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'MUL. 
 
MARK HANNA'S 
 
 "MORAL CRANKS 
 
 »> 
 
 AND — Others. 
 
 A STUDY OF TO-DAY 
 
 " Some day after the Trusts have, with great labor and difficulty, 
 taken their cart np to the top of a long hill, we will relieve them of 
 their labors; we will say, 'This is our cart,' and take it." — President 
 Gates, of the Iowa State University. 
 
 " Is there any use in rich men? Is it of advantage to the commu- 
 nity that there should be men in it who, having discharged their duty 
 to their families and to their copartners, have still a surplus which 
 they can employ in business enterprises or in so-called benevolences 
 for the public welfare? This is one of the critical questions of our 
 times. However impatient men of wealth may be that this question 
 should be asked, however indignant they may be with the questioners, 
 it is well for them to know that democracy is asking this question, and 
 is seriously determined to get an answer to it."— I,yMAN ABBOTT, D. D., 
 in " Christianity and Social Problems." 
 
 By "MUL." 
 
 BROOKIvYN (TSr. Y.) : 
 GaoRGE P. Spinnby Company, Publishers, 
 
 1900. 
 
Copyright, 1900, 
 By George F. Spinney Company. 
 
 This book may be ordered tbrougb any 
 bookseller, or will be mailed by the Pub- 
 lishers on receipt of 50 cents. Address : 
 George F. Spinney Company, P. O. Box 77, 
 Brooklyn, N, Y. 
 
PREFACE. 
 
 Much has been said in our universities, colleges and 
 pulpits during the last few years in sharp criticism of great 
 and suddenly acquired wealth. The magnitude of fortunes 
 quickly won in corporate enterprises, the tremendous and 
 ever-growing power of corporations, the steady creation 
 of multi-millionaires, the crowding aside of persons in 
 small business enterprises and the apprehensions that at 
 no distant day the hand worker and the brain worker as 
 well, will lose their individuality and become the mere 
 pawns of our money-kings — these and kindred topics of 
 general discussion have unquestionably given to Socialistic 
 ideas new interest. 
 
 And it is notable that the advocates of some of these 
 ideas who command the respectful attention of the masses 
 are men who disavow all comradeship with Karl Marx, 
 Lasalle and the present leaders of Radical Socialism. A 
 new force. Christian Socialism, has entered the field of 
 practical politics in this country, not as an organized party, 
 although here and there some of its representatives have 
 demonstrated marked strength at the polls. But if not 
 banded in a disciplined body they nevertheless have suc- 
 ceeded by agitation, argument and votes in forcing con- 
 cessions from the politicians, and in securing from large 
 numbers of conservative citizens approval of the Muni- 
 cipal Ownership idea. That particular concession has 
 been aptly termed the stepping-stone to the National 
 Ownership of railroads, telegraphs and other public utili- 
 
VI PREFACE. 
 
 ties; and the latter proposition is receiving wide-spread 
 consideration. 
 
 Furthermore, it is proposed that even the great corpora- 
 tions shall some day be seized by government and man- 
 aged in the interest of the whole people, the proposition 
 being put by the President of a Northwestern state uni- 
 versity in this fashion: " Some day, after the trusts have, 
 with great labor and difficulty, taken their cart up to the 
 top of a long hill, we will relieve them of their labors. We 
 will say, 'this is our cart,' and take it." 
 
 The letters which go to the make-up of this book were 
 written after the author's attendance upon three national 
 conventions, in 1896, and subsequent visits of enquiry 
 made to various states with a view to directing public at- 
 tention to the progress of Christian Socialism, the aims 
 and characteristic utterances of the chief spokesman of this 
 new force in our politics, the result of Municipal Owner- 
 ship experiments in Chicago, Detroit, Toledo, Boston, 
 Philadelphia and other cities, the forceful sayings of col- 
 lege professors and clergymen concerning Corporate 
 Wealth, and likewise some of the things said in defense of 
 corporations. This presentation has been supplemented 
 by an instructive exhibit showing how a few specimen 
 trusts have justified some of the fierce denunciations di- 
 rected against corporations of a prominent type, not only 
 by the new Socialism but also by sound financiers, as 
 well as by deceived and despoiled investors. The mass of 
 facts presented in these letters and the declarations of the 
 foremost controversialists in this national discussion of 
 social and industrial evolution, will afford the reader a 
 clear insight into existing conditions and thus enable him 
 to draw a sounder conclusion than would be reached from 
 a consideration of arguments advanced by political parti- 
 sans in a heated presidential campaign. 
 
PRBl'ACE. VII 
 
 In these pages you will make the acquaintance of vari- 
 ous picturesque personalities, notably that of the "Golden 
 Rule Mayor" of Toledo, Samuel M. Jones, who was char- 
 acterized as a "Moral Crank" in an interview had by the 
 writer with United States Senator Hanna and printed last 
 year. As the declarations of others who hold views in 
 common with Mayor Jones are quoted freely in this book 
 it would seem that they might fairly, from one point of 
 view, be referred to as "Mark Hanna's Moral Cranks"— 
 men who believe what they say. 
 
 MUIv. 
 
S>ttprnne Court of tiie State of jQetai porlu 
 
 BROOKLYN, N. V, 
 
 May 22, 1900. 
 
 William II. Muldoon, Esq., 
 
 Dear Sir: — I have read your articles on industrial and 
 economic topics which have appeared from time to time in 
 the Brooklyn Eagle with great interest. You have put 
 before the people in a way which they can understand 
 certain general facts in relation to organized capital, 
 especially in the use and misuse of public franchises (or 
 privileges, as I prefer to say), and the changes which are 
 resulting therefrom in our social and industrial condition. 
 It seems to me that they would receive wide attention if 
 revised and put in the accessible form of a book. It is 
 not many years ago that those who spoke of these sub- 
 jects in moderation and thoughtfulness were denounced in 
 immoderate terms. Those who were thriving on the ad- 
 vantage given to them over the rest of their fellow men 
 by their control of the public franchises and utilities which 
 they had obtained as gifts from government, used such 
 words as " anarchist " and " socialist " to deride and be- 
 little thoughtful and conservative persons who questioned 
 whether it was a wholesome, social and economic con- 
 dition which permitted the vast and growing aggrandize- 
 ment of a very few out of the many by means of the use 
 and misuse of such privileges and utilities during the 
 present generation. Your writings, always moderate in 
 tone and based on facts, have (whether you intended it 
 or not) opened the eyes of some to see that possibly the 
 
real " socialists " are those who are getting this advantage 
 by the favor and acquiescence of government, and that the 
 real " anarchists " are those who are using wealth thus 
 acquired to corrupt our legislatures and official life for 
 their own selfish interests, and to thwart government in 
 its chief purpose of good to the many by means of dis- 
 tributive justice to all. If you put the material which you 
 have in book form it seems to me that it will have a wide 
 circulation. 
 
 Sincerely yours. 
 
CONTENTS. 
 
 I^etter from Judge William J. Gaynor, of the New York 
 Supreme Court. 
 
 PREFACE. 
 
 PART ONE. 
 
 Characteristics os our American Socialism. 
 
 I. 
 
 REWGION COMBINES WITH POWTICS. PAGE. 
 
 THe " Christian Socialists " enter the field— Reinforcements 
 for those who were arrayed against Capital in 1896 — Spread 
 of the New Socialisni in the "West — The novel views of Prof. 
 George D. Herron, of the Iowa State University, attract 
 many Believers and Preachers.— Pulpit warnings to Wealth — 
 "Evolution or Revolution" declares the Rev. Dr. H. W. 
 Thomas, of Chicago — Condemnation of the Trusts by Bishop 
 Samuel Fallows of the ReformedEpiscopal Church—" Mu- 
 nicipal Ownership " a new cry against Corporate Wealth... . 1 
 
 n. 
 
 SOCIAIjISM'S STRENGTH INCREASING. 
 
 Its growth among Religionists, Educators and persons in 
 Politics — American advocates of ideas who would have been 
 stamped as followers of Karl Marx a few years ago — Trend 
 of sentiment as illustrated in conferences, conventions and 
 campaigns — Strong characterization of Trusts by President 
 Gates, of the Iowa State University , IS 
 
X CONTENTS. 
 
 III. 
 
 NO LONGER THE SOCIAWSM OF THE IDEAIdSTS' 
 
 ISOLATED COMMUNITY. PAGE. 
 
 The Communist and Radical Socialist overshadowed to-day by 
 a formidable figure worthy of serious attention— Signifi- 
 cant characteristics of the times noted by the President of 
 Columbia University, Dr. Seth I<ow, and by others— The 
 prediction of Herbert Spencer Z2 
 
 IV. 
 
 I<EADEI!.S OF THE NEW MOVEMENT AGAINST WEALTH. 
 Not the men described by the Rev. Dr. Hillis in his notable 
 contribution to the controversy between Wealth and its 
 enemies— They are to be found in church congregations and 
 in colleges, and among the great middle classes— Indictment 
 of the owners of municipal franchises by the Rev. Dr. Wash- 
 ington Gladden— " The Devil's Dance of Capitalization" as 
 it is characterized and defined by Prof. Albion W. Small, 
 Professor of Sociology in the University of Chicago 28 
 
 V. 
 
 PROFESSORS UNDER A BAN. 
 
 Professors Bemis, Parsons, Ward, Commons and Herron in 
 the light of "Victims of Intolerant Capital" — Removals 
 from college chairs regarded as giving a fresh impetus to 
 Socialism— The cases of the Kansas professors described by 
 Prof. Bemis to "Mul" — "I am on the capitalist side every 
 time," explained Prof. Harper, of the Chicago University. . . 36 
 
 VI. 
 
 WESTERN SOCIALISM. 
 
 Sentiment behind the movement for the acquisition of Public 
 Utilities in Chicago— A significant feature of the last mayor- 
 alty campaign in Chicago— Interview with Mayor Carter H. 
 Harrison upon the results of the Municipal Ownership of 
 such Public Utilities as Water-works and Electric I<ighting.. 45 
 
 VII. 
 
 EL MAHDI OF SOCIALISM. 
 
 P *of . George D. Herron, formerly of the Iowa State Univer- 
 sity — A new religion proclaimed by him with all the fervor 
 of a Crusader — Young ministers " ready to throw away their 
 lives "— Thf existing order of things condemned— The Pro- 
 fessor's personality , , > . . , , 61 
 
CONTENTS. XI 
 
 vm. 
 
 A POPUUST UNMASKS. PAGE. 
 
 Bx-congressman Howard, of Alabama, tells a Cindnuatl con- 
 vention that Government Ownership of railroads, telegraph 
 linos and trusts is of more importance than Free Silver- 
 Socialism throwing off its political disguises and coming 
 out in the open— The old Socialism and the new— Judge 
 William J. Gaynor's protest 67 
 
 IX. 
 
 POETRY IN PONTICS. 
 
 The new Socialistic movement has a poetess, Mrs. Charlotte 
 Perkins Stetson, the great grand-daughter of I^ynian 
 Beecher and grand-niece of Henry Ward Beecher — Assist- 
 ance rendered by her in the preaching of " Twentieth Cen- 
 tury Religion " — Analysis of" The New Religion " by Benja- 
 min Fay Mills 74 
 
 X, 
 
 GOI<DEN RUI,B PONTICS. 
 
 The platform of ex-Mayor Jones, of Toledo — "The Decalogue 
 and the Golden Rule," says Gov. Roocsvelt, "are, after all, 
 the two guides to conduct upon which we should base our 
 actions in political affairs" < 83 
 
 XI. 
 
 SOCIAI<ISM'S NEW GARB. 
 
 No longer the Marxite creed, but the promotion of social and 
 economic reforms in the name of " Christian Socialism " — 
 Significant evolution in Germany, Switzerland, Holland 
 and Russia — The Pope seems to have foreseen these unex- 
 pected phenomena 89 
 
 PART TWO. 
 
 PUBWC Ownership of Pdbwc UTiwties. 
 
 I. 
 
 Dr. I,YMAN ABBOTT'S WARNING. 
 
 Wealthy men must distribute their surplus or "the providence 
 of God will deprive them of a trust which they lack either 
 the fidelity or the capacity to administer "—The rich are in- 
 vited to convince the public that they are of any real social 
 use before it is too late— Municipal Ownership commended— 
 He seems to be in close touch with avowed Socialism. ...... 
 
XII CONTENTS. 
 
 II. 
 
 MUNICIPAL IMPERPBCTIONS. paOE. 
 
 Munidpal Ownership movement has its source in modem 
 Socialism— One great problem confronting its advocates is 
 the inefficiency, extravagance and corruption of municipal 
 administration— " Kicking and cuffing spoilsmen into the 
 gutter ad libitum" not wholly a reformatory idea— Prof. 
 Bemis, Dr. Shaw and Henry D. Woyd quoted— The failure 
 of Philadelphia's ownership of a gas plant 100 
 
 III, 
 
 some; arguments pro and con. 
 
 Discordant conclusions, especially in the problem of electrical 
 undertakings, pointed out by Prof. F. A. C. Perrine, of 
 Iceland Stanford University — Detroit and Chicago own and 
 operate electric lighting plants successfully — Francisco's 
 statistics of Great Britain's railroads — ^American railroad ex- 
 perience furnishes no convincing arguments to the contro- 
 versy , , , 108 
 
 IV. 
 
 EX-MAYOR SAMuai. M. JONES, OP TOI<EDO, OHIO. 
 
 A foremost figure in the West in the causes of Christian Social- 
 ism and Municipal Ownership — Early life in Wales and 
 America one of poverty and hardship — A fortune in oil — 
 Application of his novel "Christ Policy" to the Toledo 
 police force and to intoxicated citizens — Is he really prac- 
 tical? — Mark Hanna's estimate of the "Moral Crank" who 
 polled 107,000 votes for Governor of Ohio , 117 
 
 V. 
 
 GOV. HAZEN S. PINGREE, OF MICHIGAN. 
 
 The very antithesis of ex-Mayor Jones, of Toledo— The pur- 
 chase of the Detroit street railroads proposed to the Gover- 
 nor by Tom It. Johnson, of Cleveland — Eighty prominent 
 citizens opposed to city ownership take the scheme into 
 court— Prof . A. C. Kent argued that the court's decree would 
 be one of sociological importance— The Governor finally 
 denied the pleasure of experimenting with a municipal 
 railroad 18S 
 
CONTENTS. XIII 
 
 VI. 
 
 PUBWC OWNBRSHIP ABROAD. page. 
 Additional light on the conditions in Glasgow — Its railroads 
 place "an embargo upon long rides for the poor," says 
 President Jefferson S. Polk, of the Des Moines City Railroad 
 Company— Views of President Clinton I,. Rossiter, of the 
 Brooklyn Rapid Transit Company— Basis of Prof. Bemis' 
 arguments. 1^ 
 
 VII. 
 
 EXPERTS DISAGREE. 
 
 Prof. Bemis' five reasons for advocating the city ownership of 
 railroads— Statements by President Herbert H. Vreeland, 
 of the Metropolitan street railroad company, of New York 
 city — Boston's $5,000,000 subway — New York to acquire a 
 135,000,000 subway in fifty years 168 
 
 VIII. 
 
 A BIRD'S EYE VIEW OP THE FIEtD. 
 
 Convincing arguments in behalf of Municipal Ownership diffi- 
 cult to advance by its advocates — Results of experiments in 
 some American cities summed up — Venality and incapacity 
 are doubtless measurably responsible for failures — How 
 Western states encourage Municipalization — Ffty-six rail- 
 roads at one time in the hands of receivers 168 
 
 PART THRBE. 
 
 Workers oe the Trusts. 
 
 An Industrial and social study showing that the organizers of 
 colossal undertakings are not always financial giants— The 
 achievements of an office boy and an ex-reporter- How the 
 Whisky trust was formed 176 
 
 11. 
 
 How a great flour trust failed to materialize— The interesting and 
 instructive experience of a woman investor — A glittering and 
 typical scheme 1^ 
 
XIV CONTENTS. 
 
 III. 
 
 PAGE. 
 
 A $30,000,000 Malting combination which attracted attention by 
 paying a dividend three months after beginning business — 
 Two years later the deficit amounted to $1,389,399.59 — Divi- 
 dends declared by "dead reckoning " — An object lesson 195 
 
 IV. 
 
 A glance at Col. Mulberry Sellers and some of his financial pro- 
 jects — His '* Trust Ideas " have been broadened and capitalized 
 bounteously — The Workers have made efforts to form pie, 
 bread, beer, coffin, suspender, chewing gum, shoestring, 
 stockings, bedstead and many other trusts 204 
 
 How New Jersey became a great breeding place for corporations— 
 Guttenberg and Gloucester's winter racing tracks having 
 been closed, lawmakers devised a new plan for attracting 
 capital to the commonwealth — I^aws shielding stockholders 
 from responsibilities 311 
 
 VI. 
 
 The laws which guarantee secrecy and arbitrary powers— What 
 one Trust has done for Brooklyn — Competition among gas 
 companies suppressed— Reaching out for the electric light 
 company— Why legislation is demanded by opponents to 
 Trtists 224 
 
 VII. 
 
 Andrew Carnegie's lawyer says: "Instead of providing for 
 punishment of Trusts, provide for punishment of the man 
 who promotes them and you will kill the eggs in the nest 
 before they are hatched " — Chas. R. Flint defends the Trusts.. 
 
 VIII. 
 
 The Brooklyn Warehouse and Wharfage Trust— Property of once 
 prosperous warehousemen appraised at |27,3qo,<x)o in 1895, by 
 the then president of the Chamber of Commerce, Alexander 
 B. Orr— Five years later valued at $15,000,000— Net earnings of 
 over $1,500,000 cut down to $600,000 — At last a receivership 240 
 
CONTENTS. XV 
 
 IX. 
 
 PAGE. 
 
 An army of clerks, longshoremen, laborers and truckmen forced 
 to seek employment elsewhere soon after the Warehouse 
 Trust began operations — Scenes of idleness along the once 
 busy water fronts— A heavy blow dealt to Brooklyn 848 
 
 Methods described and sharply characterized in a recent opinion 
 of the United States Supreme Court— It dealt with exploits far 
 more interesting than the financial operations of Claude 
 Duval, Sick Turpin and "Cherokee Bill" — "Guilty of ap- 
 parently inexcusable conduct " says the court 255 
 
 XI. 
 
 John R. Dos Passes tells the Industrial Commission how a Trust 
 may change its clothes and laugh at law — His argument 
 against publicity not sustained by all capitalists— A cor- 
 poration law expert tells how fraudulent organizations are 
 formed 
 
 XII. 
 
 John W. Gates' career recalls memories of "Jim" Fisk— He sur- 
 prises Wall street by closing down twelve steel and wire 
 mills — Thousands of workmen thrown out of employment 
 without a jnoment's warning — ^The stock of the great Trust 
 seriously affected— His alleged big winnings 373 
 
 XIII. 
 
 A radical congressional measure which proposes confiscation of 
 "Trust "goods — We shall have to wait awhile before we can 
 know whether the bill was meant for political effect or for 
 enforcement— Great corporations show no signs of fright 281 
 
 XIV. 
 
 The Chicago Trust Conference delegates generally agreed that 
 there ought to be additional laws — Bourke Cochran, however, 
 declared that existing laws are evaded in most states — The 
 Political Trust alternately master and servant of all trusts 
 
XVI CONTENTS. 
 
 XV. 
 
 PAGE. 
 
 CAPITAL'S OFFER TO I^ABOR. 
 
 Three corporations invite the co-operation of their employees 
 in business — Two sombre pictures of fancied future social 
 conditions — They may prove to be no more than the creations 
 of pessimistic minds — No one can predict with certainty. . . , 297 
 
 XVI. 
 
 ARE THE TRUSTS FAVORED? 
 
 Judge William J. Gaynor attacks the Standard Oil Company — 
 Interesting extracts from testimony given by John D. Rocke- 
 feller and others — Francis I^ynde Stetson, former law part- 
 ner of Grover Cleveland, opposed to "coddling" investors 
 by passing laws for their benefit— A challenge to Socialism. 30i 
 
PART ONE. 
 
 Characteristics of Our American 
 Socialisms. 
 
 RELIGION COMBINES WITH POLITICS. 
 
 The "Christian Socialists" enter the field — Reinforcements 
 for those who were arrayed against capital in 1896-^ 
 Spread of the New Socialism in the West — The 
 novel views of Prof. George D. Herron, of the 
 Iowa State University, attract many Believers and 
 Preachers — Pulpit warnings to Wealth — "Evolution 
 or Revolution" declares the Rev. Dr. H. W. 
 Thomas, of Chicago — Condemnation of the Trusts 
 by Bishop Samuel Fallows, of the Reformed Episco- 
 pal Church — "Municipal Ownership" a new cry 
 against Wealth. 
 
 " The air is full of new battle cries, of the sound of the gathering 
 and marshaling of new forces and the reorganization of old ones. 
 Socialism seems to many minds to have been born again, and to be en- 
 tering on the positive and practical stage. It has ceased to be a theory ; 
 it has begun to be a kind 01 religion." — Benjamin Kidd, 1894. 
 
 It is with the forceful advent of this religion of 
 Socialism in the field of American politics — ^with 
 some of its chief spokesmen, their characteristics, 
 utterances, doctrines and achievements — the part 
 they are taking in a War on Corporate Wealth, 
 that the following series of letters will deal, the 
 letters in question presenting the results of recent 
 visits of inquiry to Western cities by the writer: 
 
2 MARK HANNA'S "MORAL CRANKS." 
 
 On the 13th of June, 1894, the Rev. George D. 
 Herron, then Professor of Applied Christianity in 
 Iowa College, delivered a commencement oration 
 at the University of Nebraska, in which he gave ex- 
 pression to novel Socialistic views that led to wide- 
 spread discussion and comment throughout the 
 country. He presented himself as a Christian So- 
 cialist, and subsequently, in 1895, by way of answer 
 to his critics and for the purpose, as he said, of 
 clarifying his message so as to leave no ground for 
 mistaking his meaning, published six lectures under 
 the title of "The Christian State— A Political Vision 
 of Christ." 
 
 Professor Herron's views seem to be fairly em- 
 bodied in the aimexed extracts from his publica- 
 tions : 
 
 "Public ownership of the sources and means of 
 production is the sole answer to the social question 
 and the sole basis of spiritual liberty." 
 
 "Competition is not law, but anarchy." 
 
 "The average workman, though an independent 
 wage earner and politically free, is less certain of 
 food for his family than was the feudal slave of some 
 kind of food." 
 
 "Labor is not a commodity any more than human 
 souls are a commodity; labor is life." 
 
 "The wages system is economic slavery; it is a 
 profane traffic in human flesh and blood." 
 
 "The only safety of capital itself is in the aboli- 
 tion of the so-called law of wages and the federation 
 of money and work in the creation of property, as 
 a communion with God in the perfection of man in 
 the freedom of Christ." 
 
 "What we have been accustomed to call eco' 
 
RELIGION COMBINES WITH POLITICS. 3 
 
 nomic laws is the lawlessness of society. There is 
 no" law but love." 
 
 "The notion that the union of religion and politics 
 can only be evil is as morally insane as the notion 
 that only evil can come from the union of God and 
 man." 
 
 "Christ is to-day the actual leader of the yet un- 
 organized, but rapidly developing political thought 
 and effort of Western nations." 
 
 "The political appearing of Christ is manifest in 
 the increasing social functions of the state and the 
 socialization of law." 
 
 "Not only must the state become Christian, 
 but Christianity must become political." 
 
 "It is through the state that Christianity will have 
 to organize the people in the social order of the 
 communion of the Holy Ghost." 
 
 "It is not the unity of religion and politics that 
 brings degradation and tyranny, but the false unity 
 of unspiritual religion and immoral politics." 
 
 Previous to Professor Herron's appearance upon 
 the stage of public affairs the chief exponents of 
 Socialism in this country were in the main German- 
 Americans, and others of foreign birth. In the 
 minds of the public socialism was associated with 
 long-haired men and beer saloons, discontent and 
 un-Christian thought, represented by atheist Hen- 
 Most, who said to churchmen in Berlin : 
 
 "The Social Democracy knows that the days of 
 Christianity are numbered." 
 
 But the proposition to make a religion of social- 
 ism presented it in a more favorable form to many 
 
4 MARK HANNA'S " MORAL CRANKS." 
 
 and it was promptly accepted by various Western 
 ministers who made numerous converts in their 
 congregations among men who either had political 
 aspirations, or were disgusted with the immorali- 
 ties of politics. Since 1895 they have had large 
 accessions to their ranks. There was much in 
 which Professor Herron had to say that met with 
 the approval of William Jennings Bryan, then a 
 churchman nourishing high political ambitions. 
 The annexed extract from the official campaign 
 book (page 9) issued after he was nominated for 
 President shows him as one apt to be open to the 
 Professor Herron argument in behalf of a combina- 
 tion of religion and politics: 
 
 "He is a Presbyterian in religion. He is often in the 
 pulpit as a lecturer. Politically he refuses no call to speak. 
 He once addressed a concourse of preachers and then 
 talked politics from a saloon bar on the same day. When 
 the house held a Sunday session Bryan left his seat for an 
 hour to lecture on the divinity of Christ at a Church on 
 Capitol Hill." 
 
 In 1896, after attending the Democratic National 
 convention at Chicago, the Populist National con- 
 vention at St. Louis, the Sound Money National 
 convention at Indianapolis ; after carefully question- 
 ing many leaders of these national gatherings, and 
 also many of their subordinate delegates from every 
 state and territory in the Union, the writer of these 
 lines reported to the Brooklyn Eagle that the move- 
 ment which had culminated in the nomination of 
 William Jennings Bryan for President was at heart 
 strongly Socialistic and that the slogan of "Free 
 Silver — 16 to i !" did not embody the dominant sen- 
 timent of the majority of those who had ranged 
 
RELIGION COMBINES WITH POLITICS. 5 
 
 themselves behind the standard of the young Ne- 
 braskan. 
 
 "War against Corporate Wealth!" would have 
 more clearly expressed the sentiment dominating 
 the Chicago and St. Louis conventions, a sentiment 
 the limitations of which were thus defined by a dis- 
 tinguished Supreme Court Judge: 
 
 "It is wealth got by this means and by that, by 
 trick and device, out of the public by means of 
 public franchises, and of laws devised for the ag- 
 grandizement of the few at the expense of the many, 
 which is under the ban of the splendid intelligence 
 and moral sense of the people of this country." 
 
 Any impartial observer who was in attendance 
 upon these conventions and familiarized himself 
 with the views expressed by the delegates will recall 
 the bitterness and heat with which corporations 
 were denounced in convention, in the hotel corri- 
 dors, on the sidewalks and wherever these delegates 
 discussed political questions. The gospel of Social- 
 ism was preached in every quarter, yet Bryan gave 
 to the speech which secured his nomination a re- 
 ligious tinge when he closed with the sonorous 
 declaration: 
 
 "You shall not press down this crown of thorns 
 upon the brow of labor. You shall not crucify 
 mankind upon a cross of gold." 
 
 Twenty thousand voices roared their approval of 
 the sentiment, and after the Nebraskan was nom- 
 inated a Socialist brought a rough and hastily-made 
 cross into the convention hall. The sacred emblem 
 was hailed with cheers and shrill exclamations of 
 gratification, and as it was carried about the arena 
 followed by screeching, howling, half-frenzied dele- 
 
6 MARK HANNA'S "MORAL CRANKS." 
 
 gates, thousands of excited spectators yelled until 
 they were red in the face, others threw hats in the 
 air and waved umbrellas wildly, others still hugged 
 their neighbors as if in a delirium of joy. That 
 sacred symbol before which untold millions have 
 reverentially bowed the head in silence, and in the 
 presence of which the fiercest passions have been 
 stilled, was for the first time in the history of any 
 American convention paraded as a political emblem. 
 That was one memorable exhibition of the new 
 Socialism in politics. 
 
 The Associated Press thus described the demon- 
 stration which followed the nomination of Bryan at 
 the St. Ivouis convention: 
 
 "When General Weaver concluded by naming 
 ' that splendid young statesman, Willian J. Bryan,' 
 the convention broke loose. Cheer followed cheer. 
 The delegates jumped to their chairs, and flags, 
 handkerchiefs, coats, hats and state guidons were 
 waved in wild confusion. Through one of the side 
 entrances four men carried a big yellow cross, four 
 by eight feet in size, surmounted by a crown of 
 thorns. On it was inscribed the words with which 
 Bryan closed his speech at Chicago." 
 
 It was because of a keen appreciation of the fact 
 that the Free Silver convention at Chicago and the 
 Populist convention at St. Louis represented a sen- 
 timent bent upon a War against Wealth that a 
 prominent official of one of the wealthiest corpora- 
 tions in New York, one of the controlling spirits of 
 
RELIGION COMBINES WITH POLITICS. 7 
 
 the Sound Money convention held in Indianapolis, 
 said after that body had adjourned, in response to 
 my inquiry as to the probable outcome of the presi- 
 dential contest: 
 
 "We have got to defeat Bryan. We have got to 
 elect McKinley. We shall surely defeat Bryan, for 
 that will give to us a chance to turn around and pre- 
 pare for what may be a more serious conflict in 
 1900." 
 
 The thoughtful observer cannot be oblivious to 
 the preparations which have been made and are 
 making for a renewal of the indecisive conflict of 
 1896. On the one side, Wealth is silently but 
 steadily combining, apparently unmoved by the 
 angry and menacing cries which rise from every 
 section of the country. The magnitude of this uni- 
 fication of mighty forces is thus outlined by Bryan: 
 
 "The Trusts have been growing in the last two 
 years with a rapidity never known before. Ninety 
 of them are capitalized at $3,500,000,000. The en- 
 tire amount of metallic money in the world is 
 $8,000,000,000. Nearly one-half of that $8,000,000,- 
 000 is represented by these ninety Trusts." 
 
 The venerable Abram S. Hewitt, who declares 
 that he regards legislative interference with capital 
 and labor as pernicious, writing of the combinations 
 of Wealth to the United States Industrial Com- 
 mission, in part confirms the statement made by 
 Bryan: 
 
 "Corporations have continued to grow and at the 
 present moment they threaten to absorb the entire 
 industrial business of the country which is capable 
 of being administered by centralized management. 
 This is precisely the direction which I anticipated 
 
8 MARK HANNA'S "MORAL CRANKS." 
 
 and seems to me to be in accordance with the evolu- 
 tion which has taken place within the last half cen- 
 tury, and which may be in accordance with a natural 
 law, if there be natural laws involved in the progress 
 of modern civilization." 
 
 The enemies of Corporate Wealth are also gird- 
 ing themselves for the coming battle, encouraged 
 by a large number of citizens who, despite their dis- 
 avowals of sympathy with the principles of Social- 
 ism, are, nevertheless, unconsciously reinforcing its 
 advocates by joining in the hue and cry raised 
 against the aggregations of capital. Bishops, cler- 
 gymen and college professors have become mouth- 
 pieces of the Socialistic propaganda, and hitherto- 
 conservative Republicans and Democrats are to be 
 counted among the new recruits to the army re- 
 organizing for an assault on Corporate Wealth. 
 They are growing in influence. In our own State of 
 New York Bishop Potter has sounded a friendly 
 note of warning to Wealth. In Chicago Bishop 
 Samuel Fallows of the Reformed Episcopal Church 
 was heard, in 1899, giving utterance to these om- 
 inous views, which are entirely in accord with the 
 beliefs of Christian Socialists: 
 
 "The present age seems to be unprecedented both 
 in the desire to become rich and in the facilities for 
 gratifying it. Employes who were working for 
 $600 a year twenty years ago have an income of 
 $20,000,000 a year. Uneducated laborers sent out 
 by sympathizing friends in the East to prospect in 
 mining have become fabulously wealthy and mar- 
 ried their daughters to European princes. A Tam- 
 
RELIGION COMBINES WITH POLITICS. 9 
 
 many boss in New York, once scarcely able to make 
 both ends meet, but now a millionaire, jauntily tells 
 a commission of inquiry that it is none of their 
 business by what political manipulation he has 
 made his colossal fortune. Chicago citizens who 
 went into municipal offices too poor to pay their 
 grocer's bills now own stone front houses and have 
 large bank accounts. The old-fashioned way of 
 working steadily and honestly to gain a comfortable 
 competence is too often looked upon as something 
 out of date. Young men on salaries in trusted posi- 
 tions are tempted to speculate and dabble in stocks 
 with their employer's money. Bankers and finan- 
 ciers to whom they look up as models are de- 
 frauders and defaulters. Trusts are created aggre- 
 gating nearly a score of billions of professed capital 
 in less than a single year, some of them of the most 
 reprehensible character, having no other end than 
 to despoil the people. The moral effect of this all- 
 consuming passion to become immediately and in- 
 ordinately rich is beyond expression. It is eating 
 like a canker into the very vitals of society. Our 
 reformatories and penitentiaries are crowded with 
 inmates in consequence of it." 
 
 The foregoing remarks of Bishop Fallows are 
 fairly representative of sentiments frequently ex- 
 pressed in pulpits throughout the West and in some 
 of our Eastern churches. Occasionally these criti- 
 cisms of Wealth are coupled with a grave menace. 
 For instance, the Rev. H. W. Thomas said in the 
 course of a sermon delivered in the People's 
 Church, McVicker's Theatre, Chicago, by way of 
 indorsing Professor Herron: 
 
10 MARK HANNA'S "MORAL, CRANKS." 
 
 "Fifty years ago there were few millionaires in 
 our country; now there are 4,000. Then all in- 
 dustries were open to competition; now they are 
 nearly all in the hands of trusts. Then there were 
 no great labor organizations; now they include 
 nearly every line of industry. Then there was work 
 for all ; now the smaller forms of business are being 
 crushed out by the larger, and it is even feared by 
 many that the middle classes in our country will dis- 
 appear, and that there will be only the rich and the 
 poor. Our country stands at the parting of the 
 ways. Our civilization is hurrying on to dangers 
 greater perhaps than we think. Professor Herron 
 is not alone in seeing the wrongs and perils of these 
 strange years. 
 
 "This pulpit has said that large things have to be 
 done on a large scale. That there is nothing neces- 
 sarily wrong in a partnership, a company, a cor- 
 poration, and nothing wrong when corporations 
 form a trust. Business can be done cheaper on a 
 large scale, and there is nothing wrong in calling 
 machinery to lighten the labor of man. The wrong 
 is in the attempted monopoly that would shut off 
 the people from the natural sources of wealth and 
 from a just share in the increased products of labor 
 under these conditions. This pulpit has said that 
 these ugly looking trusts are object lessons of the 
 higher associate possibilities of our new age, and 
 has preached hope and not despair; has believed 
 that the American people will find a peaceable solu- 
 tion of the present troubles, and that we should talk 
 and work and pray for peace, appeal to the high and 
 noble sense of right and conscience, of love and 
 brotherhood, and not to the sword. 
 
RELIGION COMBINES WITH POUTICS. ii 
 
 "But if not in this way, justice must come in 
 severer forms. It is Evolution or Revolution." 
 
 We shall hear more of this cry — Evolution or 
 Revolution ! 
 
 Sagacious observers in each of the great political 
 parties foresee the issue which promises to be a 
 dominant one in the coming presidential campaigns. 
 It was but a few months ago that so stanch a Re- 
 publican as United States Senator Beveridge, of 
 Indiana, declared that his party would forestall the 
 free silver Democrats by incorporating in the next 
 national platform a demand for federal legislation 
 against certain combinations of Wealth. Even our 
 self-possessed President seems to recognize in the 
 signs of the times some indications of an approach- 
 ing storm, for under his spur the United States In- 
 dustrial Commission began an inquiry in last No- 
 vember with a view to ascertaining "what effect 
 the trusts have on the greater units of capital, and, 
 finally, upon the employe." 
 
 Governor Roosevelt has been West, and he, too, 
 was evidently impressed by the strength of the 
 growing sentiment of hostility to Capital, and not- 
 withstanding his condemnation of what he termed 
 "Socialistic hostility to Wealth gone mad," deemed 
 it necessary to make a concession to the spirit of the 
 hour by declaring to the students of Ann Arbor 
 University: 
 
 "In New York great corporations in trying to 
 secure franchises have gradually trained themselves 
 to look upon the public as their prey. In my 
 opinion they are pursuing a most short-sighted 
 policy and adding to the forces of discontent," 
 
12 MARK HANNA'S "MORAL CRANKS." 
 
 United States Senator Depew, in a speech de- 
 livered in Brooklyn before the Montauk Club in 
 1899, also referred at length to the growing hostility 
 to Wealth, and while he expressed his contempt for 
 "anti-corporation demagogues," said: 
 
 "This tendency of the times cannot be met by 
 shouting. The crying need of the hour is for some 
 method by which light shall be let into every one 
 of these corporations or chartered concerns and the 
 public advised of their conditions, their operations, 
 their management and their right to live." 
 
 "Municipal and National Ownership of all Pub- 
 lic Utilities" is a new cry which has been raised 
 against Capital, and we have had Colonel Bryan's 
 assurance that it is a cry which will be heard in this 
 presidential compaign, for he was quoted as saying 
 to a reporter of a morning newspaper: 
 
 "This question of Municipal Ownership is now 
 being so generally agitated in the cities throughout 
 the country that it rises to the dignity of a national 
 issue. Of course, most of the gold men are op- 
 posed to such principles. They are mostly capital- 
 ists and are opposed to the common people, but 
 time and agitation will eventually bring about the 
 supremacy of the masses." 
 
 It may be said that the Free Silver leader is 
 simply repeating the ineffective appeal which he 
 made to the masses in 1896, with the addition of the 
 new cry for Municipal and National Ownership; 
 that his failure to secure popular approval of his 
 assault on Wealth precludes the possibility of suc- 
 cess in any second attack in 1900. Those who com- 
 
RELIGION COMBINES WITH POLITICS. 13 
 
 placently entertain this belief are apparently indif- 
 ferent to the significance of certain signs indicative 
 of public sentiment, and they will probably do no 
 more than smile over the declarations of Bryan 
 when he says: 
 
 "The struggle of 1896 is a plainer struggle now 
 than it was then; a struggle between Democracy 
 and Plutocracy. When we enter the campaign of 
 1900 we will have a fighting force different from 
 that which we had in 1896. We will enter it not 
 only with the people we had then, but we will gain 
 recruits every day from the Republican party, be- 
 cause the Republicans even are learning what Re- 
 publican principles of modern times mean. The 
 Industrial Trusts are going to help the Democratic 
 party. They are nothing new, but they are ex- 
 emplifying and showi|ng in vivid colors the really 
 vicious principles advocated by the Republican 
 party." 
 
 It may be that those who deride the predictions 
 of the Free Silver leader are sound in their con- 
 clusions. Yet Wealth will not look in Bryan's 
 direction alone for the expected attack. United 
 States Senator Beveridge doubtless expressed the 
 views of many influential Republicans when he pre- 
 dicted that his party would forestall the followers of 
 Bryan. He is far enough West to know that Mu- 
 ninicipal Ownership and hostility to Corporate 
 Wealth go hand in hand. In Toledo, Jones, the 
 Christian Socialist, although nominally a Republi- 
 can, received 17,000 votes when he ran for Mayor 
 in 1898, his regular Republican opponent received 
 
14 MARK HANNA'S "MORAL CRANKS." 
 
 about 4,000 votes, and the Democratic candidate 
 3,000. Many hundreds of Republicans abandoned 
 their party to vote for him. In 1899 he polled 
 107,000 votes as an independent candidate for Gov- 
 ernor of Ohio. And Jones is one of Professor Her- 
 Ton's disciples. In Michigan, Governor Pingree, 
 ostensibly a Republican, is a champion of Municipal 
 Ownership and an avowed enemy of Corporate 
 Wealth. In Chicago, Carter H. Harrison declared 
 in favor of Municipal Ownership, and was elected 
 by a big plurality. Mr. H. H. Kohlsaat, proprietor 
 of two Republican papers, says 75,000 Republicans 
 voted for Harrison. And the Mayor is irrevocably 
 in favor of Bryan's renomination. Municipal Own- 
 ership is popular in the West; it is a pet child of 
 Christian Socialists, most of whom have been Re- 
 publicans. These are signs which Wealth will 
 easily interpret. 
 
 The politicians of both great parties are making 
 concessions to the Socialists openly engaged in a 
 War on Wealth. The politicians in Germany, 
 France and England are making similar conces- 
 sions. To those who are inclined to belittle the 
 matter, and who are oblivious of the fact that there 
 is a trend of thought in the direction of Socialism 
 throughout the civilized world, the following dec- 
 laration made by Herbert Spencer in characterizing 
 the action of the average member of Parliament to- 
 day will doubtless suggest an application to our 
 average legislator: 
 
 "Every day he takes some new step toward the 
 socialistic ideal, while refusing to think that he will 
 ever arrive at it; and every day, to preserve his 
 place, he seeks to outbid his political rival in taking 
 such steps." 
 
II. 
 
 SOCIALISM'S STRENGTH INCREASING. 
 
 Its growth among Religionists, Educators and persons in 
 Politics — American advocates of ideas who would 
 have been stamped as followers of Karl Marx a few 
 years ago — Trend of sentiment as illustrated in 
 conferences, conventions and campaigns — Strong 
 characterization of Trusts by President Gates, of the 
 Iowa State University. 
 
 The sociologist who studies the social phenome- 
 non of Western civilization has ceased to look to the 
 Socialistic vote or to Socialistic parades for any 
 of those convincing evidences which indicate the 
 trend of thought in the United States. It is not to 
 the puny organizations which stridently proclaim 
 their adherence to Karl Marx that the sociologist 
 turns his gaze in any endeavor to learn in what di- 
 rection the great masses are marching. The 
 avowed Socialists are easily counted, their numbers, 
 parades and votes are not impressive or significant 
 of strength, viewed from any standpoint. Yet the 
 Socialistic idea is stronger in this country to-day 
 than at any time in its previous history. And it is 
 to the great political parties, to the press, pulpit 
 and leaders of thought that one must look to form 
 an intelligent estimate of the strength of Socialism. 
 None of these parties, and but few of these leaders 
 and molders of opinion, admit that they are So- 
 cialists. Some call themselves Democrats, others 
 Republicans, and others still reformers, but no mat- 
 ter what the title they assume, as a matter of fact 
 they are advocates of the Socialistic idea. That 
 
 15 
 
i6 MARK HANNA'S "MORAL CRANKS." 
 
 must be apparent when their utterances are tested 
 by the cardinal principle of Socialism, thus set forth 
 by the lexicographer, Thomas Kirkup: 
 
 "Socialists believe that the present economic 
 order in which industry is carried on by private 
 and competitive capital must and ought to pass 
 away, and that the normal ecomonic order of the 
 future will be one with collective means of produc- 
 tion and associated labor working for the general 
 good. This principle of Socialism is cardinal and 
 fundamental." 
 
 The late Rev. Dr. A. J. F. Behrends, writing of 
 Christian Socialism on the continent of Europe, de- 
 clared in "Socialism and Christianity": 
 
 "De Lammennais, who was born in 1872, may be 
 regarded as its earliest advocate, and Von KettUer, 
 the famous Roman Catholic bishop of Mayence, 
 who died in 1875, as its most industrious promoter. 
 They claim that the church is to be the ' animating 
 spirit of the economic as well as the religious world,' 
 and that she ought to become a great co-operative 
 association of laborers for the overthrow of capital- 
 istic tyranny. In doing this, moreover, the church 
 is only to use her social power, without appealing to 
 violence. Experimental Socialism is uniform in its 
 testimony that religion must be the solid founda- 
 tion and the secret life of the ideal state." 
 
 With the sentiment expressed in that last sen- 
 tence every Christian must agree whether he be 
 Democrat, Socialist, or Republican, and therein 
 lies the main strength of the New Socialism. 
 
SOCIALISM'S STRENGTH INCREASING. 17 
 
 "Socialism unquestionably made its greatest 
 strides in the history of the United States in 1896, 
 beginning with the day on which William Jennings 
 Bryan was nominated for President. In the plat- 
 form adopted by the National Democratic Conven- 
 tion which made this nomination the Socialistic 
 hostility to great aggregations of wealth was in- 
 dorsed, but it remained for the Populist convention, 
 held at St. Louis, to present more explicitly and 
 forcibly the Socialistic idea. That was done in the 
 adoption of the following plank : 
 
 "Transportation being a means of exchange and 
 a public necessity, the Government should own and 
 operate the railroads in the interest of the people 
 and on a non-partisan basis, to the end that all may 
 be accorded the same treatment in transportation 
 and that the tyranny and political power now exer- 
 cised by the great railroad corporations which re- 
 sult in the impairment, if not the destruction, of the 
 political rights and personal liberties of the citizen, 
 may be destroyed. Such ownership is to be ac- 
 complished gradually, in a manner consistent with 
 sound policy." 
 
 Mr. Bryan accepted the nomination of the men 
 who made this platform — Populists who claimed to 
 have polled over 1,200,000 votes in 1892. As the 
 candidate of these men and those who called them- 
 selves Democrats at Chicago, Mr. Bryan received 
 over 6,500,000 votes, a great triumph for the So- 
 cialistic idea, despite his defeat. 
 
 No observant attendant upon the proceedings of 
 the Populist National Convention could have ar- 
 rived at any other conclusion than that it was purely 
 
i8 MARK HANNA'S "MORAL CRANKS." 
 
 a Socialistic convention. On every side the dele- 
 gates proclaimed their hostility to Corporate 
 Wealth, and advocated National Ownership of rail- 
 roads, telephones, telegraph and other public utili- 
 ties. Their platform would have contained more 
 radical declarations in advocacy of the Socialistic 
 idea had it not been for the restraining hands of ex- 
 Governor Stone of Missouri and Senator Jones, 
 who believed that- a frank statement of the principles 
 of these Populists might injure Bryan's candidacy 
 among conservative voters. These delegates cared 
 little for free silver; what they most desired to do 
 was to strike a blow at the great corporations of the 
 country. 
 
 The temper dominating many of these Socialists 
 calling themselves Populists was illustrated by a 
 publication distributed by the hundreds in St. Louis 
 during the session of the convention. On the first 
 page of this paper was a picture representing a pair 
 of scales, one of which was loaded down with mort- 
 gages, evictions, foreclosures, taxes. By it stood a 
 money king with his arms full of papers labeled 
 taxes, foreclosures, evictions, greed. The second 
 scale was filled with papers labeled corn, labor, 
 wheat, cotton. By its side stood a group of work- 
 ingmen, one holding in his hand a great sword, was 
 represented as saying to the money king, while he 
 fingered the edge of his weapon : 
 
 "Better not pile on too much or we will try the 
 weight of this thing." 
 
 One may get another faint impression as to the 
 mood of these Socialists in the words of caution 
 uttered by one of the more conservative delegates, 
 the editor of the Iowa Equalist of Maquoketa: 
 
SOCIAI^ISM'S STRENGTH INCREASING. 19 
 
 "I cannot agree with General Weaver that ' this 
 fall is our last chance this side of Revolution.' Yet 
 it may be that blood will have to be shed in defense 
 of our rights, by the shedding of blood by a down- 
 trodden populace." 
 
 Bryan was defeated, but his defeat has not pre- 
 vented the spread of Socialism. Within the last 
 two years the .Socialistic cry for the National Own- 
 ership of railroads, telegraphs, telephones, and other 
 public utilities has been raised in every State of the 
 Union. Municipal Ownership, properly character- 
 ized as the stepping stone to National Ownership, 
 now has its Republican as well as its Democratic ad- 
 vocates. The Chicago Evening Post, representing 
 that element of Republicanism which views with 
 alarm the spread of Socialistic ideas, made the fol- 
 lowing comment upon the situation last summer : 
 
 "When we find Governor Roosevelt and the New 
 York Rapid Transit Commission, a body of able 
 and distinguished business men, declaring that ' of 
 course ' and ' unquestionably ' municipal construc- 
 tion, ownership and operation of the underground 
 railways should be preferred to private control and 
 management under proper safeguards, the conclu- 
 sion is unavoidable that municipal Socialism has 
 made considerable headway in the United States. 
 When we reflect that in the late Chicago Mayoral 
 campaign the Republican candidate, the spokesman 
 of the most solid and conservative element, actually 
 hoped to gain votes by out-Heroding Herod and 
 assuming a more extreme position in favor of "mu- 
 nicipalization ' than that of the avowed candidate 
 
20 MARK HANNA'S "MORAL CRANKS." 
 
 (Altgeld) of the discontented and revolutionary 
 classes, we cannot gainsay the assertions of those 
 who expect to see Municipal Socialism the fixed 
 policy in a short time." 
 
 It is a notable fact that many of our educators, 
 college presidents and college professors have 
 yielded their allegiance to certain Socialistic prin- 
 ciples. Some of these professors have lost their 
 chairs, yet their removals seem to have had no re- 
 straining influence upon those they left behind. In 
 1896 they went no farther than to demand that the 
 railroads should be owned and operated by the 
 National Government. To-day they are predicting 
 that the Trusts ought to be and will ultimately be 
 owned by the Government. 
 
 In June, 1899, the writer attended a "National 
 Political and Social Conference" held at Buffalo. 
 There were in attendance about 300 delegates from 
 various States of the Union. Many of these dele- 
 gates were college professors, clergymen and 
 women, a large percentage of whom avowed them- 
 selves Christian Socialists. They were not Popu- 
 lists and the great majority of them were well-read 
 and well-informed people of exemplary lives, im- 
 practical for the greater part, but all unquestionably 
 earnest and sincere in their desire to do something 
 for the betterment of existing social conditions. 
 The one notable sentiment which these men and 
 women applauded most heartily, and most enthu- 
 siastically reiterated, was expressed by President 
 Gates of the Iowa State University in the following 
 words: 
 
SOCIALISM'S STRENGTH INCREASING. 21 
 
 "I love the Trusts, yet I hate them as I hate the 
 idevil. I love them because they put an end to 
 destructive competition, because they save waste 
 and energy. So I may say the same thing of de- 
 partment stores. They save women shoe leather, 
 worry and their good temper. It is true that the 
 department stores put small shopkeepers here and 
 there out of business. They are put out upon the 
 streets to do the best they can, sometimes to become 
 paupers; yet that is not the fault of society. Our 
 society is so disorganized that we make no provision 
 to cure the evils caused by the Trusts. 
 
 "Some day, after the Trusts have, with great 
 labor and difficulty, taken the cart up to the top of 
 a long hill, we will relieve them of their labors. 
 We will say, 'This is our cart,' and take it. The 
 Trust as at present organized, may be called the 
 Great American Brotherhood, I,imited. Some day 
 we will strike out that word J^imited." 
 
III. 
 
 NO LONGER THE SOCIALISM OP THE 
 IDEALISTS' ISOLATED COMMUNITY. 
 
 The Communist and Radical Socialist overshadowed to- 
 day by a Formidable Figure worthy of serious atten- 
 tion — Significant characteristics of the times noted 
 by the President of Columbia University, Dr. Seth 
 l/ow, and by others — The prediction of Herbert 
 Spencer. 
 
 Among thoughtful observers of existing social 
 and industrial conditions, it is generally conceded 
 that Socialism has reached a stage in the affairs of 
 this country at which it must receive serious con- 
 sideration. So long as the advocates of Com- 
 munistic and Socialistic ideas were men and women 
 who organized small communities, given over, as 
 one writer says, "to the dreamers of dreams and to 
 the seers of visions," they failed to attract general 
 attention. To the people of the United States these 
 self-isolated communities have proved of no more 
 concern than the members of any of the small re- 
 ligious sects of this country. For these communal 
 and socialistic communities have exercised no in- 
 fluence upon social, political or industrial condi- 
 tions outside of their insignificant villages. They 
 have taught no great lesson, their failures have 
 caused no more than the passing comment that even 
 Communists and Socialists are subject to the com- 
 mon weaknesses of humanity. There are seventy- 
 two of these communistic villages in the United 
 States, and the mere announcement of this fact will 
 
KO LONGER THE SOCIALISM. 23 
 
 doubtless be news to the average man of intelli- 
 gence, for these feeble eflorts to establish a new 
 social order have scarcely made a ripple upon the 
 waters of American life. 
 
 It is not to the hamlets of these self-isolated ideal- 
 ists that any thoughtful observer will look for the 
 signs of threatened or impending changes in 
 national, social, political and industrial conditions. 
 The sociologist has turned his back on these im- 
 potent communal villages, founded for the greater 
 part by men of foreign birth who came to America 
 to escape oppression; and the student of social 
 evolution now finds in the Socialist, whose prin- 
 ciples are advanced by a political party and leaders 
 of thought, a formidable figure worthy of serious 
 attention. 
 
 Most of those influential journals which the 
 Socialist calls the organs of Capital, are alive to the 
 fact that Socialism is an active and growing force. 
 By way of illustration permit me to quote from a 
 recent editorial which appeared in the Municipal 
 Railway Record: 
 
 "Though Communism and Radical Socialism are 
 not to be considered as serious problems, yet there 
 is a social and economic change gradually develop- 
 ing which may call for sober and thoughtful con- 
 sideration. In an address before the Central Fed- 
 eration Union, on ' Some Characteristics of Our 
 Times,' President Seth Low of Columbia Univer- 
 sity said that among the many changes that were 
 taking place, one of the most marked was that the 
 individual capitalist was disappearing in the cor- 
 
24 MARK HANNA'S "MORAL CRANKS." 
 
 poration and the trust, on the one hand, and the 
 individual laborer was being absorbed by the union, 
 on the other. The individual had, indeed, increased 
 in importance politically, but he was losing his in- 
 dividuality." 
 
 "The individual laborer will certainly not hold 
 his own, if the preachers of a certain kind of Social- 
 ism have their way; for one of the most marked 
 social tendencies of the end of the century is the 
 effort to suppress individuality, to put a stop to 
 individual effort and initiative, and to establish what 
 an impracticable school of theorists call Associative 
 Socialism. President Low thinks that the move- 
 ment is well advanced. 
 
 "The material condition of the inhabitants of the 
 successful communistic village — for we have seven- 
 ty-two of them — compares favorably, no doubt, 
 with that of the German peasant by whom the 
 majority of American communes were originally 
 started ; but the monotony, the personal submission, 
 the impossibility of privacy or temporary seclusion, 
 the absence of anything like intellectual activity in 
 these societies, would render the life well-nigh un- 
 bearable to people who previously had been ac- 
 customed to a higher standard of happiness than at 
 present within the reach of the ordinary day laborer. 
 Hence, the poorer and more narrow and miserable 
 the condition of the people who start a communistic 
 experiment the more likely it is, under judicious 
 leaders, to succeed. People are easily satisfied when 
 almost any change in their lives must be for the 
 better. It would be undesirable to detract from the 
 achievement of the American communes in raising 
 the poorest and most miserable to a degree of ma- 
 
NO I.ONGER THE SOCIALISM. 25 
 
 terial prosperity, which compares with that of well- 
 to-do farmers in any country. But it is impossible 
 to resist the conviction that their chief value to the 
 world has been in illustrating the limitations and 
 drawbacks of the system." 
 
 In the foregoing lines the reader may clearly dis- 
 tinguish the difference between the denizens of the 
 communal village and the Socialist who commands 
 the attention of the president of a great university 
 and all thoughtful observers who are studying the 
 vital social questions of the day. 
 
 Radical Socialism as represented by the Herr 
 Mosts and others of that school is worthy of no 
 more serious consideration from a political stand- 
 point than that paid to the Oneida and other com- 
 munal societies, but it must be conceded that the 
 advancement of Socialistic ideas by national con- 
 ventions, the professors of our colleges, by law- 
 makers and ambitious politicians is indeed deserv- 
 ing of careful thought. And in future presidential 
 campaigns. Socialistic ideas will have to be dealt 
 with. For the Socialist is no longer self-isolated; 
 he has entered the field of national politics wearing 
 a political mask, it is true, yet none the less easily 
 identified. Municipal Ownership has been thrown 
 to him as a concession, for great numbers of our 
 people who are not Socialists have come to believe 
 that Municipal Ownership of water works and other 
 public utilities is in the public interest. Having 
 gained one concession, the Socialist now demands 
 the public ownership of railroads, telegraphs, elec- 
 tric light plants and the Trusts. What the outcome 
 
26 MARK HANNA'S "MORAL CRANKS." 
 
 of his efforts may be it is not the part of the writer 
 to predict, for he is writing these lines solely as an 
 observer. That the proposed change in the exist- 
 ing order of things will not come hastily, if it come 
 at all, may be inferred by reading the closing para- 
 graph of the plank on National Ownership of rail- 
 roads, which appeared in the platform adopted by 
 the Populistic convention in St. Louis, 1896: 
 
 "Such ownership is to be accomplished gradually, 
 in a manner consistent with sound policy." 
 
 While the writer may not venture upon any 
 prophecies concerning the possible achievements 
 or reverses of Socialism, the following prediction 
 made by that distinguished master of thought, Her- 
 bert Spencer, may be of marked interest just now: 
 
 "A sudden substitution of the regime proposed 
 for the regime which exists, as intended by bearers 
 of the red flag, seems less likely than a progressive 
 metamorphosis. To bring about the change it 
 needs but gradually to extend the state regulation 
 and restrain individual action. If the central ad- 
 ministration and the multiplying local administra- 
 tions go on adding function to function; if year 
 after year more things are done by public agency, 
 and fewer things left to be done by private agency; 
 if the business of companies are one after another 
 taken over by the state or municipality, while the 
 businesses of individuals are progressively trenched 
 upon by official competitors ; then, in no long time, 
 the present voluntary industrial organization will 
 have its place entirely usurped by a compulsory in- 
 dustrial organization. Eventually the brain worker 
 
NO LONGER THE SOCIALISM. 27 
 
 will find that there are no places left save in one or 
 other public department; while the hand worker 
 will find that there are none to employ him save 
 public officials. And so there will be established 
 a state in which no man can do what he likes, but 
 every man must do what he is told. An entire loss 
 of freedom will thus be the fate of those who do not 
 deserve the freedom they possess." 
 
IV. 
 
 LEADERS OF THE NEW MOVEMENT 
 AGAINST WEALTH. 
 
 Not the men described by the Rev. Dr. Hillis in his not- 
 able contribution to the controversy between 
 Wealth and its enemies — They are to be found in 
 church congregations and in colleges and among 
 the great middle class — Indictment of the owners of 
 municipal franchises by the Rev. Dr. Washington 
 Gladden — "The Devil's dance of Capitalization" as 
 it is characterized and defined by Prof. Albion W. 
 Small, Professor of Sociology in the University of 
 Chicago. 
 
 Eastern clergymen are beginning to understand 
 that notwithstanding the defeat of the movement 
 against Wealth in 1896, its forces have reorganized 
 and are moving forward under new leaders, with 
 new battle cries and renewed determination. In- 
 stead of demands-for free silver we hear the louder 
 demands for Municipal Ownership of public utili- 
 ties and the taxation of franchises, demands for the 
 abolishment of trusts, demands for a restriction of 
 the profits of capitalists engaged in business enter- 
 prises. The leaders in this movement are trying to 
 invest it with the character of a religious crusade; 
 its doctrines are preached as a religion. Those who 
 are carefully noting the progress of the movement 
 under its new form must have been impressed with 
 its semi-religious aspect, by the fact that in the dis- 
 cussions conducted by its leaders the sacred name 
 of Jesus Christ is mentioned more often than that 
 of Jefferson or the names of other statesmen to 
 
I.EADERS OF THE NEW MOVEMENT. 29 
 
 whose utterances the American people have hither- 
 to looked for guidance. The Golden Rule, the Deca- 
 logue, the sayings of the Scriptures are referred to 
 far more frequently in the controversies raging over 
 sociological questions now engaging the attention 
 of the country than this or that national political 
 platform. As it was in the early days of agitation 
 over the slavery question, the debaters on each side 
 are quoting Scripture in defense of their respective 
 contentions, instead of quoting statesmen. 
 
