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Title: The American Empire
Author: Nearing, Scott, 1883-1983
Language: English
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Copyright Status: Not copyrighted in the United States. If you live elsewhere check the laws of your country before downloading this ebook. See comments about copyright issues at end of book.

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THE AMERICAN EMPIRE

by

SCOTT NEARING

Author of
"Wages in the United States"
"Income"
"Financing the Wage-Earner's Family"
"Anthracite"
"Poverty and Riches," etc.



New York
The Rand School of Social Science
7 East 15th Street
1921

All rights reserved

Copyright, 1921,
by the
Rand School of Social Science

First Edition, January, 1921
Second Edition, February, 1921



CONTENTS


PART I

WHAT IS AMERICA?

CHAPTER                                            PAGE

    I The Promise of 1776                             7

   II The Course of Empire                           14


PART II

THE FOUNDATIONS OF EMPIRE.

A. THE CONQUEST OF AMERICA.

  III Subjugating the Indians                        26

   IV Slavery for a Race                             38

    V Winning the West                               49

   VI The Beginnings of World Dominion               60

B. PLUTOCRACY.

  VII The Struggle for Wealth and Power              74

 VIII Their United States                            88

   IX The Divine Right of Property                  103


PART III

MANIFEST DESTINY.

    X Industrial Empires                            120

   XI The Great War                                 143

  XII The Imperial Highroad                         158


PART IV

THE UNITED STATES--A WORLD EMPIRE.

 XIII The United States as a World Competitor       177

  XIV The Partition of the Earth                    192

   XV Pan-Americanism                               202

  XVI The American Capitalist and World Empire      218


PART V

THE CHALLENGE TO IMPERIALISM.

 XVII The New Imperial Alignment                    229

XVIII The Challenge in Europe                       243

  XIX The American Worker and World Empire          256



The American Empire



I. THE PROMISE OF 1776


1. _The American Republic_

The genius of revolution presided at the birth of the American Republic,
whose first breath was drawn amid the economic, social and political
turmoil of the eighteenth century. The voyaging and discovering of the
three preceding centuries had destroyed European isolation and laid the
foundation for a new world order of society. The Industrial Revolution
was convulsing England and threatening to destroy the Feudal State.
Western civilization, in the birthpangs of social revolution, produced
first the American and then the French Republic.

Feudalism was dying! Divine right, monarchy, aristocracy, oppression,
despotism, tyranny--these and all other devils of the old world order
were bound for the limbo which awaits outworn, discredited social
institutions. The Declaration of Independence officially proclaimed the
new order,--challenging "divine right" and maintaining that "all men are
created equal; that they are endowed by their Creator with certain
unalienable rights; that among these are life, liberty and the pursuit
of happiness. That to secure these rights, governments are instituted
among men, deriving their just powers from the consent of the governed."

Life, liberty and happiness were the heritage of the human race, and
"whenever any form of government becomes destructive of these ends, it
is the right of the people to alter or abolish it, and to institute a
new government laying its foundations on such principles, and organizing
its powers in such form, as to them shall seem likely to effect their
safety and happiness."

Thus the rights of the people were declared superior to the privileges
of the rulers; revolution was justified; and the principles of
eighteenth century individualism were made the foundation of the new
political state. Aristocracy was swept aside and in its stead democracy
was enthroned.


2. _The Yearning for Liberty_

The nineteenth century re-echoed with the language of social idealism.
Traditional bonds were breaking; men's minds were freed; their
imaginations were kindled; their spirits were possessed by a gnawing
hunger for justice and truth.

Revolting millions shouted: "Liberty, Equality, Fraternity!" Sages
mused; philosophers analyzed; prophets exhorted; statesmen organized
toward this end.

Men felt the fire of the new order burning in their vitals. It purged
them. They looked into the eyes of their fellows and saw its reflection.
Dreaming of liberty as a maiden dreams of her lover, humanity awoke
suddenly, to find liberty on the threshold.

Through the ages mankind has sought truth and justice. Vested interests
have intervened. The powers of the established order have resisted, but
the search has continued. That eternal vigilance and eternal sacrifice
which are the price of liberty, are found wherever human society has
left a record. At one point the forces of light seem to be winning. At
another, liberty and truth are being ruthlessly crushed by the
privileged masters of life. The struggle goes on--eternally.

Liberty and justice are ideals that exist in the human heart, but they
are none the less real. Indeed, they are in a sense more potent, lying
thus in immortal embryo, than they could be as tangible institutions.
Institutions are brought into being, perfected, kept past their time of
highest usefulness and finally discarded. The hopes of men spring
eternally, spontaneously. They are the true social immortality.


3. _Government of the People_

Feudalism as a means of organizing society had failed. The newly
declared liberties were confided to the newly created state. It was
political democracy upon which the founders of the Republic depended to
make good the promise of 1776.

The American colonists had fled to escape economic, political and
religious tyranny in the mother countries. They had drunk the cup of its
bitterness in the long contest with England over the rights of taxation,
of commerce, of manufacture, and of local political control. They had
their fill of a mastery built upon the special privilege of an
aristocratic minority. It was liberty and justice they sought and
democracy was the instrument that they selected to emancipate themselves
from the old forms of privilege and to give to all an equal opportunity
for life, liberty and the pursuit of happiness.

Political democracy was to place the management of community business in
the hands of the people--to give them liberty in the control of public
affairs. The highest interest of democracy was to be the interest of the
people. There could be no higher interest because the people were
supreme. The people were to select the public servants; direct their
activities; determine public policy; prescribe the law; demand its
enforcement; and if need be assert their superior authority over any
part of the government, not excepting the constitution.[1]

Democracy, in politics, was based on the idea that public affairs could
best be run by the public voice. However expert may be the hand that
administers the laws, the hand and the heart that renders the final
decision in large questions must belong to the public.[2]

The people who laid the foundations for democracy in France and the
United States feared tyranny. They and their ancestors had been, for
centuries, the victims of governmental despotism. They were on their
guard constantly against governmental aggression in any form. And they,
therefore, placed the strictest limitations upon the powers that
governments should enjoy.

Special privilege government was run by a special class,--the hereditary
aristocracy--in the interest and for the profit of that class. They held
the wealth of the nation--the land--and lived comfortably upon its
produce. They never worked--no gentleman could work and remain a
gentleman. They carried on the affairs of the court--sometimes well,
sometimes badly; maintained an extravagant scale of social life; built
up a vicious system of secret international diplomacy; commanded in time
of war, and at all times; levied rents and taxes which went very largely
to increase their own comfort and better their own position in life. The
machinery of government and the profits from government remained in the
hands of this one class.

Class government from its very nature could not be other than
oppressive. "All hereditary government over a people is to them a
species of slavery and representative government is freedom." "All
hereditary government is in its nature tyranny.... To inherit a
government is to inherit the people as if they were flocks and
herds."[3]


4. _The Source of Authority_

The people were to be the source of authority in the new state. The
citizen was to have a voice because he was an adult, capable of
rendering judgment in the selection of public servants and in the
determination of public policy.

All through history there had been men into whose hands supreme power
had been committed, who had carried this authority with an astounding
degree of wisdom and integrity. For every one who had comported himself
with such wisdom in the presence of supreme authority, there were a
score, or more likely a hundred, who had used this power stupidly,
foolishly, inefficiently, brutally or viciously.

Few men are good enough or wise enough to keep their heads while they
hold in their hands unlimited authority over their fellows. The pages of
human experience were written full of the errors, failures, and abuses
of which such men so often have been guilty.

The new society, in an effort to prevent just such transgressions of
social well being, placed the final power to decide public questions in
the hands of the people. It was not contended, or even hoped that the
people would make no mistakes, but that the people would make fewer
mistakes and mistakes less destructive of public well-being than had
been made under class government. At least this much was gained, that
the one who abused power must first secure it from those whom he
proposed to abuse, and must later exercise it unrestrained to the
detriment of those from whom the power was derived and in whom it still
resided.

The citizen was to be the source of authority. His word, combined with
that of the majority of his fellows, was final. He delegated authority.
He assented to laws which were administered over all men, including
himself. He accepts the authority of which he was the source.


5. _The American Tradition_

This was the American tradition. This was the language of the new, free
world. Life, liberty and happiness; popular sovereignty; equal
opportunity. This, to the people of the old countries was the meaning of
America. This was the promise of 1776.

When President Wilson went to Europe, speaking the language of liberty
that is taught in every American schoolroom, the plain people turned to
him with supreme confidence. To them he was the embodiment of the spirit
of the West.

Native-born Americans hold the same idea. To them the Declaration of
Independence was a final break with the old order of monarchical,
imperial Europe. It was the charter of popular rights and human
liberties, establishing once for all the principles of self-government
and equal opportunity.

The Statue of Liberty, guarding the great port of entrance to America,
symbolizes the spirit in which foreigners and natives alike think of
her--as the champion of the weak and the oppressed; the guardian of
justice; the standard-bearer of freedom.

This spirit of America is treasured to-day in the hearts of millions of
her citizens. To the masses of the American people America stands to-day
as she always stood. They believe in her freedom; they boast of her
liberties; they have faith in her great destiny as the leader of an
emancipated world. They respond, as did their ancestors, to the great
truths of liberty, equality, and fraternity that inspired the eighteenth
century.

The tradition of America is a hope, a faith, a conviction, a burning
endeavor, centering in an ideal of liberty and justice for the human
race.

Patrick Henry voiced this ideal when, a passionate appeal for freedom
being interrupted by cries of "Treason, treason!" he faced the objector
with the declaration, "If this be treason, make the most of it!"

Eighteenth century Europe, struggling against religious and political
tyranny, looked to America as the land of Freedom. America to them meant
liberty. "What Athens was in miniature, America will be in magnitude,"
wrote Tom Paine. "The one was the wonder of the ancient world; the other
is becoming the admiration, the model of the present." ("The Rights of
Man," Part II, Chapter 3.) The promise of 1776 was voiced by men who
felt a consuming passion for freedom; a divine discontent with anything
less than the highest possible justice; a hatred of tyranny, oppression
and every form of special privilege and vested wrong. They yearned over
the future and hoped grandly for the human race.

FOOTNOTES:

[1] "It is, Sir, the people's constitution, the people's government,
made for the people, made by the people, and answerable to the
people."--Daniel Webster's reply to Hayne, 1830. "Speeches and
Orations." E. P. Whipple, Boston, Little, Brown and Co., p. 257.

[2] Tom Paine held ardently to this doctrine, "It is always the interest
of a far greater number of people in a Nation to have things right than
to let them remain wrong; and when public matters are open to debate,
and the public judgment free, it will not decide wrong unless it decides
too hastily!" "Rights of Man," Part II, Ch. 4.

[3] "Rights of Man," Thomas Paine. Part II, Chapter 3.



II. THE COURSE OF EMPIRE


1. _Promise and Fulfillment_

A vast gulf yawns between the inspiring promise that a handful of men
and women made to the world in 1776, and the fulfillment of that promise
that is embodied in twentieth century American life. The pre-war
indifference to the loss of liberty; the gradual encroachments on the
rights of free speech, and free assemblage and of free press; the
war-time suppressions, tyrannies, and denials of justice; the subsequent
activities of city, state, and national legislatures and executives in
passing and enforcing laws that provided for military training in
violation of conscience, the denial of freedom of belief, of thought, of
speech, of press and of assemblage,--activities directed specifically to
the negation of those very principles of liberty which have constituted
so intimate a part of the American tradition of freedom,--form a
contrast between the promise of 1776 and the twentieth century
fulfillment of that promise which is brutal in its terrible intensity.

Many thoughtful Americans have been baffled by this conflict between the
aims of the eighteenth century and the accomplishments of the twentieth.
The facts they admit. For explanation, either they may say, "It was the
war," implying that with the cessation of hostilities and the return to
a peace basis, the situation has undergone a radical change; or else
they blame some individual or some organization for the extinction of
American liberties.

Great consequences arise from great causes. A general break-down of
liberties cannot be attributed to individual caprice nor to a particular
legislative or judicial act.

The denial of liberty in the United States is a matter of large import.
No mayor, governor, president, legislature, court, magnate, banker,
corporation or trust, and no combination of these individuals and
organizations could arbitrarily destroy the American Republic.
Underneath personality and partisanship are working the forces which
have stripped the American people of their essential liberties as the
April sun strips the mountains of their snow.

No one can read the history of the United States since the drafting of
the Declaration of Independence without being struck by the complete
transformation in the forms of American life. The Industrial Revolution
which had gripped England for half a century, made itself felt in the
United States after 1815. Steam, transportation, industrial development,
city life, business organization, expansion across the continent--these
are the factors that have made of the United States a nation utterly
apart from the nation of which those who signed the Declaration of
Independence and fought the Revolution dreamed.

These economic changes have brought political changes. The American
Republic has been thrust aside. Above its remains towers a mighty
imperial structure,--the world of business,--bulwarked by usage and
convention; safeguarded by legislation, judicial interpretation, and the
whole power of organized society. That structure is the American
Empire--as real to-day as the Roman Empire in the days of Julius Caesar;
the French Empire under the Little Corporal, or the British Empire of
the Great Commoner, William E. Gladstone.

Approved or disapproved; exalted or condemned; the fact of empire must
be evident even to the hasty observer. The student, tracing its
ramifications, realizes that the structure has been building for
generations.


2. _The Characteristics of Empire_

Many minds will refuse to accept the term "empire" as applied to a
republic. Accustomed to link "empire" with "emperor," they conceive of a
supreme hereditary ruler as an essential part of imperial life. A little
reflection will show the inadequacy of such a concept. "The British
Empire" is an official term, used by the British Government, although
Great Britain is a limited monarchy, whose king has less power than the
President of the United States. On the other hand, eastern potentates,
who exercise absolute sway over their tiny dominions do not rule
"empires."

Recent usage has given the term "empire" a very definite meaning, which
refers, not to an "emperor" but to certain relations between the parts
of a political or even of an economic organization. The earlier uses of
the word "empire" were, of course, largely political. Even in that
political sense, however, an "empire" does not necessarily imply the
domain of an "emperor."

According to the definition appearing in the "New English Dictionary"
wherever "supreme and extensive political dominion" is exercised "by a
sovereign state over its dependencies" an empire exists. The empire is
"an aggregation of subject territories ruled over by a sovereign state."
The terms of the definition are political, but it leaves the emperor
entirely out of account and makes an empire primarily a matter of
organization and not of personality.

During the last fifty years colonialism, the search for foreign markets,
and the competition for the control of "undeveloped" countries has
brought the words "empire" and "imperialism" into a new category, where
they relate, not to the ruler--be he King or Emperor--but to the
extension of commercial and economic interests. The "financial
imperialism" of F. C. Howe and the "imperialism" of J. A. Hobson are
primarily economic and only incidentally political.

"Empire" conveys the idea of widespread authority, dominion, rule,
subjugation. Formerly it referred to political power; to-day it refers
to economic power. In either case the characteristics of empire are,--


     1. Conquered territory.

     2. Subject peoples.

     3. An imperial or ruling class.

     4. The exploitation of the subject peoples and the conquered
     territory for the benefit of the ruling class.


Wherever these four characteristics of imperial organization exist,
there is an empire, in all of its essential features. They are the
acid-test, by which the presence of empire may be determined.

Names count for nothing. Rome was an empire, while she still called
herself a republic. Napoleon carried on his imperial activities for
years under the authority of Republican France. The existence of an
empire depends, not upon the presence of an "emperor" but upon the
presence of those facts which constitute Empire,--conquered territory;
subject peoples; an imperial class; exploitation by and for this class.
If these facts exist in Russia, Russia is an empire; if they are found
in Germany, Germany is an empire; if they appear in the United States,
the United States is an empire none the less surely,--traditions,
aspirations and public conviction to the contrary notwithstanding.


3. _The Preservation of Empire_

The first business of an imperial class is the preservation of the
empire to which it owes its advantages and privileges. Therefore, in its
very essence, imperialism is opposed to popular government. "The
greatest good to the greatest number" is the ideal that directs the life
of a self-governing community. "The safety and happiness of the ruling
class" is the first principle of imperial organization.

Imperialism is so generally recognized and so widely accepted as a
mortal foe of popular government that the members of an imperial class,
just rising into power, are always careful to keep the masses of the
people ignorant of the true course of events. This necessity explains
the long period, in the history of many great empires, when the name and
forms of democracy were preserved, after the imperial structure had been
established on solid foundations. Slow changes, carefully directed and
well disguised, are necessary to prevent outraged peoples from rising
against an imperial order when they discover how they have been sold
into slavery. Even with all of the safeguards, under the control of the
ablest statesmen, Caesar frequently meets his Brutus.

The love of justice; the yearning for liberty; the sense of fair play;
the desire to extend opportunity, all operate powerfully upon those to
whom the principles of self-government are dearest, leading them to
sacrifice position, economic advantage, and sometimes life itself for
the sake of the principles to which they have pledged their faith.

Therein lies what is perhaps one of the most essential differences
between popular government and empire. The former rests upon certain
ideas of popular rights and liberties. The latter is a weapon of
exploitation in the hands of the ruling class. Popular government lies
in the hopes and beliefs of the people. Empire is the servant of
ambition and the shadow of greed. Popular government has been evolved by
the human race at an immense sacrifice during centuries of struggle
against the forms and ideas that underly imperialism. Since men have set
their backs on the past and turned their faces with resolute hope to the
future, empire has repelled them, while democracy has called and
beckoned.

Empires have been made possible by "bread and circuses"; by appealing to
an abnormally developed sense of patriotism; by the rule of might where
largess and cajolery have failed. Rome, Germany and Britain are
excellent examples of these three methods. In each case, millions of
citizens have had faith in the empire, believing in its promise of glory
and of victory; but on the other hand, this belief could be maintained
only by a continuous propaganda--triumphs in Rome, school-books and
"boilerplate" in Germany and England. Even then, the imperial class is
none too secure in its privileges. Always from the abysses of popular
discontent, there arises some Spartacus, some Liebknecht, some Smillie,
crying that "the future belongs to the people."

The imperial class, its privileges unceasingly threatened by the popular
love of freedom--devotes not a little attention to the problem of
"preserving law and order" by suppressing those who speak in the name of
liberty, and by carrying on a generous advertising campaign, the object
of which is to persuade the people of the advantages which they derive
from imperial rule.

During the earlier stages in the development of empire, the imperial
class is able to keep itself and its designs in the background. As time
passes, however, the power of the imperialist becomes more and more
evident, until some great crisis forces the empire builders to step out
into the open. They then appear as the frank apologists, spokesmen and
defenders of the order for which they have so faithfully labored and
from which they expect to gain so much.

Finally, the ambition of some aggressive leader among the imperialists,
or a crisis in the affairs of the empire leads to the next step--the
appointment of a "dictator," "supreme ruler" or "emperor." This is the
last act of the imperial drama. Henceforth, the imperial class divides
its attention between,--


     1. The suppression of agitation and revolt among the people at
     home;

     2. Maintaining the imperial sway over conquered territory;

     3. Extending the boundaries of the empire and

     4. The unending struggle between contending factions of the ruling
     class for the right to carry on the work of exploitation at home
     and abroad.


4. _The Price of Empire_

Since the imperial or ruling class is willing to go to any lengths in
order to preserve the empire upon which its privileges depend, it
follows that the price of empire must be reckoned in the losses that the
masses of the people suffer while safeguarding the privileges of the
few.

As a matter of course, conquered and dependent people pay with their
liberty for their incorporation into the empire that holds dominion over
them. On any other basis, empire is unthinkable. Indeed the terms
"dependencies," "domination," and "subject" carry with them only one
possible implication--the subordination or extinction of the liberties
of the peoples in question.

The imperial class--a minority--depends for its continued supremacy upon
the ownership of some form of property, whether this property be slaves,
or land, or industrial capital. As Veblen puts it: "The emergence of the
leisure class coincides with the beginning of ownership." ("Theory of
the Leisure Class," T. Veblen, New York. B. W. Huebsch, 1899, p. 22.)
Necessarily, therefore, the imperial class will sacrifice the so-called
human or personal rights of the home population to the protection of its
property rights. Indeed the property rights come to be regarded as the
essential human rights, although there is but a small minority of the
community that can boast of the possession of property.

The superiority of ruling class property rights over the personal rights
and liberties of the inhabitants in a subject territory is taken as a
matter of course. Even in the home country, where the issue is clearly
made, the imperial class will sacrifice the happiness, the health, the
longevity, and the lives of the propertyless class in the interest of
"law and order" and "the protection of property." The stories of the
Roman populace; of the French peasants under Louis XIV; of the English
factory workers (men, women and children) during the past hundred years,
and of the low skilled workers in the United States since the Civil
War, furnish ample proof of the correctness of this contention. The
life, liberty and happiness of the individual citizen is a matter of
small importance so long as the empire is saved.

A crisis in imperial affairs is always regarded, by the ruling class, as
a legitimate reason for curtailing the rights of the people. Under
ordinary circumstances, the imperial class will gain rather than lose
from the exercise of "popular liberties." Indeed, the exercise of these
liberties is of the greatest assistance in convincing the people that
they are enjoying freedom and thus keeping them satisfied with their
lot. But in a period of turmoil, with men's hearts stirred, and their
souls aflamed with conviction and idealism, there is always danger that
the people may exercise their "unalienable right" to "alter or abolish"
their form of government. Consequently, during a crisis, the imperial
class takes temporary charge of popular liberties. Every great empire
engaged in the recent war passed through such an experience. In each
country the ruling class announced that the war was a matter of life and
death. Papers were suppressed or censored; free speech was denied; men
were conscripted against will and conscience; constitutions were thrust
aside; laws "slumbered"; writers and thinkers were jailed for their
opinions; food was rationed; industries were controlled--all in the
interest of "winning the war." After the war was won, the victors
practiced an even more rigorous suppression while they were "making the
peace." Then followed months and years of protests and demands, until,
one by one, the liberties were retaken by the people or else the
war-tyranny, once firmly established, became a part of "the heritage of
empire." In such cases, where liberties were not regained, the plain
people learned to do without them.

Liberty is the price of empire. Imperialism presupposes that the people
will be willing, at any time, to surrender their "rights" at the call of
the rulers.


5. _The Universality of Empire_

Imperialism is not new, nor is it confined to one nation or to one race.
On the contrary it is as old as history and as wide as the world.

Before Rome, there was Carthage. Before Carthage, there were Greece,
Macedonia, Egypt, Assyria, China. Where history has a record, it is a
record of empire.

During modern times, international affairs have been dominated by
empires. The great war was a war between empires. During the first three
years, the two chief contestants were the British Empire on the one hand
and the German Empire on the other. Behind these leaders were the
Russian Empire, the Italian Empire, the French Empire, and the Japanese
Empire.

The Peace of Versailles was a peace between empires. Five empires
dominated the peace table--Great Britain, France, Italy, Japan and the
United States. The avowedly anti-imperial nations of Europe--Russia and
Hungary--were not only excluded from the deliberations of the Peace
Table, but were made the object of constant diplomatic, military and
economic aggression by the leading imperialist nations.


6. _The Evolution of Empire_

Empires do not spring, full grown, from the surroundings of some great
historic crisis. Rather they, like all other social institutions, are
the result of a long series of changes that lead by degrees from the
pre-imperial to the imperial stage. Many of the great empires of the
past two thousand years have begun as republics, or, as they are
sometimes called, "democracies," and the processes of transformation
from the republican to the imperial stage have been so gradual that the
great mass of the people were not aware that any change had occurred
until the emperor ascended the throne.

The development of empire is of necessity a slow process. There are the
dependent people to be subjected; the territory to conquered; the
imperial class to be built up. This last process takes, perhaps, more
time than either of the other two. Class consciousness is not created in
a day. It requires long experience with the exercise of imperial power
before the time has come to proclaim an emperor, and forcibly to take
possession of the machinery of public affairs.


7. _The United States and the Stages of Empire_

Any one who is familiar with its history will realize at once that the
United States is passing through some of the more advanced stages in the
development of empire. The name "Republic" still remains; the traditions
of the Republic are cherished by millions; the republican forms are
almost intact, but the relations of the United States to its conquered
territory and its subject peoples; the rapid maturation of the
plutocracy as a governing class or caste; the shamelessness of the
exploitation in which the rulers have indulged; and the character of the
forces that are now shaping public policy, proclaim to all the world the
fact of empire.

The chief characteristics of empire exist in the United States. Here are
conquered territory; subject peoples; an imperial, ruling class, and the
exploitation by that class of the people at home and abroad. During
generations the processes of empire have been working, unobserved, in
the United States. Through more than two centuries the American people
have been busily laying the foundations and erecting the imperial
structure. For the most part, they have been unconscious of the work
that they were doing, as the dock laborer, is ordinarily unconscious of
his part in the mechanism of industry. Consciously or unconsciously, the
American people have reared the imperial structure, until it stands,
to-day, imposing in its grandeur, upon the spot where many of the
founders of the American government hoped to see a republic.

The entrance of the United States into the war did not greatly alter
the character of the forces at work, nor did it in any large degree
change the direction in which the country was moving. Rather, it brought
to the surface of public attention factors of American life that had
been evolving unnoticed, for generations.

The world situation created by the war compelled the American imperial
class to come out in the open and to occupy a position that, while
wholly inconsistent with the traditions of American life, is
nevertheless in keeping with the demands of imperial necessity. The
ruling class in the United States has taken a logical step and has made
a logical stand. The masters of American life have done the only thing
that they could do in the interests of the imperial forces that they
represent. They are the victims, as much as were the Kaiser and the Czar
on the one hand, and the Belgians and the Serbs on the other, of that
imperial necessity that knows no law save the preservation of its own
most sacred interests.

Certain liberal American thinkers have taken the stand that the
incidents of 1917-1918 were the result of the failure of the President,
and of certain of his advisers, to follow the theories which he had
enunciated, and to stand by the cause that he had espoused. These
critics overlook the incidental character of the war as a factor in
American domestic policy. The war never assumed anything like the
importance in the United States that it did among the European
belligerents. On the surface, it created a furore, but underneath the
big fact staring the administration in the face was the united front of
the business interests, and their organized demands for action. The
far-seeing among the business men realized that the plutocratic
structure the world over was in peril, and that the fate of the whole
imperial régime was involved in the European struggle. The Russian
Revolution of March 1917 was the last straw. From that time on the
entrance of the United States into the war became a certainty as the
only means of "saving (capitalist) civilization."

The thoughtful student of the situation in the United States is not
deceived by personalities and names. He realizes that the events of
1917-1918 have behind them generations of causes which lead logically to
just such results; that he is witnessing one phase of a great process in
the life of the American nation--a process that is old in its principles
yet ever new in its manifestations.

Traditional liberties have always given way before imperial necessity.
An examination of the situation in which the ruling class of the United
States found itself in 1917, and of the forces that were operating to
determine public policy, must convince even the enthusiast that the
occurrences of 1917 and the succeeding years were the logical outcome of
imperial necessity. To what extent that explanation will account for the
discrepancy between the promise of 1776 and the twentieth century
fulfillment of that promise must appear from a further examination of
the evidence.



III. SUBJUGATING THE INDIANS


1. _The Conquering Peoples_

The first step in the establishment of empire--the conquest of territory
and the subjugation of the conquered populations,--was taken by the
people of the United States at the time of their earliest settlements.
They took the step naturally, unaffectedly, as became the sons of their
fathers.

The Spanish, French, and English who made the first settlement in North
America were direct descendants of the tribes that have swept across
Europe and portions of Asia during the past three or four thousand
years. These tribes, grouped on the basis of similarity in language
under the general term "Aryan," hold a record of conquest that fills the
pages of written history.

Hunger; the pressure of surplus population; the inrush of new hordes of
invaders, drove them on. Ambition; the love of adventure; the lure of
new opportunities in new lands, called them further. Meliorism,--the
desire to better the conditions of life for themselves and for their
children--animated them. In later years the necessity of disposing of
surplus wealth impelled them. Driven, lured, coerced, these Aryan tribes
have inundated the earth. Passing beyond the boundaries of Europe, they
have crossed the seas into Africa, Asia, America and Australia.

Among the Aryans, after bitter strife, the Teutons have attained
supremacy. The "Teutonic Peoples" are "the English speaking inhabitants
of the British Isles, the German speaking inhabitants of Germany,
Austria-Hungary and Switzerland, the Flemish speaking inhabitants of
Belgium, the Scandinavian inhabitants of Sweden and Norway and
practically all of the inhabitants of Holland and Denmark."
("Encyclopedia Britannica.")

This Teutonic domination has been established only by the bitterest of
struggles. During the time when North America was being settled, the
English dispossessed first the Spanish and later the French. Since the
Battle of Waterloo--won by English and German troops; and the Crimean
War--won by British against Russian troops--the Teutonic power has gone
unchallenged and so it remains to-day.

The dominant power in the United States for nearly two centuries has
been the English speaking power. Thus the Americans draw their
inspiration, not only from the Aryan, but from the English speaking
Teutons--the most aggressive and dominating group among the Aryans.

Three hundred years ago the title to North America was claimed by Spain,
France and Great Britain. The land itself was almost entirely in the
hands of Indian tribes which held the possession that according to the
proverb, is "nine points of the law."

The period of American settlement has witnessed the rapid dispossession
of the original holders, until, at the present time, the Indians have
less than two per cent of the land area of the United States.[4]

The conquest, by the English speaking whites, of the three million
square miles which comprise the United States has been accomplished in a
phenomenally short space of time. Migration; military occupation;
appropriation of the lands taken from the "enemy;" settlement, and
permanent exploitation--through all these stages of conquest the country
has moved.

The "Historical Register of the United States Army" (F. B. Heitman,
Washington, Govt. Print., 1903, vol. 2, pp. 298-300) contains a list of
114 wars in which the United States has been engaged since 1775. The
publication likewise presents a list of 8600 battles and engagements
incident to these 114 wars. Two of these wars were with England, one
with Mexico and one with Spain. These, together with the Civil War and
the War with Germany, constitute the major struggles in which the United
States has been engaged. In addition to these six great wars there were
the numerous wars with the Indians, the last of which (with the
Chippewa) occurred in 1898. Some of these Indian "wars" were mere
policing expeditions. Others, like the wars with the Northwest Indians,
with the Seminoles and with the Apaches, lasted for years and involved a
considerable outlay of life and money.

When the Indian Wars were ended, and the handful of red men had been
crushed by the white millions, the American Indians, once possessors of
a hunting ground that stretched across the continent, found themselves
in reservations, under government tutelage, or else, abandoning their
own customs and habits of life, they accepted the "pale-face" standards
in preference to their own well-loved traditions.

The territory flanking the Mississippi Valley, with its coastal plains
and the deposits of mineral wealth, is one of the richest in the world.
Only two other areas, China and Russia, can compare with it in
resources.

This garden spot came into the possession of the English speaking whites
almost without a struggle. It was as if destiny had held a door tight
shut for centuries and suddenly had opened it to admit her chosen
guests.

History shows that such areas have almost always been held by one
powerful nation after another, and have been the scene of ferocious
struggles. Witness the valleys of the Euphrates, the Nile, the Danube,
the Po and the Rhine. The barrier of the Atlantic saved North America.

Had the Mississippi Valley been in Europe, Asia or Northern Africa, it
would doubtless have been blood-soaked for centuries and dominated by
highly organized nations, armed to the teeth. Lying isolated, it
presented an almost virgin opportunity to the conquering Teutons of
Western Europe.

Freed by their isolated position from the necessity of contending
against outside aggression, the inhabitants of the United States have
expended their combative energies against the weaker peoples with whom
they came into immediate contact,--


     1. The Indians, from whom they took the land and wrested the right
     to exploit the resources of the continent;

     2. The African Negroes who were captured and brought to America to
     labor as slaves;

     3. The Mexicans, from whom they took additional slave territory at
     a time when the institution of slavery was in grave danger, and

     4. The Spanish Empire from which they took foreign investment
     opportunities at a time when the business interests of the country
     first felt the pressure of surplus wealth.


Each of these four groups was weak. No one of them could present even
the beginnings of an effectual resistance to the onslaught of the
conquerors. Each in turn was forced to bow the knee before overwhelming
odds.


2. _The First Obstacle to Conquest_

The first obstacle to the spread of English civilization across the
continent of North America was the American Indian. He was in possession
of the country; he had a culture of his own; he held the white man's
civilization in contempt and refused to accept it. He had but one
desire,--to be let alone.

The continent was a "wilderness" to the whites. To the Indians it was a
home. Their villages were scattered from the Atlantic to the Pacific,
from the Gulf to Alaska; they knew well its mountains, plains and
rivers. A primitive people, supporting themselves largely by hunting,
fishing, simple agriculture and such elemental manual arts as pottery
and weaving, they found the vast stretches of North America none too
large to provide them with the means of satisfying their wants.

The ideas of the Indian differed fundamentally from those of the white
man. Holding to the Eastern conception which makes the spiritual life
paramount, he reduced his material existence to the simplest possible
terms. He had no desire for possessions, which he regarded--at the
best--as "only means to the end of his ultimate perfection."[5] To him,
the white man's desire for wealth was incomprehensible and the white
man's sedentary life was contemptible. He must be free at all times to
commune with nature in the valleys, and at sunrise and sunset to ascend
the mountain peak and salute the Great Spirit.

The individual Indian--having no desire for wealth--could not be bribed
or bought for gold as could the European. The leaders, democratically
selected, and held by the most enduring ties of loyalty to their tribal
oaths, were above the mercenary standards of European commerce and
statesmanship. Friendly, hospitable, courteous, generous, hostile,
bitter, ferocious they were--but they were not for sale.

The attitude of the Indian toward the land which the white men coveted
was typical of his whole relation with white civilization. "Land
ownership, in the sense in which we use the term, was unknown to the
Indians till the whites came among them."[6] The land devoted to
villages was tribal property; the hunting ground surrounding the village
was open to all of the members of the tribe; between the hunting grounds
of different tribes there was a neutral territory--no man's land--that
was common to both. If a family cultivated a patch of land, the
neighbors did not trespass. Among the Indians of the Southwest the
village owned the agricultural land and "periodically its governor,
elected by popular vote, would distribute or redistribute the arable
acres among his constituents who were able to care for them."[7] The
Indians believed that the land, like the sunlight, was a gift of the
Great Spirit to his children, and they were as willing to part with the
one as with the other.

They carried their communal ideas still farther. Among the Indians of
the Northwest, a man's possessions went at his death to the whole tribe
and were distributed among the tribal members. Among the Alaskan
Indians, no man, during his life, could possess more than he needed
while his neighbor lacked. Food was always regarded as common property.
"The rule being to let him who was hungry eat, wherever he found that
which would stay the cravings of his stomach."[8] The motto of the
Indian was "To each according to his need."

Such a communist attitude toward property, coupled with a belief that
the land--the gift of the Great Spirit--was a trust committed to the
tribe, proved a source of constant irritation to the white colonists who
needed additional territory. As the colonies grew, it became more and
more imperative to increase the land area open for settlement, and to
such encroachments the Indian offered a stubborn resistance.

The Indian would not--could not--part with his land, neither would he
work, as a slave or a wage-servant. Before such degradation he preferred
death. Other peoples--the negroes; the inhabitants of Mexico, Peru and
the West Indies; the Hindus and the Chinese--made slaves or servants.
The Indian for generations held out stolidly against the efforts of
missionaries, farmers and manufacturers alike to convert him into a
worker.

The Indian could not understand the ideas of "purchase," "sale" and
"cash payment" that constitute essential features of the white man's
economy. To him strength of limb, courage, endurance, sobriety and
personal dignity and reserve were infinitely superior to any of the
commercial virtues which the white men possessed.

This attitude of the Indian toward European standards of civilization;
his indifference to material possessions; his unwillingness to part with
the land; and his refusal to work, made it impossible to "assimilate"
him, as other peoples were assimilated, into colonial society. The
individual Indian would not demean himself by becoming a cog in the
white man's machine. He preferred to live and die in the open air of his
native hills and plains.

The Indian was an intense individualist--trained in a school of
experience where initiative and personal qualities were the tests of
survival. He placed the soles of his moccasined feet firmly against his
native earth, cast his eyes around him and above him and melted
harmoniously into his native landscape.

Missionaries and teachers labored in vain--once an Indian, always an
Indian. The white settlers pushed on across mountain ranges and through
valleys. Generations came and went without any marked progress in
bringing the white men and the red men together. When the Indian, in the
mission or in the government school did become "civilized," he gave over
his old life altogether and accepted the white man's codes and
standards. The two methods of life were too far apart to make
amalgamation possible.


3. _Getting the Land_

The white man must have land! Population was growing. The territory
along the frontier seemed rich and alluring.

Everywhere, the Indian was in possession, and everywhere he considered
the sale of land in the light of parting with a birth-right. He was
friendly at first, but he had no sympathy with the standards of white
civilization.

For such a situation there was only one possible solution. Under the
plea that "necessity knows no law" the white man took up the task of
eliminating the Indian, with the least friction, and in the most
effective manner possible.

There were three methods of getting the land away from the Indian--the
easiest was by means of treaties, under which certain lands lying along
the Atlantic Coast were turned over to the whites in exchange for larger
territories west of the Mississippi. The second method was by purchase.
The third was by armed conquest. All three methods were employed at some
stage in the relations between the whites and each Indian tribe.

The experience with the Cherokee Nation is typical of the relation
between the whites and the other Indian tribes. (Annual Report of the
Bureau of Ethnology. Vol. 5. "The Cherokee Nation," by Charles C.
Royce.)

The Cherokee nation before the year 1650 was established on the
Tennessee River, and exercised dominion over all the country on the east
side of the Alleghany Mountains, including the head-waters of the
Yadkin, the Catawba, the Broad, the Savannah, the Chattahoochee and the
Alabama. In 1775 there were 43 Cherokee towns covering portions of this
territory. In 1799 their towns numbered 51.

Treaty relations between the whites and the Cherokees began in 1721,
when there was a peace council, held between the representatives of 37
towns and the authorities of South Carolina. From that time, until the
treaty made with the United States government in 1866, the Cherokees
were gradually pushed back from their rich hunting grounds toward the
Mississippi valley. By the treaty of 1791, the United States solemnly
guaranteed to the Cherokees all of their land, the whites not being
permitted even to hunt on them. In 1794 and 1804 new treaties were
negotiated, involving additional cessions of land. By the treaty of
1804, a road was to be cut through the Cherokee territory, free for the
use of all United States citizens.

An agitation arose for the removal of the Cherokees to some point west
of the Mississippi River. Some of the Indians accepted the opportunity
and went to Arkansas. Others held stubbornly to their villages.
Meanwhile white hunters and settlers encroached on their land; white men
debauched their women, and white desperadoes stole their stock. By the
treaty of 1828 the United States agreed to possess the Cherokees and to
guarantee to them forever several millions of acres west of Arkansas,
and in addition a perpetual outlet west, and a "free and unmolested use
of all the country lying west of the western boundary of the above
described limits and as far west as the sovereignty of the United States
and their right of soil extend" (p. 229). The Cherokees who had settled
in Arkansas agreed to leave their lands within 14 months. By the treaty
of 1836 the Cherokees ceded to the United States all lands east of the
Mississippi. There was considerable difficulty in enforcing this
provision but by degrees most of the Indians were removed west of the
river. In 1859 and 1860 the Commissioner of Indian affairs prepared a
survey of the Cherokee domain. This was opposed by the head men of the
nation. By the Treaty of 1866 other tribes were quartered on land owned
by the Cherokees and railroads were run through their territory.

Diplomacy, money and the military forces had done their work. The first
treaty, made in 1721, found the Cherokee nation in virtual possession of
the mountainous regions of Southeastern United States. The twenty-fourth
treaty (1866) left them on a tiny reservation, two thousand miles from
their former home. Those twenty-four treaties had netted the State and
Federal governments 81,220,374 acres of land (p. 378). To-day the
Cherokee Nation has 63,211 acres.[9]

A great nation of proud, independent, liberty-loving men and women,
came into conflict with the whites of the Carolinas and Georgia; with
the state and national governments. "For two hundred years a contest
involving their very existence as a people has been maintained against
the unscrupulous rapacity of Anglo-Saxon civilization. By degrees they
were driven from their ancestral domain to an unknown and inhabitable
region" (p. 371). Now the contest is ended. The white men have the land.
The Cherokees have a little patch of territory; government support; free
schools and the right to accept the sovereignty of the nation that has
conquered them.

The theory upon which the whites proceeded in taking the Indian lands is
thus stated by Leupp,--"Originally, the Indians owned all the land;
later we needed most of it for ourselves; therefore, it is but just that
the Indians should have what is left."[10]


4. _The Triumph of the Whites_

The early white settlers had been, in almost every instance, hospitably
or even reverentially welcomed by the Indians, who regarded them as
children of the Great White Spirit. During the first bitter winters, it
was the Indians who fed the colonists from their supplies of grain;
guided them to the better lands, and shared with them their knowledge
of hunting, fishing and agriculture. The whites retaliated with that
cunning, grasping, bestial ferocity which has spread terror through the
earth during the past five centuries.

In the early years, when the whites were few and the Indians many, the
whites satisfied themselves by debauching the red men with whiskey and
bribing them with baubles and trinkets. At the same time they made
offensive and defensive alliances with them. The Spanish in the South;
the French in the North and the English between, leagued themselves with
the various tribes, supplied them with gunpowder and turned them into
mercenaries who fought for hire. Heretofore the Indian had been a free
man, fighting his wars and feuds as free men have done time out of mind.
The whites hired him as a professional soldier and by putting bounties
on scalps, plying the Indians with whiskey and inciting them by every
known device, they converted them into demons.

There is no evidence to show that up to the advent of the white men the
Indian tribes did any more fighting among themselves than the nobles of
Germany, the city states of Italy or the other inhabitants of western
Europe. Indeed there has recently been published a complete translation
of the "Constitution of the Five Nations," a league to enforce peace
which the Indians organized about the year 1390, A. D.[11] This league
which had as its object the establishment of the "Great Peace" was built
upon very much the same argument as that advanced for the League of
Nations of 1919.

When the whites first came to North America, the Indians were a
formidable foe. For years they continued to be a menace to the lonely
settler or the frontier village. But when the white settlers were once
firmly established, the days of uncertainty were over, and the Indians
were brushed aside as a man brushes aside a troublesome insect. Their
"uprisings" and "wars" counted for little or nothing. They were inferior
in numbers; they were poorly armed and equipped; they had no reserves
upon which to draw; there was no organization among the tribes in
distant portions of the country. The white millions swept onward. The
Indian bands made a stand here and there but the tide of white
civilization overwhelmed them, smothered them, destroying them and their
civilization together.

The Indians were the first obstacle to the building of the American
Empire. Three hundred years ago the whole three million square miles
that is now the United States was theirs. They were the American people.
To-day they number 328,111 in a population of 105,118,467 and the total
area of their reservations is 53,489 square miles. (Statistical Abstract
of the U. S., 1918, pp. 8 and 776.)

FOOTNOTES:

[4] The total number of square miles in Indian Reservations in 1918 was
53,490 as against 241,800 square miles in 1880. (Statistical Abstract of
the United States, 1918, p. 8.)

[5] "The Indian of To-day," C. A. Eastman. New York, Doubleday, 1915, p.
4.

[6] "The Indian and His Problem," F. E. Leupp. New York, Scribners,
1910, p. 23.

[7] Ibid., p. 24.

[8] Ibid., p. 10.

[9] "Referring to your inquiry of November 20, 1919, concerning the
Cherokee Indian Reservation, you are advised that the Cherokee Indian
country in the northeastern part of Oklahoma aggregated 4,420,068 acres.

"Of said area 4,346,223 acres have been allotted in severalty to the
enrolled members of said Cherokee Indian Nation, Oklahoma. Twenty-two
thousand eight hundred and eighty acres were disposed of as town lots,
or reserved for railway rights of way, churches, schools, cemeteries,
etc., and the remaining area has been sold, or otherwise disposed of as
provided by law.

"The Cherokee tribal land in Oklahoma with the exception of the possible
title of said Nation to certain river beds has been disposed of.

"In reference to the Eastern band of Cherokees, you are advised that
said Indians who have been incorporated hold title in fee to certain
land in North Carolina, known as the Qualla Reservation and certain
other lands, aggregating 63,211 acres."--Letter from the Office of
Indian Affairs. Dec. 9, 1919, "In re Cherokee land."

[10] "The Indian and His Problem," F. E. Leupp. New York, Scribners,
1910, p. 24.

[11] See Bulletin 184, New York State Museum, Albany, 1916, p. 61.



IV. SLAVERY FOR A RACE


1. _The Labor Shortage_

The American colonists took the land which they required for settlement
from the Indians. The labor necessary to work this land was not so
easily secured. The colonists had set themselves the task of
establishing European civilization upon a virgin continent. In order to
achieve this result, they had to cut the forests; clear the land; build
houses; cultivate the soil; construct ships; smelt iron, and carry on a
multitude of activities that were incidental to setting up an old way of
life in a new world. The one supreme and immediate need was the need for
labor power. From the earliest days of colonization there had been no
lack of harbors, fertile soil, timber, minerals and other resources.
From the earliest days the colonists experienced a labor shortage.

The labor situation was trebly difficult. First, there was no native
labor; second, passage from Europe was so long and so hazardous that
only the bold and venturesome were willing to attempt it, and third,
when these adventurers did reach the new world, they had a choice
between taking up free land and working it for themselves and taking
service with a master. Men possessing sufficient initiative to leave an
old home and make a journey across the sea were not the men to submit
themselves to unnecessary authority when they might, at will, become
masters of their own fortunes. The appeal of a new life was its own
argument, and the newcomers struck out for themselves.

Throughout the colonies, and particularly in the South where the
plantation culture of rice and tobacco, and later of cotton, called for
large numbers of unskilled workers, the labor problem was acute. The
abundance of raw materials and fertile land; the speedy growth of
industry in the North and of agriculture in the South; the generous
profits and expanding markets created a labor demand which far
outstripped the meager supply,--a demand that was met by the importation
of black slaves from Africa.


2. _The Slave Coast_

The "Slave Coast" from which most of the Negroes came was discovered by
Portuguese navigators, who were the first Europeans to venture down the
West coast of Africa, and, rounding the "lobe" of the continent, to sail
East along the "Gold Coast." The trade in gold and ivory which sprang up
as a result of these early explorations led other nations of Europe to
begin an eager competition which eventually brought French, Dutch,
German, Danish and English commercial interests into sharp conflict with
the Portuguese.

Ships sailing from the Gold Coast for home ports made a practice of
picking up such slaves as they could easily secure. By 1450 the number
reaching Portugal each year was placed at 600 or 700.[12] From this
small and quite incidental beginning there developed a trade which
eventually supplied Europe, the West Indies, North America and South
America with black slaves.

Along the "Slave Coast," which extended from Cape Verde on the North to
Cape St. Martha on the South, and in the hinterland there lived Negroes
of varying temperaments and of varying standards of culture. Some of
them were fierce and warlike. Others were docile and amenable to
discipline. The former made indifferent slaves; the latter were eagerly
sought after. "The Wyndahs, Nagoes and Pawpaws of the Slave Coast were
generally the most highly esteemed of all. They were lusty and
industrious, cheerful and submissive."[13]

The natives of the Slave Coast had made some notable cultural advances.
They smelted metals; made pottery; wove; manufactured swords and spears
of merit; built houses of stone and of mud, and made ornaments of some
artistic value. They had developed trade with the interior, taking salt
from the coast and bartering it for gold, ivory and other commodities at
regular "market places."

