Vanishing Landmarks - The Trend Toward Bolshevism

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Title: Vanishing Landmarks - The Trend Toward Bolshevism
Author: Shaw, Leslie M.
Language: English
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_VANISHING LANDMARKS_

“_When the mariner has been tossed for many days in thick weather
and on an unknown sea he naturally avails himself of the first
pause in the storm, the earliest glance of the sun, to take his
latitude and ascertain how far the elements have driven him from
his true course._”

Webster

“_Have you lately observed any encroachment upon the just liberties
of the people?_”

Franklin

[Illustration]

VANISHING LANDMARKS

_The Trend Toward Bolshevism_

By
Leslie M. Shaw

Former Secretary of the Treasury
Ex-Governor of Iowa

[Illustration]

Laird & Lee, Inc.
Chicago

Laird & Lee, Inc.

_Vanishing Landmarks_

IN JUSTIFICATION

There are several types of intellect, with innumerable variations and
combinations. Some see but do not observe. They note effects but look
upon them as facts and never seek a cause. Tides lift and rock their
boats but they ask not why. They stand at Niagara and view with some
outward evidence of delight a stream of water and an awful abyss, but
they lift neither their thoughts nor their eyes towards the invisible
current of equal volume passing from Nature’s great evaporator, over
Nature’s incomprehensible transportation system, back to the mountains,
that the rivers may continue to flow to the sea and yet the sea be not
full. That class will find little in this volume to commend, and much
to criticise.

A man is not a pessimist who, when he hears the roar and sees the
funnel-shaped cloud, directs his children to the pathway leading to the
cyclone cellar. He is not a pessimist who, after noting forty years of
boastful planning, realizes that war is inevitable, and urges
preparedness. But the man is worse than a pessimist—he is a fool—who
stands in front of a cyclone, rejoicing in the manifestation of the
forces of nature, or faces a world war, expatiating on the greatness of
his country and the patriotism and prowess of his countrymen.

It is commonly believed that Nero fiddled while Rome burned. Conceding
that he did, it was relatively innocent folly compared to the way many
Americans fiddled, and fiddled, and fiddled, and fiddled, until Germany
was well on the way to world domination. Coming in at fabulous cost and
incalculable waste, and saving the situation at the sixtieth minute of
the eleventh hour, we not only claim a full day’s pay but seem to
resent that those who toiled longer, with no more at stake, are asking
that honors be divided.

We are now facing a far worse danger than the armed hosts of the
Central Powers—a frenzied mob each day extending its influence, and
multiplying its adherents. Shall we again fiddle and fiddle, and fiddle
and fiddle, or shall we both think and act?

For six thousand years the human race has experimented in governments
and only China boasts of its antiquity. During this period almost every
possible form of government was tried but nothing stood the test of the
ages. The few surviving pages of the uncertain history of nations that
have existed and are no more, give ample proof that the task of
self-government is the severest that God in his wisdom has ever placed
upon His children.

When this government was launched the world said it would not endure.
It has both existed and prospered for more than a century and a
quarter, but there is no thinking man between the seas, and no thinking
man beyond the seas, who does not recognize that representative
government, in the great republic, is still in its experimental stage.
Even Washington declared he dared not hope that what had been
accomplished or anything he might say would prevent our Nation from
“running the course which has hitherto marked the destiny of nations.”

It is said that when Galusha Grow entered Congress he carried a letter
of introduction to Thomas Benton, then just concluding his thirty years
of distinguished service. Naturally, Senator Benton was pleased with
the brilliant Pennsylvanian, for he said to him: “Young man, you have
come too late. All the great problems have been solved.” Ah! they had
not been. Mr. Grow lived to help solve some; others have since been
solved; more confront us now than ever before in our history, and the
sky is lurid with their coming. If we are to continue a great
self-governing and self-governed nation, we must spend some time in the
study of statecraft, the most involved, the most complex, and, barring
human redemption, the most important subject that ever engaged the
attention of thinking men.