 The Rev. Dr. Hillis has made a notable contribu- 
 tion to the controversy between Wealth and its 
 assailants. In a sermon from the text "The strong 
 ought to bear the infirmities of the weak," delivered 
 in Plymouth Church Sunday, May 21, 1899, Dr. 
 Hillis said incidentally: 
 
 "To-day for the first time in history, a revolution 
 has been fomented against those who represent law, 
 order, thrift and the economy that makes and saves 
 property. 
 
 "Ours is an era when an enemy is abroad in the 
 land sowing tares by day and by night, lighting the 
 flames of class hatred. The children of unrest and 
 discontent are being taught to hate order and in- 
 dustry. Men who have earned a dollar and put it 
 into a mug of beer are being inoculated with money- 
 phobia against those who have earned a dollar and 
 put it into a savings bank. In past times good men 
 rose up against the Bastile and the Inquisition, but 
 to-day for the first time in history a revolution has 
 been fomented against those who represent law, 
 order, thrift and the economy that makes and saves 
 property." 
 
30 MARK HANNA'S "MORAL CRANKS." 
 
 Dr. Hillis seems to have overlooked the most 
 significant feature of this movement against Cor- 
 porate Wealth: While it may be true that the men 
 who have earned a dollar and put it into a beer mug 
 are being inoculated with moneyphobia against 
 those who have earned a dollar and put it in a 
 savings bank, it is incontrovertible that a great mass 
 of those arrayed in the ranks of hostility to wealth 
 are not idlers, spendthrifts or dissipated men. It 
 is useless to close one's eyes to the facts that a 
 great multitude of those who are looking upon 
 wealth with unfriendly eyes are to be found in 
 church congregations, colleges and among the so- 
 called middle classes of our communities. Those 
 who are to be regarded by Wealth as its most for- 
 midable opponents to-day are not the Herr Mosts, 
 the Lucy Parsons' and the beer-drinking Socialists 
 of yesterday. For in the van of the new movement 
 are ministers, college professors, governors of 
 states, church congregations, ambitious politicians, 
 with the old-time Socialists and the idlers following. 
 
 If one desires any proof of the truth of this state- 
 ment, let him talk with his neighbors; let him ask 
 what they have to say about trusts, corporations 
 and great aggregations of wealth, and what their 
 ministers are saying. Ask any lawyer who has had 
 experience in the trial of damage suits against cor- 
 porations to repeat the answers made by jurors 
 when examined as to their prejudices. The idea 
 that is meant to be conveyed by this suggestion may 
 be made clearer by illustration : Recently I asked a 
 lawyer of high standing who has figured promi- 
 nently in damage suits if he had noted in the ex- 
 amination of jurors any reflection of the tendency of 
 
IvEADERS OF THE NEW MOVEMENT. 31 
 
 thought concerning corporations, and he answered : 
 "It is the almost invariable custom for lawyers on 
 either side of a case to ask jurors this question: 
 'Have you any prejudices against, any feeling of un- 
 friendliness for corporations in general that might 
 affect your judgment as a juror in this case?' I 
 have heard well-dressed men, men of intelligence, 
 answer, again and again, in the affirmative, and fre- 
 quently the answer has been coupled with a bitter 
 remark indicative of great hostility to corporations 
 and great aggregations of wealth. Of late I have 
 been greatly impressed with the frequency of these 
 declarations." 
 
 Occasionally when a more or less prominent 
 clergyman inclined to sensational methods indulges 
 in denunciations of wealth, his sermon is reported, 
 but it excites little or no comment. Yet if the ser- 
 mons of many clergymen who are not classed as 
 prominent by the newspapers should be reported, it 
 would be patent to even the most complacent and 
 self-satisfied critics of the movement against Wealth 
 that it is receiving widespread encouragement from 
 pulpits deemed unworthy of notice by newspapers, 
 but nevertheless wielding in the aggregate large in- 
 fluence. Of what use is it to ignore the influence 
 which any thoughtful observer can see at work 
 about him day after day? The advance of Social- 
 ism, whether it assumes the title of Christian So- 
 cialism or presents itself in the old form, cannot be 
 stayed by the calling of names, the use of vitupera- 
 tion or epithets. Reason and sound argument, the 
 remedying of evils justly complained of, are the 
 
32 MARK HANNA'S "MORAL CRANKS." 
 
 only weapons which can be used effectively by those 
 who are facing the new movement. 
 
 The Rev. Dr. Washington Gladden of Columbus, 
 O., who was recently elected to the Common Coun- 
 cil of that City, and is a warm friend of the Christian 
 Socialist Jones, forcibly expresses a sentiment that 
 has run like wildfire through the West and has 
 reached the East. In an interesting paper on the 
 "Spread of Socialism," that appeared in the issue 
 of the Outlook, May 13, 1899, Dr. Gladden says: 
 
 "There is one class of capitalistic aggregations, 
 based on monopoly, against which popular indig- 
 nation is likely to be kindled even sooner than 
 against the so-called trusts. I refer to those which 
 are founded on municipal franchises. Most of the 
 companies owning these franchises have issued cap- 
 ital far in excess of their actual investment, have 
 disposed of the stock thus issued and are charging 
 enough for the service rendered the public to pay 
 the dividends on all this watered stock. If they 
 were content with a fair return on what the plant 
 has actually cost them, the price of the service could 
 be greatly reduced. A fair return on their actual 
 investment nobody grudges them, but the privilege 
 of taxing the community to pay dividends on two or 
 three times as much money as they have invested 
 is going to be questioned one of these days. When 
 the reckoning day comes to our monopolies some 
 sharp inquisition may be made into the fundamental 
 equities of many of these institutions. Vested rights 
 will be respected, I have no doubt; but vested 
 wrongs may be called to account. It is probable 
 
IvEADERS OF THE NEW MOVEMENT. 33 
 
 that some new legal maxims will be framed and en- 
 forced and that our jurisprudence will be enlarged 
 and invigorated by a new application of ethical prin- 
 ciples. Whether corporations in any sense private 
 will long be permitted to manage public utilities 
 may be doubted; but if they do they will certainly 
 be required to govern their conduct by a strict re- 
 gard for the public welfare." 
 
 In this statement made by Dr. Gladden is the 
 principal charge in the indictment which the advo- 
 cates of Municipal Ownership have brought against 
 corporations owning surface railroads, gas, electric 
 light and telephone plants. You will find the same 
 charge made by Professor Bemis in his book on 
 "Municipal Monopolies"; the same charge is being 
 made from pulpits and the chairs of college profes- 
 sors all over the country. With the truth or falsity 
 of this charge the writer has no concern in the writ- 
 ing of these letters; for he is dealing with facts, as 
 they have been found. Yet one may be permitted 
 to say, without being open to the charge of bias, 
 that this charge has, so far, not been refuted. 
 
 The new leaders of Socialism in this country are 
 not the beer guzzlers whose fiercest fulminations are 
 to be heard in little smoke-filled halls. The most 
 intense Socialists of the day are to be found in our 
 colleges and pulpits. Some of our observant cap- 
 italists have become convinced that something must 
 be done by them in the way of meeting a new phase 
 of social agitation, and Professor Herron, in the fol- 
 lowing language, tells how it is proposed to meet 
 college Socialism: 
 
34 MARK HANNA'S "MORAL CRANKS." 
 
 "As an instance of the educational influence oi 
 money, let me quote from one of the speakers at 
 the recent annual convention of Illinois bankers: 
 
 " 'Largely through the efforts of the American 
 Bankers' Association,' says this speaker, ' a school 
 of Commerce and Politics has been established at 
 the University of Chicago and from it much may be 
 hoped.' 
 
 "The university referred to is in no sense what- 
 ever an exception; the smallest Western college is 
 just as much dependent on the good-will of money 
 as Chicago University. All our educational and 
 missionary organizations elect men to their boards 
 for the bald reason, when divested of pious phrases, 
 that they have money ; and this without a thought of 
 how the money is obtained." 
 
 It is a significant sign of the tendency of thought 
 to find upon the heels of Professor Herron's decla- 
 rations. Dr. Gladden quoting Professor Albion W. 
 Small, head pwofessor of sociology in the University 
 of Chicago, a professor who while not regarded as 
 an advocate of Socialism, nevertheless says: 
 . "In this age of so-called democracy we are get- 
 ting to be the thralls of the most relentless system 
 of economic oligarchy that history has thus far re- 
 corded. That capital from which most of us di- 
 rectly or indirectly get our bread and butter is be- 
 coming the most undemocratic, atheistic and in- 
 human of all the heathen divinities. I am not 
 thrusting the dust of my library in your faces; but 
 if you heed the symptoms from bank and ofifice, 
 factory and railroad headquarters, and daily press, 
 
LEADERS OF THE NEW MOVEME^NT. si 
 
 you have discovered that the very men who have 
 made these combinations are beginning to be 
 frightened at their shadows. These very business 
 men, who claim a monopoly of practical ' horse 
 sense,' have involved themselves and all of us in a 
 grim tragedy. They aire asking in a quiet way how 
 it is all going to end. Whether they realize it or 
 not, our vision of freedom is passing into the 
 eclipse of universal corporate compulsion in the in- 
 terest of capital. The march of human progress is 
 getting reduced to marking time in the lock-step of 
 Capital's chain gang. It would make infinitely, 
 more for human weal if every dollar of wealth was 
 cleaned off the earth, if we could have instead of it 
 industry and homes, and justice and love and faith, 
 than to be led much further into the devil's dance of 
 capitalization." 
 
V. 
 
 PROFESSORS UNDER A BAN. 
 
 Professors Bemis, Parsons, Ward, Commons and Herron 
 alleged " Victims of Intolerant Capital " — Re- 
 movals from college chairs regarded as giving a 
 fresh impetus to Socialism — The cases of the Kan- 
 sas professors described by Prof. Bemis to "Mul" 
 — "I am on the capitalist side every time," ex- 
 plained Prof. Harper, of the Chicago University. 
 
 The removal of Professor Bemis from his chair 
 in the University of Chicago, his subsequent oust- 
 ing from a chair in the Kansas Agricultural Col- 
 lege, along vi^ith Professors Parsons and Ward; 
 the removal of Professor John H. Commons from 
 the Syracuse University, and the attempt to force 
 Professor Herron out of the Iowa State University 
 because of their alleged Socialistic teachings and 
 strictures on monopolies, caused widespread dis- 
 cussion throughout the country. The removals of 
 these educators, no matter what may have really 
 been the cause, undoubtedly gave a great impetus 
 to the new Socialism and created intense sympathy 
 among the opponents of monopolies. Far and 
 wide these professors were regarded as the victims 
 of intolerant Capital. On every side Socialists 
 pointed to the removals of these men as evidences 
 of an intention on the part of Capital to suppress 
 free speech in our colleges and universities. 
 
 In reply to the statement that these unchaired 
 professors had been removed fcfr incompetency, 
 
 36 
 
PROFESSORS UNDER A BAN. 37 
 
 Carl Vrooman, Regent of the Kansas College, said 
 to the writer: 
 
 "The professors were dismissed for political 
 reasons solely. That admission was riiade by the 
 chief officer of the college. Republicans as well as 
 Democrats in Kansas are incensed over this action. 
 They did not dare remove the professors until the 
 students went to their homes. The students got 
 wind of what was proposed and entered vigorous 
 protests. The people of the State will attend to this 
 case." 
 
 Professor Commons' friends say he was dropped 
 from the Syracuse University ostensibly on the 
 ground of economy, but really because he voted for 
 William Jennings Bryan and had exposed the evils 
 of monopolies. The professor said when I ques- 
 tioned him concerning this matter: "I do not care 
 to make any public statement at present beyond 
 this : It is true I voted for Bryan. It is true that I 
 was informed by one of the officials of the college 
 that I was not in accord with the sentiment of those 
 upon whom the college depended for support." 
 
 That was all he would say for publication. Here 
 is the first public answer made to the charge that 
 the Kansas professors were removed for incompe- 
 tency. The answer is authorized by Professor 
 Bemis and was intended for publication in a New 
 York magazine, but was handed to the writer at the 
 National Social and Political Convention held at 
 Buffalo, in June, 1899: 
 
 "There afe seven regents of the Kansas Agri- 
 cultural College. There are seven hundred stu- 
 dents. About six years ago the Democratic and 
 Populist fusion ticket won the State, which had been 
 
38 MARK HANNA'S "MORAL CRANKS." 
 
 carried by the Republicans a few years previously 
 by 70,000 majority. Governor L,ewelling was 
 elected on the fusion ticket and that gave to the 
 fusionists control of the State Board of Regents. 
 They could have reorganized the college, but did 
 not, except to call Thomas E. Wiel to the chair of 
 Political Economy. He was an A. M. of Harvard. 
 The Republicans regained control of the State and 
 the Board of Regents. They forced Professor Wiel 
 to confine his teachings largely to other branches 
 than economics, physics and rhetoric. In 1896 the 
 State again was carried by the Populists and a law 
 was passed somewhat changing the organization of 
 the Board of Regents. The entire board of seven 
 was made up of Populists and Democrats. 
 
 "They determined to make a record in the way 
 of improving the efHcacy of the college in agricul- 
 tural and engineering by increasing the number of 
 elective studies in those lines and securing a 
 stronger faculty independent of politics, for it was 
 generally held by persons of all parties that several 
 of the professors in their departments had never 
 had any advanced training in great universities and 
 were not a success at the college. 
 
 "The board also desired to increase the work in 
 economics, history and political science, and to call 
 men of well-known liberal views, although they 
 were not particular about their being politically af- 
 filiated with the Populist movement, or even with 
 the free coinage of silver at 16 to i, which had been 
 a great political shibboleth in the 1896 campaign in 
 Kansas. The board also felt that the president of 
 the college, George E. Fairchild, who had been 
 there for over fifteen years, was avowedly opposed 
 
PROFESSORS UNDER A BAN. 39 
 
 to both of the forenamed lines of development. 
 While considering whether to ask for his resigna- 
 tion, he voluntarily gave it, apparently not expect- 
 ing it to be accepted, but it was, and several changes 
 were made in the faculty. Nearly all the new pro- 
 fessors, however, in the agricultural, engineering 
 and general departments of natural science, were 
 either Republicans or entirely unidentified with po- 
 litical movements. Very careful inquiry has shown 
 that in their cases no knowledge was sought or ob- 
 tained by the new Board of Regents relative to po- 
 litical aiiEliations of these professors, and in most 
 cases it was the universal verdict that the new pro- 
 fessors were far better equipped and far more suc- 
 cessful in their teaching than were the former in- 
 structors. 
 
 "The new head of the Agricultural Department 
 had, for the previous three or four years after gradu- 
 ation from Kansas College, been in charge of the 
 famous farm of former Vice-President Levi P. Mor- 
 ton, on the Hudson River. Professor Thomas E. 
 Wiel, who had only been allowed to do a little teach- 
 ing in political economy for two years, was made 
 president, and in his new position had only tried to 
 teach one class in economics three months in each 
 year. 
 
 "Professor Frank Parsons of the Boston Univer- 
 sity School of Law, and well known for his con- 
 tributions to the Arena, was engaged to take charge 
 of classes in history and political science from Janu- 
 ary to June of each year, while the work in eco- 
 nomics was increased from two kinds to four, and 
 a three term not conducted by the president, to- 
 gether with some new courses in history, was given 
 
40 MARK HANNA'S "MORAL CRANKS." 
 
 to Professor Edward W. Bemis. 
 
 "He had been at the University of Chicago from 
 1892 to 1895 and then was dismissed with a state- 
 ment by President Harper. ' It is all very well to 
 sympathize with the working man, but we get our 
 money from the other side and can't afford to offend 
 them. I am on the capitalist side every time.' 
 
 "When President Harper of the University of 
 Chicago informed Professor Bemis in the spring of 
 1895 that his services would not be desired as as- 
 sociate professor of political economy after July, the 
 president stated that the professor's views were not 
 radical and his investigations and work along the 
 line of labor and city government were valuable and 
 he was a good man to do such work, nevertheless 
 the University of Chicago was not the place where 
 such work could be done, that the case was exactly 
 like that of Professor Ely, who was very much liked 
 by the president, but the latter could not call him 
 to the university even if there were a vacancy. 
 
 "About the same time the President in speaking 
 of Professor Bemis remarked to one prominent and 
 highly reputable gentleman : ' It is all very well to 
 sympathize with the workingmen, but we get our 
 money from those on the other side and cannot af- 
 ford to offend them.' 
 
 "To another gentleman of world-wide reputation 
 the President said : ' I am on the capitalist side every 
 time. There is where I get my money.' 
 
 "Later, when President Harper attempted to as- 
 sign other reasons for the dismissal of Professor 
 Bemis, the latter challenged him to appoint an 
 umpire, before whom these two men would apf>ear 
 and face the President, if necessary, and confirm the 
 
PROFESSORS UNDER A BAN. 41 
 
 above quotations. The President ignored the chal- 
 lenge, which is still open to him. Later, a well-to- 
 do business man of Chicago, Mr. Z. Swift Holl- 
 btook, editor of the Biblio Theca Sacra, called upon 
 the two gentlemen above quoted and gave Professor 
 Bemis a statement that he had quoted correctly 
 their conversation with President Harper, although 
 this appears in the Arena for October, 1897, and 
 was sent to the President by registered mail, with 
 a statement by the author of the article, Hon. 
 Charles A. Towne, that if the challenge for an 
 umpire was not then accepted the case must be con- 
 sidered decided against the University of Chicago, 
 that Standard Oil institution remained silent. 
 
 "When Professor Bemis was called to the Kansas 
 State Agricultural College in the spring of 1897 he 
 wrote the Populist Board of Regents that he did not 
 believe in the free coinage of silver at 16 to i and 
 must be allowed perfect independence in all his 
 teaching. This was immediately guaranteed, and 
 he declares that the agreement has been kept. Cer- 
 tain important conservative interests in Kansas, 
 such as the railroads and possibly the Standard Oil 
 influence, however, recognizing the leanings of Pro- 
 fessor Parsons and Bemis toward public ownership 
 of lighting and street railway plants, determined to 
 secure their removal. The writings of the Presi- 
 dent of this college upon the monetary history of 
 the United States, chapters of which frequently ap- 
 peared in the college magazine, the Industrialist, 
 and some personal antagonisms growing out of the 
 removals of 1896, stimulated a clamor in some of 
 the Republican newspapers of Kansas for the re- 
 moval of every teacher in the college in any way 
 
42 MARK HANNA'S "MORAL CRANKS." 
 
 connected with the departments of economics or 
 history. 
 
 "The new Republican Governor, Stanley, elected 
 last fall, was unable to secure a majority of the 
 Board of Regents for accomplishing this purpose 
 without a farcial investigation by a legislative com- 
 mittee, which enabled him legally to remove some 
 of the Populist regents on such technical charges 
 that they run a lunch room and a book store for 
 students and paid one of the regents $15 a month 
 as purchasing agent for the dining hall. Having 
 secured control of the board the Republicans were 
 met by urgent appeals, petitions and resolutions, 
 adopted almost unanimously by the students, for 
 the retention of the faculty and the continuance of 
 the course of study ; but they kept the students quiet 
 with the claim that little change would be at- 
 tempted. 
 
 "After the students had been home for the sum- 
 mer vacation, however, the regents, on June 9, dis- 
 missed the President, the Secretary, Professors 
 Parsons and Bemis and Professor Duren J. H. 
 Ward of the English department, who had come 
 under suspicion of manifesting utilitarian tenden- 
 cies and of being able to conduct sociological teach- 
 ing along liberal lines, having twice taken the 
 President's classes for a short time during his ab- 
 sence. In a conversation between the board and 
 Professor Bemis, which was taken down verbatim 
 by the President's secretary, the new President of 
 the board stated : 'We are not committing ourselves 
 in any way when I testify to my high opinion of 
 Professor Bemis personally, his ability as an in- 
 structor and his character as a gentleman.' 
 
PROFESSORS UNDER A BAN. 43 
 
 "It was also stated that there was no evidence of 
 any partisanship in the work of the dismissed pro- 
 fessors, but there had been a political revolution in 
 the state and that part of the state which the regents 
 represented did not indorse the economic tendencies 
 which it was generally believed had place in the 
 college. 
 
 "This is almost literally the language of the board. 
 Similar statements were made to each of the other 
 dismissed professors. The issue, therefore, . was 
 perfectly clear. These professors were not dis- 
 missed because of incompetency or from any evi- 
 dence of unfairness or partisanship in their work, 
 but because the Republican party of Kansas, like 
 the trustees of most privately endowed colleges and 
 universities, do not believe that students should be 
 brought into close touch with modern progressive 
 movements, in economics and political science. 
 
 "In view of all this, the Buffalo conference, under 
 the leadership of such men as N. O. Nelson and 
 Mayor Jones of Toledo, believe that the time is 
 ripe for an organized efifort to open professorships 
 more fully than now in the state institutions and to 
 secure private support for a great school of re- 
 search. A movement is now on foot for that pur- 
 pose." 
 
 That protest against interference with our uni- 
 versities was echoed by the distinguished Chancel- 
 lor McCracken in addressing the students of the 
 New York University, June 6, 1900, when he said: 
 
 "Within my time as an educator I have seen the 
 college or university brought up before the religious 
 
44 MARK HANNA'S "MORAL CRANKS." 
 
 sect which controlled it and threatened : ' Do what 
 we say or we will renounce you.' On the other 
 hand brought up before some millionaire trustee 
 and threatened : ' Do what I say or I will destroy 
 you.' 
 
 "The former had this advantage that he was con- 
 scientiously claiming what he judged a service to 
 God. The latter was openly demanding the service 
 of Mammon. I pity either the university or the 
 university man that will bow down to any claim of 
 caste whether religious caste or moneyed caste." 
 
VI. 
 
 WESTERN SOCIALISM. 
 
 Sentiment behind the movement for the acquisition of 
 Public Utilities in Chicago — A significant feature of 
 the last mayoralty campaign in Chicago — Interview 
 with Mayor Carter H. Harrison upon the results of 
 the Municipal Ownership of such Public Utilities as 
 Water-works and Electric Lighting. 
 
 ' Where are the saints able to prove their sainthood in the willing- 
 ness to be no saints, that the whole human life may be socially sancti- 
 fied at last? Where are the anointed ones who will descend into the 
 eeconomic hell, that they may ascend -with hell and its inhabitants into 
 the kingdom of heaven? Where are the saviors who will lose their 
 own souls, that they may save the soul of the race? I^et them arise and 
 come quickly ! For them wait the captives and captains of industry 
 alike ; for them wait the heart of God and the destiny of the world, 
 
 " Sooner or later they who stand for the social order of the king- 
 dom of God, -who believe and teach, in Tvork and ■word, that the facts 
 and forces of Jesus' life are wise and strong for the perfect organization 
 of society, will meet the existing order of things in clearly defined lines 
 of conflict. The Pilates of monopoly have already made friends with 
 the Herods of the state, and the high priests of the church are blessing 
 their union. It is no longer best to evade or conceal the divine inevit- 
 able ; there may have to be some dying done before our social wrongs 
 are thoroughly righted." — Professor George B. Herron in a noonday 
 lecture at Willard Hall, Chicago, December 12, 1898, before the Christian 
 Citizenship I^eague. 
 
 American Socialism claims as its latest and most 
 notable triumph the election of the radical Chris- 
 tian Socialist, Samuel M. Jones as Mayor of To- 
 ledo, and the election of the more conservative 
 Carter H. Harrison, as Mayor of Chicago. Har- 
 rison, however, does not call himself a Socialist, 
 preferring to be known as a Bryan Democrat, and 
 incidentally a believer in Municipal Ownership. 
 As Mr. Bryan recently said in referring to the Mu- 
 nicipal Ownership movement, "This question is 
 now being so generally agitated in the cities 
 throughout the country that it rises to the dignity 
 45 
 
46 MARK HANNA'S "MORAL CRANKS." 
 
 of a national issue. The gold men are opposed to 
 such principles; they are mostly capitalists and are 
 opposed to the common people. But time and agi- 
 tation will bring about the supremacy of the 
 masses," and as Mayor Harrison, a few days later, 
 declared that he irrevocably favored the renomina- 
 tion of Mr. Bryan for the presidency, conclusions 
 concerning the Mayor's disclaimer of afifinity with 
 City Socialism will easily be reached. As a matter 
 of fact, each of the three candidates for Mayor at the 
 last election held in Chicago, avowed his sympathy 
 with certain Socialistic principles. Altgeld was 
 frankly a Socialistic candidate. Zina R. Carter, 
 nominated as a Republican, manifested such a de- 
 sire to win Socialistic support that in the last stage 
 of his campaign the Chicago Evening Post, a Re~ 
 publican paper, characterized his utterances as evi- 
 dence of "Socialism Going Mad." Harrison, al- 
 though openly an advocate of Municipal Owner- 
 ship, was more guarded in his utterance of Social- 
 istic sentiments, and so despite his nomination as a 
 Democrat he received a heavy conservative Repub- 
 lican vote, which later experienced a shock when- 
 he announced his devotion to the cause of Bryan. 
 Altgeld, the acknowledged Socialistic candidate 
 for Mayor of Chicago, received 47,162 votes and 
 Carter, the Republican candidate who was charged 
 by a Republican paper with "out-Heroding Herod 
 and assuming a more extreme position in favor of 
 municipalization than that of the avowed candidate 
 of the discontented and revolutionary classes," re- 
 ceived 107,439 votes. The combined vote of these 
 two advocates of Socialistic principles amounted to 
 154,601, being 6,189 votes in excess of the 148,412 
 
WESTERN SOCIALISM. 47 
 
 votes polled by Carter, the-more conservative advo- 
 cate of Municipal Ownership. These figures viewed 
 from any standpoint show clearly that Socialistic 
 sentiment is strong in Chicago. Mr. Kohlsaat, 
 proprietor of two influential Republican papers in 
 Chicago, himself a non-believer in Municipal Own- 
 ership, indicated to the writer the dilemma which 
 confronted conservative voters in the mayoralty 
 election by saying: 
 
 "I believe that there were fully 75,000 Republi- 
 cans who voted for Mayor Harrison because they 
 believed he was the safest of the three candidates — 
 more conservative than the others." 
 
 In the light of the foregoing facts Chicago be- 
 comes a most interesting city to the student of so- 
 ciological questions, especially when it is remem- 
 bered that it was but a few years ago this com- 
 munity endeavored to strangle Socialism and An- 
 archy with the hangman's noose. The throwing of 
 a bomb by an undiscovered revolutionist and the 
 deaths which were caused by its explosion were put 
 forward in justification of the subsequent execution 
 of several Socialistic and Anarchistic agitators ju- 
 dicially declared to be the accomplices of the unde- 
 tected assassin. It was then thought that American 
 Socialism and Anarchy had received a fatal blow, 
 for the public made no distinction between the two 
 schools of social agitation. There has evidently 
 been a great revulsion in sentiment in Chicago with- 
 in the last few years. It was but a short time aga 
 that one of the editors of a leading conservative 
 
48 MARK HANNA'S "MORAL CRANKS." 
 
 newspaper of Chicago said to the writer, in speak- 
 ing of this matter: 
 
 "Chicago no longer believes that all of those who 
 were executed for the Haymarket crime were 
 guilty." 
 
 But whether those executed were guilty or in- 
 nocent, it is a fact that the doctrines which led 
 some of them to the gallows are preached with im- 
 punity in Chicago to-day. The denunciations which 
 they hurled at wealth, their declarations that the 
 rich were growing richer and the poor poorer, their 
 demands that municipal government should engage 
 in the War against Wealth, have been repeated 
 again and again, by men preaching Socialism from 
 pulpits and the chairs of college professors. And 
 the same cries have been raised by candidates for 
 public office. Witness the Rev. Dr. Thomas of the 
 People's Church, Chicago, declaring from his pul- 
 pit one Sunday after discussing social inequahties: 
 
 "The remedy will be Evolution or Revolution ! " 
 
 Hear Professor Herron as he stands before a 
 great audience in Willard Hall, Chicago, solemnly 
 declaring: 
 
 "It is no longer best to evade or conceal the 
 divine inevitable; there may have to be some dying 
 before our social wrongs are thoroughly righted." 
 
 Hear his appeal to the multitude in the same hall : 
 
 "Where are the saints able to prove their saint- 
 hood in the willingness to be no saints, that the 
 whole human life may be socially sanctified at last? 
 Where are the anointed ones who will descend into 
 the economic hell? Let them arise and come 
 quickly. Sooner or later they who stand for the 
 social order will meet the existing order in clearly 
 
WESTERN SOCIALISM. 49 
 
 Hefined lines of conflict. Where are the saviors 
 who will lose their own souls, that they may save 
 the soul of the human race?" 
 
 Are there not in these ominous utterances and 
 fervid appeals some echoes or words that recall the 
 lines from Carlyle's "French Revolution," in which 
 we hear Camille Desmoulins shouting: 
 
 "The hour is come ; the supreme hour of French- 
 man and man; when Oppressors are to try con- 
 clusions with the Oppressed, and the word is swift 
 Death or Deliverance forever." 
 
 No stronger evidence of the truth of the state- 
 ment that there has been a great revulsion from the 
 sentiment dominant in Chicago when Lucy Parsons 
 and her confreres were on trial can be offered than 
 the fact that the doctrines of Professor Herron, his 
 most radical declarations, met with widespread ap- 
 proval, and in no single instance elicited a warning 
 from the authorities. This is probably due to the 
 fact that he declares the Founder of Christianity to 
 be his leader. Even the Mayor of the city, when 
 his public utterances are brought down to the last 
 analysis, is found reiterating some of the sentiments 
 promulgated by Professor Herron, for in a recent 
 speech he said: 
 
 "In 1900 a bitter struggle awaits us. The old 
 fight must be made again — a fight along the lines 
 laid down in the platform of the last Democratic 
 convention for the rights of the plain people; a fight 
 against corruption and all its awful menace to the 
 Republic; a fight against the trusts that seek to 
 make of this nation, founded upon the theory of the 
 
so MARK HANNA'S "MORAL, CRANKS." 
 
 absolute equality of all men, a serfdom submissive 
 to the power and the arrogance of wealth ; a fight for 
 everything that will lift the people higher; a fight 
 against everything that would restrain the Republic 
 in the onward march of its triumphant destiny." 
 
 During a recent visit to Chicago I called upon 
 Mayor Harrison, at his comfortable but unpreten- 
 tious residence on Schiller street, near the lake. 
 He was attired in his bicycle clothes when he re- 
 sponded in person to my card. The Mayor im- 
 pressed me as a young man of cultivation, self con- 
 scious and evidently on very good terms with him- 
 self. In the course of the conversation which fol- 
 lowed he leaned back in his arm chair, speaking 
 habitually with a drooping of the eyelids and in a 
 deliberate, judicial way. In response to my queries 
 the Mayor said : 
 
 "Yes, I am in favor of Municipal Ownership of 
 public utilities, water, gas and electric lighting, for 
 instance. We have tried the experiment with elec- 
 tric lighting so far as the streets are concerned, and 
 with municipal water works. These trials have 
 proved satisfactory. Take our water works, for in- 
 stance: In round numbers, we have received 
 $2,500,000 more than the expense of operating 
 them. Yet a gentleman of large means had the 
 coolness to call on me and submit the proposition 
 that he could supply the city with water at less 
 expense than it is costing the municipality. Our 
 electric light plant, which is used in lighting our 
 streets, has proved successful. The all-night elec- 
 tric light lamps which formerly cost the city $235 
 
WESTERN SOCIALISM. 51 
 
 per lamp have been cut down to a point now where 
 it costs us but $68 per lamp." 
 
 Mayor Harrison was asked if it was proposed to 
 eventually furnish electric lights to consumers in 
 addition to lighting the streets, and he responded 
 with the air of one recalling an unpleasant incident : 
 
 "Eventually, yes. There was a bill introduced 
 in the Legislature giving to us the right to supply 
 consumers with light, but after it passed one house 
 of the Legislature it was sneaked away in some 
 mysterious manner." 
 
 "Then you think the city should engage in com- 
 petition with private enterprises?" 
 
 "I do not see any reason why cities should not 
 furnish light as it furnishes water to consumers," 
 said the Mayor, slowly. "There are other fields 
 in which capital can enter. Capital is not obliged 
 to go into the gas, electric light and city railroad 
 business. There are other enterprises in which it 
 may profitably engage." 
 
 "Do you believe in the Municipal Ownership of 
 railroads?" 
 
 "Yes, but the time for acquiring these roads is a 
 long way off. I do not believe that the city should 
 own and operate its street railways until a civil ser- 
 vice system is well established. Civil service is 
 young in Chicago. Some of our calls for competi- 
 tive civil service examinations are practically un- 
 attended, possibly because some think that the of- 
 fices to be competed for will be distributed by 
 political favor, no matter what examinations may 
 be had, and for another reason, because there is a 
 
52 MARK HANNA'S "MORAL CRANKS." 
 
 prejudice against civil service in the minds of many. 
 If the city should own and operate its railroads, its 
 employes would come directly in contact with the 
 public, and that is one reason why the city should 
 not run its roads until civil service is on a firm 
 basis." 
 
 "Are you in favor of the National Ownership of 
 railroads, telegraph and telephone wires?" 
 
 The Mayor gave a quick, sharp glance, smiled, 
 half closed his eyes and then answered with de- 
 liberation : 
 
 "I am not a presidential candidate and have no- 
 thing to say on that subject." 
 
 Before calling upon Mayor Harrison, one of his 
 most enthusiastic admirers, who is recognized in 
 Chicago as an authority on Municipal Ownership 
 statistics, said in referring to the success which had 
 crowned the acquisition and operation of the city's 
 water works : 
 
 "When Harrison took hold he made the corpora- 
 tions of the city that were using water pay $500,000 
 above the amount they paid in the preceding year. 
 That is to say, he put $500,000 more on the cor- 
 porations and that put the rates down so far as the 
 ordinary consumers of water were concerned. And 
 they didn't make a kick." 
 
 I repeated this statement to the Mayor and for 
 the first time he spoke hastily and said : 
 
 "That statement is incorrect. We increased our 
 water receipts about $400,000 and that was mainly 
 due to the fact that we made the corporations pay 
 for the water they actually used. It is true that this 
 
WESTERN SOCIALISM. S3 
 
 was followed by a reduction of rates to the ordinary 
 consumer. For instance, this house had to pay 
 $25 a year for water under the old system ; now the 
 rate is about $9. We did not make the corpora- 
 tions pay for more water than they used." 
 
VII. 
 
 EL MAHDI OF SOCIALISM. 
 
 Prof. George D. Herron, formerly of the Iowa State 
 University — A new religion proclaimed by him 
 with all the fervor of a Crusader— Young ministers 
 "ready to throw away their lives" — The existing 
 order of things condemned. 
 
 " There is a saying in Italy to the effect that there has never been 
 a revolution in 35uroi>e without a monk at the bottom of it ; and when 
 the social crisis culminates here in America, you will find behind it the 
 hundreds of young ministers of the gospel, who are getting ready to 
 throw away their churches, their reputations and their lives, if it need 
 be, in order to follow Christ in the social redemption that is to set the 
 people free. Whether the Church will go with them or not, they will 
 go with Christ, and share with Him the fate of the people." — Professor 
 George D. Herron of Iowa State College 
 
 In the Eastern cities of this country the public 
 seems to know as little about the strength of 
 Socialistic sentiment in the West as it knew about 
 the strength of Western free silver sentiment in 
 1895. In that year I was connected with a conser- 
 vative New York journal which knew more of what 
 was going on in Wall street behind the scenes than 
 most of its contemporaries, and it fairly represented 
 the general lack of accurate political information in 
 Eastern financial circles when it announced more 
 than once, editorially, that the free silver movement 
 was dead. The eyes of Wall street and its organs 
 were not opened to real conditions existing west of 
 New York State until the Eastern delegates to the 
 National Democratic Convention arrived at Chi- 
 cago to find that the free silver forces were in abso- 
 lute control of the situation. Similar ignorance 
 prevails in the East to-day. The public has heard 
 
 54 
 
EL MAHDI OF SOCIALISM. 55 
 
 with faint interest that here and there out West 
 college professors are preaching Socialism; it has 
 hardly heard of Professor Herron; it does not 
 realize that Christian Socialism is being preached 
 with a zeal and fervor that is making many con- 
 verts; that the War against Wealth is being pro- 
 claimed by clergymen, educators and workingmen 
 as a new religion; that the Founder of Christianity 
 is pointed out as the first leader of Socialism. And 
 this new Socialism, be it right or wrong, must 
 naturally be regarded by the thoughtful observer as 
 a more formidable force in politics than when So- 
 cialism's chief exponents in this country found their 
 largest audiences in the saloons. Now the Social- 
 ists preach to church congregations, and to students 
 in educational institutions, as well as to working- 
 men. They have won some important victories 
 under the Municipal Ownership standard, and that 
 has encouraged them to fresh declarations of hos- 
 tility to the trusts and corporations, and fresh de- 
 mands for National Ownership of public utilities. 
 They are as enthusiastic and aggressive as dervishes 
 proclaiming a holy war. Their Mad Mullah or El 
 Mahdi is Professor George D. Herron, formerly 
 known as the Rev. Dr. Herron. 
 
 Professor Herron is a most interesting and 
 unique speaker. Tall, slender, attired in dark 
 clerical-cut clothes, dark of complexion, his locks 
 and beard jet black, teeth as white as a Nubian's, 
 forehead high, eyes large and luminous, he presents 
 the appearence of an Oriental in European garb. 
 There could have been no doubts as to the sincerity, 
 
S6 MARK HANNA'S "MORAL CRANKS." 
 
 the intense earnestness of this El Mahdi of Chris- 
 tian Socialism as I heard him speak one night. I 
 fancy that most of his hearers took him at his word 
 and accepted the presentation that he made of him- 
 self as a believer in the impracticable — as one who 
 meant what he said when he declared: 
 
 "The most impracticable man that I know is the 
 practical man." 
 
 Professor Herron is certainly a man of charming, 
 winsome personality, as gentle in conversation as 
 a woman and naturally of a retiring disposition — 
 aggressive and vigorously assertive only when he is 
 on the platform or working with his pen. He cer- 
 tainly has the courage of his convictions, and has 
 made sacrifices in behalf of his cause. He doubt- 
 less has in him such material as would enable him to 
 endure bonds and stripes rather than surrender his 
 convictions. The Professor has resigned his chair 
 in the Iowa State College, rather than remain to the 
 embarrassment of his warm friend. President Gates, 
 and, I am informed, has gone abroad to meet Count 
 Tolstoi. 
 
 Professor Herron has won many Western clergy- 
 men to his views by convincing them that the 
 church is in the grip of Wealth and that it has for- 
 saken the poor. And some of these clergymen 
 have found that wherever they preach the doctrines 
 of Herron their congregations grow larger. No 
 matter how unpalatable the Christian Socialist's 
 views may be to people of the East, they are worth 
 reading, if for no other purposes than to learn how 
 he is creating a large following, and to learn where- 
 
EL MAHDI OF SOCIALISM. 57 
 
 in his appeal is worthy of acceptance or rejection. 
 From his books, "Between Caesar and Jesus," and 
 "The New Redemption," I cull the following: 
 
 "If I were to stand before any representative re- 
 ligious gathering in the land, and there preach 
 actual obedience to the Sermon on the Mount, de- 
 claring that we must actually do what Jesus said, I 
 should commit a religious scandal ; I should hence- 
 forth be held in disrepute by the official religion that 
 bears Jesus' name. 
 
 "If the head of some great oil combination, 
 though it had violated every law of God or man, 
 beside the so-called economic laws, which neither 
 God nor man ever had anything to do with, and 
 though it had debauched our nation infinitely be- 
 yond the moral shock of the Civil War, were to 
 stand before any representative religious gathering 
 with an endowment ' check ' in his hand, he would 
 be greeted with an applause so vociferous as to par- 
 take of the morally idiotic. And, mind you, the 
 condemnation of the miserable spectacle rests not 
 upon the monopolist, but upon ourselves; upon 
 those of us who worship at his shrine, and teach 
 and preach by the grace of his endowments. It is 
 we, not he and his gifts, that represent the complete 
 prostitution of public opinion." 
 
 "The present attitude of the church cannot be 
 charged against the clergy alone ; it is quite as much 
 the fault of the men upon whom the clergy depend. 
 The pastor is involved in a religious system which 
 has become thoroughly dependent upon the eco- 
 nomic system. In fact, almost more than any other 
 class, the men who minister from our pulpits are be- 
 coming the helpless victims of the most brutal in- 
 
58 MARK HANNA'S "MORAL CRANKS." 
 
 timidations of money interests. If they preach the 
 truth which Jesus preached they will disrupt their 
 congregations, destroy their own reputations, and 
 will be practically blacklisted by the churches. 
 With the doors of the church closed against him, 
 after years of preparation, and with a dependent 
 family about him, it is not wonderful that the pastor 
 seeks truth in the terms of the existing order." 
 
 "Yet, notwithstanding all this, some of the best 
 social agitation of America is proceeding from the 
 young men in the pulpits or from young men who 
 have been trained for the ministry. The most eager 
 listeners to social discussions, and the most anxious 
 inquirers are the pastors. It is no exaggeration to 
 say that probably a hundred clergymen are study- 
 ing the social problem, where one politician has 
 given to it any consideration, or has even remotely 
 heard of it." 
 
 It must be apparent that such utterances as have 
 been quoted are far more likely to command the 
 respectful attention and adherence of the so-called 
 middle classes and workingmen who are not given 
 to riotous living than would the fiery and often pro- 
 fanely punctuated declaration of agitators of the 
 Herr Most type. The new Socialist is preaching 
 a religion; he is voicing a widespread sentiment 
 concerning the church; he is presenting himself as 
 a Christian foe of trusts and monopolies, and all 
 who join him are indirectly encouraged to believe 
 that they are the real Christians and not the church- 
 men. That his religion may prove more elastic 
 than the church goers' religion, may embrace more 
 
EL MAHDI OF SOCIALISM. S9 
 
 within its borders, Professor Herron has a word 
 ol excuse, or rather, justification for the Christian 
 Socialist who visits the saloon instead of the church, 
 and says: 
 
 "Perhaps a quarter of a million people will sit 
 down in the saloons of Chicago to-night; not to get 
 drunk or even to drink, for vast numbers of them 
 do not drink at all; but because the saloon is the 
 only social shrine, the only municipal drawing room 
 in which the greater number of citizens can get to- 
 gether as human beings, and ' shake their hearts 
 out ' to each other, as the Germans say. In this 
 sense the saloon fulfills a public and profoundly re- 
 ligious function, which the church and municipal 
 system have alike failed to offer; it is the only 
 social refuge that gives warmth and color, relief 
 and' fellowship to millions of toilers. 'A thousand 
 souls are probably destroyed through perjury to 
 the tax assessor,' said Professor Macy the other 
 day, ' where one is destroyed through drunken- 
 
 It will serve no good purpose to attempt any be- 
 littlement of this style of preaching, for there is 
 abundant evidence of its effectiveness. It was this 
 sort of preaching that converted the former devout 
 churchman. Mayor Jones of Toledo, to Christian 
 Socialism; led him to tolerate wide-open saloons in 
 his city, and prompted him to say, with a look ex- 
 pressive of contempt for the church when I asked 
 him if he was a church member: 
 
 "Well, I'm not working very hard at it. I go to 
 church and stand about all that I think I can bear." 
 
6o MARK HANNA'S "MORAL CRANKS." 
 
 Anyone who has taken the time to look about 
 and learn if the new Socialistic propaganda is 
 making any headway in molding sentiment cannot 
 fail to have been impressed with the fact that this 
 college professor's doctrines are finding favor in 
 many pulpits. Even at home we hear the Rev. Dr. 
 William S. Rainsford of St. George's P. E. Church, 
 New York, declaring (so he was reported in the 
 public prints) : 
 
 "I say that the Christian Church to-day has been placed 
 under a distinct obligation to modern socialism. Social- 
 ists have seen what the church has not seen, and de- 
 nounced what the church has not denounced. I stand in 
 the pulpit to-night and say after mature deliberation that 
 the Christian Church is indebted to extremists for the 
 theories which they have advanced on social and economic 
 problems. To-day we see what our fathers did not see. 
 This matter of Socialism is growing in all the colleges in 
 the land. 
 
 "Corporations and the professions are eaten through 
 and through in this land to-day with corruption and for 
 God's sake face it. The man who seeks to buy his brother 
 is a traitor, like Arnold, and the man who seeks to buy 
 another is a slave, a damned slave." 
 
 "If any one doubts the fundamental antagonism 
 between existing civilization and the teaching of 
 Jesus," says Professor Herron, "let him read cer- 
 tain editorials in the New York Post, which is the 
 ablest organ of the new Bourbonism and of the 
 present order of things. These editorials are not 
 exceptional in their tone, but are indeed fairly 
 typical of the protests which abundantly issue from 
 the public press, the political platform, the repre- 
 sentative pulpit, the academic chair. Certain col- 
 lege professors, whose crime is that they have 
 sought social justice through the applications of 
 
EL MAHDI OF SOCIAUSM. 6i 
 
 Jesus' teachings to social conditions, are classified 
 as ' offenders who must not escape.' These seekers 
 are accused of inflaming the masses ' with passion 
 to overthrow the courts,' to the end that they might 
 place themselves where ' law cannot touch us ' — 
 that law which college professors told these poor 
 men, many of them newcomers in America, was 
 only a synonym for injustice. They have told the 
 ignorant who looked up to them for instruction that 
 Jesus Christ was an anarchist and that every good 
 Christian nowadays should be the same, and sent 
 away their audiences withinurder in their hearts. 
 
 "We have said," continues this editorial, "that 
 these men and their like have not been indicted and 
 probably cannot be punished under any law on the 
 statute book. Even if the statute book does not 
 yet contain a penalty for such offenders, they can 
 still be made to suffer. The power of public opinion 
 can be brought to bear, and the indignation of the 
 right-minded can be directed against them. 
 
 " The church for ages did excellent work in 
 preaching content to the poor and unfortunate, for 
 there was really no escape from their misery. These 
 teachings have now been dropped, or fall on leaden 
 ears. The new doctrine that no man should be 
 content, that all should try to rise, has been con- 
 verted into a proposition that all can rise, and that if 
 anybody does not rise it is because somebody is 
 keeping him down. Herein lies all the source of 
 our woes. Anybody who goes about spreading 
 this view is really an accessory before the fact to all 
 anarchist crimes." 
 
62 MARK HANNA'S "MORAL CRANKS." 
 
 To the foregoing Prof. Herron responds: 
 "We are not here to preserve the existing order, 
 but to establish the Christ order. ' The existing 
 order of things,' said Judge Gaynor, in Brooklyn, 
 not long ago, ' may be the worst possible order of 
 things. The existing order of things crucified Jesus 
 because He was a denouncer; and in this enlight- 
 ened nation the existing order of things, even dur- 
 ing the lifetime of us who are still called young, was 
 that one human being might own another, and good 
 men were mobbed for objecting to it. We owe all 
 that we have to the steady advance of the human 
 race against the compact mass who always cried 
 out, and still cry out as lustily as ever, ' Don't dis- 
 turb the existing order of things.' " 
 
 "You are told," said Mr. Gladstone, in a speech 
 at Edinburgh, delivered on June 30, 1892, " that 
 education, that enlightenment, that leisure, that 
 high station, that political experience, are arrayed in 
 the opposing camp, and I am sorry to say that I 
 cannot deny it. I painfully reflect that in almost 
 every one, if not in every one, of the greatest politi- 
 cal controversies of the last fifty years, whether 
 they affected the franchise, whether they affected 
 commerce, whether they affected religion, whether 
 they affected the bad and abominable institution of 
 slavery, or what subject they touched, these leisured 
 classes, these educated classes, these wealthy 
 classes, these titled classes have been in the wrong." 
 
 In Detroit as in Buffalo, Toledo, Chicago and 
 other cities, the careful observer will find abundant 
 evidences of the fact that Socialistic sentiment is 
 
EL MAHDI OF SOCIALISM. 63 
 
 growing in the United States. It is fostered and 
 encouraged largely by clergymen, who believe that 
 Christianity is failing to make perceptible progress 
 among the masses, not because of any impeachment 
 of the credibility of the Bible, as asserted by some 
 pulpiteers, but because it has failed to emphasize 
 what the Founder of Christianity said of Wealth, 
 and because of its alleged failure to interest itself in 
 the welfare and the social condition of the toilers 
 of humanity. 
 
 During a recent visit to Detroit, I found the 
 workingmen meeting in groups in the City Hall 
 Square, of a Sunday, discussing Municipal and Na- 
 tional Ownership, and denouncing Wealth gen- 
 erally in the same vigorous way that I heard them 
 in Western cities give expression to their hostility 
 to trusts, monopolies and men of large wealth, in 
 1896. I learned that some of the clergymen of De- 
 troit were also advocating Municipal Ownership 
 from their pulpits, sharply criticising Wealth, and 
 charging it with being inimical to the welfare of the 
 masses. Visiting the Simpson M. E. Church one 
 Sunday morning and evening I heard the Rev. C. 
 W. Blodgett on both occasions declare that he 
 favored Municipal and National Ownership of 
 public utilities, and heard him charge against 
 Wealth oppression of the poor At each service he 
 addressed crowded houses. Among other things 
 he said: 
 
 "What do these millionaires and corporations say 
 to the complaints of the people? They say as a 
 member of the Vanderbilt family once said — ' The 
 public be damned.' 
 
 "I am not going to defend Governor Pingree in 
 
64 MARK HANNA'S "MORAL CRANKS." 
 
 all he has done, but I tell you that in this matter of 
 Municipal Ownership he is doing God's work. 
 
 "Oh, the meanness of some of these men of 
 wealth. I know one of them who is a church mem- 
 ber, and I do not wonder that one of his employes 
 said to me, ' That man is the meanest man I ever 
 knew. He goes to church and calls himself a 
 Christian, yet when I had to lose an hour's time the 
 other day he docked me 15 cents. I'm sick of such 
 kind of Christians and I don't want to sit in church 
 with them.' 
 
 "I am in favor of Municipal Ownership," Dr. 
 Blodgett said, "because a government does things 
 for permanency, and where honest methods are 
 used under competent direction the laborer is better 
 paid and better work is done than can be under the 
 contract system. 
 
 " Private corporations handling public utilities 
 are not easily amenable to the public will. They 
 are in it for pelf and pelf they have. Every city that 
 has under its municipal government control of the 
 gas industry has given to the people better 
 light and made money to reduce the general taxa- 
 tion. 
 
 "The power to grant any franchise at all is liable 
 to abuse and leads to sins of bribery and corruption. 
 Municipal Ownership would take away that great 
 temptation. If Detroit owned her street railways 
 we would have better aldermen and a better council. 
 It is the key to this entire reform that the pulpit 
 and the religious press is urging on the world. 
 
 "If the national government owned the railways 
 there would be room for the employment of 
 2,000,000 at living wages, instead of 700,000 men 
 
EL MAHDI OF SOCIALISM. 65 
 
 now employed by the railway corporations at poor 
 wages." 
 
 Meeting Mr. Blodgett on the following day I 
 asked him if there were other clergymen in Detroit 
 who entertained views similar to his own and he 
 responded: 
 
 "Yes. The Rev. Dr. Boynton, one of the ablest 
 clergymen in this section of the country, a Congre- 
 gationalist, preaches to a congregation in which 
 there are many men of wealth, yet he boldly advo- 
 cates Municipal Ownership and greater considera- 
 tion for the poor at the hands of the wealthy. At 
 the preachers' meeting, which I attended to-day, 
 95 per cent, favor Municipal Ownership of public 
 utilities. I have found the same sentiment preva- 
 lent in Iowa, Illinois, Michigan and Ohio." 
 
 "Are you in accord with Professor Herron's 
 views?" I asked. 
 
 "With much that he says. He is a grand man, 
 and is exercising a great influence in the West. 
 His books are read everywhere. The Christian 
 Church has got to take up the fight for the masses ; 
 its religion must be practical as well as spiritual. 
 Present social conditions must be changed by one 
 of two methods — evolution or revolution. I have 
 hoped that the change would come by evolution, 
 and think it will when the practical common sense 
 of the American people is through with abstruse 
 theorizing. When this element of common sense 
 in the American people crystallizes it ought to 
 remedy existing evils. But in my judgment, if 
 this remedy is not applied inside of the next ten 
 
66 MARK HANNA'S " MORAI^ CRANKS." 
 
 years — possibly five — the change will come by revo- 
 lution. I believe that if Eugene V. Debs could 
 have ftiade his personality felt all over the country; 
 if he could have visited and proclaimed his doctrine 
 to every section of the country three or four years 
 ago, there would have been a revolution. He is a 
 wonderfully able and engaging speaker. Yes, it 
 will be evolution or revolution." 
 
VIII. 
 A SOCIALIST UNMASKS. 
 
 Ex-congressman Howard, of Alabama, tells the Cincin- 
 nati convention that government ownership of rail- 
 roads, telegraph lines and trusts is of more import- 
 ance than Free Silver — Socialism throwing off its 
 political disguises and coming out in the open — 
 The old Socialism and the new — Judge William J. 
 Gaynor's protest. 
 
 Four years ago the writer, after having attended 
 the National Democratic Convention at Chicago, 
 and the Populistic Convention at St. Louis — after 
 carefully questioning many of the delegates from 
 various states to those gatherings, wrote to the 
 Eagle that the movement culminating in the nom- 
 ination of Bryan was at heart strongly Socialistic, 
 and that the slogan of " Free Silver — 16 to i ! " did 
 not embody the dominant sentiment of those who 
 had ranged themselves behind the standard of the 
 yoxmg Nebraskan; that "War against Corporate 
 Wealth ! " would have more clearly expressed the 
 sentiment dominating the conventions which nom- 
 inated Bryan. 
 
 Four years have elapsed since that declaration 
 was made, and now ex-Congressman H. W. 
 Howard of Alabama, who was a prominent figure 
 in the Populistic Convention of 1896, gives his tes- 
 timony in confirmation of that which the writer had 
 to say in the last Presidential compaign. At the 
 National Convention of the Middle-of-the-Road 
 Populists, opened at Cincinnati May 9, 1900, Mr. 
 
 67 
 
68 MARK HANNA'S "MORAL CRANKS." 
 
 Howard said in the course of a long address to the 
 delegates : 
 
 "Right here I want to say that one of our great 
 mistakes has been in accentuating our demand for 
 the free coinage of silver to such an extent that the 
 Democratic party took it up as their battle cry, and 
 this produced confusion in our ranks when, in fact 
 and in truth, it is one of the least of the reforms 
 which we seek." 
 
 With equal truth, the ex-Congressman might 
 have made the same statement concerning the 
 majority of delegates who voted for Bryan at 
 Chicago. The delegates at both conventions made 
 free silver the dominant issue at the behest of 
 Senator Jones and influential silver mine owners. 
 
 During the last year Mayor Jones, the Christian 
 Socialist leader of Toledo, has repeatedly declared: 
 
 "It is no longer disreputable to be known as a 
 Socialist." 
 
 That statement is undoubtedly accepted as a 
 truth by many of our college professors, divines and 
 public men, who are advocating the doctrines of the 
 New Socialism, yet repudiate all fellowship with 
 the anti-religious Socialistic school of which Lasalle 
 and Karl Marx were leaders. That may be one of 
 the reasons why ex-Congressman Howard takes a 
 step beyond the proposed National Ownership of 
 railroads and telegraphs, and boldly advocates Gov- 
 ernment Ownership of Trusts in the following 
 words : 
 
 "Another great question, and one which has 
 been met by almost every civilized nation of the 
 
A SOCIALIST UNMASKS. 69 
 
 globe except this one, is the question of Govern- 
 ment Ownership of railroads. Under Government 
 Ownership the smallest shipper in the land i-eceives 
 the benefit of the same freight rate as the greatest 
 trust. So long as we maintain our present system 
 of private ownership of railroads the trusts will 
 flourish, and when the railroads pass into the con- 
 trol of the Government we will have delivered trusts 
 one of the most effective blows possible. Along 
 with the Government Ownership of railroads 
 should go to the Government Ownership of tele- 
 graphs. The city should own its street car lines, 
 its electric lights, gas and water works; in fact, all 
 public utilities should belong to the people, instead 
 of to the favored few. 
 
 "Still another great question which I have already 
 suggested is the trust question. The trust has 
 come to stay. It is an outgrowth of our industrial 
 system. All talk of controlling the trusts is mere 
 nonsense. When we attempt to legislate against 
 the trusts they will take the next step in the process 
 of evolution and become monopolies. What is to 
 be done with the monopoly? Capital has realized 
 what labor has not yet found out — that competition 
 is not the life but the death of business. There- 
 fore capital has ceased to compete, and is now doing 
 the more wise and sensible thing of co-operating. 
 I believe that whenever any line of industry be- 
 comes a monopoly there is only one solution pos- 
 sible, and that is for the Government control of the 
 monopoly, to use and operate it for the benefit of all 
 the people." 
 
 In the year 1875, the followers of lyasalle and 
 
70 MARK HANNA'S "MORAL CRANKS." 
 
 Karl Marx held a congress at Gotha, and adopted 
 a platform of principles, beginning as follows: 
 
 "The emancipation of the working class demands 
 the transformation of the instruments of labor into 
 the common property of society, and the co-opera- 
 tive control of the total labor." 
 
 This platform also advocated a progressive in- 
 come tax. In the course of his memorable speech, 
 delivered while the platform of the Chicago con- 
 vention was under discussion, Mr. Bryan said: 
 
 '"The income tax is a just law. It simply intends 
 to put the burdens of government justly upon the 
 backs of the people. I am in favor of an income 
 tax. When I find a man who is not willing to pay 
 his share of the burden of government which pro- 
 tects him, I find a man who is unworthy to enjoy 
 the blessings of a government like ours." 
 
 In presenting the utterances of Mr. Bryan and 
 ex-Congressman Howard, and making clear the 
 points of resemblance between the views of self- 
 avowed Socialists and men who are actively engaged 
 in American politics, the writer makes this exhibit 
 simply as an observer, and not as one engaged in 
 the controversy between the new Socialism and its 
 opponents. But why not call a spade a spade 
 when you see one? Why is it that men who are 
 advocating Socialistic ideas and have taken them 
 bodily from Socialists, insist that they are purely 
 Democratic, Republican or Populistic? Probably 
 because Socialism in this country is identified in the 
 public mind with the acts of the agitators who were 
 executed in Chicago, and with the doctrines of the 
 blatant Most, who was made to wear prison stripes. 
 Yet there is not a candid Professor of Sociology in 
 
A SOCIALIST UNMASKS. 71 
 
 all the land, not a solitary student of social, indus- 
 trial and political conditions who will, not admit 
 that the New Socialism has been making great 
 strides in the United States since 1896. And Demo- 
 crats, Republicans, Populists, who are advocating 
 ownership of railroads, telegraphs, Trusts and all 
 public utilities, would make the same concession if 
 they were as honest and frank as this Christian So- 
 cialist, Mayor Jones, or that more eminent figure, 
 Herbert Spencer. 
 