The native civilization along the West coast of Africa was far from
ideal, but it was a civilization which had established itself and which
had made progress during historic times. It was a civilization that had
evolved language; arts and crafts; tribal unity; village life, and
communal organization. This native African civilization, in the
seventeenth, eighteenth and early nineteenth centuries was confronted by
an insatiable demand for black slaves. The conflicts that resulted from
the efforts to supply that demand revolutionized and virtually destroyed
all that was worthy of preservation in the native culture.

When the whites first went to the Slave Coast there was comparatively
little slavery among the natives. Some captives, taken in war; some
debtors, unable to meet their obligations, and some violators of
religious rites, were held by the chief or the headman of the tribe. On
occasion he would sell these slaves, but the slave trade was never
established as a business until the white man organized it.

The whites came, and with guile and by force they persuaded and
compelled the natives to permit the erection of forts and of trading
posts. From the time of the first Portuguese settlement, in 1482, the
whites began their work with rum and finished it with gun-powder. Rum
destroyed the stamina of the native; gun-powder rendered his intertribal
wars more destructive. These two agencies of European civilization
combined, the one to degenerate, the other to destroy the native tribal
life.

The traders, adventurers, buccaneers and pirates that gathered along the
Slave Coast were not able to teach the natives anything in the way of
cruelty, but they could and did give them lessons in cunning, trickery
and double dealing. Early in the history of the Gold Coast the whites
began using the natives to make war on commercial rivals. In one famous
instance, "the Dutch had instigated the King of Fetu to refuse the
Assins permission to pass through his territory. These people used to
bring a great deal of gold to Cape Coast Castle (English), and the Dutch
hoped in this way to divert the trade to their own settlements. The King
having complied and plundered some of the traders on the way down, the
Assins declared war against him and were assisted by the English with
arms and ammunition. The King of Sabol was also paid to help them, and
the allied army (20,000 strong) inflicted a crushing defeat on the
Fetus."[14]

On another occasion, the Dutch were worsted in a war with some of the
native tribes. Realizing that if they were to maintain themselves on the
Coast they must raise an army as quickly as possible, they approached
the Fetus and bargained with them to take the field and fight the
Komendas until they had utterly exterminated them, on payment of $4,500.
But no sooner had this arrangement been made than the English paid the
Fetus an additional $4,500 to remain neutral![15]

Before 1750, when the competition for the slaves was less keen, and the
supply came nearer to meeting the demand, the slavers were probably as
honest in this as they were in any other trade with the natives. The
whites encouraged and incited the native tribes to make war upon one
another for the benefit of the whites. The whites fostered kidnaping,
slavery and the slave trade. The natives were urged to betray one
another, and the whites took advantage of their treachery. During the
four hundred years that the African slave trade was continued, it was
the whites who encouraged it; fostered it; and backed it financially.
The slave trade was a white man's trade, carried on under conditions as
far removed from the conditions of ordinary African life as the
manufacturing and trading of Europe were removed from the manufacturing
and trading of the Africans.


3. _The Slave Trade_

With the pressing demand from the Americas for a generous supply of
black slaves, the business of securing them became one of the chief
commercial activities of the time. "The trade bulked so large in the
world's commerce in the seventeenth and eighteenth centuries that every
important maritime community on the Atlantic sought a share, generally
with the sanction and often with the active assistance of its respective
sovereign."[16]

The catching, holding and shipping of Negroes on the African coast was
the means by which the demand for slaves was met. With a few minor
exceptions, the whites did not engage directly in slave catching. In
most instances they bought their slaves from native brokers who lived in
the coast towns. The brokers, in turn, received their slaves from the
interior, where they were captured during wars, by professional raiding
parties, well supplied with arms and ammunition. Slave-catching, begun
as a kidnaping of individuals, developed into a large-scale traffic that
provided the revenue of the more war-like natives. Villages were
attacked and burned, and whole tribes were destroyed or driven off to
the slave-pens on the coast. After 1750, for nearly a hundred years, the
demand for slaves was so great and the profits were so large that no
pains were spared to secure them.

The Slave Coast native was compelled to choose between being a
slave-catcher or a slave. As a slave-catcher he spread terror and
destruction among his fellows, seized them and sold them to white men.
As a slave he made the long journey across the Atlantic.

The number of slaves carried away from Africa is variously estimated.
Claridge states that "the Guinea Coast as a whole supplied as many as
from 70,000 to 100,000 yearly" in 1700.[17] Bogart estimates the number
of slaves secured as 2,500 per year in 1700; 15,000 to 20,000 per year
from 1713 to 1753; in 1771, 47,000 carried by British ships alone; and
in 1768 the slaves shipped from the African coast numbered 97,000.[18]
Add to these numbers those who were killed in the raids; those who died
in the camps, where the mortality was very high, and those who committed
suicide. The total represents the disturbing influence that the slave
trade introduced into the native African civilization.

In the early years of the trade the ships were small and carried only a
few hundred Negroes at most. As the trade grew, larger and faster ships
were built with galleries between the decks. On these galleries the
blacks were forced to lie with their feet outboard--ironed together, two
and two, with the chains fastened to staples in the deck. "They were
squeezed so tightly together that the average space allowed to each one
was but 16 inches by five and a half feet."[19] The galleries were
frequently made of rough lumber, not tightly joined. Later, when the
trade was outlawed, the slaves were stowed away out of sight on loose
shelves over the cargo. "Where the 'tween decks space was two feet high
or more, the slaves were stowed sitting up in rows, one crowded into the
lap of another, and with legs on legs, like rider on a crowded
toboggan." (Spears, p. 71.) There they stayed for the weeks or the
months of the voyage. "In storms the sailors had to put on the hatches
and seal tight the openings into the infernal cesspool." (Spears, p.
71.) The odor of a slaver was often unmistakable at a distance of five
miles down wind.

The terrible revolt of the slaves in the West Indies, beginning in
1781, gave the growing anti-slavery sentiment an immense impetus. It
also gave the slave owners pause. The cotton-gin had not yet been
invented. Slavery was on a shifty economic basis in the South. Great
Britain passed the first law to limit the slave trade in 1788; the
United States outlawed the trade in 1794. In 1824 Great Britain declared
the slave trade piracy. During these years, and during the years that
followed, until the last slaver left New York Harbor in 1863, the trade
continued under the American flag, in swift, specially constructed
American-built ships.

As the restrictions upon the trade became more severe in the face of an
increasing demand for slaves, "the fitting out of slavers developed into
a flourishing business in the United States, and centered in New York
City." _The New York Journal of Commerce_ notes in 1857 that "down-town
merchants of wealth and respectability are extensively engaged in buying
and selling African Negroes, and have been, with comparatively little
interruption for an indefinite number of years." A writer in the
_Continental Monthly_ for January, 1862, says:--"The city of New York
has been until of late the principal port of the world for this infamous
commerce; although the cities of Boston and Portland, are only second to
her in distinction." During the years 1859-1860 eighty-five slavers are
reported to have fitted out in New York Harbor and these ships alone had
a capacity to transport from 30,000 to 60,000 slaves a year.[20]

The merchants of the North pursued the slave trade so relentlessly
because it paid such enormous profits on the capital outlay. Some of the
voyages went wrong, but the trade, on the whole, netted immense returns.
At the end of the eighteenth century a good ship, fitted to carry from
300 to 400 slaves, could be built for about $35,000. Such a ship would
make a clear profit of from $30,000 to $100,000 in a single voyage. Some
of them made as many as five voyages before they became so foul that
they had to be abandoned.[21] While some voyages were less profitable
than others, there was no avenue of international trade that offered
more alluring possibilities.

Sanctioned by potentates, blessed by the church, and surrounded with the
garments of respectability, the slave trade grew, until, in the words of
Samuel Hopkins (1787), "The trade in human species has been the first
wheel of commerce in Newport, on which every other movement in business
has depended.... By it the inhabitants have gotten most of their wealth
and riches." (Spears, p. 20.) After the vigorous measures taken by the
British Government for its suppression, the slave trade was carried on
chiefly in American-built ships; officered by American citizens; backed
by American capital, and under the American flag.

The slave trade was the business of the North as slavery was the
business of the South. Both flourished until the Proclamation of
Emancipation in 1863.


4. _Slavery in the United States_

Slavery and the slave trade date from the earliest colonial times. The
first slaves in the English colonies were brought to Jamestown in 1619
by a Dutch ship. The first American-built slave ship was the _Desire_,
launched at Marblehead in 1636. There were Negro slaves in New York as
early as 1626, although there were only a few hundred slaves in the
colonies prior to 1650.

Since slave labor is economical only where the slaves can be worked
together in gangs, there was never much slavery among the farmers and
small business men of the North. On the other hand, in the South, the
developing plantation system made it possible for the owner to use large
gangs of slaves in the clearing of new land; in the raising of tobacco,
and in caring for rice and cotton. The plantation system of agriculture
and the cotton gin made slavery the success that it was in the United
States. "The characteristic American slave, indeed, was not only a
Negro, but a plantation workman."[22]

The opening years of the nineteenth century found slavery intrenched
over the whole territory of the United States that lay South of the
Mason and Dixon line. In that territory slave trading and slave owning
were just as much a matter of course as horse trading and horse owning
were a matter of course in the North. "Every public auctioneer handled
slaves along with other property, and in each city there were brokers,
buying them to sell again, and handling them on commission."[23]

The position of the broker is indicated in the following typical bill of
sale which was published in Charleston, S. C., in 1795. "Gold Coast
Negroes. On Thursday, the 17th of March instant, will be exposed to
public sale near the exchange ... the remainder of the cargo of negroes
imported in the ship _Success_, Captain John Conner, consisting chiefly
of likely young boys and girls in good health, and having been here
through the winter may be considered in some degree seasoned to the
climate."[24]

Such a bill of sale attracted no more attention at that time than a
similar bill advertising cattle attracts to-day.

During the early colonial days, the slaves were better fed and provided
for than were the indentured servants. They were of greater money value
and, particularly in the later years when slavery became the mainstay of
Southern agriculture, a first class Negro, acclimated, healthy, willing
and trustworthy, was no mean asset.

Toward the end of the eighteenth century slavery began to show itself
unprofitable in the South. The best and most accessible land was
exhausted. Except for the rice plantations of South Carolina and
Georgia, slavery was not paying. The Southern delegates to the
Constitutional Convention, with the exception of the delegates from
these states, were prepared to abolish the slave trade. Some of them
were ready to free their own slaves. Then came the invention of the
cotton gin and the rise of the cotton kingdom. The amount of raw cotton
consumed by England was 13,000 bales in 1781; 572,000 bales in 1820; and
3,366,000 bales in 1860. During that period, the South was almost the
sole source of supply.

The attitude of the South, confronted by this wave of slave prosperity,
underwent a complete change. Her statesmen had consented, between 1808
and 1820, to severe restrictive laws directed towards the slave trade.
After cotton became king, slaves rose rapidly in price; land, once used
and discarded, was again brought under cultivation; cotton-planting
spread rapidly into the South and Southwest; Texas was annexed; the
Mexican War was fought; an agitation was begun for the annexation of
Cuba, and Calhoun (1836) declared that he "ever should regret that this
term (piracy) had been applied" to the slave trade in our laws.[25]

The change of sentiment corresponded with the changing value of the
slaves. Phillips publishes a detailed table of slave values in which he
estimates that an unskilled, able-bodied young slave man was worth $300
in 1795; $500 to $700 in 1810; $700 to $1200 to in 1840; and $1100 to
$1800 in 1860.[26] The factors which resulted in the increased slave
prices were the increased demand for cotton, the increased demand for
slaves, and the decrease in the importation of negroes due to the
greater severity of the prohibitions on the slave trade.


5. _Slavery for a Race_

The American colonists needed labor to develop the wilderness. White
labor was scarce and high, so the colonists turned to slave labor
performed by imported blacks. The merchants of the North built the ships
and carried on the slave trade at an immense profit. The plantation
owners of the South exploited the Negroes after they reached the states.

The continuance of the slave trade and the provision of a satisfactory
supply of slaves for the Southern market depended upon slave-catching in
Africa, which, in turn, involved the destruction of an entire
civilization. This work of destruction was carried forward by the
leading commercial nations of the world. During nearly 250 years the
English speaking inhabitants of America took an active part in the
business of enslaving, transporting and selling black men. These
Americans--citizens of the United States--bought stolen Negroes on the
African coast; carried them against their will across the ocean; sold
them into slavery, and then, on the plantations, made use of their
enforced labor.

Both slavery and the slave trade were based on a purely economic
motive--the desire for profit. In order to satisfy that desire, the
American people helped to depopulate villages,--to devastate, burn,
murder and enslave; to wipe out a civilization, and to bring the
unwilling objects of their gain-lust thousands of miles across an
impassable barrier to alien shores.

FOOTNOTES:

[12] "History of the Gold Coast," W. W. Claridge. London, Murray, 1915,
vol. I, p. 39.

[13] "American Negro Slavery," U. B. Phillips. New York, Appleton, 1908,
p. 43.

[14] "A History of the Gold Coast," W. W. Claridge. London, Murray,
1915, vol. I, p. 144.

[15] Ibid., p. 150.

[16] "American Negro Slavery," U. B. Phillips. New York, Appleton, 1918,
p. 20.

[17] "History of the Gold Coast," W. W. Claridge. London, Murray, 1915,
vol. I, p. 172.

[18] "Economic History of the U. S.," E. L. Bogart. New York, Longmans,
1910 ed., p. 84-5.

[19] "The American Slave Trade," J. R. Spears. New York, Scribners,
1901, p. 69.

[20] "The Suppression of the American Slave Trade," W. E. B. DuBois. New
York, Longmans, 1896, p. 178-9.

[21] "The American Slave Trade," J. R. Spears. New York, Scribners,
1901, p. 84-5.

[22] "American Negro Slavery," U. B. Phillips. New York, Appleton, 1918,
p. VII.

[23] Ibid., p. 190.

[24] Ibid., p. 40.

[25] Benton, "Abridgment of Debates." XII, p. 718.

[26] "American Negro Slavery," U. B. Phillips. New York, Appleton, 1918,
p. 370.



V. THE WINNING OF THE WEST


1. _Westward, Ho!_

The English colonists in America occupied only the narrow strip of
country between the Alleghanies and the Atlantic Ocean. The interior was
inhabited by the Indians, and claimed by the French, the Spanish and the
British, but neither possession nor legal title carried weight with the
stream of pioneers that was making a path into the "wilderness," crying
its slogan,--"Westward, Ho!" as it moved toward the setting sun. The
first objective of the pioneers was the Ohio Valley; the second was the
valley of the Mississippi; the third was the Great Plains; the fourth
was the Pacific slope, with its golden sands. Each one of these
objectives developed itself out of the previous conquest.

The settlers who made their way across the mountains into the valley of
the Ohio, found themselves in a land of plenty. The game was abundant;
the soil was excellent, and soon they were in a position to offer their
surplus products for sale. These products could not be successfully
transported across the mountains, but they could be floated down the
Ohio and the Mississippi--a natural roadway to the sea. But beside the
Indians, who claimed all of the land for their own, there were the
Spaniards at New Orleans, doing everything in their power to prevent the
American Colonists from building up a successful river commerce.

The frontiersmen were able to push back the Indians. The Spanish
garrisons presented a more serious obstacle. New Orleans was a well
fortified post that could be provisioned from the sea. Behind it,
therefore, lay the whole power of the Spanish fleet. The right of
navigation was finally obtained in the Treaty of 1795. Still friction
continued with the Spanish authorities and serious trouble was averted
only by the transfer of Louisiana, first to the French (1800) and then
by them to the United States (1803). Napoleon had agreed, when he
secured this territory from the Spaniards, not to turn it over to the
United States. A pressing need of funds, however, led him to strike an
easy bargain with the American government which was negotiating for the
control of the mouth of the Mississippi. Napoleon insisted that the
United States take, not only the mouth of the river, but also the
territory to the West which he saw would be useless without this outlet.
After some hesitation, Jefferson and his advisers accepted the offer and
the Louisiana Purchase was consummated.

The Louisiana Purchase gave the young American nation what it needed--a
place in the sun. The colonists had taken land for their early
requirements from the Indians who inhabited the coastal plain. They had
enslaved the Negroes and thus had secured an ample supply of cheap
labor. Now, the pressure of population, and the restless, pioneer spirit
of those early days, led out into the West.

Until 1830 immigration was not a large factor in the increase of the
colonial population, but the birth-rate was prodigious. In the closing
years of the eighteenth century, Franklin estimated that the average
family had eight children. There were sections of the country where the
population doubled, by natural increase, once in 23 years. Indeed, the
entire population of the United States was increasing at a phenomenal
rate. The census of 1800 showed 5,308,483 persons in the country. Twenty
years later the population was 9,638,453--an increase of 81 per cent. By
1840 the population was reported as 17,069,453--an increase of 77 per
cent over 1820, and of 221 per cent over 1800.

The small farmers and tradesmen of the North were settling up the
Northwest Territory. The plantation owners of the South, operating on a
large scale, and with the wasteful methods that inevitably accompany
slavery, were clamoring for new land to replace the tracts that had
been exhausted by constant recropping with no attempt at fertilization.

Cotton had been enthroned in the South since the invention of the cotton
gin in 1792. With the resumption of European trade relations in 1815 the
demand for cotton and for cotton lands increased enormously. There was
one, and only one logical way to meet this demand--through the
possession of the Southwest.


2. _The Southwest_

The pioneers had already broken into the Southwest in large numbers.
While Spain still held the Mississippi, there were eager groups of
settlers pressing against the frontier which the Spanish guarded so
jealously against all comers. The Louisiana Purchase met the momentary
demand, but beyond the Louisiana Purchase, and between the settlers and
the rich lands of Texas lay the Mexican boundary. The tide of migration
into this new field hurled itself against the Mexican border in the same
way that an earlier generation had rolled against the frontier of
Louisiana.

The attitude of these early settlers is described with sympathetic
accuracy by Theodore Roosevelt. "Louisiana was added to the United
States because the hardy backwoods settlers had swarmed into the valleys
of the Tennessee, the Cumberland and the Ohio by hundreds of
thousands.... Restless, adventurous, hardy, they looked eagerly across
the Mississippi to the fertile solitudes where the Spaniard was the
nominal, and the Indian the real master; and with a more immediate
longing they fiercely coveted the Creole provinces at the mouth of the
river."[27] This fierce coveting could have only one possible
outcome--the colonists got what they wanted.

The speed with which the Southwest rushed into prominence as a factor
in national affairs is indicated by its contribution to the cotton-crop.
In 1811 the states and territories from Alabama and Tennessee westward
produced one-sixteenth of the cotton grown in the United States. In 1820
they produced a third; in 1830, a half; and by 1860, three-quarters of
the cotton raised. At the same time, the population of the
Alabama-Mississippi territory was:--


       200,000 in 1810.
       445,000 in 1820.
       965,000 in 1830.
     1,377,000 in 1840.


Thus thirty years saw an increase of nearly seven-fold in the population
of this region.[28]

Meanwhile, slavery had become the issue of the day. The slave power was
in control of the Federal Government, and in order to maintain its
authority, it needed new slave states to offset the free states that
were being carved out of the Northwest.

Here were three forces--first the desire of the frontiersmen for "elbow
room"; second the demand of King Cotton for unused land from which the
extravagant plantation system might draw virgin fertility and third, the
necessity that was pressing the South to add territory in order to hold
its power. All three forces impelled towards the Southwest, and it was
thither that population pressed in the years following 1820.


3. _Texas_

Mexico lay to the Southwest, and therefore Mexico became the object of
American territorial ambitions. The district now known as Texas had
constituted a part of the Louisiana Purchase (1803); had been ceded to
Spain (1819); had been made the object of negotiations looking towards
its purchase in 1826; had revolted against Mexico and been recognized
as an independent state in 1835.

Texas had been settled by Americans who had secured the permission of
the Mexican Government to colonize. These settlers made no effort to
conceal their opposition to the Mexican Government, with which they were
entirely out of sympathy. Many of them were seeking territory in which
slavery might be perpetuated, and they introduced slaves into Texas in
direct violation of the Mexican Constitution. The Americans did not go
to Texas with any idea of becoming Mexican subjects; on the contrary, as
soon as they felt themselves strong enough, they declared their
independence of Mexico, and began negotiations for the annexation of
Texas to the United States.

The Texan struggle for independence from Mexico was cordially welcomed
in all parts of the United States, but particularly in the South.
Despite the protests of Mexico, public meetings were held; funds were
raised; volunteers were enlisted and equipped, and supplies and
munitions were sent for the assistance of the Texans in ships openly
fitted out in New Orleans.

No sooner had the Texans established a government than the campaign for
annexation was begun. The advocates of annexation--principally
Southerners--argued in favor of adding so rich and so logical a prize to
the territory of the United States, citing the purchase of Louisiana and
of Florida as precedents. Their opponents, first on constitutional
grounds and then on grounds of public policy, argued against annexation.

Opinion in the South was greatly aroused. Despite the fact that many of
her foremost statesmen were against annexation, some of the Southern
newspapers even went so far as to threaten the dissolution of the Union
if the treaty of ratification failed to pass the Senate.

The campaign of 1844 was fought on the issue of annexation and the
election of James K. Polk was a pledge that Texas should be annexed to
the United States. During the campaign, the line of division on
annexation had been a party line--Democrats favoring; Whigs opposing.
Between the election and the passage of the joint resolution by which
annexation was consummated, it became a sectional issue,--Southern Whigs
favoring annexation and Northern Democrats opposing it.

So strong was the protest against annexation, that the treaty could not
command the necessary two-thirds vote in the Senate. The matter was
disposed of by the passage of a joint resolution (March 1, 1845) which
required only a majority vote in both houses of Congress. President Polk
therefore took office with the mandate of the country and the decision
of both houses of the retiring Congress, in favor of annexation.

Mexico, in the meantime, had offered to recognize the independence of
Texas and to make peace with her if the Texas Congress would reject the
joint resolution, and refuse the proffered annexation. This the Texas
Congress refused, and with the passage, by that body, of an act
providing for annexation, the Mexican minister was withdrawn from
Washington, and Mexico began her preparations for war.

President Polk had taken office with the avowed intention of buying
California from Mexico. The rupture threatened to prevent him from
carrying this plan into effect. He therefore sent an unofficial
representative to Mexico in an effort to restore friendly relations.
Failing in that, he and his advisers determined upon war as the only
feasible method of obtaining California and of settling the diplomatic
tangle involved in the annexation of Texas.


4. _The Conquest of Mexico_

The Polk Administration made the Mexican War as a part of its
expansionist policy.

"Although that unfortunate country (Mexico) had officially notified the
United States that the annexation of Texas would be treated as a cause
of war, so constant were the internal quarrels in Mexico that open
hostilities would have been avoided had the conduct of the
Administration been more honorable. That was the opinion of Webster,
Clay, Calhoun, Benton, and Tyler.... Mexico was actually goaded on to
war. The principle of the manifest destiny of this country was invoked
as a reason for the attempt to add to our territory at the expense of
Mexico."[29]

After the annexation of Texas it became the duty of the United States to
defend that state against the threatened Mexican invasion.

Mexican troops had occupied the southern bank of the Rio Grande. General
Zachary Taylor with a small force, moved to a position on the Nueces
River. Between the two rivers lay a strip of territory the possession of
which was one of the sources of dispute between Mexico and Texas. What
followed may be stated in the words of one of the officers who
participated in the expedition: "The presence of the United States
troops on the edge of the territory farthest from the Mexican
settlements was not sufficient to provoke hostilities. We were sent to
provoke a fight, but it was essential that Mexico begin it" (p. 41).
"Mexico showing no willingness to come to the Nueces to drive the
invaders from her soil, it became necessary for the 'invaders' to
approach to within a convenient distance to be struck. Accordingly,
preparations were begun for moving the army to the Rio Grande, to a
point near Matamoras. It was desirable to occupy a position near the
largest center of population possible to reach without actually invading
territory to which we set up no claim whatever" (p. 45).[30]

The occupation, by the United States troops, of the disputed territory
soon led to a clash in which several United States soldiers were killed.
The incident was taken by the President as a sufficient cause for the
declaration of a state of war. The House complied readily with his
wishes, passing the necessary resolution. Several members of the Senate
begged for a delay during which the actual state of affairs might be
ascertained. The President insisted, however, and the war was declared
(May 13, 1846).

The declaration of war was welcomed with wild enthusiasm in the South.
Meetings were called; funds were raised; volunteers were enlisted,
equipped and despatched in all haste to the scene of the conflict.

The North was less eager. There were protests, petitions,
demonstrations. Many of the leaders of northern opinion took a public
stand against the war. But the news of the first victories sent the
country mad with an enthusiasm in which the North joined the South.

The United States troops, during the Mexican War, won brilliant--almost
unbelievable successes--against superior forces and in the face of
immense natural obstacles. Had the war been less of a military triumph
there must have been a far more widely-heard protest from Polk's enemies
in the North. Successful beyond the wildest dreams of its promoters, the
victorious war carried its own answer to those who questioned the
worthiness of the cause. Within two years, the whole of Mexico was under
the military control of the United States, and that country was in a
position to dictate its own terms.

The demands of the United States were mild to the extent of generosity.
Under the treaty the annexation of Texas was validated; New Mexico and
Upper California were ceded to the United States; the lower Rio Grande
was fixed as the southern boundary of Texas, and in considerations of
these additions to its territory, the United States agreed to pay Mexico
fifteen millions of dollars.

Under this plan, Mexico was paid for territory that she did not need and
could not use, while the United States gave a money consideration for
the title to land that was already hers by right of conquest, and of
which she was in actual possession.

The details of the treaty are relatively unimportant. The outstanding
fact is that Mexico was in possession of certain territory that the
ruling power in the United States wanted, and that ruling power took
what it wanted by force of arms. "The war was one of conquest in the
interest of an institution." It was "one of the most unjust ever waged
by a stronger against a weaker nation."[31]

Congressman A. P. Gardner of Massachusetts summarized the matter very
pithily in his debate with Morris Hillquit (New York, April 2, 1915),
"We assisted Texas to get away from Mexico and then we proceeded to
annex Texas. Plainly and bluntly stated, our purpose was to get some
territory for American development." (Stenographic report in the _New
York Call_, April 11, 1915.)


5. _Conquering the Conquered_

The work of conquering the Southwest was not completed by the
termination of the war. Mexico ceded the territory--in the neighborhood
of a million square miles--but she was giving away something that she
had never possessed. Mexico claimed title to land that was occupied by
the Indians. She had never conquered it; never settled it; never
developed it. Her sovereignty was of the same shadowy sort that Spain
had exercised over the country before the Mexican revolution.

The new owners of the Southwest had a very different purpose in mind. No
empty title would satisfy them. They intended to use the land. The
Indians--already in possession--resented the encroachments of the
invaders, but they fared no better than the Mexicans, or than their
red-skinned brothers who had contended for the right to fish and hunt
along their home streams in the Appalachians. The Indians of the
Southwest fought stubbornly, but the wars that meant life and death to
them were the merest pastime for an army that had just completed the
humiliation of a nation of the size and strength of Mexico. The Indians
were swept aside, and the country was opened to the trapper, the
prospector, the trader and the settler.

The Mexican War was a slight affair, involving a relatively small outlay
in men and money. The total number of American soldiers killed in the
war was 1,721; the wounded were 4,102; the deaths from accident and
disease were 11,516, making total casualties of 5,823 and total losses
of 15,618.[32]

The money cost of the Mexican War--the army and navy appropriations for
the years 1846 to 1849 inclusive--was $119,624,000. Obviously the net
cost of the war was less than this gross total,--how much less it is
impossible to say.

No satisfactory figures are available to show the cost in men and money
of the Indian Wars in the Southwest. "From 1849 to 1865, the government
expended $30,000,000 in the subjugation of the Indians in the
territories of New Mexico and Arizona."[33] Their character may be
gauged by noting from the "Historical Register" (Vol. 2, p. 281-2) the
losses sustained in the four Indian Wars of which a record is preserved.
In the Northwest Indian Wars (1790 to 1795) 896 persons were killed and
436 were wounded; in the Seminole War (1817 to 1818) 46 were killed and
36 were wounded; in the Black Hawk War (1831-2) the killed were 26 and
the wounded 39; in the Seminole War (1835-1842) 383 were killed and 557
wounded. These were among the most serious of the Indian Wars and in all
of them the cost in life and limb was small. Judged on this standard,
the losses in the Southwest, during the Indian Wars, were, at most,
trifling. The total outlay that was involved in the conquest of the vast
domain would not have covered one first class battle of the Great War,
and yet this outlay added to the territory of the United States
something like a million square miles containing some of the richest and
most productive portions of the earth's surface.

This domain was won by a process of military conquest; it was taken from
the Mexicans and the Indians by force of arms. In order to acquire it,
it was necessary to drive whole tribes from their villages; to burn; to
maim; to kill. "St. Louis, New Orleans, St. Augustine, San Antonio,
Santa Fe and San Francisco are cities that were built by Frenchmen and
Spaniards; we did not found them but we conquered them." "The Southwest
was conquered only after years of hard fighting with the original
owners" (p. 26). "The winning of the West and the Southwest is a stage
in the conquest of a continent" (p. 27). "This great westward movement
of armed settlers was essentially one of conquest, no less than of
colonization" (p. 370).[34] None of the possessors of this territory
were properly armed or equipped for effective warfare. All of them fell
an easy prey to the organized might of the Government of the United
States.

FOOTNOTES:

[27] "The Winning of the West," Theodore Roosevelt. New York, Putnam's,
1896, vol. 4, p. 262.

[28] "American Negro Slavery," U. B. Phillips. New York, Appleton, 1918,
pp. 171-2.

[29] "History of the United States," James F. Rhoades. New York,
Macmillan, 1906, vol. I, p. 87.

[30] "Personal Memoirs," U. S. Grant. New York, Century, 1895, vol. I.

[31] "Personal Memoirs," U. S. Grant. New York, Century, 1895, vol. I,
pp. 115 and 32.

[32] "Historical Register of the United States Army," F. B. Heitman.
Washington, Govt. Print., vol. 2, p. 282.

[33] "The Story of New Mexico," Horatio O. Ladd. Boston, D. Lothrop Co.,
1891, p. 333.

[34] "The Winning of the West," Theodore Roosevelt. Vol. I, p. 26, 27,
and Vol. II, p. 370.



VI. THE BEGINNINGS OF WORLD DOMINION


1. _The Shifting of Control_

During the half century that intervened between the War of 1812 and the
Civil War of 1861 the policy of the United States government was decided
largely by men who came from south of the Mason and Dixon line. The
Southern whites,--class-conscious rulers with an institution (slavery)
to defend,--acted like any other ruling class under similar
circumstances. They favored Southward expansion which meant more
territory in which slavery might be established.

The Southerners were looking for a place in the sun where slavery, as an
institution, might flourish for the profit and power of the
slave-holding class. Their most effective move in this direction was the
annexation of Texas and the acquisition of territory following the
Mexican War. An insistent drive for the annexation of Cuba was cut short
by the Civil War.

Southern sentiment had supported the Louisiana Purchase of 1803 and the
Florida Purchase of 1819. From Jefferson's time Southern statesmen had
been advocating the purchase of Cuba. Filibustering expeditions were
fitted out in Southern ports with Cuba as an objective; agitation was
carried on, inside and outside of Congress; between 1850 and 1861 the
acquisition of Cuba was the question of the day. It was an issue in the
Campaign of 1853. In 1854 the American ministers to London, France and
Madrid met at the direction of the State Department and drew up a
document (the "Ostend Manifesto") dealing with the future of Cuba.
McMaster summarizes the Manifesto in these words: "The United States
ought to buy Cuba because of its nearness to our coast; because it
belonged naturally to that great group of states of which the Union was
the providential nursery; because it commanded the mouth of the
Mississippi whose immense and annually growing trade must seek that way
to the ocean, and because the Union could never enjoy repose, could
never be secure, till Cuba was within its boundaries." (Vol. viii, pp.
185-6.) If Spain refused to sell Cuba it was suggested that the United
States should take it.

The Ostend Manifesto was rejected by the State Department, but it was a
good picture of the imperialistic sentiment at that time abroad among
certain elements in the United States.

The Cuban issue featured in the Lincoln-Douglas Debates in 1858. It was
hotly discussed by Congress in 1859. Only twenty years had passed since
the United States, by force of arms, had taken from Mexico territory
that she coveted. Now it was proposed to appropriate territory belonging
to Spain.

The outbreak of hostilities deferred the project, and when the Civil War
was over, the slave power was shattered. From that time forward national
policy was guided by the leaders of the new industrial North.

The process of this change was fearfully wasteful. The shifting of power
from the old régime to the new cost more lives and a greater expenditure
of wealth than all of the wars of conquest that had been fought during
the preceding half century.

The change was complete. The slaves were liberated by Presidential
Proclamation. The Southern form of civilization--patriarchal and
feudal--disappeared, and upon its ruins--rapidly in the West; slowly in
the South--there arose the new structure of an industrial civilization.

The new civilization had no need to look outward for economic advantage.
Forest tracts, mineral deposits and fertile land afforded ample
opportunity at home. It was three thousand miles to the Pacific and at
the end of the journey there was gold! The new civilization therefore
turned its energies to the problem of subduing the continent and of
establishing the machinery necessary to provide for its vastly
increasing needs. A small part of the capital required for this purpose
came from abroad. Most of it was supplied at home. But the events
involved in opening up the territory west of the Rockies, of spanning
the country with steel, and providing outlets for the products of the
developing industries were so momentous that even the most ambitious
might fulfill his dreams of conquest without setting foot on foreign
soil. Territorial aggrandizement was forgotten, and men turned with a
will to the organization of the East and the exploration and development
of the West.

The leaders of the new order found time to take over Alaska (1868) with
its 590,884 square miles. The move was diplomatic rather than economic,
however, and it was many years before the huge wealth of Alaska was even
suspected.


2. _Hawaii_

The new capitalist interests began to feel the need of additional
territory toward the end of the nineteenth century. The desirable
resources of the United States were largely in private hands and most of
the available free land had been pre-empted. Beside that, there were
certain interests, like sugar and tobacco, that were looking with
longing eyes toward the tempting soil and climate of Hawaii, Porto Rico
and Cuba.

When the South had advocated the annexation of Texas, its statesmen had
been denounced as expansionists and imperialists. The same fate awaited
the statesmen of the new order who were favoring the extension of United
States territory to include some of the contiguous islands that offered
special opportunities for certain powerful financial interests.

The struggle began over the annexation of Hawaii. After numerous
attempts to annex Hawaii to the United States a revolution was finally
consummated in Honolulu in 1893. At that time, under treaty provisions,
the neutrality of Hawaii was guaranteed by the United States. Likewise,
"of the capital invested in the islands, two-thirds is owned by
Americans." This statement is made in "Address by the Hawaiian Branches
of the Sons of the American Revolution, the Sons of Veterans, and the
Grand Army of the Republic to their compatriots in America Concerning
the Annexation of Hawaii." (1897.) These advocates of annexation state
in the same address that: "The revolution (of 1893) was not the work of
filibusterers and adventurers, but of the most conservative and
law-abiding citizens, of the principal tax-payers, the leaders of
industrial enterprises, etc." The purpose behind the revolution seemed
clear. Certain business men who had sugar and other products to sell in
the United States, believed that they would gain, financially, by
annexation. They engineered the revolution of 1893 and they were
actively engaged in the agitation for annexation that lasted until the
treaty of annexation was confirmed by the United States in 1898. The
matter was debated at length on the floor of the United States Senate,
and an investigation revealed the essential facts of the case.

The immediate cause of the revolution in 1893 was friction over the
Hawaiian Constitution. After some agitation, a "Committee of Safety" was
organized for the protection of life and property on the islands.
Certain members of the Hawaiian government were in favor of declaring
martial law, and dealing summarily with the conspirators. The Queen
seems to have hesitated at such a course because of the probable
complications with the government of the United States.

The _U. S. S. Boston_, sent at the request of United States Minister
Stevens to protect American life and property in the Islands, was lying
in the harbor of Honolulu. After some negotiations between the
"Committee of Safety" and Minister Stevens, the latter requested the
Commander of the _Boston_ to land a number of marines. This was done on
the afternoon of January 16, 1893. Immediately the Governor of the
Island of Oahu and the Minister of Foreign Affairs addressed official
communications to the United States Minister, protesting against the
landing of troops "without permission from the proper authorities."
Minister Stevens replied, assuming full responsibility.

On the day following the landing of the marines, the Committee of
Safety, under the chairmanship of Judge Dole, who had resigned as
Justice of the Supreme Court of Hawaii in order to accept the
Chairmanship of the Committee, proceeded to the government building, and
there, under cover of the guns of the United States Marines, who were
drawn up for the purpose of protecting the Committee against possible
attack, a proclamation was read, declaring the abrogation of the
Hawaiian monarchy, and the establishment of a provisional government "to
exist until terms of union with the United States have been negotiated
and agreed upon." Within an hour after the reading of this proclamation,
and while the Queen and her government were still in authority, and in
possession of the Palace, the Barracks, and the Police Station, the
United States Minister gave the Provisional Government his recognition.

The Queen, who had 500 soldiers in the Barracks, was inclined to fight,
but on the advice of her counselors, she yielded "to the superior force
of the United States of America" until the facts could be presented at
Washington, and the wrong righted.

Two weeks later, on the first of February, Minister Stevens issued a
proclamation declaring a protectorate over the islands. This action was
later repudiated by the authorities at Washington, but on February 15,
President Harrison submitted a treaty of annexation to the Senate. The
treaty failed of passage, and President Cleveland, as one of his first
official acts, ordered a complete investigation of the whole affair.

The Senate Committee on Foreign Relations submitted a report on the
matter February 26, 1894. Four members referred to the acts of Minister
Stevens as "active, officious and unbecoming participation in the events
which led to the revolution." All members of the committee agreed that
his action in declaring a protectorate over the Islands was unjustified.

The same kind of a fight that developed over the annexation of Texas now
took place over the annexation of Hawaii. A group of senators, of whom
Senator R. F. Pettigrew was the most conspicuous figure, succeeded in
preventing the ratification of the annexation treaty until July 7, 1898.
Then, ten weeks after the declaration of the Spanish-American War, under
the stress of the war-hysteria, Hawaii was annexed by a joint resolution
of Congress.

The Annexation of Hawaii marks a turning point in the history of the
United States. For the first time, the American people secured
possession of territory lying outside of the mainland of North America.
For the first time the United States acquired territory lying within the
tropics. The annexation of Hawaii was the first imperialistic act after
the annexation of Texas, more than fifty years before. It was the first
imperialistic act since the capitalists of the North had succeeded the
slave-owners of the South as the masters of American public life.


3. _The Spanish-American War_

The real test of the imperial intentions of the United States came with
the Spanish-American War. An old, shattered world empire (Spain) held
Porto Rico, Cuba and the Philippines. Porto Rico and Cuba were of
peculiar value to the sugar and tobacco interests of the United States.
They were close to the mainland, they were enormously productive and,
furthermore, Cuba contained important deposits of iron ore.

Spain had only a feeble grip on her possessions. For years the natives
of Cuba and of the Philippines had been in revolt against the Spanish
power. At times the revolt was covert. Again it blazed in the open.

The situation in Cuba was rendered particularly critical because of the
methods used by the Spanish authorities in dealing with the rebellious
natives. The Spaniards were simply doing what any empire does to
suppress rebellion and enforce obedience, but the brutalities of
imperialism, as practiced in Cuba by the Spaniards, gave the American
interventionists their opportunity. Day after day the newspapers carried
front page stories of Spanish atrocities in Cuba. Day after day the
ground was prepared for open intervention in the interests of the
oppressed Cubans. There was more than grim humor in the instructions
which a great newspaper publisher is reported to have sent his
cartoonist in Cuba,--"You provide the pictures; we'll furnish the war."

The conflict was precipitated by the blowing up of the United States
battleship _Maine_ as she lay in the harbor of Havana (February 15,
1898). It has not been settled to this day whether the _Maine_ was blown
up from without or within. At the time it was assumed that the ship was
blown up by the Spanish, although "there was no evidence whatever that
any one connected with the exercise of Spanish authority in Cuba had had
so much as guilty knowledge of the plans made to destroy the _Maine_"
(p. 270), and although "toward the last it had begun to look as if the
Spanish Government were ready, rather than let the war feeling in the
United States put things beyond all possibility of a peaceful solution,
to make very substantial concessions to the Cuban insurgents and bring
the troubles of the Island to an end" (p. 273-4).[35]

Congress, in a joint resolution passed April 20, 1898, declared that
"the people of the Island of Cuba are, and of right ought to be, free
and independent.... The United States hereby disclaims any intention to
exercise sovereignty, jurisdiction or control over said island except
for the pacification thereof, and asserts its determination, when that
is accomplished, to leave the government and control of the island to
its people."

The war itself was of no great moment. There was little fighting on
land, and the naval battles resulted in overwhelming victories for the
American Navy. The treaty, ratified February 6, 1899, provided that
Spain should cede to the United States Guam, Porto Rico, Cuba and the
Philippines, and that the United States should pay to Spain twenty
millions of dollars. As in the case of the Mexican War, the United
States took possession of the territory and then paid a bonus for a
clear title.

The losses in the war were very small. The total number of men who were
killed in action and who died of wounds was 289; while 3,949 died of
accidents and disease. ("Historical Register," Vol. 2, p. 187.) The cost
of the war was comparatively slight. Hostilities lasted from April 21,
1898 to August 12, 1898. The entire military and naval expense for the
year 1898 was $443,368,000; for the year 1899, $605,071,000. Again the
need for a larger place in the sun had been felt by the people of the
United States and again the United States had won immense riches with a
tiny outlay in men and money.

Now came the real issue,--What should the United States do with the
booty?

There were many who held that the United States was bound to set the
peoples of the conquered territory free. To be sure the specific pledge
contained in the joint resolution of April 20, 1898, applied to Cuba
alone, but, it was argued, since the people of the Philippines had also
been fighting for liberty, and since they had come so near to winning
their independence from the Spaniards, they were likewise entitled to
it.

On the other hand, the advocates of annexation insisted that it was the
duty of the United States to accept the responsibilities (the "white
man's burden") that the acquisition of these islands involved.

As President McKinley put it:--"The Philippines, like Cuba and Porto
Rico, were entrusted to our hands by the providence of God." (President
McKinley, Boston, February 16, 1899.) How was the country to avoid such
a duty?

Thus was the issue drawn between the "imperialists" and the
"anti-imperialists."

The imperialists had the machinery of government, the newspapers, and
the prestige of a victorious and very popular war behind them. The
anti-imperialists had half a century of unbroken tradition; the accepted
principles of self-government; the sayings of men who had organized the
Revolution of 1776; written the Declaration of Independence; held
exalted offices and piloted the nation through the Civil War.

The imperialists used their inside position. The anti-imperialists
appealed to public opinion. They organized a league "to aid in holding
the United States true to the principles of the Declaration of
Independence. It seeks the preservation of the rights of the people as
guaranteed to them by the Constitution. Its members hold self-government
to be fundamental, and good government to be but incidental. It is its
purpose to oppose by all proper means the extension of the sovereignty
of the United States over subject peoples. It will contribute to the
defeat of any candidate or party that stands for the forcible
subjugation of any people." (From the declaration of principle printed
on the literature in 1899 and 1900.) Anti-imperialist conferences were
held in New York, Philadelphia, Chicago, Indianapolis, Boston and other
large cities. The League claimed to have half a million members. An
extensive pamphlet literature was published, and every effort was made
to arouse the people of the country to the importance of the decision
that lay before them.

The imperialists said a great deal less than their opponents, but they
were more effective in their efforts. The President had said, in his
message to Congress (April 1, 1898), "I speak not of forcible
annexation, for that cannot be thought of. That, by our code of morals,
would be criminal aggression." The phrase was seized eagerly by those
who were opposing the annexation of the Spanish possessions. After the
war with Spain had begun, the President changed front on the ground that
destiny had placed a responsibility upon the American people that they
could not shirk. Taking this view of the situation, the President had
only one course open to him--to insist upon the annexation of the
Philippines, Porto Rico and Guam. This was the course that was followed,
and on April 11, 1899, these territories were officially incorporated
into the United States.

Senator Hoar, in a speech on January 9, 1899, put the issue squarely. He
described it as "a greater danger than we have encountered since the
Pilgrims landed at Plymouth--the danger that we are to be transformed
from a republic, founded on the Declaration of Independence, guided by
the counsels of Washington, into a vulgar, commonplace empire, founded
upon physical force."

Cuba remained to be disposed of. With the specific guarantee of
independence contained in the joint resolution passed at the outbreak of
the war, it seemed impossible to do otherwise than to give the Cubans
self-government. Many influential men lamented the necessity, but it was
generally conceded. But how much independence should Cuba have? That
question was answered by the passage of the Cuban Treaty with the "Platt
Amendment" attached. Under the treaty as ratified the United States does
exercise "sovereignty, jurisdiction and control" over the island.


4. _The Philippines_

The territory acquired from Spain was now, in theory, disposed of.
Practically, the Philippines remained as a source of difficulty and even
of political danger.

The people of Cuba were, apparently, satisfied. The Porto Ricans had
accepted the authority of the United States without question. But the
Filipinos were not content. If the Cubans were to have self-government,
why not they?

The situation was complicated by the peculiar relations existing between
the Filipinos and the United States Government. Immediately after the
declaration of war with Spain the United States Consul-General at
Singapore had cabled to Admiral Dewey at Hong Kong that Aguinaldo,
leader of the insurgent forces in the Philippines, was then at
Singapore, and was ready to go to Hong Kong. Commodore Dewey cabled back
asking Aguinaldo to come at once to Hong Kong. Aguinaldo left Singapore
on April 26, 1898, and, with seventeen other revolutionary Filipino
chiefs, was taken from Hong Kong to Manila in the United States naval
vessel _McCulloch_. Upon his arrival in Manila, he at once took charge
of the insurgents.

For three hundred years the inhabitants of the Philippines had been
engaged in almost incessant warfare with the Spanish authorities. In the
spring of 1898 they were in a fair way to win their independence. They
had a large number of men under arms--from 20,000 to 30,000; they had
fought the Spanish garrisons to a stand-still, and were in practical
control of the situation.

Aguinaldo was furnished with 4,000 or 5,000 stands of arms by the
American officials, he took additional arms from the Spaniards and he
and his people coöperated actively with the Americans in driving the
Spanish out of Luzon. The Filipino army captured Iloilo, the second
largest city in the Philippines, without the assistance of the
Americans. On the day of the surrender of Manila, 15½ miles of the
surrounding line was occupied by the Filipinos and 600 yards by the
American troops. Throughout the early summer, the relations between the
Filipinos and the Americans continued to be friendly. General Anderson,
in command of the American Army, wrote a letter to the commander of the
Filipinos (July 4, 1898) in which he said,--"I desire to have the most
amicable relations with you and to have you and your people coöperate
with us in military operations against the Spanish forces." During the
summer the American officers called upon the Filipinos for supplies and
information and accepted their coöperation. Aguinaldo, on his part,
treated the Americans as deliverers, and in his proclamations referred
to them as "liberators" and "redeemers."

