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RIGHT AND RICHES 
 
 BY 
 
 CHARLES O. McCASLAND. 
 
 Being a Scientific Study of Weai^th and its Rei^ations to 
 
 Producer, Consumer and Society; The Cause of Want 
 
 AND its Amei^ioration; The Nature and Laws of 
 
 Money and the Dangers of Our Centrai^ized 
 
 System of Banking and Corporation 
 
 CoNTROi,; the Ei^ements of 
 
 Coi^iyECTivE Prosperity 
 
 and individual, 
 
 Success. 
 
 THE WILBUR PUBLISHING COMPANY, 
 Pasadena, Cal. 
 
<\^ 
 
 
 7mJh of GONG?iHil 
 JUN 1 1908 
 
 \rhufLf f^cg\ 
 
 Copyright, 1908, by Charles O. McCasland. 
 All rights reserved. 
 
3^ 
 
 TO THOSE WHO, 
 
 BY VOICE OR PEN, BY PRECEPT OR EXAMPLE, 
 
 ARE STRIVING TO INCULCATE 
 
 IN HUMANITY 
 
 THE APPREHENSION OF TRUTH. 
 
 Pasadena, February, 1908. 
 
CONTENTS. 
 
 INTRODUCTION. 
 
 PAG^ 
 Introduction 5 
 
 PART 11. 
 
 property. 
 chapte:r 
 
 I — Ownership — Its Justification Under Different 
 
 Conditions, the Main Inquiry of Economics. . 15 
 
 II — Business — What is Its Rightful Purpose? 19 
 
 III — Value — Its Primary Manifestation. The Wide 
 
 Divergence of Its Three Phases 24 
 
 IV — Property Essence — Property's Commercial Being 
 
 Consists in Exchange Value 33 
 
 V — Property Evolution — Is from the Power to Hinder 
 
 Use 39 
 
 VI — Property Precepts — Brief Statements of the Laws 
 
 of Property 42 
 
 PART III. 
 
 PRODUCTION. 
 
 I — What Production Comprehends — Human Efforts 
 
 but not Natural Forces 47 
 
 II — Exchange and Art — Art, Division of Labor, 
 
 Commerce 49 
 
 III — Labor and Wages — Labor not Synonymous with 
 Toil. Education Makes Effective, but Does 
 
 not Merit Increased Wages 56 
 
 IV — Wealth — How Important to Define 66 
 
 V — Capital, Increase and Interest — What is Not Capi- 
 tal. Interest but Part of Increase. Loaned 
 and directly Applied Capital 69 
 
PART IV. 
 
 SHARING OF OUTPUT. 
 CHAPT:eR 
 
 PAGE 
 
 I — Concession — The Reason for a New Term. The 
 
 Third and Greatest Taker of Output 83 
 
 II — "Living" Rates of Interest and Wages 92 
 
 III — The Eminent Domain of Greatest Efficiency 112 
 
 IV— The Consumer's Rights 128 
 
 V— The Producer's Rights 137 
 
 VI— Society's Rights 157 
 
 PART V. 
 
 re:ci.amation. 
 
 PAGE^ 
 
 I — PaternaHsm — In Which Natural PaternaHsm is 
 
 OutHned 167 
 
 II — Title Limitation — Limitation in Degree and Dura- 
 tion 171 
 
 III — Units, Monopolies, Public Ownership — As Civili- 
 zation Unifies Mankind, and Unitizes the 
 Lines of Production 175 
 
 IV — Title and Time — The Limiting of Ownership to 
 
 the Living 193 
 
 V — Taxation and Compensation — No Taxes Just Ex- 
 cept for a Consideration 207 
 
 VI — Quantitive Title Restriction — Has One a Right to 
 
 Own the Whole Earth? 217 
 
PART VI. 
 
 FINANCES. 
 CHAPTER PAGE 
 
 I — Value-Poise — The Equilibrium of Competitive 
 
 Values of Commodities 325 
 
 II — Currency and Money — The Vital Distinction Be- 
 tween Currency and Money. Currency a 
 Medium of Exchange — Money a Payer of 
 Debts 232 
 
 III — Credit — Should be Distinguished From Credence 
 
 and Confidence 255 
 
 IV — Banks and Panics 264 
 
 a — The Recent Panic — Its Cause? Lack of 
 
 Capital? Lack of Currency? 264 
 
 b — Demand for and Supply of Capital. The 
 Nature of Capital Generally Misunder- 
 stood 279 
 
 c — Dilation of Concession. How the Great 
 Stock-jobbers Exhaust the Wealth of 
 the Land 284 
 
 - d— The Part the Banks Play— The Banks 
 
 Hold, While the Stock-jobber Milks. ... 290 
 
 e — Banking Laws — The Almost Criminal 
 Ignorance of the General Public of the 
 Substance of these Vital Laws which 
 are so Easy of Access 292 
 
 f — The Remedies — To Cut Down Banks' 
 Debt-Making Powers, and Make Them 
 Maintain Actual Reserve 301 
 
 V — The Importance of Industrial Corporations — 
 Their Integrity the Foundation of Industrial 
 Stability 305 
 
 PART VII. 
 
 PROPER USE AND PLENTEOUS SUPPLY. 
 
 I— Waste and Want 313 
 
 II — Governmental Reform and Individual Opportunity 332 
 
''For the ultimate notion of right is that which 
 tends to the universal good; and when one's acting in a 
 certain manner has this tendency he has a right thus 
 to act,'' — Francis Hutcheson. 
 
 "Neither shalt thou covet thy neighhor^s house, his 
 field, or anything that is thy neighbor's." 
 
 ''Seek not proud wealth; hut such as thou mayest get 
 justly, use soberly, distribute cheerfully." — Bacon. 
 
The Author's Purpose. 
 
 OVERTY is a disease, a wide-spread, contagious 
 disease. It is a form of starvation. Now, starva- 
 tion does not always mean a lack of a sufficient 
 food supply, but often simply a malnutrition or 
 failure of assimilation. Is the wide-spread suffering from 
 poverty, which appears to-day, due to a lack of abundant 
 supply or to non-assimilation? 
 
 Economic writers quite generally hold that, collectively, 
 the supply is sufficient if properly diffused among the in- 
 dividuals, and their efforts are principally directed to the 
 evolution of a sociologic system which shall give the proper 
 distribution. This they hope to see accomplished by the re- 
 form of industrial laws; but the fact that they overlook is 
 that poverty is a condition of the individual. It is not 
 enough that measures be taken to prevent the spread of a 
 fever; it is even more important that a remedy be offered 
 the individual; for we may have a healthy community, just 
 as we may have a moral community, only through the health 
 or morality of the individual; and to these ends legislation 
 is not an effectual cause, but only an encouragement. 
 
 The cure of poverty can only be wrought out through 
 scientific understanding. In recent years every progressive 
 concern, producing a certain line of materials, is coming to 
 have chemists expert in the analysis thereof; and this has 
 resulted in the greatest advance in such industries. Now 
 the remedy for poverty is plenty and its proper application 
 to the individual need; therefore, to banish or ameliorate 
 the suffering from poverty, we require a scientific analysis 
 or understanding both of wealth and individual need. I 
 have herein attempted such analysis. 
 
2 THE AUTHOR'S PURPOSE. 
 
 While I do not presume to have developed this reasoning 
 into a finished science, I hope to have made some progress ; 
 for however much I may fall short of the purpose in the 
 treatise hereby presented, I have at least definitely de- 
 termined that when the pure science of economics is ap- 
 prehended, it will afford the individual a sure means of 
 success and present abundance; and ultimately it will bring 
 about perfect social conditions of plenty and peace. Any 
 economic teaching which does not present to the individual 
 a sure recipe for such success is lacking in its science. 
 
 In the hope that in some small measure at least the effort 
 to improve social conditions may be promoted, and that even 
 a few of tired humanity may be helped to a solution of their 
 problems, this volume is submitted. 
 
 Charlks O. McCasIvAnd. 
 
PART ONE 
 
 Introduction. 
 
 The Widespread Evil — Want. 
 
Introduction. 
 
 "7 am come that they might have life, and that they 
 might have it more ahundantly:' — John x:10. 
 
 I HE multitudes of mankind pass the greater part of 
 their waking hours struggHng to get the bare 
 necessities of Hfe — food, shelter and clothing — 
 with now and then a mere trifle of luxury. 
 
 Why is it such a task to live? 
 
 No farmer would keep a species of stock that would no 
 more than earn its feed. No manufacturer would keep an 
 engine that would no more than run itself. Is man alone 
 unprofitable? Is he lor no use but to feed himself? Sure- 
 ly life is for more than mere subsistence. 
 
 Nor is it the poor alone whose time is so engrossed. 
 Many of the minority who have secured command of a 
 competence for many years, or even for life, are slaves to 
 the habit of gathering more and to the fear of losing what 
 they have. They, too, go on with the grind of getting 
 wealth, never taking time to live and do good. 
 
 A certain farmer made a practice of producing and sell- 
 ing clover seed, whose only use is to be sown. His little 
 child was asked by another child, "What is clover for?" 
 'Why, to raise seed, of course !" 
 
 Quite as lacking in understanding is the common state- 
 ment that immigrants are needed to promote the real estate 
 interests of a place, or that the proper business of women 
 is to keep house and raise children. Indeed, the highest 
 business of both men and women is to raise mankind — 
 themselves included— to their natural estate. Epictetus says 
 the beasts were made to bear burdens, but man was made 
 to express God. 
 
6 RIGHT AND RICHES 
 
 The Great Cause who authorizes our being provides 
 continuous profusion for our needs. Is there not abundant 
 food supply as well as the materials for fabrication of 
 wares? For fuel great forests ever ready to renew them- 
 selves. Strata of coal unmeasured are accessible to man; 
 oil is ready to spout high into the air ; the great cry we hear 
 is for a market. Armies are sent out to fight and die con- 
 quering a market where goods may be shipped. Yet how 
 many at home are hungry and cold and shabby? 
 
 When some, by progressive thought, with improved 
 machine or process have made possible a profusion where 
 previously there had been but meagre supply, lovers of hu- 
 manity have hoped that, with repeated discovery, all might 
 share in the good things of life. Yet art after art has been 
 revolutionized and still, with ships and cars of multiplying 
 capacity, loaded with wares of finer and finer make, millions 
 are suffering for the plainest wants. The following, from 
 ''Social Unrest," by John Graham Brooks, instances some 
 of these processes : 
 
 "The cheapness and abundance of grain foods is explained 
 when the story of machinery has been told. The steam-going 
 plow, combined with a seeder and a harrow, has reduced the 
 tirne required for human labor (in plowing, sowing and harrow- 
 ing) to produce a bushel of wheat from an average of 32.8 
 minutes in 1839 to 2.2 minutes at the present time. It has re- 
 duced the time of animal labor per bushel from 57 to lYz 
 minutes; at the same time it has reduced the cost of human 
 and animal labor in plowing, seeding and harrowing per bushel 
 of wheat from 4 cents to 1 cent. 
 
 "Before Whitney's invention it required the work of one 
 person 10 hours to take the seed from one and a half pounds 
 of cotton. The machine will now do in the same 10 hours more 
 than 4000 times as much. That 10,000,000 bales can be marketed 
 in a season and that cloth is so cheap is no longer a wonder. 
 
 "A linen sheet that once cost 30 days' labor can now be 
 made in seven hours. A steam shovel will do in eight minutes 
 what one man can do with difficulty in 10 hours. The dirt 
 may be unloaded from a train of cars in six minutes that would 
 
INTRODUCTION 7 
 
 require with a shovel a day's work of 10 men. A stone crusher 
 will perform the work of 600 men. 
 
 "Few material blessings bring more comfort to every class 
 in the community than good roads. To none is the advantage 
 greater than to large sections of the relatively poor, as in 
 country districts. Yet the rapid growth of these highways is 
 almost exclusively the result of the machine. Yet with all this 
 multiplication of output thousands die for want of proper food 
 and shelter." 
 
 It cannot be denied that a larger percentage of people 
 have acquired and are still acquiring a reasonable amount of 
 useful things; but the millions suffer, though in some de- 
 gree less. The misery in the tenement slums of the great 
 cities is not less than that of, perhaps, the majority in the 
 average rural districts; although it is common for certain 
 writers and speakers to represent all outside of cities as 
 blossom and sunshine. Still there is improvement. 
 
 Notwithstanding the evidence of greed among the most 
 wealthy, benevolence and charity are muhiplying. The city 
 stricken by storm or catastrophe finds prompt and abund- 
 ant relief. Institutions of benevolence find readier sup- 
 port, education is freer each year. Chattel slavery has been 
 almost everywhere abolished. Apprenticing of children by 
 articles, equal to enslavement, to learn trades, has been 
 largely abandoned. Many worthy laws have been enacted 
 and cruel ones repealed. Child labor is being abolished in 
 many States. Contracting of service for a period of time has 
 been abolished pretty generally. But as one means of de- 
 spoiling the many by the few is done away with, another is 
 invented. The greatest legal managiiig skill is, of course, 
 employed by the greatest wealth. 
 
 What is needed, to bring the results of genius and in- 
 tellectual progress to the uses of the masses, is education of 
 the masses to broader outlook and nobler purpose. It is es- 
 sential to arouse a desire for better things among them. 
 They must come to think and know that such things are for 
 them and may by proper effort be had by them. It is lack 
 
8 RIGHT AND RICHES 
 
 of intelligent plan for Society more than criminal intent of 
 individuals that causes the trouble. Sir Oliver Lodge, in 
 his address to the Social and Political League, asks : 'Ts it 
 possible to reconstruct society on a scientific basis ?" 
 
 The custom of allowing absolute ownership of land, he 
 held, was responsible for many social evils, and to him it 
 was a most extraordinary and amazing thing that any man 
 had the right to sell a piece of England. 
 
 The law of inheritance, he likewise held, would also have 
 to be considered. The idea that people might live without 
 working, and yet without disgrace, was responsible for 
 much incompetence and some misery. 
 
 "All should have leisure," he writes, "but none should 
 be completely idle, save on pain of starvation or the dis- 
 ciplinary drill of prison." 
 
 From mere generalities. Sir Oliver passed to specific con- 
 structive reform, and expressed the opinion that the work- 
 houses and jails should become manufactories for human 
 beings. "Paupers," said Sir Oliver, "must be shown how to 
 live, how to work, how to develop their faculties." 
 
 There are certain natural laws underlying business 
 which should be taught to the children as well as adults un- 
 til universally understood. One man working with his axe 
 in the free woods can easily understand the quantity of 
 property he is developing. But industries, run by hundreds 
 of heads and thousands of hands, whose materials are 
 brought from every quarter, and whose product is sent to 
 the furthest parts of the globe, cannot be so easily under- 
 stood. Such an enterprise requires intricate systems of 
 bookkeeping and tabulating to properly be comprehended. 
 It is only recently that proper system in accounts has been 
 appreciated even by these greater concerns, but its effects 
 have been astonishing. 
 
 So the increased complexity of our social system re- 
 quires, and in a measure is beginning to receive, the help of 
 
INTRODUCTION 9 
 
 scientific treatment and analysis. Our Federal Government 
 is rapidly spreading the benefits of science. The next great 
 step should be to replace the lawyer majority in legislative 
 bodies with practical men of affairs-^merchants, teachers, 
 mechanics, engineers, women — persons whose thought is 
 forward, progressive, effective, free from tradition and 
 musty precedent. We should take a lesson from the great 
 corporations and employ captains of thought and accomp- 
 lishment to do our legislating instead of those whose train- 
 ing has been to obstruct and delay. 
 
 All should enjoy the blessings of science and progress, 
 preference being given to those who cause good things to 
 be, and in the degree that they know their highest use. 
 
 Why does our Government have schools for the training 
 of soldiers and marines and none for statesmen and econ- 
 omists ? Says George C. Lorimer in "The World To-day :" 
 
 "It is not uncommon for the existence of the slum to be 
 attributed to the viciousness of its denizens, as though that 
 were the sole cause of its origin. The police and the church, 
 with equal frequency, are held responsible for its continuance. 
 Poor human nature, I admit, cannot be exonerated from all 
 blame; and municipal and ecclesiastical authorities presumably 
 might do better work. The more I reflect, however, on the 
 problem, the more I am convinced that the root of the evil is 
 rather economical than civic or religious. So long as industrial 
 methods are what they are, so long as the blundering or the self- 
 ishness of modern trade methods, and the stupidity of the 
 recklessness of politicians continue to render it possible for a 
 few men to own most of a nation's wealth, and increasingly 
 difficult for the masses to make a decent support; so long as 
 the land is burdened with such a curse as the saloon, which 
 wastes, not only wealth, but the source of wealth, the produc- 
 tive energy of manhood, so long the slum will flourish, to 
 plague and disgrace its abettors. Christianity and philanthropy 
 are engaged at present in a hopeless task. They may do some- 
 thing — much. It is foolish, however, to expect them to succeed 
 as long as the industrial system is what it is, ruled by a mis- 
 leading idea and enforcing unscientific principles. If the slum 
 is to be suppressed more attention must be given to economics." 
 
10 RIGHT AND RICHES 
 
 But where shall we find the vital, effectual, and infallible 
 principles of economics, both for individual and State, save 
 in the teachings of Christianity? When we read these 
 teachings, let us take them at what they say. Let us con- 
 sult our lexicons as to the meaning of the words we read, 
 and not tradition. 
 
 Business is subject to scientific analysis. That is true 
 as well of public as of private business. But what is counted 
 "good business" is often no business at all, and what is 
 called law is often but the authorization of outlawry and 
 plunder. 
 
 The basic principle of true business and true govern- 
 ment is the golden rule. 
 
 Someone has said: "We are learning that the Golden 
 Rule and the law of self-preservation run parallel. Applied 
 to commercialism, the Golden Rule is to make money so as 
 to give a benefit also to him from whom you make it; and 
 that, too, is common sense." 
 
 The great trouble is our reluctance to accept what is new. 
 We cling to old laws and precedent until some cataclysm of 
 suffering, sentiment, or bloodshed arouses us. We sit by 
 idly and see some person or corporation quietly get posses- 
 sion of all the coal, oil, lumber, borax, or other necessity, 
 and never stir — unless perhaps to selfishly try to corner a 
 little, too — when if we were wise and brave and honest, we 
 should rise up and sound the alarm, that the peoples' birth- 
 right is being taken. When appealed to, let us not like Cain 
 reply : "Am I my brother's keeper ?" 
 
 But we are told such things are legal, they always were 
 so. True ; but do you not also know that formerly we were 
 ruled by autocrats and tyrants, as in Russia, and that we in- 
 herited the laws and spirit of such savage ages. This is a 
 thinking age. In former days oxen, or women, drew the 
 loads and the fickle wind was depended upon to move ships. 
 Now we use science to do such things by a better and surer 
 
INTRODUCTION 11 
 
 way. We do not in mechanics and industry look to the dark 
 ages for a precedent. Why should we in law ? If a thing 
 is wrong in society, we should know that there is a scientific 
 remedy. 
 
 The scientific basis of all true society is Justice. Ac- 
 quirement of property should be only equivalent to what is 
 given in return. "For Value Received" should be the test 
 of title. 
 
 When one has millions of wealth, the question should be, 
 what return did he give to those who conferred it upon him? 
 What reward did the public receive? None? What legis- 
 lation sanctioned such acquirement? Let it be at once re- 
 pealed. 
 
 Honor to those who master the secrets of nature, who 
 through invention, organization and system wrest from na- 
 ture abundance, where she has given sparingly. But down 
 with those systems which reach out and take not alone the 
 apples and grapes, but the trees and vines. Let us endeavor 
 to find some of the principles of acquiring and creating 
 wealth. 
 
 Complaint is made that economic science is not practi- 
 cal. The same is said of Christianity. Both are practical 
 in so far as scientifically understood. 
 
 The vital force of Christianity and of economics is Love. 
 Combination based on greed is a base counterfeit of co- 
 operation based on love. Greed combinations heap up 
 freight, but seldom is it true wealth ; often it is a burden to 
 its owner. Love's wealth is like a flowing stream dififusing 
 life. 
 
 In the following chapters I shall endeavor to present 
 some of the underlying principles of economics in such a 
 manner that they may be apprehended by the beginner, and 
 at the same time to maintain that accuracy of statement so 
 essential to any permanent place in science. In the light of 
 such principles we shall seek remedies for the blighting 
 evils detailed in the foregoing pages. 
 
12 RIGHT AND RICHES 
 
 The common conception of economics is from an in- 
 verted viewpoint. All the more vital propositions are seen 
 upside down. For example, it is commonly thought to be 
 desirable to have a given commodity dear by having it 
 scarce, when the natural, the little-child view, is to main- 
 tain a bountiful supply of everything so that everyone may 
 have plenty with the smallest effort. Happily, our prevail- 
 ing business practices are better than our precepts. The 
 apprehension of this true, scientific view will give plenty. 
 He who shall succeed in disclosing to humanity this true 
 focus of economic principles shall furnish the efficient rem- 
 edy for poverty and distress. My first effort will be to point 
 out some of the errors of our present methods, for the per- 
 ception of errors should indicate the nature of the opposite 
 truth. I shall not tire the reader with the refutation of the 
 mistakes of other teachers, but shall depend solely on the 
 correctness of the principles herein presented. 
 
 There has been but one unerring Economist — ''He who 
 taught as one having authority." We may without fear, 
 therefore, take as our postulates those ever-living truths 
 spoken by Him; they are for the daily affairs of men, and 
 we do no violence to their more transcendent meaning by 
 such use. This is His mission as stated in His own words : 
 "I am come that they might have life and that they might 
 have it more abundantly." The absolute principle of eco- 
 nomics is embraced in His thesis: "Seek first the Kingdom 
 of God and His righteousness, and all these things shall be 
 added unto vou." 
 
PART TWO, 
 
 Property, 
 
 Chapter I. Owni:rship. 
 
 " II. Business. 
 
 III. Value. 
 
 IV. Prope:rty Essi^nce:. 
 
 " V. Propi:rty EvoIvUTion. 
 
 " VI. Property Precepts. 
 
CHAPTER I. 
 
 OwN:eRSHiP. 
 
 IHE desires of humanity constitute one radical 
 distinction from other animals. The beast has 
 need of food and drink, and certain species 
 require other provisions. But the desires of man 
 are without bounds. They increase with knowledge of the 
 world of art and commerce. The savage wants a wigwam, 
 a bow and arrow, a canoe. The devotee of luxury spends 
 millions on a home— on summer houses and winter houses, 
 private cars, yachts. There is no limit to such fancies. Ma- 
 terial desire seeks not alone what is good, but what is useless 
 and even harmful. It is prompted by the baser, as well as 
 the higher motives. 
 
 Whatever things are desired may be termed Desidera- 
 
 tives. 
 
 Riches depend as much on a knowledge of right use as 
 of right production. The world is rich in treasures of good 
 things which the Creator has provided for mankind. They 
 are for all and there is no lack. Abundance of fuel exists 
 in forest, mine and oil well; food in field and water; fabrics 
 supplied from animal, plant, and insect. No reasonable 
 use can diminish this abundance; yet how many lack for 
 things which seem so essential. 
 
 One sees things all about him which he lacks. He sees 
 fruit on a tree which he would eat, but is stopped by one 
 who says "That is mine." 
 
 "If to the city sped, what waits him there, 
 To see profusion that he must not share." 
 
 Merchandise is displayed so as to appeal to his desires. 
 He may lack even bread to sustain Ufe. There was a news 
 
 15 
 
16 RIGHT AND RICHES 
 
 item not long ago of a man being arrested for taking bread 
 for a hungry, sick wife. Why should he not take the bread 
 which he so much needed? Because it was owned by an- 
 other person. 
 
 What is the meaning of ownership? 
 
 Ownership is the power to use and to hinder others from 
 using anything. 
 
 In order for a thing to be property it must be subject 
 to control. The owner must be able to prevent others hav- 
 ing free use of it. 
 
 Some kinds of desideratives are not entirely subject to 
 control in a commercial sense. There is no means of hind- 
 ering people from having air to breathe so that they will pay 
 for it by the gallon. There is no way of putting a fence 
 about ocean and mountains to wholly prevent people from 
 seeing them without paying admission. Many indeed do 
 suffer from lack of air, and the most available views of 
 mountains and sea are monopolized; still there remains 
 much that is very desirable and yet free. 
 
 The foundation of property is Hindrance. The power 
 to hinder others from using makes it "proper," or, peculiar 
 to us, makes the title to it. That is why ownership means 
 the power to prevent others using. If every one could at 
 pleasure ride my horse, where would my ownership be? 
 
 How is ownership instituted? 
 
 Ownership is instituted when one gets the power to 
 hinder the use of anything. What constitutes this power? 
 It may come from superior muscular or other fighting abil- 
 ity, from the control of some organization, from custom, re- 
 ligious or other sentiment, or from Legislative enactment. 
 Oppressive Hindrance depends upon the ignorance, fear or 
 greed of those hindered. 
 
 What is Property? 
 
 Any desirable thing subject to the hindrance of an owner 
 is property. 
 
OWNERSHIP 1^ 
 
 What is the most common basis of ownership in civilized 
 communities ? 
 
 Legislation. Civil law. 
 
 What is Law ? 
 
 Law is the enactment of a Government. Government is 
 an organization presumed to represent the majority of the 
 people and whose decrees are recognized and thereby made 
 operative. 
 
 In crude civiHzation, the strong and athletic swooped 
 down on the weak and took what they had procured with 
 their toil, and by sheer muscular force appropriated it and 
 hindered others from using. Not alone did these powerful 
 persons take the provisions of the weaker, but they formed 
 themselves into the government of their community, the 
 chief as king, his aides as barons, and took the substance of 
 their own people, generation after generation. 
 
 The invention of gunpowder lessened the value of mus- 
 cular strength in this game of appropriation, for the little 
 Jap can outshoot the giant Russian. The power of the 
 press is fast displacing gunpowder, but not less do the 
 holders of power take to themselves the desirable things. 
 The press is supported by the property-owning class. ^ Mus- 
 cular force has given way to law, but with no more justice. 
 Law now gives title. Many writers attribute title to produc- 
 tion, but the error leads them into chaos. 
 
 Title to property in all the earth rests on arbitrary law. 
 And law is in a large measure made .by the property holders, 
 yet it depends upon acceptance by the masses. Until re- 
 cently, only owners of real estate were allowed to vote. Law 
 must of sheer necessity make some concessions to those, 
 who by care or art, make things useful. 
 
 Property is from the word ''proper" as used in the 
 phrase 'Troper noun." It consists in an enjoyment or con- 
 trol of anything ''proper" or particular to some person or 
 company of persons. 
 
18 RIGHT AND RICHES 
 
 The word "proper" is thus used to indicate the condition 
 of something being particular or ''proper" to one's self; has 
 precisely the same meaning as selfish. "Property interests" 
 has identically the same meaning as selfish interests. 
 
 Property starts from, and forever depends upon selfish- 
 ness, hence property in goods is antagonistic to benevolence, 
 to that benign use of goods and service which blesses all. 
 
 The strict and persistent insistence on property claims, 
 we term churlishness, miserliness, which amounts almost to 
 covetousness, a violation of one of the ten commandments. 
 
 "All men are born free and equal." This equal right 
 is natural, reasonable and incontestable. Why then does 
 government, which claims to represent society — mankind in 
 common — give individuals the power to hinder the use of 
 things ? This is the main inquiry of economics. 
 
CHAPTER 11. 
 
 Business. 
 
 USINESS is regarded as the effort to acquire 
 ownership of property. Private ownership is es- 
 sential in the present status of civihzation, but the 
 present rules of its apportionment and control are 
 the causes of the greatest suffering. '^Common" or com- 
 munistic ownership of all property is possibly only through 
 infinite improvement. 
 
 An owner of property may be one person, or a company 
 of persons, or an association. A community may own cer- 
 tain ''property' for the common good of all its citizens, such 
 as schools, parks, water and light supplies, but this is a mis- 
 use of the word property, for ''property" refers not to use 
 but hindrance of use. Public ownership is being advo- 
 cated along many lines and promises great benefits. 
 
 What is the basic statement of all justice and equity? 
 It is that all desirable things PRIMARILY BELONG to 
 society. 
 
 What is meant by society? 
 
 Society consists of the people in a community at any 
 given time. The living generation. Most persons do a 
 service to society which is a just compensation for a meas- 
 ure of ownership. 
 
 What generation had, or has, the right of disposal, or 
 the right to give title to property ? 
 
 No generation has any just power to bind posterity to 
 any grant or disposal of title. 
 
 Bach generation has a right to a "new deal ;" has a right 
 to declare any title void, where a full consideration is not 
 reserved for all its members; even the savage Maoris saw 
 this. 
 
 19 
 
20 RIGHT AND RICHES 
 
 Upon what does the right to subsistence depend? 
 
 Upon being a member of the human race. We do not 
 have to earn the right to hve. It does not rest upon labor 
 or trade, professional or business ability, but upon being a 
 child of the One Father. It is an inalienable, God-given 
 claim, which all have upon the abundance of the earth. In- 
 fancy, helplessness or lack of acquisitiveness does not vitiate 
 this claim, though such inability may lessen our obligations 
 to society. Each of us is under a moral obligation to create 
 an equivalent to replenish the general fund from which we 
 partake. ''To every one according to his need, from every 
 one according to his ability" is a trite statement of the 
 natural social status. 
 
 By what perversion of logic do we justify enormous ac- 
 quisition of property by fox-like cunning? Shrewdness can 
 give no claim for wealth nor dullness any reason for des- 
 titution. 
 
 In the old school reader we had the dialogue about 
 knowledge being power, but that power was not always a 
 good thing. Perhaps the native intellect of our great money 
 kings rightly directed would be of the greatest good to so- 
 ciety. Perhaps it is largely the result of our ridiculous in- 
 dustrial system that their intellectual powers are perverted. 
 
 Business is beginning to be properly regarded by many 
 as a service to mankind, and not solely a selfish pursuit. 
 
 Elbert Hubbard says: 
 
 "Inasmuch as business supplies the necessities of life, it is 
 impossible to have a highly evolved and noble race except where 
 there is a science of business. 
 
 "Business is human service. Therefore business is essentially 
 a divine calling. 
 
 "The world can only be redeemed through business; for 
 business means betterment, and no business can now succeed 
 that does not add to human happiness. 
 
 "That many wrongs and inequalities exist in business is 
 very true; but they must and can be righted without smashing 
 
BUSINESS 31 
 
 the business fabric. Just here are required men with great in- 
 sight, patience, poise, and love of kind. 
 
 "In all of the great cities are stores that are radiating cen- 
 ters of beauty, education, and industry, where the welfare of 
 employes and the public is carefully considered by men of 
 power. 
 
 "The word "education" sometimes stands for idleness, but 
 business always means work, effort, industry. It means intelli- 
 gent, thoughtful, reasonable, and wise busyness — helping your- 
 self by helping others. Only the busy person is happy. 
 Systematic, daily, useful work is man's greatest blessing." 
 
 Traditional Conci:ptions. 
 
 Property is held in too sacred esteem generally, and es- 
 pecially in America, considering the sentimental theories we 
 hold. Law and order are indeed to be desired and are the 
 most speedy and direct routes to justice and. equity. "Let 
 all things be done decently and in order," but let us never 
 cease to condemn property which rests on injustice and 
 partiality. Little title to property rests on justice; let us 
 not, then, be too squeamish about restoring it by legal 
 means to society. 
 
 It has been discouraging for years to see the decisions 
 of the courts, when questions have arisen between the rights 
 and needs of the whole people and the traditional claims of 
 aggregated riches, given in favor of these traditional claims. 
 Is it not sad to see destitution, suffering and helplessness, to 
 see industry and honesty thrust aside to make way for 
 greed and oppression, with no other justification than 
 academic technicality? 
 
 A stronger expression of this cannot be made than to 
 quote Prof. John D. Lawson, dean of the law department of 
 the University of Missouri. 
 
 Prof. Lawson declared that legal quibbles had made a 
 mockery of justice in the United States : 
 
 "If a man is tried for murder the indictment against him 
 must set forth, under our laws, how the crime was committed, 
 
22 RIGHT AND RICHES 
 
 by what means, the exact hour of the day or night and a wealth 
 of other details that belong purely to the trial of the case. 
 
 "Because some unimportant statement in the text of that 
 charge is slightly inaccurate, the entire case may be reversed 
 and remanded for new trial. 
 
 "Original justice is now a contest, not a trial. 
 
 "It has developed into a sort of game of sport, with the 
 Judge as umpire. What do verdicts amount to if the criminals 
 have money to take an appeal? 
 
 "I know of one case thrown out of court because the word 
 "first" had been spelled "fust" in the information; in another 
 the word "breast" was spelled without an "a," and in still 
 another the information failed to state the caliber of a revolver. 
 
 "Some of these reasons for reversal were so ludicrous that 
 they read like the efforts of Mark Twain or other professional 
 funny men. 
 
 "Our present methods were copied from the statutes pre- 
 vailing under the Georges, the Stewarts and the Tudors. They 
 were intended in England to protect the accused from the 
 tyranny of the courts. 
 
 "What we need is a commission to investigate the laws 
 and their methods of enforcement. I believe this reform is 
 coming." 
 
 The erroneous notions of those without property re- 
 garding its awful sacredness are even worse than the ideas 
 of the ver}^ rich. No one can by any means acquire any ab- 
 solute right to the disposal of property. At best, ownership 
 is only empirical. The declaration of President Roosevelt, 
 regarding the trumped up claims to water needed to supply 
 one of our cities, has the right ring. He said : "The rights 
 of a great city to a supply of water transcend the supposed 
 rights of any corporation." 
 
 That conception of business is modifying, which re- 
 gards it as a game having certain arbitrary rules estab- 
 lished; and as being perfectly proper, as long as played ac- 
 cording to such rules, without regard to the awful results 
 of the unlucky. Such is the popular political shibboleth. 
 
 The average merchant seems to care little how much ex- 
 cess the consumer must pay, provided he has as low rates 
 
BUSINESS 23 
 
 as another so that he may compete. One bank wants all the 
 privileges , another may get and one railroad those equal 
 with the rest; but the newer and wiser view seeks not 
 alone equality amongst those playing the game, but the best 
 interest of those outside. 
 
 Business may be interesting as a game. The greatest 
 skill may be displayed in it. It is indeed the greatest of all 
 dramas. But this should not be its purpose. Looked at 
 from the standpoint of the common interest it is solely to 
 supply service and comforts to humanity — to serve human- 
 ity. 
 
 Whatever is inconsistent with this purpose is bad busi- 
 ness. Whoever is engaged in a business which does not 
 procure him profit, by contributing to the sum total of hap- 
 piness and service, should quit or modify it. Who takes 
 without giving is a parasite. To paraphrase the words of 
 the great Teacher: He who would be chief among business 
 men let him give the greatest service. 
 
CHAPTER III. 
 VaIvUe:. 
 
 ALUE seems a very simple thing until we begin to 
 examine it more closely. It is primarily mani- 
 fested in endurance. 
 
 Endurance is of two kinds ; the first is nega- 
 tive or passive and is manifested in the discomfort, or suf- 
 fering incident to lack of things or service. The second is 
 positive or active and is occasioned by the effort to supply 
 the lack. Hence, the discomfort of the labor which will be 
 endured for anything indicates to some extent the laborer's 
 estimate of its value. But the urgency of his lack may far 
 exceed the direst efforts of his labor. 
 
 Lack is not only occasioned by inability to procure, but 
 by parting with the needed thing for some consideration, 
 some other thing, or through the consideration of love or 
 charity. 
 
 Value, starting from this basis of endurance, assumes 
 three distinct phases, viz. : Utility, Exchange Value and 
 Lack Value. Utility is that physical characteristic of a 
 thing which enables it to satisfy desire through one or more 
 means. For example, leather has utility for the making of 
 shoes, or harness, the binding of books, upholstering of fur- 
 niture, the making of parchment, etc. Each of the metals 
 have innumerable uses; wood is good to make structures, 
 for fuel, to make paper, and so on. 
 
 Utility is an inherent quality or capacity of things to be 
 put to use. The utility of a thing is a physical property of 
 it. It does not depend on anyone's opinion or condition. 
 
 These phases of value may be illustrated by the phases 
 of distance. Individual lack compares with the conception 
 of nearness to our person, home, or headquarters. One 
 
 24 
 
VALUE 25 
 
 says, "my present employment is nearer," or "we have the 
 church or school near," "the city is near," "the store is 
 handy," a place is "foreign," and so on. In the same sense 
 one says, "I need shoes, or bread, I need forty bushels of 
 lime or twenty yards of carpet." 
 
 Utility compares with length, distance, irrespective of 
 persons. We say, "The lake is ten miles long," "the train 
 is half a mile long," "the railroad is three hundred miles 
 long." There is no reference to the location of either end 
 of the distance. In the same way in expressing utility we 
 say that certain beets are so much per cent, sugar, or that oil 
 is of a certain gravity, or coal will produce so many units 
 of heat per pound, without reference to who wishes sugar 
 or heat. 
 
 Exchang-e Value is like the location of a place East or 
 West. San Francisco is not (considered alone) more West 
 than New York. We cannot say "Denver is 500 miles 
 West" with any sense, without adding what it is west of. 
 West is solely comparative. There is no Natural West. 
 
 In practice we set up a stake at Greenwich and arbi- 
 trarily create East and West from it. That is our basis of 
 comparison. Likewise we take some species of property, as 
 tobacco, or money, or cattle, or pelts, and create a basis of 
 market-value comparison. 
 
 How greatly any one desires a thing has nothing to do 
 with its utility. 
 
 One phase of the utility of a specific thing may appeal 
 to one individual, another phase to another. One may wish 
 tobacco to chew, another to smoke, another to keep moths 
 away. One may esteem cows for the utility of their flesh 
 for food; another esteems them as an object of worship. 
 The utility inherent in anything is not therefore affected by 
 individual desire, or condition. 
 
 Utility is but one of the several factors of lack and ex- 
 change value. One desires one thing for the certain slight 
 
26 RIGHT AND RICHES 
 
 utility it possesses and finds there is a certain degree of diffi- 
 culty in getting it, while a second thing is of much more util- 
 ity to him, but of no difficulty of procurement whatever. Yet, 
 because of the difficulty of procurement, he esteems the first 
 more than the second. He will be careful that it is not 
 wasted. 
 
 Herein, then, we see the second factor of value, hindrance 
 to procurement. The active factor of endurance here comes 
 into play. We do not esteem the utility as long as there is 
 no lack, and there can be lack only in the degree in which 
 there is hindrance to procurement. Hence, the person will 
 do without, or lack anything, only up to the degree of diffi- 
 culty of getting. The amount of toil or discomfort he will 
 endure will indicate how much he lacks it, will indicate how 
 much he needs the use of it, provided he may be able thus to 
 procure it. 
 
 This then to him is its need-value. 
 
 Articles have this phase of value to one person entirely 
 isolated from all other persons, as was Robinson Crusoe. It 
 does not depend on exchange. When a city's water supply 
 is low sometimes its use is forbidden for sprinkling lawns, 
 even though paid for by the gallon, because of the urgency 
 of its need for household use. 
 
 The ability to exchange brings in the other phase of value 
 known as exchange-value, often confused with this individ- 
 ual need or lack. Individual need relates solely to personal 
 experience, what we can discern with the senses, just as do 
 the measure of distances, expressed by the terms arm's 
 length, a day's journey, and so on. But astronomical dis- 
 tances are not appreciable to the senses. They are only ap- 
 prehended by science, by mathematics. 
 
 When a person has need for a horse and has labored to 
 procure one, he mav exchange it for a cow which he feels 
 a greater lack of. Hence, exchanging originates from his 
 individual need. But presently there evolves the procuring 
 
VALUE 27 
 
 or making of things of which the individual has no lack or 
 need, but procured solely for the purpose of exchanging 
 them for whatever else he may lack. From this arises an 
 entirely new phase of value; for his estimate of value of 
 such product has no relation whatever to any utility in it to 
 minister to his lack. He cannot measure this new phase of 
 value with his senses, but only by mathematics. 
 
 It may be tobacco which the individual is producing, 
 though he does not use it in any manner. He must there- 
 fore arrive at its value by a process of figuring. He says a 
 pound of tobacco will generally get me about so much beef, 
 or so many pounds of flour, or will get me a coat ; hence, he 
 labors to grow it, and prizes it until he exchanges it for 
 what he wants. What he will be able to get with it depends 
 somewhat on how much others desire and lack tobacco ; but 
 the producer knows, nor cares nothing about this lack. He 
 cannot. What he does learn is the mathematical comparison 
 between tobacco and other things in the market, which is 
 their market or exchange value, or ratio. 
 
 Now, strange as it may seem, the market value of things 
 — the mathematical comparison of their exchangeableness, 
 becomes more familiar to us than their worth for our per- 
 sonal needs, their real worth to us. Desire for them, to a 
 great extent, is measured by what they will buy. 
 
 It is often* mistakenly considered that the individual 
 lack or need of things is approximately the same as their 
 market value, but there is scarcely any relation between 
 them. The old proverb is more nearly true: "One man's 
 meat is another's posion." What one urgently seeks is trash 
 to another. Even what the majority esteem highly and 
 think essential are useless to a large minority. Exchange 
 value is the counterfeit of real goodness. Bread which we 
 think so essential is unknown to millions of people. 
 
28 RIGHT AND RICHES 
 
 You do not commonly rate various commodities accord- 
 ing to their relative capacity to satisfy your desires, but ac- 
 cording to their market price. You rate a house at what it 
 will sell for, not by its elegant design of architecture. You 
 compare silk, cotton, linen and other textiles not entirely by 
 their serviceableness, their capacity to give the best results, 
 but largely by their price. 
 
 Again a thing of not very general utility may serve your 
 purpose well. Some things of innumerable uses are very 
 cheap because plentiful. Utility is not approximately com- 
 mensurate with either our individual need nor with the ex- 
 change value of things. 
 
 The exchangeable value of a thing nearly dispenses with 
 the conception of utility. Exchange-value is a phase be- 
 yond the comprehension of the senses, and dependent on the 
 intellect ; for it is not absolutely requisite for a thing of the 
 greatest exchange value to have any utility whatever- 
 Money need not, should not have any utility, that is, except 
 utility as money. 
 
 We may to-day go over the market quotations, which are 
 simply the record of exchanges, and fix a table of the rela- 
 tive value of a thousand commodities in Chicago to-day. 
 But to-morrow it will be very different. We may say X 
 bushels of wheat are worth Y bushels of oats; X tons of 
 hay are worth O bushels of potatoes, etc., etc. We may 
 simplify this and say 1 ton of hay is worth 12 oz. of silver, 
 1 bushel of corn is worth 1-3 oz. of silver, 100 lbs. of hogs 
 is worth 4 oz. of silver, 1 lb. butter is worth ^ oz. of silver. 
 Here we use silver in all the comparisons. This is said to 
 be taking one thing as a standard of comparison. This is a 
 convenience, for we more readily comprehend a comparison 
 with a commodity we have compared many other things 
 with. But since exchange value is not a quality of any ma- 
 terial thing, but only a temporary comparison between them 
 as indicated by the willingness of people to exchange on 
 
VALUE 29 
 
 such a basis, it is then impossible that any species of goods 
 can be made a measure of value. 
 
 The ratios in which things are given in exchange has 
 little reference to the labor consumed in their making; 
 neither any reference to their use as subsistence. Such ra- 
 tios are determined by the fancies of the exchangers, by un- 
 accountable circumstances — the weather, accident, social 
 events, religion, holidays, innumerable causes. The law of 
 value called the law of supply and demand needs qualifying. 
 Supply and demand are subject to all the above influences. 
 But after we have the relative value of a thing, it remains 
 for each of us to translate it back into our "lack value ;" 
 what the foregoing of it would mean to us. 
 
 That a pound of butter to-day is worth 5 yards of mus- 
 lin, or two pounds worth an axe, does not express either their 
 utility nor yet an individual's relative need for them, though 
 it is usually presumed to. Here is the distinction: Lack- 
 value means intensity or urgency of need. This urgency is 
 measured by the price one will pay up to a certain very im- 
 portant point, which is often neglected; that is, up to the 
 limit of the ability of him who lacks. But the urgency does 
 not stop there. 
 
 What is the lack-value of a bushel of grain ? To one it 
 may be a trifle. He slightly considers it. If the exchange 
 value be very low he may keep a few more horses or if high 
 a few less. It is a slight matter. Perhaps he does not even 
 take cognizance of it. But to another what an awful tragic 
 lack-value has this bushel of grain. What terrible urgency 
 is expressed in its lack ; for though the exchange value is low 
 he has nothing to exchange. He cries to see his children 
 dying for it. He has already given all of his meager wealth 
 for supplies of it. He has offered to labor, even to die, to 
 get further supplies but to no avail. Says Emerson : "Ah, 
 if the rich were rich as the poor fancy riches." 
 
30 RIGHT AND RICHES 
 
 Does Rockefeller know this value of coal oil? No! 
 Ask some poor mother who cannot furnish it that her son 
 may have light to pursue his studies. Does Baer know the 
 lack- value of coal? Ask some father who sees his child 
 dying from cold for want of coal. Does Havemeyer know 
 this individual value of sugar? Ask some poor country 
 folks, who, though the fruit is growing wild about them, 
 cannot get sugar to sweeten it. Labor can express the in- 
 tensity of lack, only to the extent that it can supply it. The 
 price of bread does not essentially increase in very great ratio 
 when millions are starving. 
 
 Exchange value is a cold, merciless quantity which takes 
 no thought of one's neighbor. Exchange value calls for its 
 pound of flesh, not caring whether it comes from the slaugh- 
 ter of cattle or hogs, or from the slaughter of men and 
 women in the sweat shop, or from the slaughter of helpless 
 infancy in child labor. This common method of rating 
 values by the dollar mark, rating things by what they will 
 bring on the market instead of what they mean in comfort, 
 health, happiness, yes, even in morality, in human life — in 
 manhood and womanhood — is the cause of much wrong. 
 Even in the simpler things of life this confusion may be 
 seen in persons' ordinary shopping. We see them buying 
 things of no use whatever, simply because the exchange 
 value or price is high, and doing without the cheaper things 
 for which they have many times the need. 
 
 Women judge value more from the sense of negative en- 
 durance, from having to choose what they must forego, 
 and men more from the active effort they must endure for 
 them. Neither view is perfect of itself. It is time we all 
 paid more attention to the real value of things according to 
 the enduring good they confer; according as they tend to 
 the bettering of humanity. When we sit by our blazing 
 fires in winter we should not forget what an awful tempta- 
 tion there is for the poor destitute father to steal coal to 
 
VALUE 31 
 
 keep his family warm. What does it signify that coal is 
 only $2.00 -per ton, if he has no money at all? 
 
 Theorists have attempted to create a measure of value. 
 There can be no measure of value, neither lack nor exchange 
 value. Some have suggested labor as such a measure. But 
 labor does not by any means measure human need, for the 
 reason above stated, that it will not always procure what 
 we lack on any terms. And it does not measure exchange 
 value because no two men's labor is of the same effective- 
 ness, or compensative purchasing power, because wages 
 have no relation to the toil and suffering of labor to the in- 
 dividual. You cannot make a measure of value unless you 
 find a commodity which will not alone have always the same 
 utility, but one which people will always hold in just a cer- 
 tain esteem. 
 
 Money is the best attempt at such a measure, yet it is 
 never the same for two successive days. Exchange value is 
 but remotely dependent on Individual Need or Urgency. It 
 is but a ratio, and not even a ratio of the comparative 
 urgency of things, but only a ratio between opinions as to 
 how intense such urgency is, or will be. 
 
 A big daily once had a guessing contest on the attend- 
 ance at a fair on a certain day. Now, suppose there had 
 been another guessing contest on what the average of the 
 guessers would be. To estimate this average one would not 
 only have to take into consideration the attractiveness of the 
 fair, how it was advertised, etc., but how those who guessed 
 would rate all these prospective indications. 
 
 Exchange value depends not only on shortness of supply, 
 on largeness of need, but on innumerable elements that may 
 be expected to influence people's opinions of the supply and 
 need. 
 
 There is no limit to the quantity of a commodity sought. 
 The only thing that in any sense fixes a certain quantity of 
 a commodity as a normal supply is, that people's habits 
 
32 RIGHT AND RICHES 
 
 have become adapted to that amount. Therefore any de- 
 crease from the usual supply increases its price, and any 
 increase above what has been usual tends to cheapen it, if 
 not accompanied by increase in many other groups. A 
 commodity may be low^ered in price by increase in the supply 
 of others in its group, though this is not sure to result. A 
 good supply of oil may make coal of little value; on the 
 contrary, however, the electric light has apparently in- 
 creased the demand for gas, even for illumination, by edu- 
 cating people to bright lights. 
 
 Overproduction is a favorite word of the inverted 
 school. There has never been such thing as overproduction, 
 nor ever will be. There has been, is, and there is likely for 
 some time, to be underconsumption. Thousands, millions, 
 do not know what plenty means. 
 
 Exchange value is not commensurate with the capacity 
 of the thing, to contribute directly to the comfort of its pos- 
 sessor, but with its capacity to induce others to contribute to 
 his comfort. 
 
 Exchange value is negative to all who seek. 
 
CHAPTER IV. 
 
 PropERT'y Ess^nc^. 
 
 ''Wealth in the gross is death, hut life diffused:' 
 
 — Pope. 
 
 I HAT is the Essence of Property? 
 
 Exchange Value, for 'Troperty" does not in- 
 dicate the measure of the innate serviceableness of 
 things, their capacity to add to the sum of human 
 enjoyment, but exactly the opposite— which is the power to 
 hinder enjoyment, to command the labor and wealth of 
 others. 
 
 What constitutes Value? 
 
 It arises from the pressure of desire against hindrance. 
 Desirers seek and hinderers refuse until a compromise or 
 compensation is agreed upon. This compensation is the 
 value of the thing desired. The value of property is analo- 
 gous to the pressure of steam. There is no value to steam 
 for motive purposes without its restriction by the confining 
 boiler and engine. Its value is measured by the work it will 
 effect in the engine. The value of property is through its 
 restriction by workers, and arbitrary possessors. This value 
 is exemplified in the results it will produce or buy. 
 
 Again, value may be illustrated by the electric light. The 
 hindrance to the electric current in passing through the 
 filament produces heat. When the hindrance is of the right 
 degree the heat is sufficient to produce light, but when this 
 hindrance becomes so great as to interrupt the current, the 
 value in heat or light ceases. In like manner the hindrance 
 to the current of desire for land, resources, or goods, pro- 
 duces income in the shape of rent, royalty or price, and con- 
 stitutes a value in the land, resource or goods. But when 
 
 33 
 
34 RIGHT AND RICHES 
 
 this hindrance is made so great as to stop the use, it inter- 
 rupts the value producing current. Thus cities are ruined by 
 booms. We see the use of electricity for heating irons, for 
 cooking apparatus, for several different classes of lamps, 
 which give light through heat. Some use carbon filaments, 
 others various minerals. The utility of all these utensils de- 
 pends on the quantity of heat. Now, it is plainly evident that 
 the heat is not inherent in the carbon of the filament, nor in 
 the wire of the coil used. It inures from the pressure of the 
 current against the resistance or hindrance imposed. The 
 weight, bulk, quantity, shape and consistency of these utilities 
 — filaments, coils, etc. — have no ratio to the heat output. A 
 carload of carbon filaments would not produce a spark of 
 light when not being acted upon by the current with the proper 
 degree of hindrance. Just so, wood, iron, cloth, glass, china, 
 any species of goods has no value of itself except as acted 
 upon by the ''current" desire and the resistance of owners 
 through hindrance to use. Value is not IN things. Value ex- 
 ists and continues in thought — in the current opinion or es- 
 timate of the desire for, and hindrance to having things. 
 The things are only the medium through which the current 
 of satisfaction flows to desire. 
 
 Desire varies as does the electric current in the filament. 
 It may be artificially increased or diminished within certain 
 limits. Intelligent education or advertising increases the 
 intensity of desire. Hindrance to having things is also var- 
 iable. 
 
 Strictly speaking "things" do not constitute property. 
 Value constitutes property. If things are the medium of 
 satisfaction, to desire, with a reasonable restriction to their 
 use there arises an opinion relating to such things, a vari- 
 able estimate of their utility and availability, which con- 
 stitutes value ; a value, not IN them, but relating to them. 
 
 Hence, the law of value is: Whatever increases desire 
 for certain articles tends to increase their value. Whatever 
 
PROPERTY ESSENCE 35 
 
 tends to induce or enable owners or makers to increase hin- 
 drance, tends to increase value, provided it does not in- 
 crease to such an excess as to divert the current of desire — 
 that is, to cause some substitute to be provided for satis- 
 faction. 
 
 People wish light. Not particularly that made by elec- 
 tricity or oil, but just light. Perhaps they prefer the cost- 
 less daylight. But this is not at all times and places available. 
 Hence whatever furnishes the medium or means of good 
 light is sought. The desire for light has a relation to such 
 apparatus. But some one asks, has not the fine machine, 
 built so beautifully and strongly of good steel, a permanent 
 value? Not in itself. Perhaps what it is made to produce 
 will become obsolete in a few months. Perhaps a machine 
 so much superior will be built that it will be only so much 
 scrap. 
 
 Strictly speaking, desire seeks not things but satisfac- 
 tion. People desire to be transported. Not essentially by 
 railroad. They desire goods moved; whether by boat, car, 
 wagon, auto-truck, or airship, they care not. Cars, ships, 
 trucks, etc., are of value in the degree that they satisfy this 
 desire and coupled with the degree of their owners' restrict- 
 ive control. So with everything sought. The pressure of 
 seekers, against the withholding of the holders, gives things 
 value, makes property of them. Holders of property are 
 impelled to base their price somewhat on what it would cost 
 them to replace it; hence, the wages, rent, interest, all the 
 charges of producing or procuring new supplies, enter into 
 the reckoning of prices. Plainly, goods cannot continuously 
 be sold at less than cost. Hence, loosely speaking, they are 
 usually worth what they cost. 
 
 Whatever is an obstacle to procuring supplies, whether 
 natural or purely arbitrary, tends to maintain the price of 
 such supplies. Suppose one has a ranch where he may pro- 
 cure water by pumping from a depth, or by buying from 
 
36 RIGHT AND RICHES 
 
 some one who controls a flowing stream which needs no 
 pumping; will not his cost for such water be whichever is 
 cheaper ? The price of fuel depends at certain places on the 
 arbitrary charges made by owners for oil flowing sponta- 
 neously from the earth, or on the railroads' price for coal, or 
 the work of cutting wood. Arbitrary hindrance as much 
 maintains prices as workers' wages. 
 
 Value as thus maintained is termed exchange value. It is 
 a value as between different individuals. Between present 
 owners and those who desire to procure. 
 
 Value, commercial value, exchange value, property value, 
 individualistic value, is quite distinct from utility or use- 
 fulness. In arid regions, water for growing crops is fur- 
 nished by ditches from reservoirs or streams, or by pumps. 
 Such water is property. It has exchange value. Owners 
 of ditches derive immense incomes therefrom. The crops, 
 and therefore the wealth production of the communities, 
 depend on this water property. But in other districts water 
 for growing crops comes from the clouds in rainfall. It 
 serves the same purpose. On it depends the wealth pro- 
 duction of such district. Yet rain is not property. It has 
 not exchange or commercial value. It is not counted part 
 of the wealth of the district. Why? Because it is not sub- 
 ject to control, to purchase and sale; it is not "proper" to 
 an individual owner. 
 
 Hence, we may see that the amount of value of property 
 in a community does not measure the comfort or means of 
 satisfaction in such community. The canopies over the 
 beds in Louisiana to save sleepers from being devoured by 
 mosquitos are property. But the people of another place 
 where mosquitos are absent are not poorer for lack of such 
 property. People of milder climates are not poorer for 
 lack of triple windows, immense stores of winter coal, 
 heavy brick walls, weighty furs and clothing required in 
 the rigorous climate. 
 
PROPERTY ESSENCE 37 
 
 Now, the important idea here sought to be impressed 
 is that value in property is not beneficial to humanity col- 
 lectively. Usefulness is what blesses us collectively. Ex- 
 change value but represents the power embraced in the 
 ownership of an article of property to command wealth or 
 service. "Let in the new and renewing principle of love, 
 and property will be universality," says Emerson. 
 
 Exchange value is beneficial solely to owners. The heat 
 of the Mississippi Valley causes electric fans and ice boxes 
 to be almost a necessity, while in San Francisco they are 
 almost superfluous. The demand for current in the ''Val- 
 ley" adds to the value of electric property. These demands 
 enable electric and ice companies to collect large revenue 
 from the people. But is San Francisco poorer by reason 
 of being almost without fans and ice? In one city, by 
 reason of frequent storms or earthquakes, buildings must 
 be built of great endurance, while in another where there 
 are no storms nor freezing, they are of light and cheap con- 
 struction. Is the first city richer for its more costly build- 
 ings? In one city rents are low and lots correspondingly 
 low. The real estate may not have but half the selling 
 value that it would if rents were as high as in another city. 
 But is the city poorer therefor ? Only the utility of property 
 aggregates to the community collectively. 
 
 Value is positive to him who wishes to sell, but negative 
 to him who must buy. High prices for potatoes benefit 
 growers but impoverish eaters. But plentifulness in utility 
 blesses all. 
 
 The arbitrary restriction of supply by those who, by 
 any means, control supply, establishes value; determines the 
 "propertyness" of a thing, as much as the difficulties of 
 growing, mining or fabrication. 
 
 Hence, the re^nT of land combines with the wagiJS of 
 labor, and the inte^rest of capital, to give vaeue; to output. 
 
38 RIGHT AND RICHES 
 
 But only the productive factors, labor and capital, give util- 
 ity, add comfort and satisfaction. 
 
 Trusts greatly enhance the aggregate value of the prop- 
 erty they control, while perhaps lessening the actual supply 
 of utilities. 
 
 We have no measure of utilities in an aggregate. In 
 some lines there is some sort of an attempt in this direction. 
 We speak of so many candle power of light, so many rooms 
 in a house, so many seats in a theater. But to aggregate 
 we must say so many dollars' worth of food, buildings or 
 what not. The new buildings built in a city in the last year 
 may be rated at a million dollars and yet be less in number 
 and utility than those of ten years ago, which cost but half 
 a million. 
 
 This lack of words or even definite ideas to comprehend 
 the utility phase of things is one thing which make econom- 
 ics so difficult to grasp. With the present status of thought 
 the quantity and importance of property must be rated by 
 its exchange value. 
 
CHAPTER V. 
 
 Property Evolution. 
 
 HERE is a kind of property that is permanent, 
 fixed, whose use does not injure or diminish it. 
 Areas of the surface of the earth as sites for 
 homes and other uses are fixed property ; use does 
 not injure this class of property. The site occupied by a 
 home thousands of years ago still exists. It requires no 
 renewal. 
 
 There is another class of property which is consumed 
 with use, which depends for its existence on constant RE- 
 NEWAL either by NATURE or MAN. This is Wealth. 
 Food, clothing, shelter, art, means of transportation, fuel, 
 etc., are wealth. Wealth does not depend solely on labor. 
 It is supplied also from spontaneous natural growths; as 
 grass, stock, fruit, etc., accruing to land owners. Wealth 
 does not endure long. Some a day, some a week, month, 
 year or even a generation, as milk, ice, meat, cloth, wood, 
 iron. 
 
 One may procure a piece of FIXED PROPERTY, hold 
 it without effort during his life and bequeath it to his suc- 
 cessors. But it is necessary for us all to be continually ac- 
 quiring a renewal of our supply of wealth. 
 
 Under primitive conditions man procures this renewal 
 by adapting the wild unlimited growths and deposits of ma- 
 terials to his use. He kills game, to secure food and skins 
 from which to make clothing and shelter. He catches fish 
 from the boundless waters. He cuts trees from the limitless 
 forest. He kills the bear or buffalo from the herds, so 
 numerous and plentiful that he thinks it not waste to take 
 the hide and leave the carcass. But even so he finds some 
 things only available at certain seasons. Fruits, nuts, etc., 
 
 3- 39 
 
40 RIGHT AND RICHES 
 
 must be gathered and stored in season. Fish are more 
 plentiful at certain seasons. He must gather in stores or 
 stocks of such things until the next season. He does not 
 find all the things he requires at one location. He must 
 bring some of his supplies from a distance. To do this he 
 needs means of transportation, boats, wagons, etc. He 
 may find it even more convenient to cultivate crops or do- 
 mesticate animals. This requires fences, barns, implements. 
 For his stores he needs warehouses. All the stores, ware- 
 houses, fences, barns, boats, wagons, implements are useful 
 in making his work effective. They are his Capital. 
 
 To have capital he must put by what he should like to 
 use in enjoyment at once, or must devote his time to pro- 
 curing wealth for capital instead of procuring something to 
 enjoy at once. But he soon learns that by this abstention, 
 this working for and applying wealth for a future use, he 
 may have much larger supplies and with less labor. As 
 men become more civilized and educated in science and in 
 neighborliness, the tendency to create capital is stronger. 
 
 But all wares must be made from natural supplies of 
 material. Production advances but little, until the producer 
 finds that "knowing persons" have anticipated his need of 
 raw materials and have seized upon all lands which contain 
 them. As he advances further, he finds the avenues which 
 lead to markets barred by toll gates. These persons, like the 
 Moor bands, now being suppressed, demand a large share of 
 his output for this access. 
 
 We see that output is shared between the producers for 
 their labor and capital, and those who have the power to 
 hinder the use of natural opportunities. This hindering 
 power embraces the ownership of land, mines, franchises, 
 and trade monopolies. Their owners gain possession of 
 them either by violence or graft, or by taking them before 
 society's needs have grown to require them. Society, 
 through the ignorance, fear and greed of its members, for- 
 
PROPERTY EVOLUTION 41 
 
 bears to disturb them and confirms their title thereto by 
 laws of cession or grant. Hence, we may term all such 
 property, as consists of control of natural or social oppor- 
 tunities, CONCESSION. 
 
 Property consists not in physical volumes or areas, but 
 in authority. Property evolves from and consists in the con- 
 trol of others desires, through the command of the physical 
 or functional entities on which their satisfaction depends. 
 Hence the power to permit or hinder use constitutes prop- 
 erty. 
 
CHAPTER VI. 
 
 Propkrty Precepts. 
 
 HE following facts about property are important 
 to remember : 
 
 1. That property evolves in a thing from the 
 first recognition of authority to hinder its use. 
 
 2. That laws of property are dictated principally by 
 and for the advantage of the owners of property. 
 
 3. That the existing basis of ownership is not even 
 approximately founded on right. 
 
 4. That government was forever instituted and founded 
 on the theory of the superior rights of the fortunate, but 
 even so, that order with injustice is better than anarchy, 
 and that rapid strides are being made toward improvement. 
 
 5. That decrees or grants of title by one generation is 
 not an obligation that the succeeding generation is morally 
 bound to respect in making their laws. 
 
 6. That one's claim to the reasonable requisites of life 
 is not dependent on his labor. 
 
 7. That each has a right to an equal supply for person- 
 al needs, irrespective of his productive or acquisitive ca- 
 pacity; but that each person's obligations to society are in 
 proportion to his natural or acquired capacities. 
 
 8. That the right to control the means of production 
 is in some measure justified by their successful use for the 
 good of society. 
 
 9. That the opulent have no meaner idea of the rights 
 of the poor than the poor have of their own rights, and 
 oppression is supported by the false ideas of the oppressed. 
 
 10. That the intensity of lack is in no degree measured 
 by Exchange-value. 
 
 43 
 
PROPERTY PRECEPTS 43 
 
 11. The relative Exchange- value of things is not like- 
 ly to be their relative worth to any one person. 
 
 12. The Exchange-value of a thing depends not on its 
 utility to one, but what it will procure him from others. 
 
 13. Value is not in things, but in the prevailing opin- 
 ion of them. 
 
 14. Desire is not for things, but satisfaction. 
 
 15. The value of a thing is the compromise between 
 desire and hindrance. 
 
 16. Increase of exchange- value in a commodity is as 
 much loss to the users as it is gain to the holders. 
 
 17. That property, under the present status, consists 
 less in the ability to use than in the power to hinder use. 
 
PART THREE. 
 
 Production. 
 
 Chapter I. What Production Compre;he:nds. 
 
 " II. Exchange: and Art. 
 
 " III. Labor and Wage:s. 
 
 IV. Wealth. 
 
 V. Capital, Increase and Interest. 
 
CHAPTER i. 
 
 What Production Compre:hends. 
 
 |0 study the condition of output or the replenishing 
 of the stock of wealth, we must define a very con- 
 fusing though common term of economics — Pro- 
 duction. The principal confusion of economic 
 thought arises from a double meaning attached to this term. 
 When a Robinson Crusoe lands on a fertile island he finds 
 there the sources of abundant supply of subsistence, but little 
 of it IS in condition for his use. Trees must be cut for fuel, 
 and shaped and built up for shelter. Food must be gathered 
 or provided by killing animals. This takes effort on his 
 part, or labor. To provide a satisfactory supply he must 
 plant and cultivate crops. The supply which he has thus 
 adapted, or even which is partly completed for use, by his 
 labor, he prizes and protects from waste. It is valuable. He 
 has caused it to have a special utility for his enjoyment above 
 all the wild growth of the island. He has ''produced" it 
 with his labor. Here is production in its true economic 
 meaning. 
 
 Production, therefore, comprises all effects of human 
 agency, directed toward service and increase, or replenish- 
 ing of supplies for the satisfaction of desire. 
 
 Service is that part of production which does not result 
 in a tangible output but is applied directly to satisfaction. 
 Teaching, nursing, domestic service, etc., are examples of 
 service resulting from labor. Hotels, means of transporta- 
 tion for passengers, theatrical and other amusements, are 
 examples of service resulting from labor and capital. Service 
 has the general nature and is produced by the same methods 
 as is tangible output. 
 
 47 
 
48 RIGHT AND RICHES 
 
 Many writers confuse natural forces with human agency 
 in treating of production. To be sure, human agency can do 
 nothing without natural forces; but the use of such forces 
 do not for that reason constitute them factors of production. 
 To illustrate, let us take the term heat. Heat is a certain 
 phenomenon observed in its effects on the human body and 
 on other material elements. Now heat may be produced by 
 the use of coal, or wood, or gas, or electricity, or friction. 
 There is animal heat and sun heat and chemical heat. Yet 
 we do not confuse heat with fuel, or chemical action. Heat 
 is a distinct phenomenon. It is a powerful and useful agency 
 for many purposes. We care not whether it results from 
 fuel, electricity, or sunlight. 
 
 Human agency must use a multitude of natural mate- 
 rials and forces, but we must maintain our idea of human 
 agency unconfused as the sole factor of production. Soil, 
 sun, mineral deposits, and such things are not factors of 
 production. It is the effect produced on or with them that 
 constitutes production. These forces act freely, hence do not 
 induce valued the essence of wealth. The profusion of their 
 output is not wealth unless humanly circumscribed. 
 
 Webster defines produce: ''To lead forward," ''to cause 
 to exist;" he also gives many other definitions, but in the 
 economic sense it must be restricted. We must limit it to 
 what human agency causes; to the leading forward; the 
 making available by human initiative, by human effort. The 
 other common meaning of produce, "to yield," referring to 
 growths or results of natural causes, must be eliminated 
 from the economic meaning. Human agency plants, culti- 
 vates and gathers crops ; it mines and quarries useful min- 
 erals ; it shapes, modifies and transports. This is production. 
 Output of wealth is from both human and natural forces, but 
 its production comprises only the human contribution. 
 
CHAPTER 11. 
 
 Exchange and Art. 
 
 HIS human agency is of two distinct natures, the 
 
 active and the passive. The active agency is called 
 
 Labor, the passive, Capital. Labor actively moves, 
 
 directs and accomplishes. Humanity passively al- 
 
 lozvs its wealth to aid this active element. Produce does not 
 
 mean simply to grow or manufacture, but to make available 
 
 in any way. Exchange is an effective means of production. 
 
 Exchange is often treated by economists as an evolution. 
 Exchange is not an evolution, it is a revolution, an innova- 
 tion. The wildest savage may incidentally trade his bow, 
 or boat, or gun, to another for some other thing. He may 
 see what an advantage this is and seek other trades. These 
 are incidents. 
 
 But when a community has advanced to a state of in- 
 telligence such as to allow one or more of its citizens to de- 
 vote his attention solely to the production of one kind of 
 commodity, a distinctly new era has opened up. Presto! 
 there is born exchange- value ; for exchange value is not, 
 as many mistakenly think, simply that comparison of es- 
 teem which an Indian might entertain regarding a fine fur, 
 a pony, or a boat, as a means contributing to his pleasure. 
 Nothing of the kind. It is more nearly like the esteem of the 
 gaudy beads which an educated and refined explorer might 
 carry into the wilderness to exchange to the Savages, as 
 Stanley did — of no earthly attraction, or worth to their 
 owner except to trade for what he may desire. He esteems 
 them only for what they will buy. 
 
 Thus one engages in production of one commodity 
 alone, that commodity being rated by him as though he had 
 
 49 
 
50 RIGHT AND RICHES 
 
 no personal use for it whatever, but as the wampum or 
 beads, which one reckons some other one will wish, and for 
 which they will furnish his needs for other things. Ex- 
 change starts very early in civilization : "Abel was a keeper 
 of sheep, but Cain was a tiller of the ground." 
 
