lands. 
 
 Who has created, or what has given the land, this 
 value? 
 
 Within recent years thousands of people have gone from 
 all parts of the country and made their homes in 
 Western Washington. Many of these people have located 
 in the cities and towns, thus helping to build up the towns 
 and create better markets for the products of the land. 
 Others have bought farms and have settled upon them. 
 Eailroads have extended their lines; new communities 
 have been established ; stores and schools have been brought 
 nearer to these lands; roads have been built and the 
 lands made more accessible. Thousands more are ex- 
 pected to settle in this district within the next few years. 
 
98 EEGULATION 
 
 Thus we find that the increase in the value of these unim- 
 proved lands has been due to the efforts and the industry 
 of the people of Western Washington who have built up 
 and developed both its cities and its agricultural districts, 
 and that even those who have not yet settled there but are 
 expected to arrive in the future, have given the land an in- 
 creased value. 
 
 In the Western city of which I have spoken there are 
 two hundred and fifty thousand lots, of which one fifth or 
 fifty thousand are improved; four fifths or two hundred 
 thousand of the lots within the city are unimproved. 
 These two hundred thousand lots were bought and are now 
 being held by people, many of them working-people and 
 people of small means, not because they have need of them 
 but for speculation — ^they bought them purposing to hold 
 them for an advance and sell again at a profit. To many 
 of these people a small piece of unimproved property repre- 
 sents the savings of years of toil and sacrifice. 
 
 Speculation in land — ^the buying of land, not to use 
 but to hold for an advance and sell again — creates an arti- 
 ficial scarcity of land and gives the land an artificial value. 
 Because of speculation in land, this city of three hundred 
 thousand people covers an area large enough to provide 
 homes for more than a million. The working-people of 
 the city must go miles from the business district and from 
 their places of employment in order to secure homesites, 
 and for such must pay a sum that represents the savings 
 of years of economy and toU. 
 
 Speculation in any commodity creates an artificial 
 scarcity by withdrawing from the market that which is 
 held for an advance ; it gives such commodity an unnatural, 
 an artificial value and makes it difiSeult for the people to 
 obtain. Speculation in those things that are necessary 
 to life is vicious. 
 
THE LAND PEOBLEM 99 
 
 In our study of the problem of land monopoly we 
 find:— 
 
 (a) That the land is the natural heritage of all the 
 people; that all have an equal right to the natural re- 
 sources of the country. 
 
 (b) That under our present system of private ovraer- 
 ship of the land many are excluded from it. 
 
 (c) That the increase in the value of the land should 
 be for the benefit of all the people. That under our pres- 
 ent system of land monopoly those who own and monopolize 
 the land secure all the benefits of such enhanced value, 
 while those who create the value are burdened with 
 higher rents and higher prices because of their service to 
 society. 
 
 (d) That speculation in land is unnatural and wrong, 
 and places a heavier burden upon the people. 
 
 (e) That a great wrong is done a large class of the 
 people by the continuance of the present system of land 
 ownership. 
 
 (f ) That to confiscate the land would be unjust to a 
 large and important class of the people. 
 
 If one man has invested his savings in land, while an- 
 other has put his savings in a bank, and a third has in- 
 vested his savings in a stock of merchandise, it would not 
 be just to take the land from the one, whUe protecting by 
 law the money in the bank and the goods of the merchant. 
 
 The problem before us, then, is to find a means by 
 which we may deal fairly with those who are now excluded 
 from the land without doing injustice to those who, in an 
 effort to provide for themselves and for their children, have 
 put their savings into the land. 
 
 Those who favor the single tax propose that we "abolish 
 all taxes save one single tax levied on the value of land, 
 irrespective of the value of the improvements in or on it"; 
 
100 REGULATION 
 
 that this tax be equal to the full rental value of the land, 
 so that its full earnings will go to the Government and 
 there will be no part left to those who hold title to the 
 land. Single tax would take from the people immediately 
 the value of their land, while leaving them the empty title. 
 
 Eegulation would take from the people immediately the 
 absolute title to the land, giving them a lease estate in- 
 stead ; but they would retain the value of the land, 
 or the right to occupy and use it, until two genera- 
 tions or more had passed away. Although the land would 
 not revert to the people until eighty years after the remedy 
 that Eegulation offers had been applied, and those who 
 now own the land could continue to occupy and use it 
 during such period, yet it would give immediate relief to 
 the people without doing iajustice to those who are now the 
 owners of the land. 
 
 After the adoption of the remedy of Eegulation those 
 who now own the land could not appropriate the in- 
 crease in its value due to the growth and development of 
 the community. Speculation in land would cease. A 
 board of men elected by the people would fix a tariff of 
 maximum prices of raw materials and maximum land 
 rents. The people would be protected against the charge 
 of exorbitant prices for raw materials and exorbitant 
 land rents. The land would become more easily acces- 
 sible to the people. 
 
 Under Eegulation those who now own the land would 
 not be disturbed in their possession, but could occupy and 
 use the land as now, without any restriction except that 
 they would not be allowed to charge an iinjust price for 
 raw materials, for -products of the soil, or for land rents, 
 or to derive an unjust profit from the rental of the land 
 or from the sale of their estate in the land. Their estate 
 in the land would be the right to occupy and use it until 
 the end of the eighty-year lease period. They could rent 
 
THE LAND PROBLEM 101 
 
 the land during this period; they could sell their right in 
 the land; they could devise their right, and those to 
 whom such right would descend by inheritance would take 
 all the right of the present owner. The absolute, per- 
 petual, inheritable right to the improvements upon the 
 land, such as buildings, land clearing, fencing, preparation 
 of the soil, and improvements of whatsoever nature, would 
 not be affected. 
 