The Filipinos, at the earliest possible moment, organized a government.
On June 18 a republic was proclaimed; on the 23rd the cabinet was
announced; on the 27th a decree was published providing for elections,
and on August 6th an address was issued to foreign governments,
announcing that the revolutionary government was in operation, and was
in control of fifteen provinces.

The real intent of the Americans was foreshadowed in the instructions
handed by President McKinley to General Wesley Merritt on May 19, 1898.
General Merritt was directed to inform the Filipinos that "we come not
to make war upon the people of the Philippines, nor upon any party or
faction among them, but to protect them in their homes, in their
employments, and in their personal and religious rights. Any persons
who, either by active aid or by honest submission, coöperate with the
United States in its effort to give effect to this beneficent purpose,
will receive the reward of its support and protection."

The Filipinos sent a delegation to Paris to lay their claims for
independence before the Peace Commission. Meeting with no success, they
visited Washington, with no different result. They were not to be free!

On September 8, 1898, General Otis, commander of the American forces in
the Philippines, notified Aguinaldo that unless he withdrew his forces
from Manila and its suburbs by the 15th "I shall be obliged to resort to
forcible action." On January 5, 1899, by Presidential Proclamation,
McKinley ordered that "The Military Government heretofore maintained by
the United States in the city, harbor, and bay of Manila is to be
extended with all possible dispatch to the whole of the ceded
territory." On February 4, 1899, General Otis reported "Firing upon the
Filipinos and the killing of one of them by the Americans, leading to
return fire." (Report up to April 6, 1899.) Then followed the Philippine
War during which 1,037 Americans were killed in action or died of
wounds; 2,818 were wounded, and 2,748 died of disease. ("Historical
Register," Vol. II, p. 293.)

The Philippines were conquered twice--once in a contest with Spain (in
coöperation with the Filipinos, who regarded themselves as our allies),
and once in a contest with the Filipinos, the native inhabitants, who
were made subjects of the American Empire by this conquest.[36]


5. _Imperialism Accepted_

The Philippine War was the last political episode in the life of the
American Republic. From February 4, 1899, the United States accepted the
political status of an Empire. Hawaii had been annexed at the behest of
the Hawaiian Government; Porto Rico had been occupied as a part of the
war strategy and without any protest from the Porto Ricans. The
Philippines were taken against the determined opposition of the natives,
who continued the struggle for independence during three bitter years.

The Filipinos were fighting for independence--fighting to drive invaders
from their soil. The United States authorities had no status in the
Philippines other than that of military conquerors.

Continental North America was occupied by the whites after a long
struggle with the Indian tribes. This territory was "conquered"--but it
was contiguous--it formed a part of a geographic unity. The Philippines
were separated from San Francisco by 8,000 miles of water;
geographically they were a part of Asia. They were tropical in
character, and were inhabited by tribes having nothing in common with
the American people except their common humanity. Nevertheless, despite
non-contiguity; despite distance; despite dissimilarity in languages and
customs, the soldiers of the United States conquered the Filipinos and
the United States Government took control of the islands, acting in the
same way that any other empire, under like circumstances, unquestionably
would have acted.

There was no strategic reason that demanded the Philippines unless the
United States desired to have an operating base near to the vast
resources and the developing markets of China. As a vantage point from
which to wage commercial and military aggression in the Far East, the
Philippines may possess certain advantages. There is no other excuse for
their conquest and retention by the United States save the economic
excuse of advantages to be gained from the possession of the islands
themselves.

The end of the nineteenth century saw the end of the Republic about
which men like Jefferson and Lincoln wrote and dreamed. The New Century
marked the opening of a new epoch--the beginning of world dominion for
the United States.

FOOTNOTES:

[35] "A History of the American People," Woodrow Wilson. New York,
Harpers, 1902, Vol. V, pp. 273-4.

[36] For further details on the Philippine problem see Senate Document
62, Part I, 55th Congress, Third Session.



VII. THE STRUGGLE FOR WEALTH AND POWER


1. _Economic Foundations_

The people of the United States, through their contests with the
American Indians, the Mexicans and the Filipinos, have established that
"supreme and extensive political domination" which is one of the chief
characteristics of empire.

But the American Empire does not rest upon a political basis. Only the
most superficial portions of its superstructure are political in
character. Imperialism in the United States, as in every other modern
country, is built not upon politics, but upon industry.

The struggle between empires has shifted, in recent years, from the
political and the military to the economic field. The old imperialism
was based on military conquest and political domination. The new
"financial" imperialism is based on economic opportunities and
advantages. Under this new régime, territorial domination is
subordinated to business profit.

While American public officials were engaged in the routine task of
extending the political boundaries of the United States, the foundations
of imperial strength were being laid by the masters of industrial
life--the traders, manufacturers, bankers, the organizers of trusts and
of industrial combinations. These owners and directors of the nation's
wealth have been the real builders of the American Empire.

As the United States has developed, the economic motives have come more
and more to the surface, until no modern nation--not England
herself--has such a record in the search for material possessions. The
pursuit of wealth, in the United States, has been carried forward
ruthlessly; brutally. "Anything to win" has been the motto. Man against
man, and group against group, they have struggled for gain,--first, in
order to "get ahead;" then to accumulate the comforts and luxuries, and
last of all, to possess the immense power that goes with the control of
modern wealth.

The early history of the country presaged anything but this. The
colonists were seeking to escape tyranny, to establish justice and to
inaugurate liberty. Their promises were prophetic. Their early deeds put
the world in their debt. Forward looking people everywhere thrilled at
the mention of the name "America." Then came the discovery of the
fabulous wealth of the new country; the pressure of the growing stream
of immigrants; the heaping up of riches; the rapacious search after
more! more! the desertion of the dearest principles of America's early
promise, and the transcribing of another story of "economic
determinism."

Until very recent times the American people continued to talk of
political affairs as though they were the matters of chief public
concern. The recent growth and concentration of economic power have
showed plainly, however, that America was destined to play her greatest
rôle on the economic field. Capable men therefore ceased to go into
politics and instead turned their energies into the whirl of business,
where they received a training that made them capable of handling
affairs of the greatest intricacy and magnitude.


2. _Every Man for Himself_

The development of American industry, during the hundred years that
began with the War of 1812, led inevitably to the unification of
business control in the hands of a small group of wealth owners.

"Every man for himself" was the principle that the theorists of the
eighteenth century bequeathed to the industrial pioneers of the
nineteenth. The philosophy of individualism fitted well with the
temperament and experience of the English speaking peoples; the practice
of individualism under the formula "Every man for himself" seemed a
divine ordination for the benefit of the new industry.

The eager American population adopted the slogan with enthusiasm. "Every
man for himself" was the essence of their frontier lives; it was the
breath of the wilderness.

But the idea failed in practice. Despite the assurances of its champions
that individualism was necessary to preserve initiative and that
progress was impossible without it, like many another principle--fine
sounding in theory, it broke down in the application.

The first struggle that confronted the ambitious conqueror of the new
world was the struggle with nature. Her stores were abundant, but they
must be prepared for human use. Timber must be sawed; soil tilled; fish
caught; coal mined; iron smelted; gold extracted. Rivers must be
bridged; mountains spanned; lines of communication maintained. The
continent was a vast storehouse of riches--potential riches. Before they
could be made of actual use, however, the hand of man must transform
them and transport them.

These necessary industrial processes were impossible under the "every
man for himself" formula. Here was a vast continent, with boundless
opportunities for supplying the necessaries and comforts of
life--provided men were willing to come together; divide up the work;
specialize; and exchange products.

Coöperation--alone--could conquer nature. The basis of this coöperation
proved to be the machine. Its means was the system of production and
transportation built upon the use of steam, electricity, gas, and labor
saving appliances.

When the United States was discovered, the shuttle was thrown by hand;
the hammer was wielded by human arm; the mill-stones were turned by wind
and water; the boxes and bales were carried by pack-animals or in
sailing vessels,--these processes of production and transportation were
conducted in practically the same way as in the time of Pharaoh or of
Alexander the Great. A series of discoveries and inventions, made in
England between 1735 and 1784, substituted the machine for the tool; the
power of steam for the power of wind, water or human muscle; and set up
the factory to produce, and the railroad and the steamboat to transport
the factory product.

American industry, up to 1812, was still conducted on the old,
individualistic lines. Factories were little known. Men worked singly,
or by twos and threes in sheds or workrooms adjoining their homes. The
people lived in small villages or on scattered farms. Within the century
American industry was transformed. Production shifted to the factory;
about the factory grew up the industrial city in which lived the tens or
hundreds of thousands of factory workers and their families.

The machine made a new society. The artisan could not compete with the
products of the machine. The home workshop disappeared, and in its place
rose the factory, with its tens, its hundreds and its thousands of
operatives.

Under the modern system of machine production, each person has his
particular duty to perform. Each depends, for the success of his
service, upon that performed by thousands of others.

All modern industry is organized on the principle of coöperation,
division of labor, and specialization. Each has his task, and unless
each task is performed the entire system breaks down.

Never were the various branches of the military service more completely
dependent upon each other than are the various departments of modern
economic life. No man works alone. All are associated more or less
intimately with the activities of thousands and millions of their
fellows, until the failure of one is the failure of all, and the success
of one is the success of all.

Such a development could have only one possible result,--people who
worked together must live together. Scattered villages gave place to
industrial towns and cities. People were compelled to coöperate in their
lives as well as in their labor.

The theory under which the new industrial society began its operations
was "every man for himself." The development of the system has made
every man dependent upon his fellows. The principle demanded an extreme
individualism. The practice has created a vast network of
inter-relations, that leads the cotton spinner of Massachusetts to eat
the meat prepared by the packing-house operative in Omaha, while the
pottery of Trenton and the clothing of New York are sent to the Yukon in
exchange for fish and to the Golden Gate for fruit. Inside as well as
outside the nation, the world is united by the strong hands of economic
necessity. None can live to himself, alone. Each depends upon the labor
of myriads whom he has never seen and of whom he has never heard.
Whether we will or no, they are his brothers-in-labor--united in the
Atlas fellowship of those who carry the world upon their shoulders.

The theory of "every man for himself" failed. The practical exigencies
involved in subjugating a continent and wresting from nature the means
of livelihood made it necessary to introduce the opposite
principle,--"In Union there is strength; coöperation achieves all
things."


3. _The Struggle for Organization_

The technical difficulties involved in the mechanical production of
wealth compelled even the individualists to work together. The
requirements of industrial organization drove them in the same
direction.

The first great problem before the early Americans was the conquest of
nature. To this problem the machine was the answer. The second problem
was the building of an organization capable of handling the new
mechanism of production--an organization large enough, elastic enough,
stable enough and durable enough--to this problem the corporation was
the answer.

The machine produced the goods. The corporation directed the production,
marketed the products and financed both operations.

The corporation, as a means of organizing and directing business
enterprise is a product of the last hundred years. A century ago the
business of the United States was carried on by individuals,
partnerships, and a few joint stock companies. At the time of the last
Census, more than four-fifths of the manufactured products were turned
out under corporate direction; most of the important mining enterprises
were corporate, and the railroads, public utilities, banks and insurance
companies were virtually all under the corporate form of organization.
Thus the passage of a century has witnessed a complete revolution in the
form of organizing and directing business enterprise.

The corporation, as a form of business organization is immensely
superior to individual management and to the partnership.

1. The corporation has perpetual life. In the eyes of the law, it is a
person that lives for the term of its charter. Individuals die;
partnerships are dissolved; but the corporation with its unbroken
existence, possesses a continuity and a permanence that are impossible
of attainment under the earlier forms of business organization.

2. Liability, under the corporation, is limited by the amount of the
investment. The liability of an individual or a partner engaged in
business was as great as his ability to pay. The investor in a
corporation cannot lose a sum larger than that represented by his
investment.

3. The corporation, through the issuing of stocks and bonds, makes it
possible to subdivide the total amount invested in one enterprise into
many small units.[37] These chances for small investment mean that a
large number of persons may join in subscribing the capital for a
business enterprise. They also mean that one well-to-do person may
invest his wealth in a score or a hundred enterprises, thus reducing the
risk of heavy losses to a minimum.

4. The corporation is not, as were the earlier forms of organization,
necessarily a "one man" concern. Many corporations have upon their
boards of directors the leading business men, merchants, bankers and
financiers. In this way, the investing public has the assurance that the
enterprise will be conducted along business lines, while the business
men on the board have an opportunity to get in on the "ground floor."

The corporation has a permanence, a stability, and a breadth of
financial support that are quite impossible in the case of the private
venture or of the partnership. It does for business organization what
the machine did for production.

The corporation came into favor at a time when business was expanding
rapidly. Surplus was growing. Wealth and capital were accumulating.
Industrial units were increasing in size. It was necessary to find some
means by which the surplus wealth in the hands of many individuals could
be brought together, large sums of capital concentrated under one
unified control, the investments, thus secured, safeguarded against
untoward losses, and the business conservatively and efficiently
directed. The corporation was the answer to these needs.

"United we stand" proved to be as true of organizers and investors as it
was of producers. The corporation was the common denominator of people
with various industrial and financial interests.

The corporation played another rôle of vital consequence. It enabled the
banker to dominate the business world. Heretofore, the banker had dealt
largely with exchange. The industrial leader was his equal if not his
superior. The organization of the corporation put the supreme power in
the hands of the banker, who as the intermediary between investor and
producer, held the purse strings.


4. _Capitalist against Capitalist_

The early American enterprisers--the pioneers--began a single-handed
struggle with nature. Necessity forced them to coöperate. They
established a new industry. The factory brought them together. They
organized their system of industrial direction and control. The
corporation united them. They turned on one another in mortal combat,
and the frightfulness of their losses forced them to join hands.

The business men of the late nineteenth century had been nurtured upon
the idea of competition. "Every man for himself and the devil take the
hindermost" summed up their philosophy. Each person who entered the
business arena was met by an array of savage competitors whose motto was
"Victory or Death." In the struggle that followed, most of them suffered
death.

Capitalist set himself up against capitalist in bitter strife. The
railroads gouged the farmers, the manufacturers and the merchants and
fought one another. The big business organizations drove the little man
to the wall and then attacked their larger rivals. It was a fight to the
finish with no quarter asked or given.

The "finish" came with periodic regularity in the seventies, the
eighties and the nineties. The number of commercial failures in 1875 was
double the number of 1872. The number of failures in 1878 was over three
times that of 1871. The same thing happened in the eighties. The
liabilities of concerns failing in 1884 were nearly four times the
liabilities of those failing in 1880. The climax came in the nineties,
after a period of comparative prosperity. Hard times began in 1893.
Demand dropped off. Production decreased. Unemployment was widespread.
Wages fell. Prices went down, down, under bitter competitive selling,
to touch rock bottom in 1896. Business concerns continued to fight one
another, though both were going to the wall. Weakened by the struggle,
unable to meet the competitive price cutting that was all but the
universal business practice of the time, thousands of business houses
closed their doors. The effect was cumulative; the fabric of credit,
broken at one point, was weakened correspondingly in other places and
the guilty and the innocent were alike plunged into the morass of
bankruptcy.

The destruction wrought in the business world by the panic of 1893 was
enormous. The number of commercial failures for 1893 jumped to 15,242.
The amount of liabilities involved in these failures was $346,780,000.
This catastrophe, coming as it did so close upon the heels of the panics
that had immediately preceded it, could not fail to teach its lesson.
Competition was not the life, but the death of trade. "Every man for
himself" as a policy applied in the business world, led most of those
engaged in the struggle over the brink to destruction. There was but one
way out--through united action.

The period between 1897 and 1902 was one of feverish activity directed
to coördinating the affairs of the business world. Trusts were formed in
all of the important branches of industry and trade. The public looked
upon the trust as a means of picking pockets through trade conspiracies
and the boosting of prices. The Sherman Anti-Trust Law had been passed
on that assumption. In reality, the trusts were organized by far seeing
men who realized that competition was wasteful in practice and unsound
in theory. The idea that the failure of one bank or shoe factory was of
advantage to other banks and shoe factories, had not stood the test of
experience. The tragedies of the nineties had showed conclusively that
an injury to one part of the commercial fabric was an injury to all of
its parts.

The generation of business men trained since 1900 has had no illusions
about competition. Rather, it has had as its object the successful
combination of various forms of business enterprise into ever larger
units. First, there was the uniting of like industries;--cotton mills
were linked with cotton mills, mines with mines. Then came the
integration of industry--the concentration under one control of all of
the steps in the industrial process from the raw material to the
finished product,--iron mines, coal mines, blast furnaces, converters,
and rail mills united in one organization to take the raw material from
the ground and to turn out the finished steel product. Last of all there
was the union of unlike industries,--the control, by one group of
interests, of as many and as varied activities as could be brought
together and operated at a profit. The lengths to which business men
have gone in combining various industries is well shown by the recent
investigation of the meat packing industry. In the course of that
investigation, the Federal Trade Commission was able to show that the
five great packers (Wilson, Armour, Swift, Morris and Cudahy) were
directly affiliated with 108 business enterprises, including 12
rendering companies; 18 stockyard companies; 8 terminal railway
companies; 9 manufacturers of packers' machinery and supplies; 6 cattle
loan companies; 4 public service corporations; 18 banks, and a number of
miscellaneous companies, and that they controlled 2000 food products not
immediately related to the packing industry.[38]

Business is consolidated because consolidation pays--not primarily,
through the increase of prices, but through the greater stability, the
lessened costs, and the growing security that has accompanied the
abolition of competition.

Again the forces of social organization have triumphed in the face of an
almost universal opposition. American business men practiced competition
until they found that coöperation was the only possible means of
conducting large affairs. Theory advised, "Compete"! Experience warned,
"Combine"! Business men--like all other practical people--accepted the
dictates of experience as the only sound basis for procedure. Their
combination solidified their ranks, preparing them to take their places
in a closely knit, dominant class, with clearly marked interests, and a
strong feeling of class consciousness and solidarity.

It was in the consummation of these combinations, integrations and
consolidations that the investment banker came into his own as the
keystone in the modern industrial arch.


5. _The Investment Banker_

The investment banker is the directing and coördinating force in the
modern business world. The necessities of factory production demanding
great outlays of capital; the immense financial requirements of
corporations; the consolidation of business ventures on a huge scale;
the broadened use of corporate securities as investments--all brought
the investment banker into the foreground.

Before the Spanish War, the investment banker financed the trusts. After
the war he was entrusted with the vast surpluses which the concentration
of business control had placed in a few hands. Business consolidation
had given the banker position. The control of the surplus brought him
power. Henceforth, all who wished access to the world of great
industrial and commercial affairs must knock at his door.

This concentration of economic control in the hands of a relatively
small number of investment bankers has been referred to frequently as
the "Money Trust."

Investment banking monopoly, or as it is sometimes called, the "Money
Trust" was examined in detail by the Pujo Committee of the House of
Representatives, which presented a summary of its report on February 28,
1913. The committee placed, at the center of its diagram of financial
power, J. P. Morgan & Co., the National City Bank, the First National
Bank, the Guaranty Trust Co., and the Bankers Trust Co., all of New
York. The report refers to Lee, Higginson & Co., of Boston and New
York; to Kidder, Peabody & Co., of Boston and New York, and to Kuhn,
Loeb & Co., of New York, together with the Morgan affiliations, as being
"the most active agents in forwarding and bringing about the
concentration of control of money and credit" (p. 56).

The methods by which this control was effected are classed by the
Committee under five heads:--

1. "Through consolidations of competitive or potentially competitive
banks and trust companies which consolidations in turn have recently
been brought under sympathetic management" (p. 56).

2. Through the purchase by the same interests of the stock of
competitive institutions.

3. Through interlocking directorates.

4. "Through the influence which the more powerful banking houses, banks,
and trust companies have secured in the management of insurance
companies, railroads, producing and trading corporations and public
utility corporations, by means of stock holdings, voting trusts, fiscal
agency contracts, or representation upon their boards of directors, or
through supplying the money requirements of railway, industrial, and
public utility corporations and thereby being enabled to participate in
the determination of their financial and business policies" (p. 56).

5. "Through partnership or joint account arrangements between a few of
the leading banking houses, banks, and trust companies in the purchase
of security issues of the great interstate corporations, accompanied by
understandings of recent growth--sometimes called 'banking
ethics'--which have had the effect of effectually destroying competition
between such banking houses, banks, and trust companies in the struggle
for business or in the purchase and sale of large issues of such
securities" (p. 56).

Morgan & Co., the First National Bank, the National City Bank, the
Bankers Trust Co., and the Guaranty Trust Co., which were all closely
affiliated, had extended their control until they held,--


     118 directorships in 34 banks with combined resources of
     $2,679,000,000.

     30 directorships in 10 insurance companies with total assets of
     $2,293,000,000.

     105 directorships in 32 transportation systems having a total
     capital of $11,784,000,000.

     63 directorships in 24 producing and trading companies having a
     total capitalization of $3,339,000,000.

     25 directorships in 12 public utility corporations with a total
     capitalization of $2,150,000,000.


The investment banker had become, what he was ultimately bound to be,
the center of the system built upon the century-long struggle to control
the wealth of the continent in the interest of the favored few who
happened to own the choicest natural gifts.


6. _The Cohesion of Wealth_

The struggle for wealth and power, actively waged among the business men
of the United States for more than a century, has thus by a process of
elimination, subordination and survival, placed a few small groups of
strong men in a position of immense economic power. The growth of
surplus and its importance in the world of affairs has made the
investment banker the logical center of this business leadership. He,
with his immediate associates, directs and controls the affairs of the
economic world.

The spirit of competition ruled the American business world at the
beginning of the last century, the forces of combination dominated at
its close. The new order was the product of necessity, not of choice.
The life of the frontier had ingrained in men an individualism that
chafed under the restraints of combination. It was the compelling
forces of impending calamity and the opportunity for greater economic
advantage--not the traditions or accepted standards of the business
world--that led to the establishment of the centralized wealth power.
American business interests were driven together by the battering of
economic loss and lured by the hope of greater economic gains.

Years of struggle and experience, by converting a scattered,
individualistic wealth owning class into a highly organized, closely
knit, homogeneous group with its common interests in the development of
industry and the safeguarding of property rights, have brought unity and
power to the business world.

Individually the members of the wealth-controlling class have learned
that "in union there is strength"; collectively they are gripped by the
"cohesion of wealth"--the class conscious instinct of an associated
group of human beings who have much to gain and everything to lose.

FOOTNOTES:

[37] The 169 largest railroads in the United States have issued
84,418,796 shares of stock. ("American Labor Year Book," 1917-18, p.
169.) Theoretically, therefore, there might be eighty-four millions of
owners of the American railroads.

[38] Summary of the Report of the Federal Trade Commission on the Meat
Packing Industry, July 3, 1918, Wash., Govt. Print., 1918.



VIII. THEIR UNITED STATES


1. _Translating Wealth into Power_

The first object of the economic struggle is wealth. The second is
power.

At the end of their era of competition, the leaders of American business
found themselves masters of such vast stores of wealth that they were
released from the paralyzing fear of starvation, and were guaranteed the
comforts and luxuries of life. Had these men sought wealth as a means of
satisfying their physical needs their object would have been attained.

The gratification of personal wants is only a minor element in the lives
of the rich. After they have secured the things desired, they strive for
the power that will give them control over their fellows.

The possession of things, is, in itself, a narrow field. The control
over productive machinery gives him who exercises it the power to enjoy
those things which the workers with machinery produce. The control over
public affairs and over the forces that shape public opinion give him
who exercises it the power to direct the thoughts and lives of the
people. It is for these reasons that the keen, self-assertive, ambitious
men who have come to the top in the rough and tumble of the business
struggle have steadily extended their ownership and their control.


2. _The Wealth of the United States_

The bulk of American wealth, which consists for the most part of land
and buildings, is concentrated in the centers of commerce and
industry--in the regions of supreme business power.

The last detailed estimate of the wealth of the United States was made
by the Census Bureau for the year 1912. At that time, the total wealth
of the country was placed at $187,739,000,000. (The estimate for 1920 is
$500,000,000,000.) Roughly speaking, this represented an estimate of
exchangeable values. The figures, at best, are rough approximations.
Their importance lies, not in their accuracy, but in the picture which
they give of relationships.


The Total Wealth of the United States, Classified by Groups, with the
Percentage of the Total Wealth in Each Group[39]


                                               _Total Estimated
                                                    Wealth_

                                             _Amount_
                                             (000,000   _Per Cent_
             _Wealth Groups_                _Omitted_)   _of Total_

     1. Real Property (land and buildings)   $110,676       59

     2. Public Utilities (railroads, street
     railways, telegraph, telephone,
     electric light, etc.)                     26,415       14

     3. Live Stock and Machinery (live
     stock, farm implements and manufacturing
     machinery)                                13,697        7

     4. Raw Materials, Manufactured Products,
     Merchandise (including
     gold and silver bullion)                  24,193       13

     5. Personal Possessions (clothing,
     personal adornments, furniture,
     carriages, etc.)                          12,758        7

     Total of all groups                     $187,739      100


The bulk of the exchangeable wealth of the United States consists of
"productive" or "investment" property. If, to the total of 110 billions
given by the Census as the value of real property, are added the real
property values of the public utilities, the total will probably exceed
three quarters of the total wealth of the United States. If, in
addition, account is taken of the fact that much of the wealth classed
as "raw materials, etc.," is the immediate product of the land (coal,
ore, timber), some idea may be obtained of the extent to which the
estimated wealth of the country is in the form of land, its immediate
products, and buildings. Furthermore, it must be remembered that great
quantities of ore lands, timber lands, waterpower sites, etc., are
assessed at only a fraction of their total present value.

The personal property of the country is valued at less than one
fourteenth of the total wealth. It is in reality a negligible item, as
compared with the value of the real property, of the public utilities,
and of the raw materials and products of industry.

The wealth of the United States is in permanent form--land and
improvements; personal possessions are a mere incident in the total. In
truth, American wealth is in the main productive (business) wealth,
designed for the further production of goods, rather than for the
satisfaction of human wants.


3. _Ownership and Control_

Who owns this vast wealth? It is impossible to answer the question with
anything like definiteness. Figures have been compiled to show that five
per cent of the people own two-thirds to three-quarters of it; that the
poorest two-thirds of the people own five per cent of it, and that the
well-to-do or middle class own the remainder. These figures would make
it appear that more than one-fourth of the population is in the middle
class. If the income-tax returns are to be trusted this proportion is
far too high. On all hands it is admitted that the wealth of the
country is concentrated in the hands of a small fraction of the people
and the important wealth--that is, the wealth upon which production,
transportation and exchange depends--is in still fewer hands.

Neither the total wealth of the country, nor that portion of the total
which is owned directly by the propertied class is of most immediate
moment. Ownership does not necessarily involve control. A puddler in the
Gary Mills may own five shares of stock in the Steel Corporation without
ever raising his voice to determine the corporation policy. This is
ownership without control. On the other hand, a banking house through a
voting trust agreement, may control the policy of a corporation in which
it does not own one per cent of the stock. This is control without
ownership. Ownership may be quite incidental. It is control that counts
in terms of power.

Most of the property owners in the United States play no part in the
control of prices or of production, in the direction of economic policy,
or in the management of economic affairs.

Theoretically, stockholders direct the policies of corporations, and,
therefore, each holder of 5 or 10 shares of corporate stock would play a
part in deciding economic affairs. Practically, the small stockholder
has no part in business control.

The small farmer--the small business man of largest numerical
consequence--has been exploited by the great interests for two
generations. Despite his numbers and his organizations, despite his
frequent efforts, through anti-trust laws, railway control laws, banking
reform laws, and the like, he has little voice in determining important
economic policies.

The small savings bank depositor or the holder of an ordinary insurance
policy is a negative rather than a positive factor in economic control.
Not only does he exercise no power over the dollar which he has placed
with the bank or with the insurance company, but he has thereby
strengthened the hands of these organizations. Each dollar placed with
the financier is a dollar's more power for him and his.

Suppose--the impossible--that half of the families in the United States
"own property." Subtract from this number the small stockholders; the
holders of bonds, notes and mortgages; the small tradesman; the small
farmer; the home owner and the owner of a savings-bank deposit or of an
insurance policy--what remains? There are the large stockholders, the
owners and directors of important industries, public utilities, banks,
trust companies and insurance companies. These persons, in the
aggregate, constitute a fraction of one per cent of the adult population
of the United States.

Start with the total non-personal wealth of the country, subtract from
it the share-values of the small stockholders; the values of all bonds,
mortgages and notes; the property of the small tradesman and the small
farmer; the value of homes--what remains? There are left the stocks in
the hands of the big stockholders; the properties owned and directed by
the owners and directors of important industries, public utilities,
banks, trust companies and insurance companies. This wealth in the
aggregate probably makes up less than 10 per cent of the total wealth of
the country and yet the tiny fraction of the population which owns this
wealth can exercise a dictatorial control over the economic policies
that underlie American public life.


4. _The Avenues of Mastery_

While control rests back directly or indirectly upon some form of
ownership, most owners exercise little or no control over economic
affairs. Instead they are made the victims of a social system under
which one group lives at the expense of another.

Against this tendency toward control by one group or class (usually a
minority) over the lives of another group or class (usually a majority)
the human spirit always has revolted. The United States in its earlier
years was an embodiment of the spirit of that revolt. President Wilson
characterized it excellently in 1916. Speaking of the American Flag, he
said,--"That flag was originally stained in very precious blood, blood
spilt, not for any dynasty, nor for any small controversies over
national advantage, but in order that a little body of three million men
in America might make sure that no man was their master."[40]

Against mastery lovers of liberty protest. Mastery means tyranny;
mastery means slavery.

Mastery has always been based upon some form of ownership. There is in
the United States a group, growing in size, of people who take more in
keep than they give in service; people who own land; franchises; stocks
and bonds and mortgages; real estate and other forms of investment
property; people who are living without ever lifting a finger in toil,
or giving anything in labor for an unceasing stream of necessaries,
comforts and luxuries. These people, directly or indirectly, are the
owners of the productive machinery of the United States.

Historically there have been a number of stages in the development of
mastery. First, there was the ownership of the body. One man owned
another man, as he might own a house or a pile of hides. At another
stage, the owner of the land--the feudal baron or the landlord--said to
the tenant, who worked on his land: "You stay on my land. You toil and
work and make bread and I will eat it." The present system of mastery is
based on the ownership by one group of people, of the productive wealth
upon which depends the livelihood of all. The masters of present day
economic society have in their possession the natural resources, the
tools, the franchises, patents, and the other phases of the modern
industrial system with which the people must work in order to live. The
few who own and control the productive wealth have it in their power to
say to the many who neither own nor control,--"You may work or you may
not work." If the masses obtain work under these conditions the owners
can say to them further,--"You work, and toil and earn bread and we will
eat it." Thus the few, deriving their power from the means by which
their fellows must work for a living, own the jobs.


5. _The Mastery of Job-Ownership_

Job-ownership is the foundation of the latest and probably the most
complete system of mastery ever perfected. The slave was held only in
physical bondage. Behind serfdom there was land ownership and a
religious sanction. "Divine right" and "God's anointed," were terms used
to bulwark the position of the owning class, who made an effort to
dominate the consciences as well as the bodies of their serfs.
Job-ownership owes its effectiveness to a subtle, psychological power
that overwhelms the unconscious victim, making him a tool, at once easy
to handle and easy to discard.

The system of private ownership that succeeded Feudalism taught the
lesson of economic ambition so thoroughly that it has permeated the
whole world. The conditions of eighteenth century life have passed,
perhaps forever, but its psychology lingers everywhere.

The job-holder has been taught that he must "get ahead" in the world;
that if he practices the economic virtues,--thrift, honesty,
earnestness, persistence, efficiency--he will necessarily receive great
economic reward; that he must support his family on the standard set by
the community, and that to do all of these essential things, he must
take a job and hold on to it. Having taken the job, he finds that in
order to hold it, he must be faithful to the job-owner, even if that
involves faithlessness to his own ideas and ideals, to his health, his
manhood, and the lives of his wife and children.

The driving power in slavery was the lash. Under serfdom it was the
fear of hunger. The modern system of job-ownership owes its
effectiveness to the fact that it has been built upon two of the most
potent driving forces in all the world--hunger and ambition--the driving
force that comes from the empty stomach and the driving force that comes
from the desire for betterment. Thus job-owning, based upon an automatic
self-drive principle, enables the job-owner to exact a return in
faithful service that neither slavery nor serfdom ever made possible.
Job-owning is thus the most thorough-going form of mastery yet devised
by the ingenuity of man.

Unlike the slave owner and the Feudal lord the modern job-owner has no
responsibility to the job-holder. The slave owner must feed, clothe and
house his slave--otherwise he lost his property. The Feudal lord must
protect and assist his tenant. That was a part of his bargain with his
overlord. The modern job-owner is at liberty, at any time, to
"discharge" the job-holder, and by throwing him out of work take away
his chance of earning a living. While he keeps the job-holder on his
payroll, he may pay him impossibly low wages and overwork him under
conditions that are unfit for the maintenance of decent human life.
Barring the factory laws and the health laws, he is at liberty to impose
on the job-holder any form of treatment that the job-holder will
tolerate.

There is no limit to the amount of industrial property that one man may
own. Therefore, there is no limit to the number of jobs he may control.
It is possible (not immediately likely) that one coterie of men might
secure possession of enough industrial property to control the jobs of
all of the gainfully occupied people in American industry. If this
result could be achieved, these tens of millions would be able to earn a
living only in case the small coterie in control permitted them to do
so.

Job ownership is built, of necessity, on the ownership of land,
resources, capital, credit, franchises, and other special privileges.
But its power of control goes far beyond this mere physical ownership
into the realms of social psychology.

The early colonists, who fled from the economic, political, social and
religious tyranny of feudalism, believed that liberty and freedom from
unjust mastery lay in the private ownership of the job. They had no
thought of the modern industrial machine.

The abolitionists who fought slavery believed that freedom and liberty
could be obtained by unshackling the body. They did not foresee the
shackled mind.

The modern world, seeking freedom; yearning for liberty and justice;
aiming at the overthrow of the mastery that goes with irresponsible
power, finds to its dismay that the ownership of the job carries with
it, not only economic mastery, but political, social and even religious
mastery, as well.


6. _The Ownership of the Product_

The industrial overlord holds control of the job with one hand. With the
other he controls the product of industry. From the time the raw
material leaves the earth in the form of iron ore, crude petroleum,
logs, or coal, through all of the processes of production, it is owned
by the industrial master, not by the worker. Workers separate the
product from the earth, transport it, refine it, fabricate it. Always,
the product, like the machinery, is the possession of the owning class.

While industry was competitive, the pressure of competition kept prices
at a cost level, and the exploiting power of the owner was confined to
the job-holder. To-day, through combinations and consolidations,
industry has ceased to be competitive, and the exploiting power of the
job-owner is extended through his ownership of the product.

The modern town-dweller is almost wholly in the hands of the private
owners of the products upon which he depends. The ordinary city dweller
spends two-fifths of his income for food; one-fifth for rent, fuel and
light, and one-fifth for clothes. Food, houses, fuel (with the exception
of gas supply in some cities), and clothing are privately owned. The
public ownership of streets and water works, of some gas, electricity,
street cars, and public markets, is a negligible factor in the problem.
The private monopolist has the upper hand and he is able through the
control of transportation, storage, and merchandising facilities, to
make handsome profits for the "service" which he renders the consumer.


7. _The Control of the Surplus_

The wealth owners are doubly entrenched. They own the jobs upon which
most families depend for a living. They own the necessaries of life
which most families must purchase in order to live. Further, they
control the surplus wealth of the community.

There are three principal channels of surplus. First of all there is the
surplus laid aside by business concerns, reinvested in the business,
spent for new equipment and disposed of in other ways that add to the
value of the property. Second, there are the 19,103 people in the United
States with incomes of $50,000 or more per year; the 30,391 people with
incomes of $25,000 to $50,000 per year and the 12,502 people with
incomes of $10,000 to $25,000 per year. (Figures for 1917.) Many, if not
most of these rich people, carry heavy insurance, invest in securities,
or in some other way add to surplus. In the third place there are the
small investors, savings-bank depositors, insurance policy holders who,
from their income, have saved something and have laid it aside for the
rainy day. The masters of economic life--bankers, insurance men,
property holders, business directors--are in control of all three forms
of surplus.

The billions of surplus wealth that come each year under the control of
the masters carry with them an immense authority over the affairs of the
community. The owners of wealth owe much of their immediate power to
the fact that they control this surplus, and are in a position to direct
its flow into such channels as they may select.


8. _The Channels of Public Opinion_

No one can question the control which business interests exercise over
the jobs, the industrial product, and the economic surplus of the
community. These facts are universally admitted. But the corollaries
which flow naturally from such axioms are not so readily accepted. Yet
given the economic power of the business world, the control over the
channels of public opinion and over the machinery of government follows
as a matter of course.

The channels of public opinion--the school, the press, the pulpit,--are
not directly productive of tangible economic goods, yet they depend upon
tangible economic goods for their maintenance. Whence should these goods
come? Whence but from the system that produces them, through the men who
control that system! The plutocracy exercises its power over the
channels of public opinion in two ways,--the first, by a direct or
business office control; and second, by an indirect or social prestige
control.

The business office control is direct and simple. Schools, colleges,
newspapers, magazines and churches need money. They cannot produce
tangible wealth directly, and they must, therefore, depend upon the
surplus which arises from the productive activities of the economic
world. Who controls that surplus? Business men. Who, then, is in a
position to dictate terms in financial matters? Who but the dominant
forces in business life?

The facts are incontrovertible. It is not mere chance that recruits the
overwhelming majority of school-board members, college trustees,
newspaper managers, and church vestrymen, from the ranks of successful
business and professional men. It is necessary for the educator, the
journalist, and the minister to work through these men in order to
secure the "sinews of war." They are at the focal points of power
because they control the sources of surplus wealth.

The second method of maintaining control--through the control of social
prestige--is indirect, but none the less effective. The young man in
college; the young graduate looking for a job; the young man rising in
his profession, and the man gaining ascendancy in his chosen career are
brought into constant contact with the "influential" members of the
business world. It is the business world that dominates the clubs and
the vacation spots; it is the business world that is met in church, at
the dinner tables and at the social gathering.

The man who would "succeed" must retain the favor of this group. He does
so automatically, instinctively or semi-consciously--it is the common,
accepted practice and he falls in line.

The masters need not bribe. They need not resort to illegal or unethical
methods. The ordinary channels of advertising, of business acquaintance
and patronage, of philanthropy and of social intercourse clinch their
power over the channels of public opinion.


9. _The Control of Political Machinery_

The American government,--city, state and nation--is in almost the same
position as the schools, newspapers and churches. It does not turn out
tangible, economic products. It depends, for its support, upon taxes
which are levied, in the first instance, upon property. Who are the
owners of this property? The business interests. Who, therefore, pay the
bills of the government? The business interests.

Nowhere has the issue been stated more clearly or more emphatically than
by Woodrow Wilson in certain passages of his "New Freedom." As a student
of politics and government--particularly the American Government--he
sees the power which those who control economic life are able to
exercise over public affairs, and realizes that their influence has
grown, until it overtops that of the political world so completely that
the machinery of politics is under the domination of the organizers and
directors of industry.

"We know," writes Mr. Wilson in "The New Freedom," "that something
intervenes between the people of the United States and the control of
their own affairs at Washington. It is not the people who have been
ruling there of late" (p. 28). "The masters of the government of the
United States are the combined capitalists and manufacturers of the
United States.... Suppose you go to Washington and try to get at your
government. You will always find that while you are politely listened
to, the men really consulted are the men who have the biggest
stakes--the big bankers, the big manufacturers, the big masters of
commerce, the heads of railroad corporations and of steamship
corporations.... Every time it has come to a critical question, these
gentlemen have been yielded to and their demands have been treated as
the demands that should be followed as a matter of course. The
government of the United States at present is a foster-child of the
special interests" (p. 57-58). "The organization of business has become
more centralized, vastly more centralized, than the political
organization of the country itself" (p. 187). "An invisible empire has
been set up above the forms of democracy" (p. 35). "We are all caught in
a great economic system which is heartless" (p. 10).

This is the direct control exercised by the plutocracy over the
machinery of government. Its indirect control is no less important, and
is exercised in exactly the same way as in the case of the channels of
public opinion.

Lawyers receive preferment and fees from business--there is no other
large source of support for lawyers. Judges are chosen from among these
same lawyers. Usually they are lawyers who have won preferment and
emolument. Legislators are lawyers and business men, or the
representatives of lawyers and business men. The result is as logical as
it is inevitable.

The wealth owners control the machinery of government because they pay
the taxes and provide the campaign funds. They control public officials
because they have been, are, or hope to be, on the payrolls, or
participants in the profits of industrial enterprises.


10. _It is "Their United States"_

The man fighting for bread has little time to "turn his eyes up to the
eternal stars." The western cult of efficiency makes no allowances for
philosophic propensities. Its object is product and it is satisfied with
nothing short of that sordid goal.

The members of the wealth owning class are relieved from the food
struggle. Their ownership of the social machinery guarantees them a
secure income from which they need make no appeal. These privileges
provide for them and theirs the leisure and the culture that are the
only possible excuse for the existence of civilization.

The propertied class, because it owns the jobs, the industrial products,
the social surplus, the channels of public opinion and the political
machinery also enjoys the opportunity that goes with adequately assured
income, leisure and culture.

The members of the dominant economic class hold a key--property
ownership--which opens the structure of social wealth. Those who have
access to this key are the blessed ones. Theirs are the things of this
world.

The property owners enjoy the fleshpots. They hold the vantage points.
The vital forces are in their hands. Economically, politically,
socially, they are supreme.

If the control of material things can make a group secure, the wealth
owners in the United States are secure. They hold property, prestige,
power.

The phrase "our United States" as used by the great majority of the
people is a misnomer. With the exception of a theoretically valuable but
practically unimportant right called "freedom of contract," the majority
of the wage earners in the United States have no more excuse for using
the phrase "our United States" than the slaves in the South, before the
war, for saying "our Southland."

The franchise is a potential power, making it theoretically possible for
the electorate to take possession of the country. In practice, the
franchise has had no such result. Quite the contrary, the masters of
American life by a policy of chicanery and misrepresentation, advertise
and support first one and then the other of the "Old Parties," both of
which are led by the members of the propertied class or by their
retainers. The people, deluded by the press, and ignorant of their real
interests, go to the polls year after year and vote for representatives
that represent, in all of their interests, the special privileged
classes.

The economic and social reorganization of the United States during the
past fifty years has gone fast and far. The system of perpetual (fee
simple) private ownership of the resources has concentrated the control
over the natural resources in a small group, not of individuals,
but of corporations; has created a new form of social master, in
the form of a land-tool-job owner; has thus made possible a type of
absentee-landlordism more effective and less human than were any of its
predecessors and has decreased the responsibility at the same time that
it has augmented the power of the owning group. These changes have been
an integral part of a general economic transformation that has occupied
the chief energies of the ablest men of the community for the past two
generations.

The country of many farms, villages and towns, and of a few cities, with
opportunity free and easy of access, has become a country of highly
organized concentrated wealth power, owned by a small fraction of the
people and controlled by a tiny minority of the owners for their benefit
and profit. The country which was rightfully called "our United States"
in 1840, by 1920 was "their United States" in every important sense of
the word.

FOOTNOTES:

[39] "Estimated Valuation of National Wealth, 1850-1912," Bureau of the
Census, 1915, p. 15.

[40] "Addresses of President Wilson," House Doc. 803. Sixty-fourth
Congress, 1st Session (1916), p. 13.



IX. THE DIVINE RIGHT OF PROPERTY


1. _Land Ownership and Liberty_

The owners of American wealth have been molded gradually into a ruling
class. Years of brutal, competitive, economic struggle solidified their
ranks,--distinguishing friend from enemy; clarifying economic laws, and
demonstrating the importance of coördination in economic affairs.
Economic control, once firmly established, opened before the wealth
owning class an opportunity to dominate the entire field of public life.

Before the property owners could feel secure in their possessions, steps
must be taken to transmute the popular ideas regarding "property rights"
into a public opinion that would permit the concentration of important
property in the hands of a small owning class, at the same time that it
held to the conviction that society, without privately owned land and
machinery, was unthinkable.

Many of the leading spirits among the colonists had come to America in
the hope of realizing the ideal of "Every man a farm, and every farm a
man." Upon this principle they believed that it would be possible to set
up the free government which so many were seeking in those dark days of
the divine right of kings.

For many years after the organization of the Federal Government men
spoke of the public domain as if it were to last indefinitely. As late
as 1832 Henry Clay, in a discussion of the public lands, could say, "We
should rejoice that this bountiful resource possessed by our country,
remains in almost undiminished quantity." Later in the same speech he
referred to the public lands as being "liberally offered,--in
exhaustless quantities, and at moderate prices, enriching individuals
and tending to the rapid improvement of the country."[41]

The land rose in price as settlers came in greater numbers. Land booms
developed. Speculation was rife. Efforts were made to secure additional
concessions from the Government. It was in this debate, where the public
land was referred to as "refuse land" that Henry Clay felt called upon
to remind his fellow-legislators of the significance and growing value
of the public land. He said, "A friend of mine in this city bought in
Illinois last fall about two thousand acres of this refuse land at the
minimum price, for which he has lately refused six dollars per acre....
It is a business, a very profitable business, at which fortunes are made
in the new states, to purchase these refuse lands and without improving
them to sell them at large advances."[42]

A century ago, while it was still almost a wilderness, Illinois began to
feel the pressure of limited resources--a pressure which has increased
to such a point that it has completely revolutionized the system of
society that was known to the men who established the Government of the
United States.

This early record of a mid-western land boom, with Illinois land at six
dollars an acre, tells the story of everything that was to follow. Even
in 1832 there was not enough of the good land to go around. Already the
community was dividing itself into two classes--those who could get good
land and those who could not. A wise man, understanding the part played
by economic forces in determining the fate of a people, might have said
to Henry Clay on that June day in 1832, "Friend, you have pronounced the
obituary of American liberty."

Some wise man might have spoken thus, but how strange the utterance
would have sounded! There was so much land, and all history seemed to
guarantee the beneficial results that are derived from individual land
ownership. The democracies of Greece and Rome were built upon such a
foundation. The yeomanry of England had proved her pride and stay. In
Europe the free workers in the towns had been the guardians of the
rights of the people. Throughout historic times, liberty has taken root
where there is an economic foundation for the freedom which each man
feels he has a right to demand.


2. _Security of "Acquisitions"_

Feudal Europe depended for its living upon agriculture. The Feudal
System had concentrated the ownership of practically all of the valuable
agricultural land in the hands of the small group of persons which ruled
because it controlled economic opportunity. The power of this class
rested on its ownership of the resource upon which the majority of the
people depended for a livelihood.

The Feudal System was transplanted to England, but it never took deep
root there. When in 1215 A. D. (only a century and a half after the
Great William had made his effort to feudalize England) King John signed
the Magna Carta, Feudalism proper gave way to landlordism--the basis of
English economic life from that time to this.

The system of English landlordism (which showed itself at its worst in
the absentee landlordism of Ireland) differed from Feudalism in this
essential respect,--Feudalism was based upon the idea of the divine
right of kings. English landlordism was based on the idea of divine
right of property. English landlordism is the immediate ancestor of the
property concept that is universally accepted in the business world of
to-day.

The evils of Feudalism and of landlordism were well known to the
American colonists who were under the impression that they arose not
from the fact of ownership, but from the concentration of ownership. The
resources of the new world seemed limitless, and the possibility that
landlordism might show its ugly head on this side of the Atlantic was
too remote for serious consideration.