About the only subject which vitally affects all, and yet to which few
give serious thought, is the science of government. Our farms and our
factories, our mills and our mines, together with current news, much of
it frivolous, and little of it thought-inspiring, engage our attention,
but statecraft, as distinguished from partisan politics, is accorded
scant consideration. In the first place we are too busy, and, secondly,
we do not improve even our available time. A young New Englander was
asked how his people spent their long winter evenings. “Oh,” said he,
“sometimes we sit by the fire and think, and sometimes we sit by the
fire.” It is the hope of the author that the following pages will
invite attention to some problems that in his humble judgment must be
thought out at the fireside, and must be wisely solved, if we expect to
keep our country on the map, and our flag in the sky until the Heavens
shall be rolled together as a scroll.

Recent years have demonstrated the abiding patriotism of the American
people and their faith in the ever-increasing greatness of America. Few
there be who would not gladly die for their country. The only thing
they are not willing to do is to think, and then hold their conduct in
obedience to their judgment. The future of our blessed land rests with
those who can think, who will think, who can and will grasp a major
premise, a minor premise and drawing a conclusion therefrom, never
desert it.

It has become painfully commonplace to say that the American people can
be trusted. While their good intentions can be relied upon, no nation
will long exist on good intentions. The nations that have gone from the
map have perished in spite of good intentions. The future of America
rests not in the purity of motives, nor upon the intelligence, but in
the wisdom of its citizens. In the realm of statecraft some of the most
dangerous characters in history have been intelligent, pious souls, and
some of the safest and wisest have been unlearned.

Socrates taught by asking questions. So far as possible he who is
interested enough to read this volume will be expected to draw his own
conclusions. The facts stated are historically correct. What deductions
I may have drawn therefrom is relatively immaterial. The question of
primary importance to you will be, and is, what conclusions you draw.
And even your conclusions will be worthless to you and to your country
unless your conduct as a citizen is in some degree influenced and
controlled thereby.

From the monument that a grateful people had erected to a worthy son I
read this extract from a speech he had made in the United States
Senate: “He who saves his country, saves himself, saves all things, and
all things saved bless him; while he who lets his country perish, dies
himself, lets all things die, and all things dying curse him!”

LESLIE M. SHAW.

Washington, D.C., March, 1919.

CONTENTS

I Republic Versus Democracy 13
II The Constitutional Convention 19
III Statesmen Must First be Born and Then Made 27
IV Expectations Realized 31
V Independence of the Representative 36
VI Trend of the Times 43
VII Constitutional Liberty 48
VIII What is a Constitution 57
IX Preliminary 70
X No Competition Between the Sexes 74
XI Purposes and Policies of Government 79
XII The Result of this Policy 86
XIII All Dependent Upon the Payroll 93
XIV American Fortunes not Large, Considering 98
XV Popular Dissatisfaction 103
XVI Greed and its Punishment 110
XVII Obstructive Legislation 115
XVIII The Inevitable Result 121
XIX Unearned Increment 131
XX Business Philosophies 137
XXI The Government’s Handicap 145
XXII The Post Office 158
XXIII Civil Service 161
XXIV Civil Service Retirement 179
XXV Property by Common Consent 184
XXVI Equality of Income 193
XXVII An Historical Warning 196
XXVIII Capital and Labor 202
XXIX Can the Crisis be Averted 209
XXX Industrial Republics 217
_Conclusion_ 224
_Appendix_ 232

VANISHING LANDMARKS

CHAPTER I

REPUBLIC VERSUS DEMOCRACY

Representative government and direct government compared.

The Fathers created a republic and not a democracy. Before you dismiss
the thought, examine your dictionaries again and settle once and
forever that a republic is a government where the sovereignty resides
in the citizens, and is exercised through representatives chosen by the
citizens; while a democracy is a government where the sovereignty also
resides in the citizens but is exercised directly, without the
intervention of representatives.

Franklin Henry Giddings, Professor of Sociology of Columbia University,
differentiates between democracy as a form of government, democracy as
a form of the state, and democracy as a form of society. He says:
“Democracy as a form of government is the actual decision of every
question of legal and executive detail, no less than of every question
of right and policy, by a direct popular vote.” He also says:
“Democracy as a form of the state is popular sovereignty. The state is
democratic when all its people, without distinction of birth, class or
rank, participate in the making of legal authority. Society is
democratic only when all people, without distinction of rank or class,
participate in the making of public opinion and of moral authority.”