 At the end of the eighty-year lease period the people 
 then occupying the land and owning the improvements 
 upon it could continue to occupy it by paying the G-ov- 
 ernment a fair rental according to the value of the land 
 exclusive of improvements. If those who occupied the 
 land at the end of the lease period and to whom the im- 
 provements belonged did not elect to continue to occupy 
 it, then whoever should rent the land from the Govern- 
 ment would be compelled to pay them a fair price for their 
 improvements. 
 
 The value of an eighty-year estate in land is to-day 
 about eighty per cent of the value of an absolute, per- 
 petual title. However, the people are influenced so largely 
 in the purchase of land by the incentive to provide for 
 themselves and for their children, and so little by the in- 
 centive to provide for their children's children and for 
 after generations, that, if all land were held under such a 
 lease and no absolute, perpetual title to land could be had, 
 the people's desire to own land would be as great as now, 
 and, therefore, at the beginning of such eighty-year lease 
 period its value would be but little affected by the pros- 
 pect of the termination of the owner's right in the land at 
 a time long after he had passed away. 
 
CHAPTEE XIV 
 
 THE PKOBLBM OF VAST PRIVATE FORTUNES 
 
 The political and industrial conditions of the past half- 
 century have favored the amassing of vast fortunes by the 
 ffew. The concentration of so much wealth and power in 
 the hands of a few is recognized to-day as a great menace 
 to the people. 
 
 Some have proposed that a heavy tax be levied upon the 
 wealth of the rich. It would be far better, however, to 
 permit men to acquire only that to which they are justly 
 entitled, rather than to permit them to acquire more than 
 their just share and take from them again a part of such 
 wealth by an income tax or an inheritance tax. 
 
 The conditions that have encouraged or permitted the 
 accumulation of vast private fortunes are: — 
 
 First. There has been an unnatural and unjust ratio 
 between the parts of production the four classes have 
 received, so that the people have received too small a part 
 and a few have received too large a share. 
 
 Second. Men have been permitted to secure monopolies 
 by tariff legislation, by public franchise, by patent, and 
 by crushing out competitors. 
 
 Third. They have been permitted to charge the highest 
 prices the people could pay, and to pay the smallest wage 
 for which they could secure men to operate their in- 
 dustries. 
 
 Fourth. Men have been permitted to monopolize valu- 
 able lands and to appropriate to themselves the value in 
 the land due to the growth and development of the com- 
 munity. 
 
 102 
 
THE PROBLEM OF VAST PRIVATE FORTUNES 103 
 
 TJnder Eegulation a natural, just, and equitable ratio 
 ■would be maintained between the parts of production 
 the four classes receive — ^between the part of the dollar 
 that represents land rent and raw material, the part that 
 represents labor or wages, the part that represents interest, 
 and the part that represents profits. 
 
 TJnder Eegulation the people would be permitted to ac- 
 quire only that to which they are justly entitled. None 
 could then secure a monopoly and charge exorbitant 
 prices, while paying the lowest wage for which they could 
 secure labor. The profits of all would be regulated, and a 
 minimum wage scale would be maintained. 
 
 TJnder Eegulation the increase in the value of the 
 land due to the growth and development of the community 
 would not increase the wealth of a few, but this value in 
 the land would be appropriated by society, which creates 
 it. 
 
CHAPTBE XV. 
 
 THE PEOBLEM OF THE HIGH COST OF LIVING 
 
 The problem that has been most discussed and in 
 which the people have manifested the greatest interest 
 during the past few years is the problem of the high cost 
 of living. 
 
 The condition may be attributed to three causes : — 
 
 First. The general level of prices is constantly chang- 
 ing; within recent years it has been constantly rising. 
 Under a good money system the price level would remain 
 constant. We may say, therefore, that this condition is 
 due to our money system. 
 
 Eegulation would provide a money of constant, unchang- 
 ing value or purchasing power. Under Eegulation a given 
 amount of money would purchase the same amount of com- 
 modities generally or averaged at all times. This subject 
 is more fully discussed in the following chapter. 
 
 Second. The people receive too small a part of that 
 which they produce. There is an unnatural and unjust 
 ratio between the total production and the part of produc- 
 tion the people receive. Therefore, they must work too 
 many hours in order to secure the simple necessities of life. 
 
 Under Eegulation a just ratio would be maintained be- 
 tween the part the people receive and the total production, 
 between the parts of production each of the four classes re- 
 ceive. 
 
 Third. A wasteful system of distribution. Too many 
 are engaged in the work of distribution. This greatly 
 increases the cost of distribution — ^greatly increases the 
 amount of labor necessary to perform the work of distri- 
 
 1041 
 
THE PEOBLEM OP THE HIGH COST OF LIVING 105 
 
 bntion — and increases the cost of living of the people, 
 ■whether we consider the cost of living in dollars or iii 
 hours of labor. 
 
 If the number of men engaged in the mercantile busi- 
 ness of the country was materially reduced, and those 
 remaining in business were able to do a large business 
 without being put to a heavy expense to secure and main- 
 tain their trade, they could well afford to do business upon 
 a much narrower margin of proiit. 
 
 Competition increases the cost of distribution. This is 
 well illustrated by the immense advertising bill the people 
 of the country are compelled to pay each year. Con- 
 sider the number of hours of labor this represents. This 
 does not add to the wealth or comforts of the people; 
 this labor does not create anything useful — anything that 
 the people can eat or wear or enjoy in any way. 
 