With the independence of the United States assured after the War of
1812; with the growth of industry, and the coming of tens of thousands
of new settlers, the future of democracy seemed bright. Daniel Webster
characterized the outlook in 1821 by saying, "A country of such vast
extent, with such varieties of soil and climate, with so much public
spirit and private enterprise, with a population increasing so much
beyond former examples, ... so free in its institutions, so mild in its
laws, so secure in the title it confers on every man to his own
acquisitions,--needs nothing but time and peace to carry it forward to
almost any point of advancement."[43]

"So free in its institutions, so mild in its laws, so secure in the
title it confers on every man to his own acquisitions,"--the words were
prophetic. At the moment when they were uttered the forces were busy
that were destined to realize Webster's dream, on an imperial scale, at
the expense of the freedom which he prized. Men were free to get what
they could, and once having secured it, they were safeguarded in its
possession. Property ownership was a virtue universally commended.
Constitutions were drawn and laws were framed to guarantee to property
owners the rights to their property, even in cases where this property
consisted of the bodies of their fellow men.

The movement toward the protection of property rights has been
progressive. Webster as a representative of the dominant interests of
the country a hundred years ago rejoiced that every man had a secure
title to "his own acquisitions," at a time when the property of the
country was generally owned by those who had expended some personal
effort in acquiring it. It was a long step from these personal
acquisitions to the tens of billions of wealth in the hands of
twentieth century American corporations. Daniel Webster helped to bridge
the gap. He was responsible, at least in part, for the Dartmouth College
Decision (1816) in which the Supreme Court ruled that a charter, granted
by a state, is a contract that cannot be modified at will by the state.
This decision made the corporation, once created and chartered, a free
agent. Then came the Fourteenth Amendment with its provision that "no
state shall make or enforce any law which shall abridge the privileges
or immunities of citizens of the United States; nor shall any state
deprive any person of life, liberty or property, without due process of
law." The amendment was intended to benefit negroes. It has been used to
place property ownership first among the American beatitudes.

Corporations are "persons" in the eyes of the law. When the state of
California tried to tax the property of the Southern Pacific Railroad at
a rate different from that which it imposed on persons, the Supreme
Court declared the law unconstitutional. This decision, coupled with
that in the Dartmouth College Case secured for a corporation "the same
immunities as any other person; and since the charter creating a
corporation is a contract, whose obligation cannot be impaired by the
one-sided act of a legislature, its constitutional position, as property
holder, is much stronger than anywhere in Europe." These decisions "have
had the effect of placing the modern industrial corporation in an almost
impregnable constitutional position."[44]

Surrounded by constitutional guarantees, armed with legal privileges and
prerogatives and employing the language of liberty, the private property
interests in the United States have gone forward from victory to
victory, extending their power as they increased and concentrated their
possessions.


3. _Safeguarding Property Rights_

The efforts of Daniel Webster and his contemporaries to protect
"acquisitions" have been seconded, with extraordinary ability, by
business organizers, accountants, lawyers and bankers, who have
broadened the field of their endeavors until it includes not merely
"acquisitions," but all "property rights." Daniel Webster lived before
the era of corporations. He thought of "acquisitions" as property
secured through the personal efforts of the human being who possessed
it. To-day more than half of the total property and probably more than
three-quarters of productive wealth is owned by corporations. It
required ability and foresight to extend the right of "acquisitions" to
the rights of corporate stocks and bonds. The leaders among the property
owners possessed the necessary qualifications. They did their work
masterfully, and to-day corporate property rights are more securely
protected than were the rights of acquisitions a hundred years ago.

The safeguards that have been thrown about property are simple and
effective. They arose quite naturally out of the rapidly developing
structure of industrialism.

_First_--There was an immense increase in the amount of property and of
surplus in the hands of the wealth-owning class. After the new industry
was brought into being with the Industrial Revolution, economic life no
longer depended so exclusively upon agricultural land. Coal, iron,
copper, cement, and many other resources could now be utilized, making
possible a wider field for property rights. Again, the amount of surplus
that could be produced by one worker, with the assistance of a machine,
was much greater than under the agricultural system.

_Second_--The new method of conducting economic affairs gave the
property owners greater security of possession. Property holders always
have been fearful that some fate might overtake their property, forcing
them into the ranks of the non-possessors. When property was in the form
of bullion or jewels, the danger of loss was comparatively great. The
Feudal aristocracy, with its land-holdings, was more secure.
Land-holdings were also more satisfactory. Jewels and plate do not pay
any rent, but tenants do. Thus the owner of land had security plus a
regular income.

The corporation facilitated possession by providing a means (stocks and
bonds) whereby the property owner was under no obligation other than
that of clipping coupons or cashing interest checks upon "securities"
that are matters of public record; issued by corporations that make
detailed financial reports, and that are subject to vigorous public
inspection and, in the cases of banks and other financial organizations,
to the most stringent regulation.

_Third_--Greater permanence has been secured for property advantages.
Corporations have perpetual, uninterrupted life. The deaths of persons
do not affect them. The corporation also overcame the danger of the
dissipation of property in the process of "three generations from shirt
sleeves to shirt sleeves." The worthless son of the thrifty parent may
still be able to squander his inheritance, but that simply means a
transfer of the title to his stocks and bonds. The property itself
remains intact.

_Fourth_--Property has secured a claim on income that is, in the last
analysis, prior to the claim of the worker.

When a man ran his own business, investing his capital, putting back
part of his earnings, and taking from the business only what he needed
for his personal expenses, "profits" were a matter of good fortune.
There were "good years" and "bad years," when profits were high or low.
Many years closed with no profit at all. The average farmer still
handles his business in that way.

The incorporation of business, and the issuing of bonds and stocks has
revolutionized this situation. It is no longer possible to "wait till
things pick up." If the business has issued a million in bonds, at five
per cent, there is an interest charge of $50,000 that must be met each
year. There may be no money to lay out for repairs and needed
improvements, but if the business is to remain solvent, it must pay the
interest on its bonds.

Businesses that are issuing securities to the public face the same
situation with regard to their stocks. Wise directors see to it that a
regular rate, rather than a high rate of dividends, is paid. Regularity
means greater certainty and stability, hence better consideration from
the investing public.

_Fifth_--The practices of the modern economic world have gone far to
increase the security of property rights.

Business men have worked ardently to "stabilize" business. They have
insisted upon the importance of "business sanity;" of conservatism in
finance; of the returns due a man who risks his wealth in a business
venture; and of the fundamental necessity of maintaining business on a
sound basis. After centuries of experiment they have evolved what they
regard as a safe and sane method of financial business procedure. Every
successful business man tried to live up to the following
well-established formula.

First, he pays out of his total returns, or gross receipts, the ordinary
costs of doing business--materials, labor, repairs and the like. These
payments are known as running expenses or up-keep.

Second, after up-keep charges are paid he takes the remainder, called
gross income, and pays out of it the fixed charges--taxes, insurance,
interest and depreciation.

Third, the business man, having paid all of the necessary expenses of
doing business (the running expenses and the fixed charges), has left a
fund (net income) which, roughly speaking, is the profits of the
business. Out of this net income, dividends are paid, improvements and
extensions of the plant are provided for.

Fourth, the careful business man increases the stability of his
business by adding something to his surplus or undivided profits.

The operating statistics of the United Steel Corporation for 1918
illustrate the principle:


     1. Gross Receipts                         $1,744,312,163
       Manufacturing and Operating expenses
       including ordinary repairs               1,178,032,665
                                              ---------------
     2. Gross Earnings                         $  566,279,498
       Other income                                40,474,823
                                              ---------------
                                               $  606,754,321

       General Expense, (including commission
       and selling expense, taxes, etc.)          337,077,986
       Interest, depreciation, sinking fund, etc. 144,358,958
                                               --------------
     3. Net Income                             $  125,317,377
       Dividends                                   96,382,027
                                               --------------
     4. Surplus for the year                   $   28,935,350
       Total surplus                              460,596,154


Like every carefully handled business, the Steel Corporation,--


     1. Paid its running expenses,
     2. Paid its fixed obligations,
     3. Divided up its profits,
     4. And kept a nest egg.


The effectiveness of such means of stabilizing property income is
illustrated by a compilation (published in the _Wall Street Journal_ for
August 7th, 1919) of the business of 104 American corporations between
December 31, 1914, and December 31, 1918. The inventories--value of
property owned--had increased from 1,192 millions to 2,624 millions of
dollars; the gain in surplus, during the four years, was 1,941
millions; the increase in "working capital" was 1,876 millions. These
corporations, representing only a small fraction of the total business
of the country, had added billions to their property values during the
four years.

These various items,--up-keep; depreciation; insurance; taxes; interest;
dividends and surplus,--are recognized universally by legislatures and
courts as "legitimate" outlays. They, therefore, are elements that are
always present in the computation of a "fair" price. The cost to the
consumer of coffee, shoes, meat, blankets, coal and transportation are
all figured on such a basis. Hence, it will be seen that each time the
consumer buys a pair of shoes or a pound of meat, he is paying, with
part of his money, for the stabilizing of property.

Fifth. Property titles under this system are rendered immortal. A
thousand dollars, invested in 1880 in 5 per cent. 40 year bonds, will
pay to the owner $2,000 in interest by 1920, at which time the owner
gets his original thousand back again to be re-invested so long as he
and his descendants care to do so. The dollar, invested in the business
of the steel corporation, by the technical processes of bookkeeping, is
constantly renewed. Not only does it pay a return to the owner, but
literally, it never dies.

The community is built upon labor. Its processes are continued and its
wealth is re-created by labor. The men who work on the railroad keep the
road operating; those who own the railroad owe to it no personal fealty,
and perform upon it no personal service. If the worker dies, the train
must stop until he is replaced; if the owner dies, the clerk records a
change of name in the registry books.

The well-ordered society will encourage work. It will aim to develop
enthusiasm, to stimulate activity. Nevertheless, in "practical America"
a scheme of economic organization is being perfected under which the
cream of life goes to the owners. They have the amplest opportunities.
They enjoy the first fruits.


4. _Property Rights and Civilization_

Under these circumstances, it is easy to see how "the rights of
property" soon comes to mean the same thing as "civilization," and how
"the preservation of law and order" is always interpreted as the
protection of property. With a community organized on a basis which
renders property rights supreme in all essential particulars, it is but
natural that the perpetuation of these rights should be regarded as the
perpetuation of civilization itself.

The present organization of economic life in the United States permits
the wealth owners through their ownership to live without doing any work
upon the work done by their fellows. As recipients of property income
(rent, interest and dividends) they have a return for which they need
perform no service,--a return that allows them to "live on their
income."

The man who fails to assist in productive activity gives nothing of
himself in return for the food, clothing and shelter which he
enjoys,--that is, he lives on the labor of others. Where some have sowed
and reaped, hammered and drilled, he has regaled himself on the fruits
of their toil, while never toiling himself.

The matter appears most clearly in the case of an heir to an estate. The
father dies, leaving his son the title deeds to a piece of city land. If
he has no confidence in his son's business ability or if his son is a
minor, he may leave the land in trust, and have it administered in his
son's interest by some well organized trust company. The father did not
make the land, though he did buy it. The son neither made nor bought the
land, it merely came to him; and yet each year he receives a
rent-payment upon which he is able to live comfortably without doing any
work. It must at once be apparent that this son of his father,
economically speaking, performs no function in the community, but merely
takes from the community an annual toll or rental based on his ownership
of a part of the land upon, which his fellowmen depend for a living. Of
what will this toll consist? Of bread, shoes, motor-cars, cigars, books
and pictures,--the products of the labor of other men.

This son of his father is living on his income,--supported by the labor
of other people. He performs no labor himself, and yet he is able to
exist comfortably in a world where all of the things which are consumed
are the direct or indirect product of the labor of some human being.

Living on one's income is not a new social experience, but it is
relatively new in the United States. The practice found a reasonably
effective expression in the feudalism of medieval Europe. It has been
brought to extraordinary perfection under the industrialism of Twentieth
Century America.

Imagine the feelings of the early inhabitants of the American colonies
toward those few gentlemen who set themselves up as economically
superior beings, and who insisted upon living without any labor, upon
the labor performed by their fellows. It was against the suggestion of
such a practice that Captain John Smith vociferated his famous "He that
will not work, neither shall he eat." The suggestion that some should
share in the proceeds of community life without participating in the
hardships that were involved in making a living seemed preposterous in
those early days.

To-day, living on one's income is accepted in every industrial center of
the United States as one of the methods of gaining a livelihood. Some
men and women work for a living. Other men and women own for a living.

Workers are in most cases the humble people of the community. They do
not live in the finest homes, eat the best food, wear the most elaborate
clothing, or read, travel and enjoy the most of life.

The owners as a rule are the well-to-do part of the community. They
derive much of all of their income from investments. The return which
they make to the community in services is small when compared with the
income which they receive from their property holdings.

Living on one's income is becoming as much a part of American economic
life as living by factory labor, or by mining, or by manufacturing, or
by any other occupation upon which the community depends for its
products. The difference between these occupations and living on one's
income is that they are relatively menial, and it is relatively
respectable, that is, they have won the disapprobation and it has won
the approbation of American public opinion.

The best general picture of the economic situation that permits a few
people to live on their incomes, while the masses of the people work for
a living, is contained in the reports of the Federal Commissioner of
Internal Revenue. The figures for 1917 ("Statistics of Income for 1917"
published August 1919) show that 3,472,890 persons filed returns, making
one for each six families in the United States. Almost one half of the
total number of returns made in 1917 were from persons whose income was
between $1000 and $2000. There were 1,832,132 returns showing incomes of
$2000 or more, one for each twelve families in the country.

The number of persons receiving the higher incomes is comparatively
small. There were 270,666 incomes between $5,000 and $10,000; 30,391
between $10,000 and $25,000; 12,439 between $25,000 and $50,000. There
were 432,662 returns (22 for each 1000 families in the United States)
showing incomes of $5,000 or over; there were 161,996 returns (8 returns
for each 1000 families) showing incomes of $10,000 or over; 49,494
showing incomes of $25,000 and over; 19,103 showing incomes of $50,000
and more. Thus the number of moderate and large incomes, compared with
the total population of the country, was minute.

The portion of the report that is of particular interest, in so far as
the present study is concerned, is that which presents a division of the
total net income of those reporting $2,000 or more, into three
classes--income from personal service, income from business profits and
income from the ownership of property.


                 PERSONAL INCOMES BY SOURCES--1917

                                      _Amount of_    _Per Cent_
                                      _Income_       _of Total_
               _Source_                               _Income_
     1. Income from personal service;
     salaries, wages; commission,
     bonuses, director's
     fees, etc                         $ 3,648,437,902   30.21

     2. Income from business; business,
     trade, commerce,
     partnership, farming, and
     profits from sales of real
     estate, stocks, bonds, and
     other property                      3,958,670,028   32.77

     3. Income from property; rents
     and royalties                         684,343,399    5.67
     Interest on bonds, notes, etc.        936,715,456    7.76
     Dividends                           2,848,842,499   23.59
     Total from Property                 4,469,901,354   37.02

     4. Total income                    12,077,009,284  100.00


Those persons who have incomes of $2,000 or more receive 30 cents on the
dollar in the form of wages and salaries; 33 cents in the form of
business profits, and 37 cents in the form of incomes from the ownership
of property. The dividend payments alone--to this group of property
owners, are equal to three quarters of the total returns for personal
service.

These figures refer, of course, to all those in receipt of $2,000 or
more per year. Obviously, the smaller incomes are in the form of wages,
salaries, and business profits, while the larger incomes take the form
of rent, interest and dividends. This is made apparent by a study of the
detailed tables published in connection with the "Income Statistics for
1916."

Among those of small incomes--$5,000 to $10,000--nearly half of the
income was derived from personal services. The proportion of the income
resulting from personal service diminished steadily as the incomes rose
until, in the highest income group--those receiving $2,000,000 or more
per year, less than one-half of one per cent. was the result of personal
service while more than 99 per cent. of the incomes came from property
ownership.

A small portion of the American people are in receipt of incomes that
necessitate a report to the revenue officers. Among those persons, a
small number are in receipt of incomes that might be termed
large--incomes of $10,000 or over, for example. Among these persons with
large incomes the majority of the income is secured in the form of rent,
interest, dividends and profits. The higher the income group, the larger
is the percentage of the income that comes from property holdings.

The economic system that exists at the present time in the United States
places a premium on property ownership. The recipients of the large
incomes are the holders of the large amounts of property.

Large incomes are property incomes. The rich are rich because they are
property owners. Furthermore, the organization of present-day business
makes the owner of property more secure--far more secure in his income,
than is the worker who produces the wealth out of which the property
income is paid.


5. _Plutocracy_

The owning class in the United States is established on an economic
basis,--the private ownership of the earth. No more solid foundation for
class integrity and class power has ever been discovered.

The owners of the United States are powerfully entrenched. Operating
through the corporation, its members have secured possession of the bulk
of the more useful resources, the important franchises and the
productive capital. Where they do not own outright, they control. The
earth, in America, is the landlords and the fullness thereof. They own
the productive machinery, and because they own they are able to secure a
vast annual income in return for their bare ownership.

Families which enjoy property income have one great common
interest--that of perpetuating and continuing the property income; hence
the "cohesion of wealth." "The cohesion of wealth" is a force that welds
individuals and families who receive property income into a unified
group or class.

The cohesion of wealth is a force of peculiar social significance. It
might perhaps be referred to as the class consciousness of the wealthy
except that it manifests itself among people who have recently acquired
wealth, more violently, in some cases, than it appears among those whose
families have possessed wealth for generations. Then, the cohesion of
wealth is not always an intelligent force. In the case of some persons
it is largely instinctive.

Originally, the cohesion of wealth expresses itself instinctively among
a group of wealth owners. They may be competing fiercely as in the case
of a group of local banks, department stores, or landlords, but let a
common enemy appear, with a proposition for currency reform, labor
legislation or land taxation and in a twinkling the conflicting
interests are thrown to the winds and the property owners are welded
into a coherent, unified group. This is the beginning of a wealth
cohesion which develops rapidly into a wealth consciousness.

American business, a generation ago, was highly competitive. Each
business man's hand was raised against his neighbor and the downfall of
one was a matter of rejoicing for all. The bitter experience of the
nineties drove home some lessons; the struggles with labor brought some
more; the efforts at government regulations had their effect; but most
of all, the experience of meeting with men in various lines of business
and discussing the common problems through the city, state and national
and business organizations led to a realization of the fact that those
who owned and managed business had more in common than they had in
antagonism. By knifing one another they made themselves an easy prey for
the unions and the government. By pooling ideas and interests they
presented a solid front to the demands of organized labor and the
efforts of the public to enforce regulation.

"Plutocracy" means control by those who own wealth. The "plutocratic
class" consists of that group of persons who control community affairs
because they own property. This class, because of its property
ownership, is compelled to devote time and infinite pains to the task of
safeguarding the sacred rights of property. It is to that task that the
leaders of the American plutocracy have committed themselves, and it is
from the results of that accomplished work that they are turning to new
labors.

FOOTNOTES:

[41] Speech in the Senate, June 20, 1832. Works Colvin Colton, ed. New
York, Putnam's, 1904, vol. 7, p. 503.

[42] Ibid., p. 503.

[43] "Speeches," E. P. Whipple, ed. Little, Brown & Co., 1910, pp.
59-60.

[44] "The Constitutional Position of Property in America," Arthur T.
Hadley, _Independent_, April 16, 1908.



X. INDUSTRIAL EMPIRES


1. _They Cannot Pause!_

The foundations of Empire have been laid in the United States. Territory
has been conquered; peoples have been subjugated or annihilated; an
imperial class has established itself. Here are all of the essential
characteristics of empire.

The American people have been busy laying the political foundations of
Empire for three centuries. A great domain, taken by force of arms from
the people who were in possession of it has been either incorporated
into the Union, or else held as dependent territory. The aborigines have
disappeared as a race. The Negroes, kidnaped from their native land,
enslaved and later liberated, are still treated as an inferior people
who should be the hewers of wood and the drawers of water. A vast
territory was taken from Mexico as a result of one war. A quarter
million square miles were secured from Spain in another; on the
Continent three and a half millions of square miles; in territorial
possessions nearly a quarter of a million more--this is the result of
little more than two hundred years of struggle; this is the geographic
basis for the American Empire.

The structure of owning class power is practically complete in the
United States. Through long years the business interests have evolved a
form of organization that concentrates the essential power over the
industrial and financial processes in a very few hands,--the hands of
the investment bankers. During this contest for power the plutocracy
learned the value of the control of public opinion, and brought the
whole machinery for the direction of public affairs under its
domination. Thus political and social institutions as well as the
processes of economic life were made subject to plutocratic authority.
A hundred years has sufficed to promulgate ideas of the sacredness of
private property that place its preservation and protection among the
chief duties of man. Economic organization; the control of all important
branches of public affairs, and the elevation of property rights to a
place among the beatitudes--by these three means was the authority of
the plutocracy established and safeguarded.

Since economic political and social power cover the field of authority
that one human being may exercise over another, it might be supposed
that the members of the plutocratic class would pause at this point and
cease their efforts to increase power. But the owners cannot pause! A
force greater than their wills compels them to go on at an ever growing
speed. Within the vitals of the economic system upon which it subsists
the plutocracy has found a source of never-ending torment in the form of
a constantly increasing surplus.


2. _The Knotty Problem of Surplus_

The present system of industry is so organized that the worker is always
paid less in wages than he creates in product. A part of this difference
between product and wages goes to the upkeep and expansion of the
industry in which the worker is employed. Another part in the form of
interest, dividends, rents, royalties and profits, goes to the owners of
the land and productive machinery.

The values produced in industry and handed to the industrial worker or
property owner in the form of income, may be used or "spent" either for
"consumption goods"--things that are to be used in satisfying human
wants, such as street car transportation, clothing, school books, and
smoking tobacco; or for production goods--things that are to be used in
the making of wealth, such as factory buildings, lathes, harvesting
machinery, railroad equipment. Those who have small incomes necessarily
spend the greater part for the consumption of goods upon which their
existence depends. On the other hand, those who are in receipt of large
incomes cannot use more than a limited amount of consumption goods.
Therefore, they are in a position to turn part of their surplus into
production goods. As a reward for this "saving" the system gives them
title to an amount of wealth equal to the amount saved, and in addition,
it grants an amount of "interest" so that the next year the recipient of
surplus gets the regular share of surplus, and beside that an additional
reward in the form of interest. His share of the surplus is thus
increased. That is, surplus breeds surplus.

The workers are, for the most part, spenders. The great bulk of their
income is turned at once into consumption goods. The owners in many
instances are capitalists who hold property for the purpose of turning
the income derived from it into additional investments.

Could the worker buy back dollar for dollar the values which he produces
there would be no surplus in the form of rent, interest, dividends and
profits. The present economic system is, however, built upon the
principle that those who own the lands and the productive machinery
should be recompensed for their mere ownership. It follows, of course,
that the more land and machinery there is to own the greater will be the
amount of surplus which will go to the owners. Since surplus breeds
surplus the owners find that it pays them not to use all of their income
in the form of consumption, but rather to invest all that they can,
thereby increasing the share of surplus that is due them. The worker, on
the other hand, finds that he must produce a constantly larger amount of
wealth which he never gets, but which is destined for the payment of
rent, interest, dividends and profits. Increased incomes yield increased
investments. Increased investments necessitate the creation and payment
of increased surplus. The payment of increased surplus means increased
incomes. Thus the circle is continued--with the returns heaping up in
the coffers of the plutocracy.

Originally the surplus was utilized to free the members of the owning
class from the grinding drudgery of daily toil, by permitting them to
enjoy the fruits of the labor of others. Then it was employed in the
exercise of power over the economic and social machinery. But that was
not the end--instead it proved only the beginning. As property titles
were concentrated in fewer and fewer hands, and the amount of property
owned by single individuals or groups of individuals becomes greater,
their incomes (chiefly in the form of rent, interest, dividends and
profits) rose until by 1917 there were 19,103 persons in the United
States who declared incomes of $50,000 or more per year, which is the
equivalent of $1,000 per week. Among these persons 141 declared annual
incomes of over $1,000,000. Besides these personal incomes, each
industry which paid these dividends and profits, through its
depreciation, amortization, replacement, new construction, and surplus
funds was reinvesting in the industries billions of wealth that would be
used in the creation of more wealth. The normal processes of the growth
of the modern economic system has forced upon the masters of life the
problem of disposing of an ever increasing amount of surplus.

During prosperous periods, the investment funds of a community like
England and the United States grow very rapidly. The more prosperous the
nation, the greater is the demand from those who cannot spend their huge
incomes for safe, paying investment opportunities.

The immense productivity of the present-day system of industry has added
greatly to the amount of surplus seeking investment. Each invention,
each labor saving device, each substitution of mechanical power that
multiplies the productive capacity of industry at the same time
increases the surplus at the disposal of the plutocracy.

The surplus must be disposed of. There is no other alternative. If hats,
flour and gasoline are piled up in the warehouses or stored in tanks, no
more of these commodities will be made until this surplus has been used.
The whole economic system proceeds on the principle that for each
commodity produced, a purchaser must be found before another unit of the
commodity is ordered. Demand for commodities stimulates and regulates
the machinery of production.

Those in control of the modern economic system have no choice but to
produce surplus, and once having produced it, they have no choice except
to dispose of it. An inexorable fate drives them onward--augmenting
their burdens as it multiplies their labors.

Investment opportunities, of necessity, are eagerly sought by the
plutocracy, since the law of their system is "Invest or perish"!

Invest? Where? Where there is some demand for surplus capital--that is
in "undeveloped countries."

The necessity for disposing of surplus has imposed upon the business men
of the world a classification of all countries as "developed" or
"undeveloped." "Developed" countries are those in which the capitalist
processes have gone far enough to produce a surplus that is sufficient
to provide for the upkeep and for the normal expansion of industry. In
"developed" countries mines are opened, factories are built, railroads
are financed, as rapidly as needed, out of the domestic industrial
surplus. "Undeveloped" countries are those which cannot produce
sufficient capital for their own needs, and which must, therefore,
depend for industrial expansion upon investments of capital from the
countries that do produce a surplus.

"Developed" countries are those in which the modern industrial system
has been thoroughly established.

The contrast between developed and undeveloped countries is made clear
by an examination of the investments of any investing nation, such as
Great Britain. Great Britain in 1913 was surrounded by rich, prosperous
neighbors--France, Germany, Holland, Belgium. Each year about a billion
dollars in English capital was invested outside of the British Isles.
Where did this wealth go? The chief objectives of British investment,
aside from the British Dominions and the United States, were (stated in
millions of pounds) Argentine 320; Brazil 148; Mexico 99; Russia 67;
France 8 and Germany 6. The wealth of Germany or France is greater than
that of Argentine, Brazil and Mexico combined, but Germany and France
were developed countries, producing enough surplus for their own needs,
and, therefore, the investable wealth of Great Britain went, not to her
rich neighbors, but to the poorer lands across the sea.

Each nation that produces an investable surplus--and in the nature of
the present economic system, every capitalist nation must some day reach
the point where it can no longer absorb its own surplus wealth--must
find some undeveloped country in which to invest its surplus. Otherwise
the continuity of the capitalist world is unthinkable. Great Britain,
Belgium, Holland, France, Germany and Japan all had reached this stage
before the war. The United States was approaching it rapidly.


3. _"Undeveloped Countries"_

Capitalism is so new that the active struggle to secure investment
opportunities in undeveloped countries is of the most recent origin. The
voyages which resulted in the discovery, by modern Europeans, of the
Americas, Australia, Japan, and an easy road to the Orient, were all
made within 500 years. The actual processes of capitalism are products
of the past 150 years in England, where they had their origin. In
France, Germany, Italy and Japan they have existed for less than a
century. The great burst of economic activity which has pushed the
United States so rapidly to the fore as a producer of surplus wealth
dates from the Civil War. Only in the last generation did there arise
the financial imperialism that results from the necessity of finding a
market for investable surplus.

The struggle for world trade had been waged for centuries before the
advent of capitalism, but the struggle for investment opportunities in
undeveloped countries is strictly modern. The matter is strikingly
stated by Amos Pinchot in his "Peace or Armed Peace" (Nov. 11, 1918).

"If you will look at the maps following page 554 of Hazen's 'Europe
since 1815,' or any other standard colored map showing Africa and Asia
in 1884, you will see that, but for a few rare spots of coloration, the
whole continent of Africa is pure white. Crossing the Red Sea into
Arabia, Persia, Mesopotamia and Asia Minor, you will find the same or
rather a more complete lack of color. This is merely the cartographer's
way of showing, by tint and lack of tint, that at that time Africa and
Western Asia were still in the hands of their native populations.

"Let us now turn to the same maps thirty years later, i.e., in 1914. We
find them utterly changed. They are no longer white, but a patch work of
variegated hues....

"From 1870 to 1900, Great Britain added to her possessions, to say
nothing of her spheres of influence, nearly 5,000,000 square miles with
an estimated population of 88,000,000. Within a few years after
England's permanent occupation of Egypt, which was the signal for the
renaissance of French colonialism, France increased hers by 3,500,000
square miles with a population of 37,000,000, not counting Morocco added
in 1911. Germany, whose colonialism came later, because home and nearby
markets longer absorbed the product of her machines, brought under her
dominion from 1884 to 1899 1,000,000 square miles with an estimated
population of 14,000,000."

This is a picture of the political effects that followed the economic
causes summed up in the term "financial imperialism."

In the seventeenth and eighteenth centuries it was the trader, dealing
in raw stuff; in the nineteenth century it was the manufacturer,
producing at low cost to cut under his neighbor's price. During the past
thirty years the investment banker has occupied the foreground with his
efforts to find safe, paying opportunities for the disposal of the
surplus committed to his care. British bankers, French bankers, German
bankers, Belgian bankers, Dutch bankers--all intent upon the same
mission--because behind all, and relentlessly driving, were the
accumulating surpluses, demanding an outlet. European bankers found that
outlet in Africa, Asia, Australia and the Americas. The stupendous
strides in the development of the resources in these countries would
have been impossible but for that surplus of European capital.

The undeveloped countries to-day have the same characteristics,--virgin
resources, industrial and commercial possibilities, and in many cases
cheap labor. This is true, for example, in China, Mexico and India. It
is true to a less extent in South America and South Africa. The logical
destination of capital is the point where the investment will "pay."

The investor who has used up the cream of the home investment market
turns his eyes abroad. As a recent writer has suggested, "There is a
glamor about the foreign investment" which does not hold for a domestic
one. Foreign investments have yielded such huge returns in the past that
there is always a seeming possibility of wonderful gains for the future.
The risk is greater, of course, but this is more than offset by the
increased rate of return. If it were not so, the wealth would be
invested at home or held idle.


4. _The Great Investing Nations_

The great industrial nations are the great investing nations. An
agriculture community produces little surplus wealth. Land values are
low, franchises and special privileges are negligible factors. There can
be relatively little speculation. Changes in method of production are
infrequent. Changes in values and total wealth are gradual. The owning
class in an agriculture civilization may live comfortably. If it is very
small in proportion to the total population it may live luxuriously, but
it cannot derive great revenues such as those secured by the owning
classes of an industrial civilization.

Industrial civilization possesses all of the factors for augmenting
surplus wealth which are lacking in agricultural civilizations. Changes
in the forms of industrial production are rapid; special privilege
yields rich returns and is the subject of wide speculative activity;
land values increase; labor saving machinery multiplies man's capacity
to turn out wealth. As much surplus wealth might be produced in a year
of this industrial life as could have been turned out in a generation or
a century of agricultural activity or of hand-craft industry.

England, France, Germany, Holland, Belgium, Japan and the United States,
the great industrial nations, have become the great lending nations.
Their search for "undeveloped territory" and "spheres of influence" is
not a search for trade, but for an opportunity to invest and exploit. If
these nations wished to exchange cotton for coffee, or machinery for
wheat on even terms, they could exchange with one another, or with one
of the undeveloped countries, but they demand an outlet for surplus
wealth--an outlet that can only be utilized where the government of the
developed country will guarantee the investment of its citizens in the
undeveloped territory.

The investing nations either want to take the raw products of the
undeveloped country, manufacture them and sell them back as finished
material (the British policy in India), or else they desire to secure
possession of the resources, franchises and other special privileges in
the undeveloped country which they can exploit for their own profit (the
British policy in South America).

The Indians, under the British policy, are thus in relatively the same
position as the workers in one of the industrial countries. They are
paid for their raw material a fraction of the value of the finished
product. They are expected to buy back the finished product, which is a
manifest impossibility. There is thus a drastic limitation on the
exploitation of undeveloped countries, just as there is a limitation on
the exploitation of domestic labor. In both cases the people as
consumers can buy back less in value than the exploiters have to sell.
Obviously the time must come when all the undeveloped sections of the
world have been exploited to the limit. Then surplus will go a-begging.

Some of the investors in the great exploiting nations have abandoned the
idea of making huge returns by way of the English policy in India.
Instead the investors in every nation are buying up resources,
franchises and concessions and other special privileges in the
undeveloped countries and treating them in exactly the same way that
they would treat a domestic investment. In this case the resources and
labor of the undeveloped country are exploited for the profit of the
foreign investor.

The Roman conquerors subjugated the people politically and then exacted
an economic return in the form of tribute. The modern imperialists do
not bother about the political machinery, so long as it remains in
abeyance, but content themselves with securing possession of the
economic resources of a region and exacting a return in interest and
dividends on the investment. Political tribute is largely a thing of the
past. In its place there is a new form--economic tribute--which is
safer, cheaper, and on the whole far superior to the Roman method of
exploiting undeveloped regions.


5. _The American Home Field_

A hundred years ago the United States was an undeveloped country. Its
resources were virgin. Its wealth possibilities were immense. Both
domestic and foreign capitalists invested large sums in the canals, the
railroads and other American commercial and industrial enterprises. The
rapid economic expansion of recent years has involved the outlay of huge
sums of new capital.

The total capital invested in manufactures was 8,975 millions in 1899
and 22,791 millions in 1914. The total of railway capital was 11,034
millions in 1899 and 20,247 millions in 1914. Manufacturing and
railroading alone secured a capital outlay of over 20 billions in 15
years. Some idea of the increase in investments may be gained from the
amount of new stocks and bonds listed annually on the New York Stock
Exchange. The total amount of new stocks listed for the five years
ending with 1914 was 1,420 millions; the total of new bonds was 2,226
million. (_The Financial Review Annual_, 1918, p. 67.) The total capital
of new companies (with an authorized capital of at least $100,000) was
in 1918, $2,599,753,600; in 1919, $12,677,229,600, and in the first 10
months of 1920, $12,242,577,700. (Bradstreets, Nov. 6, 1920, p. 731.)
The figures showing the amount of stocks and bonds issued do not by any
means exhaust the field of new capital. Reference has already been made
to the fact that the United States Steel Corporation, between 1903 and
1918 increased its issues of stocks and bonds by only $31,600,000,
while, in the same time its assets increased $987,000,000. The same fact
is illustrated, on a larger scale, in a summary (_Wall Street Journal_,
August 7, 1919) of the finances of 104 corporations covering the four
years, December 31, 1914, to December 31, 1918. During this time, six of
the leading steel companies of the United States increased their working
capital by $461,965,000 and their surplus by $617,656,000. This billion
was taken out of the earnings of the companies. Concerning the entire
104 corporations, the _Journal_ notes that, "After heavy expenditures
for new construction and acquisitions, and record breaking dividends,
they added a total of nearly $2,000,000,000 to working capital." In
addition, these corporations, in four years, showed a gain of
$1,941,498,000 in surplus and a gain in inventories of $1,522,000,000.

Considerable amounts of capital are invested in private industry, by
individuals and partnerships. No record of these investments ever
appears. Farmers invest in animals, machinery and improved
buildings--investments that are not represented by stocks or bonds.
Again, the great corporations themselves are constantly adding to their
assets without increasing their stock or bond issues. In these and
other ways, billions of new capital are yearly absorbed by the home
investment market.

Although most of the enterprises of the United States have been floated
with American capital, the investors of Great Britain, Holland, France
and other countries took a hand. In 1913 the capitalists of Great
Britain had larger investments in the United States than in any other
country, or than in any British Dominion. (The U. S., 754,617,000
pounds; Canada and Newfoundland, 514,870,000 pounds; India and Ceylon,
378,776,000 pounds; South Africa, 370,192,000 pounds and so on.)
(_Annals_, 1916, Vol. 68, p. 28, Article by C. K. Hobson.) The aggregate
amount of European capital invested in the United States was
approximately $6,500,000,000 in 1910. Of this sum more than half was
British. ("Trade Balance of the United States," George Paisch. National
Monetary Commission, 1910, p. 175.)

By the beginning of the present century (the U. S. Steel Corporation was
organized in 1901) the main work of organization inside of the United
States was completed. The bankers had some incidental tasks before them,
but the industrial leaders themselves had done their pioneer duty. There
were corners to be smoothed off, and bearings to be rubbed down, but the
great structural problems had been solved, and the foundations of world
industrial empire had been laid.


6. _Leaving the Home Field_

The Spanish-American War marks the beginning of the new era in American
business organization. This war found the American people isolated and
provincial. It left them with a new feeling for their own importance.

The worlds at home had been conquered. The transcontinental railroads
had been built; the steel industry, the oil industry, the coal industry,
the leather industry, the woolen industry and a host of others had been
organized by a whole generation of industrial organizers who had given
their lives to this task.

Across the borders of the United States--almost within arm's reach of
the eager, stirring, high-strung men of the new generation, there were
tens of thousands of square miles of undeveloped territory--territory
that was fabulously rich in ore, in timber, in oil, in fertility. On
every side the lands stretched away--Mexico, the West Indies, Central
America, Canada--with opportunity that was to be had for the taking.

Opportunity called. Capital, seeking new fields for investment, urged.
Youth, enthusiasm and enterprise answered the challenge.

The foreign investments of the United States at the time of the
Spanish-American War were negligible. By 1910 American business men had
two billions invested abroad--$700,000,000 in Mexico; $500,000,000 in
Canada; $350,000,000 in Europe, and smaller sums in the West Indies, the
Philippines, China, Central and South America. In 1913 there was a
billion invested in Mexico and an equal amount in Canada. ("Commercial
Policy," W. S. Culbertson, New York, Appleton, 1919, p. 315.)

Capital flowed out of the United States in two directions:


     1. Toward the resources which were so abundant in certain foreign
     countries.

     2. Toward foreign markets.


7. _Building on Foreign Resources_

The Bethlehem Steel Corporation is a typical industry that has built up
foreign connections as a means of exploiting foreign resources. The
Corporation has a huge organization in the United States which includes
10 manufacturing plants, a coke producing company, 11 ship building
plants, six mines and quarries, and extensive coal deposits in
Pennsylvania and West Virginia. The Bethlehem Steel Corporation also
controls ore properties near Santiago, Cuba, near Nipe Bay, Cuba, and
extensive deposits along the northern coast of Cuba; large ore
properties at Tofo, Chile, and the Ore Steamship Corporation, a carrying
line for Chilean and Cuban ore.

The American Smelting and Refining Company is another illustration of
expansion into a foreign country for the purpose of utilizing foreign
resources. According to the record of the Company's properties, the
Company was operating six refining plants, one located in New Jersey;
one in Nebraska; one in California; one in Illinois; one in Maryland,
and one in Washington. The Company owned 14 lead smelters and 11 copper
smelters, located as follows: Colorado, 4; Utah, 2; Texas, 2; Arizona,
2; New Jersey, 2; Montana, 1; Washington, 1; Nebraska, 1; California, 1;
Illinois, 1; Chile, 2; Mexico, 6. Among these 25 plants a third is
located outside of the United States.

These are but two examples. The rubber, oil, tobacco and sugar interests
have pursued a similar policy--extending their organization in such a
way as to utilize foreign resources as a source for the raw materials
that are destined to be manufactured in the United States.


8. _Manufacturing and Marketing Abroad_

The Bethlehem Steel Corporation and the American Smelting and Refining
Company go outside of the United States for the resources upon which
their industries depend. Their fabricating industries are carried on
inside of the country. There are a number of the great industries of the
country that have gone outside of the United States to do their
manufacturing and to organize the marketing of their products.

The International Harvester Company has built a worldwide organization.
It manufactures harvesting machinery, farm implements, gasoline engines,
tractors, wagons and separators at Springfield, Ohio; Rock Falls, Ill.;
Chicago, Ill.; Auburn, New York; Akron, Ohio; Milwaukee, Wisc., and
West Pullman, Ill. It has iron mines, coal mines and steel plants
operated by the Wisconsin Steel Company. It has three twine mills and
four railways. Foreign plants and branches are listed as follows:
Norrkoping, Sweden; Copenhagen, Denmark; Christiania, Norway; Paris,
France; Croix, France; Berlin, Germany; Hamilton, Ontario, Canada;
Zurich, Switzerland; Vienna, Austria; Lubertzy, Russia; Neuss, Germany;
Melbourne, Australia; London, England; Christ Church, New Zealand.

One of the greatest industrial empires in the world is the Standard Oil
Properties. It is not possible to go into detail with regard to their
operations. Space will admit of a brief comment upon one of the
constituent parts or "states" of the empire--The Standard Oil Company of
New Jersey. With a capital stock of $100,000,000, this Company, from the
dissolution of the Standard Oil Company, December 15, 1911, to June 15,
1918, a period of six and a half years, paid dividends of $174,058,932.

The company describes itself as "a manufacturing enterprise with a large
foreign business. The company drills oil wells, pumps them, refines the
crude oil into many forms and sells the product--mostly abroad." (_The
Lamp_, May, 1918.) The properties of the Company are thus listed:

1. The Company has 13 refineries, seven of them in New Jersey, Maryland,
Oklahoma, Louisiana and West Virginia. Four of the remaining refineries
are located in Canada, one is in Mexico and one in Peru.

2. Pipeline properties in New York, New Jersey, Pennsylvania and
Maryland.

3. A fleet of 54 ocean-going tank steamers with a capacity of 486,480
dead weight tons. (This is about two per cent of the total ocean-going
tonnage of the world.)

4. Can and case factories, barrel factories, canning plants, glue
factories and pipe shops.

5. Through its subsidiary corporations, the Company controls:

a. Oil wells in Pennsylvania, West Virginia, Ohio, Kentucky, Louisiana,
Arkansas, Mississippi, Texas, California, Peru and Mexico. In connection
with many of these properties refineries are operated.

b. One subsidiary has 550 marketing stations in Canada. Others market in
various parts of the United States; in the West Indies; in Central and
South America; in Germany, Austria, Roumania, the Netherlands, France,
Denmark and Italy.

The Standard Oil Company of New Jersey comprises only one part--though a
very successful part--of the Standard Oil Group of industries. It is one
industrial state in a great industrial empire.

Foreign resources offer opportunities to the exploiter. Foreign markets
beckon. Both calls have been heeded by the American business interests
that are busy building the international machinery of business
organization.


9. _International Business and Finance_

The steel, smelting, oil, sugar, tobacco, and harvester interests are
confined to relatively narrow lines. In their wake have followed general
business, and above all, financial activities.

The American International Corporation was described by its
vice-president (Mr. Connick) before a Senate Committee on March 1, 1918.
"Until the Russian situation became too acute, they had offices in
Petrograd, London, Paris, Rome, Mexico City. They sent commissions and
agents and business men to South America to promote trade.... They were
negotiating contracts for a thousand miles of railroad in China. They
were practically rebuilding, you might say, the Grand Canal in China.
They had acquired the Pacific Mail.... They then bought the New York
Shipbuilding Corporation to provide ships for their shipping interests."

By 1919 (_New York Times_, Oct. 31, 1919) the Company had acquired
Carter Macy & Co., and the Rosin and Turpentine Export Co., and was
interested in the International Mercantile Marine and the United Fruit
Companies.

Another illustration of the same kind of general foreign business
appeared in the form of an advertisement inserted on the financial page
of the _New York Times_ (July 10, 1919) by three leading financial
firms, which called attention to a $3,000,000 note issue of the Haytian
American Corporation "Incorporated under the laws of the State of New
York, owning and operating sugar, railroad, wharf and public utility
companies in the Republic of Hayti." Further, the advertisers note: "The
diversity of the Company's operations assures stability of earnings."

American manufacturers, traders and industrial empire builders have not
gone alone into the foreign field. The bankers have accompanied them.

Several of the great financial institutions of the country are
advertising their foreign connections.

The Guaranty Trust Company (_New York Times_, Jan. 10, 1919) advertises
under the caption "Direct Foreign Banking Facilities" offering "a direct
and comprehensive banking service for trade with all countries." These
connections include:

1. Branches in London and Paris, which are designated United States
depositories. "They are American institutions conducted on American
lines, and are especially well equipped to render banking service
throughout Europe." There are additional branches in Liverpool and
Brussels. The Company also has direct connections in Italy and Spain,
and representatives in the Scandinavian countries.

2. "Direct connections with the leading financial institutions in
Argentina, Uruguay, Chile, and Brazil." A special representative in
Buenos Ayres. "Through our affiliation with the Mercantile Bank of the
Americas and its connections, we cover Peru, Northern Brazil, Columbia,
Ecuador, Venezuela, Nicaragua, Honduras, Guatemala, and other South and
Central American countries."

3. "Through the American Mercantile Bank of Cuba, at Havana, we cover
direct Cuba and the West Indies."

4. "Direct banking and merchant service throughout British India,"
together with correspondents in the East Indies and the Straits
Settlements.

5. "Direct connections with the National Bank of South Africa, at Cape
Town, and its many branches in the Transvaal, Rhodesia, Natal,
Mozambique, etc."

6. Direct banking connections and a special representative in Australia
and New Zealand.

7. "Through our affiliations with the Asia Banking Corporation we
negotiate, direct, banking transactions of every nature in China,
Manchuria, Southeastern Siberia, and throughout the Far East. The Asia
Banking Corporation has its main office in New York and is establishing
branches in these important trade centers: Shanghai, Pekin, Tientsin,
Hankow, Harbin, Vladivostok. We are also official correspondents for
leading Japanese banks."

The advertisement concludes with this statement: "Our Foreign Trade
Bureau collects and makes available accurate and up-to-date information
relating to foreign trade--export markets, foreign financial and
economic conditions, shipping facilities, export technique, etc. It
endeavors to bring into touch buyers and sellers here and abroad."

The same issue of the _Times_ carries a statement of the Mercantile Bank
of the Americas which "offers the services of a banking organization
with branches and affiliated banks in important trade centers throughout
Central and South America, France and Spain." The Bank describes itself
as "an American Bank for Foreign trade." Among its eleven directors are
the President and two Vice-Presidents of the Guaranty Trust Company.

The Asia Banking Corporation, upon which the Guaranty Trust Company
relies for its Eastern connections, was organized in 1918 "to engage in
international and foreign banking in China, in the dependencies and
insular possessions of the United States, and, ultimately in Siberia"
(_Standard Corporation Service_, May-August, 1918, p. 42). The officers
elected in August 1918, were Charles H. Sabin, President of the Guaranty
Trust Co., President; Albert Breton, Vice-President of the Guaranty
Trust Co., and Ralph Dawson, Assistant Secretary of the Guaranty Trust
Company, Vice-Presidents, and Robert A. Shaw, of the overseas division
of the Guaranty Trust Company, Treasurer. Among the directors are
representatives of the Bankers Trust Company and of the Mercantile Bank
of the Americas.