The distinction, briefly and concisely stated, is this: One is direct
government, the other representative government. Under a democratic
form of government, the people rule, while in a republic they choose
their rulers. In democracies, the people legislate; in republics, they
choose legislators. In democracies, the people administer the laws; in
republics, they select executives. In democracies, judicial questions
are decided by popular vote; in republics, judges are selected, and
they, and they only, interpret and construe laws and render judgments
and decrees. I might add that in republics the people do not instruct
their judges, by referendum or otherwise, how to decide cases. Unless
the citizens respect both the forms of law and likewise judicial
decisions, there is nothing in a republic worth mentioning.

When we speak of individuals and communities as being democratic, we
correctly use the term. My father’s family, for instance, like all New
England homes of that period, was very democratic. It was so democratic
that the school teacher, the hired man and the hired girl ate with the
family. We sat at a common fireside and joined in conversation and
discussed all questions that arose. It was a very democratic family;
but it was not a democracy. My father managed that household.

In very recent years we have been using the word “democracy” when we
have meant “republic.” This flippant and unscientific manner of
speaking tends to lax thinking, and is fraught with danger. A good
illustration of careless diction is found in the old story that Noah
Webster was once overtaken by his wife while kissing the maid. She
exclaimed: “I am surprised!” Whereupon the great lexicographer rebuked
her thus: “My dear Mrs. Webster, when will you learn to use the English
language correctly? You are astonished. I’m surprised.”

It is a well known fact that the meaning of words change with usage.
Some recent editions of even the best dictionaries give democracy
substantially the same definition as republic. They define a republic
as a “representative democracy” and a democracy as a government in
which the people rule through elected representatives. This gradual
change in the meaning of the word would be perfectly harmless if our
theory of government did not also change. Probably our change of
conception of representative government is largely responsible for the
evolution in the popular use of the word democracy.

A far more important reason why the term “democracy” should not be used
improperly lies in the fact that every bolshevist in Russia and
America, every member of the I. W. W., in the United States, as well as
socialists everywhere, clamor for democracy. All of these people, many
of them good-intentioned but misguided, understand exactly what they
mean by the term. They seek no less a democratic form of government as
Professor Giddings defines it, than a democratic society as he defines
that, and likewise financial and industrial democracy. They want not
only equality before the law, but equality of environment and equality
of rewards. Only socialists, near-socialists, anarchists and bolsheviki
clamor for “democracy.” Every true American is satisfied with
representative government, and that is exactly what the term republic
means.

EQUALITY

The expression, “All men are created equal,” does not signify equality
of eyesight, or equality of physical strength or of personal
comeliness. Neither does it imply equal aptitude for music, art or
mechanics, equal business foresight or executive sagacity or
statesmanship. Equality before the law is the only practicable or
possible equality.

Why educate, if equality in results is to be the goal? Why practice
thrift, or study efficiency, if rewards are to be shared independent of
merit? Those who clamor most loudly for equality of opportunity, have
in mind equality of results, which can be attained only by denying
equality of opportunity. Equal opportunity in a foot race is secured
when the start is even, the track kept clear and no one is permitted to
foul his neighbor. But equality of results is impossible between
contestants of unequal aptitude when all are given equality of
opportunity.

The kind of “democracy” which the socialist and the anarchist demand,
confessedly hobbles the fleet, hamstrings the athletic and removes all
incentive to efficiency. The keystone of representative government is
rewards according to merit, and the buttresses that support the arch
are freedom of action on the one side, and justice according to law on
the other.