 On July 14, 1896, Judge William J. Gaynor of 
 the Supreme Court of the State of New York, wrote 
 a letter to Almet F. Jenks, now of the Appellate 
 Division of the Supreme Court, in which he made 
 the following protest against the cry of "Anar- 
 chist !" 
 
 "It is a time for moral courage. I could not ex- 
 press to you all I feel, but depend upon it, in this 
 hour of weakness, hesitation and desertion, the 
 great mind and heart of the unselfish, intelligent 
 people are not faltering. Though mazes of sophis- 
 try and masses of immaterial fact and fiction their 
 aggregate intelligence, made up by the graduates of 
 colleges and common school, sees with sound 
 vision, and though some things may not be shaped 
 in platform declaration" (the Chicago platform) 
 "as they would have them, nevertheless they see and 
 understand the main purpose and are steadfast to it. 
 
 "Their ranks are not disordered by this shame- 
 less cry of Anarchist and Socialist which is being 
 thrown into their faces, and which is about all that 
 can be heard from certain qua:rters which might 
 
^2 MARK HANNA'S "MORAL CRANKS." 
 
 prudently refrain from such vicious epithets. Such 
 free use of them is Hkely to provoke the inquiry 
 whether, for instance, the comparatively few who 
 have in a generation or less ajnassed, and who are 
 now amassing, vast inflated fortunes out of the 
 public .by the issue of untold millions of fraudulent 
 bonds and stocks upon public privileges and fran- 
 chises, to pay interest and dividends upon which a 
 proportionate tribute is levied upon nearly every 
 community in this country — whether they are not 
 the Anarchists, the endangerers of our institutions 
 and social order, instead of those who think it 
 wholesome and wise that such a state of things and 
 the unrest and demoralization caused by it should 
 not continue. 
 
 " There is no jealousy against wealth in this 
 country. On the contrary, those who accumulate 
 wealth, however great, in any legitimate calling, 
 professional, mechanical, agricultural, mercantile or 
 other, are subjects of emulation and honor. This 
 is true of every locality. It is wealth got by this 
 means and by that, by trick and device, out of the 
 public by means of public franchises, and of laws 
 devised for the aggrandizement of the few at the 
 expense of the many, which is under the ban of the 
 splendid intelligence and moral sense of the people 
 of this country." 
 
 Summing up the results of his inquiries and ob- 
 servations in several states, recalling his interviews 
 with leaders of the movement against Trusts, and 
 reviewing the declarations of various delegates to, 
 national conventions in which one form of Capital 
 
A SOCIALIST UNMASKS. 73 
 
 was fiercely denounced, the writer of these lines 
 must add his testimony to that of the Supreme 
 Court Judge who declares that there is no wide- 
 spread jealousy of Wealth honestly acquired. As 
 true to-day as it was in 1896, is this keen judicial 
 observer's declaration. 
 
IX. 
 
 POETRY IN POLITICS. 
 
 The new Socialistic movement has a poetess, Mrs. Char- 
 lotte Perking Stetson, the great granddaughter of 
 Lyman Beecher and grand-niece of Henry Ward 
 Beecher — Assistance rendered by her in the preach- 
 ing of "The twentieth century religion" — Analysis 
 of "The new rehgion" by Benjamin Fay Mills. 
 
 " Public or political morality, even more than what we call individ- 
 ual and social morality, is destroyed by the economic system. If any 
 text were needed for this proposition it was furnished the other day by 
 Mr. Charles T. Root, representing the Merchants' Association of New 
 York City, at a meeting of vast financial interests in Chicago. His ad- 
 dress, as reported by the Times-Herald of October 6, i8g8, began with 
 this veiy candid and solemn thesis : 
 
 "' The commercial element in this country shall have its rightful 
 due, and that due is nothing more nor less than a preponderating in- 
 iiuence in national and state legislation.' 
 
 " The political corruption ot which we complain is simply the over- 
 flow of the business corruption by which the * commercial element ' 
 ^ains and maintains this ' preponderating influence.' Political corrup- 
 tion is an integral part of the present Business system. In fact, political 
 bribery, both direct and indirect, is the foundation upon which industry 
 and commerce now rest. Behind every political 'ring' you may find 
 the private owners of public franchises." — Professor George D. 
 Herron. 
 
 Writing from the other side of the Atlantic con- 
 cerning Social Evolution, Benjamin Kidd declared 
 a few years ago that "the evolution which is slowly 
 proceeding in human society is not primarily in- 
 tellectual, but religious in character." Much in 
 verification of this statement may be found by a 
 careful study of sociological conditions in the 
 United States. The men and women who are most 
 prominent to-day in the agitation of social questions 
 point to the Founder of Christianity as their model 
 of leadership, and to Plis teachings as the ground- 
 work of their doctrines. They are as vigorous in 
 the promulgation of their views and as intense in 
 devotion to them as were William Lloyd Garrison, 
 
 74 
 
POETRY IN POLITICS. 75 
 
 Wendell Phillips and the old school Abolitionists 
 to the principles which they maintained in their war 
 against Slavery. And so, whether one agrees with 
 or dissents from these new Socialistic doctrines, a 
 study of those proclaiming them becomes obliga- 
 tory upon all who would be well informed. 
 
 In the work of educating his constituents to the 
 support of his views as an avowed Christian So- 
 cialist, Mayor Jones of Toledo appealed for assist- 
 ance to the chiefs of the new school to whose doc- 
 trines he had given his adherence. And they re- 
 sponded in person. From time to time, Professor 
 Herron, Henry D. Lloyd, Mrs. Charlotte Perkins 
 Stetson and others, leaders in the War against 
 Wealth, appeared in Toledo, upon the invitation of 
 the Mayor, to deliver addresses in his Golden Rule 
 Park during summer months, or in a public hall in 
 winter. In these addresses the argument for Mu- 
 nicipal Ownership, the brotherhood of man, the cor- 
 ruptions of politics, the arraignment of Wealth were 
 presented and discussed from the standpoint of 
 those who are recognized as the foremost advo- 
 cates of a radical change in the existing order of 
 society. In Toledo, as elsewhere, Mrs. Stetson 
 was recognized as the Poetess of the Twentieth 
 Century Religion, as the new movement was 
 originally characterized by Benjamin Fay Mills. 
 
 Mrs. Charlotte Perkins Stetson was born in 
 Hartford, Conn., the great-granddaughter of 
 Lyman Beecher, and grand niece of Henry Ward 
 Beecher and Harriet Beecher Stowe. Her young 
 womanhood was devoted to teaching, and even in 
 
76 MARK HANNA'S "MORAL CRANKS." 
 
 her girlish days she gave evidence of literary ability. 
 Removing to California after her marriage, Mrs. 
 Stetson became the writer of poetry, a lecturer on 
 social questions and the owner of a weekly paper in 
 San Francisco. It was her expressed hope to do 
 for labor what Harriet Beecher Stowe had done for 
 the slave. In the circles of labor Mrs. Stetson won 
 esteem and popularity. The gold medal of the 
 Alameda County Trades and Labor Union was 
 awarded to her for an essay on "Labor Measures." 
 She has lectured with success throughout the East 
 and West and in Great Britain. She has lived in 
 the Social Settlements of Chicago and written of 
 their work, and devoted much of her time to the 
 building up of various clubs for women. An ad- 
 mirer says of the poetess : 
 
 "Mrs. Stetson is that rarest of persons, a re- 
 former with a sense of humor; a preacher who is 
 never dull, and a satirist who is still essentially a 
 poet." 
 
 Here is one of Mrs. Stetson's effusions, entitled 
 "Similar Cases," which is very popular among the 
 advocates of the Twentieth Century Religion, for 
 it is regarded as an answer to those who refuse to 
 believe that an evolution in society is progressing. 
 The poetess begins by describing the evolution and 
 aspirations of one of the lower types of animals : 
 
 There was once a little animal, no bigger than a fox. 
 And on five toes he scampered over Tertiary rocks. 
 They called him Eohippus, and they called him very small, 
 And they thought him of no value when they thought of 
 
 of him at all. 
 For the lumpish Dinoceras and Coryphodont so slow 
 Were the heavy aristocracy in days of long ago. 
 
POETRY IN POLITICS. 77 
 
 Said the little Eohippus: "I am going to be a horse! 
 And on my middle-finger-nails to run my earthly course! 
 I'm going to have a flowing tail! I'm going to have a 
 
 mane! 
 I'm going to stand fourteen hands high on the Psychozoic 
 
 plain!" 
 The Coryphodont was horrified, the Dinoceras shocked; 
 And they chased young Eohippus, but he skipped away 
 
 and mocked. 
 Then they laughed enormous laughter, and they groaned 
 
 enormous groans. 
 And they bade young Eohippus "go and view his father's 
 
 bones!" 
 Said they: "You always were as low and small as now 
 
 we see. 
 And therefore it is evident you're always going to be!" 
 "What! Be a great, tall, handsome beast with hoofs to 
 
 gallop on! 
 Why, you'd have to change your nature!" said the Loxo- 
 
 lophodon. 
 Then they fancied him disposed of, and retired with gait 
 
 serene; 
 That was the way they argued in "the Early Eocene." 
 
 Next is described the evolution of the Anthropoid 
 Ape, his critics, his transition to a higher type of 
 animal life: 
 
 There was once an Anthropoidal Ape, far smarter than the 
 
 rest, 
 And everything that they could do he always did the best; 
 So they naturally disliked him and they gave him 
 
 shoulders cool. 
 And, when they had to mention him, they said he was a 
 
 fool. 
 Cried this pretentious ape one day, "I'm going to be a 
 
 Man! 
 And stand upright, and hunt and fight, and conquer all I 
 
 can! 
 I'm going to cut down forest trees to make my houses 
 
 higher! 
 I'm going to kill the Mastodon! I'm going to make a. 
 
 Fire!" 
 Loud screamed the Anthropoidal Apes with laughter wild 
 
 and gay. 
 Then tried to catch that boastful one, but he always got 
 
 away. 
 
78 MARK HANNA'S "MORAL CRANKS." 
 
 So they yelled at him in chorus, which he minded not a 
 
 whit, 
 And they pelted him with cocoanuts, which didn't seem to 
 
 hit. 
 And then they gave him reasons which they thought of 
 
 much avail 
 To prove how his preposterous attempt was sure to fail. 
 Said the sages: "In the first place, the thing cannot be 
 
 done! 
 And second, if it could be, it would not be any fun! 
 And third and most conclusive, and admitting no reply. 
 You would have to change your nature. We should like 
 
 to see you try!" 
 They chuckled then triumphantly, those lean and hairy 
 
 shapes; 
 For these things passed as arguments — with the Anthro- 
 
 poidal Apes! 
 
 Mrs. Stetson concludes with the aspirations of 
 
 the Neolithic Man and the objections raised against 
 
 them, in this way satirizing the arguments raised 
 
 against the preachings of the Twentieth Century 
 
 religion : 
 
 There was once a Neolithic Man, an enterprising wight, 
 Who made his simple implements unusually bright. 
 Unusually clever he, unusually brave. 
 And he sketched delightful mammoths on the borders of 
 
 his cave. 
 To his Neolithic neighbors, who were startled and sur- 
 prised, 
 Said he: "My friends, in course of time, we shall be 
 
 civilized! 
 We are going to live in Cities and build churches and 
 
 make laws! 
 •We are going to eat three times a day without the natural 
 
 cause! 
 We're going to turn life upside-down about a thing called 
 
 Gold! 
 We are going to want the earth and take, as much as we 
 
 can hold! 
 We're going to wear a pile of stuff outside our proper 
 
 skins; 
 We are going to have Diseases! and Accomplishments! I 
 
 and Sins! ! ! 
 And then they all rose up in fury against their boastful 
 
 friend; 
 For prehistoric patience comes quickly to an end. 
 
POETRY IN POLITICS. 79 
 
 Said one: "This is chimerical! Utopian! Absurd!" 
 Said another: "What a stupid life! Too dull, upon my 
 
 word!" 
 Cried all: "Before such things can come, you idiotic 
 
 child, 
 You must alter Human Nature!" and they all sat back and 
 
 smiled. 
 Thought they: "An answer to that last will be hard to 
 
 find!" 
 It was a clinching argument — to the Neolithic Mind! 
 
 In the East, as well as in the West, the new 
 religionists who have entered the field of politics 
 are promulgating their doctrines. In Boston they 
 have been warmly welcomed. • From a Brooklyn 
 woman of culture, prominent because of the pubHc 
 interest she has manifested in sociological ques- 
 tions and her efforts to awaken in society an interest 
 in the great social problems of the day, comes this 
 message: 
 
 "You are quite right in saying that the movement 
 you are discussing is rooted in religious feeling and 
 partakes of its fervor and tenacity. Mrs. Charlotte 
 Perkins Stetson possibly expresses its sentiments 
 as well as anyone when she says in her lines, "To a 
 Good Many': 
 
 You have new power, new consciousness, jiew sight. 
 
 You can help God! You stand in the great light 
 
 Of seeing Him at work. You can go on 
 
 And walk with Him and feel the glory won. 
 
 Help make the state more like God's dwelling place. 
 
 New paths for life divine as you untrod; 
 
 A social body for the soul of God. 
 
 In Boston, last winter, and up to a recent date, 
 Benjamin Fay Mills and his wife delivered a series 
 of addresses descriptive of the Twentieth Century 
 
8o MARK HANNA'S " MORAIv CRANKS." 
 
 Religion. The following extracts from an address 
 on "The New Party" are offered in corroboration of 
 the statement that Religion has entered the field of 
 American politics. At the outset Mr. Mills ex- 
 pressed his dissatisfaction with both great political 
 parties : 
 
 "The Republican party is drunk with wealth and 
 power; possessing few convictions that are not born 
 of selfishness; haughty, arrogant, corrupt; bound 
 by the lowest traditions and disregarding the 
 highest ones; descending to infamy in order to re- 
 tain power; hypnotizing some people and throttling 
 others by money and intimidation; the slave of the 
 rich and the enemy of the toiler; and yet, in mo- 
 ments of lucidity caused by the shock of sudden 
 reverse, from the fear of being robbed of its spoils, 
 making frantic efforts to lull the people to sleep 
 by administering the soothing syrup of grotesque 
 and puerile attempts at pseudo-reformation. 
 
 "In our greatest state it elects as Governor an 
 honest man by the will of one of the most un- 
 American men in America ! In the next most im- 
 portant state — after seemingly conclusive proof of 
 his criminal conduct — it bows its neck to the yoke 
 of another unhung boss ; and in the highest national 
 places it puts men in power for unholy political 
 reasons, who, willingly or unwillingly, tolerate the 
 meanest frauds and permit the cruel, unpunished 
 murder of American soldiers at the hands of their 
 own countrymen!" 
 
 "The Democratic party it is impossible at present 
 to define or characterize. We do not know whether 
 it is in the agonies of dissolution or undergoing re- 
 generation. It has always been nearer the heart 
 
POETRY IN POUTICS. 8i 
 
 of the mass of the people than its adversary. What- 
 ever we may think of the currency question, I pity 
 the man who does not recognize the moral quality 
 in the mighty enthusiasm of the Chicago conven- 
 tion; the first large national body to be moved in 
 such fashion since the abolition of slavery. I know 
 the utter venality of many of its former leaders, and 
 the unspeakable corrupt methods by which it has 
 gained many of its victories; but I am not sure but 
 that its moral choice of 1896 — whether wise or un- 
 wise — makes possible such a thorough regeneration 
 and reorganization as may fit it to become the 
 leader of the hosts of the coming commonwealth. 
 
 "I have not the heart to speak as severely as I 
 might of the so-called Democracy, while the or- 
 ganization lies bleeding from its recent disruptions ; 
 but it certainly will require a seriously difiEerent 
 medicine from bichloride of silver to effect a cure ! 
 And even if this might be, it would be so altered as 
 to be recognizable only in its deep sympathy for the 
 people, as people, and in its historic name — ^which 
 certainly would be an appropriate title for the New 
 Party." 
 
 Mr. Mills does not see anything in the future for 
 the Prohibitionists or the Populists; the Socialist- 
 Labor Party he declares to be "without soul" in- 
 tolerant of other agencies working toward similar 
 ends instead of co-operating with them as far as 
 possible. After enumerating all the social reforms 
 which the New Party will advocate, which cannot 
 be mentioned in detail because of lack of space, Mr. 
 Mills says: 
 
82 MARK HANNA'S "MORAL CRANKS." 
 
 "The New Paily will have the brain and culture 
 of the best of the Republicans, without the demoral- 
 izing selfishness of the others. It will have the one- 
 ness with the people and sensitiveness to their will 
 of the Democrats, without their venality. It will 
 possess the almost sublime determination of the 
 Prohibitionists, without their limitations. It will 
 be inspired by the broad sympathies and visions of 
 the Populists, without being embarrassed by their 
 earlier characteristics and their later mistakes and 
 compromises. It may appreciate the great pro- 
 gramme and greater devotion of the Socialist Labor 
 party, without its bitterness, and the purpose and 
 spirit of the Social Democrats, with the wisest 
 leadership and the most statesmanlike methods. 
 
 "And finally this is to be a truly Religious Party. 
 The New Religion and the New Politics are to be 
 one. And in the divine fellowship of humanity and 
 the ministry of the nation to all the other nations of 
 the world will be discovered the great religious in- 
 spiration for which the world is now groaning and 
 travailing in pain. Such a nation will regard itself 
 as the brother of all others and endeavor to lead 
 the world by its service and sacrifice into the same 
 holy fellowship." 
 
X. 
 
 GOIvDEN RULE POLITICS. 
 
 The platform of ex-Mayor Jones, of Toledo — "The Deca- 
 logue and the Golden Rule," says Gov. Roosevelt, 
 "are, after all, the two guides to conduct upon 
 which we should base our actions in political af- 
 fairs." 
 
 When Samuel M. Jones, the Christian Socialist, 
 became Mayor of Toledo, O., he announced that 
 his policy in politics and in the administration of his 
 office would be based upon the Golden Rule. He 
 has repeatedly declared that the adoption of the 
 Golden Rule in politics will do more in the way of 
 reforming the world than anything that has ever 
 been embodied in political platforms or any of the 
 utterances of statesmen. In one of his notable 
 letters commending the Golden Rule as a panacea 
 for the ills of society, Mayor Jones said : 
 
 "Let us have a system in which 'every man will 
 have just what he earns, and nothing more — a fair 
 play, Golden Rule system; and twenty- five years of 
 that sort of a system would relegate all of our 
 prisons, jails and almshouses to the domain of 
 relics of a hideous past. Social systems, like indi- 
 viduals, may be known by their fruits. Men do not 
 gather grapes from thorns, nor figs from thistles. 
 Our million of paupers, tramps and criminals are 
 not the result of chance or accident; they are the 
 legitimate fruit of our un-Christian social system. 
 As long as the system continues we may expect the 
 fruit." 
 
84 MARK HANNA'S " MORAI, CRANKS." 
 
 American politicians generally would probably 
 do no more than smile if their attention should be 
 directed to Mayor Jones' advocacy of the Golden 
 Rule lin politics, but they may feel like pinching 
 themselves and rubbing their eyes to learn if they 
 are really awake when they find a self-confessed be- 
 liever in practical politics, like Theodore Roosevelt, 
 saying practically the same thing that Jones has 
 said to the amusement of men in pursuit of the 
 spoils of office. For nothing more absurd or 
 Utopian, nothing more violently in conflict with the 
 present political system than the Golden Rule 
 could be presented to the average politician. The 
 fact that the Governor of the great State of New 
 York does agree with Jones in the belief that the 
 Sermon on the Mount furnishes a safe rule for guid- 
 ance in public afifairs will surprise more than the 
 politicians, and doubtless be regarded as fresh evi- 
 dence of the growth of Christian Socialism. 
 
 At Bufifalo, on May 14, 1899, Governor Roose- 
 velt delivered a speech on "Property, Its Use and 
 Abuse," at the dinner of the Independent Club. In 
 the course of his remarks the Governor decried in- 
 temperate denunciations of corporate wealth, while 
 admitting the existence of corrupt corporations. In 
 the following language he took his place by the side 
 of the Christian Socialist, Jones: 
 
 "Now, of course a great deal of what I have to say 
 must be about the right. All of the great truths 
 up to which we try to act are comprehended in the 
 right. I certainly have not found any new prin- 
 ciple of importance in public life, and so far as I 
 
GOLDEN RULE POLITICS. 85 
 
 have been able to get I have become a more and 
 more convinced believer in the doctrine enunciated 
 a ievf years ago by a then eminent statesman, that, 
 after all, the Decalogue and the Golden Rule are 
 the two guides to conduct upon which we should 
 base our actions in political affairs." 
 
 The Decalogue and the Golden Rule as "guides 
 to conduct in political affairs!" That is indeed a 
 new sentiment in practical politics, significant and 
 impressive when taken in connection with the facts 
 concerning the spread of Christian Socialism in 
 the United States. 
 
 Perhaps the Governor himself will be surprised to 
 find that he is not only repeating the sentiments ex- 
 pressed again and again by Mayor Jones, but also 
 by Professor Herron, the leader of Christian So- 
 cialism in the West, who said the notion that the 
 union of religion and politics can only be evil is as 
 morally insane as the notion that only evil can come 
 from the union of God and man, and added: 
 
 "The man who professes Christ in the prayer 
 meeting, or in his creed, and then denies the prac- 
 ticability of the Sermon on the Mount as industrial 
 law is both a hypocrite and an atheist. If Chris- 
 tianity cannot be applied to the actual life of man, 
 if the Golden Rule cannot be practiced in the mar- 
 ket, * * * then Qod has not spoken the truth 
 and revealed His life in Jesus Christ." 
 
 Governor Roosevelt made other declarations in 
 his Buffalo speech which indicate clearly that he 
 
86 MARK HANNA'S "MORAL CRANKS." 
 
 was thinking along the lines marked out by the 
 Christian Socialist. For instance, he said : 
 
 "If there is one thing which I should like to 
 eradicate from the character of any American it is 
 the dreadful practice of paying a certain mean ad- 
 miration and homage to the man who, whether in 
 business or politics, achieves success at the cost of 
 sacrificing all those principles for the lack of which, 
 in the eye of any righteous man, no possible 
 achievement of such success can in any way com- 
 pensate." 
 
 That is a Christian Socialist sentiment conserva- 
 tively expressed. Here is the same sentiment at 
 heart more vigorously delivered by Professor Her- 
 ron: 
 
 "The priests who accompanied the pirate ships of 
 the Sixteenth Century to say mass and pray for the 
 souls of the dead pirates for a share of the spoil, 
 were not a whit more superstitious or guilty of 
 human blood, according to the light of their teach- 
 ing, than Protestant leaders who flatter the ghastly 
 philanthropy of men who have heaped their colos- 
 sal fortunes upon the bodies of their brothers. Their 
 fortunes are the proudest temples of the most de- 
 fiant idolatry that has ever corrupted the worship of 
 the living God. Their philanthropy is the greatest 
 peril that confronts and deceives and endangers the 
 life of the church, and thinks to bribe the judgments 
 of God and deceive the Holy Ghost." 
 
 The Christian Socialists have declared repeated- 
 ly that society must be purged of its evils by "Evo- 
 lution or Revolution"; they are delivering ominous 
 
GOLDEN RULE POLITICS. 87 
 
 warnings of possible dark days near at hand in the 
 history of this country. These warnings have been 
 characterized as the harmless vaporings of fanatical 
 minds by those who profess to see in the spread of 
 Christian Socialism nothing worthy of serious 
 thought. The character of these "vaporings" is 
 shown by the following utterances from the prophet 
 of Christian Socialism, Professor Herron: 
 
 "Revolution of some sort is not far off. The 
 social change will bring forth either the revolution 
 of love or the tragedy and woe of a leadership in- 
 spired by a love of revolution. Either a revival of 
 love, an outpouring of love through the Messianic 
 fellowship of some vast social sacrifice, or a uni- 
 versal French Revolution will come." 
 
 "If we reformers can find no basis of agreement 
 as to what is to be done, while the industry and the 
 moral well-being of the entire nation are massacred 
 by a single trust, then Nero fiddling while Rome 
 burned is a paragon of innocence in comparison 
 with ourselves. If we can do nothing to save the 
 people unless we can save them with the terms of 
 our own particular programmes, or until some day 
 of dreadful judgment forces us together, then the 
 fury of that reckoning may tear all our programmes 
 to shreds, and the people be saved by fire and by 
 sufifering unspeakable." 
 
 The foregoing may be treated with derision, but 
 practically the same sentiments expressed by the 
 Governor of New York may be deemed worthy of 
 grave consideration. For at Buffalo Governor 
 Roosevelt said last year with all the earnestness at 
 his command: 
 
 "Oh, if I could only impress upon you; if I only 
 
88 MARK HANNA'S "MORAL CRANKS." 
 
 had the eloquence and power of enforcing convic- 
 tions upon you, to make you understand the two 
 sides of the question — not understand them; you 
 may do that in theory now^but to make you realize 
 them, the two sides; that the rich man who buys a 
 privilege from a Board of Aldermen for a railway 
 which he represents, the rich man who gets a privi- 
 lege through the Legislature by bribery and cor- 
 ruption for any corporation — that that man is com- 
 mitting an offense against the community which it 
 is possible may some day have to be condoned for 
 .in blood and destruction, not by him, not by his 
 sons, but by you and your sons !" 
 
XI. 
 
 SOCIALISM'S NEW GARB. 
 
 No longer the Marxite creed, but the promotion of social 
 and economic reforms in the name of "Christian 
 Socialism" — Significant evolution in Germany, 
 Switzerland, Holland and Russia — The Pope himself 
 seems to have foreseen these unexpected phen- 
 omena. 
 
 There can be no doubt, as will be shown even 
 more clearly in the articles devoted to Municipal 
 Ownership which follow, that Christian Socialists 
 have entered the field of American politics, and that 
 Socialism has assumed an entirely new aspect in 
 America — in fact that it is being preached as a Re- 
 ligion. 
 
 From abroad comes the information that in 
 Europe also Socialism has taken on the new garb. 
 And this word comes from Rome, where trained 
 observers of the affairs of the world have been 
 deeply impressed by Socialism's latest claim to 
 public attention. To those who have noted the 
 progress of the new Socialism in the United States 
 as described in my previous letters, the following 
 statement made by a distinguished clerical cor- 
 respondent of the New York Sun and printed in the 
 news columns of that influential and enterprising 
 newspaper May 14 will prove interesting, instruc- 
 tive and significant: 
 
 "Rome, April 15, 1899. — ^The Pope has been 
 much struck by the radical cvqIuUqp, that Socialism 
 
90 MARK HANNA'S "MORAL CRANKS." 
 
 is going through in Germany. The extraordinary 
 conversion of Marxism into a great party of social 
 reform seems on the point of spreading through 
 Europe. At the last workingmen's congress at 
 Lucerne, for instance, one of the leaders of the old 
 Swiss Marxism, M. Greulich, preached on the im- 
 perative need of transformation. ' I am an old 
 Marxite,' he cried, ' but coming into contact with 
 facts I have felt that Marxism does not stand the 
 test of experience. Let us be men, not of revolu- 
 tion, but of reform.' 
 
 "The Dutch Socialism describes the same curve. 
 Lately, at Leeuwarden, the capital of Friesland — 
 Friesland is the paradise of Dutch Socialism — the 
 fifth congress was held of the party, which, as is 
 well known, won four seats at the last elections and 
 has increased from 2,383 votes to 6,977. Ninety- 
 one delegates, representing fifty-five associations, 
 with a membership of 2,500, were present. These 
 Socialists no longer discuss the Marxite creed, 
 neither the scientific nor the historic parts of it. 
 What interests them is the reform economic plat- 
 form. No comment is needed. 
 
 "If this evolution takes place at all along the line 
 — and it seems from the favor with which M. Mil- 
 lerand greets the ideas of M. Charles Benoist that 
 French Socialism is also capable of putting on a 
 new dress — we run the great danger of seeing the 
 peasants, the artisans and the shopkeepers entering 
 the Socialistic organization. While the govern- 
 ments and the old parties oppose to democracy the 
 last forces of the status quo and of liberalism, So- 
 cialism avoids the conflict, makes a side evolution 
 and gathers in the humble, the poor and the injured, 
 
SOCIALISM'S NEW GARB. 91 
 
 as Dostojewski calls them, by a magnificent round- 
 about movement. 
 
 "Leo XIII seems to have foreseen these unex- 
 pected phenomena. If the States and the Catho- 
 lics do not follow the principles and practice of 
 Christian democracy we do not see how Socialism 
 can be prevented from turning the sheaves of hu- 
 manity into its barns. 
 
 " Innominato." 
 
 It is evident that socialism is entering upon a 
 new stage. In this country the Rev. Father Ducey 
 and the Rev. Dr. McGlynn are the only prominent 
 Roman Catholic ecclesiastics who have been sus- 
 pected of sympathy, because of their pulpit utter- 
 ances, with the aims of the Christian Socialists, the 
 leaders of the latter being mainly Protestant clergy- 
 men and college professors. Yet in the new Social- 
 istic movement there are undoubtedly many Roman 
 Catholic laymen. 
 
 From Russia comes the official statement that the 
 Nihilists are losing favor with the workingmen; 
 that the toilers are turning from Krapotkin and 
 Bakunin to the Social Democrats of Germany for 
 guidance. The Russian workingman is beginning 
 to think that organization and not the bomb and 
 dagger is to be the force which will best serve his 
 interests. The Russian workingmen are turning 
 from revolutionary doctrines to organization. In a 
 report on this matter made by the Moscow chief 
 of police, first printed in the Arbeiter Zeitung of 
 Vienna and subsequently reprinted in the London 
 
92 MARK HANNA'S "MORAL CRANKS." 
 
 Times, it appears that Russian workingmen are al- 
 ready organizing on the German Socialistic lines of 
 combination. The Chicago Times-Herald, which 
 has devoted considerable attention to this new 
 movement, says, in the course of a thoughtful 
 editorial : 
 
 "The chief of police of Moscow is much per- 
 plexed by the phenomenon. He fears, and with 
 reason, that it is going to be a serious task to dis- 
 criminate between the one class and the other. The 
 process of combination will conduce to independ- 
 ence of thought and prepare the way for political 
 union. Every workingman may thus become a 
 Socialist at heart while he is ostensibly seeking no- 
 thing more than a wage concession from his em- 
 ployer." 
 
 The closing paragraph foreshadows what may 
 happen in our own land on a larger scale. Not 
 only the workingmen but members of the middle 
 class may become either Christian Socialists at 
 heart or their allies, while ostensibly seeking no- 
 thing more than certain concessions from cor- 
 porate wealth. 
 
PART TWO. 
 
 Public Ownership of Public Utilities. 
 
 DR. LYMAN ABBOTT'S WARNING. 
 
 Wealthy men must distribute their surplus or "the provi- 
 dence of God will deprive them of a trust which 
 they lack either the fidelity or the capacity to ad- 
 minister" — The rich are invited to convince the 
 public that they are of any real social use before it 
 is too late — Municipal Ownership commended — 
 He seems closely in touch with avowed Socialism. 
 
 At every step taken by the student of the Munici- 
 pal Ownership movement in this country he is con- 
 fronted by the famiHar figure of some well-known 
 clergyman, by evidences that the movement owes 
 much of its force to the support given to it by 
 Christian ministers, who regard Municipal Owner- 
 ship merely as an incidental step in the direction of 
 greater things desired. This statement is as true 
 concerning the East as it is of the West. For in- 
 stance, one cannot study the new movement in this 
 section of the country without coming face to face 
 with the Rev. Dr. Lyman Abbott. But unlike the 
 Christian Socialists, who have entered the field of 
 politics. Dr. Abbott does not denounce Wealth as 
 being simply another name for Sin; on the contrary, 
 
 93 
 
94 MARK HANNA'S "MORAL CRANKS." 
 
 he speaks of it in a kindly way, and to it in words 
 of friendly admonition instead of invective. 
 
 In his book on "Christianity and Social Prob- 
 lems," Dr. Abbott says: 
 
 "In my judgment it is indispensable to national 
 welfare that the nation should exercise a control 
 over the great interstate lines of railroads, while the 
 peril to a Federal system involved in Governmental 
 Ownership appears to me a serious if not an in- 
 superable obstacle. On the other hand, the sooner 
 our cities own the city lines of railroads the better 
 both for the convenience of the people and the 
 purity of our municipal governments." 
 
 The doctor declares that the really great move- 
 ment of this Nineteenth Century is a movement to 
 add fraternity to liberty in the realm of religion, 
 and adds: 
 
 "The movement may be just as clearly traced in 
 government. Democracy no longer believes in 
 what has well been called the night watchman 
 theory. It rejects the aphorism that the sole func- 
 tion of government is to govern; that its sole duty 
 is to protect one community against another com- 
 munity. By government we protect and promote 
 manufactures. By government we aid with sub- 
 sidies railroads and canals, and various public en- 
 terprises. By government we educate the children 
 of the commonwealth in all the elements that are 
 necessary to citizenship, and in many of the states 
 maintain universities of the higher grade. By 
 government we establish parks for public play- 
 grounds. By government we supply our houses 
 
DR. LYMAN ABBOTT'S WARNING. 95 
 
 with water and light and are beginning to provide 
 our cities with transportation. 
 
 "In Great Britain government takes care of the 
 savings of the poor, regulates the rates of rent be- 
 tween landlord and tenant, erects buildings and 
 rents them to the poor, regulates by law the condi- 
 tions, and hours of labor. In Germany government 
 provides for the workingman insurance against 
 sickness, death and old age. In Switzerland gov- 
 ernment manages express business; in Austria it 
 owns and operates the railroads, and these are only 
 a part of the functions on which government is en- 
 tering." 
 
 Scripture is quoted by the Doctor to show that 
 the biblical condemnations of the vice of acquisi- 
 tiveness imply by their phraseology that there is " a 
 legitimate acquisition and a noble use of wealth," 
 but he utters these words of warning to the rich (the 
 quotation is from the Doctor's book) : 
 
 "There is only one way in which men can 
 justify their existence in the community. It is by 
 using, in the administration of their trust for the 
 public, the capacities with which they have been 
 endowed and by which they have acquired the 
 wealth which it is their duty to distribute. Those 
 of us whose surplus is not large or who have none 
 at all, must frankly recognize the difficulty of the 
 task which his exceptional position lays upon the 
 man of wealth. It is almost impossible to give 
 money to the individual without danger of pauper- 
 izing the individual ; it is not easy to give money to 
 
S6 MARK HANNA'S "MORAL CRANKS." 
 
 the community without danger of pauperizing the 
 community. 
 
 "But if the men whose abiHties have enabled 
 them to accumulate wealth have not also the ability 
 to distribute it wisely, a democratic age will find a 
 way to distribute that surplus by democratic 
 methods, which is only another way of saying that 
 the providence of God will deprive them of a trust 
 which they lack either the fidelity or the capacity to 
 administer." 
 
 The relations which Dr. Abbott sustains to 
 Christian Socialism may be indicated by his an- 
 nouncement in the book from which I have quoted 
 that he concurs with Frederic Harrison in both the 
 opinions which the latter expresses in the following 
 significant paragraphs: 
 
 "My own creed, on which this is not the time or place to 
 enlarge, teaches me that in our industrial age all wealth 
 is really the product of thousands working together in 
 ways of which they are not conscious, and with complex 
 and subtle relations that no analysis can apportion. The 
 rich man is simply the man who has managed to put him- 
 self at the end of the long chain, or into the center of an 
 intricate convolution, and whom society and law suffer to 
 retain the joint product conditionally; partly because it is 
 impossible to apportion the just shares of the co-operators 
 and partly because it is the common interest that the 
 product should be kept in a mass and freely used for the 
 public good. But this personal appropriation of wealth is 
 a social convention, and purely conditional on its proving 
 to be convenient. The great problem which the next cen- 
 tury will have seriously to take in hand and finally solve 
 is this: 
 
 "Are rich men likely to prove of any real social use, or 
 will it be better for society to abolish the institution? 
 
 "For my own part, I see many ways in which they 
 can be of use, and I earnestly invite them to convince the 
 public of this before it is too late." 
 
DR. LYMAN ABBOTT'S WARNING. gj 
 
 There you have the views of a distinguished 
 clergyman who is not likely to suffer at the hands 
 of Wealth, yet deems it a duty to issue a warning in 
 behalf of humanity. 
 
 Here that the reader may see how closely in 
 touch Dr. Abbott is with avowed Socialism, is sub- 
 mitted an extract from an address delivered at the 
 Chicago Conference on Trusts, last year, by the late 
 Laurence Gronlund, the former Socialistic editor of 
 a widely circulated daily newspaper of New York 
 City, the extract being taken from the report pub- 
 lished by the Civic Federation of Chicago : 
 
 "While public control of what is now strictly 
 private business should be merely the ideal for the 
 next century, and not be attempted until its close, 
 there is some business that should immediately be 
 entered upon. That is the so-called public utilities, 
 such as Municipal Ownership and management of 
 waiter works, of course, of street transportation in 
 every form, of gas works and electric power works. 
 These may not be trusts yet — only large enterprises. 
 But in Brooklyn we find surface and elevated rail- 
 roads already a trust, and in Manhattan they will 
 soon be that. It would be highly desirable and the 
 best thing for itself if the new democracy would in 
 its next National platform incorporate a plank de- 
 manding Municipal Control. Nothing would so 
 much convince our people of the blessings of public 
 control, and prove to them that government can 
 do business as well, and even better, than private 
 parties, as such an object-lesson. But here we have 
 a suggestion to make. It is that the state should 
 have more to say than it now has in municipal enter- 
 prises. For them to succeed, they must be under- 
 
98 MARK HANNA'S "MORAL, CRANKS." 
 
 taken, not with a view to giving labor employment, 
 but with the object of furnishing the best and 
 cheapest water, light and transportation. This the 
 f tate can effect better than the city. Hence the cry 
 of ' local self-government ' is wrong. Capitalists 
 might just as properly demand that the legislature 
 shall grant the stockholders of a railroad ' self-gov- 
 ernment free from state interference.' The city is 
 a creation of the sovereign state, and when a charter 
 is granted it should safeguard state interests to the- 
 same extent that is supposed to be done in granting 
 a charter for a railroad. We say that the state 
 should exercise oversight and have final control, 
 simply because it at least is one step further re- 
 moved from local pressure, and hence will dare and 
 be able to do things that the local authorities will 
 not dare even attempt. 
 
 "Then there are public utilities that come under 
 the jurisdiction of the Nation which will furnish 
 splendid opportunities for curbing the trusts. We 
 should have a National express system, to which 
 the late convention with Germany ought to give a 
 great impulse, a National telegraph. National banks 
 of deposit (postal savings banks) and National 
 banks of loans from the funds thus accumulated, 
 and finally National control of railroads. We do 
 at present adyocate National ownership and man- 
 agement of these latter ; this might as yet be too big 
 a mouthful to digest, but National control of rail- 
 road fares and freight rates — this is perfectly prac- 
 ticable, and has been several times recommended to 
 Congress. It would with one stroke abolish the 
 unjust discrimination, both between localities and 
 between shippers, which the interstate commission 
 
DR. I,YMAN ABBOTT'S WARNING. 99 
 
 has been unable to effect. If trusts should ever 
 dare to raise prices, such a National control of 
 freight rates will immediately bring them to their 
 senses. It is perfectly practicable, we contend. 
 Through a committee of Congress it is just as easy 
 to establish schedules of fares and freight rates on 
 all ou'r railroads, and to enforce them, as through 
 the Committee on Ways and Means to establish 
 schedules of duties on imports and to enforce them, 
 as is now done. 
 
 "This is a practical way, and, we think, a far-see- 
 ing way to utilize the trusts for the public welfare, 
 while to attempt to crush the trusts, we repeat, is 
 simply the notion of the damagogues," 
 
II. . 
 
 MUNICIPAL IMPERFECTIONS. 
 
 Municipal Ownership movement has its source in Social- 
 ism — One great problem confronting its advocates 
 is the inefficiency, extravagance and corruption of 
 municipal administration — "Kicking and cuffing 
 spoilsmen into the gutter ad libitum" not wholly a 
 reformatory idea — Prof. Bemis, Dr. Shaw and 
 Henry D. Lloyd quoted — The failure of Phila- 
 delphia's ownership of its gas plant. 
 
 "There is no denying that the government of cities is the one con- 
 spicuous failure of the United States. The deficiencies of the national 
 government tell but little for evil on the welfare of the people. The 
 faults of the state governments are insignificant compared with the ex- 
 travagance, corruption and mismanagement which mark the admini- 
 strations of most of the great cities, for these evils are not confined to 
 one or two cities. In New York they have revealed themselves on the 
 largest scale. They are 'gross as a mountain and palpable.' But there 
 is not a city with a population exceeding 200,000 where the poison 
 germs have not sprung into a vigorous life ; and in some of the smaller 
 ones, down to 70,000, it needs no microscope to note the results of their 
 growth. Kven in cities of the third rank similar phenomena may be 
 observed." — James Bryce in the American Commonwealth. 
 
 It is undoubtedly true that many well meaning 
 and upright citizens are advocates of Municipal 
 Ownership of gas, electric light, railroad and tele- 
 phone plants — citizens who would indignantly re- 
 sent the charge of being Socialists ; yet that does not 
 alter the fact that the Municipal Ownership move- 
 ment is at heart Socialistic. The Christian Socialist 
 leader of the West, Professor Herron, and his fol- 
 lowers candidly concede that in the event of the 
 triumph of the Municipal Ownership idea the next 
 step to be taken must be in the direction of the ac- 
 quisition by the national government of railroads, 
 telegraph lines and "other public utilities." 
 
 "Public ownership of the sources and means of 
 production is the sole answer to the social question, 
 
MUNICIPAL IMPERFECTIONS. loi 
 
 and the sole basis of spiritual liberty," Professor 
 Herron declares. 
 
 With no regard whatever for such religious be- 
 liefs as are entertained by Herron and his fellow 
 Christian Socialists, Frederick Engels, the German 
 Socialist, says in "Socialism, Utopian and Scien- 
 tific," a publication which has had wide circulation 
 in Europe: 
 
 "With the seizure of the means of production by 
 Society, production of commodities is done away 
 with, and, simultaneously the mastery of the pro- 
 duct over the producer. Anarchy in social pro- 
 duction is replaced by definite, systematic organiza- 
 tion. The struggle for individual existence disap- 
 pears. Then for the first time, man, in a certain 
 sense, is finally marked off from the rest of the 
 animal kingdom, and emerges from mere animal 
 conditions of existence into really human ones. The 
 whole sphere of the conditions which environ man, 
 and which have hitherto ruled man, now comes 
 under the domain and control of man, who, for the 
 first time, becomes the real conscious lord of 
 Nature, because he has now become master of his 
 own social organization. It is the ascent of man 
 from the kingdom of necessity to the kingdom of 
 freedom." 
 
 So it would seem that the German Socialist and 
 the American Christian Socialist agree as to Public 
 Ownership. 
 
 Socialism and Municipal and National Owner- 
 ship are moving forward hand in hand in the West. 
 If the evidence already submitted in support of this 
 
102 MARK HANNA'S "MORAL CRANKS." 
 
 statement is not deemed conclusive, read the utter- 
 ances of Mayor Jones of Toledo, the high priest of 
 Christian Socialism. In an address delivered before 
 the League of American Municipalities, at Detroit, 
 the Mayor said, among other things : 
 
 "The imperative demand of this hour upon us is 
 that we shall set ourselves to the task of so chang- 
 ing our system that through the medium of Public 
 Ownership the wealth of the people may again come 
 into the hands of those who have produced it, and 
 the realization of the dreams of our forefathers shall 
 be fulfilled and we shall have the perfected repub- 
 lic in which every man shall be secure in the posses- 
 sion of the fruit of the labor in his hands. 
 
 "Through Public Ownership the Municipality, 
 the State, the Nation may find a means of express- 
 ing its love for the people. 
 
 "The movement for Public Ownership is Gov- 
 ernment seeking the good of all as against the in- 
 dividual who seeks only his own good. It is the 
 casting down of idols and the lifting up of ideals. 
 It is dethroning the millionaires and exalting the 
 millions." 
 
 The leaders of the new Socialism in the West, 
 Mayor Jones of Toledo, Professor Herron, Profes- 
 sor Bemis and the professors of sociology in various 
 halls of learning who are preaching Municipal and 
 National Ownership, have seemingly fallen into 
 some confusion of mind in their attempts to grapple 
 with the main objection to the ownership of public 
 utilities by cities, viz., the "extravagance, corrup- 
 tion and mismanagement which mark the adminjs- 
 
MUNICIPAI. IMPERFECTIONS. 103 
 
 tration of most of the great cities of the United 
 States." It is generally conceded by these profes- 
 sors and chief spokesmen for Municipal Owner- 
 ship that the administrations of most of our cities 
 are not conducted on business principles that they 
 are inefficient, more often dishonest, and controlled 
 by men who are in politics for what they can make 
 out of it. The way in which these preachers of the 
 new Socialism approach the consideration of mani- 
 fest evils which demand practical and drastic treat- 
 ment appears grotesque. For the first problem that 
 confronts them they do not seem able to present 
 an adequate solution. 
 
 In a paper on "Municipal lyighting," contributed 
 to Professor Bemis' book, "Municipal Monopolies," 
 John R. Commons, former Professor of Sociology, 
 Syracuse University, frankly says : 
 
 "It must be confessed that the legal organization 
 of our municipalities is not yet perfected for the 
 espousal of Public Ownership on a large scale. 
 
 "Wherever the spoils system and corruption exist 
 we may expect to find the Aldermen in control." 
 
 Professor Bemis says: 
 
 "The greatest advantage of Municipal Ownership 
 is its tendencies to relieve communities from cor- 
 rupting relations with men of wealth. Some be- 
 lieve that merely the form of corruption would be 
 changed thereby; that, instead of the corruption of 
 the city council by franchise-seeking corporations, 
 there would come the corruption of the spoils sys- 
 tem." 
 
 How would this wise professor of Kansas eco- 
 nomics deal with the corruption of a city council, 
 
104 MARK HANNA'S "MORAL CRANKS." 
 
 not an uncommon occurrence, by the way? He 
 answers : 
 
 "Even if this should at first prove true, the spoils- 
 men can be kicked and cuffed about in the gutter 
 ad libitum, and without the slightest danger to one's 
 social or business position. In fact, it is becoming 
 almost the fashionable thing to express disgust at 
 the political office seeker." 
 
 In support of his contention that even a corrupt 
 or weak municipal administration could more 
 safely be intrusted with the management of public 
 utilities than a private corporation. Professor Bemis 
 quotes "our most eminent student of municipal 
 problems, Dr. Albert Shaw," as follows: 
 
 "With honest, independent and truly representa- 
 tive government, such as our forefathers knew, and 
 such as they hoped would be ours in perpetuity, it 
 would seem to me a matter of comparatively little 
 moment whether the public welfare was served by 
 the Municipal Ownership and operation of gas 
 plants, or under fair terms, by a private company. 
 On some accounts I should considerably prefer the 
 latter alternative. But with weak and flabby gov- 
 ernment, lacking in moral stamina and lacking the 
 intellectual force to make advantageous bargains, 
 with private corporations, I should be incHned to 
 the opinion that direct ownership and operation as 
 offering less temptation, might well have better re- 
 sults for the community in some cases." 
 
 It is not as an opponent of Municipal Ownership, 
 but simply as an investigator, that the writer of 
 these letters deals with the arguments made in its 
 
MUNICIPAL IMPERFECTIONS. los 
 
 behalf by its leading spokesman. Municipal 
 Ownership may be a good thing for cities under 
 better municipal conditions than now prevail 
 throughout the country, and there is unquestion- 
 ably much to be fairly said in condemnation of the 
 greed, the extortions, the unsatisfactory treatment 
 of the public by various corporations, yet the main 
 question at issue is this : 
 
 Do the advocates of Municipal Ownership ofifer 
 an intelligent, feasible, effective remedy for ad- 
 mitted evils? 
 
 Is there any choice between a greedy and un- 
 scrupulous corporation and a greedy and unscru- 
 pulous political machine? Can the public reason- 
 ably expect to receive fairer treatment from the 
 machine than the corporation? Is state legislation a 
 failure? Is it no longer possible to frame laws 
 which will compel corporations to serve the public 
 efficiently and without extortion? If the answer be 
 that corporations are no longer amenable to law, 
 then manifestly we have a condition bordering on 
 Anarchy. 
 
 The spokesmen for Municipal Ownership, Shaw, 
 Bemis, Commons, Jones, Pingree and even Mayor 
 Harrison of Chicago, say it is wiser to trust munici- 
 pal governments than corporations. Having ad- 
 vanced this proposition in his text book, "Munici- 
 pal Monopolies," Professor Bemis, apparently for- 
 getful of what he had previously said, proceeds to 
 demonstrate that what he terms a corrupt common 
 council cannot be trusted, and refrains from repeat- 
 ing the statement that "spoilsmen can be kicked 
 
io6 MARK HANNA'S "MORAL CRANKS." 
 
 and cuffed about in the gutter ad libitum." In the 
 following language he tells how faith in one munici- 
 pal administration was betrayed: 
 
 "The lease of the Philadelphia gas works in 1897 
 for thirty years, after fifty-six years of public opera- 
 tion and sixty-two years of public ownership, has 
 been widely heralded as an evidence of failure of 
 Public Ownership. The salient facts which alone 
 can be here given, illustrate, rather, the extent to 
 which powerful corporate influences will weaken 
 and corrupt government for their own ends when 
 the people are asleep and the spoils system is al- 
 lowed to prevail. 
 
 "Surrounding the committee rooms and council 
 chambers at all the meetings when the United Gas 
 Company's ordinance was under consideration was 
 a band of the shrewdest and most skillful lobbyists, 
 and at one time some of them had the audacity to 
 enter upon the floor of the councils and direct their 
 fight for the ordinance from that point of vantage. 
 Yet despite the public protests, and despite the 
 public indignation, and despite the very much better 
 offers of competing companies, the United Gas Im- 
 provement Company, controlled as it is by those 
 who have already secured the street railway, elec- 
 tric hghting and gasoline franchises and privileges, 
 was able to carry the day. And yet there are some 
 people who wonder at the prevailing discontent 
 among the poorer classes and the growth of that 
 sentiment for which Mr. Bryan stands." 
 
 Of all the leaders of the new Socialism, Henry 
 D. Lloyd, author of "Wealth and Commonwealth," 
 is the only one who appears to comprehend the 
 character of the first problem which must be solved 
 
MUNICIPAI^ IMPERFECTIONS. 107 
 
 before any reasonable hope of the success of Mu- 
 nicipal Ownership can be entertained by its advo- 
 cates. He says tersely and clearly at the outset, 
 though less clearly at the close : 
 
 "Our problem is a paradox. We must have pure 
 government in order to municipalize, and we must 
 municipalize in order to have pure government." 
 
III. 
 
 SOME ARGUMENTS PRO AND CON. 
 
 Discordant conclusions, especially in the problem of 
 electrical undertakings, pointed out by Prof. F. A. 
 C. Perrine, of Leland Stanford University— Detroit 
 and Chicago operate electric lighting plants success- 
 fully — Francisco's statistics of Great Britain's rail- 
 roads — American railroad experience furnishes no 
 arguments to the controversy. 
 
 Municipal Ownership being regarded by the 
 Christian Socialists and their allies as the first step 
 in the direction of changing existing governmental 
 systems, it is natural that the question should be 
 asked at this stage of the new movement. 
 
 "What have the experts to say about the Munici- 
 pal Ownership of electric lighting, gas and railway 
 
 plants?" 
 
 In support of each conclusion, for or against, 
 great arrays of figures are presented, but the con- 
 tending experts never start out from the same basis 
 of facts. The expert who is making out a case for 
 Municipal Ownership omits to make any such al- 
 lowance for wear and tear of plants, for deprecia- 
 tion, for interest on amount of money invested in 
 city plants, for taxes, differences in cost of coal and 
 for other elements of expense which the expert who 
 is against Municipal Ownership shows are either 
 too low or omitted altogether from the reports 
 brought forward in support of municipalization. 
 Those who have had no practical experience in 
 electrical engineering appear to be the most dog- 
 
 io8 
 
SOME ARGUMENTS PRO AND CON. 109 
 
 matic in advocating or condemning Municipal 
 Ownership. 
 
 F. A. C. Perrine, Professor of Electrical En- 
 gineering, Leland Stanford University, writes for 
 Professor Bemis a paper entitled, "Validity of Elec- 
 tric Light Comparisons," which shows the uncer- 
 tainty of comparisons between plants of cities, and 
 at the very outset he declares : 
 
 "No problem in economics has yielded more dis- 
 cordant solutions than has the problem of the com- 
 parative value of Municipal and Private Owner- 
 ship in electrical undertakings. Attempts have 
 been made to explain these discordant solutions by 
 reference to the comparative fullness of data used 
 by the different investigators, but instances are not 
 infrequent of opposite conclusions from a con- 
 sideration of the same statistics." 
 
 When the investigator looks for something tan- 
 gible in the way of Municipal Ownership and op- 
 eration of electric lighting plants, he will find that 
 but two large cities in America have tried the ex- 
 periment with any degree of success. Chicago and 
 Detroit own their street lighting plants, and despite 
 the statement of critics to the efifect that these elec- 
 tric light plants and their operation have been 
 marked by extravagant expenditures, the fact re- 
 mains that they are proving satisfactory to the muni- 
 cipalities which established them. And they have 
 shown to the private electric lighting companies the 
 advisability of reducing rates from time to time. 
 
 Philadelphia tried the experiment of running a 
 
no MARK HANNA'S " MORAI. CRANKS." 
 
 municipal gas plant for a score of years and finally 
 abandoned the effort. Boston was disposed to es- 
 tablish a municipal electric lighting plant, but after 
 investigating the subject carefully dropped it and 
 made its contracts with a private company. Here 
 in part is what one of the experts had to say about 
 the Chicago plant in a report made to the Mayor 
 of Boston in 1898: 
 
 "The information contained in the annual re- 
 ports of the department of electricity is extremely 
 meager respecting the construction and operation of 
 the electric lighting plant; but I have not thought 
 it worth while to spend the time required to secure 
 all the data possible upon these points, for the rea- 
 son that the annual cost to the City of Chicago of 
 the lights operated by its municipal plant is so very 
 much in excess of the prices obtained by Detroit 
 through its municipal plant, and by other cities, 
 including Boston, through private contracts, that 
 it seemed a useless expense to continue the investi- 
 gation further for the purpose of clearing up the 
 ambiguities in the report of the Electrical Bureau, 
 or for the purpose of ascertaining just what it is that 
 makes it cost so much to run the Chicago plant. 
 
 "The annual cost to operate this plant has always 
 been in the nature of a public scandal, and al- 
 though better results are being obtained by the 
 present superintendent than under his predecessor 
 in ofifice, the figures still show either a very poor 
 plant or a very extravagant management, or both. 
 
 "Thus the cost for coal and station supplies is 
 $23.55 per light as against $10.43 i" Detroit, and 
 the cost for labor is $46.95 as against $33.25 in 
 Detroit. It is, however, only fair to point out that 
 
SOME ARGUMENTS PRO AND CON. in 
 
 the labor cost has been reduced by the present man- 
 agement. In 1894 it was $52.60, a sum which the 
 late Professor Parsons, one of the most extreme 
 advocates of Municipal Ownership, used to justify, 
 although admitting that it was $35.10 in excess of 
 what the labor cost to a private company would be. 
 The additional 200 per cent, was, in his opinion, 
 paid and rightly paid, not for the manufacture of 
 light, but for the 'elevation of labor.' This ex- 
 cessive cost has been somewhat reduced, as we have 
 seen, but judging by the experience of Detroit, 
 where the public plant is managed on a close ap- 
 proximation to business principles, it is still many 
 dollars per lamp more than it ought to be." 
 
 Justice to Mr. Edward B. Ellicott, the City 
 Electrician of Chicago, requires the statement that 
 the cost of furnishing electric arc light to Chicago 
 has been materially reduced since the foregoing re- 
 port was made, Mr. Ellicott, by general testimony, 
 seems to be an upright and competent head of the 
 Chicago Municipal Electric Light Plant. While 
 the writer of this letter was discussing with Mr. Elli- 
 cott the work of his department an incident oc- 
 curred which may be presented as an object lesson 
 to those who assert that a city can under present 
 conditions serve the public as well as a private 
 corporation. An Alderman interrupted our con- 
 versation by stepping up to Mr. ElHcott's desk and 
 breaking in with the query: 
 
 "Have you done anything about fixing the wages 
 of the trimmers? You know the Common Council 
 
112 MARK HANNA'S " MORAI. CRANKS." 
 
 passed a resolution givin' them $68 a month. They 
 want the three months' back pay at them figures." 
 
 "The Common Council had no business to go 
 over my head and fix wages without consulting 
 me," said the City Electrician quietly but firmly. 
 "I called for an appropriation after I had figured 
 expenses down to as low a point as possible. Then 
 the Common Council fixes rates that may cause a 
 deficiency." 
 
 "Yes," said the Alderman, nonchalantly. "But 
 the boys have been to see me, to know what's going 
 to be done." 
 
 "I will not order their back pay at the advanced 
 figures," remarked Mr. Ellicott. "Some one else 
 will have to do that if it is done. If there is a de- 
 ficiency the Common Council will have to stand 
 the responsibility.'" 
 
 The Alderman smiled as if to say that the Com- 
 mon Council would assume the responsibility cheer- 
 fully, and as he left Mr. Ellicott said: 
 
 "That's one of the sort of things that handicaps 
 a man in a position like mine, but the Mayor won't 
 stand for this advance, in my opinion." 
 
 Mr. Ellicott informed me subsequently that 
 Chicago is now lighting its streets at a cost of $68 
 per arc lamp, but that does not include deprecia- 
 tion in plant, and several other items which figure 
 in the cost of light when a private company makes 
 up its expense account. I was informed that 
 Chicago was obliged to contract with a private com- 
 pany for 531 all night lamps at a cost of $103 per 
 lamp. In a carefully prepared statement made by 
 
SOME ARGUMENTS PRO AND CON. 113 
 
 Department of Street Lighting in 1899, the follow- 
 Deputy Commissioner Walton of the Brooklyn 
 ing figures are presented, showing the number of 
 electric lights in Broolclyn, N. Y., and cost, as fol- 
 lows: 
 
 No. Cost. 
 
 Electric lights (Flatbush company) 332 $97.50 
 
 Electric lights (Ocean Parkway, Flatbush 
 
 company) 95 116.80 
 
 Electric lights in all other parts of the 
 
 borough, 1,200 c. p 3,545 124.10 
 
 Electric lights in all other parts of the 
 
 borough, 600 c. p 210 62.05 
 
 Most of the municipal electric light plants in this 
 country are owned and operated by small cities, 
 and Francisco, author of "Municipal Ownership 
 V. Private Corporations," gives a long list of fail- 
 ures. It is generally admitted by the experts who 
 are entitled to credence that the results in these 
 smaller cities have produced no convincing argu- 
 ments in favor of Municipal Ownership of electric 
 light plants. 
 