 While division of labor is foreign to that desolate state 
 where one would try to supply all his own wants, it is, nev- 
 ertheless, the natural inspiration of man's efforts ; but greed 
 is not its natural stimulus. Nor may we trust greed to di- 
 rect the output and supply of wealth. True, production rests 
 on the artistic instinct of man, which rises and expands with 
 his moral and intellectual development — with his re-approach 
 to his native condition of brotherhood, for what is the motive 
 of true art but the desire to bless others by contributing 
 what will give comfort and happiness. - 
 
 ''Bear ye one another's burdens and so fulfil the law 
 of Christ. But let every man prove his own work and 
 then shall he have rejoicing in himself alone and not in 
 another" — Gal. 6:2,4. 
 
 Someone has tritely said : "Love is the art of hearts and 
 the heart of arts." Is it not well recognized that no noble 
 art is produced in response to a pecuniary reward? Every 
 normal person has the instinct of art in some line, if he 
 has not smothered it; that is, of art in its broad sense of 
 creating things or service of use and beauty. To use Em- 
 erson's words : "As soon as beauty is sought, not from re- 
 ligion and love, but for pleasure, it degrades the seeker. 
 Beauty must come back to the useful arts, and the distinction 
 between the fine and the useful arts be forgotten. It is vain 
 that we look for genius to reiterate its miracles in the old 
 arts ; it is its instinct to find beauty and holiness in new and 
 necessary facts in the field and roadside, in the shop and 
 mill. Proceeding fiom a religious heart it will raise 
 to a divine use, the railroad, the insurance ofiice, the joint 
 stock company, our law, our primary assemblies, our com- 
 
EXCHANGE AND ART 51 
 
 But Art, starting from such sublime source, may like 
 plant life be dwarfed or distorted. The tree repressed and 
 stunted becomes knarled and knotty. So art is distorted by 
 the unnatural environment of the artist, into morbid phases 
 and freakish imitation of ancient degeneracy and ignorance, 
 and such phase is often held up as a standard. Wholesome 
 art is the outward expression of the inner life of the com- 
 munity contemporary with the artist. Such art is mani- 
 fested in all the wares and commodities of a people. And 
 as the choicest wood, marble, gems and gold are put to base 
 uses, so art is put to uses which tend to debase rather than 
 to uplift mankind. 
 
 A nation may be pretty well judged by its use of the more 
 genteel arts. The most extravagant art of India and some 
 other lands is lavished on tombs, as if to emphasize the fact 
 that there civilization itself is dead. America has most of 
 her art in the home. Art here is for the living. 
 
 Art is for man and not man for art. Art should be used, 
 but not worshiped. "Thou shalt not make unto thee any 
 graven image, thou shalt not bow down to them or serve 
 them." The depraving results of worshiping churches in- 
 stead of worshiping in churches; worshiping works of art, 
 instead of worshiping by works of art, is sadly shown by 
 the populace of old centers of art. The tendency of wor- 
 shiping their art by the devotees of sculpture, painting, 
 music and other arts which assume the title of "fine arts," 
 has distressing effect on such worshipers. The loose mor- 
 als of persons who go to excess in their adoration is pro- 
 verbial. The song or picture of the most exquisite technique 
 is not always the most inspiring, enjoyable or elevating. 
 
 There is but one reason why the makers of the finest 
 statuary or paintings, or the writers, or interpreters of 
 beautiful music, should become egotistical about their art 
 more than the workers on a fine auto, cottage or boat. This 
 one reason is because their work is more individualistic. 
 
52 RIGHT AND RICHES 
 
 One man makes a painting alone, or sings a song alone. 
 Many must co-operate in the auto or boat. 
 
 The art which blesses mankind is inspired by love. But 
 all output of physical commodities does not emanate from 
 this divine impulse. Therein is one cause of our troubles. 
 
 Exchange, commerce, is necessary to give scope to the 
 artistic instinct and talent. A hermit, isolated from society, 
 cannot have either inclination or opportunity to create much 
 of beauty. The artistic instinct is a part of man's spiritual 
 nature. Its desire is to give ; greed seeks to take. 
 
 Greed and selfishness repress art. The artist seeks not 
 to promote his own ease or satisfaction, but that of others. 
 The knowledge that he does so is his greatest reward. Yet 
 this does not lessen the pecuniary reward due him, which is 
 the supplying of his needs as a compensation. However little 
 appreciated, this noble motive is the main stimulus of com- 
 merce. Because of greed, producers dare not be completely 
 disinterested. That business is on a mean and sordid basis 
 whose main motive is not the good of those it supplies. It 
 may seem that great success is sometimes achieved by con- 
 cerns whose only object is gain, but it cannot be denied that 
 success is surer and more common, from the high purpose 
 to give the greatest possible good to patrons. 
 
 The next step after some have engaged to produce but 
 one line, and to depend on exchange for their own requisites, 
 is the engaging by some solely in the occupation of promot- 
 ing exchanges, and ceasing all efforts at growing or fabri- 
 cating commodities. Such persons fill a necessary place in 
 the development of industry. To be adapted to such a 
 sphere, which most persons are not, one should have a ca- 
 pacity to judge the commodities he handles and to interpret 
 the desires of the people, so that he may help to direct pro- 
 ducers how to furnish an output which will satisfy people's 
 desires. 
 
EXCHANGE AND ART 53 
 
 Exchange is a vital part of production, for shoes on the 
 retailers' shelves are, from an economic view, not completed 
 except in a degree, any more than when they are simply 
 leather, thread, etc. They must be fitted to feet and sold, to 
 be completed. Output may be roughly separated into 
 groups, each of which is intended to satisfy a certain desire, 
 as grains, potatoes, fruit, etc., for food; lumber, stone, lime, 
 etc., for building. Each person seeks to satisfy his desire 
 for food, clothing, ornament, music, etc., by offering some- 
 thing of another group in exchange for it. This exchange 
 is accomplished by first exchanging for the symbol of wealth, 
 money, and then changing the money for what we desire. 
 
 An article is actually of more value to the buyer than to 
 the seller. This is the legitimate profit of the merchant. He 
 must keep a stock subject to loss by fire, change of style, etc., 
 must pay rent, and many other expenses, in order to allot 
 a pair of shoes to each wearer that will suit him in price, 
 style and comfort. 
 
 Many seem unable to distinguish any radical difference 
 between gambling and business risks. Business risks are a 
 necessity. Some one must carry them, and the premium 
 which the consumer pays for goods, reimburses merchants 
 for their losses. But gambling is an artificial risk, created 
 for no final good purpose, but only to catch those who wish 
 to get money without giving a return. Much that is called 
 speculation is only gambling. Gambling is a total loss to the 
 community in wasted time, energy and manhood. It is com- 
 mon to be charitable to many useless and harmful lines of 
 exchange or business, and class it with respectable industry ; 
 but no business deserves such respect that does not actually 
 contribute to the final supplying of comfort and happiness. 
 The risks and losses incurred in honest trade are but part 
 of the total cost to consumers. It is desirable, of course, to 
 keep them down to a minimum. Risks created for no real 
 
54 RIGHT AND RICHES 
 
 purpose but to gamble on should be stopped by law, and 
 happily such practice is becoming more general. 
 
 Goods of different groups may be procured from the same 
 locality or from widely distant lands. The greater portion, 
 however, arise right in the same locality. The production 
 of salt goes on in the same field with grain, glass, fish, 
 leather, gold, copper, etc. True, where coffee grows, little 
 corn is raised, and to some great gold mines water must be 
 brought four hundred miles up an elevation of two thousand 
 feet. Yet som.e points, by common consent, become pro- 
 ducers in certain lines. One place monopolizes the brass 
 button and buckle business, another makes beer, another 
 automobiles. Sometimes this is because the skill developed 
 in some pioneer plant clusters about it in other works. But 
 whether from near or far, the production in one group. is 
 paid for from the product of many others. The motive of all 
 true production is the good of the consumer, to better serve, 
 and satisfy mankind. This motive in a considerable measure, 
 however, is frustrated, as I shall endeavor to show. 
 
 Government should encourage the production of such 
 things as are for the best interests of consumers. The mak- 
 ing of intoxicants and injurious drugs should be discour- 
 aged. The highest standards in all lines should be en- 
 couraged. The Pure Food Law, recently enacted, which 
 discourages adulterations, is in the right direction. One of 
 the Dakotas compels the labeling of paints with the exact 
 ingredients. Government should busy itself with supplying 
 its people by encouraging the largest and the best possible 
 supply of things that promote their happiness, and give 
 special care to the things needed by the poor. Then there 
 would be no need of worrying about foreign markets. 
 
 To give, is an imipulse antecedent to, and correlative with, 
 to create. Guaranteeing abundant use by all, is a means, 
 both reasonable and humane, to promote art and exchange. 
 The springs of output which are not drawn upon, like the 
 
EXCHANGE AND ART gg 
 
 cow that is not milked, soon goes dry. There is no lack 
 of ever-w.II,ng producers, if the application of their output to 
 Its ultoate purpose is not thwarted by greed; for "it is more 
 blessed to give than to receive." 
 
CHAPTER III. 
 
 Labor and Wag^s. 
 
 ABOR, as one of the two factors of production, em- 
 braces more than is meant in the common use of 
 the term. The common signification is mechan- 
 ical, or muscular work, the more intelligent or 
 trained portion of such workers being popularly termed 
 skilled laborers; those untrained, common laborers. Labor 
 as an economic term includes the efforts of both these classes, 
 and more. Labor may be defined only as a factor of pro- 
 duction. 
 
 Labor comprises all hum.an action tending to the satisfac- 
 tion of desire. It includes the thought applied to inventing, 
 planning, directing, discovering, and organizing, as well as 
 the muscular, or mechanical effort devoted to producing sat- 
 isfaction. 
 
 Labor is not synonymous with toil. Toil may produce no 
 result. A desirable result is essential to labor. A toilsome 
 effort usually is labor. Labor is generally unnecessarily toil- 
 some and unpleasant. The belief seems to be widespread 
 that results depend on strain, weariness and worry. But 
 labor may be the greatest of pleasures. The most intelligent 
 business decisions, good management of men and operations, 
 are not dependent on strain and worry. Neither does labor 
 consist in mechanical force or "horsepower." A half dozen 
 slight persons with intelligence may produce more results 
 than an army of muscular ignoramuses. 
 
 The more intelligent the worker is, the more he employs 
 nature's forces. A stream of water flowing uselessly down 
 the canon may be confined and used as a hydraulic jet to 
 tear down and move the very mountains, with little labor, 
 
 56 
 
LABOR AND WAGES 57 
 
 moving more dirt and washing out more gold than infinite 
 crude labor. The master laborer, the "captain of industry," 
 brings about an organization which turns out many times 
 the former output. Yet wages are not generally in ratio to 
 the importance of the results of labor to society; for the 
 master laborers, who make not alone "two blades of grass 
 to grow instead of one," but who make whole plains of 
 desert to "blossom as the rose," are often so absorbed in their 
 good work as to neglect to secure their rightful pecuniary 
 recompense. 
 
 Workers demand a compensation for their labor called 
 wages. As all productive effort and service is labor, so all 
 returns for such effort are wages. Wages in common par- 
 lance refer to a payment to laborers at stated intervals by a 
 "boss." But as an economic term, wages include the reward 
 the president of a great railroad or the manager of a great 
 industry receives for his efforts. Wages are not only pay- 
 ment from an employer to an employe, but include as well 
 the reward for effort represented in the product of one work- 
 ing for himself. Burbank's profits from his botanical work 
 are his wages. The game is the reward to the hunter ; the 
 fish to the fisherman. Under primitive conditions the laborer 
 takes the whole product as his reward. As civilization pro- 
 gresses he requires capital and must divide the product with 
 its owner as interest. Then the land from which he gets the 
 essentials of production acquires value and part of the prod- 
 uct must go as rent or accessage. 
 
 Education o^ Laborers. 
 
 The processes which multiply output must have intelli- 
 gent direction. Seed will not grow with advantage unless 
 skill directs its planting. The product of chemical action is 
 useless unless properly conducted. The knowledge requisite 
 to direct processes of production is called Science. Science 
 is the truth discovered and adapted to a useful purpose. The 
 
58 RIGHT AND RICHES 
 
 results of science on the output of useful things in recent 
 years are marvelous. Electricity alone, which is merely a 
 process and not a physical entity, is doing the work formerly 
 requiring millions of men. Output has not simply been 
 added to by Science, but multiplied. What is the price of 
 Science? In the main it is without cost to whomsoever 
 would use it. It belongs to Society as a heritage from the 
 past. In some measure Science is personal property. Some 
 ideas and processes are vested in the private ownership of 
 those who discover them, but only for limited periods. This 
 is right. But only a small fraction of invention or discovery 
 is patented or copyrighted. 
 
 Employers of labor are neglecting a most profitable 
 means of increasing their business by failing to establish 
 technical schools in connection with their plants. For a small 
 cost a hall could be built, or leased, convenient to the factory 
 and made inviting by such furniture and supplies as could 
 be afforded. Some one skilled in the line of production 
 in which the factory is engaged could be had to give lessons 
 and lectures at certain periods. All sorts of literature bear- 
 ing on the line of production should be kept there, available 
 to all employes. It should not be forgotten that the cheap- 
 est employe, if given some insight into the art, may discover 
 important improvements. Such places could also be made to 
 serve as clubs for the men. Decorations and furnishings 
 could be partly supplied by subscriptions of employes. Pub- 
 lic library branch stations might be secured. In larger estab- 
 lishments, experimental laboratories could be had. This has 
 been done by some proprietors with especially splendid re- 
 sults, both in the exceptional quality of the output and its 
 wonderful sale. 
 
 Greater skill and intelligence of employes inevitably 
 means greater profit to an establishment as well as the work- 
 ers, and especially to society. 
 
LABOR AND WAGES 59 
 
 The public schools should co-operate with employers in 
 this technical, training, paying a share of the expenses of 
 such teachers. The regular pupils of the public schools 
 should visit these industries in delegations at short intervals, 
 in charge of teachers, and study the actual workings there- 
 of. At such times the employes and teachers could discuss 
 the process foi- the instruction of all. By this means the 
 industries would get better results from their operatives. 
 The children of the schools would get practical ideas, in- 
 stead of boarding school theories, which would encourage 
 them not alone to select a calling for life, but would broaden 
 their ideas. The time will come when people will wonder at 
 the stupidity of the long hours now spent in study of "long 
 distance" subjects, tedious history of wars, or things Won- 
 derful because far away in distance or because lacking prac- 
 tical import. It should be learned that the finest literary or 
 scientific education is best grounded when based on a knowl- 
 edge of the practical things right about us. 
 
 Purpose:. 
 
 The first precept that should be taught the student is to 
 seek the purpose of things; for therein is the inception of 
 every progressive thought. What is the purpose of a win- 
 dow in a certain place? Is it to be looked out of, or into? 
 Is it desired to admit the air, the sunshine, or only the light ? 
 We cannot effectively use one conventional style of window 
 for all such purposes. What is the purpose of a road or 
 street in a certain section? Simply to front houses on? No, 
 it is to "go" on. But to go where on ? To the center of the 
 city or only to a more important thoroughfare, or to the car 
 line ? Is a road simply for the travel of some isolated farm- 
 ers to town, or for the great streams of inter-city or inter- 
 state travel ? How stupid that we have no such compre- 
 hensive system of roads, but just short stretches, which are 
 nearly as useless as would be a fence part way around a 
 
60 RIGHT AND RICHES 
 
 pasture. What is a jail for? To torture and ruin those 
 put in it, or to improve them ? What are the great exposi- 
 tions for? To make money, or to educate? What is edu- 
 cation for? Which is a system of railroads for; the public 
 or the owners ? What is taxation for ; to make us poorer or 
 to make richer ? 
 
 It is sometimes complained that college graduates can 
 make no more income than carpenters or plumbers ; be it so 
 — there is no essential injustice implied. 
 
 A recent article stated that Germany had carried technical 
 education to the extreme, the graduates being unable to se- 
 cure positions of advantage. But does this argue against 
 the great advantage of such schools to Germany? Educa- 
 tion is largely an investment made by society ; and to society 
 is due the dividend. If the education is of the right kind, 
 society gets dividends a hundred fold. 
 
 A Northerner asked a Southern Priest if it were good to 
 educate the negro. The Priest thought not. Why? Be- 
 cause of his antiquated idea of what education is. He was 
 then asked : Is not the negro who has been taught to be a 
 good mason, carpenter, cook or farmer, worth more to the 
 community and himself than one untaught? "O, yes," was 
 the reply. "Then is not that education?" asked the North- 
 erner. And is not the failure generally in the kind and not 
 in the quantity of education? There is too much stereo- 
 typing of education. Why should all the public schools of a 
 State teach the same thing to every pupil in a certain grade, 
 or year? There should be the greatest variation between 
 one city and another, between urban and rural school; and 
 each city should have numbers of lines of study which might 
 be undertaken by different individuals. 
 
 What does the multitude need of Latin, or Shakespeare 
 or Algebra? Some individual students should be able to 
 study architecture instead of Latin, cooking instead of Al- 
 
LABOR AND WAGES 61 
 
 gebra, economics instead of Caesar; in other words, present 
 social sense, instead of ancient savagery and stupidity. 
 
 The science of tanning is very important and useful, but 
 it is needless for more than a very limited number to learn it. 
 
 Gardening has more tendency both to broaden character 
 and to be useful than too much mathematics. How to dress 
 becomingly is more tending to elevate both individual and 
 society than tedious volumes on how nature made mountains. 
 Every dollar the community spends on education should de- 
 mand a return, not in bookish parrots, but in greater diver- 
 sity of accomplishment; greater beauty and harmony in the 
 social man. The shaping of courses of study should be 
 made with reference to the kind of accomplishments which 
 society is most lacking. A good crop of aldermen should be 
 produced and put on the market. Then might come a course 
 of study for policemen. A course entirely without law 
 books, for prospective judges, would tend greatly to advance 
 civilization. 
 
 Children should be instructed in both the essence and the 
 forms of politeness. They should be taught civic pride, how 
 to organize and act in unison for the advancement of what 
 they believe to be right. There should be as perfect solidar- 
 ity in the army of industry, the army of civic improvement, 
 philanthropy and progress as in the army of war. 
 
 But while bountiful results are what benefit society, are 
 what all should strive for, still they do not, with our present 
 greedy system, immediately determine the scale of wages. 
 Wages are the compensation or balance between desire and 
 hindrance. This hindrance depends on the laborers — upon 
 what they demand for their work. Such demand depends 
 on incentive and power. The incentive must be educated, 
 the power organized. It must always be remembered, how- 
 ever, that the wages can be hut a part of the product. Lib- 
 eral wages necessitate liberal production. It is plainly im- 
 possible for high wages to result from a small output. 
 
62 RIGHT AND RICHES 
 
 Labor does not compete with labor as many think, but 
 labor furnishes a market for other labor. Isolated incidental 
 cases there may be where it competes, such as where an ex- 
 cessive number learn one trade ; but, broadly speaking, labor 
 is paid with the product of other labor. 
 
 Again, increased wages may fail to result from increased 
 output, first, because the product may be cheapened in con- 
 sequence of such increased supply. Second, because labor 
 is but one of two factors of production and but one of three 
 recipients in the division of output. By reason of cheaper 
 price, the increased output ma}^ not have increased value, 
 or, having greatly increased value, such value may be taken 
 by capital, or concession, as increased interest or rent. 
 
 The share received by labor depends on the amount and 
 strength of the laborer's demands. Strange as it may seem 
 this demand is not in any degree in proportion to the toil- 
 someness or unpleasantness of the work. In many cases it 
 seems even to be in inverse ratio to such suffering. The 
 most pleasant work, even arts that would almost be pursued 
 for the very pleasure of accomplishment, often get the high- 
 est pay. Why is this ? Because the more free, refuse both 
 the work and the pay of the ox. Those little advanced have 
 not the initiative to rebel, nor the power to compel higher 
 wages. 
 
 There is a sentimental thought that industry depends 
 upon these poorly-paid laborers, and a "practical" thought 
 which seeks to keep these workers down to their present 
 level so that they will not refuse to bear these burdens. Both 
 are wrong. As these laborers become more intelligent and 
 independent, so that they will refuse to bear these burdens so 
 cheaply, there will be found a way to dispense with such 
 tasks without discomfort to the consumer. *'The man with 
 the hoe" is not a necessity. 
 
 He ''that grieves not and that never hopes" does not 
 bear "on his back the burden of the world." 
 
LABOR AND WAGES 63 
 
 He bears a useless burden. 
 
 Who is the master which thus enslaves him? 
 
 Who but his own perverted thought, his ignorance, 
 greed, hate or fear, his indifference to his neighbor or per- 
 haps to even his own family? 
 
 Love is the law of liberty, enlarging the capacity and 
 broadening the opportunity. "For all the law is fulfilled in 
 one word, even in this : 'Thou shalt love thy neighbor as 
 thyself.' " 
 
 There is a worthy Master to whom he may go. He says 
 "Come unto me all ye that labor and are heavy laden and I 
 will give you rest. * * * Learn of me, for my yoke is 
 easy and my burden is light." 
 
 Five men in a certain great steel mill now roll with elec- 
 trical apparatus thousands of tons of steel daily from ingots 
 — an output that a few years ago would have required 
 hundreds to have toiled in the heat. The abolition of slavery 
 in the South has multiplied the output and enjoyment of 
 wealth. Much work is drudgery solely owing to the con- 
 ditions under which ir is pursued. Tending a garden is the 
 most genteel pursuit, or the dullest toil, according to the 
 motive of the worker. 
 
 When workingman, as well as millionaire, learns that the 
 true way to rise to freedom from poverty is not by treading 
 upon others, poverty and toil will cease upon the earth. 
 "God gave man dominion over all the earth" but not as 
 many would construe it. He did not give one person do- 
 minion over others. The power to command others is not 
 a righteous motive for business, or the acquisition of wealth. 
 The proper purpose of wealth is the good it will do. Hence 
 value, price, is not an essential of wealth in its true charac- 
 ter, though those high in position teach that it is. 
 
 Natural wholesome labor is the result of "loving our 
 neighbor as (being one with) ourselves." Such labor pro- 
 duces the great results and wearies least. 
 
64 RIGHT AND RICHES 
 
 "And who is my neighbor?" Plainly the one we meet 
 in the way ; not alone the member of our church, tribe, city, 
 or nation ; but he who needs our sympathy. 
 
 The: Tim^ Factor. 
 
 One of the most important elements of labor is TIME. 
 We would all prefer to have our time at our own disposal, 
 to use as we please. Moreover, there are expenses which 
 occur with the lapse of each day and month. Hence, there 
 has arisen the practice of paying for labor by the day. This 
 is in some measure being displaced by the piece-work sys- 
 tem. 
 
 Workers should be given an insight into the whole scope 
 of the business of their employer; should be changed from 
 one phase of work to another. Employers should seek to 
 interest workers in the final results and not treat them as 
 machines. 
 
 All should labor. No one should be compelled to drudge. 
 Labor is ennobling. Drudgery is degrading. The highest 
 intellectual endeavor is labor. Application to any art, 
 whether that classed as fine art, or commercial art, is labor. 
 Indeed any art is ''fine art" if finely accomplished. Nothing 
 gives more lasting pleasure than accomplishment. Nothing 
 has such refreshing and renewing effect as to see results ac- 
 cruing from honest effort. Surely it is a reflection of the 
 Nature of Our Maker. What a pity that so many seem de- 
 prived of the chance to do wholesome labor. Millions are 
 seemingly so deprived by concession's engrossment of re- 
 sources. Millions more toil at depressing drudgery. Others 
 are deprived by caste, by their belonging through birth or 
 wealth, to the leisure class caste. But you say they might 
 work if they would. Very truly ; but it requires true cour- 
 age for a man of wealth to turn aside from the selfish occu- 
 pation of exerting authority, embraced in ownership of 
 wealth, from speculation and spoliation, to wholesome labor. 
 
LABOR AND WAGES 65 
 
 It is also unfortunate that so many persons are engaged 
 in useless pursuits. And under our topsy-turvy system of 
 commerce this class includes those of the best, as well as 
 those of the worst characters. For how many consider it of 
 any importance that his work should benefit society? 
 
CHAPTER IV. 
 
 Wi:ai.th. 
 
 HERE is a class of property that is sought for the 
 purpose of being consumed. 
 
 To be consumed means to be used up. Not 
 essentially destroyed at once, but in a period of a 
 few months or years. Food, clothing, houses, vehicles, orna- 
 ments, machinery and such things, taken as a whole, are 
 rapidly used up, or they decay in a short time after being 
 fitted for use. Hence, to maintain a stock of such things 
 there must be constant new supplies procured. This class 
 of property is termed wealth. 
 
 Writers on economics for some reason seem to have had 
 a hard time defining this class of property. They all seem 
 to have much the same thing in mind, but their definitions 
 are so poor that they become greatly confused thereby. 
 
 To properly define wealth is of absolute necessity, in or- 
 der to have any reliable foundation for a definite considera- 
 tion of the subject; for economics is the study of wealth. 
 Some definitions call it "stored labor." This leads us astray. 
 Others, "a product of labor," which is equally faulty. Some 
 include notes, bonds and other evidence of credit ; some even 
 include land. By the following definition 1 think we may 
 identify it under all circumstances. 
 
 Wealth comprises that class of property which is being 
 continuously consumed in enjoyment and reproduction; and 
 continually replenished by output. 
 
 Output means simply the putting of new supply on the 
 market. It does not imply labor, though labor may promote 
 such supply. It may accrue entirely from land or from Cap- 
 ital without labor. Output comprises all desirable things 
 
WEALTH 67 
 
 which come upon the market from natural causes or promo- 
 tive effort, accruing periodically or continuously, in contra- 
 distinction to native or permanent property. 
 
 Land, mineral deposits and forests exist practically per- 
 manent in their native condition. They are fixed entities. 
 Grass, animals, fruits, etc., manufactures, buildings, ships, 
 are output. Growing crops, orchards, vineyards, etc., are 
 output. Output and permanent property merge together un- 
 til the distinction becomes one of period. Things accruing 
 in a period longer than an ordinary generation begin to have 
 the nature of fixities. So also do structures enduring longer 
 than a generation. Nothing is wealth which is not from 
 Output, Land is not wealth ; it does not accrue periodically, 
 nor is it consumed by use or time. Franchises, patents, evi- 
 dences of debt are not wealth ; they are not consumed in en- 
 joyment. Grass grows without labor, yet grass is an output. 
 But is all grass wealth? No, only that which is property, 
 which has value from being controlled by someone. 
 
 Value is of the essence of wealth as of property in gen- 
 eral. Is stone wealth? Yes, if for the purpose of con- 
 sumption it has been moved from its natural bed to a point 
 more available for use. Does not labor create wealth? It 
 contributes to its value, it increases its value, by charging 
 wages for making it more available or desirable. Does na- 
 ture, sunshine, rain, soil, create wealth? No, they cannot, 
 as they charge nothing for their service. Does not land 
 contribute to it? No. Land grows utilities, its work is 
 without charge. The products of land become wealth by 
 reason of the landlord's charge for them. Is the destruc- 
 tion of a forest by fire "consumption?" No, it is waste. 
 Consumption means use. Is a railroad wealth? Yes, 
 tracks, grades, tunnels, cars, equipment and buildings are. 
 
68 RIGHT AND RICHES 
 
 They are consumed through use and must be renewed. Is 
 a city lot wealth? No. Are lots not turned out and put 
 on the market? Lots are not an output. They are not 
 changed from their places and nature, are not consumed. Is 
 corporation stock wealth ? No. It has not utility to be con- 
 sumed. 
 
 I 
 
CHAPTER V. 
 
 CaPITAI,, lNCRi:AS^ AND INTEREST. 
 
 HAT is capital? Capital comprises all wealth, of 
 which the enjoyment is being deferred that it may 
 increase in value or be used to facilitate output of 
 wealth. Capital is of two classes, STOCK and 
 EQUIPMENT. 
 
 What is STOCK? Any material accumulation in any 
 kind of industry from which a final supply to consumers is 
 to come is called Stock. Seed, ores, wood, coal, animals, 
 growing crops, grain for milling, fibres for spinning, logs 
 for sawing, are crude stocks. Flour, boards, thread, leather, 
 pig iron, lime, etc., are slightly developed stocks. Bread, 
 furniture, clothing, shoes, stoves, etc., are manufactured 
 stocks. Dry goods, hardware, millinery, etc., are merchan- 
 dise stock which only lack selling to users. When bought 
 by users, these things cease to be stock. 
 
 Equipment comprises any wealth which is being used to 
 handle stock, to move, plant, cultivate, clean, separate, com- 
 bine or otherwise manipulate it. Plows, wagons, horses, 
 cars, ships, machinery, bridges, barns, warehouses, shops, 
 fixtures, etc., when used in industry are Equipment. Cap- 
 ital consists solely of WEALTH. Capital is comprised only 
 of stock and equipment. Land, notes, bonds, franchises, 
 mines are not capital. Neither credit nor money is capital. 
 Nothing but wealth is capital, and only that wealth which is 
 at the time devoted to increase in value or to assisting out- 
 put, which constitutes either stock or equipment. Capital 
 depends on TIME for its effects. By allowing sufficient 
 time many natural and chemical changes take place in stock. 
 Animals and crops grow, wood seasons, chemical action sep- 
 
 69 
 
70 RIGHT AND RICHES 
 
 arates various elements and combines others. Time is re- 
 quired to manufacture and move stock. 
 
 Equipment is made effective only by time. A mill will 
 saw so much lumber in a day, a machine will press but 
 so many brick, a ship or car will travel but so far with its 
 load. 
 
 Stock and equipment are effective in proportion to the 
 time they are applied. Here is the origin of interest. While 
 wealth is capital, while it is being used as stock or equip- 
 ment, it may not be devoted to enjoyment. One wishes to 
 enjoy at once whatever he has. The poor child hastens to 
 buy candy with the dime someone gives it. The adult has 
 the same impatience, but perhaps under better control. What 
 woman is not anxious to get her new dress home, or what 
 man is not anxious to try his new gun? But adults are 
 guided by reason. They will give up one thing if they are 
 offered something equally suitable instead. They will de- 
 fer enjoyment if the consideration is sufficient. The child 
 will eat the apple green. The adult waits for it to ripen and 
 thereby gets much greater pleasure. Interest is the price 
 received by owners of wealth for waiting. Interest, like the 
 price of anything, is the compromise between desire and 
 hindrance. The desire for capital is for its advantages in 
 industry. The hindrance to its use is owners' aversion to 
 waiting. Owners seek as large a rate of interest as pos- 
 sible, but users will pay as little, obviously they can pay no 
 more than the increase they can secure by use as stock or 
 equipment. It is mistakenly thought by some that the aver- 
 age natural increase is the current rate of interest. 
 
 The origin of the word capital is from the Latin caput or 
 head. The greatest capitalists of old were owners of herds. 
 They counted their wealth by the head. Cattle on the 
 boundless range is yn ideal example of capital. In early 
 days on the Western plains a few cows were a capital which 
 speedily grew into a fortune. The owners were compelled 
 
CAPITAL, INCREASE AND INTEREST 71 
 
 to abstain from killing or marketing them in order for the 
 herd to grow. 
 
 Thk Law o^ Interest. 
 
 Interest is that part of the increase of wealth accruing 
 to owners or lenders from its use as capital — as stock and 
 equipment. 
 
 Lending is but one way of getting interest. The most 
 extensive way is to apply it to industry and get the natural 
 increase. Borrowing and lending is a dangerous method of 
 applying wealth to increase. The lender of capital, on the 
 average, simply gets a part of the natural increase. Henry 
 George seemed to think that this "increase" was limited to 
 natural growth, as of vegetation or animals. He very clear- 
 ly showed the fallacy of the old school conception of interest, 
 which regarded as interest the increased product which labor 
 was able to turn out, when supplied with tools or machinery, 
 over what it could produce without them. Then he went to 
 the other extreme and concluded that there is no power of 
 increase in tools, machinery, etc. 
 
 Let us see. Suppose we resort to the useful illustration 
 of the small community, a hundred workers on an isolated 
 island. The only timber on this island is away up in the 
 mountains, inaccessible by wagon. The only means of get- 
 ting it is for some of these workers to carry it down on 
 their shoulders, or perhaps on the backs of burros, at a cost 
 of tremendous labor. Thus while abundance of timber is 
 in these mountains, this community is limited to a very 
 scant supply. After suffering from this scarcity for some 
 time, they arrange to set ten of their number to building a 
 flume, compensating them therefor from the produce of the 
 remaining ninety. 
 
 This flume when completed is capital. It gives an annual 
 increase in wealth in wood, lumber, etc., of perhaps five 
 hundred per cent, of its cost. In other words, their new 
 
 6— 
 
73 RIGHT AND RICHES 
 
 supply of wood would have taken by the old method the 
 labor of more than half their number, whereas now it takes 
 that of but one man. Or suppose that they had procured 
 their water by carrying it a long distance and now dig a 
 well. This well-capital gives them an increased supply of 
 many hundred per cent. Or suppose that by building a sea- 
 worthy boat with the labor of ten of their number for some 
 months, this boat-capital now allows them to procure in- 
 creased supplies of fruit, fish, animals, eggs, etc., from the 
 sea and the adjacent islands. Does not the wealth invested 
 in the boat give a natural increase for interest as truly as 
 though devoted to growing such things? To society, the 
 rate of interest by such facilities is commensurate with the 
 increase of output. 
 
 But boats and flumes do not give to their owner a rate of 
 interest in proportion to what they furnish supplies in excess 
 of what could be carried on men's backs. A modern sawmill, 
 cutting perhaps several thousand times the lumber per em- 
 ploye that would be cut by a handsaw, has not interest effect- 
 iveness of several hundred thousand per cent, to its owner, 
 but perhaps only five, or six, or seven per cent. Here is 
 the vital point which Mr. George tries to explain by the 
 theory that the exchangeableness of wealth averages inter- 
 est, and therefore the "mill wealth" takes Up its average 
 share of the "increase power" contributed to the whole sum 
 of wealth by vegetable and animal growth. 
 
 But there is not an averaging or leveling in the natural 
 increase of output given by capital in various enterprises, 
 whether we count the output by volume or value. This 
 natural increase varies without limit in various enterprises, 
 but it does not all accrue to the capital owner as real in- 
 terest. 
 
 The capital owner often gets but a small part as interest. 
 He must usually divide this increase with the owner of 
 "concession," that is, the owner of the land, franchise, etc., 
 
CAPITAL, INCREASE AND INTEREST 
 
 73 
 
 on which the enterprise depends. Obviously, then, the aver- 
 age rate of natural increase, or natural advantage from the 
 use of capital is not the same, nor has it any approximate 
 ratio to the average or current interest rate. Hiis is a vital 
 point in economics. What, then, is the basis of the current 
 rate of interest ? 
 
 The demand for equipment and stock— capital— arises 
 as we have just stated, from the real creative increase power 
 of capital. Those having use for it get it from those who 
 v^ill furnish it the cheapest, hence: 
 
 The current interest rate is the compromise agreement 
 between accumulators of zvealth and those who seek tt to use 
 as capital. 
 
 The accumulators of wealth will refuse to save it up 
 defer its enjoyment, below a minimum rate, depending some- 
 what on how much it reduces their subsistence expenditure 
 below their "standard" of living. Hence, the rate of in- 
 terest, paid to capital, invested in the most productively ef- 
 fective equipment, is no more than in the most common 
 essentials of industry. A sailing ship, on the average, even 
 to-day, pays as good profit on the amount invested as the 
 most modern steamer. The share of output which is the 
 result of the use of capital is the increase of output caused 
 by the devotion of wealth to purposes of increase; whether 
 as seed for planting, stock for growing, machinery or equip- 
 ment, ships, railroad rails, ties and cars. All true capital 
 gives a real increase from which interest is paid, and as cap- 
 ital may be augmented or replenished from the general fund 
 of wealth, there is a leveling or averaging of the rate of in- 
 terest of wealth devoted to every purpose. 
 
 But may not any property in any use pay interest? In 
 the common use of the term, yes. One may pay interest on 
 the price of a piano or a watch, used alone for pleasure or 
 for the price of land. This should be termed fictitious in- 
 terest. All property is exchangeable. A cow may be ex- 
 
74 RIGHT AND RICHES 
 
 changed for a dress, money for merchandise, credit for 
 money or machinery. Now interest for capital is based on 
 the time it is used and its VALUE, on the amount of wealth 
 or value comprised in the capital, and not on its utility. 
 Ten men may each borrow a thousand dollars' worth of cap- 
 ital to use in ten different branches of industry. Each pays 
 the market rate of so much per cent., irrespective of what 
 it increases output. Because a steam thresher threshes out 
 thousands of times the grain that could be threshed in the 
 same time with a club, that does not determine its interest 
 value. Its interest \alue is based on how much wealth it 
 comprises, how much value it is postponing the use of. A 
 brush not worth two cents, dragged over a field, may do the 
 work of a thousand hoes, yet not be capital. The lenders 
 do not care whether threshers, railroad cars, or printing 
 presses are procured with what they lend. They expect so 
 much interest each year for each hundred dollars value. In- 
 terest is the price of deferring. It is paid out of increase. 
 
 If one has property which specifically may not be ap- 
 plied as capital — as stock or equipment — he may readily ex- 
 change it for the same value of real capital; hence, if he 
 lend it to another or sell it to him to be returned or paid 
 for in a year, he will expect the same interest that he could 
 have received by exchanging it for real capital and letting 
 it be used in industry. Governments formerly were heavy 
 payers of fictitious interest with taxes wrung from their sub- 
 jects. Money is not capital, because on the average it neither 
 grows, nor causes to grow with lapse of time. 
 
 There must of necessity be a fund accruing to pay in- 
 terest; people cannot pay interest very extensively unless it 
 is accruing from what the d^bt was incurred for. Deferred 
 payments for land are the greatest source of fictitious in- 
 terest. But the land may pay rent. The borrower looks 
 to a particular species of wealth when he borrows — certain 
 tools, engines, structures, which will facilitate production. 
 
CAPITAL. INCREASE AND INTEREST 75 
 
 A stock of a certain species of goods whose value is being 
 made greater by being shipped to another place or by being 
 retailed to consumers, is capital. Only a fraction of capital 
 is borrowed. 
 
 An increase of capital in a community or nation tends 
 to increase the abundance of subsistence for all, hence its 
 use should not be discouraged by capital being taxed. 
 
 But the effects of Time are not alone to increase or im- 
 prove wealth but to destroy it. When any natural deposit or 
 resource is moved, modified or changed from its natural place 
 or condition to make it more useful, from that moment it 
 must be cared for and further improved until ready to be 
 consumed, or time will begin to destroy whatever value is 
 promoted in it. Time is a destroyer as well as a producer 
 of Wealth. This tendency to decay is one thing that dis- 
 tinguishes wealth from concession property. 
 
 Time does not destroy, but renews Natural resources. 
 Cut timber rots, quarried stone slacks, mined coal becomes 
 useless. Loss and destruction also come unexpectedly and 
 take wealth away, so that by deferring use we may forever 
 lose it. Risk therefore joins with impatience to increase 
 owners' reluctance to defer use. Good government reduces 
 risk and thereby promotes accumulation of capital. 
 
 Capital is one feature which distinguishes civilization 
 from barbarism. This is both because Capital contributes 
 to civilization, and because civilization eliminates enough 
 of the risk of loss to encourage large accumulation of cap- 
 ital. Capital in the United States to-day is perhaps safer 
 from violence than it ever was anywhere, at any time be- 
 fore. This is one of the many objects of government. But 
 much yet remains to be done, not in protecting wealth from 
 violence, but from the processes of manipulators of finances, 
 stocks, and real estate speculation. 
 
 No credit is capital. Credit which represents the price 
 of stock or equipment constitutes a quasi-ownership of such 
 
76 RIGHT AND RICHES 
 
 capital which we might term LATENT TITLE to capital. 
 This Latent Title of the creditor is subject to the active, 
 apparent, title of the borrower. But credit for which the 
 debtor received no real capital, but only land, personal con- 
 sumption, or loss, has no relation whatever to capital. 
 
 Real capital increases the actual supply of wealth in the 
 community. This is the class of capital usually considered 
 in economic study as capital. 
 
 Wealth increasing in value or contributing to the in- 
 crease or creation of other wealth is actual Capital. Noth- 
 ing but wealth can be Capital. Crops growing, goods in 
 transit to where their value is greater, materials in process 
 of improvement in shape or quality, are capital. 
 
 Much confusion has grown out of misunderstanding the 
 function of capital. It was formerly said to be to supply 
 stock and equipment to be used in the work, and a fund to 
 pay wages called a wage-fund. Modern economists of any 
 discernment see that capital does not supply a wage-fund. 
 That fund is continually produced by workers. The pro- 
 prietor of the producing concern exchanges another form 
 of property to the workers from time to time for their share 
 of the product. This may be money, credit, or other mer- 
 chandise. Whatever is so exchanged is called wages. The 
 workers now have not more wealth, but it is of a kind more 
 ready for their use. The proprietor has as much or more 
 wealth, but must market it. A manufacturer finds at the 
 end of a week an increase in value of stock by reason of 
 work done on it, of more than $1,000.00. He buys this by 
 paying the workmen $1,000.00 wages. Suppose he has stip- 
 ulated that they should have so much wages ; that does not 
 change the fact that they are producing them in the new 
 wealth created. 
 
 But it is argued that the manufacturer must have this 
 fund to begin with, else he could not pay the wages. Do 
 not all manufacturers get the money from week to week. 
 
CAPITAL. INCREASE AND INTEREST 77 
 
 and month to month to pay wages, from the sale of goods? 
 But grant that they do not sell the stock before pay day or 
 before several pay days; that they must go on buying the 
 workmen's share for several pay days, before entirely com- 
 pleted or marketable output is furnished, what is this but 
 buying an added supply of more nearly finished stock? Is 
 it not common, usual, for stock to pass through many hands 
 before completion? 
 
 Suppose one is making articles of steel from steel bars 
 which he buys; then he builds a rolling mill and rolls the 
 bars ; then a furnace and makes the pig ; then ovens and 
 makes the coke; then mines and digs the coal. Now is he 
 not as truly buying coal when he pays the miners wages, or 
 pig when he pays the furnace-men's wages, as when he for- 
 merly bought such bars in the market. What appears to be 
 a wage fund is rather a part of the STOCK FUND. Pro- 
 duction is a continuous process. The Singer Sewing 
 Machine Co. sells so many machines each year, and pays so 
 much wages, just as truly as it pays so much wages and sells 
 so many machines. The producer of food is continuously 
 exchanging some of his stock for part of the stocks of fuel, 
 fabrics, etc. 
 
 The average opportunity to use capital profitably in man- 
 ufacturing, shipping, agriculture or merchandising, deter- 
 mines the demand for it. When such undertakings are 
 profitable much capital is sought and interest is higher. 
 When they are dull interest rates are low. When those 
 undertakings are prosperous there is prosperity. Wages are 
 also high. When interest is too low people refuse to devote 
 so much wealth to capital. Some that has been so applied 
 is consumed, some wasted. 
 
 Wealth is like a stream. It flows from the springs of 
 output continuously. There may be lakes or partially sta- 
 tionary water through which a stream passes. Water taken 
 from such places is the same as taken from the stream ; it is 
 
n RIGHT AND RICHES 
 
 replaced from the stream. Some portion of wealth appears 
 to be fixed. Buildings, bridges, etc., are quite durable. 
 Some economists make much of this slight distinction. But 
 where is wealth that is not deteriorating by either decay or 
 change of style ? How much machinery, or printing presses, 
 or ships, or railroad equipment of ten years ago, is of much 
 value now even if as sound as new? Now, just as water 
 is taken from a stream and diverted to turn a dynamo, so is 
 part of this stream of wealth diverted at or near its source 
 into capital. 
 
 The water is taken from a certain Western irrigating 
 ditch to produce electricity and then returned to the ditch, 
 thus producing a considerable additional supply, pumped by 
 the electricity from wells. 
 
 So capital is returned to the stream of wealth augmented. 
 Prosperity is increase in the output and enjoyment of wealth. 
 In common parlance all property is, indifferently, called 
 wealth and capital. The definite distinction seems impossible 
 to many writers on economics. The distinction between 
 wealth and land is very wide. Land exists naturally. 
 Wealth is largely the result of human initiative. It is ac- 
 cumulated for capital by the passive effort of humanity. If 
 the whole supply of wealth were destroyed it could be al- 
 most completely restored in a few months by effort and 
 abstention. The supply of land continues as it has been. 
 It may not be increased, but its price and the rent for its 
 use increase with population and progress. He who pro- 
 duces five hundred dollars' worth of wealth a year may con- 
 sume but half of it and apply the other half as capital. 
 
 There is perhaps three times the capital now in the coun- 
 try there was ten years ago. There is no limit to the supply 
 of capital that might be furnished, except the limitation on 
 the opportunity to use it. 
 
 Hence, Labor and Capital are the partners of Produc- 
 tion. They are the human forces that change native ele- 
 
CAPITAL, INCREASE AND INTEREST 79 
 
 ments into those things we desire. Interest is as just and 
 meritorious a charge as wages. The payment of hberal in- 
 terest helps replenish wealth. Accessage is the predatory 
 charge. Any person, if he have opportunities, may labor 
 and cause output of wealth. Any person who lacks capital 
 may save it if he is producing an output. Laws which seek 
 to limit interest on loans to a rate below the current aver- 
 age abstention price of capital are not only ill advised, but 
 futile. Reasonable usury laws protect the inexperienced 
 from disreputable sharks. But liberal rates should be al- 
 lowed, especially where payments may be made in monthly 
 installments, and notes should never be taxed. 
 
 The tremendous excess of the rate of increase from cap- 
 ital, above the current rate of interest that is allowed the 
 investing public, is not commonly observed. 
 
PART FOUR. 
 
 Sharing of Output. 
 
 Chapte:r I. Concession. 
 
 11. "Living" Rates oe Interest and 
 Wages. 
 
 III. The Eminent Domain oe GreatEvST 
 
 Eeeiciency. 
 
 IV. The Consumer's Rights. 
 V. The Producer's Rights. 
 
 VI. Society's Rights. 
 
CHAPTER I. 
 
 Conce:ssion, 
 
 'Wly people are destroyed from lack of knowledge^ 
 
 — Hosea. 
 
 AVING examined the function of Labor and Capital 
 in production, we see that they transform the re- 
 sources of nature, assisted by science and the ad- 
 vantage of social progress, into wealth and service 
 for the satisfaction of desire. 
 
 But we find that labor and capital do not receive as the 
 reward of their service all, nor nearly all, of the product. 
 There is a third recipient of output which, though it neither 
 ''toils nor spins," receives a share larger than either labor 
 or capital, perhaps larger than both. This third claimant 
 may be termed "Concession." 
 
 In current works on economics the term "Land" is used. 
 It is not by them restricted to agricultural or any particular 
 class of land, but is meant to include such control as may be 
 obtained of natural elements, to compel the payment for 
 their use. 
 
 This use of the word "Land" to designate such author- 
 ity, seems to me to be not only confusing, both to reader 
 and writer, but even with the meaning assigned to it by 
 such authors, inadequate to cover the sharing of the third 
 party to the division of output. It was adopted long ago 
 when agriculture was of much greater relative importance, 
 and when franchises and monopolistic property was of small 
 relative consequence. 
 
 "Concession" is a word which we have not seen used in 
 this connection, but we need not use it in any other sense 
 than that defined by the best dictionaries. The Century 
 Dictionary defines Concede : "To grant, as a right or privi- 
 lege; yield up; allow." It defines Concession: "The thing 
 
 83 
 
84 RIGHT AND RICHES 
 
 yielded; a grant; specifically applied to grants of land, privi- 
 leges or immunities made by government to individuals or 
 companies." 
 
 "Concession" or "Concessions" include grants of land, 
 by special enactment as a bonus to encourage the undertak- 
 ing of an enterprise presumed to be of public benefit; pat- 
 ents to land under a general law ; franchises permitting the 
 carrying on of certain kinds of business. Franchises may 
 or may not include the use of public streets, roads, or other 
 spaces, but may depend on certain favor or patronage. All 
 the above "Concessions" are definitely warranted or granted 
 by direct assent of government. Besides these there are vast 
 millions of dollars' worth of Concessions which are by "com- 
 mon consent." 
 
 The Century further defines Concede: "To admit as 
 true, just or proper; to acquiesce in by silent acceptance." 
 This class of concession is of vastly greater importance than 
 is usually perceived. 
 
 It is habitual to concede important privileges to persons 
 simply because they have become established in their enjoy- 
 ment. 
 
 For example : Preferment in politics is often given to old 
 citizens, or to descendants or relatives of those who former- 
 ly enjoyed some privilege. Often this seems to result from 
 the strange phenomenon of thought observed by Benjamin 
 Franklin, that when one has once accommodated or be- 
 friended a person there is a greater incentive to do so again. 
 Castes rest on this strange influence. 
 
 Again, courts recognize title by use. One may include 
 an area of another's land in his enclosure for a certain length 
 of time and acquire title thereby, or allow use of land for a 
 road and lose title to it. 
 
 Hence, concession is first by acquiescence of the people 
 and second by grant of government. 
 
CONCESSION 85 
 
 Acquiescence is the usual basis of authority. The power 
 and domination of big corporations are greatly magnified. 
 Trusts rest principally on the cowardice of the individual. 
 The most ardent democrats will usually take off their hats to 
 royalty. The enslaved masses are fettered by their fears of 
 their supposed masters. They are made slaves by their 
 acquiescence. If you can arouse in any class of oppressed 
 humanity the incentive to be free, and get them to investi- 
 gate, they will find their oppressors have no power save that 
 conceded by the oppressed. Political bosses rule by this 
 common acquiescence. This is a principle of economics 
 more important than is at first apparent. Therefore, "Know 
 the truth and the truth shall make you free." 
 
 Current works on economics treat Land, Labor, and 
 Capital as the three recipients of output. They say that 
 Land receives Rents ; Labor, Wages ; Capital, Interest. As 
 so considered, Rent, Wages and Interest embrace the whole 
 product. For the purpose of comparison we shall call the 
 share received by Concession for access to the opportunities 
 it dominates either "Rent," or "Accessage." "Accessage," 
 or "Rent," as here used, shall include what is commonly 
 covered by the economic meaning of rent, and in addition, 
 that vast revenue commanded by concession other than land. 
 
 The most important form of monopoly is land; that is, 
 the surface of the soil and the deposits upon or beneath it. 
 The next in importance are franchises for railroads, tele- 
 graph, gas, electric, and other service corporations, having 
 permission to use public space or having eminent domain. 
 
 Then there are such companies as banks, which enjoy 
 the privilege of issuing currency, and other concerns enjoy- 
 ing special privileges, patronage, subsidies or immunities. 
 Much valuable property rests upon the monopoly enjoyed 
 by concerns which perform a function which is a unit by its 
 very nature, but not having any franchise, as commonly 
 meant, such as the telegraph, express, sleeping cars, asso- 
 
86 RIGHT AND RICHES 
 
 ciated press, etc. There is a tendency in this direction by 
 ice, milk and many other businesses of supply. The con- 
 centration of certain lines of business into a unit or monop- 
 oly is as natural as gravitation. 
 
 Production is the result of Capital and Labor applied to 
 preparing and marketing natural resources. But production 
 can scarcely begin before it meets a hindrance to the use of 
 these resources. The producer finds that he has been pre- 
 ceded by those who have laid claim to the native resources 
 he must use and with whom he must make terms. The 
 fertile land, the mine, the forest, the best positions along 
 the trail and near the water supply are early appropriated. 
 
 As towns and cities advance, these claimants advance 
 their demands. Society, with its weakness for acquiescing 
 in WHAT IS, has generally conceded even the most un- 
 reasonable of these claims and confirmed them by grant or 
 CESSION, thus giving to a few what is the birthright of 
 all. 
 
 When Robinson Crusoe was alone on his island, every 
 tree, shrub, plant, animal or ^tone was rightfully his for 
 his exclusive use. But had another party of, say, ten persons 
 been cast on the island as he was, could he still have right- 
 fully claimed everything to their exclusion? No. His 
 stockade and bungalow and any other of his productions 
 should have still been his. A small child could answer that 
 question. But the harbor, land, trees, rocks and streams 
 were as much for the use of the new-comers as for him ; and 
 it would be a strange party with superior force that should 
 not compel him to share them. 
 
 But suppose another addition of 89 people, making a 
 hundred in all, should their rights be less? 
 
 Suppose then that they apportion the island, alloting to 
 each a certain tract. Now when another person arrives 
 what shall his rights be? Why not just the same as that of 
 all the first hundred? 
 
CONCESSION 87 
 
 To whom does Boston Common belong? To those in- 
 dividuals who landed on Plymouth Rock, and died centuries 
 ago? No, to every inhabitant or visitor of Boston when- 
 ever or wherever born. To whom does Yosemite belong? 
 To' whom does New York City rightfully belong? To 
 every American, native or adopted; to Society, and society 
 does not mean part of the people, but all of the people at 
 all times. 
 
 Concession consists of access to all or certain resources 
 in a given territory to the total or partial exclusion of others. 
 It may extend in scope over an acre or less, or over a State. 
 That class called land title usually carries the exclusive 
 right to all the resources of certain land for all time. Fran- 
 chises are usually limited to the marketing of a certain kind 
 of supply and are limited in time. Patents are only for the 
 control of newly devised articles. They cover the whole 
 country and are limited in time. Trusts, by combinations 
 of advantages, control the market for certain utilities. 
 
 Output is divided between three takers : Concession, 
 Capital and Labor. Concession charging access; capital, 
 interest; and labor, wages. Not according as they promote 
 output, for there are but two factors to production — Labor 
 and Capital. Concession does nothing to promote or cause 
 output, yet it would be master in the division and have 
 Labor and Capital take its termSi 
 
 It is common for economists to class Land, Labor and 
 Capital as the factors of Production, saying that for pro- 
 duction land gets rent; labor, wages, and capital, interest. 
 
 This is confusing and misleading. 
 
 Rent is never paid to land but to a landlord, nor do 
 landlords as such in any degree aid production ; as laborers 
 they may, or as capitalists. 
 
 The only intelligent statement of production is to limit 
 it to two factors, labor and capital. 
 
88 RIGHT AND RICHES 
 
 VaIvUe: Emanation. 
 
 Value or property emanation is not production. The 
 very entity of property is price, while the ultimate of pro- 
 duction is satisfaction. Price hinders instead of helping 
 satisfaction. 
 
 Even as a factor of price-promotion "land" as soil, 
 mine, or forest, is not certainly meant by such econ- 
 omists, but its owner, who draws rent. Sunshine aids 
 production quite as much as land, yet it does not . take a 
 share of the crop. Owners of land by charging access do 
 indeed enhance the cost, or hindrance to getting such things, 
 with the result of greater price to the consumer. In truth 
 the whole value of output in specific cases may rest on the 
 landlord's charge. This does not make it his product. It 
 simply gives the product value because it restricts it. 
 
 He simply takes the whole natural growth as his rent, 
 as his advantage of access to the land, his access fee. Now 
 when we give a definite meaning to ''Production," we elim- 
 inate the "concession man" from it as a factor. We then 
 have two persons, the laborer and capitalist, producing from 
 natural resources. Yet the product must be shared with a 
 third person for simply being master of such resources. In 
 practice the holder of concession often furnishes the capital 
 required in production; in some instances he uses his own 
 labor, but in this country to-day, perhaps more than half the 
 output is taken by those who simply own the concession. In 
 most cases they neither work, furnish capital, nor even 
 superintend. Hundreds of millions are added to the cost of 
 farm products as rent for lands ; to the cost of merchandise 
 by rent of business sites. Occupants of city apartments pay 
 landlords seldom or never seen. 
 
 The Analysis of Property is as follows: 
 
 Desire X Hindrance^Valuezz^Property. 
 
 Hindrance=:Accessage paid concession -[-Reward paid 
 for production. 
 
 I 
 
CONCESSION 89 
 
 Reward=Wages -[- Interest. 
 
 That is, the three hindrances to output, wages, interest 
 and rent, by Hmiting the supply, maintain the value of 
 wealth. They constitute the Consumer's Cost. The con- 
 sumer either directly, or through dealers and exchange, must 
 ever pay the sum of these three elements of cost, or hin- 
 drance to supply. 
 
 The Essence of property is mental. 
 
 Value is not in any degree in proportion to any material 
 element, but is wholly dependent on desire and hindrance — 
 ''sought-afterness" and restriction, and the measure of the 
 value is the measure of the property. So much value is so 
 much property, the property being not the goods but the 
 value of them. The property, or value manifested, in any 
 quantity of goods is subject to the above analysis. Like 
 the mercury in the thermometer value rises and falls, not 
 from a force within things, but from a force without, the 
 change of mental estimates of demand and offering. 
 
 But on the average the value of commodities is their 
 cost of output — the reward of production plus accessage; 
 as on the average they may not be had cheaper, and no 
 greater cost will continuously be incurred than consumers 
 will consent to pay. Consumers desire not coal but heat 
 Coal is one means of supply. The Hindrance or cost of 
 coal is the accessage paid to owners of coal land and rail- 
 roads, plus the producers' reward — the wages paid workers 
 at mining and transporting, and the interest due for equip- 
 ment of mine and carrier. These two constituents of re- 
 striction, accessage and reward, in varying proportions, 
 comprise the cost of all wealth. 
 
 Taking for example a bushel of wheat, of what is its 
 value or cost made up? Its cost is the rent, perhaps half, 
 and the grower's reward, half; or a city home, the lot is 
 perhaps forty per cent, and the house sixty. Of the price 
 
90 RIGHT AND RICHES 
 
 of the house, maybe thirty per cent, is accessage to owners 
 of forests, etc. 
 
 Now we must all admit the justice of rewarding those 
 whose efforts have cared for the crop or fashioned the 
 fabric for our use, but when we buy we must pay, not alone 
 this reward, but added thereto the charge of them who have 
 contributed nothing at all, but have impeded all output until 
 they were paid toll. Though concession's revenues are with- 
 out one scintilla of justification, yet the earned wealth that 
 is taken as arbitrary charges is past comprehension. Con- 
 sider that owners of all our coal, iron, lead, copper and 
 precious metal mines ; all our agricultural land, oil wells and 
 public service franchises are absorbing the enormous rev- 
 enues which sustain their values, and returning practically 
 no compensation to producers and society who confers them. 
 
 No one can get the smallest amount of property without 
 either earning it or taking it from others. 
 
 But we hear it argued that the owner was early to get 
 such well located lot before the city grew. He should reap 
 the reward of waiting; yet have we not, everyone, waited 
 since we were born? 
 
 Nothing has less merit than priority. If I am first out 
 on the street in the morning, should all turn aside for me? 
 Is there even any justice that he who rides in a street car 
 from the terminus should get a seat, while he who gets on 
 in the middle of the line should stand, though he pa}^ as 
 much? A reserved seat is sold at a theater, on just prin- 
 ciples. "First come first served" is a rule without equity. 
 
 The farce of the superior rights of the old citizen, in 
 politics, and preferment in general, is founded on the same 
 false sentiment. It is a well-known fact that the later 
 comers into a community are the ones who put life into it. 
 When the mails came in the spring to Alaska, people would 
 stand in line for hours and hours waiting. Twenty, forty, 
 fifty dollars would be paid for a place near the head of the 
 
CONCESSION 91 
 
 line. So we have, and so we will have, scrambles for wealth 
 where priority is its price. But the man in the front of the 
 line has done nothing to entitle him to preference. Should 
 another door be opened and the line reversed no injustice 
 would really be done. 
 
 There is no justice in the rushes permitted to be made 
 for land in opening new districts by the Government. Some- 
 one hurrying to be first does the public, whose the land is, 
 no good. Should a mob break into a store and carry off 
 the goods the front fellow would be not less a thief than 
 those behind him. Plainly to make people race for native 
 resources is not intilligent. What value they have belongs 
 to the public, and the public should receive a full compen- 
 sation, and so with franchises. 
 
 Busses are run in a street; the right of way is free to 
 all, but some one of intelligence says: 'Xet's lay rails and 
 put on cars and run them by electricity and carry people 
 more cheaply, easily and comfortably." Yes, but who is 
 going to get the privilege to do it? Every one may not 
 have tracks on the same street as they had busses. So they 
 go before the council and he who can use the biggest "per- 
 suasion" gets the franchise. Now it is not wrong to have 
 cars on the streets, but this way of deciding who is to do it 
 is wrong. The franchise is of value to the public, and the 
 public should receive its Natural Rent. When the public 
 gets none it is robbed. 
 
CHAPTER II. 
 
 ''Living'' Rates o^ Interest and Wages. 
 
 NDER the individualistic system, three recipients, 
 Capital, Labor and Concession, take all of output. 
 They do not all share in every instance. Some- 
 times there is output without rent, sometimes 
 without capital's use, sometimes without labor, sometimes, 
 indeed, without either labor or capital. Grass grows with- 
 out labor or capital, and is sold standing. Again the most 
 inestimable services often require neither capital nor con- 
 cession. 
 
 Rent or accessage is that profit or income accruing from 
 the control of land or other natiiral or social resource. 
 
 Rent is not limited to a periodical payment in money or 
 goods made by renter to owner, but consists as well in the 
 profit income or advantage secured, by the owner's use of 
 his own land. 
 
 Wages are not limited to the narrow meaning of money 
 paid to someone hired. Wages are any reward, however 
 received, for active human exertion, applied to production 
 or service. Under the most savage conditions they in- 
 clude the whole output. The primitive hunter gets all the 
 game as his wages ; the miner all the gold he washes as his 
 wages ; the pioneer gets all the wood he cuts from the wild 
 woods as his wages, all the crop he grows on the free land 
 until the land assumes value and has ownership, or until 
 equipment is used of enough value that the interest on it is 
 worth considering. 
 
 Interest is that part of wealth's increase which is given 
 as a reward for deferring its enjoyment, whether paid to its 
 possessor or to its lender. 
 
 92 
 
"LIVING" RATES OF INTEREST AND RICHES 93 
 
 Manifestly, one person may derive his income from one, 
 two, or all these sources combined. He may labor on his 
 own land and use his own capital. 
 
 Under the economic meaning of wages, the salary of the 
 railroad president is as much wages as that of the section 
 man. The earnings of the greatest architect, chemist, 
 painter, musician or actor are his wages. The owner of a 
 great factory may derive his income: 
 
 First, from the advantage which the ownership of the 
 site gives — rent. 
 
 Second, from the benefits of his work of superintending 
 it — wages ; and 
 
 Third, from the increase accruing to the capital repre- 
 sented in the building, machinery, stock being finished, etc. 
 — interest. 
 
 Sometimes the whole product goes to Labor as wages, 
 or to capital as interest, or to concession as accessage, but 
 most commonly they all share in some degree. 
 
 Now what are the laws which determine the share which 
 each shall receive? Is there a scientific determination of 
 this important question? If not, there can be no Science of 
 Economics. Many theories have been advanced and have 
 gained more or less adherents, but let us see if these are 
 universal laws. We shall use the terms Rent and Acces- 
 sage, and the terms Concession and Land, as synonymous. 
 
 Let us first seek the law of Rent or Accessage. Rent is 
 a charge for the use or advantage of land or other oppor- 
 tunity ; land being the most simple or concrete form of such 
 opportunities. Its possession must always give some ad- 
 vantage before rent can be charged. A business lot in the 
 heart of a metropolis may be worth to the user $1.00 per 
 square foot a month, but as we go down the scale of busi- 
 ness lots, we finally come to a grade which will only be 
 used when rent-free. So in agricultural land, some is worth 
 
94 RIGHT AND RICHES 
 
 $20.00 per acre or more rent, but a lower grade, by reason 
 of remoteness from centers, etc., will only be used rent-free. 
 Land of such value as to be used when rent-free, but 
 for which no rent at all will be paid, is said to be at the 
 "margin of rent." That is, the worker believes that the out- 
 put will give him wages, but not enough more to pay any 
 rent. If one cannot make an output on land which will ex- 
 ceed in value the wages and interest he may otherwise make, 
 he will not pay any rent for it. If he can make twice the 
 amount of such wages and interest, he will probably give 
 half the output as rent. Hence we have deduced the follow- 
 ing law of rent: 
 
 The rent which will he given for a piece of land is equal 
 to what the output from it exceeds the current rates of wages 
 and interest for the quantity of labor and capital used. 
 
 An intelligent merchant is guided by this law. If he is 
 offered one store room rent-free and another at $1,000 per 
 month, he will take the latter if he considers he can make 
 $1,100 more in it. A manufacturer will not take as a bonus 
 from one city a building rent-free, if he can pay $10,000 
 rent in another city, and make $11,000 more. This law 
 variously stated is commonly acted upon. 
 
 There are many very mistaken theories about rent, 
 pretty generally held amongst real estate men and investors, 
 and one is that rent and the consequent value of property in 
 various cities is commensurate with the population. An- 
 other basis of figuring is on the business of the city. Neither 
 is in any degree to be relied upon. Prices of property and 
 rates of rent in a city are more or less arbitrary, and de- 
 pend principally upon the understood or tacit agreement 
 among owners to make them high, and the degree of resist- 
 ance on the part of tenants. Property is more likely to be 
 high in a city where it is largely held by prosperous people. 
 In cities where the lots are large with each residence, they 
 may not be higher in price than small lots, where lots are 
 
"LIVING" RATES OF INTEREST AND RICHES 95 
 
 generally small. Other things being equal, the rate of rent 
 in a city is proportionate to the local expenditures of its citi- 
 zens, or broadly, to their standard of subsistence. The 
 prosperity of a city depends not upon the native abundance 
 of material resources near it but upon the right thinking of 
 its citizens. 
 
 High interest, while wages are yet low, means that labor 
 will be diverted from producing wealth for consumption to 
 producing wealth for capital until an equilibrium is reached 
 between wages and interest. High wages while interest is 
 still low, means that labor will make little new capital while 
 old may be used, but will be employed at producing wealth 
 for enjoyment, and that laborers will become consumers of 
 wealth more largely, thus tending to lessen the portion avail- 
 able for capital ; that there will be greater demand for cap- 
 ital to be employed in conjunction with greater demand for 
 labor in production, which will tend to increase interest 
 rates. Low rates for interest means slack industry; means 
 that little labor will be employed in producing new supplies 
 of capital. Every laborer getting good wages may partici- 
 pate in the benefit of high interest rates by saving and in- 
 vesting. Not so with accessage. The gas works, the tele- 
 graph, the railroad, the express company, may increase their 
 profits while both interest and wages are lowering. 
 
 It must not be forgotten that wages mean not alone the 
 stipend paid by employers, but the part of the output re- 
 ceived by those who are their own employers. Some seem 
 to think that high wages tend to limit output, but when 
 wages are so high that employers might somewhat cut down 
 the number of employes, will not products be in such de- 
 mand that laborers may employ themselves ? History shows 
 that the greatest output is coincident with the highest in- 
 terest and wages. But if rents get too high, production con- 
 tracts. Too high rents — all rents, tend to lessen output. 
 This does not imply that high interest and wages always 
 
96 RIGHT AND RICHES 
 
 tend to lessen the income from land or other concession. A 
 large production means more to divide, and all parties to the 
 division may receive more. But when excessive rents ab- 
 sorb and consume, so as to stop industry; when that which 
 replenishes capital is wasted; when the ultimatum of labor 
 is refused, rent also drops. 
 
 Labor and Capital, being the productive factors, are 
 partners in the sharing of output, as Henry George has 
 rightly stated. Here, however, we must begin to disagree 
 with George's teachings, for they proceed to fix a certain 
 share as rent, and then compute the joint share, the Reward 
 of Production, by deducting rent from the whole product. 
 We shall proceed to determine the shares of Interest and 
 Wages separately, and then find the share of rent by sub- 
 tracting their sum from the total output. Let us first as- 
 certain the share of labor. 
 
 The law of Wages is : 
 
 The minimum wage in a given community is that rate 
 below which workers will refuse to produce. 
 
 This refusal depends principally on what it takes to 
 maintain the standard of living that has become usual to the 
 various classes of workers in that community. 
 
 The law of Interest is like unto that of wages : 
 The minimum Interest rate is that below which those ac- 
 quiring wealth will refuse to save and devote it to repro- 
 ductive use. 
 
 This refusal is also based somewhat on the standard of 
 living usual in the community. For people with small in- 
 comes will, in one community, be content with meagre sub- 
 sistence while they save for a low rate, simply because such 
 standard of subsistence is common among their class there; 
 while in another place it would take double the rate to in- 
 duce them to dispense with the more costly living which is 
 there common. 
 
"LIVING" RATES OF INTEREST AND RICHES 97 
 
 We have now determined both Wages and Interest to 
 be founded upon refusal to take less, and having determined 
 them, we rnay now ascertain what is the share of rent, by 
 deducting this sum from the total output. 
 
 The share of Rent is : 
 
 What is left after paying wages and interest. 
 
 Let us try these rules on a practical problem — to culti- 
 vate a certain piece of land requires ten workers and $10,000 
 capital. With interest at 6%, and wages at $1.50 per day, 
 the output will pay such Wages and Interest and leave, we 
 will say, half the output for rent. But if there is such in- 
 crease of wages and interest as to add 50% to the total Re- 
 ward of Production, then but one-fourth of the output will 
 be given for rent. And if the Reward of Production should 
 double, such land would bring no rent. 
 