Republics keep a one-price store. Whoever pays the price, gets the
goods. Democracy, on the contrary, expects voluntary toil, popular
sacrifices and then proposes to distribute the resultant good either
_pro rata_ or indiscriminately. No one can read socialistic literature
without recognizing that political, social, industrial and financial
democracy is the goal of its endeavor. When the supreme conflict comes
between organized government, organized liberty, organized justice and
bolshevism under whatsoever garb it may choose to masquerade, I do not
intend anyone shall “shake his gory head” at me and say that I helped
popularize their universal slogan and international shibboleth. Unless
we speedily give heed we shall be fighting to make America _unsafe_ for
democracy. Then we may have difficulty in explaining that we have meant
all these years a very different thing than our language has expressed.

CHAPTER II

THE CONSTITUTIONAL CONVENTION

The republican character of the constitutional convention, the
qualifications of the delegates, and the extent to which they
trusted to the wisdom of the people.

The Constitutional Convention was a republican body, and not a mass
meeting. George Washington presided. He was a delegate from Virginia.
James Madison was another representative from the same state, and he
wrote the greater part of the Constitution. Thomas Jefferson was in
France, and had nothing whatever to do with drafting the great
document, or in securing its adoption. Benjamin Franklin was a delegate
from Pennsylvania. Roger Sherman was a representative of Connecticut.
New York sent no delegate, but Alexander Hamilton, who with George
Washington had early recognized that the League of Nations, or League
of Sovereign States, which means the same, and which the old Articles
of Confederation created, was proving an utter failure in practice, and
had, therefore, urged from the beginning “a more perfect union,”
attended and he was seated as a delegate from New York. His matchless
vision led him to seek the incorporation of additional safeguards
against bolshevism, as it is now called, and though his advice was not
heeded it was Hamilton, more than any other man, with John Jay and
James Madison his able supporters, who secured the ratification of the
Constitution as drafted.

These, and the other delegates, representing the people of the several
states, after much deliberation formulated the historic document
beginning, “We the people.” It provides among other things that its
ratification by _delegated conventions_ in nine of the thirteen states
shall make it binding upon the states so ratifying the same. It also
provides that it can be amended in a similar _delegated convention_
called at the request of chosen representatives in the legislatures of
two-thirds of all the states, or by joint resolutions passed by
two-thirds of the representatives of the people, in Congress assembled,
when ratified by representatives of the people in three-fourths of the
states, in their respective legislatures assembled.

Those who talk about “taking the government back to the people” would
do well to remember that the American people have never voted upon any
provision of the National Constitution, and there is no way provided by
which they can, in any direct way, express their approval or
disapproval. I repeat, the Fathers created a republic, and not a
democracy. Washington speaks of “the delegated will of the
nation”—never of the popular wish of the people.

THE FATHERS CONSULTED HISTORY

The members of the Constitutional Convention were worthy of their
seats. They were men of both learning and experience. They had read
history. They knew that many attempts at representative government had
been made and that all had failed. They also knew the path all these
republics had taken on their way to oblivion. They were fully alive to
the fact that the first step had always been from representative
government to direct government; from direct government to chaos, from
chaos to the man on horseback—the dictator; thence to monarchy. The
discussion in the convention makes it abundantly clear that the Fathers
sought to save America from the monarch, and to protect her from the
mass. They chose the middle ground between two extremes, both fraught
with danger.

They even went so far as to guarantee that no state should be cursed
with a democratic form of government, or a monarchial form of
government or any other kindred system. The provision is in this
language: “The United States shall guarantee to every state in this
Union a republican form of government.” That excludes every other form.

CONFIDENCE IN THE PEOPLE JUSTIFIED

The members of the Constitutional Convention, having been selected
because of their aptitude for public matters, their knowledge of public
questions and their experience in public affairs, very naturally had
confidence that men of like caliber and character would always be
selected for important representative positions. They believed the
people would choose legislators, executives and judges of aptitude, at
least, and would retain them in office until they attained efficiency
through experience.

Presumably these delegates anticipated that men would be born with no
aptitude for public positions, but they confidently believed even these
would be able to select men of aptitude. They may have realized that
some men would be unfit for Congress, who, nevertheless, would be
competent to select able congressmen. For these, as well as for other
reasons, they provided no way by which those whom no one would think of
sending to Congress, and who naturally give no attention to public
affairs, could instruct their congressmen, who alone must bear the
responsibility of legislation. Had such a thing as legislating by
referendum been thought of at that time, the Fathers certainly would
have expressly prohibited it. Legislation by representatives was
considered and express and detailed provision therefor was made.