10. _The National City Bank_

The National City Bank of New York--the first bank in the history of the
Western Hemisphere to show resources exceeding one billion
dollars--illustrates in its development the cyclonic changes that the
past few years have brought into American business circles. The National
City Bank, originally chartered in 1812, had resources of $16,750,929 in
1879 and of $18,214,823 in 1889. From that point its development has
been electric. The resources of the Bank totaled 128 millions in 1899;
280 millions in 1909; $1,039,418,324 in 1919. Between 1889 and 1899 they
increased 600 per cent; between 1899 and 1919 they increased 700 per
cent; during the 40 years from 1889 and 1919 the increase in resources
exceeded six thousand per cent.

The organization of the Bank is indicative of the organization of modern
business. Among the twenty-one directors, all of whom are engaged in
some form of business enterprise, there are the names of William
Rockefeller, Percy A. Rockefeller, J. Ogden Armour, Cleveland H. Dodge
of the Phelps-Dodge Corporation, Cyrus H. McCormick of the International
Harvester Co., Philip A. S. Franklin, President of the International
Mercantile Marine Co.; Earl D. Babst, President of the American Sugar
Refining Co.; Edgar Palmer, President of the New Jersey Zinc Co.;
Nathan C. Kingsbury, Vice-President of the Union Pacific Railroad Co.,
and Frank Krumball, Chairman of the Chesapeake & Ohio Railroad Co. Some
of the most powerful mining, manufacturing, transportation and public
utility interests in the United States are represented, directly or
indirectly, in this list.

The domestic organization of the Bank consists of five divisions, each
one under a vice-president. New York City constitutes the first
division; the second division comprises New England and New York State
outside of New York City; the three remaining divisions cover the other
portions of the United States. Except for the size and the completeness
of its organization, the National City Bank differs in no essential
particulars from numerous other large banking institutions. It is a
financial superstructure built upon a massive foundation of industrial
enterprise.

The phase of the Bank's activity that is of peculiar significance at the
present juncture is its foreign organization, all of which has been
established since the outbreak of the European war.

The foreign business of the National City Bank is carried on by the
National City Bank proper and the International Banking Corporation. The
first foreign branch of the National City Bank was established at Buenos
Aires on November 10th, 1914. On January 1st, 1919, the National City
Bank had a total of 15 foreign branches; on December 31st, 1919, it had
a total of 74 foreign branches.

The policy of the Bank in its establishment of foreign branches is
described thus in its "Statement of Condition, December 31st, 1919":
"The feature of branch development during the year was the expansion in
Cuba, where twenty-two new branches were opened, making twenty-four in
the island. Cuba is very prosperous, as a result of the expansion of the
sugar industry, and as sugar is produced there under very favorable
conditions economically, and the location is most convenient for
supplying the United States, the industry is on a sound basis, and
relations with the United States are likely to continue close and
friendly. Cuba is a market of growing importance to the United States,
and the system of branches established by the Bank is designed to serve
the trade between the two countries." The trader and the Banker are to
work hand in hand.

The National City Bank has branches in Argentina, Brazil, Belgium,
Chile, Colombia, Cuba, Italy, Porto Rico, Russia, Siberia, Spain,
Trinidad, Uruguay and Venezuela, all of which have been established
since 1914.

A portion of the foreign business of the National City Bank is conducted
by the International Banking Corporation which was established in 1902
and which became a part of the National City Bank organization in 1915.
The International Banking Corporation has a total of twenty-eight
branches located in California, China, England, France, India, Japan,
Java, Dominican Republic, Philippine Islands, Republic of Panama and the
Straits Settlements. Under this arrangement, the financial relations
with America are made by the National City Bank proper; while those with
Europe and Asia are in the hands of the International Banking
Corporation and the combination provides the Bank with 75 branches in
addition to its vast organization within the United States.

The National City Bank of 1889, with its resources of eighteen millions,
was a small affair compared with the billion dollar resources of 1920.
Thirty years sufficed for a growth from youth to robust adulthood.
Within five years, the Bank built up a system of foreign branches that
make it one of the most potent States in the federation of international
financial institutions.


11. _Onward_

Exploiters of foreign resources, manufacturers, traders and bankers have
moved, side by side, out of the United States into the foreign field.
Step by step they have advanced, rearing the economic structure of
empire as they went.

The business men of the United States had no choice. They could not
pause when they had spanned the continent. Ambition called them, surplus
compelled them, profits lured them, the will to power dominated their
lives. As well expect the Old Guard to pause in the middle of a
charge--even before the sunken road at Waterloo--as to expect the
business interests of the United States to cease their efforts and lay
down their tools of conquest simply because they had reached the ocean
in one direction. While there were left other directions in which there
was no ocean; while other undeveloped regions offered the possibility of
development, an inexorable fate--the fate inherent in the economic and
the human stuff with which they were working compelled them to cry
"Onward!" and to turn to the tasks that lay ahead.

The fathers and grandfathers of these Twentieth Century American
Plutocrats, working coatless in their tiny factories; managing their
corner stores; serving their local banks, and holding their minor
offices had never dreamed of the destiny that lay ahead. No matter. The
necessity for expansion had come and with it came the opportunity. The
economic pressure complemented the human desire for "more." The
structure of business organization, which was erected to conquer one
continent could not cease functioning when that one continent was
subdued. Rather, high geared and speeded up as it was, it was in fine
form to extend its conquests, like the well groomed army that has come
scatheless through a great campaign, and that longs, throughout its
tensely unified structure to be off on the next mission.

The business life of the United States came to the Pacific; touched the
Canadian border; surged against the Rio Grande. The continent had been
spanned; the objective had been attained. Still, the cry was "Onward!"

Onward? Whither?

Onward to the lands where resources are abundant and rich; onward where
labor is plentiful, docile and cheap; onward where the opportunities
for huge profits are met with on every hand; onward into the undeveloped
countries of the world.

The capitalists of the European nations, faced by a similar necessity
for expansion, had been compelled to go half round the earth to India,
to South Africa, to the East Indies, to China, to Canada, to South
America. Close at home there was no country except Russia that offered
great possibilities of development.

The business interests of the United States were more fortunate. At
their very doors lay the opportunities--in Canada, in Mexico, in the
West Indies, in Central and South America. Here were countries with the
amplest, richest resources; countries open for capitalist development.
To be sure these investment fields had been invaded already by foreign
capitalists--British, German, Belgian and Spanish. But at the same time
they were surrounded by a tradition of great virility and power--the
tradition of "America for the Americans."



XI. THE GREAT WAR


1. _Daylight_

The work of industrial empire building had continued for less than half
a century when the United States entered the Great War, which was one in
a sequence of events that bound America to the wheel of destiny as it
bound England and France and Germany and Japan and every other country
that had adopted the capitalist method of production.

The war-test revealed the United States to the world and to its own
people as a great nation playing a mighty rôle in international affairs.
Most Europeans had not suspected the extent of its power. Even the
Americans did not realize it. Nevertheless, the processes of economic
empire building had laid a foundation upon which the superstructure of
political empire is reared as a matter of course. Henceforth, no one
need ask whether the United States should or should not be an imperial
nation. There remained only the task of determining what form American
imperialism should take.

The Great War rounded out the imperial beginnings of the United States.
It strengthened the plutocracy at home; it gave the United States
immense prestige abroad.

The Era of Imperialism dawned upon the United States in 1898. Daylight
broke in 1914, and the night of isolation and of international
unimportance gave place to a new day of imperial power.


2. _Plutocracy in the Saddle_

The rapid sweep across a new continent had placed the resources of the
United States in the hands of a powerful minority. Nature had been
generous and private ownership of the inexhaustible wilderness seemed to
be the natural--the obvious method of procedure.

The lightning march of the American people across the continent gave
the plutocracy its grip on the natural resources. The revolutionary
transformations in industry guaranteed its control of the productive
machinery.

The wizards of industrial activity have changed the structure of
business life even more rapidly than they have conquered the wilderness.
True sons of their revolutionary ancestors, they have slashed and
remodeled and built anew with little regard for the past.

Revolutions are the stalking grounds of predatory power. Napoleon built
his empire on the French Revolution; Cromwell on the revolt against
tyrannical royalty in England. Peaceful times give less opportunity to
personal ambition. Institutions are well-rooted, customs and habits are
firmly placed, life is regulated and held to earth by a fixed framework
of habit and tradition.

Revolution comes--fiercely, impetuously--uprooting institutions,
overthrowing traditions, tearing customs from their resting places. All
is uncertainty--chaos, when, lo! a man on horseback gathers the loose
strands together saying, "Good people, I know, follow me!"

He does know; but woe to the people who follow him! Yet, what shall they
do? Whither shall they turn? How shall they act? Who can be relied upon
in this uncertain hour?

The man on horseback rises in his stirrups--speaking in mighty accents
his message of hope and cheer, reassuring, promising, encouraging,
inspiring all who come within the sound of his voice. His is the one
assurance in a wilderness of uncertainty. What wonder that the people
follow where he leads and beckons!

The revolutionary changes in American economic life between the Civil
War and the War of 1914 gave the plutocrat his chance. He was the man on
horseback, quick, clever, shrewd, farseeing, persuasive, powerful.
Through the courses of these revolutionary changes, the Hills, Goulds,
Harrimans, Wideners, Weyerhausers, Guggenheims, Rockefellers,
Carnegies, and Morgans did to the American economic organization exactly
what Napoleon did to the French political organization--they took
possession of it.


3. _Making the Plutocracy Be Good_

The American people were still thinking the thoughts of a competitive
economic life when the cohorts of an organized plutocracy bore down upon
them. High prices, trusts, millionaires, huge profits, corruption,
betrayal of public office took the people by surprise, confused them,
baffled them, enraged them. Their first thought was of politics, and
during the years immediately preceding the war they were busy with the
problem of legislating goodness into the plutocracy.

The plutocrats were in public disfavor, and their control of natural
resources, banks, railroads, mines, factories, political parties, public
offices, governmental machinery, the school system, the press, the
pulpit, the movie business,--all of this power amounted to nothing
unless it was backed by public opinion.

How could the plutocracy--the discredited, vilified plutocracy--get
public opinion? How could the exploiters gain the confidence of the
American people? There was only one way--they must line up with some
cause that would command public attention and compel public support. The
cause that it chose was the "defense of the United States."


4. _"Preparedness"_

The plutocracy, with a united front, "went in" for the "defense of the
United States,"--attacking the people on the side of their greatest
weakness; playing upon their primitive emotions of fear and hate. The
campaign was intense and dramatic, featuring Japanese invasions, Mexican
inroads, and a world conquest by Germany.

The preparedness campaign was a marvel of efficient business
organization. Its promoters made use of every device known to the
advertising profession; the best brains were employed, and the country
was blanketed with preparedness propaganda.

Officers of the Army and Navy were frank in insisting that the defense
of the United States was adequately provided for. (See testimony of
General Nelson A. Miles. _Congressional Record_, February 3, 1916, p.
2265.) Still the preparedness campaign continued with vigor. Congressman
Clyde H. Tavenner in his speech, "The Navy League Unmasked," showed why.
He gave facts like those appearing in George R. Kirkpatrick's book,
"War, What For"; in F. C. Howe's "Why War," and in J. A. Hobson's
"Imperialism," showing that, in the words of an English authority,
"patriotism at from 10 to 15 per cent is a temptation for the best of
citizens."

Tavenner established the connection between the preparedness campaign
and those who were making profits out of the powder business, the nickel
business, the copper business, and the steel business, interlocked
through interlocking directorates; then he established the connection
between the Navy League and the firm of J. P. Morgan & Co., 23 Wall St.,
New York. Regarding this connection, Congressman Tavenner said, "The
Navy League upon close examination would appear to be little more than a
branch office of the house of J. P. Morgan & Co., and a general sales
promotion bureau for the various armor and munition makers and the
steel, nickel, copper and zinc interests."[45]

The preparedness movement came from the business interests. It was
fostered and financed by the plutocrats. It was their first successful
effort at winning public confidence, and so well was it managed that
millions of Americans fell into line, fired by the love of the flag and
the world-old devotion to family and fireside.


5. _Patriots_

From preparedness to patriotism was an easy step. The preparedness
advocates had evoked the spirit of the founders of American democracy
and worked upon the emotions of the people until it was generally
understood that those who favored preparedness were patriots.

Plutocratic patriotism was accepted by the press, the pulpit, the
college, and every other important channel of public information in the
United States. Editors, ministers, professors and lawyers proclaimed it
as though it were their own. Randolph Bourne, in a brilliant article
(_Seven Arts_, July, 1917) reminds his readers of "the virtuous horror
and stupefaction when they read the manifesto of their ninety-three
German colleagues in defense of the war. To the American academic mind
of 1914 defense of war was inconceivable. From Bernhardi it recoiled as
from a blasphemy, little dreaming that two years later would find it
creating its own cleanly reasons for imposing military service on the
country and for talking of the rough rude currents of health and
regeneration that war would send through the American body politic. They
would have thought any one mad who talked of shipping American men by
the hundreds of thousands--conscripts--to die on the fields of
France...."

The American plutocracy was magnified, deified, and consecrated to the
task of making the world safe for democracy. Exploiters had turned
saviors and were conducting a campaign to raise $100,000,000 for the Red
Cross.[46] The "malefactors of great wealth," the predatory business
forces, the special privileged few who had exploited the American people
for generations, became the prophets and the crusaders, the keepers of
the ark of the covenant of American democracy.

Radicals who had always opposed war, ministers who had spent their lives
preaching peace upon earth, scientists whose work had brought them into
contact with the peoples of the whole world, public men who believed
that the United States could do greater and better work for democracy by
staying out of the war, were branded as traitors and were persecuted as
zealously as though they had sided with Protestantism in Catholic Spain
under the Inquisition.

By a clever move, the plutocrats, wrapped in the flag and proclaiming a
crusade to inaugurate democracy in Germany, rallied to their support the
professional classes of the United States and millions of the common
people.


6. _Business in Control_

After the declaration of war, the mobilization and direction of the
economic war work of the government was placed in the hands of the
Council of National Defense, an organized group of the leading business
men. The Council consisted of six members of the President's Cabinet,
assisted by an Advisory Commission and numerous sub-committees. The
"Advisory Commission" of the Council (the real working body) contained
four business men, an educator, a labor leader and a medical man. ("The
Council of National Defense" a bulletin issued by the Council under date
of June 28, 1917.)

Each member of the Advisory Commission had a group of persons
coöperating with him. The make-up of these various committees was
significant. Among 706 persons listed in the original schedule of
sub-committees, 404 were business men, 200 were professional men, 59
were labor men, 23 were public officials and 20 were miscellaneous. It
was only in Mr. Gompers' group that labor had any representation, and
even there, out of 138 persons only 59 were workers or officials of
unions, while 34 were business men and 33 professional men, so that
among Mr. Gompers' assistants the business and professional men combined
considerably outnumbered the labor men.

The make-up of some of the sub-committees revealed the forces behind the
Defense Council. Thus Mr. Willard's sub-committee on "Express" consisted
of four vice-presidents, one from the American, one from the
Wells-Fargo, one from the Southern and one from the Adams Express
Company. His committee on "Locomotives" consisted of the Vice-President
of the Porter Locomotive Company, the President of the American
Locomotive Company, and the Chairman of the Lima Locomotive Corporation.
Mr. Rosenwald's committee on "Shoe and Leather Industries" consisted of
eight persons, all of them representing shoe or leather companies. His
committee on "Woolen Manufactures" consisted of eight representatives of
the woolen industry. The same business supremacy appeared in Mr.
Baruch's committees. His committee on "Cement" consisted of the
presidents of four of the leading cement companies, the vice-president
of a fifth cement company, and a representative of the Bureau of
Standards of Washington. His committee on "Copper" had the names of the
presidents of the Anaconda Copper Company, the Calumet & Hecla Mining
Company, the United Verde Copper Company and the Utah Copper Company.
His committee on "Steel and Steel Products" consisted of Elbert H. Gary,
Chairman of the United States Steel Corporation; Charles M. Schwab, of
the Bethlehem Steel Company; A. C. Dinkey, Vice-President of the Midvale
Steel Company; W. L. King, Vice-President of Jones & Loughlin Steel
Company, and J. A. Burden, President of the Burden Steel Company. The
four other members of the committee represented the Republic Iron and
Steel Company, the Lackawanna Steel Company, the American Iron and Steel
Institute and the Picklands, Mather Co., of Cleveland. Perhaps the most
astounding of all the committees was that on "Oil." The chairman was the
President of the Standard Oil Company, and the secretary of the
committee gives his address as "26 Broadway," the address of the
Standard Oil Company. The other nine members of the committee were oil
men from various parts of the country. What thinking American would have
suggested, three years before, that the Standard Oil Company would be
officially directing a part of the work of the Federal Government?

Comment is superfluous. Every great industrial enterprise of the United
States had secured representation on the committees of business men that
were responsible for the direction of the economic side of war making.

Then came the Liberty Loan campaigns and Red Cross drives, the direction
of which also was given into the hands of experienced business men. In
each community, the leaders in the business world were the leaders in
these war-time activities. Since the center of business life was the
bank, it followed that the directing power in all of the war-time
campaigns rested with the bankers, and thus the whole nation was
mobilized under the direction of its financiers.

The results of these experiences were far-reaching. During two
generations, the people of the United States had been passing anti-trust
laws and anti-pooling laws, the aim of which was to prevent the business
men of the country from getting together. The war crisis not only
brought them together, but when they did assemble, it placed the whole
political and economic power of the nation in their hands.

The business men learned, by first hand experience, the benefits that
arise from united effort. They joined forces across the continent, and
they found that it paid. James S. Alexander, President of the National
Bank of Commerce (New York), tells the story from the standpoint of a
banker (_Manchester Guardian_, January 28, 1920. Signed Article.) In a
discussion of "the experience in coöperative action which the war has
given American banks" he says, "The responsibility of floating the five
great loans issued by the government, together with the work of
financing a production of materials speeded up to meet war necessities,
enforced a unity of action and coöperation which otherwise could hardly
have been obtained in many years."


7. _Economic Winnings_

The war gains of the plutocracy in the field of public control were
important, as well as spectacular. Behind them, however, were economic
gains--little heralded, but of the most vital consequence to the future
of plutocratic power.

The war speeded production and added greatly to the national income, to
investable surplus, to profits and thus to the economic power of the
plutocrats.

The most tangible measure of the economic advantage gained by the
plutocracy from the war is contained in a report on "Corporate Earnings
and Government Revenues" (Senate Document 259. 65th Congress, Second
Session). This report shows the profits made by the various industries
during 1917--the first war year.

The report contains 388 large pages on which are listed the profits
("percent of net income to capital stock in 1917") made by various
concerns. A typical food producing industry--"meat packing"--lists 122
firms (p. 95 and 365). Of these firms 31 reported profits for the year
of less than 25 percent; 45 reported profits of 25 but under 50 percent;
24 reported profits of 50 but under 100 percent, and 22 reported profits
of 100 percent or more. In this case, a third of the profits were more
than 25, but less than 50 percent, and half were 50 percent or over.

Manufacturers of cotton yarns reported profits ranging slightly higher
than those in the meat packing industry (pp. 167, 168, 379). Among the
153 firms reporting, 21 reported profits of less than 25 percent; 61
reported 25 but less than 50 per cent; 55 reported 50 but under 100
percent, and 16 reported 100 percent or more.

Profits in the garment manufacturing industry were lower than those in
yarn manufacturing. Among the 299 firms reporting (pp. 171, 380) 74 gave
their profits as less than 25 percent; 121 gave their profits as 25 but
under 50 percent; 65 gave profits of 50 but less than 100 percent, and
39 gave their profits as 100 percent or over.

The profits of 49 Steel plants and Rolling Mills (pp. 100, 365) were
considerably higher than profits in any of the industries heretofore
discussed. Four firms reported profits of less than 25 percent; 13
reported profits of 25 but less than 50 percent; 17 reported profits of
50 but less than 100 percent, and 15 reported profits of more than 100
percent. In this instance two-thirds of the firms show profits of 50
percent or over.

Bituminous Coal producers in the Appalachian field (340 in number, pp.
130 and 372) report a range of profits far higher than those secured in
the manufacturing industries. Among these 340 firms, 23 reported profits
of less than 25 percent; 45 reported profits of 25 but under 50 percent;
79 reported profits of 50 but under 100 percent; 135 reported profits of
100 but under 500 percent; 21 reported profits of 500 but under 1,000
percent, and 14 reported profits of 1,000 percent and over. In the case
of these coal mine operators only a fourth had profits of under 50
percent and half had profits of more than 100 percent.

The profits in these five industries--food, yarn, clothing, steel and
coal--are quite typical of the figures for the tens of thousands of
other firms listed in Senate Document 259. Profits of less than 25
percent are the exception. Profits of over 100 percent were reported by
8 percent of the yarn manufacturers, by 13 percent of the garment
manufacturers, by 18 percent of the meat packers, by 31 percent of the
steel plants, and by 50 percent of the bituminous coal mines. A
considerable number of profits ranged above 500 percent, or a gain in
one year of five times the entire capital stock.

When it is remembered that these figures were supplied by the firms
involved; that they were submitted to a tremendously overworked
department, lacking the facilities for effective checking-up; and that
they were submitted for the purposes of heavy taxation, the showing is
nothing less than astounding.


8. _Winnings in the Home Field_

What has the American plutocracy won at home as a result of the war? In
two words it has gained social prestige and internal (economic)
solidarity. Both are vital as the foundation for future assertions of
power.

The plutocracy has unified its hold upon the country as a result of the
war. Also, it has won an important battle in its struggle with labor.
The position held by the American plutocracy at the end of the Great War
could hardly be stated more adequately than in a recent Confidential
Information Service furnished by an important agency to American
business men:


     "SHALL VICTORS BE MAGNANIMOUS?


"There is no doubt about it--Labor is beaten. Mr. Gompers was at his
zenith in 1918. Since then he has steadily lost power. He has lost power
with his own people because he is no longer able to deliver the goods.
He can no longer deliver the goods for two reasons. For one thing, peace
urgency has replaced war urgency and we are not willing to bid for peace
labor as we were willing to bid for war labor. For another thing, the
employing class is immensely more powerful than it was in 1914.

"We have an organized labor force more numerous than ever before.
Relatively twice as many workers are organized as in 1916. But this same
labor force has lost its hold on the public. Furthermore, it is divided
in its own camp. It fears capital. It also fears its own factions. It
threatens, but it does not dare.

"We said that the employing class was immensely more powerful than in
1914. There is more money at its command. Eighteen thousand new
millionaires are the war's legacy. This money capacity is more
thoroughly unified than ever. In 1914 we had thirty-thousand banks,
functioning to a great degree in independence of each other. Then came
the Federal Reserve Act and gave us the machinery for consolidation and
the emergency of five years war furnished the hammer blows to weld the
structure into one.

"The war taught the employing class the secret and the power of
widespread propaganda. Imperial Europe had been aware of this power. It
was new to the United States. Now, when we have anything to sell to the
American people we know how to sell it. We have learned. We have the
schools. We have the pulpit. The employing class owns the press. There
is practically no important paper in the United States but is theirs!"


9. _The Run of the World_

The war gains of the American plutocracy at home were immense. Even more
significant, from an imperial standpoint, were the international
advantages that came to America with the war. The events of the two
years between 1916 and 1918 gave the United States the run of the world.

Destiny seemed to be bent upon hurling the American people into a
position of world authority. First, there was the matter of credit. The
Allies were reaching the end of their economic rope when the United
States entered the war. They were not bankrupt, but their credit was
strained, their industries were disorganized, their sources of income
were narrowed, and they were looking anxiously for some source from
which they might draw the immense volume of goods and credit that were
necessary for the continuance of the struggle.[47]

The United States was that source of supply. During the years from 1915
to 1917, the industries of the United States were shifted gradually from
a peace basis to a war basis. Quantities of material destined for use in
the war were shipped to the Allies. The unusual profits made on much of
this business were not curtailed by heavy war taxation. Thus for more
than two years the basic industries of the United States reaped a
harvest in profits which were actually free of taxation, at the same
time that they placed themselves on a war basis for the supplying of
Europe's war demand. When the United States did enter the war, she came
with all of the economic advantages that had arisen from selling war
material to the belligerents during two and a half years. Throughout
those years, while the Allies were bleeding and borrowing and paying,
the American plutocracy was growing rich.

When the United States entered the war, she entered it as an ally of
powers that were economically winded. She herself was fresh. With the
greatest estimated wealth of any of the warring countries, she had a
public national debt of less than one half of one percent of her total
wealth. She had larger quantities of liquid capital and a vast economic
surplus. As a consequence, she held the purse strings and was able,
during the next two years, to lend to the Allied nations nearly ten
billion dollars without straining her resources to any appreciable
degree.

The nations of Europe had been so deeply engrossed in war-making that
they had been unable to provide themselves with the necessary food. All
of the warring countries, with the exception of Russia, were importers
of food in normal times. The disturbances incident to the war; the
insatiable army demands, and the loss of shipping all had their effect
in bringing the Allied countries to a point of critical food scarcity in
the Winter of 1916-1917.

The United States was able to meet this food shortage as easily as it
met the European credit shortage--and with no greater sacrifice on the
part of the American people. Then, too, with the exception of small
amounts of food donated through relief organizations, the food that
went to Europe was sold at fancy prices. The United States was therefore
in a position to lay down the basic law,--"Submit or starve."

With the purse strings and the larder under American control, the
temporary supremacy of the United States was assured. She was the one
important nation (beside Japan) that had lost little and gained much
during the war. She was the only great nation with a surplus of credit,
of raw materials and of food.

The prosperity incident to this period is reflected in the record of
American exports, which rose from an average of about two billions in
the years immediately preceding the war to more than six billions in
1917. In the same year the imports were just under three billions,
leaving a trade balance--that is, a debt owing by foreign countries to
the United States--of more than three billions for that one year.


10. _Victory_

The war had been in progress for nearly three years before the United
States took her stand on the side of the Allies. At that time the flower
of Europe's manhood had faced, for three winters, a fearful pressure of
hardship and exposure, while millions among the non-combatants had
suffered, starved, sickened and died. The nerves of Europe were worn and
the belly of Europe was empty when the American soldiers entered the
trenches. They were never compelled to bear the brunt of the conflict.
They arrived when the Central Empires were sagging. Their mere presence
was the token of victory.

For the first time in history the Americans were matched against the
peoples of the old world on the home ground of the old world, and under
circumstances that were enormously favorable to the Americans. European
capitalism had weakened itself irreparably. The United States entered
the war at a juncture that enabled her to take the palm after she had
already taken billions of profit without risk or loss. The gain to the
United States was immense, beyond the possibility of present estimate.
The rulers of the United States became, for the time being, at least,
the economic dictators of the world.

The Great War brought noteworthy advantages to the American plutocracy.
At home its power was clinched. Among the nations, the United States was
elevated by the war into a position of commanding importance. In a
superficial sense, at least, the Great War "made" the plutocracy at home
and "made" the United States among the nations.

FOOTNOTES:

[45] "The Navy League Unmasked," Speech of December 15, 1915,
_Congressional Record_.

[46] This campaign was conducted by H. P. Davison, one of the leading
members of the firm of J. P. Morgan and Co. Later a great war-fund drive
was conducted by John D. Rockefeller, Jr. Cleveland H. Dodge of the
Phelps-Dodge corporation was treasurer of another fund.

[47] J. Maynard Keynes notes the "immense anxieties and impossible
financial requirements" of the period between the Summer of 1916 and the
Spring of 1917. The task would soon have become "entirely hopeless" but
"from April, 1917" the problems were "of an entirely different order."
"The Economic Consequences of the Peace." New York, Harcourt, Brace &
Howe, 1920, p. 273.



XII. THE IMPERIAL HIGHROAD


1. _A Youthful Traveler_

Along the highroad that leads to empire moves the American people, in
the heyday of its youth, sturdy, vigorous, energy-filled, replete with
power and promise--conquerors who have swept aside the Indians, enslaved
a race of black men, subdued a continent, and begun the extension of
territorial control beyond their own borders. More than a hundred
million Americans--fast losing their standards of individualism--fast
slipping under the domination of a new-made ruling class of wealth-lords
and plutocrats--journey, not discontentedly, along the imperial
highroad.

The preliminary work of empire-building has been accomplished--territory
has been conquered; peoples have been subjected and a ruling class
organized. The policy of imperialism has been accepted by the people,
although they have not thought seriously of its consequences. They have
set out, in good faith, as they believe, to seek for life, liberty and
happiness. They do not yet realize that, along the road that they are
now traveling, the journey will not be ended until they have worn
themselves threadbare in their efforts to conquer the earth.

The American people,--lacking in political experience and in world
wisdom; ignorant of the laws of economic and social change,--have
committed themselves, unwittingly, to the world old task of setting up
authority over those who have no desire to accept it, and of exacting
tribute from those who do not wish to pay it.

The early stages of the journey led across a continent. The American
people followed it eagerly. Now that the trail leads to other continents
they are still willing to go.

"Manifest destiny" is the cry of the leaders. "We are called," echo the
followers, and the nation moves onward.

There was some hesitancy among the American people during the Spanish
War. Even the leaders were not ready then. Now the leaders are
prepared--for markets, for trade, for investments. They are indifferent
to political conquest, but economically they are prepared to go on--into
Latin America; into Asia; into Europe. The war taught them the lesson
and gave them an inkling of their power. So they move along the imperial
highroad--followed by a people who have not yet learned to chant the
songs of victory--but who are destined, at no very distant date, to
learn victory's lessons and to pay victory's price. Along the path,--far
away in the distance they see the earth like a ball, rolling at their
feet. It is theirs if they will but reach out their hands to grasp it!


2. _An Imperial People_

This is the American people--locked in the arms of mighty economic and
social forces; building industrial empires; compelled, by a world war,
to reach out and save "civilization,"--capitalist civilization,--a
people that, by its very ancestry, seems destined to follow the course
of empire.

The sons and daughters of the native born American stock are, in the
main, the descendants of the conquering, imperial races of the modern
world. During recent times, three great empires--Spain, France and Great
Britain--have dominated western civilization. It was these three empires
that were responsible for the settlement of America. The past generation
has seen the German empire rise to a position that has enabled her to
shake the security of the world. The Germans were among the earliest and
most numerous settlers of the American colonies. Those who boast
colonial ancestry boast the ancestry of conquerors. The
Anglo-Saxon-Teutonic races, the titular masters of the modern world;
the races that have spread their power where-ever ships sail or trade
moves or gain offers, furnished the bulk of the early immigrants to
America.

The bulk of the early immigration to the United States was from Great
Britain and Germany. The records of immigration (kept officially since
1820) show that between that year and 1840 the immigrants from Europe
numbered 594,504, among them there were 358,994 (over half) from the
British Isles, and 159,215 from Germany, making a total from the two
countries of 518,209, or 87 percent of the immigrants arriving in the
twenty-year period. During the next twenty years (1840-1860) the total
of immigrants from Europe was 4,050,159, of which the British Isles
furnished 2,386,846 (over half) and Germany 1,386,293, making, for these
two countries, 94 percent of the whole immigration. Even during the
years from 1860 to 1880, 82 percent of those who migrated to the United
States hailed from Great Britain and Germany. American immigration, from
1820 to 1880, might, without any violence to facts, be described as
Anglo-Teutonic, so completely does the British-German immigrant dominate
this period.

Literally, it is true that the American people have been sired by the
masters and would-be masters of the modern earth.


3. _A Place in the Sun_

The Americans, like many another growing people, have sought a place in
the sun--widening their boundaries; grasping at promised riches. Unlike
other peoples they have accomplished the task without any real
opposition. Their "promised land" lay all about them, isolated from the
factional warfare of Europe; virgin; awaiting the master of the Western
World.

The United States has followed the path of empire with a facility
unexampled in recent history. When has a people, caught in the net of
imperialism, encountered less difficulty in making its imperial dream
come true? None of the foes that the American people have encountered,
in two centuries of expansion, have been worthy of the name. The Indians
were in no position to withstand the onslaught of the Whites. The
Mexicans were even less competent to defend themselves. The Spanish
Empire crumpled, under attack, like an autumn leaf under the heel of a
hunter. Practically for the taking, the American people secured a
richly-stocked, compact region, with an area of three millions of square
miles--the ideal site for the foundation of a modern civilization.

The area of the United States has increased with marvelous rapidity. At
the outbreak of the Revolution (1776) the Colonies claimed a territory
of 369,000 square miles. The Northwest Territory (275,000 square miles)
and the area south of the Ohio River (205,000 square miles) were added
largely as a result of the negotiations in 1782. The official figures
for 1800 give the total area of the United States as 892,135 square
miles. The Louisiana Purchase (1803) added 885,000 square miles at a
cost of 15 millions of dollars. Florida, 59,600 square miles, was
purchased from Spain (1819) for 5 millions of dollars; Texas, 389,000
square miles was annexed in 1845; the Oregon Country, 285,000 square
miles, was secured by treaty in 1846; New Mexico and California, 529,000
square miles, were ceded by Spain (1848) and a payment of 15 millions
was made by the United States; in 1853 the Gadsen Purchase added 30,000
square miles at a cost of ten millions of dollars. This completed the
territorial possessions of the United States on the mainland (with the
exception of Alaska) making a continental area of 3,026,798 square
miles. Between 1776 and 1853 the area of the United States was increased
more than eight fold. What other nation has been in a position to
multiply its home territory by eight in two generations?

These vast additions to the continental possessions of the United States
were made as the result of a trifling outlay. The most serious losses
were involved in the Mexican War when the casualties included more than
13,000 killed and died of wounds and disease. The net money cost of the
war did not exceed $100,000,000. In return for this outlay--including
the annexation of Texas--the United States secured 918,000 square miles
of land.[48]

There is no way to estimate the loss of life or the money cost of the
Indian Wars. For the most part, the troops engaged in them suffered no
more heavily than in ordinary police duty, and the costs were the costs
of maintaining the regular army. The total money outlay for purchases
and indemnities was about 45 millions of dollars. Within a century the
American people gained possession of one of the richest portions of the
earth's surfaces--a portion equal in area to more than three times the
combined acreage of Belgium, France, Germany, Italy, Japan and the
British Isles[49]--in return for an outlay in money and life that would
not have provided for one first class battle of the Great War.

Additions to the territory of the country were made with equal facility
during the period following the Civil War. Alaska was purchased from
Russia for $7,200,000; from Spain, as a result of the War of 1898, the
United States received the Philippines, Porto Rico, and some lesser
islands, at the same time paying Spain $20,000,000; Hawaii was annexed
and an indemnity of $10,000,000 was paid to Panama for the Canal strip.
During the second half of the nineteenth century, 716,666 square miles
were added to the possessions of the United States. The total direct
cost of this territory in money was under forty millions. These gains
involved no casualties with the exception of the small numbers lost
during the Spanish-American and Philippine Wars.

One hundred and thirty years have witnessed an addition to the United
States of more than two and a half million square miles of contiguous,
continental territory, and three-quarters of a million square miles of
non-contiguous territory. The area of the United States in 1900 was four
times as great as it was in 1800 and more than ten times as great as the
area of the Thirteen Original Colonies. For the imperialist, the last
century and a half of American history is a fairyland come true.

Other empires have been won by the hardest kind of fighting, during
which blood and wealth have been spent with a lavish hand. The empire of
the French, finally crushed with the defeat of Napoleon, was paid for at
such a huge price. The British Empire has been established in savage
competition with Holland, Spain, France, Russia, the United States,
Germany and a host of lesser powers. The empires of old--Assyria, Egypt,
Rome--were built at an intolerable sacrifice. So terrible has been the
cost of empire building to some of these nations that by the time they
had succeeded in creating an empire the life blood of the people and the
resources of the country were devoured and the empire emerged, only to
fall an easy prey to the first strong-handed enemy that it encountered.

No such fate has overtaken the United States. On the contrary her path
has been smoothed before her feet. Inhabiting a garden spot, her immense
territory gains in the past hundred and fifty years have been made with
less effort than it has cost Japan to gain and hold Korea or England to
maintain her dominion over Ireland.

Once established, the old-world empire was not secure. If the territory
that it possessed was worth having, it was surrounded by hungry-eyed
nations that took the first occasion to band together and despoil the
spoiler. The holding of an empire was as great a task as the building of
empire--often greater because of the larger outlay in men and money that
was involved in an incessant warfare. Little by little the glory faded;
step by step militarism made its inroads upon the normal life of the
people, until the time came for the stronger rival to overthrow the
mighty one, or until the inrushing hordes of barbarians should blot out
the features of civilization, and enthrone chaos once more.

How different has been the fate of the people of the United States!
Possessed of what is probably the richest, for the purposes of the
present civilization, of any territory of equal size in the world, their
isolation has allowed them more than a century of practical freedom from
outside interference--a century that they have been able to devote to
internal development. The absence of greedy neighbors has reduced the
expense of military preparation to a minimum; the old world has failed
to realize, until within the last few years, what were the possibilities
of the new country; vitality has remained unimpaired, wealth has piled
up, industry has been promoted, and on each occasion when a greater
extent of territory was required, it has been obtained at a cost that,
compared with the experience of other nations, must be described as
negligible.

So simple has been the process of empire building for the United States;
so natural have been the stages by which the American Empire has been
evolved; so little have the changes disturbed the routine of normal life
that the American people are, for the most part, unaware of the imperial
position of their country. They still feel, think and talk as if the
United States were a tiny corner, fenced off from the rest of the world
to which it owed nothing and from which it expected nothing.

The American Empire has been built, as were the palaces of Aladdin, in a
night. The morning is dawning, and the early risers who were not even
awakened from their slumbers by the sound of hammer and engine, are
beginning to rub their eyes, and to ask one another what is the meaning
of this apparition, and whether it is real.


4. _The Will to Power_

The forces of America are the forces of Empire,--the geography, the
economic organization, the racial qualities--all press in the direction
of imperialism. There is logic behind the two centuries of conquest in
which the American people have been engaged; there is logic in the rise
of the plutocracy. Now it remains for the rulers of America to accept
the implications of imperialism,--to thrill with the will to power; to
recognize and strengthen imperial purpose; to sell imperialism to the
American people--in other words to follow the call of manifest destiny
and conquer the earth.

The will to power is very old and very strong. Economic and social
necessity on the one hand, and the driving pressure of human ambition
and the love of domination on the other, have given it a front place in
human affairs. The empires of the past were driven into being by this
ardent force. As far back as history bears a record, one nation or tribe
has made war on its more fortunately situated neighbor; one leader has
made cause against his fellow ruler. The Egyptians and Carthaginians
have conquered in Africa; the Persians, Assyrians and Babylonians
conquered in Asia; the Macedonians, Greeks, Romans, Spanish, Dutch,
French, and British built their empires on one or more of the five
continents. Conqueror has succeeded conqueror, empire has followed
empire. Spoils, domination, world power, have been the objects of their
campaigns.

Each great nation grew from small beginnings. Each arose from some
simple form of tribal or clan organization--more or less democratic in
its structure; containing within itself a unified life and a simple folk
philosophy.

From such plain beginnings empires have developed. The peasants, tending
their fertile gardens along the borders of the Nile; the vine dressers
of Italy, the husbandmen and craftsmen of France and the yeomen of Merry
England had no desire to subjugate the world. If tradition speaks truth,
they were slow to take upon themselves anything more than the defense of
their own hearthstones. It was not until the traders sailed across the
seas; not until stories were brought to them of the vast spoil to be
had, without work, in other lands, that the peasants and craftsmen
consented to undertake the task of conquest, subjugation and empire
building.

The plain people do not feel the will to power. They know only the
necessities of self-defense. It is in the ambitions of the leisure
classes that the demands of conquest have their origin. It is among them
that men dream of world empire.[50]

The plain people of the United States have no will to power at the
present time. They are only asking to be let alone, in order that they
may go their several ways in peace. They are babes in the world of
international politics. For generations they have been separated by a
great gulf of indifference from the remainder of the human race, and
they crave the continuance of this isolation because it gives them a
chance to engage, unmolested, in the ordinary pursuits of life.

The American people are not imperialists. They are proud of their
country, jealous of her honor, willing to make sacrifices for their dear
ones. They are to-day where the plain folk of Egypt, Rome, France and
England were before the will to power gripped the ruling classes of
those countries.

Far different is the position of the American plutocracy. As a ruling
class the plutocracy feels the necessity of preserving and enlarging its
privileges. Recently called into a position of leadership, untrained and
in a sense unprepared, it nevertheless understands that its claim to
consideration depends upon its ability to do what the ruling classes of
Egypt, Rome, France and England have done--to build an empire.

Almost unconsciously, out of the necessities of the period, has come the
structure of the American Empire. In essence it is an empire, although
the plain people do not know it, and even the members of the plutocracy
are in many instances unaware of its true character. Yet here, in a land
dedicated to liberty and settled by men and women who sought to escape
from the savage struggles of empire-ridden Europe, the foundations and
the superstructure of empire appear.

1. The people of the United States have conquered and now hold
possession of approximately three million square miles of continental
territory that has been won by armed force from Great Britain, Mexico,
Spain, and the American Indians. (The entire area of Europe is only
3,800,000 square miles.)

2. The people of the United States have conquered and now hold under
their sway subject people who have enjoyed no opportunity for
self-determination. A whole race--the African Negroes--was captured in
its native land, transported to America and there sold into slavery. The
inhabitants of the Philippine Islands were conquered by the armed forces
of the United States and still are subject people.

3. The United States had developed a plutocracy--a property holding
class, that is, to all intents and purposes, the imperialist
class--controlling and directing public policy.

4. This plutocratic class is exploiting continental United States and
its dependencies. After years of savage internal strife, it has
developed a high degree of class consciousness, and led by its bankers,
it is taking the fat of the land. The plutocrats, who have made the
country their United States, are at the present moment busy disposing of
their surplus in foreign countries. As they build their industrial
empires, they broaden and deepen their power.

Thus is the round of imperialism complete. Here are the conquered
territory, subject people, an imperial ruling class, and the
exploitation, by this class, of the lands and peoples that come within
the scope of their power. These are the attributes of empire--the
characteristics that have appeared, in one form or another, through the
great empires of the past and of the present day. Differing in their
forms, they remain similar in the principles that they represent. They
are imperialism.


5. _Imperial Purpose_

The building of international industrial empires by the progressive
business men of the United States lays the foundation for whatever
political imperialism is necessary to protect markets, trade and
investment. Gathering floods of economic surplus are the driving forces
which are guided by ambition and love of gain and power.

The United States emerged from the Great War in a position of
unquestioned economic supremacy. With vast stores of all the necessary
resources, amply equipped with capital, the country has entered the
field as the most dangerous rival that the other capitalist nations must
face. Possessed of everything, including the means of providing a navy
of any reasonable size and an army of any necessary number, the United
States looms as the dominating economic factor in the capitalist world.

Imperial policy is frequently bold, rough and at times frankly brutal
and unjust. Where subject peoples and weaker neighbors submit to the
dictates of the ruling power there is no friction. But where the subject
peoples or smaller states attempt to assert their rights of
self-determination or of independence, the empire acts as Great Britain
has acted in Ireland and in India; as Italy and France have acted in
Africa; as Japan has acted in Korea; as the United States has acted in
the Philippines, in Hayti, in Nicaragua, and in Mexico.

Plain men do not like these things. Animated by the belief in popular
rights which is so prevalent among the western peoples, the masses
resent imperial atrocities. Therefore it becomes necessary to surround
imperial action with such an atmosphere as will convince the man on the
street that the acts are necessary or else that they are inevitable.

When the Church and the State stood together the Czar and the Kaiser
spoke for God as well as for the financial interests. There was thus a
double sanction--imperial necessity coupled with divine authority.
Those who were not willing to accept the necessity felt enough reverence
for the authority to bow their heads in submission to whatever policy
the masters of empire might inaugurate.

The course of empire upon which the United States has embarked involves
a complete departure from all of the most cherished traditions of the
American people. Economic, political and social theories must all be
thrust aside. Liberty, equality and fraternity must all be forgotten and
in their places must be erected new standards of imperial purpose that
are acceptable to the economic and political masters of present day
American life.

The American people have been taught the language of liberty. They
believe in freedom for self-determination. Their own government was born
as a protest against imperial tyranny and they glory in its origin and
speak proudly of its revolutionary background. Americans are still
individualists. Their lives and thoughts both have been
provincial--perhaps somewhat narrow. They profess the doctrine "Live and
let live" and in a large measure they are willing and anxious to
practice it.

How is it possible to harmonize the Declaration of Independence with the
subjugation of peoples and the conquest of territory? If governments
"derive their just powers from the consent of the governed," and if it
is the right of a people to alter or to abolish any government which
does not insure their safety and happiness, then manifestly subjugation
and conquest are impossible.

The letter and the spirit of the Declaration of Independence contradict
the letter and spirit of imperial purpose word for word and line for
line. There can be no harmony between these two theories of social life.


6. _Advertising Imperialism_

Since the tradition of the people of the United States and the
necessities of imperialism are so utterly at variance, it becomes
necessary to convince the American people that they should abandon
their traditions and accept a new order of society, under which the will
to power shall be substituted for liberty and fraternity. The ruling
class of imperial Germany did this frankly and in so many words. The
English speaking world is more adroit.

The first step in the campaign to advertise and justify imperialism is
the teaching of a blind my-country-right-or-wrong patriotism. In the
days preceding the war the idea was expressed in the phrase, "Stand
behind the President." The object of this teaching is to instill in the
minds of the people, and particularly of the young, the principles of
"Deutschland über alles," which, in translation, means "America first."
There are more than twenty million children in the public schools of the
United States who are receiving daily lessons in this first principle of
popular support for imperial policy.

Having taken this first step and made the state supreme over the
individual will and conscience, the imperial class makes its next
move--for "national defense." The country is made to appear in constant
danger from attack. Men are urged to protect their homes and their
families. They are persuaded that the white dove of peace cannot rest
securely on anything less than a great navy and army large enough to
hold off aggressors. The same forces that are most eager to preach
patriotism are the most anxious about national preparedness.

Meanwhile the plain people are taught to regard themselves and their
civilization as superior to anything else on earth. Those who have a
different language or a different color are referred to as "inferior
peoples." The people of Panama cannot dig a canal, the people of Cuba
cannot drive out yellow fever, the people of the Philippines cannot run
a successful educational system, but the people of the United States can
do all of these things,--therefore they are justified in interfering in
the internal affairs of Panama, Cuba and the Philippines. When there is
a threat of trouble with Mexico, the papers refer to "cleaning up
Mexico" very much as a mother might refer to cleaning up a dirty child.

Patriotism, preparedness and a sense of general superiority lead to
that type of international snobbery that says, "Our flag is on the seven
seas"; or "The sun never sets on our possessions"; or "Our navy can lick
anything on earth." The preliminary work of "Education" has now been
done; the way has been prepared.

One more step must be taken, and the process of imperializing public
opinion is complete. The people are told that the imperialism to which
they have been called is the work of "manifest destiny."


7. _Manifest Destiny_

The argument of "manifest destiny" is employed by the strong as a
blanket justification for acts of aggression against the weak. Each time
that the United States has come face to face with the necessity of
adding to its territory at the expense of some weak neighbor, the
advocates of expansion have plied this argument with vigor and with
uniform success.