 Hence, it follows that the ''Margin of rent" is where 
 Labor and Capital will refuse to operate for less than all the 
 output. 
 
 Now George, so logical in most of his reasoning, here 
 falls into the greatest error. He determines the rent of land 
 to be that amount by which the output exceeds that of land 
 at the ''Margin of rent," just as we do, but he fails ever to 
 determine his ''Margin of rent." For his only definition of 
 the "Margin of rent" is where land will pay no more than 
 the Reward of Production, and his Reward of Production is 
 the whole output at the "Margin of rent." Hence, he is but 
 reasoning in a circle. 
 
 He does indeed say that the "Margin of rent" is "where 
 land may be had by producers free of rent," but is it not 
 plainly obvious that no land may ever be had free of rent 
 except simply such as will produce no more than the Pro- 
 ducers' Reward? George determines Wages and Interest, 
 this Producers' Reward, for the whole community, to be no 
 more than can be made on this free land, this "no-man's- 
 
98 RIGHT AND RICHES 
 
 land," lying loose in the commons. What a meagre re- 
 ward ! It is only that of the Indian. 
 
 Further, it is evident that in actual practice such land 
 may seldom be had free, as it is taken up by speculators 
 long before it is worth working. Nor can anything but 
 remote relations be traced between wages in congested cen- 
 ters, and distant places where land is free. Wages in St. 
 Louis may average $2.00 per day, while but 30 cents can 
 be made on the nearest free land. This ''Margin of rent," 
 which under the present status of industry marks the rates 
 of ''Living" wages and interest has no relation to "free" or 
 unappropriated land, has, in fact, no relation whatever to 
 land ownership, hut to the accustomed standard of living. 
 The "Margin of rent" refers to a condition of thought, and 
 not to areas or locations, not to some hypothetical grade of 
 land which remains "uncornered." 
 
 This doctrine of George's is not only unscientific, but 
 fatalistic. It is the^ weakest point in the logic of this great 
 man. It presumes an absolute authority and power in the 
 hands of Concession Holders, which, like the laws of the 
 Medes and Persians, cannot be gainsaid, instead of attrib- 
 uting to them only such power as is conceded them. 
 
 Correct Rkasoning Hopei^ui.. 
 
 Education has created the widespread desire for wealth 
 among us. Education increases desire as well as produc- 
 tion. Education extends in many directions — in habits, 
 tastes and appreciation. Educate the natives of Congo and 
 how rich they will ]3ecome. Education is real or imaginary. 
 We are getting some of the real kind. Much of the kind 
 which has been called education was not education, but the 
 worship of dead relics of a dead past. We want live edu- 
 cation — a knowledge of principles — that does not wait when 
 something good is proposed to be done, to ask: "Has it 
 been done before?" "What did Caesar do?" The new kind 
 
*'LIVING" RATES OF INTEREST AND RICHES 99 
 
 of education will not consult the attorneys of hereditary in- 
 terest. Real education teaches of the Truth, "which is the 
 same yesterday, to-day and forever." 
 
 Neither destitution nor starvation can subjugate men 
 who know their rights and have brotherliness enough to 
 stand together to maintain them. 
 
 "Poverty" has indeed followed "Progress." 
 
 What is the remedy? 
 
 More progress. 
 
 Men were not constituted to exist isolated in the wilder- 
 ness. The are brothers. When civilization shall have be- 
 come enough civilized, men will be brave in the fraternal de- 
 mand for what is their own. 
 
 The resort to free land is but one of the least important 
 alternatives of labor and capital. This is not denying the 
 good effect of the extension of the area of production. The 
 irrigation of the arid lands now progressing, means much. 
 The drainage of swamps soon to be comprehensively started 
 will mean a great deal more. It raises the standard of living, 
 and so raises wages and interest. 
 
 Greed is the greatest enemy of progress, but greed is not 
 confined solely to the opulent. If all those who have one 
 talent would not bury it, but would use it for humanity, the 
 millennium would soon come. 
 
 The true statement of the laws of Output's division gives 
 hope. It puts the responsibility for wages on the workers. 
 As they improve themselves, their wages will improve. In 
 proportion as laborers as a class improve themselves moral- 
 ly and intellectually, their condition will improve; for with 
 this moral and intellectual improvement will come an in- 
 crease of self-respect and independence which will raise their 
 standard of living. When laborers put aside low ideals of 
 value, that of spending for drink and other evil habits, or 
 for sordid selfishness, there will follow better ideas of justice 
 and fairness. "They will know their rights and knowing 
 
100 RIGHT AND RICHES 
 
 dare maintain." While greed continues the motive of ef- 
 fort, while men covet wealth that they in turn may dom- 
 inate others, they shall themselves suffer from greed; for 
 the "propertyless" class have the same lack of appreciation 
 as have the rich, that the true value of wealth is the good 
 we may do with it. What share of the product labor will 
 accept depends on the laborers' incentive for a larger and 
 better use of wealth, and their power to demand it. 
 
 If workers and conservators of useful wealth may re- 
 fuse less than a certain share of output, they are not then 
 entirely helpless under Concession's demand for tribute. 
 One evidence that producers have this power to refuse is 
 manifested in strikes. No one will deny the energy dis- 
 played in strikes even though they doubt their wisdom. 
 "Proprietorism" has come to recognize their force, even 
 though it disputes their justice or wisdom. 
 
 Labor strikes are too familiar to all to require comment, 
 but Capital strikes, though far more widespread in their dis- 
 astrous results, are as yet a force generally unrecognized 
 and misunderstood. Their dire effects are well known to 
 all, but the attempts of popular "doctors of commerce" to 
 diagnose them have been as erroneous as it would be to take 
 indigestion to be measles. However much we may deplore 
 strikes, it nevertheless remains a fact that the present meas- 
 ure of wages and interest is determined by strikes. 
 
 What is a CapitaIv Strike? 
 
 In order to answer this question we must continually 
 bear in mind exactly what capital is, and what true interest 
 is. Capital is the nutriment of Commerce, and we must not 
 confuse the lack of nutriment with a blood disease. Unless 
 we really know what capital is, we cannot recognize its 
 functions and effects, nor the source from which it comes; 
 then how can we expect to understand the real nature of 
 these periodic hard times which are nothing but commer- 
 cial malnutrition? 
 
^'LIVING" RATES OF INTEREST AND RICHES 101 
 
 George's misconception of the basis of interest clouded 
 his treatment of this subject. His error, that interest rests 
 entirely on animal and vegetable growth and increase, mis- 
 led him to the conclusion, that the prevailing increase giv- 
 en by capital depended on the amount of such growth ; that 
 other forms of capital than those subject to such growth, by 
 some mysterious means, took up or absorbed a share of this 
 potency, through the exchangeableness of wealth, until all 
 capital took on an average interest potency. In other words, 
 his theory was that the rate or percentage of increase given 
 by capital is the ratio which this animal and vegetable growth 
 bears to the whole total of capital. 
 
 This theory has been quite generally accepted, perhaps 
 because it is so vague and mysterious, and so far from the 
 simple facts. A magazine article in the summer of 1907 
 laboriously explained the apparent shortage of capital as 
 occasioned by the fact that manufactures and transportation 
 interests were expanding out of all proportion to agricul- 
 ture. But pray, what are transportation and manufactures 
 but means to make products of the soil available? What 
 tends more to such products' increase than the facility of 
 transport ? 
 
 When we start from the actual cause and measure of in- 
 terest we miss all this vague, mysterious reasoning. 
 
 We see that interest, like wages, is simply a compensa- 
 tion for reluctance. That increase depends no more on ani- 
 mal or vegetable growth than it does on transportation or 
 education. Every species of wealth that facilitates output 
 gives increase as much as does a herd of cattle, or field of 
 grain, or orchard of fruit. Much confusion is engendered 
 by the ''old school" proposition that "capital employs la- 
 bor," and the declaration of later writers that capital only 
 "adds to the effectiveness of labor," or that "labor employs 
 capital." As well might we say that "modern plows and 
 reapers add to the effectiveness of horses," or that "horses 
 
103 RIGHT AND RICHES 
 
 employ reapers, etc., in agricultural work," as that labor em- 
 ploys capital. 
 
 The real essential entity of both Labor and Capital con- 
 sists alone in the physical expression of human thought. 
 Labor and Capital are equal factors ; neither employs the 
 other. Capital is often employed without labor, and usually 
 without any definite ratio to the labor employed. And labor 
 is employed without any certain relation to capital. The 
 ownership of herds increasing on the free public domain 
 made many rich in the last quarter century. The whole out- 
 put was practically interest. This was not through the use 
 of capital by labor, or labor by capital. The labor of the 
 cowboy was a mere incident. The cattle simply increased, 
 and the increase depended on how many the owner had to 
 begin with, and how few he disposed of, not on how many 
 cowboys he had. Much language is wasted and much mis- 
 understanding caused by making incidents into vital fac- 
 tors. The definition of labor cannot, with any scientific 
 sense, be made to include the laborer. Labor is the effective 
 energy, either mental or muscular, which promotes produc- 
 tion. The employment of capital in specific cases may be to 
 entirely dispense with labor. We may intelligently say that 
 industry or production employs labor or capital, or we may 
 say that some person employs labor and capital. He may 
 employ his own labor or another's, and his own capital 
 or another's. It would be foolish to say that the section- 
 men's labor employed the capital of the railroad, or even 
 that the section-men employed it. 
 
 The correct statement is that capital is employed by pro- 
 duction. The old school proposition that laborers depend 
 for opportunity to work, or at least to work effectively, on 
 the existing supply of capital, and that their employment is 
 limited in proportion to its amount, is too palpably incorrect 
 to need much argument. Capital is but the physical means 
 through which thought is applied to the production of sup- 
 
"LIVING" RATES OF INTEREST AND RICHES 103 
 
 plies or service. The real essential entity of any item of cap- 
 ital from a production standpoint— which is the only stand- 
 point from which capital may be truly reckoned— is not its 
 bulk, weight, cost, density, etc., but its productive effective- 
 ness, its capacity to increase the sum total of human sup- 
 plies. So true and vital is this conception of Capital that 
 we should try to divest our thoughts of all other false con- 
 ceptions. It is common to speak of improved machines as 
 ''inventions" in such expressions as ''there is a new inven- 
 tion which produces many times the results." Is not a wheel, 
 a plow, a steam engine, or a bridge each as truly an "in- 
 vention" or idea to-day as when the first idea of it was put 
 to the service of humanity ? 
 
 What the great master, Henry George, means to bring 
 out, is that laborers, if natural resources are available, may, 
 by their work, increase capital without limit. 
 
 Output of wealth is from three elements: First, re- 
 sources—the natural material substances and forces; sec- 
 ond, labor— the manipulation of these natural elements by 
 human effort; third, the addition of sums of partly devel- 
 oped wealth— stock— to the natural supplies— capital— and 
 the manipulation of these "stocks" by artificially contrived 
 engines or means — more capital. 
 
 Hence, a small sum of wealth will accrue yearly from 
 land spontaneously; a considerably greater output can be 
 made to accrue by human hands unaided by implements of 
 any value whatever; this is the increase given by labor; 
 but with the addition of capital— reserved stocks and equip- 
 ment—the output can be increased several hundredfold. 
 How much more corn can be grown with modern imple- 
 ments, than with a clam shell! How much greater com- 
 merce is possible from the use of railroads and ships, than 
 could be carried on men's backs and on rafts ! It is idle to 
 call this increase an increased power of labor, for it is not. 
 Education does give labor increased power, but this is some- 
 
104 RIGHT AND RICHES 
 
 thing very different from capital, for the most educated 
 labor is the least effective without capital co-operate with it. 
 There is an exaggerated notion of the importance of labor 
 as a creator of wealth. It is more scientifically correct to 
 speak of production as the discovery than as the creation 
 of wealth. We should learn that our supply depends not 
 on how hard we work, but how rightly we think. 
 
 The increase given by capital is perhaps hundreds of 
 times that of labor. The important thing to distinguish is 
 that only a fraction of this increase goes to capital-fur- 
 nishers, as interest. A considerable part of it goes directly 
 to the consumer in cheaper wares and the remainder goes to 
 concession. Legitimate interest is always drawn from the 
 capital increase, but its amount is not based on any ratio or 
 percentage to such increase. 
 
 Wages and rent both are also principally taken from this 
 increase which capital produces. 
 
 Wages to-day with us are many times the increase given 
 by labor. The real increase actually given by labor would 
 only support wild Indians. 
 
 It is well to remember that the part of output taken by 
 either recipient is not in any sense an approximate percent- 
 age of such output. Interest is a percentage of the capital 
 devoted, but has no approximate ratio to the output given. 
 Wages have no relation to output. Wages are no more 
 where the results per worker per day are $1,000 than where 
 they are only $3.00. 
 
 George says that abstention is but a negative factor ; that 
 it can produce nothing. Quite true, but we are willing to 
 pay to prevent things being consumed. We build fences to 
 keep stock from eating crops, and pay policemen to prevent 
 people taking our. good,s. Conservators of capital merit in- 
 terest for deferring its enjoyment. Indeed here is the vital 
 distinction between the equities of interest and rent, which 
 George so persistently insists upon. If owners might, and 
 
"LIVING" RATES OF INTEREST AND RICHES 105 
 
 were inclined to, eat up land, or eat up its vital forces which 
 would not again develop for some years, then rent would 
 be as just as interest. But owners can get no possible good 
 from land except by allowing it to be used. So that what 
 makes rent unjust i.s that they withold not alone what they 
 need to use, but what they cannot possibly use. 
 
 The effective results of capital are as much increase 
 when they make wealth available or usable, as though they 
 created it out of ''darkness and void." Does not the electric 
 furnace, for practical import, create those things which were 
 impossible to extract without it ? Why then does not a rail- 
 road ''create" coal for a region which could have none with- 
 out it? Surely the eifectiveness of capital consists in its 
 increase, but the interest to its owner is a part, only, of this 
 increase. Indeed there is no reason why its owner should 
 get any of this increase but what justly compensates him 
 for deferring its enjoyment. Capital in one instance may 
 produce an increase of but 1 to 6% and in another 100 to 
 10,000 fold, yet the owner does not (and why should he?) 
 get more interest in one case than another. 
 
 Let us repeat the simple law of interest : Interest is the 
 smallest price for which those acquiring wealth will save and 
 devote it to increase. In short, interest is the price which 
 the proprietors of industry must pay for abstention. 
 
 If you lend me $10,000, what is it to you what employ- 
 ment I make of it? Whether I sink a shaft and develop a 
 million dollar mine, or perfect an invention like the tele- 
 phone, worth several millions, or buy cattle to fatten ; you do 
 not charge me for what I get from it, but you charge me 
 $600 per year for your waiting to use it; perhaps to build 
 you a home. 
 
 No more do wages refer to the results of labor. When 
 I hire men to work for me for a month or a year, they rate 
 their wages by their own reluctance, and not by size of 
 product. If I am fortunate enough to get a big crop, or 
 
106 RIGHT AND RICHES 
 
 other result, they are only interested in a friendly way. No 
 less is it true from a selfish standpoint that wages are the 
 price of reluctance to give time or toil when workers labor 
 at their own enterprise. They are deterred from entering 
 lines where the product will not compei^sate for their re- 
 luctance. 
 
 This does not deny the fact that wages are from product, 
 yet they are ever but a part of output. This is true because 
 no one except in isolated instances would have others labor, 
 or devote his own labor, to an enterprise that did not pro- 
 duce more than enough to recompense such labor. 
 
 Labor seeks as wages returns to maintain its wonted 
 standard of living, hence ''living wages," and capital seeks 
 interest as a recompense for saving. Reluctance to save is 
 influenced, as we have noticed also by the accustomed stand- 
 ard of living. This has an important bearing on results; 
 for labor and capital, thus basing their demands on their ac- 
 customed needs, take little cognizance of a multiplying out- 
 put ; hence Concession continues to give these ''usual wages" 
 or hiring wages during advancing prosperity, and has left 
 as its share, not only a multiplying quantity of wealth, but 
 a multiplying percentage of output. This is the reason that 
 rents and franchise dividends double up with prosperity, 
 while wages stay so much per day, and interest so much per 
 hundred dollars. Why the merchant and farmer pay more 
 rent, yet are glad to make as much. Here is the source of 
 the common phrase, "making a living." Concessionists don't 
 figure to "make a living," they take "all the traffic will 
 bear." 
 
 The shares of wages and interest are in a manner fixed 
 at so much money per day for various classes of labor, and 
 so much money per year for each hundred dollars capital 
 devoted. Especially is this so of wages paid as a periodical 
 stipend, and of interest paid by borrower to lender. Interest 
 is no more a percentage of output than wages are. 
 
''LIVING" RATES OF INTEREST AND RICHES 107 
 
 One must figure the percentage of gain he is deriving 
 from an enterprise, not by taking the ratio of his present 
 pro-fits to his initial investment, but the ratio of present 
 profits to the present value of his holdings in the enterprise. 
 This is the current rate of profit. 
 
 We must particularly observe that the present invest- 
 ment is to be taken as the basis of profit deduction ; not an 
 investment of long ago. That is, suppose one makes an 
 initial investment of $10,000 worth of horses and wagons 
 for draying purposes. At the end of a month, or a year, he 
 should make a balance sheet and inventory of his capital. 
 Perhaps the horses have increased in value, perhaps de- 
 creased. Perhaps he has accumulated from the business 
 more horses, wagons, cash or other forms of wealth until 
 the assets of the business is $12,000 after allowing salaries 
 to himself and other employes. He has then made 20% 
 profit on his capital for a year. But unless he takes this 
 $2,000 out of the business and devotes it to other uses, he 
 will then have, not $10,000 capital invested, but $12,000. 
 At the end of another like period it may shrink to $10,000 
 or $9,000. Every business man does, or should, balance 
 his business at least once or twice a year ; that is, in a sense 
 "close it up and start over" by reinvesting the assets which 
 the inventory and balance sheet show to be then on hand. 
 The rates of profit must then be calculated on this rein- 
 vestment. 
 
 The profit through the use of capital is from the increase 
 or reproduction which it gives. The rate of interest is but 
 the part of this increase which the real furnisher of capital 
 actually gets and not what it produces, for much of this in- 
 crease is most commonly taken by concession. This is the 
 vital point. Capital really invested in a gas plant might 
 show a return to the investors of 20 to 30% if based on the 
 ratio of annual income to real wealth assets. But here we 
 must not forget our reinvestment rule. Its last balance 
 
108 RIGHT AND RICHES 
 
 sheet may show real wealth assets 30% and franchise value 
 70%. Hence supposing its capital be $1,000,000, what then 
 is reinvested consists in $300,000 real wealth, and $700,000 
 concession. Hence, seven-tenths of its income is accessage 
 and only three-tenths real interest. 
 
 The stock and bond issues of such companies are usually 
 kept up to the total value of the wealth and concession 
 assets combined. That is up to an amount on which the net 
 income will be somewhere near 5%. If new capital is de- 
 sired the investing public is asked to furnish it at this rate. 
 That is, the public is asked to furnish real capital on such a 
 basis that it will only get a fraction of the natural increase 
 which the capital employed by the enterprise really pro- 
 duces. Now what is the result of this? Simply that with 
 a rising tide of prosperity, which comes periodically, the 
 ample funds of capital are not offered a participation in this 
 larger increase, but are offered stocks and bonds more and 
 more attenuated as prosperity continues; more and more 
 inflated in proportion not alone to the real capital actually 
 employed, but even to the rates of income of such concerns 
 until the public in large numbers refuses to buy. This ends 
 in a panic in which such securities are suddenly ''deflated" 
 which would be well enough were not honest values like- 
 wise annihilated and the whole system of commerce thereby 
 paralyzed. 
 
 If it were not for this monopolizing of the benefits of 
 prosperity by concession and the dishonesty of stock-jobbers, 
 unlimited floods of capital would respond to the attraction 
 of a bountiful increase in industry. . Holders of lands and 
 franchises want others to furnish the real earned capital for 
 all construction, and are only willing to give them 5%, even 
 though the whole property pays 18%. 
 
 The increase, or profit, in any industry on the original 
 capital employed becomes accessage or rent to the extent 
 that it exceeds the percentage the public investors may earn 
 
"LIVING" RATES OF INTEREST AND RICHES 109 
 
 by investing in it on the basis offered them. If a gas plant 
 costs $200,000 and pays $40,000 net per year, the public 
 may only get in on a basis of about $1,000,000 capitaliza- 
 tion. Hence this $40,000 is $8,000 interest and $32,000 ac- 
 cessage. The opportunity to employ capital profitably is 
 limited only by the restraint of concession. When a new 
 device displaces much labor, its first tendency is to give in- 
 creased output. The immediate results probably will be 
 great profit to owners of such devices. Then there is a 
 rush of wealth-owners to produce and operate such devices, 
 and if not restricted by patent or otherwise, prices of 
 product will fall proportionately, which brings the profit 
 of such ownership down to the average interest rate. The 
 next tendency is an increased accessage rate or rent for 
 land, or other opportunities where it may be used, which 
 boosts prices of output up to, or above, former prices. This 
 is apparent in the tremendous increase in commodity prices 
 and of rents coincident with industrial progress. 
 
 Great claims are made for a new automatic gold dredg- 
 ing machine. If it will, with nominal cost, extract gold 
 from areas of sand, what will be the result? The first 
 builders may make, as it is claimed, from one hundred to 
 several hundred per cent, per annum, but how long before 
 gold-bearing lands, where these dredges will work, will 
 assume immense value. This is but a more simple illustra- 
 tion of the appropriation of the increase given by all forms 
 of equipment. Street cars are of no greater value with con- 
 solidation of companies, and growth of patronage, but 
 franchises are. 
 
 Now as prosperity advances, this fixed or accustomed 
 sum of money paid by. concession to labor and capital, this 
 usual number of dollars, has a smaller and smaller purchas- 
 ing power. Yet concession persistently refuses to give 
 more than so much wages per day until threatened with labor 
 strikes, and it as persistently refuses to give more than 
 
110 RIGHT AND RICHES 
 
 four or five per cent, interest. Instead it increases 
 stock and bond issues to the limit on which such per 
 cent, can be promised. But owners of capital are not a 
 segregated class as are union wage earners, therefore they 
 are not organized. These furnishers of capital have other 
 interests ; they are in most cases also laborers, or slight 
 owners of concession. They do not send their business 
 agent to demand more of proprietorism ; they do not say to 
 Wall Street, "You must give us 7 or 8% or we will strike." 
 No, they just quietly and individually strike. While this 
 rebelling or refusing by savers proceeds quietly and unher- 
 alded, its effect is as widespread as a labor strike, but it is 
 insidious. Small sums of capital returning to investors, 
 five, fifty, a hundred or ten thousand dollars, which before 
 were hurriedly reinvested, are now hoarded or consumed. 
 Owners now quietly refuse to put them again into trade or 
 industry, until given more favorable terms. It is as truly a 
 strike as that of labor, but it is individual, unorganized and 
 unspoken. 
 
 The important question is : 
 
 Do strikes pay? 
 
 Is simple, dogged, stupid, passive refusal, with its stop- 
 page of output, an effective means of remedying too low 
 wages or interest? The disastrous results of labor strikes 
 are well recognized, but capital strikes have never been de- 
 termined by a true diagnosis, but are called by the vague 
 name of "industrial depression." They are usually compli- 
 cated by a paroxysm of fear called a panic. The present 
 rates of wages and interest are entirely determined by strikes 
 which manifest the refusal of producers to take less than the 
 minimum, concertedly fixed by labor, and spontaneously 
 demanded by capital owners. But these strike-projectors 
 make no attempt to attain anywhere near their Natural Re- 
 ward. They strive but to maintain "Living Wages and 
 Interest." 
 
''LIVING" RATES OF INTEREST AND RICHES ill 
 
 The foregoing rules of 'Xiving Wages and Interest" are 
 not based on immutable laws of truth; they are but a pre- 
 sentation of the jangling contentions of selfishness which 
 obtain in the prevailing status of industry. Heretofore re- 
 formers have not even attempted to define an infallible 
 standard of true Wages and Interest. 
 
 Without a scientific determination of the true measure 
 of such rewards, how shall we know how much we should 
 expect? How shall producers know how much they lack 
 of receiving their just compensation? 
 
 The prevailing Rules of industry are diametrically op- 
 posed to the Golden Rule. 
 
CHAPTER III. 
 
 The Eminent Domain o^ Greatest Eeeiciency. 
 
 ''One only master grasps the whole domain; 
 And half a tillage stints thy smiling plain." — Goldsmith. 
 
 OUNTLESvS millions flow into the coffers of con- 
 cession yearly from the control of land, franchises 
 and other forms of monopoly. No property ex- 
 ists without labor or privation endured, or to be 
 endured for it. Value, the essence of property, is the posi- 
 tive to a negative suffering. Utility is not. The most es- 
 sential blessings come unearned, but property means the 
 power to command service. Every dollar received for rent 
 of priceless business sites, for fertile field or mine, for divi- 
 dend earned on franchise privilege, represents labor or de- 
 privation. Who are the losers of this vast revenue? Does 
 it mean the ''hire of the laborer kept back ?" Does it mean 
 overcharge to the consumer? Does it mean the despoiling 
 of society of her property? It may mean either or all. 
 From whence does this unearned wealth come? The 
 answers heard to this question are many. 
 
 If workers do not deserve, nor even ask a wage com- 
 mensurate with output; if owners of Capital when fixing 
 the rate it shall demand as interest, take no cognizance of 
 the amount of increase resulting therefrom; if concession, 
 because it contributes nothing, has no right to any share 
 whatever of output, to whom then does accessage rightly 
 belong? It irrefutably belongs to Society. 
 
 What, then, is the Natural Estate of Society? 
 What is the Natural Reward of Producers? 
 What is the Natural Price to Consumers? 
 
 112 
 
THE DOMAIN OF USE 113 
 
 What are the Scientific Rates of Wages, Interest, Rent 
 and Taxes? 
 
 First, let us particularly distinguish these classes of 
 humanity. It is common to assume that consumers and so- 
 ciety are practically identical, and in loose conversation to 
 say that everyone is a laborer, and even to designate those 
 who dominate the earth's property as simply stewards for 
 the people. But distinctions of these classes are radical and 
 essential to a consideration of economics. 
 
 All people are consumers, and all people are society, but 
 this does not constitute consumers and society as one class, 
 for very important reasons. First, because, if society means 
 anything, it means God's children — all having equal right 
 to inherit the blessings He has provided for them. 
 
 Now consumers do not stand to each other in any rela- 
 tion of equality, for they do not consume equally. Some con- 
 sume millions, others but dollars. Not only in quantity, but 
 in quality is this difference. A large share of the output of 
 wealth is of a quality and kind, the use of which is almost 
 unknown to the masses. What interest has the person 
 working for a starvation wage in the price of sealskins, 
 diamonds, cut glass, expensive laces and such things which 
 he does not hope to ever own. Hence, what cheapens prices 
 of things indiscriminately does not benefit the masses in 
 proportion, but only what cheapens what the masses use. 
 In other words, an average cheapening of prices does not 
 counterbalance a reduction in wages, and a raise of prices 
 in general does not take from laborers the benefits of in- 
 creased wages. Neither do prices advance as a result of 
 advanced wages in the ratio of the advance of wages. 
 Neither is the 'laboring class" in its broad economic mean- 
 ing anything near equal to society. No doubt three-fourths of 
 the wealth produced is consumed by others than laborers 
 and their dependents; by those who absorb instead of pro- 
 mote. Hence, the importance of keeping clear the interests 
 
114 RIGHT AND RICHES 
 
 of producers, consumers and society. You may own a few 
 shares of stock in the IlHnois Central Railroad. Yet if it 
 owe you ten thousand dollars, you do not say, "let it go, 
 it's all in the family," that to collect it would be taking 
 out of one of your pockets to put into the other. No, you 
 say "my interest as a stockholder is slight compared with 
 my individual interest." 
 
 Society includes not alone the millionaire, the independ- 
 ent middle class, and the skilled and effective mechanic, but 
 helpless infancy and age, the invalid, imbecile, the cripple, 
 the blind. All have claims on her. 
 
 Is a definite analysis of the rights of these classes pos- 
 sible ? 
 
 The press and platform are burdened with discussions of 
 monopoly and "trust." The rich become richer so rapidly, 
 they are bewildered with their wealth and know no remedy, 
 yet destitution cries for relief. If these errant streams of 
 unwieldy wealth may be traced to their real sources they 
 may perhaps be returned to their native channels. This is 
 the great problem of to-day. 
 
 It is plainly evident that the consumer is plundered. Any 
 housewife can testify to that. The advanced prices of com- 
 modities in the face of cheapened methods of output prove 
 that. 
 
 It is quite evident that the slight advances of wages are 
 but a fraction of what increased product would justify. 
 
 The great problem confronting the officers of every com- 
 munity is to make the revenues meet the needs to carry on 
 the urgent public work. 
 
 Surely, then, the laborer, the consumer and society are 
 all deprived by Concession. But in what proportion? To 
 determine this v/e must first determine the native rights of 
 producers, citizens and consumer. 
 
 What is the NATURAL REWARD of the producer? 
 
 What the inherent interest of Society in output? 
 
THE DOMAIN OF USE 115 
 
 What the natural legitimate price to the consumer? 
 
 There is a wide lange of opinion as to what is produc- 
 tion's Natural Reward, There is a radical class who claim 
 the whole product as the producer's reward. Some aver 
 that the whole product should go to the laborer as wages. 
 The other extreme view held is that natural wages and in- 
 terest is what the market affords, what competition de- 
 termines ; in other words, what is now paid. The un- 
 reasonableness of the first class in general causes the ac- 
 ceptance of the view of the last w^ho have the argument 
 convincing to many that what is, is right. If higher prices 
 of commodities, as our protectionist friends teach, tend to 
 make wages proportionately higher, what is the harm of 
 higher prices? If producers merit the whole product, what 
 interest have we as citizens, and not producers, in the ques- 
 tion ? On the other hand, if Accessage is the charge for 
 what rightly belongs to Society, wherein is the producer's 
 cause for complaint? As a matter of fact, a large class of 
 producers take this view. As producers, neither laborers 
 nor capitalists are liable to give much thought to the re- 
 striction of output — to what is added to the consumer's 
 price by high rates and rents. Mr. Paul Morton in speak- 
 ing of railroad rates says : 
 
 "The people— the consumers — must be protected against ex- 
 tortionate rates imposed by the railroads. I say the people, 
 because the shipper, who is often a middleman, is not so much 
 interested in keeping rates fair. The shipper does not want 
 discrimination; he does not want A to be given a lower rate 
 than B; in short, he does not want rebates unless he alone 
 can have them. The shipper's interest demands that he bring 
 his goods to market at a no higher charge for carrying than that 
 paid by every one of his competitors, to the end that they do 
 not undersell him and put him to loss. There, however, the 
 shipper's interest usually comes to an end. He wants all 
 shippers to pay equal rates, with no favoring rebate discrim- 
 inations to any one, so that all shall enter the market on even 
 terms. The height of freight rates, so that they be equal is 
 
116 RIGHT AND RICHES 
 
 not to him of prime importance. "With the man who buys 
 from the shipper — the consumer finally — the business lies the 
 other way about. The shipper, fixing his selling price, adds 
 the freight charge to the original cost. The consumer pays 
 the freight. The freight rate thus becomes an element in price- 
 making. Wherefore, I repeat that, in order to protect the pub- 
 lic, the consumer, the Government should, in all cases, whether 
 interstate or otherwise, insist that freight rates shall be reason- 
 able." 
 
 We need not look to the renting farmer to reform land 
 laws, nor to the employe of oppressive franchised corpora- 
 tions to bother about reasonable service and rates. They 
 are often better paid than the average worker and are care- 
 less. Many declare that the natural scarcity of native re- 
 sources give such resources their value, and that it matters 
 not to workers whether society, or individuals, collect the 
 rental. Very truly, the coal vein does not especially belong 
 to the user of the pick, nor the forest to the wielder of the 
 ax. The tendency of the producer, the business man in 
 general, is to underestimate his rightful reward. It is the 
 theorist, the talker and writer who exaggerates the pro- 
 ducer's natural share. In the most primitive state of in- 
 dustry the producer naturally gets the whole output as his 
 reward. This is his Naturai, Re;ward^ where there is no 
 preference in sources of supply. 
 
 But such a condition cannot be found where production 
 has advanced beyond the most primitive stage. Only in 
 the most remote districts will a producer find resources and 
 conditions on equal terms to all. We may imagine that one 
 savage has a right to hunt or fish equal with every other 
 of his tribe, or to plant a few hills of corn, or gather wild 
 growths. 
 
 With the first steps of real industry, however, we find 
 producers appropriating quantities of native supplies and 
 setting up exclusive claim to the use of certain privileges. 
 The placer miner goes to work washing out precious metal 
 
THE DOMAIN OF USE 117 
 
 from the field of sand. At first the number of miners are 
 few and all work in common as neighbors. But as the in- 
 flux of gold-seekers begins, they stake out their claims to 
 areas of sand and inches of water. The new-comers find 
 the opportunities restricted. The most primitive agriculture 
 recognizes the advantage of the specially fertile valley. The 
 smallest village has a corner or point of especial value. 
 
 Here then is the radical error of the ''historical" school 
 of economics. It does not recognize this evolution of value 
 in the control of the peculiarly advantageous positions by 
 producers. The honest workman with all good purpose 
 takes possession of a tract of land on the bank of a stream 
 which he proceeds to use, cultivating some and pasturing 
 stock on the rest. He needs to cross the stream occasionally. 
 Hence he rigs up a rude boat. Others wish to cross. He 
 carries them for honest fare. What is wrong with such 
 conduct ? Nothing. But this travel increases ; dozens, then 
 hundreds wish to cross the stream there. For a rental he 
 permits a store to be built. Then he leases the ferry privi- 
 lege. Then other lots. The travel increases to thousands. 
 A city grows. Our workman is no longer a workman. He 
 does not live by his wages but from tribute paid by the 
 growing population for access to the advantages of which 
 he got possession. He did not create them. He simply 
 happened along where they were. Thus the Vanderbilt 
 fortune grew. 
 
 How many schemes of philanthropic colonization, how 
 many co-operative schemes of business have come to grief 
 through lack of recognition of this insiduous power of do- 
 minion. Many colonies have gone into the remote wilderness 
 thinking the members and their descendants would be free 
 from domination of a hated aristocracy, but how soon has 
 the same class arisen among its own members based on the 
 power of appropriated resources. 
 
118 RIGHT AND RICHES 
 
 Plainly, then, we cannot arrive at justice by the lazy 
 methods of present and past practice; by letting the pro- 
 ducer have absolute ownership of the area he appropriates. 
 Let us then take as our postulate and foundation law of all 
 justice: that society is the primary owner of all output; 
 that the individual acquires just ownership only as society 
 in equity grants it to him. 
 
 ''Know froTn the hounteous heavens all riches flow, 
 And what man gives, the gods hy man bestow.''' — Homer. 
 
 The correctness of this postulate is made more evident 
 by the fact that producers do not claim a reward propor- 
 tionate to output, but only sufficient to maintain their ac- 
 customed standard of living. They ask only for Living 
 Wages ajtd Interest, but they are ever seeking for larger 
 opportunity to produce. 
 
 It is the self-evident duty of Society to procure the best 
 possible 'living," the largest possible supply of wealth, for 
 her members in the aggregate ; we need not at present in- 
 quire as to its apportionment. Output is from three ele- 
 ments, Resources, Accumulated Capital, and Human En- 
 deavor. Then if Society has an inalienable right to all Re- 
 sources, which cannot be questioned, what m.ust she do to 
 secure this Greatest Possible Supply? Manifestly she must 
 secure to the ever-willing producers a scope of opportuni- 
 ties or resources so broad and rich as to admit of the high- 
 est possible efficiency from the efforts of all. 
 
 There is a story of a modern ship being stranded on a 
 fertile but uninhabited island. It was conveniently loaded 
 with a quantity of seeds, machinery, and other useful stock 
 and equipment for starting industry on the island. Now 
 suppose you were governing such a colony thrown upon 
 such u^>claimed field. Suppose you thus commanded 100 
 producerb ^^d were responsible for their best subsistence; 
 would you not carefuly select for operation the most choice 
 resources which such island afforded? First of all you 
 
THE DOMAIN OF USE 119 
 
 would select as a place for your little city or settlement the 
 best possible site, and not some miserable swamp, as is often 
 the site of cities. You would give careful attention to plan- 
 ning the best arrangement of such city. You would then 
 put your woodsmen to work on the choicest trees, your 
 plowmen on the richest soil, your fishermen would be di- 
 rected to where the catch was most valuable, your quarry- 
 men would take the most available stone. You would not 
 let a man work at one place when he could produce twice 
 the results at another. Moreover, you would try as much 
 as you could to let the builder build, and keep the smith at 
 the forge, instead of compelling them to do that for which 
 they had no aptitude or taste. In other words, you would 
 seek to have continually the largest possible use of the re- 
 sources of the whole island. Hence you would not tolerate 
 that one person should appropriate and control the best 
 timber, water supply or boat landing. 
 
 Even so should Society do, "that it may give seed to the 
 sower and bread to the eater." 
 
 Society should guarantee to all producers the best re- 
 sources possible. Or stated conversely: She should assert 
 her right to guarantee that the resources should be used 
 to the highest possible efficiency. To this end she should 
 assert her title to that scope of the best quality of resources 
 " needed for the fullest use of all workers, so that no one need 
 work with opportunities inferior to any opportunities that 
 were idle. 
 
 A railroad has the right to take by condemnation what- 
 ever property is needful to its most efficient operation. Why 
 should not all producers be given this same right, the ac- 
 cess to the most efficient means of production ? 
 
 It has ever been recognized that the State has the right 
 to take what is needful for it to use for the best interest of 
 all. This right is termed Eminent Domain. The State 
 delegates the right of Eminent Domain to railroads. Why 
 
120 RIGHT AND RICHES 
 
 not to all producers? Giving this eminent power to one 
 class only, gives it authority over all others. Is it anarchy 
 to deny the right of an industry to shut down and leave its 
 thousands of employes idle and helpless? Even Russia has 
 prohibited such closing of works. 
 
 Should producers of every class have the right to appro- 
 priate the* use of the best resources needful to the largest 
 output, we might term this the "EMINENT DOMAIN OF 
 GREATEST EFFICIENCY," or "The Domain of Use." 
 
 The apprehension of the nature and import of this zone 
 of opportunity is the first step in the solution of our prob- 
 lem. The vital principle involved in the extent of this do- 
 main is the only solvent by which an analysis may be made 
 of the tribute taken by Concession. Hereby we may isolate 
 Preclusion, that blight equally ruinous to producers and 
 consumers. As the extent of Preclusion is the extent of the 
 consumer's overcharge, and also the extent of labor's dep- 
 rivation, we may thus deduce what would constitute Nat- 
 ural Prices and Natural Wages. We shall further learn 
 that the marginal line of this Domain on which all may find 
 opportunity to produce with the highest efficiency, is the 
 MARGIN OF NATURAL RENT. 
 
 The whole problem is practically solved when we realize 
 how small a fraction the present results of industry are, 
 with producers operating on inferior resources, of what they 
 would be, were all workers and all capital employed with 
 the most effective opportunities. It is amazing to compre- 
 hend how, under this rational management of opportunities 
 "of the people, by the people, for the people," both the 
 supply of consumers and the reward of producers might be 
 multiplied, and with only a fraction of the effort and ab- 
 stention now endured. Yet this emancipation of mankind 
 is prevented only by the wanton preclusion of the use of 
 rich opportunities which are now held idle. 
 
THE DOMAIN OF USE 121 
 
 If owners of opportunities allowed their fullest use and 
 took only the premium which preference is worth, they 
 would not then dwarf production to a fraction of its nat- 
 ural output, nor would a given area of resource have its 
 present intense rental power. We may illustrate this by 
 the power of a stream flowing down a canon. If the whole 
 of such stream is allowed to pass over a wheel with its nat- 
 ural flow, some power is generated; but if we, by a high 
 dam, impound such stream and keep back its flow until we 
 have a head of two or three hundred feet, we may then 
 project a fraction of its flow against a turbine with an in- 
 tensity hundreds of times as great, and limited only by 
 the height of our impounding dam. Just so does the price of 
 coal, or salt, or starch, or oil depend on repression and re- 
 striction. The prices may be thus increased a hundredfold, 
 and yet with even less reward to producers. 
 
 Now natural opportunities, land and it-s elements and 
 the forces contingent on it, are of varying degrees of rich- 
 ness or capacity. 
 
 Nature has not distributed the fertility of soil, the de- 
 posits of mineral wealth, of streams and sea with unvarying 
 sameness over all areas. These things range from small 
 areas of almost perfect richness to wide areas of such pov- 
 erty as to be not worth attention. Hence, to insure the ful- 
 lest output, Society must obviously guarantee the fullest 
 employment of the richer grades of resources, beginning at 
 the richest and including all those of decreasing grades of 
 richness, until her fullest needs are supplied. In other 
 words, no one should be employed taking coal from mines 
 where but ten tons were procured with a certain quantity of 
 effort, while other fields of coal were idle where the same 
 effort would produce a hundred tons, or even eleven tons. 
 No one should be compelled to transport stuff by wagon 
 at hundreds of times the effort with which it could be moved 
 by railroad. Society should guarantee the full working of 
 
122 RIGHT AND RICHES 
 
 the richer resources, and by the most effective means. To 
 this end she should assert her rightful ownership of all such 
 richer resources, and give everyone access to them on equal 
 terms, so that they may enjoy their natural function of cre- 
 ation. Millions of tons of fruit should not be allowed to rot 
 in orchards because freight rates are exorbitant. Conces- 
 sion now dominates nearly all resources, however poor or 
 rich. 
 
 The revenues of concession are from two distinct fac- 
 tors. The first is natural rent, or the natural value of the 
 actual use which is made of the resources controlled. The 
 second factor is that addition to natural prices which are 
 levied upon consumers by means of monopoly, or the PRE- 
 CTUSION OF USE— by holding rich resources idle in 
 order to limit output, which may be termed PRECLUSION 
 CHARGES. The Preclusion Charge is a direct loss to the 
 consumer by increasing the cost, or reducing the quantity 
 of his subsistence. It is an equal loss to the producer by 
 the waste of that excess of labor required to produce from 
 inferior opportunities. Or, stated in another form : 
 Through Preclusion of opportunity, or holding of resources 
 out of use, the producer's actual output is reduced in exact 
 ratio with consumer's supply; or in inverse ratio to the ex- 
 cess of cost to consumers above the Natural Price. 
 
 If producers had full use of the richest opportunities, 
 there would ensue such a plentiful product that the same 
 total of rent now paid to Concession might be taken from 
 such product, and yet, with only a fraction of present prices 
 to consumer, leave producers a multiplied reward. Hence, 
 we see that Concession robs Society of its rightful revenue 
 — natural rent. It thwarts productive effort by holding im- 
 mense resources idle and diminishing product, that it may 
 thereby plunder consumers through increased prices of 
 goods. 
 
THE DOMAIN OF USE 123 
 
 Let us suppose an isolated community having 100,000 
 acres of land ; ten persons own it, having 10,000 acres each. 
 Instead of using as much as possible they agree together and 
 use but a small part, and by precluding the use of the rest, 
 charge a proportionately higher price for the output. Now 
 is it not evident that the small production will yield as 
 much to the owners of the land as though all were culti- 
 vated? We see then that there is a revenue from preven- 
 tion of use, which is often greater than that from use. Nor 
 do we have to resort to some small island for example. In 
 California, almost adjoining land which brings rental of 
 $100 or more per acre per year, one estate owns thirty miles 
 of Ocean front, and not far away is a beautiful island thirty 
 miles long, owned jointly by two men, who make or allow 
 but the slightest use of it. It is claimed that the cotton 
 planter's union, by limiting the acreage, has greatly ad- 
 vanced the price of their crop, and that they are now 
 alarmed because Australia proposes to grow cotton, and are 
 already trying to induce the Australians to join their union. 
 The prices of iron, cement, lumber, in fact most commodi- 
 ties, are many times what a full output would maintain. It 
 is said that a reduction of half from usual agricultural 
 crops more than doubles their price. 
 
 It is plainly apparent that under a condition of society 
 where none controlled any resources except such as he act- 
 ually used, there would be due from those using the richest 
 resources a premium to compensate the less fortunate ones 
 who must produce from inferior supplies. This equaliza- 
 tion could only be made in practice by each paying to So- 
 ciety, the real primary owner of all resources, a premium 
 commensurate with such richness, which would be natural 
 rent. 
 
 The use-preference or natural rent of one parcel of re- 
 sources over another arises from different causes according 
 to its class. The essentials or resources of production from 
 
124 RIGHT AND RICHES 
 
 which accessage is collected may be divided into the fol- 
 lowing classes : 
 
 First, the SURFACE of the land or soil. 
 
 Second, its CONTENTS, mineral deposits, etc. 
 
 Third, ACCESS to market, means of transportation, 
 communication, etc. 
 
 The surface of land, other things being equal, decreases 
 in value in ratio to its distance from some social center. 
 Social centers may be centers of population, of exchange, of 
 residence, education, or centers of other attractive force. 
 The preference in contents of land depends on their ease of 
 availableness. Their value decreases, other things being 
 equal, in ratio to the amount of labor required to procure 
 and adapt them to use. It is manifest that only the most 
 limited areas of land can be at the centers. The Contents 
 of land, mineral deposits, forests, clays, coal, etc., while 
 plenty in the aggregate, are found on more or less small 
 areas. Some room is required for operations in working 
 them; so under even ideal conditions, it is only possible for 
 but few to use the very best. One hill may contain, as at 
 Carara, enough marble for a hundred generations. Iron 
 mines, limestone ledges, coal measures, are almost inex- 
 haustible, yet beyond the reach of all but the few. The 
 rapidity of decrease in availableness of supply frorn first 
 to last choice, varies with different products. Fire clay is 
 limited in extent, while building brick clay is general. 
 Limestone covers wide areas in much the same degree of 
 convenience to be quarried. There may be but one spring 
 of a certain mineral water, while water of general utility is 
 widespread in its supply. 
 
 The control of the means of ''Access" to market is per- 
 haps of equal value v/ith the "Contents" or ''Deposits" of 
 materials. How large a portion of the contents of land is 
 of no value, because those who dominate Access to market 
 through ownership of railroads, banks, terminals, etc., and 
 
THE DOMAIN OF USE 125 
 
 through ''Combinations in Restraint of Trade," preclude it 
 from any outlet. 
 
 Let us classify the resources of a certain community into 
 ten grades; let us suppose that it contains 100 units of la- 
 bor, each unit we will represent by L. The product of 1 
 unit of labor in the 1st grade will be wealth to the amount 
 of 1,000 units, or 1,000 W; in the second grade, 500 W; in 
 the fourth grade, 250 W ; in the fifth grade, 200 W, and so 
 on. Hence, on account of preclusion there is only 1 L or 
 1 per cent, of the labor of the community employed in the 
 1st grade, 2 per cent, in the 2nd, and so on, according to 
 
 the following 
 
 table : 
 
 
 
 Grade of 
 
 Efficiency 
 
 Units 
 
 
 Resources 
 
 of Labor 
 
 Employed 
 
 Output 
 
 1 
 
 1000 
 
 1 
 
 1000 
 
 3 
 
 500 
 
 2 
 
 1000 
 
 3 
 
 333 
 
 3 
 
 1000 
 
 4 
 
 250 
 
 4 
 
 1000 
 
 5 
 
 200 
 
 10 
 
 2000 
 
 6 
 
 166 
 
 10 
 
 1660 
 
 7 
 
 142 
 
 10 ■ 
 
 1400 
 
 8 
 
 125 
 
 10 
 
 1250 
 
 9 
 
 110 
 
 10 
 
 1100 
 
 10 
 
 100 
 
 40 
 
 4000 
 
 15410 
 
 This table shows that although twice the number be 
 employed in the 2nd grade, 4 times in the fourth and ten 
 times in the 10th, the output is no more. 
 
 Again, supposing that the capacity or extent of the 
 first grade would give room for the employment of 50 units, 
 or 50% of the labor, and the second grade the other 50%. 
 See what a great increase of output is possible; for the 
 first grade would yield to 50 units of labor 50,000 units of 
 wealth, and the second grade 25,000 units of wealth, or a 
 total of 75,000 units, or almost five times the present output 
 with the same expenditure of labor. Therefore, we see 
 the margin of preclusion is at 100, although there are 
 abundant resources, for several times the present output, 
 
126 RIGHT AND RICHES 
 
 having a productiveness sufficient to give labor an efficiency 
 of 1,000, or ten times its present productiveness. Hence, 
 in such a community, concession by precluding use would 
 be causing the product to cost ten times the labor, or would 
 be reducing producers' share to less than one-tenth their 
 natural reward and increasing the cost to consumers, to 
 ten times its natural price. 
 
 Now of course this is only a hypothetical community, 
 but let us compare it with our own community. Compare 
 the efficiency of a railroad train carrying 40 cars of 40 
 tons, or 1,600 tons, each, 15 miles an hour, and a common 
 wagon carrying one ton three miles per hour. You see we 
 have an efficiency of 8,000 to 1. But the railroad train will 
 take, perhaps, in its crew, care-takers and track repairers, 
 say, 40 men to the train, though I think this could be great- 
 ly reduced if roads were double tracked and worked to their 
 fullest capacity. But even at 40 men we have an efficiency 
 per man of 200 to 1, yet we see rates so high that a common 
 wagon can compete successfully in some cases with the 
 railroad. 
 
 It is said by eminent scientists that the gas from a 
 bushel of coal has a much greater heat efficiency than the 
 coal itself as commonly used, and that the by-products will 
 more than pay for the work of gas-making. Yet see the 
 labor that is wasted in handling and in using coal, and the 
 enormous destruction by smoke, causing in some cities an 
 excess of deterioration of several per cent, on all structures, 
 furnishings and fabrics, or a sum many times what the total 
 cost of gas fuel would be. Why not convert all coal into 
 gas or electricity right at the mines? Millions of acres of 
 the best land is idle while land with not 5% of its efficiency 
 for growing crops is used. Of the better grades of land a 
 large share can be but partially used by tenants-at-will. It 
 is used but for annual crops, while it might produce ten 
 times the value in fruit. Such tenants cannot give it the 
 
THE DOMAIN OF USE 127 
 
 drainage or fertilizing which would multiply its output. 
 How many of the best lots in cities are cumbered with 
 shacks ! 
 
 There can be no doubt that under a wisely regulated 
 production, with the full use of native resources and the 
 increased use of improved methods, which would then be 
 available, the output of industry would be more than ten 
 times what it is now. 
 
CHAPTER IV. 
 
 Thij Consume:r's Rights. 
 
 HAT are the consumer's rights in the output of 
 wealth from the abundant resources God has 
 provided for him? 
 
 What is his loss to Concession? 
 
 The degree in which Concession deprives the consumer 
 is reflected in the general standard of living among the 
 masses. In one community meat is eaten by all, and at 
 every meal, while the masses in another may seldom be able 
 to taste it. The standard of living in one community may 
 embrace pianos, theaters, art, periodical literature, the daily 
 paper, education of children, carpets, horses, etc. ; in an- 
 other the most meagre necessities, due to the exactions of 
 those who dominate the resources of production. 
 
 In considering this question we must entirely eliminate 
 the money price as a measure of cost, and confine our es- 
 timate to the time cost, hours-per-day-cost, in individual 
 effort. It is indifferent how many dollars each has, but 
 how high a standard of living. Whatever curtails produc- 
 tion increases the cost of living. 
 
 If birds or insects ravage crops, the planter is not the 
 only, nor perhaps the greatest sufferer. How much more 
 then is the consumer's concern when wanton idle humanity 
 represses output; for the loss then is not alone what output 
 is curtailed, for the human parasites use the spoil gained 
 by its restriction to purchase goods for destructive waste. 
 
 Trust prices of shoes, flour, meat, fuel, all the require- 
 ments of life, are too well known*to need much comment. 
 The people of the Great West are acquainted with the effect 
 of railroad rates on what they use; yet there seems to be a 
 
 128 
 
THE CONSUMER'S RIGHTS 129 
 
 widespread blindness to the effects of a tariff tax on im- 
 ports. But in the ratio in which domestic commerce ex- 
 ceeds foreign, a ratio of several hundred to one, so the im- 
 portance of the tariffs of concession exceed those of custom- 
 house dues ; especially in our own land where we have near- 
 ly fifty great commonwealths trading freely together. Ex- 
 press, telegraph, telephone, and railroad charges, and most 
 of all land rents, affect us as consumers. 
 
 Nevertheless the evils of the infamous tariff tax to both 
 producer and consumer can hardly be overestimated. What- 
 ever the method by which one individual or nation seeks to 
 profit by another's loss is always unnatural, wicked, and in 
 the long run results in loss to such nation or individual. 
 
 For hundreds of years the Moor pirates had levied trib- 
 ute from the commerce of all nations. Their ancient head- 
 quarters were at Tarifa, hence the word ''tariff." The 
 American spirit of freedom rebelled and the cry was raised 
 "Millions for defense, but not a penny for tribute," and 
 these bands of pirate tariff-takers were driven from the seas. 
 And as this spirit of freedom becomes more enlightened, as 
 the masses come to have enough fraternal love and un- 
 selfishness to stand together and support a defense, we shall 
 see concession's piratical tribute resisted. 
 
 But the tariff issue as defined by the two dominant par- 
 ties is devoid of principles. One party wants a tariff 
 avowedly for protection, the other wants a tariff, of the 
 same rate as far as we may judge by their declarations, 
 but for goodness sake, not for protection! For revenue 
 only! 
 
 Nothing could be a more palpable absurdity., 
 
 I knew a schoolboy who was caught stealing quite a 
 quantity of tobacco from a schoolmate, and when the 
 teacher was surprised to think he wished to chew it, he pro- 
 tested with righteous indignation that he did not chew. He 
 was going to put it in his clothes to keep the moths away, 
 
130 RIGHT AND RICHES 
 
 and seemed to be totally oblivious to the crime of taking it. 
 What possible difference can it make to the victims of the 
 tariff whether the enactors of the law have the one or the 
 other of two abstract motives? 
 
 Those who pay customs dues, either do owe the gov- 
 ernment or they do not. If they do they should pay ; if they 
 do not, then to make them pay one cent is a crime. And 
 who pays but the consumer? For it is ever added to the 
 price of goods. 
 
 Yet a tariff injures producers in like degree by narrow- 
 ing their field of opportunity. 
 
 But we in America have been especially blessed in that, 
 while concession has continued to increase its levy on pro- 
 duction, the wide domain, whose margin appears to be al- 
 most reached, afforded a constant extension of opportun- 
 ity, which, coupled with our marvelous inventive genius, 
 has steadily multiplied output. Hence, while the standard 
 of life among us is dreadfully repressed, while the results 
 of poverty oji the millions among us is pitiable, yet this 
 widening of fields and improvement of process has given 
 to at least a numerous minority of our citizens a standard 
 of life beyond the dreams of older countries. For notwith- 
 standing the outcry among us against trusts and predatory 
 wealth, the extent of Preclusion in America is but a frac- 
 tion of what it is in older countries ; it simply takes a more 
 noticeable form. 
 
 This is why immigration sets so strongly our way. This 
 is why our standard of wages is higher. But these new 
 lands in America are all but exhausted. What will continue 
 this prosperity? Education! Civilization! Brotherly 
 love! Christianity! We have developed a citizenship that 
 will not be again enslaved by the hereditary class. The 
 leaven of Christianity is working. Benevolence is increas- 
 ing. Love in the family is more general. The air is full 
 of reform. The Americans of to-day, crowded to the limits 
 
THE CONSUMER'S RIGHTS 131 
 
 of new land, are getting ready to stand together for their 
 rights. The next few years will see a reform of tax and 
 title laws; a resistance of high rents. Sir Thomas Lipton 
 says such abundant production as we are having in Ameri- 
 ca was probably never dreamed of before in any country. 
 Yet discontent is now almost as great among the masses 
 at the inequality of its diffusion as in the hardest times. 
 
 There is a correlation between inventive genius and this 
 wider field of opportunity which our wide domain has af- 
 forded. Given a large native supply to draw upon, the 
 producer bends his energies to develop the resource with 
 mind as well as muscle. Steam, electricity, compressed air, 
 steel, cement, all the elements of science and invention are 
 called into use. But when the real producer (for we must 
 eschew the sophistry which includes all profit-takers as pro- 
 ducers, all stock jobbers, land speculators and franchise 
 grabbers) when the real producer is only a beast of burden, 
 having no interest in his task, with the beneficiary of his 
 toil a distant hereditary parasite on industry; whence can 
 come application of progressive means ? 
 
 But the fruit of every scientific process is to-day largely 
 taken by Concession. Greed is now less dense, less person- 
 al, but more highly organized. Does a gas company offer 
 a larger percentage of interest to seekers of investment be- 
 cause its by-products increase from year to year? No, it 
 issues more stock. Does it sell gas cheaper? Very seldom. 
 Do inventions and discoveries in general tend to raise the 
 rate of wages? Not directly. The extent to which the 
 fruits of progress and larger output are taken by conces- 
 sion-holders must be studied and apprehended by the people 
 before relief can com.e. If the investment of a certain sum 
 in a given line of industry return profits above a regular 
 interest rate, what is the result? Capital will, if permitted, 
 flow into such industry rapidly until the normal rate is 
 reached. But if the owners of the industry have a control 
 
132 RIGHT AND RICHES 
 
 of resources by which competition can be avoided, then 
 their concern automatically assumes a vested value, and 
 the stock sold to the public by them represents this infla- 
 tion rather than increase of real capital and productive- 
 ness. Access to resource and market assumes a value equal 
 to the difference between the actual sum invested and the 
 amount on which income will now pay normal rates. 
 
 It is common for the stocks and bonds of such concerns 
 to be increased by the issue of what is confusingly termed 
 ''watered stock," until they reach an amount of which the 
 ordinary rates of 5 to 7% will be paid. The expression 
 ''watered stock" conveys the thought of dilution, as a dis- 
 honest person might put water into syrup. The addition to 
 securities, such as here indicated, represents the growth of 
 concession's value, which is the most permanent form of 
 value and the most likely to pay dividends. This growth of 
 concession value proceeds both from increased patronage 
 and higher tariffs as well as from lower production cost. 
 Though such a concern borrow capital, it will pay only mar- 
 ket rates. Accumulators of capital are still restricted to 
 market interest rates when they wish to invest. 
 
 President Roosevelt's recent message has inadvertently 
 raised the discussion of a most important question. Is the 
 State under any obligation to recognize the sacredness of 
 property based on this inflation? Must rates for public 
 service be based on the topmost price to which stock-jobbers 
 can boost prices by fictitious sales and misrepresentation? 
 Must we pay $1.00 for gas because gas stock sells on the 
 basis of $10,000,000 valuation for a plant that could be 
 duplicated for $1,000,000 simply because the gas company 
 boosts it by boasting an exclusive and perpetual franchise? 
 Or has the city the right to build a new plant for $1,000,- 
 000 and furnish gas on that basis of cost? 
 
 The law of value of groups applies with special force to 
 concessions. An increase of the price of commodities with 
 
THE CONSUMER'S RIGHTS 133 
 
 free competition, at once tends to increase the output and 
 so restore former prices. Not so with concession property. 
 There remains but the one gas company, one telephone or 
 telegraph monopoly. Every new schoolhouse, every new 
 invention, everything that makes for peace, and larger use 
 of wealth, also raises rent. Every piano factory, every 
 automobile factory, every trolley line, every new magazine, 
 every new bridge, every paved road, every ship canal, tends 
 to raise rent. All these things increase the power to patron- 
 ize concession, and no increase in quantities of opportunities 
 can take place. The desire for land is universal and its 
 purchase is only limited by the wealth with which to buy. 
 
 Do you know, Mr. Consumer, that you pay the dividends 
 on the forty to eighty per cent, of the stock of corporations 
 which represent franchises or land title, controlling natural 
 resources ? 
 
 How much do we pay for oil, coal, lumber, all the com- 
 mon essentials of subsistence, in excess of their productive 
 cost ? 
 
 What percentage of your annual income do you pay 
 as the arbitrary addition to the price of your fuel in the 
 past few years ? Has the Reward of Production increased ? 
 No. Whatever addition has been made to wages paid to 
 miners has been more than offset by increased output with 
 improved methods and machinery. Do you know how 
 much the freight rate on coal has been advanced in the 
 face of a reduction of fully half in cost of carrying it ? Who 
 gets it? Why has lime, cement, sand, lumber, everything 
 for the building of a house advanced ? The answer is, the 
 raw materials have been cornered, the freight rates raised, 
 the rent of the manufacturing site, and merchant's shop, 
 doubled or quadrupled. 
 
 Do you notice that the output in many of the larger 
 lines has been increased per worker in the past few years 
 from two to ten fold, while the price you are paying has 
 
134 RIGHT AND RICHES 
 
 been increased? The cost of producing copper was so 
 much reduced by improved process that the deposits worth 
 working were multiplied. Did the price come down in pro- 
 portion? No, the trust stored the output and held it up. 
 When the trust got shaky the price fell ; but with its reor- 
 ganization the price will be restored. 
 
 Did you ever see a modern sawmill almost automatical- 
 ly snatch the logs from the water and turn them into lum- 
 ber, a hundred times as much in a day with the same crew 
 as when lumber was a third its present price? Who gets 
 the profit? The owner of the forest and the carrier. Lum- 
 ber was delivered to the building a few years ago for little 
 more than present stumpage in Oregon. 
 
 We should enjoy a multiplied supply of commodities 
 out of the multiplied output. It is our right to demand it. 
 At the same time that we as individuals are engaged with 
 the problem of increased prices, our cities are struggling 
 with treasury deficits where they have recently given away 
 franchises worth tens of millions. 
 
 Even moral reforms increase this arbitrary Concession 
 value. Governor Folk in speaking of the great benefits of 
 closing the race track gambling and the Sunday closing of 
 saloons, says : 
 
 "The result of two and a half years of strict enforce- 
 ment of the laws in Missouri has been remarkable. In St. 
 Louis there is more building to-day than in twenty years. 
 In Kansas City real estate has risen in value more in the 
 last two years than in ten years before, and St. Joseph is 
 rapidly forging to the front." 
 
 We hear much, especially in campaign times, of the 
 importance of "the farmer" in the commerce of the land. 
 Now who is this very important "farmer"- for whom high- 
 priced wheat is desired? He is no other than the owner of 
 the farm land. High-priced wheat means high rent, not 
 higher wages on the farm. What class kept a protective 
 
THE CONSUMER'S RIGHTS 135 
 
 tariff in England on breadstuff until the Cobden Club agi- 
 tation? Who keeps it on to-day in Germany but the land 
 owners? The farm laborer is exactly equal to other labor- 
 ers in what he does for society. He does no more than the 
 factory worker, and deserves no more consideration from 
 the legislator, nor does he get it. The land owner is the fel- 
 low who makes the noise. His representative says, ''We 
 feed you all. No business can exist without the farmer. 
 Agriculture is the basis of all commerce, etc." Nonsense ! 
 We do not any more depend upon those who till the soil 
 than other workers. The owner of the land is only an ex- 
 hausting parasite. But we do depend on the soil. The 
 owning of the land by the so-called "farmers" is of no bene- 
 fit to society, but the land is vital. It is not good for so- 
 ciety for land to be high priced and rents high. Yet high 
 rent and high land result from large output of wealth. 
 
 There is a moral in this for those whose resources are 
 in land or other form of concession. They should see the 
 importance of all progressive and moral reform to the value 
 of their property. Good streets, good roads, good schools, 
 civic improvement in general, should be worked for and 
 encouraged by them from purely selfish interest, if for no 
 other reason. It is to the credit of that bright body of men 
 in the real estate business, that they are usually found work- 
 ing energetically for every progressive measure, though 
 few of them seem to realize the evil effects of high land 
 values and high rents. 
 
 What excuse is there to-day for anyone in this land to 
 lack food, with such abundant crops and such magic me- 
 chanical means of moving them; or shoes when machines 
 grind them out by the million; or homes when there are 
 such effective and bountiful means of building. Why 
 should babies and children whose weazen faces show lack 
 of nourishment, be so commion on street cars and in the 
 populous quarters of all our cities? Why should human 
 
136 RIGHT AND RICHES 
 
 beings in America exist in dark, dirty cellars, above or be- 
 low ground? Why should multitudes of rural children be 
 almost as bereft of the knowledge of real life and comfort as 
 the beasts of the field? Why? It is not alone because a 
 large share of output is arbitrarily taken by those who do 
 nothing to promote it; but that output is dwarfed by the 
 preclusion of resources to use, by their being held idle to 
 maintain excessive prices. 
 
 Let us legally open to production the Domain of Oppor- 
 tunity of Highest Efficiency, by collectively asserting our 
 Right of Eminent Domain, and thereby establishing sup- 
 plies at Natural Prices ; by building public roads, public 
 railroads, public canals and cement mills, by establishing 
 public forests and lumbering plants, public water power and 
 electric plants, public coal mines, oil wells, refineries and 
 steamship lines. Also let us tax opportunities held idle the 
 same as like opportunities at work. Thus let us open wide 
 the gates of opportunity. Then there will be no^ lack to 
 society's supply, for the impulse to produce even in this 
 "world of greed" is stronger than that of pay. 
 
 Millions are constantly clamoring for the chance to pur- 
 sue some art. A fev/ have transcendental notions of their 
 sphere, but the majority are abundantly practical in their 
 choice of a calling. 
 
 Thus let us not only restore to rightful owners that ma- 
 jority of output now taken by drones, but let us enable an 
 output five to ten times that of the present. Let us claim 
 the prodigious fruits of invention and intelligence, of prog- 
 ress, civilization, Christianity, as the rightful estate of all, 
 and no longer be satisfied with the crumbs and scraps doled 
 out to us by a privileged class. 
 
CHAPTER V. 
 
 The^ Producer's Rights. 
 
 HAT are Natural Wages and Interest? As we 
 have before stated, workers are naturally im- 
 pelled to produce, not by the pay which is pre- 
 viously stipulated, either by an employer or what 
 is expected to be procured from sale of output, but by the 
 innate joy of producing. How, then, can there be Natural 
 Wages even as an ideal ? Very consistently, for just recom- 
 pense seldom comes as a stipulated, but as a natural return for 
 right action. A good temperance man does not refrain from 
 drink through fear of tremens or bankruptcy, yet he gets the 
 just reward of being temperate. One who is honest simply 
 because he thinks it pays, is not safe to trust ; yet there can be 
 no doubt that one who is naturally honest from pure love 
 of honesty and from love of right, should be rewarded — is 
 rewarded. So while pay is not a noble motive for labor, 
 recompense is a noble impulse in its beneficiary. And while 
 greed does not and cannot promote industry, personal im- 
 pulse and initiative can and does. 
 
 If communal production and common use may be con- 
 ceived of as a possible ultimate ideal, which we need not 
 here decide, at any rate it may only be reached by gradually 
 working up to it. It seems far more practical to undertake 
 some degree of common production and use; that is, the 
 public ownership and operation of some utilities, and mean- 
 time to adopt an ideal reward for individual effort. Any- 
 how, we shall need to hire workers under public ownership. 
 Tet us then seek to find what such just recompense is. 
 
 We have seen that the present meagre reward is deter- 
 mined solely by the demand for accustomed subsistence, and 
 
 137 
 
138 RIGHT AND RICHES 
 
 that the so-called ''Margin of Rent" is only a fiction. But 
 when we apprehend the "Eminent Domain of Efficiency" 
 we find that its margin is the Margin o^ Natural, RitNTS, 
 and that this margin also defines the measure of Natural 
 Reward — Natural Wages and Interest — on the one hand, 
 and Natural Public Revenue on the other. 
 
 Concession now includes in her domain all resources and 
 opportunities, not alone that which will pay to operate 
 whether now being used or now idle, but all that might in 
 future pay. This is why there is no definite margin to Con- 
 cession's rent. But the Domain of Use, as it includes no idle 
 resources, is not nearly so extensive. Everyone could find 
 all the room that he needed for employment on but a frac- 
 tion of the field of resources now dominated by concession, 
 were all to work on the richest and best. 
 
 Suppose resources, soil, clay, stone, mineral deposits, 
 means of communication, etc., were graded from the most 
 perfect, which might be said to have a productive capacity 
 of 100,000 down to that with a productive capacity of 1,000, 
 100, 1. Now, with all resources so graded, let us suppose 
 there would be no need to operate any with a productive 
 capacity poorer than 1,000. 
 
 Grade 1,000 would then be the "Margin of Natural 
 Rent." Society might then leave all resources poorer than 
 1,000 open to private use and exploitation. The whole out- 
 put of such "open" resources would then be the minimum 
 Natural Reward of Production. 
 
 But you say this is all too theoretical. It would be im- 
 possible to so grade all resources. Manifestly it would be 
 impossible to survey every acre of land and tag it with its 
 grade. But a very simple rule will make it automatically 
 grade itself. Society has but to insist that no resource shall 
 be held idle; that anyone wishing to produce may take pos- 
 session of any idle resource which is worth working — that is, 
 that use may have Eminent Domain. By this very simple 
 
THE PRODUCER'S RIGHTS 139 
 
 rule the resources rich enough, to be worked would be auto- 
 matically determined and put to work. Thus a sufficient 
 volume of the best would be selected and would belong to 
 Society. Whatever would be outside the scope of this 
 Domain would remain open to the pleasure of private ex- 
 ploitation, and its product would be its reward. 
 