The preceding differentiation between republic and democracy has no
reference, of course, to political parties. Long before the republican
party, as now constituted, had an existence, democratic orators grew
eloquent over “republican institutions,” meaning thereby representative
institutions.

Every protestant church in America is a republic. Its affairs are
managed by representatives—by boards. Otherwise there would be no
churches. Every bank and every corporation is a republic, managed by
boards and officers selected by stockholders. The United States Steel
Corporation, for instance, is analogous to a republic, the stockholders
being the electors, but if the stockholders were to take charge of that
corporation, and direct its management by initiative or referendum, it
would be in the hands of a receiver within ninety days.

The United States of America is a great Corporation, in which the
Stockholder is the Elector. Stockholders of financial and industrial
corporations desire dividends, which are paid in cash. Not desiring
office, the stockholders are satisfied to have the corporation managed
by representatives of aptitude and experience. The dividends paid by
political corporations like the United States and the several states
are “liberty and the pursuit of happiness,” “equality before the law,”
an army and navy for national defense, and courts of justice for the
enforcement of rights and the redress of wrongs. But stockholders in
political corporations are not always satisfied with these returns.
Some prefer office to dividends payable only in blessings.

In banks and other business corporations, stockholders are apt to
insist that representatives and officers who show aptitude and
efficiency shall be continued in office so long as dividends are
satisfactory. In political corporations the people have recently been
pursuing a very different course. They have been changing their
representatives so frequently that efficiency, which results only from
experience, is impossible.

While stockholders of a corporation would certainly wreck the
institution if they attempted to manage its affairs directly or by
referendum, it is very appropriate for stockholders, acting on the
recommendation of their representatives—the board of directors—to
determine an important measure like an issue of bonds, or whether the
scope and purpose of the concern shall be enlarged or its capital
increased. Analogous to this is the determination of governmental
policies at regular elections where the people choose between the
programs of different political parties as set forth in their
platforms. Thus the people sometimes ratify the policy of protection,
and sometimes the policy of free trade, demonstrating that they do not
always act wisely by frequently reversing themselves.

Political parties usually omit from their platforms the details of
legislation. The only exception that occurs to me was when every detail
of a financial policy was incorporated in the platform submitted for
ratification. The coinage was to be “free,” it was to be “unlimited,”
and at the “ratio of 16 to 1.” If the people had approved this at the
polls their representatives would have had no discretion. There would
have been no room for compromise. While the people are presumably
competent to choose between policies recommended in the platforms of
political parties, it is a far stretch of the imagination to suppose
that the average citizen is better prepared to determine the details of
a policy than the man he selects to represent him in the halls of
Congress. The congressman who concedes that his average constituent is
better prepared to pass upon a proposition than he is necessarily
admits in the same breath that his district committed a serious blunder
in sending him. It ought to have selected a man at least of average
intelligence.

The fact that neither stockholders _en masse_, nor employees _en masse_
are able to manage a business enterprise does not imply that the
principle of a republic may not be advantageously applied to industrial
concerns. This question is again referred to in Chapter XXX, and the
possible safe, middle course between the industrial autocracy demanded
by capital, and the industrial democracy demanded by labor, is
suggested and briefly discussed.

CHAPTER III

STATESMEN MUST FIRST BE BORN AND THEN MADE

Some fundamental qualifications for statesmanship. Integrity
and wisdom compared.

How are lawyers obtained? Admission to the bar does not always produce
even an attorney. And there is a very marked difference between an
attorney and a lawyer. But when a young man is admitted to the bar who
has aptitude for the law, without which no man can be a lawyer,
industry in the law, without which no man ever was a lawyer, then with
some years of appropriate environment—the court room and the law
library—a lawyer will be produced into whose hands you may safely
commit your case.