 As to the Municipal Ownership of railroads Fran- 
 cisco says: 
 
 ■'If we were to believe all the statements made 
 by the advocates of Municipal Ownership we should 
 have nearly all the railways in large cities in foreign 
 countries owned and operated by municipalities, 
 while the fact is that it is an exceptional case where 
 the municipality owns and operates the plants. 
 
 "The reports to Parliament shows that in Great 
 Britain there are 153 street railways. Of this num- 
 ber 116 are operated and owned by private com- 
 panies; 31 are owned by the municipality and leased 
 
114 MARK HANNA'S "MORAI. CRANKS." 
 
 to private parties, while only 6 are owned and oper- 
 ated by the municipalities. Of these cities, only 
 one — Glasgow — claims that the enterprise is a suc- 
 cessful one. 
 
 "There are but 14 cities in the world that operate 
 their street railways. Before the English govern- 
 ment bought the telegraph system the private cor- 
 poration had been making a profit on the plant, 
 but the government has never made a profit since, 
 and the taxpayers would have saved millions of 
 pounds if the government had not attempted the 
 management of this business enterprise. 
 
 "Sheffield, England, had a street railroad oper- 
 ated by a private company which paid from 5 to 
 8 per cent, dividends. The city took the business 
 and under municipal management the property did 
 not even earn the interest upon the capital invested, 
 and this, too, in a city with 17,000 persons per mile 
 of track. 
 
 "Huddersfield, England, has operated a street 
 railroad for fourteen years and has lost in that time 
 $311,000, and in Plymouth, Huddersfield, Shefifield 
 and other cities boys from 14 to 16 years of age are 
 paid $2.50 per week and employed as conductors." 
 
 Professor Bemis says that in 1897, Huddersfield 
 was obliged by the board of trade to lease its street 
 railway lines as soon as a reasonable offer could 
 be obtained from a private company : 
 
 "Hence it is not surprising if Public Ownership 
 failed of success where private ownership did not 
 venture to enter. In Plymouth, a city of 100,000 
 inhabitants, a private company, after partially con- 
 
SOME ARGUMENTS PRO AND CON. us 
 
 structing a short line of three and one-half miles, 
 failed. The city was indeed forced to undertake 
 the business itself. It is not surprising, therefore, 
 that it has only earned about two-thirds of the in- 
 terest on the plant after paying all other expenses." 
 
 Professor Bemis, referring to one objection to 
 Municipal Ownership, remarks: 
 
 "Aside from the dangers of the spoils system, 
 it is claimed that public operation is Socialistic. 
 This argument would apply equally well to the Post 
 Office and has ceased to be a bugbear." 
 
 As to Municipal Ownership of American rail- 
 roads, the Professor, as has been previously stated, 
 says that only two railroads in the United States 
 are owned by municipalities, the Brooklyn Bridge 
 Railroad and a small road at Port Huron, Ontario. 
 Neither has produced a convincing argument for 
 Municipal Ownership. The Brooklyn Bridge road 
 is now managed by a private corporation. The 
 advocates of Public Ownership turn to Great 
 Britain and the continent for arguments in support 
 of their theory. The claim as to the ownership 
 and operation of street railways in Glasgow have 
 been considered. It is admitted by the advocates 
 of Municipal Ownership that the favorable con- 
 ditions existing in Glasgow cannot be paralleled 
 in this country until our political spoils system 
 is abolished. Referring to Public Ownership 
 abroad, Francisco says: 
 
 "Experience shows that in Europe, Australia and 
 America, State aid to railroads has resulted in im- 
 mense losses. Most of the railways in Austria, 
 after an unsuccessful trial, were sold to private con- 
 tractors for about one-half their cost. Mr. Knapp, 
 
ii6 MARK HANNA'S "MORAL CRANKS." 
 
 of the Inter-State Commerce Commission, in a 
 letter to the Nation, referring to Government Own- 
 ership in Germany says: "Henceforth it will be 
 advisable, for a railway employe not to vote other- 
 wise than in accordance with the political opinions 
 of his chief. Railroad officers, post office and tele- 
 graph clerks no longer dare to petition in their own 
 names to the Reichstag, because they are threatened 
 with punishment if they do. In Italy the govern- 
 ment took the system into its own hands, but the 
 gross receipts being continually less than the ex- 
 penses, a special committee was appointed to in- 
 vestigate, and after making the most thorough and 
 careful investigation, reported that: 
 
 "State railroads as a rule did not do so much for 
 industry as private railroads; that in general their 
 rates were higher, their facilities worse, their re- 
 sponsibility less, while the state railroad manage- 
 ment was more apt to tax business than to foster it; 
 political considerations were brought into matters 
 of railroad construction and management in a way 
 which was disastrous alike to railroads and politics." 
 
IV. 
 
 EX-MAYOR SAMUEL H. JONES, OF 
 TOLEDO, OHIO. 
 
 A foremost figure in the West in the causes of Christian 
 Socialism and Municipal Ownership — Early life in 
 Wales and America one of poverty and hardship — 
 A fortune in oil — Application of his novel "Christ 
 policy" to the Toledo poKce force and to intoxi- 
 cated citizens — Is he really practical? — Mark 
 Hanna's estimate of the "crank" who polled 107,000 
 votes for Governor of Ohio. 
 
 "The Rev. Heber Newton of tlie Madison Avenue Episcopal 
 CImrch, New York, in a recent sermon said ' the kingdom of God was a 
 new order of society, which men themselves should bring about, from 
 which should be abolished poverty and misery.* The time would come, 
 he said, when men would consider it a crime and an outrage that any 
 person should starve to death in the midst of plenty. He for one 
 looked to see poverty abolished in our own generation. So do I." — 
 Mayor Samuel M. Jones of Toledo, O. 
 
 Municipal Ownership being regarded as the step- 
 ping stone to National Ownership by Christian 
 Socialists, the new religionists of the West, it may 
 be instructive to review the efforts of one of the 
 high priests of this latest cult to put into practical 
 operation his scheme for the betterment of citizen- 
 ship, on Socialistic lines. Next to Professor 
 George D. Herron, of the Iowa State College, 
 Mayor Samuel M. Jones, of Toledo, O., is the fore- 
 most figure of the West in the advocacy of Muni- 
 cipal and National Ownership. His triumphant 
 re-election to a public ofhce of great responsibility; 
 the enthusiastic acceptance of his unique views by 
 large masses of citizens in the West, invest his per- 
 sonality and doctrines with interest to all who are 
 studying sociological questions. 
 
 117 
 
ii8 MARK HANNA'S "MORAL CRANKS." 
 
 Mayor Jones is from any point of view a man of 
 picturesque individuality. He is about 53 years 
 of age, was born in Wales, consequently can never 
 aspire to the presidency, and came to this country 
 when he was a child. He is of the average height, 
 broad of shoulder, muscular, alert in movement 
 and apparently of rugged health. His hair and 
 closely trimmed mustache are tinged with gray, his 
 eyes bright and searching, chin indicative of reso- 
 lution, manner quiet and self possessed, attire plain 
 but neat, his general appearance that of an ener- 
 getic business man. He is evidently a very earn- 
 -est man, although not boisterous in speech even 
 when most thoroughly aroused, and the general 
 testimony of all who know him, friends and oppo- 
 nents, is that he is sincere and honest. His em- 
 ployes entertain a genuine affection for him, and 
 the 17,000 votes which he received when a candi- 
 date for re-election tell of the esteem in which he 
 is held by most of his fellow townsmen, for the Re- 
 publican and Democratic candidates who- ran 
 against him polled together no more than 7,000 
 votes. The following sketch of the Mayor's early 
 life is from his own lips: 
 
 "Glancing briefly at the past, I can see some in- 
 fluences that have led to the belief I now hold as to 
 my relation to my fellow men. I was born in 
 Wales, August 3, 1846; came with my parents to 
 America when I was three years old and I have 
 often heard them tell of the tedious voyage of 
 thirty days in an emigrant sailing ship and the sub- 
 sequent voyage over the Erie Canal to central New 
 York, where they finally settled in Lewis County. 
 My parents were very poor and very pious. The 
 
EX-MAYOR SAMUEL H. JONES. 119 
 
 poverty in our family was so stringent that it was 
 necessary for me to go out to work, and I bear upon 
 my body to-day the marks of the injustice and 
 wrong of child labor. 
 
 At the age of 18 I heard of the opportunities in 
 the oil regions of Pennsylvania, and at once made 
 my way to Titusville. I landed there with 15 cents 
 in my pocket, and without an acquaintance in the 
 state. For three days I went through one of the 
 most trying experiences of any young man's life^ — 
 living without money and seeking work among 
 strangers. I had promised to write to my mother, 
 and I used hotel stationery to fulfill my promise, 
 but was without the necessary three cents then 
 needed to purchase a postage stamp. This was one 
 of the hardest financial problems of my life. I 
 overcame it through a clever dodge. Seeing a man 
 on the way to the postoffice with a bundle of letters 
 in his hand I inquired of him : 'Are you going to the 
 postoffice?' 'Yes, sir,' he said. 'Will you have the 
 kindness to mail this for me?' At the same time 
 pushing my hand into my empty pocket in search 
 for the necessary coin, fumbling my pocketknife and 
 keys a moment. The gentleman kindly said, 
 ' Never mind, I will stamp it,' and the revenue was 
 provided which took my first letter to my mother." 
 
 The Mayor says he found his first remunerative 
 employment in the oil fields : 
 
 "Since 1870 I have been more or less of an oil 
 producer. In 1886 I came to the Ohio oil fields 
 and began in the business of producing oil at Lima. 
 Since that time I have followed it both in Ohio and 
 
120 MARK HANNA'S "MORAL CRANKS." 
 
 Indiana, and to some extent in Pennsylvania and 
 West Virginia. In 1893 I invented some important 
 improvements in appliances for producing oil, and, 
 finding manufacturers unwilling to make the ar- 
 ticles, fearing there was nothing in it, I concluded 
 to go into the manufacturing business." 
 
 Mayor Jones eventually found the oil business 
 profitable and is now considered a man of ample 
 means. In Toledo he employs forty of fifty men in 
 his oil sucker rod manufactory and on every Christ- 
 mas day presents each employee with a check repre- 
 senting five per cent, on the amount paid the em- 
 ployee in wages during the year. One of the 
 Mayor's townsmen supplied the following informa- 
 tion concerning the former's early life: 
 
 "He started at the foot of the ladder. He was an 
 oil well driller and had to work very hard ; his hands 
 are still calloused from manual labor. He knows 
 what hard work means and that is why he does not 
 work his men more than eight hours a day, and he 
 won't allow any of his men to work on a Sunday. 
 He practices what he preaches." 
 
 When Mr. Jones first ran for Mayor he was the 
 regular Republican candidate. Then all the liquor 
 saloon keepers opposed him, for he was an active 
 church member and it was said that a few years 
 previous to his residence in Toledo he was known 
 in Lima, O., as a vigorous enemy of the saloons. 
 But he was elected and the saloons were undis- 
 turbed until the clergymen of Toledo insisted that 
 they should be closed. Mayor Jones said : 
 
 "If you enforce one law, enforce all." 
 
EX-MAYOR SAMUEL H. JONES. 121 
 
 The saloons were closed and then the sale of milk, 
 newspapers and cigars on Sunday was prohibited. 
 The drug stores, candy stores, newspaper stands 
 and bootblacks went out of business for two or 
 three Sundays. Then public sentiment forced a 
 repeal of all the Sunday closing ordinances. The 
 clergymen subsequently stormed at Jones, but he 
 replied in the words used by him in delivering an 
 address at the annual meeting of the League of 
 American Municipalities, in Detroit: 
 
 "The time is coming when we shall make a clear 
 distinction between respectability and righteous- 
 ness, and when we shall come to see, as did Frances 
 Willard, the great apostle of temperance, before her 
 death, that poverty is the cause of drunkenness, 
 rather than drunkenness the cause of poverty." 
 
 Mayor Jones had not long been in office before 
 he began to try and carry into practical execution 
 the introduction of what he calls "The Christ policy 
 in politics, municipal and social life." He says that 
 this policy alone can conquer evil, and he adopted 
 at the outset of his political career as a religious 
 political motto: 
 
 "Whatsoever ye would that men should do unto 
 you, do ye even so unto them." 
 
 The first practical move which he made in the 
 direction of enforcing this new and novel policy in 
 the afifairs of municipal government was to deprive 
 the policemen of their clubs and furnish them with 
 canes. Every Toledo policeman now carries a cane 
 with a curved handle. The Mayor next gave the 
 police to understand that men would not establish 
 any substantial claims to promotion by luaking a 
 
122 MARK HANNA'S "MORAL CRANKS." 
 
 great number of arrests for drunkenness. The idea 
 was conveyed to them that the policeman who won 
 the reputation of being a humane officer, and suc- 
 ceeded in getting more drunken men home than to 
 the station houses would have a better chance for 
 promotion than the officer seeking to make a record 
 by the number of arrests he might make for drun- 
 kenness. 
 
 The Mayor's policy is still in force, and so it may 
 fairly be said that there is one city in the Union 
 where a man can get comfortably drunk, comfort- 
 ably intoxicated (if he is not violent) and zig-zag 
 through the streets feeling that if he is not able to 
 identify his keyhole, he can rely upon the friendly 
 assistance of a policeman who steadily bears in mind 
 the Mayor's motto: 
 
 "Whatsoever ye would that men should do unto 
 you, do ye even so unto them." 
 
 In defense of his policy, Mayor Jones said : 
 "In the future, as in the past, I shall pin my faith 
 to love as the only power that can save the world, 
 and if again I am called into the public service, I 
 shall use my best endeavor to administer love as 
 law. It seems to me preposterous to hold that 
 Jesus would practice a 'hickory club and shot gun' 
 policy in dealing with evil. There is but one way 
 to overcome evil, and that is both scientific and 
 scriptural. 'Be not overcome with evil, but over- 
 come evil with good,' and that policy will overcome 
 the evil that flows from the saloon, as well as from 
 all other sources. The one way to finally over- 
 come the saloon evil is to provide a better substi- 
 
EX-MAYOR SAMUEL H. JONES. 123 
 
 tute. If we are to adopt the method of extirpating 
 evil instead of the regenerative method that Jesus 
 preached and practiced, it seems to me that to be 
 logical, our business men who believe in that plan 
 should hang a sign in their show windows, bearing 
 such inscriptions as these : ' No saloon money 
 wanted here,' "No brewers' money wanted here,' 
 ' No liquor dealers' money wanted here,' ' No em- 
 ployees of any of these people wanted to trade at 
 this store.' " 
 
 Mayor Jones was busy preparing for a trip to 
 New York, where he had been announced to speak 
 art a workingman's dinner, when I visited his un- 
 pretentious and cramped official quarters in a 
 private building in the City of Toledo. After he 
 had finished the dictation of his speech, he found 
 time to say in response to my queries : 
 
 "My policy in public life as in private life may be 
 summed up in these words : I believe in the Christ- 
 policy in politics and in every-day life. Love is the 
 only power in the world that will conquer evil. I 
 believe in Municipal Ownership because I regard it 
 as one step in the direction of the brotherhood of 
 man. Christ is the great Leader of men." 
 
 "You speak like a churchman. Are you one?" 
 I asked. 
 
 "Well, I'm not working much at it," responded 
 the Mayor with a slight tinge of bitterness in his 
 tones. "I give $100 a year to the church, and I go 
 there and stand about as much of it as I think I can 
 bear." 
 
 Plainly, the Mayor does not entertain a friendly 
 
124 MARK HANNA'S "MORAL CRANKS." 
 
 feeling for the churches of Toledo, and this may be 
 due to the fact that most of the clergymen in Toledo 
 opposed his candidacy for re-election; yet his con- 
 fidential secretary informed me later that the Mayor 
 spoke as he did of churches because he did not think 
 they were working effectively for the good of those 
 outside of the church. 
 
 The Mayor said further, as if in explanation of 
 his bitter reference to the clergy: 
 
 "They found fault with me because the saloons 
 are not closed on Sundays. We have no ordinance 
 requiring the closing of saloons ; the only restriction 
 on them is a state law, and I have no way of enforc- 
 ing that restriction. After all, the liquor question 
 is but incidental to greater questions of evil, inci- 
 dental to a condition of society that causes drunken- 
 ness. Sam Jones came here during my campaign 
 and he stood with the clergymen in denouncing me. 
 He said there are 841 saloons in Toledo, while there 
 are only 581. When I first became Mayor there 
 were 589. The sin that is destroying souls to-day 
 is the sin of ignorance, indifference and apathy to 
 political and economic evils." 
 
 This is what Sam Jones, the evangelist, had to 
 say about his namesake in Todelo: 
 
 "Mayor Sam M. Jones of this city believes in the 
 Golden Rule. He does by all saloon keepers, 
 gamblers and dervishees just as he would be done 
 by if he were a saloon keeper, gambler or dervishee. 
 I was told that Mayor Jones was a man without a 
 bad habit. He was elected two years ago by the 
 church people of the city, being a prominent mem- 
 
EX-MAYOR SAMUEL H. JONES. 125 
 
 ber of the church himself. He telegraphed to. 
 Washington Gladden of Columbus, O., the night 
 of his election, two years ago, that he was elected 
 by a good majority, in spite of 600 saloons and the 
 devil. If he is elected the 3d of April again he will 
 be elected by 840 saloon keepers and the devil, with 
 the preachers and their influence in the churches 
 against him. 
 
 "Mayor Jones is a man of theories. He believes 
 that poverty creates saloons and that poverty 
 among the working people makes the saloon neces- 
 sary. I have told the people in this city that I 
 had visited many of the lunatic asylums of the dif- 
 ferent states and talked with the inmates, but that 
 I had come to Toledo to find a man fool enough to 
 advance such a theory as that — that poverty creates 
 saloons and makes them necessary. I thought the 
 saloon was the mother of poverty and wretched- 
 ness." 
 
 "Are you in accord with the views of Professor 
 Herron?" I asked Mayor Jones. 
 
 "Professor Herron has exercised a large influence 
 upon my life," responded the Mayor, then hastily, 
 "If you desire to get my views more in detail, here 
 is a gentleman who will give them to you. He 
 knows me well, what I think, what my life has been 
 and what my aims are. I have got to hurry to 
 catch a train for New York, but this gentleman will 
 give you perhaps even more than if I were to talk 
 to you." 
 
 Thereupon the Mayor introduced his first assist- 
 ant, Mr. Reynolds Voit, a courteous and well-in- 
 
126 MARK HANNA'S "MORAL CRANKS." 
 
 formed official, then hurried away to catch his train. 
 Here is what Mr. Voit had to say of the Mayor: 
 
 "Of course you know Mayor Jones adopted the 
 Golden Rule as his motto when he entered upon his 
 official duties. He had the policemen's clubs taken 
 away from them, and they were supplied with canes. 
 He did not believe in the clubbing of citizens by 
 policemen, and the locking up of every man that 
 might happen to get intoxicated. He gave the 
 police to understand that not the officer who made 
 the most arrests for drunkenness, but the officer 
 who got most drunken men to their homes would 
 stand the better chance for promotion. Then he 
 started in to inaugurate a policy of leniency among 
 the magistrates. By virtue of his office he was en- 
 titled to sit as a magistrate, and he exercised his 
 right. He sat on the bench himself, and instead of 
 heavily fining and locking up every man who came 
 before him for drunkenness he would fine the of- 
 fender $i; the law required him to impose a fine. 
 But he would first fine the man and then remit it 
 with the understanding that the offender would be 
 on his good behavior. The Mayor took pride in 
 calling the attention of the ministers to the fact that 
 the men who received this lenient treatment did not 
 come before him again." 
 
 Although Mr. Voit was carefully questioned he 
 did not seem to be able to point to anything more 
 practical done in the way of municipal reform by the 
 Mayor than the substitution of canes for the clubs 
 formerly used by the policemen; the discourage- 
 ment of arrests for drunkenness, and the suspension 
 
EX-MAYOR SAMUEL H. JONES. 127 
 
 of fines for drunkenness. Mr. Voit furnished abun- 
 dant documentary evidence that the Mayor had 
 made many official recommendations that are at 
 present unacted upon. Following is a list of the 
 recommendations made by the Mayor : 
 
 The establishment of a city plant for the manufac- 
 ture of fuel gas. 
 
 The control and operation by the city of the elec- 
 tric lighting plant. 
 
 The establishment of civil service in all depart- 
 ments of the municipality. 
 
 No grant or extension of franchises to private 
 enterprise without the approval of the people. 
 
 The abandonment of the contract system on all 
 public work, such as paving, sewers, etc. 
 
 The compilation and publication of the city direc- 
 tory by the municipality itself. 
 
 The establishment of kindergartens as part of the 
 public school system. 
 
 A larger appropriation for street improvement. 
 
 The springling of the streets by the city itself. 
 
 The passage of the ordinance for the appointment 
 of building inspector. 
 
 A larger appropriation for public parks. 
 
 An appropriation for music in the parks. 
 
 The establishment of playgrounds for the chil- 
 dren. 
 
 The establishment of free public baths. 
 
 The veto power to be abolished and the referen- 
 dum to the people substituted in its place. 
 
 The streets in the business section of Toledo were 
 very unclean. Clouds of dust rose from the streets 
 
128 MARK HANNA'S "MORAL CRANKS." 
 
 as I looked out and remarked to the Mayor's repre- 
 sentative : 
 
 "Your thoroughfares are very dirty." 
 
 "Yes," said Mr. Voit. "That is owing to the 
 fact that the Street Commissioners and Auditor 
 have not adjusted their accounts. That will be 
 remedied in due time." 
 
 Mayor Jones, in one of his messages to the Com- 
 mon Council of Toledo, referred to "the havoc and 
 destruction that is wrought to both life and prop- 
 erty by the clouds of dust and filth that is blown 
 through unsprinkled streets," and recommends, in- 
 stead of the thorough cleaning of these streets, 
 "sprinkling." This is what he had to say about a 
 dangerous nuisance: 
 
 "I believe that your honorable body can, with 
 very great profit to the people, consider the question 
 of the sprinkling of the streets at the public ex- 
 pense instead of leaving this important duty to the 
 care of public enterprise, as is now done. This 
 work is successfully done publicly in other cities, 
 and I see no reason why it may not be attempted 
 with great profit here. The havoc and destruction 
 that is wrought to both life and property by the 
 clouds of dust and filth that is blown through un- 
 sprinkled streets now cannot be estimated, to say 
 nothing of the personal discomfort that arises from 
 this cause. I am sure that the small tax that would 
 be necessary to provide for the general sprinkling of 
 the streets of the city would be cheerfully met by 
 our citizens and would be generally declared to be 
 the best kind of an investment, when once it has 
 been tried and the advantage of a dustless city ex- 
 perienced." 
 
EX-MAYOR SAMUEL H. JONES. 129 
 
 Music in the parks, kindergartens, suspension of 
 fines for drunkenness, playgrounds for children, the 
 guidance of intoxicated persons to their homes, 
 free public baths, the publication of a directory by 
 the city. Municipal Ownership, all these things 
 recommended in the interest of the people, and then 
 " the sprinkling of dirty streets " instead of their 
 purification. And there you have an illustration of 
 what happens when a well-meaning Christian So- 
 cialist who abhors the practical follows his ideals 
 in municipal life. 
 
 It may be profitable to make an inquiry as to 
 whether the chief spokesman for the crusade against 
 Wealth and Public Ownership would be apt to 
 better prevailing municipal and social conditions if 
 they were placed in control of public affairs. Are 
 they practical men? Are their plans for the im- 
 provement of municipal government and society 
 feasible and practical? 
 
 Mayor Jones frankly avowed his small estimate 
 of the practical man's worth in addressing the 
 League of American Municipalities: 
 
 "What we lack is ideals, not idols ! Our idol has 
 been the practical man; we must find the ideal man. 
 We have pointed to the individual who, by his 
 superior cunning or prowess and strength has 
 amassed the wealth of his fellow men, as our model 
 of success. But, gentlemen, we are coming to see 
 that all such success is purchased at the price of the 
 failure of the many, and our greatness is to be 
 proven in the days to come, not by pointing to the 
 individuals here and there who are like the ana- 
 
130 MARK HANNA'S "MORAL CRANKS." 
 
 conda, gorged with wealth for which they have no 
 use, at the expense of an army of paupers and 
 tramps who have no wealth to use, but rather by 
 pointing to a citizen that is made up of people tnily 
 free and truly happy. A republic in which there is 
 neither drones nor idlers, where the interests of all 
 sings us to our work; and when we shall have 
 passed up the broad avenues of collective owner- 
 ship to a realization of that condition, who shall be 
 able to fathom our productivity and cheer?" 
 
 Mayor Jones has felt it necessary to write an 
 open letter to the people of the United States in 
 which he states it will be impossible for him to 
 respond to the thousands of letters requesting pe- 
 cuniary aid. In this letter he says that while he is 
 a believer in the brotherhood of man, his fortune 
 is not so large as to warrant the demands made 
 upon it. While the writer was in a conversation 
 with the Mayor's confidential representative, Mr. 
 Rudolph Voit, the latter said: 
 
 "The Mayor is continually lending money to 
 people or practically giving it away, and I don't 
 wonder that he says he expects to die a poor man. 
 I know that he has let people have in the aggregate 
 thousands of dollars that he will not get back. I 
 have known him to advance money, again and 
 again, in cases where I would have said no, and in 
 many cases where I have advised him to say no." 
 
 "Is it not likely that his generosity has been im- 
 posed upon?" I asked. 
 
 "I have no doubt of it," was the answer. "One 
 of his peculiarities is that he will not take interest 
 where he lends money. To illustrate: I recall .1 
 case where a young man wrote that if the Mayor 
 
EX-MAYOR SAMUEL H. JONES. 131 
 
 would loan him several hundred dollars he could 
 start an enterprise that would pay a handsome 
 profit. The Mayor wrote an answer to the effect 
 that if the young man could get others to raise a 
 certain amount he would advance $500. The young 
 man claimed to have complied with the Mayor's 
 request and then the Mayor advanced $500. In a 
 short time the enterprise failed and the Mayor was 
 out $500. One day a stranger came in ; he had been 
 drinking and said he wanted to borrow enough 
 money to take him back to his native city. The 
 Mayor gave the man some good advice about his 
 habits and then asked me if I had the money for the 
 stranger's fare. I said no and advised the Mayor to 
 have nothing to do with the man. But Mr. Jones 
 pulled out his 1,000-mile mileage railroad ticket and 
 said to the stranger: ' If I let you have this ticket 
 to use will you send it back to me when you get 
 home?' The stranger said, ' Yes,' and the Mayor 
 let him have the ticket. I thought that was the last 
 of the ticket, but sure enough the man sent it back 
 along with the price of that part of the ticket that 
 had been used. That pleased the Mayor immensely 
 and he took care to remind me that one cannot al- 
 ways judge a man by his appearance. But for that 
 man who acted squarely with the Mayor I can lay 
 my hand upon the letters of a dozen who have 
 abused his confidence. He's got to stop this in- 
 discriminate giving or he will wind up without a 
 dollar." 
 
 The Mayor has unquestionably been bled freely 
 by men always on the lookout for credulous hu- 
 
132 MARK HANNA'S "MORAL CRANKS." 
 
 manitarians who can be persuaded to help those 
 who will make no sustained effort to help them- 
 selves. He has been an easy victim for idlers and 
 frauds to play upon, but his eyes are at last opened 
 to the true character of the idlers who lie in wait 
 for any man of means who preaches the doctrine of 
 the brotherhood of man. When he first announced 
 that he would be guided by the Golden Rule in poli- 
 tics, such a fierce raid was made upon his pocket- 
 book that he found it necessary to say to his work- 
 men, to whom he pays a yearly percentage upon the 
 profits of his business, in addition to good wages : 
 
 "A few years ago I had an ambition to ' make 
 money,' as it is called; and then I thought I would 
 use it to help ' worthy ' young men to start in busi- 
 ness, to get an education, and so on. But my mind 
 has undergone a very marked change on this sub- 
 ject. I now understand that if a young man is 
 helped into a business that makes him rich, it is 
 just helping to delay the day when all men may 
 have what is justly their due ; that is, the day when 
 all men may have the product of their own toil. I 
 think I can help you to understand what I mean by 
 a practical illustration of the principle right here. 
 There are about fifty of you working for the Acme 
 Sucker Rod Company. You are all here present. 
 Now, can any of you tell me why I should want to 
 help any particular one of you and not help all the 
 rest? If any young man can tell why he should be 
 helped to start in business and the rest be left to 
 plod along as best they may, I am sure we will all 
 be glad to hear from him. No one seems to want to 
 undertake that job." 
 
EX-MAYOR SAMUEI. H. JONES. 133 
 
 Despite the fact that Jones is characterized as a 
 " moral crank " by the politicians, he has hosts of 
 admirers and believers in his integrity. In June, 
 1899, after having learned by extended investiga- 
 tion in Ohio that Mayor Jones was very popular in 
 that state, the writer called upon Senator Mark 
 Hanna at the latter's ofiSce in Cleveland, to question 
 him concerning the political outlook. In the course 
 of the interview the Senator was asked: 
 
 "Is Golden Rule Jones of Toledo making any 
 headway with his ideas in the state?" 
 
 The Senator smiled and answered in an ofl-hand 
 way: 
 
 "Oh, no; he does not amount to anything. He 
 is simply a crank, but he is a moral crank, and that 
 makes the thing worse, for he believes what he says. 
 He is a disappointed candidate for Governor. I 
 took care to make some inquiries as to what there 
 really was in this movement in which he is engaged. 
 I sent some of my labor lieutenants down to To- 
 ledo to see who was behind Jones. They found 
 that the real working men were not with him, that 
 he was backed by the riff-raff and the idle fellows 
 you find in every city. All the liquor dealers and 
 bums were for him, along with the Democrats, and 
 that is how he came to be elected Mayor." 
 
 Two months later Mayor Jones, in compliance 
 with the requests of several thousand voters, be- 
 came an independent candidate for Governor. The 
 Republican and Democratic machines each treated 
 his candidacy with contempt at the outset of the 
 campaign, but before it was half over both were 
 frightened. When the votes were counted it was 
 discovered that he had defeated Senator Hanna's 
 
134 MARK HANNA'S "MORAL CRANKS." 
 
 candidates in the Senator's own county, and that 
 over 107,000 citizens had voted for him. Jones' 
 campaign cost him less than $8,000. His oppo- 
 nents spent over $200,000. 
 
V. 
 
 GOV. HAZEN S. PINGREE, OF MICHIGAN. 
 
 The very antithesis of ex-Mayor Jones, of Toledo — The 
 purchase of the Detroit street railroads proposed to 
 the Governor by Tom L,. Johnson, of Cleveland — 
 Eighty prominent citizens opposed to city owner- 
 ship take the scheme into court — Prof. A. C. Kent 
 argued that the court's decree would be one of 
 sociological importance — The Governor finally de- 
 nied the pleasure of experimenting with a municipal 
 railroad for "the people." 
 
 "I tell thee, Jack Cade, the clothier, means to dress the common- 
 wealth, and turn it, and set a new nap upon it." — Second part of Henry 
 
 To the City of Detroit, rather than to Toledo, the 
 Christian and other Socialists of the country were 
 looking in 1899 for the acquisition and operation of 
 street railways by a municipality. For Toledo is 
 tax-burdened, the rate being 3.32 against that of 
 1.59 in Detroit last year; and Toledo, despite the 
 fact that it has an honest Socialistic Mayor, sincere 
 in his advocacy of Municipal Ownership, has not 
 been able to free itself from the $1,555,000 gas bonds 
 issued for the construction and maintenance of a 
 city pipe line in an unsuccessful effort to supply the 
 city with free natural gas. The city is obliged to 
 secure quarters in private buildings for its public 
 ofificials, and as it has not yet been able to build a 
 city hall, Toledo is clearly an uninviting field for 
 any large experiment in the direction of Municipal 
 Ownership. For these reasons Detroit was re- 
 garded as the city of all others in the country where 
 Municipal Ownership was expected to furnish a 
 135 
 
136 MARK HANNA'S " MORAL CRANKS." 
 
 new and convincing argument to the people of the 
 United States. 
 
 Although Governor Pingree has not publicly 
 gone so far as Mayor Jones of Toledo in placing 
 the prevailing evils of society at the door of ag- 
 gregated wealth, nevertheless, it is believed by the 
 Christian and other Socialists of the West that at 
 heart he is in sympathy with their doctrines. 
 Whether this belief has any foundation in fact I 
 know not, yet in his Detroit office, in response to 
 my inquiry as to whether he was in favor of 
 National Ownership of railroads and telegraph lines 
 he replied: 
 
 "I've nothing to say about that matter now, but 
 I'm agin the Trusts. I believe they're all a damn 
 conspiracy agin the people, every damn one of 
 em. 
 
 Pingree and Jones are of one mind concerning 
 Municipal Ownership of what they term public 
 utilities, but in many other respects they appear to 
 be widely apart. Jones was born in Wales and in 
 his younger days became a driller of oil wells. 
 Pingree was born in Maine and began his working 
 days as a cobbler. Jones devoted his evenings to 
 study and is to-day a man of widely diversified read- 
 ing, capable of expressing his views in good Eng- 
 lish, does not require any assistance in preparing 
 his official papers or speeches and comports himself 
 as a gentleman. Pingree has devoted the greater 
 part of his days to the acquisition of wealth and the 
 nourishment of political ambitions. He is super- 
 ficial, often uncouth and almost invariably dema- 
 
GOV. HAZEN S. PINGREE, MICHIGAN. 137 
 
 gogish. Jones, out of his own pocket, has helped 
 the workingman and the needy. Pingree has also 
 done some humanitarian work, but the City of De- 
 troit has paid for the greater part of it. Jones is a 
 man of exemplary habits, who does not drink liquor, 
 smoke or indulge in profanity and he is a church- 
 man who does not believe that morality can be en- 
 forced by legislation. Pingree was a churchman 
 'before he became a politician. Jones is quiet in 
 speech and manner. Pingree, when he is " at him- 
 self," to use a Western colloquialism, has the bear- 
 ing of a political swashbuckler. When he was a 
 more or less devout churchman he manifested deep 
 respect for clergymen; w^hen he became a full- 
 fledged political demagogue, he made new associa- 
 tions and adopted new modes of expression. Here 
 let me quote one of his townsmen, not a churchman, 
 but a public-spirited citizen of prominence: 
 
 "He has a mighty poor opinion of ministers. He 
 says some of them are worse than the saloon- 
 keepers." 
 
 Pingree is stalwart and broad-shouldered, dis- 
 posed to corpulency, is partially bald, has an oval- 
 shaped pufify fac€, sandy mustache and imperial, 
 shifty eyes generally shielded by spectacles, and 
 walks with the air of a man who thinks he is en- 
 titled to a good share of the sidewalk. 
 
 Being anxious to learn more of the personality 
 of this Michigan Governor and his underlying 
 motives in proclaiming himself a champion of the 
 rights of the common people and an advocate of the 
 Municipal Ownership of public utilities, I ques- 
 
138 MARK HANNA'S " MORAL CRANKS." 
 
 tioned one of his neighbors, a successful lawyer of 
 high standing. My informant said, among other 
 things : 
 
 "Pingree is in the habit of telling the laboring 
 classes that he began life as a cobbler; now he is 
 a shoe manufacturer and a man of wealth. In 
 1889 he was elected Mayor of Detroit, and has 
 served in that capacity for three terms. In 1894 
 and 1895 he began to loom up as a professed 
 friend of the workingman. He was then a member 
 of a Republican combination of leaders known as 
 the Big Four. Having his eye on the governor- 
 ship, he began to advocate the adoption of three- 
 cent fares on the street railways. Finally a line 
 was started in accordance with his ideas; that is to 
 say, eight tickets could be purchased for 25 cents, 
 single fares 5 cents. It has been shown that in 
 most cases the workingman who does not feel like 
 expending 25 cents at once pays cash for his ride. 
 In 1895, Albert Pack, one of the Big Four owners 
 of a street railway, wanted to get an extension of the 
 franchise, and fell in with Pingree's ideas. The 
 road had $1,500,000 of bonds to sell and diplomacy 
 was necessary. Pack has said that he promised to 
 secure the gubernatorial nomination for Pingree if 
 the latter would not fight him. Pingree did get the 
 nomination and won by a big majority. Pack got 
 what he wanted, the system of eight rides for 25 
 cents was adopted on some lines and six rides for 
 25 cents on others. The workingmen, who really 
 paid 5 cents cash for their rides, began to shout 
 praises for Pingree, and then he began to taste the 
 pleasures of notoriety and think that some day he 
 might become President. You know he got a great 
 
GOV. HAZEN S. PINGREE, MICHIGAN. 139 
 
 deal of notoriety all over the country by establish- 
 ing the Detroit potato patches for the poor. The 
 man who originated that idea was Colonel Cor- 
 neUus Gardener, when he had come to Detroit after 
 spending some years on the frontier. He was a 
 humane man and had seen but little of poverty in 
 cities. The Colonel was deeply impressed by the 
 wretchedness of the poor and he originated the plan 
 of providing the poor with land upon which they 
 could raise potatoes. Pingree was permitted to ap- 
 propriate the idea as his own, because the Colonel 
 was his friend, and so Pingree took care to appro- 
 priate all the credit coming from the carrying of 
 the idea into execution and the origination of the 
 idea. So it is that whenever he does anything for 
 the poor he does it with a brass band." 
 
 The four street lines of railroads in Detroit, the 
 so-called three-cent fare lines and the others are 
 mainly owned and controlled by Tom L. Johnson, 
 the single tax advocate, who made some millions 
 out of Brooklyn surface roads, by Henry L. Wilson 
 of New York, and a few others less prominent in 
 business circles. Governor Pingree in addressing 
 a public meeting in Detroit during my stay there 
 said he was first induced to becoine interested in the 
 present movement to bring about Municipal Own- 
 ership of street railways in Detroit by receiving a 
 telephone message about two months ago from 
 Tom L. Johnson. He said he subsequently called 
 upon Johnson in Cleveland and the latter outlined 
 a plan by which the City of Detroit might acquire 
 
140 MARK HANNA'S "MORAL CRANKS." 
 
 the railroad lines and operate them on a three-cent 
 fare basis. 
 
 "I told Johnson right off I would entertain the 
 proposition," said the Governor. 
 
 Tom Johnson, instead of Pingree, being the real 
 author of the plan by which Detroit was to acquire 
 a street railway system and demonstrate to the 
 people of this country the beauties of Municipal 
 Ownership, the query naturally arose, Why does 
 Johnson, a successful and persistent money-grab- 
 ber, now advocate Municipal Ownership? One 
 answer was that his street railway franchise will ex- 
 pire inside of nine years and that fact has affected 
 the sale of the bonds of the road. If the City of 
 Detroit could be induced to acquire the road, then 
 grant a thirty years' franchise as security to John- 
 son, the bonds would sell. 
 
 Pingree promptly agreed to Tom Johnson's prop- 
 osition and a legislative bill was passed to provide 
 for the acquirement of the street railroads by De- 
 troit, but it omitted the referendum — no provision 
 was made for a vote on the scheme. The "referen- 
 dum," the right of the people to vote as to whether 
 they will acquire the property of corporations, has 
 been preached from one end of the country to the 
 other by Professor Bemis, the authority to which 
 the advocates of Municipal Ownership look for 
 their statistics and formulated principles. This is 
 the way Pingree talked when he was reproached 
 for not making in his bill a provision for the refer- 
 endum : 
 
 "No, sir ; I ain't going back on the people. But 
 
GOV. HAZEN S. PINGREE, MICHIGAN. 141 
 
 what in the devil do the people know about the 
 value of trolley cars, and rails, and — why, say, there 
 ain't a man in Detroit can guess the value of the 
 roads within $3,000,000, no, sir, not within $3,000,- 
 000. I can't and I know a durn sight more about 
 street cars than you do. 
 
 "That's right. I don't trust the council more'n 
 ever I did, but those three commissioners will be all 
 right. Some folks will be watchin' 'em to see they 
 are, b'gosh." 
 
 Governor Pingree was evidently in an irritable 
 state of mind when I called upon him in his office 
 in the Majestic Building, Detroit, to ask why this 
 self-proclaimed champion of the common people 
 had denied them the privilege of voting on the pro- 
 posed acquirement of the street railway system by 
 the city. His irritability may have been due to the 
 fact that he had just returned from New York after 
 a conference with Tom Johnson, to learn that sixty 
 influential citizens of Detroit had determined to ask 
 the courts to pass upon the constitutional objec- 
 tions to the Governor's bill providing for the ap- 
 pointment of a railroad commission, of which he is 
 chairman, and conferring upon the commission the 
 power to purchase for the City of Detroit its city 
 railways, which have a bonded indebtedness of 
 $11,000,000. He had learned, further, that "the 
 dear common people " to whom he frequently ap- 
 peals, wanted to vote on the proposed acquirement 
 of the city railways and were displeased over his 
 private conferences with Tom Johnson, the railway 
 magnate. 
 
142 MARK HANNA'S "MORAL CRANKS." 
 
 The Governor talked freely about certain phases 
 of Municipal Ownership, which have been referred 
 to at length in previous letters, but when I men- 
 tioned "the referendum," the desire of citizens to be 
 permitted to vote for the acceptance or rejection of 
 his commission's plan for the acquisition of the rail- 
 roads, he seemed to suddenly remember that he 
 had a pressing business engagement elsewhere. As 
 the Governor reached the corridor, a second refer- 
 ence to his failure to provide for a public vote 
 elicited from him the sharp reply accompanied by 
 an angry shake of the head: 
 
 "I am ready to go before the people, by . 
 
 I've got nothin' to conceal or hold back, by . 
 
 Those fellows that are agin me want to have a refer- 
 endum. They want to put things off when they've 
 got to be finished up quick. If I stand for any- 
 thing, by , it is for the people, and I'm willin' to 
 
 go before 'em." 
 
 A reference to some criticisms made by clergy- 
 men provoked a sneer. The Governor threw his 
 head up quickly after the fashion of a horse stung 
 by a gad fly, made a grimace expressive of contempt 
 and said snappily: 
 
 "Those fellows would find fault with the Ten 
 Commandments. They're like the Free Press (the 
 leading paper in Detroit). I told the Press, ' I 
 knew you'd be agin me, for you always have been.' 
 They said, ' No, we were with you once and that 
 was when you were agin the war.' That was the 
 
 only time they ever were with me, by . Now I 
 
 know that the people are with me in this railroad 
 fight and we will win." 
 
GOV. HAZEN S. PINGREE, MICHIGAN. 143 
 
 The citizens who decided to test the validity of 
 Pingree's Municipal Ownership bill at first held 
 private meetings and their names were not made 
 public. Most of them were business men and a 
 few were afraid that opposition to Pingree would 
 bring a boycott upon their heads. After the Gov- 
 ernor had learned this fact, later in the day, he be- 
 came more voluble, and said to the citizens' com- 
 mittee: 
 
 "Now, I see that they daren't act open and above 
 board, like honest men. They haven't the nerve 
 to come out as they should and tell their names. 
 And why? Because they're afraid that Governor 
 Pingree will boycott their stores. By George! 
 they may be afraid that they'll lose trade. I won't 
 say a word against them, but this is the people's 
 fight, and I don't wonder some of these fellows who 
 toady to corporations and the like are afraid of 
 losing trade. In the sight of God they're dishonest 
 when they take the trade from the poor man, filch 
 him for all they're worth and then sneak like house- 
 thieves into court under the protecting wing of a 
 corporation attorney, who is doing it all for the 
 love of the poor man, and defeat what is the people's 
 will." 
 
 Having made this suggestion of a boycott, the 
 Governor next proceeded, in his demagogish way, 
 to make an appeal to the dear common people, 
 said he: 
 
 "And now I want to say that we're willing to 
 give the eight-hour day, and that's one of the 
 reasons we want to buy the road. We ain't afraid 
 to tell John McVicar or anyone else where we stand 
 on that proposition. These fellows have been paid 
 
144 MARK HANNA'S " MORAL CRANKS." 
 
 too little and worked too hard. These conductors 
 who are entrusted with the collection of thousands 
 of dollars apiece a year, and these motormen who 
 have the safety of your children and my children, 
 who are responsible for hundreds of human lives, 
 haven't been paid as they should, and if we can 
 raise their pay to a point of adequate compensation 
 we're going to do it, and Mr. John McVicar can 
 object and be damned. If under Municipal Own- 
 ership we can aflford to pay hard-working em- 
 ployees $365,000 per year more than they are now 
 receiving, you can put me down as being in favor of 
 it more than ever." 
 
 Pingree did not intimidate the business men who 
 united to test the validity of his Railway Commis- 
 sion bill. Eighty business men, who declared that 
 they were resident taxpayers of Detroit and owned 
 property aggregating $5,000,000 subject to taxa- 
 tion, employed able counsel to secure an injunction 
 and quo warranto proceedings against Pingree's 
 bill. Their names appear in a complaint, and they 
 averred that for property which is not worth over 
 $6,000,000, it was proposed to pay $17,000,000 (but 
 friends of the commission say not over $12,000,000). 
 The following allegation was also made: 
 
 "Upon information and belief the relators aver 
 that it is the intention of the commissioners, and it 
 has been publicly announced by Commissioners 
 Stevenson and Schmidt, that if the negotiations for 
 purchase of the roads result in an agreement as to 
 the value of the property, they would apply to the 
 common council for a grant of a right to use the 
 
GOV. HAZENS. PINGRE E, MICHIGAN. 14s 
 
 streets and highways of the City of Detroit neces- 
 sary for the operation of the lines of street railways 
 now in operation within the city for the period of 
 thirty years, and pledge such right, together with 
 the property purchased, as security for the payment 
 of such sum as should be agreed upon as the value 
 of the property purchased from the company." 
 
 Professor Bemis, then of the Kansas Agricultural 
 College, one concededly honest but theoretical 
 Municipal Ownership advocate, was called to De- 
 troit by Pingree, to aid the Railway Commission in 
 fixing upon a purchase price. But the professor 
 gave a shock to Pingree when he declared that the 
 people should be permitted to vote for or against 
 the adoption of the Railway Commission's terms of 
 purchase. The Governor deemed it advisable to 
 yield to Professor Bemis, although it was but re- 
 cently that a Detroit paper reported Pingree as say- 
 ing: 
 
 "Why, ain't I willin' to let the people decide the 
 price?' Why, there isn't a more complicated ques- 
 tion before the people of tlie United States. It's 
 more mixed up than the Atkinson bill calculations, 
 b'gosh." 
 
 Prof. Bemis is a warm admirer and frien3 of the 
 Christian Socialist, Professor Herron. As he is 
 regarded by the Socialistic advocates of Municipal 
 Ownership in this country as their chief practical 
 spokesman and statistician, and as his name and 
 plans are likely to figure frequently in political cam- 
 paigns, it will probably be of interest to note what 
 he regards as the weightiest objection to Municipal 
 
146 MARK HANNA'S " MORAL CRANKS." 
 
 Ownership. In his book on Municipal Monopolies 
 the professor says: 
 
 "The most serious objection to Municipal Own- 
 ership and operation is the possibility that such 
 operation would not be so progressive in the testing 
 of the latest inventions and in extensions to unde- 
 veloped territory as is the present system. 
 
 "This it is impossible to determine, save by ref- 
 erence to experience with water and electric light 
 plants in this country, and with such plants, to- 
 gether with plants and telephone systems abroad. 
 In all these cases, extension to new territories seems 
 to have been as characteristic of public as of private 
 ownership. American water works frequently ex- 
 tend their mains where private companies have re- 
 fused to go, for lack of the prospect of immediate 
 returns. Publicly owned gas works of England 
 seem as ready to adopt water, gas, or labor saving 
 machines in charging their retorts with coal, as do 
 the private works. 
 
 "By way of partial reconciliation between the 
 overhaste of some advocates of municipalization 
 and the exaggerated fears of opponents, it should 
 be added that, as the matter is likely to work itself 
 out in practice, the question is not going to be one 
 of sudden transition, but rather one of gradual ex- 
 perimentation. Each municipality will watch crit- 
 ically the results elsewhere, and hasten or retard its 
 own action according to evidence of success or fail- 
 ure in other places similarly circumstanced. 
 
 "Neither is the question one of universal transi- 
 tion from private to public management. For 
 some time to come, all that America is likdy to see 
 is an imitation of what now appears in England, 
 
GOV. HAZEN S. PINGREE, MICHIGAN. 147 
 
 viz., the spectacle of public and private plants work- 
 ing side by side in adjoining cities, each a check 
 upon the other, until it is clearly demonstrated 
 which offers the greatest economic, political and 
 social advantages." 
 
 Professor A. C. Kent, who made the main argu- 
 ment before the Supreme Court against the Pingree 
 Municipal Ownership bill, said ait the outset: 
 
 "This is the first tangible move in the direction of 
 Socialism. It is the first evidence of a concerted 
 action, and is the first indication of the crystalliza- 
 tion of a communistic sentiment which has been 
 preached and agitated with much vigor during the 
 last decade. 
 
 "We do not know what the limitations of such 
 a movement will be, once it is started. We can- 
 not conceive whether it will result in confiscation 
 and the curtailing of private rights. If a city goes 
 into the street railway business there is nothing to 
 prevent it from organizing itself into a Socialistic 
 Commonwealth. There is not a great public utility 
 operated by a corporation in this country that is not 
 more or less affected by this experiment. 
 
 "Therefore, I say of this case that it's coming 
 into court affects the social and economic life of our 
 nation and our homes. The decision which will be 
 given by the Supreme Court will spread its in- 
 fluence over the whole world. It is not a decree of 
 the law so much as it is a decree of sociological im- 
 portance, and places or fails to place the limitation 
 upon Socialistic enterprises." 
 Professor Kent thus corroborates the statement 
 
148 MARK HANNA'S " MORAL CRANKS." 
 
 made at the outset of these letters, viz., that Social- 
 istic sentiment in the West is the main factor in the 
 Municipal Ownership movement. That statement, 
 so far as the writer is concerned, deals solely with 
 the existence of a fact, not with the merits of either 
 side of the controversy. 
 
 Detroit has an electric lighting plant which lights 
 the streets of the city well, but it did not purchase it 
 from a corporation. The city established the plant 
 and is satisfied with its enterprises. Detroit has un- 
 doubtedly taught the private electric light corpora- 
 tions that cities are likely to become their competi- 
 tors unless more moderate rates are charged for 
 lighting. While the great mass of voters in De- 
 troit insist upon their right to vote upon the ques- 
 tion of acquiring city railways, it is the opinion of 
 conservative citizens with whom I conversed that 
 a popular vote would at that time have sustained 
 Pingree. Socialism has a strong hold upon the 
 working and middle classes of Detroit, and Social- 
 istic doctrines are preached from the pulpits of the 
 city. The Socialistic sentiment is quite as strong 
 in Detroit as I found it in Toledo, under the leader- 
 ship of Mayor Jones, probably stronger. 
 
 Note.— Pingree' s railroad scheme met with such vigorous opposi- 
 tion in the courts that he finally abandoned it, and thus the country 
 was deprived of the great object lesson in the form of municipal owner- 
 ship of surface railroads so confidently promised by the Governor of 
 Michigan. 
 
VI. 
 
 PUBLIC OWNERSHIP ABROAD. 
 
 Additional light upon the conditions in Glasgow— Its rail- 
 roads place "an embargo upon long rides for the 
 poor," says President Jeflferson S. Polk, of the Des 
 Moines City Railway Company — Views of President 
 Clinton L. Rossiter, of the Brooklyn Rapid 
 Transit Company — Basis of Prof. Bemis' argu- 
 ments. 
 
 There is a great lack of information and a vast 
 amount xii misinformation concerning the merits of 
 Municipal Ownership, the chief claims in its behalf 
 being that it is more economical for a city to serve 
 itself than to be served by a private corporation, that 
 it increases wages, shortens hours of labor, and re- 
 duces the taxes of cities. But I have not been able 
 to secure convincing figures in general support of 
 this contention. The advocate of Municipal Own- 
 ership, if he makes any pretensions to the possession 
 of accurate information will refer you to Glasgow, 
 Leeds, Birmingham and other European cities for 
 corroborative evidence of the soundness of his 
 claims. The misinformation concerning this ques- 
 tion may be illustrated by the following remarks 
 which I heard a Detroit clergyman make to his 
 congregation, a remark very much the same as 
 those which I have frequently heard made in 
 Brooklyn and Manhattan: 
 
 "Municipal Ownership of the street railways in 
 Glasgow is going to do away with the paying of 
 taxes; it has given to its employees shorter hours of 
 
 149 
 
ISO MARK HANNA'S " MORAL CRANKS." 
 
 labor and larger wages than are paid to our city 
 railroad employees." 
 
 Here I am reminded of a communication from the 
 Lord Provost of Glasgow which appears in M. J. 
 Francisco's "Municipal Ownership vs. Private Cor- 
 porations," and it reads as follows : 
 
 "The Lord Provost of Glasgow has received communi- 
 cations from all parts of America desiring confirmation 
 of a statement to the eflfect that the citizens of Glasgow- 
 would be freed from all taxes or rates in consequence of 
 the profits derived from their gas, water, electric lightings 
 and other undertakings of the government. 
 
 "I have accordingly been requested by the Lord Pro- 
 vost to inform you that this statement has no foundation 
 in fact. There is no probability of this city being exempt 
 from taxation. 
 
 "JOHN S. SAMUELS, 
 
 "City Chambers." 
 
 Mr. Francisco says further: 
 
 "Boston has five times and Brooklyn seven times 
 as many miles of tracks as Glasgow. In Glasgow 
 the fare is 1.85 cents per mile, and the average trip 
 is one mile, while in Boston and Brooklyn a passen- 
 ger can ride eighteen miles for 5 cents; thus show- 
 ing that the rates when operated by private com- 
 panies are lower than when operated by the mu- 
 nicipality. In addition to this, in Glasgow they 
 pay their conductors and motormen from 85 cents 
 to $1.12 per day, while the West End road in Bos- 
 ton pays their conductors and motormen $2 and 
 $2.25 per day. 
 
 "The Socialists have a great deal to say about 
 the profits in Glasgow. An examination shows 
 that the West End Street Railway Company of 
 Boston pays into the city treasury in taxes 28 per 
 cent, per year more than the entire operating profits 
 
PUBLIC OWNERSHIP ABROAD. 151 
 
 of the Glasgow municipal system for a year, and 
 Brooklyn paid twice over as much in taxes as the 
 Glasgow operating profits." 
 
 Professor Bemis, in his "Municipal Monopolies," 
 while making an argument for Municipal Owner- 
 ship, says of the car rates charged in Glasgow: 
 
 "The present schedule of fares, assuming i penny 
 to be equal to 2 cents (American), is .57 of a mile 
 on the average for i cent, 1.74 miles on the average 
 for 2 cents, 2.3 miles for 3 cents, 3.45 miles for 4 
 cents, 4.15 miles for 5 cents, 5.24 for 6 cents. A 
 workingman can travel from about 21^ miles for 2 
 cents to about 5J miles for 4 cents, before 7 A. M. 
 and between 5 and 6.15 P. M. About 35 per cent, 
 of the passengers pay only i cent fare, and about 
 half pay 2 cents. The longest distance is 5f miles 
 and the highest fare is 6 cents." 
 
 That statement would seem to dispose of the 
 claim that Glasgow railroad service is preferable to 
 railroad service in American cities. Professor 
 Bemis' admission that 35 per cent, of the passengers 
 ride but .57 of a mile, and 50 per cent, ride 1.74 of a 
 mile, unintentionally, no doubt, gives additional 
 force to a most serious charge made against the 
 railway authorities of Glasgow by Jefferson S. Polk, 
 President of the Des Moines (la.) City Railway 
 Company, in an address delivered before the Union 
 Municipal League of that city, viz., that Glasgow 
 puts an embargo on long rides for the poor, and 
 thus congested its laboring population in tenement 
 houses. 
 
 Here is Mr, Polk's charge made in a somewhat 
 
152 MARK HANNA'S " MORAL CRANKS." 
 
 declamatory way, yet, nevertheless, of interest, be- 
 cause of its facts : 
 
 "Glasgow's population is more dense than any 
 other city in Great Britain. Its 840,000 population 
 (city proper) is crowded into an area of 11,861 acres, 
 less than half the area of Des Moines. 
 
 "When Glasgow took charge of its tramway sys- 
 tem in 1863; one would have supposed the dictates 
 of humanity would have prompted its councilmen 
 to adopt such rates of fares, rules and regulations 
 for the operation of its tramways as would tend to 
 scatter rather than to further congest its popula- 
 tion; that they would make it possible for its suf- 
 fering poor to go to the country and breathe God's 
 pure air, and to allow their little ones to gambol on 
 the green sward and grow to maturity with healthy 
 bodies, with good morals and pure habits. In- 
 stead of this they adopted a system of fares which 
 puts an embargo on long rides for the poor, and 
 which, with the scant wages paid for labor, has 
 reared an insurmountable wall between its poor 
 suffering humanity and God's beautiful world with- 
 out. This crime, for crime it is, we can only con- 
 clude was the result of the fact that its vast tene- 
 ment houses, the abodes of misery, pestilence and 
 crime, belonged to the city and to the rich con- 
 stituents of the council, and to scatter this vast pop- 
 ulation was to vacate them, cut down the rent roll 
 and destroy their property. 
 
 "Glasgow, that hoary-headed municipal monster, 
 instead of being the benefactor of the human race, 
 as we are told by so many, and an example for all 
 municipalities to follow, has, by its methods, proved 
 itself to be more cruel, more heartless and more to 
 
PUBUC OWNERSHIP ABROAD. 153 
 
 be shunned than the devil himself. It has robbed 
 more than half of its population of the ballot. It 
 has robbed the laborers of the just reward of their 
 toil. It has cooped them up in tenement houses, 
 face to face with poverty and crime, misery and pes- 
 tilence, with no hope of escape but in death, at the 
 promptings of the greed and avarice of its rulers 
 and their constituents." 
 
 By way of contrast with the foregoing, read what 
 Professor Bemis is so frank as to say of a Chicago 
 street railway: 
 
 "A resident of Hull House, Chicago, in one of the 
 great centers of Chicago poverty, remarks that the 
 workers at the Settlement had labored for years 
 with only moderate success to secure better sanitary 
 conditions for the foreign-born population about 
 them, when suddenly street railway extensions in- 
 duced S,ooo of the people to move to healthful 
 suburbs. It is with full recognition of the benefits 
 of our street railroads that we may still call atten- 
 tion to possible improvements." 
 