 Society should assert her estate in such Eminent Domain 
 of Resources by some reasonable means which we will here- 
 after consider, and then all access charges would belong to 
 society as a natural source of taxes. Society should, how- 
 ever, operate under her own corporate control and manage- 
 ment, many of the enterprises of production and service. In 
 fact a large share should be so operated; a share increasing 
 with the progress of civilization or brotherhood, but to do so, 
 Society must employ individual workers and perhaps borrow 
 capital. 
 
 What recompense should she give such employes, and 
 capital furnishers? 
 
 How much should mail carriers, operators of municipal 
 light, heat or power plants, receive? 
 
 How much should mayors, governors, councilmen, legis- 
 lators, congressmen, receive as a recompense for their serv- 
 ices? 
 
 Why, Natural Wages, of course. 
 
 Why should the public, any more than a private corpora- 
 tion, take service without recompense? 
 
 What interest should Nation, State or City pay? 
 
 Just such an amount as people would be willing to save 
 for — Natural Interest. 
 
 With opportunity for all to produce and acquire wealth 
 all would have incomes; each would have his own ideas of 
 the price of abstention. Such price as would procure the 
 saving of the requisite fund of capital would be Natural In- 
 terest. If a certain rate did not procure the desired fund, 
 
140 RIGHT AND RICHES 
 
 more should be paid. The abohtion of Preclusion will es- 
 tablish Natural Interest for the use of capital is now re- 
 stricted by the concessionizing of resources, by compelling 
 capital to accept a share in common with fictitious and arbi- 
 trary property in lands and franchises, represented by multi- 
 plied stock and bond issues, calling for rents and dividends. 
 
 But with the wide field of free opportunity outside the 
 Domain of Greatest Use; or within such domain after pay- 
 ing Natural Rent, Capital could always make a liberal rate 
 of interest. For under such conditions there would be such 
 unhampered opportunity for the use of capital and such 
 abundant increase from such use that savers would not be 
 compelled to stint and starve in order to accumulate. 
 
 Nothing is more absurd than to dogmatically say that in- 
 terest should not be more than 2 or 3 per cent. All have a 
 free opportunity to save, to some extent at least, but all have 
 not a free opportunity to use capital. No class has any 
 monopoly of saving; hence, interest should be left to agree- 
 ment to supply and demand. This does not deny the wis- 
 dom of reasonable usury laws to protect the helpless. 
 
 We establish Natural Wages and Interest when we pre- 
 vent rich resources from being held idle, for we then open 
 up to all the opportunity to produce. 
 
 But the question arises : How may we determine what 
 is a just rate of wages by this natural standard until this 
 Domain of Opportunity shall have been established ? 
 
 Manifestly, we may not define it in dollars and cents. 
 
 But by taking the Domain of Use as a working theory — 
 even as we use the "atomic theory of matter" and the 
 ''etheric theory" of light as a working basis in physical 
 science, and the perfect man in God's image as revealed in 
 scripture, as our model and basis of Christian science — we 
 may then begin to form true and definite conceptions. If we 
 conclude that production might by the most efficient use of 
 opportunities be multiplied by ten, then to be conservative 
 
THE PRODUCER'S RIGHTS 141 
 
 we may at least assume that wages ought to be at least five 
 times their present rate, and consumers' cost one-fifth what 
 it now is. 
 
 If the present wage among us is an average of $1.50 for 
 ten hours, we may Ihen safely assume $5.00 for six hours 
 to be no more than a fair wage. And when we compute the 
 marvelous productive increase offered by improved pro- 
 cesses applied in recent years, the correctness of such esti- 
 mates of a minimum wage is incontrovertible. 
 
 However, all reforms are best brought about gradually. 
 This ideal of Eminent Domain must be established by taking 
 a little here and a little there; by extending the scope of pub- 
 lic undertakings ; by fixing lower and lower rates for public 
 utilities privately owned; by establishing collective competi- 
 tion here and there; by breaking up the largest estates; by 
 reserving and recovering certain useful, natural deposits; 
 by extending the scope of free public service and enjoy- 
 ments, such as playgrounds, baths, highways, etc.; by ex- 
 tending the power to condemn property, now enjoyed only 
 by railroads and a few other such corporations, to more and 
 more lines — to factories, private schools, merchants and 
 farmers. This gradual widening of the productive field will 
 tend to automatically raise the wage rate gradually towards 
 the Natural Rate. 
 
 As has been pointed out, the opening up of new and free 
 fields has heretofore been of untold value to American work- 
 men. But this free field for the settler and prospector is 
 visibly narrowing. We are rapidly becoming a congested 
 community. Not that our natural resources are not ample 
 for many scores of times our present population, but that 
 the hand of greed grasps them and demands a constantly in- 
 creasing toll. Some measure of reform is being attempted 
 in the matter of withholding title to public coal lands. Re- 
 form of mining claim laws is greatly needed. We may con- 
 cede a very large reward to the prospector who discovers a 
 
142 RIGHT AND RICHES 
 
 new camp, but what is the sense in allowing those who hear 
 first of its discovery to rush in and stake free claims ? 
 
 PropriETorism and Labor Unions. 
 
 We have recently seen the evolution of an alternative 
 among us which gives great force to the demands of labor. 
 This is the labor union, imported from Britain. 
 
 In much "poetical" economic writing, labor is supposed 
 to employ capital and "land" in production. Such it may do 
 at the most primitive or initial step, but m civilization little 
 production occurs where the laborer is also proprietor. 
 
 Where so remote that land is valueless, the planter works 
 and gets the crop. But as soon as civilization approaches 
 he gets title to the land, and shares its crop whether he work 
 or not. Capital as seldom dictates the terms of production. 
 How few industries are not established on some vested in- 
 terest? In actual practice the great industries to-day are 
 controlled by "proprietorism." Manufacturers have learned 
 this much of economics. They now strive to control their 
 raw^ material, and as much as possible the means of handling 
 it. 
 
 Proprietors assume the sole right to dictate terms to 
 both producer and consumer. The "Boss of Production" 
 pays labor as low wages as it may be secured for, and sells 
 the output as high as possible. 
 
 Where does he get this right? 
 
 When street railways are consolidated, and the in- 
 creased income is stocked for millions, are wages raised? 
 
 When tariffs are raised to protect special interests, do 
 they raise wages as their profits advance? 
 
 It is not a popular doctrine that the share allotted by 
 competition as wages is not increased by prosperity — by 
 largely increased output — but the facts support it. 
 
 If a new process of making starch gives double the out- 
 put with the same labor and cost of equipment, either one of 
 
THE PRODUCER'S RIGHTS 143 
 
 two things will occur — starch will be cheapened in propor- 
 tion and the consumer get the benefit, or on the other hand, 
 the starch-makers combining the skill, etc., will merge and 
 issue double the stock, or the land where the starch-giving 
 plants are grown will bring more rent; usually the latter. 
 Workmen in starch works, or those who grow starch- 
 yielding plants, would receive no more on account of the in- 
 creased output, but as consumers they would benefit if the 
 price were lowered. What a terrible appreciation of land 
 has resulted from prosperity in the last three years ! Ad- 
 vances from 25 to 500 per cent, in farm lands, and equally 
 as much in city lots ; will agricultural labor easily get much 
 advance when crops must pay on such valuations? With 
 constant advances of rent, will factory workers and mer- 
 chants gain much from big output and sales ? 
 
 "Proprietorism" is commonly called ''Capitalism," but 
 this is a misleading term. Society and Labor have no quar- 
 rel with Capital. The Proprietor is an intermediary be- 
 tween the worker and owner of capital on the one hand, 
 and Concession on the other. Sometimes he owns some 
 real capital; sometimes he does productive work; some- 
 times he owns concessions, but usually he is the agent of 
 both Capital and Concession, and generally is oblivious of 
 any distinction between capital and concession. Proprietor- 
 ism is not a new institution. Abraham and Lot divided the 
 plain between them. Their ignorant herdmen were then 
 ready to fight for their masters, but unconscious of their own 
 rights, as some "hirelings" are to-day. 
 
 The rapid increase of mechanical and engineering skill 
 in recent years, by their increased pov/er of output, has mul- 
 tiplied the importance of control of deposits of native re- 
 sources. Real producers — workers — who control their sup- 
 plies, are rapidly becoming a thing of the past. Proprietor- 
 ism has taken the field. Without some means of enforcing 
 
144 RIGHT AND RICHES 
 
 their demands, laborers and capital savers would be en- 
 slaved. 
 
 However great the loss to himself and to society, the 
 capitalist can refuse to save, to renew capital, can consume 
 the old if the rate is too low, but laborers cannot indefinite- 
 ly cease working. Left to individual freedom of contract, 
 they will be enslaved. The labor union is a necessity to pre- 
 vent this enslavement of the laborer; for the acquisitiveness 
 of the individual laborer, as manifested in his capacity to 
 look out for his own interests in the matter of wages, tends 
 to decrease in inverse ratio to his productive efficiency. 
 
 Left to the false protection of individual selfishness, his 
 case is hopeless. The laborer can never be liberated by his 
 own avarice, but only by its very opposite, benevolence, 
 brotherly love. He must be saved by obedience to the com- 
 mand, "Let every one consider not his own but his brother's 
 good." 
 
 The measure in which Labor Unions represent this true 
 unity of man will also be the measure of their benefits to 
 workers. This conception does not imply the laborer's 
 hatred of his employer, but united resistance to wrong sys- 
 tems. 
 
 "To the capitalist corporation the wage contract is simply 
 a question of so many dollars to be paid," writes Sidney Webb 
 in the International Monthly. "To the workmen it is a matter 
 of placing, for 10 to 12 hours out of every 24, his whole life at 
 the disposal of his hirer. What hours he shall work, when and 
 where he shall get his food, the sanitary conditions of his em- 
 ployment, the safety of the machinery, the temperature and 
 atmosphere to which he is subjected, the fatigue or strains that 
 he endures, the risks of disease or accident that he incurs, all 
 these are involved in the workmen's contract, and not in his 
 employer's. These are matters of as vital importance to the 
 wage earner as are his wages. Yet about these matters he can- 
 not, in practice, bargain at all. Imagine a weaver, before ac- 
 cepting employment in a Massachusetts cotton mill, examining 
 the proportion of steam in the atmosphere of the shed, testing 
 the strength of the shuttle guards, and criticising the sound- 
 
THE PRODUCER'S RIGHTS 145 
 
 ness of the shafting belts. A Pittsburg mechanic prying into 
 the security of the hoists and cranes or the safety of the lathes 
 and steam hammers, among which he must move: a work girl 
 in a Chicago sweatshop computing the cubic space which will 
 be her share of the workroom, discussing the ventilators, 
 warmth and lighting of the place in which she will spend nearly 
 all her working life, or examining disapprovingly the sanitary 
 accommodation provided: think of the man who wants a job 
 in a New Jersey white lead works testing the poisonous influ- 
 ence of the particular process employed, and reckoning in 
 terms of dollars and cents the exact degree of injury to his 
 health which he is consenting to undergo. On all these mat- 
 ters, at any rate, v\^e must at once give up the notion of free- 
 dom of contract. In the absence of any restraint of law, the 
 conditions of sanitation, decency and security from accident in 
 the various enterprises of the United States Steel Corporation, 
 or the Standard Oil Company, the Western Union Telegraph 
 Company, or the Pennsylvania Railroad, are absolutely at the 
 mercy of the rulers of these great undertakings. They decide 
 these questions of life for the millions of workmen whom they 
 employ — and thus, to this extent, for the American Nation — as 
 arbitrarily (and it is to be hoped as humanely) as they do for 
 their horses." 
 
 "In the general course of human nature," remarked the 
 shrewd founders of the American Constitution, "power over a 
 man's subsistence amounts to a power over his will." 
 
 Fai^se: Notions o^ Capital. 
 
 It is a great fiction that rich Proprietors bring the cap- 
 ital to a community. They, of course, do to some extent, 
 but not in the degree popularly estimated. There is but an 
 infinitesimal part of Output applied as "Capital" in the or- 
 dinary acceptance of the term. Of course, the whole output 
 may be termed capital, or stock, during a more or less brief 
 period of its developrhent, but even so, almost the total value 
 of such stock consists of tribute for concession. A crop of 
 corn growing is capital, but its cost is largely rent until it 
 is almost ready for use. A house in course of construction 
 is capital, but the workmen may wait until it is completed 
 for their pay. 
 
146 RIGHT AND RICHES 
 
 In a city of 100,000 people the annual production of 
 wealth may be $1,000 each, or $100,000,000. An influx of 
 foreign capital of $10,000,000 in a year in that city would 
 be thought remarkable. An application of one-tenth of the 
 production, or $10,000,000 per annum for any number of 
 years, would be beyond precedent. So it is easy to see that 
 if capital and labor were free to use the resources of nature, 
 and supply the needs of society, no borrowing need ever be 
 done by one community from another. Mechanics of small 
 wages who buy lots on easy terms get good homes in a few 
 months without paying other interest than on the cost of 
 the lot. A $100,000,000 street railway is perhaps $85,000,- 
 000 franchise. Even the fifteen million real capital was not 
 an initial investment of more than perhaps a few hundred 
 thousand, which was supplemented perhaps by part of the 
 fares taken in. There is no lack of capital, but lack of op- 
 portunity to use it. If capital got all natural interest instead 
 of concession getting most of the natural increase, no lack 
 of capital would ever be felt. 
 
 As prosperity increases, the "capital stock" of industrial 
 corporations is doubled, trebled, quadrupled to be sold to 
 the masses for their savings. Does this mean more real de- 
 votion of capital to industry? No, but that those who own 
 the franchises, lands, or other monopoly power, of such in- 
 dustry, are trading its increase of value for this stock, and 
 then unloading this stock onto the public. Hence conces- 
 sion, by this means absorbs the wealth people are ready to 
 devote to productive capital, and squanders it in "riotous 
 living." 
 
 An example of productive power when the industrial 
 Proprietor controls his material, is exhibited by a great steel 
 company. This organization has secured unlimited supplies 
 of ore, fuel, and transportation facilities. They are even 
 now arranging to avoid the expenses incident to city activi- 
 ties — high rents, etc. — by building a plant on cheap rural 
 
THE PRODUCER'S RIGHTS 147 
 
 land. No wonder its output staggers comprehension. No 
 wonder if its profits are, as it is said, 75%. But the real 
 producer, the puddler, the roller, the miner, the recent buyer 
 of its securities, does not get this saving. They perhaps enjoy 
 some increase^ but only a fraction of what goes to the pro- 
 prietors. Yet there is much advantage to society, even that 
 the proprietor of industry should dominate the resources of 
 production, instead of capricious disinterested drones, for it 
 is the proprietor's interest to turn out the largest possible 
 output, and this at. least puts production on a surer footing. 
 There is less danger of shutdowns. 
 
 What if all natural resources were controlled, not by 
 selfish industrial proprietors, but by government, with use 
 guaranteed on equal terms to all who would produce? En- 
 forced idleness would cease. Every industry would expand 
 as has the steel industry. No one would need lack for any- 
 thing. But the multiplied plenty that would result would 
 not accrue to selfish corporate proprietors, to be expended 
 in the vicious living that has disgraced Pittsburg, but would 
 be divided betwen society and real producers — workers and 
 savers. Workers would get the Natural Reward due them 
 — such wages as were never before known. And Society, 
 with the revenue derived from its natural income, would 
 banish poverty, even from the widow and orphan, from the 
 helpless invalid, and the mentally incompetent. 
 
 Millions of acres now held idle would then be used. In- 
 telligent cultivation would succeed the haphazard work of 
 tenants at the caprice of selfish landlords. I do not believe 
 there is a county in any State where there is not abundance 
 of natural wealth either mineral or agricultural. It only 
 lacks development. What are the most prohibitive bars to 
 this development? Landowners and public carriers. We 
 are told that only private enterprise develops industry. Do 
 not the carrier systems favor the already developed industry ? 
 The other monopoly interests do also. The tremendous 
 
148 RIGHT AND RICHES 
 
 force of the banks and the daily press is on that side. This 
 further concentrates population about these interests in the 
 big cities. 
 
 The complaint of merchants is common that "they are 
 working for their landlord." Yet if they go where rent is 
 low there is no business. This is not endorsing the pes- 
 simistic complaint of those who believe the world is "going 
 to the dogs." It is not; it is coming "from the dogs," for it 
 ets better every day. Nor were opportunities ever so 
 
 many. 
 
 Motive: and Opportunity. 
 
 Ours is not a creed of despair ; it holds out to the indi- 
 vidual who has high aspirations the widest range of op- 
 portunities. As the vessel with powerful motor can ride 
 against adverse currents over the limitless ocean, so one 
 who is impelled by the noble motive to be of service to man- 
 kind, may ever find a field which greed, stupidity and fear 
 are powerless to circumscribe. Never was there greater de- 
 mand for the Roosevelt, Folk, or Hadley to lead in the fight 
 on corruption than to-day; never was such demand for 
 greater teachers, editors, preachers ; never was there such 
 urgent call for legislators of broad knowledge of economics 
 and statecraft ; never greater call for proficient chemist, en- 
 gineer, or for the wise structural and civic master builder. 
 This high and natural motive lifts one out of the mire of 
 greed. Truly "the harvest is great, but the laborers are few." 
 There is unprecedented call for men with right motives to 
 work for human freedom. Tuskegee Institute is a grand 
 monument to such endeavor. 
 
 He who thinks only of the pay envelope has poor chance 
 to succeed. The commission salesman who thinks little of 
 his commission until he has earned it is much the most likely 
 to make the sale. The merchant who tries most perfectly to 
 serve his customers on fair margins of profit is surest to suc- 
 ceed. In short, he who strives, no matter in what line of 
 
THE PRODUCER'S RIGHTS 149 
 
 work he undertakes, to do it better than others, has ah'eady 
 a broad field for his efforts. He must work persistently, 
 hopefully, until such time ^s his merit is recognized, but his 
 ultimate success is sure. 
 
 The bane of the age is the "get something for nothing" 
 class. The press gives much space to bonanza fortune 
 strikes, and Young America becomes intoxicated with 
 dreams of similar luck, and forgets the true and sure motive 
 of business. 
 
 Success or failure must obtain in one's thought before it 
 can be manifested in tangible effects. 
 
 It is the listless class with no aspiration or goal in life 
 who demand our sympathy. This vast army of poor, help- 
 less goalless humanity is the prey of the merciless system of 
 greed. The way to pursue any course is to have a goal 
 ahead. From this vast multitude, born amidst dismal sur- 
 roundings, with a childhood spent without play and a youth 
 without hope, it is as if by a miracle that one becomes pos- 
 sessed of aspirations ; yet — 
 
 In every face a lamp is framed 
 
 Like searchlight to project its ray; 
 By love alone is it inflamed, 
 
 And 'lumes the heaven ascending way. 
 Ah, you whose lamps have plentier flow 
 
 Let brightest beams tired hearts inspire; 
 Though eyes begrimed reflect faint glow, 
 
 Love will relight the holy fire. 
 
 Success is contagious. Those great leaders of accomp- 
 lishment through noble efforts have an inspiring effect on 
 humanity. 
 
 "But when He saw the multitudes, He was moved with 
 compassion on them, because they fainted and were scat- 
 tered abroad as sheep having no shepherd * * * and 
 He began to teach them many things." He was the guide, 
 the way-shower. 
 
150 RIGHT AND RICHES 
 
 Let us not alone break down the barriers that keep these 
 milHons in the ''jungle," but let us through the embellish- 
 ments and refinements of modern progress and Christianity, 
 incite them to come out into the ranks of higher citizenship ; 
 if need be, let us drive them out of both city slum and rural 
 obscurity into the fraternal ranks of useful activity by re- 
 placing such slum with Civic beauty and by banishing ob- 
 scurity with means of intercourse and interest. Much prog- 
 ress in this direction has been made, and is being made. 
 
 "Think not that former days were better than these, for 
 in so doing thou dost greatly err." 
 
 But with the advance of science there should be much 
 more rapid improvement of the condition of the masses. 
 The burden of taxation should be taken from output and 
 placed on concession. Tax the vacant lot as m.uch, or more, 
 than the improved. Nor stop with this; allow the coal 
 miner, the oil driller, the home builder, the agriculturist to 
 condemn land or its deposits, just as a railroad company 
 may do, taking full account of all real equities. 
 
 A few acres of iron in one body was recently sold for 
 150 million dollars. 
 
 Why has our government given away this vast wealth? 
 
 Principally because it has largely been appropriated by 
 the owners before its v/orth was recognized by the public. 
 Shrewd men have gone ahead of population and grabbed 
 great tracts of land. Some of them are now being prose- 
 cuted. Close corporations began to grab street railway fran- 
 chises while electricity was little understood, and when it 
 became recognized, continued to get them by bribery. 
 
 The greatest obstacle in the way of reform is the ten- 
 dency of people to defer to precedent. That is the fatal 
 weakness of lawyers as legislators. They worship prece- 
 dent as the Chinese worship their dead ancestors. The fol- 
 lowing forceful presentation of this matter is from the St. 
 Louis Censor: 
 
THE PRODUCER'S RIGHTS 151 
 
 "Among other things that are being probed by an ever- 
 increasing number of people, is the great and vital question as 
 to whom this planet, called the earth, rightly and justly be- 
 longs. It constitutes a question, that in my humble opinion will 
 have to be answered in the next fifty years, and will assert 
 itself with ever-growing insistence. 
 
 "The statement is believable that ninety people out of a 
 hundred, on first hearing the right of private ownership in land 
 questioned, are mildly shocked, and look upon such a bold ques- 
 tion as a dangerous approach to the verge of anarchy; for it is 
 a fact that some errors take on by reason of age a sort of 
 sacerdotal character. It may be possible, however, that if any 
 of the ninety per cent who, first hearing private ownership in 
 land questioned, are thoughtfully disposed, and follow the sub- 
 ject up, ninety-nine per cent of them will come to one conclu- 
 sion, namely: That private ownership in land is one of the most 
 monstrous injustices that ever afflicted the earth! That un- 
 counted millions have suffered, and that many millions still suf- 
 fer this great injustice handed down from an intensely savage 
 and brutally selfish era, is all due to the inertia of the human 
 mind and its indisposition to think." 
 
 "Each person born into the world finds the iniquitous sys- 
 tem in full working order, and everybody apparently convinced 
 that it is all right; and such a person accepts that whole propo- 
 sition without a protest or murmur. It is one of the titanic 
 errors that is accepted because it bears the label of tradition. 
 If we had to deal with it at first hand, as did our savage an- 
 cestors who had nothing to guide them but selfishness, we 
 would unanimously pronounce the system monstrously cruel 
 and unjust." 
 
 Not less monstrous, but less excusable, is a private sys- 
 tem of currency. 
 
 The basis of prevailing wage rates is that of all value 
 —Demand and Hindrance. Employers' need of more help 
 does not raise wages unless Labor can ofifer a hindrance or 
 demand for a certain amount. This hindrance is not auto- 
 matically fixed by workers, but must be arbitrarily fixed 
 outside of the natural working of free contract, aside from 
 "supply and demand." 
 
 10- 
 
152 RIGHT AND RICHES 
 
 The labor union says to its members : ''When we all re- 
 fuse at once, another will not take your place." What 
 grander impulse ever caused action than unionism, that is, 
 if it be true unionism., whose uniting cement is love. Talk 
 of the patriotism of the soldier ! It is nothing to that of him 
 who packs his tools to guarantee his fellows a fair price 
 for their work. All honor to them. Unionism has said we 
 must have more wages, then shorter hours, then more wages, 
 then better conditions. Not "will you please?" but "you 
 must." 
 
 Working upon the following scientific platform, the 
 American Federation of Labor should accomplish much : 
 
 First. Free schools and compulsory education. 
 
 Second. Unrelenting protest against the issuance and 
 abuse of injunction process in labor disputes. 
 
 Third. A workday of not more than eight hours in the 
 24 hour day. 
 
 Fourth. A strict recognition of not over eight hours per 
 day on all Federal, State or municipal work, and at not less 
 than the prevailing rate per diem wage of the class of employ- 
 ment in the vicinity where the work is performed. 
 
 Fifth. Release from employment one day in seven. 
 
 Sixth. The abolition of the contract system on public work. 
 
 Seventh. The municipal ownership of public utilities. 
 
 Eighth. The abolition of the sweatshop system. 
 
 Ninth. Sanitary inspection of workshop, factory and home. 
 
 Tenth. Liability of employers for injury to body or loss of 
 life. 
 
 Eleventh. The nationalization of telegraph and telephone. 
 
 Twelfth. The passage of anti-child labor laws in States 
 where they do not exist, and rigid defense of them where they 
 have been enacted into law. 
 
 Thirteenth. Woman suffrage co-equal with man suffrage. 
 
 Fourteenth. Suitable and plentiful play grounds for chil- 
 dren in all cities. 
 
 Fifteenth. Continued public agitation for public bath 
 houses in all cities. 
 
 Sixteenth. Qualifications in all permits to build in all cities 
 and towns that there shall be bathrooms and bathroom attach- 
 ments in all houses and compartments used for habitation. 
 
THE PRODUCER'S RIGHTS 153 
 
 Seventeenth. A system of finance whereby money shall be 
 issued exclusively by the government, with such regulations and 
 restrictions as will protect it from manipulation by the banking 
 interest for their own private gain. 
 
 But having a platform does not assure success. Love is 
 the only true bond by which men may be united. There is, 
 unfortunately, too much of greed and hate, too much disre- 
 gard of consumer and society in the practices of labor 
 unions. Labor unions can never succeed, until they extend 
 the scope of their purpose to both sexes and all races, and 
 to consumer as well as producer. 
 
 Captains of industry — managers of Concession's inter- 
 est — may not lightly refuse the demands of organized labor. 
 Most works on economics assume labor to be helpless, with 
 no alternative but unconditional acceptance of concession's 
 terms, or retreat to the wilderness. 
 
 But the army of unionism does not so readily capitulate. 
 It has wise leaders (as well as many unworthy ones, just as 
 have government and all forms of social organization) who 
 see that subsistence is provided for their campaign; who 
 devise means of strategy and plans of siege to force their 
 issues. But do not forget, Unionist, that you must be paid 
 from the output. You must see to it that that continues to 
 increase, if you wish to continue to advance. If you limit 
 apprentices, you "kill the goose that lays the golden egg" 
 Encourage invention! Invention helps you by increasing 
 the fund from which wages come. 
 
 But there is a weak point in the plans of unionism — a 
 danger constantly to be reckoned with. This is the "army 
 of the idle," which may ever be hired by aggregated pro- 
 prietorism, as were the Hessians to fight our independence. 
 If employment may be provided for this army the liberty of 
 labor is won forever. Edward Markham says : 
 
 "It is the first duty of a government to see to it that all of 
 her people have the opportunity to live by labor. She must 
 keep open the gates of opportunity, so that every man and 
 
154 RIGHT AND RICHES 
 
 every woman may have the material resources for living a com- 
 plete life. A government that fails in this, fails in the vital 
 thing. 
 
 "Progress and poverty have been yoke-mates from the most 
 ancient times. There is an aver-grow^ing army of enforced 
 idlers going onward in the shadow of civilization. 
 
 "This is the pathetic fact of the modern world. Think of 
 the able-bodied man knocking in vain at the door of life, beg- 
 ging simply for the chance to live by the work of his hands. 
 There are always tens of thousands of these hapless men. This 
 is proved by the fact that an army of strike-breakers is always 
 standing ready to swarm in, to take the place of strikers. Out 
 in Colorado, a certain city furnished work for a drove of work- 
 less men, and the shovels were piled upon the ground. The 
 men were there promptly on the hour, and so eager were they 
 for work that they fell to fighting for the shovels, breaking 
 bones and shedding blood, so wildly fearful were the men that 
 the shovels would not go round." 
 
 "It should not be forgotten also that idle men are a con- 
 stant menace to the public safety. Not only do the vagrant 
 class drift down from this army of idle workers, but thieves 
 and anarchists are recruited from these ranks. A man must do 
 one of three things— work, beg or steal. If the labor market 
 denies a man labor and the law forbids beggary, he sometimes 
 forgets that the law also forbids stealing. Sometimes, too, in 
 a government where a man cannot find work, he finds it easy 
 to lose faith in government and go over to the anarchists who 
 insanely hope to sweep away all of the laws of order." 
 
 What causes this idle army? It is created and main- 
 tained by selfishness, culminating in Concession's Preclu- 
 sion. It is evident that this army is not an "army of lazi- 
 ness," else they would not be ever ready to take strikers' 
 places. They are prevented from v^ork by their lack of pur- 
 pose and their submission to the repressions exercised by 
 those who dominate the sources of supply. The reason of 
 their idleness is given in the pitiful reply of the vineyard 
 laborers of scripture, "Because no man hath hired us." It 
 is sad, that to become producers, so many must depend on 
 being hired; but it is a natural result of that domination of 
 
THE PRODUCER'S RIGHTS 155 
 
 the field of production which enables owners to give an 
 arbitrary "penny" to workers, and of the prevalence of the 
 disposition to do nothing useful without pay. 
 
 But if we may recover to society the natural opportun- 
 ities now held idle by concession, so that when proprietors 
 refuse the just demands of producers, they may have access 
 to such opportunities, to start productive enterprises on their 
 own account, and if, on the other hand, the masses may gain 
 an impulse to effort based on the living truth that it "is 
 more blessed to give than to receive," then the "army of the 
 idle" will cease to exist. Then the laborer may become a 
 free agent in contracting his services, instead of being help- 
 less, as now. Then if Proprietorism does refuse to hire, it 
 may not also, as it now seems to do, entirely exclude pro- 
 ducers from the field of production. Then may labor assert 
 itself and secure its natural wages. 
 
 What would be the relations which should exist between 
 Capital and Labor, if they, the two real productive factors, 
 should get the whole product, except what is due Society 
 as its Natural Rent? Under this natural system of output 
 and diffusion, there may be found the following Natural 
 Relations : 
 
 First. There would ensue a continuously increasing 
 output in proportion to the labor and capital employed. 
 
 Second. This output, though larger in volume, would 
 have a much less total value as measured in human endur- 
 ance because the hours of labor would be shortened. Its 
 money value would depend on the volume of money. 
 
 Third. Output with the progress of industry naturally 
 .tends to increase in a -greater ratio than the increase of cap- 
 ital employed. 
 
 Fourth. Natural wages tend to increase in proportion 
 to the increase of output. 
 
 Fifth. While interest naturally increases only in pro- 
 portion to Capital Employed. 
 
156 RIGHT AND RICHES 
 
 Sixth. Hence, wages naturally tend to increase more 
 rapidly than interest and so to get a larger percentage of 
 output in comparison with interest. 
 
 Seventh. For while interest naturally tends to increase 
 in proportion to the increase of capital, the rate of interest, 
 being a percentage and not a quantity, does not tend to in- 
 crease. 
 
 Eighth. Rather, the rate of interest tends to decrease 
 from the earlier stages of industry, until a rather ripe stage 
 of development is reached. 
 
 Ninth. But the percentage of output taken by accessage 
 tends to increase as the tides of prosperity rise, until it de- 
 prives both Labor and Capital of their Reward, and thus it 
 stifles industry. 
 
 Tenth. This is accelerated by the tendency of currency 
 under our present system, to increase in volume and de- 
 crease in value with the rise of prosperity. 
 
CHAPTER VI. 
 Society's Rights. 
 
 "Am I my hrother's keeper?" 
 
 "Ye eat the fat, * * * * * dut ye feed not the flock. 
 The diseased have ye not strengthened, neither have ye 
 healed that which was sick, neither have ye l)Ound up 
 that which was hroken, neither have ye brought again 
 that which was driven away, neither have ye sought 
 that which was lost; but with force and cruelty have 
 ye ruled them." 
 
 IVILIZATION is the right relation of citizens. Its 
 highest ideal is the obedience to that command. 
 "Thou shalt love thy neighbor as thyself." No 
 high degree of civilization is possible without a 
 general response to the religion embraced in this command. 
 Civilization is the only remedy for the evils of density, or 
 sparseness of population. When men are crowded together 
 they need the results of the exercise of brotherliness as well 
 as when but a few are alone in the remote wilderness. There 
 need be no effort to either directly increase or limit popula- 
 tion. Henry George well points out the natural instinct 
 which reduces births as the causes of mortality are checked. 
 Race suicide as regards numbers is not an impending calam- 
 ity ; there is no danger of a lack of material men. Increase 
 of normal, spiritual manhood is the vital work before us. 
 
 Unless mankind is nearing the divine ideal — the image 
 and likeness of the Maker — their increase in numbers is of 
 no more benefit than the increase of rabbits. It has not 
 been the numerous races, but the races with high ideals, 
 who have advanced man's social welfare. The physical ag- 
 gregation of great numbers of micn on limited areas does not 
 by any means tend to their welfare. One writer has ad- 
 
 157 
 
158 RIGHT AND RICHES 
 
 vanced the theory that contact engenders "Social Love," as 
 he terms it. Perhaps the right kind of contact does, but 
 surely not physical contact. If crowding had promoted civ- 
 ilization, the world had long ago been civilized. Surely the 
 most crowded com.munities are not most, but least, civil- 
 ized. The contact that elevates is spiritual contact, the con- 
 tact of Love; and this love is not some blind animal force. 
 True love is the ministering to our brother's need ; such love 
 elevates both giver and recipient. Those who would learn 
 more of this vital Social Love should read the writings of 
 Paul and James and John. This true Love is being recog- 
 nized to-day as never before as the greatest economic and 
 Social force. Its efforts are being more beautifully and ef- 
 fectually organized, and applied in fraternal, municipal and 
 State undertakings. 
 
 Civic improvement is no mere idle sentiment. It is the 
 essential of progress and advancement. Beautiful parks, 
 boulevards, streets, schools, libraries, recreation grounds for 
 old and young, not only express the demands of a higher 
 thought, but promote it. Civic improvement is as old as 
 cities themselves, but civic improvement in the modern sense 
 is a succession of steps toward a preconceived ideal in which 
 individual acts of improvement are related to one another, 
 and are bent toward the execution of a logical and unified 
 scheme. Civic improvement is becoming a profession in 
 which eminent intellects are engaging, and it is very profit- 
 able from the standpoint of material prosperity. Working 
 people do more and better work when living in the midst of 
 beautiful and wholesome surroundings. It pays factories 
 to have flowers over the walls of their buildings. A city 
 which sets out for a high ideal of beauty, as Kansas City 
 among others has done, attracts and develops a higher class 
 of citizens than another city which neglects them. How 
 does Concession repress and impede these enterprises? By 
 despoiling society of her natural revenue, naturai rent. 
 
SOCIETY^S RIGHTS 159 
 
 St. Louis has long contended with a Terminal Monopoly 
 which exacts a toll from her commerce for crossing the river. 
 This monopoly owns all the bridges, but it is now proposed 
 to build a bridge with city ownership which shall be free. 
 The principal bridge, designed by Captain Eads and known 
 as the Eads bridge, is a continuation of Washington Avenue. 
 But near this bridge on Washington Avenue, within a length 
 less than 2,000 feet,, the land fronting on this one street 
 exacts a revenue from commerce far in excess of the total 
 taken by the bridge combine, with which press and platform 
 have resounded. Think of it! This little space of land, 
 exclusive of buildings, which no man helped produce, takes 
 a tribute far in excess of the magnificent steel arch bridge, 
 more than a mile in length, another railroad bridge, many 
 engines, buildings, etc., a tunnel many blocks in length, and 
 many miles of tracks; even though this terminal property 
 pays upon a capitalization several times the value of all this 
 visible property. 
 
 Yet nothing is said of this landlord's tribute. 
 
 While the rent of this tract is so great it is but a speck 
 on the City's surface, nor is it the highest in rental value. 
 Yet with all this immense value which the real estate of 
 the city yields to its owners — value belonging mainly to so- 
 ciety— (for most of its rent is Natural Rent or Use-pre- 
 mium) her charitable houses are crowded almost like the 
 prisoners were in the "Black Hole of Calcutta." Her 
 schools are crowded for want of buildings, her streets poor- 
 ly payed, her central parks crowded and tramped until the 
 trees refused to grow, What if they get a free bridge ; will 
 commerce be the freer? Perhaps, but will there not be a 
 tendency to advance rents and absorb the saving? For con- 
 cession, like interest, tends to average itself. 
 
 The merchants of one city are compelled to compete with 
 those of another, and if other rates are high, they cannot 
 
160 RIGHT AND RICHES 
 
 also pay as high rents. What is true of St. Louis is true in 
 greater or less degrees of all cities. 
 
 Many can see no difference between an investment in 
 Wealth and one in Concession. The rights of the buyer of 
 land or stock in a franchised corporation, may be just to the 
 extent of the price he has paid, so far as he is individually 
 concerned; it is the same justice that property in slaves 
 possessed. It would be wrong to deprive such investors of 
 their property, but no one has a just perpetual right to any 
 kind of property. The value of all property should return 
 to the common fund at the end of certain periods. Wealth 
 does so return, because the old is consumed and the re- 
 plenishing must come through the channels of output. But 
 Concession needs no replenishing; it grows in value with- 
 out care. 
 
 In speaking of the Astor estate. Barton J. Hendrick 
 says : 
 
 "Astor had invested about $2,000,000 in New York real 
 estate. At his death its value was $20,000,000. When William 
 B. Astor died, in 1876, it had increased to $100,000,000. By 
 1890 competent authorities estimated it at more than $250,000,- 
 000. The total Astor holdings now distributed among several 
 branches of the family, amount to at least $450,000,000. Here 
 evidently, we have a most notable instance of the unearned 
 increment. When John Jacob Astor died, the New York Her- 
 ald, in an editorial article, gravely suggested that his property 
 be divided in two parts, one-half to go to his heirs, the other 
 to the City of New York. For it was not Astor's energy or 
 genius, said the "Herald," which had made him so rich; it was 
 the city's commerce, its fashion, its men of enlightenment and 
 progress, which had converted his goat farms and swamps into 
 the richest rent-bearing soil. The owner of great railroads or 
 steel corporations must constantly nurse his fortune, must join 
 in the competition for improved methods and the indispensable 
 men. Under these conditions a great fortune is a great burden, 
 maintained only by constant vigilance. The whole Astor fam- 
 ily, however, could sleep for a hundred years, and at the end 
 find that their riches had grown a hundredfold. All the eco- 
 
SOCIETY'S RIGHTS 161 
 
 nomic and social forces which have made New York the Ameri- 
 can metropolis, have entirely, without their instigation, also 
 made their wealth." 
 
 A striking example of this deprivation of humanity by 
 the Concession interest is exhibited in Los Angeles. Per- 
 haps history does not give another instance of such growth 
 in population for a period of ten years as Los Angeles had 
 from 1896 to 1906, and with this growth such an exploita- 
 tion by the real estate interest. Millions of lots were platted 
 from land which recently cost the exploiters a nominal 
 price per acre, and through the unprecedented influx of peo- 
 ple, was concessionized up into the total of hundreds of mil- 
 lions, and sold to those who sought to enjoy the glories 
 which Nature has there provided. Yet with all this accre- 
 tion of unearned riches, the stewards of The Public's in- 
 terest sat by and failed to claim the thousandth part of so- 
 ciety's share. To-day the city finds itself almost a municipal 
 pauper, without public buildings, without parks, and sewers, 
 its streets rivers of mud when it rains; its jail a foul center 
 of pestilence from inadequate space and sanitary accommo- 
 dations; and the overcrowding largely occasioned by law- 
 lessness caused by the desperate results on her business in- 
 terests of this reckless exploitation. 
 
 Los Angeles will recover from this condition and set her 
 house in order, but the cost will be paid by owners who have 
 paid hard dollars for their land, instead of from the un- 
 earned increment. 
 
 Every city in our land has had the same experience in a 
 degree, but every city has not had the natural requisites to 
 create an Earthly Paradise. Nor have these exploiters as a 
 rule had much permanent gain. Many of them are now pen- 
 niless. 
 
 The time has come for society to claim her own, and 
 with this plenteous fund make cities fit for human habita- 
 tion. Jefferson said : "The art of government is merely the 
 
162 RIGHT AND RICHES 
 
 art of being honest." But it is impossible to be truly honest 
 without the adoption of scientific principles as a basis of 
 action. 
 
 As one cannot rightly administer the affairs of another 
 without a definite knowledge of the affairs which are his; 
 no more can he the affairs of a city or State, without a 
 scientific knowledge of what constitutes its rightful estate. 
 And science teaches that this estate of Society includes the 
 whole of Natural Rent. Yet this plethoric fund is but part 
 of her rightful revenues, for she is the sole, rightful and 
 indisputable heir of all the wealth of past ages. Society has 
 no need to beg for revenue, to impose on her useful and pro- 
 ductive children for burdensome rates of revenue, nor to 
 skimp and economize in the furnishing and provisioning of 
 her house. She is rich beyond the wildest dreams of ro- 
 mance. Will not you, dear reader, be one of her attorneys 
 to insist on her claims to this great estate ? 
 
 Be:uk:? and Practice. 
 
 Is the ownership of and receipt of the revenues from 
 concession inconsistent with belief in the foregoing prin- 
 ciples ? 
 
 Tom T. Johnson was reproached with getting a fortune 
 from protected industries while preaching against the iniqui- 
 ties of the system; yet his position was consistent, for he 
 used such income to help support the reform. It is likewise 
 consistent to believe in the injustice of our land and fran- 
 chise laws, and yet take revenues from holdings under such 
 laws, if we use such revenues unselfishly. 
 
 Why should all of such revenues be resigned to the 
 wholly selfish? Further, while such concession exists, it is 
 a burden and a tax on all our legitimate efforts, and it is in 
 a measure our duty to recoup ourselves by securing some 
 share of accessage, just as we might protest against the des- 
 
SOCIETY'S RIGHTS 163 
 
 truction of forests or game, and yet justify ourselves in par- 
 taking of such forests or game while there are no laws to 
 prevent their wasteful use. 
 
 We are entitled to some share of the increase given by 
 land and social resources — everyone is ; and we may rightly 
 secure to ourselves a share even before we are able to guar- 
 antee it to everyone. 
 
PART FIVE. 
 
 Reclamation. 
 
 Chapter I. Patj^rnai^ism. 
 
 " 11. TiTL^ Limitation. 
 
 III. Units, Monopoi.iks, Pubuc Owne^rship. 
 
 " IV. TiTLt and Tim^. 
 
 " V. Taxation and Compi:nsation. 
 
 " VI. QUANTITIV^ T1TI.E: Re:STRICTI0N. 
 
CHAPTER I. 
 
 Paternalism. 
 
 HE noble-minded Ruskin perceived the unfairness 
 of die prevailing commercial system. But Con- 
 cession in his time was not so nearly developed, 
 not so nearly ripe for elimination, as to-day. He 
 recognized brotherhood as the natural relation of man to 
 man, a relation the opposite of the devouring greed of ram- 
 pant commercialism. He pointed out the failure of the 
 Erench attempt at fraternalism, because it lacked * 'paternal- 
 ism" (as he terms it), a condition precedent to fraternalism. 
 What is paternalism? We hear much sarcastic com- 
 ment on ''paternalism" these days, when reforms are pro- 
 posed. The term as commonly used in such connection, im- 
 plies a sort of fatherly pampering or partiality on the part 
 of government to a certain element or class of citizens. 
 
 When labor asks for laws which it deems necessary for 
 its protection, the cry goes up : "Paternalism ! Paternal- 
 ism !" When laws are demanded to protect childhood from 
 the modern Moloch, the devouring factory, there is a loud 
 cry of paternalism! When public lands, minerals or other 
 wealth would be reserved for public good, there is the same 
 cry. 
 
 Now Ruskin had a perfect conception of an ideal pater- 
 nalism, however crude in its details his political economy. 
 His idea of paternalism, was such a government control and 
 management of "the great estate our Father has devised to 
 us all," that it should not only prosper to the greatest pos- 
 sible extent, but that the results of its plenteous output 
 should be shared by all, due regard being taken for the 
 merits of each brother or sister. 
 
 -11 167 
 
168 RIGHT AND RICHES 
 
 A healthy social structure is not built up by using in- 
 dividual men as the bricks thereof — resting an appalling 
 burden upon those below, that those above may attain to em- 
 inence; but rather, as St. Paul has so beautifully portrayed 
 it, society is a vital, living organism, and individual men are 
 its members as illustrated by the members of our bodies, 
 each contributing to the nourishment, well-being, harmony 
 and beauty of the whole body, and each dependent on the 
 whole. 
 
 "And whether one member suflfer all suffer." But under 
 a system based on individual greed, some men are merely 
 parasites on the rest. 
 
 Down with an elevated class which is a burden on those 
 beneath ! 
 
 The powerful owner of great riches is commonly and 
 justly censured for his greed when he looks to the procure- 
 ment of legislation promoting his advantage. But, my 
 dear brothers and sisters who toil for a meagre wage, ex- 
 amine your owa hearts. Are you less selfish? How much 
 thought do you give to your fellow toiler's condition? Ex- 
 amine your own desires, and see if you do not covet property 
 for the power which it gives to dominate others. Judgment 
 must be given against you that the primal and continuing 
 cause of your enslavement is your own avarice rather than 
 the greed of the big magnates. Your greed to get wealth 
 solely for selfish consumption. And this is the evidence 
 which condemns you : That while you hold the voting 
 power wholly in your own hands, yet through your greedy 
 indifference, you neglect to inform yourselves of the prin- 
 ciples of government, or of the legislation which your en- 
 slavers procure ; you even neglect to vote. 
 
 If you would be free, you must get free along with your 
 fellows. Then in the name of Heaven, READ ! THINK ! 
 ORGANIZE! 
 
PATERNALISM 169 
 
 Organize not alone labor unions, but clubs, societies, as- 
 sociations, to protect, educate and elevate mankind. If your 
 union organization or government is infested with grafters, 
 rout them out ! Attend the primaries ! Vote ! Govern the 
 land for Humanity! 
 
 One object of this volume is to advocate some systems 
 of legislative reform for the reclamation of our birthright 
 in this wonderful estate, bequeathed us by our Creator, the 
 fruit of which is being taken by concession. I am not going 
 to advocate a system of paternalism, which is expressed in 
 the mother bird who is afraid to push her brood from the 
 nest ; for no one wishes the government to maintain a help- 
 less class of grown-up infants on a figurative nursing bottle. 
 Rather I wish to advocate the abolition of all laws which 
 support "pets.'' 
 
 Let us, then, rather demand the ideal, true paternalism 
 of Ruskin ; and what is needful to introduce it, but the 
 abolition of -favoritism ? 
 
 Certainly "one may not lift himself by his boot-straps," 
 nor are the means of subsistence and luxury created by law. 
 But legislation, which repeals such laws as permit the few 
 to impede and destroy, to despoil and deprive the many, will 
 introduce true paternalism — will provide bountiful supplies 
 for all. 
 
 I would simply recommend that no laws be passed grant- 
 ing franchises for the operation of certain, simple services. 
 I would recommend the repeal of laws which extend title 
 beyond the life of him to whom it is granted as a reward of 
 his service; of those laws which despoil and discourage in- 
 dustry by taxation of capital, and by imposition of licenses, 
 tariffs, and other unjust burdens ; of laws which give a dom- 
 ination of great expanses of natural opportunity without re- 
 gard to use; of laws which uphold estates grown in extent 
 beyond the enjoyment of their owners. I would repeal all 
 such falsely paternalistic laws, and let humanity come natur- 
 
170 RIGHT AND RICHES 
 
 ally into its rightful heritage, unhampered by favoritism. 
 These are not new or untried theories. Yet it need not be 
 expected that legislation alone, however wise, will perfect 
 mankind. The discussion of progressive legislative reforms 
 does, however, help to elucidate sociological principles and 
 their enactment into statutes tends to develop an improv- 
 ing civic thought by making ideas fixed and tangible. 
 
CHAPTER II. 
 
 T1T1.E: Limitation. 
 
 jAVING noted the present methods by which con- 
 sumers, producers and society are robbed of their 
 rightful enjoyment of output, what means can be 
 suggested to restore these losses? 
 
 That title to all property primarily inheres in Society is 
 our basic postulate. Therefore, only society can confer 
 title. 
 
 Title does not emanate from labor, any more than from 
 capital or concession. Society now decrees title to reward 
 labor and capital, and confirms into title the claims made by 
 concession. Those who "howl paternalism" the loudest are 
 they whose wealth is founded on the favoritism of govern- 
 ment. 
 
 But when we seek for the basic equitable principles of 
 title and the laws which should naturally govern title, we 
 find that the agent of society — government — has no just 
 right to give perpetual, or absolute, title for any cause. That 
 the most that may be naturally and equitably done is to give 
 an "easement" or a preferred temporary right to use prop- 
 erty, to him by whom it is merited. 
 
 This awfully sacred thing called "title," or property 
 rights, is the real incubus on civilization. 
 
 Parents may have several children and a home with a 
 number of rooms. They may assign one room to Johp. and 
 another to Helen and another to Kate. Other brothers and 
 sisters being too young need no separate rooms. But how 
 foolish when John or Helen go out into the world to be gone 
 for several years, or forever, to hold their rooms unused, a 
 prey to moth and mildew, while the younger children, now 
 
 171 
 
172 RIGHT AND RICHES 
 
 grown up, are suffering for their use. Why any more should 
 society, our common mother, apportion the use of her estate 
 for all eternity to certain individuals and their descendants? 
 
 Title's exclusiveness needs reforming as much as its dur- 
 ation. At the very best we can only concede a temporary, 
 partial private possession and control of things for any con- 
 sideration. The rights of Society must at all times be para- 
 mount. This principle is rapidly being recognized. For- 
 merly the owner of land had the right to inflict capital pun- 
 ishment thereon. What he may do or allow on it is con- 
 tinually being restricted. 
 
 Why should title give to the land owners of a district 
 the authority to say whether saloons should be licensed 
 therein; or franchises granted; or nuisances maintained? 
 Many States are taking away these prerogatives of realty 
 owners. Many cities are prescribing rigid rules as to what 
 one may build on his own lot, as to its sanitary conditions, 
 its liability to burn, its nearness to the curb line, etc. In 
 Kansas City one is liable to arrest for hitching his horse to 
 a tree in front of his own lot. 
 
 But the greatest care should be taken in these restrictions 
 not to impose rules burdensome to the whole people. 
 
 These simple and beneficial limitations are only a be- 
 ginning, but they denote some perception of the true char- 
 acter of title, and as there grows a broader apprehension 
 of it, they may be so extended as to recover to society much 
 of its natural rights in property. Controllers of public serv- 
 ice corporations reluctantly admit society's rights to control 
 what is "one's own ;" but Society has a right to enforce her 
 Domain of Greatest Use. 
 
 Title should only extend to the individual along such 
 lines and under such restrictions as will guarantee the great- 
 est common good. 
 
 But precedent dies hard in our courts. Many court de- 
 cisions are based on the farce comedies of history. Title 
 
TITLE LIMITATION 173 
 
 may justly emanate only from the people, and at the end of 
 a season, like the leaves from the trees, must return to its 
 source. 
 
 Every private interest should be subordinate to the pub- 
 lic good. This does not imply the communistic doctrine 
 which seeks the elimination of private property, but rather 
 aims to make private property more universal and abund- 
 ant. All have an inalienable right to live, but this does not 
 mean that rations should be issued to the individual as in 
 time of calamity or siege. The true principles of fairness 
 rather encourage each family to own its home, to accumulate 
 capital, to be diligent in business. 
 
 That the only right to subsistence is that bought by 
 labor, is one of the most pernicious of doctrines. All have 
 a right to partake of the glorious bounties which God has 
 given. Each one has this right before he is able to work. 
 But all who are able to work owe it to Society to do so, 
 and acquiring property by any lucky cause, cannot cancel 
 that obligation. 
 
 The principle of ''eminent domain" should be extended 
 to individuals, as well as municipalities and corporations. 
 Anyone should have the authority to condemn property for 
 any useful purpose. Naturally, statutes giving such power 
 should also impose such restrictions as would insure justice. 
 One should not have power to condemn another's home, 
 simply to use it for his home. It should always depend upon 
 a superior use being made of the property condemned. This 
 remedy offers a most effective weapon against trusts. But 
 it is especially effective against the engrossment of large 
 tracts of land. 
 
 Why should not a gardener or a fruit grower have a 
 superior right in land to one who makes little or no use of 
 it? Why has any one a right to hold idle tracts of land 
 anywhere in the way of progress and improvement? Nor 
 would I limit such condemnation to the purchase of such 
 
174 RIGHT AND RICHES 
 
 lands, but I would give the right to condemn their tempor- 
 ary use, upon payment of the rent adjudged to be fair. 
 Had the Irish this power, they could not be evicted as they 
 have been to make room for pastures and game preserves. 
 The most effective course along these lines is that pursued 
 in Australia and New Zealand where the State has con- 
 demned and subdivided the large tracts. 
 
 Many industries, as they expand, are obstructed by the 
 owners of the land they require, though it may be almost 
 worthless for all other purposes. Access to waterfronts, to 
 railroads, harbors, roads, is often controlled by the title to a 
 small strip of land. In some States the water supplies 
 needed to produce crops upon arid lands, or even to supply 
 cities, are most shamefully allowed to be appropriated and 
 wasted. 
 
CHAPTER III. 
 
 Units, Monopoue:s, Pubi^ic OwN:eRSHip. 
 
 ECOGNIZING the universal,, primal title of society, 
 many great lovers of humanity have advocated the 
 common holding of all wealth by the community — 
 communism. One of the most complete exposi- 
 tions of a plan to carry this idea out is Edward Bellamy's 
 "Looking Backward." But there are radical limitations to 
 the practical success of both "common" production and 
 "common" use. 
 
 Much property is only susceptible of use individually. 
 Clothing, furniture, houses for home use and innumerable 
 personal belongings are valueless if not devoted to the spe- 
 cial use of one person or one famxily. We may adapt our 
 personal property to our special requirements. Then again 
 many things which may be used by many in common give 
 much greater satisfaction if allotted to the use of one person. 
 A livery horse is not so satisfactory as one kept and trained 
 to the usage of one person. A hotel is not like a home. 
 Books may be used at a public library with much satisfac- 
 tion, but not so much as to entirely make a private library 
 needless. 
 
 Then again, many arts are much more satisfactorily pur- 
 sued privately. This applies to a large degree in agriculture. 
 The cultivation of a large tract with hired labor is seldom 
 nearly so successful as when subdivided into many small 
 tracts, each worked by its owner in person. Targe depart- 
 ment stores fail to give the satisfaction to shoppers that 
 small tradesmen are able to give. They are now very suc- 
 cessful in many places, and are able to make many econ- 
 omies, and sometimes lower prices, but it is very likely that 
 
 175 
 
176 RIGHT AND RICHES 
 
 they will be replaced soon by small tradesmen under some 
 co-operative renting arrangement. 
 
 The individual by working under his own direction is 
 able to give a character to his work. He is encouraged to 
 see and take advantage of processes and methods, impossible 
 where subject to the control of a distant authority. 
 
 But there is a limit to the advantages of this personal 
 interest. Many working together are enabled : First, to di- 
 vide the various processes of the undertaking so that each 
 may do some part for which he or she has more special apti- 
 tude. In a factory, one may successfully buy stock, another 
 manage machinery, another sell output, another keep the 
 accounts. Secondly, by combining together, they may pro- 
 cure equipment, impossible for single individuals, either to 
 buy or to use, separately. 
 
 The ability to have the required capital to furnish equip- 
 ment and get adequate stock to work upon may be provided 
 by joint stock companies or corporations. Each individual 
 puts in his portions or shares of so many dollars for which 
 he is supposed to share proportionately in the net profits. 
 
 But corporations do not pretend to divide profits with 
 any but stockholders. Those who operate their plants are 
 hired at the lowest market price, often at scant living wages, 
 while the company makes large profits. Attempts have been 
 made to correct this defect by forming co-operative societies, 
 or corporations in which none but workers hold stock or 
 share profits. There are many radical difiiculties in putting 
 this into practice, one of which is the impossibility of agree- 
 ing on a basis of division in proportion to what workers 
 contribute to output. Some have attempted to give a stipu- 
 lated salary to each operative and then divide profits in pro- 
 portion to salaries. This may be somewhat more attractive 
 than simply paying higher wages, but operatives usually 
 seem to have little appreciation for it, regarding the profits 
 divided as charity. Some co-operative societies have, how- 
 
UNITS, MONOPOLIES, PUBLIC OWNERSHIP 177 
 
 ever, been measurably successful. That is, they have grov^n 
 to do quite an extensive business. But even they have not 
 included consumers in their sharing. In many cases they 
 have failed through cumbersome methods which have an- 
 noyed patrons and have failed to regard the necessities of 
 commerce. 
 
 In both corporations and co-operatives private initiative 
 tends to decrease as the business extends. The only private 
 initiative which is likely to be very effective in a great in- 
 dustry is the controlling stockholder. The Public, may with 
 .good reason expect to hire managers as progressive for 
 publicly operated enterprises under reasonable conditions. 
 Competition should not be confused with Exci^i^aTion. 
 Competition as defined by Webster has two phases of 
 meaning; the first, striving between two or more for the 
 same thing of value; the second conveys the sense of un- 
 selfish desire; to excel, or outdo in quantity or quality of 
 excellence, but Bxcelation better expresses this latter mean- 
 ing. 
 
 The theory of competition is that each concern, animated 
 by a desire to get as large a share of trade as possible, or all 
 of it, will cut down prices and try to undersell the other. 
 This implies that each must strive to cut down the cost of 
 the product by cutting down wages, and quality of output, 
 too, if it may be done without discovery. This selfish com- 
 petition, like all war, when carried to its logical conclusion, 
 means the annihilation of all but one of the contending par- 
 ties; in other words, that the survivor shall be a trust or 
 monopoly. This is a consummation worthy of the primary 
 impulse of competition. 
 
 Selfish competition, like everything else founded on 
 avarice, is a failure. Greed is not a healthy, normal, in- 
 spiration. Its natural results are deception, injury, waste 
 and destruction. 
 
178 RIGHT AND RICHES 
 
 Among the accompaniments of competition are wasteful 
 advertising and dishonest methods of getting business. 
 Grafting, rebating, and various methods of commercial slug- 
 ging of rivals ; cutting of wages, working of children, sweat- 
 shop production. 
 
 In order to defend this destructive system, instances are 
 cited of the good results of laudable efforts to excel. But 
 that is not competition. The effort to excel is indeed the 
 life of trade. It is a stimulant to industrial progress that 
 should be encouraged. But selfish competition not only 
 does not encourage "excelation" but is most destructive 
 of it. Everything that tends to promote the highest excel- 
 lence in products should be supported. 
 
 But have we not seen abundant evidence of the worthless 
 trash resultant from strenuously selfish competition? "Ex- 
 celation" means the setting up of standards and their con- 
 stant elevation toward the highest conceptions of excellence. 
 But it does not in any sense mean the reduction to the low- 
 est levels of price, even at the cost of honor, honesty, and 
 the destruction of the best standards of civilization and hu- 
 manity. It does not mean getting trade irrespective of hon- 
 est wages, honest goods, or honest methods, 
 
 "Excelation" holds up to child and adult the illustrious 
 achievements of heroes in all lines of science, invention, art 
 and progress. The evils of Trusts are not overestimated, 
 but the remedy is not selfish competition ; for Trusts are but 
 the culmination of competitive greed, not alone the greed of 
 the few who organize them, but the greed of the whole com- 
 munity. 
 
 If the present heads of trusts were all banished and the 
 corporations dissolved, think you that they would not im- 
 mediately spring up again from the conditions which first 
 produced them? 
 
 The very assumption that reasonable prices for good 
 service, or good goods, can be maintained by greed, is too 
 
UNITS, MONOPOLIES, PUBLIC OWNERSHIP 179 
 
 absurd on its face for consideration. But the evil of trusts 
 is not that they put an end to selfish competition. Indeed, 
 this is the only commendable thing that may be said of them. 
 This result is like that of the termination of petty tribal 
 wars by the triumph of some more powerful chief ; which at 
 least brings about a cessation of destructive strife, though it 
 does not institute justice. Greed formerly had a more per- 
 sonal expression in individual "boorishness." It is now com- 
 ing to a head, is more nearly ripe for expulsion. It is mani- 
 fested more in organized form, but it is not less an expres- 
 sion of individual covetousness, widespread among the peo- 
 ple. Our President has wisely said that greed is the great- 
 est danger which confronts our Nation. Covetousness is as 
 radical a sin as murder and must be so recognized. 
 
 In order to compete, the apple growers in some dis- 
 tricts put a few good ones on the top of the barrel. In 
 order to excel, the apple growers of Hood River, Oregon, 
 pack the barrel straight through with precisely the same 
 kind, with the result that Hood River apples bring almost 
 double on the New York market. It is the effort to excel 
 that has made the products of different cities famous — the 
 china of one, the cutlery of another, the butter, lace, linens, 
 etc., of others. 
 
 The excellence guaranteed by certain brands of hats, 
 shoes, collars, etc., make people demand them. To get trade 
 thus is praiseworthy, but the attempt to compete against 
 honest goods by offering shams and shoddy goods at low 
 prices, is degrading. The right of the consumer to procure 
 his needs from the best and most available supply is incon- 
 testable. No infamous tariff law framed in the interests of 
 unjust holders of natural raw materials — holders of forests, 
 mines, or soil — whether purporting "to protect labor" or "to 
 raise revenue," can be justified by reason or experience. Yet 
 does not the selfishness of the majority support the tariff? 
 
180 RIGHT AND RICHES 
 
 God made trade free. Every instinct of true manhood 
 is for removing the barriers to trade, whether they be ob- 
 structions in waterways, unjust carrier charges or any of 
 the despoihng forms of taxation of trade or industry, such 
 as tariffs, Hcenses, taxation of the results of industry, or the 
 repression by trusts or holders of idle or half-used lands. 
 Only greed of the most destructive and vicious type desires 
 to curtail output and use of things desirable. But trusts 
 would not be wholly prevented by removal of the tariff. 
 Many are international in scope. 
 
 There is but one remedy for trusts. This is to give peo- 
 ple access to such a supply of each product as would best 
 satisfy the demand. If monopoly has made it impossible 
 for private interests to do this and exist, then government 
 should take the field and offer such supply. But govern- 
 ment will not unselfishly provide such supply until the people 
 it represents are less selfish. Happily, people are advancing 
 along this line. 
 
 Ruskin had a beautiful conception of this problem, even 
 though trusts were hardly known in his day. He com- 
 plained of inability, by reason of dishonest trade methods, 
 to procure honest wares in certain lines — among others, art 
 materials — and suggested that the government produce such 
 things of fine quality and offer them for sale at a liberal per- 
 centage of profit, stamped with the quality. Private con- 
 cerns could not then hope to sell other than a good quality 
 of such things. 
 
 No more reasonable, simple or sure solution can be imag- 
 ined for the trust evil. In this manner cities could easily 
 defend themselves from such abuses as an ice or milk monop- 
 oly. This remedy would not only restore the right price, 
 but the right quality of such things. 
 
 Unitization is not always, however, an evil per se. 
 Rather it is often the only rational method of supply; for 
 good service in many lines depends on the uniting of service. 
 
UNITS, MONOPOLIES, PUBLIC OWNERSHIP 181 
 
 Telegraphs, telephones, railways, postal service is radically 
 reduced in efficiency by division. 
 
 Of what use is a sleeping car if it does not carry us at 
 least all night ? Or a telegraph if it does not reach all wish- 
 ing to communicate? If there are two telephones, we must 
 pay for both or be in communication with subscribers of but 
 one system. It has been lately officially recognized that rail- 
 roads may not be successfully operated without at least 
 making a unit of their freight service. As production be- 
 comes more natural, as the brotherhood of man is more rec- 
 ognized, the means of supply tend the more to become units. 
 Brotherhood means unity. 
 
 Means of communication, transportation and travel are 
 most essentially units. Every citizen of a city has increasing 
 need of telephone connection with every other citizen of the 
 same city. 
 
 The excellent article on "Trusts" in Cyclopedia Ameri- 
 cana points out this natural evolution of units as operated by 
 trusts, and the further fact, that this "unitizing," being the 
 result of natural and deep-seated laws, cannot be suppressed 
 by stupid superficial laws. 
 
 Every American has with the progress of time greater 
 need of railroad, mail, telegraph and public highway com- 
 munication, not only with every other American, but with 
 the whole world. Automobiles have given a great impetus 
 to this desire for intercommunication. 
 
 As the necessity of these imit services grows, so the 
 value of the franchises controlling them grows. This value 
 should naturally accrue equally to every citizen. But during 
 the life of a franchise it accrues solely to its owners. 
 
 Consider the enormous value of telegraph, telephone and 
 railway franchises. These should be recovered to the pub- 
 lic. At greatly reduced rates they would give enough net 
 revenue to pay all expenses of government, while paying the 
 
182 RIGHT AND RICHES 
 
 same wages as now, if it were desirable to raise all revenues 
 so. 
 
 There is no moral restriction against the public supply 
 of the people's needs, even though it do make worthless, 
 franchises and concessions of vast value, based on excessive 
 charges. Would it be wicked for you or me to privately put 
 on the market a supply so cheap as to break up such es- 
 tablished interests ? Then why is it wrong for the public to 
 institute such service? 
 
 Why should a certain fictitious value be recognized as a 
 basis for the rates of a monopoly service corporation simply 
 because there are a few innocent stockholders, without re- 
 gard to the million innocent patrons? Rates for transpor- 
 tation, communication, electricity, etc., should be gradually 
 reduced to what will pay liberal interest on the value of the 
 tangible physical property at present cost of its duplication. 
 The German Minister of Ways recognized the justice of this 
 principle and likewise how to apply it. For when private 
 ownership of railroads became detrimental to progress and 
 he began to negotiate for their public purchase, he was 
 asked fictitious prices, he at once began preparations for 
 their paralleling. This brought the "varmint" out into the 
 daylight. Their purchase was then made without further 
 difficulty, but, fortunately for Germany, they are not ham- 
 pered by a Supreme Court as we are. 
 
 When this new and just principle is established, it will 
 be notice to the purchasers of such stock not to expect div- 
 idends from the spoliation of the people. 
 
 Many reformers are too careful to state their respect for 
 the prerogative of established interests and for property 
 based on concession; that such property is as just as any, 
 and should pay no more taxes, etc. This is like the ante- 
 helium talk about slave-property. Will such persons state 
 whether the standard of such property shall be based on 
 market value after or before a panic? 
 
UNITS, MONOPOLIES, PUBLIC OWNERSHIP 183 
 
 Mayor Carter H. Harrison, of Chicago, made an ad- 
 dress to the Yale law school on "Some Phases of the Mu- 
 nicipal Problem," in which he laid down seven principles so 
 axiomatic that they might be termed the seven civic com- 
 mandments. They are: 
 
 "1. Public property is worth to the people dollar for 
 dollar what private property of the same character is worth 
 to its owner. 
 
 2. The municipality is greater than any corporation to 
 which it grants rights. 
 
 3. The demands of the individual, whether it be a 
 single man or the artificial entity known as a corporation, 
 must be subordinated to the requirements of the mass of 
 the citizens. 
 
 4. Public service should be directed toward providing 
 the greatest good to the greatest number. 
 
 5. The commandment *Thou shalt not steal' should not 
 be applied merely to the property of individuals. 
 
 6. The boodling of a franchise through a city council 
 is no less dishonest than the burglary of a neighbor's house. 
 
 7. The corrupter of an official stands no higher in the 
 sight of God, nor should he stand higher in the eyes of man, 
 than the official who betrays the public confidence by the ac- 
 ceptance of a bribe." 
 
 The revenue which service plants derive is not the only 
 loss to the public. A greater loss is the lack of good serv- 
 ice. Contrast the grade of service given in a $1.00 telegram 
 and a 3c letter, collected and delivered by men who pass ex- 
 amination for ability. Telegrams are delivered by boys who 
 can scarcely read or write the simplest words, coming to us 
 so dirty, misspelled, mispunctuated that their meaning is 
 often obscured. 
 
 The petty charges of telegraph and express concerns for 
 delivery on prepaid service is often enough for the service. 
 
 12— 
 
184 RIGHT AND RICHES 
 
 It is needless to point out the defects of service to the 
 strap-hanging passengers of car lines; to the overcharged 
 patrons of duplicate telephone systems, or users of the in- 
 termittent gas supply of private companies, who never know 
 whether they may have their meal wholly cooked, to say 
 nothing of the bills. 
 
 That the benefits from the blessings which God has so 
 plentifully provided — the rich stores of nature and of prog- 
 ress — may be best diffused among all mankind, it is impera- 
 tive that many kinds of property be restored to the common 
 ownership of society; that it be controlled and operated en- 
 tirely independent of private interest. This is Public Owner- 
 ship, but it remains to some extent a question of expediency 
 what should be so undertaken. 
 
 We hear that without private enterprise we would have 
 no gas, electricity, etc. Public Ownership does not con- 
 template the discouragement of private enterprise, but fran- 
 chising of corporations does. Did the railroads adopt safety 
 inventions until compelled to do so by law? Do they yet 
 lend special accommodation to the small coal miner, or oil 
 producer, or cement manufacturer? Why can an old, rich 
 concern in New England compete in California with a su- 
 perior natural supply thousands of miles nearer? Simply 
 because young enterprise has no show for transportation 
 over private ways in competition with vested interests. 
 