 Under Eegulation a board of men elected by the people 
 would fix a tariff of maximum profits; the profits of all 
 those engaged in business would be regulated. The maxi- 
 mum profit the merchant would be allowed to charge 
 would be so fixed that he would be compelled either 
 to do a large business or else to become a producer. There 
 would be fewer merchants; those engaged in business 
 would do a larger business; the cost of doing business 
 would be greatly reduced ; they could afford to do business 
 upon a smaller margin of profit; their profits would be 
 regulated by the people, and they would be permitted to 
 charge only a fair profit. Eegulation would provide em- 
 ployment for all, and none would suffer because of the 
 increase in the number of producers that would result. 
 
CHAPTER XVI 
 
 THE MONET PROBLEM 
 
 When the price of commodities generally or averaged 
 rises, the purchasing power of money is reduced or, in 
 other words, money depreciates in value; when the price 
 of commodities falls, the value of money appreciates. 
 
 A depreciation in the value or purchasing power of 
 money is as truly a loss to the people as the loss of a part of 
 the dollars they have saved or a reduction in their wages. 
 It is not sufficient that a man receive the number of dollars 
 agreed upon, but he should receive the value or purchasing 
 power agreed upon — ^he should receive dollars of the value 
 or purchasing power agreed upon. 
 
 If I were to borrow one hundred dollars of you and 
 agree to return the money with five dollars' interest in one 
 year, and if during that time the purchasing power of the 
 dollar depreciated ten per cent, so that one hundred dol- 
 lars would only purchase as much as ninety dollars would 
 have purchased at the time the loan was made ; then at the 
 end of the year I would pay you one hundred and five dol- 
 lars, but the money you would receive, both principal and 
 interest, would exchange for less of commodities generally 
 than would the principal at the time the money was loaned 
 to me. It is as if I were to borrow one hundred bushels 
 of wheat, promising to return to you one hundred and five 
 bushels after the harvest; during the intervening time the 
 bushel measure is, by common consent of the people of 
 the community, reduced in capacity one tenth; then at the 
 time agreed upon I' would return to you one hundred and 
 five bushels, measured with the reduced measure, but al- 
 
 106 
 
THE MONEY PEOBLEM 107 
 
 though you would receive one hundred and five bushels, 
 you would actually receive less wheat than the hun- 
 dred bushels you had loaned to me, although it had been 
 agreed between us that you were to receive one twentieth 
 more than the amount loaned. 
 
 Every change in the value or purchasing power of the 
 dollar alters the terms of every existing contract whose 
 terms are expressed in money, without the consent of the 
 parties to the contract. 
 
 When commodities are appreciating — ^when money is 
 depreciating — ^the wages of the people are reduced; they 
 receive less for their labor than was agreed — ^not less 
 money but less value. They suffer a loss until they secure 
 a proportionate increase in wages. The people have no 
 accurate means by which they can determine the amount 
 of, such increase in the cost of the things they buy, 
 and employer and employed will most naturally dis- 
 agree as to the advance in wages required to offset 
 such change in the value of the money in which their 
 wages are paid. The people cannot secure an increase in 
 wages without making a strong demand. The necessity 
 of their making frequent demands for an increase in 
 wages during a period of advancing prices results in a 
 more strained relation between employer and employed. 
 When prices are falling — ^when the value or purchasing 
 power of money is appreciating — employers are compelled 
 to pay more than was agreed until such time as they can 
 effect a reduction in the wages of their employees. Every 
 such reduction is sternly resisted by the workers. 
 
 This constant readjustment of the wage scale of the 
 country to equalize changes in the price level — in the 
 value of money — ^results in strikes and threatened strikes, 
 lockouts and threatened lockouts, the hampering of busi- 
 ness operations, a great loss both to employers and em- 
 ployed, and a great economic loss to society. 
 
108 EEQDLATIOSr 
 
 When money is depreciating — when prices are rising — 
 the creditor receives less than was contemplated, not less 
 money but less value. When money is appreciating — 
 when prices are falling — ^the debtor is compelled to pay 
 more than was contemplated, not more money but more 
 value. 
 
 When money is depreciating, all that have money in 
 banks and all that have money loaned suffer a loss. When 
 money is appreciating — ^when the prices of commodities 
 are falling; — those who have stocks of merchandise suffer 
 because of the depreciation of their goods. 
 
 A depreciation of money reduces the value of every 
 life insurance policy in the country. If a life insurance 
 policy for ten thousand dollars, written fifteen years ago, 
 is paid to-day, the beneficiary will receive but little more 
 than half the value that was contemplated by both parties 
 to the contract at the time the policy was taken, for ten 
 thousand dollars will buy only as much to-day as six 
 thousand dollars would have bought fifteen years ago. 
 
 Byron W. Holt, writing in Everylody's Magazine for 
 April, 1910, says: — 
 
 "Because of rising prices, the dollar of 1896 now looks like 
 sixty-two cents. At the butcher's store it looks like only forty- 
 six cents, having lost more than half of its purchasing power 
 in beef, pork, and mutton. 
 
 "In view of all the facts, we are inclined to agree with the 
 statement of Mr. William C. Brown, President of the New York 
 Central Railroad, who, on January 12th, said: — 
 
 " 'The most portentous cloud discernible upon the political or 
 economic horizon, at this time, is the steady, relentless increase 
 in the price of everything that goes to make up the cost of 
 living.' 
 