 Proceeding still further in my efforts to learn 
 how our American street railway systems measured 
 up alongside of the much-exploited municipal rail- 
 roads of Glasgow, I came across a paper from 
 Clinton L,. Rossiter, President of the Brooklyn 
 Rapid Transit Company, a paper which he read 
 before a convention of the New York State Street 
 Railway Association, and in which I found the an- 
 nexed interesting statement: 
 
 "The purchase of a piece of farm land for build- 
 ing purposes in the suburbs of any of our cities is 
 
IS4 MARK HANNA'S " MORAL CRANKS." 
 
 followed immediately by a request upon the local 
 railway to extend its lines, and without such exten- 
 sions it will be found that the city itself will be very 
 slow to make expenditures for the improvement of 
 the streets and sewers, water mains, etc., and next 
 to impossible to get the gas and other companies 
 to extend. In support of this statement some 
 figures in regard to Boston are very instructive, 
 showing, as they do in the case of Brookline, a 
 suburb of Boston, that in the thirty years from 1855 
 to 1885 the increase was, with the introduction of 
 the street railway, thirty millions. Another case 
 that will illustrate this has occurred in Brooklyn. 
 During the year 1896 one of the roads constructed 
 an extension some three miles in length through 
 an entirely new territory, where the streets for 
 blocks had not been cut through and no improve- 
 ments whatever made to the adjoining property. 
 To-day, less than a year since the road was opened, 
 there have been over 500 houses constructed (nearly 
 all of 'them being occupied as soon as completed) on 
 the line of this street and adjacent side streets. If 
 it had not been for the railroad extension not one 
 of these houses would have been built, and it can be 
 readily seen that it is not the railroad company 
 which will reap the first benefits but the city, which 
 will have increased its assessment roll not less than 
 $3,000,000 in the present year and the opportunity 
 given to hundreds of individuals of finding com- 
 fortable homes." 
 
 So much has been said by American advocates 
 of Municipal Ownership commendatory of the 
 
PUBLIC OWNERSHIP ABROAD. iss 
 
 course pursued by Glasgow in acquiring and operat- 
 ing street railways, gas, water and electric light 
 plants, that what is said in answer must necessarily 
 prove interesting and possibly instructive. For this 
 reason, and the fact that Mr. Polk of the Des 
 Moines City Railway Company based his declara- 
 tions upon statements gathered from correspond- 
 ence with Mr. Young, the general manager of Glas- 
 gow's street railway system, it will repay the student 
 of Municipal Ownership to read the following ad- 
 ditional extract from Mr. Polk's address: 
 
 "Glasgow is the only city in the world that fur- 
 nishes any consolation to the advocates of Munici- 
 pal Ownership — or, as some choose to term it. Mu- 
 nicipal Monopoly. No advocate of Municipal 
 Ownership, whether he be professor, lawyer or 
 preacher, fails to dish up to his hearers its merits, 
 whether imaginary or real, with fulsome and ex- 
 travagant praise. They all clamor for Glasgow's 
 methods and Glasgow's conditions, and blindly and 
 fervently pray for their adoption in America. Their 
 eyes are fixed on Glasgow as were the eyes of the 
 wise men of the East on the Star of Bethlehem. 
 They speak of Glasgow as the grand, the glorious 
 city, the Emmanuel, the savior of municipalities. 
 
 "Glasgow is one of the richest and the second 
 most populous city in Great Britain. It and its 
 suburbs have a population of over 1,000,000. It is 
 one of the royal burghs of Scotland, and is governed 
 by a Lord Provost, or Lord Mayor, who is elected 
 for three years by the council, from their own num- 
 ber, and by seventy-five councilmen elected by the 
 qualified sufifrage of its property owners. No man 
 is eligible to any one of these ofi&ces, unless he is 
 
IS6 MARK HANNA'S " MORAL CRANKS." 
 
 blessed with much of this world's goods. No citi- 
 zen of Glasgow is entitled to vote for councilmen 
 who has not the requisite property qualifications. 
 This condition is intensified, as Mr. Shaw, the 
 author of ' Municipal Government in Great Britain,' 
 tells us, by the fact that if a voter has property in 
 more than one voting district he can vote in each, 
 or, in other words, he becomes a repeater. Less 
 than one-half the citizens of Glasgow can vote. 
 
 "The government is a government of the rich, 
 and not one of the people. The poor man has no 
 voice or vote therein. He is in Glasgow as much 
 a serf as he is in Russia. When you ask for the 
 cause of Glasgow's success in running its public 
 utilities, you are pointed, with pride, to the fact 
 that none but property owners can vote, and none 
 but the rich and powerful are eligible for office. 
 They tell you that no city can be run economically 
 and successfully on any other plan." 
 
 Professor Bemis' main argument in behalf of 
 Glasgow's acquisition and operation of a street rail- 
 way system appears to be embodied in the statement 
 that the city has made large profits; that its reports 
 show it carried during eleven months of 1895 
 57,104,647 passengers, during which period the 
 excess of receipts above operating expenses, taxes 
 and interest amounted to £24,204; that during 
 eleven months of 1898 the roads carried 106,344,437 
 passengers and the excess of receipts above operat- 
 ing expenses, taxes and interest amounted to 
 £82,149. Yet if Glasgow has accomplished these 
 results by enforcing a property qualification upon 
 
PUBLIC OWNERSHIP ABROAD. 157 
 
 voters, by intrusting the management of its mu- 
 nicipal affairs to councilmen who are men of recog- 
 nized ability and integrity, it will be seen at a glance 
 that these conditions cannot be parallelled in many 
 cities in the United States under the present polit- 
 ical system. 
 
VII. 
 EXPERTS DISAGREE. 
 
 Prof. Bemis' five reasons for advocating the city owner- 
 ship of railroads — Statements by President Herbert 
 H. Vreeland, of the MetropoUtan Street Railroad 
 Company, of New York City — Boston's $5,000,000 
 subway — New York to acquire a $35,000,000 subway 
 in fifty years. 
 
 " Christianity agrees with Socialism in recognizing the mutual de- 
 
 J>endence of men, and classes of men, on each other, and in seeking a 
 arger diffusion of virtue^ intelligence, political power and wealth ; but 
 it differs from Socialism in putting first, both as an end in itself and as 
 a means to social reconstruction, the reconstruction of the individual. 
 
 "For the maintenance of industrial order Christ enunciates two 
 fundamental principles — the law of service and the standard of values. 
 Industrial peace is to be brought about not by a well-balanced conflict 
 of self-interest, by capital buying labor in the cheapest market and 
 labor selling itself in the highest market, but by a frank reorganization 
 of partnership between the power of the brain and the power of the 
 muscle, which should be united in the community as they are united in 
 the individual, and should work together for the largest service to 
 humanity ; not the greatest acquisition of wealth, but the greatest de- 
 velopment of mankind. Brotherhood certainly does not mean that all 
 men are equal : Christ says ' He that is greatest among you shall be 
 your servant.' It does not mean that all men shall render the same 
 service and receive the same rewards. Christ in the Parable of the 
 Talents, says : ' He gave to one man five talents, to another two, and to 
 another one ; to every man according to his several ability.' " — Dr. 
 I,YMAN Abbott in "Christianity and Social Problems." 
 
 Professor Bemis in his argument for Municipal 
 Ownership makes these claims: 
 
 "The greatest advantage of Municipal Ownership 
 is its tendency to relieve communities from cor- 
 rupting relations with men of wealth. 
 
 "Our rich and influential citizens, whose financial 
 interests as investors in franchises now prompt them 
 to desire weak or corrupt government, would under 
 public operation have no financial interests at stake, 
 except as taxpayers, and in that capacity would de- 
 sire efficient administration. 
 
 "Another reason for Public Ownership is its ten- 
 158 
 
EXPERTS DISAGREE. iS9 
 
 dency to give higher wages and shorter hours to 
 workingmen, and to permit their membership in 
 labor organizations. 
 
 "A fourth reason for the Municipal Ownership 
 and operation — Under private ownership thousands 
 of owners of suburban land are made rich in every 
 city by the increase of land values through the con- 
 struction of street railways, gas works, electric light 
 and telephone wires, as well as by water mains, 
 street paving and sidewalks. There would be no 
 injustice, but the greatest public advantage, under 
 Public Ownership, in paying for these extensions by 
 special assessments on the increased value of these 
 suburban lots." 
 
 "A fifth reason for Municipal Ownership and 
 operation arises from the acknowledged tendency 
 of such management to render service at the lowest 
 price consistent with payment of a low rate of in- 
 terest, and perhaps the accumulation of a sinking 
 fund that shall ultimately render unnecessary all 
 interest charges, while the natural tendency of 
 private operation is to charge such a price as will 
 give the highest net profit. 
 
 "Finally, and as a result of the tendency of public 
 operation as just spoken of, the argument from ex- 
 perience and statistical comparisons of public and 
 private plants similarly situated is, on the whole, 
 favorable to municipal undertakings of the char- 
 acter under discussion." 
 
 That is the summing up of the case for Municipal 
 Ownership by its chief spokesman. To the un- 
 biased student of this question, to the searcher after 
 
i6o MARK HANNA'S " MORAL CRANKS." 
 
 facts, Professor Bemis' "reasons" must be regarded 
 as largely theonetical, and therein unsatisfactory and 
 disappointing. 
 
 Where, for instance, are his figures, his facts, if 
 there be any, showing "by experience and statis- 
 tical comparisons of public and private plants," that 
 the Municipal Ownership of railroads is desirable 
 from the private citizen's point of view? The facts, 
 and not theories, are required for public informa- 
 tion. And this is what the Professor has to say, in 
 answer to any demand for facts, so far as actual 
 Municipal Ownership in the United States is con- 
 cerned, when his statements are sifted: 
 
 "The only example of city ownership and opera- 
 tion of a street railway on the continent, aside from 
 that over the Brooklyn Bridge, is that at Port 
 Arthur, Ontario, a place of only 2,698 population in 
 1890. The road is too small, of course, to present 
 many lessons or any evidence of financial success. 
 On an average, each passenger rides three miles, 
 and pays 5 cents fare. * * * 
 
 "In 1897, the last year for which an official report 
 (of the Brooklyn Bridge Railway) is at hand, the 
 total cost of transportation for the nearly 46,000,000 
 passengers in that year was apparently about 
 $200,000 less than the receipts." 
 
 Having Heard one of the chief advocates of Mu- 
 nicipal Ownership the public will naturally desire 
 to hear what the defenders of the corporations have 
 to say. 
 
 H. H. Vreeland, President of the Metropolitan 
 Street Railroad Company of New York, is credited 
 
EXPERTS DISAGREE. i6i 
 
 in the Independent of May, 1900, with the author- 
 ship of a contribution headed "The Failure of Mu- 
 nicipal Ownership." The article in question has 
 been widely discussed, probably because of the im- 
 pression that it is a fresh contribution to the contro- 
 versy over Municipal Ownership, made by one 
 authorized to act as spokesman for the private cor- 
 porations. As a matter of fact, the greater part of 
 Mr. Vreeland's contribution to the Independent ap- 
 peared in a paper which he read before the New 
 York State Railway Association in 1897, and to this 
 has been added a long extract from an address made 
 by Robert P. Porter, at Syracuse, in September, 
 1899. The President of the Metropolitan Street 
 Railroad Company does not make any materially 
 new contribution to the dispute between those who 
 advocate and those who oppose Municipal Owner- 
 ship. 
 
 In his recent paper, as in the one read by him 
 before the State Railway Association in 1897, Mr. 
 Vreeland deals with the claim made by the Associa- 
 tion for the Public Control of Franchises four years 
 ago, in these words, which he characterizes as 
 "recent" utterances : 
 
 "According to the most conservative authorities, 
 half the city's revenues could be derived from its 
 street car, gas and other franchises. In this event, 
 taxes upon private and personal property would be 
 cut in two." 
 
 Commenting upon this extravagant claim, the 
 establishment of which is not necessary to prove 
 that Municipal Ownership may be in the interest of 
 municipalities, Mr. Vreeland quotes the report of 
 the Controller for the year ending August i, 1897, 
 
i62 MARK HANNA'S " MORAL CRANKS." 
 
 and from these figures builds up an argument to the 
 effect that the acquirement of the street railroads 
 could not result in the reduction of taxes by one- 
 half, and further, that the City of New York is not in 
 a condition to acquire franchises that would cost 
 "about $295,000,000." It does not require any ar- 
 gument to show that the demolition of the extrava- 
 gant claim which Mr. Vreeland attacks fails to sub- 
 stantiate his assertion that Municipal Ownership 
 would be a failure. For to make good his assertion 
 he must prove that the municipality cannot own and 
 operate street railways successfully. That he does 
 not do. 
 
 Mr. Vreeland says in his contribution to the Inde- 
 pendent: 
 
 "Results of recent investigations by the State of 
 New York and the State of Massachusetts all tend 
 to the same conclusion establishing the superiority 
 of private ownership." 
 
 In 1900, as in 1897, Mr. Vreeland quotes the fol- 
 lowing from a report made by a legislative com- 
 mittee of the Staite of New York: 
 
 "The preponderance of testimony taken and the 
 majority of opinion expressed before this com- 
 mittee are against the subject so commonly referred 
 to as Municipal Ownership. It is obvious, under 
 our present system of municipal government, the 
 ownership and operation of railroads by the cities 
 and municipalities would have a tendency to con- 
 vert these enterprises into powerful political ma- 
 chines, the results of which would be detrimental to 
 the public welfare. Under all these conditions and 
 
EXPERTS DISAGREE. 163 
 
 circumstances it would seem that the ownership 
 and operation of street railways by the municipal 
 authorities is quite impracticable at the present time. 
 As an abstract proposition, we believe that no gov- 
 ernment, national, state or municipal, should em- 
 bark in a business that can be as well conducted by 
 private enterprise. The reverse of this proposition 
 carried out to a logical conclusion would put all 
 business enterprises under governmental manage- 
 ment and control and leave to no citizen any hope, 
 ambition or aspiration beyond that of seeking an 
 official position that affords a meager existence." 
 
 Solely with a view to setting Mr. Vreeland right 
 and removing erroneous beliefs created by a state- 
 mient in the second paragraph of his paper, it may 
 be stated as a matter of fact that the report from 
 which he quotes was not made recently; it was 
 made in 1895. And the quotation in question may 
 not be regarded as convincing when it is remem- 
 bered that the Legislature of 1895 was not con- 
 spicuously virtuous, nor was it generally looked 
 upon as a champion of measures in the best interests 
 of the people. 
 
 Since that report was made some things have 
 happened which would probably have received 
 notice in Mr. Vreeland's recent contribution to the 
 Independent if he had cared to revise the paper 
 originally written in 1897. For instance, the Legis- 
 lature of this state has, under the leadership of a 
 professedly conservative Republican Governor, en- 
 acted a law making the City of New York the ulti- 
 mate owner of a $35,000,000 railroad tunnel. Con- 
 
i64 MARK HANNA'S "MORAL CRANKS." 
 
 troller Coler, in his book on "Municipal Govern- 
 ment," says of this act: 
 
 "As you are doubtless aware, the contract for 
 the construction of the Rapid Transit Railroad pro- 
 vides for its completion by the contracting company 
 for a specified sum to be named in the bid. This 
 sum is to be paid by the city to the contractor from 
 time to time as the work progresses by the issue of 
 bonds. The same contracting company is bound 
 by the terms of the contract, and under heavy 
 bonds, to operate the road for a term of fifty years, 
 paying to the city as a rental the annual interest on 
 the bonds issued and i per cent, additional for the 
 purpose of establishing a sinking fund for the 
 liquidation of the bonds at the expiration of the 
 lease. 
 
 "Thereafter the road becomes the unincumbered 
 property of the city. A more advantageous con- 
 tract can scarcely be imagined. Here is a case 
 where the bonds issued by the city are in no real, 
 practical sense a debt at all. There is absolutely no 
 burden thrown upon the taxpayers ; on the contrary, 
 the city will ultimately acquire, without cost, an 
 asset of inestimable value." 
 
 As to Mr. Vreeland's assertion that the results of 
 "recent" investigations in this state and Massachu- 
 setts tend to establish the "superiority of private 
 ownership": 
 
 In 1895, the Transit Commission of Boston began 
 the building of a subway in that city for the use of 
 street cars. The Legislature had authorized the 
 treasurer of the Citv of Boston to issue and sell 
 
EXPERTS DISAGREE. 165 
 
 "bonds registered or with coupon attached, as he 
 may deem best, in the name and behalf of said city 
 to an amount not to exceed $7,000,000." This issue 
 was to defray the cost of the construction of the 
 Boston Municipal Subway. 
 
 Speaking of the personnel of the Transit Com- 
 mission and the cost of the subway, Secretary Beal 
 said to the writer: 
 
 "The subway has cost less than $5,000,000 and I 
 believe that this is largely due to the character of the 
 Transit Commission. There are no professional 
 politicians on the commission; it is composed of 
 public-spirited men of means, not dependent upon 
 their salaries. As a matter of fact, the commis- 
 sioners have not drawn all the money due to them." 
 
 The municipal subway on which work was begun 
 March 28, 1895, was opened to the public for travel 
 in September i, 1897. It has proved to be a com- 
 plete success, and engineers say it is one of the 
 finest subways in the world. 
 
 The Boston Transit Commission made a contract 
 with the West End Street Railway Company short- 
 ly after the subway was completed, the main clauses 
 of this contract reading as follows: 
 
 "The compensation — The compensation per annum to 
 be paid in quarterly payments is a sum equal to 4 7-8 per 
 cent, of seven million dollars, or 47-8 of the net cost of 
 the subway if such net cost shall be less than seven million 
 dollars. It is also provided that the compensation for 
 any quarter of a year after the company shall have ac- 
 quired the use of all portions of the subway shall not be 
 less than a sum computed by charging a toll of 5 cents 
 for each passage through the subway of a car not exceed- 
 ing 25 feet in body length, and a proportionately greater 
 charge for cars of greater length, it being understood 
 that any car which enters or passes through the subway 
 
i66 MARK HANNA'S " MORAL CRANKS." 
 
 or a portion thereof in one direction and then reverses its 
 direction within the subway and makes a round trip is 
 to be considered as making two passages. 
 
 "Equipment — The company is required to equip the 
 subway with tracks, wires, appHances, fixtures, machinery, 
 furniture and apparatus adapted thereto and necessary for 
 the convenient maintenance and operation of a railway 
 therein and for the safety and accommodation of the 
 passengers upon said railway." 
 
 Speaking of the revenue derived from the leasing 
 of the subway to the railway company, one of its 
 officers, who accompanied the writer on a visit of 
 inspection, said: 
 
 "It is estimated that the compensation to be paid 
 annually, being 4|- per cent, of the net cost of the 
 subway, will be sufficient to meet the annual interest 
 on' and sinking fund requirements of the bonds 
 which have been issued for the construction of the 
 subway. Those bonds run for a term of forty years. 
 Some of them are 4 per cent, bonds and some are 
 3^ per cent, bonds, and they have been issued at 
 various premiums, which premiums have been paid 
 into the sinking fund. The average rate at which 
 money for the construction of the subway has thus 
 far been borrowed by the city is less than 3^ per 
 cent., leaving about if per cent, to provide for sink- 
 ing fund requirements." 
 
 The construction of the Boston Subway and its 
 ownership by the city demonstrate that a munici- 
 pality can do some things quite as well as private 
 corporations, that is if the servants of the munici- 
 pality are honest and capable. There was no cheap 
 work done on the Boston Subway; it was built sub- 
 stantially and thoroughly, yet without waste of 
 money. Instead of costing the $7,000,000 author^ 
 
EXPERTS DISAGREE. 167 
 
 ized to be expended upon this great work, it has 
 cost considerably less than $5,000,000. The oppo- 
 sition to the project was fierce; it was opposed by 
 railroad, gas and telephone companies, business 
 men, patriotic citizens who said its construction 
 would destroy a large portion of the historic Boston 
 Common, and by many others who believed the 
 subway would be a long black, foul-smelling tunnel 
 in which accidents would be numerous. It was 
 predicted that it would cost millions for the removal 
 of water mains, sewers, conduits and gas pipes. It 
 really cost about $142,000 for the changing of pipes 
 and sewers. Three hundred trees were cut down 
 along the edge of the Common, but it is as attractive 
 as ever. Any attempt to go back to old methods 
 of transportation and to close the subway would 
 lead to another Revolution in Boston. 
 
VIII. 
 
 A BIRD'S-EYE VIEW OF THE FIELD. 
 
 Convincing arguments in behalf of Municipjil Owner- 
 ship difficult to advance by its advocates — Results of 
 experiments in some American cities summed up — 
 Venality and incapacity are doubtless measurably 
 responsible for failures — How western states en- 
 courage Municipalization — Fifty-six railroads at one 
 time in the hands of receivers. 
 
 It must be apparent to all who have read these 
 letters that abundant evidence has been presented 
 to make it quite clear that the prominent advocates 
 of Municipal Ownership consider it but incidental 
 to the larger things they have in mind as indicated 
 by Dr. Abbott's enumeration of the functions on 
 which government is entering. All have their eyes 
 turned in the direction of Wealth, some addressing 
 to it words of menace, others words of warning. 
 
 As Municipal Ownership is the subject under 
 immediate consideration, the writer recognizes that 
 it would be an unwarranted digression to deal with 
 any of Dr. Abbott's declarations save the one in 
 which he holds that "the sooner our cities own tlie 
 lines of railroads, the better both for the conven- 
 ience of the people and the purity of our municipal 
 governments." Similar assertions have been made 
 by advocates of Municipal Ownership, but as- 
 siduous search for the statistics, the facts, if there 
 be any, upon which these assertions are supposed to 
 be based, have failed to materialize. 
 
 The real facts in evidence are that professional 
 advocates of Municipal Ownership who have in- 
 
 l«8 
 
BIRD'S-EYE VIEW OF THE FIELD. 169 
 
 vestigated the experiments tried in most of the cities 
 where it has proved a failure, attribute the failure 
 to a lack of purity and competency in municipal 
 administration; notably in the case of the experi- 
 ment made in Philadelphia, the Common Council 
 of which was branded as venal by Professor Bemis 
 and other leading spokesmen for the Municipal 
 Ownership idea. 
 
 It is frankly admitted by Professor Bemis and 
 his associates that they cannot advance any con- 
 vincing arguments based upon statistics gathered 
 in the United States. In this country the experi- 
 ment has been tried with two railroads owned and 
 operated by municipalities. One experiment was 
 a flat failure, the other far from satisfactory. In 
 neither case did the ownership of these roads purify 
 municipal government or satisfy public demands. 
 
 Municipal Ownership of gas and electric light 
 plants has been tried in many small cities and a 
 few large ones with indifferent success in some 
 cases and disaster and scandal in many others. Re- 
 ferring to comparisons relating to the running of 
 electric light plants. Professor Bemis says : 
 
 "Even after all care possible has been exercised 
 to secure fair comparisons between private and 
 public plants, it still must be admitted that the com- 
 parisons relate only to the relative cost to the tax- 
 payers and consumers, and do not directly touch 
 the question propounded by Professor Perrine, as 
 to whether Private or Public Ownership procures 
 the production of electric light with the least ex- 
 
170 MARK HANNA'S " MORAL CRANKS." 
 
 penditure of human energy, by reason of utilizing 
 the best adapted machinery and other equipment, 
 and by the least waste and best supervision of 
 operation." 
 
 Chicago and Detroit are pointed to by the ad- 
 vocates of Municipal Ownership as cities which 
 have demonstrated that municipalities can light 
 their streets as well and at less cost than would be 
 the case where they to rely upon private com- 
 panies. It has not been clearly established, how- 
 ever, that these cities are doing all that is claimed, 
 although the fact remains that the taxpayers of 
 Chicago and Detroit seem to be satisfied with the 
 operation of these municipal electric light plants. 
 Many gasoline lamps are still used in the lighting 
 of Chicago's outlying wards, and a private company 
 is furnishing the city some of its lights at $103 per 
 lamp. 
 
 The opponents of Municipal Ownership point to 
 Philadelphia as a large city, demonstrating at a 
 heavy cost to its taxpayers that a municipal gas 
 plant could not be run economically and without 
 scandal by politicians under the present political 
 spoils system. It has been shown conclusively that 
 a large portion of the force employed on the Phila- 
 delphia municipal gas plant was made up of ward 
 heelers, faithful only in their allegiance to a political 
 boss. Professor Bemis, referring to the abandon- 
 ment of the operation of the Philadelphia municipal 
 gas plant after sixty-two years of public ownership 
 and fifty-six years of public operation, declares: 
 
 "The works under public operation would have 
 
BIRD'S-EYE VIEW OF THE FIELD. 171 
 
 shown better results than were obtained had it not 
 been for the spoils system, general inefficiency and 
 unprogressiveness ." 
 
 The experience of Hamilton, O., is adduced as a 
 typical illustration of the failure of the Municipal 
 Ownership idea when applied to small cities. Fran- 
 cisco says Hamilton owned city water works in 
 1884 costing $315,000 and started a municipal gas 
 plant costing $160,000 in 1889; in 1895 an electric 
 light plant was established at a cost of $100,000. 
 The $575,000 cost of these plants was met by the 
 selling of city bonds. The city clerk says: 
 
 "The threat to shut down the electric light plant 
 is because they are out of funds. Hamilton of all 
 the cities in the United States has been most af- 
 flicted with the Municipal Ownership craze, and 
 now having its fill on theory is reaping the results, 
 and we must bear and grin as best we can under 
 adverse circumstances. We are deluded in the be- 
 lief that we have cheap water, gas and electric light. 
 When we add to these luxuries the fact that we have 
 so raised the rate of municipal taxation until it has 
 become burdensome, and then compare with other 
 cities of our size we find we are not as well off as we 
 think." 
 
 "The city not being able to meet its obligations. 
 Judge Crane as attorney filed a petition for ' a re- 
 ceiver ' for the City of Hamilton, alleging ten 
 grounds in support of the application, viz.: 
 
 "That the city is on the verge of bankruptcy." 
 
 "That the city has refused to pay past debts which 
 are a year overdue." 
 
 "That the city has defaulted upon various bonded 
 debts," 
 
172 MARK HANNA'S " MORAL CRANKS." 
 
 "That the credit of the city grows worse each 
 month." 
 
 "That through extravagance, more money is ex- 
 pended than the resources of the city will permit." 
 
 "That the city is more severely taxed than any 
 other in Ohio," etc. 
 
 Most of the failures of Municipal Ownership and 
 operation in the United States have doubtless been 
 due either to the incompetency or venality of public 
 officials. The Municipal Railway Record of New 
 York, a journal which does not approve of the 
 Municipal Ownership idea as applied to railroads, 
 nevertheless furnishes the following evidence that 
 owners of railroads are often no better business 
 managers than some of our public servants. 
 
 "Even with the great increase of the business of 
 the railroads of the country, following upon the 
 great industrial boom, only about one-third of the 
 railroad stock paid a dividend to its holders. The 
 report of railway statistics for 1898, compiled by the 
 Interstate Commerce Commission, shows that 11 
 roads went into the hands of receivers against 45 
 taken out." 
 
 It is but fair to say at this point that Municipal 
 Ownership seems to have about as good a record 
 as a large percentage of our railroads. The oppo- 
 nents of Municipal Ownership point to the failure of 
 Philadelphia in running its gas works, while on the 
 other hand the advocates of City Ownership direct 
 attention to the numerous wreckings of railroads, 
 the most recent example of reckless management 
 being furnished when the once prosperous Third 
 
BIRD'S-EYE VIEW OF THE FIELD. 173 
 
 Avenue Railroad of New York was placed in the 
 hands of a receiver, and shameful transactions dis- 
 closed. 
 
 The history of some of the wreckers or corpora- 
 tions is as black as that of plunderers of municipali- 
 ties. Boss Tweed was placed behind prison bars 
 because of his crime against a great municipality. 
 But who has ever heard of the imprisonment in this 
 country of a wholesale despoiler of railroads? In 
 Tweed's day two Wall street operators, by trick 
 and device, aided by Supreme Court Judges who 
 were subsequently impeached and removed, ob- 
 tained possession of a great railroad. Alarmed by 
 the menace of criminal prosecution they made resti- 
 tution of nearly $10,000,000 to stockholders who 
 had been despoiled, yet they held on to the road, 
 ground out new stock without authority of law, and 
 then had the issue legalized by a corrupt legislature 
 controlled by Tweed. He died in prison, but they 
 lived to enjoy their ill-gotten gains and to flaunt 
 their wealth in the faces of people who knew them 
 to be eminent robbers. 
 
 Despite its failures in various cities it is true 
 that out West the Municipal Ownership idea has, 
 as Mr. Bryan says, arisen almost to the dignity of 
 a national issue, and several states have conferred 
 upon cities the authority to build or acquire and 
 operate gas, electric light and in some cases rail- 
 way plants. In a paper contributed by Professor 
 Parsons to Professor Bemis' Municipal Monopolies 
 the following statements are made, showing what 
 
174 MARK HANNA'S " MORAI, CRANKS." 
 
 states have done in the way of encouraging munici- 
 palization : 
 
 "Ohio permits any city or town to erect or pur- 
 chase gas works, and gives to cities the right to 
 supply gas to consumers in competition with private 
 gas companies. 
 
 "In Iowa cities or towns may supply their in- 
 habitants with light or water from municipal 
 plants." 
 
 The Indiana statutes of 1896 provide that in cities 
 of 35,000 or more population, the Boards of Public 
 Works shall have power to purchase or erect by 
 contract or otherwise, and operate, gas works, elec- 
 tric light works, street cars and other lines for the 
 conveyance of passengers and freight, telegraph and 
 telephone lines, steam and power houses, and lines 
 to supply the city and its inhabitants. 
 
 Kansas confers upon municipalities the authority 
 to build or buy gas, electric light or power, water 
 or heating plants and to supply inhabitants. 
 
 Similar powers are conferred upon municipalities 
 by the State of Missouri. 
 
 South Carolina, in the Constitution of 1895, de- 
 clares that any city or town may, on a vote of a 
 majority of its electors, build or buy water works 
 or light plants and supply its inhabitants. 
 
 Wisconsin gives to municipalities the right to 
 build or buy and operate water works and street 
 lighting plants. 
 
 Minnesota gives to municipalities, on a two-thirds' 
 vote, the right to buy at eminent domain value, and 
 to operate gas, electric light, street railway, water, 
 telephone, heat or power works. 
 
 Five states have general laws empowering muni- 
 
BIRD'S-EYE VIEW OF THE FIEIvD. 175 
 
 cipalities to own and operate street railways. Ten 
 states have general laws authorizing municipal tele- 
 graphs or telephones, or both, and in five of the 
 states the power is commercial. 
 
 As to the value of figures presented by the 
 friends of Municipal Ownership and its opponents, 
 Professor Bemis says: 
 
 "It is indeed difficult to gather statistics of any 
 value upon electric and gas lighting. The bias of 
 the investigator, the secretiveness of the private 
 companies, the poor bookkeeping of many of the 
 public companies and the fact that the conduct of a 
 public plant, especially one united with a water 
 plant, does not require the keeping of accounts in 
 the way most conclusive to comparisons with other 
 companies, account for the well-grounded distrust 
 of most lighting statistics." 
 
PART THREE. 
 
 Workers of the Trusts. 
 
 I. 
 
 An industrial and social study showing that the organizers 
 of colossal business undertakings are not always 
 financial giants — The achievements of an office boy 
 and an ex-reporter — How the whiskey trust was 
 formed. 
 
 In the far-reaching and often fierce controversies 
 over Trusts, which have largely engaged the at- 
 tention of the people of this country during the last 
 four years, much has been written and said con- 
 cerning The Workers, the sons of toil, who, on the 
 one side, it is said, have received substantial benefits 
 from these great aggregations of capital, and on the 
 other side are declared to be the victims of hard- 
 ships caused by new financial and industrial con- 
 ditions. There is, undoubtedly, a measure of truth 
 in both declarations, for some workingmen have 
 been benefited and others injured by the formations 
 of these ever-growing trusts. But it is not the in- 
 tention of the writer to join in this controversy; his 
 purpose in this brief industrial study being simply 
 to direct attention to The Workers of The Trusts, 
 the Organizers and Promoters of corporative en- 
 great havoc with the bank accounts of confiding 
 terprises, some of whose methods have wrought 
 176 
 
WORKERS OF THE TRUSTS. 177 
 
 investors — ^to show how they have given an im- 
 petus to the new Socialism. 
 
 The Workers of The Trusts, modestly remaining 
 behind the scenes, as they direct the great industrial 
 combinations which have caused the financiers of 
 the world to turn their eyes toward the United 
 States frequently in amazement because of the 
 gigantic character of these new business enterprises 
 — these cunning Workers seem to have hitherto es- 
 caped general observation. One might well be ex- 
 cused for fancying these Workers to be giants in- 
 tellectually, prodigies in whose presence the ordi- 
 nary individual would appear as a pigmy. And yet 
 in the light of recent developments a general de- 
 lusion has been dispelled. For we have learned 
 from the New York State Superintendent of Bank- 
 ing that one of these launchers of colossal business 
 undertakings was no more nor less than a clerk, but 
 none the less a remarkable clerk, a clerk who has 
 demonstrated his ability to secure a loan of $2,000,- 
 000 from the State Trust Company. The New 
 York World produces the proof of this extraordi- 
 nary statement, showing how the loan was secured 
 by printing the following letter: 
 
 May 16, 1899. 
 To the State Trust Company: 
 
 Gentlemen — Please take up and pay for 20,000 shares of 
 the preferred stock of the Electric Vehicle Company, 
 which will be delivered to you by that company at par, 
 and hold same for my account. I will reimburse you on 
 demand for the amount paid with 4 per cent interest from 
 the date of payment and all expenses, including revenue 
 stamps 
 
 DANIEL H. SHEA. 
 
 We hereby guarantee the performance of the above 
 promise ^ 
 
 P. A. B. WIDENER. 
 THOMAS F. RYAN. 
 
178 MARK HANNA'S " MORAI. CRANKS." 
 
 The Daniel of Scripture days entered a den of 
 lions and came out unscathed. A modern Daniel, 
 a young clerk at that, plays with the lions of the 
 State Trust Company and retires with $2,000,000. 
 Surely this is a modern miracle. 
 
 Turning from the clerk's $2,000,000 transaction 
 to another business undertaking, involving $1,500,- 
 000 and possibly $2,000,000, we may find other 
 Workers of the Trusts whose individualities are cal- 
 culated to dispel the illusion that these promoters 
 of great industrial enterprises are giants of finance 
 and intellect. For instance : 
 
 A few years ago, Henry D. Macdona was favor- 
 ably known to members of the newspaper fraternity 
 as a bright reporter, employed from time to time on 
 various New York City newspapers. Being a tact- 
 ful, well-informed, discreet and industrious worker, 
 he secured employment under the management of 
 a powerful corporation, in which William C. Whit- 
 ney is the controlling spirit. Newspaper men said 
 his duties were in the nature of a press agent ; at all 
 events, he did not rank with the managers of the 
 corporation which employed him, and his salary 
 was estimated by his former associates to range 
 from $5,000 to $7,000 per annum. On January 14 
 of the present year the morning papers printed a 
 long story containing the complaint of Abram 
 Kling to the efifect that the State Trust Company 
 had made excessive loans, and in specifying the 
 loans in question Kling said: 
 
 "Your petitioner further represents that the laws 
 applicable to trust companies forbid any trust com- 
 
WORKERS OF THE TRUSTS. 179 
 
 pany from loaning any moneys directly or indirectly 
 to any director or officer thereof, but notwithstand- 
 ing such provision, three of the loans afocesaid were 
 virtually made to directors of said company; that 
 the said loan of $2,000,000, ostensibly to one Daniel 
 H. Shea, was in reality a loan to William C. Whit- 
 ney, Thomas F. Ryan, P. A. B. Widener and A. N. 
 Brady, for whose benefit and at whose instance it 
 was negotiated, said Shea being a mere servant or 
 employee of said Ryan or of said syndicate." 
 
 Kling attacked other loans, and in specifying 
 what he called "the securities for which are of 
 doubtful value, or without ready market," included 
 in the list the following : 
 "Henry D. Macdona, 1,300 shares Distill- 
 ing Company stock, and 1,600 common 
 of same, as collateral for loan of $40,000." 
 
 Macdona's prominence in the field of great busi- 
 ness enterprises seems to equal that of the clerk 
 Shea, for I find in a pamphlet, bearing date "New 
 York, June 21, 1899," the following introduction to 
 a "Deposit Agreement": 
 
 "Whereas, P. Lewis Anderson and Henry D. 
 Macdona, both of the City and State of New York, 
 hereinafter called organizers, purpose to create 
 under the laws of the State of New Jersey or some 
 other state to be approved by the counsel of the 
 organizers, a corporation to be known as the Dis- 
 tilling Company of America (or some other name 
 satisfactory to the organizers), hereinafter called the 
 Corporation, the object of which corporation shall 
 be, among other things, the manufacture, sale, dis- 
 
i8o MARK HANNA'S " MORAL CRANKS." 
 
 tribution and warehousing of whisky, spirits and al- 
 cohol, which corporation shall have an authorized 
 capital stock of one hundred and twenty-five million 
 dollars ($125,000,000), consisting of fifty-five mil- 
 lion dollars ($55,000,000) preferred stock, evidenced 
 by five hundred and fifty thousand (550,000) shares 
 of seven (7) per cent, cumulative preferred stock, 
 and seventy million dollars ($70,000,000) common 
 stock, evidenced by seven hundred thousand 
 (700,000) shares of common stock." 
 
 The foregoing indicates the initial steps taken by 
 the ex-reporter and a former clerk in the direction 
 of forming the Whisky Trust. The companies 
 which composed the trust formed consisted of the 
 American Spirits Manufacturing Company, Ken- 
 tucky Distilling and Warehouse Company, Spirits 
 Distributing Company, Standard Distilling and 
 Distributing Company. P. Lewis Anderson, fel- 
 low organizer with Macdona, represented the 
 whisky companies. 
 
 The Whisky Trust was formed despite the pro- 
 tests of some of the minority stockholders. On 
 July, 1899, the Distilling Company's preferred stock 
 was quoted at 59 bid, 61 asked. The common 
 stock sold at 21 bid and 23 asked. 
 
 On March 12, 1900, the quotations were 7J bid 
 for common stock and 7^ asked. For preferred 
 stock 28 bid and 28J asked — 52 points less for com- 
 mon stock and 14 less for preferred stock than 
 could have been secured a trifle over a year ago. 
 
 It was alleged by some of the minority stock- 
 holders of the Whisky Trust that the promoters of 
 
WORKERS OF THE TRUSTS. i8i 
 
 this organization received in return for their work 
 of forming the $125,000,000 whisky combine at 
 least $10,700,000 of preferred stock and $13,360,000 
 of common stock, worth at that time about $9,000,- 
 000. They instituted legal proceedings, with a view 
 to ascertaining where the common and preferred 
 stock in question had been placed, and the inquiry 
 is still pending. 
 
 To even the inexperienced layman it must be 
 very clear that $24,006,000 of common and pre- 
 ferred Whisky Trust stock, sold at the prevailing 
 prices in July, '99, would have netted several mil- 
 lions, and if the promoters had this stock and dis- 
 posed of it at the time referred to, they are far better 
 off than those who own the stock to-day. 
 
 The profits or losses of these Whisky Trust stock- 
 holders are of no concern to the writer, and I fancy 
 to none of my readers. The writer is content with 
 having shown how some of the Workers of the 
 Trusts operate through figureheads. It may be of 
 interest, however, to state that it has been charged 
 that "the Whitney syndicate" were the real organ- 
 izers of the Whisky Trust, and that they profited 
 handsomely by the work of getting whisky manu- 
 facturers to combine ; that the use of a large sum of 
 money was required to perfect the work of organ- 
 ization. 
 
 Mr. Macdona, so it appears from the record, re- 
 ceived a loan of $40,000 on Whisky Trust stock 
 from the State Trust Company, and it is not reason- 
 able to assume that these figures represent all that 
 he received for organizing a $125,000,000 business 
 enterprise. If the ex-reporter is not the possessor 
 of a million or more dollars, then other Workers of 
 Trusts have treated him in a miserly fashion. 
 
II. 
 
 How a great flour trust failed to materialize — The interest- 
 ing and instructive experience o£ a woman investor 
 — A glittering and typical scheme. 
 
 It is generally conceded by politicians, Republi- 
 cans and Democrats, that the Trusts will be one of 
 the main issues of the Presidential campaign. Much 
 will be said and written concerning them that can- 
 not fail to prove confusing to the public mind, for 
 they have their defenders as well as assailants. On 
 the one side Mark A. Hanna and other Republicans 
 of prominence have declared that while the Trusts 
 are profitable to those forming them, these great 
 business enterprises are, on the whole, likewise 
 beneficial to the people of the country. Even such 
 critics of Capital as ex-Governor Altgeld and 
 Samuel M. Jones, the "Golden Rule Mayor" of 
 Toledo, have repeatedly asserted that "the Tr|usts 
 have come to stay"; that they are the natural out- 
 come of evolution in business life; that the govern- 
 ment must finally own them. On the other hand, 
 William Jennings Bryan, and those who are in ac- 
 cord with his views, steadily denounce the Trusts 
 as evils responsible for the infliction of widespread 
 hardships and oppressions. 
 
 Amid all these confusing claims, the thoughtful 
 and careful observer who is not bewildered by the 
 noisy contentions of opposing politicians, and the 
 strident vociferations of irrational reformers, may 
 glean from the indisputable records made by the 
 Trusts facts which will enable him to intelligently 
 182 
 
WORKERS OF THE TRUSTS. 183 
 
 estimate the merits and demerits of many of these 
 tremendous aggregations of capital. Such an in- 
 vestigator will doubtless find that various Trusts 
 have proved signally successful from a business 
 standpoint, and in many instances have conferred 
 benefits upon others than those who control them. 
 But he will not proceed far in his study of the 
 records before he confronts most conclusive and 
 convincing evidence that many of these Trusts have 
 left a wake marked by the wreckage of private 
 fortunes, the rifled cash boxes of small investors, 
 plundered widows and orphans, credulous and vic- 
 timized representatives of almost every walk in 
 life. As the student of these records made by some 
 of the Trusts pursues his studies he cannot fail to 
 be impressed by the fact that in most cases where 
 wreck and ruin have been wrought by these com- 
 binations of capital, the Workers of the Trusts, the 
 organizers of them escaped unscathed while in- 
 vestors in great numbers were despoiled. For these 
 reasons, and not with any intent to attack Trusts 
 generally, but rather for the purpose of presenting 
 a few notable facts which may serve such of my 
 readers who are disposed to invest in these new 
 enterprises without careful thought and inquiry — 
 these lines are written. 
 
 The writer has told how an ex-reporter an3 an 
 office clerk organized a $125,000,000 Whisky Trust; 
 how the preferred stock boomed by the promoters 
 sold for 59 one year ago, and the common stock for 
 21; and one day recently the preferred sold for 
 28 and the common for 7^. Those facts and others 
 
i84 MARK HANNA'S " MORAL CRANKS." 
 
 taken from the records tell a story which carries its 
 own warning against placing reliance upon the glit- 
 tering promises of one type of men interested in the 
 formation of Trusts. Similar instances might be 
 multiplied. 
 
 The older residents of New York will easily recall 
 the days when the L,awrences, Waterburys, Mar- 
 shalls, Walls, accumulated large fortunes as indi- 
 vidual manufacturers of cordage. We all know 
 what happened when, a few years ago, the Cordage 
 Trust was formed, and the individual manufacturer, 
 with the exception of ex-Mayor Fitler of Philadel- 
 phia, ceased to manufacture. The Cordage Trust 
 did not last long; when it failed it ruined thousands 
 of investors, but Mr. Fitler, withdrawing from the 
 Trust in the early days of its operations to carry on 
 his work as he had done in previous years, flourished 
 and is still flourishing. 
 
 In the warehouse business the Pierreponts, 
 Stranahans, Montagues, Beards and others identi- 
 fied honorably with the business interests of Brook- 
 lyn, accumulated a great deal of wealth. In 1895 
 the owners of the warehouses along the Brooklyn 
 water front were induced to form a Warehouse 
 Trust. Great profits were predicted. The capital 
 stock was over-subscribed. Men anxious to secure 
 stock stood in long lines in front of a Trust Com- 
 pany which had been designated to receive sub- 
 scriptions; those who succeeded in placing their 
 money were thought to have been singularly fortu- 
 nate. The stock was quoted at high figures. 
 
 In February last an application for the appoint- 
 ment of Hugh Grant as receiver of the Warehouse 
 Trust, the subsequent appointment of John F. Car- 
 
WORKERS OF THE TRUSTS. i8s 
 
 roll, and the controversy consequent upon this ap- 
 pointment by Judge Fitzgerald, vividly recalled the 
 glowing predictions made as to the supposed bright 
 future of the warehouse combination and empha- 
 sized the shattering of the golden prophecies of 
 1895. 
 
 Recently there appeared in the news columns of 
 the Brooklyn Eagle the report of a proceeding be- 
 fore Justice Jenks of the Supreme Court, which was 
 headed: 
 
 "Big Flour Trust Declared a Swindle. Mrs. 
 Jewell's Lawyer Says Hecker-Jones Concern Was 
 Wrecked by U. S. Milling Company. Original 
 Stock Now Desired. Mrs. Jewell Asks for a Per- 
 manent Injunction Restraining Transfer of Securi- 
 ties." 
 
 Being a layman, inexperienced in law, I shall not 
 venture an opinion as to whether the Flour Trust 
 was a swindle or a perfectly legitimate business en- 
 terprise. But it is fair to say at this point, that 
 the names of some of the organizers of this Trust 
 are esteemed in Brooklyn as men of good repute 
 and high social standing. There are, however, 
 some facts involved in this suit which demonstrate 
 conclusively that even honest men may make grave 
 miscalculations concerning desired profits, and that 
 Trusts even when formed by honest men end ,in 
 financial disaster. And these facts may serve as a 
 warning to the inexperienced, who think they see 
 in all Trusts a short road to big dividei;cEs and ulti- 
 mate wealth. 
 
i86 MARK HANNA'S " MORAIv CRANKS." 
 
 In the year 1898 Ora M. Jewell was the owner of 
 340 shares of the preferred stock of the Hecker- 
 Jones-Jewell Milling Company, also the owner of 
 250 shares of comomn stock and 22 bonds of the 
 company which she valued at $81,000. She de- 
 clares in a sworn statement that she was induced by 
 the promoters of the United States Milling Com- 
 pany, a proposed colossal Flour Trust, to transfer 
 her stock to them, on the understanding that it 
 would be "ready for complete working by the ist 
 day of February, 1899," otherwise the stock was 
 to be returned to her. She asserts that the organ- 
 ization was not formed, that she has made a demand 
 for the return of her stock, and that she has reason 
 to believe that the said stock is to be transferred by 
 its present possessors, the Central Trust Company, 
 to a new corporation founded on the ruins of the 
 United States Milling Company; that she wants to 
 regain possession of her stock and bonds and can- 
 not. Justice Jenks heard arguments for and against 
 the issuance of a permanent injunction restraining 
 the holders of Mrs. Jewell's stock from disposing of 
 it contrary to her wishes. 
 
 In the merits of this point of the controversy the 
 writer has no concern, but the agreement which 
 Mrs. Jewell was induced to sign is of public in- 
 terest, for it is a document which indicates the 
 character of other allurements of the Trusts which 
 have first captivated and then brought disaster to 
 inexperienced investors. The agreement which 
 Mrs. Jewell signed — apparently an almost certain 
 guarantee of the return of large dividends — reads as 
 follows : 
 
WORKERS OF THE TRUSTS. 187 
 
 "Stockholders' and Bondholders' Agreement. 
 
 "Hecker- Jones-Jewell Milling Company. 
 "It having been represented to the undersigned 
 that Thomas A. Mclntyre and various other per- 
 sons identified with the flour milling interests in 
 this country propose to organize a corporation un- 
 der the laws of a state of the United States to have 
 the following capitalization, to wit : 
 
 Common stock, 125,000 shares, at $100 
 each $12,500,000 
 
 Preferred stock, 6 per cent, cumulative, 
 
 125,000 shares at $100 each 12,500,000 
 
 First mortgage 6 per cent, consolidated 
 gold bonds covering all the milling 
 properties acquired 15,000,000 
 
 "Such stock and bonds to be issued in acquiring 
 properties and providing a working capital and in 
 paying legal and other expenses, including profit 
 to organizers, and reserving such amount as may 
 be deemed necessary for future use of the company. 
 
 "That it is proposed that such company shall ac- 
 quire the principal flour mills situated in Minneapo- 
 lis and Duluth in the State of Minnesota; at Su- 
 perior and West Superior cities, and at Milwaukee, 
 in the State of Wisconsin, of the Hecker-Jones- 
 Jewell Milling Company, having an estimated ag- 
 gregate capacity of 90,000 barrels per day, or so 
 many of said mills or others as may be considered 
 advantageous by the organizers. 
 
 "That from the statements made by the various 
 owners, it is estimated by the organizers that the 
 yearly .savings and economies to be made available 
 
i88 MARK HANNA'S " MORAL CRANKS." 
 
 by placing the said mills under one management 
 and ownership will amount to a large sum, at the 
 very least, sufficient to pay a dividend of 6 per cent, 
 on the entire common stock of the proposed com- 
 pany, and that the present combined net earnings 
 of the said mills which the organizers purpose to 
 acquire, are in excess of the amount necessary to 
 pay the interest on said bonds, and the dividend of 
 6 per cent, on the preferred stock issued. 
 
 "Now, therefore, in order to facilitate and assist 
 the said Mclntyre and his associates in the organ- 
 ization of said corporation, and the acquisition of 
 said properties, the accomplishment of which the 
 undersigned deem for their best interest, and is an 
 inducement for such organizers to procure the ob- 
 jects aforesaid, and also in consideration of the 
 sum of $1 paid to each of the undersigned by 
 Thomas A. Mclntyre, the receipt of which is hereby 
 acknowledged, the subscribers hereto, holders of 
 the stock and bonds of the Hecker-Jones-Jewell 
 Milling Company hereby promise and agree, each 
 for himself, and not for the other, to deposit with 
 the Franklin Trust Company of New York, which 
 is hereby designated as trustees hereunder for the 
 organizers and the undersigned, the number of 
 shares of the common stock and preferred stock, 
 and of the bonds of the said Hecker-Jones-Jewell 
 Milling Company, set opposite their names, when- 
 ever notified by mail so to do by the said com- 
 mittee herein appointed to carry out the provisions 
 of this agreement, and receive for such stock and 
 bonds the receipts of said Trust Company, cer- 
 tifying that they are received, and to be held and 
 disposed of in accordance with the terms and spirit 
 
WORKERS OF THE TRUSTS. 189 
 
 of this instrument; each certificate ol stock so de- 
 posited to have attached a properly executed power 
 of transfer. 
 
 "The said Trust Company and said committee are 
 authorized in case of said organization being carried 
 into effect, to accept and exchange on behalf of the 
 undersigned for the stock and bonds deposited here- 
 under, share for share, of stock of the same class, 
 and bond for bond of like amount, of the securities 
 of the new company, or for the negotiable receipts 
 of a Trust Company, which is to deliver said new 
 stock and bonds, should the same be delayed in 
 execution. 
 
 "And the undersigned hereby constitute and ap- 
 point George H. Southard, William A. Nash and 
 C. Gerhard Moller, or a majority of them, a com- 
 mittee and attorney with free power to act for the 
 undersigned, and in their stead as their true and 
 lawful attorneys to carry out the purposes and pro- 
 visions of this agreement, and to consent and assist 
 in the sale of the property and business of said 
 Hecker-Jones-Jewell Milling Company, to the said 
 proposed company as herein contemplated, and to 
 consent and vote for the dissolution of the said 
 Hecker-Jones-Jewell Milling Company, if it is 
 deemed necessary; and the undersigned further 
 agree to deposit with such stock powers of attorney 
 and proxies, which shall be sufficient and in form to 
 authorize and carry out the said organization, ac- 
 quisition of properties, and generally fulfilling the 
 terms of this agreement. 
 
 "It is further understood and agreed that in case 
 the proposieid corporation shall not be organized, 
 and its bonds and stocks, or a Trust Company's 
 
190 MARK HANNA'S " MORAL CRANKS." 
 
 negotiable receipts therefor, shall not be ready for 
 exchange by the first day of February, 1899, then 
 the stock and bonds deposited hereunder shall be 
 returned to the owners thereof; also that the re- 
 ceipts of the Franklin Trust Company, duly en- 
 dorsed by the party in whose namjc the same are 
 issued, shall be conclusive evidence of the title of 
 the holder thereof to either the new securities or 
 those deposited hereunder; also that the under- 
 signed shall be put to no expense whatever by 
 reason of their signatures hereto, the exchange of 
 securities, or the services rendered by the said 
 Trust Company or the committee and attorney 
 aforesaid. 
 "New York City, August 22, 1898." 
 
 Ninety thousand barrels of flour daily. Six per 
 cent, dividends. Your stock back if we do not 
 perfect the organization described in the "agree- 
 ment." All the big mills in the country to combine 
 in the Flour Trust. Could anything be more al- 
 luring to an investor who has not had experience in 
 Wall street? 
 
 The time for perfecting the Flour Trust was ex- 
 tended one year by consent of all parties. But on 
 January 29, of the present year, so Mrs. Jewell 
 swears she received "a printed circular purporting 
 to come from Thomas A. Mclntyre and others," 
 reading in part as follows: 
 
 "Plan for the reorganization of the United States 
 Flour Milling Company. 
 
 "A new corporation will he created under the 
 
WORKERS OF THE TRUSTS. 191 
 
 laws of the State of New Jersey, under the name 
 (probably) of the Standard Klour Company." 
 
 Mrs. Jewell says further: "Said circular provides 
 for the reorganization of the United States Millintr 
 Company and contemplates dealing with deponent's 
 bonds and stocks of the Hecker- Jones-Jewell Mill- 
 ing Company without her consent." In the papers 
 filed by Mrs. Jewell's counsel she makes a declara- 
 tion under oath of which the following is a part : 
 
 "Deponent further respectfully calls the attention 
 of the court to said agreement dated August 22, 
 1898, known as ' the stockholders' and bondholders' 
 agreement,' which agreement states ' it is proposed 
 that such company shall acquire the principal flour 
 mills situated in Minneapolis and at Duluth, in the 
 State of Minnesota, at Superior and West Superior 
 cities and at Milwaukee, in the State of Wisconsin, 
 of the Hecker- Jones-Jewell Milling Company, hav- 
 ing an estimated aggregate capacity of 90,000 bar- 
 rels per day, or as many of said mills or others as 
 may be considered advantageous by the organizers.' 
 
 "And deponent avers that she is informed and be- 
 lieves that the total capacity of the United States 
 Flour Milling Company is not 90,000 barrels per 
 day or anything like that capacity, but has in fact 
 a capacity of at most 39,000 barrels per day. (See 
 prospectus attached to affidavit of Charles P. Mar- 
 tens). And said United States Flour Milling Com- 
 pany does not include the principal flour mills of 
 Minneapolis, which are the Pillsbury-Washburn 
 Company and the Washburn-Crosby Company, 
 which have an aggregate capacity of 50,000 barrels 
 per day, which is about half the capacity of all the 
 spring wheat flour mills of this country. 
 
192 MARK HANNA'S " MORAL CRANKS." 
 
 "Deponent respectfully urges this court that 
 while by the terms of the agreement some dis- 
 cretion and latitude as to the number and capacity 
 of mills included in the United States Flour Milling 
 Company might be given to the organizers and 
 trustees, such discretion must be exercised in a 
 reasonable and fair way, and deponent submits that 
 the difference between 90,000 barrels per day and 
 39,000 barrels per day is too great to admit of a 
 conclusion that such discretion was exercised in a 
 reasonable and fair way." 
 
 Bartram Bros., representing 300 shares preferred 
 stock of the Hecker-Jones-Jewell Milling Com- 
 pany; E. H. Dougherty & Co., 100 shares preferred 
 stock and $5,000 first mortgage bond; E. H. 
 Dougherty, trustee, $6,000 first mortgage bond; 
 E. H. Dougherty, $9,000 first mortgage bond; 
 Donald S. L. Eee, 100 shares preferred stock; Jacob 
 K. Draper, 50 shares preferred stock; V. Cairo, 65 
 shares preferred stock; R. D. Armstrong, 150 
 shares of preferred stock; John V. Hecker, 200 
 shares preferred stock, all joined in afifidavits io the 
 effect that they had learned that the referred-to 
 agreement was not carried out; that the said United 
 States Flour Milling Company did not acquire the 
 principal flour mills of Minneapolis, and did not ac- 
 quire the Hecker-Jones-Jewell Milling Company. 
 
 Promoter Mclntyre put in an affidavit to the ef- 
 fect that Mrs. Jewell was fully informed as to what 
 was to be done with her stock and that her son 
 Edward, acting as agent for Mrs. Jewell, sanctioned 
 all that was done. 
 
WORKERS OF THE TRUSTS. 193 
 
 Edward H. Jewell, 24 years old, swears positively 
 that he did not know until January, 1900, that the 
 Hecker- Jones- Jewell Milling Company was not in- 
 cluded in the consolidation of the flour interests; 
 that he never acted as the agent of his mother; that 
 he was not her agent; that "Thomas A. Mclntyre 
 was a personal friend of deponent's father, who is 
 now dead, and deponent thought said Mr. Mclntyre 
 would be a proper person to advise him whether it 
 would be advisable for him (deponent) to purchase 
 a seat in the Stock Exchange." 
 
 "That said Mclntyre was one of the parties be- 
 hind the circular or prospectus of May 13, 1899; 
 * * * That said prospectus contains misstate- 
 ments, misrepresentations and evasions, and that 
 said Mclntyre became the treasurer of the new com- 
 pany, and that it is now in the hands of a receiver 
 admittedly insolvent, and that said Mclntyre is 
 now seeking through a reorganization agreement 
 to perpetuate his influence and methods, and that 
 finally, if the relief prayed for by this plaintiff is not 
 granted the reorganization agreement may become 
 operative and plaintiff's securities still further re- 
 moved from her control. 
 
 "March 19, 1900." 
 
 Judge Jenks granted a permanent injunction 
 pendente lite. The writer does not vouch for the 
 charge made against Promoter Mclntyre or the 
 denial which he makes, and presents the foregoing 
 as an extract from court records. In citing this 
 case the sole purpose is to show a form of agree- 
 ment that is often used in the proposed formation of 
 Trusts and often broken by men who make similar 
 promises to investors as will be shown later. 
 
194 MARK HANNA'S " MORAL CRANKS." 
 
 All of the foregoing may prove dull reading to 
 those who have not the means, and possibly to those 
 who have means but no desire to invest in Trusts. 
 But there are others to whom this story may prove 
 of service. For in this narrative they may discern 
 some of the pitfalls into which the inexperienced 
 and unwary may tumble — into which such persons 
 may be led by well-meaning business men, and like- 
 wise by unscrupulous Workers of the Trusts. 
 
III. 
 
 A $30,000,000 malting combination which attracted atten- 
 tion by paying a dividend three months after be- 
 ginning business — Two years later the deficit 
 amounted to $l,389,399.S^Dividends declared by 
 "dead reckoning" — An object lesson 
 
 In the course of a conversation concerning the 
 Workers of the Trusts had with a well-informed 
 lawyer, the latter said to the writer: 
 
 "If my business was not satisfactory I should re- 
 move to New Jersey, settle down there, cultivate the 
 good-will of a Chancellor and Judges, and get ready 
 to pluck a few big legal plums." 
 