 Has experience proved Public Operation a success? 
 There are some apparently great failures ; but these are often 
 farces. The absurdity of expecting old, rotten barges on the 
 Erie Canal to compete with and compel a reasonable rate on 
 railroads, when these barges require several men and several 
 mules two or three weeks to go from Buffalo to New York 
 with less than two carloads, is evident. Nor will much 
 more be accomplished when the State of New York spends 
 enough on the canal to gridiron the State with railroads. 
 
UNITS, MONOPOLIES, PUBLIC OWNERSHIP 185 
 
 Four modern railroad tracks will do more hauling than ten 
 inland canals. Canals are a relic of primitive times, unless 
 they allow the passage of ships between two great water- 
 ways, as the Panama Canal purposes to do. Various States 
 have owned pieces of railroad which were failures. They 
 were not units. But there are many great successes. The 
 test of success with a public enterprise is not that it make 
 money or lower the tax rate; its main object is better and 
 cheaper service. 
 
 Toronto is well satisfied with its experiments in public 
 ownership. Its waterworks yield a profit, though the charge 
 has been reduced to $2.40 a year for an eight-room house 
 and $4.20 for a 10-room house. The street railways, munici- 
 pally owned, but leased to a company, paid 5 per cent, on 
 the stock and, in addition, turned $235,447 into the city 
 treasury in a year. Gas in Toronto is 80 cents a thousand, 
 and the city has decided to build its own plant unless the 
 price is reduced. 
 
 One direction in which the substitution of public for 
 private monopoly is most certain to be a success is by elim- 
 inating graft. Most of the official graft now originates 
 from bribery by franchised corporations seeking extensions 
 of privilege, or protecting those held. 
 
 What greater success could be expected than the Postal 
 Service? Though there is often an apparent deficit, we 
 must remember that the mail is used for much free public 
 service, which would cost millions if the postoffice were 
 private. Tons of public documents, seed, etc., are carried 
 freely. 
 
 What better example of success could be had than the 
 public schools? How would education have flourished 
 without this great boon ? It needs further extension in free 
 books and free noonday lunch to all pupils, not as charity, 
 but as the most economical means of supplying these needs. 
 
186 RIGHT AND RICHES 
 
 After two years' investigation of practical results both 
 in Europe and America, the Committee of the National Civic 
 Federation have just made a report as follows: 
 
 "That the four leading public utilities, gas, water, electric light 
 and power, and street railways, the only ones they investigated, 
 cannot be suitably regulated by competition. 'Legalized and 
 regulated monopoly,' whether under public or private owner- 
 ship, is necessary. Of the sort of industry suitable for public 
 ownership, they say in the first place, 'Undertakings in which 
 the sanitary motive enters largely should be operated by the 
 public,' since it is dangerous to allow any one to make a profit 
 out of a public utility which affects the health of the citizens, 
 and the public operation of these utilities must not consider 
 merely the profit to be made. The Commission believes that 
 franchises should be granted for only a limited time, with the 
 provision that the public may buy them out at a fair valuation. 
 The Commission believes in the widest publicity of the accounts 
 of public service corporations, and that they should issue new 
 capital only with the permission of public authority. In order 
 to isolate municipal undertakings from politics the Commission 
 recommends that the municipality employ an executive man- 
 ager, and that the finances of the undertaking be separated 
 from those of the rest of the city. The municipally owned 
 business should be as distinct from the rest of the city gov- 
 ernment as is the privately owned." 
 
 It is argued against public ownership that it incurs debt. 
 What is a debt? Something that absorbs production. Do 
 not franchised corporations absorb? A debt may be event- 
 ually paid or its rate reduced. Franchises continue to ab- 
 sorb if they are not themselves publicly absorbed. They are 
 bonded for several times the cost of improvements and the 
 patrons must pay the interest. 
 
 But is there not danger in "Government paternalism?" 
 Is not this going into business contrary to the traditions of 
 government? Surely it is, but government was traditionally 
 and historically instituted to allow the privileged class to 
 prey upon the rest of mankind. Happily its purpose is be- 
 ing somewhat changed. Senator Beveridge said, in appeal- 
 
UNITS, MONOPOLIES, PUBLIC OWNERSHIP 187 
 
 ing for protection from the blighting effects of childhood 
 labor, ''The Constitution was made for the people, not the 
 people for the Constitution." It is not so certain that it 
 wm, but it is unquestionable that it should be made for 
 them. There was nothing ever done by man that may not 
 be improved in the light of experience. 
 
 We should extend our advantages and comforts in ev- 
 ery possible way. Our cities should supply transportation, 
 telephones, gas, electricity. The time is not far distant when 
 they will supply heat, compressed air for cleaning, refriger- 
 ation and other uses ; when they will cut lawns, plant trees, 
 remove all rubbish, wash all streets, conduct funerals, own 
 cemeteries and do innumerable things scientifically and ef- 
 fectively. 
 
 Why should not all the people in common do everything 
 for all the people which they can do collectively more effect- 
 ively or cheaply? 
 
 There should be no attempt to make a profit on such 
 service as is to the common interest to have done thoroughly. 
 
 Whatever is demanded in something like equal propor- 
 tion by all, which may not lead to waste or extravagance 
 at public expense, may perhaps be free. For instance, clear- 
 ing of garbage, ashes, sprinkling of streets, etc. ; providing 
 play grounds, boating lakes, rest stations, drinking foun- 
 tains and music rooms. But broader opportunities are good 
 hard roads, reforesting of hills, reclamation of swamps, and 
 the general beautification of city and country. The eft'ort of 
 philanthropists as well as municipalities to provide cheap 
 and good flats in congested districts is a mistake. It will be 
 much more easy and effective to relieve the congestion. 
 What creates congestion? 
 
 Manifestly it is the employment given near such old 
 shacks as are rented cheaply. The remedy is to move the 
 employment to the suburbs and condemn the shacks as a 
 place for parks. The money some generous rich men are 
 
188 RIGHT AND RICHES 
 
 spending to provide model tenements, if spent to induce 
 industries to move out of congested centers, would relieve 
 thousands where the model tenements but slightly relieve 
 few. 
 
 High buildings tend to congestion. Building restrictions 
 if honest are of great benefit. No two houses after the same 
 plan should be allowed in the same block. 
 
 Robert Hunter ihinks that capitalism (proprietorism) 
 will soon go the way of "other class systems." "Lawson," 
 he says "sees its frenzied finance; Hughes sees its robbery 
 of the widow and orphans ; Hearst sees its political treach- 
 ery; Steffens sees its political perfidy; Miss Tarbell its soul 
 of dishonor and hypocrisy; Robert De Forest its murderous 
 tenements ; Felix Adler its slavery of the children ; Roose- 
 velt its poisonous food products." Mr. Hunter sees all these 
 things at once, and the sight has driven him to join those 
 who demand "the social ownership of the instruments of 
 production." 
 
 Public ownership is an effective means of giving to labor 
 good wages and to the user good cheap service. 
 
 It is not the tendency of publicly owned utilities to raise 
 rates or cut wages w^ith the advent of prosperity. Advan- 
 tages of science, and general progress inure through this 
 channel directly to the benefit of all. 
 
 Privately owned concerns charge "what the traffic will 
 bear." When invention reduces cost it does not imply a re- 
 duced cost to patrons of private service. What a large per- 
 centage of the benefit produced by such noble branches of 
 government as the geological survey, harbor and river im- 
 provement, reclamation service, etc., are absorbed by great 
 private monopolies who dominate the approaches thereto! 
 
 The extensive building of highways, now so generally 
 agitated, could be made a grand blessing to humanity. If 
 15y proper legislation the principal roads, those connecting 
 the greater cities, were made into boulevards, it would be 
 
UNITS. MONOPOLIES, PUBLIC OWNERSHIP 189 
 
 the crowning achievement in relieving congestion. But to 
 do this, the land, not alone for a broad street, but from two 
 to five hundred feet adjoining, should be acquired by the 
 State, and platted into home sites. Then with a publicly 
 owned car line, with driveways, cement walks and lawns on 
 either side, the grandest residence places on earth would be 
 afforded, and could be sold at fair prices to repay the cost. 
 
 Public ownership and operation is pre-eminently scien- 
 tific and certain of success with all forms oi service- 
 industries which are units, and whose output is not diversi- 
 fied and intricate. If intelligently administered, it restores 
 to society its natural rent, to consumers their natural prices,'. 
 to laborers their natural wages. Its rapid extension is only 
 limited by our blindness to our mutual interests which toler- 
 ate the crude and barbarous forms of government yet pre- 
 vailing in most of our States and municipalities, where 
 quantity of legislators takes the place of quality and intel- 
 ligence. Is it any wonder that a herd of barkeepers and 
 ignoramuses should fail to administer anything success- 
 fully? 
 
 The most radical evolution tending to such an improve- 
 ment of government as will hasten publicly-furnished utili- 
 ties as well as the achievement of other needed reforms is 
 the simplified form of government termed the "Commission 
 plan of Government." This plan, born of calamity, and the 
 courage of less than a score of citizens of real public spirit 
 in Galveston, is being inaugurated in various cities. Its suc- 
 cess is the result of its common-sense simplicity. A board 
 of a small number, preferably three to seven, is appointed by 
 the Governor or elected at large in the city, to manage the 
 city's affairs as would the directors of a corporation. They 
 are adequately paid by the city for their work, instead of 
 being paid by bribe-givers. What could be more absurd 
 than to elect members of a city's government from wards. 
 The interests of the various sections of a city need no dis- 
 
190 RIGHT AND RICHES 
 
 tinctive representation, and to select legislators so gives the 
 meanest citizen with a local ''pull" a sure seat. But why is 
 it more intelligent to elect State Legislators so, or to have 
 such a great unwieldy herd of them? 
 
 This new, simple form of government recognizes the 
 natural unity of the community to be governed. It was the 
 perception of vital principles which caused the framers of 
 our Federal Constitution to preserve the integrity of the 
 States. Each State has certain conditions, certain moral 
 and social problems which demand peculiar treatment. Our 
 nation is stronger by maintaining the integrity of States. 
 Centralization of power in the Federal authority is extreme- 
 ly dangerous. Each State is a family and should have a 
 separate house to suit itself. But wards, townships, legis- 
 lative and congressional districts have no individuality. 
 
 A city is a unit and not a federation of wards, and to 
 cut it up into parts for representation is to nullify the ex- 
 pression of the public will, by a complicated division of re- 
 sponsibility. As well might a railroad select a director from 
 each county through which it passes. 
 
 Public ownership is sound in theory and works well in 
 practice, but with all its possibilities, no one reform will rec- 
 tify the dense errors which centuries of darkness have estab- 
 lished. The utilities which at this time appear to be ripe for 
 public ownership, effect but a minority of the people. Addi- 
 tional measures of reform are needed, the most fundamental 
 of which is an aroused public conscience. Corruption and 
 graft have grown fat on the unprecedented rise of franchise 
 values, but dishonest or ignorant legislators can damage the 
 community even more by depriving it of the use of public 
 conveniences through refusing franchises and neglecting 
 other means to provide them, than by granting franchises 
 without proper restrictions. To prevent effective utilities 
 by lack of legislation is burying the public's talent. Mod- 
 ern conveniences benefit the public, however unjust it may 
 
UNITS, MONOPOLIES, PUBLIC OWNERSHIP 191 
 
 be to enrich corporations through franchises for them. Un- 
 til pubHc ownership and operation is possible, franchises 
 should be quickly granted under such terms as will best con- 
 serve the public's interest. 
 
 Los Angeles proposes to adopt intelligent measures with 
 regard to the sand in her river bed, to which she holds fee 
 simple title through an ancient Spanish grant. A daily 
 paper says : 
 
 "The scheme of Contractor Doran to hoist sand out of the 
 river bed and deliver it to the sand haulers at a stated price per 
 load, after being turned down by the city council, will be rec- 
 ommended by the mayor as a good one for the city to adopt. 
 
 "The mayor has sent a communication to the council rec- 
 ommending that the city purchase hoisting machinery, exclude 
 teamsters from the river bed and charge them ten cents per load 
 for gravel delivered on the banks. 
 
 "About 1200 loads of gravel are hauled out of the river bed 
 every day. The cost of the machinery, he says, would be only 
 several hundred dollars. The city would make $100 or more 
 per day out of the enterprise, prevent the undermining of bridge 
 piers and dispense with the numerous conflicts among quarrel- 
 ing teamsters in the river bed. Greatest stress is laid on the 
 financial feature, as the city needs the money." 
 
 In the construction of the great Roosevelt Dam, which 
 will form an artificial lake covering 25.5 square miles of 
 ground, a large quantity of cement was required. The best 
 price quoted to the Government for cement delivered was 
 nine dollars a barrel. When it was announced that the Gov- 
 ernment would construct a local plant of its own to manu- 
 facture the cement needed, at the request of manufacturers 
 further bids were asked for. The best price then offered 
 was $4.98. The Government plant was constructed, and for 
 over two years has been producing cement at a cost of about 
 two dollars per barrel. The toal cost of the plant was 
 $218,380.57. It has already paid for itself and will save on 
 this job about a million dollars. The same plan has been 
 adopted at the Panama Canal. 
 
192 RIGHT AND RICHES 
 
 The City of St. Louis is arranging to supply itself with 
 lime by kilns in its Workhouse. St. Louis not only uses 
 large quantities of lime in public works, but in purifying 
 her water supply by a system perfected through the efforts 
 of Mr. John A. Wixford, one of the moderate salaried em- 
 ployes in the Water Department, a process eminently su- 
 perior to any method of filtering both in its results and 
 cost. 
 
 Until social conditions advance far enough beyond their 
 present status, it will be impossible for the people to under- 
 take the collective performance of all functions which now 
 require franchises or other private control of natural or 
 social opportunities. It is then only a question of what so- 
 ciety is now ready to undertake to do collectively. This 
 depends on the degree of civic progress in each community. 
 As men come to have more benevolence they will begin to 
 lose that inverted conception of wealth which rests on hin- 
 dering others' use of it, upon the power given by it to com- 
 mand others, and they will gain the true idea of its real 
 value, which is efficiency to contribute happiness. 
 
CHAPTER IV. 
 
 TitIvE: and Time. 
 
 HAT is the purpose of giving private title to prop- 
 erty? That it may be more effectively used. 
 Naturally, then, no title should run for a longer 
 period than a lifetime; for why should we extend 
 title to the dead? The Chinese and some Indians bury his 
 property with the owner. Is it more reasonable to allow its 
 disposal by him after his death? 
 
 All ownership should be limited to the lifetime of the 
 grantee. This is not an untried theory. Patents are granted 
 for only a limited term by every government. So are copy- 
 rights. In many countries they are based on the life time of 
 the author; in some they extend to the time his youngest 
 child attains a certain age. In most States franchises for 
 public utilities and corporate charters are only granted for 
 a limited term of years. After a great struggle, Illinois has 
 finally secured a law limiting franchises to a shorter term of 
 years than previously given. 
 
 Why should the title to land be perpetual? 
 
 We grant that he who goes into the wilderness as the 
 pioneer deserves credit. But no one can do a service to com- 
 pensate all future generations for the loss of their birth- 
 right. Has any certain generation the sole right to the 
 earth? Has not each child born an equal claim to enjoy 
 the bounties of nature ? 
 
 What if William Penn had formed a close corporation 
 for his heirs, and held to Pennsylvania, and continued until 
 now to collect rent upon all land in the State? 
 
 But why not as well one hold title as for a considerable 
 number of men to do so? The Anthracite Coal Trust col- 
 
 193 
 
194 RIGHT AND RICHES 
 
 lects millions upon millions on a small fraction of the State. 
 Shall this be perpetual ? 
 
 While the same principle holds good with Wealth-prop- 
 erty — that its title should not extend beyond the lifetime of 
 its producer, yet nature enforces the law as to such prop- 
 erty. Only an infinitesimal portion of it endures even for 
 the fourth of a lifetime. How much wealth is there to-day 
 more than ten years old ? Many houses, some roads, scarce- 
 ly any railroads — they must nearly all have had new ties 
 and rails — no grain, very little furniture or fabrics. In 
 forty years almost all such things become memories. 
 
 Hence, in limiting the term of ownership we need but 
 look to Concessions and Credits. Here alone we have per- 
 manence. Lands which were granted hundreds of years 
 ago, are to-day held by descendants, and in many cases 
 growing more and more valuable. 
 
 There was litigation in St. Louis to establish ownership 
 on account of the alleged possession of the property by an 
 ancestor more than two centuries previous. Had evidence 
 been sufficient, the claim should have been recognized by 
 our courts. Is this not worse than burying property with 
 the dead? 
 
 The remedy is very simple. The same remedy was pro- 
 posed for freeing the negroes, that all born after the plan 
 went into effect should be free. So let us recognize that 
 each child is born with an inalienable right to the freedom 
 of his pro rata of land and opportunity. 
 
 The termination of title to homes and farms, when they 
 are of such small size as to be personal in their nature, need 
 not disturb the occupants but simply come about by a con- 
 cession tax on the rental value. This could be put into effect 
 by gradual increase in the ground tax to somewhere near 
 the rental value of the land, excluding improvements. Im- 
 provements of a permanent nature, such as drainage, etc., 
 might also be considered to merge into the land value after 
 
TITLE AND TIME 195 
 
 an average lifetime. Railroad grades, tunnels, canals, etc., 
 become fixtures. 
 
 Bernard Shaw, in comparing copyright protection with 
 land title, brings out the absurdity of the former. He says : 
 
 "Property in land was instituted in order to secure to the 
 tiller of the soil the reward of his labor. 
 
 "Property on the land has the effect of entirely preventing 
 the tiller of the soil's getting anything out of it. He gives all 
 the rest to absolute idlers. 
 
 "We go on in the old way and we do not revise it. 
 
 "It is perfectly evident to me that if we, by some means 
 or other, could be thrown into a state of chaos, and if to-mor- 
 row we could sit down and work out new institutions, we would 
 not dare to institute property in land at the present time. It 
 would be the act of madmen. 
 
 "Property in books, however, is a matter of recent insti- 
 tution, and we find this property strictly limited. You don't 
 say to a man who has written a particular book: 'This book 
 shall be yours and your heirs' forever.' What you say, very 
 sensibly is, 'We will allow you to have the privilege for forty- 
 two years, or, if you live longer, for seven years after your 
 death, or rather, whichever period shall be the longest.' 
 
 " 'It is quite useful for Socialists who are engaged in 
 propaganda to remind people that in this very important de- 
 partment of production, the production of works of art, they 
 have actually applied the strictly Socialistic method of settling 
 property, that instead of giving a man an unlimited period, 
 they give him title for a limited period, and then throw the 
 book into the common stock.' 
 
 " 'At the end of that period all these extraordinary works 
 of a man will be thrown into the common stock and another 
 person may print his books.' " 
 
 The G:eNi:RATioN's Rights. 
 
 I know that inheritance is a sacred institution. It ex- 
 isted away back in the days of Abraham. Those in power 
 have fostered the idea. Until recently, they fixed the laws 
 all over the world so that their children should inherit the 
 
196 RIGHT AND RICHES 
 
 government. Printing presses and public schools are break- 
 ing in on that prerogative. 
 
 But property, the greatest force to compel or govern 
 people, is still universally considered a right for people to 
 inherit. It is plausible. My boys or girls are the dearest on 
 earth. Why should they not have what is mine when I am 
 gone? Ah, but how about others' dear sons and daugh- 
 ters? They have a birthright, too, whether their ancestors 
 were money makers or not. And how do you know that 
 what you have now may be kept for your children when you 
 are gone? Were it not better to leave less, and to leave a 
 better system of society and government for them to live 
 under? One that would guarantee them a useful education 
 and a broad opportunity? To love those near to us is well, 
 but 'Mo not even publicans the same?" 
 
 Are all men born free and equal ? What does this mean ? 
 Not that they are equal in stature, or intellect, or talents, but 
 equal in rights. Our government is supposed to be based on 
 this principle, but does our government carry it out? In 
 some matters of sentiment this principle is enacted into law. 
 All have the right to trial by jury, all have the right of free 
 speech, all have the right to work for a living, if the priv- 
 ileged few give them the opportunity. 
 
 If there is to be a race or contest for a prize of equals, 
 all start at once on even ground and have an equal 
 weight. If there is not equality, some handicap is put on 
 the superior ones. A true sportsman would hold an athlete 
 of a superior class in contempt who should enter a race with 
 inferiors and then try to use some advantage. In the race 
 of life do all start equally? How many poor boys strug- 
 gling, suffering from hunger, weather, exposure and lack of 
 education and equipment can testify to the negative ! How 
 many poor girls are growing into v/omanhood without any 
 of those things that are requisite for comfort and refine- 
 
TITLE AND TIME 197 
 
 ment, how many who are even suffering for bread! Robert 
 Hunter says: 
 
 "Summed up in a sentence, the chief cause of the prevail- 
 ing poverty of the adult poor is the fact that they are handi- 
 capped by the effects of a poverty-cursed childhood. As some- 
 one has said, 'the destruction of the poor is their poverty.' The 
 poor child who survives the appalling slaughter of the inno- 
 cents — 307 deaths per thousand — is too frequently marked for 
 life by the insufficient food and care which brought his fellow 
 sufferers of the poor home to the grave. Here is 'race suicide' 
 in its most appalling shape. And inasmuch as most of the 
 deaths from disease among the infantile population in poor 
 quarters are undoubtedly due to insufficient nourishment, the 
 food problem is the most pressing. 'There is at least one 
 European municipality which has solved this problem of the 
 feeding of school children in a delightful, direct and simple 
 way. The city of Vercelli, Italy, has made feeding as compul- 
 sory as education. Every child, rich or poor, is compelled to 
 attend the school dinner provided by the municipality, just as it 
 is compelled to attend the school lessons.' " 
 
 How many babies have not sufficient clothes to prevent 
 suffering! How many die from lack of ordinary care and 
 good food, through poverty, while others are born with title 
 to tracts miles and miles in extent ! Yes, while even dogs 
 have thousands squandered on them ! 
 
 I do not plead for equality between the ignorant and the 
 learned, between the filthy and the clean, between the boor- 
 ish and the refined, in the ordinary social intercourse. I do 
 not wish to hold down the man of great capacity to the level 
 of him who can only shovel. I only plead for an equal start. 
 
 What more right has the tender babe of a Gould or a 
 Carnegie than the child of him who gets but nine dollars a 
 week for shoveling? The Carnegie or Henry B. Hyde or 
 Krupp deserves more than he who can only push a wheel- 
 barrow, but where does one babe derive a greater right than 
 another? You say from the right of inheritance, but what 
 proof have you that inheritance is right ? That we are used 
 
198 RIGHT AND RICHES 
 
 to it, and are not shocked by it, is true ; but we should be, 
 for it is the monster crime, though not yet recognized. 
 A prominent minister recently said : 
 
 "It is rather a hopeful commentary on the decency of 
 human nature that the actual abuse of children now excites 
 among civilized people the greatest abhorrence and resentment. 
 The neglect of children and the sinful iniquities of society of 
 which they are constantly the victims do not seem to have made 
 an appeal to public sentiment sufficiently strong to have cor- 
 rected them. 
 
 "In a hearing at Scranton before the arbitration committee 
 appointed to investigate the complaints of the miners, it was 
 testified that little girls no older than 11 and 13 years were em- 
 ployed at night work in mills, for which they received 65 cents 
 for twelve hours labor. 
 
 "Now, let no man or woman who looks into the laughing 
 eyes of children who are well clothed and fed and pampered by 
 fortune forget that the system which consigns other children to 
 toil and privation is desperately wicked. Let them not lay the 
 flattering unction to their souls that when they have satisfied 
 the wants and gratified the desires of their own darlings they 
 have discharged their whole duty. There is not a principle of 
 justice in all the universe of God that sanctions the inequalities 
 which cause certain children to abound in luxury and others to 
 suffer from poverty." 
 
 Can a baby before it crawls give consideration to the 
 community for more than its common share? 
 
 If one should be allowed to take what was owned by his 
 parents, when they have property, why should he not be 
 compelled to pay his parents' debts, if they die bankrupt? 
 
 All would say, ''Oh, he is not responsible for his fath- 
 er's failure." Neither is he for his success. ' 
 
 What should be done with estates, should they be dis- 
 tributed to the poor? No, not directly. That would be 
 too drastic and very likely the poor would be harmed in- 
 stead of benefited and the children of the rich, being used to 
 luxury, would suffer too greatly. I do not contemplate 
 when Mr. Brown dies to go into his home and sell it, to- 
 
TITLE AND TIME 199 
 
 gether with its library and furnishings, and put his children 
 into a public home. 
 
 No, I simply propose to go ahead, along the line on 
 which we have started out, and to broaden as we go along. 
 We made the great initial step when we established free 
 schools. This recognized the common right of the child to 
 education. Now some "anarchists" in school managements 
 in different cities have recognized the child's right to eat, 
 and have arranged to give a good warm meal to those com- 
 ing to school hungry. 
 
 "Suffer little children to come unto me, and forbid 
 them not, for of such is the Kingdom of Heaven." What a 
 narrow construction we put upon the Master's words when 
 we are satisfied with simply providing Sunday-schools and 
 churches where the child may go if it happens to have any- 
 thing to wear, and when we neglect every earthly provision 
 for its comfort. No saying of the Master is more obviously 
 true than the above. The child thought is receptive of God's 
 truth, and the first duty of the Christian is to strive to open 
 up to it the gates of this kingdom of harmony not only to 
 his own children, but all children; not alone by offering 
 them good words, but by striving to see their needs sup- 
 plied. 
 
 In many States the child's common right to correction 
 and training to keep it out of crime is being recognized, and 
 juvenile courts are established. 
 
 Laws are being made and enforced to prevent those un- 
 der fourteen from being put to hard labor. They should be 
 taught to be useful and happy. They should have pleasant 
 surroundings. They need not own them but use them. 
 
 No child should be compelled to liVe in pent-up tene- 
 ments. Cities should secure ground for cottages and make 
 them available to all children. Private builders should not 
 be allowed to build without sanitary and attractive features. 
 Bad tenements should be torn down. Baths and gym- 
 
 13- 
 
300 RIGHT AND RICHES 
 
 nasiums, gardens for them to work in, play grounds to play 
 in, laboratories, and machine shops and studios to work in, 
 should be available to, and urged upon all children. 
 
 Gov. Folk of Missouri, in speaking of the working of 
 the compulsory education law in Missouri, pointed out what 
 he declared to be a serious defect in it : 
 
 "This defect," said Gov. Folk, "exists in practically all of 
 the States that have compulsory education. The defect is in the 
 provision which permits a child, 'the sole support of indigent 
 parents," to be relieved from school attendance and allowed to 
 labor. 
 
 "Recently, I went through some of the great factories of 
 St. Louis to investigate the workings of this law. While the 
 child-labor law is enforced, I found many instances of little 
 girls and boj^s of 9, 10 and 11 years of age at work. In each 
 of these cases it was claimed that the child was the only support 
 of a parent. Experience has demonstrated that the majority of 
 claims for exemption are not bona fide, and are the product of 
 parental advice rather than necessity. 
 
 "However it may be, I believe if a parent is so poor that he 
 must depend for support upon the labor of an infant child, he is 
 poor enough for the State to support him as a pauper. He 
 should not be allowed to destroy the child mentally, physically 
 and morally, as is the usual result when children are permitted 
 to work in factories at such tender ages. It is far more im- 
 portant that the child should be given an education, and be 
 made a useful citizen, than that the parent eke out a miserable 
 existence through the meager earnings of an infant when the 
 parent can as well or better be supported by the State." 
 
 Bernard Shaw says that one of the plainest duties of 
 Society is to pension widows. This principle is well recog- 
 nized in the institution of alimony. We insist that a man 
 who has married a woman, support her until she has by 
 some misconduct forfeited that claim. Then, by what sort 
 of reasoning can Society shirk this responsibility when the 
 man dies leaving her without estate? 
 
 Among their first lessons, children should be taught 
 citizenship — their mutual rights, duties and responsibilities. 
 They should come early and naturally into the habit of prac- 
 
TITLE AND TIME 201 
 
 tical organization and collective action so that they may be 
 able to assert themselves against professional politicians. 
 Progress is rapid in child culture and protection. Burbank, 
 inspired master of floriculture, would naturally perceive the 
 truth of child culture and affirms environment to be all im- 
 portant. Nathan Strauss, noble Hebrew, recognized the 
 child's right to pure milk. Many others are looking out to 
 provide them fresh air and enjoyment of nature. But from 
 where is the money to come to give the dear innocent ones 
 the wholesome environment which is their right? That 
 brings us to the other side of the question. Why, by the 
 most natural reasoning possible, from the excessive estates 
 left by the rich to their heirs. 
 
 A small boy inherits the Field millions, including vast 
 commercial enterprises where thousands are employed. This 
 is a misfortune to the child. There are two weak ends to 
 life, as we now live. The child and the aged need care, and 
 it must come from those in intermediate life who are strong, 
 and able to provide for more than their own personal needs. 
 
 There are two conditions of life conducive to vice and 
 crime, excessive wealth and poverty. Why not somewhat 
 level these extremes? I believe in inheritance, but it is the 
 inheritance by one generation of the progress of previous 
 ones ; the inheritance, by the weak and helples.s child, of the 
 care and protection of sturdy manhood and womanhood ; the 
 inheritance by age of enough for support whether or not 
 it has had sufficient acquisitiveness to accumulate and hold 
 on to it. 
 
 Elbert Hubbard has said: "So long as men accumulate 
 wealth that their children shall not work, and so long as the 
 rottenness of gentility shall be unperceived, so long will one 
 generation weaken itself by consuming what another has 
 created. 
 
 "The use of power to form a Superior Class is the one thing 
 that has wrecked the world and made calamity so long of life. 
 This Superior Class is always a menace, always a curse. Its 
 distinguishing feature is to exclude — it is ossified selfishness. 
 
202 RIGHT AND RICHES 
 
 "The Superior Class is a burden. No nation ever survived 
 it long, none ever can. This volunteer Superior Class has 
 always thought that good is to be gained by avoiding labor; 
 by wearing costly and peculiar clothing; by being carried in a 
 palanquin, by being waited on by servants; by eating and drink- 
 ing at midnight; by attaining a culture beyond the reach of 
 most; by owning things that only a few can enjoy — these are 
 the ambitions of the self-appointed Superior Class. 
 
 "The Superior Class lives by its wits, or on the surplus 
 earned by slaves or men that are dead. When you live on the 
 labor of dead men you are dead yourself. It can never be done 
 away with through violence and revolution. This has been 
 tried again and again. Revolution is a surgical operation that 
 always leaves the roots of the cancer untouched. Another 
 excrescence sprouts, and one Superior Class is exchanged for 
 another. 
 
 "No, the desired end can never come through threat and 
 violence — that is where men have stumbled since history be- 
 gan. The millennium will come in this way, men will re- 
 fuse to enlist as soldiers for any other reason than to protect 
 a threatened invasion of their homes. 
 
 "There is no health in idleness, there is no joy in selfishness. 
 The Superior Class is simply a huge mistake — it is to be pitied, 
 not envied, and when our children and our children's children 
 know this, and are willing to do unto others as they would be 
 done by, one generation will then conserve and hold the good 
 that another has gained." 
 
 Here is a clear recognition of the important truth so sel- 
 dom recognized, that the enslavement of the masses comes 
 not from some persons in the oppressing class, but from the 
 innate selfishness and lack of love among the masses. To 
 destroy the aristocrats never brought freedom. As St. Paul 
 states it : "For we wrestle not against flesh and blood but 
 * * * against the rulers of darkness of this world." 
 
 What is the community's interest in great estates? They 
 are accumulated (if legally) through the growth of the 
 community in population, wealth or intelligence; perhaps 
 partially through some bright ideas or inventions of their 
 builders. But bright ideas, in a measure, belong to the pub- 
 
TITLE AND TIME 203 
 
 lie. They are the outgrowth of our civilization. The men 
 who give us the greatest thoughts seldom receive much 
 compensation in property. Hence such ideas, when their 
 originators have been duly compensated, naturally revert to 
 the public. 
 
 But it may be asked, if the unearned increment of land 
 and franchises are restored to Society through taxation upon 
 an assessment based solely upon those elements of property 
 value, what then is there left to descend from one generation 
 to another? 
 
 While assessment may be entirely limited to the conces- 
 sion element of property, yet it will always be impossible to 
 take the whole of concession value through taxation. 
 
 But aside from all such interest, there is another kind of 
 property of almost equal extent, which is handed down from 
 generation to generation. This is the great volume of 
 Credit. In the chapter on Credit I try to analyze this form 
 of property. It arises from a legitimate source, but after 
 the lapse of years grows to be a veritable vampire on in- 
 dustry. The Rothschild estate, whose origin was the price 
 of graft and crime of the most diabolical order, has lived and 
 grown fat on extortion and corruption, generation after gen- 
 eration, and still goes on sucking the life blood of many na- 
 tions. 
 
 Credit as a means of exchange is a useful servant of 
 civilization, but its fruit belongs only to him who has earned 
 it by abstention. 
 
 Credit which represents the value of goods actually be- 
 stowed upon the debtor, is in practical effect a latent title 
 in such capital and entitled to its share of its fruitage. 
 
 How much credit is but the awful incubus of debt to 
 those who owe, for which they slave from generation to 
 generation! Millions, billions of debt is saddled upon the 
 producing class by manipulation of legal tender, and 
 through stock jobbing and real estate speculation. 
 
204 RIGHT AND RICHES 
 
 The Israelites recognized in a crude way this debt- 
 slavery, and tried to remedy it through their Jubilee Year 
 law which canceled debt. But such laws cannot distinguish 
 between the true credit and the false. 
 
 There is no way apparent except to liquidate it in some 
 measure at the death of the holder through inheritance tax. 
 Many States have a measure of taxation on estates. Men 
 of the greatest business ability endorse it. 
 
 The unequivocal declaration of three of America's fore- 
 most financiers and men of affairs in favor of a liberal in- 
 heritance tax was the salient feature in the recent delibera- 
 tions of the Civic Federation. 
 
 Andrew Carnegie and August Belmont strongly advo- 
 cated the inheritance tax and so did Melville E. Ingalls. 
 
 An income tax, Mr. Carnegie said, "was impossible," 
 but he believed with Mr. Gladstone, "that it made a nation 
 of liars." 
 
 As to a graduated inheritance tax, Mr. Carnegie said he 
 advocated that "as the best means of getting something like 
 a better distribution of wealth than we can by any other 
 means." 
 
 "The growth of the American public," Mr. Carnegie 
 continued, "that is, the basis of great estates — the public — 
 is the partner in every enterprise where money is made hon- 
 orably. I say the community fails in its duty, and our legis- 
 lators fail in their duty, if they do not exact a tremendous 
 share, a progressive share — no idea of ever making his 
 children paupers, no idea of interfering with his right to 
 leave them a competence — of those millions which would 
 really have a different name from property. 
 
 "My experience is that I would as soon leave a curse to 
 my boy as the almighty dollar. There are exceptions every 
 now and then, but we must legislate not for exceptions; we 
 must legislate for the general good." 
 
TITLE AND TIME 205 
 
 To tax gifts and inheritances is right. It is not burden- 
 some. It is simple in collection. We bring nothing into the 
 Vv^orld when we come and should take nothing out. Larger 
 fortunes should pay a greater percentage. Indirect heirs 
 should be cut off entirely except by will, so should bequests 
 to religion. 
 
 This seems to be a proper form of revenue for Federal 
 purposes, to replace in some measure the iniquitous tariff. 
 But it might be advisable that it should be applied to specific 
 purposes. 
 
 The most appropriate use possible is for old age pen- 
 sions. 
 
 Certain forms of property only might be taxed for this 
 purpose — inherited bonds, corporation stocks, mortgages 
 and all inherited evidence of debt seem advisable for national 
 taxes. Real estate and personal property inherited might 
 be left to be taxed locally. 
 
 Old age pensions are of the plainest and most positive 
 necessities of civilization. 
 
 Why should the soldier of war get a pension and the 
 soldier of peace get none? The most useful citizens often 
 have the least acquisitiveness. What is more pitiful than 
 a white-haired man or woman, after a lifetime in useful 
 work — perhaps in raising a family — helpless and without 
 support? He may have earned vast fortunes of wealth of 
 which all got a benefit, and yet, either through mistaken 
 liberality or lack of good management, arrives at old age 
 penniless. The wants of the old are not many; they should 
 be supplied. Not as a gift, but as something due them. 
 This is done in New Zealand. This means of restoring to 
 society its own is eminently scientific. No other remedy can 
 take its place. As intelligence increases it will be demanded. 
 
 How little it would cost for each county to procure a 
 tract of rolling farm land and subdivide it into lots of half 
 an acre or so and erect on each a small, plain, cozy cottage 
 
206 RIGHT AND RICHES 
 
 of two or three rooms. Each poor old person in the county 
 could be furnished one of these as their own home for the 
 balance of their lives. The land would, with their own light 
 labor, half support them. The county could furnish such 
 further assistance as was needed. Meeting places and clubs 
 should be furnished to make their hours more pleasant. The 
 average Poorhouse is one of the saddest failures known. A 
 fraction of burdensome inheritances would supply the ut- 
 most needs of childhood and age. 
 
CHAPTER V. 
 
 Taxation and Compe^nsation. 
 
 jHAT is Government f It is not a person, society or 
 corporation. In a monarchy it is the king and 
 royalty. In a true democracy it is simply the agent 
 of society. But there is no existing example of 
 true democracy. Various countries with Republican form 
 of government are approaching nearer to a true democracy 
 than ever before in history. But it matters not in its effects 
 whether the will of the people is thwarted by an heredi- 
 tary royalty, or by some other power, which dictates to and 
 controls the people's agent. 
 
 Wherever the people's agent is controlled by another 
 power than the people, the funds placed at its disposal by 
 taxation are largely used for the benefit of this controlling 
 force. 
 
 In a monarchy it is diverted to the use of a royal fam- 
 ily and its multitude of relations. In a republic it may be 
 diverted to the use of the owners of privilege. 
 
 A truly democratic republic is a corporation in which 
 each citizen holds one share of stock, no more, no less. We 
 should each and everyone vote that share, and insist on a 
 large dividend. 
 
 There should be no assessment ever needed on this stock. 
 Society has such rich resources, which, should its agents hon- 
 estly lease or otherwise collect an equitable revenue from 
 them, would pay for many times the benefits that govern- 
 ment now affords us. 
 
 Government is society's Trustee. The property in the 
 hands of Society's agent is intended only to be used for such 
 purposes as benefit all people. We often hear the expression 
 
 207 
 
308 RIGHT AND RICHES 
 
 "taxes for the support of government." This expression 
 betrays an ignorance of the true purpose of government. 
 One would not say that the dues he paid to his lodge, his 
 church, or the premiums he paid to his mutual insurance so- 
 ciety, were intended by him for the support of its agents. 
 Another expression of the same persons is "the protection 
 given taxpayers by government." 
 
 Protection to what ? Against what ? Protection against 
 bandits or pirates? Truly government does give this pro- 
 tection, but it takes such a minor part of its revenues that 
 it is foolish to consider such protection as being any consid- 
 erable part of the purpose of taxation. 
 
 If it is meant the protection of certain interests in their 
 system of extortion, we may consider that taxation to them 
 is indeed compensated by "protection." 
 
 But what compensation should the taxpayer get under 
 an honest system of government? He should get a direct 
 commercial advantage for every dollar he pays. To para- 
 phrase the old sentimental, though reasonless. Revolution- 
 ary battle-cry, we want "no taxation without compensa- 
 tion." "No taxation without compensation" implies the 
 correlative proposition, "compensation to society for all con- 
 cessions and privileges." This compensation which is due' 
 to society in return for the natural and social opportunities 
 conferred upon private persons and concerns, would supply 
 a plenteous fund of revenue. The Saturday Evening Post 
 says: 
 
 "The assessed value of land alone, exclusive of improve- 
 ments, in the City of New York is greater than the assessed 
 value of all the real estate, improvements included, in the State 
 of Pennsylvania, and nearly twice as great as the value of all 
 the real estate, improvements included, in the State of New 
 York outside of the city. The assessed valuation of land for six 
 square miles of Manhattan in the neighborhood of Central Park 
 is greater than the assessed value of all the real estate in the 
 State of Missouri. 
 
TAXATION AND COMPENSATION 209 
 
 "So says the president of the New York City tax board in 
 his latest report; and we earnestly commend the statement to 
 the consideration of all those persons whether official or lay, 
 who are studying the troublesome subject of taxation. 
 
 "The City of New York created every dollar of that enor- 
 mous value. And, while the city is creating this vast wealth 
 for individuals, it is anxiously seeking money to pay its running 
 expenses. Try to imagine a man who produces a million dol- 
 lars a week and has to borrow money to buy flour and bacon. 
 
 "Various expedients to recover for the people who actually 
 make it, some share of this immense increment have been sug- 
 gested, and even tentatively practiced, as in levying a graduated 
 percentage tax upon the increase in value between each 
 recorded transfer. In nearly every American city, tax experts 
 toil over schemes — mostly impracticable — to uncover tax-dodg- 
 ing personal property or get a few thousand more out of dog 
 licenses, and will not look at this gold mine of realty in- 
 crement." 
 
 What a farce are most of the present means of taxation ! 
 Even the most common theory of taxation, if applied in any 
 business but that of government, would be resisted as pure 
 robbery. 
 
 This accepted precept is that each shall pay taxes accord- 
 ing to the value of the property owned by him. 
 
 Suppose one had his bill at the hotel rendered on this 
 basis ; suppose the grocer, tailor, street car line, the gas com- 
 pany, the coal merchant, charged on this basis. How ab- 
 surd ! What ridiculous consequences ! 
 
 Why should one pay taxes on the value of his diamonds, 
 stocks, merchandise, live stock, because he lives within the 
 geographical limits of a city, State or other taxing com- 
 munity? Intelligent taxation is a debt for value received. 
 How can one cancel such debt to one community and incur 
 a like one to another community by moving his bed across 
 a boundary line? 
 
 Many laws are passed by State legislatures purporting 
 to encourage the growing of fine stock. Yet whenever 
 stock of great value is brought into the State, the owner 
 
210 RIGHT AND RICHES 
 
 must pay a tax penalty. A recent press notice gloated over 
 the fact that a fine collection of art had been caught by a 
 new form of assessment. Millionaires, and people of even 
 less wealth, are driven out of cities, where the rate is high, 
 to villages where it is less, by such robbery laws. 
 
 The history of taxation would be the basis for the great- 
 est of farce comedies, if it were not of such sad conse- 
 quences. There have been taxes on cats, dogs, birds. 
 
 Most street railway franchises have a license tax on cars, 
 of $35.00 or so. Do strap-hangers ever consider how many 
 cars this may keep out of use? 
 
 Taxes on wheeled vehicles have caused great districts 
 to depend on sleds for means of conveyance. Taxes on salt 
 have caused people to become diseased for want of it. Taxes 
 on windows have built thousands of homes with solid walls 
 except for doors. This is indeed a consistent result of 
 ignorant taxation — to wish to shut out all light. One of 
 the most extensive as well as pernicious bases of taxation 
 is that on exchange. Think of striking at the very roots of 
 business with taxation. 
 
 The "Iron Duke" paralyzed the trade of the prosperous 
 Netherlands by such a tax. Customs houses are monuments 
 to this most abominable form of taxation. Tariff taxation 
 hinders trade, robs the producers of one country and the 
 consumers of another. It is so uncertain in its results that 
 it breeds public extravagance, even while it is producing 
 panic by piling a great surplus in the treasury. Big bank- 
 ers fatten on this through free use of such surplus. There 
 is no known certain means of reducing or increasing the 
 amount of revenue under a tariff tax. Lowering the rate 
 often increases the revenue, and raising it often lowers it. 
 No one can approximately predict the amount of revenue. 
 A tariff tax, like most unjust taxation, fosters artificial lines 
 of industry. (Thomas G. Shearman, in his Natural Taxa- 
 tion, has very logically dissected tax systems. His work 
 
TAXATION AND COMPENSATION 211 
 
 should be read by every member of a legislative body from 
 United States Congress to district school board.) 
 
 It is v^ell recognized that if railroads allow some patrons 
 free or reduced rates they must overcharge others. If this 
 is true of a private corporation, hov\r much more so must it 
 be true of government. If government gives its resources 
 free to some, it is compelled to rob others. 
 
 The usual manner of enforcing payment is often as fool- 
 ish as the basis of tax assessment. In many States property 
 is sold for taxes, but the buyer is given no title, while the 
 poor owner is deprived of his. In some States a discount 
 is allowed for payment previous to a certain day and a pen- 
 alty is exacted after such day. But in most States there is 
 no such reasonable provision. Millions of dollars are forced 
 from the people's pockets into the hands of treasurers, to be 
 kept by the bankers who back them, free of interest. 
 
 John F. Smulski, elected treasurer of Illinois, deserves 
 great praise for refusing to qualify until a law was passed 
 permitting him to loan out the State funds with interest pay- 
 able to the State. He also insisted that the State should pay 
 the surety company bond premiums to keep the treasurer 
 free from bank domination. 
 
 But why should Illinois have from five to eight million 
 dollars at a time in her treasury? Why not distribute its 
 collection throughout the twelve months of the year? 
 
 That taxes are neither philanthropy nor charity is tersely 
 stated in the following editorial from the Saturday Evening 
 Post entitled "The Important Taxpayer" : 
 
 "Somebody has discovered, in a flourishing inland city, that 
 the school board, which disburses a great deal of public money, 
 has no member who owns much property and pays taxes to a 
 considerable amount. Opponents of the administration, there- 
 fore, are making what capital they can out of the ancient and 
 naive theory that taxpayers have a proprietary interest in the 
 government. One observes, however, that they are not suc- 
 ceeding as well as they might reasonably have expected to do 
 
212 RIGHT AND RICHES 
 
 a dozen years ago, when the statement, that taxpayers were 
 opposed to a certain measure, was regarded as a crushing 
 argument, and "wasting taxpayers' money" was a damning 
 charge against any administration. 
 
 "Of course, no administration does or ever did waste tax- 
 payers' money — for the simple reason that, the moment the 
 taxes are paid, the money ceases to be taxpayers' money and 
 becomes the government's money. What the government does 
 with it is no more the business of the taxpayer than of any 
 other citizen. Small taxpayers have the modesty to acknowl- 
 edge this self-evident truth. But if a man pays a considerable 
 amount in taxes it is often nearly impossible to wean him from 
 the gross and palpable fallacy that he is entitled to especial 
 consideration on the part of the government." 
 
 The same theory is held in many churches regarding 
 large contributors. Such contributors give sums of money 
 "to the Lord" and then count themselves controlling stock- 
 holders in His church. 
 
 Continuing, the Post says: 
 
 "Any one who thinks that taxes are a voluntary contribu- 
 tion should attend a session of the board of assessors for his 
 locality. In many cities, saloons pay more taxes than any 
 other interest, but are not given proportionate representation 
 on school boards and park commissions. 
 
 "We wish speakers and writers on political subjects would 
 drop the bad habit of talking about large taxpayers as though 
 they were entitled to higher regard than other citizens." 
 
 The owner of lots should pay the full cost of paving the 
 street in front of them. He gets compensation in increased 
 value. But he should not therefore have his general taxes 
 increased. This is like the story of the landlord raising the 
 rent because the tenant fixed the roof. 
 
 License taxes are a crime. The first thing tax reformers 
 should strive for is, that pending the abolition of taxes on 
 production, all taxes on land or franchises should be as- 
 sessed separately from any improvements, and the taxes at 
 payment be receipted separately. This would bring the 
 
TAXATION AND COMPENSATION 213 
 
 matter to people's understanding. It would have another 
 excellent effect. It would promote a more equal assessment. 
 Lot 10 of a block assessed without improvements might 
 look very strange assessed for double that of 9 or 11. 
 
 It is often more easy to pay the taxes in a community 
 where they are high than in another where they are low. 
 Taxes are an investment and should pay higher dividends 
 than any other investment if properly assessed and expended. 
 Government investments should constantly but carefully in- 
 crease. They can often be made very profitable. The 
 profits of good sewers, parks, schools, clean streets and such 
 things are immense. 
 
 The object of government is happiness of the people, all 
 the people, not a favored few. Each child should have the 
 care which childhood needs, should have education, enter- 
 tainment and music. Each adult should have a chance to 
 earn a comfortable subsistence with some degree of luxury. 
 
 None should acquire private title to anything more than 
 what is the "natural reward" for production. All else be- 
 longs to public and is an ample fund of taxes. In "The 
 World To-day," Sir Henry Campbell-Bannerman says : 
 
 "It may accurately be said that there is practically but one 
 great impediment in the way of a sweeping improvement which 
 would elevate the physical and moral welfare of the people. 
 This is the interest, and the overdue regard to the interest, of 
 the landowner, and the political and social influence that he and 
 his class can exercise. 
 
 "Let the value of land be assessed independently of the 
 buildings upon it, and upon such valuation let contributions be 
 made to those public services which create the value. What is 
 our rating system? It is a tax upon industry and labor, upon 
 enterprise, upon improvements; it is a tax which is the direct 
 cause of much of the suffering and overcrowding in the towns." 
 
 The wretchedness of the city slum is partly the result 
 of the present system of tax robbery. The slum tenant is 
 taxed on nearly all he eats and wears and then pays the high 
 
214 RIGHT AND RICHES 
 
 price which natural Hmitations of space near the center de- 
 mands. But he does not pay this to society, whose it rightly 
 is, but to his landlord. Each addition to population makes 
 the value of land greater. What makes this value the fol- 
 lowing paragraph from the St. Louis Post-Dispatch, en- 
 titled "The Money Value of Men," indicates: 
 
 "With immigration from Europe now on the million-a- 
 year basis, Prescott F. Hall has published a volume intend- 
 ed to show its advantages and disadvantages to the country. 
 In dealing with its advantages, he estimates each immigrant 
 as worth at least a thousand dollars, so that a single year's 
 arrivals from Europe are supposed to add a thousand mil- 
 lion dollars to the wealth of the country. One statement 
 offered in support of this view is that it 'costs a thousand 
 dollars to rear a child to the age of 14.' While this does 
 not seem to be necessarily or even generally true, it is prob- 
 able that the average Value' of any man who can consume 
 enough to live on and pay for it by his own work, is placed 
 low at a thousand dollars." 
 
 To whom are these immigrants worth $1,000 each? To 
 owners of concessions, of course. The immigrants go to 
 make the slums more crowded, hence to make rents and 
 franchises more valuable. But I doubt if the city slum 
 is more cheerless than doleful poverty in the country 
 on land near or beyond "the marginal limit" of cultivation 
 (that is so poor or far from civilization no one wants it), or 
 on better farms giving all the cream of their crops for rent. 
 
 People do not leave farms without cause. Nor do they 
 go to the big city without some shadow of reason. Edward 
 Everett Hale says : 
 
 "It is easy to make faces as we meet the young country- 
 man with his wife when they come from Podunk to New York 
 and to ask them what they have come for; but it is foolish to 
 suppose that the congestion of cities results from their in- 
 experience or ignorance. There are some important people who 
 are working with them in this matter of crowding the towns. 
 
TAXATION AND COMPENSATION 215 
 
 First of all, there is the large real estate interests in every city. 
 It needs no organization; it is an organization already. The 
 man whose grandmother owned an orchard of old apple trees 
 in the heart of Boston or New York is glad that his grandmother 
 owned that orchard. He is glad that he owns the square feet 
 or square inches of that orchard to-day. He knows as well as 
 I know that those square inches are worth a great deal more 
 in money than they were worth a hundred years ago. Now 
 that man does not mean to diminish the current of population 
 which falls into Boston or New York. He means to keep up the 
 price of real estate in those cities if he can. And when you 
 address him a civil note, asking him if he will not attend a 
 meeting of gentlemen who wish to promote emigration to 
 Idaho, it is almost certain that that man will have another en- 
 gagement. 
 
 "Again, it is to be observed that great cities have of neces- 
 sity their own spokesmen — shall one say their own drummers? — 
 at work for them even unconsciously. Every issue of any news- 
 paper of the week-day or a Sunday has its announcements of 
 the attractions of a great city." 
 
 This real estate interest crowds every industry possible 
 into the city and close to the center. 
 
 Why do the newspapers drum for this interest, and in 
 some cases, particularly in the newer cities, fill the people 
 with shameful lies? Because this interest does lots of ad- 
 vertising. Why the need to go thirty stories above ground 
 in New York and six under, when in an afternoon's auto 
 ride one can go to the haunts of wild bear and turkeys ? 
 
 This land interest knowingly and intentionally takes the 
 people's earnings. Unintentionally they lure them into 
 places of the greatest hardship. 
 
 The time is ripe for a society to expose fake booms and 
 to discourage the congestion in city centers. This may be 
 done by taxing these congested centers; by regulating the 
 running of cars so they will not all reach one certain street 
 crossing, but a number some distance apart; by creating a 
 central zone where factories may not be operated, or if oper- 
 ated, put a heavy license tax on them. Limit the height of 
 
 14— 
 
316 RIGHT AND RICHES 
 
 buildings. It does no good to improve transportation if the 
 number of people going to one center correspondingly in- 
 creases. Scatter employment and you will scatter employes. 
 
 Concession taxation, that is limiting current levies of 
 taxes to those values which are naturally the property of the 
 community, is but reclaiming what is the community's own. 
 It will take the burden from wealth, from capital, from in- 
 dustry. It will restore to the providers of capital what is 
 now being taken wrongly by government. It will discour- 
 age holding of concessions for the purpose of prechiding 
 their use, hence will partially restore to producers their 
 Natural Reward, to capital its rightful increase, and to labor 
 its just wage. 
 
 Such taxation would be but the compensation, or 
 recompense, due to society from the payer. Society has no 
 more just right than any other corporation or organization 
 to forcibly take from anyone, without having some rational 
 basis of claim; without having previously contributed to 
 such individual an equivalent. 
 
 The simple fact of the extent of one's riches is no indica- 
 tion whatever of the extent of society's dues from him. 
 
 Australasia is far in advance of America in its manner 
 of arriving at just assessment values. One of their simple 
 provisions is to make the land liable to public purchase at 
 a certain per cent, above its assessment for taxes. 
 
CHAPTER VI. 
 
 QUANTITIVI: TlTLl^ Rj:STRICTION. 
 
 RESIDENT ROOSEVELT, among others, has 
 pointed out the dangers to society from unHmited 
 holdings of property by an individual or corpora- 
 tion. What is the reasonable quantity which one 
 may hold? This is hard to establish, but scarcely more so 
 than to assess the just value of property for taxation. 
 
 Let us start out gradually as Australia has done. Break 
 up the most extensive estates. What has been the curse of 
 Ireland, or California? Each are blessed with a climate fit 
 for Paradise, and soil of surprising wealth ; especially Cali- 
 fornia, such diversity in all things does she possess. The 
 highest mountain in the States, in the same county with 
 land 600 feet below sea-level, vast stores of valuable min- 
 erals, some almost unknown elsewhere; trees compared with 
 which all others are shrubs. But as Ireland is cursed by 
 English landlords, California is cursed by Spanish land 
 grants, now owned by all nationalities. 
 
 One old Spaniard was recently offered $750,000 for one 
 grant of a thousand acres which perhaps does not now, for 
 want of care, produce a hundred dollars worth per year. 
 Yet he plays dog in the manger and asks a million which, if 
 offered, he should perhaps refuse. There are hundreds of 
 tracts the same; some tens of thousands of acres in extent. 
 Vast tracts have been acquired in many States by lumber 
 companies. 
 
 "The chairman of the board of directors of the United States 
 Steel Corporation, says the Review of Reviews, is virtually the 
 ruler of an empire owning more land than Massachusetts, New 
 Hampshire,^ and Vermont combined; supporting more people 
 than inhabit Nebraska; employing more men than fought at 
 
 217 
 
218 RIGHT AND RICHES 
 
 Gettysburg; sailing a larger navy than that of Italy; making 
 more steel than Germany; gathering in a larger revenue than the 
 United States, and representing more capital than all the banks 
 in the city of New York. 
 
 Has a man a right to own all he can get? The question 
 of unreasonable fortunes is a vital one to government. They 
 give extraordinary power. Power is government. Conflict 
 arises between the private power and the constituted author- 
 ity which results in the triumph of the private power if not 
 patriotically checked. 
 
 Frederick Upham Adams in The Cosmopolitan, says : 
 
 "A marked tendency has already developed on the part of 
 our "leisure class," resulting in the purchase of vast tracts of 
 land which are withdrawn from settlement, agriculture or 
 lumbering, and which are set aside for game preserves. Thou- 
 sands of square miles of the Adirondacks are already thus re- 
 served. This segregation of valuable tracts of land by the 
 nobility and aristocracy is one of the curses which afflict Ger- 
 many, Austria, Russia and even Great Britain. The idle heir of 
 a billionaire could, if he chose, purchase such States as Idaho, 
 Nevada, Arizona, or New Mexico, and convert one or all of 
 them into private pleasure grounds. 
 
 "There would be nothing inherently vicious in such a pro- 
 ceeding. He could "get rid of his money" by hiring an army 
 of men to prepare golf courses a thousand miles in extent; he 
 could boulevard the Rocky Mountains for the exclusive use of 
 his automobiles and for those of his friends, and he could do 
 with it as one does with any other piece of private property. 
 
 "The total assessed valuation of the States of Idaho, Ari- 
 zona, Nevada and New Mexico, according to the latest statis- 
 tics available, is $184,379,167, and the beautiful State of Idaho 
 is listed at a trifle more than fifty millions. Such an invest- 
 ment would not bother the sportive heir of a billionaire. For 
 less than one-quarter of his patrimony he could purchase, and 
 have the sole use of, one-seventh of the area of the United 
 States, subject only to the exactions of the federal and common 
 law. 
 
 Should he be permitted to do this? It will not avail the 
 individualist to plead that no person will be so foolish as to at- 
 tempt such a step. If a man can purchase a range of mountains 
 
QUANTITIVE TITLE RESTRICTION 319 
 
 and use them to look at or hunt in, who shall prevent him from 
 adding the adjoining counties to his playground? The in- 
 dividualist must answer in the affirmative. Can he hold a 
 quarter of a State, half a State, all of a State or several States? 
 The individualist must affirm that there can be no limit set to 
 his holdings. If he makes any other answer the whole fab- 
 ric of his theory falls to the ground. 
 
 "The moment a man declares his belief that the govern- 
 ment should have the power to limit the accumulation of wealth, 
 or to interfere with its investment or expenditure, that moment 
 he has arrayed himself against the "freedom of contract," and 
 has joined the ranks of those who demand radical changes in 
 institutions which have existed for centuries. If an individual 
 has the right to own or control the great transportation lines 
 which connect the Atlantic with the Pacific, why do you chal- 
 lenge his right to purchase the thinly populated empire con- 
 tained in such States as Idaho, Arizona, Nevada and New 
 Mexico? As an individualist you assert that the national 
 government has no right to interfere with the private manage- 
 ment of two hundred thousand miles of railway; what concern 
 is it of yours what our young billionaire does with four hun- 
 dred and twenty thousand square miles of territory admirably 
 adapted for a hunting and fishing preserve? How are you to 
 prevent him from buying it; how are you to regulate his use of 
 it; how are you to take it from him?" 
 
 The most obvious remedies for too great an accumulation 
 of wealth in one person are the appHcation of the State's 
 right of Eminent Domain and a graduated tax after so much 
 is acquired. It should at least seem no hardship to expect 
 the great magnates of property to pay a higher percentage 
 than others. We might compensate for such increase of tax 
 rate on the very ricli by remitting all tax to the very poor 
 owners of very humble homes. We might begin by limit- 
 ing the quantity of land any person might own as is pro- 
 posed in Oklahoma. Alien ownership of land in Oklahoma 
 is prohibited, excessive land ownership by Oklahomans dis- 
 couraged, and charters to land companies are to be denied 
 under the terms of a proposed constitutional proposition. 
 After denying to non-residents the right to own land in 
 
220 RIGHT AND RICHES 
 
 Oklahoma, the proposition requires the Legislature to pro- 
 vide that those who may inherit land in Oklahoma shall re- 
 linquish title within a reasonable time. Corporations desir- 
 ing to buy, sell or speculate in lands, or act as the agents for 
 other corporations or persons, shall be denied a charter un- 
 der the terms of the provision. 
 
 Extensive ownership of lands by Americans is discour- 
 aged by sections of the proposition, which provides for the 
 levying of additional taxes on persons having land above a 
 certain amount. Those persons having more than 2,000 
 'acres will be required to pay the following additional tax 
 in excess : Above 2,000 acres, 2 per cent. ; above 3,000 acres, 
 5 per cent. ; above 10,000 acres, 25 per cent. ; above 20,000 
 acres, 50 per cent., and above 30,000 acres, 100 per cent. 
 
 Another section of the proposition provides that banks 
 and loan companies acquiring land by foreclosure of mort- 
 gages shall be exempt from this excess taxation for a period 
 not to exceed five years after the foreclosure. The legisla- 
 ture is authorized to provide for a graduated tax upon per- 
 sons leasing more than 2,000 acres of land. 
 
 It is proposed to have Kansas compel the owners of land 
 in excess of the amount necessary for a livelihood to pay 
 an additional tax or license. Edwin Taylor, who owns 
 more than 1,000 acres of the richest land in Kansas, is the 
 father of the proposed legislation. Mr. Taylor says he has 
 more land than he is entitled to; that he is a land monopo- 
 list, and that he is willing to divide his property with smaller 
 holders or pay an additional tax. Mr. Taylor is one of the 
 advanced thinkers of the State, besides being one of the 
 State's wealthiest men. 
 
 In a speech on the subject before the meeting of the State 
 Horticultural Society, he said: 
 
 "There may be a discrepancy between my practice and 
 my precept concerning land. I say in explanation that I 
 have played the land game according to the rules in force. 
 
QUANTITIVE TITLE RESTRICTION 221 
 
 but I believe these rules to be unjust and unwise. For my 
 part, I believe in one wife and one farm for one man, and I 
 would have the laws so changed that Mormonism in either 
 would be impossible. 
 
 "Monopoly is one of the words with which the American 
 public is impatient, and the meanest monopoly of all is the 
 monopoly of land, outside of the requirements of a home and 
 a livelihood. It is a monopoly that will not always last. We 
 can choose between its gradual extinction and its going out 
 in strife and distress. If you are disposed to laugh at my 
 dismal prophecy, bear in mind that both the North and the 
 South either laughed or reviled at the earlier abolitionists. 
 I draw no parallel betwen the situations; I merely say that 
 a wrong thing is not a safe thing, and that land monopoly 
 beyond the reasonable limits of a homestead or the basis of 
 a livelihood, whether measured by the golden rule or the 
 good of the State, is wrong." 
 
 Land is the most important but not the only monopoly. 
 Patents, copyrights, and some other forms of property might 
 well be restricted. 
 
 The power given by copyright or patent need not be 
 unlimited. It need not require a very intricate law to com- 
 pel the holder to produce his works at reasonable prices. 
 Their property in such things might be limited to a certain 
 percentage on their selling price as customs are collected ad 
 valorem. Anyone might then produce such things by pay- 
 ing this royalty. But until the grosser evils of land laws and 
 franchises are remedied we need not worry with copyright 
 and patent laws. 
 
 There is no reason why unwieldy estates should not be 
 broken up and recovered to society to be equitably diffused 
 among its members, and the most rational way to begin is 
 with graduated taxation; equally as effective, however, is 
 
322 RIGHT AND RICHES 
 
 the assertion of the State's right of Eminent Domain as 
 Australasian countries have done. 
 
 5|x ^ 3^ ^ 
 
 The foregoing means of reclamation are consistent with 
 the basic scientific principles of right. They admit of be- 
 ing practically put into effect, therefore every lover of hu- 
 manity should inform himself about them and work for their 
 adoption. 
 
 I appeal to you, communistic socialists, to be reasonable, 
 for you cannot have a tree before you have a bush. If ever 
 you attain your ideal it must be brought about gradually. 
 
 I appeal to you individualists, you who believe in Abso- 
 lutism in title, I warn you against the rising discontent. If 
 you do not consent to justice by means legal and orderly, 
 take care lest this discontent, driven to desperation, break 
 forth in anarchy. For men more easily learn the injustice 
 from which they suffer than they do the remedy therefor. 
 
PART SIX 
 
 Finance. 
 
 Chapte:r I. Vai^ue-Poise). 
 
 11. Money. 
 
 " III. Credit. 
 
 " IV. Banks and Panics. 
 
 " V. The Importance o^ Industriai, Corpora- 
 tions. 
 
CHAPTER I. 
 
 VaIvUE^-Poise:. 
 
 |N the chapter on "Value" the distinction between 
 "Exchange-Value" and "Utility" and "Lack- 
 Value" are set out. In considering exchange- 
 value, market, or money-prices, we must take care 
 not to try to measure it by human endurance, for it is this 
 that makes so much jumble of the subject. 
 
 Is it not obvious that as the sum of wealth, the volume 
 of commodities and conveniences increase, that the endur- 
 ance, toil, suffering, or labor-cost, constantly grows less 
 and less? 
 
 As hours of labor are shortened and conditions of labor 
 made more tolerable, the output per worker increases in 
 proportion. This is especially so when we take the sum of 
 output to humanity as a whole, and not simply the returns 
 to laborers ; for the number who have leisure is rapidly in- 
 creasing. 
 
 Exchange- value is purely a comparison of market prices ; 
 not a comparison of either the utility, the cost in labor or 
 the privation it would cause for one to be compelled to do 
 without the various things. 
 
 This exchange value of things is subject to very simple 
 laws, loosely expressed as the "laws of supply and de- 
 mand." More exactly stated, these laws are as follows: 
 
 Such supply of things consists only of the available sup- 
 ply — "what is on the market," "for sale" in a competitive 
 way. A suppressed store or deposit of natural or made 
 wealth is not part of the supply. This refers more, how- 
 ever, to unproduced wealth, as produced wealth is seldom 
 suppressed in large quantities. 
 
 225 
 
226 RIGHT AND RICHES 
 
 Stocks of wheat, cotton, etc., stored in warehouses to 
 ''bull" the market, are Hkely to affect the market the same 
 as though offered for sale, where there is fear that they may 
 be suddenly offered. But unmined ore, unplowed fields, etc., 
 do not compete. 
 
 Only that demand affects the market which is backed by 
 purchasing power; which is seeking exchange. Suppose 
 you were located on an isolated island and had a thousand 
 tons of sugar. What would be its value to you ? Obviously 
 what the inhabitants would and could give you in exchange 
 for it, which might be limited to a few very crude articles 
 of food, furs, etc. But could you teach these natives how 
 to fabricate the innumerable commodities of civilization, 
 you would thereby increase their means of buying your 
 sugar and in that degree increase its value. At the same 
 time you would likewise increase the value of their own 
 original staple products by enabling the natives to buy them 
 with such newly evolved wealth. The starving peasant 
 with nothing to offer for bread does not constitute demand 
 for bread. 
 
 Demand is only made effective by having other forms of 
 wealth with which to buy. Desire for things in general is 
 unlimited. Hence, the demand for those things which satisfy 
 a certain desire, is dependent on the total supply of all other 
 things being offered for such satisfaction. But desire is 
 relative as to various commodities. 
 
 With unlimited quantities of free supplies, there would 
 be only a minute quantity of some things used, while im- 
 mense quantities of others would be taken. Hundreds of 
 times as much flour would be used as pepper; many times 
 as much cotton as silk. Such we may term the Natural De- 
 mand. In proportion as people are able to supply this nat- 
 ural demand there is Effective Demand. Natural Demand 
 may increase or decrease with change of conditions of life 
 and industry. 
 
VALUE-POISE 227 
 
 The value of the sum total of all wealth may be repre- 
 sented by a circle which always has 360 degrees, no more, no 
 less, though the volume of wealth multiply. The com- 
 modity or group of commodities which satisfies a certain 
 desire, as for food, fuel, or money, comprises a segment of 
 so many degrees, minutes or seconds of this circle of supply. 
 
 Natural Demand likewise is like a circle, the various 
 needs constituting segments of so many degrees. We might 
 estimate the Natural Demand for food at present as 45° or 
 one-eighth of the total circle of demand. It was formerly 
 much more. 
 
 The balance or poise of value resulting from supply and 
 demand may be illustrated by a compound scale as shown 
 on page 229. The upper arm is scaled from to 100. On 
 this arm moves the weight C which stands for the given 
 commodity under the consideration as, for example, steel or 
 window glass, or cement. The lower arm has a hinged 
 bearing at one end, E. The other end is suspended from the 
 end of the upper arm. Upon this lower arm moves the 
 weight B which stands for the total wealth of the com- 
 munity. Now, obviously, if we move the weight B along 
 the arm towards F we will have to move the weight C up 
 towards 100 if the volumes of the weights remain un- 
 changed. 
 
 Now, as we are illustrating value and not gravitation 
 the figures on the upper scale stand for value and where 
 the weight C is supported indicates the value of the com- 
 modity being considered. 
 
 That is, if the volume of total wealth increase one- 
 seventh it would tend to move up the value of steel (for 
 instance), from 70 to 80, or if the total volume of wealth 
 decrease it will tend to move steel down perhaps to 60. 
 