 "In the past thirteen years (July 1, 1896, to January 1, 1910), 
 the cpst of living has advanced more than 61 per cent. In the 
 past eighteen months it has advanced 19J per cent; in the past 
 year 11.2 per cent; and in the past four months 7.4 per 
 cent. • * * 
 
THE MONET PEOBLEM 109 
 
 "The one general and permanent cause — ^the one most nearly 
 fundamental — ^to explain the universal, prolonged, and impor- 
 tant rise in the price level is found in the depreciating value 
 of gold." 
 
 How can the people maintain a fixed or steady price 
 level ? 
 
 By adopting a money system that will provide a money 
 of constant value or purchasing power — a money that will 
 purchase the same amount of commodities averaged at all 
 times. 
 
 We find, then, that the problem of the varying price 
 level or varying cost of living is but one phase of the 
 money problem. 
 
 If three of the richest men in the land were to act con- 
 certedly in calling in large loans and withdrawing large 
 sums of money from circulation, they could create an arti- 
 ficial scarcity of money at any time, they could create 
 a financial panic; they could thus discredit the policy of 
 the political administration. Because a few men hold this 
 power, they are able, by threats, to intimidate those in 
 authority and secure legislation that they desire. By 
 creating such a money stringency they would cause the 
 prices of stocks to fall, and, after buying large quantities, 
 they could put the money withdrawn back into circulation 
 and add materially to their wealth by the rise in the value 
 of stocks that would necessarily follow. 
 
 It is, indeed, a dangerous condition that permits a few 
 men to hold such power to destroy the prosperity of the 
 country. And to-day the people realize this danger and 
 fear the operations of the "money trust." 
 
 How can the people protect themselves against tha 
 danger of an artificial money stringency produced by the 
 "money trust" by its withdrawing from circulation a part 
 of the money that it controls? 
 
110 REGULATION 
 
 By adopting a money system that is so elastic that 
 whenever money is withdrawn from circulation, money 
 will flow in from an inexhaustible supply and take the 
 place of the money thus withdrawn; a money system pro- 
 viding a currency so regulated in volume that there will 
 always be enough money in circulation to meet the de- 
 mands of the commercial world and never a surplus; a 
 money system so elastic and regulated in volume that all 
 that have good security can always secure money at a fair 
 rate and none need have money lying idle. 
 
 There are five attributes or qualities that good money 
 must possess. 
 
 (1) It must be generally acceptable without exception. 
 It must be good for the payment of all debts public and 
 private, and all the people must be willing to accept it in 
 exchange for commodities and services and in the settle- 
 ment of aU debts. 
 
 (3) It must be constant in value or purchasing power. 
 A given amount of money must purchase the same amount 
 of commodities and services generally or averaged at aU 
 times. 
 
 (3) It must be elastic and regulated in volume, so 
 that there will be enough money in circulation at all 
 times to meet the demands of the commercial world and 
 never more than is required. 
 
 (4) It must be diflBcult to counterfeit. 
 
 (5) It must be made of an inexpensive material. 
 The money of Eegulation would possess these five quali- 
 ties. 
 
 In a preceding chapter entitled "Eegulation" I have 
 set forth and fuUy explained the details of the money 
 system of Eegulation as herein proposed, and have an- 
 swered those questions that may suggest themselves to 
 the reader. 
 
CHAPTEE XVII 
 
 THE TAEIFF PROBLEM 
 
 Eeviewing the political history of the country for the 
 past fifty years, we find that the one problem that has been 
 most constantly before the people and the one most dis- 
 cussed is the problem of the tariff. 
 
 The people have been offered three tariff policies: — 
 
 A protective tariff is one that levies a duty upon all 
 commodities imported that can well be produced at home. 
 It may be a prohibitive duty, or a duty sufficient only to 
 equalize the cost of production at home and abroad. Its 
 purpose is not mainly to produce a revenue, but to re- 
 strict the importation of those commodities that can well 
 be produced at home. 
 
 A tariff "for revenue only" is a tariff levied for the 
 purpose of producing a revenue and not for the pur- 
 pose of restricting the importation of foreign com- 
 modities; such a tariff policy is therefore called "free 
 trade." It is a lower tariff than a protective tariff. 
 
 There are some that are opposed to any tariff what- 
 ever.'- Their arguments are similar to the arguments of 
 those who favor a tariff for revenue only. 
 
 Those who favor a protective tariff claim: — 
 
 (a) A free-trade policy will not materially increase 
 our exports, but under such a policy much that the people 
 consimie is produced abroad. There is, therefore, less em- 
 ployment for the people. 
 
 iThis policy is likewise called free trade. Some writers use 
 the term to denote only this policy. 
 
 Ill 
 
112 EBGULATIOlSr 
 
 (b) Under a free-trade policy the producers in this 
 country must compete in home markets with producers in 
 foreign countries and, therefore, the -wage scale of this 
 country can be but little higher than that of those foreign 
 countries whose products enter our markets in competition 
 with our own. 
 
 (c) A protective tariff encourages the development of 
 diversified industries. 
 
 (d) Under a low tariff much goods must be im- 
 ported and consumed by the people ia order to reduce the 
 cost of living and produce a revenue. 
 