The American nation began its work of territorial expansion with the
purchase of Louisiana. Jefferson, who had been elected on a platform of
strict construction of the Constitution, hesitated at an act which he
regarded as "beyond the Constitution." (Jefferson's "Works," Vol. IV, p.
198.) Quite different was the language of his more imperialistic
contemporaries. Gouverneur Morris said, "France will not sell this
territory. If we want it, we must adopt the Spartan policy and obtain it
by steel, not by gold."[51] During February, 1803, the United States
Senate debated the closing of the Mississippi to American commerce. "To
the free navigation of the Mississippi we had an undoubted right from
nature and from the position of the Western country,"[52] said Senator
Ross (Pennsylvania) on February 14. On February 23rd Senator White
(Delaware) went a step farther: "You had as well pretend to dam up the
mouth of the Mississippi, and say to the restless waves, 'Ye shall cease
here, and never mingle with the ocean,' as to expect they (the settlers)
will be prevented from descending it."[53] On the same day (February
23rd) Senator Jackson (Georgia) said: "God and nature have destined New
Orleans and the Floridas to belong to this great and rising Empire."[54]

God, nature and the requirements of American commerce were the arguments
used to justify the purchase, or if necessary, the seizure of New
Orleans. The precedent has been followed and the same arguments
presented all through the century that followed the momentous decision
to extend the territory of the United States.

Some reference has been made to the Mexican War and the argument that
the Southwest was a "natural" part of the territory of the United
States. The same argument was made in regard to Cuba and by the same
spokesmen of the slave-power. Stephen A. Douglas (New Orleans, December
13, 1858) was asked:

"How about Cuba?"

"It is our destiny to have Cuba," he answered, "and you can't prevent it
if you try."[55]

On another occasion (New York, December, 1858) Douglas stated the matter
even more broadly:

"This is a young, vigorous and growing nation and must obey the law of
increase, must multiply and as fast as we multiply we must expand. You
can't resist the law if you try. He is foolish who puts himself in the
way of American destiny."[56]

President McKinley stated that the Philippines, like Cuba and Porto
Rico, "were intrusted to our hands by the Providence of God" (Boston,
February 16, 1899), and one of his fellow imperialists--Senator
Beveridge of Indiana--carried the argument one step farther (January 9,
1900) when he said in the Senate (_Congressional Record_, January 9,
1900, p. 704): "The Philippines are ours forever.... And just beyond the
Philippines are China's illimitable markets. We will not retreat from
either. We will not repudiate our duty to the archipelago. We will not
abandon our opportunity in the Orient. We will not renounce our part in
the mission of our race, trustee, under God, of the civilization of the
world."

Manifest destiny is now urged to justify further acts of aggression by
the United States against her weaker neighbors. _The Chicago Tribune_,
discussing the Panama Canal and its implications, says editorially (May
5, 1916): "The Panama Canal has gone a long way towards making our shore
continuous and the intervals must and will be filled up; not necessarily
by conquest or even formal annexation, but by a decisive control in one
form or another."

Here the argument of manifest destiny is backed by the argument of
"military necessity,"--the argument that led Great Britain to possess
herself of Gibraltar, Suez and a score of other strategic points all
round the earth, and to maintain, at a ruinous cost, a huge navy; the
argument that led Napoleon across Europe in his march of bloody, fatal
triumph; the argument that led Germany through Belgium in 1914--one of
the weakest and yet one of the most seductive and compelling arguments
that falls from the tongue of man. Because we have a western and an
eastern front, we must have the Panama Canal. Because we have the Panama
Canal, we must dominate Central America. The next step is equally plain;
because we dominate Central America and the Panama Canal, there must be
a land route straight through to the Canal. In the present state of
Mexican unrest, that is impossible, and therefore we must dominate
Mexico.

The argument was stated with persuasive power by ex-Senator Albert J.
Beveridge (_Collier's Weekly_, May 19, 1917). "Thus in halting fashion
but nevertheless surely, the chain of power and influence is being
forged about the Gulf. To neglect Mexico is to throw away not only one
link but a large part of that chain without which the value and
usefulness of the remainder are greatly diminished if indeed not
rendered negligible." By a similar train of logic, the entire American
continent, from Cape Horn to Bering Sea can and will be brought under
the dominion of the United States.

Some destiny must call, some imperative necessity must beckon, some
divine authority must be invoked. The campaign for "100 percent
Americanism," carefully thought out, generously financed and carried to
every nook and corner of the United States aims to prove this necessity.
The war waged by the Department of Justice and by other public officers
against the "Reds" is intended to arouse in the American people a sense
of the present danger of impending calamity. The divine sanction was
expressed by President Wilson in his address to the Senate on July 10,
1919. The President discussed the Peace Treaty in some of its aspects
and then said, "It is thus that a new responsibility has come to this
great nation that we honor and that we would all wish to lift to yet
higher service and achievement. The stage is set, the destiny disclosed.
It has come about by no plan of our conceiving but by the hand of God
who has led us into this war. We cannot turn back. We can only go
forward, with lifted and freshened spirit to follow the vision."


8. _The Open Road_

The American people took a long step forward on November 2, 1920. The
era of modern imperialism, begun in 1896 by the election of McKinley,
found its expression in the annexation of Hawaii; the conquest of Cuba
and the Philippines; the seizure of Panama, and a rapid commercial and
financial expansion into Latin America. In 1912 the Republicans were
divided. The more conservative elements backed Taft for reëlection. The
more aggressive group (notably United States Steel) supported
Roosevelt. Between them they divided the Republican strength, and while
they polled a total vote of 7,604,463 as compared with Wilson's
6,293,910, the Republican split enabled Wilson to secure a plurality of
2,173,512, although he had less than half of the total vote.

President Wilson entered office with the ideals of "The New Freedom." He
was out to back the "man on the make," the small tradesman and
manufacturer; the small farmer; the worker, ambitious to rise into the
ranks of business or professional life. With the support, primarily, of
little business, Wilson managed to hold his own for four years, and at
the 1916 election to poll a plurality, over the Republican Party, of
more than half a million votes. He won, however, primarily because "he
kept us out of war." April, 1917, deprived him of that argument. His
"New Freedom" doctrines, translated into international politics (in the
Fourteen Points) were roughly handled in Paris. The country rejected his
leadership in the decisive Congressional elections of 1918, and he and
his party went out of power in the avalanche of 1920, when Harding
received a plurality nearly three times as great as the highest one ever
before given a presidential candidate (Roosevelt, in 1904). Every state
north of the Mason and Dixon Line went Republican. Tennessee left the
Solid South and joined the same party. The Democrats carried only eleven
states--the traditional Democratic stronghold.

The victory of Harding is a victory for organized, imperial, American
business. The "man on the make" is brushed aside. In his place stands
banker, manufacturer and trader, ready to carry American money and
American products into Latin America and Asia.

Before the United States lies the open road of imperialism. Manifest
destiny points the way in gestures that cannot be mistaken. Capitalist
society in the United States has evolved to a place where it must make
certain pressing demands upon neighboring communities. Surplus is to be
invested; investments are to be protected, American authority is to be
respected. All of these necessities imply the exercise of imperial power
by the government of the United States.

Capitalism makes these demands upon the rulers of capitalist society.
There is no gainsaying them. A refusal to comply with them means death.

Therefore the American nation, under the urge of economic necessity;
guided half-intelligently, half-instinctively by the plutocracy, is
moving along the imperial highroad, and woe to the man that steps across
the path that leads to their fulfillment. He who seeks to thwart
imperial destiny will be branded as traitor to his country and as
blasphemer against God.

FOOTNOTES:

[48] "New American History," A. B. Hart. American Book Co., 1917, p.
348.

[49] The total area of these countries, exclusive of their colonies, is
807,123 square miles.

[50] See "Theory of the Leisure Class," Thorstein Veblen. New York,
Huebsch, 1918, Ch. 10.

[51] "A History of Missouri," Louis Houck. Chicago, R. R. Donnelly &
Sons, 1908, vol. II, p. 346.

[52] "History of Louisiana," Charles Gayarre. New Orleans, Hansell &
Bros., Ltd., 1903, vol. III, p. 478.

[53] Ibid., p. 485.

[54] Ibid., p. 486.

[55] McMaster's "History of the American People." Vol. VIII, p. 339.

[56] Ibid., p. 339.



XIII. THE UNITED STATES AS A WORLD COMPETITOR


1. _A New World Power_

Youngest among the great nations, the United States holds a position of
immense world power. Measured in years and compared with her sister
nations in Europe and Asia, she is a babe. Measured in economic strength
she is a burly giant. Young America is, but mighty with a vast economic
strength.

An inexorable destiny seems to be forcing the United States into a
position of international importance. Up to the time of the Spanish War,
she played only a minor part in the affairs of the world. The Spanish
War was the turning point--the United States as a borrowing nation gave
way then, to the United States as an investing nation. Economic forces
compelled the masters of economic life to look outside of the country
for some of their business opportunities.

Since the Civil War the United States has been preparing herself for her
part in world affairs. During the thirty years that elapsed between 1870
and 1900 she emerged from a position of comparative economic inferiority
to take a position of notable economic importance. Between the years
1870 and 1900 the population of the United States increased 97 per cent.
During the same period the annual production of wheat increased from 236
million bushels to 522 million bushels; the annual production of corn
from 1,094 to 2,105 million bushels; the annual production of cotton
from 4,352 to 10,102 thousand bales; the annual production of coal from
29 to 241 million tons; the annual production of petroleum from 221 to
2,672 million gallons; the annual production of pig iron from 1,665 to
13,789 thousand tons; the annual production of steel from 68 to 10,188
thousand tons; the annual production of copper from 12 to 271 thousand
tons, and the production of cement (there is no record for 1870) rose
from two million barrels in 1880 to 17 million barrels in 1900. Thus
while the production of food more than kept pace with the increase of
population, the production of those commodities upon which the new
industry depends--coal, petroleum, iron, steel, copper and
cement--increased many times more rapidly than the population. During
one brief generation the United States, with almost unbelievable
rapidity, forged ahead in the essentials for supremacy in the new world
of industry.

By the time of the Spanish War (1898) American industries had found
their stride. During the next fourteen years they were overtaking their
European competitors in seven league boots. Between 1900 and 1914 while
the population of the United States increased by 30 per cent,--


     Wheat production increased       70 per cent
     Corn production increased        27  "   "
     Cotton production increased      58  "   "
     Coal production increased        90  "   "
     Petroleum production increased  317  "   "
     Pig Iron production increased    69  "   "
     Steel production increased      131  "   "
     Copper production increased      89  "   "
     Cement production increased     406  "   "


The United States was rushing toward a position of economic world power
before the catastrophe of 1914 hurled her to the front, first as a
producer (at immense profits) for the Allies, and later as the financier
of the final stages of the War.

The economic position that is now held by the United States among the
great competing nations of the world can be in some measure
suggested--it cannot be adequately stated--by a comparison of the
economic position of the United States and some of the other leading
world empires.

Neither the geographical area of the United States nor the numerical
importance of its people justifies its present world position. The
country, with 8 per cent of the area and 6 per cent of the population of
the world, looms large in the world's economic affairs,--how large will
appear from an examination of certain features that are considered
essential to economic success, such as resources, capital, products,
shipping, and national wealth and income.


2. _The Resources of the United States_

The most important resource of any country is the fertile, agricultural
land. Figures given in the Department of Agriculture Year Book for 1918
(Table 319) show the amount of productive land,--including, beside
cultivated land, natural meadows, pastures, forests, woodlots, etc., of
the various countries according to pre-war boundary lines. The total of
such productive land for the 36 leading countries of the world was
4,591.7 million acres. Russia, including Siberia, had almost a third of
this total (1,414.7 million acres). The United States came second with
878.8 million acres, or 19 per cent of the total available productive
land. Third in the list was Argentine with 537.8 million acres. British
India came fourth with 465.7 million acres. Then there followed in order
Austria-Hungary, Germany, France, Australia, Spain and Japan.
Austria-Hungary, Germany and France combined had almost exactly four
hundred million acres of productive land or less than half the
productive area of the United States.

The United States, in the area of productive land, is second only to
Russia. In the area of land actually under cultivation, however, it
stands first, with Russia a close second and British India a close
third,--the amounts of cultivated land in each of these countries being
293.8 million acres, 279.6 million acres, and 264.9 million acres
respectively. These three countries together contain 64 per cent of the
1,313.8 million acres of cultivated land of the world. The United States
alone contains 22 per cent of the total cultivated land.

The total forest acreage available for commercial purposes is greatest
in Russia (728.4 million acres). The United States stands second with
400 million acres and Canada third with 341 million acres. The Chief of
Forest Investigations of the United States Department of Agriculture
(Letter of Oct. 11, 1919) places the total forest acreage of both Brazil
and Canada ahead of the United States. In the case of Brazil no figures
are available showing what portion of the 988 million acres of total
area is commercially available. Canada with a total forest acreage of
800 million acres has less timber commercially available than the United
States with a total forest area of 500 million acres.

The iron ore reserves of the world are estimated at 91,000 million tons
("Iron Ores," Edwin C. Eckel. McGraw Hill Book Co., 1914, pp. 392-3). Of
this amount 51,000 millions are placed in Asia and Africa; 12,000
million tons in Europe, and 14,800 million tons in North America. The
United States alone is credited with 4,260 million tons or about 5 per
cent of the world's supply. The United States Geological Survey
(_Bulletin_ 666v) estimates the supply of the United States at 7,550
million tons; the supply in Newfoundland, Mexico and Cuba as 7,000
million tons, and that in South America as 8,000 million tons as against
12,000 million tons for Europe. This estimate would give the United
States alone 8 per cent of the iron ore of the world. It would give
North America 15 per cent and the Western Hemisphere 25 per cent, as
against 15 per cent for Europe.

Iron ore furnishes the material out of which industrial civilization is
constructed. Until recently the source of industrial power has been
coal. Even to-day petroleum and water play a relatively unimportant
rôle. Coal still holds the field.

The United States alone contains 3,838,657 million tons--more than half
of the total coal reserves of the world. ("Coal Resources of the World."
Compiled by the Executive Committee, International Geological Congress,
1913, Vol. I, p. XVIII ff.) North America is credited with 5,073,431
million tons or over two-thirds of the world's total coal reserves
(7,397,553 millions of tons). The coal reserve of Europe is 784,190
million tons or about one-fifth of the coal reserves of the United
States alone.

Figures showing the amount of productive land and of timber may be
verified. Those dealing with iron ore and coal in the ground are mere
estimates and should be treated as such. At the same time they give a
rough idea of the economic situation. Of all the essential
resources,--land, timber, iron, copper, coal, petroleum and
water-power,--the United States has large supplies. As compared with
Europe, her supply of most of them is enormous. No other single country
(the British Empire is not a single country) that is now competing for
the supremacy of the world can compare with the United States in this
regard, and if North America be taken as the unit of discussion, its
preponderance is enormous.


3. _The Capital of the United States_

The United States apparently enjoys a large superiority over any single
country in its reserves of some of the most essential resources. The
same thing is true of productive machinery.

Figures showing the actual quantities of capital are available in only a
small number of cases. Estimates of capital value in terms of money are
useless. It is only the figures which show numbers of machines that
really give a basis for judging actual differences.

Live stock on farms, the chief form of agricultural capital, is reported
for the various countries in the Year Book of the United States
Department of Agriculture. The United States (1916) heads the list with
61.9 million cattle; 67.8 million hogs; 48.6 million sheep and goats,
and 25.8 million horses and mules,--204 million farm animals in all. The
Russian Empire (including Russia in Asia) is second (1914) with 52.0
million cattle; 15.0 hogs; 72.0 million sheep and goats, and 34.9
horses and mules,--174 million farm animals in all. British India (1914)
reports more cattle than any other country (140.5 million); she is also
second in the number of sheep and goats with 64.7 millions, but she has
no hogs and 1.9 million horses. Argentina (1914) reports 29.5 million
cattle; 2.9 million sheep and goats; and 8.9 million horses and mules.
The number of animals on European farms outside of Russia is
comparatively small. Germany (1914), United Kingdom (1916),
Austria-Hungary (1913), and France (1916) reported 61.8 million cattle,
46.6 million hogs, 60.8 million sheep and goats, and 11.5 million horses
and mules, making a total of 180.7 million farm animals. These four
countries with a population of about 206 million persons, had less live
stock than the United States with its population (1916) of about 100
millions.

It would be interesting to compare the amount of farm machinery and farm
equipment of the United States with that of other countries.
Unfortunately no such figures are available.

The figures showing transportation capital are fairly complete.
(_Statistical Abstr._ 1918, pp. 844-5.) The total railroad mileage of
the world is 729,845. More than one-third of this mileage (266,381
miles) is in the United States. Russia (1916) comes second with 48,950
miles; Germany (1914) third, with 38,600 miles and Canada (1916) fourth
with 37,437 miles.

The world's total mileage of telegraph wire (Ibid.) is 5,816,219, of
which the United States has more than a fourth (1,627,342 miles). Russia
(1916) is second with 537,208 miles; Germany (1914) is third with
475,551 miles; and France fourth with 452,192 miles.

The Bureau of Railway Economics has published a compilation on
"Comparative Railway Statistics" (_Bulletin 100_, Washington, 1916) from
which it appears that the United States is far ahead of any other
country in its railroad equipment. The total number of locomotives in
the United States was 64,760; in Germany 29,520; in United Kingdom
24,718; in Russia (1910) 19,984; and in France 13,828. No other country
in the world had as many as ten thousand locomotives. If these figures
also showed the locomotive tonnage as well as the number, the lead of
the United States would be even more decided as the European locomotives
are generally smaller than those used in the United States. This fact is
clearly brought out by the figures from the same bulletin showing
freight car tonnage (total carrying capacity of all cars). For the
United States the tonnage was (1913) 86,978,145. The tonnage of Germany
was 10.7 millions; of France 5.0 millions; of Austria-Hungary 3.8
millions. The figures for the United Kingdom were not available.

The United States also takes the lead in postal equipment. (_Stat.
Abstr._, 1918, pp. 844-5.) There are 324,869 post offices in the world;
54,257 or one-sixth in the United States. The postal routes of the world
cover 2,513,997 miles, of which 450,954 miles are in the United States.
The total miles of mail service for the world is 2,061 millions. Of this
number the United States has 601.3 millions.

The most extreme contrast between transportation capital in the United
States and foreign countries is furnished by the number of automobiles.
_Facts and Figures_, the official organ of the National Automobile
Chamber of Commerce (April, 1919) estimates the total number of cars in
use on January 1, 1917 as 4,219,246. Of this number almost six-sevenths
(3,500,000) were in use in the United States. The total number of cars
in Europe as estimated by the Fiat Press Bureau, Italy, was 437,558, or
less than one-seventh of the number in use in the United States.
Automobile distribution is of peculiar significance because the industry
has developed almost entirely since the Spanish-American War and
therefore since the time when the United States first began to develop
into a world power.

The world's cotton spindleage in 1919 is estimated at 149.4 million
spindles. (Letter from T. H. Price 10/6/19.) Of this total Great Britain
has 57.0 millions; the United States 33.7 millions; Germany 11.0
millions; Russia 8.0 millions, and France and India each 7.0 millions.

No effort has been made to cite figures showing the estimated value of
various forms of capital, because of the necessary variations in value
standards. Enough material showing actual quantities of capital has been
presented to prove that in agriculture, in transportation, in certain
lines of manufacturing the United States is either at the head of the
list, or else stands in second place. In transportation capital
(particularly automobiles) the lead of the United States is very great.

If figures were available to show the relative amounts of capital used
in mining, in merchandising, and in financial transactions they would
probably show an equally great advantage in favor of the United States.
In this connection it might not be irrelevant to note that in 1915 the
total stock of gold money in the world was 8,258 millions of dollars.
More than a quarter (2,299 millions) was in the United States. The total
stock of silver money was 2,441 millions of dollars of which 756
millions (nearly a third) was in the United States. (_Stat. Abstr._,
1918, pp. 840-1.)


4. _Products of the United States_

Figures showing the amounts of the principal commodities produced in the
United States are far more complete than those covering the resources
and capital. They are perhaps the best index of the present economic
position of the United States in relation to the other countries of the
world.

The wheat crop of the world in 1916 was 3,701.3 million bushels. Russia,
including Siberia, was the leading producer with 686.3 million bushels.
The United States was second with 636.7 million bushels or 17 per cent
of the world's output. British India, the third wheat producer, had a
crop in 1916 of 323.0 million bushels. Canada, with 262.8 million
bushels, was fourth on the list. Thus Canada and the United States
combined produced almost exactly one-fourth of the world's wheat crop.

As a producer of corn the United States is without a peer. The world's
corn crop in 1916 was 3,642.1 million bushels. Two-thirds of this crop
(2,566.9 million bushels) was produced in the United States.

The position of the United States as a producer of corn is almost
duplicated in the case of cotton. The _Statistical Abstract_ published
by the British Government (No. 39, London, 1914, p. 522) gives the
world's cotton production as 21,659,000 bales (1912). Of this number the
United States produced 14,313,000--almost exactly two-thirds. British
India, which ranks second, reported a production of 3,203,000 bales.
Egypt was third with 1,471,000 bales.

About one-tenth of the world's output of wool is produced in the United
States. World production for 1917 is placed at 2,790,000 pounds.
(_Bulletin_, National Association of Wool Manufacturers. 1918, p. 162.)
Australia heads the list with a production of 741.8 million pounds.
Russia, including Siberia, comes second with 380.0 million pounds. The
United States is third with 285.6 million pounds and Argentina fourth
with 258.3 million pounds.

The United States leads the world in timber production. "Last winter we
estimated that the United States has been cutting about 50 per cent of
the total world's supply of lumber." (Letter from Chief of Forest
Investigation. U. S. Forest Service. Oct. 11, 1919.) The same letter
gives the present annual timber cut. The United States 12.5 billion
cubic feet; Russia 7.1 billion cubic feet; Canada 3.0 billion cubic
feet; Austria-Hungary 2.7 billion cubic feet.

A third of the iron ore produced in the world in 1912 came from the
United States. The world's production in that year was 154.0 million
tons (_British Statistical Abstract_, No. 39, p. 492). The United States
produced 56.1 million tons or 36 per cent of the whole; Germany produced
32.7 million tons; France 19.2 million tons; the United Kingdom 14.0
million tons. No other country is reported as producing as much as ten
million tons.

The position of the United States as a producer of iron and steel was
greatly enhanced by the war. _The Daily Consular and Trade Reports_
(July 9, 1919, p. 155) give a comparison between the world's steel and
iron output in 1914 and 1918. In 1914 the United States produced 23.3
million tons of pig iron; Germany produced 14.4 million tons; the United
Kingdom 8.9 million tons, and France 5.2 million tons. The United States
was thus producing 45 per cent of the pig iron turned out in these four
countries. For 1918 the pig iron production of the United States was
39.1 million tons. That of the other three countries was 22.0 million
tons. In that year the United States produced 64 per cent of the pig
iron product of these four countries. An equally great lead is shown in
the case of steel production. In 1914 the United States produced 23.5
million tons of steel. Germany, the United Kingdom and France produced
27.6 million tons. By 1918 the production of the United States had
nearly doubled (45.1 million tons).

The total pig iron output of the world for 1917 was placed at 66.9
millions of tons. The world's production of steel in 1916 was placed at
83 million tons. The United States produced considerably more than half
of both commodities. ("The Mineral Industry During 1918." New York,
McGraw Hill Book Co., 1919, pp. 379-80).

The two chief forms of power upon which modern industry depends are
petroleum and coal. The United States is the largest producer of both of
these commodities. The world's production of petroleum in 1917 was 506.7
million barrels (_Mineral Resources_, 1917, Part II, p. 867). Of this
amount the United States produced 335.3 million barrels or 66 per cent
of the total. The second largest producer, Russia, and the third,
Mexico, are credited with 69 million barrels and 55.3 million barrels
respectively.

As a coal producer the United States stands far ahead of all other
nations. The United States Geological Survey (_Special Report_, No. 118)
placed the total coal production of the world in 1913 at 1,478 million
tons. Of this amount 569.9 million tons (38.5 per cent) were produced in
the United States. The production for Great Britain was 321.7 million
tons; for Germany 305.7 million tons; for Austria-Hungary 60.6 million
tons. No other country reported a production of as much as fifty million
tons. In 1915 the United States produced 40.5 per cent of the world's
coal; in 1917 44.2 per cent; in 1918 46.2 per cent.

Copper has become one of the world's chief metals. Two-thirds of all the
copper is produced in the United States. Copper production in 1916
totaled 3,107 million pounds (_Mineral Resources in the United States_,
1916, part I, p. 625). The production for the United States was 1,927.9
million pounds (62 per cent of the whole). The second largest producer,
Japan, turned out 179.2 million pounds.

The precious metals, gold and silver, are largely produced in the United
States. The world's gold production for 1917 was 423.6 million dollars
(_Mineral Resources_, 1917, p. 613). Africa produced half of this amount
(214.6 million dollars). The United States was second with a production
of 83.8 million dollars (20 per cent of the whole). The same publication
(p. 615) gives the world's silver production in 1917 as 164 million
ounces. 77.1 million ounces (43 per cent) were produced in the United
States. The second largest producer was Mexico, 31.2 million ounces; and
the third Canada, with 22.3 million ounces. These three North American
countries produced 76 per cent of the world's output of silver.

Judge Gary, speaking at the Annual Meeting of the Iron and Steel
Institute (1920) put the situation in this summary form:--

As frequently stated, notwithstanding the United States has only 6% of
the world's population and 7% of the world's land, yet we produce:


     20% of the world's supply of gold,
     25% of the world's supply of wheat,
     40% of the world's supply of iron and steel,
     40% of the world's supply of lead,
     40% of the world's supply of silver,
     50% of the world's supply of zinc,
     52% of the world's supply of coal,
     60% of the world's supply of aluminum,
     60% of the world's supply of copper,
     60% of the world's supply of cotton,
     66% of the world's supply of oil,
     75% of the world's supply of corn,
     85% of the world's supply of automobiles.


With the exception of rubber, practically all of the essential raw
materials and food products upon which modern industrial society depends
are produced largely in the United States. With less than a sixteenth of
the world's population, the United States produced from a fifth to
two-thirds of most of the world's essential products.


5. _Shipping_

The rapid increase in the foreign trade of the United States created a
demand for American shipping facilities. Before the Civil War the United
States held a place as a maritime nation. Between the Civil War and the
war with Spain the energies of the American people were devoted to
internal improvement. With the advent of expansion that followed the
Spanish-American War, came an insistent demand that the United States
develop a merchant marine adequate to carry its own foreign trade.

The United States Commissioner of Navigation in his report for 1917 (p.
78) gives the net gross tonnage of steam and sailing vessels in 1914 as
45 million tons in all. The tonnage of Great Britain was 19.8 million
tons; of Germany 4.9 million tons; of the United States 3.5 million
tons; of Norway 2.4 million tons; of France 2.2 million tons; of Japan
1.7 million tons, and of Italy 1.6 million tons.

The war brought about great changes in the distribution of the world's
shipping. Germany was practically eliminated as a shipping nation. The
necessity of recouping the submarine losses, and of transporting troops
and supplies led the United States to adopt a ship-building program
that made her the second maritime country of the world. Lloyd's Register
of Shipping gives the steam tonnage of the United Kingdom as 18,111,000
gross tons in June, 1920. For the same month the tonnage of the United
States is given as 12,406,000 gross tons. Japan comes next with a
tonnage of 2,996,000 gross tons. According to the same authority the
United Kingdom had 41.6 per cent of the world's tonnage in 1914 and 33.6
per cent in 1920; while the United States had 4.7 per cent of the
world's tonnage in 1914 and 24 per cent in 1920.


6. _Wealth and Income_

The economic advantages of the United States enumerated in this chapter
inevitably are reflected in the figures of national wealth and national
income. While these figures are estimates rather than conclusive
statements they are, nevertheless, indicative of a general situation.

During the war a number of attempts were made to approximate the pre-war
wealth and income of the leading nations. Perhaps the most ambitious of
these efforts was contained in a paper on "Wealth and Income of the
Chief Powers" read before the Royal Statistical Society. (See _The
London Economist_, May 24, 1919, pp. 958-9.) This and other estimates
were compiled by L. R. Gottlieb and printed in the _Quarterly Journal of
Economics_ for Nov. 1919. Mr. Gottlieb estimates the pre-war national
wealth of Great Britain, France, Italy, Japan, Russia, Belgium, Germany,
Austria-Hungary, Turkey and Bulgaria at 366,100 million dollars. At the
same time the wealth of the United States was estimated at 204,400
million dollars. Thus the wealth of the United States was equal to about
36 per cent of the total wealth of the great nations in question.

The same article contains an estimate of pre-war national incomes for
these great powers. The total is placed at 81,100 million dollars. The
income for the United States is placed at 35,300 million dollars, or
more than 43 per cent of the total.

The war has made important changes in the wealth and income of the
principal powers. The wealth and income of Europe have been reduced,
while the wealth and income of the United States have been greatly
increased. This increase is rendered doubly emphatic by the
demoralization in foreign exchange which gives the American dollar a
position of unique authority in the financial world.

The latest wealth estimates (_Commerce and Finance_, May 26, and July
28, 1920) in terms of dollars at their purchasing-power value, makes the
wealth of the whole British Empire 230 billions of dollars; of France,
100 billions; of Russia, 60 billions; of Italy, 40 billions; of Japan,
40 billions; of Germany, 20 billions, and of the United States, 500
billions. These figures are subject to alteration with the alteration of
the exchange rates, but they indicate the immense advantage that is
possessed by the business men of the United States over the business men
of any or of all of the other nations of the world.

Before the war, the British were the chief lenders in the international
field. In 1913 Great Britain had about 20 billions of dollars of foreign
investments, as compared with 9 billions for France and about 6 billions
for Germany. At the end of 1920, the British foreign investments had
shrunk to a fraction of their former amount, while the United States,
from the position of a debtor nation, had become the leading investing
nation of the world, with over 9 billions of dollars loaned to the
Allied governments; with notice loans estimated at over 10 billions;
with foreign investments of 8 billions, and goods on consignment to the
extent of 2 billions.

The United States therefore began the year 1921 with a greater financial
lead, by several times over, than that which she held before the war,
when she was credited with a greater wealth and a larger income than
that of any other nation in the world. The extent of the advantage
enjoyed by the United States at the end of 1920 cannot be stated with
any final accuracy, but its proportions are staggering.


7. _The Economic Position of the United States_

Economically the United States is a world power. She occupies one of the
three great geographical areas in the temperate zone. If she were to
include Canada, Mexico and Central America--the territory north of the
Canal Zone--she would have the greatest unified body of economic
advantage anywhere in the world.

The United States is rich in practically all of the important industrial
resources. She has a large, relatively homogeneous population, a great
part of which is directly descended from the conquering races of the
world. Almost all of the essential raw materials are produced in the
United States, and in relatively large quantities. The period since the
Spanish War has witnessed a rapid increase in wealth production. The war
of 1914 resulted in an even greater increase in shipping. The investable
surplus is greater in the United States than in any other nation, and in
amount as well as in percent the national debt is less than that in any
other important nation except Japan. Economically the position of the
United States is unique. The masters of her industries hold a position
of great advantage in the capitalist world.



XIV. THE PARTITION OF THE EARTH


1. _Economic Power and Political Authority_

Economically the United States is a world power. Her world position in
politics follows as a matter of course.

While the American people were busy with internal development, they
played an unimportant part in world affairs. They were not competing for
world trade, because they had relatively little to export; they were not
building a merchant marine because of the smallness of their trading
activities; they were not engaged in the scramble after undeveloped
countries because, with an undeveloped country of their own, calling
continually for enlarged investments, they had little surplus capital to
employ in foreign enterprises.

This economic isolation of the United States was reflected in an equally
thoroughgoing political isolation. With the exception of the Monroe
Doctrine, which in its original form was intended as a measure of
defense against foreign political and military aggression, the United
States minded its own affairs, and allowed the remainder of the world to
go its way. From time to time, as necessity arose, additional territory
was purchased or taken from neighboring countries--but all of these
transactions, up to the annexation of Hawaii (1898) were confined to the
continent of North America, in which no European nation, with the
exception of Great Britain, had any imperative territorial interest.

The economic changes which immediately preceded the Spanish War period
commanded for the United States a place among the nations. The passing
of economic aloofness marked the passing of political aloofness, and
the United States entered upon a new era of international relationships.
Possessed of abundant natural resources, and having through a long
period of peace developed a large working capital with which these
resources might be exploited, the United States, at the beginning of the
twentieth century, was in a position to export, to trade and to invest
in foreign enterprises.

The advent of the World War gave the United States a dramatic
opportunity to take a position which she must have assumed in any case
in a comparatively short time. It had, however, one signal, diplomatic
advantage,--it enabled the capitalist governments of Europe to accept,
with an excellent grace, the newly acquired economic prominence of the
United States and to recognize her without question as one of the
leading political powers. The loan of ten billions to Europe; the
sending of two million men at double quick time to the battle front; the
immense increases in the production of raw material that followed the
declaration of war by the United States; the thoroughness displayed by
the American people, once they had decided to enter the war, all played
their part in the winning of the victory. There were feelings, very
strongly expressed, that the United States should have come in sooner;
should have sacrificed more and profiteered less. But once in, there
could be no question either of the spirit of her armies or of the vast
economic power behind them.

When it came to dividing the spoils of victory, the United States held,
not only the purse strings, but the largest surpluses of food and raw
materials as well. Her diplomacy at the Peace Table was weak. Her
representatives, inexperienced in such matters, were no match for the
trained diplomats of Europe, but her economic position was unquestioned,
as was her right to take her place as one of the "big five."


2. _Dividing the Spoils_

The Peace Conference, for purposes of treaty making, separated the
nations of the world into five classes:


     1. The great capitalist nations.
     2. The lesser capitalist states.
     3. Enemy nations.
     4. Undeveloped territories.
     5. The socialist states.


The great capitalist states were five in number--Great Britain, France,
Italy, Japan and the United States. These five states dominated the
armistice commission and the Peace Conference and they were expected to
dominate the League of Nations. The position of these five powers was
clearly set forth in the regulations governing procedure at the Peace
Conference. Rule I reads: "The belligerent powers with general
interests--the United States of America, the British Empire, France,
Italy and Japan--shall take part in all meetings and commissions." (_New
York Times_, January 20, 1919.) Under this rule the Big Five were the
Peace Conference, and throughout the subsequent negotiations they
continued to act the part.

The same concentration of authority was read into the revised covenant
of the League of Nations. Article 4 provides that the Executive Council
of the League "shall consist of the representatives of the United States
of America, of the British Empire, of France, of Italy and of Japan,
together with four other members of the League." The authority of the
Big Five was to be maintained by giving them five votes out of nine on
the executive council of the League, no matter how many other nations
might become members.

It was among the Big Five, furthermore, that the spoils of victory were
divided. The Big Five enjoyed a full meal; the lesser capitalist states
had the crumbs.

The enemy nations were stripped bare. Their colonies were taken, their
foreign investments were confiscated, their merchant ships were
appropriated, they were loaded down with enormous indemnities, they were
dismembered. In short, they were rendered incapable of future economic
competition. The thoroughgoing way in which this stripping was
accomplished is discussed in detail by J. M. Keynes in "The Economic
Consequences of the Peace" (chapters 4 and 5).

The undeveloped territories--the economic opportunities upon which the
Big Five were relying for the disposal of their surplus products and
surplus capital, were carved and handed about as a butcher carves a
carcass. Shantung, which Germany had taken from China, was turned over
to Japan under circumstances which made it impossible for China to sign
the Treaty--thus leaving her territory open for further aggression. The
Near East was divided between Great Britain, France and Italy. Mexico
was not invited to sign the treaty and her name was omitted from the
list of those eligible to join the League. The German possessions in
Africa and in the Pacific were distributed in the form of "mandates" to
the Great Powers. The principle underlying this distribution was that
all of the unexploited territory should go to the capitalist victors for
exploitation. The proportions of the division had been established,
previously, in a series of secret treaties that had been entered into
during the earlier years of the war.

With the Big Five in control, with the lesser capitalist states
silenced; with the border states made or in the making; with the enemy
reduced to economic impotence, and the unexploited portions of the world
assigned for exploitation, the conference was compelled to face still
another problem--the Socialist Republic of Russia.

Russia, Czar ridden and oppressed, had entered the war as an ally of
France and Great Britain. Russia, unshackled and attempting
self-government on an economic basis, was an "enemy of civilization."
The Allies therefore supported counter-revolution, organized and
encouraged warfare by the border states, established and maintained a
blockade, the purpose of which was the starvation of the Russian people
into submission, and did all that money, munitions, supplies,
battleships and army divisions could do to destroy the results of the
Russian Revolution.

The Big Five--assuming to speak for all of the twenty-three nations that
had declared war on Germany--manipulated the geography of Europe,
reduced their enemies to penury, disposed of millions of square miles of
territory and tens of millions of human beings as a gardener disposes of
his produce, and then turned their united strength to the task of
crushing the only thing approaching self-government that Russia has had
for centuries.

A more shameless exhibition of imperial lust is not recorded in history.
Never before were five nations in a position to sit down at one table
and decide the political fate of the world. The opportunity was unique,
and yet the statesmen of the world played the old, savage game of
imperial aggression and domination.

This brutal policy of dealing with the world and its people was accepted
by the United States. Throughout the Conference her representatives
occupied a commanding position; at any time they would have been able to
speak with a voice of almost conclusive authority; they chose,
nevertheless, to play their part in this imperial spectacle. To be sure
the Senate refused to ratify the Treaty,--not because of its imperial
iniquities, but rather because there was nothing in it for the United
States.


3. _Italy, France and Japan_

The shares of spoil falling to Italy and France as a result of the
treaty are comparatively small although both countries--and particularly
France--carried a terrific war burden. Japan, the least active of any of
the leading participants in the war, received territory of vast
importance to her future development.

Italy,--under the secret treaty of London, signed April 26, 1915, by
the representatives of Russia, France, Great Britain and Italy,--was to
receive that part of Austria known as the Trentine, the entire southern
Tyrol, the city and suburbs of Trieste, the Istrian Islands and the
province of Dalmatia with various adjacent islands. Furthermore, Article
IX of the Treaty stipulated that, in the division of Turkey, Italy
should be entitled to an equal share in the basin of the Mediterranean,
and specifically to the province of Adalia. Under Article XIII, "In the
event of the expansion of French and English colonial domains in Africa
at the expense of Germany, France and Great Britain recognize in
principle the Italian right to demand for herself certain compensations
in the sense of expansions of her lands in Erithria, Somaliland, in
Lybia and colonial districts lying on the boundary, with the colonies of
France and England." Substantially, this plan was followed in the Peace
Treaty.

The territorial claims of France were simple. The secret treaties
include a note from the French Minister of Foreign Affairs to the French
Ambassador at Petrograd, dated February 1-14, 1917, which stated that
under the Peace Treaty:


     "(1) Alsace and Lorraine to be returned to France.

     "(2) The boundaries will be extended at least to the limits of the
     former principality of Lorraine, and will be fixed under the
     direction of the French Government. At the same time strategic
     demands must be taken into consideration, so as to include within
     the French territory the whole of the industrial iron basin of
     Lorraine and the whole of the industrial coal-basin of the Saar."


The Peace Treaty confirmed these provisions, with the exception of the
Saar Valley, which is to go to France for 15 years under conditions
which will ultimately cause its annexation to France if she desires it.
France also gained some slight territorial concessions in Africa. Her
real advantage--as a result of the peace--lies in the control of the
three provinces with their valuable mineral deposits.

The territorial ambitions of Japan were confined to the Far East. The
former Russian Ambassador to Tokio, under date of February 8, 1917,
makes the statement that Japan was desirous of securing "the succession
to all the rights and privileges possessed by Germany in the Shantung
province and for the acquisition of the islands north of the Equator."
In a secret treaty with Great Britain, Japan secured a guarantee
covering such a division of the German holdings in the Pacific.

These concessions are of great importance to Japan. By the terms of the
Treaty one of her rivals for the trade of the East (Germany) is
eliminated, and the territory of that rival goes to Japan. With the
control of Port Arthur and Korea and Shantung, Japan holds the gateway
to the heart of Northern China. The islands gained by Japan as a result
of the Treaty give her a barrier extending from the Kurile Islands, near
Kamchatka, through the Empire of Japan proper, to Formosa. Farther out
in the Pacific, there are the Ladrones, the Carolines and the Pelew
Islands, which, in combination, make a series of submarine bases that
render attack by sea difficult or impossible, and that lie,
incidentally, between the United States and the Philippine Islands.
Japan came away from the Peace Conference with the key to the East in
her pocket.


4. _The Lion's Share_

The lion's share of the Peace Conference spoil went to Great Britain. To
each of the other participants, certain concessions, agreed upon
beforehand, were made. The remainder of the war-spoil was added to the
British Empire. This "remainder" comprised at least a million and half
square miles of territory, and included some of the most important
resources in the world.

The territorial gains of Great Britain cover four areas--the Near East,
the Far East, Africa, and the South Pacific.

The gains of Great Britain in the Near East include Hedjez and Yemen,
the control of which gives the British possession of virtually all of
the territory bordering on the Red Sea. The Persian Gulf is likewise
placed under British control, through her holding of Mesopotamia and her
control over Persia and Oman. The eastern end of the Mediterranean is
held by the British through their control of Palestine.

Thus the gateway to the East,--both by land and by sea, the eastern
shores of the Mediterranean, the valleys of the Tigris and the Euphrates
and the basin of the Red Sea all fall into the hands of the British, who
now hold the heart of the Near East. The gains of Great Britain in
Africa include Togoland, German Southwest Africa and German East Africa.
With these accessions of territory, Great Britain holds a continuous
stretch of country from the Cape to Cairo. A British subject can
therefore travel on British soil from Cape Town via the Isthmus of Suez,
to Siam, covering a distance as the crow flies of something like 10,000
miles.

The British gains in the South Pacific include Kaiser Wilhelm Land and
the German islands south of the Equator.

What these territorial gains mean in the way of additional resources for
the industries of the home country, only the future can decide. Certain
it is, that outside of the Americas, Central Europe, Russia, China and
Japan, Great Britain succeeded in annexing most of the important
territory of the world.

The _Chicago Tribune_, in one of its charmingly frank editorials, thus
describes the gains to the British Empire as a result of the war. "The
British mopped up. They opened up their highway from Cairo to the Cape.
They reached out from India and took the rich lands of the Euphrates.
They won Mesopotamia and Syria in the war. They won Persia in diplomacy.
They won the east coast of the Red Sea. They put protecting territory
about Egypt and gave India bulwarks. They made the eastern dream of the
Germans a British reality.

"The British never had their trade routes so guarded as now. They never
had their supremacy of the sea so firmly established. Their naval
competitor, Germany, is gone. No navy threatens them. No empire
approximates their size, power, and influence.

"This is the golden age of the British Empire, its Augustan age. Any
imperialistic nation would have fought any war at any time to obtain
such results, and as imperialistic nations count costs, the British
cost, in spite of its great sums in men and money was small." (January
4, 1920.)


5. _Half the World--Without a Struggle_

Two significant facts stand out in this record of spoils distribution.
One is that Great Britain received the lion's share of them in Asia and
Africa. The other, that there is no mention of the Americas. Outside of
the Western Hemisphere, Great Britain is mistress. In the Americas, with
the exception of Canada, the United States is supreme.

There are two reasons for this. One is that Germany's ambitions and
possessions included Asia and Africa primarily--and not America. The
other is that the Peace Conference recognized the right of the United
States to dominate the Western Hemisphere.

The representatives of the United States declared that their country was
asking for nothing from the Peace Conference. Nevertheless, the
insistent clamor from across the water led the American delegation to
secure the insertion in the revised League Covenant of Article XXI which
read: "Nothing in this covenant shall be deemed to affect the validity
of international engagements, such as treaties of arbitration or
regional understandings like the Monroe Doctrine for securing the
maintenance of peace." This article coupled with the first portion of
Article X, "The members of the League undertake to respect and preserve
as against external aggression the territorial integrity and existing
political independence of all members of the League," guarantees to the
United States complete authority over Latin America, reserving to her
political suzerainty and economic priority.

The half of the earth reserved to the United States under these
provisions contains some of the richest mineral deposits, some of the
largest timber areas, and some of the best agricultural territory in the
world. Thus at the opening of the new era, the United States, at the
cost of a comparatively small outlay in men and money, has guaranteed to
her by all of the leading capitalist powers practically an exclusive
privilege for the exploitation of the Western Hemisphere.



XV. PAN-AMERICANISM


1. _America for the Americans_

In the partition of the earth, one-half was left under the control of
the United States. Among the great nations, parties to the war and the
peace, the United States alone asked for nothing--save the acceptance by
the world of the Monroe Doctrine. The doctrine, as generally understood,
makes her mistress of the Western Hemisphere.

The Monroe Doctrine originated in the efforts of Latin America to
establish its independence of imperial Europe, and the counter efforts
of imperial Europe to fasten its authority on the newly created Latin
American Republics. President Monroe, aroused by the European crusade
against popular government, wrote a message to Congress (1823) in which
he stated the position of the United States as follows:

"The American continents, by the free and independent condition which
they have assumed and maintained, are henceforth not to be considered as
subjects for future colonization by any European powers."

Monroe continues by pointing out that the United States must view any
act which aims to establish European authority in the Americas as
"dangerous to our peace and safety."

"The United States will keep her hands off Europe; she will expect
Europe to keep her hands off America," was the essence of the doctrine,
which has been popularly expressed in the phrase "America for the
Americans." The Doctrine was thus a statement of international
aloofness,--a declaration of American independence of the remainder of
the world.

The Monroe Doctrine soon lost its political character. The southern
statesmen who were then guiding the destinies of the United States were
looking with longing eyes into Texas, Mexico, Cuba and other potential
slave-holding territory. Later, the economic necessities of the northern
capitalists led them in the same direction. Professor Roland G. Usher,
in his "Pan-Americanism" (New York, The Century Company, 1915, pp.
391-392) insists that the Monroe Doctrine stands "First, for our
incontrovertible right of self-defense. In the second place the Monroe
Doctrine has stood for the equally undoubted right of the United States
to champion and protect its primary economic interest against Europe or
America."

Through the course of a century this statement of defensive policy has
been converted into a doctrine of economic pseudo-sovereignty. It is no
longer a case of keeping Europe out of Latin America but of getting the
United States into Latin America.

The United States does not fear political aggression by Europe against
the Western Hemisphere. On the contrary, the aggression to-day is
largely economic, and the struggle for the markets and the investment
opportunities of Latin America is being waged by the capitalists of
every great industrial nation, including the United States.


2. _Latin America_

Four of the Latin American countries, viewed from the standpoint of
population and of immediately available assets, rank far ahead of the
remainder of Latin America. Mexico, with a population in 1914-1915 of
15,502,000, had an annual government revenue of $72,687,000. The
population of Brazil is 27,474,000. The annual revenue (1919) is
$183,615,000. Argentine, with a population of 8,284,000, reported annual
revenues of $159,000,000 (1918); and Chile, with a population of
3,870,000, had an annual revenue of $77,964,000 (1917). These four
states rank in political and economic importance close to Canada.