 Asked to explain his reason for considering New 
 Jersey a desirable place for residence, the lawyer 
 replied: 
 
 "Well, there are over 250 great corporations, 
 Trusts, most of them, that have been incorporated 
 in New Jersey, each with a capital stock amounting 
 to more than $20,000,000. Many of these so-called 
 Trusts are water-logged, and, inside of the next 
 two years will go down. There will have to be re- 
 ceivers for these concerns, and receiverships will 
 be well worth having. That is the main reason why 
 I think that New Jersey is going to be a desirable 
 place for lawyers." 
 
 It is true that quite a number of New Jersey so- 
 called Trusts, organized to lure inve.stors in this 
 state, have already been wrecked, and it is fair to 
 assume that a similar fate will overtake others whic.i 
 were not organized in accordance with sound busi- 
 ness principles, and that were formed by the 
 
 19s 
 
196 MARK HANNA'S "MORAL CRANKS." 
 
 Workers of the Trusts really for the purpose of fill- 
 ing their coffers alone. In the meantime, however, 
 the unscrupulous Promoter will continue to look 
 for easy victims, and multiply his promises of great 
 profits to investors in his schemes. And he will 
 doubtless succeed in many instances, for there are 
 those who will not profit by the experiences of their 
 fellows — must have their own bitter experiences 
 before they learn to avoid the Workers of the 
 Trusts. It is not to men of this type that these 
 letters are addressed, for they are in the same class 
 with the bucolic visitor to town who persists in his 
 efiforts to buy the confidence man's "green goods,"' 
 despite all that has been printed. 
 
 The green goods man's circular inviting and so 
 oflen winning the confidence of the credulous 
 farmer is an amateurish production compared with 
 the finished and captivating literary efiforts of the 
 experienced Worker of the Trust. There is not 
 one of these plans for the formation of Trusts, 
 drawn by the skillful hand of the kind of Promoter 
 that I have in mind, which does not sooner or later 
 prove conclusively that figures will lie, despite the 
 oft repeated assertion to the contrary. And the 
 prevalence of the credulity which blindly accepts the 
 lying figures and golden promises of conscienceless 
 promoters of Trusts is illustrated by the comment 
 of a close observer of present financial conditions: 
 
 "Mark Twain made a great mistake when he gave 
 to the public Colonel Sellers' great scheme for or- 
 ganizing an eye-water company, with a view to 
 supplying a long-felt want, among the weak-eyed 
 
WORKERS OF THE TRUSTS. i97 
 
 natives of Egypt and adjacent lands. If Twain had 
 not put forward this scheme as a humorous story, 
 and had held it in reserve for these days, he would 
 have had no trouble whatever in incorporating an 
 Eye- Water Trust under the laws of the state of New 
 Jersey, capital $50,000,000, and on the watered 
 stock accorded to him as a promoter might by a 
 quick turn have made a million or more of dollars. 
 Colonel Sellers' plan could have been set forth 
 seriously in almost the same language which is 
 credited to him by Twain, and in the shape of a 
 printed agreement drawn for the signatures of in- 
 vestors, would without doubt have been signed un- 
 hesitatingly by hundreds of men who have sub- 
 scribed to even more absurd documents." 
 
 Here is an instructive lesson: In 1897 it occurred 
 to two enterprising and steadily active promoters 
 that it would be a money-making scheme to or- 
 ganize a Malting Trust. In the Commercial and 
 Financial Chronicle of New York, issued October 2, 
 1897, there appeared under the head of "'General 
 Investment News," an announcement of which the 
 following is a part: 
 
 "American Malting Company — Malt Consolida- 
 tion About Completed — New Securities. — The 
 American Malting Company, with authorized cap- 
 ital stock of $30,000,000, was incorporated this 
 week under the laws of New Jersey, to consolidate 
 over twenty malting properties." 
 
 "The following is an official statement: 
 
 "The organization of the American Malting 
 Company has now been fully completed and the 
 
198 MARK HANNA'S " MORAL CRANKS." 
 
 transfer to it of over twenty of the largest and best 
 appointed malt houses is practically completed, care 
 having been taken to secure only such as by reason 
 of their large capacity, their location and facilities 
 for doing business can be operated at a minimum 
 of cost. 
 
 "Malt is manufactured from barley and is indis- 
 pensable in the operations of all brewers and vine- 
 gar and yeast manufacturers. It will be the aim of 
 the company to manufacture only the highest 
 grades of malt and to so systematize the business 
 and curtail expenses as to manufacture the product 
 at the lowest possible cost, and thus be enabled to 
 increase profits without increasing cost to con- 
 sumers." 
 
 The names of twenty-one large malting houses 
 purchased by the company were attached to the 
 foregoing, and then the "ofificial statement" con- 
 tinued as follows: 
 
 "The company is authorized to issue $15,000,000 
 7 per cent, cumulative preferred stock and a like 
 amount of common, but there remains in the 
 treasury $2,500,000 of the preferred and $1,250,000 
 of the common stock, together with $2,000,000 as 
 cash working capital. 
 
 "Expert chartered accountants after examination 
 have certified that during the past five years of de- 
 pression these concerns have earned net about 
 $1,300,000 per annum on a competitive basis. It is 
 the opinion of the ablest men in the trade that the 
 net earnings by reason of reductions in the cost of 
 administration, etc., can be increased at least 
 $1,000,000 per annum. As the dividends on the 
 $12,500,000 preferred stock outstanding will re- 
 
WORKERS OF THE TRUSTS. 199 
 
 quire the payment of but $875,000 per annum, the 
 prospect of early dividends on the common would 
 seem to be reasonably assured. 
 
 "Permanent organization will be perfected Satur- 
 day. 
 
 "Moore & Schley of this city are the bankers who 
 have the consolidation in charge." 
 
 The Malting Trust was organized, and boomed in 
 the newspapers. In three months after it began 
 business it declared a dividend. There was a rush 
 for the stock of the Trust. At one period its pre- 
 ferred stock sold for 87^, its common stock for 37. 
 
 To-day its preferred stock can be bought for 25, 
 its common stock for 5. 
 
 This great shrinkage in values of stock will, per- 
 haps, prove mystifying to the reader who had had 
 no business dealings with Trusts, and still more so 
 when he learns that dividends were paid to preferred 
 stockholders at the following rate: 
 
 January 15, 1898 $219,450 
 
 April 15, 1898 219,450 
 
 July 15, 1898 219,450 
 
 October 15, 1898 219,450 
 
 Dividends for the year 1898 $877,800 
 
 January 15, 1899 $219,450 
 
 April 15, 1899 252,700 
 
 July 15, 1899 252,700 
 
 October 15, 1899 252,700 
 
 Dividends for the year 1899 $977.55° 
 
 Combined dividends for two years $1,855,350 
 
200 MARK HANNA'S " MORAL CRANKS." 
 
 Such figures seem to furnish convincing proof 
 that the Mah Trust was a great money-making cor- 
 poration. 
 
 In January of the present year a meeting of the 
 directors of the company was held and a committee 
 of keen business men was appointed to- report on 
 the condition of the Trust. That committee made 
 a report on March 5, and disclosed in temperate, 
 judicial language an astounding condition of af- 
 fairs — a new and amazing way of paying dividends. 
 The report says, among other things: 
 
 "Profits were determined and dividends declared 
 by ' dead reckoning,' a dividend having been de- 
 clared within three months after business began." 
 
 That is to say, out of cash on hand dividends were 
 paid on prospective profits figured out, and which 
 did not materialize. In a note attached to the re- 
 port is the following statement: 
 
 "Dividends paid amount to $1,855,350.00 
 
 "Discount on bonds amounts to 400,000.00 
 
 "Total $2,255,350.00 
 
 "Profits as above 865,399.39 
 
 "Deficit as on page 11 $1)389,399-59 
 
 Another significant and illuminative part of the 
 report from which I quote says: 
 
 "On organization of your company there was is- 
 sued to a party who held purchasing options on 
 certain malting plants, situated in different states, 
 
WORKERS OF THE TRUSTS. 201 
 
 $13,740,000 of the common stock and $12,500,000 
 of the preferred stock, which, with $10,000 of the 
 common stock, originally subscribed for in cash, 
 represent a par total value of $26,250,000, for which 
 the company acquired all the plants stated in 
 Schedule A, hereto annexed, and cash, as a working 
 capital, the sum of $2,080,000. 
 
 "The books of the company do not show any 
 valuation for any individual plant or what price the 
 selling maltsters received, but simply record that 
 the stock, issued as above stated, was paid to the 
 party above referred to for all the plants shown in 
 Schedule A and for $2,080,000 in cash." 
 
 So it seems that " a party," presumably a 
 Worker of the Trusts, was handed over $2,000,000 
 in cash and a large amount of securities, represent- 
 ing a face value of over $26,000,000, for which he 
 turned over several malting plants ! And the books 
 do not show what was paid for any individual plant, 
 nor do they record the amounts paid to the selling 
 maltsters ! 
 
 Suppose that this promoter delicately referred to 
 as "a party" had secured a number of options from 
 owners of malting houses and had said to one : 
 
 "I will give to you $300,000 for your plant; that 
 is $100,000 more than it is worth. Make out to me 
 a receipt for $500,000. You will get what you 
 want. The remainder is my concern. If anyone 
 questions you say I paid you $500,000. You have 
 no cause to complain, for I agree to give you far 
 more than your plant is worth." 
 ' I have no knowledge that this was done, nor do 
 I desire to intimate that it was done. I am merely 
 supposing a hypothetical case for the purpose of 
 
202 MARK HANNA'S " MORAL CRANKS." 
 
 showing that in case no bona fide records of the 
 sales to the Malt Trust were kept there was room 
 for the perpetration of a great outrage upon the 
 stockholders of the American Malting Company. 
 
 Does not the following cold analysis of the busi- 
 ness methods of the former management of the 
 Malting Trust place them in the category of Colonel 
 Sellers' Eye-Water Trust? 
 
 "At the end of the company's fiscal year, Decem- 
 ber 31, 1898, computations of the company's profits 
 were made for the first time. They covered a period 
 of one year, two months and twenty days." 
 
 "After deducting $877,800 for four quarterly 
 dividends of if per cent, each paid on the preferred 
 stock a bookkeeping surplus of $198,649.79 was 
 shown. 
 
 "This profit balance was obtained by crediting 
 Profit and Loss account in the following manner: 
 There was on hand at that date executory contracts 
 for about 6,700,000 bushels of malt (nearly one-half 
 of the company's annual business) manufactured 
 and sold, but not delivered. 
 
 "It was computed that this malt when delivered 
 would realize a profit of $388,063.36, and this esti- 
 mated amount was treated as a net profit, without 
 deduction for administrative and incidental ex- 
 penses." 
 
 It is no more than fair to the American Malting 
 Company to say that the old management respon- 
 sible for the conditions exposed was removed, and 
 
wor?:ers of the trusts. 203 
 
 that its affairs are now in the hands of practical and 
 shrewd business managers, who say that the com- 
 pany was handicapped by "over-capitalization" and 
 add: 
 
 "The condition of your company to invite credit, 
 do business and meet competition is better than at 
 any time since its organization." 
 
 But that mysterious Promoter, gently referred to 
 as " a party," does not appear to be concerned in the 
 present management, yet I doubt not that he will 
 appear later in connection with the formation of 
 other Trusts. For your Worker of the Trusts is 
 an ever-busy man. 
 
IV. 
 
 A glance at Col. Mulberry Sellers and some of his finan- 
 cial projects — His "Trust ideas" have been broad- 
 ened and capitalized bounteously — The workers 
 have made efforts to form pie, bread, beer, whisky, 
 coffin, suspender, chewing gum, shoe-string, stock- 
 ings, bedstead and many other trusts. 
 
 It has been suggested that before proceeding 
 further in my story of the methods pursued by the 
 Workers of the Trusts I should offer some proof in 
 corroboration of the assertion that Mark Twain's 
 Colonel Mulberry Sellers was one of the founders of 
 this new Guild. The proof is at hand, and it may 
 be well to deal with the humorous features of some 
 of the Trusts under consideration in these letters 
 before dealing with the serious, if not criminal as- 
 pects of unbusinesslike transactions which every 
 now and then either startle communities or arouse 
 deep indignation. 
 
 In one of his confidential moods, while address- 
 ing his young friend, Washington Clay, who had 
 gone to Washington in search of a fortune, Colonel 
 Sellers, after finding that the young man had but 
 $i8 to invest, said: 
 
 "Well, all right; don't despair. Other people 
 have been obliged to begin with less. I have a 
 small idea that may develop into something for us 
 both, all in good time. Keep your money close and 
 add to it. I'll make it breed. I've been experi- 
 menting (to pass away the time) on a little prepara- 
 
 2C4 
 
WORKERS OF THE TRUSTS. 205 
 
 tion for curing sore eyes — a kind of decoction nine- 
 tenths water and the other tenth drugs that don't 
 cost more than a dollar a barrel; I'm still experi- 
 menting; there's one ingredient wanted yet to per- 
 fect the thing, and somehow I can't just manage to 
 hit upon the thing that's necessary, and I don't 
 dare talk with a chemist, of course. But I'm pro- 
 gressing, and before many weeks I wager the coun- 
 try will ring with the fame of Beriah Sellers' Infal- 
 lible Imperial Oriental Optic Liniment and Salva- 
 tion for Sore Eyes — the medical wonder of the age ! 
 Small bottles 50 cents and large ones a dollar. 
 Average cost, 5 and 7 cents for the two sizes. The 
 first year sell, say, 10,000 bottles in Missouri, 7,000 
 in Iowa, 3,000 in Arkansas, 4,000 in Kentucky, 
 6,000 in Illinois, and say 25,000 in the rest of the 
 country. Total, 55,000 bottles; profit clear of all 
 expenses, $20,000 at the very lowest calculation. 
 All the capital needed is to manufacture the first 
 2,000 bottles — say $150 — then the money would be- 
 gin to flow in. The second year sales would reach 
 200,000 bottles — clear profit, say $75,000 — and in 
 the meantime the great factory would be building 
 in St. Louis, to cost say $100,000. The third year 
 we could easily sell 1,000,000 bottles in the United 
 States and " 
 
 "O, splendid!" said Washington. "Let's com- 
 mence right away — ^let's " 
 
 " — 1,000,000 bottles in the United States — profit 
 at least $350,000 — and then it would begin to be 
 time to turn our attention toward the real business." 
 
 "The real idea of it! Ain't $350,000 a year a 
 pretty real " 
 
 "Stuff ! Why, what an infant you are, Washing- 
 
2o6 MARK HANNA'S " MORAL CRANKS." 
 
 ton — what a guileless, short-sighted, easily-con- 
 tented innocent you are, my poor little country- 
 bred know-nothing ! Would I go to all that trouble 
 and bother for the poor crumbs a body might pick 
 up in this country? Now, do I look like a man 
 who — does my history suggest that I am a man who 
 deals in trifles, contents himself with the narrow 
 horizon that hems in the common herd, sees no fur- 
 ther than the end of his nose? Now you know that 
 that is not me — couldn't be me. You ought to 
 know that if I throw my time and abilities into a 
 patent medicine, it's a patent medicine whose field 
 of operations is the solid earth ! its clients the 
 swarming nations that inhabit it! Why, the Re- 
 public of America for an eye-water country? Lord 
 bless you, it is nothing but a barren highway, that 
 you've got to cross to get to the true eye-water 
 market ! Why, Washington, in the Oriental coun- 
 tries people swarm like the sands of the desert; 
 every square mile of ground upholds its thousand 
 of struggling human creatures — and every separate 
 and individual devil of them's got the ophthalmia. 
 It's as natural to them as noses are' — and sin. It's 
 born with them, it stays with them, it's all that some 
 of them have left when they die. Three years of in- 
 troductory trade in the Orient, and what will be the 
 result? Why, our headquarters would be in Con- 
 stantinople and our hindquarters in 'Farther India !' 
 Factories and warehouses in Cairo, Ispaham, Bag- 
 dad, Damascus, Jerusalem, Veddo, Peking, Bang- 
 kok, Delhi, Bombay and Calcutta I Annual income 
 • — well, God only knows how many millions and 
 millions apiece!" 
 
WORKERS OF THE TRUSTS. 207 
 
 Thousands have laughed over Colonel Sellers' 
 financial vagaries, yet careful scrutiny of many of 
 the multitude of enterprises put forward by the 
 Workers of the Trusts during the last three years 
 and backed on paper by millions of dollars in stock, 
 will disclose propositions, seriously advanced, 
 which are quite as absurd as those which fell from 
 the lips of Mark Twain's great financier. 
 
 Colonel Sellers simply figured out profits on 
 goods not manufactured, and the prices they would 
 bring. And here, as a companion piece to this 
 bright picture of prospective wealth, we have the 
 undisputed announcement made by the experienced 
 business men who recently investigated the former 
 management of the American Malting Company, 
 that $1,855,350 was paid out in dividends when 
 there was really a large deficit. This statement 
 from the committee, showing how profits were ar- 
 rived at, dividends declared, was printed in a pre- 
 vious letter, but it is reproduced for comparison 
 with Colonel Sellers' scheme, and reads as follows: 
 
 "Profits were determined and dividends declared 
 by ' dead reckoning.' 
 
 "After deducting $877,800 for four quarterly divi- 
 dends of if per cent, each paid on the preferred 
 stock, a bookkeeping surplus of $198,649.79 was 
 shown. 
 
 "This profit balance was obtained by crediting 
 Profit and Loss account in the following manner: 
 There was on hand at that date executory contracts 
 for about 6,700,000 bushels of malt (nearly one-half 
 of the company's annual business) manufactured 
 and sold, but not delivered. 
 
 "It was computed that this malt when delivered 
 
2o8 MARK HANNA'S " MORAIv CRANKS." 
 
 would realize a profit of $388,063.36, and this esti- 
 mated amount was treated as a net profit, without 
 deduction for administrative and incidental ex- 
 penses." 
 
 This declaration ought to convince any reason- 
 able man that truth in this case is stranger than 
 Mark Twain's fiction, and that Colonel Sellers was 
 not quite so humorous a figure from a financial 
 standpoint as any one of the old directors of the 
 American Malting Company. 
 
 Colonel Sellers did no more than air his great 
 financial schemes. He did not do, as some of his 
 successors have done, capitalize his ideas at $30,- 
 000,000 or $40,000,000, buy great ■ properties with- 
 out putting up a dollar personally, pay the men dis- 
 posing of these properties with stock of their own 
 creation, and call upon them to produce the cash 
 needed for the work of perfecting a Trust, pocket 
 the stock allotted to him as organizer, and then 
 quietly dispose of his holdings. But he did furnish 
 ideas which have brought great profit to the up-to- 
 date Worker of the Trust. 
 
 Take the Colonel's proposed Hog Trust idea and 
 see if it is not as sound a business proposition as 
 that advanced by the Workers of the Trusts, who 
 proposed to establish a coUossal Flour Trust. The 
 Colonel thus outlined his scheme: 
 
 "We've got quiet men at work (he was very im- 
 pressive here) mousing around, to get propositions 
 out of all the farmers in the whole West and North- 
 west for the hog crop, and other agents quietly get- 
 ting propositions and terms out of all the manu- 
 factories — and, don't you see, if we can get all the 
 
WORKERS OF THE TRUSTS. 209 
 
 hogs and all the slaughter-houses into our hands on 
 the dead quiet — whew ! it would take three ships to 
 carry the money. I've looked into the thing, cal- 
 culated all the chances for and all the chances 
 against, and though I shake my head and hesitate, 
 and keep on thinking, apparently, I've got my mind 
 made up that if the thing can be done on a capital 
 of $6,000,000, that's the horse to put up money on ! 
 Why, Washington — but what's the use of talking 
 about it? Any man can see that there's whole At- 
 lantic oceans of cash in it, gulfs and bays thrown 
 in." 
 
 The promoter of the proposed Flour Trust said 
 in effect: 
 
 "We have good, quiet men at work mousing 
 around in the West and Northwest, and they have 
 secured options on all the big mills of Duluth, Mil- 
 waukee, Buffalo and other large cities. We can 
 bring into the Flour Trust mills with a capacity for 
 turning out in the aggregate 90,000 barrels of flour 
 daily. That would guarantee to us 540,000 barrels 
 per week, or allowing for 313 working days (we 
 won't work our men on Sundays), we can turn out 
 16,902,000 barrels yearly." 
 
 But the organizers of the proposed Trust did not 
 get control of all the mills which they pointed to in 
 the agreement which they induced investors to sign. 
 The Flour Trust failed to materialize and there are 
 many investors to whom these lines will not appear 
 in the least humorous. 
 
 All sorts of Trusts have been formed and are 
 forming, while others are dying. There is a Pie 
 
210 MARK HANNA'S " MORAL CRANKS." 
 
 Trust, a Coffin Trust, a Suspender Trust, a Chewing 
 Gum Trust, and a host of similar combinations, 
 some of which may be provocaitive of humorous 
 thoughts in the minds of the non-investor, but on 
 the other hand have become stern and solemn reali- 
 ties to hundreds who have parted with their money. 
 
 It is with the more serious features of unbusiness- 
 like Trusts and the operations of the Workers of 
 these Trusts, that I shall deal hereafter. Some of 
 these Trusts are conspicuous for the evil thus de- 
 scribed in the Outlook months ago: 
 
 "The evil of the Trust is over-capitalization, 
 which puts an extravagant value on property, repre- 
 sents that value in stock and bonds, attempts to 
 pay the interest on that stock and bonds to the 
 holders, and, as a necessary result, takes the un- 
 earned interest out of either the wages of the 
 laborer or the prices paid by the consumer, or both. 
 This is not robbery, because robbery takes property 
 from another man's pocket by violence; it is not 
 theft, because theft takes it from his pocket by 
 stealth ; but it takes the property of another without 
 giving any equivalent therefor, and does this in 
 common with both robbery and theft." 
 
V. 
 
 How New Jersey became a great breeding place for cor- 
 porations— Guttenburg and Gloucester's winter 
 racing tracks having been closed, lawmakers de- 
 vised a new plan for attracting capital to the com- 
 monwealth — Laws shielding stockholders from re- 
 sponsibilities. 
 
 New Jersey has become a great breeding place 
 for all sorts of Trusts. 
 
 Why? 
 
 Mr. Cook, author of "Stock and Stockholders 
 and Corporation Law," answers the question in 
 this way: 
 
 "New Jersey is the favorite state for incorpora- 
 tions. Her laws seem to be framed with a special 
 view to attracting incorporation fees and business 
 fees from her sister states, and especially from New 
 York, across the river. She has largely succeeded 
 in doing so, and now runs the state government 
 very largely on revenues derived from New York 
 enterprises. In New Jersey the incorporation fee is 
 one-fiftieth of i per cent, of the par value of the 
 capital stock; the annual tax is one-tenth of i per 
 cent, of the same; the incorporation may be 'for 
 any lawful business or purpose whatever'; only one 
 director need be a resident; there is no limitation 
 on the amount of capital stock; stockholders are 
 not liable for corporate debts; stock may be issued 
 for property and no annual reports of the business 
 are necessary." 
 
 Mr. Cook says that New York was formerly very 
 liberal in its treatment of corporations, "yet New 
 
212 MARK HANNA'S " MORAL CRANKS." 
 
 York Legislatures devote themselves to extorting 
 large license fees and taxes from corporations, and 
 to imposing unreasonable liabilities on the stock- 
 holders and officers"; that "the result has been that 
 New York enterprises have been driven to New 
 Jersey for incorporation, and New York has been 
 deprived of an enormous income, which a more fair 
 and reasonable policy would have secured." 
 
 The foregoing is from the standpoint of the 
 Trusts, but as they are to be the uppermost topic 
 of discussion in the coming presidential campaign, 
 it may be well for my readers to consider them from 
 another point of view, and before the battle and 
 smoke of a national political conflict can confuse 
 the mind and cloud the vision. 
 
 The defenders of the Trusts say that these cor- 
 porations have been "driven" from New York and 
 other states to New Jersey. The assailants of the 
 Trusts say that these corporations have sought 
 homes in New Jersey because that state has passed 
 laws relieving stockholders from liability for cor- 
 porate debts, providing avenues of escape from ob- 
 ligations and conferring upon them the authority 
 to create vast bonded indebtedness without re- 
 straint. The exegesis of New Jersey Trust laws 
 has been put in this homely way : 
 
 "'Six or seven years ago New Jersey Legisla- 
 tures invited Capital from other states to invest in 
 its all-winter race tracks at Guttenberg, Gloucester 
 and other resorts. That was a time when New 
 Jersey members of the Legislature, carrying season 
 passes to the race tracks, and legal tender souvenirs 
 
WORKERS OF THE TRUSTS. 213 
 
 of regard from race track proprietors, declared that 
 the racing laws of New York were illiberal and un- 
 just, and that they were driving Capital to New 
 Jersey. The New Jersey winter race tracks did at- 
 tract considerable money to that state, and the 
 state did derive a large revenue from these resorts 
 for the blacklegs of New York, but a time came 
 when public sentiment, sick of the unenviable 
 notoriety which the state had gained throughout 
 the country, forced the lawmakers to abandon their 
 support of the thieving race tracks. The Gutten- 
 berg and Gloucester race tracks with their attend- 
 ant evils of gambling in every form had to shut 
 down. The state was forced to look elsewhere for 
 new revenues. Then some of the wise and far-see- 
 ing lawmakers saw that an immense amount of 
 revenue might be derived by the state by making it 
 a breeding place and haven of refuge for the Trusts ; 
 that by relieving stockholders of such corporations 
 from liabilities for debts incurred, such liabilities as 
 are imposed in most of the states of the Union — 
 that by relieving directors and stockholders from 
 restrictions placed upon them in the public interest 
 by New York — by giving to them the authority to 
 conduct their business practically in a secret way, 
 and without requiring them to make annual repo'rts 
 showing the condition of their enterprises — in this 
 way New Jersey might acquire a great revenue. 
 The necessary laws were passed, and New Jersey 
 has secured the desired revenue, and incidentally a 
 reputation quite as malodorous as that which it 
 acquired when it sought revenues from the notor- 
 ious winter race tracks." 
 
214 MARK HANNA'S " MORAL CRANKS." 
 
 In the foregoing lines the two points of view 
 are furnished. Let us see what unbiased investiga- 
 tion discloses: 
 
 Any intelligent visitor to Jersey City will have 
 no difiSculty in finding the rival offices of two cor- 
 porations which make it a business of assisting in 
 the formation of Trusts, if required, but which de- 
 vote most of their time to the housing of corpora- 
 tions. That is to say, the special corporations make 
 it their business to furnish quarters for Trusts' 
 meeting rooms. New Jersey laws require that a 
 corporation must have an office in the state, kept 
 open during business hours; that "the corporation 
 must have a sign," also an agent authorized to make 
 transfers, etc. 
 
 If a visitor in search of information concerning 
 Trusts should visit the building corner of Grand 
 and Greene streets, Jersey City, he will find the of- 
 fice of "The Corporation Trust of New Jersey." 
 On the windows of its offices he will see displayed 
 a long list of Trusts, each of which has an office and 
 meeting rooms in the building. One office may 
 serve for a score of Trusts. The names thus dis- 
 played represent corporations standing for many 
 millions of dollars; they are the names of corpora- 
 tions whose real working offices are for the greater 
 part in New York State — offices in showy buildings, 
 handsomely equipped and crowded with clerks. 
 
 The visitor to this building who is curious to 
 learn more concerning the business methods of 
 these Trusts, and to what extent they are willing or 
 obliged to take the public into their confidence, can 
 
WORKERS OF THE TRUSTS. 215 
 
 secure this information by discreetly questioning 
 any of the courteous and well-informed attaches of 
 the Corporation Trust Company. If he should put 
 his questions as one who is contemplating the 
 formation of a Trust, he will receive answers cal- 
 culated to surprise him if he should happen to be a 
 business man retaining old-fashioned ideas of what 
 were once considered honorable business methods. 
 I should not venture to submit any of the confiden- 
 tial statements which are made to inquirers, for the 
 accuracy of the report might be questioned. But, 
 without fear of contradiction, can present extracts 
 from the literature which is handed out at the office 
 of the Corporation Trust Company. 
 
 In one of the pamphlets issued by this corpora- 
 tion, which is intended to stimulate the formation of 
 Trusts in New Jersey, the following candid and se- 
 ductive announcement is made: 
 
 "The question what publicity does organization 
 as a private corporation involve is sometimes asked. 
 
 "Practically none under the laws of the State of 
 New Jersey. 
 
 "i. Certain documents must be filed with the 
 Secretary of State, and are open there for public 
 inspection, viz., the certificate of incorporation, the 
 certificate of payment of capital stock, showing 
 whether paid in cash or issued for property pur- 
 chased, and annually a list of the officers and direc- 
 tors and the location of the principal office in New 
 Jersey, and the name and address of the agent in 
 charge." 
 
 "2. The corporation must keep a record of the 
 stockholders at its principal office in New Jersey, 
 which is open for private inspection of the stock- 
 
2i6 MARK HANNA'S " MORAL, CRANKS." 
 
 holders, but this is not in practice found objection- 
 able. If anyone interested desires that his name 
 should not appear among the stockholders, he can 
 place his stock in the name of a third party, whose 
 name will be entered in the register as the stock- 
 holder. 
 
 "3, But there is under New Jersey laws no neces- 
 sity to file or publish any accounts or balance sheets, 
 or any statement of loans or liabilities, and in 
 practice corporations find that the laws of New 
 Jersey require no inconvenient disclosure of their 
 private afifairs, as do the laws of many of the other 
 states." 
 
 Publicity is avoided ! No unpleasant disclosures 
 need be feared ! No exhaustive or enlightening 
 reports are required by the state! Proceeding 
 upon the theory that most of the Trusts organized 
 under these elastic laws seek financial support or 
 victims outside of the State of New Jersey, the law- 
 makers of that commonwealth have had no hesita- 
 tion in according to them the utmost freedom, if 
 not license. It is undoubtedly true that these loose 
 laws have attracted honest and enterprising capital 
 to New Jersey; it is more impressively true that 
 these laws have stimulated the formation of all sorts 
 of wild-cat and unbusinesslike enterprises. 
 
 In this pamphlet from which I have quoted 
 marked stress is placed upon the fact that under 
 the Trust laws of New Jersey 
 
 "A corporation cannot make its stockholders 
 
WORKERS OF THE TRUSTS. 217 
 
 bankrupt because of the corporation's liabilities. 
 If the corporation gets into difficulties it will be 
 wound up voluntarily or otherwise, and its cred- 
 itors can take the corporation's property, but no- 
 thing more. The stockholders are free to go into 
 business again and are not put to expense of de- 
 fending against insolvency proceedings, or humil- 
 iated by examinations as insolvents, or by the ap- 
 pointment of receivers." 
 
 On another page this exponent of the beauties of 
 New Jersey law says: 
 
 "There are no afterclaps, but when once in- 
 corporated the stockholder's position is clear and 
 defined for all time. His liability is simply and 
 only to pay into the corporation what he agrees to 
 pay." 
 
 He and fellow directors may swindle wholesale, 
 yet they are not liable for more than they agree to 
 pay for their stock, would seem to be one interpre- 
 tation of this law. 
 
 The special pleader for New Jersey laws says 
 further: 
 
 "What is true of the laws of the State of New 
 York is true of very many other states, and by the 
 statutes of most states the directors are under 
 varied circumstances , and many of them circum- 
 stances beyond their control, made personally liable 
 for all the debts of the corporation. A failure to 
 file an annual report, a failure to publish a notice 
 as required by statute, the purchase of real estate 
 beyond a certain amount, the creaition of a bonded 
 indebtedness beyond a certain amount, are all cir- 
 
2i8 MARK HANNA'S " MORAL CRANKS." 
 
 cumstances which under the laws of certain states 
 render the stockholders and officers liable for all 
 the debts of the company. The true object of in- 
 corporation is limited liability and in no sense is 
 this as clearly and fully obtained as under the laws 
 of the State of New Jersey." 
 
 "The laws of the State of New Jersey practically 
 allow a corporation in the management of its busi- 
 ness the same freedom as an individual. There is 
 no limitation on its powers to buy, sell and convey 
 real estate within and without the state. There h 
 no limitation on its powers to create a bonded in- 
 debtedness, but in each case the matter is left to 
 the prudence and discretion of the stockholders, or 
 to the Board of Directors, according to the pro- 
 visions of the charter." 
 
 If an assailant of the Trusts should make such 
 statements as are herewith quoted, his word would 
 probably be questioned in some quarters. But 
 these are the printed words of the Corporation 
 Trust and cannot be disputed. 
 
 One of the most significant statements made by 
 this exponent of New Jersey Trust law reads as 
 follows : 
 
 "The policy of the State of New Jersey says to in- 
 corporators, the only liability upon you shall be 
 that you shall pay for the stock for which you have 
 subscribed and when this is done, either in cash 
 or in property, your liability as to all parties shall 
 be at an end. 
 
 "As to the issue of stock for property purchased, 
 the law wisely provides that the judgment of the 
 
WORKERS OF THE TRUSTS. 219 
 
 Board of Directors when once exercised as to the 
 value of the property purchased, shall be final and 
 conclusive upon all parties, and as to holders of 
 stock in New Jersey corporations issued for prop- 
 erty purchased, the question of whether the stock 
 is fully paid or not is not one which can be litigated 
 as against them, provided the Board of Directors 
 have passed upon the matter and their judgment 
 has been honest." 
 
 To understand the full significance of that last- 
 quoted paragraph, it is necessary to make an ap- 
 plication. If it is a sound statement of law, then 
 Joseph R. Megrue, a retired capitalist, who is mov- 
 ing in a New York court to set aside a contract of 
 purchase, would have no standing in New Jersey. 
 Mr. Megrue alleges that it was represented to him 
 thait the property of the United States Flour Milling 
 Company, exclusive of its good will, was worth 
 $10,500,000; that bonds which he purchased were 
 secured by a first mortgage of $7,500,000. 
 
 Mr. Megrue's counsel is reported by the New 
 York Times as saying that his client at great per- 
 sonal expense employed appraisers to make an 
 estimate of the value of the nineteen mills which 
 are owned by the company in different parts of the 
 country, and as a result will go into court with af- 
 fidavits declaring the total value of all the plants to 
 be but a little more than half of the face value of 
 the mortgage. 
 
 "The question of the property not being worth 
 the face of the mortgage has not been raised before. 
 There cannot be very much room for difference of 
 opinion in the value of machinery, land and struc- 
 tures on nineteen common mills. It is impossible 
 
220 MARK HANNA'S " MORAL CRANKS." 
 
 for experts to vary more than $100,000 in their ap- 
 praisement. This is the first case in the history of 
 these Trusts where they have gone right to the root 
 of the matter and showed how the public are made 
 the victims." 
 
 I shall not attempt to split hairs over a question 
 of differences between Trusts and Corporations, 
 preferring rather to show some of their points of 
 resemblance to each other. Here permit me to 
 quote Edward Quinton Keasby, a conservative and 
 able member of the New Jersey bar, who shows how 
 a corporation may be a Trust and that a Trust 
 must always start in as a corporation in his state: 
 
 "It is true that many large Corporations have 
 been formed during the last few years under the 
 laws of New Jersey, and that they are called Trusts. 
 The names of many of them are well known. In 
 name and in form they are merely ordinary cor- 
 porations organized under an old statute in New 
 Jersey, that makes provision for the formation of 
 manufacturing companies, but their capital stock 
 is very large, and their names will be recognized as 
 those of some of the most notorious of Trusts. 
 There is the Standard Oil Company with a capital 
 of $100,000,000; the American Sugar Refining 
 Company, with a capital of $75,000,000; the Ameri- 
 can Woolen Company, with a capital of $65,000,000.; 
 the Amalgamated Coffee Company, with a capital 
 of $75,000,000; the Distilling Company of America, 
 with a capital of $125,000,000; the Federal Steel 
 Company, with a capital of $200,000,000, and many 
 others. The whole number of corporations or- 
 
WORKERS OF THE TRUSTS. 221 
 
 ganized between January i and August i, 1899, was 
 1,636, and the aggregate of their capital stock is 
 more than two thousand million dollars." 
 
 Mr. Keasby said further: "Combinations of 
 capital for the purpose of controlling the market 
 are no longer made in the form of Trusts. They 
 are no longer made by means of agreements to re- 
 frain from compeitition and by placing the stock of 
 rival companies in the hands of trustees. When 
 the courts declared that such agreements and con- 
 spiracies were invalid, and the Legislatures of many 
 states declared combinations in the form of Trusts 
 or otherwise to prevent competition to be unlawful, 
 the agreements were annulled, and the combina- 
 tions were dissolved, and men who desired to unite 
 their interests under one control formed corpora- 
 tions and transferred to them the stock or property 
 and business of existing companies. It is these 
 Corporations that we have to deal with, and not 
 with agreements in restraint of trade or conspiracies 
 to prevent competition and maintain prices. 
 
 "The results intended and accomplished by the 
 Corporations may be the same as those intended by 
 the Trusts, but the difference is vital in its legal 
 effect. 
 
 "The Corporations are in form like other corpora- 
 tions, and they exercise the rights of property which 
 are common to all corporations, and indeed to all 
 individuals. They differ from other corporations 
 only in thaJt they are larger and more powerful, in 
 that they have more capital, and have acquired the 
 control of many separate enterprises under a single 
 
222 MARK HANNA'S " MORAL CRANKS." 
 
 management, and as a consequence they do in effect 
 prevent competition among the several enterprises 
 under their control, and tend to monopolize, so far 
 as is possible, the trade of those enterprises. It is 
 in these points of difference that they resemble the 
 combinations made in the form of Trusts, and it is 
 in these points of difference that they are regarded 
 as dangerous. 
 
 "There has been no legislation in New Jersey 
 against Trusts as such. No statute has been passed 
 declaring combination and agreements by way of 
 Trusts or otherwise in restraint of trade to be un- 
 lawful. When combinations of industrial enter- 
 prises became so large as to be formidable, it soon 
 became apparent that it was not easy to find words 
 which would apply to the really formidable com- 
 binations of Capital without affecting the freedom 
 of contract between individuals and making illegal 
 a great number of perfectly harmless arrangements 
 with respect to the conduct of their trade." 
 
 That a Corporation can legally attempt to destroy 
 competition in New Jersey is demonstrated in an 
 opinion delivered by Chief Justice Magie of the 
 Court of Errors and Appeals, July 7, 1899. This 
 opinion was handed down in the case of the Trenton 
 Potteries Trust, which was held by the court to a 
 contract calculated to destroy competition in its 
 line of manufacture. The Chief Justice said in part: 
 
 "Corporations may lawfully do any acts within 
 the corporate powers conferred on them by legis- 
 lative grant. Under our liberal corporation laws, 
 corporate authority may be acquired by aggrega- 
 
WORKERS OF THE TRUSTS. 223 
 
 tions of individuals, organized as prescribed to en- 
 gage in and carry on almost every conceivable 
 manufacture or trade. Such corporations are em- 
 powered to purchase, hold and use property ap- 
 propriate to their business. They may also pur- 
 chase and hold the stock of other corporations. 
 
 "Under such powers it is obvious that a corpora- 
 tion may purchase the plant and business of com- 
 peting individuals and concerns. The Legislature 
 might have withheld such powers or imposed 
 limitations upon their use. In the absence of pro- 
 hibition or limitation on their powers in this respect 
 it is impossible for the courts to pronounce acts 
 done under legislative grant to be inimical to 
 public policy. 
 
 "It follows that a corporation empowered to 
 carry on a particular business may lawfully pur- 
 chase the pljuit and the business of competitors, al- 
 though such purchases may diminish, or, for a 
 time, at least, destroy competition." 
 
VI. 
 
 The laws which guarantee secrecy and arbitrary powers — 
 What one trust has done for Brooklyn — Competi- 
 tion among gas companies suppressed — Reaching 
 out for the electric light company — Why legislation 
 is demanded by opponents of trusts. 
 
 Among the aggressive assailants of the Trusts 
 it is charged that most of these gigantic combina- 
 tions of capital are of Republican creation, and that 
 the managers of the Republican party are com- 
 mitted to the protection of these great corporations. 
 Yet investigation will disclose the fact that for every 
 Republican capitalist interested in Trusts there is 
 always a Democratic associate, usually one who is 
 not in accord with his party In its industrial and 
 financial declarations. Democrats as well as Re- 
 publicans have declared that " the Trusts have come 
 to stay." That declaration is assented to by the 
 more thoughtful cf labor leaders who privately ad- 
 mit that "Workingmen's" Unions are Trusts in 
 which, however, every member of these combina- 
 tions has a voice. One question at issue thus 
 promises to be: 
 
 Upon what terms shall the Trusts of Capital and 
 the Trusts of Labor be permitted to continue their 
 organizations? 
 
 Labor calls for the application of legislative re- 
 strictions and examinations of the Trusts of Cap- 
 ital, and Capital calls for the same action regarding 
 Labor Trusts. Undoubtedly each class of com- 
 binations demands intelligent and honest legisla- 
 224 
 
WORKERS OF THE TRUSTS. 223 
 
 tion. And without doubt each of the great political 
 parties of this country will formulate its remedies 
 during the coming presidential campaign. 
 
 It may prove profitable to study some of the 
 phases of Trust organization, some of the methods 
 of the Workers of the Trusts which will be selected 
 as the objective points of attack from political 
 quarters. 
 
 It has been shown by the quoted utterances of a 
 mouthpiece of "The Corporation Trust of New Jer- 
 sey" how collossal combinations of capital can be 
 formed in that state without being obliged to sub- 
 mit to the authorities of the commonwealth any 
 sort of accounts or balance sheets, or any statement 
 of loans or liabilities, and without any limitations 
 upon its powers to create bonded indebtedness. It 
 was shown further that under the elastic laws of 
 New Jersey the judgment of a Board of Directors 
 "where once exercised as to the value of property 
 purchased shall be final and conclusive upon all 
 parties, and as to holders of stock in New Jersey 
 corporations issued for property purchased, the 
 question of whether the stock is fully paid or not is 
 not one which can be litigated against them." 
 
 That is to say, if a Board of Directors shall agree 
 to purchase properties at twice their real value with 
 stock or cash, they cannot be sued by a stockholder; 
 their judgment must be final and conclusive. It is 
 that sort of legislation which has led to the gener- 
 ally conceded evil of over-capitalization, and over- 
 capitalization will be one of the points of attack 
 
226 MARK HANNA'S " MORAI^ CRANKS." 
 
 when legislation is proposed by Democratic and 
 Republican statesmen and stump speakers. 
 
 It must be plain to those who have read what has 
 been submitted concerning New Jersey Trust laws 
 that they have attracted capital to that state and 
 stimulated the formation of Trusts mainly because 
 these laws guard corporations from publicity, be- 
 cause, as the Corporation Trust Company's mouth- 
 piece says: 
 
 "In practice corporations find that the laws of 
 New Jersey require no inconvenient disclosures of 
 their private afifairs." 
 
 Here, for the purpose of illustrating the liber- 
 ality of these New Jersey Trust laws in dealing with 
 the organization of corporations, I shall submit a 
 summarized extract from the articles of incorpora- 
 tion of a $200,000,000 Trust, the Federal Steel Com- 
 pany: 
 
 "The board of directors is authorized to increase 
 its number without consent of the stockholders, and 
 to make, alter, amend or rescind the by-laws, to fix; 
 the amount the company's working capital, and to 
 execute mortgages and liens on the property of the 
 corporation; but there shall be no sale of all the 
 property except by a vote of two-thirds of the di- 
 rectors. The directors may by majority vote ap- 
 point three or more of their number to be an ex- 
 ecutive committee, with the full powers of the 
 board, to manage the company's business. They 
 shall also determine whether and at what times and 
 places and under what conditions the books of the 
 corporation shall be open to the inspection of the 
 
WORKERS OF THE TRUSTS. 227 
 
 stockholders, and no stockholder shall have power 
 to inspect the books or accounts except as author- 
 ized by statute, by determination of the directors 
 or in accordance with the terms of a resolution 
 adopted at a meeting of the stockholders." 
 
 Under these articles of incorporation a Board of 
 Directors can, without the consent of any stock- 
 holder, or even the consent of two-thirds, or all the 
 stockholders, wipe out the by-laws of the corpora- 
 tion, sell all or any of the property of the company, 
 "transfer or otherwise dispose" of any of the prop- 
 erty. Another provision reads as follows: 
 
 "The Board of Directors from time to time shall 
 determine whether and to what extent, and at what 
 times and places, and under what conditions and 
 regulations, the accounts and books of the corpora- 
 tion, or any of them, shall be open to the inspection 
 of the stockholders; and no stockholder shall have 
 any right of inspecting any account or book or 
 document of the corporation, except as conferred 
 by statute or authorized by the Board of Directors, 
 or by a resolution of the stockholders." 
 
 That provision seems to secure secrecy and to 
 guard against the inquiries of a stockholder who 
 may want to know some things he has a right to 
 know concerning the disposition of his money. He 
 cannot get this information from any report made 
 to the state, for the company does not disclose its 
 affairs to the state. If the directors do not want 
 him to "inspect any book or account or document 
 of the corporation," they can shut him off, and he 
 
228 MARK HANNA'S " MORAL CRANKS." 
 
 must apply to the court, a place of uncertainties in 
 New Jersey. 
 
 It is true that even in our own State of New York 
 the Trusts often manage to succeed in their efforts 
 to withhold information sought by stockholders. 
 For instance, a stockholder in a corporation that 
 has been swallowed with others, by a Trust, may 
 desire to know what has become of stock which he 
 surrendered that a consolidation of interests might 
 be effected. The Trust refuses to give the informa- 
 tion asked for and the stockholder must go to the 
 courts for relief. Here is a case in point: 
 
 On January 17, 1896, Elias C. Benedict filed a 
 bill of complaint in the Second Circuit Court of the 
 United States for the Southern District of New 
 York against John G. Moore, Grant B. Schley, Wil- 
 liam H. Duff, Elberton R. Chapman, Henry H. 
 Tunnerman, Henry H. Rogers, William Rocke- 
 feller, William H. Cooper, Guaranty Trust Com- 
 pany and William J. Logan, in which, among other 
 important statements, the plaintiff alleged that 
 Logan, Rogers, Rockefeller and Moore and Schley 
 and Cooper engaged in a scheme to become owners 
 and controllers of the seven gas companies of 
 Brooklyn, and they intended to become such by the 
 consolidation of the same. They applied to the 
 plaintiff for some shares he owned in the Williams- 
 burgh Company, one of the old companies after- 
 wards consolidated, so as to obtain control of two- 
 thirds of the stock of said company; he further said 
 that the promoters obtained at least two-thirds of 
 the stock of other gas companies and elected direc- 
 tors, the instruments of the promoters. 
 
WORKERS OF THE TRUSTS. 229 
 
 Mr. Benedict asserted that the promoters caused 
 the new company to enter into separate agreements 
 with each of the old companies for the sale of fran- 
 chise and property to the new company for stock 
 and bonds of the new company deposited with the 
 Guaranty Trust Company as trustee. 
 
 Mr. Benedict's suit was a suit for an accounting 
 of the stock placed in the syndicate's hands ; it was 
 tried early in 1900, and ex-Speaker Reed appeared 
 for the Gas Trust interest. There you have the case 
 of an investor who for nearly four years had been 
 trying to learn what became of his stock and to se- 
 cure full value for it. Incidentally this case is of 
 present interest, for the daily papers have an- 
 nounced that the Brooklyn Gas Trust may become 
 the owner of the Kings County Electric Light Com- 
 pany. Should this surmise prove correct, then 
 Brooklyn, so far as electric lighting and gas are 
 concerned, will be absolutely governed by a Trust, 
 
 In the year 1895 the Brooklyn Gas Trust was 
 formed under the name of the Brooklyn Union 
 Gas Company capital stock $15,000,000; issuance 
 of bonds, $15,000,000. It was composed of the 
 Brooklyn Gas Light Company, Metropolitan Gas 
 Light Company, Fulton Gas Light Company, Citi- 
 zens' Gas Light Company, Williamsburgh Gas 
 Light Company, Nassau Gas Light Company, and 
 People's Gas Light Company, were held, and a 
 proposition by the Brooklyn Union Gas Company 
 was made, ofifering in exchange for each share of 
 stock in the old companies the following amount of 
 stocks and bonds of the Brooklyn Union Gas Com- 
 pany, so it was reported at the time; 
 
230 MARK HANNA'S " MORAL CRANKS." 
 
 Bonds. Stocks. 
 
 Brooklyn Gas Light Company 22.75 24.37 J^ 
 
 Metropolitan Gas Light Company 132.18 172.41 
 
 Fulton Municipal Gas Company 112.38 135.71 
 
 Citizens' Gas Light Company 8.57 85.71 
 
 Williamsburgh Gas Light Company. . . . 97.00 157.50 
 
 Nassau Gas Light Company 46.80 63.00 
 
 People's Gas Light Company 3.40 9.00 
 
 Before these gas companies were consolidated 
 with a Trust there was competition among them 
 for public patronage. If one company did not fur- 
 nish satisfactory gas you could go to another that 
 was anxious to secure your custom. 
 
 One of these companies was accorded a franchise 
 with the understanding that it should be null and 
 void if it should sell its privileges to another com- 
 pany. 
 
 Franchises were granted to gas companies for the 
 purpose of creating competition. There is no com- 
 petition now. If the gas is not satisfactory you 
 can use the electric Hght; if that is too expensive 
 you can use Mr. Rockefeller's kerosene. 
 
 Many complaints have been made concerning the 
 quality of gas furnished to consumers. It is with- 
 in the knowledge of the writer that these complaints 
 were well-grounded. The gas at times has been as 
 feeble as the light from tallow dips. Even the 
 street lamps have to be furnished with Welsbach 
 burners before they can be relied upon to furnish 
 adequate light. 
 
 Residents of Brooklyn are worse off than the 
 dwellers on Manhattan Island, for there the com- 
 panies do occasionally compete and cut rates. In 
 one Borough of Greater New York gas has been 
 
WORKERS OF THE TRUSTS. 231 
 
 sold to consumers for 65 cents a thousand; in the 
 Borough of Brooklyn the rate is $1.05. Two rates 
 in one city. I refer to what we see under our own 
 eyes in Brooklyn simply for the purpose of direct- 
 ing attention to one of the results produced by the 
 Workers of the Trusts. 
 
VII. 
 
 Andrew Carnegie's lawyer says: "Instead of providing 
 for punishment of trusts provide for punishment of 
 the man that promotes them and you will kill the 
 eggs in the nest before they are hatched" — Charles 
 R. Flint defends the trusts. 
 
 " One million dollars is the fee that James B. Dill, the big corpora- 
 tion lawyer is to receive for bringing the interests of the two big steel 
 kings, Andrew Carnegie and H. C. Frick, to a harmonious adjustment. 
 Mr. Dill, who is yet a young man, was asked by Mr. Carnegie to find 
 some way to settle the differences between the magnates. 
 
 "The mammoth new combine is the result of Mr. Dill's work. It 
 is eminently satisfactory to both Carnegie and Frick, and Mr. Dill's 
 bill of $1,000,000 is to be allowed without question. 
 
 "The ta.sk of restoring harmony between the two strong-willed 
 men was no child's play for Mr. Dill, and the masterful way in which 
 tranquility was restored through the new combine entitles the peace- 
 maker to be ranked among the first corporation lawyers of the 
 country." — From Evening World. 
 
 It is fair to assume that Mr. Dill's estimate of the 
 Workers of the Trusts will be very generally ac- 
 cepted as the judgment of an expert in the work of 
 placing corporations upon a sound legal basis. And 
 here it will probably prove of interest to recall some 
 of the declarations made by Mr. Dill before the 
 Chicago Conference on Trusts last September. 
 Following Bourke Cochran, the now distinguished 
 New Jersey corporation lawyer said: 
 
 "I cannot agree with Mr. Cochran that it makes 
 not much difiference how much you capitalize a cor- 
 poration, provided you make it public. A corpora- 
 tion that issues a certificate of stock which says on 
 the face of it that it represents $ioo, when these 
 men know it does not represent $ioo, misrepresents 
 the facts and will not and should not succeed. It 
 makes a great difiference to the man who gets stock 
 on that certificate, believing he is getting $ioo 
 232 
 
WORKERS OP THE TRUSTS. 233 
 
 worth. One of the greatest evils of the day is over- 
 capitalization." 
 
 Mr. Dill said further in the course of the speech, 
 from which I have quoted : 
 
 "In speaking of honest combinations for business, 
 I want to point out two dangers which are likely to 
 arise: The first is over-capitalization, and in the 
 second place concealment. If, instead of provid- 
 ing for the punishment of the Trusts, after being 
 organized, you will provide for the punishment of 
 the man that promotes them, you will kill the eggs 
 in the nest before they are hatched." 
 
 "I would simply provide for the English statute 
 in this country — that any article advertising the 
 stock of a corporation, wherein a sum of money 
 is mentioned as the subscribed capital, shall truly 
 state the amount of money actually paid in and sub- 
 scribed as capital of the corporation. I would pass 
 the English law, which is that every holder of stock, 
 and every person through whose hands it may have 
 passed, shall be deemed to hold that stock, subject 
 to the payment in full in cash, unless the stock is 
 issued, together with a contract showing all the 
 conditions of the issue of that stock, which shall be 
 filed in every state where the company does busi- 
 ness." 
 
 In this frank statement made by a corporation 
 lawyer who himself has long been engaged in the 
 work of aiding in the formation of great corpora- 
 tions, you have the reputable business man's esti- 
 
234 MARK HANNA'S " MORAL CRANKS." 
 
 mate of the unscrupulous Worker of the Trust, and 
 a trained observer's protest against over-capitaliza- 
 tion and concealment. 
 
 Nearly one hundred speakers addressed the Con- 
 ference on Trusts, at Chicago, and a large percent- 
 age of the addresses were made by business men 
 and students of economics who believe that tlie 
 Trusts, as most great combinations of Capital are 
 called, cannot be legislated out of existence. They 
 agreed, however, that over-capitalization, the pro- 
 duct of the Workers of the Trust, and likewise con- 
 cealment of methods, required legislation. Here 
 are some of the views expressed upon this subject: 
 
 William Fortune, President Indiana State Board 
 of Commerce, was quoted as saying: 
 
 "It is clear that there is both good and evil in the 
 present operations of the Trust scheme. In the 
 good features there is enduring vitality; it is the 
 evil that the people will seek to eliminate. Dis- 
 honesty in capitalization and practices which violate 
 good morals, must, like other criminal acts, be 
 brought under governmental restraint. It will be 
 folly to undertake reckless warfare for the annihila- 
 tion of the Trusts, but the claws of the monster, if 
 that it be, can be cut, and under the restraining in- 
 fluences of good regulations this Behemoth, biggest 
 born of commerce, may become a docile, harmless 
 and really amicable pet." 
 
 John Graham Brooks, Lecturer University of 
 Chicago, said in the course of his remarks : 
 
 "Of the restraint upon abuses, I believe an abso- 
 lute above-board method of doing business (as com- 
 
WORKERS OF THE TRUSTS. 235 
 
 plete as that to which the national banks now sub- 
 mit) to be by far the most important. No one in 
 the community knows better the necessity of such 
 publicity than the very men who make the Trusts. 
 Nor have I ever heard this necessity stated so 
 strongly and •eo convincingly as by some of these 
 gentlemen. Germany has plenty of these large 
 corporations — that we are now discussing under 
 the antiquated name of Trusts — but the rights of 
 the stockholders to every whit of information neces- 
 sary to their security are assured in that country. 
 A competent writer upon Trusts, like Dr. von Halle, 
 is astounded in his investigations in the United 
 States that a people famous for practical business 
 shrewdness should suffer the gross abuses which 
 this secrecy involves. England has also her power- 
 ful ' alliances.' A good authority has estimated 
 that Capital has been shifted from the smaller to 
 the larger corporations to the extent of two billion 
 dollars within the last dozen years. But the law 
 gives to the stockholders very definite rights of 
 publicity, and the Lord Chief Justice, since the 
 Hooley scandals, says these rights must be made 
 more exacting still. The forced publicity for 
 private as well as for public corporations in Massa- 
 chusetts makes any dangerous degree of stock 
 watering extremely difficult. Give us, then, an ab- 
 solute publicity of methods, and special dangers like 
 ' over-capitalization ' are practically met." 
 
 The Trusts have their champions and these let- 
 ters, dealing with the progress of the War on 
 Wealth, would be one-sided and worthy of no at- 
 
236 MARK HANNA'S " MORAL CRANKS." 
 
 tention were they to ignore the replies which de- 
 fenders of the great industrial corporations make 
 to their assailants. And so I submit an extract 
 from an address on " Industrials," delivered by 
 Charles R. Flint of New York at the Union Club, 
 Boston : 
 
 "In this country, in addition to getting the ad- 
 vantages of putting private businesses into cor- 
 f)orate form, we are obtaining the benefits of con- 
 solidated management. We thus secure the ad- 
 vantages of larger aggregations of capital and 
 ability. If I am asked what these are, the answer 
 is only difficult because the list is so long. The 
 following are the principal ones: Raw material 
 bought in large quantities is secured at a lower 
 price; the best quality of goods is produced; the 
 specialization of manufacture on a large scale in 
 separate plants permits the fullest utilization of 
 special machinery and processes, thus decreasing 
 cost; the standard of quality is raised and fixed, the 
 number of styles is reduced and the best standards 
 adopted; those plants which are best equipped and 
 most advantageously situated are run continuously 
 and in preference to those less favored; in case of 
 local strikes or fires the work goes on elsewhere in 
 such a way as to prevent serious loss; there is no 
 multiplication of the means of distribution, a better 
 force of salesmen takes the place of a large number, 
 and the same is true of branch stores; terms and 
 conditions of sale become more uniform, and 
 credits, through comparisons, are more safely 
 granted; the aggregate of stocks carried is greatly 
 reduced, thus saving interest, insurance, storage 
 and shop wear; greater skill in management ac- 
 
WORKERS OF THE TRUSTS. 237 
 
 crues to the benefit of the whole instead of a part, 
 and large advantages are realized from comparative 
 accounting and comparative administration. 
 
 "Such are some of the advantages of consolida- 
 tion. The grand result is a much lower market 
 price, which accrues to the benefit of the con- 
 sumers, both at home and abroad, and brings with- 
 in reach at the cheaper price classes and qualities of 
 goods which would otherwise be unobtainable by 
 them. This is the great ultimate advantage, and 
 if this were not sooner or later true, if the world at 
 large did not ultimately reap the benefit, the other 
 advantages would be as nothing. 
 
 "Nothing in the past has more demoralized in- 
 dustries than over-production in times of prosperity 
 and the scramble for a market in times of adversity, 
 resulting in the cutting of prices to such an extent 
 as to necessitate the reduction of wages and the 
 manufacture of inferior — I might say counterfeit — 
 goods. Such competition, instead of being the life 
 of trade, is the death of trade, resulting in failure 
 among jobbers, manufacturers and suppliers of raw 
 material, and even affecting that favored class of 
 which there are so many representatives here — the 
 bankers. In the long run the consumer is unfavor- 
 ably affected by th.ese conditions — the goods he 
 buys, though apparently cheap, are inferior in 
 quality, and he suffers, as all do, from disorganiza- 
 tion." 
 