 -Those who oppose a protective tariff claim, and there 
 is much logic in their argument, that a high protective 
 tariff gives a monopoly to the homp producer of tariff- 
 protected commodities; that under present conditions he 
 is permitted to charge the highest price for his goods that 
 the people will pay; that employers combine and exert a 
 strong influence upon the labor market and pay the 
 smallest wage for which they can secure labor; (employers 
 do not pay the highest wage the profits of their business 
 will allow, but the lowest wage for which they can se- 
 cure labor;) even though the people, by imposing a high 
 protective tariff, enable the manufacturer to charge a 
 higher price for his products, yet he wUl pay his em- 
 ployees the smallest wage for which he can secure labor. 
 Under a high protective tariff, therefore, the manufac- 
 turer of tariff-protected commodities is permitted to 
 charge an exorbitant price for his products — ^to charge 
 too great a profit; the cost of living is greatly increased; 
 the people are given no protection against low wages ; and 
 the ratio between the wages of the people and the price 
 they are compelled to pay for the things their labor pro- 
 duces is out of its natural proportion, so that the people 
 receive too small a part of the production. 
 
 Those who oppose a protective tariff contend that the 
 
THE TARIFF PEOBLEM 113 
 
 trusts are able to influence tariif legislation, and that 
 our tarifE schedules are made to favor the interests of the 
 trusts and not the interests of the people. 
 
 We shall now consider the eight principal arguments 
 in favor of no tarifE or a tariif for revenue only. 
 
 First. If to restrict our commerce with the people 
 of other countries by imposing a protective tariff will 
 increase our wealth and prosperity, then we should like- 
 wise restrict commerce between states, between cities, and 
 even between individuals. Why should the farmer in 
 N'9rthern Minnesota be permitted to exchange commodi- 
 ties freely with those living in Maine and California, but 
 be restricted in the exchange of products with his neigh- 
 bor, living just across the Canadian boundary line? 
 
 "If a little is good, more is better," is a poor rule when 
 applied to most things of life. The other questions here 
 involved are treated in the discussion of the fourth and 
 sixth arguments. 
 
 Second. Under a protective tariff those who produce 
 tarifE-protected commodities are enabled to charge an ex- 
 orbitant or unjust profit. 
 
 This is one of the strongest arguments that have been 
 written against a protective tarifE. Under Eegulation the 
 profits of those who produce and those who distribute 
 tariff-protected commodities would be regulated, and they 
 could not charge more than a just profit. 
 
 Third. When a tax is imposed upon imports, the peo- 
 ple are constantly tempted to evade the law and to per- 
 jure themselves. 
 
 If there were no laws upon our statute books, there 
 would be no violation of law, there would be no law- 
 breakers. Shall we, therefore, abolish all law and revert 
 to a primitive condition of anarchy? 
 
 Fourth. An indirect tax, such as a tax upon imports, 
 is paid by the people in proportion to their consumption. 
 
114 EEGDLATION 
 
 The poor consume far more in proportion to their wealth 
 or income than do the rich and therefore pay more than 
 their share of such tax. 
 
 The main fimction of a protective tarifE is not to pro- 
 duce revenue, but to make it possible for the people of a 
 nation by their laws to create and maintain certain eco- 
 nomic conditions that it would be impossible for them 
 to maintain if the industries and markets of the nation 
 were subject to the free competition of other countries 
 wherein such economic conditions do not exist. Regula- 
 tion is a national remedy and cannot be applied within a 
 state or municipality only. Neither could it be applied 
 within the nation were it not possible to place restrictions 
 upon our commerce with foreign countries by a tariff upon 
 imports. It would not be possible to fix land rents and 
 the price of raw material, the price of labor, the rate 
 of interest, and the rate of profit allowed the manufacturer 
 and the merchant, these regulations applying only to com- 
 modities produced at home, and to fix and maintain a con- 
 stant price level, and yet permit commodities to be im- 
 ported from other countries and sold upon our markets 
 vtithout tariff regulation. It would not be just to deter- 
 mine the price the home producer should charge for his 
 products, and permit the foreign producer to sell his 
 products in our markets without a regulation of the 
 price he should charge. If we are to regulate the profit 
 of the merchant in the sale of commodities manufactured 
 at home, it would not be just or in harmony with the 
 principles of Eegulation to permit him to buy foreign- 
 made goods at less than the price he would have to pay 
 for goods produced at home under Eegulation and to sell 
 them at the price for which he would sell the same com- 
 modities if produced at home, thus making a greater profit 
 than that permitted in the sale of home products ; while if 
 he should buy commodities abroad for less than he would 
 
THE TARIFF PROBLEM 115 
 
 have to pay for the same commodities produced at home, 
 and if he should sell them upon the home market at the 
 profit he would have made if he had sold the same com- 
 modities produced at home, then he would sell such com- 
 modities at a less price than the price of home prod- 
 ucts as determined by the tariffs of the several boards, 
 and the importation and sale of foreign-made commodi- 
 ties would, thus, not only cause such commodities to come 
 into unfair competition with the products of the home 
 producer, whose costs and selling prices would be regulated 
 by law and would therefore be inflexible, but such sale 
 of commodities for less than the price determined by the 
 tariffs of the boards would reduce the general price level 
 and cause an appreciation in the purchasing power or value 
 of the money. 
 
 The remedy for the present disproportionate condition 
 of wealth is not to be found in a tax upon wealth, but in 
 the destruction of those conditions that make it pos- 
 sible for a few to appropriate more than is justly theirs 
 and thus to acquire vast fortunes. Under the present 
 system of private land monopoly, a few have become pos- 
 sessed of land that the growth and development of the 
 community has caused greatly to increase in value, and 
 the few controlling such land have been permitted to ap- 
 propriate all that increase in value produced by the in- 
 dustry of all the people. The people have been permitted 
 to secure monopolies in the manufacture and sale of 
 commodities and in the sale of service, and to pay the 
 smallest wage for which they could secure labor, and to 
 charge as great a price as the people could pay, and thus 
 to appropriate more than a just profit. We should de- 
 stroy the conditions that make it possible for a few 
 to appropriate more than is justly theirs, rather than 
 attempt to remedy the condition by taxing from them a 
 part of the wealth thus acquired. 
 