Great Britain holds a number of strategic positions in the West Indies.
Other nations have minor possessions in Latin America. None of these
possessions, however, is of considerable economic or political
importance. There remain Bolivia, Uruguay, Colombia, Ecuador, Paraguay,
Peru, Venezuela, and the Central American states. The most populous of
these countries is Peru (5,800,000 persons). All of the Central American
states combined have a population of less than 6,000,000. The annual
revenues of Uruguay (population 1,407,000) are $30,453,000 (1918-19).
The combined government revenues of all Central America are less than
twenty-five millions. (_Statistical Abstract of the U. S._, 1919, p.
826ff.)

Compared with the hundred million population of the United States; its
estimated wealth (1918) of 250 billions; and its federal revenues of a
billion and a half in 1916, the Latin American republics cut a very
small figure indeed. The United States, bristling with economic surplus
and armed with the Monroe Doctrine, as accepted and interpreted in the
League Covenant, is free to turn her attention to the rich opportunities
offered by the undeveloped territory stretching from the Rio Grande to
Cape Horn. What is there to hinder her movements in this direction?
Nothing but the limitation on her own needs and the adherence to her own
public policies. This vast area, containing approximately nine million
square miles (three times the area of continental United States), has a
population of only a little over seventy millions. The entire government
revenues of the territory are in the neighborhood of six hundred
million, but so widely scattered are the people, so sharp are their
nationalistic differences, and so completely have they failed to build
up anything like an effective league to protect their common interests,
that skillful maneuvering on the part of American economic and political
interests should meet with no effectual or thoroughgoing opposition.

The "hands off America" doctrine which the United States has enunciated,
and which Europe has accepted, means first that none of the Latin
American Republics is permitted to enter into any entangling alliances
without the approval of the United States. In the second place it means
that the United States is free to treat all Latin American countries in
the same way that she has treated Cuba, Hayti and Nicaragua during the
past twenty years.


3. _Economic "Latin America"_

The United States is the chief producer--in the Western Hemisphere--of
the manufactured supplies needed by the relatively undeveloped countries
of Latin America. At the same time, the undeveloped countries of Latin
America contain great supplies of ores, minerals, timber and other raw
materials that are needed by the expanding manufacturing interests of
the United States. The United States is a country with an investible
surplus. Latin America offers ample opportunity for the investment of
that surplus. Surrounding the entire territory is a Chinese wall in the
form of the Monroe Doctrine--intangible but none the less effective.

Before the outbreak of the Great War, European capitalists dominated the
Latin American investment market. The five years of struggle did much to
eliminate European influence in Latin America.

The situation was reviewed at length in a publication of the United
States Department of Commerce "Investments in Latin America and the
British West Indies," by Frederick M. Halsey (Washington Government
Printing Office, 1918):

"Concerning the undeveloped wealth of various South American countries,"
writes Mr. Halsey, "it may be said that minerals exist in all the
Republics, that the forest resources of all (except possibly Uruguay)
are very extensive, that oil deposits have been found in almost every
country and are worked commercially in Argentine, Colombia, Chile,
Ecuador, Peru and Venezuela, and that there are lands available for the
raising of live stock and for agricultural purposes" (p. 20).

As to the pre-war investments, Mr. Halsey points out that "Great Britain
has long been the largest investor in Latin America" (p. 20). The total
of British investments he places at 5,250 millions of dollars. A third
of this was invested in Argentine, a fifth in Brazil and nearly a sixth
in Mexico. French investments are placed at about one and a half
billions of dollars. The German investments were extensive, particularly
in financial and trading institutions. United States investments in
Latin America before the war "were negligible" (p. 19) outside of the
investments in the mining industry and in the packing business.

Just how much of a shift the war has occasioned in the ownership of
Latin American railways, public utilities, mines, etc., it is impossible
to say. Some such change has occurred, however, and it is wholly in the
interest of the United States.

Generalizations which apply to Latin America have no force in respect to
Canada. The capitalism of Canada is closely akin to the capitalism of
the United States.

Canada possesses certain important resources which are highly essential
to the United States. Chief among them are agricultural land and timber.
There are two methods by which the industrial interests of the United
States might normally proceed with relations to the Canadian resources.
One is to attack the situation politically, the other is to absorb it
economically. The latter method is being pursued at the present time. To
be sure there is a large annual emigration from the United States into
Canada (approximately 50,000 in 1919) but capital is migrating faster
than human beings.

The Canadian Bureau of Statistics reports (letter of May 20, 1920) on
"Stocks, Bonds and other Securities held by incorporated and joint stock
Companies engaged in manufacturing industries in Canada, 1918," as owned
by 8,130,368 individual holders, distributed geographically as follows:
Canada, $945,444,000; Great Britain, $153,758,000; United States,
$555,943,000, and other countries, $17,221,322. Thus one-third of this
form of Canadian investment is held in the United States.


4. _American Protectorates_

The close economic inter-relations that are developing in the Americas,
naturally have their counter-part in the political field. As the
business interests reach southward for oil, iron, sugar, and tobacco
they are accompanied or followed by the protecting arm of the State
Department in Washington. Few citizens of the United States realize how
thoroughly the conduct of the government, particularly in the Caribbean,
reflects the conduct of the bankers and the traders.

Professor Hart in his "New American History" (American Book Co., 1917,
p. 634) writes, "In addition the United States between 1906 and 1916
obtained a protectorate over the neighboring Latin American States of
Cuba, Hayti, Panama, Santo Domingo and Nicaragua. All together these
five states include 157,000 square miles and 6,000,000 people."
Professor Hart makes this statement under the general topic, "What
America Has Done for the World."

The Monroe Doctrine, logically applied to Latin America, can have but
one possible outcome. Professor Chester Lloyd Jones characterizes that
outcome in the following words, "Steadily, quietly, almost unconsciously
the extension of international responsibility southward has become
practically a fixed policy with the State Department. It is a policy
which the record of the last sixteen years shows is followed, not
without protest from influential factions, it is true, but none the less
followed, by administrations of both parties and decidedly different
shades within one of the parties.... Protests will continue but the
logic of events is too strong to be overthrown by traditional argument
or prejudice." ("Caribbean Interests." New York, Appleton, 1916, p.
125.)

Latin America is in the grip of the Monroe Doctrine. Whether the
individual states wish it or not they are the victims of a principle
that has already shorn them of political sovereignty by making their
foreign policy subject to veto by the United States, and that will
eventually deprive them of control over their own internal affairs by
placing the management of their economic activities under the direction
of business interests centering in the United States. The protectorate
which the United States will ultimately establish over Latin America was
forecast in the treaty which "liberated" Cuba. The resolution declaring
war upon Spain was prefaced by a preamble which demanded the
independence of Cuba. Presumably this independence meant the right of
self-government. Actually the sovereignty of Cuba is annihilated by the
treaty of July 1, 1904, which provides:

"Article I. The Government of Cuba shall never enter into any treaty or
compact with any foreign power or powers which will impair or tend to
impair the independence of Cuba, nor in any matter authorize or permit
any foreign power or powers to obtain by colonization or for military or
naval purposes, or otherwise, lodgement in, or control over any portion
of said island."

The most drastic limitations upon Cuba's sovereignty are contained in
Article 3 which reads, "the Government of Cuba consents that the United
States may exercise the right to intervene for the preservation of Cuban
independence, the maintenance of a government adequate for the
protection of life, property and individual liberty, and for discharging
the obligation with respect to Cuba imposed by the Treaty of Paris on
the United States now to be assumed and undertaken by the Government of
Cuba." Under this article, the United States, at her discretion, may
intervene in Cuba's internal affairs.

Under these treaty provisions the Cuban Government is not only prevented
from exercising normal governmental functions in international matters,
but if a change of internal government should take place which in the
opinion of the United States jeopardized "life, property and individual
liberty" such a government could be suppressed by the armed forces of
the United States and a government established in conformity with her
wishes. Theoretically, Cuba is an independent nation. Practically, Cuba
has signed away in her treaty with the United States every important
attribute of sovereignty.

The fact that Cuba was a war-prize of the United States might be
advanced as an explanation of her anomalous position, were it not for
the relations now existing between the Dominican Republic, Hayti and
Nicaragua on the one hand and the United States on the other. The United
States has never been at war with any of these countries, yet her
authority over them is complete.

The Convention between the United States and the Dominican Republic,
proclaimed July 25, 1907, gave the United States the right to appoint a
receiver of Dominican customs in order that the financial affairs of the
Republic might be placed on a sound basis. This appointment was followed
in 1916 by the landing of the armed forces of the United States in the
territory of the Dominican Republic. On November 29, 1916, a military
government was set up by the United States Marine Corps under a
proclamation approved by the President. "This military government at
present conducts the administration of the government" (Letter from
State Department, September 29, 1919).

The proclamation issued by the Commander of the United States Marine
Corps and approved by the President, cited the failure of the Dominican
government to live up to its treaty obligations because of internal
dissensions and stated that the Republic is made subject to military
government and to the exercise of military law applicable to such
occupation. Dominican statutes "will continue in effect insofar as they
do not conflict with the objects of the Occupation or necessary
relations established thereunder, and their lawful administration will
continue in the hands of such duly authorized Dominican officials as
may be necessary, all under the oversight and control of the United
States forces exercising Military Government." The proclamation further
announces that the Military Government will collect the revenues and
hold them in trust for the Republic.

Following this proclamation Captain H. S. Knapp issued a drastic order
providing for a press censorship. "Any comment which is intended to be
published on the attitude of the United States Government, or upon
anything connected with the Occupation and Military Government of Santo
Domingo must first be submitted to the local censor for approval. In
case of any violation of this rule the publication of any newspaper or
periodical will be suspended; and responsible persons,--owners, editors,
or others--will further be liable to punishment by the Military
Government. The printing and distribution of posters, handbills, or
similar means of propaganda in order to disseminate views unfavorable to
the United States Government or to the Military Government in Santo
Domingo is forbidden." (Order secured from the Navy Department and
published by The American Union against Militarism, Dec. 13, 1916.)

A similar situation exists in Hayti. The treaty of May 3, 1916, provides
that "The Government of the United States will, by its good officers,
aid the Haitian Government in the proper and efficient development of
its agricultural, mineral and commercial resources and in the
establishment of the finances of Hayti on a firm and solid basis."
(Article I) "The President of Hayti shall appoint upon nomination by the
President of the United States a general receiver and such aids and
employees as may be necessary to manage the customs. The President of
Hayti shall also appoint a nominee of the President of the United States
as 'financial adviser' who shall 'devise an adequate system of public
accounting, aid in increasing revenues' and take such other steps 'as
may be deemed necessary for the welfare and prosperity of Hayti.'"
(Article II.) Article III guarantees "aid and protection of both
countries to the General Receiver and the Financial Adviser." Under
Article X "The Haitian Government obligates itself ... to create without
delay an efficient constabulary, urban and rural, composed of native
Haitians. This constabulary shall be organized and officered by
Americans." The Haitian Government under Article XI, agrees not to
"surrender any of the territory of the Republic by sale, lease or
otherwise, or jurisdiction over such territory, to any foreign
government or power" nor to enter into any treaty or contract that "will
impair or tend to impair the independence of Hayti." Finally, to
complete the subjugation of the Republic, Article XIV provides that
"should the necessity occur, the United States will lend an efficient
aid for the preservation of Haitian independence and the maintenance of
a government adequate for the protection of life, property and
individual liberty."

A year later, on August 20, 1917, the _New York Globe_ carried the
following advertisement:--


                             FORTUNE IN SUGAR

     "The price of labor in practically all the cane sugar growing
     countries has gone steadily up for years, except in Hayti, where
     costs are lowest in the world.

     "_Hayti now is under U. S. Control._

     "The Haitian-American corporation owns the best sugar lands in
     Hayti, owns railroads, wharf, light and power-plants, and is
     building sugar mills of the most modern design. There is assured
     income in the public utilities and large profits in the sugar
     business. We recommend the purchase of the stock of this
     corporation. Proceedings are being taken to list this stock on the
     New York Stock Exchange.

     "Interesting story 'Sugar in Hayti' mailed on request.

     "P. W. Chapman & Co., 53 William St., N. Y. C."


Hayti remained "under United States control" until the revelations of
the summer of 1920 (see _The Nation_, July 10 and August 28, 1920), when
it was shown that the natives were being compelled, by the American
forces of occupation, to perform enforced labor on the roads and to
accept a rule so tyrannous that thousands had refused to obey the orders
of the military authorities, and had been shot for their pains. On
October 14, 1920, the _New York Times_ printed a statement from
Brigadier General George Barnett, formerly Commandant General of the
Marine Corps, covering the conditions in Hayti between the time the
marines landed (July, 1915) and June, 1920. General Barnett alleges in
his report that there was evidence of "indiscriminate" killing of the
natives by the American Marines; that "shocking conditions" had been
revealed in the trial of two members of the army of occupation, and that
the enforced labor system should be abolished forthwith. The report
shows that, during the five years of the occupation, 3,250 Haytians had
been killed by the Americans. During the same period, the losses to the
army of occupation were 1 officer and 12 men killed and 2 officers and
26 men wounded.

The attitude of the United States authorities toward the Haytians is
well illustrated by the following telegram which the United States
Acting Secretary of the Navy sent on October 2, 1915, to Admiral
Caperton, in charge of the forces in Hayti: "Whenever the Haytians wish,
you may permit the election of a president to take place. The election
of Dartiguenave is preferred by the United States."

The Cuban Treaty established the precedent; the Great War provided the
occasion, and while Great Britain was clinching her hold in Persia, and
Japan was strengthening her grip on Korea, the United States was engaged
in establishing protectorates over the smaller and weaker Latin-American
peoples, who have been subjected, one after another, to the omnipotence
of their "Sister Republic" of the North.


5. _The Appropriation of Territory_

Protectorates have been established by the United States, where such
action seemed necessary, over some of the weaker Latin-American states.
Their customs have been seized, their governments supplanted by military
law and the "preservation of law and order" has been delegated to the
Army and Navy of the United States. The United States has gone farther,
and in Porto Rico and Panama has appropriated particular pieces of
territory.

The Porto Ricans, during the Spanish-American War, welcomed the
Americans as deliverers. The Americans, once in possession, held the
Island of Porto Rico as securely as Great Britain holds India or Japan
holds Korea. The Porto Ricans were not consulted. They had no
opportunity for "self-determination." They were spoils of war and are
held to-day as a part of the United States.

The Panama episode furnishes an even more striking instance of the
policy that the United States has adopted toward Latin-American
properties that seemed particularly necessary to her welfare.

Efforts to build a Panama Canal had covered centuries. When President
Roosevelt took the matter in hand he found that the Government of
Colombia was not inclined to grant the United States sovereignty over
any portion of its territory. The treaty signed in 1846 and ratified in
1848 placed the good faith of the United States behind the guarantee
that Colombia should enjoy her sovereign rights over the Isthmus. During
November 1902 the United States ejected the representatives of Colombia
from what is now the Panama Canal Zone and recognized a revolutionary
government which immediately made the concessions necessary to enable
the United States to begin its work of constructing the canal.

The issue is made clear by a statement of Mr. Roosevelt frequently
reiterated by him (see _The Outlook_, October 7, 1911) and appearing in
the _Washington Post_ of March 24, 1911, as follows:--"I am interested
in the Panama Canal because I started it. If I had followed the
traditional conservative methods I would have submitted a dignified
state paper of probably two hundred pages to the Congress and the debate
would have been going on yet. But I took the Canal Zone and let the
Congress debate, and while the debate goes on, the Canal does also."

Article 35 of the Treaty of 1846 between the United States and Colombia
(then New Grenada) reads as follows,--"The United States guarantees,
positively and efficaciously to New Grenada, by the present stipulation,
the perfect neutrality of the before mentioned Isthmus ... and the
rights of sovereignty which New Grenada has and possesses over said
territory."

In 1869 another treaty was negotiated between the United States and
Colombia which provided for the building of a ship canal across the
Isthmus. This treaty was signed by the presidents of both republics and
ratified by the Colombian Congress. The United States Senate refused its
assent to the treaty. Another treaty negotiated early in 1902 was
ratified by the United States Senate but rejected by the Colombian
Congress. The Congress of the United States had passed an act (June 28,
1902) "To provide for the construction of a canal connecting the waters
of the Atlantic and the Pacific Oceans." Under this act the President
was authorized to negotiate for the building of the canal across the
Isthmus of Panama. If that proved impossible within a reasonable time,
the President was to turn to the Nicaragua route. The treaty prepared in
accordance with this act provided that the United States would pay
Colombia ten millions of dollars in exchange for the sovereignty over
the Canal Zone. The Colombian Congress after a lengthy debate rejected
the treaty and adjourned on the last day of October, 1902.

Rumor had been general that if the treaty was not ratified by the
Colombian Government, the State of Panama would secede from Colombia,
sign the treaty, and thus secure the ten millions. In consequence of
these rumors, which threatened transportation across the Isthmus,
American war vessels were dispatched to Panama and to Colon.

On November 3, 1902, the Republic of Panama was established. On November
13 it was recognized by the United States. Immediately thereafter a
treaty was prepared and ratified by both governments and the ten
millions were paid to the Government of Panama.

Early in the day of November 3, the Department of State was informed
that an uprising had occurred. Mr. Loomis wired, "Uprising on Isthmus
reported. Keep Department promptly and fully informed." In reply to this
the American consul replied, "The uprising has not occurred yet; it is
announced that it will take place this evening. The situation is
critical." Later the same official advised the Department that (in the
words of the Presidential message, 1904) "the uprising had occurred and
had been successful with no bloodshed."

The Colombian Government had sent troops to put down the insurrection
but the Commander of the United States forces, acting under instructions
sent from Washington on November 2, prevented the transportation of the
troops. His instructions were as follows,--"Maintain free and
uninterrupted transit if interruption is threatened by armed force with
hostile intent, either governmental or insurgent, at any point within
fifty miles of Panama. Government forces reported approaching the
Isthmus in vessels. Prevent their landing, if, in your judgment, the
landing would precipitate a conflict."

Thus a revolution was consummated under the watchful eye of the United
States forces; the home government at Bogota was prevented from taking
any steps to secure the return of the seceding state of Panama to her
lawful sovereignty, and within ten days of the revolution, the new
Republic was recognized by the United States Government.[57] (Ten days
was the length of time necessary to transmit a letter from Panama to
Washington. Greater speed would have been impossible unless the new
state had been recognized by telegraph.)


6. _The Logical Exploiters_

The people of the United States are the logical exploiters of the
Western Hemisphere--the children of destiny for one half the world. They
are pressed by economic necessity. They need the oil of Mexico, the
coffee of Brazil, the beef of Argentine, the iron of Chile, the sugar of
Cuba, the tobacco of Porto Rico, the hemp of Yucatan, the wheat and
timber of Canada. In exchange for these commodities the United States is
prepared to ship manufactured products. Furthermore, the masters of the
United States have an immense and growing surplus that must be invested
in some paying field, such as that provided by the mines, agricultural
projects, timber, oil deposits, railroad and other industrial activities
of Latin-America.

The rulers of the United States are the victims of an economic necessity
that compels them to seek and to find raw materials, markets and
investment opportunities. They are also the possessors of sufficient
economic, financial, military and naval power to make these needs good
at their discretion.

The rapidly increasing funds of United States capital invested in
Latin-America and Canada, will demand more and more protection. There is
but one way for the United States to afford that protection--that is to
see that these countries preserve law and order, respect property, and
follow the wishes of United States diplomacy. Wherever a government
fails in this respect, it will be necessary for the State Department in
coöperation with the Navy, to see that a government is established that
will "make good."

Under the Monroe Doctrine, as it has long been interpreted, no
Latin-American Government will be permitted to enter into entangling
alliances with Europe or Asia. Under the Monroe Doctrine, as it is now
being interpreted, no Latin-American people will be permitted to
organize a revolutionary government that abolishes the right of private
interests to own the oil, coal, timber and other resources. The mere
threat of such action by the Carranza Government was enough to show what
the policy of the United States must be in such an emergency.

The United States need not dominate politically her weaker sister
republics. It is not necessary for her to interfere with their
"independence." So long as their resources may be exploited by American
capitalists; so long as the investments are reasonably safe; so long as
markets are open, and so long as the other necessities of United States
capitalism are fulfilled, the smaller states of the Western Hemisphere
will be left free to pursue their various ways in prosperity and peace.

FOOTNOTE:

[57] For further details see "The Panama Canal" Papers presented to the
Senate by Mr. Lodge, Senate Document 471, 63rd Congress, 2nd Session.



XVI. THE AMERICAN CAPITALISTS AND WORLD EMPIRE


1. _The Plutocrats Must Carry On_

The American plutocrats--those who by force of their wealth share in the
direction of public policy--must carry on. They have no choice. If they
are to continue as plutocrats, they must continue to rule. If they
continue to rule, they must shoulder the duties of rulership. They may
not relish the responsibility which their economic position has thrust
upon them any more than the sojourners in Newfoundland relish the savage
winters. Nevertheless, those who own the wealth of a capitalist nation
must accept the results of that ownership just as those who remain in
Newfoundland must accept the winter storms.

The owners of American timber, mines, factories, railroads, banks and
newspapers may dislike the connotations of imperialism; may believe
firmly in the principles of competition and individualism; may yearn for
the nineteenth century isolation which was so intimate a feature of
American economic life. But their longings are in vain. The old world
has passed forever; the sun has risen on a new day--a day of world
contacts for the United States.

Henry Cabot Lodge of Massachusetts stated the matter with rare accuracy
in a speech which he made during the discussion over the conquest of the
Philippines. After explaining that wars come, "never ostensibly, but
actually from economic causes," Senator Lodge said (_Congressional
Record_, 56th Congress, 2nd Session, p. 637. January 7, 1901):

"We occupy a great position economically. We are marching on to a still
greater one. You may impede it, you may check it, but you cannot stop
the work of economic forces. You cannot stop the advance of the United
States.... The American people and the economic forces which underlie
all are carrying us forward to the economic supremacy of the world."

Senator Lodge spoke the economic truth in 1901. William C. Redfield
reënforced it in an address before the American Manufacturers Export
Association (_Weekly Bulletin_, April 26, 1920, p. 7): "We cannot be
foreign merchants very much longer in this country excepting on a
diminishing and diminishing scale--we have got to become foreign
constructors; we have got to build with American money--foreign
enterprises, railroads, utilities, factories, mills, I know not what, in
order that by large ownership in them we may command the trade that
normally flows from their operation." That is sound capitalist doctrine.
Equally sound is the exhortation that follows: "In so doing we shall be
doing nothing new--only new for us. That is the way in which Germany and
Great Britain have built up their foreign trade."

New it is for America--but it is the course of empire, familiar to every
statesman. The lesson which Bismarck, Palmerston and Gray learned in the
last century is now being taught by economic pressure to the ruling
class of the United States.

The elder generation of American business men was not trained for world
domination. To them the lesson comes hard. The business men of the
younger generation are picking it up, however, with a quickness born of
paramount necessity.


2. _Training Imperialists_

Every great imperial structure has had simple beginnings. Each imperial
ruling class has doubtless felt misgivings, during the early years of
its authority. Hesitating, uncertain, they have cast glances over their
shoulders towards that which was, but even while they were looking
backward the forces that had made them rulers were thrusting them still
farther forward along the path of imperial power. Then as generation
succeeded generation, the rulers learned their lesson, building a
tradition of rulership and authority that was handed down from father to
son; acquiring a vision of world organization and world power that gave
them confidence to go forward to their own undoing. The masters of
public life in Rome were such people; the present masters of British
economic and political affairs are such people.

American imperialists still are in the making. Until 1900 their eyes
were set almost exclusively upon empire within the United States. Those
who, before 1860, dreamed of a slave power surrounding the Gulf of
Mexico, were thrust down and their places taken by builders of railroads
and organizers of trusts. To-day the sons and grandsons of that
generation of exploiters who confined their attention to continental
territory, are compelled, by virtue of the organization which their
sires and grandsires established, to seek Empire outside the boundaries
of North America.

During the years when the leaders of American business life were
spending the major part of their time in "getting rich," the sweep of
social and economic forces was driving the United States toward its
present imperial position. Now the position has been attained, those in
authority have no choice but to accept the responsibilities which
accompany it.

Economically the United States is a world power. The war and the
subsequent developments have forced the country suddenly into a position
of leadership among the capitalist nations. The law of capitalism is:
Struggle to dispose of your surplus, otherwise you cannot survive. This
law has laid its heavy hand upon Great Britain, upon France, upon
Germany, and now it has struck with full force into the isolated,
provincial life of the United States. It is the law--immutable as the
system of gravitation. While the present system of economic life
exists, this law will continue to operate. Therefore the masters of
American life have no alternative. If they would survive, they must
dispose of their surplus.

Politically the United States is recognized as one of the leaders of the
world. Despite its tradition of isolation, despite the unwillingness of
its statesmen to enter new paths, despite the indifference of its people
to international affairs, the resources and raw materials required by
the industrial nations of Europe, the rapidly growing surplus and the
newly acquired foreign markets and investments make the United States an
integral part of the life of the world.

The ruling class in the United States has no more choice than the rulers
of a growing city whose boundaries are extending with each increment of
population. If it is to continue as a ruling class, it must accept
conditions as they are. The first of these conditions is that the United
States is a world power neither because of its virtue nor because of its
intelligence in the delicacies of the world politics, but because of the
sheer might of its economic organization.

Economic necessity has forced the United States into the front rank
among the nations of the world. Economic necessity is forcing the ruling
class of the United States to occupy the position of world leadership,
to strengthen it, to consolidate it, and to extend it at every
opportunity. The forces that played beside the yellow Tiber and the
sluggish Nile are very much the same as those which led Napoleon across
the wheat fields of Europe and that are to-day operating in Paris,
London, and in New York. The forces that pushed the Roman Empire into
its position of authority and led to the organization of Imperial
Britain are to-day operating with accelerated pace in the United States.
The sooner the American people, and particularly those who are directing
public policy, wake up to this simple but essential fact, the sooner
will doubt and misunderstanding be removed, the sooner will the issues
be drawn and the nation's course be charted.


3. _The Logical Goal_

The logical goal of the American plutocracy is the economic and
incidentally the political control of the world. The rulers of Macedon
and Assyria, Rome and Carthage, of Britain and France labored for
similar reasons to reach this same goal. It is economic fate. Kings and
generals were its playthings, obeying and following the call of its
destiny.

The rulers of antiquity were limited by a lack of transportation
facilities; their "world" was small, including the basin of the
Mediterranean and the land surrounding the Persian Gulf and the Indian
Ocean, nevertheless, they set out, one after another, to conquer it.
To-day the rapid accumulation of surplus and the speed and ease of
communication, the spread of world knowledge and the larger means of
organization make it even more necessary than it was of old for the
rulers of an empire to find a larger and ever larger place in the sun.
The forces are more pressing than ever before. The times call more
loudly for a genius with imagination, foresight and courage who will use
the power at his disposal to write into political history the gains that
have already been made a part of economic life. Let such a one arise in
the United States, in the present chaos of public thought, and he could
not only himself dictate American public policy for the remainder of his
life, but in addition, he could, within a decade, have the whole
territory from the Canadian border to the Panama Canal under the
American Flag, either as conquered or subject territory; he could
establish a Chinese wall around South American trade and opportunities
by a very slight extension of the Monroe Doctrine; he could have in hand
the problem of an economic if not a political union with Canada, and
could be prepared to measure swords with the nearest economic rival,
either on the high seas or in any portion of the world where it might
prove necessary to join battle.

Such a program would be a departure from the traditions of American
public life, but the traditions, built by a nation of farmers, have
already lost their significance. They are historic, with no contemporary
justification. The economic life that has grown up since 1870 of
necessity will create new public policies.

The success of such a program would depend upon four things:

1. A coördination of American economic life.

2. A fast grip on the agencies for shaping public opinion.

3. A body of citizens, martial, confident, restless, ambitious.

4. A ruling class with sufficient imagination to paint, in warm
sympathetic colors, the advantages of world dominion; and with
sufficient courage to follow out imperial policy, regardless of ethical
niceties, to its logical goal of world conquest.

All four of these requisites exist in the United States to-day, awaiting
the master hand that shall unite them. Many of the leaders of American
public life know this. Some shrink from the issue, because they are
unaccustomed to dream great dreams, and are terrified by the immensity
of large thoughts. Others lack the courage to face the new issues. Still
others are steadily maneuvering themselves into a position where they
may take advantage of a crisis to establish their authority and work
their imperial will. The situation grows daily more inviting; the
opportunity daily more alluring. The war-horse, saddled and bridled, is
pawing the earth and neighing. How soon will the rider come?


4. _Eat or Be Eaten_

The American ruling class has been thrown into a position of authority
under a system of international economic competition that calls for
initiative and courage. Under this system, there are two
possibilities,--eat or be eaten!

There is no middle ground, no half way measure. It is impossible to
stop or to turn back. Like men engaged on a field of battle, the
contestants in this international economic struggle must remain with
their faces toward the enemy, fighting for every inch that they gain,
and holding these gains with their bodies and their blood, or else they
must turn their backs, throw away their weapons, run for their lives,
and then, hiding on the neighboring hills, watch while the enemy
despoils the camp, and then applies a torch to the ruins.

The events of the great war prove, beyond peradventure, that in the wolf
struggle among the capitalist nations, no rules are respected and no
quarter given. Again and again the leaders among the allied
statesmen--particularly Mr. Lloyd George and Mr. Wilson--appealed to the
German people over the heads of their masters with assurances that the
war was being fought against German autocracy, not against Germans.
"When will the German people throw off their yoke?" asked one Allied
diplomat. The answer came in November, 1918. A revolution was contrived,
the Kaiser fled the country, the autocracy was overthrown. Germans
ceased to fight with the understanding that Mr. Wilson's Fourteen Points
should be made the foundation of the Peace. The armistice terms violated
the spirit if not the letter of the fourteen points; the Peace Treaty
scattered them to the winds. Under its provisions Germany was stripped
of her colonies; her investments in the allied possessions were
confiscated; her ships were taken; three-quarters of her iron ore and a
third of her coal supply were turned over to other powers; motor trucks,
locomotives, and other essential parts of her economic mechanism were
appropriated. Austria suffered an even worse fate, being "drawn and
quartered" in the fullest sense of the term. After stripping the
defeated enemies of all available booty, levying an indeterminate
indemnity, and dismembering the German and Austrian Empires, the Allies
established for thirty years a Reparation Commission, which is virtually
the economic dictator of Europe. Thus for a generation to come, the
economic life of the vanquished Empires will be under the active
supervision and control of the victors. Never did a farmer's wife pluck
a goose barer than the Allies plucked the Central Powers. (See the
Treaty, also "The Economic Consequences of the Peace," J. M. Keynes. New
York, Harcourt, Brace & Howe, 1920.)

Under the armistice terms and the Peace Treaty the Allies did to Germany
and Austria exactly what Germany and Austria would have done to France
and Great Britain had the war turned out differently. The Allied
statesmen talked much about democracy, but when their turn came they
plundered and despoiled with a practiced imperial hand. France and
Britain, as well as Germany and Austria, were capitalist Empires. The
Peace embodies the essential economic morality of capitalist
imperialism, the morality of "Eat or be eaten."


5. _The Capitalists and War_

The people and even the masters of America are inexperienced in this
international struggle. Among themselves they have experimented with
competitive industrialism on a national scale. Now, brought face to face
with the world struggle, many of them revolt against it. They deplore
the necessities that lead nations to make war on one another. They
supported the late war "to end war." They gave, suffered and sacrificed
with a keen, idealistic desire to "make the world safe for democracy."
They might as well have sought to scatter light and sunshine from a
cloudbank.

The masters of Europe, who have learned their trade in long years of
intrigue, diplomacy and war, feel no such repugnance. They play the
game. The American people are of the same race-stocks as the leading
contestants in the European struggle. They are not a whit less
ingenious, not a whit less courageous, not a whit less determined. When
practice has made them perfect they too will play the game just as well
as their European cousins and their play will count for more because of
the vast economic resources and surpluses which they possess.

American statesmen in the field of international diplomacy are like
babies, taking their first few steps. Later the steps come easier and
easier, until a child, who but a few months ago could not walk, has
learned to romp and sport about. The masters of the United States are
untrained in the arts of international intrigue. They showed their
inferiority in the most painful way during the negotiations over the
Paris Treaty. They are as yet unschooled in international trade, banking
and finance. They are also inexperienced in war, yet, having only raw
troops, and little or no equipment, within two years they made a notable
showing on the battlefields of Europe. Now they are busy learning their
financial lessons with an equal facility. A generation of contact with
world politics will bring to the fore diplomats capable of meeting
Europe's best on their own ground. What Europe has learned, America can
learn; what Europe has practiced, America can practice, and in the end
she may excel her teachers.

To-day economic forces are driving relentlessly. Surplus is accumulating
in a geometric ratio--surplus piling on surplus. This surplus must be
disposed of. While the remainder of the world--except Japan--is
staggering under intolerable burdens of debt and disorganization, the
United States emerges almost unscathed from the war, and prepares in
dead earnest to enter the international struggle,--to play at the master
game of "eat or be eaten."

Pride, ambition and love of gain and of power are pulling the American
plutocrats forward. The world seems to be within their grasp. If they
will reach out their hands they may possess it! They have assumed a
great responsibility. As good Americans worthy of the tradition of their
ancestors, they must see this thing through to the end! They must win,
or die in the attempt; and it is in this spirit that they are going
forward.

The American capitalists do not want war with Great Britain or with any
other country. They are not seeking war. They will regret war when it
comes.

War is expensive, troublesome and dangerous. The experiences of Europe
in the War of 1914 have taught some lessons. The leaders and thinkers
among the masters of America have visited Europe. They have seen the old
institutions destroyed, the old customs uprooted, the old faiths
overturned. They have seen the economic order in which they were vitally
concerned hurled to the earth and shattered. They have seen the red flag
of revolution wave where they had expected nothing but the banner of
victory. They have seen whole populations, weary of the old order, throw
it aside with an impatient gesture and bring a new order into being.
They have good reasons to understand and fear the disturbing influences
of war. They have felt them even in the United States--three thousand
miles away from the European conflict. How much more pressing might this
unrest be if the United States had fought all through the war, instead
of coming in when it was practically at an end!

Then there is always the danger of losing the war--and such a loss would
mean for the United States what it has meant for Germany--economic
slavery.

Presented with an opportunity to choose between the hazards of war and
the certainties of peace most of the capitalist interests in the United
States would without question choose peace. There are exceptions. The
manufacturers of munitions and of some of the implements and supplies
that are needed only for war purposes, undoubtedly have more to gain
through war than through peace, but they are only a small element in a
capitalist world which has more to gain through peace than through war.

But the capitalists cannot choose. They are embedded in an economic
system which has driven them--whether they liked it or not--along a path
of imperialism. Once having entered upon this path, they are compelled
to follow it into the sodden mire of international strife.


6. _The Imperial Task_

The American ruling class--the plutocracy--must plan to dominate the
earth; to exploit it, to exact tribute from it. Rome did as much for the
basin of the Mediterranean. Great Britain has done it for Africa and
Australia, for half of Asia, for four million square miles in North
America. If the people of one small island, poorly equipped with
resources, can achieve such a result, what may not the people of the
United States hope to accomplish?

That is the imperial task.


     1. American economic life must be unified. Already much of this
     work has been done.

     2. The agencies for shaping public opinion must be secured. Little
     has been left for accomplishment in this direction.

     3. A martial, confident, restless, ambitious spirit must be
     generated among the people. Such a result is being achieved by the
     combination of economic and social forces that inhere in the
     present social system.

     4. The ruling class must be schooled in the art of rulership. The
     next two generations will accomplish that result.


The American plutocracy must carry on. It must consolidate its gains and
move forward to greater achievements, with the goal clearly in mind and
the necessities of imperial power thoroughly mastered and understood.



XVII. THE NEW IMPERIAL ALIGNMENT


1. _A Survey of the Evidence_

Through the centuries empires have come and gone. In each age some
nation or people has emerged--stronger, better organized, more
aggressive, more powerful than its neighbors--and has conquered
territory, subjugated populations, and through its ruling class has
exploited the workers at home and abroad.

Europe has been for a thousand years the center of the imperial
struggle,--the struggle which called into being the militarism so hated
by the European peoples. It was from that struggle that millions fled to
America, where they hoped for liberty and peace.

The eighteenth century witnessed the rise of Great Britain to a position
of world authority. During the nineteenth century she held her place
against all rivals. With the assistance of Prussia, she overthrew
Napoleon at Waterloo. In the Crimean War and the Russo-Japanese War she
halted the power of the Czar. Half a century after Waterloo Germany,
under the leadership of Prussia won the Franco-Prussian War, and by that
act became the leading rival of the British Empire. Following the war,
which gave Germany control of the important resources included in Alsace
and Lorraine, there was a steady increase in her industrial efficiency;
the success of her trade was as pronounced as the success of her
industries, and by 1913 the Germans had a merchant fleet and a navy
second only to those of Great Britain.

Germany's economic successes, and her threat to build a railroad from
Berlin to Bagdad and tap the riches of the East, led the British to form
alliances with their traditional enemies--the French and the Russians.
Russia, after the breakdown of Czarism in 1917, dropped out of the
Entente, and the United States took her place among the Allies of the
British Empire. During the struggle France was reduced to a mere shell
of her former power. The War of 1914 bled her white, loaded her with
debt, disorganized her industries, demoralized her finances, and
although it restored to her important mineral resources, it left her too
weak and broken to take real advantage of them.

The War of 1914 decided the right of Great Britain to rule the Near East
as well as Southern Asia and the strategic points of Africa. In the
stripping of the vanquished and in the division of the spoils of war the
British lion proved to be the lion indeed. But the same forces that gave
the British the run of the Old World called into existence a rival in
the New.

People from Britain, Germany and the other countries of Northern Europe,
speaking the English language and fired with the conquering spirit of
the motherland, had been, for three centuries, taming the wilderness of
North America. They had found the task immense, but the rewards equally
great. When the forces of nature were once brought into subjection, and
the wilderness was inventoried, it proved to contain exactly those
stores that are needed for the success of modern civilization. With the
Indians brushed aside, and the Southwest conquered from Mexico, the new
ruling class of successful business men established itself, and the
matter of safeguarding property rights, of building industrial empires
and of laying up vast stores of capital and surplus followed as a matter
of course.

Europe, busy with her own affairs, paid little heed to the New World,
except to send to it some of her most rugged stock and much of her
surplus wealth. The New World, left to itself, pursued its way--in
isolation, and with an intensity proportioned to the size of the task in
hand and the richness of the reward.

The Spanish War in 1898 and the performance of the Canadians in the Boer
War of 1899 astounded the world, but it was the War of 1914 that really
waked the Europeans to the possibilities of the Western peoples. The
Canadians proved their worth to the British armies. The Americans showed
that they could produce prodigious amounts of the necessaries of war,
and when they did go in, they inaugurated a shipping program, raised and
dispatched troops, furnished supplies and provided funds to an extent
which, up to that time, was considered impossible. The years from 1914
to 1918 established the fact that there was, in the West, a colossus of
economic power.


2. _The New International Line-Up_

There are four major factors in the new international line-up. The first
is Russia; the second is the Japanese Empire; the third is the British
Empire and the fourth is the American Empire. Italy has neither the
resources, the wealth nor the population necessary to make her a factor
of large importance in the near future. France is too weak economically,
too overloaded with debt and too depleted in population to play a
leading rôle in world affairs.

The Russian menace is immediate. Bolshevism is not only the antithesis
of Capitalism but its mortal enemy. If Bolshevism persists and spreads
through Central Europe, India and China, capitalism will be wiped from
the earth.

A federation of Russia, the Baltic states, the new border provinces, and
the Central Empires on a socialist basis would give the socialist states
of central and northern Europe most of the European food area, a large
portion of the European raw material area and all of the technical skill
and machinery necessary to make a self-supporting economic unit. The two
hundred and fifty millions of people in Russia and Germany combined in
such a socialist federation would be as irresistible economically as
they would be from a military point of view.

Such a Central European federation, developing as it must along the
logical lines that lead into India and China would be the strongest
single unit in the world, viewed from the standpoint of resources, of
population, of productive power or of military strength. The only
possible rivals to such a combination would be the widely scattered
forces of the British Empire and the United States, separated from it by
the stretches of the Atlantic Ocean. Against such a grouping Japan would
be powerless because it would deprive her of the source of raw materials
upon which she must rely for her economic development. Great Britain
with her relatively small population and her rapidly diminishing
resources could make no head against such a combination even with the
assistance of her colonial empire. Northern India is as logical a home
for Bolshevism as Central China or South-eastern Russia. Connect
European Russia, Germany, Austria-Hungary, Siberia, India and China with
bonds that make effective coöperation possible and these
countries--containing nearly two-thirds of the population of the world,
and possessed of the resources necessary to maintain a modern
civilization--could laugh at outside interference.

Two primary difficulties confront the organizers of the Federated
Socialist Republics of Europe and Asia. One is nationality, language,
custom and tradition, together with the ancient antagonisms which have
been so carefully nurtured through the centuries. The other is the
frightful economic disorganization prevalent throughout Central
Europe,--a disorganization which would be increased rather than
diminished by the establishment of new forms of economic life. Even if
such an organization were perfected, it must remain, for a long time to
come, on a defensive basis.


3. _The Yellow Peril_

The "yellow peril" thus far is little more than the Japanese menace to
British and American trade in the Far East. The Japanese Archipelago is
woefully deficient in coal, iron, petroleum, water power and
agricultural land. The country is over-populated and must depend for
its supplies of food and raw materials upon continental Asia. There
seems to be no probability that Japan and China can make any effective
working agreement in the near future that will constitute an active
menace to the supremacy of the white race. Alone Japan is too weak in
resources and too sparse in population. Combined with China she would be
formidable, but her military policy in Korea and in the Shantung
Province have made any effective coöperation with China at least
temporarily impossible.

Furthermore, the Japanese are not seeking world conquest. On the
contrary, they are bent upon maintaining their traditional aloofness by
having a Monroe Doctrine for the East. This doctrine will be summed up
in the phrase, "The East for the Easterners,"--the easterners being the
Japanese. Such a policy would prove a serious menace to the trade of the
United States and of Great Britain. It would prove still more of a
hindrance to the investment of American and British capital in the very
promising Eastern enterprises, and would close the door on the Western
efforts to develop the immense industrial resources of China. The recent
"Chinese Consortium," in which Japan joined with great reluctance,
suggests that the major capitalist powers have refused to recognize the
exclusive right of Japan to the economic advantages of the Far East. How
seriously this situation will be taken by the United States and Great
Britain depends in part upon the vigor with which Japan prosecutes her
claims and in part upon the preoccupation of these two great powers with
Bolshevism in Europe and with their own competitive activities in ship
building, trade, finance and armament.


4. _The British and the American Empires_

The two remaining major forces in world economics and politics are the
British Empire and the American Empire,--the mistress of the world, and
her latest rival in the competition for world power. Between them,
to-day, most of the world is divided. The British Empire includes the
Near East, Southern Asia, Africa, Australia and half of North America.
Dogging her are Germany, France, Russia and Italy, and, as she goes to
the Far East,--Japan. The United States holds the Western Hemisphere,
where she is supreme, with no enemy worthy the name.

The British power was shaken by the War of 1914. Never, in modern times,
had the British themselves, been compelled to do so much of the actual
fighting. The war debt and the disorganization of trade incident to the
war period proved serious factors in the curtailment of British economic
supremacy. At the same time, the territorial gains of the British were
enormous, particularly in the Near East.

The Americans secured real advantages from the war. They grew immensely
rich in profiteering during the first three years, they emerged with a
relatively small debt, with no great loss of life, and with the greatest
economic surpluses and the greatest immediate economic advantages
possessed by any nation of the world.

The British Empire was the acknowledged mistress of the world in 1913.
Her nearest rival (Germany) had one battleship to her two; one ton of
merchant shipping to her three, and two dollars of foreign investments
to her five. This rivalry was punished as the successive rivals of the
British Empire have been punished for three hundred years.

The war was won by the British Empire and her Allies, but in the hour of
victory a new rival appeared. By 1920 that rival had a naval program
which promised a fleet larger than the British fleet in 1924 or 1925;
within three years she had increased her merchant tonnage to two-thirds
of the British tonnage, and her foreign investments were three times the
foreign investments of Great Britain. This new rival was the American
Empire--whose immense economic strength constituted an immediate threat
to the world power of Great Britain.


5. _The Next Incident in the Great War_

Some nation, or some group of nations has always been in control of the
known world or else in active competition for the right to exercise such
a control. The present is an era of competition.

Capitalism has revolutionized the world's economic life. By 1875 the
capitalist nations were in a mad race to determine which one should
dominate the capitalist world and have first choice among the
undeveloped portions of the earth. The competitors were Great Britain,
Germany, France, Russia and Italy. Japan and the United States did not
really enter the field for another generation.

The War of 1914 decided this much:--that France and Italy were too weak
to play the big game in a big way, that Germany could not compete
effectively for some time to come; that the Russians would no longer
play the old game at all. There remained Japan, Great Britain and the
United States and it is among these three nations that the capitalist
world is now divided. Japan is in control of the Far East. Great Britain
holds the Near East, Africa and Australia; the United States dominates
the Western Hemisphere.

The Great War began in 1914. It will end when the question is decided as
to which of these three empires will control the Earth.

Great Britain has been the dominant factor in the world for a century.
She gained her position after a terrific struggle, and she has
maintained it by vanquishing Holland, Spain, France and Germany.

The United States is out to capture the economic supremacy of the earth.
Her business men say so frankly. Her politicians fear that their
constituents are not as yet ready to take such a step. They have been
reassured, however, by the presidential vote of November, 1920.
American business life already is imperial, and political sentiment is
moving rapidly in the same direction.

Great Britain holds title to the pickings of the world. America wants
some or all of them. The two countries are headed straight for a
conflict, which is as inevitable as morning sunrise, unless the menace
of Bolshevism grows so strong, and remains so threatening that the great
capitalist rivals will be compelled to join forces for the salvation of
capitalist society.

As economic rivalries increase, competition in military and naval
preparation will come as a matter of course. Following these will be the
efforts to make political alliances--in the East and elsewhere.

These two countries are old time enemies. The roots of that enmity lie
deep. Two wars, the white hot feeling during the Civil War, the
anti-British propaganda, carried, within a few years, through the
American schools, the traditions among the officers in the American
navy, the presence of 1,352,251 Irish born persons in the United States
(1910), the immense plunder seized by the British during the War of
1914,--these and many other factors will make it easy to whip the
American people into a war-frenzy against the British Empire.

Were there no economic rivalries, such antagonisms might slumber for
decades, but with the economic struggle so active, these other matters
will be kept continually in the foreground.

The capitalists of Great Britain have faced dark days and have
surmounted huge obstacles. They are not to be turned back by the threat
of rivalry. The American capitalists are backed by the greatest
available surpluses in the world; they are ambitious, full of enthusiasm
and energy, they are flushed with their recent victory in the world war,
and overwhelmed by the unexpected stores of wealth that have come to
them as a result of the conflict. They are imbued with a boundless faith
in the possibilities of their country. Neither Great Britain nor the
United States is in a frame of mind to make concessions. Each is
confident--the British with the traditional confidence of centuries of
world leadership; the Americans with the buoyant, idealistic confidence
of youth. It is one against the other until the future supremacy of the
world is decided.