 But the demand for steel may increase from causes 
 other than the general increase of total wealth, it may be 
 
228 RIGHT AND RICHES 
 
 from a campaign of advertising and education of the public 
 in new uses for steel. 
 
 Now this increased incentive to use steel obviously will 
 cause a greater pressure of total wealth, B, upon the supply 
 of steel, C. 
 
 Now, if the special demand for steel cause its value to 
 move up from 35 to 70 we shall have to move the weight 
 B correspondingly to balance it and this will indicate a 
 value decrease in general wealth only as measured in steel. 
 
 Now these relations are as true between any other com- 
 modity and the total wealth as they are of steel. The value 
 of money is as truly dependent on its ratio to other wealth, 
 and any special demand for it, caused by fear and the 
 withdrawl of credit, will surely lower the money- value of 
 the total of all other wealth. 
 
 For the increased demand for money will cause people 
 to offer a larger volume for a dollar. 
 
 Likewise an increase of the money volume C even 
 though maintaining its nominal value at 100, lowers its 
 real value and increases the value of general wealth B so 
 that it moves up on the scale on the lower arm. Decrease 
 of money volume while not changing its nominal value en- 
 hances its real value and lowers all other values as measured 
 in money. 
 
 But such lowering of the money-value of things makes 
 them very much harder for the average person to procure. 
 
VALUE-POISE 
 
 229 
 
230 RIGHT AND RICHES 
 
 It is impossible for the total of values to increase or de- 
 crease. The value of concessions often increases, occupy- 
 ing a larger segment of the circle with a corresponding de- 
 crease in the value of true output, wealth, or vice versa. 
 But when both concessions and true wealth increase in 
 pricej we may know that money has decreased in value. 
 That is, that the volume of money C is greater, and conse- 
 quently its units have less value, and naturally it takes 
 more dollars to balance other wealth. That has been the 
 case the past few years, when lands, franchises, etc., as well 
 as food, building material and all wealth have gone up in 
 money-measured price. The value of all things cannot 
 change. It would increase the circle to over 360 degrees — an 
 impossibility. The relative segments only can change. As 
 prices are counted in dollars, an increase in their number 
 and a lessening of the value of dollars makes an increase of 
 prices — an apparent increase of wealth. 
 
 But there may be an artificial temporary demand cre- 
 ated by the over-selling of such commodity on contract — 
 selling the market "short," as it is called "on 'change." 
 Commodities such as wheat or the shares of a corporation 
 are often sold on margin for future delivery, greatly in ex- 
 cess of the actual supply, the seller depending on buying 
 below the contracted price to fill the contract. If it be- 
 comes known that there is an excess of such selling, the 
 "shorts are squeezed;" that is, those who hold the actual 
 commodity or contracts for it, raise the price and make the 
 shorts pay. Then, after the date of settlement of such con- 
 tracts, the price is likely to slump. 
 
 ' Just in the same way excessive debt — contracting to de- 
 liver money — is in fact "selling the money-market short." 
 After the panic is over the money market slumps and there 
 is for a time demand for but part of the original volume of 
 money. 
 
VALUE-POISE 231 
 
 So we see that neither demand nor supply has any 
 dependable fixity. Demand depends on the whims and 
 fancies of fickle mortals. Supply, which is on the market 
 and active, is likewise dependent on holder's fickle notions 
 and fears of how little or how much demand will pay. 
 Hence we see that there can be no scientific determination of 
 value established; for it is impossible to found anything 
 definite upon fear and selfishness, and such is the basis of 
 exchange value. Kor selfishness holds out for excessive 
 demands until fear impels the taking of a fraction of reason- 
 able prices. 
 
 15- 
 
CHAPTER II. 
 
 Currency and Monky. 
 
 "An article is determined to 6e money hy reason of 
 the performance dy it of certain functions without regard 
 to its form or substance.'' — Appleton's Encyclopedia. 
 
 ^niHAT is money? 
 
 J^p Not a species of things of a certain form, 
 
 ^^1 weight, color or substance; not a class of things 
 constituted according to certain prescribed rules. 
 Money is rather an idea, or thought, objectified in in- 
 numerable forms and substances. What is a noun? Not 
 a tree or a man or a house. No, a noun is an idea. "Tree," 
 "man," or "house" may, when expressing a different kind 
 of an idea, be a verb. What is a preposition? A word 
 being used to show a certain relation between two ideas. 
 Now money is that idea, thought or conception, however 
 expressed, which performs a certain function or functions. 
 The identification of many things must be by their func- 
 tions. What is a ferry? Not essentially a large boat or a 
 small one, a long or a short one, a steam, man-power, gaso- 
 line or sail boat. But it is a boat which crosses a stretch of 
 water at stated intervals for the transfer of freight or pas- 
 sengers. While it is engaged in performing this function 
 of transfer it is a ferry. Now what is the function of 
 money? It has two, one is to be currency, the other to pay 
 debts. We will notice first that as currency. 
 
 Whatever is accepted as a medium of exchange is 
 currency. 
 
 There are three distinct relations in which owners view 
 property. First, that of seller. His relation is such that he 
 must take the pains to find a buyer whom it suits. This is 
 
 232 
 
CURRENCY AND MONEY 233 
 
 true just the same whether he be producer or distributor. 
 The last relation is that of buyer. The buyer has been at 
 the pains to find property to suit. Property is of more 
 utility in his hands. This is true whether he be the final 
 user, or in turn is to become a seller. The medium rela- 
 tion is that of currency. The possessor of currency stands 
 midway between buyer and seller. 
 
 To illustrate : A seller has shoes to sell. Their price is 
 $3.50, but to get it he must be to the pains of informing 
 buyers that he has them, and must by selecting, fitting, etc., 
 suit the buyer. He who has bought new shoes has been to 
 the trouble to visit a store to select the appropriate style, 
 etc., and to get fitted. He tells you his shoes are worth 
 $3.50. Now let us compare those $3.50 shoes in the dealer's 
 hands, in the wearer's hands, and Three Dollars and a half. 
 Three dollars and fifty cents is the value in each case from 
 a casual view. Yet the wearer would not like to take the 
 currency for them, and the seller should dislike to give it. 
 In a real merit or utility sense, the shoes are worth less than 
 the currency in the hands of the seller, but more than the 
 currency in the possession of the wearer. The buyer of the 
 shoes may have sold potatoes to get the currency. The cur- 
 rency is worth more than his potatoes were to him. Goods 
 bought are worth their currency cost, plus the trouble of 
 buying. Currency is worth the goods sold plus the trouble 
 of selling. This intermediate esteem of currency causes it to 
 circulate, to become current. All money is currency, but all 
 currency is not money. 
 
 One of the functions of money then is to flow forward 
 as goods flow backward from seller to buyer; to complete 
 the circuit or current of trade, to be currency. 
 
 The other function is to pay debts. The seller delivers 
 his goods to the buyer upon a promise to pay in the future. 
 So much money is stipulated to be paid. Now manifestly, 
 to be a just payer of debts, it must have an unchanging value. 
 
234 RIGHT AND RICHES 
 
 For if it is to pay for goods with a certain market value or 
 purchasing power at the time of sale, the payment should 
 have the same purchasing power at maturity, no more, no 
 less. It must always be supposed, too, that aside from the 
 real payment, interest is given as a consideration for wait- 
 ing. Hence, there arises an office in a ''payer of debts" 
 known as a measure of value. 
 
 Money is made a payer of debts by a laz<u which stip- 
 ulates that it shall be taken for all debts, or be a legal tender. 
 That is, that the tender of the stipulated money is made a 
 legal fulfillment of the obligation. This is the radical dis- 
 tinction between ''lawful money" and such things as checks 
 and drafts, which are usually accepted as money, but may be 
 refused at the option of the creditor. Nevertheless, such 
 checks and drafts are currency to the extent that they are 
 taken, to the extent that they are Current. This, then, is 
 the radical point that is commonly overlooked. That it is 
 compulsory for the creditor to accept money in payment, but 
 not other currency. 
 
 The reason that this point is so extremely important is 
 this : because the whole volume of Currency, and not simply 
 the volume of legal tender money, is what currently or nor- 
 mally controls the value of currency, including legal tender 
 money. 
 
 I would like to impress upon the reader's mind, for it is 
 all im.portant to any intelligent consideration of money, that 
 the total volume of currency controls the current value or 
 money price of things, but in critical times this volume is 
 reduced to the fund of legal tender money. 
 
 It would be as reasonable to think that the anthracite 
 coal supply alone determines the price of all fuel in Chicago 
 or St. Louis, as to think that some part of the volume of 
 money, viz. : the fund of gold or even the total fund of legal 
 tender money, determines the value of money. 
 
CURRENCY AND MONEY 235 
 
 The fact is that the whole volume of currency including 
 checks and drafts is what influences the value of money, 
 the value of a dollar. 
 
 We hear it said: ''The increased supply of gold has 
 cheapened money, and by decreasing its purchasing power, 
 has raised prices of other property, but we need more cur- 
 rency." It would be quite as reasonable to say : "The pro- 
 duction of petroleum has so cheapened it that coal cannot be 
 produced to compete with it ; what we need is more fuel." 
 
 The value of currency at a given date is dependent on 
 the volume of currency at that date. The whole volume of 
 our currency then, and not legal tender money alone, is the 
 measure of value. Here is the cause of all our financial 
 troubles. Values are measured by the whole volume of cur- 
 rency, while debts are payable with but one kind of cur- 
 rency — legal tender money. 
 
 In good times, checks and drafts based on credit con- 
 stitute the larger part of currency; real money less than 
 half. Debts are contracted on this basis of value. When 
 depression comes, this ''optional currency" disappears, leav- 
 ing only legal tender money on which to base values with 
 which debts are paid. 
 
 A perfect money will have a constant unchanging value. 
 A perfect system of money will reduce the percentage of 
 optional currency to the smallest fraction possible. It will 
 dispense with nearly all currency but what is legal tender. 
 Any money which is not a real measure of value is dis- 
 honest money whether it be too cheap or too dear. 
 
 No money based on a metal can honestly measure value. 
 
 No material thing has intrinsic value. It has only value 
 
 on account of its relation to general desire for it, and the 
 
 hindrance of its supply. Both these conditions are ever 
 
 changing. 
 
 We can at a given time compare the value of everything 
 to one thing. That would be making it the standard of com- 
 
^36 RIGHT AND RICHES 
 
 parison. Suppose we compare the market price or purchas- 
 ing power of all things with silver. Having once done this, 
 say on the 1st day of January, 1907, it is not essential to 
 care further about the metal silver, but only the ratio thus 
 deduced. We might on that date arbitrarily declare that 
 helium, a metal which exists in the sun and not on earth, 
 was worth as much per ounce as silver. We should then 
 have the following table of value: 
 
 1 cow 30 oz. silver; 30 oz. helium. 
 
 1 horse 60 oz. silver; 60 oz. helium. 
 
 1 ton coal 10 oz. silver; 10 oz. helium. 
 
 1 ton iron 20 oz. silver; 20 oz. helium. 
 
 1 bu. wheat 1 oz. silver; 1 oz. helium. 
 
 1 bu. potatoes ^ oz. silver; ^ oz. helium. 
 
 1 lb. butter ^ oz. silver; ^2 oz. helium. 
 
 From the above we may see that a cow is worth 30 bush- 
 els of wheat, 60 pounds of butter, 3 tons of coal. A ton of 
 iron is worth 2 tons of coal, 40 pounds of butter, etc. Now it 
 is apparent that we may make the comparison just as com- 
 pletely and more simply if we drop either silver or helium 
 from the table. We may also simplify it by dropping the 
 word ''ounce." We now have the following : 
 
 1 cow = 30 helium. 
 
 1 horse = 60 helium. 
 
 1 ton coal = 10 helium. 
 1 ton iron = 20 helium, 
 and so on. 
 
 Now we have 1 helium as our standard of value. 
 
 One looks at a market report. He sees coal has dropped 
 to 6 heliums, iron has advanced to 25 heliums, butter to 1 
 helium. Now what cares he whether helium exists at all, 
 even in the sun. He knows that he can now buy 1 ton of 
 coal with 6 pounds of butter. That to pay the debt of 15 
 heliums contracted he must give 15 pounds of butter. 
 
 This is almost as true of a gold standard. A gold stand- 
 ard is a fiction. We care nothing about the existence of 
 
CURRENCY AND MONEY 237 
 
 gold. It is likewise purely fictitious that money is based on 
 it. At the start it may have been, but we have now only 
 the name, not the substance, as a basis. 
 
 Jevons, "Money and Exchange," Chapter VIII says: 
 
 "Those who use coins in ordinary business need never 
 inquire how much metal they contain. Probably not one 
 person in two thousand in this kingdom knows, or need 
 know, that a sovereign should contain 123.27447 grains of 
 standard gold. Money is made to go. People want coin, 
 not to keep in their own pockets, but to pass it off into 
 their neighbors' pockets." 
 
 Value is not material, but mental. 
 
 It is just as impossible to conceive of physical substance 
 as a measure of value as it is to conceive of iron or wood 
 having a certain speed. The hind wheel of a carriage has 
 the same speed as the front. Gold being legally exchangeable 
 has the same value as money. Speed is not a quality of a 
 material, neither does it produce a permanent effect on it. 
 It is a relation between it and something else. 
 
 The attempt to regulate the value of money by basing 
 it on gold is a failure. It would only be possible to base it 
 on the natural, changing-commodity value of gold by con- 
 tinuously redeeming it all every day or week. The value of 
 gold is kept the same as money because the gold may be 
 converted into money, and not because all money may be 
 converted into gold; that were impossible, for money is 
 many times the volume of gold. 
 
 To think money tributary to gold, or its value based on 
 gold, is as far removed from scientific fact as to think the 
 sun tributary to the earth, and that it revolves around the 
 earth daily. This is the basic error of popular financial 
 thought. One may expect any sort of theories to be built 
 upon such a basis. 
 
 As a sample, it is asserted that this supposed basis, gold, 
 is increasing so rapidly as to depreciate its value and dislo- 
 
238 RIGHT AND RICHES 
 
 cate prices, and then the same person in the same breath 
 will allege a shortage or scarcity of currency. 
 
 Money is mistakenly said by some to be a means of stor- 
 ing value. Were a ferry taken for the storage of coal, should 
 it continue to be a ferry? 
 
 While coin or bills are in hoarding they are not money. 
 Money must be current. Standing water does not turn a 
 wheel, neither is it a function of money to be hoarded. 
 
 Cars are to move freight. Railroads must, indeed, pro- 
 vide a greater number on account of their being at times 
 converted into storage places by shippers. Many means are 
 taken to prevent this ; demurrage is charged of so much for 
 each day they are held. Yet at times we witness the dis- 
 tressing famines in coal and other things, resulting from cars 
 being, idle on sidings instead of performing their proper 
 function. 
 
 Now, just as a ferry may be constituted of almost any- 
 thing that will float, however imperfect, so, many things may 
 for a time assume the office of money; but while so acting 
 they must cease to perform their previous function. A 
 yacht may make a fine ferry, but it may not be used for a 
 pleasure cruise without interrupting this use. 
 
 There is no standard, naturally or physically evolved, 
 that may be taken as a model or basis for money any more 
 than there are natural ferries. 
 
 In Ideal Money may in progress of time be perfected, 
 but a perfect conception of ideal money is impossible while 
 an inverted conception of business is held. When the true 
 purpose of industry is seen to be to confer a blessing upon 
 the user and not primarily to give profit or pay to the pro- 
 ducer, then the true idea of money will be understood. 
 Money will be then seen to be a certificate indicating that 
 the holder has contributed so much toward the sum of hu- 
 man happiness, and he will be given credit by society in such 
 an amount on her obligations against him. 
 
CURRENCY AND MONEY 239 
 
 A log may be made to answer for a ferry in some de- 
 gree. Tobacco has served some of the purposes of money. 
 But money is by the nature of its functions an artificial 
 establishment. 
 
 Credit is transmuted into money, but while so acting it 
 truly ceases to be credit. Money cannot be credit; it must 
 be cash. 
 
 What change or transformation must be made in credit 
 to cause it to act as money ? 
 
 It must be changed from promise into fulfillment. Credit 
 is a promise to pay. Money is "pay ;" its very essence con- 
 sists in "pay." A piomise to pay implies future. A owes 
 B $1,000, due in a year, yet B may be destitute during this 
 year notwithstanding A's promise is good. Credit to be 
 changed to money must be divested of futurity, even of 
 promise. It must not agree to pay, but pay. The form of 
 printing has little to do with the nature or function of what 
 passes current and so constitutes money. A currency note 
 may read that the maker, whether bank or government, 
 "promises to pay," but this is not read nor considered by 
 takers any more than its series number. It becomes money 
 only through its being sought^ to be again paid to seller or 
 creditor. Whenever money is sought that it may be col- 
 lected, or that its metal may be used or hoarded, it ceases to 
 be money. 
 
 How, then, is credit transformed into money ? By some 
 law or private arrangement or common consent, which 
 causes a certain class of it to be sought by all. 
 
 A usual method is to make it a legal tender for debts ; 
 then B seeks it because C seeks it because D seeks it to pay 
 A, and A seeks it because B seeks it. It performs a circuit 
 because there is attraction at some point ahead of it in the 
 circuit. Exchanging goods for money is not barter, for the 
 reason that money is a ''medium relation' of property. But 
 
240 RIGHT AND RICHES 
 
 credit which has general acceptance in payment for goods, 
 acquires this relation until liquidated. 
 
 Suppose you wish to use cloth and have a stock of po- 
 tatoes which you do not wish to use. You will not trade 
 your potatoes for apples unless you get a greater market 
 value of apples, for it will be as difficult to get cloth with 
 apples as with potatoes. Neither will you trade your po- 
 tatoes for a note due in a year, however good, unless you 
 get it at a discount or put in potatoes above the market 
 price; for to get cloth with it, it must be discounted. But 
 you will trade your potatoes for money, because money has 
 a value equal to your potatoes, plus the trouble to sell them. 
 And you know it has a value to the cloth-owner equal to 
 the market value of cloth, plus the trouble of selling, even 
 while it 'has a value to you equal to that of the cloth, less 
 the trouble of buying. 
 
 Notes (as credit) have no such value. No one wishes a 
 note if he may get what it calls for instead. He will only 
 take it to get the interest promised. 
 
 Suppose a stranger in Chicago has the note of a New 
 York millionaire with the best of credit for $1,000 due on 
 demand without interest. Will he not have to discount it to 
 get the money at once ? No bank will cash it in full without 
 some consideration. It is only a piece of property surely 
 worth $1,000 in New York. But it takes time to collect it. 
 
 A New York Bank Currency note is taken by any bank 
 from any one. There is no thought of being obliged to collect 
 it. It is not simply worth $1,000 but is $1,000, not only in 
 New York but in Chicago or San Francisco now. 
 
 Money is positive wealth; credit is not wealth at all be- 
 cause it is a negation. Money seeks a seller, credit a payer. 
 Money is wealth because it is a means of exchange or use, 
 just as a telephone is by being a means of communication. 
 As electricity embraces less power than the steam which 
 generated it and more power than it is possible to apply to 
 
CURRENCY AND MONEY 241 
 
 ultimate use, but is yet invaluable because so readily con- 
 verted to any purposes desired, even so money, though of 
 less value than the property by which we acquire it, is in- 
 dispensably useful because it may be readily converted into 
 the multiform things we desire. 
 
 Credit involves a Debit. There is no debit to money. 
 The following analogy illustrates this: Credit is like a 
 vacuum seeking to consumiC or swallow a certain quantity 
 of matter. It is a minus quantity. Money is like a chemical, 
 sulphur, for instance. Sulphur is a true element, a positive 
 element. It is obtained by inducing another element such 
 as calcium to part with it, which is done at a certain cost. 
 Many elements having a "desire" or affinity for sulphur 
 will give up the substance they hold and take the sulphur 
 instead. Sulphur is not a minus quantity. Its positive ac- 
 tion on the element causes it to release the desired substance. 
 It is then recovered and the process repeated. This use of 
 sulphur is very extensive in the arts. Sulphur is a chem- 
 ical medium of exchange. 
 
 Money has a greater affinity with sellers, and less with 
 buyers, than have goods. This is why it circulates. Money 
 depends for its value on the limitation of its supply. Credit 
 depends for its value on payment. People look to the payee 
 for the value of credit; to the seller and creditor for the 
 value of money. Paying credit destroys it. Money is not 
 lessened by being paid over. The purchasing power of 
 money is increased with its decrease in volum.e, but its debt- 
 paying power is not increased. 
 
 Credit as credit will not be sought without it bear inter- 
 est. As money it must not bear interest, else the interest will 
 become an attraction to draw it aside from its current, and 
 cause it to be hoarded. A note of one bank to another is an 
 active debt. But its issue of "money notes" is not a debt as 
 long as it continues to circulate. Holders of such notes do 
 
242 RIGHT AND RICHES 
 
 not seek the bank for their value, but sellers, creditors and 
 tax collectors. 
 
 Some one has proposed to allow the whole volume of 
 credit to circulate, but only a limited quantity will circulate. 
 The supply must be so limited that money seekers' demand 
 for it will be so strong as to make up for lack of interest. 
 Simple credit due in a year will only be taken at a discount 
 of 2, 4 or 6%. If due on demand it will be presented at 
 once for cancellation as are checks. But with legal-tender 
 power to make it money, it may never be presented. This is 
 in a measure fixed money, the same pieces staying in circu- 
 lation some time. Checks act as money, but checks are very 
 transitory, they are canceled within an hour, or a day, or 
 a week. Perhaps their volume may be twice as much to- 
 morrow as to-day, or only half as much. 
 
 We need a certain dependable volume of "fixed" money. 
 Why? Because transitory money has a tendency to sud- 
 denly disappear and cause disaster. 
 
 The value of bank-checking, based on deposits, depend- 
 ing on loans, is questionable. A great volume of money 
 of any kind is not especially desirable. The desirable thing 
 is steadiness of value. ''Fixed" money should be perman- 
 ently and definitely fixed. The quantity should be wisely 
 and unselfishly controlled so as to insure constant value. 
 
 The value of money is inverse to the ratio of its volume 
 with the demand for it. 
 
 There are many theories about this ratio. Mill says its 
 value is inverse, with the ratio of its volume, to the volume 
 of trade. This is commonly accepted by economists as the 
 correct statement of the basis of money's value, but this 
 relates solely to its ''present-competitive-value" or "cur- 
 rency-value." The most important value of money to be 
 controlled is its future or speculative value. 
 
 But even the currency value of money is not its ratio to 
 the "volume of trade," if by that is meant the total volume 
 
CURRENCY AND MONEY 243 
 
 of exchanges ; for the vokime of exchanges may be increased 
 or multipHed without regard to the vohime of present wealth 
 or present property. The "volume of exchanges" may be 
 increased, or even multiplied, by exchanging evidences of 
 debt. On the other hand, the facility of exchange may be 
 mAich greater at one time than another, enabling exchanges 
 to be made much more rapidly; hence, in greatly increased 
 volume with the same amount of money in a given period. 
 A dollar moving, or changing hands more rapidly, transfers 
 more goods a day or week, just as does a car moving more 
 rapidly. 
 
 Let us look at this proposition from an individual stand- 
 point. How much money will a man commonly have on 
 hand? Obviously on the average, he will have an amount 
 in proportion to his assets, and not in proportion to the 
 amount that passes through his hands. Hence, with in- 
 crease of wealth among the individuals of the community, 
 that is among the multitude, the average people, there is a 
 tendency to keep more money on hand. So the demand is 
 increased. But this tendency continues only until the indi- 
 vidual reaches a certain degree of affluence after which he 
 begins to depend largely on his personal accounts and checks. 
 This class is a minority, however, whose fortunes consist 
 less of real wealth than of credits or concessions. 
 
 Now this is not only true of money, but of any commo- 
 dity. People have more carpets or more books or glass in 
 proportion to the increase of wealth. Hence, increase of 
 wealth increases the "currency value" of money, if its vol- 
 ume remains the same. Increase of its volume decreases its 
 currency value, unless there is general increase of wealth. 
 
 From this we may deduce the following law of the 
 volume of money : The volume of money should be in one 
 continuing proportion to the real Wealth of the community. 
 
 But currency's speculative value is what makes the big 
 demand. The present real value of wheat may be 60 cents. 
 
244 RIGHT AND RICHES 
 
 yet by excessive sales on futures the "shorts" may be made 
 to pay 75 cents. The "short" selling of money — debt — is 
 many times that of any other species of thing. Everyone 
 who gives his "promise to pay" is selling money for future 
 delivery. Mill neglects to take into consideration this de- 
 mand — the use which causes the most desperate demand for 
 money, that of paying debts. 
 
 Now, what is debt? 
 
 It is a contract to deliver a certain quantity of a certain 
 species of property. Contracts are continually made to de- 
 liver so many bushels of wheat, corn or oats, so many shares 
 of a certain corporation's stock on a certain future day. It 
 quite commonly happens that these contracts to deliver, 
 taken in the aggregate, exceed all expectations, and when 
 those who make them seek to fulfill their obligation they 
 find the market thronged with others trying also to get the 
 same things. The sellers are said to be "short" on the mar- 
 ket. This competition for a particular commodity, say 
 wheat, is not to get it to grind, to be eaten, but to fill these 
 contracts. In com.mon parlance the wheat market is 
 "bulled" or overcontracted. Thus prices may be jumped 
 50% or more above what physical conditions warrant. 
 
 I know of no market, nor any use for buckeyes, the seed 
 of the beautiful tree scattered through the woods of the Mis- 
 sissippi Valley. They fall off the tree and rot. It would be 
 no trouble for farmers in many localities to pick up a bushel 
 of them. They could easily afford to do it for twenty-five 
 cents. But suppose a market gambler should, in the summer 
 quietly contract for several million bushels of buckeyes at 
 fifty cents. It matters not whether he had the least idea of 
 using them. He could easily make contracts with a farmer 
 in any district where they are common, to deliver fifty to a 
 hundred bushels, as each would think he could go out and 
 pick them up without trouble; but when in the fall he en- 
 countered dozens of others also after them, he would hunt 
 
CURRENCY AND MONEY 345 
 
 up the man he had contracted with and try to substitute 
 apples, bushel for bushel. If he could not, he would offer 
 two bushels of apples for one, then five or ten bushels of 
 apples or potatoes or wheat, or ten dollars in money for 
 every bushel of buckeyes he had agreed to deliver for half 
 a dollar. He would now be at the mercy of his creditor, 
 the buyer, or of those who might have buckeyes. 
 
 Likewise is money of final payment, that which is con- 
 tracted to be delivered when we promise to pay "dollars." 
 Nothing but legal tender will do. We cannot tell how much 
 others have contracted to deliver at the same time, but we 
 may be sure it is many times the total amount of legal tender 
 in existence. 
 
 Now, if all these deliveries are quietly made, and each 
 of the creditors pay out again what is delivered without de- 
 lay, and it is passed on to fulfill other contracts, no harm 
 comes; but if the creditors foolishly or maliciously lock it 
 up for a month or a year in a safe deposit box, we are at 
 the mercy of our creditors. 
 
 Here, then, is the vital factor in the value of money. 
 
 The value of money is no more based on gold than the 
 value of cloth is based on the production of silk. The de- 
 mand for silk depends on its use for cloth. It belongs to the 
 cloth group. People desire cloth fabrics for many purposes. 
 Cloth of cotton, wool, linen or many other fibres may be 
 substituted for silk. The "group" is what desire seeks. 
 The desire for money has no relation to any material what- 
 ever, but to a group of entities however constituted that will 
 be accepted by others. 
 
 Now this acceptance is of two classes, voluntary and 
 compulsory. This is the vital point so often overlooked. 
 Whatever is voluntarily accepted is currency. Checks, 
 drafts and various other forms of promise are usually ac- 
 cepted voluntarily and act as currency. But the other class 
 ^rthe only class which is money of contract — compulsory 
 
^46 RIGHT AND RICHES 
 
 money, money of last resort, must be made a legal tender 
 by law. This is the only part of the volume of currency 
 which creditors can be made to take in fulfillment of the 
 enormous volumes of debt, of contracts for future delivery 
 of money, periodically made in such tremendous volumes. 
 
 Were it not for debts for payments contracted to be made 
 in the future, we could well leave the volume of money to 
 regulate itself. It would then do so automatically, for when 
 the volume became proportionately too large as compared 
 with demand, its value per unit would be less, and vice 
 versa. 
 
 Nothing is honest money that can be retired or diverted 
 from the debt-paying supply in critical times. The supply 
 of currency should as nearly as possible consist wholly of 
 legal tender. Redeemable, or retirable notes, changeable 
 volumes of checking accounts are all alike dangerous. 
 
 The "banker" economists ridicule the words "legal ten- 
 der," yet legal tender is a vital element of money. Checks 
 and drafts are not legal tendef. They are but "half money." 
 Legal tender may be termed "whole money," because it has 
 the whole function of money, viz. : currency and debt-paying 
 power. 
 
 Checks cannot be made to pay debts without the consent 
 of the creditor. Moreover checks may be issued in excess 
 of banks actual legal tender holdings only as borrowers' 
 deposit notes. Debts under our present system increase 
 with increase of trade. But when credit is withdrawn, 
 loans cancelled, and the power of issuing checks reduced 
 to the volume of actual legal tender, and legal tender even 
 more greatly reduced by the retiring of bank issues, we 
 are then left ruinously short of currency to conduct busi- 
 ness with or money to pay debts. Credit indeed responds 
 to the usual trade demands of currency, but not to the 
 crisis debt demands. Even coin is then hoarded. 
 
CURRENCY AND MONEY 247 
 
 It is then plainly desirable that a much larger share of 
 money be money of last resort, legal tender, which cannot 
 be redeemed or canceled; and a much smaller share ''half- 
 money." 
 
 Credit is not an unmixed good. Any credit which is 
 fictitious, which is not for real productive capital, is an evil 
 and should be discouraged. No artificial encouragement 
 should be given to private banks of deposit. Government 
 should maintain banks in connection with the Postoffice, 
 where deposits could be made and checked upon. Bank- 
 note money is a crime, for it can be put in circulation only 
 by being borrowed by someone. The banks still keep a 
 "string on it." Bank loans should be greatly reduced by 
 requiring heavy reserves. This reduction of currency by 
 consequent reduction of checking, should be replaced by the 
 direct government issue of "whole money." 
 
 Money has ever and universally been issued according to 
 convenience or accident. Usually large volumes have been 
 issued by both banks and governments to get the profits or 
 benefits of credit without paying interest ; to dishonestly get 
 something for nothing, for it is as dishonest to try to steal 
 interest as principal. Franklin protested against such issue 
 by the Colony of Pennsylvania, when, while their issue was 
 stable, it was proposed to increase it to raise an Indian 
 war fund. Franklin insisted on the issue of bonds whose 
 interest rate should cause them to be hoarded and tiius 
 prevent them from flooding the currency market. During 
 the Civil War some blundering money-issuing was done by 
 the issue of "interest-bearing money." Had only the 
 needed currency, increase, if any, been made, and then 
 credit had been obtained by interest-bearing bonds, the 
 money and bonds should both have maintained par with 
 gold. 
 
 16- 
 
^48 RIGHT AND RICHES 
 
 Our present currency is entirely founded on the false 
 basis of credit. 
 
 The gold standard is entirely a fiction. This is the cause 
 of panics. Money should be divorced from credit. 
 
 Mr. R. H. Patterson, a very eminent English economist 
 and opponent of the specie-basis system, says : 
 
 "If much gold happens to come into the country, the note 
 circulation is likely to be increased to a corresponding extent; 
 if gold is withdrawn from us, the note circulation is propor- 
 tionately diminished. If, owing to a temporary cause, all the 
 gold available for monetary purposes were sent abroad, all our 
 paper money would likewise disappear, and the country be left 
 without money of any kind. A more absurd theory was never 
 propounded. If metallic money fails us, we are on no account to 
 use any other. This we are told to regard as a masterpiece of 
 economical science; this is the great discovery which our ad- 
 vances into civilization have revealed to us. The gospel of 
 monetary science now is, that when a country does not want 
 paper money, it ought to have a great supply of it; and when it 
 does require paper money it shall have none. When a country 
 has enough of specie, it ought to double its currency by issuing 
 an equal amount of bank-notes, and when there is no specie, 
 there should likewise be no notes. Is it necessary to discuss 
 such a theory? In order to be refuted it needs only to be 
 stated; in order to be rejected it only needs to be understood. 
 It is a theoretical monstrosity against which common sense 
 revolts — a burlesque of reason, which even the present genera- 
 tion will live to laugh at." 
 
 Money should not be redeemable in gold, or anything 
 else. In the name of common sense, why should we expect 
 to need less money in a year, or at any future time? 
 
 To provide for retiring it is as fooHsh as would be the 
 action of a city government which should pave the street 
 with blocks provided with rings for the attachment of der- 
 ricks, that they might be easily removed and piled up when 
 not further needed. 
 
 Should there be a flexible currency ? 
 
 Should a yard measure be made of elastic? 
 
CURRENCY AND MONEY 249 
 
 Some maintain that there is a critical time in each year 
 when money is in special demand. I doubt it. If this were 
 found after exhaustive inquiry to be true, it could be reme- 
 died by requiring- a slightly less reserve to be kept by banks 
 at such seasons. But I have heard no argument on this 
 season of increased demand that sounded reasonable. When 
 there is a large crop the demand for credit for speculating 
 is no doubt greater. 
 
 It is said that in harvest time the banks in the farming 
 communities withdraw their deposits from the Wall Street 
 banks to be loaned to farmers to pay laborers. But why 
 permit banks in the country, where money is supposed to be 
 lacking, to deposit their funds in the centers where there is 
 already such excess of it as drives men mad? 
 
 How silly is the cry, on the one hand, for the issue of 
 money to pension soldiers, or for "what not" purposes, other 
 than the needed supply of currency, and on the other, the 
 contention for a ''gold basis." There is no scientific reason 
 for the free coinage of silver other than the fact that two 
 commodities fluctuate less than one, and that silver money 
 would not have to be borrowed to get into circulation, as 
 bank notes must, for coined silver would be paid out in in- 
 dustry, but banks may not pay out their notes except on 
 loans. This was the principal objection of the bankers to 
 free silver. There has been since 1894 a greater inflation 
 through banknote issue than would have occurred with free 
 coinage. Every dollar of these banknotes had to be bor- 
 rowed from the banks, and observe the result of this debt 
 volume in the present panic. 
 
 Credit evidenced by checks becomes current for short 
 terms transferring property. Hence, such checks are cur- 
 rency. Bankers and governments really convert credit, 
 evidenced by notes, into currency. These notes must be 
 for proper sums and payable to bearer on demand without 
 interest. If not payable until a distant future, they will 
 
250 RIGHT AND RICHES 
 
 only be taken at a discount. When bearing interest they 
 will not be parted with, but kept for the interest. But such 
 notes, during the time they are currency, cease to be credit. 
 Although the issuer is liable for their payment, it is only 
 when they cease to circulate. The citizen of Texas who 
 holds a note issued by a Maine bank cares nothing for the 
 bank. He looks not to the bank for pay, but to the mer- 
 chant, whose goods he will buy with it. Money as long as 
 it is money seeks property to buy, or creditors, and not 
 redemption. But notes are a dangerous and imperfect form 
 of money. There was never a greater lie put into circula- 
 tion than that anyone in 1896 was afraid silver m.oney 
 would not be good. 
 
 Too many people conclude that no one but bankers know 
 about the science of money. These same people leave city 
 government to grafters. Aside from their interests, suc- 
 cessful business men are likely to know less of the prin- 
 ciples of money than poorer persons. 
 
 There is also a large "party" of stupid persons, animated 
 by prejudice against those who are provident enough to 
 have Capital loaned out, who howl against banks and Wall 
 Street without knowing why, and clamor for the govern- 
 ment to issue unlimited volumes of money to be loaned to 
 farmers at 2%, or to be used to buy all the railroads, or 
 dredge rivers, or what not. These gentlemen commonly 
 have long hair, and they somewhat strengthen the cause of 
 banks by their talk. 
 
 When one advocates that money be issued, either to give 
 banks or government credit, he is ignorant of the first prin- 
 ciples of money, or is '^interested." No less does it show 
 ignorance to think that interest rates depend on the volume 
 of money. I know that the Bank of England claims other- 
 wise, but it gets millions of pounds in interest out of its 
 claim. 
 
CURRENCY AND MONEY 251 
 
 Rationai, Moni:y. 
 
 What are the chief requisites of a nation's currency? 
 
 First: It should by all means be issued designedly — for 
 the purpose of currency — and not inadvertently or incident- 
 ally as a means of saving interest, boosting prosperity or 
 patronizing a powerful class. An intelligent city will not 
 trust its water supply to chance, but employs expert en- 
 gineers to calculate it. Why should there be no predeter- 
 mination in this alone of the most vital instruments of so- 
 ciety? Money should not be provided, as some persons 
 build walks — when they have^ cinders to get rid of. 
 
 Second: The money supply should be one consistent 
 scheme. One complete comprehensive unity, planned and 
 instituted solely for the performance of its peculiar func- 
 tions; not a haphazard patchwork of incident and accident. 
 To this end, the devising of a currency to be substituted for 
 our present blundering, crazypatch currency, should be given 
 over to a body of men learned in economics, and having no 
 members who are interested in banks or stock manipulation. 
 
 Third: It should have a constant value by means of a 
 constantly maintained ratio to the volume of wealth. 
 
 Fourth : It should be divorced from credit. 
 
 Fifth : It should be sure. 
 
 Sixth: It should be convenient of transfer. 
 
 Seventh: Its volume should be free from any changes 
 resulting from variations in confidence or credit. No change 
 in its volume should be possible, except the changes deter- 
 mined by the commission in charge of it, and they should 
 be limited to a very small percentage in any year. 
 
 Eighth : No private interest should in any manner con- 
 trol or assist in its issue or retirement. 
 
 Ninth : Its value should be entirely divorced from that 
 of any metal or commodity. It should be made chiefly of 
 
252 RIGHT AND RICHES 
 
 paper, a material of nominal cost, and the incidental profit 
 should of course go to the nation. 
 
 Tenth : As nearly as possible, everything but legal tender 
 money should be eliminated from the volume of currency by 
 the discouragement of debt. 
 
 ''I would change the form of these notes, so that instead 
 of being technically, or in form, a promise, they should have 
 stamped upon them the denomination as gold and silver 
 have." — Senator Wright, of Iowa, U. S. Senate, 43d Con- 
 gress; Congressional Record, Vol. II, page 751. 
 
 When a correct basis for money has been adopted then 
 let some properly constituted branch of the treasury pay 
 this safe and honest money to the people through the retire- 
 ment of bonds and other legitimate disbursements for public 
 improvements, etc., until the whole present volume of bank- 
 notes and redeemable currency should be replaced or such 
 volume as scientific research should determine as desirable. 
 
 Beyond the volume needed to maintain its constant 
 value, government should not issue money, and it should 
 pay a good fair rate of interest for all credit. 
 
 The stock argument against irredeemable money is that 
 governments are liable to over-issue. Are they more liable 
 than banks to do so? 
 
 But however imperfect a means of gauging the money 
 value we adopt, is it reasonable to expect that it would 
 be better than to leave the whole matter of value and volume 
 to chance ; to changing conditions which tend to increase the 
 volume when it is already too great and to reduce it still 
 more when it is too low? 
 
 Any tariff or impost taxation tends to complicate the 
 currency problem by withdrawing a large percentage of the 
 currency as surplus in the treasury, which, in effect, is ex- 
 actly the same as canceling it during the time it is so with- 
 drawn from circulation, as is recognized by everyone. The 
 banks like this, for they get free government deposits. With 
 
CURRENCY AND MONEY 253 
 
 a national system this surplus could be kept down to a frac- 
 tion of the year's expenditures. 
 
 The monetary commission referred to should work along 
 with the treasury. Should money depreciate in value, pur- 
 chases by government should be decreased and the money 
 so saved turned into a hoard or reserve for the purpose. 
 Should money increase in value, government purchases 
 should be increased to pay out this hoard and any additional 
 issue of currency required. It is a most rational plan, on 
 all accounts, for governments of all kinds to do the most 
 work in the dullest times, when it may not alone be done 
 more cheaply but will tend to revive business. Interest is 
 also lower in dull times. 
 
 Even with our unnatural tax system, a measure of suc- 
 cess could be made by the issuance of bonds payable on de- 
 mand. They should, of course, bear more than 2% when 
 stripped of their use as security for bank issues, and when 
 payable on demand, else they would find no sale. Any bond 
 should bear more than 2%. No community fit to live in can 
 have an interest rate so low as 2% ; 5% is nearer a normal 
 rate of interest. 
 
 Should the surplus in the treasury grow too large, these 
 bonds could be called and paid in legal tender. Should a 
 deficit occur in the treasury, these demand bonds should be 
 issued to make it good, and so keep the volume of money 
 constant. 
 
 The great English financial writer, Thomas Atwood, 
 says: 
 
 "Contrast all the dangers, the changes, the fluctuations, the 
 unjust ruin, the unjust aggrandizement attendant upon a 
 metallic standard with the security, the equality of prices and 
 of values, the exemption from unjust losses and from unjust 
 gains, and the general stability of all profits and of all prosperity, 
 which a non-convertible paper currency presents, self-existent, 
 self-dependent, liable to no foreign actions, entirely under our 
 
254 RIGHT AND RICHES 
 
 own control; contracting, expanding or remaining fixed accord- 
 ing as the wants and exigencies of the community may require — 
 a non-convertible paper currency presents every element of 
 national security and happiness without the possibility of in- 
 juring any one class of the community. By it we may forever 
 insure a wholesome range of prices, neither too high nor too 
 low, but securing at all times the due reward of industry to the 
 productive classes, and the due distribution of mutual rights and 
 interests among all other classes of the community. I have re- 
 flected upon the subject for twenty years; I have continually 
 turned it in my mind in a thousand shapes and ways, and I still 
 most firmly retain the opinion above expressed. And one im- 
 portant fact I ought to mention, in confirmation of this opinion. 
 I have never met one single individual who has had leisure and 
 disposition to turn his thoughts to this subject who has not 
 fully adopted the same opinion in the end. 
 
 "If these arguments are wrong, is it not strange that no 
 one has ever been found to point out their error?" 
 
CHAPTER HI. 
 
 Credit. 
 
 HE word credit denotes two very distinct entities. 
 When one's promise of future payment is potent 
 to obtain property, either by reason of a good 
 character, or on account of possessing such assets 
 that one may be compelled to pay, such person is said to 
 have credit. The more correct or definite terms for this 
 ability to obtain credit are credence, credibility or trust- 
 worthiness. 
 
 When one holds the promise or obligation of another, 
 or has a balance at a bank — a clearing-house of credits — he 
 thereby owns a portion or share in the present or future 
 wealth of the community. We might term this "latent title" 
 partnership, or undivided interest in property, existing in, 
 or accruing to, the possession or stewardship of persons, 
 perhaps unknown to the creditors, who owe a correspond- 
 ing debt or obligation to deliver it. This is a meaning far 
 from the other, though the two are usually confused. The 
 first is but the ability to contract debts. The latter is an 
 ownership of property as yet unapportioned. 
 
 ''Confidence" is that condition of thought which gives 
 credence. Fear destroys confidence. But confidence refers 
 not alone to giving credence to persons; it is not alone the 
 faith in the trustworthiness of persons, but faith in the suc- 
 cess of enterprises. The value attaching to property de- 
 pends on confidence. Panics annihilate wealth by destroy- 
 ing confidence. 
 
 It is often mistakenly asserted that there is as much real 
 wealth in the country after as before a panic. It is not so. 
 The real wealth is the general estimate of the importance of 
 things, goods or enterprises. 
 
 355 
 
256 RIGHT AND RICHES 
 
 Credit, latent-title, accrues temporarily to different in- 
 terests with the output of wealth. The growth of a crop 
 means a credit to the land-owner and tenant. 
 
 The steel company sells its product, for which it secures 
 to itself in return the transfer of credit in banks. If its 
 business is profitable its stockholders have a credit accruing 
 for which the company transfers this credit to them in divi- 
 dends. This credit, latent-title, is constantly accruing to 
 owners of capital, concession or loan obligations. This 
 quasi-title is floated or transferred, either by the transfer 
 of the promises, the debt-obligations of debtors ; by the 
 handing about of the specific notes or bonds, or by trans- 
 ferring by checks the debits of banks guaranteed by the 
 pooled promises held by banks, from their debtors. 
 
 Credit is a promise to deliver. It involves a promisor 
 called a debtor, and a promisee called a creditor. A date of 
 delivery may be stipulated or left to the option of either 
 party. A loan that m.ay be paid or declared due at any time 
 is termed a Call Loan. The property promised may be 
 specified, or only a certain vahie promised, the kind to be de- 
 termined at delivery. 
 
 We deliver our baggage to a carrier and get a check 
 promising to redeliver to us the certain trunks or pieces. 
 Wheat is delivered to elevators, and receipts taken promis- 
 ing so many bushels of the same quality, but not the same 
 specific wheat. These receipts are bought and sold more 
 largely than the specific wheat. 
 
 In rural districts it is quite common for one person, who 
 is known at the general store, to give in exchange for labor 
 or goods, an unspecific order on such store ; not for so much 
 flour or sugar, but for so much value of any goods selected. 
 He will pay the store at harvest. Department stores in 
 cities, commonly, upon the return of goods not desired, issue 
 a credit check of like nature to such orders. 
 
CREDIT 257 
 
 The promise to pay money, while legally specific, is not 
 so in general practice. Few notes are actually paid in 
 money. Most are paid by giving another form of credit 
 due on demand — checks. The holder of a note may, in some 
 instances, even be able to demand gold, a special kind of 
 money; but this power is rarely enforced. Money is de- 
 manded in time of panic, to some extent, but not universally, 
 else few should escape bankruptcy. 
 
 Credit is not capital, but its principal use is to procure 
 capital. One may buy a diamond or a coat with debt. This 
 simply implies that he expects that wherewith to pay, either 
 from his salary or other income. 
 
 Interest is usually charged for credit. When one fur- 
 nishes funds or goods and waits a year, he charges in addi- 
 tion to the cash price the current rate of interest. Hence, 
 the borrower cannot consistently borrow except he put the 
 results of such borrowing to procuring him increase where- 
 with to pay such interest. 
 
 I may buy one piano and hold it a year and return it 
 with 6 per cent, interest added, for I have had that much 
 pleasure from the music; so that I take the interest from 
 my other income. But if I may be able to sell them at 10 
 per cent, above what I pay, I can buy a thousand pianos and 
 pay 6 per cent, interest thereon, for by distributing them to 
 users I add to their value. They are my capital. 
 
 Credit is largely given for capital. A wishes horses and 
 equipment to grow crops. B has them, but he has not faith 
 in A's ability to redeem his promise to pay for them at har- 
 vest. But when C, in whom he has faith, endorses A's 
 promise to pay, he takes it for the capital A wishes. C 
 thereby gives A credence wherewith to get capital. Now if 
 A succeeds in growing a valuable harvest, he may through 
 exchange redeem his promise to B, and thereby he may 
 then obtain some credence with A on his own account. 
 
258 RIGHT AND RICHES 
 
 A feature of credit overlooked is this : That while cred- 
 it is primarily based on some species of tangible property, 
 such as lands, merchandise, etc. — either existent or to be 
 produced, which is looked to as a means of payment — this 
 credit in common practice comes to be largely superimposed 
 upon other credit. For instance : A has tangible assets, land 
 for instance, of a value of more than $10,000. He gives B 
 a mortgage on this land for $10,000; B puts up this mort- 
 gage as collateral at a bank and gets a checking account of 
 $10,000. He has his check certified for this amount at the 
 bank, and puts it up as security with D for stocks worth 
 $10,000. Now here are four $10,000 credits based on an 
 original $10,000 of property. In actual practice, this repe- 
 tition of credit goes much further, even to ten or more times. 
 Banks extend a credit to borrowers of more than ten times 
 the actual money in their vaults. 
 
 In every community there are those with sums of credit 
 that they do not immediately need to spend. Salaried persons 
 save part of their salaries. Merchants have not use for their 
 daily receipts until certain demands mature. Farmers sell 
 their crops and have no need for the proceeds until new crops 
 are to be planted or improvements made. A dealer in credits 
 borrows from several hundred these small sums of credit 
 and money aggregating, say, $10,000 at little or no interest. 
 With this accumulated sum he buys from the lumberman the 
 note of the builder ; from the grain grower, the note of the 
 stockfeeder; from the factory, the note of the merchant; he 
 also loans money to the brickmaker to pay for labor and fuel 
 to complete his kilns of brick ; the ice man to store his 
 houses with ice, and so on. Now the sellers of these notes 
 do not immediately need all the cash, but they simply allow 
 the credit dealer to owe them the amounts due on demand 
 or upon their written order. 
 
 It may be that the grain grower wishes to buy more land 
 and it will be months before he gets what suits him. It 
 
CREDIT 259 
 
 will perhaps take the factory some weeks to pay out the pro- 
 ceeds of the note given, for wages or supplies. The lumber- 
 man may not wish to pay for new stock for weeks, hence 
 the credit dealer will not need to pay out all of the $10,000 
 he borrows in order to secure $10,000 of notes. He may buy 
 at least $40,000 of notes therewith. 
 
 When the manufacturer pays his men they will pay the 
 money to the merchants, who at once deposit it with him 
 again. So of payments made by all other borrowers. Such 
 credit dealer is called a banker. Many persons think a 
 banker must be very rich to loan so much. But they forget 
 that he may be borrowing quite as much as he is loaning. 
 
 A banker needs to be able to judge how much to loan 
 of what he has borrowed, by guessing how much redeposit- 
 ing will be done and how much checking out. He must also 
 study applicants for loans to determine what credence they 
 should have. But being a banker does not tend to give a 
 knowledge of national finances any more than being a black- 
 smith does. 
 
 But, it may be asked, how can one deposit abstract credit 
 in a bank? 
 
 By depositing checks, notes or drafts. 
 
 How does this help the bank ? It enables the bank to 
 make loans, to give checking accounts to customers, and 
 take the responsibility of meeting their checks with part of 
 the cash on hand, because it has these credit resources to 
 realize on if required, by rediscounting them. 
 
 Is a bank of use in a community? Yes. It serves peo- 
 ple in various ways. First, it furnishes a safe storage for 
 funds, allowing them, at the same time, to be more conven- 
 iently paid out by check without the trouble of counting, or 
 the risk of loss in delivery. Second, it is a means of making 
 the capital of those who do not wish to use it, available to 
 those who do. 
 
260 RIGHT AND RICHES 
 
 Now the lumberman could not hunt up several hundred 
 persons with dribs of money in order to get $5,000. If he 
 went to them they might not trust him, or they would not 
 be willing to lend for any definite time. The banker bor- 
 rows these sums and by having so many is able to take 
 chances on lending a definite sum for a definite time, it being 
 likely that if one calls for his deposit, another will make one 
 as great. He needs only to keep a certain percentage of re- 
 serve. Most people are not afraid to trust him.. He virtual- 
 ly endorses the loan to the lumberman. 
 
 Suppose a library is formed by borrowing ten books 
 from each of 5,000 persons, each of whom may now have 
 the use of 50,000 books instead of ten. A loan library is a 
 "book bank." A livery stable, if it borrowed its rigs, would 
 be a conveyance bank. This plan is proposed with freight 
 cars. A pool would borrow all idle cars for a day or year 
 — however long the owners had no need of them — and re- 
 loan them. This principle gives the great efficiency to Pull- 
 man cars. They are diverted to the line of heavy traffic. 
 
 The business of production and distribution would be 
 much hampered if deprived of banks. A producer may not 
 have great wealth, yet he finds that retailers desire ''time" 
 if they buy. He can take their notes if he may discount 
 them. But he may even need to borrow, so as sufficiently 
 to finish his stock as to begin selling. The banker, seeing 
 the progress of his stock, may readily lend him credit to 
 pay wages and for supplies. He must at the start have 
 money to build his plant, or borrow it for some years on 
 bonds or mortgages. 
 
 A bank's principal dealings are in credit — in simple ab- 
 stract promises to pay, not money, though the stipulation is 
 so written; but to pay value, goods, wealth, property. A 
 farmer sells his hogs, a miner his ore, a merchant his wares ; 
 they may simply get credit, promises to pay, notes or checks. 
 These they turn over to the credit storehouse, the bank, to 
 
CREDIT 261 
 
 keep until, they wish specific property, or to cancel their 
 debts. When one sells anything it is sufficient to get a 
 check, an interest in "demand credit." He may then trans- 
 fer it to others, in exchange for what he desires to enjoy 
 or use for capital. 
 
 But credit is not capital. Neither, if one get from the 
 bank actual currency, has he acquired capital. Yet, while 
 neither money nor credit is capital, they are the most con- 
 venient means with which to secure it. 
 
 Suppose you wish to go into manufacturing. You either 
 have, or by some means secure, a balance or credit at a 
 bank for $20,000. Now, according to common parlance, you 
 have so much capital, but according to strict economic terms 
 you have but the means of getting it as you require it. With 
 this you buy stocks of "raw material" and such machinery 
 and other equipment as you require. You require workmen. 
 These fashion the raw material into useful shape. 
 
 At the end of a week or a month they have thus added 
 several hundred dollars of value to it. These workmen 
 thereby acquire an interest or credit in the wealth being 
 thus developed. Say their share is now $1,000. You buy it 
 by paying them wages. To do this you must have other 
 credit to transfer to them, with which they may buy what 
 they see fit. How do you get this credit? Naturally you 
 sell the product and get a transfer of the buyer's credit at 
 the bank. 
 
 But suppose you simply deposit your note at the bank 
 and give the workmen checks. They may with these checks 
 procure food from the grocer, coal, shoes, lumber, etc., from 
 dealers, or pay installments on land — in short, procure sub- 
 sistence as well as to make other uses of them, the recipients 
 perhaps indirectly buying the output of your factory there- 
 with. But this does not constitute this subsistence "cap- 
 ital," for when bought for consumption it is no longer cap- 
 ital. 
 
262 RIGHT AND RICHES 
 
 This variety of goods bought by employes is, however, 
 wealth — whether berries or vegetables picked to their order 
 in exchange for credit. By this credit acting temporarily 
 as currency, this variety of goods is "fluxed," or made to 
 flow to balance the $1,000 product taken over by you. 
 
 Now, while it could not be expected in practice that the 
 various dealers receiving them would return any great por- 
 tion of your checks to you, yet they will in fact return all 
 the credit indirectly to employers generally; so we see that 
 through credit the wealth of the gardener is transm.uted in- 
 directly into manufacturers' capital, in the shape of part of 
 your week's output, by his taking the wage checks which he 
 may convert into capital for himself by buying part of it — 
 perhaps a plow. 
 
 A, B and C are depositors at a bank, have a balance. E 
 borrows from it to pay for his stock of merchandise. Hence, 
 A, B and C are indirect title-owners in E's stock. They 
 may buy portions of it, and by checks to E enable him in a 
 measure to liquidate. In this indirect way, owners of credit 
 have a sort of indirect title in the goods of debtors. 
 
 It should always be remembered that what is received 
 by the debtor as a consideration for his promise is a distinct- 
 ly different parcel of property from that which he agrees to 
 return in payment. What he receives may be capital, per- 
 sonal enjoyment or the satisfaction of other debt; what he 
 expects to pay with may be the proceeds of crops or manu- 
 factured goods. Thus millions and millions of credit repre- 
 sent nothing but the power to absorb wealth yet to be cre- 
 ated. 
 
 Debt beyond a very limited amount is a great evil. It 
 leads those of poor judgment to extravagance. Debts ma- 
 ture, sometimes suddenly, and tremendous volumes simul- 
 taneously. Confidence is destroyed, debtors lose their cred- 
 ence. Awful loss and bankruptcy result. It is then that 
 the legal phase of the contract is partially enforced which 
 
CREDIT 263 
 
 requires a specific commodity; money, or even a specific 
 kind of money, gold. Values of all other things are thereby 
 sacrificed. 
 
 Laws should be changed to remedy the very foundation 
 of credit. A correct money system would be one of the 
 remedies. 
 
 But aside from the money question, credit vitally de- 
 mands to be studied. 
 
 If everyone could realize that it is quite as dishonest to 
 needlessly delay the payment of an account, as to fail en- 
 tirely to pay part of it; this would greatly reduce the debt 
 volume. The risks of mercantile business are more than 
 doubled by the necessity to carry needless accounts, and 
 there is no surer foundation precept of success in business 
 than for one to hasten to pay ones debts at the earliest 
 moment. 
 
 The economy to the public by increased use of money 
 through banking, reminds me of the boy and the jam. 
 
 "My son," said this boy's mother, "isn't it rather an ex- 
 travagance to eat butter with that superb jam?" 
 
 "No, ma'am, it's an economy," the boy answered, "the 
 same piece of bread does for both." 
 
 Beyond a reasonable volume, the benefit of banking is, 
 that it makes the same piece of coin serve the banker to 
 soak up many times as much of the people's good things, 
 taken as interest. 
 
 17- 
 
CHAPTER IV. 
 Banks and Panics. 
 
 ''The work of righteousness shall de peace, and the 
 effect of righteousness, quietness and assurance forever^ 
 
 — Isaiah. 
 
 A — The Recent Panic — Its Cause. 
 
 B — Demand for and Supply of Capital. 
 
 C — Dilation of Concession Value. 
 
 D — The Part the Banks Play. 
 
 B — Banking Laws. 
 
 P — The Remedies. 
 
 A— THE RECENT PANIC— ITS CAUSE. 
 
 O banks promote panics? Are those cataclysms, 
 
 which bring loss and destruction of wealth to all 
 
 classes, whether patrons of banks or not, caused 
 
 either by the reprehensible actions of bankers, or 
 
 by the inherent wrongs of the banking system as legalized? 
 
 But, first, what is a panic? 
 
 A panic is a paroxysm of fear. It follows a period of 
 prosperity; but is it an essential consequence of such pros- 
 perity ? 
 
 The recent panic has been productive of much interest- 
 ing discussion and, as might have been expected, the views 
 given are much biased by the business and connections of 
 the reviewers. Among the many causes suggested are the 
 following : 
 
 First. "Lack of sufficient money." 
 
 Second. "Use of capital more rapidly than it was being 
 produced, causing inability to procure capital for future de- 
 velopment." 
 
 264 
 
BANKS AND PANICS 265 
 
 Third. "Lack of an elastic currency." 
 
 Fourth. "Excessive wages demanded by unionism." 
 
 Fifth. The widespread thought that prosperity should 
 "just naturally" be followed by depression. 
 
 Sixth. General extravagance among the people. 
 
 Seventh. The scare caused by prosecution of corpora- 
 tion crime. 
 
 None of these suggestions offer a solution of the prob- 
 lem. Such widespread and depressing fear is attributable 
 neither to incidental occurrences nor to normal activities 
 however intense. Such fear indicates deep-seated and dan- 
 gerous unrighteousness. 
 
 The first assumption — the insufficient supply of money — 
 is mistakenly inferred from the increasing interest rate. The 
 second, because the price of securities fell. The causes of 
 the panic were obviously conditions accompanying the pre- 
 vious strenuous prosperity. 
 
 What is prosperity? 
 
 Webster defines it as success; well being; happiness, 
 stripped of certain parasitical conditions which accompany 
 it; national prosperity means that people are advancing to- 
 ward their rightful condition of peace and plenty. 
 
 But many adverse phenomena commonly accompany it. 
 You often hear it said that a town is prosperous which has 
 many saloons. Here is a sequence v\^hich is not a conse- 
 quence, but the reverse. A prosperous city will give sup- 
 port to more saloons than a dead, dull place, but this does 
 not change the fact that the saloons, far from making a 
 place richer, make it much poorer. 
 
 Likewise, a large volume of debt is likely to accompany 
 prosperity, but this volume of debt does not promote pros- 
 perity, as many are deluded into thinking, but hinders and 
 finally destroys it. 
 
 Prosperity does not imply debt. 
 
266 RIGHT AND RICHES 
 
 During prosperity, however, there occurs the natural 
 expansion of industry; simultaneously there is likely to be 
 more or less inflation of debt. A panic is the collapse of 
 this inflation ; and this collapse, like some terrible explosion, 
 is destructive of all property values. 
 
 Is inflation essential to expansion? 
 
 It seems to be quite commonly conceded that it is; so 
 much so that the two terms are confusedly used as synonyms. 
 It is time for a little careful thinking along this line. 
 
 We have expressions from supposed "masters of finance" 
 showing that even they are deluded by this illusion. The 
 parent of this absurd thought 'is the common, mistaken no- 
 tion that wealth must be loaned to become capital. This 
 arises from the fact that the ordinary person is ready to 
 admit that he knows nothing of the great mystery (?) of 
 finance, and to fall down on his knees to the banker and al- 
 low him to do all his thinking on the question. 
 
 Now, bankers are simply men, biased by their interests 
 and warped by the phenomena most common to them. In 
 their daily business, bankers see wealth applied as capital 
 solely through the process of loans ; ergo, they come to for- 
 get that only a fraction of the capital which contributes to 
 industry is borrowed. Hence, arises the delusion that Credit 
 and Capital are synonymous. The logical conclusion from 
 this fallacious premise is, that the more prosperity we have 
 the more credit, hence, the more debt we must have. 
 
 The author has no prejudice against bankers. They are 
 not worse than men in other lines, nor more likely to try to 
 conspire against the common good. However, they are able, 
 more effectively than men in other lines, to influence legis- 
 lation for their selfish purposes, because of this willingness 
 of people to admit that financial matters are a mystery be- 
 yond them. Further, they are liable to do infinitely greater 
 damage by their selfish dictation of legislation, because of 
 the more vital character of financial matters. Labor unions. 
 
BANKS AND PANICS 267 
 
 farmers, or mine owners, are no doubt as likely to try to get 
 special legislation; but people do not concede to them all 
 knowledge in their respective lines; hence, evil results are 
 sooner recognized. 
 
 There is no delusion more widespread nor mischievous 
 than that an accumulation of credits increases capital or 
 helps business. Suppose there is $1,000 owing from A to 
 B and from B to C and from C to D and from D to E and 
 from E to F and from F to G and from G to H and from 
 H to I and from I to A. There would then be $10,000 of 
 credit. Would it not be a good thing if a clearance could 
 be made and the whole thing wiped out? If each creditor 
 held a note, this might be done by passing I's note from A 
 to B, B to C and so on down the line until I held it himself. 
 He could then destroy it. By this simple means of clear- 
 ance a burden would be lifted from ten debtors, $10,000 of 
 credit would be wiped out, yet with great benefit to both 
 creditors and debtors. 
 
 Banks recognize the advantage of clearing their own 
 debts; hence, they have clearing-houses to cancel all debts 
 among themselves that may be cancelled. Of the total mil- 
 lions of international business, all but the smallest fraction 
 is canceled in this way. This fraction represents the inter- 
 national foreign investments of individuals. 
 
 But the permission given banks to issue millions of cur- 
 rency, which they can keep in circulation only by having a 
 corresponding volume of notes due them, necessitates this 
 immense volume of debt that is uncancelable. The collec- 
 tion of a vast surplus by the iniquitous tariff system of taxes 
 and by other careless and haphazard means of State and 
 municipal revenue, which surplus is deposited in banks for 
 long periods pending disbursement, is the basis of other tre- 
 mendous volumes of unclearable debt. 
 
 But while an increasing volume of debt is not essential 
 nor helpful to prosperity, still our "paternal laws" operate 
 
368 RIGHT AND RICHES 
 
 to cause its Increase with the increase of prosperity, while 
 the naUiral tendency, if not frustrated by these paternaHstic 
 laws, would be exactly the reverse. Most important of such 
 laws are the laws confirming concession, and those granting 
 favors to banks, for debt consists largely of the price of 
 land, of bonds representing franchises, and notes for bank 
 credits borrowed. 
 
 Before we may hope to account for panics, we must come 
 to a better understanding of the distinctions between Credit 
 and Capital, between Money and Capital, between Credit and 
 Money, between Credit and Confidence, 
 
 The relations between money, credit and capital may 
 seem illusive and baffling. A great demand for capital is 
 often mistaken for a demand for money. A lack of confi- 
 dence is mistaken for a lack of capital or money. The na- 
 ture and identity of each is generally confused. Each has 
 more the nature of a stream which rises and falls than that 
 of fixed objects. 
 
 Is there an equipoise or normal relation between the vol- 
 ume of capital, credit and money? If so, what relative vol- 
 ume of credit may safely exist, as compared to the volume 
 of capital ? What volume of money is needed as compared 
 to the volume of capital ? What permanent increase of con- 
 cession value is possible as compared to increase of output? 
 
 There is between these classes of property, and between 
 each of them and the whole volume of property in general 
 a proportion which, when disregarded, results in disorganiza- 
 tion of business. The volume of capital must not become 
 too small as compared with the whole volume of property, 
 nor the volume of credit too large in proportion to that of 
 capital. If these ratios are kept normal and the supply of 
 money is not contracted nor inflated by legislative changes or 
 the manipulation of the banking interest, credit will auto- 
 matically regulate itself. 
 
BANKS AND PANICS 269 
 
 It is most important to the understanding of these ques- 
 tions that we recognize definitely what each of these terms 
 include. Credit is die reverse side of debt. There can be 
 no increase of one without an equal increase of the other. 
 Capital is wealth-property applied to increase output. Capital 
 is concrete. It has v/eight and bulk. It consists solely of 
 a ''stock" of something useful, or becoming useful, or the 
 apparatus used in handling such ''stock." It is not some- 
 thing created with ink and paper. 
 
 Persons go into debt for capital and for other property; 
 such debt causes credit to accrue to him who loans, but the 
 ownership of capital is not in any sense dependent on bor- 
 rowing. 
 
 Owners of capital do not have to loan it in order to apply 
 it to production. They may apply it themselves, either per- 
 sonally or by transferring it to a corporation for its stock. 
 No debt is incurred by this means. Debt is in no degree an 
 essential to any phase of production, though "wise ones" 
 often assume that it is. Capital is an essential to Produc- 
 tion, but capital does not arise from debt. It arises from 
 devotion of wealth to aid production. Wealth is a stream 
 from output. It accrues to Laborer, Capitalist, and Conces- 
 sionist. These may consume it or employ it in production. 
 Credit and debt come about by a number of persons becom- 
 ing borrowers of property, and another number becoming 
 lenders, or what is the same, a number buying property on 
 time from others who sell on time. 
 
 But such buying or borrowing is not essentially for 
 capital. A user of capital is not necessarily a borrower. 
 Divorce from your thoughts all notion that money is capital. 
 Now, if the amount of borrowing becomes abnormally large, 
 credit becomes strained. But remember that borrowing is 
 not limited to borrowing for capital; in fact a tremendous 
 portion of debt is not for Capital but for Concession. A class 
 of debt that goes far toward bringing on trouble is that for 
 
270 RIGHT AND RICHES 
 
 land. But debt for stocks or bonds is more dangerous to 
 the public. 
 
 When credit is strained; when it is hard to borrow or 
 renew loans, it is not because capital is scarce. It is because 
 debt has become excessive; because the debtor class, the 
 borrowing or buying-on-credit class, has become too numer- 
 ous or has contracted debt out of proportion to the capital 
 owned by them ; because there has been too many farms cut 
 into lots and sold at fictitious prices — too many franchises 
 capitalized and the stock, subject to too heavy bond issues, 
 unloaded onto the public; because too much debt has been 
 made both for capital and for property other than Capital, 
 for property which gives no increase with which to meet 
 interest and repay principal. It is because criminal stock 
 jobbing has become so notorious as to destroy the capital- 
 owner's confidence in corporate issues, as in the recent 
 panic; because real estate prices, through speculation, have 
 become double what output of wealth will pay rent on, as 
 in some previous inflations; because too large a percentage 
 of output is taken by idlers as rent or accessage, and with- 
 held from the capital fund until borrowed. 
 
 Debt and credit are created entirely aside from produc- 
 tion and industry. A has $100,000 of property — wheat, cot- 
 ten, merchandise, land; B signs a note to him for $50,000 
 for half of it, and C for the other half. Here is no increase 
 of property, no increase of capital, no increase or decrease 
 of money, but $100,000 increase of debt. Credit and debt 
 do not imply an increase, but a transfer of wealth, or, per- 
 haps, only a transfer of a quantity of other credit evidences. 
 
 Credit and debt are promises independent of all indus- 
 trial operations. The "bull" element encourages debt; the 
 "bear" element discourages it. Debt is normally reckoned 
 to be paid from that for which it was incurred ; the principal 
 from its sale and the interest from its increase of value, or 
 increase of product. If for capital, the profit of the industry, 
 
BANKS AND PANICS 271 
 
 or if for land, the rent is expected to exceed the interest. 
 But much debt is for that which produces no income or 
 output, being incurred with the gambling, or speculative 
 desire to get something for nothing. 
 
 Vacant property is bought with expectation of increase 
 in value. Corporate shares which pay little or no dividends 
 are bought in hope of expansion. Increase in prices of 
 franchises and land is limited by increase in the general 
 output of wealth in the community. On the whole, however, 
 increase in such prices can exceed ordinary interest rates 
 for but very limited periods. 
 
 Buying on expectation of a rise in prices is speculation. 
 
 All debt must be for something giving an increase, or 
 some one must lose. If borrowing becomes too excessive 
 panic must be the inevitable result. Speculation is likely to 
 accompany prosperity : if too general it causes adversity. 
 