116 REGULATION' 
 
 Fifth. 'No matter how much of commodities we may 
 import, we must produce and export commodities of an 
 equal value to settle the bills, or, in other words, to give 
 in exchange. Therefore, the importation of commodities 
 produced in foreign countries will not materially reduce 
 the amount of labor required at home, for the amount of 
 labor required to produce the commodities we must give 
 in exchange is nearly equal to the amount of labor that 
 would have been required to produce an equal value of the 
 commodities imported. 
 
 The statement that every nation must produce and ex- 
 port commodities equal in value to the commodities im- 
 ported, is not true. If the people had no credit in foreign 
 markets, this would be true. The people of this country 
 could import commodities vastly in excess of the value 
 of commodities exported. Such balance would be settled 
 either by wiping out debts owed in this country by people 
 living in foreign countries, or by increasing our foreign 
 indebtedness. It is as if one were to assert that no matter 
 how much a tailor might consume he could not reduce his 
 wealth, for he would have to produce clothes of a value 
 equal to the value of all his purchases of woolens and food 
 and luxuries. As long as he ha-s money in the bank, he 
 can buy without making a suitj and when his money is 
 exhausted he can still buy without producing a garment 
 as long as he has credit at the stores. It is only when his 
 money is spent and his credit is exhausted that he must 
 produce and sell clothes of a value equal to the value of 
 all the things he buys — the materials he uses in his tai- 
 loring and the things that he consumes. 
 
 Sixth. The people of each country can produce certain 
 commodities to better advantage than they can certain 
 other commodities. The people of each country should 
 produce those commodities that they can produce with 
 the greatest economy in labor, and should exchange freely 
 
THE TARIFF PROBLEM 117 
 
 STicli commodities with other countries for those commodi- 
 ties that they cannot produce without a greater expendi- 
 ture of labor than is required for them to produce an equal 
 value of the commodities they give in exchange. 
 
 As the unit of our social organization is the family, so 
 the unit of the world organization is the nation. To im- 
 prove the social conditions of a community we must im- 
 prove the moral, intellectual, and economic conditions of 
 its social units, the homes of its people. The advance- 
 ment of the world to-day depends upon the integrity of 
 the nations (by integrity I mean wholeness, entireness, 
 unbrokenness) and the condition of their national spirit 
 and national life. It would be as great a folly to try to 
 advance the political, economic, industrial, social, and 
 moral conditions of the whole world to-day by destroying 
 national lines and national feeling, national spirit and na- 
 tional self-interest among the people as it would be to try 
 to improve the social conditions of a village by destroy- 
 ing the homes, the home life, and the home ties of its 
 people. 
 
 The complete development of a nation, the complete 
 development of the national life of its people, cannot be 
 attained without the full development of diversified agri- 
 culture, diversified manufacturing, domestic and foreign 
 transportation, and domestic and foreign trade. 
 
 A nation whose people are engaged in only a limited 
 number of pursuits will not make a strong nation, and 
 its industrial organization will not be well balanced. Such 
 a nation is at all times dependent upon other nations. A 
 nation whose people are engaged exclusively in manufac- 
 ture of certain kinds, that is dependent upon other nations 
 for its raw materials for manufacture and for its food 
 stuffs, is not as strong a nation as it would be if it had a 
 population engaged in diversified pursuits, a population 
 trained to perform all kinds of labor known to the world ; 
 
118 EEGULATIOlf 
 
 it is not as strong a nation as it would be if it produced its 
 own raw materials and food stuffs and its people were inde- 
 pendent of aU other nations, secure within the confines of 
 their country, without concern for their relations with 
 other nations, sources of supply of materials, or foreign 
 markets. 
 
 The wonderful defvelopment of the resources of this 
 country, the wonderful advanoement of its people, their 
 wonderful intellectual and commercial attainments, would! 
 not have been possible if we were to-day, and had always 
 been, a people engaged mainly in agriculture. Without 
 this development of resources, without this intellectual 
 and commercial advancement of the people, this nation 
 would not stand where it does to-day upon the roll of na- 
 tions, it would not command the respect of other nations 
 that it now commands, nor would the people feel secure 
 from the danger of unfair treatment by foreign powers. 
 
 When human self-interest shall have been destroyed and 
 man shall deal fairly with his fellow without necessity of 
 law, and nation shall deal fairly with nation without 
 necessity of army and navy, — ^then the people of the world 
 may be as one great nation, national lines may be wiped 
 out, each nation may put its choicest products into the 
 world's storehouse, and all take from it the things that 
 they need. Then — 
 
 They shall beat their swords into plow- 
 Bhares, and their spears into pruning- 
 hoolcs: nation shall not lift up sword' 
 against nation, neither shaJl they learn 
 war any more. 
 
 To carry out an extreme policy for the building up of a 
 nation's industries to the end that they be complete, so 
 that the people may produce everything that they con- 
 sume, would, indeed, be a wasteful policy, for there are 
 many commodities that, because of the incapacity of the 
 people for certain kinds of work or because of climatic 
 
THE TARIFF PEOBLEM 119 
 
 conditions, the people of a nation are not well fitted to 
 produce, but they can much better produce other commod- 
 ities suited to their natural and industrial conditions and 
 exchange such commodities for the things they need but 
 are not fitted to produce. Between an extreme protective 
 policy and free trade the people must find a safe middle- 
 ground. 
 