6. _The Imperial Task_

American business interests are engaged in the work of building an
international business structure. American industry, directed from the
United States, exploiting foreign resources for American profit, and
financed by American institutions, is gaining a footing in Latin
America, in Europe and Asia.

The business men of Rome built such a structure two thousand years ago.
They competed with and finally crushed their rivals in Tyre, Corinth and
Carthage. In the early days of the Empire, they were the economic
masters, as well as the political masters of the known world.

Within two centuries the business men of Great Britain have built an
international business structure that has known no equal since the days
of the Cæsars. Perhaps it is greater, even, than the economic empire of
the Romans. At any rate, for a century that British empire of commerce
and industry has gone unchallenged, save by Germany. Germany has been
crushed. But there is an industrial empire rising in the West. It is
new. Its strength is as yet undetermined. It is uncoördinated. A new era
has dawned, however, and the business men of the United States have made
up their minds to win the economic supremacy of the earth.

Already the war is on between Great Britain and the United States. The
two countries are just as much at war to-day as Great Britain and
Germany were at war during the twenty years that preceded 1914. The
issues are essentially the same in both cases,--commercial and economic
in character, and it is these economic and commercial issues that are
the chief causes of modern military wars--that are in themselves
economic wars which may at any moment be transferred to the military
arena.

British capitalists are jealously guarding the privileges that they have
collected through centuries of business and military conflict. The
American capitalists are out to secure these privileges for themselves.
On neither side would a military settlement of the issue be welcomed. On
both sides it would be regarded as a painful necessity. War is an
incident in imperialist policy. Yet the position of the imperialist as
an international exploiter depends upon his ability to make war
successfully. War is a part of the price that the imperialist must pay
for his opportunity to exploit and control the earth.

After Sedan, it was Germany versus Great Britain for the control of
Europe. After Versailles it is the United States versus Great Britain
for the control of the capitalist earth. Both nations must spend the
next few years in active preparation for the conflict.

The governments of Great Britain and the United States are to-day on
terms of greatest intimacy. Soon an issue will arise--perhaps over
Mexico, perhaps over Persia, perhaps over Ireland, perhaps over the
extension of American control in the Caribbean. There is no difficulty
of finding a pretext.

Then there will follow the time-honored method of arousing the people on
either side to wrath against those across the border. Great Britain will
point to the race-riots and negro-lynchings in America as a proof that
the people of the United States are barbarians. British editors will
cite the wanton taking of the Canal Zone as an indication of the
willingness of American statesmen to go to any lengths in their effort
to extend their dominion over the earth. The newspapers of the United
States will play up the terrorism and suppression in Ireland and there
are many Irishmen more than ready to lend a hand in such an enterprise;
tyranny in India will come in for a generous share of comment; then
there are the relations between Great Britain and the Turks, and above
all, there are the evidences in the Paris Treaty of the way in which
Great Britain is gradually absorbing the earth. Unless the power of
labor is strong enough to turn the blow, or unless the capitalists
decide that the safety of the capitalist world depends upon their
getting together and dividing the plunder, the result is inevitable.

The United States is a world Empire in her own right. She dominates the
Western Hemisphere. Young and inexperienced, she nevertheless possesses
the economic advantages and political authority that give her a voice in
all international controversies. Only twenty years have passed since the
organizing genius of America turned its attention from exclusively
domestic problems to the problems of financial imperialism that have
been agitating Europe for a half a century. The Great War showed that
American men make good soldiers, and it also showed that American wealth
commands world power.

With the aid of Russia, France, Japan and the United States Great
Britain crushed her most dangerous rival--Germany. The struggle which
destroyed Germany's economic and military power erected in her stead a
more menacing economic and military power--the United States. Untrained
and inexperienced in world affairs, the master class of the United
States has been placed suddenly in the title rôle. America over night
has become a world empire and over night her rulers have been called
upon to think and act like world emperors. Partly they succeeded, partly
they bungled, but they learned much. Their appetites were whetted, their
imaginations stirred by the vision of world authority. To-day they are
talking and writing, to-morrow they will act--no longer as novices, but
as masters of the ruling class in a nation which feels herself destined
to rule the earth.

The imperial struggle is to continue. The Japanese Empire dominates the
Far East; the British Empire dominates Southern Asia, the Near East,
Africa and Australia; the American Empire dominates the Western
Hemisphere. It is impossible for these three great empires to remain in
rivalry and at peace. Economic struggle is a form of war, and the
economic struggle between them is now in progress.


7. _Continuing the Imperial Struggle_

The War of 1914 was no war for democracy in spite of the fact that
millions of the men who died in the trenches believed that they were
fighting for freedom. Rather it was a war to make the world safe for the
British Empire. Only in part was the war successful. The old world was
made safe by the elimination of Britain's two dangerous rivals--Germany
and Russia; but out of the conflict emerged a new rival--unexpectedly
strong, well equipped and eager for the conflict.

The war did not destroy imperialism. It was fought between five great
empires to determine which one should be supreme. In its result, it gave
to Great Britain rather than to Germany the right to exploit the
undeveloped portions of Asia and of Africa.

The Peace--under the form of "mandates"--makes the process of
exploitation easier and more legal than it ever has been in the past.
The guarantees of territorial integrity, under the League Covenant, do
more than has ever been done heretofore to preserve for the imperial
masters of the earth their imperial prerogatives.

New names are being used but it is the old struggle. Egypt and India
helped to win the war, and by that very process, they fastened the
shackles of servitude more firmly upon their own hands and feet. The
imperialists of the world never had less intention than they have to-day
of quitting the game of empire building. Quite the contrary--a wholly
new group of empire builders has been quickened into life by the
experiences of the past five years.

The present struggle for the possession of the oil fields of the world
is typical of the economic conflicts that are involved in imperial
struggles. For years the capitalists of the great investing nations
have been fighting to control the oil fields of Mexico. They have hired
brigands, bought governors, corrupted executives. The war settled the
Mexican question in favor of the United States. Mexico, considered
internationally, is to-day a province of the American Empire.

During the blackest days of the war, when Paris seemed doomed, the
British divided their forces. One army was operating across the deserts
of the Near East. For what purpose? When the Peace was signed, Great
Britain held two vantage points--the oil fields of the Near East and the
road from Berlin to Bagdad.

The late war was not a war to end war, nor was it a war for disarmament.
German militarism is not destroyed; the appropriations for military and
naval purposes, made by the great nations during the last two years, are
greater than they have ever been in any peace years that are known to
history.

The world is preparing for war to-day as actively as it was in the years
preceding the War of 1914. The years from 1914 to 1918 were the opening
episodes; the first engagements of the Great War.

There is no question, among those who have taken the trouble to inform
themselves, but that the War of 1914 was fought for economic and
commercial advantage. The same rivalries that preceded 1914 are more
active in the world to-day than ever before. Hence the possibilities of
war are greater by exactly that amount. The imperial struggle is being
continued and a part of the imperial struggle is war.


8. _Again!_

This monstrous thing called war will occur again! Not because any
considerable number of people want it, not even because an active
minority wills it, but because the present system of competitive
capitalism makes war inevitable. Economic rivalries are the basis of
modern wars and economic rivalries are the warp and woof of capitalism.

To-day the rivalries are economic--in the fields of commerce and
industry and finance. To-morrow they will be military.

Already the nations have begun the competition in the building of tanks,
battleships and airplanes. These instruments of destruction are built
for use, and when the time comes, they will be used as they were between
1914 and 1918.

Again there will be the war propaganda--subtle at first, then more and
more open. There will be stories of atrocities; threats of world
conquest. "Preparedness" will be the cry.

Again there will be the talk of "My country, right or wrong"; "Stand
behind the President"; "Fall in line"; "Go over the top!"

Again fear will stalk through the land, while hate and war lust are
whipped into a frenzy.

Again there will be conscription, and the straightest and strongest of
the young men will leave their homes and join the colors.

Again the most stalwart men of the nations will "dig themselves in" and
slaughter one another for years on end.

Again the truth-tellers will be mobbed and jailed and lynched, while
those who champion the cause of the workers will be served with
injunctions if they refuse to sell out to the masters.

Again the profiteers will stop at home and reap their harvests out of
the agony and the blood of the nation.

Again, when the killing is over, a few old men, sitting around a table,
will carve the world--stripping the vanquished while they reward the
victors.

Again the preparations will begin for the next war. The people will be
fed on promises, phrases and lies. They will pay and they will die for
the benefit of their masters, and thus the terrible tragedy of
imperialism will continue to bathe the world in tears and in blood.



XVIII. THE CHALLENGE TO IMPERIALISM


1. _Revolutionary Protest_

Since the Franco-Prussian War the people of Europe have been waking up
to the failure of imperialism. The period has been marked by a rapid
growth of Socialism on the continent and of trade-unionism in Great
Britain. Both movements are expressions of an increasing working-class
solidarity; both voice the sentiments of internationalism that were
sounded so loudly during the revolutionary period of the eighteenth
century.

The rapid growth of the European labor movement worried the autocrats
and imperialists. Bismarck suppressed it; the Russian police tortured
it. Despite all of the efforts to check it or to crush it, the
revolutionary movement in Europe gained force. The speeches and writings
of the leaders were directed against the capitalist system, and the rank
and file of the workers, rendered sharply class conscious by the
traditions of class rule, responded to the appeal by organizing new
forms of protest.

The first revolutionary wave of the twentieth century broke in Russia in
1905. The Russian Revolution of 1917 destroyed the old régime and
replaced it first by a moderate or liberal and then by a radical
communist control. Like all of the proletarian movements in Europe the
Russian revolutionary movement was directed against "capitalism" and
"imperialism" and despite the fact that there was no considerable
development of the capitalist system in Russia, its imperial
organization was so thoroughgoing, and the imperial attitude toward the
working class had been so brutally revealed during the revolutionary
demonstrations in 1905, that the people reacted with a true Slavic
intensity against the despotism that they knew, which was that of an
autocratic, feudal master-class.

The international doctrines of the new Russian régime were expressed in
the phrase "no forcible annexations, no punitive indemnities, the free
development of all peoples." The keynote of its internal policy is
contained in Section 16 of the Russian Constitution, which makes work
the duty of every citizen of the Republic and proclaims as the motto of
the new government the doctrine, "He that will not work neither shall he
eat." The franchise is restricted. Only workers (including housekeepers)
are permitted to vote. Profiteers and exploiters are specifically denied
the right to vote or to hold office. Resources are nationalized together
with the financial and industrial machinery of Russia. The Bill of
Rights contained in the first section of the Russian Constitution is a
pronouncement in favor of the liberty of the workers from every form of
exploitation and economic oppression.

The Russian revolution was directed against capitalism in Russia and
against imperialism everywhere. This dramatic assault upon capitalist
imperialism centered the eyes of the world upon Russia, making her
experiment the outstanding feature of a period during which the workers
were striving to realize the possibilities of a more abundant life for
the masses of mankind.


2. _Outlawing Bolshevism_

Capitalist diplomats were wary of the Kerensky régime because they did
not feel certain how far the Russian people intended to go. The triumph
of the Bolsheviki made the issue unmistakably clear. There could be no
peace between Bolshevism and capitalism. From that day forward it was a
struggle to determine which of the two economic systems should survive.

During the years 1918 and 1919 the capitalist world organized one of the
most effective advertising campaigns that has ever been staged. Every
shred of evidence that, by any stretch of the imagination, could be
distorted into an attack upon the Bolshevist régime, was scattered
broadcast over the world. Where evidence was lacking, rumor and
innuendo were employed. The leading newspapers and magazines, prominent
statesmen, educators, clergymen, scientists and public men in every walk
of life went out of their way to denounce the Russian experiment in very
much the same manner that the propertied interests of Europe had
denounced the French experiment during the years that followed 1789.

All of the great imperialist governments had at their disposal a vast
machinery for the purveying of information--false or true as the case
might demand. This public machinery like the machinery of private
capitalism was turned against Bolshevism. The capitalist governments
went farther by backing with money and supplies the counter
revolutionary forces under Yudenich, Denekine, Seminoff, and Kolchak.
Allied expeditions were landed on the soil of European and Asiatic
Russia "to free the Russian people from the clutches of the Bolsheviki."
A blockade was declared in which the Germans were invited to join (after
the signing of the armistice), and the whole capitalist world united to
starve into submission the men, women and children of revolutionary
Russia.

No event of recent times, not even the holy war against the autocracy of
militarist Germany, had created such a unanimity of action among the
Western nations. Bolshevism threatened the very existence of capitalism
and as such its destruction became the first task of the capitalist
world.

The collapse of the capitalist efforts to destroy socialist Russia
reflects the power of a new idea over the ancient form. The Allied
expeditions into Russia met with hostility instead of welcome. The
counter-revolutionary forces were overwhelmed by the red army. The
buffer states made peace. The Allied soldiers mutinied when called upon
to take part in a war against the forces of revolutionary Russia. "Holy
Russia" became holy Russia indeed--recognized and respected by the
proletarian forces throughout Europe.


3. _The New Europe_

Russia is the dramatic center of the European movement against
capitalist imperialism, but the movement is not confined to Russia. Its
activities are extended into every important country on the continent.

Since March, 1917, when the first revolution occurred in Russia,
absolute monarchy and divine, kingly rights have practically disappeared
from Europe. Before the Russian Revolution, four-fifths of the people of
Europe were under the sway of monarchs who exercised dictatorial power
over the domestic and foreign affairs of their respective nations.
Within two years, the Hohenzollerns, the Hapsburgs and the Romanoffs
were driven from the thrones of Germany, of Austria and of Russia. Other
rulers of lesser importance followed in their wake, until to-day, the
old feudal power that held the political control over most of Europe in
1914 has practically disappeared.

This is the obvious thing--a revolution in the form of political
government--the kind of revolution with which history usually deals.

But there is another revolution proceeding in Europe, far more important
because more fundamental--the economic and social revolution; the change
in the form of breadwinning; the change in the relation between a man
and the tools that he uses to earn his livelihood.

Every one knows, now, that Czars and Kaisers and Emperors did not really
control Europe before 1914, except in so far as they yielded to bankers
and to business men. The crown and the scepter gave the appearance of
power, but behind them were concessions, monopolies, economic
preferments, and special privilege. The European revolution that began
in 1917 with the Czar, did not stop with kings. It began with them
because they were in such plain sight, but when it had finished with
them it went right on to the bankers and the business men.

War is destruction, organized and directed by the best brains
available. It is merry sport for the organizers and for some of the
directors, but like any other destructive agent, it may get out of hand.
The War of 1914 was to last for six weeks. It dragged on for five years,
and the wars that have grown out of it are still continuing. In the
course of those five years, the war destroyed the capitalist system of
continental Europe. Patches and shreds of it remained, but they were
like the topless, shattered trees on the scarred battle-fields. They
were remnants--nothing more. In the first place, the war destroyed the
confidence of the people in the capitalist system; in the second place,
it smashed up the political machinery of capitalism; in the third place,
it weakened or destroyed the economic machinery of capitalism.

Each government, to win the war, lied to its people. They were told that
their country was invaded. They were assured that the war would be a
short affair. Besides that, there were various reasons given for the
struggle--it was a war to end war; it was a war to break the iron ring
that was crushing a people; it was a war for liberty; it was a struggle
to make the world safe for democracy.

Not a single important promise of the war was fulfilled, save only the
promise of victory. Hundreds of millions, aroused to the heights of an
exalted idealism, came back to earth only to find themselves betrayed.
With less promise and more fulfillment; with at least an appearance of
statesmanship; with some respect for the simple moralities of
truth-telling, fair-dealing, and common honor, there might have been
some chance for the capitalist system to retain the confidence of the
peoples of war-torn Europe, even in the face of the Russian Revolution;
but each of these things was lacking, and as one worker put it: "I don't
know what Bolshevism is, but it couldn't be any worse than what we have
now, so I'm for it!"

Such a loss of public confidence would have proved a serious blow to any
social system, even were it capable of immediately reëstablishing normal
conditions of living among the people. In this case, the same events
that destroyed public confidence in the capitalist system, destroyed the
system itself.

The old political forms of Europe--the czars, emperors and kaisers, who
stood as the visible symbols of established order and civilization, were
overthrown during the war. The economic forces--the banks and business
men--had used these forms for the promotion of their business
enterprises. Capitalism depended on czars and kaisers as a blacksmith
depends on his hammer. They were among the tools with which business
forged the chains of its power. They were the political side of the
capitalist system. While the people accepted them and believed in them,
the business interests were able to use these political tools at will.
The tools were destroyed in the fierce pressure of war and revolution,
and with them went one of the chief assets of the European capitalists.

There was a third breakdown--far more important than the break in the
political machinery of the capitalist system--and that was the
annihilation of the old economic life.

Economic life is, in its elements, very simple. Raw materials--iron ore,
copper, cotton, petroleum, coal and wheat--are converted, by some
process of labor, into things that feed, clothe and house people. There
are four stages in this process--raw materials; manufacturing;
transportation; marketing. If there is a failure in one of the four, all
of the rest go wrong, as is very clearly illustrated whenever there is a
great miners' or railroad workers' strike, or when there is a failure of
a particular crop. During the war, all four of these economic stages
went wrong.

Between the years 1914 and 1918 the people of Europe busied themselves
with a war that put their economic machine out of the running.

For a hundred years the European nations had been busy building a finely
adjusted economic mechanism; population, finance, commerce--all were
knit into the same system. This system the war demolished, and the years
that have followed the Armistice have not seen it rebuilt in any
essential particular, save in Great Britain and in some of the neutral
countries.

Not only were the European nations unable to give commodities in
exchange for the things they needed but the machinery of finance, by
means of which these transactions were formerly facilitated, was
crippled almost beyond repair. Under the old system buying and selling
were carried on by the use of money, and money ceased to be a stable
medium of exchange in Europe. It would be more correct to say that money
was no longer taken seriously in many parts of Europe. During the war
the European governments printed 75 billions of dollars' worth of paper
money. This paper depreciated to a ridiculous extent. Before the war,
the franc, the lira, the mark and the crown had about the same value--20
to 23 cents, or about five to a dollar. By 1920 the dollar bought 15
francs; 23 liras; 40 marks, and 250 Austrian crowns. In some of the
ready-made countries, constituted under the Treaty or set up by the
Allies as a cordon about Russia, hundreds and thousands of crowns could
be had for a dollar. Even the pound sterling, which kept its value
better than the money of any of the other European combatants, was
thirty per cent. below par, when measured in terms of dollars. This
situation made it impossible for the nations whose money was at such a
heavy discount to purchase supplies from the more fortunate countries.
But to make matters even worse, the rate of exchange fluctuated from day
to day and from hour to hour so that business transactions could only be
negotiated on an immense margin of safety.

Add to this financial dissolution the mountains of debt, the huge
interest charges and the oppressive taxes, and the picture of economic
ruin is complete.

The old capitalist world, organized on the theory of competition between
the business men within each nation, and between the business men of one
nation and those of another nation, reached a point where it would no
longer work.

In Russia the old system had disappeared, and a new system had been set
up in its place. In Germany, and throughout central Europe, the old
system was shattered, and the new had not yet emerged. In France, Italy
and Great Britain the old system was in process of disintegration--rapid
in France and Italy; slower in Great Britain. But in all of these
countries intelligent men and women were asking the only question that
statesmanship could ask--the question, "What next?"

The capitalist system was stronger in Great Britain than in any of the
other warring countries of Europe. Before the war, it rested on a surer
foundation. During the war, it withstood better than any other the
financial and industrial demands. Since the war, it has made the best
recovery.

Great Britain is the most successful of the capitalist states. The other
capitalist nations of Europe regard her as the inner citadel of European
capitalism. The British Labor Movement is seeking to take this citadel
from within.

The British Labor Movement is a formidable affair. There are not more
than a hundred thousand members in all of the Socialist parties, in the
Independent Labor Party and in the Communist Party combined. There are
between six and seven millions of members in the trade unions.

Perhaps the best test of the strength of the British Labor Movement came
in the summer of 1920, over the prospective war with Russia. Warsaw was
threatened. Its fall seemed imminent, and both Millerand and
Lloyd-George made it clear that the fall of Warsaw meant war. The
situation developed with extraordinary rapidity. It was reported that
the British Government had dispatched an ultimatum. The Labor Movement
acted with a strength and precision that swept the Government off its
feet and compelled an immediate reversal of policy.

Over night, the workers of Great Britain were united in the Council of
Action. As originally constituted, the "Labor and Russia Council of
Action" consisted of five representatives each from the Parliamentary
Committee of the Trades Union Congress, the Executive Committee of the
Labor Party and the Parliamentary Labor Party. To these fifteen were
added eight others, among whom were representatives of every element in
the British Labor Movement. This Council of Action did three things--it
notified the Government that there must be no war with Russia; it
organized meetings and demonstrations in every corner of the United
Kingdom to formulate public opinion; it began the organization of local
councils of action, of which there were three hundred within four weeks.
The Council of Action also called a special conference of the British
Labor Movement which met in London on August 13. There were over a
thousand delegates at this conference, which opened and closed with the
singing of the "Internationale." When the principal resolution of
endorsement was passed, approving the formation of the Council of
Action, the delegates rose to their feet, cheered the move to the echo,
and sang the "Internationale" and "The Red Flag." The closing resolution
authorized the Council of Action to take "any steps that may be
necessary to give effect to the decisions of the Conference and the
declared policy of the Trade Union and Labor Movement."

Such was the position in the "Citadel of European Capitalism." The
Government was forced to deal with a body that, for all practical
purposes, was determining the foreign policy of the Empire. Behind that
Council was an organized group of between six and seven millions of
workers who were out to get the control of industry into their own
hands, and to do it as speedily and as effectually as circumstances
would permit.

Meanwhile, the mantle of revolutionary activity descended upon Italy,
where the red flag was run up over some the largest factories and some
of the finest estates.

Throughout the war, the revolutionary movement was strong in Italy. The
Socialist Party remained consistently an anti-war party, with a radical
and vigorous propaganda. The Armistice found the Socialist and Labor
Movements strong in the North, with a growing movement in the South for
the organization of Agricultural Leagues.

The Socialist propaganda in Italy was very consistent and telling. The
paper "Avanti," circulating in all parts of the country, was an agency
of immense importance. The war, the Treaty, the rising cost of living,
the growing taxation--all had prepared the ground for the work that the
propagandists were doing. Their message was: "Make ready for the taking
over of the industries! Learn what you can, so that, when the day comes,
each will play his part. When you get the word, take over the works!
There must be no violence--that only helps the other side. Do not linger
on the streets, you will be shot. Remain at home or stay in the
factories and work as you never worked before!"

That, in essence, was the Italian Socialist propaganda--simple, clear
and direct, and that was, in effect, what the workers did.

The returned soldiers were a factor of large importance in the Italian
Revolution. They were radicals throughout the war. The peace made them
revolutionists. "The Proletarian League of the Great War" was affiliated
with "The International of Former Soldiers," which comprised the radical
elements among the ex-service men of Great Britain, Germany, France,
Austria, Italy and a number of the smaller countries. There were over a
million dues-paying members in this International, and their avowed
object was propaganda against war and in favor of an economic system in
which the workers control the industries. It was this group in
Italy--particularly in the South--that carried through the project of
occupying the estates.

The workers are in control of the whole social fabric in Russia where
the revolution has gone the farthest. In Great Britain, where the labor
movement is perhaps more conservative than in any of the other countries
of Europe, the Government is compelled to deal with a labor movement
that is strong enough to consider and to decide important matters of
foreign policy. The workers of Italy have the upper hand. In
Czecho-Slovakia, in Bulgaria, in Germany and in the smaller and neutral
countries the workers are making their voices heard in opposition to any
restoration of the capitalist system; while they busy themselves with
the task of creating the framework of a new society.


4. _The Challenge_

This is the challenge of the workers of Europe to the capitalist system.
The workers are not satisfied; they are questioning. They mean to have
the best that life has to give, and they are convinced that the
capitalist system has denied it to them.

The world has had more than a century of capitalism. The workers have
had ample opportunity to see the system at work. The people of all the
great capitalist countries--the common people--have borne the burdens
and felt the crushing weight of capitalism--in its enslavement of little
children; in its underpaying of women; in long hours of unremitting,
monotonous toil; in the dreadful housing; in the starvation wages; in
unemployment; in misery. The capitalist system has had a trial and it is
upon the workers that the system has been tried out.

During this experiment, the workers of the world have been compelled to
accept poverty, unemployment and war.

These terrible scourges have afflicted the capitalist world, and it is
the workers and their families that have borne them in their own
persons. In those countries where the capitalist system is the oldest,
the workers have suffered the longest. The essence of capitalism is the
exploitation of one man by another man, and the longer this exploitation
is practiced the more skillful and effective does the master class
become in its manipulation.

The workers look before them along the path of capitalist imperialism
that is now being followed by the nations that are in the lead of the
capitalist world. There they see no promise save the same exploitation,
the same poverty, the same inequality and the same wars over the
commercial rivalries of the imperial nations.

The workers of Europe have come to the conclusion that the world should
belong to those who build it; that the good things of life should be the
property of those who produce them. They see only one course open before
them--to declare that those who will not work, shall not eat.

The right of self-determination is the international expression of this
challenge. The ownership of the job is its industrial equivalent.
Together, the two ideas comprise the program of the more advanced
workers in all of the great imperial countries of the world. These ideas
did not originate in Russia, and they are not confined to Russia any
more than capitalism is confined to Great Britain. They are the
doctrines of the new order that is coming rapidly into its own.

Capitalism has been summed up, heretofore, in the one word "profit." The
capitalist cannot abandon that standard. The world has lived beyond it,
however, and without it, capitalism, as a system, is meaningless. If the
capitalists abandon profit, they abandon capitalism.

Without profit the capitalist system falls to pieces, because it is the
profit incentive that has always been considered as the binder that
holds the capitalist world together. Hence the abandonment of the profit
incentive is the surrender of the citadel of capitalism. While profit
remains, exploitation persists, and while there is exploitation of one
man by another, no human being can call himself free.

The capitalists are caught in a beleaguered fortress in which they are
defending their economic lives. Profit is the key to this fortress, and
if they surrender the key, they are lost.


5. _The Real Struggle_

This is the real struggle for the possession of the earth. Shall the few
own and the many labor for the few, or the many own, and labor upon jobs
that they themselves possess? The struggle between the capitalist
nations is incidental. The struggle between the owners of the world and
the workers of the world is fundamental.

If Great Britain wins in her conflict with the United States, her
capitalists will continue to exploit the workers of Lancashire and
Delhi. Her imperialists will continue their policy of world domination,
subjugating peoples and utilizing their resources and their labor for
the enrichment.

If the United States wins in her struggle with Great of the bankers and
traders of London. Britain, her capitalists will continue to exploit the
workers of Pittsburg and San Juan. Her imperialists will continue their
policy of world domination, subjugating the peoples of Latin American
first, and then reaching out for the control over other parts of the
earth.

No matter what imperial nation may triumph in this struggle between the
great nations for the right to exploit the weaker peoples and the choice
resources, the struggle between capitalism and Socialism must be fought
to a finish. If the capitalists win, the world will see the introduction
of a new form of serfdom, more complete and more effective than the
serfdom of Feudal Europe. If the Socialists win, the world enters upon a
new cycle of development.



XIX. THE AMERICAN WORKER AND WORLD EMPIRE


1. _Gains and Losses_

The American worker is a citizen of the richest country of the world.
Resources are abundant. There is ample machinery to convert these gifts
of nature into the things that men need for their food and clothing,
their shelter, their education and their recreation. There is enough for
all, and to spare, in the United States.

But the American worker is not master of his own destinies. He must go
to the owners of American capital--to the plutocrats--and from them he
must secure the permission to earn a living; he must get a job.
Therefore it is the capitalists and not the workers of the United States
that are deciding its public policy at the present moment.

The American capitalist is a member of one of the most powerful
exploiting groups in the world. Behind him are the resources, productive
machinery and surplus of the American Empire. Before him are the
undeveloped resources of the backward countries. He has gained wealth
and power by exploitation at home. He is destined to grow still richer
and more powerful as he extends his organization for the purposes of
exploitation abroad.

The prospects of world empire are as alluring to the American capitalist
as have been similar prospects to other exploiting classes throughout
history. Empire has always been meat and drink to the rulers.

The master class has much to gain through imperialism. The workers have
even more to lose.

The workers make up the great bulk of the American people. Fully
seven-eighths (perhaps nine-tenths) of the adult inhabitants of the
United States are wage earners, clerks and working farmers. All of the
proprietors, officials, managers, directors, merchants (big and little),
lawyers, doctors, preachers, teachers, and the remainder of the business
and professional classes constitute not over 10 or 12 percent of the
total adult population. The workers are the "plain people" who do not
build empires any more than they make wars. If they were left to
themselves, they would continue the pursuit of their daily affairs which
takes most of their thought and energy--and be content to let their
neighbors alone.


2. _The Workers' Business_

The mere fact that the workers are so busy with the routine of daily
life is in itself a guarantee that they will mind their own business.
The average worker is engaged, outside of working hours, with the duties
of a family. His wife, if she has children, is thus employed for the
greater portion of her time. Both are far too preoccupied to interfere
with the like acts of other workers in some other portion of the world.
Furthermore, their preoccupation with these necessary tasks gives them
sympathy with those similarly at work elsewhere.

The plain people of any country are ready to exercise even more than an
ordinary amount of forbearance and patience rather than to be involved
in warfare, which wipes out in a fortnight the advantages gained through
years of patient industry.

The workers have no more to gain from empire building than they have
from war making, but they pay the price of both. Empire building and war
making are Siamese twins. They are so intimately bound together that
they cannot live apart. The empire builder--engaged in conquering and
appropriating territory and in subjugating peoples--must have not only
the force necessary to set up the empire, but also the force requisite
to maintain it. Battleships and army corps are as essential to empires
as mortar is to a brick wall. They are the expression of the organized
might by which the empire is held together.

The plain people are the bricks which the imperial class uses to build
into a wall about the empire. They are the mortar also, for they man the
ships and fill up the gaps in the infantry ranks and the losses in the
machine gun corps. They are the body of the empire as the rulers are its
guiding spirit.

When ships are required to carry the surplus wealth of the ruling class
into foreign markets, the workers build them. When surplus is needed to
be utilized in taking advantage of some particularly attractive
investment opportunity the workers create it. They lay down the keels of
the fighting ships, and their sons aim and fire the guns. They are
drafted into the army in time of war and their bodies are fed to the
cannon which other workers in other countries, or perhaps in the same
country, have made for just such purposes. The workers are the warp and
woof of empire, yet they are not the gainers by it. Quite the contrary,
they are merely the means by which their masters extend their dominion
over other workers who have not yet been scientifically exploited.

The work of empire building falls to the lot of the workers. The profits
of empire building go to the exploiting class.


3. _The British Workers_

What advantage came to the workers of Rome from the Empire which their
hands shaped and which their blood cemented together? Their masters took
their farms, converted the small fields into great, slave-worked
estates, and drove the husbandmen into the alleys and tenements of the
city where they might eke out an existence as best they could. The
rank-and-file Roman derived the same advantage from the Roman Empire
that the rank-and-file Briton has derived from the British Empire.

Great Britain has exercised more world mastery during the past hundred
years than any other nation. All that Germany hoped to achieve Great
Britain has realized. Her traders carry the world's commerce, her
financiers clip profits from international business transactions, her
manufacturers sell to the people of every country, the sun never sets on
the British flag.

Great Britain is the foremost exponent and practitioner of capitalist
imperialism. The British Empire is the greatest that the world has known
since the Empire of Rome fell to pieces. Whatever benefits modern
imperialism brings either for capitalists or for workers should be
enjoyed by the capitalists and workers of Great Britain.

Until the Great World War the capitalists of Great Britain were the most
powerful on earth with a larger foreign trade and a larger foreign
investment than any other. At the same time the British workers were
amongst the worst exploited of those in any capitalist country in
Europe.

The entire nineteenth century is one long and terrible record of
master-class exploitation inside the British Isles. The miseries of
modern India have been paralleled in the lives of the workers of
Ireland, Scotland, Wales and England. Gibbins, in his description of the
conditions of the child workers in the early years of the nineteenth
century ends with the remark, "One dares not trust oneself to try and
set down calmly all that might be told of this awful page of the history
of industrial England."[58]

Even more revolting are the descriptions of the conditions which
surrounded the lives of the mine workers in the early part of the
nineteenth century. Women as well as men were taken into the mines and
in some cases, as the reports of the Parliamentary investigation show,
the women dragged cars through passage-ways that were too low to admit
the use of ponies or mules.

England, mistress of the seas, proud carrier of the traffic of the
world, the center of international finance, the richest among all the
investing nations--England was reeking with poverty. Beside her
factories and warehouses were vile slums in which people huddled as
Ruskin said, "so many brace to a garret." There in the back alleys of
civilization babies were born and babies died, while those who survived
grew to the impotent manhood of the street hooligan.

The British Empire girdled the world. For a century its power had grown,
practically unchallenged. Superficially it had every appearance of
strength and permanence but behind it and beneath it were the hundreds
of thousands of exploited factory workers, the underpaid miners, the
Cannon Gate of Edinburgh and the Waterloo Junction of London.

Capitalist imperialism has not benefited the British workers. Quite the
contrary, the rise of the Empire has been accompanied by the
disappearance of the stalwart English yeoman; by the disappearance of
the agricultural population; by the concentration of the people in huge
industrial towns where the workers, no longer the masters of their own
destinies, must earn their living by working at machines owned by the
capitalist imperialists. The surplus derived from this exploited labor
is utilized by the capitalists as the means of further extending their
power in foreign lands.

Imperialism has brought not prosperity, but poverty to the plain people
of England.

There is another aspect of the matter. If these degraded conditions
attach to the workers in the center of the empire, what must be the
situation among the workers in the dependencies that are the objects of
imperial exploitation? Let the workers of India answer for Great
Britain; the workers of Korea answer for Japan, and the workers of Porto
Rico answer for the United States. Their lot is worse than is the lot of
the workers at the center of imperial power.

Empires yield profits to the masters and victory and glory to the
workers. Let any one who does not believe this compare the lives of the
workers in small countries like Holland, Norway, Denmark and
Switzerland, with the lives of the workers in the neighboring
empires--Russia, Germany, France and Great Britain. The advantage is all
on the side of those who live in the smaller countries that are minding
their own affairs and letting their neighbors alone.


4. _The Long Trail_

The workers of the United States are to-day following the lead of the
most powerful group of financial imperialists in the world. The trail is
a long one leading to world conquest, unimagined dizzying heights of
world power, riches beyond the ken of the present generation, and then,
the slow and terrible decay and dissolution that sooner or later
overtake those peoples that follow the paths of empire. The rulers will
wield the power and enjoy the riches. The people will struggle and
suffer and pay the price.

The American plutocracy is out to conquer the earth because it is to
their interest to do so. The will-o'-the-wisp of world empire has
captured their imaginations and they are following it blindly.

The American people, on November 2, 1920, gave the American imperialists
a blanket authority to go about their imperial business--an authority
that the rulers will not be slow to follow. First they will clean house
at home--that housecleaning will be called "the campaign for the
establishment of the open shop." Then they will go into Mexico, Central
America, China, and Europe in search of markets, trade and investment
opportunities.

Behind the investment will come the flag, carried by battle-ships and
army divisions. That flag will be brought front to front with other
flags, high words will be spoken, blood will flow, life will ebb, and
the imperialists will win their point and pocket their profit.

Behind them, in November, and at all other times of the year, there
will be the will, expressed or implied, of the working people of the
United States, who will produce the surplus for foreign investment; will
make the ships and man them; will dig the coal and bore for the oil;
will shape the machines. Their hands and the hands of their sons will be
the force upon which the ruling class must depend for its power. They
will produce, while the ruling class consumes and destroys.

The trail is a long one, but it leads none the less certainly to,
isolation and death. No people can follow the imperial trail and live.
Their liberties go first and then their lives pay the penalty of their
rulers' imperial ambition. It was so in the German Empire. It is so
to-day in the British Empire. To-morrow, if the present course is
followed, it will be equally true in the American Empire.


5. _The New Germany_

One of the chief charges against the Germans, in 1914, was that they
were not willing to leave their neighbors in peace. They were out to
conquer the world, and they did not care who knew it. It was not the
German people who held these plans for world conquest, it was the German
ruling class. The German people were quite willing to stay at home and
attend to their own affairs. Their rulers, pushed by the need for
markets and investment opportunities, and lured by the possibilities of
a world empire, were willing to stake the lives and the happiness of the
whole nation on the outcome of these ambitious schemes. They threw their
dice in the great world game of international rivalries--threw and lost;
but in their losing, they carried not only their own fortunes, but the
lives and the homes and the happiness of millions of their fellows whose
only desire was to remain at home and at peace.

Germany's offense was her ambition to gain at the expense of her
neighbors. Lacking a place in the sun, she proposed to take it by the
strength of her good right arm. This is the method by which all of the
great empires have been built and it is the method that the builders of
the American Empire have followed up to this point. The land which the
ruling class of the United States has needed has heretofore been in the
hands of weak peoples--Indians, Mexicans, a broken Spanish Empire. Now,
however, the time has come when the rulers of the United States, with
the greatest wealth and the greatest available resources of any of the
nations, are preparing to take what they want from the great nations,
and that imperial purpose can be enforced in only one way--by a resort
to arms. The rulers of the United States must take what they would have
by force, from those who now possess it. They did not hesitate to take
Panama from Colombia; they did not hesitate to take possession of Hayti
and of Santo Domingo, and they do not propose to stop there.

The people of the world know these things. The inhabitants of Latin
America know them by bitter experience. The inhabitants of Europe and of
Asia know them by hearsay. Both in the West and in the East, the United
States is known as "The New Germany."

That means that the peoples of these countries look upon the United
States and her foreign policies in exactly the same way that the people
of the United States were taught to regard Germany and her foreign
policies. To them the United States is a great, rich, brutal Empire,
setting her heel and laying her fist where necessity calls. Men and
women inside the United States think of themselves and of their fellow
citizens as human beings. The people in the other countries read the
records of the lynchings, the robberies and the murders inside the
United States; of the imperial aggression toward Latin America, and they
are learning to believe that the United States is made up of ruthless
conquerors who work their will on those that cross their path.

The plain American men and women, living quietly in their simple homes,
are none the less citizens of an aggressive, conquering Empire. They may
not have a thought directed against the well-being of a single human
creature, but they pay their taxes into the public treasury; they vote
for imperialism on each election day; they read imperialism in their
papers and hear it preached in their churches, and when the call comes,
their sons will go to the front and shed their blood in the interest of
the imperial class.

The plain people of the German Empire did not desire to harm their
fellows, nevertheless, they furnished the cannon-fodder for the Great
War. America's plain folks, by merely following the doctrine, "My
country, right or wrong--America first!" will find themselves, at no
very distant date, exactly where the German people found themselves in
1914.


6. _The Price_

The historic record, in the matter of empire, is uniform. The masters
gain; the workers pay.

The workers of the United States will not be exempt from these
inexorable necessities of imperialism. On the contrary they will be
called upon to pay the same price for empire that the workers in Britain
have paid; that the workers in the other empires have paid. What is the
price? What will world empire cost the American workers?

1. It will cost them their liberties. An empire cannot be run by a
debating society. Empires must act. In order to make this action mobile
and efficacious, authority must be centered in the hands of a small
group--the ruling class, whose will shall determine imperial policy.
Self-government is inconsistent with imperialism.

2. The workers will not only lose their own liberties, but they will be
compelled to take liberties away from the peoples that are brought under
the domination of the Empire. Self-determination is the direct opposite
of imperialism.

3. The American workers, as a part of the price of empire, will be
compelled to produce surplus wealth--wealth which they can never
consume; wealth the control of which passes into the hands of the
imperial ruling class, to be invested by them in the organization of the
Empire and the exploitation of the resources and other economic
opportunities of the dependent territory.

4. The American workers must be prepared to create and maintain an
imperial class, whose function it is to determine the policies and
direct the activities of the Empire. This class owes its existence to
the existence of empire, without which such a ruling class would be
wholly unnecessary.

5. The American workers must be prepared, in peace time as well as in
war time, to provide the "sinews of war": the fortifications, the battle
fleet, the standing army and the vast naval and military equipment that
invariably accompany empire.

6. The American workers must furthermore be ready, at a moment's call,
to turn from their occupations, drop their useful pursuits, accept
service in the army or in the navy and fight for the preservation of the
Empire--against those who attack from without, against those who seek
the right of self-determination within.

7. The American workers, in return for these sacrifices, must be
prepared to accept the poverty of a subsistence wage; to give the best
of their energies in war and in peace, and to stand aside while the
imperial class enjoys the fat of the land.


7. _A Way Out_

If the United States follows the course of empire, the workers of the
United States have no choice but to pay the price of Empire--pay it in
wealth, in misery, and in blood. But there is an alternative. Instead of
going on with the old system of the masters, the workers may establish a
new economic system--a system belonging to the workers, and managed by
them for their benefit.

The workers of Europe have tried out imperialism and they have come to
the conclusion that the cost is too high. Now they are seeking, through
their own movement--the labor movement--to control and direct the
economic life of Europe in the interest of those who produce the wealth
and thus make the economic life of Europe possible.

The American workers have the same opportunity. Will they avail
themselves of it? The choice is in their hands.

Thus far the workers of the United States have been, for the most part,
content to live under the old system, so long as it paid them a living
wage and offered them a job. The European workers felt that too in the
pre-war days, but they have been compelled--by the terrible experiences
of the past few years--to change their minds. It was no longer a
question of wages or a job in Europe. It was a question of life or
death.

Can the American worker profit by that experience? Can he realize that
he is living in a country whose rulers have adopted an imperial policy
that threatens the peace of the world? Can he see that the pursuit of
this policy means war, famine, disease, misery and death to millions in
other countries as well as to the millions at home? The workers of
Europe have learned the lesson by bitter experience. Is not the American
worker wise enough to profit by their example?

FOOTNOTE:

[58] "Industry in England," H. deB. Gibbins. New York, Scribner's, 1897,
p. 390.

THE END



INDEX.


Advertising imperialism, 169

America, conquest of, 27

America first, 170

America for Americans, 202

American capitalists, 218
   "          "       program of, 226
   "     empire, costs of, 160
   "        "    course of, 158
   "        "    development of, 15
   "        "    economic basis of, 74
   "        "    growth of, 161
   "     imperialism, 23
   "     Indian, 29
   "     industries, growth of, 178
   "     people, ancestry, 159
   "     protectorates, 207
   "     Republic, disappearance of, 72
   "     tradition, failure of, 12
   "     worker and empire, 256

Anti-imperialism, 68

Appropriation of territory, 213

Automobile distribution, 183


Bankers, unity of, 150

Bethlehem Steel Co., 132

British Empire, gains of, 198
   "       "    position of, 234
   "    Labor, position of, 250

Business control, 148


Canada, investments in, 206

Capitalism and Bolshevism, 244
    "       "  war, 225
    "      breakdown of, 248
    "      law of, 223

Cherokees, dealings with, 33

Class government, 10
  "   struggle, in Europe, 254

Coal reserves, 180

Cohesion of wealth, 86, 118

Competition, ferocity of, 223

Competitive industry, 75

Conquering peoples, 26

Conquest of the West, 49

Council of Action, organization, 250
   "    "  National Defense, 148

Cuban independence, 66
  "    treaty, 208


Dictatorship, possibility of, 222

Dominican Republic, relations with, 209


Education for imperialism, 169

Empire and British workers, 258
  "    characteristics of, 15
  "    definition of, 16
  "    evolution of, 22
  "    prevalence of, 17
  "    price of, 20, 264
  "    stages in, 19
  "    workers and, 262

Empires, the Big Four, 231

Europe, financial breakdown, 249
  "     revolution in, 246


Financial imperialism, 135

Foreign investments, 131

France, gains of, 197


Government and business, 99

Great Peace, 36

Great War, 143
  "    "   advantages of, to the United States, 157
  "    "   next incidents of, 235
  "    "   results of, 240

Guaranty Trust Company, 136


Hawaii, annexation of, 62
  "     revolution in, 63

Hayti, conditions in, 210


Immigrants, race of, 160

Imperial alignment, 229
    "    goal, 222
    "    purpose, 165
    "    sentiments, 166
    "    task, 237
    "      "   nature of, 228

Imperialism, advantages of, 256
     "       beginnings of, 65
     "       challenge to, 243
     "       cost of, 261
     "       establishment of, 72
     "       failure of, 243
     "       psychology of, 170

Imperialists, training of, 219

Incomes, in the United States, 115

Industrial combination, 81
     "     organization, 78
     "     revolution, 76

International exploitation, 128
      "       finance, 135
      "       Harvester Co., 133

Investing nations, 127

Investment bankers, 86

Investments in the United States, 130

Italy, gains of, 197


Job ownership, 94


Labor, colonial shortage of, 38

Landlordism, 105

Land ownership, 103
  "  policy, 104

Latin America, 203

Liberty, desire for, 8


Manifest destiny, 171

Mastery, avenues of, 92

Mexican War, provocation of, 55
   "     "   success of, 56

Mexico, conquest of, 54

Monroe Doctrine, 202
   "       "     logic of, 207


National City Bank, 138

Navy League, 146

Negro civilization, in Africa, 40
  "   slaves, values of, 47

Negroes, numbers enslaved, 43

New Europe, 246

Next War, contestants in, 236
  "   "   preparations for, 241
  "   "   pretexts for, 238

New Orleans, struggle for, 50


Ownership, advantages of, 114


Panama, relations with, 213
  "     revolution in, 215
  "     seizure of, 214

Patriotism, 147

Peace Treaty, provisions of, 224
  "      "    results of, 194

Personal incomes, sources of, 116

Philippines, conquest of, 69

Plutocracy, 117
     "      control of, 148
     "      dictatorship of, 92
     "      domestic power of, 153
     "      economic gains of, 151
     "      growing power of, 143

Popular government, 9

Population, increase of, 50

Preparedness, 145

Press censorship, 210

Product ownership, 96

Profiteering, 151

Property, Indian ideas of, 30
    "     ownership, security of, 107
    "     rights, and civilization, 113
    "     rights of, 103
    "     safeguards to, 108

Public opinion, control of, 98


Resources of the United States, 179

Revolution in Europe, 246

Russia, Allied attack on, 245
   "    world position of, 231


Slave Coast, 39
  "   power, defeat of, 61
  "   trade, America's part in, 44
  "     "    beginnings of, 39
  "     "    conditions of, 43
  "     "    development of, 42

Slavery, and expansion, 60
   "     beginnings of, 39
   "     in the United States, 45

Slaves, early demand for, 41

Southwest, conquest of, 51, 57

Sovereignty, source of, 11

Spanish War, 65

Standard Oil Co., 134

Surplus, disposal of, 123
   "     pressure of, 121


Teutonic peoples, 26

Texas, annexation of, 52

Timber reserves, 180

Transportation facilities, 183


Undeveloped countries, 124

United States, capital of, 181
  "       "    financial power of, 154
  "       "    past isolation, 192
  "       "    position of, 221
  "       "    products of, 184
  "       "    resources of, 179
  "       "    shipping, 188
  "       "    wealth and income, 189
  "       "    world attitude to, 263
  "       "    world power of, 177


Wealth and income, 189
  "    of the United States, 89
  "    ownership, 90

Western Hemisphere, and the United States, 200

World conquest, 218

Workers' business, 257


Yellow peril, 232





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