 All interest, all rent, all profit, all enhancement of values, 
 as well as all wages, must be paid from the output of in- 
 dustry. Hence, when debt, which generally draws interest, 
 gets out of proportion to output, trouble surely follows. 
 
 Debt has always, and rightly, been regarded as an evil 
 to be kept to the smallest bounds ; yet government, influenced 
 by bankers and stock-jobbers, creates the occasion for most 
 of our debt volumes; and this banking interest, through a 
 sympathetic press, would make people believe debt a blessing. 
 
 How lacking in shame are the banks, when a crisis comes, 
 to turn down in cold blood applications for loans made 
 by patrons, and at the same time appeal to the patriotism 
 of those who have balances due them, not to withdraw them. 
 What an evidence of rottenness in our financial system, that 
 such an unnatural system is authorized. 
 
 The extent to which productive exchange is hampered 
 by lack of the medium of exchange is grossly exaggerated. 
 It is hindered, even paralyzed, by panics. Ignorance, greed, 
 dishonesty and fright — do stop the circulation of commerce, 
 
2^2 RIGHT AND RICHES 
 
 even as physical excesses do the circulation of the blood; 
 and a system of finance that has become weakened by arti- 
 ficial stimulation, succumbs most quickly. While it used to be 
 contended that workingmen needed stimulating drinks at 
 their work, this theory now has few supporters, even in Ger- 
 many. Likewise people will some day learn that artificial 
 currency stimulation results in stagnation, paralysis. 
 
 Production would not be one iota less if banks were 
 required to hold at all times even 60% of their deposits in 
 legal tender money. True, they would lose 6% or 7% on 
 billions. Individuals can and will at all times, except dur- 
 ing brief periods of fright, furnish to borrowers in any com- 
 munity all the capital that there is any opportunity to put 
 to productive use, and on a basis that is safe. In periods 
 of great prosperity, when capital can make rates of profit 
 above 6% or 7% — that is, when the real normal rate of 
 interest is perhaps 9% or 10% — banks, because they get 
 deposits freely from individuals and government, make 
 mountains of loans at 6% or 7%, of which a large portion 
 are unsafe. A slight scare comes, depositors ask for their 
 money. The banks have but 5% to 10% of the amount of 
 the deposits on hand. They cannot pay. Then the banks 
 storm the Federal Treasury for deposits of public funds, or 
 ask permission to inflate more. 
 
 What a stupid mistake was recently made by the offer 
 of $150,000,000 bonds that bank currency might be issued 
 thereon. There was no scarcity of currency. The only 
 trouble was that the bank loans had been too many times 
 the amount of the actual money in the country. They owed 
 too much to depositors; but these loans were rapidly re- 
 duced. Banks do not wish to extend further credits in 
 times of panic; rather to curtail it. And individuals do 
 not then seek to make new loans, but only to renew old ones, 
 to protect themselves against loss. Were all the gold of the 
 world dumped into our own banks in the midst of a panic 
 
BANKS AND PANICS %n 
 
 it would not promote the desire either to lend or to borrow. 
 What delays recovery from a panic is the g-eneral disinclina- 
 tion of men to borrow and begin new enterprises. The 
 banks fill up with money and no one seeks it. Loans will 
 go begging shortly, but these bonds will go on drawing 
 interest. 
 
 The attempt to cure the evils of inflation with further 
 inflation, is as though the Colonists had bribed the savages 
 to peace with rifles. It is like trying to put out a fire by 
 pouring on gasoline. If this policy continues, the banks 
 will get an act pledging the Government to redeem their 
 unlimited issues, as well as guarantee their depositors, and 
 Government and all will go down together. Why not learn 
 that ten dollars per capita is just as good as $500.00 if let 
 alone, and not juggled. 
 
 But the big bankers use the currency for a sponge to 
 soak up the wealth of the world and then squeeze it into 
 their private coffers. The "country banks" are not con- 
 scious parties to this, but are used by the metropolitan 
 banks. What more right has a bank to refuse to deliver 
 my money to me on demand than the liveryman to refuse 
 my horse because it is a holiday, and he has it hired out at 
 an exorbitant rate? 
 
 The total fund of money remains of the same total value, 
 notwithstanding the increase or decrease of its volume in 
 number of dollars. It is the dollars, the imits that increase 
 or decrease in value. Decrease in value of the dollar makes 
 apparent, but not real, increase in value of all other prop- 
 erty, for it increases for the time its "dollar price." 
 
 To think that increase of money increases wealth is as 
 absurd as to think that shortening the weight arm of a scale 
 would increase the thing weighed. It would certainly in- 
 crease the apparent weight. If we shorten the arm with- 
 out increasing the size of the "weights" it will take more 
 "weights" to balance the thing weighed. Now, what sense 
 
274 RIGHT AND RICHES 
 
 would there be in shortening this arm, and making "pounds" 
 smaller, simply to be able to say that we have more pounds of 
 things? But if some special "interest" could get the sole 
 monopoly of making the weight disks, and could charge a 
 big rental for their use, don't you suppose this "interest" 
 should try to get a law to shorten the scale arm so they 
 could rent out more disks, just as the banks wish to reduce 
 the value of currency so people must rent (borrow) larger 
 numbers of their notes. 
 
 Why not have honest weights and honest measures of 
 value ? 
 
 High interest rates do not indicate insufficient volume 
 of money. The financial reviewers tell of the demand of 
 borrowers exceeding the supply or quality of money in 
 existence. Now, borrowing money would not take it out 
 of existence, would not remove it from the available fund of 
 money, for in actual reality, people do not borrow money, 
 they borrow Credit 'or they borrow Capital — stock and 
 equipment. 
 
 Would any one be so foolish as to borrow money, store 
 it away and pay interest? Perhaps one does occasionally 
 give his note and get currency; but most often, a check 
 which he seldom cashes. He gets Credit. This he imme- 
 diately converts into concrete wealth, not credit nor money, 
 but capital, or concession. Money cannot produce an out- 
 put. Railroads, horses, machinery, stocks of goods, animals, 
 contribute an output. 
 
 One says : "I have a thousand dollars capital, 'money in 
 the bank.' " What does he mean ? Not currency, gold or 
 silver coin, or greenbacks. No one has that in the bank. 
 He has $1,000.00 credit at the bank. 
 
 Credit is not capital, cannot be made into capital, but it 
 is commonly so called because one may readily exchange it 
 for real capital. But we must be definite. We are now 
 considering the volume of capital in the community, not 
 
BANKS AND PANICS 275 
 
 what it is possible for you or me to get. Credit will get 
 potatoes, but you would not say credit is potatoes. Credit 
 will not carry cargoes of goods across the sea. It requires 
 ships made of wood or steel. Money will not shelter a 
 stock of dry goods from the rain, it requires a store-room. 
 Money will not carry a railroad train over a river, it re- 
 quires a bridge. It will not print newspapers; a press is 
 necessary. Ships, buildings, stocks of goods, bridges, 
 presses, are real capital. Money is not. This is not a play 
 on words, but a scientific fact. 
 
 What some industries suffer for, even on the crest of the 
 wave of prosperity, is real capital, not money. Yet some 
 of our "eminent financiers" do not perceive this. Even 
 the great Henry George became confused regarding this. 
 
 Let us trace the ordinary case of a man starting into a 
 business, say that of manufacturing. He has $100,000 
 "capital," according to the loose expressions of ordinary 
 speech ; that is, perhaps, he owns some farm land, some flats 
 in the city, some bank stock, a few shares of railroad stock, 
 some real estate mortgages ; perhaps he has a bank balance 
 of $200.00. He decides to start a factory and contracts for 
 a building to cost $5,000.00. He has but $200.00 in cash, 
 yet when the building is finished he pays for it in cash 
 which he gets just the day he needs it by selling some mort- 
 gages. Later, his machinery is delivered; $5,000.00 more 
 becomes due; this he gets by selling some railroad stock, 
 and he now has the bulk of his equipment. Then comes 
 his "stock" of materials to be worked upon. Now he sells 
 his bank shares to pay for it. Later, he has rents come in, 
 sells some land, etc., to get in funds to take up the increase 
 of "stock" accruing from, the work of his employes. At no 
 time has he had money for capital. For brief periods and 
 in small installments money or credit has been used in the 
 exchange incident to the transfer of property — land, credits, 
 railroad shares, etc. — into capital, that is, into stock and 
 
276 RIGHT AND RICHES 
 
 equipment. But at no time has he held a volume of cur- 
 rency out of circulation by his operations. This common 
 speech which says "capital" for anything which may be ex- 
 changed for it is well enough, just as one says he has earned 
 his "bread" when he means the resource to buy bread or 
 other subsistence needs. But in economics, "capital" is first, 
 last and all the time limited to stock and equipment. 
 
 Reviews of the markets, by those eminent in banking, 
 and manipulation of corporation shares and bonds, account 
 for a "weak market" as being caused by production exceed- 
 ing the proper ratio to the existing fund of money — money 
 being limited to gold, or to a general form of currency, ac- 
 cording to the school to which the reviewer belongs. Yet 
 the scientific fact is that neither the output of wealth nor 
 the quantity of wealth which is available for capital is in 
 any degree limited by the size of the fund of currency. 
 There is no normal ratio or relation between the two, any 
 more than between such output and the number of horses 
 in use. 
 
 In order to be definite on this point, I must risk being 
 tedious. Capital is not money, is not derived from money; 
 is not credit, is not derived from credit. A reasonable use 
 of credit and money facilitate the application of wealth to 
 productive purposes, but capital may be thus applied with- 
 out the use of either money or credit. And the degree in 
 which money facilitates such application is not in proportion 
 to its quantity; more especially if this quantity is considered 
 to be the funds of gold. Credence expands naturally with the 
 success of production, as any person of ordinary observa- 
 tion can see. If one succeeds with the capital you lend him, 
 will you not lend him more? And does not the profit he 
 pays you increase your ability to supply him ? But you will 
 be able to get greater interest in prosperous times, and will 
 demand more interest while he will naturally seek to cancel 
 his debts. 
 
BANKS AND PANICS 277 
 
 There is such a thing as an extraordinary demand for 
 capital. Let us assume that it may at times exceed all pos- 
 sibility of immediate supply. This comes about from the 
 unnatural ''ebb and flood" of business, due largely to our 
 panic-breeding system of finance, to the fact that business 
 starts, runs high and then slumps. When business im- 
 proves, all rush at once to enlarge and extend equipment, 
 making the demand for capital abnormal. Then our sys- 
 tem floods the land with an intoxicating supply of bank 
 credit. 
 
 But someone may ask, if you have money or credit may 
 you not exchange it for capital? Indeed, but that is not 
 necessarily increasing the existing fund of capital nor de- 
 creasing the fund of money. It may get me more capital, 
 but it may do so by taking it from you. What is needed is 
 to have the available fund of capital enlarged. How? 
 
 By such inducements as will cause those who have in- 
 comes of wealth accruing to them, from rent, interest, divi- 
 dends, etc., to diveH them from their enjoyment fund to 
 their investment fund. Higher rates of interest, and greater 
 assurance, or security from loss, have such tendency by dis- 
 couraging waste. If large volumes of accruing credit — 
 power to claim title to wealth — are being converted into 
 capital, being put to work instead of being "cashed" and 
 consumed, this maintains or increases the fund of capital. 
 But if the rich credit-holders, income-getters, convert their 
 income from credit into luxuries; if, instead of buying brick, 
 steel, cement, machinery — stock and equipment — they buy 
 wasteful personal supplies and consume them, this depletes 
 the ''share" and "loan-carrying" volume, as well as the 
 "wealth basis" — the real capital. 
 
 A railroad does not need more money when in the inten- 
 sity of prosperity it struggles to sell more bonds. It needs 
 more cars, rails, bridges, sidings, etc. Why can't it provide 
 these things from its increased income, one naturally asks. 
 
278 RIGHT AND RICHES 
 
 That it should be able to is unquestionable. The reason it 
 cannot is because with the growth of prosperity, the con- 
 trolling "interest" in its affairs manipulates its capitaliza- 
 tion — increases its issue of stock and bonds, without adding 
 to its real capital. 
 
 A high interest rate is not an indication of a scarcity of 
 money; rather the reverse. Inflation, over-supply of money 
 tends to enhance prices, which has the same temporary effect 
 as real increase of wealth, as far as procuring profits to make 
 payments of interest from borrowers to lenders is effected. 
 When people see the prices of things advancing, they seek 
 to borrow so they may speculate in them. Continued pros- 
 perity depends on the following relations of credit, capital, 
 money and property in general : 
 
 First. The volume of credit should not be too great in 
 proportion to the volume of all property. 
 
 Second. The volume of capital should not be too small 
 in proportion to all other property. 
 
 Third. The volume of money should be constant in 
 proportion to the whole volume of wealth, for this is essen- 
 tial to the maintenance of money's constant value, and the 
 consequent steadiness of markets, which promotes real pro- 
 duction. 
 
 Fourth. The volume of money need have no relation to 
 the number or volume of exchanges. 
 
 Fifth. The volume of capital is entirely independent of 
 the volume of money. 
 
 Sixth. The volume of capital is entirely independent of 
 the volume of credit. 
 
 vSeventh. The volume of currency, other than money 
 (checking accounts, drafts, retirable note issues, etc.) should 
 be the smallest possible proportion (commensurate with 
 free movements of exchange) to the volume of unredeem- 
 able, final legal-tender, debt-paying money. 
 
BANKS AND PANICS 379 
 
 Eighth. The volume of credit should not become too 
 great as compared to the volume of output ; for credit com- 
 monly draws interest, and the revenues to pay this interest, 
 whether obtained from rents, dividends or enhancements of 
 value, must be supplied by current output. 
 
 Ninth. Debt must always be equal in volume to Credit. 
 No increase of one is possible without an equal increase of 
 the other. 
 
 The foregoing consideration of the relations of Capital, 
 Currency and Credit to prosperity proves conclusively that 
 prosperity was not interrupted by the scarcity of either Cur- 
 rency or Credit. 
 
 Let us now consider the assertion that lack of Capital 
 put a sudden stop to that wild, strenuous scramble of trade 
 which existed a few months ago. 
 
 B— DEMAND FOR AND SUPPLY OF CAPITAL. 
 
 Does the demand for capital in prosperous times tend to 
 increase more rapidly than the output of wealth from which 
 it is supplied? 
 
 No. 
 
 Notable writers have attributed the present alleged short- 
 age of capital to the destruction of capital by the Boer, the 
 Spanish-American and Russo-Japanese wars, and the San 
 Francisco fire. These were indeed unfortunate wastes of 
 capital, great losses to industry. But it may well be ques- 
 tioned whether these wars did not, along with such waste, 
 also retard business to such extent as to lessen in like degree 
 its demand for capital. This, however, will not hold good 
 regarding the San Francisco fire. That not only destroyed 
 capital, but its rebuilding made the most intense demands 
 for it. 
 
 Professor Laughlin says : "The scarcity of capital is the 
 important thing in the situation." But in the course of his 
 reasoning he does not really have in view the scarcity of cap- 
 
 18-' 
 
280 RIGHT AND RICHES 
 
 ital; for he immediately says : ''When we hear it said that 
 business must slow up, it means that all speculation for fu- 
 ture values must azvait the groivth of new capital. * =i= * * 
 The undermining of confidence in some of our large indus- 
 tries has caused very serious liquidation in securities." 
 
 In other words, speculative increase depends on output 
 increase. Loss of confidence prevents re-investment. This 
 does not mean scarcity of capital, but unwillingness to trust 
 it to those in control of the corporations dominating the 
 field of opportunity. 
 
 We must see how small are the effects of all these wars 
 and disasters on remotely subsequent conditions, when we 
 recognize the brevity of a "generation" of capital, for cap- 
 ital created to-day is in a large measure consumed in to- 
 morrow's industry. 
 
 That the waste or loss of capital at one period would 
 cause it to be scarce several years later, is as unlikely as that 
 the failure of a potato crop would make seed potatoes scarce 
 several years later, and that the extensive use of capital 
 would make it scarce, is as unlikely as to think that the ex- 
 tensive growing of potatoes for a period of years should 
 make the seed scarce. 
 
 Deprivation of the peasant class, by a predatory ruling 
 class through oppressive taxes or rents in Ireland or India, 
 tends to make a dearth of seed for planting, as well as tools 
 for cultivation of crops. The continued despoiling of crops 
 by wars or marauding bands will likely cause a small plant- 
 ing of seed, not essentially because seeds are scarce, but 
 because there is lack of assurance of reaping the fruit. 
 
 The important fact that capital is mostly supplied by the 
 immediate period which puts it to use must not be over- 
 looked. It is doubtful if it would greatly tax industry to 
 supply in three years a volume of capital equal to the whole 
 existing supply, should a demand suddenly arise that the 
 
BANKS AND PANICS 281 
 
 world's capital be doubled. The following figures are an 
 eloquent proof of this : 
 
 The whole total capital invested in manufacturing in- 
 dustries in the United States, according to the census for 
 1900, was but 9,835 million dollars, yet the output was 13,- 
 014 million dollars, or over 30% more than the capital. 
 
 No statistics are available to show how much of this 
 pseudo ''capital" of 9,800 million dollars consists of land and 
 franchise values — concession — but no doubt, if we placed it 
 at half, we should be far too low. On this basis we should 
 have in round numbers 5,000 million dollars of real capital 
 employed in manufactures, creating an output of 13,000 
 million dollars, or m.ore than two and one-half times the cap- 
 ital employed. Now to do this requires about 2,000 million 
 dollars for wages and nearly 7,000 million dollars for raw 
 materials ; but this 9,000 million dollars does not deduct from 
 the output, but is still an effective part of it. A large part of 
 this 9,000 million dollars may be continued as capital if de- 
 manded, as the price of this raw material and wages earned 
 can be reinvested in the capital fund if needed. 
 
 Suppose 15% of this output were put to extensions. It 
 would much more than double the capacity in three years. 
 No doubt the railroads and mines, if true figures of actual 
 capital were available, would show conditions similar to 
 manufactures. Agriculture certainly would if the land were 
 eliminated from the '"capital" employed. It has been asserted 
 by one who has given the subject much study that the rail- 
 road stock is 95% water. But industry does not demand on 
 the average 33 per cent, addition of equipment. Ten per 
 cent, would be tremendous when any extensive field of oper- 
 ations is included. Perhaps 5% would be nearer the most 
 extreme demands. 
 
 From a product more than double the whole value of ex- 
 isting capital, there would then be demanded but 2^^% of 
 product to be applied as capital increase. This is not includ- 
 
282 RIGHT AND RICHES 
 
 ing the capital which consists of stocks of goods either in 
 process of -completion or sale, for such stocks are at comple- 
 tion the output itself and are not consumed in their capital 
 function, but flow on to enjoyment and reproductive uses. 
 
 But most important of all we must remember that ev- 
 ery addition to capital increases, in a geometrical ratio, the 
 output of wealth available for capital. Hence, the natural 
 tendency of industry, when not frustrated by adverse inter- 
 ference, is to furnish for the added demand for capital a 
 multiplied supply. Doubling capital is likely to quadruple 
 output. 
 
 The Hon. Lyman Gage, after recounting losses and ex- 
 tensive use of capital in the construction of "railways, elec- 
 tric plants, cotton mills, steamships, etc., which use he esti- 
 mates at 5,000 millions of dollars in the past six years, says : 
 "It has been further evident to thinking persons that the 
 pressure for the use of capital has outm^easured the supply of 
 capital." 
 
 Does not Mr. Gage obviously forget that these electric 
 plants, railways, steamships, etc., are still continuing in 
 themselves to be the most intensely effective productive cap- 
 ital, and that they are giving a multiplied output of wealth 
 from which new capital may be constituted. Yet Mr. Gage 
 proposes to supply this presumed shortage of capital by issue 
 of emergency banknotes, to create it with printing presses. 
 
 Even if it were a fact that enlarging industry tends to 
 increase the consumption of capital more rapidly than it in- 
 creases the output of wealth from which it is supplied, as 
 these professors of "high finance" allege, then how, by all 
 that is logical, do they expect to meet this excessive demand 
 with the printing of "paper capital" — by the multiplication 
 of I. O. U.'s? A bank's promise to pay, whether a currency 
 note or the granting of a checking account, is not an addi- 
 tion to the community's supply of capital, but only an obli- 
 gation on the part of the bank to procure capital somewhere, 
 
BANKS AND PANICS 283 
 
 somehow-— a mere bet by the bank that new deposits will 
 meet the obligation. 
 
 The excess of such obligations is indeed the sole basis of 
 panics. Banks do not, in the very nature of their business 
 cannot, limit loans to what they have got, but make them 
 mostly with what they expect to get. 
 
 Wealth must first he produced in concrete form and 
 turned into the fund of wealth in return for credit. It is 
 then withdrawn for enjoyment and for capital in specific 
 form, and this credit canceled. No increase of wealth can 
 be made but by growing, manufacturing, mining, etc.— by 
 output. No increase or replenishing of capital is possible 
 but by someone deferring use of some of this real output 
 wealth and devoting it to capital. The real trouble crops 
 out as we further read Mr. Gage's article in Everybody's 
 Magazine. 
 
 ''Syndicates privately formed,'' he says, ''who had taken 
 blocks of securities in expectation of selling them to the pub- 
 lic, found that there was no public that would or could buy 
 them." 
 
 The undeniable fact is that these "Syndicates privately 
 formed" are the "milk in the cocoanut." They have been, 
 like vampires, for many years, sucking the substance of the 
 people, as well as the corporations they control, by taking 
 blocks of securities at a few cents on the dollar and selling 
 them to the public by their "washing" schemes at close to 
 par. 
 
 But the public has come to know more of these "syndi- 
 cates privately formed" than they did formerly. With this 
 knowledge the public has also become fearful of their cor- 
 porations and afraid of the banks they manipulate. 
 
 Mr. Gage says further : "Under these unusual induce- 
 ments =^ * * * banks took over hundreds of millions of se- 
 curities of these corporations ; thus the delicacy of the situa- 
 tion was greatly aggravated." 
 
284 RIGHT AND RICHES 
 
 And does not Mr. Gage suppose that with legislation en- 
 abling banks to deposit the securities of these very same cor- 
 porations as security for additional issues of notes — "emer- 
 gency currency" — that they would under the same "unusual 
 inducements" load up with double the former amount of 
 these securities? 
 
 It is wonderful what a lot of information there is "be- 
 tween the lines" of Mr. Gage's article. 
 
 C— DILATION OF CONCESSION VALUE. 
 
 All forms of productions would become progressively 
 cheaper — easier of procurement — with the extended use of 
 capital — increased equipment — and improved methods, were 
 it not for the repressive power given by Concession to take 
 an increasing share of output without giving any help. 
 
 It is contrary to nature for prices to advance with pros- 
 perity, as has been the case the past few years. The natural 
 tendency of prosperity is to reduce the price (the real ease- 
 of-acquirement "price," not essentially to change the money 
 price) of all productions because of their more bountiful 
 output with more plentiful capital. Food, clothing, houses, 
 ships, railroads, highways, etc., should become increasingly 
 available to all. The natural tendency is to maintain a nor- 
 mal interest rate, higher, much higher than the interest 
 rate of hard times (not the premium paid to get renewals of 
 loans), but not tending to increase progressively with the 
 multiplying productiveness of capital. 
 
 We must remember first that interest "rate" is a percent- 
 age and not a stated quantity. As prosperity advances, the 
 natural tendency is for the owners of capital in an industry 
 to receive a constantly increasing volume of goods, more 
 tons of steel, more barrels of cement, etc., but of less value 
 when measured by human endurance. 
 
 To illustrate: Suppose one invests a hundred tons of 
 pig iron, when it is worth $20. By immense production its 
 
BANKS AND PANICS ^85 
 
 value is reduced in ten years to $10 per ton, but whereas 
 the first year he got as net increase 6 tons, he now gets 12 
 tons. His 12 tons reinvested has now a productive power 
 in tons greater than 12 tons of ten years ago, but has no 
 more value as measured in human endurance than 6 tons 
 had then. This illustration of course does not apply to the 
 ten year period just past, but would apply where the natural 
 laws of industry were not frustrated. 
 
 What is the natural basis of the interest rate of capital ? 
 This is the important point for us to grasp. 
 
 It is the percentage of increase which will, on the aver- 
 age, induce owners to defer the personal-enjoyment-con- 
 sumption of wealth, and devote it to capital. Obviously, 
 users of capital cannot pay more than its reproductive in- 
 crease. 
 
 Suppose such user borrow capital in the form of cattle 
 to feed on the free range. He certainly may not pay the 
 furnisher of it as interest, more than the annual increase 
 of the herd, but he may pay much less. Or again, we will 
 assume that he has not free range. He must then first take 
 from the herd's increase rent for this pasture, after which 
 he must take any interest charges from the balance of the 
 increase. Or if he owe no one for his capital, he must still 
 first deduct the rent from the increase, then the rest of the 
 increase will constitute wages for the labor occasioned and 
 interest on the value of the capital. 
 
 Furnishers of capital in all lines must ever divide the 
 increase with Concession by paying accessage or rent either 
 directly or indirectly. 
 
 Herein, then, is the vital point! 
 
 Concession invariably takes as large a share as owners 
 will tolerate. When two hundred dollars' worth of oranges 
 (above cost of care) grow on an acre of trees, which have 
 taken perhaps $100 of capital to plant and grow to bearing 
 size, what is the result? Is this two hundred per cent, in- 
 
286 RIGHT AND RICHES 
 
 terestf Not by any means. The concession value in the orange 
 grove is dilated. This new term seems needful, as "capital- 
 ized" entirely obscures the real meaning sought to be ex- 
 pressed. The land goes to $1,900 or $2,500 per acre. This 
 $200 net crop is mostly rent, accessage, which this dilated 
 concession power demands. 
 
 Now, let us notice the corporate working of dilation for 
 corporate issues are more vitally responsible for panics. We 
 may have seemed to digress, almost to have forgotten our 
 text, "Panics," but not so. 
 
 Webster defines "dilatation" or "dilation" : The expand- 
 ing of anything into greater bulk by its own elastic power. 
 
 We hear, and we see in the press much about the "water- 
 ing" of stock. If this expression "watering" has any defin- 
 ite meaning, I take it to be the increase of a corporation's 
 securities to an amount in excess of the market or exchange- 
 value of its assets, or perhaps in excess of their profit-paying 
 value or ability. But the term "watering" is also confusing- 
 ly used to indicate the swelling or increase of capitalization 
 to cover an actual increased value or profit-paying power 
 in franchises or other concessions owned by such company 
 (such increase perhaps being in consequence of progressive 
 conditions in the community giving more patronage or from 
 some power to charge higher rates). 
 
 The word "dilation" expresses this meaning, that is, the 
 swelling, expansion or distension of concession value which 
 will actually pay dividends on more stock or interest on more 
 bonds. 
 
 What is the common history of corporate issues, from the 
 beginning of the recovery from one panic until the crest of 
 the inflation wave is reached, and explosion precipitates an- 
 other? Take as an example a corporation manufacturing 
 a staple commodity such as iron, owning beds of ores, etc., 
 or one operating railroads, or gas plants, having franchises, 
 or mines of coal or minerals depending on ore lands. Sup- 
 
BANKS AND PANICS 287 
 
 posing such corporation to be "capitalized" at a reasonable 
 cost of its "plant" — tangible equipment and stock on hand. 
 As prosperity increases income, does the percentage of divi- 
 dends increase correspondingly? No. Is the difference 
 applied to extensions and enlargement of plant? No, not 
 commonly. Plainly the property of the company is worth 
 more when it is bringing in a larger income. Then what is 
 done with this increased value which grows with geometrical 
 ratio? Certainly we have not recently seen the increased 
 output reduced in price. 
 
 We might then expect that each share of stock would 
 pay multiplying dividends, 6%, then 10%, then 15, 20 and 
 30% ; that these corporations, able to use capital with such 
 great increase, would double their capital stock and offer 
 the public the new shares, paying these wonderful dividends. 
 Either that or cut prices to consumers on their output. But 
 they do neither. As the concession's value dilates they in- 
 crease their stock and bonds. They issue a large quantity 
 of bonds bearing only a stingy 4 or 5%, and sell them to the 
 public in exchange for real capital to make extensions. But 
 why do not the "public" investors start plants of their own 
 and make 30% instead of buying these low-rate bonds? Be- 
 cause the established corporations have the field, own the 
 concessions. But do they pay their old original stockholders 
 30 or 40 per cent? In effect, yes^ — if the management does 
 not take advantage of their position to scoop up this profit, 
 which is common. But they seldom pay a larger percentage 
 in form, for they double, treble, or quadruple the stock issue, 
 and turn the new shares over pro rata to old shareholders 
 as a "share dividend," com.monly called "cutting a water- 
 melon." In other words, the original holder of 100 shares 
 is presented at various periods with 50 or 100 new shares, 
 so that while he gets but 5 or 6% on each share he gets it on 
 two, three or four shares instead of one. Or perhaps in ad- 
 
288 RIGHT AND RICHES 
 
 dition to doubling the stock the bonded debt is doubled, 
 trebled or quadrupled. 
 
 Thus the dilating concession value is ''capitalized" or 
 more properly speaking, ''securitized." Thus the public is 
 made to furnish the real capital at 5%, while those on the 
 ground floor, the concession holders, get 20, 30 or 40%. It 
 is quite common, however, for the clique in control of ''syn- 
 dicates privately formed," to defraud even the masses of the 
 original stockholders by concealing the true profit earnings 
 from them. In this case they take these new issues them- 
 selves at a fraction of their face, and then, by disclosing 
 the true profits or by exaggerating them and showing the 
 wonderful growth to come and by "washing" the issues on 
 'change until the public is led to expect still further enor- 
 mous growth of profits, this controlling clique gets from 
 the public perhaps double what the treasury of the company 
 got for the new issues of stocks or bonds. The public will 
 often buy on a present basis of 2 or 3% present interest or 
 dividends, if the promises of growth are rosy enough. 
 
 Mr. Stuyvesant Fish, in his article some months ago in 
 the public press, displays an ignorance of economic science, 
 for he says: "Despite the unprecedented output of gold, 
 money is dear; and dear because of high prices and activity 
 in trade." I have shown the reader that "dear money" is 
 evidenced by low prices, and that high prices for the whole 
 circle of things are a mathematical impossibility, and are 
 simply the manifestation of cheap money caused by exces- 
 sive supply. He, however, proceeds to cite the loss of 
 "money" in the Boer and Russo-Japanese Wars. Yet there 
 is no history of any loss of money in these wars. Mr. Fish 
 surely means wealth and not money. 
 
 The high wages he mentions are a further evidence of 
 cheap money. But however untrained in the study of eco- 
 nomics from society's standpoint, Mr. Fish is "up" on the 
 practices of corporate manipulation. He says : 
 
BANKS AND PANICS 289 
 
 "Wall Street has absorbed and is absorbing more than its 
 share of the loanable fund. While banks outside of New York 
 are lending more freely than usual at this season, yet that 
 which they lend is instantly and persistently absorbed by 
 Wall street. The New York Stock Exchange has ceased to be 
 a free market where buyers and sellers fix prices through 
 demand and supply, and has become the plaything of a few 
 managers of cliques and pools. The investing public is out 
 of the market * * * * simply because of distrust 
 * * * * of the methods of corporate finance now in vogue in 
 Wall Street. Indeed it seems to me that we are already em- 
 barked on a long-needed Moral Financial Reformation, which 
 like the Religious Reformation of the middle ages, will through 
 much cruelty, work out good in the end. To the need of such 
 a reformation the public is fully awake." 
 
 Let us hope so, Mr. Fish. 
 
 The watering of corporate securities, however, serves 
 another very important purpose, viz. : When the pubHc 
 clamors for reduced rates these corporation managers point 
 to the "enormous 'capital invested' and the low percentage of 
 dividend paid," as an excuse for not giving the naturally re- 
 duced prices and rates which prosperity should naturally 
 make available to patrons. This is how the public is kept 
 from reduced rates and how the honest investors of real cap- 
 ital are prevented from participating in the constantly in- 
 creasing interest rate which a multiplying output without 
 reduction of prices should give. 
 
 A judge recently declared the law, reducing the price of 
 gas in New York City from the exorbitant price of eighty 
 cents to be unconstitutional, because that even though the 
 securities of the company had been "watered" to cover the 
 dilation of franchise value, yet there were innocent stock- 
 holders. Pray, why are a few "innocent stockholders' " in- 
 terests so much more sacred than the multitude of citizens' 
 interests ? 
 
290 RIGHT AND RICHES 
 
 D— THE PART THE BANKS PLAY. 
 
 It is not herein claimed that concession values would not 
 be ultimatel}^ increased without the help of banks, nor that 
 depression of industry would not ultimately result from the 
 increasing exactions thereof. Depression is sure to result 
 from lessening the Reward of Production by the demands of 
 increased accessage. But we are at present considering 
 only increase of debt and its culmination in fright and panic. 
 
 Banks promote this dangerous incubus of debt and there- 
 by help to bring on the crisis in the stock market. 
 
 This is the part the banks play. 
 
 Nature is hard to circumvent. With increased produc- 
 tion and prosperity it is impossible for any special interest 
 to get all the profit. Some of it must be diffused in spite of 
 the most ingenious scheming. This diffusing of prosperity, 
 although it only reaches the average public in a fraction of 
 the degree it should, does, however, raise the percentage 
 that the public's capital will earn locally, from 4 or 5% 
 up to 6, 7 or 8%. The great corporations continue to place 
 large volumes of bonds bearing but 4 or 5% on the market, 
 together with stocks which are then earning no higher rates. 
 
 The public, by reason of the measure of prosperity exist- 
 ing generally among the people, that has escaped the schem- 
 ers, is able to get a greater rate of revenue from various 
 local investments, hence does not absorb these corporate 
 issues so readily. 
 
 The banks magnify this apparent increased rate of profit 
 from private investments as well as corporate issues ; for, by 
 increased issues of their notes and by the extension of check- 
 ing accounts to depositors of personal notes for loans, they 
 progressively expand the volume of currency, thus decreas- 
 ing its "unit-value" and inversely increasing the apparent 
 or money value of all other classes of property, thus causing 
 unhealthy speculation. 
 
BANKS AND PANICS 291 
 
 These bank loans amounted in 1902 to more than 6,600 
 milHon dollars or three times the total money in the coun- 
 try and more than nine times the money in the possession 
 of all the banks. By November, 1907, these loans had in- 
 creased about 25%, or to about 7,500 million dollars. Think 
 of it, a volume of debt giving no return to the public which 
 was equal to more than three-fourths of the manufacturing 
 capital of the land. Who pays the interest on this debt ? 
 
 What do we need of this vast fund of fictitious wealth? 
 This is the principal source of inflation which breeds panics. 
 This is the booster of fictitious values; for all these loans, 
 consisting of accounts subject to check, are performing the 
 currency function of money. The apparent increase of 
 values thus caused enables dealers in lands, lots, and even 
 real wealth to reap actual profits. (But they are exceeded 
 by the losses of holders when the slump comes.) These 
 profits merge with true interest into the revenues of in- 
 vestors, thus further raising the current interest rate. 
 
 This advance of the current interest rate reflects again 
 on the stock market with depressing effect. For the already 
 great issues of big corporation's bonds must now sell cheaper 
 to give buyers this higher rate. These concerns then need in- 
 creased supplies of real capital, cars, engines, machinery, etc., 
 to meet the demands of generally increased industry. ' To 
 meet this need they offer bonds and short time notes bearing 
 somewhat higher rates of revenue. These join with more 
 widespread increased current rates in diverting investment 
 from old issues on the market. 
 
 The interest rate which people generally are able to make 
 in business and land speculation grows to say 7%. Now, in 
 order for a 5% bond to make a 7% return it must be bought 
 at about 70 cents on the dollar. So that when the general 
 rate of interest among the public grows to 8%, these bonds 
 to pay 8%, so the public can afford to buy them, must be sold 
 at about 60 cents on the dollar. 
 
292 RIGHT AND RICHES 
 
 Additional issues cannot be put on the market in compe- 
 tition. Some corporations must have new capital. Some 
 railroads must have new cars, etc. What do they do? They 
 turn to the banks, for the big stock-jobbers also dominate 
 the ^'Central" banks. The banks furnish the funds for a 
 while at the old rate. 
 
 This is the beginning of the end. 
 
 But why can the banks furnish funds at a rate below 
 what the general public can afford ? The answer is furnished 
 by a study of our banking laws. 
 
 H_BANKING LAWS. 
 
 No better example is needed of the danger to the public 
 in trusting an interested class to dominate legislation, than 
 is furnished by the laws passed at the dictation of the banks. 
 
 When "free silver" was proposed these bankers were loud 
 in their assertions that property could not "be created by 
 law." Yet when their class selfishness seems to demand it, 
 they expect government to reverse one of the basic laws of 
 nature and commerce — to create capital out of paper. 
 
 If Congress should hold a conference with the "Consoli- 
 dated Counterfeiters' Association" or "The United Smug- 
 glers' Union" and amend the laws to suit them, it would 
 seem past belief. Yet when the country is threatened by these 
 wholesale embezzlers, the head manipulators of banks, they 
 are invited and asked what further favors they should like. 
 
 This is not insinuating that bankers generally are crim- 
 inals, though it might truly be stated that the procuring of 
 some of our financial laws are among the worst of crimes ; 
 for they are planned particularly and specifically to support 
 the stock- jobbing dens of thieving, chief of which is Wall 
 Street. 
 
 Let us briefly summarize the National Bank Act which 
 in so far as may be State bank laws are patterned after. The 
 salient feature of this act is the section regarding reserves. 
 
BANKS AND PANICS 293 
 
 At the start the more honest and intelHgent members of 
 Congress recognized the need that banks carry a decent 
 amount of reserve. They thought that a bank should at all 
 times hold in its vaults at least one dollar for every four 
 dollars it owed its depositors. This need would be apparent 
 to one of "ordinary" intelligence. But those masters of the 
 art of "making something out of nothing" thought not. 
 Finally they beat the amount down by this masterpiece of 
 scheming for the interest of Wall Street. 
 
 This brilliant plan classified National banks or banking 
 cities into three classes, with special privileges to those cities 
 in certain classes, an action which had it been of popular 
 benefit would have been enjoined and declared unconstitu- 
 tional, as discriminating between States. 
 
 Now notice the fine planning. 
 
 The banks of New York City alone constituted the first 
 class, known as "Central Reserve Banks ;" those of sixteen 
 other cities,* the second class, called "Reserve City Banks," 
 and all other banks the third class, commonly called "Coun- 
 try Banks." The banks of the first and second classes were 
 to hold 25% reserve, but the third class need keep only 15%. 
 
 Now here comes the Wall Street clause. Instead of these 
 banks each holding its reserve in its vaults so it would 
 have it when demanded, it was provided that the third 
 class banks could loan three-fifths of their reserves (leaving 
 in their vaults but 6%) to the banks of the First and Second 
 classes. The Reserve City Banks in turn may deposit half 
 of their reserve in the Central Reserve, that is, in New York 
 banks. 
 
 Now, suppose such deposits of Country Banks increased 
 the total deposits of the Reserve City Bank, say in Phila- 
 
 *St. Louis and Chicago were later added to the Central 
 Reserve cities, and other cities were added to the second class 
 but without practical effect. 
 
294 RIGHT AND RICHES 
 
 delphia, one-third, or from $1,500,000 to $2,000,000. The 
 Philadelphia bank's reserve would now be $500,000, or no 
 more than the amount of the country bank deposit, and yet 
 it may deposit half of this in New York banks. But the 
 Country Banks may, and mostly do, send their reserves di- 
 rectly to New York. This is exactly as though two men 
 should trade $1,000 checks and then say they each had 
 $1,000 more cash. 
 
 There is a lack of sincerity with regard to these banking 
 matters on the part of the banks and public officials. 
 
 Scrutinize the statement of a bank when it does purport 
 to give one to the public, and you will see under the head of 
 ''Cash" assets an item termed, "due from other banks and 
 the U. S. Treasurer" amounting perhaps to something like 
 half of the cash they purport to have on hand. Yet you see 
 no corresponding deduction for "cash that they owe other 
 banks and the U. S. Treasurer." That is counted under the 
 general head of deposits. 
 
 Further these banks while earning 10 to 12% on their 
 capital and surplus (the National Banks earned 10.98% in 
 1902), pose as philanthropic institutions. When they loan 
 you their credit at 6 or 7% they are "accommodating" you. 
 But when you expect them to return the gold you deposited 
 with them, you are "unpatriotic." 
 
 An ex-Secretary of the Treasury, writing in a great 
 Encyclopedia, says : "These National Banks have since 
 their establishment received more than $4,000,000,000 of the 
 Government's money and cared for it, thus doing the Gov- 
 ernment a great service. "A great service" indeed, to have 
 four billion dollars without interest at critical times, when 
 call money is perhaps at 50%. It is a singular thing how 
 many men connected with the U. S. Treasury graduate into 
 bank officials. Can it be a compensation? 
 
 When a bank fails, entailing great loss and confusion 
 and its officers are prosecuted criminally, they often deserve 
 
BANKS AND PANICS 295 
 
 sympathy. The banking laws are more criminal than such 
 officers usually are. To allow banks to lend all but 6% of 
 their deposits, and then prosecute the officers for receiving 
 deposits after the bank is insolvent, is like allowing a child 
 to play with great sums of coin and bills, and then beating it 
 cruelly when some of it is lost. 
 
 Now there could have been but one purpose for this re- 
 serve scheme: It was to put the great bulk of the money 
 of the country within reach of the Wall Street Manipulators, 
 and they were not disappointed in the least with its practical 
 workings. Mind you, this is real money that is thus gath- 
 ered to the great stock gambling center, not just credit. 
 
 In the recent panic this banking crowd deliberately and 
 persistently circulated the report that the cause of the panic 
 was the withdrawal of their money from the banks by the 
 people. 
 
 Yet what is the truth of the matter? (There are as yet 
 no statistics available regarding the condition of the banks 
 of the country, other than National, but there is no reason 
 to suppose that withdrawals from them would be greater 
 than from the National banks.) 
 
 Circular No. 56, issued by the United States Comptroller 
 of Currency on December 23, 1907, and giving the condition 
 of National Banks on December 3, 1907, is full of interest- 
 ing information. Amazing as it may be, it shows that the 
 National Banks of the whole country actually held in their 
 vaults on December 3, 1907, 26 million dollars more actual 
 money than on November 12, 1906. How can such an out- 
 rageous falsehood, as that hoarding made the trouble, be 
 promulgated in the face of this statement? 
 
 But where was all this money, that the banks of the coun- 
 try could not meet their demands with it? Largely loaned 
 on Wall Street. As we have outlined above, all National 
 banks are supposed to maintain a sacred fund of 15% or 
 25%, according to their class, to meet any unusual demands 
 
 19- 
 
296 RIGHT AND RICHES 
 
 of depositors. There has not been shown any extraordinary 
 demand over the country in general at the beginning of the 
 panic, but just the normal demands of a thriving business 
 situation. Yet the banks were entirely unable to meet it, 
 and turned their depositors away with various make-shifts, 
 such as cashiers' checks, and what was euphoniously termed 
 scrip, but was nothing more nor less than counterfeit money 
 issued on a gigantic scale. 
 
 I repeat, where was this great volume of money which 
 was in the banks, a sum even in excess of a year previous ? 
 The answer is given in the said circular, and is the key that 
 unlocks the whole secret of the cause of this and previous 
 panics. 
 
 This is where the money was: More than 200 million 
 dollars of this sacred fund had been received by the New 
 York banks as reserve agents, as a sacred trust to be re- 
 turned instantly upon demand. This statement shows that 
 all the National Banks of the whole country together held 
 on December 3, 1907, a total sum of but 660 million dollars 
 in real money. Yet the trouble was not that the banks had 
 too little money, but that they owed too much to depositors. 
 
 These banks, with this 660 million dollars of actual 
 money, had built up, upon it, liabilities to the total of 8,407 
 million dollars, or about thirteen times the amount of their 
 cash. And a further study of this statement shows that 
 the most outrageous excess of liabilities to cash was found 
 in the banks of New York City. 
 
 These forty banks of New York City had received from 
 the outside banks, and still owed them on December 3, of this 
 vital reserve fund, on which solvency of the outside banks 
 depended, with the promise to make instant return of it upon 
 demand, the enormous sum of more than 200 million dol- 
 lars, which, as can be seen, is about one-third of the total 
 money held by all the National Banks. 
 
BANKS AND PANICS 297 
 
 And how much money did these New York City banks 
 have to meet this sacred demand ? The circular shows that 
 on December 3, 1907, they had but 176 milHon dollars all 
 told, to meet liabilities of every description. Yet in addi- 
 tion to this reserve money which the country banks were 
 supposed to be able to get upon call for it, these New York 
 City banks owed their individual depositors the staggering 
 sum of 586 million dollars. 
 
 But it may also be said that the individual depositors 
 also owed them, approximately, the same amount and that 
 this would to some extent, be a set-off. This is somewhat 
 true, as the theory of banking is built up upon the assump- 
 tion that only about 20% of what a bank owes depositors 
 needs to be kept actually on hand, to meet emergencies. But 
 this 20% would be about 120 million dollars, or two-thirds 
 of all the cash they had on hand. 
 
 Still this is not all. They owed the United States Treas- 
 ury 76 million dollars, or nearly half of the cash that they 
 had. There was no offset to this; And they owed State 
 and private banks and trust companies the immense sum of 
 195 million dollars, and they had due them from these in- 
 stitutions to offset this but the insignificant sum of 10 mil- 
 lion dollars. 
 
 They owed then, sums due immediately on demand, as 
 follows : 
 
 Reserves to outside banks $200,000,000 
 
 Reserves to their own individual depositors . . . 120,000,000 
 
 U. S. Treasury 76,000,000 
 
 Banks, other than National, Net Balance 185,000,000 
 
 Or a total of $581,000,000 
 
 They had total cash of but 176 million dollars. These 
 statements are almost past belief, but they are made by the 
 Comptroller of Currency, and a copy of the statement can 
 be had for the asking. 
 
298 RIGHT AND RICHES 
 
 Now how would you go about meeting immediate de- 
 mands for 581 million dollars with only 176 million dol- 
 lars ? What could you do when the outside banks and your 
 home depositors clamored for their money, but make an un- 
 conditional surrender and throw the whole system of finance 
 into chaos, spreading ruin and misery throughout the land, 
 upsetting all lines of industry, cutting off the means of the 
 employer to pay wages, and of the worker to earn bread? 
 
 How great was the sum of misery the following winter 
 throughout the whole length and breadth of the land — 
 hunger, cold and desperation, followed by crime — all pre- 
 cipitated by this criminal banking system. For there was 
 no other probable reason for interruption of industry but 
 the periodical plucking of their victims by the manipulators 
 of this banking system. 
 
 Yet what did these big magnates do but make a big 
 bluff, appeal to the United States Treasurer, howl for an 
 emergency currency, demand another bond issue, and then 
 try to throw the odium of the whole criminal business onto 
 the People and the Administration ? 
 
 Is it difficult to see how profit may be made by *'The 
 System," as Lawson calls the clique who dominates the 
 forty National banks of New York City, and through them 
 the big Insurance Companies, Railway Systems and other 
 enormous aggregations of capital? Is it not obvious how 
 advantage may be taken of such a crisis to pile up private 
 fortunes ? 
 
 Suppose Mr. Magnate, who controls several of these 
 banks and several other immense corporations, has pretty 
 well cleaned out his holdings of shares at top prices to the 
 public, and has a big credit balance in these New York banks 
 as depositor. All he has to do is to check out a few millions 
 and put it in his safe deposit box, and Slam ! goes the bot- 
 tom out of the market. He can then take his money out of 
 the deposit box and buy back for 20 million dollars what he 
 
BANKS AND PANICS 299 
 
 has recently sold for 100 million. This money machine is a 
 veritable Titanic pump to exhaust the people of their wealth. 
 
 And what do these New York banks do with this vol- 
 ume of money they draw in from all over the land? They 
 loan it "on call," that is, due on demand ; they loan it on the 
 security of corporation issues as collateral, with the stipula- 
 tion that if not paid on demand the securities may be sold 
 to the highest bidder. But how may 300 or 400 million dol- 
 lars of stock be thrown on the market at once? Who is to 
 buy ? It would mean ruin to attempt it, and they know it. 
 
 When men of moderate means fail to meet their obliga- 
 tions they are declared bankrupt and put in Receivers' hands. 
 But I understand that courts which were appealed to by de- 
 positors to force banks to pay, would not entertain such 
 suits. 
 
 Do banks cause panics? 
 
 Can they help but cause panics when they gather into 
 New York City more than one-third of the real money de- 
 posits of all the banks in the country, and use them to spec- 
 ulate in fraudulent securities? 
 
 The National Banking Law is a most complete and ef- 
 fectual scheme to give entire control of the money market 
 to the head stock-jobbers of Wall Street and thereby to give 
 them control of the values of all property in the land. 
 
 And yet they want more. They , are clamoring for the 
 deposit of all the Federal revenues now held in Subtreas- 
 uries. This would remove the last resource of safety. When 
 the slump came there would then be no more "kind Uncle 
 Sam" to go to, as his money would be included with the rest 
 in stock deals. 
 
 They are also crying for an emergency currency. That 
 is, that when they have overloaded themselves with loans on 
 collateral and otherwise, they may in a crisis issue "legal 
 tender money" against this collateral. 
 
300 RIGHT AND RICHES 
 
 When a clerk takes the funds entrusted to his care and 
 speculates in stocks or bets on races it is called an awful 
 crime. Why is it not a worse crime when banks take the 
 money you and I deposit with them and hand it over to Wall 
 Street gamblers, and not only endanger the loss of our de- 
 posits but the whole system of commerce on which the peo- 
 ple depend? It is fortunate that people generally were not 
 so greatly in debt as at times of former panics. It was more 
 strictly a bank and corporation panic this time. 
 
 And yet, scientifically speaking, this system of greed is 
 but the extreme concrete expression of greed latent in the 
 thought of the people at large. It is the embodiment or 
 dominant expression of the prevailing desire to get without 
 giving. In other words, the widespread greed of the masses 
 finally culminates in this overruling system of spoiliation 
 which succeeds against all other plans of covetousness. 
 
 Senator La Follelte has made the statement that four- 
 teen men dominate the entire resources and business of the 
 land through this system. Doubtless of this fourteen there 
 is one individual who is dominant. Yet, dear reader, it is 
 not A. B., or C. D., or E. F. who is responsible for this 
 system. It is not the fourteen persons who are officially di- 
 recting the workings of this system who are the primal 
 cause of its existence. They are but the temporary directors 
 or exponents of the culminated manifestation of the wide- 
 spread greed of the community. 
 
 Do not too quickly conclude that the foregoing state- 
 ments are vague, metaphysical sentiments. They are hard, 
 scientific laws of commerce. We have all read the story of 
 the two greedy cats who quarreled about the cheese and how 
 through their greed they were made subject to the monkey 
 who devoured it all. Even so does the greed of the millions 
 consume them, each greedy person contending against all 
 the rest and beating them down to become the prey of the 
 strongest. And this Wall Street system stands for the 
 
BANKS AND PANICS 301 
 
 most seductive conception of greed, which has culminated 
 in the manipulation of the most abstruse and elusive phase 
 of economic forces — the currency or money supply. 
 
 But if a means were instituted to exterminate stock- 
 jobbers as the leaders of oppression were guillotined in 
 France, their places would be immediately filled from among 
 the ranks of the public. 
 
 "For we wrestle not against flesh and blood, but against 
 principalities, against powers, against the rulers of darkness 
 of this world." In other words, against greed and fear. 
 
 The extent to which greed may unconsciously affect 
 public affairs is shown by the stingy voter being against 
 measures of public good because he thinks it will increase 
 taxes, even when he pays not one cent of taxes. 
 
 Only that dominant thought which is avaricious will tol- 
 erate legalized oppression. But there are many signs of 
 improvement. You do not get the reply so often now when 
 you discuss these abuses with citizens: ''Wouldn't you do 
 it?" 
 
 F— THE REMEDIES. 
 
 The only sure cure is improved citizenship, and happily 
 we are making great progress in this direction. Love and 
 brotherhood will banish greed and fear. This improved 
 citizenship is expressing itself in improved legislation and 
 such legislation is helpful; it is effective, when backed by 
 public opinion. 
 
 Legislation embracing the following features might tend 
 to curb this destructive system if enforced by honest offi- 
 cials, backed by honest public thought. 
 
 First. The reserve clause of our National Bank law 
 should be changed to require each bank to carry its whole 
 reserve in its own vaults until used to cancel its obligations. 
 
 Second. Increase the reserve requirement to 35% for 
 all banks. 
 
o02 RIGHT AND RICHES 
 
 Third. Provide for the actual use of this reserve for the 
 purpose for which it is supposed to be held, by providing 
 that it may be paid out to meet depositors' demands by the 
 bank paying 7 or 8% tax per annum on the amount its re- 
 serve is thus depleted. And instead of an emergency cur- 
 rency provide for a period of grace of a few days' extent, 
 available both to the banks against their depositors and to 
 those who owe the banks, by the payment of a certain reas- 
 onable percentage as penalty to the waiting creditor. 
 
 Fourth. Prohibit call loans, for they endanger the bor- 
 rower individually and in the end the banks collectively. 
 
 Fifth. Prohibit more than a small percentage of depos- 
 its being loaned on collateral. 
 
 Sixth. To prevent banks sending their money to New 
 York and other centers, prohibit banks from receiving in- 
 terest from other banks and forbid State banks loaning 
 money outside their own State. 
 
 Seventh. Compel banks at least once a month to pub- 
 lish a statement of the actual cash in their vaults, the amounts 
 owing by them to other banks, as well as what other banks 
 owe them. 
 
 Eighth. Reduce the percentage that a single firm may 
 borrow of the loanable funds of a bank. 
 
 Ninth. Prevent banks from paying more than 2% in- 
 terest on deposits. 
 
 Tenth. Forbid the investment of deposits in securities 
 which mature at a more distant date than three months. 
 This would cut out bonds and stocks. 
 
 Eleventh. Withdraw the function of issuing currency 
 notes from banks and replace such notes with legal tender 
 money issued directly by government. Also provide for dis- 
 posal of Treasury accumulations as suggested under the 
 head of *'A Rational Money Plan." 
 
 Twelfth. Establish Postal Banks. 
 
BANKS AND PANICS 303 
 
 The recent action of the banks in refusing to pay depos- 
 itors their money when due, that is, on demand, suggests 
 the question, why should not all debtors at all times have a 
 few days of grace? It is a well-established fact that values 
 are more staple, where there is a long period of redemption 
 from mortgages. These statutory redemption periods are 
 good alike for lenders as well as borrowers and especially for 
 the general public through prevention of panic. Why, if one 
 owes a note or obligation, not give him twenty to sixty days' 
 grace, with a reasonable penalty, not of court costs, but in- 
 creased interest ? It would save many good men from fail- 
 ure. If good for banks, why not for the people? 
 
 In States where there is no redemption from real estate 
 mortgage sales, values are seriously impaired thereby. The 
 maker of the loan seldom really wants the money, but fore- 
 closes while he is frightened. 
 
 Is it not the duty of law makers to restrict banking to its 
 safe and useful function? 
 
 Properly restricted, banks are a useful and powerful aid 
 to industry, prosperity and progress. 
 
 A bank's proper function is to have a knowledge of its 
 customers' proper standing and trustworthiness; to have 
 such capital, and conservative and honest management as 
 causes people to place confidence in it; and to lend its en- 
 dorsement, backed by this popular confidence, to those cus- 
 tomers, by giving them a reasonable amount of credit, lim- 
 ited by the legitimateness of the purpose of their use of it, 
 and by the bank's capacity after maintaining a conservative 
 reserve. 
 
 No interference with such function should be oflfered by 
 legislation, but should conservative restrictions reduce the 
 average net profits of banks from what they have been com- 
 monly earning, 10 to 12%, I cannot see that great hardship 
 would be done them. At any rate, the public has a right to 
 
304 RIGHT AND RICHES 
 
 demand legal protection against the present panic-breeding 
 system. 
 
 No great permanent progress can be made by labor in 
 securing its rightful wage ; no sure promise of safety can be 
 made to conservators of true capital for its safety from loss, 
 while banks may, in response to the criminal gamblers of 
 Wall Street, inflate credit and currency beyond all bounds, 
 with the resultant annihilation of both credit and currency. 
 This leaves honest industry not alone without credit, but 
 without a medium of exchange, and by such disorganization 
 almost entirely without a market. 
 
 Let industry grow up on a broad solid "Concrete foun- 
 dation," and there will be a chance for permanent progress 
 and reform. 
 
 But currency and banking reforms will not prevent Con- 
 cession from absorbing Rewards of Production in propor- 
 tion to the increase of prosperity, and thereby finally curtail- 
 ing output and causing depression. Such reforms can only 
 prevent such siidden and violent collapse. Money reform 
 will prevent the wild inflation of debt and largely prevent 
 stock jobbing. But no system of money will prove a total 
 cure for the evils of Concession. These evils exist under 
 all kinds of money systems, but to prevent panics means 
 much. 
 
CHAPTER V. 
 
 The: Importance q-^ Industriai, Corporations. 
 
 |ANKS, by reason of government patronage and the 
 special privileges or concessions they have obtained, 
 hold a place in the commerce and industry of to- 
 day far beyond what is normal or safe. They are 
 the cause of- an application of capital by the loan avenue, 
 dangerously in excess of what is natural, economical or safe. 
 Buying shares (not bonds) of joint-stock companies, thus 
 applying capital directly to productive purposes without the 
 incurring of debt or credit, is a far saner, safer, and more 
 direct and economical method than by lending it tO' ( deposit- 
 ing it in) banking concerns and trust companies constituting 
 them a "blind pool" to relend it to others, to again relend or 
 invest it for the purchase of capital. The corporation, both 
 small and large, is one of the grandest forms of civilization's 
 blessings. 
 
 Dr. Lyman Abbott, addressing the People's Institute at 
 New York on the "Coming Age," caused a sensation by de- 
 claring that corporations were tending to fraternalism in 
 industry. He pointed out that the stockholders of the great- 
 est trusts had increased from hundreds to thousands, and 
 said that if the number continues to increase, it will mean 
 that the ownership of these gigantic corporations will be 
 distributed more and more. He said : 
 
 "Do not destroy corporations, if they will manage things 
 for the good of the whole, and the people can make men to 
 manage these interests properly and do away with the evils 
 that exist in them to-day. As examples of the fraternalism 
 which I say is coming, I might point to President Roosevelt's 
 proposed tax on inheritances, Bryan's proposed tax on in- 
 comes, Henry George's proposed tax on all natural opportunities 
 
 305 
 
306 RIGHT AND RICHES 
 
 and the whole country's proposition that the people shall 
 operate the great highroads of the United States." 
 
 Civilization — brotherhood — impels men to have mutual 
 interests, to trust each other. This suggests another unfor- 
 tunate reason for the abnormal volume of bank deposits, 
 that is, that the unscrupulous methods of some of the great 
 stock manipulators prevent investments in stocks. 
 
 Corporation scrutiny and restriction is coming, none too 
 soon. The mistaken outcry against the mere magnitude of 
 corporations we have heard for so long is wasted energy. 
 But it is of the greatest importance to society to have all 
 capital employed at useful work as well as all labor. A 
 thousand people with $100 can furnish $100,000 capital if 
 it may be collected together. But corporations offer a better, 
 steadier and more direct process of applying this capital 
 than do banks. The industrial corporation may not preclude 
 the need of banks, but rightly restricted it would take their 
 place in a large measure as a place of deposit for capital. 
 
 But to be reliable they must be restricted against issuing 
 bonds. Bonds help make panics. They create the disturb- 
 ances from the change of interest rates. If corporations 
 got their capital entirely from the sale of stock, they would 
 have no trouble from high interest rates, for then would 
 dividends also be high. 
 
 By far the larger portion of debt consists of corporation 
 bonds ; they pay no larger per cent, when there is prosperity, 
 as they usually run for long periods. Companies do not 
 wish to sell bonds for a long period at high rates, when hard 
 times may reduce income in a short time. Hence we see the 
 great railroads and industries trying to get capital by over- 
 loading banks with short-time notes, thereby tempting fate 
 and panic. Corporations could at all times sell their stock 
 to make extensions or betterments, if they owed no bonds 
 and were free from clique manipulation. If they were free 
 
INDUSTRIAL CORPORATIONS 307 
 
 from debt they could continue a large degree of operations 
 during the most depressing times. 
 
 Millions upon millions of bonds are issued in good times 
 with no limit but the ability to sell them ; then as a matter of 
 course when depression comes they cannot even get money 
 to pay current expenses. An individual almost universally 
 limits his debts to what he thinks he may safely pay. But a 
 corporation having no personality has no personal liability. 
 The stockholders in control often over-issue bonds, buying 
 them at a few cents on the dollar for the sole purpose of fore- 
 closure. Then they sell their stock, buy the bonds, and take 
 the whole property under foreclosure, thus criminally de- 
 priving the stockholders of their property. Not only that, 
 but the great mountains of bonds are in times of depression 
 the great incubus on industry. 
 
 Private persons must go into debt. Business cannot be 
 done without it, but it is not essential for corporations to go 
 into debt. They may instead issue more stock. Stock is 
 not a debt, but a direct partnership title. The State has a 
 right to refuse to allow bond issues by corporations. The 
 sole thing to be considered in granting corporation charters 
 is the public's good. Any phase of their actions which is a 
 public evil should be stopped. Bond issues are a great evil 
 to the public in general and to the stockholders in particu- 
 lar. The gigantic robbery of stockholders through the graft 
 of cliques has lately been a revelation to the public. In one 
 instance especially, a clique issued bonds to themselves away 
 below par and immediately marketed them at several millions 
 profit. These graft swindlers are of several types. There is 
 the same clique controling two corporations, having little 
 interest in one, and robbing it to enrich the other, where 
 they are large owners. There is the holding of the stock of 
 one corporation by another. This is so palpably unnecessary 
 and such an infamous means to rob the stockholders, and es- 
 
308 RIGHT AND RICHES 
 
 pecially the public, that legislators have no excuse for allow- 
 ing it. 
 
 But the crowning means of swindling is bonding and the 
 resulting reorganization. A corporation should only be al- 
 lowed to issue stock. Should its assets shrink, the law should 
 provide that all stock should be surrendered and a smaller 
 amount taken in exchange pro rata by each stockholder, in 
 the same manner that increased issues are now alloted pro 
 rata. By this means a quantity of stock could be taken from 
 the stockholders and placed in the treasury to be sold to pay 
 debts or acquire the new capital needed. There is no limit 
 to the workings of this plan. A million-dollar corporation 
 finding its assets shrunken to $600,000, and itself in need of 
 $100,000 additional capital, could call for a surrender of 
 50% of all stock. Four-fifths of this could be canceled and 
 the remaining $100,000 turned into the treasury. It would 
 now be worth par and could be sold to get the new capital. 
 Corporations should be compelled to maintain their stock 
 near par. What a travesty on honesty to allow such a cor- 
 poration to issue on top of its $1,000,000 stock another mil- 
 lion of bonds to be sold for perhaps $200,000, making a total 
 outstanding capitalization of $2,000,000 and only $800,000 
 real capital. No wonder Wall Street is rotten. 
 
 Prohibit corporation bonds ; reduce stock to a par basis ; 
 provide that it shall be transferred on a public record, as real 
 estate is. Charge a small fee for each transfer, not enough 
 to deter actual investors in bona fide industries from buy- 
 ing, but enough to stop idle gambling. The corporations of 
 the country are of vital concern to every citizen. It is very 
 important that capital be available to output the abundant 
 native wealth. Whatever increases the danger of investment 
 obstructs production, makes the means of subsistence more 
 difficult to obtain. 
 
 But what is the need for unlimited transfer of stock, in 
 volume equal to the total of listed stocks in short periods? 
 
INDUSTRIAL CORPORATIONS 309 
 
 This does not promote the legitimate interests of corpora- 
 tions, but only the interest of the stock gambler. The Stock 
 Exchange is not an essential to corporations' real interests, 
 any more than the infamous race track poolroom is of benefit 
 to the live stock industry. 
 
 When corporations, whether engaged in industry, pub- 
 lic service or banking, assume such magnitude as to be vital 
 to public interest, they should be declared semi-public and 
 the public's interest should be asserted and represented by a 
 reasonable number of members on the board of directors. 
 
 If corporations were not loaded down with inflated issues 
 on which the holders demand interest and dividends, they 
 would not be compelled to cut wages or "lay off" employes 
 with the slightest recession of business. If these issues were 
 only allowed upon an exhibit in detail of their assets, the 
 amount of growth in the value of franchises and monopo- 
 lies would be disclosed. 
 
 We cannot, with safety either to industry or to the very 
 existence of our government, much longer defer corpora- 
 tion reform. All industrial progress and government hon- 
 esty depends on corporation integrity. 
 
 Not the size, but the conduct of a corporation is what 
 demands attention. Targe corporations are not essentially 
 vicious, but when they are, they are capable of greater hairm. 
 They are also capable of functions vital to Society, which 
 only they can perform, until such time as our legislative and 
 executive bodies become sufficiently educated and honorable 
 to give us public ownership. 
 
 Do not imagine chat because you own no corporate shares 
 you have no interest in corporate matters. Your interest is 
 scarcely less than though you were a chief stockholder. The 
 wage earner's employment depends on the right conduct 
 of corporations, as does the merchant's success, or even the 
 
310 RIGHT AND RICHES 
 
 religionist's or reformer's progress. This becomes a more 
 vital problem as business tends more and more to corporate 
 form. 
 
 Will the patriotism of our citizens be sufficient for its 
 solution ? 
 
PART SEVEN 
 
 Right Use and Plenteous Supply. 
 
 Chapte^r I. Waste and Want. 
 
 " 11. GovERNMENTAIv REFORM AND InDIVIDUAI. 
 
 Opportunity. 
 
 20- 
 
CHAPTER I. 
 
 Wast^ and Want. 
 
 "Seemeth it a small thing unto you to have eaten up 
 the good pasture, but you must tread down with your 
 feet? And to have drunk of the deep waters, dut ye 
 must foul them with your feet? And as for my flock, 
 they eat that which ye have trodden, and they drink 
 that which ye have fouled with your feet." 
 
 NUMEROUS school holds the theory that waste, 
 
 by some subtle means, increases production. The 
 
 theory is more than a subject for idle debate. It 
 
 makes a virtue of the profligacy of the idle, which 
 
 enslaves the industrious. 
 
 It is not so simple a matter as it might at first seem, to 
 combat these advocates of waste. They embrace the multi- 
 tude, yet the number who perceive the scientific truth is rap- 
 idly increasing. It is strange that intelligent people could 
 ever hold to such an impossible theory. Yet it is common, 
 though less so than formerly, to hear war advocated as pro- 
 moting good times, to hear the liquor and tobacco traffics de- 
 fended as helps to business activity. Persons apparently 
 moral and honest will assert that the vicious and idle revel- 
 ings of vulgar wealth help trade and commerce. The same 
 school urges the appropriation of public funds for the most 
 useless of projects, maintaining that labor is thereby em- 
 ployed and business improved. 
 
 From what inverted logic has such policy evolved? 
 Partly by the blinding shortsightedness of greed. This sel- 
 fish reasoning would welcome the grubbing out of orchards 
 if it might profit from the wages of those thereby employed, 
 regardless of the loss of future fruit ; or the burning of fields 
 
 313 
 
314 RIGHT AND RICHES 
 
 of cotton or elevators full of grain to enhance the prices. 
 Persons powerful in the councils of state advocate the en- 
 couragement of production with a view solely to the profit 
 of industrial proprietors. 
 
 What reasonable motive can there be for production but 
 to provide a supply for wholesome needs ? Much, n!o doubt, 
 is ennobling in the arts and avocations which produce. All 
 nature abhors idleness. It is ever accompanied with degen- 
 eracy. But effort and exertion, without rational purpose, 
 are not far removed from the nature of idleness. 
 
 One might suppose that these strenuous advocates of 
 production, who care nothing for lack and distress, were 
 moved by some exuberant flood of energy, which compelled 
 them to '*do or die;" but instead they are impelled by the 
 most sordid greed. It is not passion to create, but to get, 
 that moves them. 
 
 The normal inspiration to create is the desire to give, 
 to bless, humanity. The ''pay" or profit is a secondary con- 
 sideration for a noble effort. This will not at first seem true 
 in practical experience ; yet who does not recognize the pre- 
 cept as true that an employe who ''watches the clock" will 
 never be promoted. Recompense — compensation subse- 
 quently — is certainly due, but is the secondary, and not the 
 primary impulse. The wheels of commerce would stand 
 still if there were no other motive than greed. None should 
 engage in any work seriously without having in mind the 
 utility of the result. 
 
 This school cares nothing for consumers. Who is hungry 
 or naked is the least of their concerns. They are worried 
 about retaining a market for some great grinding mill. The 
 selfishness of such economists is the basis of their logic. 
 Their school should be called "inverted economics." True 
 economics seeks to find the underlying principles of com- 
 merce, that thereby commerce may furnish abundance to all. 
 Are thousands starving? The true school seeks the cause. 
 