 Seventh. In those countries where high wages are 
 paid, labor is more productive and better machinery is 
 used. Therefore, the worker in such a country need not 
 fear competition with those countries where wages are 
 much lower. 
 
 If we provide a means by which we can accurately de- 
 termine the fair price of conunodities produced at home 
 and the cost of such commodities when bought abroad, and 
 if we charge a duty only sufficient to make goods bought 
 abroad cost the purchaser what the same goods would 
 have cost him if he had bought goods produced at home 
 and had bought them at a fair price, — ^then, if this con- 
 tention be true, there would be no duty charged upon im- 
 ports. 
 
 Eighth. 'K low tariff will reduce the cost of living. 
 Under a free-trade policy the home producer must 
 sell his goods in home markets in competition with for- 
 eign products. This would protect the people against the 
 charge of an exorbitant or unjust profit by the home pro- 
 ducer, and would reduce the cost of living of the people. 
 
 A low tariff will not affect the price of commodities so 
 as to reduce the cost of living through the competition 
 of foreign markets unless large quantities of foreign-made 
 goods are imported and consumed by the people. The 
 importation of each million dollars.' worth of goods means 
 the loss to the people of a vast sum in wages. 
 
 There is but one tariff policy compatible with the prin- 
 ciples of Eegulation. 
 
120 EEQDLATION 
 
 Under Eegulation the land board would fix land rents 
 and the price of raw material; the wage board would fix 
 the price of labor; the money board would fix the rate of 
 interest; the profit board would fix the rate of profits. 
 The determinations of these tovi boards would fix the 
 price of aU. commodities produced in this country. Their 
 determinations would fix the general price level and the 
 value or purchasing power of the dollar. The prices of 
 commodities would fiuctuate as conditions would require, 
 but the price of all commodities averaged would always 
 remain the same — ^the price level would not change, the 
 dollar would have a constant value. To exempt imported 
 commodities from the operation of the determinations of 
 the boards would make the successful operation of the 
 remedy impossible. 
 
 Under Eegulation the cost, including transportation, 
 of all goods imported would be ascertained; the price the 
 importer would have had to pay for the same goods if 
 produced at home and bought upon home markets, as 
 determined by the tariffs of the several boards, would be as- 
 certained. If the cost of the goods imported would be 
 found to be less than the price the importer would have 
 had to pay for the same goods produced at home and 
 bought upon home markets, then a duty equal to the 
 difference would be charged, so that goods imported would 
 cost the importer the same as goods produced at home and 
 bought upon home markets. 
 
CHAPTER XVIII 
 
 OTHER REMEDIES CONSIDERED 
 
 In the preceding eight chapters we have considered the 
 eight politico-economic problems that confront the peo- 
 ple at the present time. In these chapters we have 
 analyzed these problems and become familiar with 
 the causes that have created them. In the chapter 
 preceding these eight chapters I have described a remedy 
 that would cure each one of these conditions — ^would 
 solve each one of these problems — and would, I believe, 
 be acceptable to the people. 
 
 I have presented the remedy of Eegulation before dis- 
 cussing the eight problems, in order that the reader might 
 be familiar with its details while studying the problems, so 
 that I might point out how it would cure each condition 
 or solve each problem. 
 
 In this chapter we shall consider, very briefly, the six 
 most important remedies that have heretofore been offered 
 the people as a cure for the conditions or problems of the 
 time. 
 
 Having analyzed the problems and become familiar with 
 their causes, the reader should now be able to answer for 
 himself the question. Have the people heretofore been of- 
 fered a remedy for the problems of the time that is ade- 
 quate, definite, and complete in detail; a remedy that is 
 suited to the times and to the temper of the people; a 
 remedy that the people would be willing and ready to ac- 
 cept if they were brought to understand ? 
 
 If the reader finds that no such remedy has hereto- 
 fore been offered the people, that they have never re- 
 jected an adequate and timely remedy, — then I trust 
 
 121 
 
133 REGULATION 
 
 he will agree with me that the lack of progress in politico- 
 econoinic matters during the past century has been due, 
 not to an unwillingness on the part of the people to ac- 
 cept and apply such a remedy, but to the fact that no 
 such remedy has been offered them; that when the people 
 have found such a remedy they will be quick to recognize 
 its merit; that they will not have to be forced to accept 
 it, but that no power can prevent them from accepting 
 it; that there can be no "class struggle," for when such a 
 remedy is found it will not be of the nature of "class legis- 
 lation. 
 
 What are the functions that a remedy must perform 
 in order to solve all the politico-economic problems con- 
 fronting the people to-day ? 
 
 It must provide a means by which the wealth of the 
 country will be divided among the people in a ratio that 
 is equitable, fair, and just — ^in a natural ratio. A remedy, 
 in order that it be adequate, must perform this function, 
 and it need do nothing else. 
 
 "We may say, then, that there is but one problem before 
 the people to-day, the problem of the distribution of 
 wealth — ^the division of the wealth of the coixntry be- 
 tween the people in a natural and just ratio. 
 
 The most important remedies for the politico-economic 
 conditions or problems of the time that have heretofore 
 been offered the people are: (1) tariff reform, (3) money 
 reform, (3) anti-trust legislation, (4) special taxes (in- 
 come tax, inheritance tax, corporation tax, etc.), (5) single 
 tax, (6) socialism. 
 