 Mr. Flint is a dominant figure in a powerful 
 Trust; he is authorized to speak for the Trusts. 
 Referring to the general charge that the Trusts are 
 
238 MARK HANNA'S " MORAL CRANKS." 
 
 inimical to the interests of the workingman, Mr. 
 Flint said: 
 
 "Not only are we dependent for our position in 
 the world's markets upon the existence of large in- 
 dustrial corporations, but the wages of the Ameri- 
 can workmen can be sustained only by our keeping 
 in the lead in the development of labor-saving ma- 
 chinery through centralized manufacture. He 
 must be placed and held in the position of an over- 
 seer. To-day the productive capacity of the labor- 
 saving machinery of the United States more than 
 equals that of 400,000,000 of people not using labor- 
 saving devices. It requires the intelligence of the 
 American workman to direct these labor-saving 
 implements and machines. No other condition 
 would justify the payment of overseer's wages, 
 which the American wage-earner is receiving to- 
 day." 
 
 "Man-power, under these conditions, has given 
 place to machine-power, and the man, instead of 
 being a machine, a mere hand-worker, daily be- 
 comes more and more a brain-worker and more and 
 more a man. This, more than any other single fact, 
 accounts for the increased prosperity of our people, 
 their larger leisure, larger liberty and larger en- 
 joyment of life. Compare their condition with that 
 which prevailed before the aggregation of wealth 
 and intelligence in the development of industries, 
 when wealth was obtained by conquest, not by 
 production; when the masses had meat but once a 
 week; when their houses were without chimneys 
 and without windows ; when their clothing and sur- 
 roundings were filthy; when the death rate was 
 double what it is to-day — and you go back to a time 
 
WORKERS OF THE TRUSTS. 239 
 
 when the nobiHty knew less of the world than the 
 laboring man of to-day; when the present neces- 
 sities of the masses were luxuries of the rich, and 
 you realize that the emancipation proclamations 
 were written by Watt and Arkwright, Stephenson 
 and Fulton, Franklin and Morse, Bessemer and the 
 great organizers who have offered their discoveries 
 and distributed the benefits of their inventions to 
 the whole world." 
 
 In reply to part of the foregoing the Christian 
 Socialist says: 
 
 "The ' brain worker ' feeding a machine like an 
 automaton, merits no comment. But the working- 
 man's condition is better than it was fifty or one 
 hundred years ago, and this improved state is due 
 more to labor unions and his ballot than to Wealth. 
 He has had to fight hard for every advantage he has 
 gained; has often had to endure bonds and blows, 
 to suffer in strikes and lockouts before securing a 
 reduction in the hours of labor and an increase iti 
 wage. The corporations have invariably made 
 these concessions grudgingly. And Capital also 
 has grown with the years. Fifty years ago the man 
 who possessed $500,000 was the leader of society; 
 he has been displaced by the multi-millionaire." 
 
VIII. 
 
 The Brooklyn Warehouse and Wharfage Trust — Prop- 
 erty of once prosperous warehousemen, appraised at 
 $27,000,000 in 189s by the then president of the 
 Chamber of Commerce, Alexander E. Orr— Five 
 years later valued at $15,000,000 — Net earnings of 
 over $1,500,000 cut down to $600,000 — At last a 
 receivership. 
 
 There is probably no large community in this 
 country that has not had an unpleasant and pos- 
 sibly bitter experience at the hands of some Worker 
 of the Trusts. Brooklyn has certainly had a 
 variety of experiences in connection with Railroad 
 and Gas Trusts, Cordage, Flour and Malting 
 Trusts, yet it seems to the writer that more inter- 
 esting than any of these is the experience acquired 
 by those who invested in the Brooklyn Warehouse 
 and Wharfage Trust. For in this enterprise were 
 engaged many owners of warehouses who pros- 
 pered individually until induced to join forces in 
 one large corporation. And all these men stood 
 high in business and social circles. But in an evil 
 hour for them they caught the Trust fever and this 
 is what happened: 
 
 To these conservative, upright and prosperous 
 business men came a Worker of the Trusts who 
 told them how they could add largely to their net 
 earnings by forming a Trust. They were told they 
 could save $150,000 yearly by the reduction of 
 office expenses, that they could increase their yearly 
 earnings at least $75,000 by making use of a number 
 of available improvements. These statements were 
 240 
 
WORKERS OP THE TRUSTS. 241 
 
 made to warehouse men whose yearly aggregaite net 
 earnings, before forming the proposed Trust, 
 amounted to over $1,500,000. The warehouse 
 owners succumbed to the seductive figures and con- 
 vincing argument submitted to them, and the 
 Brooklyn Wharf and Warehouse Company was 
 formed. 
 
 January 29, 1895, the Brooklyn Wharf and Ware- 
 house Company mortgaged its real estate and lease- 
 hold property to the United States Mortgage Com- 
 pany, the preface to the indenture reading in this 
 way: 
 
 "Whereas, the Warehouse Company, for the purposes of 
 its business, has purchased and is about to purchase, cer- 
 tain real estate and leasehold property, which have been 
 or are about to be conveyed and transferred to it by proper 
 instruments in writing, etc. 
 
 "Whereas, to enable the Warehouse Company to make 
 payment in full of the purchase of said real estate and 
 property hereinabove referred to, the Warehouse Com- 
 pany has found it necessary and by resolution duly passed 
 by its Board of Directors, has duly determined to mort- 
 gage the whole of its real estate and leasehold property 
 acquired and to be acquired, as in this Indenture provided, 
 and has resolved to make and issue its bonds on the aggre- 
 gate amount of $17,500,000 in part payment of the_ pur- 
 chase price of said real estate and leasehold property." 
 
 To this instrument were attached the signatures 
 of Andrew Mills, President of the Brooklyn Wharf 
 and Warehouse Company, and George W. Young, 
 President of the United States Mortgage Company. 
 
 G. W. Young, Thomas A. Mclntyre, W. A. Nash, 
 Andrew Mills, George H. Southard and James 
 Timpson, "owning more than two-thirds of all the 
 stock of the corporation," assented to the mortgage 
 and attached their signatures to it. The incorpora- 
 
242 MARK HANNA'S " MORAL CRANKS." 
 
 tors of the company were George W. Young, Wil- 
 liam A. Nash, George H. Southard, Andrew Mills 
 and James Timpson, the latter of New Jersey. 
 
 On Monday, February 4, 1895, the daily papers 
 printed a two-column advertisement, which con- 
 tained the following announcement: 
 
 "United States Mortgage Company, Central 
 
 Trust Company and New York Guaranty 
 
 and Indemnity Company oiler for sale at 103. 
 
 and accrued interest $7,000,000 purchase 
 
 money first mortgage 5 per cent. 50 year 
 
 Gold Bonds of the Brooklyn Wharf and 
 
 Warehouse Company. 
 
 There are held to acquire other properties. . $1,825,000 
 
 There have been sold to former owners 5,500,000 
 
 There have been sold to other investors 3,175,000 
 
 There are ofifered for subscription 7,000,000 
 
 Total $17,500,000 
 
 The authorized and issued capital stock is 
 $12,500,000, consisting of 
 
 Preferred Series "A" $2,500,000 
 
 Preferred Series "B" 5,000,000 
 
 Common Stock 5,000,000 
 
 "The officers and directors of the company will be: 
 Thomas A. Mclntyre, president; David Dows, Jr., first 
 vice-president J. S. T. Stranahan, second vice president; 
 William A. Nash, treasurer; Samuel Taylor, Jr., secretary. 
 (This was followed by list of directors.) 
 
 "It owns in fee the following well known wharf prop- 
 erties in the City of Brooklyn: Empire Stores, Fulton 
 Stores, Martin Stores, Watson Stores, Harbeck Stores, 
 Watson Elevator, Roberts Stores, Mediterranean Stores, 
 Pierrepont Stores, Prentice Stores, Woodruff Stores, 
 Pierrepont Stores, Dow's Stores, Union Stores, Masters 
 Stores, Nye and Commercial Stores, McCormack Stores, 
 Clinton Stores, Stranahan's Stores, Laimbeer's Stores, 
 Excelsior Stores, Finlay Stores (South Pier), Finlay 
 Stores (North Pier), Pinta's Stores, Atlantic Dock Piers, 
 Atlantic Dock Company outlying property, German-Am- 
 erican Stores, Merchant Stores, New York Warehousing 
 Company's Stores, Beard's Amity Street Stores, Franklin 
 
WORKERS OF THE TRUSTS. 243 
 
 Stores, Beard's Erie Basin Stores. A total frontage of 
 14,569 feet, or 2 3-4 miles." 
 
 The advertised valuartion of these stores was 
 calculated to inspire confidence in the new enter- 
 prise, the appraisals having been made by such men 
 of capacity and character as Alexander E. Orr, 
 Martin Joost and George M. Chauncey. They were 
 quoted in the advertisement referred to as follows, 
 and the importance of the announcement will appear 
 ,when a later sworn appraisal is submitted. Here 
 is another extract from the company's advertise- 
 ment: 
 
 "VALUATION. 
 
 "The following appraisals have been made, which include 
 all of the above described property and additional prop- 
 erty not acquired, for which bonds have been withheld, 
 as stated: 
 
 Mr. Alexander E. Orr, president Chamber of 
 Commerce $27,300,000 
 
 Mr. Orr further states in his appraisal that the value of 
 the properties as a money earning power would be in- 
 creased 25 per cent, when concentrated under one in- 
 telligent management. 
 
 Mr. Martin Joost, vice-president Bond and 
 Mortgage Guarantee Company $26,750,000 
 
 Mr. Joost states that the value of the properties would be 
 enhanced at least 15 per cent, by consoHdation. 
 
 Mr. George M. Chauncey, president D. & M. 
 Chauncey Real Estate Company $30,000,000 
 
 The fact that these warehouse men had been 
 making handsome earnings before the formation 
 of the Brooklyn Wharf and Warehouse Company 
 was emphasized in an impressive way by the pub- 
 lication of the following Certificate of Accountants 
 annexed to the advertised announcement : 
 
244 MARK HANNA'S " MORAL CRANKS." 
 
 "Messrs. Yalden, Brooks & Walker, Public Accountants, 
 have made a careful examination of the books of the 
 various properties now consolidated, and have reported 
 as follows: 
 
 "ii Pine St., New York, Jan. 29, 1895. 
 
 "George W. Young, Esq., President United States Mort- 
 gage Co., New York: 
 
 "Dear sir — We have made a careful examination of the 
 operation of the properties which have been acquired by 
 the Brooklyn Wharf and Warehouse Co., and present de- 
 tailed statements showing the net earnings after payment 
 of taxes and other expenses of operation, as follows: 
 
 1891 $1,343,338.82 
 
 1892 1,460,990.37 
 
 1893 1,569,638.05 
 
 1894 1,704,071.25 
 
 Total $6,078,038.49 
 
 These figures show average net earnings per 
 
 annum of $1,519,510.00 
 
 From which should be deducted rents of 
 
 leasehold properties 225,000.00 
 
 Which leaves a total of $1,294,510.00 
 
 Deducting interest on the $15,675,000 bonds 
 issued 783,750.00 
 
 There remains applicable to the accumulation 
 of the surplus and for dividends on capital 
 stock as provided in the company's articles 
 of association '. $510,760.00 
 
 We deem it proper to add that during the past year a 
 number of improvements have been made in the way of 
 new piers and storehouses, which, in our judgment, will 
 increase the earnings at least $75,000 per year. 
 
 It is our further opinion that the saving in office ex- 
 penses under one management of those properties would 
 be $150,000 per year. 
 
 YALDEN, BROOKS & WALKER. 
 
 This was followed by the statement: 
 "The company has in addition to the foregoing 
 property a Working Cash Capital of $500,000. 
 "In addition thereto a surplus at the rate of at 
 
WORKERS OF THE TRUSTS. 245 
 
 least $100,000 per annum shall be accumulated until 
 it amounts to $500,000." 
 
 Naturally, in the light of the statements thus 
 made by business men of probity and recognized 
 ability, the bonds of the Warehouse Trust were 
 eagerly sought for and commanded high figures. 
 The Trust began business apparently under most 
 auspicious conditions, with a bond issue of $17,- 
 500,000, and capital stock of $12,500,000, one-half 
 of which capital stock had been paid in as certified 
 to February 6, 1895. 
 
 The annual reports for five years, however, show 
 that the expected great profits did not materialize ! 
 
 Annual report filed March 12, 1896: 
 
 Existing debts do not exceed $16,724,540.83 
 
 Existing assets amount to at least 16,724,540.83 
 
 Annual report dated January 23, 1897: 
 
 Existing debts do not exceed $20,000,000.00 
 
 Existing assets of said corporation amount 
 
 to at least 20,000,000.00 
 
 Annual report dated January 31, 1898: 
 Existing debts do not exceed $20,104,000.00 
 
 of which $17,500,000 consist of 1st mort- 
 gage bonds. 
 Existing assets of said corporation amount 
 
 to at least the sum of 20,104,000.00 
 
 Annual report filed January 26, 1899: 
 
 Existing debts do not exceed $19,677,000.00 
 
 Existing assets at least equal 19,677,000.00 
 
 Annual report filed January 26, 1900: 
 Existing debts do not exceed sum of $20,000,000.00 
 
 exclusive of interest not accrued on bonds 
 and other obligations, and exclusive of 
 rent not accrued on leases. 
 Existing assets at least equal the amount of 
 
 one dollar. 
 
 In February last, default was made by the Ware- 
 house Trust in payment of the interest upon its 
 
246 MARK HANNA'S " MORAL CRANKS." 
 
 bonds. On application of a bondholders' com- 
 mittee, composed of F. P. Olcott, George W. 
 Young, Frederic Cromwell, Adrian Iselin, Jr., 
 Walter G. Oakman, Henry A. Redfield and others, 
 the United States Mortgage Company, of which 
 George W. Young was President, was appointed re- 
 ceiver of the Trust by Judge Dickey. 
 
 The petition for the appointment of a receiver 
 was accompanied by an affidavit from Arthur Turn- 
 bull, treasurer of the United States Mortgage and 
 Trust Company, that on information obtained from 
 one of the directors he learned that the income for 
 the year ending February i, 1900, did not exceed 
 $600,000; ithat the annual interest on $17,500,000 of 
 the first mortgage bonds was $875,000, and that the 
 company owed $345,401.18 taxes due October, 
 1899. 
 
 The most surprising affidavits made in connection 
 with the affairs of the Trust and submitted to the 
 court read as follows : 
 
 HERBERT C. PLASS, being duly sworn, deposes and 
 says that he is engaged in the business of buying and 
 selling and renting real estate in the City of New York as 
 a real estate broker and appraiser, and has been so en- 
 gaged for the past twenty years. That he is familiar with 
 the property of the Brooklyn Wharf and Warehouse Com- 
 pany covered by the mortgages described in the com- 
 plaint in this action. That he has recently made a thor- 
 ough and careful appraisement of the value of the said 
 properties both fee and leasehold. That in his judgment 
 the present values of the said properties does not exceed 
 the sum of fifteen millions of dollars. 
 
 HERBERT C. PLASS. 
 
 Sworn to before me this 2d day of February, 1900, 
 William Finkenaur, Notary Public, New York County. 
 
 WARNER B. MATTESON, being duly sworn, de- 
 poses and says that he is an attorney and counselor 9t 
 
WORKERS OF THE TRUSTS. 247 
 
 law. That he has seen the original affidavit, a copy of 
 which is hereto annexed, made by Herbert C. Plass and 
 verified the 2d day of February, A. D. 1900. Deponent 
 further says that he knows the property of the Brooklyn 
 Wharf and Warehouse Company covered by the mort- 
 gages described in the complaint in this action and that 
 the value of the same does not exceed the sum of fifteen 
 million dollars to the best of deponent's knowledge, in- 
 formation and belief. 
 
 WARNER B. MATTESON. 
 Sworn to before me this Sth day of February, A. D. 
 1900, William Finkenaur, Notary Public, New York 
 County. I 
 
 Alexander E. Orr, President Chamber 
 of Commerce, valuation of Ware- 
 house Trust property in 1895 $27,300,000 
 
 Martin Joost, valuation, 1895 26,750,000 
 
 George M. Chauncey, valuation, 1895. . 30,000,000 
 Less than 5 years later: 
 
 Herbert C. Plass' valuation $15,000,000 
 
 W. B. Matteson's valuation 15,000,000 
 
 Average yearly net earnings of ware- 
 houses before trust was formed 1,519,510 
 
 Income year ending February i, 1900. . 600,000 
 Debts year ending February i, 1900, 
 
 over 1,000,000 
 
 These figures, which show the loss of great sums 
 of money, would seem to indicate clearly that even 
 upright business men cannot always touch a Trust 
 without having their fingers burned, despite the 
 fact that their ventures may be made when business 
 is booming throughout the country. And this ex- 
 hibit of wrecked financial hopes and blighted pre- 
 dictions is enough to dampen the enthusiasm of 
 even so enthusiastic a man as Thomas A. Mclntyre 
 of the Warehouse and United States Flour Milling 
 Trusts. 
 
IX. 
 
 An army of clerks, 'longshoremen, laborers and truckmen 
 forced to seek employment elsewhere soon after the 
 Warehouse Trust began operations — Scenes of idle- 
 ness along the once busy water front — A heavy blow 
 dealt to Brooklyn. 
 
 Those of my readers who are accustomed to 
 crossing the East River by way of the Wall Street 
 or South Brooklyn ferries cannot fail to have been 
 impressed by the great changes wrought within the 
 last few years in the appearance of that section of 
 our water front lying between the Bridge and Ham- 
 ilton ferry. A few years ago a forest of masts and 
 steamers' funnels lined the wharves, and along the 
 docks and in and about the warehouses an army of 
 longshoremen, truckmen and laborers were busily 
 engaged. To-day this army of workingmen has 
 disappeared from view, some of the warehouses ap- 
 pear to have gone out of business, and scenes of 
 idleness are presented where bustling activities for- 
 merly met the eye. The Warehouse Trust is said 
 to be in a large m>easure responsible for the present 
 deplorable condition of affairs prevailing along what 
 was once the busiest section of Brooklyn. 
 
 In a recent letter, dealing with the Workers of 
 the Trusts, the writer quoting from the records, told 
 how the warehousemen were induced to form a 
 Warehouse and Wharfage Trust, how promises of 
 large profits and handsome dividends were set forth 
 in a glowing prospectus ; how properties appraised 
 at from $26,000,000 to $30,000,000 in 1895 shrunk 
 in value to $15,000,000 when the Trust finally fell 
 248 
 
WORKERS OF THE TRUSTS. 249 
 
 into the hands of a receiver. As an interesting and 
 instructive supplement to that letter I submit the 
 following statement concerning some of the causes 
 which led to the downfall of the Trust and the heavy 
 blow dealt to Brooklyn. The story comes from one 
 who has had extended experience in warehouse af- 
 fairs. 
 
 "The cardinal mistake made by the Warehouse 
 Trust was that of giving too much money to secure 
 the various properties. That this was done is evi- 
 denced by the eagerness with which every owner 
 grasped at the offer. Only Jeremiah P. Robinson 
 held off for a time. Finally he came in, too, and the 
 property changed hands. The late John T. Martin 
 had always steadily refused to go into any combina- 
 tion, as he once told me, he would allow no man to 
 manage his business. 
 
 "Nearly all the owners got their prices in cash. 
 As a rule, any bonds that were taken were over and 
 above the cash values of the property. Cornell 
 University was perhaps the only exception. The 
 institution had purchased Watson's stores as an 
 investment, and it had turned out a poor one. The 
 University sold to the Trust for $500,000, accepting 
 all bonds. Professor Thurston of Cornell once told 
 me that they were advised to hold on to the bonds 
 as a good investment, and that the same lawyer pre- 
 vented them being sold at the one time that they 
 went to 104. The University has had cause to re* 
 gret having taken this advice. 
 
 'Mr. Stranahan and his associates neyer would 
 
2S0 MARK HANNA'S " MORAL CRANKS." 
 
 have sold the Atlantic dock property were it not for 
 the fact that the price offered was enormous. When 
 it was stated at a meeting of the owners there was 
 not a dissenting voice to the sale. The United 
 States elevator, the best equipped one on the river, 
 had been held for years on an option of $175,000. 
 Former Alderman Jahn told me recently that his 
 brother had had an option on this property for 
 $225,000. The Trust gave $350,000 for it in hard 
 cash, not a single bond being accepted by the astute 
 men who composed the United States Warehouse 
 Company. 
 
 "Beard's stores, in the Erie Basin and at the foot 
 of Amity street, could not be sold, having been en- 
 tailed by wise old Billy Beard, so they were leased 
 for twenty years, with the right of renewal for an 
 equal term. The rental is said to be $250,000 a 
 year. A man, well-known in Brooklyn, who was 
 formerly connected with this property, told me at 
 the time of the transaction that the best year they 
 ever had, and it was an immense year of business, 
 the property paid $196,000; but the place had been 
 full of ships and merchandise. 
 
 "Some very amusing stories are told of the ig- 
 norance of the Trust about what was purchased. 
 The Anchor Line had some very fine horses at the 
 Union stores. These were used to haul trucks 
 around the piers. The Trust people did not know 
 of their existence until the superintendent asked for 
 oats to feed them with. 
 
 "Having secured the entire control, the manage- 
 ment proceeded straight away to antagonize every 
 
WORKERS OF THE TRUSTS. 251 
 
 one. A host of brokers were thrown out of em- 
 ployment. The various warehouse staffs were dis- 
 charged as a rule, and their business consolidated at 
 68 Broad street, Manhattan. Drivers had to go 
 there to get their orders for goods indorsed before 
 they could get them out of store. They had to 
 await their turn for these, and the attendance on 
 the line was poor, so that often half a day would be 
 lost in trying to get perhaps a single barrel or bale 
 of goods. Double trucks were valued at $1 per 
 hour, and the merchants were furious. Now this 
 is to be altered, and the merchandise accounts will 
 be kept at the various warehouses again, so that 
 there will be less loss of time for drivers. This ex- 
 plains why Henry E. Nitchie has been brought back 
 into the concern. He will look after the warehouse 
 accounts and receipts." 
 
 "Having secured the warehouse property, the 
 manager of the Trust proceeded to demonstrate to 
 ship brokers, ship owners and merchants that he 
 held the key of the situation; that he was the czar 
 to whose ukase all should bend. Unless piers were 
 rented ships should go to unload and load just 
 where he thought fit to order them. And some- 
 times, even at the last moment, it was with difficulty 
 the men interested cotild learn the location. There 
 was none of the give-and-take policy that actuated 
 the individual owners. There were no more of the 
 small concessions that enabled a lot of brokers to do 
 a comfortable business. Mclntyre's word was law. 
 Landing charges were put on. Every ton of ma- 
 terial put on or ofif over the string-piece had to pay 
 
252 MARK HANNA'S " MORAL, CRANKS." 
 
 5 cents, and if landed on the dock instead of on a 
 truck, lo cents. There were bitter complaints, but 
 small attention was paid to them. The Sugar Trust 
 then began to withdraw raw sugar from the stores 
 as much as possible. It has since, to a large ex- 
 tent, only brought it here as rapidly as it can be 
 handled ; as little of it as possible goes into store and 
 it is only left in as short a time as may be. Much 
 of it is now stored in Jersey. A good deal is stored 
 on lighters. 
 
 "Recently the steamship Ivewisham discharged 
 her entire cargo into lighters lying alongside, not 
 a bag of the cargo even touching the dock. Grad- 
 ually other kinds of merchandise drifted away. 
 
 "The greatest loss of all, however, was in the grain 
 trade. When the Trust took hold there were about 
 16,000,000 bushels in store. Grain pays a storage 
 charge of a third of a cent per bushel every ten days, 
 or 75 cents per 100 bushels per month. This would 
 be equivalent to $120,000 per month on 16,000,000 
 bushels. When it is handled, the charges are: 
 receiving, f of a cent per bushel; weighing and de- 
 livering, ^ cent per bushel. The trimming costs 
 $24 per boatload of 8,000 bushels, but this goes en- 
 tirely to the men. The other charges named amount 
 to $1,425 for a cargo of 100,000 bushels, which is a 
 moderate one, large steamiers taking double that or 
 even 250,000 bushels. 
 
 "As the railroads began to develop their terminals 
 at other ports, such as Boston, Montreal, Newport 
 News, Norfolk, Philadelphia, Baltimore, New Or- 
 leans and Galveston, they put in modern elevators, 
 
WORKERS OF THE TRUSTS. 253 
 
 equipped with labor-saving devices. By these 
 means the grain is transferred direct from the cars 
 to the ship alongside. The only charges made are 
 for trimming, so that there is a saving in loading a 
 vessel at these ports of 100,000 bushels, that 
 amounts to $1,125, while the port and wharfage 
 charges are proportionately lower. Besides these, 
 there are dififerential rates that operate against this 
 port. To illustrate the gall which makes such 
 charges, take the weighing for instance. The 
 weigher will handle 40,000, or even 50,000 bushels 
 per day. He gets $2.50 for his services, while the 
 Trust rakes in half a cent a bushel, or $500, for this 
 item alone on 100,000 bushels. These charges 
 would figure up a neat profit on a cargo, which a 
 ship does not always clear. And hence it is that the 
 grain and the tramp steamships have gone to the 
 other ports where no such charges exist. The 
 great bulk of grain now exported from this port 
 goes on the ocean liners, which must have it for 
 ballast. These do not come to Brooklyn, but are 
 loaded at their piers by floating elevators. 
 
 "The loss of the grain business has ruined lots of 
 people along the water front, because it threw an 
 army of men out of work. The trimmers made 
 good money, while the host of men employed in the 
 stores in keeping the grain in condition received 
 steady wages. These have lost that work and have 
 betaken themselves elsewhere. . Rightly or wrong- 
 ly, the Trust is held responsible for driving this 
 trade away. 
 
 "The enormous fixed charges had to be met by 
 
254 MARK HANNA'S " MORAL CRANKS." 
 
 maintaining excessive rates in the face of the facts 
 stated and so the ships and the business went else- 
 where. Thus it is that the trade of the other ports 
 is increasing, while the Produce Exchange figures 
 show conclusively that the grain export percentage 
 has been steadily decreasing since the Trust took 
 hold. Whether that trade ever can be brought 
 back is problematical. 
 
 "Taken altogether, Thomas A. Mclntyre and his 
 associates have a knotty problem to solve, while the 
 unlucky bondholders must grin and bear their 
 losses with what equanimity they can muster." 
 
 One of the warehouse men who was practically 
 forced to sell his property to the Trust, yet had the 
 sagacity to demand payment in cash, said to the 
 writer, in speaking of the matter : 
 
 "I said to Mr. Mclntyre, when the transaction 
 was closed and the money paid : ' You'll have more 
 need for lawn mowers over at those warehouses 
 than for anything else before you are through.' " 
 
 Note.— The company has reduced its charges, removed some of 
 the former grounds of complaint, and its controlling spirits announce 
 that they will put it on a paying basis. 
 
X. 
 
 Methods described and sharply characterized in a recent 
 opinion of the United States Supreme Court — It 
 dealt with exploits far more interesting than the 
 financial operations of Claude Duval, Dick Turpin 
 and "Cherokee Bill" — "Guilty of apparently inex- 
 cusable conduct. 
 
 " The masses of the people feel instinctively that corporate manage- 
 ment has been frequently a fountain of oppression, of fraud and cor- 
 ruption, but the lack of specific information has caused the public 
 indignation, which ought to be visited upon the oflBcers responsible for 
 this shame, to be turned on the Corporations who have been its victims. 
 We hear much about the corruption of municipal corporations. Well, 
 probably they are corrupt ; certainly they cannot be more so than they 
 are believed to be. But the government of Industrial Corporations has 
 largely escaped public censure, notwithstanding the recklessness and 
 fraud which have characterized it. What we punish as corruption in 
 politics, we are inclined to encourage as talent m finance. The courts 
 of nearly every state record prosecutions of public ofiicers for bribery. 
 I don't believe that in the whole history of our jurisprudence an ofiicer 
 of a Corporation has been compelled to ans-wer at the bar of a criminal 
 court for corruption or fraud perpetrated by indirect and insidious 
 methods." — W. Bourke Cochran. 
 
 The court records of various states furnish abun- 
 dant evidence of the iniquities of the Workers of the 
 Trusts, and the necessity for legislation which will 
 at least restrict if not suppress their power for evil. 
 The history of their disrepuitable operations, even 
 when recorded in the cold, unemotional language 
 employed by members of the judiciary, is at times 
 as fascinating as fiction. Claude Duval, Dick Tur- 
 pin, "Cherokee Bill," the stage robbers and kin- 
 dred highwaymen were indeed vulgar and petty 
 financial operators compared with some of our 
 Workers of the Trusts, who make play for millions. 
 Confirmation of this statement may be found in a 
 recent opinion written by a member of the United 
 States Supreme Court. Long judicial decisions are 
 seldom read by others than judges and lawyers, but 
 the one from which I shall quote is so clear and 
 
 »55 
 
256 MARK HANNA'S " MORAL CRANKS.'* 
 
 lucid, it so accurately describes and justly character- 
 izes methods of financiering altogether too common 
 nowadays, that it cannot fail to interest every in- 
 telligent reader. In this opinion you will see how 
 designing men can commit grave moral offenses 
 and yet richly profit by them within the pale of the 
 law by obeying the "letter" of the law. 
 
 On the 22d of January, 1900, Justice Brown of 
 the United States Supreme Court handed down an 
 opinion and decision in the case of Harry W. Dick- 
 erman et al. against the Northern Trust Company, 
 portions of which are herewith reproduced from the 
 Supreme Court Reporter of March i. Lack of space 
 prevents the reproduction of this notable opinion in 
 full. And yet in such extracts as are given you 
 have a comprehensive judicial description of the 
 mode of procedure followed by Workers of the 
 Trusts who transform credulity and paper into gold, 
 then pocket the product. 
 
 The Northern Trust Company, holder of a mort- 
 gage upon the property of the Columbia Straw 
 Paper Company of New Jersey, having secured a 
 decree of foreclosure and sale, some of the stock- 
 holders of the last-namied corporation moved to 
 have it set aside, and they declared among other 
 things : 
 
 "That they with other stockholders of the de- 
 fendant company had been injured by the wrongful 
 manner in which its securities had been issued." 
 
 Jusitice Brown's opinion opens as follows: 
 
 "This case presents primarily the question 
 v/hether a minority of the stockholders of a corpora- 
 
WORKERS OF THE TRUSTS. 257 
 
 tion have a right to intervene in the foreclosure of 
 a mortgage upon the corporate property for tlie 
 purpose of showing that the property was sold to 
 the corporation by the connivance of the mort- 
 gagees at a gross over-valuation, and to compel the 
 bonds held by them to be subjected to a set-off of 
 their indebtedness to the corporation for unpaid 
 stock." 
 
 After reviewing some of the allegations and an- 
 swers made by the parties to the proceedings, the 
 court says : 
 
 "The gravamen of the petitioners' contention is 
 that the bondholders should be held for the dif- 
 ference paid by Stein (a promoter) for thirty-nine 
 mill properties, namely, $1,887,000 of stock, and 
 the amount for which he subsequently turned them 
 over to the paper company, viz., $4,000,000 in stock, 
 the difference being $2,113,000." 
 
 That is the judicial way of stating that the pro- 
 moters in this case pocketed $2,113,000. 
 
 In presenting the easily-understood detailed 
 claims of the complainants, Justice Brown says: 
 
 "In support of this contention the petitioners 
 introduced evidence of the following facts: 
 
 "In October, 1892, there were about seventy 
 straw-paper mills doing business in the North- 
 western states, and having a practical monopoly of 
 the manufacture of straw paper. Some efforts had 
 been made to combine them in a single corporation, 
 but they had proved unsuccessful, when, in Feb- 
 ruary, 1892, the scheme was revived by one Stein, 
 who represented a firm of New York capitalists. 
 
iS8 MARK HANNA'S " MORAL CRANKS." 
 
 certain other capitalists in Buffalo, who were repre- 
 sented by one Beard, and still others in Chicago. 
 
 "As a result of certain conferences between Stein 
 and some others who had previously endeavored to 
 obtain options, Philo D. Beard and Thomas D. 
 Ramsdell undertook to obtain options for the pur- 
 chase of these mills, to be turned over to a corpora- 
 tion to be organized by Beard and Ramsdell with a 
 capital stock of $4,000,000. The options did not 
 specify the number of mills that were to join, al- 
 though it seems to have been understood that the 
 entire seventy were to be gotten if possible; but as 
 a matter of fact Beard and Ramsdell obtained op- 
 tions upon only thirty-nine. 
 
 "The options show clearly that it was intended 
 to turn the properties over to the new corporation. 
 
 "For these properties they agreed to pay $2,788,- 
 000, part in cash ($766,000), part in preferred stock 
 ($629,000), part in common stock ($1,258,000) and 
 part in notes ($135,000) of the new company. The 
 stock payments thus aggregated $1,887,000. 
 
 "Instead of calling the mill owners together and 
 organizing a new corporation, Beard and Ramsdell 
 turned over the options to Stein, and articles of in- 
 corporation were drawn by a member of the New 
 York firm under the laws of New Jersey, which 
 were executed by Beard, one Taylor, a clerk in the 
 office of the New York firm, and one Heffen- 
 heimer, a New York lawyer residing in New Jersey, 
 each of these subscribing for four shares, aggregat- 
 ing twelve shares out of a total issue of 40,000. 
 
 "These articles of incorporation were filed in the 
 
WORKERS OF THE TRUSTS. 259 
 
 office of the Secretary of State on December 6, 1892. 
 The three incorporajtors met immediately in Ho- 
 boken as stockholders, and elected themselves as 
 directors, with six others, two of whom were mem- 
 bers of the New York firm, and the others, clerks 
 in their office. Not a single mill owner who ex- 
 pected to become a stockholder was placed on the 
 board at this time, although representations had 
 been made by the syndicate that a majority of the 
 stockholders would be mill owners. Philo D. 
 Beard was elected President, and Samuel H. Gug- 
 genheimer. Secretary. 
 
 "Immediately thereafter, and on December 10, 
 1892, Stein, who held all the options, assuming to 
 act as an independent owner, although he had ob- 
 tained the options for the benefit of the company, 
 and had promised to pay for them in the stock of the 
 company, made a proposition in writing drawn by 
 a member of the New York firm to this Board of 
 Directors to sell the thirty-nine mills to the paper 
 company for $5,000,000, being an advance of 
 $2,1 13,000 over what he had agreed to pay for them. 
 
 "This proposition was drafted by the New York 
 firm, and the stockholders upon the day the proposi- 
 tion was received had another meeting, and in- 
 structed themselves as directors to accept. They 
 authorized Beard as President to enter into a con- 
 tract with Stein, which was accordingly done. Stein 
 and wife acknowledged it before a clerk in the office 
 of the Chicago firm. 
 
 "This Board of Directors served for only two 
 weeks, when they were succeeded by another 
 
26o MARK HANNA'S " MORAL CRANKS." 
 
 Board composed of Beard, Stein, Heffenheimer and 
 others mostly in their interest. For the next month 
 the members of the Chicago firm were busy in get- 
 ting the mill owners to deposit their title deeds and 
 abstracts, but nothing appears to have been said to 
 them of what had occurred in New York." 
 
 The opinion goes on to tell how the promoters 
 secured a great share of the stock, 3,788 shares of 
 preferred, 14,751 shares of common, aggregating 
 18,549 shares of the par value of $1,854,900. The 
 court adds: 
 
 "The mill owners, although the largest stock- 
 holders, never seem to have been treated as a factor 
 in these operations, and in some way or other the 
 syndicate got possession of $2,113,000 in stocks and 
 bonds, which they appear to have used in the fur- 
 therance of their own interests. From this testi- 
 mony it would appear. * * * 
 
 "3. That the corporation was organized by three 
 parties, who held but 12 shares out of 40,000 shares, 
 one of the three being a clerk in the office of the 
 New York firm, and the other two acting in their 
 interest. 
 
 "4. That a member of the New York firm drew 
 the proposition by which Stein offered to sell the 
 properties to a corporati®n in which the member 
 himself was the only responsible stockholder. 
 
 "5. That the owners of the mill properties knew 
 nothing of the organization of the corporation, or 
 of its acceptance of Stein's proposition to sell his 
 properties to the straw-paper company. 
 
 "6. That the stock was fixed at $5,000,000 upon 
 
WORKERS OF THE TRUSTS. 261 
 
 the idea that seventy mills would join the combina- 
 tion, but, as a matter of fact, only thirty-nine 
 joined, that but $2,788,000 was paid for these prop- 
 erties, and that $2,113,000 of stock was distributed 
 among the parties who got up the corporation with- 
 out any distinct consideration being received. 
 
 "7. That the mill owners received stock which 
 was worth but one-half the value of that which they 
 supposed they would receive. * * * 
 
 "Assuming these facts to have made out a case 
 of fraud in the organization of the Straw Paper 
 Company, and in the purchase of the mill properties, 
 it is difficult to see how they aflect the validity of the 
 bonds, as a whole, the right of the trustees to fore- 
 close, or how they can entitle the complainant to 
 compel the bondholders, so far as at least they were 
 innocent holders, to set off their indebtedness to 
 the paper company for stock against the indebted- 
 ness of the company upon the bonds. 
 
 "The company did, in fact, go through the form 
 of an organization under the laws of the State of 
 New Jersey, and while the first Board of Directors 
 seem to have been mere tools in the hands of the 
 New York firm, with no real interest in the com- 
 pany, they appear to have conformed to the letter of 
 the law, and until formally dissolved the corpora- 
 tion had a legal existence. * * * 
 
 "A list of the parties to whom the bonds were de- 
 livered by the Northern Trust Company upon the 
 requesit of the Straw Paper Company shows that 
 nearly all the bonds were originally issued to 
 Samuel Untermeyer, Philo D. Beard, John D. 
 
262 MARK HANNA'S " MORAL CRANKS." 
 
 Hood, to members of the Chicago firm, and others 
 more or less connected with the organization of the 
 company. But the testimony shows far the larger 
 part of them had been transferred to other parties, 
 presumably for the purpose of raising the $800,000 
 deposited with the Trust Company. There is no- 
 thing to impugn the good faith of most of these 
 holdings." * * * 
 
 Dealing directly with the acts committed by the 
 promoters of the proposed Straw Paper Trust, 
 Justice Brown declares unemotionally, yet severely: 
 
 "Somewhat different considerations apply to 
 those who took part in the organization of the 
 company, and in the purchase of the thirty-nine 
 mills, and who received the bonds and stocks of 
 the paper company with notice of the fraudulent 
 character of the scheme. 
 
 "We are not disposed to condone the offenses of 
 those who through Beard and Ramsdell and their 
 assignee Stein, as their agents, purchased these 
 plants for $2,788,000, and immediately thereafter 
 went through the form of repurchasing of their own 
 agents (in fact, of themselves) the same properties 
 at $5,000,000. 
 
 "These men stood in the light of promoters of the 
 Straw Paper Company. 
 
 "The promoter is the agent of the corporation and sub- 
 ject to the disabilities of an ordinary agent. His acts are 
 scrutinized carefully and he is precluded from taking a 
 secret advantage of other stockholders. Cook, 'Stock and 
 Stockholders.' Section 651." 
 
 "It has been held that, if persons start a company and 
 induce others to subscribe for shares, for the purpose of 
 selling property to the company when organized, they 
 
WORKERS OF THE TRUSTS. 263 
 
 must faithfully disclose all facts relating to the property 
 which would influence those who form the company in de- 
 ciding upon the judiciousness of the purchase. If the pro- 
 moters are guilty of any misrepresentation of facts, or 
 suppression of the truth in relation to the character and 
 value of the property, or their personal interest in the pro- 
 posed sale, the company will be entitled to set aside the 
 transaction or recover compensation for any loss which it 
 has suffered. — Marowetz. Private Corporations, sections 
 291, 294. S46." 
 
 "It is true that the options were taken from each 
 owner of the thirty-nine mill plants severally and 
 that no mention was made of the number that were 
 to be taken into the new corporation. But each 
 option contract showed that it was the purpose of 
 Beard and Ramsdell to organize one or more cor- 
 porations, with a capital of $1,000,000 preferred and 
 $3,000,000 of common stock, and with a bonded in- 
 debtedness of $1,000,000. This clause of itself as 
 well as the whole scheme of the contract, indicates 
 that a large number of similar options were to be 
 obtained, and that one or more large corporations 
 was to be organized to conduct the business. 
 
 "It goes without saying that it never could have 
 been contemplated that any one or any small num- 
 ber of these mills, which were comparatively in- 
 significant afifairs, were to be reorganized with a 
 capital stock of $4,000,000. The oral testimony in- 
 dicates that it was the understanding that all the 
 straw-paper mills in that section of the country, 
 some seventy in number, were to be consolidated 
 into the new corporation, and such from the testi- 
 mony before us would appear to be the fact. 
 
 "Now, if it were understood by the owners of 
 these thirty-nine mills, who received in cash and 
 
264 MARK HANNA'S " MORAL CRANKS." 
 
 stock $2,788,000 for their plants, that Beard and 
 Ramsdell, who held themselves out in the option 
 contracts as promoters of the new corporations, 
 were to transfer these options to Stein, and that the 
 latter was to set himself up as a purchaser and resell 
 these properties to the new corporation for $5,000,- 
 000, it is impossible to suppose that they would 
 have consented to the arrangement. 
 
 "Bound as these promoters were to deal fairly 
 and honorably with the stockholders in the new 
 corporation, they were guilty of apparently inex- 
 cusable conduct in excluding the mill owners from 
 all participation in organizing the new corporation 
 and putting in their own clerks as directors, and 
 paying off the mill owners in stock which was really 
 of little more than half of the value they must have 
 expected to receive. 
 
 "If they were unable to obtain options upon only 
 thirty-nine out of the seventy mills, they should 
 have made known this fact, or at least given to these 
 mill owners the benefit of the surplus stock. Of 
 course, they were entitled to charge a reasonable 
 sum for their services and expenses, but the parties 
 who represented the substantial interests in the new 
 corporations were entitled to be informed of the 
 steps taken. 
 
 "We think that no acquaintance with legal prin- 
 ciples was necessary to apprise these parties that 
 they were not deeding fairly with the owners of the 
 mills in concealing from them the facts connected 
 with this purchase, and in dealing with the property 
 as if they themselves were the only parties in in- 
 terest." 
 
WORKERS OF THE TRUSTS. 265 
 
 The court decides that the foreclosure of the 
 mortgage and the decree of sale ordered to secure 
 payment of the bonds cannot be reversed, for the 
 bonds were "duly issued, negotiated and sold" and 
 are valid obligations of the company, now held by 
 a number of persons who became owners thereof for 
 a valuable consideration. Yet, the court suggests 
 a procedure that may right a wrong, in these sig- 
 nificant words : 
 
 "These bonds must ultimately be presented for 
 redemption from the proceeds of sale, and we see 
 nothing in the decree appealed from to prevent an 
 inquiry being instituted as to their validity in the 
 hands of their present holders. We are clearly of 
 opinion that, so far as they were purchased by in- 
 nocent holders, they are not subject to the set-off 
 claimed. The question whether, so far as they are 
 held by parties cognizant of the alleged fraud, they 
 are subject to a set-ofiE, is not one which properly 
 arises in this case, where the bonds must be treated 
 as an entirety, but is a defense applicable to each 
 individual bondholder. 
 
 "Mr. Justice Shiras and Mr. Justice Peckham 
 concurred in the result, but were of opinion that the 
 question of fraud was irrelevant to the issue." 
 
 But similar questions of fraud in connection with 
 the formation of Trusts will certainly be regarded 
 by the people of the United States as relevant to 
 a dominant issue in the coming presidential cam- 
 paign. 
 
XI. 
 
 John R. Dos Passes tells the Industrial Commission how 
 a trust may change its clothes and laugh at law — 
 His argument against publicity not sustained by all 
 capitalists — A corporation law expert tells how 
 fraudulent organizations are formed. 
 
 " I bring you down to our own immediate legislation — ^What I call 
 our legislation — against Aggregated Capital, and I draw your attention 
 again to the Anti-Trust Act of 1890. Now I am not going to analyze or 
 discuss it. Why are you here? Why are you, gentlemen, sitting here 
 and deliberating, if you have already on the statute books an act drawn 
 bjr an astute statesman, which illegalizes all combinations, making it a 
 misdemeanor to have combinations in restraint of trade? Why do you 
 want more legislation ? Isn't that statute enough? * * * The Sugar 
 Trust was an illegal creation in New York and was judicially declared 
 so. With what result? It walked over to New Jersey, put on a neTV 
 suit of clothes, came back to New York as a foreigner, and there it is 
 flourishing, and in face of your Anti-Trust act of 1890, and a tremendous 
 Anti-Trust statute in New York. With the New York statute staring it 
 in the face and the awful hand of the Sherman act pointing at it, why, 
 we see the Sugar Trust calmly attending to its usual business as if 
 nothing had happened? — ^John R. Dos Passos, in defense of Aggre- 
 gated Capital before Industrial Commission^ Washington, D. C, De- 
 cember 12, 1899. 
 
 Fortunately for Capital and country, those who 
 are authorized to speak for the mighty industrial 
 combinations of the United States do not all agree 
 with Lawyer Dos Passos in his contention that 
 there should be no further legislation in relation to 
 Trusts, which have taken on the form of Corpora- 
 tions. Mr. Dos Passos made a long argument be- 
 fore the Industrial Commission in which he seemed 
 to speak as one who looked upon aggregated 
 Capital as a sacred thing — practically above all fur- 
 ther attempts to govern its operations by so vulgar 
 a thing as law. And he assumed the still more 
 dangerous attitude of one flouting at lav/s already 
 enacted, flinging in the face of lawmakers and 
 people the contemptuous remark that a Trust needs 
 but to change its clothes, and then, like any com- 
 366 
 
WORKERS OF THE TRUSTS. 267 
 
 mon malefactor safely disguised, it may laugh at 
 and defy law with impunity. 
 
 Of course if this opinion should be generally ac- 
 cepted by the people of the United States — if citi- 
 zens should come to believe that any effort to pre- 
 vent, by the enactment of laws, corporations from 
 doing wrong — if they should be convinced that 
 these combinations were beyond the reach of law, 
 that would be a bad hour for Capital. For where 
 Law fails. Force has had a habit of going to the 
 front in the history of nations. 
 
 While Mr. Dos Passas is declaring that "the cry 
 of publicity, in my estimation, is entirely unwar- 
 ranted by the law and facts," while he is kowtowing 
 to "the men who occupy the elegant residences on 
 Fifth avenue," and on other avenues of the great 
 cities of the country, and proclaiming of them "it 
 should be a matter of pride to point out these men 
 as types of American citizenship, proper incentives 
 to young people of the present age," other repre- 
 sentatives of Capital and the Trusts talk in another 
 strain and less effusively. Listen to what they 
 have to say: 
 
 From the Industrial Commission's printed digest 
 of evidence, taken by it while examining into the 
 affairs of Trusts and Industrial Conditions, I take 
 the following bits of testimony: 
 
 Mr. Havemeyer, President of the American 
 Sugar Refining Company, was asked: 
 
 "Q. One word further with reference to the 
 question of publicity. If I understood you cor- 
 rectly you would yourself favor any bill that should 
 
268 MARK HANNA'S " MORAL CRANKS." 
 
 be introduced that would provide for public reports 
 of all corporations if you thought the law would be 
 administered fairly and honestly?" 
 
 "A. Well, that requires more thought than I am 
 able to give it at the moment. I can see no real 
 harm in exposing the affairs of a corporation to a 
 governmental inspection, providing some means 
 can be taken to protect that exposure from the ad- 
 vantage of competitors. I will state broadly that 
 where a corporation is dealing particularly in things 
 that are essential to the benefit of mankind — cloth- 
 ing, fuel, oil, sugar, rioe, food — anything which is 
 peculiarly, as I have described it, of a quasi public 
 character, it would be beneficial to the public to 
 have them all under governmental superintend- 
 ence." 
 
 "Mr. Gary, President of the Federal Steel Com- 
 pany, declares that it is desirable that all classes of 
 the people should have the fullest possible knowl- 
 edge of the actual facts concerning great industrial 
 combinations. * * The witness believed that the 
 enforced publicity of the affairs of the corporations 
 under state laws is one of the best remedies for 
 monopoly and abuses. With plenty of investiga- 
 tion and discussion the corporation doing an il- 
 legitimate business will not succeed in the long 
 run." 
 
 "Mr. Archbold, Vice-President of the Standard 
 Oil Company, says : He considers that the next step 
 in progress will be the establishment of Federal 
 Corporations. 
 
 " 'If such corporations should be made possible, 
 
WORKERS OF THE TRUSTS. 269 
 
 under such fair restrictions and provisions as should 
 rightfully attach to them, any branch of business 
 could be freely entered upon by all comers, and the 
 talk of monopoly would be forever done away 
 with.' " 
 
 Extracts from Mr. Archbold's testimony: 
 
 "Q. Would you consider it advantageous to the 
 country as a whole to have greater publicity re- 
 garding the business of all the great corporations 
 that now exist? For example, with reference to the 
 amounts of stock that are represented by plant, the 
 amounts represented by patents, by good will, the 
 amounts that are water, and so on. In other words, 
 would you consider it an advantageous thing for 
 the country to have substantially the English cor- 
 poration law apply in this country? 
 
 "A. If it could be put in Federal hands, yes. 
 
 "Q. And you would favor, then, the publicity of 
 accounts, the making of reports to 'the Federal 
 Government quite in detail? 
 
 "A. Oh, unquestionably. 
 
 "Q. Somewhat the same system as is applied to 
 our national banks? 
 
 "A. Unquestionably." 
 
 "Mr. Rockefeller, President of the Standard Oil 
 Company, expresses himself in favor of ' Federal 
 legislation under which corporations may be created 
 and regulated, if possible.' " 
 
 It would seem from the foregoing testimony and 
 a great deal more of a similar character that the real 
 representatives of great Capital recognize the justice 
 of the demand for publicity, one thing which the 
 Workers of the Trusts fear. 
 
270 MARK HANNA'S " MORAL CRANKS." 
 
 These Trust Workers will tell you that under 
 state laws publicity of the affairs of corporations is 
 assured, but on this point Andrew Carnegie's law- 
 yer, Mr. Dill, testified: 
 
 "In New York there is no statute requiring stock 
 and transfer books to be open to stockholders, and 
 although the courts have held that this is a common 
 law right, the stockholder desiring to enforce the 
 right is compelled to bring suit at heavy expense. 
 
 Mr. Dill declares that the strict laws of New 
 Jersey are violated by many corporations, and that 
 there is no effective mode of enforcement. The 
 Attorney-General is authorized to bring suit against 
 corporations for failure to file their annual reports, 
 and the law prescribes a penalty of $200 per day, 
 but the witness has seen a statement in the news- 
 papers that of 10,000 corporations taken at random 
 not 2,000 have filed these required statements. Per- 
 sonal investigation made by Mr. Dill on the basis 
 of the records in the office of the Secretary of State 
 incline him to believe that the statements thus made 
 are well founded. 
 
 I have quoted largely from Mr. Dill's testimony 
 because he is a recognized authority in corporation 
 matters, and his services have been employed by 
 some of the greatest capitalists of the country. On 
 the dangers of over-capitalization and fraudulent 
 issues of stocks, favorite methods of Workers of 
 the Trusts, Mr. Dill is quoted in the Industrial 
 Commissioner's preliminary report as follows: 
 
 "Mr. Dill, a corporation lawyer of New York 
 City, believes that, while many corporations with a 
 
WORKERS OF THE TRUSTS. 271 
 
 very large capital are not over-capitalized, there are 
 many others which have either a fraudulent purpose 
 originally or may become the cause of fraudulent 
 action. Any corporation which is grossly over- 
 capitalized is presumably organized for the purpose 
 of getting the stock into the hands of the public, 
 and in order to do this there must be either mis- 
 representation or concealment of material facts. 
 The witness knows of one corporation which he was 
 asked to organize, the value of whose assets was 
 believed, after careful examination by his office, not 
 to exceed $500,000. The proposed capitalization 
 was $8,000,000, and the company has since been or- 
 ganized for that sum. The prospectus of this com- 
 pany may not contain directly false representations, 
 but it lacks greatly in the statement of material 
 facts. 
 
 "Aside from the possible injury to investors from 
 over-capitalization, a fraudulently capitalized com- 
 pany seeks usually to make a show of earnings, and 
 this must result either in robbing the capital or in 
 increasing the prices of its product or reducing the 
 wages of labor." 
 
 Addressing the students of Williams College, 
 Mass., June 8, 1900, Mr. Dill said, among other 
 things : 
 
 "That corporation whose stock has been issued 
 upon the principle of millions for nothing, through 
 whose veins flows more water than blood, such a 
 corporation is in a perilous position, because it 
 must, to keep its standing, pay dividends to its 
 stockholders, although that stock was issued upon 
 a basis of an airy nothing. 
 
272 MARK HANNA'S " MORAI. CRANKS." 
 
 "This tendency created the so-called pirates 
 among combinations. One class of organizations 
 assuming to sail under the flag of industrial com- 
 binations, has been designated as ' gambling 
 specialties.' 
 
 "We will not quarrel with terms or designations 
 at this point, but say that many of these organiza- 
 tions were organized, financed, created and floated 
 for the purpose of affording speculation on the 
 street, and without due regard to business or in- 
 dustrial principles. The trustees who were sup- 
 posed to represent the stockholders represented 
 simply themselves in private speculation. The of- 
 ficers who were supposed to guard the finances of 
 the company for the benefit of the stockholders, 
 used the finances for their own benefit, and for their 
 own personal gain in the way of speculation. Prices 
 were said to be increased, wages vVere cut down, 
 mills closed, and all the apparent methods of in- 
 dustry used for the purpose of affecting the market 
 value of the stock." 
 
XII. 
 
 John W. Gates' career recalls memories of "Jim" Fisk — 
 How he surprised Wall Street by closing down 
 twelve steel and wire mills — Thousands of workmen 
 thrown out of employment without a moment's 
 warning— The stock of the great trust seriously af- 
 fected — His alleged big winnings. 
 
 John W. Gates, one of the organizers and pro- 
 moters of the $200,000,000 Federal Steel Company, 
 and creator of the $90,000,000 American Steel and 
 Wire Company, will be remembered in Wall street 
 for many years to come as a financier entitled to 
 more distinction than that achieved by Jim Fisk. 
 But Mr. Gates is more than a Wall street celebrity 
 now. He has attained national distinction. 
 Through his orders several thousands of men em- 
 ployed in twelve mills of the American Steel and 
 Wire Company were thrown out of employment in 
 May, 1900, thie mills shut down, and the stock 
 of this great money-making corporation received 
 a heavy blow. The sudden closing down of these 
 mills was a complete surprise to the public, for al- 
 most daily during the six months previous to the 
 closing the newspapers had been fed with glowing 
 reports of the condition of the American Steel and 
 Wire Company and suggestions that the mills of 
 the concern would have to work overtime to fill 
 orders. 
 
 On a Monday before it was generally known 
 in Wall street that the mills of the Steel and 
 Wire Company were to be closed, large blocks of 
 stock were eagerly purchased by various Stock 
 
 273 
 
274 MARK HANNA'S "MORAL CRANKS." 
 
 Exchange houses. The conservative New York 
 Tribune of Wednesday, April i8, went as far as it 
 dared to in the way of commenting upon Mr. Gates' 
 action, and said: 
 
 "John W. Gates has never been credited with being in 
 business 'for his health,' as the common expression is, so 
 it was felt in Wall street yesterday to be a pity that he is, 
 as he said on Monday, not interested in the stock market. 
 For there were great possibilities of gain in the stock 
 market for the man who had the power, and used it, to 
 shut down suddenly a third of the plants of a great steel 
 maunfacturing corporation, in the face of a concurrence 
 of expert opinion that the iron and steel industry was still 
 prosperous, if such a man had only been familiar with the 
 process known in Wall street as 'selling short.' As it is, 
 somebody or some set of men has undoubtedly reaped 
 rich advantage from the move of the American Steel and 
 Wire Company, while all that Mr. Gates has earned, as 
 far as the absolute knowledge of the public goes, observers 
 of the situation said yesterday, is the reproach of his 
 associates in the steel business and an added measure of 
 popular distrust for the properties with which he is identi- 
 fied. But there might be compensating benefits, it was 
 suggested. 
 
 "Naturally, as the most influential factor in the Ameri- 
 can Steel and Wire Company, Mr. Gates holds stock of 
 the company; and not less naturally, it was said yester- 
 day, he would seek to part with his stock on learning that 
 the company was in a bad way. So it was no surprise 
 yesterday to various Stock Exchange houses when there 
 were delivered to them blocks of Steel and Wire preferred 
 stock in the name of John W. Gates, which stock had been 
 bought by them on Monday. Steel and Wire preferred 
 ranged on Monday between 8s and 8o5^, closing Ys per 
 cent, above the lowest. Yesterday it dipped as low as 
 77ii, affording an excellent opportunity for one who had 
 sold outright at around 85 to reinvest, or to one who had 
 sold short to cover, as the stock rallied to 81^ at the 
 close." 
 
 In presenting his reasons for closing the steel 
 and wire mills, Mr. Gates said, in part: 
 
 "It all amounts to this: The steel and wire busi- 
 ness is in bad shape. It has been getting worse 
 constantly, and the mills of every sort have been 
 
WORKERS OF THE TRUSTS. 275 
 
 running on orders that they obtained six or more 
 months ago. The demand to-day, in our line at 
 least, and I think proportionately so in the other 
 departments of the steel trade, is only about 30 per 
 cent, of the volume it should be. For instance, we 
 have been making five thousand and six thousand 
 tons of finished products in the justified expecta- 
 tion of selling about six thousand. We have, in 
 fact, been selling only two thousand or three thou- 
 sand tons. That illustrates the situation." He 
 said further that he was not interested in the stock 
 market. 
 
 It may be true that the steel and wire business 
 was "in bad shape" as Mr. Gates declared it to be, 
 for the Board of Directors of the American Steel 
 and Wire Company sustained him in shutting down 
 the mills, but this does not lessen the force of the 
 following query and criticism: 
 
 "If the company is now in bad condition some 
 indication of this must have been observed several 
 weeks ago by those who govern the affairs of the 
 big steel and wire combination; but it was only a 
 fortnight ago that insiders sent out the most opti- 
 mistic reports regarding the company's business. 
 If the management knew that business was poor it 
 did not admit the public into its confidence. 
 Why?" 
 