WASTE AND WANT 315 
 
 Are people freezing to death in the streets of New York, a 
 city whose wealth is the wonder of the earth ? It asks what 
 is out of gear. Those of the inverted school seek scarcity 
 of what they produce that prices may be high. The ex- 
 tremists of this school will go to any lengths to cause such 
 scarcity. Their favorite method is a protective tariff. An- 
 other is a high freight rate with a rebate. Trusts, combina- 
 tions, graft and commercial slugging are among the methods 
 of retarding output. 
 
 Hon. Leslie M. Shaw, addressing 700 students in the 
 Harvard Union, prophesied a gigantic international trade 
 war for the twentieth century, a contest which in bitterness 
 would surpass the awful battles that were fought out during 
 the century just passed with bayonet and powder. Said he: 
 
 "England, France and Germany have long been depend- 
 ent upon their manufacturers for their national subsistence. 
 We have long regarded ourselves as an agricultural nation, 
 but at the present time we are manufacturing 5 per cent, more 
 articles than we can consume, and our manufactures are in- 
 creasing four times as fast as our agricultural pursuits. 
 These figures plainly show that before long we, too, will have 
 to be dependent upon a foreign market in order to support 
 our manufacturers. We must have this market if we are to 
 exist. So must England, Germany and France. The con- 
 flict will be an awful one. God grant that it may be blood- 
 less." 
 
 But why in the name of reason should we wish our man- 
 ufacturers supported when we no longer need their wares? 
 And would not a normal infant ask why we should wish to 
 send away our products except to procure the many things 
 we desire, and to supply those who lack. 
 
 One of the priests of this creed was quoted in a recent 
 publication as being in great apprehension because Japan is 
 colonizing Manchuria with wheat raisers, and Korea with 
 cotton growers. 
 
316 RIGHT AND RICHES 
 
 Dreadful calamity to contemplate! Awful, cruel, bar- 
 baric Japan to undertake to feed and clothe her people! 
 ''But," says this priest, ''it will rob America of her market 
 in Asia for wheat and cotton." The same journal told of 
 the freezing of poorly clad Americans. 
 
 Contrast such economics with the desire of a true econo- 
 mist to irrigate a new State, or to drain and put a sea wall 
 about the Mississippi Delta, that our food and clothing sup- 
 ply may be increased. It may be safely said that America 
 never raises enough cotton to plentifully clothe even her 
 own people. Perhaps some day she shall, but never shall 
 she be burdened by a single bale too much. 
 
 The following editorial from the St. Louis Post-Dispatch 
 is logical : 
 
 "The Booklovers' Magazine for April published an article 
 by Harold Bolce in which he took great pains to show that we 
 have but a trifling share of the trade of South America, the 
 Orient and Oceanica. The facts presented by Mr. Bolce are in- 
 disputable, but the inference he appears to draw that our 
 manufacturers show lack of energy is entirely unwarranted. 
 Mr. Bolce, like a great many other critics of the industrial 
 situation, appears to be unable to grasp the idea that it is a 
 big job to cope with the demands of a country growing as 
 rapidly as the United States. When our manufacturers accom- 
 plish that successfully, they achieve infinitely greater results 
 than those of any other nation. Mr. Bolce should not lose 
 sight of the fact that the value of the output of American 
 factories exceeds that of its three greatest rivals. We ought 
 to felicitate ourselves, that we not only manufacture more, but 
 consume more, than any other people on the globe." 
 
 Satisfaction is the ultimate of trade. Foreign trade that 
 is natural is good. It gets nations acquainted and promotes 
 good feeling. It is right for government agents to investi- 
 gate foreign fields and report the situation. 
 
 Various industrial associations might dO' well to have 
 agents touring our own States to educate users and report 
 needs. Home trade is what counts in productive volume. 
 
WASTE AND WANT 317 
 
 Think what interest is felt about Chinese trade. Some advo- 
 cate the expenditure of milHons of money, and men too if 
 need be, to get it ; while the others are in dread lest they shall 
 produce what we wish to sell. 
 
 A daily paper remarks : 
 
 "The Pacific Coast views with alarm an alleged boycott 
 by Chinese merchants against American goods. So long 
 as Chinese immigrants are barred here," the tale of horrors 
 runs, "so long will the Celestial merchant prince taboo our 
 wares." 
 
 Terrible if true! China bought from us in 1904 $12,862,- 
 000 worth of goods, almost exactly 3 cents' worth for each of 
 her population. There is in Europe a little country smaller than 
 Texas, 19 times smaller than China, that bought of us in the 
 same year $213,723,000 worth of goods, or $3.85 per person. 
 That country is the German Empire. 
 
 A Chinaman at home patronizes Uncle Sam's shop to the 
 enormous extent of 3 cents. Every German spends in it nearly 
 $4.00 a year. Yet we are pouring out money by the hundreds 
 of millions for power and prestige on the Pacific, with fatuous 
 eyes fixed on "the future trade of the Orient," and don't even 
 take the trouble to frame a reciprocity treaty when our present 
 trade with Germany is threatened with serious diminution. 
 Was ever commerce with such folly sought — or shunned?" 
 
 This paper might further have asked, How much does 
 the average American patronize Uncle Sam's shops? 
 
 The best basis of business, either individual or national, 
 is to provide those things that shall well and truly supply 
 wholesome needs, and take little thought of markets. 
 
 The following is a most sensible and broadminded view 
 of the future of Pacific trade : 
 
 "As industry develops — ^when Japan and even China be- 
 come really great manufacturing countries in the modern sense, 
 and especially when the great natural resources of China 
 begin to be developed and the habits and wants of the people 
 become more numerous and complex, as the habits and wants 
 of all peoples do in proportion to the development of their 
 industrial life — a trade will grow up across the Pacific ana- 
 logous to the trade that now goes back and forth across the 
 
318 RIGHT AND RICHES 
 
 Atlantic. Our best customers now are those nations that are 
 furthest advanced in industry — England, Germany and France. 
 This great law of commerce will not be changed because 
 the Japanese and the Chinese now have cheap labor. If 
 Japan proves equal to her great industrial opportunity, as she 
 proved equal to her military necessity, the whole world will 
 profit by the development that she will set going." 
 
 A narrow view in one's personal affairs might be ex- 
 pected, but for those posing as statesmen to advocate re- 
 striction of production and wasteful methods is Httle less 
 than criminal. 
 
 IndividuaHstic selfishness that takes no cognizance of the 
 interest of others, nor of the intelligent self-interest result- 
 ing from the general welfare, sees no difference between 
 being employed, to build, plant, develop ; or to devastate and 
 destroy. But there is a widespread cause for this false 
 reasoning. It is based on the universal economic slavery 
 of the masses to those who govern the means of production 
 — the natural materials of which wealth is made. 
 
 But greed forges its own chains. Its only view is that 
 of the chance to be employed. The chance to use some of 
 the wealth that arises from these natural stores or sources, 
 by getting it as wages. They care not whether their work 
 may produce or destroy so long as wages are paid. Does 
 the worker in the distillery or brewery think of the ruin his 
 productions are causing? 
 
 On the other hand, the employing class have, under this 
 abnormal situation, come to regard themselves as the bene- 
 factors of those they employ, holding the employed as under 
 obligations to their employer, instead of the employer being 
 lucky to have someone to relieve him of his task. 
 
 A dear good lady in telling of the difficulty of getting 
 washing done in a certain place, said she finally found an old 
 colored lady who said she was very busy but would "try by 
 working late into the night" to accommodate her next day. 
 Whereat this good lady became indignant and told the col- 
 
WASTE AND WANT 319 
 
 ored lady she did not wish to be "accommodated," that she 
 wished to pay. Her friend to whom she was talking took 
 her to task and asked by what logic she thought it other 
 than an accommodation to have the woman go to such extra 
 pains to do her work. We do not resent a bank's "accom- 
 modating" us, even though we pay interest and our security 
 is good. 
 
 A foolish justification of waste is that it puts money in 
 circulation. "Wait until he is dead, his boys will put his 
 money in circulation" is a common remark. Now it is quite 
 true that many men of means are too cautious of investing 
 in progressive things, but it is not true that rich men keep 
 a quantity of currency idle. They often do great injury by 
 keeping resources idle. 
 
 "The money is not wasted" is a common expression. It 
 is as though one should watch a child with a cup dip up 
 cream from a vessel and pour it into the sewer, and should 
 say, "Oh, the cup is not wasted." 
 
 Money is only a cup to dip and measure wealth. 
 
 A man of great prominence expressed himself in one of 
 the magazines that the heirs soon diffuse the estate among 
 the community. As well might we say a conflagration dif- 
 fuses the wealth consumed among the people of the com- 
 munity. How foolish! When $1,000 is spent foolishly it 
 is not in the slightest a question of money. That much value 
 is annihilated. Rich people spend little currency; haz/e very 
 little compared to their expenditures. They spend credit 
 and redeem it with property. A fortune spent wastefully 
 is a fortune lost to the whole world. Some may profit by 
 easy bargains with such heirs, but such bargains are mere 
 incidents ; while a carefully managed estate is likely to be a 
 source of continuous benefit to the whole community. 
 
 There is no benefit in the mere process of money circula- 
 tion. Money circulation usually accompanies, arises from, 
 exchange; but exchange may, or may not, be part of the 
 
320 RIGHT AND RICHES 
 
 process of wealth production. A race track is a place where 
 much money changes hands. Yet it often results in the 
 failure of many useful business enterprises through money 
 lost there. Certainly the whole expense of maintaining a 
 race track is a total loss ; besides there is the loss of time of 
 all patrons. 
 
 The function performed by money is perhaps the most 
 misunderstood of all the things with which man comes in 
 constant contact. These confused theories constitute money- 
 spending a creator of wealth, even when its effects are the 
 worst form of wealth destruction and waste of labor. 
 
 Wealth is a stream supplied by production and exhausted 
 by expenditure. Little accumulates. Of the year's produc- 
 tion but a fraction remains at the end of the year. Its ex- 
 penditure is divided between reproductive capital and ulti- 
 mate consumption. Consumption embraces normal use and 
 lavish waste. Production promptly responds to the class of 
 consumption by replenishing the various kinds of commo- 
 dities in proportion to their exhaustion ; hence consumption 
 determines the character of production. An overconsump- 
 tion of luxuries tends to an underproduction of essentials. 
 This power of directing industry is exercised not alone by 
 the ownership and superintendence of factories, fields or 
 mines, but by simple money-spending. How the owners of 
 a large income are in a position of power is well illustrated 
 by one having sole direction of a supply of water. Such a 
 person might, by the opening or closing of sluices, turn all 
 the water to the turbine wheel to produce electricity, or to 
 pleasure grounds and parks, to please the whim of some 
 Croesus, leaving millions of people perishing for water to 
 drink. Or by properly seeing and doing his duty he could 
 so distribute the precious resource in his charge as to give 
 ample supply for necessity and reasonable pleasure. 
 
 Does not the buyer of shoes direct labor and capital to 
 making shoes ; the buyer of horses to the growing of horses ; 
 
■ WASTE AND WANT 321 
 
 the buyer of beer to the making of beer, and of bread to the 
 making of bread? Ships make travel and travel makes 
 ships. To use the eloquent words of Ruskin, "For you who 
 have it (riches or property) in your hands are in reality the 
 pilots of the power and effort of the State. It is entrusted 
 to you as an authority for good or evil, just as completely 
 as kingly authority was ever given to a prince, or military 
 command to a captain." 
 
 But this grand man did not perceive the limitations of 
 industry; for economic science was yet young in his day. 
 Hence, the error of the further statement he makes. "And 
 according to the quantity of it (wealth) that you have in 
 your hands you are the arbiters of the whole issue. Whether 
 the work of the State shall suffice for the State or not de- 
 pends upon you." 
 
 Many think that industry depends on the capital of the 
 rich, instead of seeing that it depends upon the permission 
 of those who dominate natural resources. To think that the 
 liberal patronage of an industry by the rich, the spending 
 of money for luxuries and service, adds to the total employ- 
 ment of labor and capital is an error not to be wondered at. 
 This patronage certainly employs those directly concerned 
 and makes the industries patronized more prosperous, as we 
 have just pointed out, but it does so at the expense of other 
 industries. 
 
 Goldsmith, inspired poet of economics, had a clear con- 
 ception of this truth and plead with the people of his day in 
 these sublime lines : 
 
 "Ye friends of truth, ye statesmen who survey 
 The rich man's joys increase, the poor's decay 
 'Tis yours to judge, how wide the limits stand 
 Between a splendid and a happy land. 
 Proud swells the tide with loads of freighted ore, 
 And shouting folly hails them from the shore. 
 Yet count our gains, this wealth is but a name 
 That leaves the useful products still the same 
 Not so the loss." 
 
333 RIGHT AND RICHES 
 
 In other words, be not carried away by the delusion that 
 a large foreign trade, that high prices for land, high rents 
 and rates, much building of mansions and skyscrapers mean 
 plenty. *'Yet count our gains," sit down and figure, ''This 
 wealth is but a name." ''Not so our loss." It is but too 
 real. Visit the tenements of the poor. See who is deprived 
 to provide these things. Look for the corning panic, the 
 paralysis that must inevitably follow this unhealthy trade. 
 
 The beneficiaries of privilege are skillful at misrepresen- 
 tation, as Ruskin says, "By concealing its own fatality under 
 aspects of mercantile complication and expediency, and giv- 
 ing rise to multitudes of false theories based on a mean be- 
 lief in narrow and immediate appearances of good done here 
 and there by things which have the universal and everlasting 
 nature of evil." 
 
 In a previous chapter I have pointed out the conditions 
 that place the final limit on output. Output as a whole is 
 not limited by lack of capital, nor is employment of labor 
 limited by such lack, but even were it so limited, spending 
 money for luxuries is not applying it as capital. Output is 
 limited by preclusion of resources, to a point below the min- 
 imum "wage margin," that is, by holders of concession hold- 
 ing out for a share of the output that leaves producers less 
 than they will continue working for. 
 
 Of course, all holders of concession do not hold out for 
 an excessive share, nor do all producers decline to produce 
 but at the margin this thing is done. A price is asked for 
 lots that builders or users refuse to pay; railroad rates are 
 so high that a certain product cannot be produced and pay 
 them; excessive rents cause merchants and farmers to fail, 
 so output is limited at the base. 
 
 When concession holders raise their demands so that 
 there is not left of the product enough for the standard min- 
 imum of wages and interest, production declines. This re- 
 bellion is begun by capital, rather than labor. Owners of 
 
WASTE AND WANT 323 
 
 capital say, "I can see no profit to be made by me, after 
 paying such rent or rates. I shall sell my stock and quit*;" 
 or they refuse to begin new propositions. This is the limi- 
 tation of the basis of industry, this establishes the extent of 
 production ; establishes how much grain is grown, how much 
 ore is mined; determines the volume of the output at its 
 source. 
 
 Now, to divert a large percentage of this determined vol- 
 ume of grain, cotton or ore to purposes of waste, tends to 
 enhance the cost of the share needed for essentials. The 
 Czar of Russia wisely forbids the export of grain, to min- 
 imize the extent of famine, even though he does little else 
 that shows any economic wisdom. By the same reasoning 
 the lumber, cotton or food products wasted, increase the dis- 
 tress of the poor. Goldsmith puts it, 
 
 "Around the world each needful product flies 
 For all the luxuries the world supplies." 
 
 So the rich whose income is from grain and whose con- 
 sumption of it for food is a minor part of their personal ex- 
 penditures, wish to have it high priced so it may purchase, 
 when exported, much silk or wine or diamonds. But the 
 comfort of the masses demands abundant and cheap food 
 products. 
 
 Of course, in an Intelligent consideration of this matter of 
 vulgar waste, the question is not whether it is better for the 
 rich to get their income and bury it, or to expend it for per- 
 sonal luxuries. That might be debatable, but there is little 
 tendency for them to do this. Any normal person with an 
 annual income of a million, will either invest it again in in- 
 dustry, or in lands, franchises, etc., with a prospect of in- 
 creased value, or in personal luxury. It is so uncommon as 
 not to be worth considering for them to habitually turn it 
 into cash and lock it in a vault, or to take it in the form of 
 grain or ore or lumber and store 'it away indefinitely. The 
 
324 RIGHT AND RICHES 
 
 question then is between spending in wasteful luxury or re- 
 irivestment. 
 
 Now, what are some of the things bought for personal 
 luxury? It is a pretty poetical theory that the "ladies and 
 gentlemen bountiful" go into the highways and hedges and 
 hire the poor and destitute to provide these luxuries, but can 
 such employes make extravagant gowns or autos, build man- 
 sions or do high-class catering ? No. The rich buy the out- 
 put from the best in labor as well as materials. But there 
 is a phase of this luxury that Goldsmith saw, even in his 
 time, and it grows worse each year : 
 
 "The man of wealth and pride 
 Takes up a space that many poor supplied; 
 Space for his lake, his parks' extended bounds; 
 Space for his horses, equipage and hounds; 
 The robe that wraps his limbs in silken cloth, 
 Has robbed the neighboring fields of half their growth." 
 
 The largest item of extravagance is in land and its basic 
 outputs. Now in this last is where the great error is made. 
 The employment of labor and capital, the sum total of its 
 output or product, is not dependent on the owners of Wealth 
 (real Wealth as defined in economics) nor on the spending 
 of money, but on the margin of opportunity which is left 
 open to producers. This is determined by the standard of 
 wages and interests, which producers demand and are able 
 to enforce. This law determines the total of the volume of 
 output, even as the capacity of the sources of water supply 
 determine how much is available in a district. Mere spend- 
 ing of money with its resultant employment of labor to main- 
 tain the supply of such things as are bought, does not in- 
 crease the sum total of output. 
 
 But spenders of money — final purchasers of finished 
 product — consumers, determine in what proportion to 
 each other various classes of products shall be made. 
 To use the words of Ruskin again, "By the way we 
 
WASTE AND WANT 325 
 
 spend it (money or wealth) we entirely direct the labor 
 of these people during a given time." Or more cor- 
 rectly, we direct the application or proportion applied to 
 each of various lines, of an otherwise determined volume of 
 producing capacity, limited as we have seen by the laws of 
 wages and Preclusion. Continuing he says, "We become 
 masters or mistresses and compel them to produce within 
 certain periods a certain article. Now that article may be 
 a useful and lasting one, or it may be a useless and perish- 
 able one— it may be useful to the whole community or use- 
 ful only to ourselves. And our selfishness and folly or our 
 virtue and prudence are shown, not by our spending money, 
 but by our spending it for the wrong or the right thing, and 
 we are wise and kind; not in maintaining a certain number 
 of people for a given period, but only in requiring them to 
 produce during that period the kind of things which shall 
 be useful to society, instead of those which are only useful 
 to ourselves." 
 
 Our Sunday papers a while ago gave us a story of a 
 New York millionaire's daughter who considered herself a 
 great benefactress because she expended $100,000 annually 
 in dress. She boasted of working 1,000 women making her 
 gowns. Think of it, one thousand women, toiling, strug- 
 gling in pent-up tenements ; their babies neglected and their 
 own household duties left undone, all to provide clothes for 
 the back of one useless, idle woman ! Yet she asks : "What 
 can I do better with my money?" 
 
 Indeed, what can a vain, . thoughtless, idle woman do 
 with half a million or more a year ? It is indeed a problem. 
 But no harder to answer than the question, "What right 
 has a vain, idle, thoughtless woman to have so much wealth 
 come into her hands each year ?" Let not the reader think 
 that the expenditure of money is hereby condemned. Wealth 
 is only for use. But one should distinguish what is the best 
 
326 RIGHT AND RICHES 
 
 use, and should not be blinded by false theories when making 
 such distinction. Ruskin says : 
 
 "I don't say you ought not sometimes to think of your- 
 selves — only do not confuse Vanity' with benevolence nor 
 cheat yourselves into thinking that all your finery is so much 
 put into the hungry mouths of those beneath you ; it is not 
 so; it is what you yourselves, whether you will or no, must 
 sometimes instinctively feel it to be, that so much has been 
 taken out of their mouths." 
 
 If we perceive the scientific fact, demonstrated in the 
 chapter "The Domain of Use," that the whole volume of the 
 output of wealth is fixed by the extent of such Domain; 
 that the supply of capital put into industry is always as 
 much as these ''rates" will allow to have a reasonable in- 
 crease; and that currency circulates in response to the 
 volume of output, then we may clearly see that whatever 
 absorbs part of this determined output, without satisfy- 
 ing wholesome need, must inevitably cause some to suffer 
 lack. It is simply a proposition of subtraction. What, then, 
 is the distinction between a proper use of one's income and 
 the dissipation of it in criminal extravagance? It is largely 
 to be decided by one's own conscience, but a little considera- 
 tion may help to an intelligent decision. Epictetus said : 
 
 "What you avoid suffering, do not attempt to make 
 others suffer. You avoid slavery; take care that others are 
 not your slaves. For if you endure to have a slave, you ap- 
 pear to be a slave yourself first. For vice has no community 
 with virtue, nor freedom with slavery." 
 
 The first question to decide is what moral right we 
 have in the income which the "rules of the game of trade" 
 have thrown into our possession, for legal title is not essen- 
 tially moral title. A certain person when asked to pay a 
 debt, said that the statute of limitations had relieved him of 
 liability for it. He was told that there was no statute which 
 hindered one from discharging an honest debt. Just so, there 
 
WASTE AND WANT 327 
 
 is no law to prevent one from rectifying the receipt of gains, 
 which are legal, but unmerited. 
 
 First then, we should study the source of our income, 
 whether it be just; does it come from excessive charges? 
 Does it come from hindering instead of promoting industry ? 
 Then we should be careful to discriminate in expenditures 
 for our personal satisfaction, between what is really excel- 
 lent and what is merely display ; between what has real art- 
 istic merit and dignity of form and color, and what simply 
 has the form of the dollar mark, and the glitter of gold. 
 
 It is said by a critic of architecture that the mansions 
 of the Russians excel the modern mansions of any other 
 land, in both their size and the extravagance of their inter- 
 iors. Is not this fact consistent with the universal motive 
 of extravagance? In proportion to the depressing and en- 
 slaving methods by which income is wrung from toilers, such 
 is the extent of its flaunting in the faces of those who are 
 oppressed. This taunting impudence reached its limit when 
 the French Revolution burst forth to rebuke it. 
 
 "O, luxury! thou curst by Heaven's decree, 
 
 How do thy potions, with insidious joy, 
 Diffuse their pleasures only to destroy! 
 
 Kingdoms by thee, to sickly greatness grown, 
 Boast of a florid vigor not their own: 
 
 At every draught more large and large they grow, 
 A bloated mass of rank unwieldy woe; 
 
 Till, sapped their strength, and every part unsound, 
 Down, down they sink, and spread a ruin round." 
 
 — Goldsmith. 
 
 To accumulate wealth, to be surrounded by what is ex- 
 cellent in architecture and art is commendable ; but first look 
 to the moral rightness of your revenues, and even though it 
 be beyond criticism, do not think that you have still no obli- 
 gation to society in its expenditure; this wealth is only rela- 
 tively yours. 
 
 21— 
 
g28 RIGHT AND RICHES 
 
 How can you best meet this obligation? That is your 
 problem. To give it away to the individual poor is not al- 
 ways well. Your business may offer the best opportunity. 
 Do you own lands, or franchised industries? Perhaps you 
 can serve your fellow-man best by using your wealth to pro- 
 mote the greatest possible output therefrom in quality and 
 quantity. Or by developing the highest standards of excel- 
 lence in the sanitary, moral and intellectual condition of your 
 employes, which may be done by a reasonable investment of 
 your wealth. If your income is from tenements, do the ten- 
 ants get all that is due them ? He who has the right motive 
 need not be long in finding investments in philanthropy 
 which will not only not exhaust themselves, but which will 
 increase in their usefulness as time goes on. Mr. Spreckels 
 of San Francisco has made one of the grandest of such in- 
 vestments in furnishing funds to prosecute graft. 
 
 To broaden the field of effort by drainage and reclama- 
 tion; to support efforts to divert population from big cities 
 to small ones through better surroundings, thus remedying 
 the awful results of the greed which entices them to such 
 cities, are suggestions for such use. 
 
 Whatever conserves natural resources for the best and 
 largest use, whatever extends the range of their utility, 
 broadens the field of output and blesses all. 
 
 Every laborer should take an interest in the greatest de- 
 velopment of our natural resources and the protection of 
 them from waste. Timber, mineral and water reserves 
 should be regarded as his capital. Irrigation, drainage and 
 reclamation benefit all. Waste of public funds is his injury. 
 The eradication of graft is labor's only hope. Such waste 
 as intemperance in intoxicants or extravagance of any sort 
 is an injury to labor. Why? Because there is just one pair 
 of hands to feed each mouth if all work. 
 
 When the extravagance of the rich is condemned by the 
 poor it will soon be corrected. Do not the large majority 
 
WASTE AND WANT 329 
 
 of the poor covet wealth for the same purpose? They need 
 to learn the true spirit of ownership as much as the rich. 
 They have it in their power to direct by their votes the ex- 
 penditure of public revenues. They should appreciate this 
 responsibility. This one effort on their part would soon 
 ameliorate the worst distress. The sums now expended on 
 navies would open up vast resources if spent on good roads, 
 or deep waterways, or railroads, or drainage. The land and 
 mineral resources the Federal Government allows to be 
 stolen would, if saved, yield revenues to transform our land. 
 Many think that the employment of labor on wasteful 
 production and extravagance is good for wages. Do you 
 not know that the million dollar yacht and the locomotive 
 to bring you coal cannot be built with the same labor or 
 material ? 
 
 Now, if the work of a larger percentage of laborers is 
 diverted to serving the very rich and the very wasteful, it 
 must leave the number so much lessened, who provide the 
 food, clothing, etc., needed by the common people. 
 
 Hence, by the law of supply and demand, it is enhanced 
 in price, is harder to get. Suppose that a wealthy class con- 
 stituting but one per cent, of the people should hire ten per- 
 sonal servants each. That would be twenty per cent, of all 
 the labor. Then suppose that they should consume 50 per 
 cent, of the goods produced. This would leave for 99 per 
 cent, of the people the product of less than 40 per cent, of 
 all workers, while this one per cent, consume the service of 
 60 per cent. Do you suppose that the common people could 
 live as well? Two evils will surely result, long hours of 
 labor and short rations to the common people. 
 
 Is it any of your business what another consumes? In- 
 deed yes. It is the duty of every worker especially to look 
 with disfavor on an increase of the ranks of personal serv- 
 ants. An increase of luxuries may come from an increase 
 of scientific knowledge, but an increase of the number in 
 
330 RIGHT AND RICHES 
 
 servitude means a decrease of the free labor wherewith to 
 supply our needs. What is the trouble now in this country? 
 Immeasurable increase of output is accompanied by slight 
 increase of supplies to the masses. 
 
 Where output has been multiplied by ten, use by the 
 masses has perhaps not increased half. Where does the 
 other more than eight-tenths of the increase go to? It is 
 said by the press that the one room occupied by one of our 
 millionaire's daughters married to a foreign title, cost about 
 a million dollars in decorations and furnishings ; that her 
 servants were a small army of skilled men and women. 
 
 How many mansions are being built that cannot be cared 
 for by less than ten or a dozen servants? What is that to 
 us? Simply that it decreases the number engaged in pro- 
 duction of those things needed by all, causing corresponding 
 increase of price. Also it increases the probability that our 
 children shall be servants. For remember that servants are 
 not made of wood or iron, but consist of men and women. 
 There is too much seeking of wealth from sordid motives. 
 
 We must learn the true consistence of zvealth and that 
 its enjoyment is not through the domination of others but 
 through its wholesome diffusion. How many, after strenu- 
 ously acquiring a profusion of property fail to enjoy it as 
 they had expected they should. 
 
 ''The ground of a certain rich man brought forth plen- 
 tifully and he said 'i^ * * I will tear down my barns and 
 build greater and there will I bestow my fruits and my 
 goods, and I will say unto my soul (sensuous desires) : 'Soul, 
 thou hast much goods laid up for many years ; take thine 
 ease, eat, drink, and be merry.' But God said unto him, 
 'Thou fool, this night thy soul (sensuous appetite or desire) 
 shall be required of thee.' " "What shall a man give in ex- 
 change for his soul?" How can one buy the appetite to get 
 pleasure out of things which no longer please ? 
 
WASTE AND WANT 331 
 
 Why do those becoming rich often find no pleasure in 
 any of the things they had in view when striving for their 
 riches ? Because their motives were wrong while they were 
 accumulating such things. Truly, "a man's life consisteth 
 not in the abundance of his possessions." 
 
 But ''the slothful man is brother to him that wasteth." 
 
 The effect of this law does not depend on the quantity of 
 wealth but how it is used. He who had one talent which he 
 devoted entirely to self was condemned, while he who had 
 five and put them out at interest, or useful service, was 
 blessed with larger means of usefulness. It is the duty of 
 those possessed of much property to devote it and the op- 
 portunities thereby afforded to the service of humanity, and 
 it is no less the duty of those without property to devote 
 their efforts to unselfish service, and such devotion is usual- 
 ly rewarded with increasing supply of wealth. 
 
CHAPTER 11. 
 
 Govi:rnme:ntai. Re:form and Individuai, Opportunity. 
 
 ''And the government shall he upon his shoulders: 
 Of the increase of his government and peace there 
 shall he no end.'' — Isaiah. 
 
 "And a King shall reign and prosper and shaU 
 execute judgment and justice in the earth * * * and 
 this shall he His name wherehy he shall he called The 
 Lord Oue Righteousness." — Jeremiah. 
 
 NE of the disciples on the way to Emmaus after 
 Jesus' crucifixion despondently declared: "But we 
 trusted that it had been He which should have re- 
 deemed Israel." The Jews, even the disciples, 
 misunderstanding prophecy, expected Jesus to redeem them 
 from the Roman power. Just before his ascension they 
 asked Him : "Wilt thou at this time restore again the King- 
 dom to Israel?" 
 
 People commonly expect all reform to be brought by some 
 "man on horseback," dealing destruction to those whom they 
 think to be their oppressors. Jesus strove to remove this 
 mistake from his hearers' minds by telling them "The King- 
 dom of Heaven cometh not with observation," "The King- 
 dom of Heaven is within you." "We wrestle not with flesh 
 and blood, but with the powers of darkness." 
 
 Reforms come not down from organized authority, but 
 proceed from the improvement of the dominant thought of 
 the people up to the constituted authority. As Markham 
 sublimely voices it, 
 
 "Nay for He comes to loosen and unbind, 
 To build the lofty purpose in the mind." 
 
 Then what object does it serve to learn the principles of 
 economics? Does it do any good for people to learn how 
 
 332 
 
GOVERNMENT AND OPPORTUNITY 333 
 
 they are being deprived of the results of their labor? How 
 their public officers are misrepresenting them? That courts 
 are prejudiced by predatory interests? 
 
 It does much good; for error subjected to the light is 
 powerless and truth understood will prevail. A public opin- 
 ion based on science, on a knowledge of the truth, will cor- 
 rect public errors. 
 
 Is the inauguration of such reforms as Public Owner- 
 ship, Initiative and Referendum, etc., essential to the cor- 
 rection of public abuses? 
 
 Yes and no. They are important because they represent 
 the crystallization of the better thought, but statutory en- 
 actments are not the goal of reform movements. Statutes 
 depend for their effectiveness upon the people, upon having 
 the eternal laws of truth "written in the people's hearts;" 
 upon an understanding of what is right, and why it is right. 
 True popular government guaranteeing liberty and justice 
 is attainable only through the self-government of the indi- 
 vidual citizen and he may only succeed in goj^rerning himself 
 by the apprehension and demonstration of the absolutely 
 scientific divine principle of government, the "royal law of 
 liberty." Enslavement is proportionate to the ignorance and 
 selfishness and indifference of the enslaved, regarding their 
 rights. 
 
 All law is fulfilled in one word: "Thou shalt love thy 
 neighbor as thyself.*' 
 
 The conception of government as something far away 
 is happily beginning to give way to a truer conception. We 
 must cease to speak of government in the third person ; gov- 
 ernment is "we" — not "they." The following extract from 
 a recently recovered ancient manuscript, is said to be the 
 words of Jesus : "Strive therefore to know yourselves and 
 ye shall be aware that ye are the sons of the Father, and ye 
 shall know that ye are in the City of God and that ye are 
 the city." The "city" was the common ancient expression 
 
334 . RIGHT AND RICHES 
 
 for organized society. It is beginning to be recognized that 
 the foundation of a city's prosperity is righteousness and not 
 dissoluteness. 
 
 Government is not now so generally thought to consist 
 in fort and navy, in policeman's club and grated cell, as for- 
 merly. This is evidenced by the advance of prison reform, 
 juvenile courts, paroles of prisoners, , and other methods 
 which began with the great step of abolition of debtors' 
 prisons. A police court in Chicago is giving a good demon- 
 stration of the superiority of "common sense" — true sense — 
 over stereotyped foolishness in dealing with the violators of 
 the law. This judge reasons with the delinquent ones as 
 man to man ; appeals to the good in them, points out the re- 
 sults of their mistaken conduct irrespective of statutes, and 
 with splendid results. 
 
 I hope to see the day that no disagreement regarding 
 property or service can come to a farce comedy court trial, 
 until efforts to agree on the real truth shall have been ex- 
 hausted, until after both parties to the contention shall have 
 submitted in writing his full sworn statement of facts to the 
 arbitration of three of their fellow citizens, with only the 
 principals present, and without witnesses or lawyers. How 
 little the law has to do with such matters as an agent's claim 
 for commission, an employe's claim for wages, an ordinary 
 claim for damages to property, or a debt for the price of 
 property. These matters almost solely rest on reason, and 
 to becloud them with great volumes of legal opinions is in 
 itself a crime. 
 
 No better statement of government can be made than that 
 by Ruskin. "Government is always twofold * * * visible 
 and invisible. The visible government is that which nomin- 
 ally carries on the national business; determines its foreign 
 relations, raises taxes, levies soldiers, fights battles or di- 
 rects that they be fought, and otherwise becomes the ex- 
 ponent of the national fortune. The invisible government 
 
GOVERNMENT AND OPPORTUNITY 335 
 
 is that exercised by all energetic and intelligent men, each 
 in his sphere, regulating the inner will and secret ways of 
 the people, essentially forming its character, and preparing 
 its fate." 
 
 If property owners make the laws and influence the 
 courts and the press, does not this statement conflict with 
 the one that public opinion is all-powerful? No. It con- 
 firms it. This predatory class but represents or embodies the 
 thought of the community. The public is plundered by their 
 schemes of greed only to the extent of the public's greed. 
 It is greed in the majority which tolerates oppressive greed 
 in the few. St. Paul says : "But if ye bite and devour take 
 heed that ye be not consumed one of another." Greed can- 
 not combat greed. 
 
 Statutory law, with its whole machinery of courts, law- 
 yers and common law farces, is all a poor substitute for the 
 power of a public opinion founded on righteousness. We do 
 not depend on statutes to-day to prevent chattel slavery. 
 Emerson tritely expresses it, "The law is only a memor- 
 andum." 
 
 "Evil is not power." When, for love of mankind and 
 love of God, the light of truth is thrown upon what are sup- 
 posed to be the impregnable fortresses of evil — as evil com- 
 binations of capital, grafting, political corruption, all forms 
 of greed — these herds of swinish forces are seen to "rush 
 violently down a steep place." Have we not seen the rush 
 of corruptionists to panic and suicide in the last few years ? 
 "Evil is not power." The emancipation of mankind does 
 not depend on human legislation. It must be first in the 
 hearts of the people to get such laws, and afterward to make 
 them eflfective. 
 
 A knowledge am.ong the people of the economics Jesus 
 taught, is a better guarantee of peace than navies and forts ; 
 a better guarantee of justice than much legislation ; a better 
 
336 RIGHT AND RICHES 
 
 guarantee of the safety of property and person than im- 
 mense prisons and police forces. 
 
 Seventeen men who put aside selfishness reformed Gal- 
 veston. One man with honest patriotic effort started the 
 reform in Missouri. Intelligent patriotism, civics, philan- 
 thropy, even true religion depends on a knowledge of the 
 science of economics, for economics is one of the two phases 
 of religion ; that of our duty to our fellw nian, "for he that 
 loveth not his brother whom he hath seen, how can he love 
 God whom he hath not seen?" 
 
 Says Governor Folk of Missouri in his Thanksgiving 
 Day Proclamation: 
 
 "Let us encourage industry and attack not wealth. Let us 
 fight not men but the evil men do. Let us love not money 
 but manhood. Let us preserve inviolate the principle of popu- 
 lar self-government; unite in enforcing the laws and counter- 
 acting any attempt to defy them. Let us realize that liberty to 
 make laws does not mean license to break them; that the 
 liberty guaranteed us is liberty under the law, not liberty against 
 the law. Let us not array class against class, but preserve the 
 rights of all by causing each to respect the rights of the other. 
 Let us appeal not to cunning but to conscience, and remember 
 that by making the public conscience clean the public life is 
 made clean." 
 
 Hate does not promote liberty. Happiness and plenty 
 are not guaranteed by material means, either by engines of 
 destruction or construction. Says Marcus Aurelius, the wise 
 pagan apostle of pure thought: "Look within, for within is 
 the fountain of life, and it will ever bubble up if we will 
 ever dig." When the Kingdom of Heaven is attained it will 
 be from within. The icy barriers of greed which exclude 
 humanity from its own, must be bombarded by wisdom and 
 melted by love. Love is the opponent of aggression. Ac- 
 cording to Emerson, "Love is the only opponent of prop- 
 erty as we now have it." 
 
 Says Dr. Washington Gladden in the Congregational ist : 
 
GOVERNMENT AND OPPORTUNITY 337 
 
 "How great is the need of enkindling in the soul of the 
 nation a great sense of the eternal realities — of the sacredness 
 of truth, of the holiness of justice, of the nobility of service, 
 of the divineness of humanity! O, can you not see — you states- 
 men — you publicists — you political philosophers — that the one 
 vital need of this nation, at this hour, is the presence in the 
 hearts of the people of that friendliness for one another which 
 is the soul of justice and the only bond that can hold men 
 together in fruitful relations? To fill human society with this 
 great friendliness — this is the business of the Christian Church. 
 This is what we mean when we pray. 'Thy Kingdom come, 
 Thy will be done on earth, as it is in Heaven.' " 
 
 The comparative prosperity of tv^o peoples is commen- 
 surate with the degree of their real Christian character, and 
 is manifested in charitable and elevating works. The meas- 
 ure of this true civilization is indicated by their treatment 
 of woman. Have you never known a man to complain bit- 
 terly of his poor fortunes or the long hours some enslaving 
 employers compel their men to work, while yet he would 
 himself sit idly by and compel his wife, whom he professed 
 to love, to work fifteen hours a day for him and his children 
 without raising a hand to help her? Is it to be wondered 
 at that such men are poor? The more savage the man, the 
 more his selfishness is manifested in overbearing force. Who 
 gave man and not women the right to vote? One of our 
 gi-eatest living statesmen has pointed out the excellence of 
 Christian ideals over Oriental ideals, to be the infinite super- 
 iority of Love, the vital force of Christianity, over reciproc- 
 ity, the lifeless rule of the Oriental religion. Reciprocity 
 does nothing without pay; Love thinks not of the pay but 
 of the blessing it may impart and finds it "more blessed to 
 give than receive." This is obvious in the more bountiful 
 wealth of the Christian community, for is it not self-evident 
 that giving adds to the sum of wealth while taking decreases 
 it. In the degree that man discovers Love, God, he finds 
 abundance, for ''God is all." Christian lands are free from 
 famines, which almost depopulate un-Christian nations. 
 
338 RIGHT AND RICHES 
 
 Are they who suffer from poverty, then, morally or men- 
 tally inferior to those who enjoy affluence? This is not im- 
 plied at all, for the grandest characters we know may be des- 
 titute of property, while those of greatest possessions may 
 exhibit the meanest dispositions. Yet notwithstanding these 
 apparent inconsistencies, it remains an uncontrovertible 
 truth that poverty is an unnatural and deplorable error that 
 we should earnestly, carefully and prayerfully strive to over- 
 come. But we should be sure that in this effort to overcome 
 poverty we proceed from true principles. 
 
 It is not enough that the pupil have the right answer 
 attached to his methematical problem. He must have at- 
 tained it by the correct principle, for him to truly benefit 
 thereby. Likewise it is no conclusive proof of progress in 
 the science of business that we get a quantity of property 
 by indiscriminate means. It is essential to our ultimate good 
 that our supply come as a result of the demonstration of 
 right business principles. He who flatters himself on his 
 wonderful progress in the knowledge of business may sadly 
 need even the advice of his indigent brother, regarding the 
 true solution of this great problem. ''He that seeth his 
 brother have need" and has no compassion on him, has cer- 
 tainly made little progress in the real science of success, no 
 more has he who is unkind to his own family. 
 
 It is important to have an accurate statement of the re- 
 lations and laws of wealth and production. It is very im- 
 portant to have legislation based on these natural and un- 
 changing laws, but most of all to learn that "Love is the 
 fulfilling of the law." Evolution of good government, of 
 intelligent commerce, of all social progress is not the crea- 
 tion of something new, but the recognition of principles that 
 were ever operative. This is true of mechanics and industry, 
 just as it is true of the so-called evolution of man. Steam, 
 chemistry, and the principles of engineering are not new. 
 Man was made perfect, in the image of God. The Prophet 
 
GOVERNMENT AND OPPORTUNITY 339 
 
 Isaiah thousands of years ago saw a perfect social status 
 based on right or righteousness. 
 
 Considerable economic writing of late has been a vague 
 presentation of a strange, mysterious god termed "social 
 love," social evolution, whose "worship" is labor. These 
 teachers point to the widening field of industry, the growing 
 interdependence between people of the most remote corners 
 of the earth. They also note the growing fraternity, peace and 
 good will among men, and attribute them to the effects of 
 this "social god," a god of blind energy expressed in work. 
 
 To such teachers let us repeat the words uttered by Paul 
 in that grand outburst of eloquence on Mars Hill : "Ye men 
 of Athens, I see that in all things ye are too superstitious, 
 for as I passed by and beheld your devotions 1 found an 
 altar with this inscription, 'TO THE UNKNOWN GOD.' 
 Whom therefore ye ignorantly worship, Him declare I unto 
 you. God that made the world and all things therein, seeing 
 that He is Lord of Heaven and earth, dwelleth not in tem- 
 ples made with hands ; neither is worshiped with men's 
 hands as though He needed anything, seeing He giveth to all 
 life, and breath, and all things ; and hath made of one blood 
 all nations of men." 
 
 It is not extension of the field of exchange that is pro- 
 moting the brotherhood of man; but it is the extension of 
 brotherhood through the teachings of Him who came to 
 bring "peace on earth" that is making exchange world-wide. 
 
 Isaiah foresaw the time to come "that the mountains of 
 the Lord's House shall be established in the top of the 
 mountains, and shall be exalted above the hills; and all na- 
 tions shall flow unto it. For out of Zion shall go forth the 
 law and the word of the Lord from Jerusalem, and he shall 
 judge among the nations and shall rebuke many peoples; 
 and they shall beat their swords into plowshares, and their 
 spears into pruning hooks, nation shall not life up sword 
 against nation, neither shall they learn war any more." 
 
340 RIGHT AND RICHES 
 
 The recognition of God as our Father makes us all one 
 family ; it destroys race hatred and false national "interests." 
 
 Love certainly prompts activity and useful effort, but 
 there is no tendency in indiscriminate work to elevate the 
 worker, rather a tendency in much of it to degrade. 
 
 We must learn both what right is, and what riches are. 
 Riches, wealth, is not simply tons or pounds of freight. The 
 word wealth is from weal or well. Its primary meaning as 
 given by the Century Dictionary is prosperity, well-being, joy 
 and happiness. To confine the use of the word more to mater- 
 ial wares is a later tendency. Wares are only wealth in the de- 
 gree that they promote well-being. Wares of great value to 
 one advanced in civilization would often times be of no use 
 to one lower in the scale, and vice versa. Many philan- 
 thropists have been discouraged because those whom they 
 sought to help failed to use what was offered them. To a 
 refined person, the lack of a bathroom in a house would 
 seem a great privation, yet tenants have been known to use 
 nice enameled bathtubs only as a storage for ashes. Wares 
 are not happiness. Happiness is limited by them only ac- 
 cording to our mental estimates. Some think tobacco and 
 intoxicants wealth; many others think them what Ruskin 
 terms "illth." 
 
 Current economics tend too much to a material concep- 
 tion of wealth. The conception of needful things as "prop- 
 erty," an entity whose basis is hindrance to use, is the an- 
 tithesis of the true idea of such things conveyed by the term 
 "goods." "Goods" or "good" consists in the effectual ex- 
 pression of a benign motive to minister to need. This is 
 the ideal conception, this fulfills the golden rule: Whatso- 
 ever ye would that men should do to you, do ye even so to 
 them, for this is the law and the prophets. The common 
 rule of property, which is directly antagonistic to this, might 
 be rendered : Take ye all the traffic will bear, for this is the 
 source of corruption and depression. How harmful these 
 
GOVERNMENT AND OPPORTUNITY 341 
 
 inverted notions are appears in the dire effects of thinking 
 money to consist of metal, in the tendency to give more at- 
 tention to taxing useful commodities than privileges im- 
 mensely more valuable, in the inordinate desire to acquire 
 immense houses and fill them with cumbrous merchandise, 
 in the savage taste of some rich women to have innumerable 
 dresses at a cost of fabulous sums, and most of their time 
 and thought. These unfortunate tendencies are shown by 
 our cities in sacrificing all that make them fit for habitation, 
 to blighting, smoking factories, and in licensing nuisances 
 for money; in the poisoning envy and jealousy of many 
 poor toward the prosperous. 
 
 A message was recently sent 1,200 miles without paper, 
 or ink, through air, instantly. Steam was always easily 
 available, yet it was not always wealth. Where formerly it 
 was thought essential that thousands of miles of unsightly 
 fences, harboring obnoxious weeds, be built to protect farm- 
 ers' crops, now a simple word of fraternity and intelligence 
 expressed in a memorandum called law, protects those crops. 
 Is not this intelligent word greater riches than the fences, 
 that before had cost millions? Emerson says, "They only 
 who build on ideals build for Eternity." Wealth arises not 
 so much from muscular effort, or mechanical energy as from 
 unselfish purpose to serve, to contribute. Production is 
 more truly a discovering or revealing of riches than a cre- 
 ation of them. "Every good gift * * * cometh down from 
 the Father of lights." Poverty is darkness. 
 
 Do not limit the success of your undertakings by the toil 
 they involve, either as to your recompense or the good to be 
 done. Success is not limited to the measure of the toil en- 
 dured even from the ordinary commercial standpoint, for 
 those who prosper greatest do not toil the hardest, nor does 
 any moral law measure your reward by your toil but rather 
 by the love you put into your work. Toil is necessitated by 
 the number of our mistakes we must correct. Yet he who 
 
342 RIGHT AND RICHES 
 
 labors not seldom makes much progress ; for we must "work 
 out our own salvation." It takes work to root the errors 
 out of our thought so that God may work through us. He 
 who has the right motives in life finds little time for idle- 
 ness. But the toil of many is like struggling to pump the 
 water from an excavation without first shutting out the in- 
 flow from the sea. 
 
 We must not fail to do our work because conditions seem 
 adverse. "He that observeth the winds shall not sow, and 
 he that regardeth the clouds shall not reap." The success- 
 ful man is one that continues to do his part regardless of 
 good or bad times. "Cast thy bread upon the waters for 
 thou shalt find it after many days." "In the morning sow 
 thy seed and in the evening withhold not thine hand." Some 
 persons never expect to have anything, perhaps because they 
 work with the wrong motive. 
 
 St. James writes : "Ye ask and receive not because ye ask 
 amiss," for the purpose of consuming it in selfish indulgence. 
 
 Jesus emphasized the importance of motives to our suc- 
 cess in acomplishment when, teaching how to pray, and 
 made His meaning unmistakable by the following illustra- 
 tion : "Which of you shall have a friend and shall go unto 
 him at midnight and say unto him : 'Friend, lend me three 
 loaves, for a friend of mine in his journey is come to me 
 and I have nothing to set before him.' " Continuing He 
 points to the inevitable result of such an appeal ; that though 
 he will not supply you because you are his friend yet be- 
 cause of the worthy motive which prompts your seeking — 
 the desire to minister to another's need — ^he will give you 
 as much as you need. 
 
 What great wealth would be secured to us if we could 
 look to the purpose of our work rather than the pay. 
 Wealth consists in thought and action. You cannot give 
 "that which is holy unto the dogs, neither pearls to swine." 
 Has not improved machinery been burned by those who 
 
GOVERNMENT AND OPPORTUNITY 343 
 
 thought it harmful, and are not all progressive ideas resisted 
 by communities and persons not yet ready for them? In- 
 gratitude both to God and to man, for what we receive is 
 the principal cause of poverty. 
 
 Many are thought to be rich and think themselves ''rich 
 and increased with goods" when they are "wretched and 
 miserable and poor and blind and naked." Confidence, hon- 
 esty and brotherliness are better than expensive courts to 
 guarantee justice. Friendship and love between nations is 
 better national wealth, than forts and navies. 
 
 Nothing is more evident than that "a man's life con- 
 sisteth not in the abundance of his possessions." 
 
 It is remarkable how the beautiful, simple, scientifically 
 economic teachings of Jesus and the scriptures have been 
 misconstrued by professing Christians, and made to justify 
 the most infamous industrial practices and to condemn the 
 most worthy motives and acts in connection with the pro- 
 curing of wealth ; and on the other hand how the economists 
 of high motive and rational theories have condemned the 
 Christian teachings as opposed to the welfare of the honest 
 worker. Christianity and economics are inseparable; at- 
 tempt to divorce them and you have neither. 
 
 Religious teachers have persistently interpreted scrip- 
 tural statements to condemn wealth as an evil per se; then 
 again they have justified slavery thereby, and preached 
 submission to every evil and oppression. The most plain 
 and sacred promises in regard to God's providence and 
 abundant supplies for all our needs, have been nullified 6y 
 giving them a figurative meaning, while others have been 
 narrowed from a broad meaning to one of narrow and mean 
 import. The passage "It is more blessed to give than to 
 receive," and "The Lord loveth a cheerful giver," are almost 
 stripped of meaning when construed to imply only the con- 
 tribution to church funds, or for that matter, when such 
 
 22— 
 
3M RIGHT AND RICHES 
 
 giving does not include the giving of kindly service which 
 is possible to all. It is only necessary to read the beauti- 
 ful precepts and principles stated by Jesus and His 
 disciples, and the Prophet Isaiah particularly, and to take 
 the meaning of their words given by Webster's Dictionary 
 to have a most beautiful Science of Economics. Truly, 
 much of the scriptures have a double meaning, as have all 
 profound writings, but it is as wrong to rob them of their 
 literal meanings, as of their scriptural. Take the word 
 "bread;" sometimes spiritual strength is plainly implied, 
 other times subsistence, or only food ; other times both spirit- 
 ual and bodily subsistence is meant. 
 
 In the 6th chapter of Matthew we have the grandest 
 economic teaching ever given to poor, tired, worrying hu- 
 manity: "Take no thought for your life what ye shall eat 
 or what ye shall drink ; nor yet for your body what ye shall 
 put on." There can be no question that literal subsistence is 
 here meant; there is no double meaning nor any figurative 
 meaning. He means just plainly what he says. Further on 
 he says: "For your Father knoweth that ye have need of 
 these things." It is as one might say to a little boy at his 
 grandmother's : "Now, don't worry nor ask about when you 
 are going to have dinner, or what you will have ; Grandma 
 knows you haven't had your dinner." 
 
 Is it not as plainly a violation of this command to be 
 worried by poverty, by the lack of the wholesome instru- 
 ments of harmonious activities as it is to be unduly strenu- 
 ous to pile up wealth? We should no more let the lack of 
 things dominate us than we should allow their possession to 
 hinder the true purpose of life. 
 
 Jesus had no accumulation of property. He had "not 
 where to lay His head," yet he was not troubled by lack of 
 a boat; He walked on the water; nor for lack of bread to 
 feed the multitudes ; He, got the coin from the fish's mouth 
 to pay the tax to Caesar which he declared to be unjust." 
 
GOVERNMENT AND OPPORTUNITY 345 
 
 Then Jesus makes the one grand vital statement of all 
 true economics : "Seek ye first the Kingdom of God and His 
 righteousness and all these things shall be added unto you." 
 Manifestly there is no meaning to this when we construe 
 "seeking the Kingdom of God" to mean only a place to go to 
 after we are dead, for how could food and clothing be added 
 to our bodies after we are dead? This is not a bargain to 
 "pay" food and clothing in return for believing something 
 or doing something. It is rather a scientific proposition; 
 just as a teacher would say to a pupil: "Take a base of 8, 
 a perpendicular of 6, and a hypotenuse of 10, and you wilt 
 have a perfect right angled triangle." Henry Drummond 
 rightly teaches that the Kingdom of God is a kingdom of 
 cause and effect. He says science must include the infallible 
 spiritual laws. Right not simply secures riches. Right is 
 riches, true riches, but not property. 
 
 Because Jesus and His disciples refused to counsel the 
 suppression of certain evils by violence, their words have 
 been construed by some to justify such evils. Paul says : 
 "Servants be obedient to your masters according to the flesh 
 '•' * * not with eye service, as manpleasers, but as the serv- 
 ants of Christ doing the will of God from the heart." This 
 has been construed to uphold slavery, though nothing could 
 be farther from the truth. When Jesus was asked to inter- 
 fere in the settling of an estate by one who thought he was 
 not getting his fair share. He asked : "Man, who made me 
 a judge or a divider over you? And He said unto them 
 take heed and beware of covetousness ; for a man's life con- 
 sisteth not in the abundance of the things that he possesseth." 
 While Jesus was the greatest economist, His mission was not 
 to introduce reform in legislative measures, not to right 
 abuses by force, but to teach men truth and love, which 
 would of its very nature make them free. Isaiah prophesied 
 of Him : "He shall not strive nor cry, neither shall any man 
 hear His voice in the street; He shall bring forth judg- 
 
346 RIGHT AND RICHES 
 
 ment unto truth, He shall not fail nor be discouraged till 
 He have set judgment in the earth." 
 
 Most economic writing is too much discouraged and dis- 
 couraging, but it cannot be otherwise when it looks only to 
 human legislation for relief. 
 
 Jesus did not decry the production and use of wealth. 
 He warned against its hoarding and its worship. How 
 many find "when they have much goods laid up for many 
 years" that they have no so^d or sense of enjoyment of them. 
 'Xay not up for yourselves treasures upon earth where moth 
 and rust doth corrupt, and where thieves break through and 
 steal." But lay up treasures in heaven — harmony, righteous- 
 ness, right thinking, understanding, the satisfaction of good 
 done. 
 
 The old Scotchman who, after he had become a bank- 
 rupt, was reproached with having been too liberal with his 
 benefactions replied: "Ah, that is the only part of my for- 
 tune I have left; I can't lose that." 
 
 Waste must not be confused with liberality. "The vile 
 person shall no more be called liberal, nor the churl said to 
 be bountiful. The liberal deviseth liberal things, and by lib- 
 eral things shall he stand." It is common to hear the giving 
 of public wealth embraced in franchises, to rich corporations, 
 endorsed by the same persons who urge the poor to be sat- 
 isfied with their meagre supply. 
 
 Wealth is wealth as light is light only when it is diffused. 
 Nature abhors the storing up of wealth. How few things 
 can we heap up without they decay. "Take therefore no 
 thought for the rporrow." He said to pray "give us this day 
 our daily bread ;" in other words, replace anxiety with love, 
 for "perfect love casteth out fear." "Cease to do evil, learn 
 to do well; seek judgment; relieve the oppressed * * * if 
 ye be willing and obedient, ye shall eat the good of the land." 
 Righteousness tends to the flow of prosperity, just as a 
 straight channel tends to a rapid flow of water. Is it not 
 
GOVERNMENT AND OPPORTUNITY 347 
 
 every day becoming better recognized that confidence is the 
 basis of prosperity and that fear annihilates wealth? Love 
 is no less a vital part of wealth, but it is not so much com- 
 mercially recognized. But confidence should rest on under- 
 standing of the truth. 
 
 'T even I am He that comforteth you; who art thou 
 that thou shouldst he afraid of a man that shall die =^ * * 
 and forgettest the Lord thy maker that hath stretched forth 
 the heavens and laid the foundations of the earth ; and hast 
 feared every day because of the fury of the oppressor as if 
 he were ready to destroy, and where is the fury of the op- 
 pressorf 
 
 Do present laws oppress? What are you doing to pro- 
 mote freedom? Scripture teaches that the "law of liberty" 
 is ''to love our neighbor." It is not alone the rich who are 
 oppressive; poor men are often brutal to their families. 
 "The Kingdom of Heaven is within you." You do not have 
 to be a millionaire to be an oppressor nor to be a philan- 
 thropist. "True the heart grows rich in giving." Try it. 
 Give everyone a smile, do everyone a kindness. It is retro- 
 active. Are you a poor man without proper employment? 
 Get your heart full of love and good will. People like to hire 
 such persons. See how much kindness and love you can 
 put into the work you have to do. 
 
 Drummond points to the great difference between trying 
 to be "pleasing" and trying to "give pleasure." Trying t® 
 he pleasing is eye service. Trying to give pleasure by our 
 work is what gets a better job. If you are a painter or 
 plasterer, see that your material is free from "dope." Are 
 3^ou a carpenter, don't be too saving of nails. Try being a 
 law unto yourself. It is unfortunately true that some labor 
 agitators are dishonest workmen, and lax about paying their 
 debts. Don't cowardly submit to wrong where you can 
 remedy it, for if you do you become particeps criminis. 
 
348 RIGHT AND RICHES 
 
 The accepted economic precepts make the oppressor en- 
 tirely too formidable and invincible. He is only a shadow, 
 has only the power we concede; turn on the light and he 
 vanishes. The poor are oppressed by their own errors and 
 fears. Do not sit down and hate some rich person. "He 
 that hateth his brother is a murderer." Do not think you 
 are bound down by an unfortunate system, or the lack of 
 certain laws. ''Fret not thyself because of evildoers, neither 
 be thou envious against the workers of iniquity." Whatever 
 laws you think good, work for their enactment, but know 
 that their enactment, and especially their effect depends 
 upon the state of thought in the community. You do not 
 need to wait for prohibition to stop drinking; just quit con- 
 ceding any power to the drink habit. Yet he who is not 
 willing to give up drink for the good of humanity is ex- 
 tremely selfish. 'Tf meat cause my brother to offend I will 
 eat no meat while the world stands," says Paul. 
 
 Do not seek trouble ; seek happiness in truth. Thinkers 
 everywhere are coming to recognize that most of our 
 troubles are only what we make of them. Poverty, disease 
 and sin are only as strong as we concede them to be. None 
 of them have any real legal existence. "The nature of evil 
 does not exist," says Epictetus. "The truth will make you 
 free." Warning men of the awful power of drink did not 
 promote temperance. Strenuous precautions against dis- 
 ease do not promote health, neither does the fear of hard 
 times and evil industrial conditions promote prosperity. Do 
 you believe the 23rd Psalm? "The Lord is my shepherd, 
 I shall not want." "Be not overcome with evil, but over- 
 come evil with good." — Romans 12 :21. If God be for us 
 who can be against us?" "Trust in the Lord and do good; 
 so shalt thou dwell in the land, and verily thou shall be fed." 
 —Psalm 37. 
 
 Said Jeremy Taylor: "Prosperities can only be enjoyed 
 by them who fear not at all to lose them." Predatory wealth 
 
GOVERNMENT AND OPPORTUNITY 349 
 
 that takes the shares of labor, consumer and society is only 
 the concession we make of it. Evil of whatever nature has 
 only the power we concede to it. Many persons suffer in- 
 tensely from imaginary slights and insults. Epictetus says 
 no man can insult you if you do not take offense. *Xet all 
 those who put their trust in Thee rejoice; let them ever 
 shout for joy because thou defendest them; let them also 
 that love thy name be joyful in Thee. For Thou Lord wilt 
 bless the righteous; with favor shalt Thou compass him as 
 with a shield." 
 
 "The lips of the righteous feed many; but fools die for 
 want of wisdom." If there were no brave hearts contrglled 
 by kindness and love ; if every creditor insisted on his pound 
 of flesh, not caring how much blood were shed in taking it, 
 what a terrible thing a panic would be. But there is lots 
 of love among men and it is impelling them to the study of 
 right and it will reform laws, but meantime let us be a law 
 unto ourselves. The community with least greed and fear 
 recovers most quickly from panic. 
 
 How many fail from having a heart poisoned from hate ! 
 How many fail from being pessimistic, having no faith in 
 their fellow men nor in progressive measures. Faith at 
 Seattle moved mountains and cast them into the sea. How 
 few have the high ideal He prescribed : "Whosoever will be 
 chief among you let him be your servant." Service is His 
 ideal of business. How many strive, worry and struggle to 
 get property wherewith to exercise authority. You cannot 
 have a God of greed in your business and a God of love in 
 your religious life. 
 
 While the way of Jesus provides, for those wonder- 
 provoking demonstrations in the provision of subsistence, as 
 instances by Elijah and the handful of "meal that wasted 
 not" in Jesus getting the coin from the fish's mouth to pay 
 His taxes, and in the feeding of the five thousand, yet 
 God's blessings mostly come through the usual channels. 
 
350 RIGHT AND RICHES 
 
 For when the devil suggested that He command that the 
 stones be made bread, He repHed, ''Man shall not live by 
 bread alone." The principles of His economics apply in the 
 ordinary relations of life. He taught faith, love, diligence, 
 honesty, understanding, patience, purity, temperance, kind- 
 ness; to have the; thought right. Where are such sure ele- 
 ments of success? Hov^ many fail through intemperance, 
 ignorance, dishonesty, impatience! But if we know the 
 truth no power can oppress us. 
 
 A noble example of the power of love and truth is fur- 
 nished in Roger Williams, who, by inspiring through his 
 integrity the confidence and friendship of the Indians, was 
 alone able to live right amongst them during all the bloody 
 wars without fear or harm. No other Colonist could depend 
 upon their word or treaties; no other person had any re- 
 source for safety from their tomahawks. What a power in 
 the business world does such integrity, such bounteous love 
 give a man ! A power for good but not for evil ! 
 
 Is anything more obvious than the work of Christians 
 in the commerce of America? Dishonesty and confusion 
 there is, but what grand results have been achieved by the 
 noble service of our Christian merchants, manufacturers, in- 
 ventors and men in many lines. Christian principles are the 
 only sure rules of success. But negative goodness simply is 
 not sufficient; righteousness is what guarantees prosperity. 
 "We must seek first the Kingdom of God and His right- 
 eousness." 
 
 What does ''righteousness" mean? Webster defines 
 "righteous" as right knowledge or understanding, as being 
 derived from "right wis" or right wise. He defines righteous- 
 ness : "Comprehending holy principles and affections of the 
 heart, conformity of life to divine law." 
 
 In the light of these definitions it would seem that Jesus 
 was simply stating an absolute scientific principle when He 
 affirmed that "all these things" should be available to him 
 
GOVERNMENT AND OPPORTUNITY 351 
 
 who sought His righteousness. For righteousness, as thus 
 comprehending one's being in conformity with divine law, 
 implies a consonance with or at-one-ment with God and man. 
 
 Can there be other than a plenteous supply of wealth — 
 well being — happiness or satisfaction from such attainment? 
 
 Nor need we wait for results until the ultimate perfec- 
 tion of this righteous attainment is reached. We may claim 
 results according to the degree of our progress. In Matthew 
 25 we have Jesus' words : "Come ye blessed of my Father, 
 inherit the kingdom prepared for you from the foundation 
 of the world * * * inasmuch as ye have done it (loved and 
 ministered) unto one of the least of these my brethren." 
 
 The Bible contains the directions for attaining this right- 
 eousness by which all good is added unto us, and all error 
 excluded. "But how shall we understand without a teacher?" 
 Let us thank God that we have a teacher; that in our day 
 there is a woman with such clear perception of the spiritual 
 meaning of Jesus' teachings that she has given us a key to 
 their wonderful treasures. The little book "SCIENCE 
 AND HEALTH, WITH KEY TO THE SCRIPTURES," 
 by Mary Baker G. Eddy, enables us, more than any 
 book I have ever read, to so comprehend the scriptural 
 Truth, that it will indeed free us from every enslaving op- 
 pressor to which we have been conceding authority, and to 
 cast out not only the error of poverty but disease and sin. 
 The author is grateful for the slight understanding of the 
 Truth which he has received through study of the scriptures 
 in the light of the teachings of this wonderful Book, and 
 refers the reader to the same key to the treasures of the 
 scriptures for a full solution of the problem of life. There- 
 by he may learn that righteousness comes by understanding, 
 and understanding comes only by demonstration. "He that 
 is faithful over a few things is made ruler over many 
 things." 
 
352 RIGHT AND RICHES 
 
 We hear much of the unholiness of wealth ; such quota- 
 tions as "Money is the root of all evil," etc., being cited. 
 Jesus surely did teach the inadequacy of property as a source 
 of satisfaction ; yet He as certainly taught that in our pres- 
 ent stage of being "Your Father knoweth that ye have need 
 of such things." Jesus as surely taught the overcoming of 
 disease and poverty as that of sin. He fed the multitudes ; 
 He directed the casting of the net for a large catch ; He sent 
 them forth to heal without purse or scrip; His parting 
 words were "Preach the gospel, heal the sick, and nothing 
 shall by any means hurt you." Thousands are learning that 
 these truths are for our present realization. 
 
 The greatest lack of humanity to-day, and what is most 
 discouraging, is the l?xk of an ultimate purpose in life ; lack 
 of a desire which, when supplied, will truly give satisfac- 
 tion. Material wealth or physical well-being is not the ulti- 
 mate of Jesus' teachings, but spiritual perfection through 
 putting off sensuality and fear, through becoming a new 
 man "renewed in knowledge after the image of Him that 
 created him." Only as man progresses toward this rightful 
 estate of perfection can he attain any true sense of brother- 
 hood, or sonship ; only by this means is social progress pos- 
 sible. 
 
 The ultimate of such social progress is the complete ex- 
 tinction of property as constituted of the power to hinder use, 
 for when we realize the fulfillment of the commandment to 
 love our neighbor as ourself we shall not seek to hinder but 
 to bless him to the fullest extent. 
 
 And as men attain this knowledge they will become 
 faithful citizens in urging all social reforms. He taught us 
 to look right about us for our work. 
 
 We approve kindergarten work, yet we do not expect 
 every child who cuts paper to be a paper-box maker. 
 
 A boy who is enthusiastic in his interest in electricity or 
 chemistry will apply his small knowledge to the demonstra- 
 
GOVERNMENT AND OPPORTUNITY 353 
 
 tions possible in his mother's kitchen. The child must learn 
 in the range of thought and action within reach, and advance 
 to what is higher. As we become men we must put away 
 childish things, but we must put our knowledge to the proof 
 regarding "earthly things," or how shall we believe what He 
 tells us "of Heavenly things?" 
 
 If we are really following the teachings of the Master, 
 "we look for new heavens and a new earth wherein dwelleth 
 righteousness/' and we may be sure we are making small 
 advancement if we have no interest in civic reforms which 
 tend to uplift and bless humanity, as well as every other 
 means to promote harmony both in ourselves and our en- 
 vironment. 
 
 Our business is likely to be our best and widest field for 
 demonstrating God's kingdom, for it is likely to bring us 
 most into contact with humanity. Paul writes : "I beseech 
 you that ye walk worthy of the vocation wherein ye are 
 called, with all lowliness and meekness, forbearing one an- 
 other in love, till we all come in the unity of the faith, and 
 of the knowledge of the Son of God, unto a perfect man, 
 unto the measure of the stature of the fullness of Christ." 
 
 St. John says: "Beloved, now are we the sons of God, 
 and it doth not yet appear what we shall be; but we know 
 that when He shall appear (or be revealed to us) we shall 
 be like him, for we shall see Him as He is, and every one 
 that hath this hope in him purifieth himself even as He is 
 pure." 
 
 Only by attaining purity and righteousness; only by 
 gaining the understanding of God as Life, Truth and Love, 
 and Man as God's image, can we love our neighbor as our- 
 self. "If we love one another God dwelleth in us and His 
 love is perfected in us." 
 
 As we become "renewed in knowledge after the image 
 of God," in which we were created, as related in the first 
 chapter of Genesis, we shall have "dominion over all the 
 
354 RIGHT AND RICHES 
 
 earth." We shall be less subject to poverty, disease, sin, 
 death or any other of those enemies to whom we have been 
 conceding authority as our masters. The ultimate of this 
 Divine understanding is heaven, perfect satisfaction. The 
 Psalmist says : "I shall be satisfied when I awake in His 
 likeness." 
 
PUBLISHER'S NOTE. 
 
 nrO THE READER:— If after having read 
 Right and Riches you believe that its teachings 
 tend to the good of mankind, we ask that you com- 
 mend it to your friends. 
 
 You and your friends, and their friends control 
 the destinies of the Nation and the world. Hence 
 you cannot measure the influence you may have. 
 
 It takes but a word spoken, or written in a 
 
 letter or on a post card, to tell your friends of a book 
 
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 book worth the rime to read without some such 
 
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 THE WILBUR PUBLISHING CO.. 
 PASADENA. CALIFORNIA.