 Could any change in our tariff schedules assure all the 
 people a just distribution of wealth? A wise tariff policy 
 is essential to the highest development of our national life 
 and to the realization of the greatest degree of prosperity 
 
OTHER REMEDIES CONSIDERED 123 
 
 for the people of the nation, but it cannot assure all the ■ 
 people a just distribution of wealth. 
 
 Could any improvement of our money system do this? 
 A good money system is essential, and any remedy that 
 will prove efiBcient will provide for a money system with a 
 unit of constant value. But no change in our money 
 system could assure all the people a just distribution of 
 wealth. 
 
 Could the regulation of or the destruction of the trusts 
 do this ? No. No such remedy could assure all the peo- 
 ple a just distribution of wealth. 
 
 Could the levy of special taxes, such as an income tax, 
 an inheritance tax, or a corporation tax, do this? Could 
 the regulation of or the destruction of the vast private 
 fortunes of the day do this? No. Not though this wealth 
 were distributed among all the people. Any remedy that 
 will prove adequate will destroy the opportunity for a 
 few to accumulate such fortunes as exist to-day. But 
 simply to regulate or destroy the fortunes that a few have 
 accumulated would not assure all the people a just distribu- 
 tion of wealth. 
 
 Would the single tax do this? Would the return of 
 the title to the land to the people do this? It would 
 destroy the burden that is now laid upon the people 
 by those who monopolize the land and exact a heavy 
 tribute from the workers of the country; but it would not 
 assure all the people a just distribution of wealth. 
 
 Would socialism do this? 
 
 While socialists are not agreed upon the details of 
 their remedy, the fullest and most complete socialist 
 program would be one in which all the land and all the 
 machinery of production and distribution of the country 
 would be appropriated by the people and owned collect- 
 ively by them, that is, by the Government, and all the 
 
124 EBGULATION 
 
 workers would become employees of tlie Government. 
 
 A few of those who call themselves socialists propose 
 that all the people share alike in the wealth of the coun- 
 try; others that each man receive in proportion to the 
 number of hours he has labored, without regard to the 
 nature or efficiency of his work. However, it appears 
 that those who advocate such divisions do not represent the 
 majority of the socialists of the country to-day, and, as 
 such proposals would never meet with the favor of any 
 considerable part of the people, we need not here con- 
 sider them. 
 
 Under a socialist regime we would still be a nation of 
 people of many types, of varying degrees of ambition and 
 capacity, of varying needs and requirements — teachers, 
 doctors, artists, inventors, public officials, directors of 
 great enterprises, farmers, mechanics, and common 
 laborers; efficient workers and indolent workers; am- 
 bitious men and slovenly men; some desiring to work 
 hard and efficiently that they might possess more of the 
 comforts of life, others preferring to make little effort, 
 content with receiving a share that would not nearly 
 satisfy their more ambitious fellows. 
 
 The problem of the distribution of the wealth the peo- 
 ple would create in a socialist state is not solved by 
 socialism as the remedy is offered to the people to-day. 
 This is the only problem that we need to solve, and the 
 appropriation of all the property of the country would 
 not make its solution easier. 
 
 Emulation offers a means by which all the people may 
 secure a natural, just, and equitable distribution of wealth. 
 It provides for nothing else. This is the only function a 
 remedy need perform in order that it be wholly adequate 
 to solve all the problems of the time. 
 
 THE END 
 
ANNOUNCEMENT 
 
 The Regulation Yearbook will be published annually, the first 
 number appearing in the early part of the year 1915. Each 
 number will contain a brief account of the important events 
 of the year in the industrial world, and comment upon same; 
 a brief account of the important political events of the year, 
 and a discussion of same; a brief account of other important 
 occurrences of the year at home and abroad; a summary of the 
 important industrial legislation enacted during the year in this 
 and other countries; brief articles upon political, economic, and 
 social subjects; and an account of the progress of the Eegulation 
 movement during the year. 
 
 We shall also publish, from time to time, a series of books 
 upon the subject of Eegulation and upon other timely political, 
 economic, and social topics. "Regulation'' is the first of this 
 series, and the books that will follow it will be, like this book, 
 brief, condensed, simple in style, adapted for the busy business 
 man and for those who have devoted little time to the study of 
 economic literature, yet so accurate in their analysis of politico- 
 economic and social problems and so rational that they will be 
 of interest to every economic student. 
 
 In creating a demand for these books we shall depend upon 
 the personal efforts of intelligent local representatives, rather 
 than upon extensive advertising. We hope, through our local 
 representatives, to secure a personal interview with every intelli- 
 gent man and woman in the country at least twice each year, and 
 believe that we can accomplish more in this way than we could 
 through any amount of advertising. 
 
 We want an intelligent, capable, responsible person, well 
 recommended, permanently to represent us in each district, and 
 to such can offer more independent and profitable employment 
 and greater opportunities than are offered by most salaried 
 positions. 
 
 We are engaged in an educational campaign against those who 
 would, through corruption, render our political institutions in- 
 eflacient and thus destroy them; and against those who, in 
 ignorance of true economic principles, seek to establish a new 
 social organization in which the one economic problem — ^that 
 of the division of production — ^would be as vexing as it is now. 
 The success of the work will largely depend upon the efficiency of 
 our local representatives. You can help by assisting us in secur- 
 ing a desirable person to represent us in your community, and by 
 telling your friends of the work in which we are engaged. 
 
 THE REGULATION PUBLISHING CO.