 The writer cannot confess to any feeling of sym- 
 pathy for speculators who. are tricked in Wall street 
 — those who are really deserving of sympathy in 
 the case under consideration being the men who 
 have been thrown ouit of employment and the 
 
276 MARK HANNA'S " MORAIv CRANKS." 
 
 women and children dependent upon them. And 
 attention is directed in this letter to Mr. Gates' 
 operations simply because in his acts we see a 
 Worker of the Trusts at work, furnishing a most 
 instructive lesson to the people of this country on 
 the eve of a presidential campaign. That working- 
 men alone are not the sole sufiferers by the closing 
 of Mr. Gates' mills is patent from the follow- 
 ing statement clipped from the financial columns 
 of the Tribune: 
 
 "The street has been frightened by the tales of woe from 
 Chicago, but the chances are that the American Steel and 
 Wire Company will find it convenient to start its works 
 just as soon as certain insiders have bought back the 
 stocks which they sold before they suddenly discovered 
 that the steel and wire business was going to the dogs. 
 The Brooklyn ' financier ' who has just been found guilty 
 of larceny will think over his misdeeds behind prison bars 
 for several years to come. The law discriminates at times, 
 but not always wisely. Manipulation of stocks by un- 
 scrupulous speculators has not yet put any one in jail, but 
 the time may come when the honest element in Wall 
 street will be able to congratulate itself upon the arrest, 
 indictment and conviction of stock market thimble- 
 riggers. 
 
 "The gross manipulation in the steel shares has hurt 
 Wall street. It has not injured the worth of railway 
 securities or upset the bank accounts of important market 
 interests, but it has alarmed the public and unsettled con- 
 fidence in industrial concerns. Fortunately, there are not 
 many industrial companies whose managers are gamblers, 
 but industrial companies generally have sufifered in public 
 estimation because of the stock manipulation in a few. 
 The management of most steel companies is made up of 
 able business men who are not speculators, but their com- 
 panies' stocks have sufifered because of the developments 
 in American Steel and Wire. 
 
 "Speculators who are followers of legitimate market 
 operations will do well not to enter the game that the 
 Chicago gamblers are playing. The Chicago clique is 
 playing with marked cards and loaded dice. Wall street 
 has had many scandals, and the Steel and Wire scandal 
 takes rank among the worst." 
 
 Mr. Gates was brought before Magistrate Zeller 
 
WORKERS OF THE TRUSTS. ^.-^ 
 
 of New York City on the charge of violating the law 
 prohibiting the giving of false information concern- 
 ing a corporation. The charge was dismissed. He 
 resigned the chairmanship of his Board of Direc- 
 tors, was succeeded by one of his friends, then he 
 sailed for Europe to enjoy an outing on the Conti- 
 nent. 
 
 Careful investors, as a rule, are not disposed to 
 invest a great deal of confidence in any head of a 
 business concern who is addicted to gambling. 
 That is one reason why one class of Wall street in- 
 vestors avoided Jim Fisk's enterprises when he was 
 at the height of his power. In April last the morn- 
 ing papers announced, under flaring headlines, that 
 John W. Gates and young "Joe" Leiter had spent 
 the largest part of their time during a ride from 
 Chicago to New York in playing poker for enor- 
 mous stakes. Leiter was credited with having won 
 a million dollars from Gates. No official denial of 
 this sitory was made until the New York Herald 
 printed a letter, of which the following is a copy: 
 
 AMERICAN STEEL AND WIRE COMPANY. 
 1. W, GATES, President. 
 
 New York, April i6th, 1900. 
 
 The Financial Editor "The Herald," 
 
 New York City. 
 Dear Sir:— 
 
 Some time ago your paper gave considerable space to a 
 poker story, wherein it was set forth that J. W. Gates had 
 lost something like a million dollars at poker at the Wal- 
 dorf (an absolute fabrication by the way). Since you 
 chronicle the losings of gentlemen like Mr. Gates, perhaps 
 you are equally as anxious to distribute knowledge of their 
 winnings. If so, let it appear on your financial page that 
 during the late rise in railroad stocks, J. W. Gates has 
 
278 MARK HANNA'S " MORAL CRANKS." 
 
 made between three and four million dollars (which is 
 true), principally in B. & O. and Union Pacific stocks, 
 both great favorites of his. 
 By doing this you will greatly please, 
 
 Very sincerely yours, 
 
 W. A. Holland, 
 Secretary to Mi. J. W. Gates. 
 
 Mr. Gates had nothing to say about the foregoing 
 letter until questioned by a Sun reporter, who sub- 
 sequently wrote the following: 
 
 "John W. Gates, chairman of the directors of the 
 American Steel and Wire Company, was asked 
 yesterday about the letter that W. A. Holland, his 
 secretary, sent to a morning newspaper recently, 
 which announced that Mr. Gates had made profits 
 of about $4,000,000 bulling stocks, particularly Bal- 
 timore and Ohio and Union Pacific. 
 
 " 'Well, the man isn't here now,' he replied. ' I 
 didn't authorize him to send the letter.' '" 
 
 An estimate of the magnitude of the corporation 
 controlled by this poker-playing chairman of the 
 American Steel and Wire Company may be formed 
 by reading the following extracts from the testi- 
 mony given by him to the Industrial Commission at 
 Washington, November 14, 1899: 
 
 "We are owners of iron mines, miners of iron 
 ore, owners of coal mines, miners of coal, burners of 
 coke. We operate eight or nine blast furnaces, 
 three Bessemer steel works; we have, either built 
 or in process of construction, seventeen open hearth 
 furnaces, about twenty-two to twenty-five rod roll- 
 ing mills, and twenty to thirty wire mills; and our 
 finished product is plain wire of every shape and 
 
WORKERS OF THE TRUSTS. 279 
 
 kind used in America, barbed fence wire, wire nails 
 and every kindred article in the wire line." 
 
 "Wire fences?'" 
 
 "Yes ; wire fencing of all kinds, wire clothes lines, 
 wire rope, wire for electrical purposes. We make 
 a large share of the copper as made in this country 
 — about two-thirds." 
 
 "What proportion of wire nails do you produce?" 
 
 "I presume that varies from 65 to 90 per cent. 
 * * * We have a monopoly of the barbed wire. 
 We practically own every patent on barbed wire and 
 machinery in existence in the United States and we 
 claim that no one can manufacture barbed wire 
 without infringing our patents. * * * fhere 
 is a great deal of woven wire fencing made in this 
 country. We claim monopoly under patents of 
 most of the woven wire fencing under patents that 
 we purchased and we get a very much larger profit 
 on that than we do on the plain fence wire or even 
 barbed wire or wire nails, for the reason that we 
 own patents on the machinery and the patent on 
 the product." 
 
 "How many men do you employ?"' 
 
 "Do you mean including everything in full?" 
 
 "Yes; in the iron industry, both mining and 
 manufacturing?" 
 
 "Well, if I should guess, I should guess 36,000," 
 replied Mr. Gates. 
 
 Mr. Gates was asked: "What efifect will the 
 present high prices have upon consumption in the 
 future in the steel business?" 
 
 "I have thought they would check it," said the 
 witness, "but in talking with railroad presidents, I 
 have made up my mind that it would not give much! 
 
28o MARK HANNA'S "MORAL, CRANKS." 
 
 of a check. Certain it is that our railroad presi- 
 dents, and men who have made a study of this 
 thing, believe that these high prices are going to 
 rule for two or three years." 
 
 At the Chicago Conference on Trusts, a delegate 
 interrupted Bourke Cochran's address to ask the 
 following question concerning a Trust which Mr. 
 Gates helped to organize, but the question was not 
 answered: 
 
 "Take the Federal Steel Trust. It was or- 
 ganized with a capital of $200,000,000. In less than 
 six months' time every product of that Trust — steel, 
 iron, nails, barbed wire and all the necessities of 
 the farmers, and everything that enters into the 
 construction of buildings in every city in this coun- 
 try, and in the construction of every farmhouse in 
 the United States, had been increased from 100 to 
 126 per cent., whereas labor in the mills, as shown 
 by the Amalgamated Steel Union, has only risen 
 about 10 to 25 per cent. Now, I wish to know if 
 the consumers of this country have not been robbed 
 of that 90 and 100 per cent, difference between the 
 price of labor and the price of the finished product 
 furnished to the 50,000,000 farmers in this country?" 
 
XIII. 
 
 A radical Congressional measure which proposes confis- 
 cation of "Trust" goods — We shall have to wait 
 awhile before we can know if the bill was meant for 
 political effect or for enforcement — Great corpora- 
 tions show no signs of fright. 
 
 It was announced that the RepubHcans of Con- 
 gress would pass an anti-Trust bill as a reinforce- 
 ment of the weak points of the Sherman Act. This 
 was to be done for the purpose of forestalling action 
 which the National Democratic Convention is ex- 
 pected to take in the way of declaring war on the 
 Trusts. One section of this new bill provides that 
 property of Trusts violating the Sherman law may 
 be seized in transit and condemned, and that a 
 severe penalty may be imposed upon the railroad 
 engaged in the transportation of forfeited goods. 
 Another section provides as follows : 
 
 "The claim that any testimony or evidence given 
 in any case brought under the act of July 2, 1890, 
 being an act to protect trade and commerce against 
 unlawful restraints and monopoly, and known as 
 the Sherman act, or that the introduction of any 
 books, papers or documents may tend to incrim^ 
 inate the person giving such testimony or evidenccj 
 shall not excuse such witness from testifying; but 
 such testimony or evidence shall not be used against 
 such person on trial of any criminal proceeding." 
 
 Other provisions are summarized in these words : 
 
 The bill requires the branding or marking of 
 Trust-made goods shipped out of a state, so as to be 
 easily identified as the product of a Trust. 
 
 »8i 
 
282 MARK HANNA'S " MORAL CRANKS." 
 
 Requires corporations having a capital of more 
 than $1,00,000, or doing an annual business of 
 $1,000,000, to file reports of their afifairs with the 
 Secretary of State. 
 
 Provides for the process of injunction against 
 combinations sending Trust-made goods from state 
 to state or to foreign countries. 
 
 Prohibits the use of the mails to concerns proved 
 to be Trusts and to their officials. 
 
 The provisions of this new anti-Trust bill, which 
 politicians say was framed to meet the emergencies 
 of a presidential campaign, would seem to threaten 
 the very lives of some of the great corporations 
 that are popularly regarded as Trusts. Yet this 
 proposed legislation does not appear to have been 
 taken so seriously in Wall street as to affect stocks 
 in even the faintest degree. The great corporations 
 which are called Trusts have demonstrated their 
 ability to cope with the drastic anti-Trust law of 
 New York and other states, with the Sherman Act 
 thrown in, and show no signs of panic because of 
 proposed additional hostile legislation. The se- 
 renity with which these corporations regard the 
 latest anti-Trust measure is doubtless due in a 
 measure to the fact that no goods can be 
 confiscated unless it shall be legally shown that 
 they are manufactured and sold in violation of law. 
 That is to say, it must be first shown conclusively 
 that a corporation is a Trust before its goods can be 
 branded as the products of a Trust or confiscated 
 as such. 
 
 It must be borne in mind that all of the mighty 
 
WORKERS OF THE TRUSTS. 283 
 
 combinations of capital organized as corporations 
 have been formed by some of the ablest lawyers in 
 the land with a view to meeting every legal require- 
 ment of organization. They feel that these com- 
 binations will be in no danger until the laws regu- 
 lating the formation of corporations are radically 
 changed. And after all is said it must be apparent 
 to those who have studied anti-Trust laws already 
 upon the statute books that the future welfare of the 
 great Trusts or corporations, call them what you 
 may, will depend largely upon the man or men 
 called upon to enforce the laws. For the severest 
 anti-Trust law may become a dead letter in the 
 hands of an official or officials friendly to corpora- 
 tive interests. 
 
 No matter what legislation may be enacted by 
 Congress in the way of dealing with the Trusts, the 
 sincerity of the men behind this legislation will be 
 discussed by the country. For under Democratic 
 and Republican administrations as well the Trusts 
 have grown and flourished, more notably, however, 
 during the last three years. The question will be 
 asked: Which of the two great political parties is 
 most friendly to the Trusts? 
 
 On December 3, 1899, Mark Hanna, one of the 
 dominant figures of the Republican party, dictated 
 the following statement to the reporter of a New 
 York daily paper: 
 
 "So long as the Trusts have not proved a menace 
 to business nor to the laboring interests of the 
 country, so long as all that is said about them is 
 merely talk and nothing but talk, so long as they 
 
284 MARK HANNA'S " MORAL CRANKS." 
 
 have not proved a curse to the country, I believe 
 they should be let alone. 
 
 "This combination of capital for one purpose or 
 another is not a political question at all. It is a 
 business question and ought not to have been 
 brought into politics." 
 
 That does not sound like the utterance of one 
 who may reasonably be regarded as hostile to 
 Trusts. Yet at the recent Republican State Con- 
 vention in Ohio, 'the following declaration was 
 made in the platform: 
 
 "The Republican party of Ohio stands committed 
 to legislative and executive opposition to the threat- 
 ening combinations of capital that seek to resist 
 competition and stifle independent producers. 
 
 "We insist that injurious combinations shall be 
 forbidden and so-called Trusts shall be so regulated 
 from time to time and be so restricted as to guar- 
 antee immunity from hurtful monopoly and assure 
 fair treatment and protection to all competing in- 
 dustries." 
 
 It is fair to assume that this plank in the Repub- 
 lican platform was placed there solely for political 
 effect, for Senator Hanna dominated the Ohio State 
 Convention, and it is known that he still believes 
 there is no justification for the hue and cry raised 
 against corporations in general. "So-called Trusts" 
 is the term which Senator Hanna uses in referring 
 to great combinations of Capital. When the Stan- 
 dard Oil Company left the State of Ohio, the Sen- 
 ator expressed his deep regrets, and severely criti- 
 cised those state officials who were believed to be 
 
WORKERS OF THE TRUSTS. 285 
 
 responsible for the Oil Company's abandonment of 
 the state. 
 
 Here it may be of interest to my readers to scan 
 an extract from the testimony given by George Rice 
 before the Industrial Commission at Washington 
 November 11, 1899. He is a witness who asserts 
 that proper efforts to enforce the anti-Trust laws 
 have not been made: 
 
 "I am a citizen of the United States, born in the 
 state of Vermont. Producer of petroleum for more 
 than thirty years, and a refiner of same for twenty 
 years, but my refinery has been shut down during 
 the past three years, owing to the powerful and all- 
 prevailing machinations of the Standard Oil Trust, 
 in criminal collusion and conspiracy with the rail- 
 roads to destroy my business of twenty years of 
 patient industry, toil, and money in building up, 
 wholly by and through unlawful freight discrimina- 
 tions. I have been driven from pillar to post, from 
 one railway line to another, for twenty years, in the 
 absolutely vain endeavor to get equal and just 
 freight rates with the Standard Oil Trust, so as to 
 be able to run my refinery at anything approach- 
 ing a profit, but which I have been utterly unable 
 to do. I have had to consequently shut down, with 
 my business absolutely ruined and my refinery idle. 
 This has been a very sad, bitter and ruinous ex- 
 perience for me to endure, but I have endeavored to 
 the best of my circumstances and ability to combat 
 it the utmost I could for many a long waiting year, 
 expecting relief through the honest and proper ex- 
 ecution of our laws, which have as yet, however. 
 
286 MARK HANNA'S " MORAL CRANKS." 
 
 never come. But I am still living in hopes, though 
 I may die in despair." 
 
 After Mr. Rice had testified at great length con- 
 cerning his disastrous encounter with the Standard 
 Oil Company, substantiating much that he said by 
 documentary evidence, he was questioned as follows 
 by Representative Livingston: 
 
 "Please explain why the anti-Trust act is not 
 ■executed. A. Because the Attorney-General does 
 not enforce it as he ought to enforce it. 
 
 "Q. Can it not be enforced in the states inde- 
 pendent of the Attorney-General? A. No. The 
 act says that it must be done through the Attorney- 
 General of the United States and his deputies. You 
 know he has about seventy-five deputies under him. 
 I will just read Section 4: 
 
 Sec. 4. The several circuit courts of the United States 
 are hereby invested with jurisdiction to prevent and re- 
 strain violations of this act; and it shall be the duty of the 
 several district attorneys of the United States, in their 
 respective districts, under the direction of the Attorney 
 General, to institute proceedings in equity to prevent and 
 restrain such violations. Such proceedings may be by 
 way of petition setting forth the case and praying that 
 such violation shall be enjoined or otherwise prohibited. 
 When the parties complained of shall have been duly 
 notified of such petition the court shall proceed, as soon 
 as may be, to the hearing and determination of the case; 
 and pending such petition and before final decree the court 
 may at any time make such temporary restraining order or 
 prohibition as shall be deemed just in the premises. 
 
 "Q. Has there been any effort made in your state 
 to enforce that by any one of those solicitors? A. 
 I do not know. I have had correspondence with 
 the Attorney-General of the United States myself 
 in regard to proceedings against the Standard Oil 
 Trust, but he doesn't act. I wrote him a year ago. 
 
WORKERS OF THE TRUSTS. 287 
 
 "Q. Have you that correspondence? A. No, I 
 haven't it with me, but that is the great trouble 
 with the whole business. If this anti-Trust act 
 which was passed had been immediately enforced, 
 I do not think there would have been this epidemic 
 of Trusts we have to-day, because they can enjoin 
 and prohibit and confiscate their goods. I will just 
 read that part of it: 
 
 Sec. 6. Any property owned under any contract or by 
 any combination or pursuant to any conspiracy (and be- 
 ing the subject thereof) mentioned in section i of this 
 act, and being in the course of transportation from one 
 state to another or to a foreign country, shall be for- 
 feited to the United States and may be seized and con- 
 demned by like proceedings as those provided by law for 
 the forfeiture, seizure and condemnation of property im- 
 ported into the United States contrary to law. 
 
 "They can enjoin. Suppose all these seventy- 
 five attorneys were under orders from the Attorney- 
 General of the United States to proceed against 
 everyone; it would make a great difference. But, 
 of course, it would not amount to anything unless 
 you get some of them in state prison — fines with 
 them don't amount to anything. 
 
 "Q. (By Mr. Jenks.) Do I understand you to 
 say that in your correspondence with the Attorney- 
 General the Attorney-General declined to enforce 
 the law? A. He made excuses from one thing to 
 another; that he hadn't the time to look into it, and 
 the Assistant Attorney-General had gone to Europe 
 and hadn't got back. 
 
 "Q. What does the Interstate Commission say 
 about it? A. They do not decide my cases; they 
 do not decide this gross freight discrimination. 
 
 "Q. Do they give you any reason why they do 
 
288 MARK HANNA'S " MORAL CRANKS." 
 
 not decide them? Have you any correspondence 
 here that will show that? A. Yes, here is the de- 
 cision of this case. 
 
 "Q. (By Mr. Phillips.) When was that decision 
 rendered? A. April 9, 1892. They were brought 
 in March, 1889, and April 26, 1889. They did not 
 decide them until April 9, 1892, and then they only 
 partially decided them and left them all open for ad- 
 ditional evidence. 
 
 "Q. (By Representative Livingston.) Additional 
 evidence on which side? A. And, of course, it so 
 disgusted me that I would not have anything more 
 to do with it; I would not take any more evidence. 
 I had spent a lot of money and I had a first-class 
 lawyer, one of the finest in the United States, and a 
 railroad man, to see to the cases, and proved all that 
 I charged, and then they hung them up," 
 
XIV. 
 
 The Chicago trust conference delegates generally agreed 
 that there ought to be additional laws— Bourke 
 Cockran, however, declared that existing laws are 
 evaded in most states— The Political Trust alter- 
 nately master and servant of all Trusts. 
 
 In the preface to a stenographic report of the 
 most extended and interesting discussion of Trusts 
 had in this country since these powerful combina- 
 tions of capital have been under discussion, a report 
 printed by the Civic Federation of Chicago, Presi- 
 dent Franklin Head says: 
 
 "The discussions of the general subject of Trusts 
 and trade combinations during the past summer 
 occupied seemingly more than any other the public 
 mind. Their greatest need in such discussions 
 seemed, to use the happy expression of Lyman 
 Abbott, to be light, not heat. For the purpose of 
 eliciting the fullest possible discussion of such sub- 
 ject from all standpoints, the Civic Federation of 
 Chicago invited the Governors of the various states 
 and the leading commercial, industrial and labor 
 organizations to send delegates to a conference tq 
 be held in Chicago from the 13th to the i6th of 
 September. A considerable number also of 
 students of economics from the various colleges and 
 universities were invited to give expression to their 
 views upon the same general topic. The response 
 to this invitation was most gratifying and a most 
 able and intelligent body of men from all parts of 
 the country assembled for such a conference. 
 "The delegates appointed by the Governors rep- 
 2S9 
 
290 MARK HANNA'S " MORAL CRANKS." 
 
 resented every interest in their respective states, in- 
 cluding Congressmen, ex-Congressmen, ex-Gov- 
 ernors, ex-Supreme Court Judges, Attorney-Gen- 
 erals, Presidents of banks, Presidents of railroads, 
 manufacturing and commercial organizations, and 
 representatives of labor, agricultural and education- 
 al interests." 
 
 Many speakers took part in the four days' discus- 
 sion of the corporations which are generally re- 
 ferred to as Trusts. These combinations of capital 
 were as warmly defended on the one side as they 
 were fiercely assailed on the other. In one point 
 the disputants with but few exceptions agreed, and 
 that was the conceded necessity of legislation re- 
 quiring the Trusts to make public — that is to say, 
 to file with Secretaries of States — certain informa- 
 tion now concealed from all except those who are 
 within the inner circles of these corporations. 
 Bourke Cochran expressed the dominant sentiment 
 of the conference in the following words: 
 
 "Wherever we discover corporate abuse we find 
 that it is developed in secrecy, originates in secrecy. 
 Special favors could never be granted in the light of 
 day. Misrepresentations would be useless if all the 
 facts within the knowledge of corporate officers 
 were imparted to the public. Fraud upon corpora- 
 tions by the directors would never be attempted if 
 their operajtions were conducted within full view of 
 the stockholders and of the public. 
 
 "Everybody who has discussed corporate mis- 
 conduct on this platform has agreed that it is en- 
 couraged by the secrecy surrounding corporate 
 
WORKERS OF THE TRUSTS. 291 
 
 management. What objection can there be to pub- 
 licity? Wie are told that corporate management is 
 private business. This certainly is not true of cor- 
 porations engaged in operating public franchises. 
 Such corporations are government agencies, and the 
 right of the people to full information concerning 
 the operations of public agencies cannot be ques- 
 tioned under a republican form of government. 
 Corporations of every kind are created for the pur- 
 pose of encouraging industry and promoting pros- 
 perity. Whenever they become engines of fraud or 
 oppression they are perverted from their original 
 purposes. Secrecy being the source of evil, pub- 
 licity is its natural antidote. 
 
 "The pretense that publicity would injure the in- 
 terests of stockholders is a device to plunder them. 
 Under the cloak of secrecy stockholders have been 
 robbed quite as extensively as the people have been 
 oppressed." 
 
 '"Every stockholder should have the right to ex- 
 amine the books of a corporation and to learn every 
 detail of its operation. If it be objected that to al- 
 lowr the holder of a single share in a corporation 
 capitalized for millions to examine its books at 
 pleasure would disturb its business, the answer is 
 simple. If a corporation doesn't want a great 
 number of stockholders it need not have them. It 
 has but to divide its capital stock into shares of $500 
 or $1,000 or $10,000 each in order to reduce the 
 number of its shareholders. Corporations divide 
 their stock into a greater number of shares because 
 it is easier to raise money from many persons con- 
 
292 MARK HANNA'S " MORAL CRANKS." 
 
 itributing each a small sum than from a few persons 
 each contributing a large amount. If the corpora- 
 tion enjoys the advantage of such a subdivision of 
 its capital it should accept a corresponding respon- 
 sibility to every individual shareholder. Indeed, 
 under existing laws every stockholder has a right to 
 examine the books of a corporation, if the courts 
 would enforce it. In this respect the only new leg- 
 islation necessary is an act compelling the courts 
 to grant as a matter of right what to-day they grant 
 as a matter of discretion. 
 
 "Every corporation should be compelled to file 
 with the Secretary of State, at its organization, a 
 statement of all the property, franchises, good will 
 and assets of every description on which its cap- 
 italization is based. It should be compelled to 
 make a full report every year of all its business to 
 some department of the state. This is the law to- 
 day in nearly every state, but I believe it is evaded 
 in all of them. The reports are invariably mis- 
 leading, when they are not incomprehensible. 
 
 "The powers now exercised in almost every state 
 by the Department of Insurance and the Depart- 
 ment of Banking should be extended so as to make 
 it the duty of some public authority to examine the 
 condition of every corporation, to scrutinize its 
 operation and to institute criminal proceedings 
 against any officers attempting to practice fraud or 
 concealment in preparing the reports exacted by 
 law. 
 
 "Finally, the violation, evasion or disregard of 
 any of these provisions should be punished by long 
 terms of imprisonment. Where great sums are to 
 be gained by disobeying the law, fines will not se- 
 
WORKERS OF THE TRUSTS. 293 
 
 cure obedience to it. Under such circumstances, 
 fines are too often regarded as mere taxes on finan- 
 cial operations, to be collected subsequently from 
 the public." 
 
 A notable illustration of the truth of this last 
 statement is found in the fact that three agents of 
 the wealthiest Trusts in this country were, on a jury 
 trial at Buffalo, found guilty of a conspiracy to ruin 
 a small oil refiner's business, whose works had been 
 blown up by one of their tools. They escaped, each 
 with a paltry fine of $250. 
 
 E. C. Crow, Attorney-General of Missouri, pre- 
 sented to the Chicago Conference his remedy for 
 the evils of the Trusts in these words : 
 
 "I am firmly of the opinion that the state should 
 enact laws providing that no corporation should be 
 organized for any but public and quasi public 
 purposes. The argument will be made that cor- 
 porate control of business is so absolute and easy 
 that trading corporations are a necessity. It is 
 true that the control of a trading corporation is 
 easy, because it depends on enough dollars to buy a 
 majority of the stock, and not on the brains of the 
 individual shareholder. One man may buy enough 
 shares of stock to control a corporation, yet there 
 may be a hundred stockholders. Let us have laws 
 enacted that declare the members of a corporation 
 responsible to the same extent as the members of a 
 co-partnership for the debts, acts and liabilities of a 
 corporation. The mere caution of men risking 
 their all in one business venture will prevent the 
 
294 MARK HANNA'S " MORAL CRANKS." 
 
 formation of great Trusts where individual liability 
 exists." 
 
 Another reformer suggested a bill based upon 
 the following extract from the drastic revenue laws 
 of Newfoundland — the Act of 1898: 
 
 "i. Whenever the Governor in Council has 
 reason to believe that with regard to any article of 
 commerce there exists any Trust, combination, as- 
 sociation or agreement of any kind among manu- 
 facturers of such articles or dealers therein, to un- 
 duly enhance the price of such article, or in any 
 other way to unduly promote the advantage of the 
 manufacturers or dealers at the expense of the con- 
 sumers, the Governor in Council may commission 
 or empower any Judge of the Supreme Court to 
 inquire in a summary way into and report to the 
 Governor in Council whether such Trust, combina- 
 tion, association or agreement exists. 
 
 "2. The Judge may compel the attendance of 
 witnesses and examine them under oath and require 
 the production of books and papers, and shall have 
 such other necessary powers as are conferred upon 
 him by the Governor in Council for the purposes of 
 such inquiry. 
 
 "3. If the Judge rieports that such Trust, com- 
 bination, association or agreement exists, and if it 
 appears to the Governor in Council that such disad- 
 vantage to the consumers is facilitated by the duties 
 of customs imposed on a like article, when im- 
 ported, then the Governor in Council shall place 
 such article on the free list, or to reduce the duty 
 
WORKERS OF THE TRUSTS. 295 
 
 on it as to give to the public the benefit of reason- 
 able compensation in such article." 
 
 It is true, as Mr. Cochran declared, that in nearly 
 every state of the Union there are laws which if en- 
 forced would insure publicity where concealment is 
 now had. John R. Dos Passos, a distinguished 
 corporation lawyer, told the Industrial Commission 
 at Washington that there was no need of further 
 anti-Trust laws, and practically flung in the faces 
 of the Commission the fact that these great cor- 
 porations are not restrained by existing laws. 
 James B. Dill, one of Andrew Carnegie's lawyers, 
 and legal adviser to various powerful corporations, 
 told the Commission of the failure of many corpora- 
 tions to comply with the requirements of the laws 
 of his state. Ex-Governor Altgeld is upon record 
 as declaring that it is useless to legislate against the 
 Trusts — that Democrats and Republicans alike 
 have failed to enforce anti-Trust laws; and in that 
 opinion many concur. 
 
 Present laws, the Sherman act, thje anti-Trust 
 acts of various states having failed to accomplish 
 desired results, the thoughtful citizen may feel dis- 
 posed to ask: Of what use will it be to pass ad- 
 ditional anti-Trust laws? Having asked this ques- 
 tion he will naturally make the further query: Why 
 are not present laws efficacious? If the writer were 
 called upon to make answer, he would reply that 
 the Trusts may regard with absolute serenity all 
 professedly hostile legislation so long as these cor- 
 porations are blackmailed and protected by the 
 greatest of all Trusts in this country — the Political 
 
296 MARK HANNA'S " MORAL CRANKS." 
 
 Trust. For in this Political Trust are Republican 
 and Democratic bosses, each of whom controls 
 Aldermen, Assemblymen, State Senators, members 
 of Congress, and in many instances officials whose 
 duty it is to enforce the provisions of law. Politi- 
 cians may fulminate against the Trusts for political 
 effect, but the Trusts will not cease to smile at the 
 harmless demonstrations so long as the Political 
 Trust is willing to accept campaign subscriptions 
 from any and every corporation. The Trusts will 
 not believe there is real cause for alarm so long as 
 this far-reaching Political Trust, with branch of- 
 fices in every city and hamlet of the country, is en- 
 gaged in that work which has been fitly character- 
 ized in the editorial columns of a leading American 
 journal as The Sale of I^aw. 
 
XV. 
 CAPITAL'S OFFER TO LAROR. 
 
 Three corporations invite the co-operation of their em- 
 ployes in business — ^Two somber pictures of fancied 
 future social conditions that may prove to be no 
 more than the creations of pessimistic minds — No 
 one can predict with certainty. 
 
 Speculating as to the probable ultimate triumph 
 of Socialism, Herbert Spencer has drawn a gloomy, 
 picture of the future in which the voluntary indus- 
 trial organization is displaced by a compulsory in- 
 dustrial and Socialistic organization, a state in 
 which "the brain worker will find there are no 
 places left save in one or other public department; 
 while the hand worker will find that there are none 
 to employ him save public officials. And so there 
 will be established a state in which no man can do 
 what he likes, but every man must do what he is 
 told." 
 
 The Socialist, on the other hand, declares that 
 Spencer has drawn a picture of conditions inevitable 
 if the Trusts go on adding function to function; 
 that if the great corporations are permitted to drive 
 the small shopkeepers, artisans and manufacturers 
 out of individual business they and all the brain 
 workers will eventually become no more than cogs 
 in a great wheel, ever engaged in crushing out in- 
 dividuality. It is the fear of such a condition that 
 has given great stimulus to the idea that the power 
 of Corporate W'ealth must be restrained. Every- 
 where throughout the country men of moderate 
 
 297 
 
298 MARK HANNA'S " MORAL CRANKS." 
 
 means, and men of no means, and thoughtful 
 mothers as well, have grown apprehensive as to 
 the future of their sons and daughters. These fears 
 are expressed somewhat after this fashion: 
 
 "The avenues of individual business are rapidly 
 closing. It will soon be impossible for our sons to 
 embark in any small business enterprise with hopes 
 of building upon it a fortune or even a competency. 
 The small shopkeepers are already doomed; the 
 shops they have vacated confront you on every 
 business thoroughfare. The shoe stores are con- 
 trolled by the Trusts, the blacksmith no longer 
 makes horseshoes in his shop, the butcher is de- 
 plendent upon a Beef Trust, the individual tailor is 
 being pushed aside by the department stores, so are 
 the milliners and the dressmakers and the haber- 
 dashers. The corporations control the sale of all 
 anthracite coal, bagging, brass goods, rolled copper, 
 glass, iron, steel, chains, nails, shovels, pipe, glu- 
 cose, kerosene, oil, matches of first grade, raisins, 
 felt and slate roofing, powder and ammunition, 
 stoves, sardines, starch, snufif, tobacco, solder, 
 scythe snaths, tin plate, tinware, white lead, white 
 pine, lumber, yeast cakes, woodenware, linseed. 
 The Trust and Title Guarantee Companies are 
 rapidly taking away business from the lawyers who 
 formerly derived handsome revenues from searches, 
 the procurement of loans upon real estate, the 
 making and probating of wills, the care of estates. 
 The small shipbuilder, the carriage maker, the 
 maker of furniture, the housebuilder of small means, 
 are all going to the wall. In all our large cities 
 there are hundreds of college boys either vainly 
 seeking remunerative lemployment or employed at 
 
CAPITAL'S OFFER TO LABOR. 299 
 
 rates less than those demanded by mechanics. The 
 best that the majority of young men and young 
 women may hope for in the future, if thp Trusts 
 continue to augment their power, is to become mere 
 cogs, small wheels or inconspicuous parts of the 
 machinery of an industrial world in which the mag- 
 nates of wealth must become supreme. To many 
 young men therie will be nothing to look to beyond 
 a private soldier's uniform and probable graves in 
 the Philippines or other American colonial posses- 
 sions." 
 
 These are sombre pictures, which may prove to 
 be no more than the creations of unreasonable fears, 
 for, although the philosopher may speculate and 
 the prophet predict, no man can find any point of 
 vantage in the past experiences of this country 
 from which he can see into the future, or accurately 
 reason out what is to come. We are passing 
 through an experimental stage of commercialism, 
 the like of which has no counterpart in the history 
 of this or any other country. The makers of the 
 Trusts no more certainly know what the ultimate 
 outcome of these gigantic combinations will be than 
 those whose apprehensions are aroused by them. 
 Here and there, however, the careful observer can 
 see some small signs which may indicate a brighter 
 future than the pessimist contemplates, faint indi- 
 cations that those who are called the Captains of 
 Industry and those who serve them unwillingly but 
 as a matter of necessity, may yet solve the great 
 social problem of centuries by co-operation in which 
 all will be united by a common bond of interest. 
 
300 MARK HANNA'S " MORAL CRANKS." 
 
 One of these signs is manifest in the following, 
 clipped from the news columns of the New York 
 Herald: 
 
 "Labor and Capitai, Join Their Forces. Secretaries 
 
 OF Five Unions to be Directors in a 
 
 New Cotton Concern. 
 
 "Fall River, Mass., May lo. An organization will be 
 formed here shortly which will be the first of its kind in 
 this part of the country, and it will be watched with in- 
 terest by both capital and labor. 
 
 "The secretaries of the five big labor unions, together 
 with National Representative William S. Greene and 
 former City Solicitor Phillips, have signed an agreement 
 to incorporate the American Cotton Company, for the 
 manufacture of fine cotton goods. 
 
 "The capital will be $1,000,000, divided into 40,000 shares 
 of $2S each, in order that the working class of the city 
 may be induced to subscribe. The secretaries will also be 
 directors. 
 
 "All the secretaries have the same general idea of the 
 good that may be accomplished by a co-operative mill. 
 They think that the salvation of this community is in 
 fine cotton goods, made with the care and speed that 
 ought to accompany skill and intelligence among opera- 
 tives. Not one of them believes that the frequent com- 
 plaints of the restrictions that have been placed upon 
 Massachusetts cotton manufacturing by the Legislature 
 has any real foundation. They think the business offers 
 great opportunities for profit if a better system is used." 
 
 On May 25, 1896, President Fish, of the Illinois 
 Central Railroad, issued a circular addressed to the 
 "officers and employes of the Illinois Central Rail- 
 road," in which they were invited to becomte share- 
 holders. This circular in part read as follows: 
 
 "On the first day of each month the company will quote 
 to employes, through the heads of their departments, a 
 price at which their applications will be accepted for the 
 purchase of Illinois shares during that month. An em- 
 ploye is offered the privilege of subscribing for one share 
 at a time, payable in installments in sums of $5 or any 
 multiple of $5 on the completion of which the company 
 
CAPITAL'S OFFER TO LABOR. 301 
 
 will deliver to him a certificate of the share registered in 
 his name on the books of the company. He can then, 
 if he wishes, begin the purchase of another share on the 
 installment plan. The certificate of stock is transferable 
 on the company's books, and entitles the owner to such 
 dividends as may be declared by the Board of Directors, 
 and to a vote in their election. 
 
 "Any ofKcer or employe making payments on this plan 
 will be entitled to receive interest on his deposits, at the 
 rate of 4 per cent, per annum, during the time he is paying 
 for his share of stock, provided he does not allow twelve 
 consecutive months to elapse without making any pay- 
 ment, at the expiration of which period interest will cease 
 to accrue, and the sum at his credit will be returned to 
 him on his application therefor. 
 
 "In case an employe leaves the service of the company 
 from any cause, he must then either pay in full for the 
 share for which he has subscribed and receive a certificate 
 therefor, or take his money, with the interest which has 
 accrued. 
 
 Forrest Crissey, in the Outlook of May 13, 1899, 
 said of President Fish's experiment: 
 
 "So rapidly did this new gospel of shareholding 
 spread among the employes that June 30, 1898, 
 found the plan at this stage of development: Em- 
 ployes to the numbler of more than 7oo owned stock 
 in the road. The shares subscribed for by these 
 men of the pay-roll amounted to 2,042, of which 
 1,569 were fully paid for, the certificates having^ 
 been issued to the subscribers. This left 473 shares 
 in process of payment under the provisions stated 
 in the President's circular. The deposits on these 
 shares reached the considerable figure of $28,621.49. 
 The total number of shareholders then living in this 
 country was 3,365, and they owned 237,709 shares. 
 While there has been a steady increase in the num- 
 ber of employes who have invested in shares since 
 June 30, 1898, the increasle has not been large, 
 
302 MARK HANNA'S " MORAL CRANKS." ^ 
 
 owing to the marked appreciation in the value of 
 the stock." 
 
 Vice-President Welling, of the Illinois Central 
 Railroad, said, after the shareholding schemte had 
 two years' trial: 
 
 "All classes of employes have availed themselves 
 of the opportunity to purchase stock through the 
 company, and many are constant subscribers, mak- 
 ing application for another share as soon as they 
 have paid for the outstanding one. The rise in Il- 
 linois Central stock has tempted some to sell in 
 order to realize a profit on their investment, and 
 at the same timie it has deterred, to some extent, 
 would-be subscribers who are not yet accustomed 
 to seeing the stock above par. The greater part of 
 the subscriptions were made when the stock was 
 h'elow par, and as there has been a steady advance 
 in the price of the stock, subscribers are well satis- 
 fied with their investments. 
 
 "The acquisition of a part ownership in the com- 
 pany's property, with a vote in the conduct of its 
 afifairs, is an educational factor in bringing home to 
 the mind of the employe having such ownership the 
 relation and inter-dependence of labor and capital. 
 He needs no argument to convince him of the 
 soundness of the proposition that his hard-earned 
 savings invested in the road are but a part of his 
 labor transmuted into capital, helping to furnish 
 employment to other workers and adding to the 
 material welfare and prosperity of the common- 
 wealth, as well as yielding, under prudent manage- 
 m)ent, a fair return on his labor investment. He 
 must of necessity grasp the meaning of co-opera- 
 tion and what is necessary to protect and sustain it." 
 
CAPITAL'S OFFER TO LABOR. 303 
 
 The efforts that have thus been made of a railroad 
 company and cotton mill owners to secure the co- 
 operation of their employes indicates a commend- 
 able desire to unite the interests of Capital and 
 Labor. When, however, the widespread belief that 
 corporations for the greater part are over-capital- 
 ized shall have no basis of fact, when the fear of 
 watered stock shall have been dispelled, proposed 
 co-operation between employer and employe may 
 prove more attractive to the laboring masses than 
 at present. 
 
XVI. 
 
 ARE THE TRUSTS FAVORED? 
 
 Judge Gaynor attacks the Standard Oil Company — Inter- 
 esting extracts from testimony given by John D. 
 Rockefeller and others — Francis L,ynde Stetson, 
 former law partner of Grover Cleveland, is opposed 
 to "coddling" investors by passing laws for their 
 benefit — A challenge to Socialism. 
 
 Speaking of "Trusts, Economically and Legally 
 Considered," Justice William J. Gaynor of the 
 Supreme Court, New York, said at one stage of an 
 address delivered before the Department of Law of 
 the Brooklyn Institute May i8, 1900: 
 
 "The railroads in this country, my friends, are 
 nothing in law but the public highways of the coun- 
 try. They are juat as much the public highways of 
 the country as the toll roads and the fnee roads 
 which they superseded. From the beginning of 
 our history the carrying of freight and the carrying 
 of passengers as long as we have any record of time 
 was deemled a public matter and a governmenital 
 matter, and a matter to be regulated by govern- 
 ment and for government to keep control of. Now, 
 that being so — they being our public highways, 
 over which all of us have a right to go — can you 
 conceive of anything more demoralizing, anything, 
 I may say, more criminal, than that one man may 
 carry his freight at one-half what another man car- 
 ries it? That combinations of capital and combina- 
 tions of wealth may carry their freight at a figure so 
 reduced that they can destroy all those who are in 
 304 
 
ARE THE TRUSTS FAVORED? 305 
 
 competition with them? Why, it is an obvious 
 matter that the freight rates are at the bottom of all 
 distribution. That is the most essential matter you 
 can conceive of in the distribution of the community 
 — the rates which have to be paid for freights. If 
 one man can get a freight rate which enables him 
 to sell his product at a cheaper rate than the man 
 in competition with him, why he can destroy his 
 competitor, can't he? 
 
 "The Standard Oil may be cited as an example. 
 The men who organized it were no better at digging 
 oil wells than those who wiere on the oil fields, but 
 when it could get its freight carried for 60 cents a 
 barrel and its competitors were charged $1.60 to 
 $2 a barrel, it meant that its competitors could do 
 nothing else than turn their business over to it. If 
 all these people were on the same level the big fish 
 would not be able to eat the little fish." 
 
 "It seems to me, my friends, that this is the root 
 of the evil in this country. It seems to me that 
 the American people do not want anything but fair 
 play. Some of us thought thie ttarifif law also a 
 discrimination. That confines a competition to this 
 country and by lessening the area of competition 
 works to the disadvantage of the community. That 
 may be so or it may not be so. I do not undertake 
 to say, but I do say that the blackest page in our 
 history — and it will be so written by the next gen- 
 eration or the generation that comes after — is this 
 using our public highways to give discriminating 
 rates to these combinations of capital, and thereby 
 enable them to undersell and drive their competitors 
 
3o6 MARK HANNA'S " MORAL CRANKS." 
 
 out of business. It is criminal. You say, how is 
 it to be stopped? Well, the interstate commerce 
 law was passed to stop it and the Interstate Com- 
 merce Commission was established to stop it, but 
 it is a conceded thing that it is an absolute break- 
 down; it has not stopped it. Some want the gov- 
 ernment to take the railroads over and control them 
 by government operation. I scarcely wish to sug- 
 gest anything, but I have suggested elsewhere and 
 I suggest again that while I could not say that it 
 would be advisable for the govjernment to take 
 these corporations, I would say that the government 
 ought to appoint every freight agent in the United 
 States. That being done the government has ab- 
 solute control of the receipt and billing of freight 
 by its own agents under its own civil service, and 
 if it were necessary to go further it would not be 
 too much to say that the penalty of death ought 
 to be visited upon anybody who would take freight 
 at a rate below what others could get it at." 
 
 Testifying before the Industrial Commission at 
 Washington, D. C, in December, 1899, John D. 
 Rockefeller said: 
 
 "The Standard Oil Company of Ohio, of which I 
 was President, did receive rebates from the rail- 
 roads prior to 1880, but received no special ad- 
 vantages for which it did noit give full compensation. 
 The reason for rebates was that such was the rail- 
 road's method of business. A public rate was made 
 and collected by the railway companies, but so far 
 as my knowledge extends, was never really retained 
 in full, a portion of it was repaid to the shippers as 
 
ARE THE TRUSTS FAVORED? 307 
 
 a rebate. By this method the real rate of freight 
 which any shipper paid was not known by his 
 competitors nor by other railway companies, the 
 amount being in all cases a matter of bargain with 
 the carrying company. Each shipper made the 
 best bargain he could, but whether he was doing 
 better than his competitor was only a matter of con- 
 jecture. Much depended upon whether the shipper 
 had the advantage of competition of carriers. The 
 Standard Oil Company of Ohio, being situated at 
 Cleveland, had the advantage of different carrying 
 lines, as well as of water transportation in the 
 summer, and taking advantage of those facilities 
 made the best bargains possible for its freights. All 
 other companies did the same, their success depend^ 
 ing largely upon whether they had the choice of 
 more than one route. The Standard sought also to 
 offer advantages to the railways for the purpose of 
 lesslening rates of freight. It offered freights in 
 large quantity, carloads and trainloads. It fur- 
 nished loading facilities and discharging facilities. 
 It exempted railways from liability for fire. For 
 these services it obtained contracts for special al- 
 lowances on freights. These never exceeded, to 
 the best of my present recollections, 10 per cent. 
 But in almost every instance it was discovered sub- 
 sequently that our competitors had been obtaining 
 as good, and, in some instances, better rates of 
 freight than ourselves." 
 
 The StanHard Oil Company filed with the In- 
 dustrial Commission letters from the managers of 
 twenty great railroads, in which the denial was 
 
3o8 MARK HANNA'S " MORAL CRANKS." 
 
 made that the roads made freight discriminations 
 favoring the Oil Tru&t. Lewis Emery, Jr., an oil 
 refiner of Bradford, Pa., testified that the companies 
 did make discriminations. He began his testimony 
 by saying: 
 
 "I diesire to say that I hold no animosity toward 
 the Standard Oil people or any association. They 
 were thirty-four years my companions, and I only 
 meet them here to-day upon fair and equitable 
 terms. They believe in their method of doing busi- 
 ness and I in mine. We agreed to separate. Many 
 of the stockholders of the Standard Oil Company 
 have been associates of mine all these years in the 
 ownership of property, and I own property with 
 them at the present time. Therefore, I feel that 
 there is no one here in the room who will say I tell 
 an untruth because I may differ from him." 
 
 When asked to produce proof of the charge that 
 railroads made secret rates, drawbacks and re- 
 bates, Mr. Emory submitted what he called a "con- 
 fession" made by a powerful railroad corporation, 
 in the form of a letter, dated December 22, 1898. 
 The letter was signed by Ejeceivers Cowen and 
 Murray of the Baltimore and Ohio Railroad Com- 
 pany and was addressed to Chairman Knapp of the 
 Interstate Commerce Commission. This interest- 
 ing communication, which sustains the charge that 
 railroads violated the Interstatie Commerce law, 
 reads in part as follows: 
 
 "Within the territory north of the Ohio River and east 
 of the Mississippi the railroad carriers are transporting 
 the larger part of the interstate traffic at rates less than 
 those shown in the published tariff filed with your com- 
 mission, which are by statute the only lawful rates. 
 
ARE THE TRUSTS FAVORED? 309 
 
 "While this condition continues, there will exist the 
 unjust discriminations and the unjust preferences and ad- 
 vantages between persons, localities and particular de- 
 scriptions of traffic, the prevention of which is the main 
 object of the act of Congress establishing your commis- 
 sion. Only by securing the uniform charging of the pub- 
 lished rates can the just equality of service and of charge 
 required by law be secured either between persons or be- 
 tween localities. 
 
 "The Supreme Court of the United States has now 
 fully determined the so-called anti-trust act applies to rail- 
 road carriers and in legal effect prohibits any agreement 
 between them which restrains competition in any degree, 
 even though such agreement goes no further than to 
 secure the observance of the restraints imposed by the act 
 to regulate commerce. It is, therefore, no longer lawful 
 for the carriers to create by agreements between them 
 joint agencies or associations as formerly, to prevent the 
 cutting of rates, however unlawful. Without some im- 
 partial body to investigate the complaints of one compet- 
 ing carrier against another and to check illegal rate cut- 
 ting, if found to exist, it will be practically impossible for 
 the railroad carrier alone to prevent that form of competi- 
 tion between them, however earnest the great majority of 
 the carriers may be to stop it. 
 
 "We see no reason why the commission should refuse 
 its aid to the carriers in an effort to prevent competition 
 from taking the form of illegal concessions through 
 secret rates, drawbacks, rebates and other devices, and we 
 see no reason why the carriers should not seek the aid of 
 the commission in such an effort by reporting to the com- 
 ihission. any departure from published rates, to the end 
 that the facts may be fully ascertained and the illegal 
 practice stopped. 
 
 "The receivers of the Baltimore and Ohio Railroad 
 Company will maintain, on and after January i, 1899, 
 upon the lines operated by them, the rates, fares and 
 charges shown on the tariffs published and filed with the 
 commission as required by law." 
 
 '"After that day, Jan. i, 1899!'" said Mr. 
 Emory, quoting from the letter. "A practical ad- 
 mission that they have not previous to that time. 
 Put your own conclusions upon it." 
 
 The witness said that he had no evidence to con- 
 nect the Standard Oil Company with these con- 
 
310 MARK HANNA'S " MORAL CRANKS." 
 
 fessed discriminations of the Baltimore and Ohio 
 Road. 
 
 In the Industrial Commission's review of the evi- 
 dence taken by that body this statement is made 
 cerning the continued failure of law to prevent dis- 
 criminations in freight rates: 
 
 One of the chief causes, in the opinion of some of the 
 witnesses, of industrial combinations, and at any rate one 
 of the greatest evils in connection with them, is the 
 discriminations which it is claimed they have received in 
 the freight rates given by the railroads. In other investi- 
 gations carried on by the Industrial Commission, es- 
 pecially that on transportation, it has been quite generally 
 conceded by railroad men and shippers that even up to the 
 present time discriminating rates are made in favor of large 
 shippers. 
 
 Much greater differences of opinion exist with reference 
 to the condition of affairs since the passage of the inter- 
 state commerce act. It has been charged as a matter of 
 general belief on the part of almost all of the opponents 
 of the Standard Oil Company that these discriminations 
 in various forms have been continually received, even up 
 to date. On the other hand these charges have been de- 
 nied in toto and most emphatically by every representative 
 of the Standard Oil Company with reference to all cases 
 excepting one, which they claim was a mistake, the 
 amount of freight due being promptly paid on discovery 
 of the error. The Standard Oil Company not merely 
 challenged its opponents to bring forth proof of any case, 
 but produced many letters from leading officials of rail- 
 roads to show that the company had in no case received 
 any favors or asked for them. 
 
 In the case of iron, steel and tin plate shipments, while 
 discriminations were not acknowledged, there was hesita- 
 tion on the part of the officers of two of the companies, 
 at any rate, in denying directly that favors were received. 
 Outsiders knew of no discriminations. 
 
 One witness, Mr. Rice, an oil refiner, presented 
 evidence of methods pursued by corporation of- 
 ficials in the days when they were less wise than 
 
ARE THE TRUSTS FAVORED? 311 
 
 now. That evidence is summarized in the Indus- 
 trial Commission's digest of testimony as follows: 
 "Mr. Rice submitted a letter from Chess, Carley 
 & Co., a representative of the Standard Oil Com- 
 pany, to Mr. Culp, general freight agent of the 
 Louisville and Nashville Railroad: 
 
 Chess, Carley & Co., Louisville. 
 J. M. Culp, Esq., G. F. A.: 
 
 Dear sir— Wilkinson & Co., Nashville, received car of 
 oil Monday, 13th, 70 bbl., which we suspect slipped thro' 
 on the usual sth-class rate— "in fact, we might say," we 
 know it did— paying only $41.50 freight from here. 
 Charges $57.40. Please turn another screw. 
 Yours truly, 
 CHESS, CARLEY & CO. 
 June 16, '81. 
 
 "Wilkinson & Co. were Mr. Rice's agents at Nash- 
 ville. Mr. Rice declares that within five days the 
 rates to Nashville were raised 50 per cent. He 
 does not know whether the Standard Oil Company 
 paid this full rate or not, but thinks it fair to pre- 
 sume from general experience that it did not. He 
 admits that it is an extremely difiEcult thing to prove 
 that rebates have been received." (704, 705.)" 
 
 One of the most striking phases of the present 
 general controversy over the powerful corporations 
 which are commonly characteri2ied as Trusts, is 
 presented in the conflicting utterances of John D. 
 Rockefeller on the one side, and on the other by 
 corporation lawyers whose views are expressed by 
 Francis Lynde Stetson, a former law partner of ex- 
 President Cleveland. Here stands the head of the 
 mighty Oil Trust declaring that laws should be 
 
312 MARK HANNA'S " MORAL, CRANKS." 
 
 enacted for the prevention of frauds upon the public. 
 And there stands Lawyer Stetson declaring that 
 laws are false props and delusive supports, many 
 of which are real injuries to investors, thus evincing 
 his contempt for existing laws, and later contending 
 that Federal legislation is undesirable. 
 
 Mr. Rockefeller was asked to indicate the chief 
 disadvantages or dangers to the public arising from 
 great combinations of capital into corporations, and 
 he replied: 
 
 "The dangers are that the power conferred by 
 combinations may be abused; that combinations 
 may be formed for speculation in stocks rather than 
 for conducting business, and that for this purpose 
 prices may be temporarily raised instead of being 
 lowered. These abuses are possible to a greater 
 or less extent in all combinations, large or small, 
 but this fact is no more of an argument against 
 combinations than the fact that steam may explode 
 is an argument against steam. Steam is necessary 
 and can be made comparatively safe. Combina- 
 tion is necessary and its abuses can be minimized; 
 otherwise our legislators must acknowledge their 
 incapacity to deal with the most important instru- 
 ment of industry. Hitherto most legislative at- 
 itempts have been an efifort not to control but to de- 
 stroy; hence their futility." 
 
 "What legislation, if any, would you suggest re- 
 garding industrial combinations?" the witness was 
 asked. 
 
 Mr. Rockefeller replied: 
 
 "First. Federal legislation under which corpora- 
 tions may be created and regulated, if that be pos- 
 sible. Second, in lieu thereof, state legislation as 
 
ARE THE TRUSTS FAVORED? 313 
 
 nearly uniform as possible encouraging combina- 
 tions of persons and capital for the purpose of carry- 
 ing on industries, but permitting state supervision, 
 not of a character to hamper industries, but suf- 
 ficient to prevent frauds upon the public." 
 
 The Standard Oil magnate frankly admits the 
 necessity of legislation in the interest of the public 
 and investors, but if Lawyer Stetson's conclusions 
 are sound the enactment of such legislation would 
 be in the nature of a coddling of investors. Mr. 
 Stetson aided in the organization of the $200,000,- 
 000 Federal Steel Trust. This is a corporation 
 which permits its Board of Directors to increase its 
 number without consultirig other stockholders. 
 Examined before the Industrial Commission, Mr. 
 Stetson was asked this question in reference to the 
 organization of the Steel Trust: 
 
 "There is a further provision here with reference 
 to the powers of directors in other particulars that 
 perhaps you can explain. It says" (reading) "the 
 corporation may use and apply its surplus earnings 
 or accumulated profits authorized by law to be re- 
 served, to the purchase or acquisition of property, 
 and to the purchase and acquisition of its own cap- 
 ital stock from time to time, to such extent and in 
 such manner and upon such terms as its Board of 
 Directors shall determine.' Is it usual to make pro- 
 vision of that kind that a company may purchase its 
 own stock?" 
 
 "No, it is not," replied Mr. Stetson. 
 
 "Can you explain why?" 
 
 "I have always put it in any place where the law. 
 
314 MARK HANNA'S " MORAL CRANKS." 
 
 permitted me to do it. In the laws of the State of 
 New York there has been, though I do not suppose 
 it survives in all cases, an absolute prohibition 
 against a corporation using any of its own funds 
 for the purchase of its capital stock; but I have 
 never seen in reason and justice why a corporation, 
 out of its surplus, might not be reducing its capital 
 stock. Of course, it is entirely improper that any 
 of the funds of the corporation, other than those 
 constituting the surplus, should be paid back to 
 the stockholders under a guise of purchase of 
 corporate stock. But when the corporation is 
 solvent and has a surplus, I can see no good reason 
 why that surplus should not be so used. It was in- 
 tended here to confer this right." 
 
 Mr. Stetson said he was in favor of giving to 
 organizers of such corporations as were under dis- 
 cussion absolute freedom of compact. 
 
 "Your proposition is, as a lawyer, that it is wise 
 to give the utmost freedom in all matters of that 
 kind?" said one of the Commission. 
 
 "Absolutely," responded the witness, and he 
 added : 
 
 "This paternal system or idea Is at the foot of 
 most of the evils that underlie what the public 
 complain of in corporations. They have been 
 coddled into the belief that when they deal with 
 a corporation they have got to have some kind of 
 protection and may rely on some kind of protection 
 that they do not invoke in their dealings vpith indi- 
 viduals. ]Svery man who deals with an individual 
 inquires as to his credit before he makes up his 
 mind as to whether he will extend to him the faci- 
 
ARE THE TRUSTS FAVORED? 315 
 
 lities of his credit or not ; but in some way when 
 he comes to the same man organized into a corpo- 
 ration, then he is taught that he can rely on some- 
 thing besides the credit of that institution— can 
 rely on a report or statement it makes, which is 
 fallacious. He may, if the report is untrue, punish 
 that man criminally, which he seldom does; but 
 that does not pay him for the credit that he has 
 extended. And that false prop and delusive sup- 
 port upon which the public are invited to rely by 
 many of these laws is a real injury, in my honest 
 belief, and is not any benefit." 
 
 At another stage of Mr. Stetson's examination 
 one of the Commission said : 
 
 "My idea is that in these large aggregations of 
 capital where men, women and children are hold- 
 ing stock the stockholder nowadays may need a 
 little more protection than you seem inclined to 
 give to him." 
 
 " The I^egislature cannot give it to him, nor can 
 you or I," said Mr. Stetson. "There is not any- 
 thing yet that takes incompetents, lunatics and 
 paupers and makes them competent, responsible 
 business men. You cannot do it, and you have 
 got to trust to the development that comes from 
 the experience of having your property at risk. 
 Othello's ^reat point was, 'I have had losses too,' 
 and I would not give anything for the business 
 qualifications of a man who has not had something 
 at risk. As long as he thinks he is buoyed up by 
 some life preserver he will not make a success, nor 
 will the community and the world get on through 
 the efforts of that kind of coddling." 
 
 If this declaration of the organizer of a $200,- 
 
3i6 MARK HANNA'S " MORAI, CRANKS." 
 
 000,000 Trust were to stand as the final word of 
 Corporate Wealth — if the great hosts of honest in- 
 vestors in this country should be convinced that 
 their despoilment by the Workers of the Trusts 
 meant their classification as incompetents and luna- 
 tics, by the owners of the Trusts — if throughout 
 this country it should generally be accepted as a 
 fact that all laws for the protection of honest in- 
 vestors in corporativle enterprises were no more 
 than false props and delusive supports — who could 
 doubt that Socialism would sweep over this land 
 like a mighty whirlwind? Who could doubt that 
 in the enactment of new laws there would be hard, 
 and strange, and drastic provisions, containing no 
 suggestion of that "coddling" which excites the fine 
 scorn of the distinguished mouthpiece of Corporate 
 Wealth who says of credulous men still relying for 
 protection upon law: 
 
 "They have been coddled into the belief that 
 when they deal with a corporation they have got 
 to have some kind of protection!" 
 
 Finis. 
 
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