How are law makers obtained? Many seem to think it only necessary to
deliver a certificate of election, and, behold, a constructive
statesman, of either gender. I would like to ask whether, in your
judgment, it requires any less aptitude, any less industry, or a less
period of appropriate environment to produce a constructive law maker,
than to develop a safe law practitioner.

I will carry the illustration one step further. Do you realize that it
would be far safer to place the man of ordinary intelligence upon the
bench, with authority to interpret and enforce the laws as he finds
them written in the book, than to give him pen and ink and let him
draft new laws? We all recognize that it requires a man of legal
aptitude and experience to interpret laws, but some seem to assume
neither aptitude nor experience is necessary in a law-maker. If
legislators in state and nation are to be abjectly obedient to the wish
of their constituents, what use can they make of knowledge and
judgment? They will prove embarrassments, will they not?

To interpret the laws requires aptitude improved by experience; it
demands special knowledge, both of the general law and of the
particular case under discussion. It takes a specialist.

I would rather have the ordinary man stand over my dentist and tell him
how to crown my tooth than to have him stand over my congressman and
tell him how to vote. He knows, in a general way, how a tooth should be
crowned, and further than that I refuse to carry the illustration.
Then, I can stand a bad tooth better than I can a bad law. No man ever
lost his job because of a bad tooth. But millions have stood in the
bread line, and other millions will suffer in like manner because of
unfortunate and ill-considered legislation.

INTEGRITY VERSUS WISDOM

We all demand integrity in office, but integrity is the most common
attribute of man. I can go on the street and buy integrity for a dollar
a day, if it does not require any work; but aptitude, experience and
wisdom are high-priced. If I had to choose between men of probity but
wanting in aptitude and experience, and men of aptitude and experience
known to be dishonest, I should unhesitatingly choose the crook rather
than the fool; either for bank president or congressman. Banks seldom
fail because of dishonesty. Banks fail because of bad management. The
thief may steal a little of the cream but the careless and the
inexperienced spill the milk.

Thus far in our history no man has ever walked the street in vain for
work, no man has gone home to find his wife in rags and his children
crying for bread, because of dishonesty in public office. The United
States can stand extravagance, it can stand graft, it has stood and is
standing the most reckless abandon in all its financial expenditures.
The worst this nation has yet encountered—and may the good Lord save
us from anything more dreadful—is incompetency in the halls of
legislation. Extravagance and graft stalk forth at noonday when
incompetency occupies the seats intended for statesmen.

None but bolsheviki would consider subjecting an army to democratic
command. The personnel of an army may possess equal patriotism without
possessing equal aptitude for war. Recent experiences have only
emphasized what was said more than a thousand years ago: “An army of
asses commanded by a lion will overthrow an army of lions commanded by
an ass.”

Strange, is it not, that every one should recognize this principle when
applied to an army and to business, and an overwhelming majority
overlook it when applied to governmental matters?

CHAPTER IV

EXPECTATIONS REALIZED

The capacity of the people to select representatives wiser than
their constituents illustrated by historic facts.

America has passed through several crises, and each time has been saved
because the people’s representatives were wiser than the people. In
this respect, the expectation of the Fathers has been realized. I will
mention but three instances.

During the Civil War the government resorted to the issuance of paper
currency, commonly called greenbacks. While conservative people assumed
that these greenbacks would be redeemed whenever the government was
able, nevertheless, there being no express provision for their
redemption, they went to depreciation, and passed from hand to hand far
below par. All this resulted in inflation which inevitably led to a
period of depression.

In this connection it is well to remember that whenever we have had a
period of depression, and whenever we shall have such a period, there
always has been and ever will be a group of people with a panacea for
our ills. During the period referred to, a political party, calling
itself the “Greenback Party,” came into existence and advocated the
issuance of an indefinite volume of irredeemable paper currency which,
in their ignorance, they called “money.” The specious argument was to
the effect that when “money” can be made on a printing press, it is
silly to have less than enough. They expressly advocated issuing all
the currency the people could use without making any provision for its
retirement. Whenever the people wanted more, they proposed to print
more.

Fully seventy-five percent of the American people, without regard to
political affiliation, favored some phase or degree of “greenbackism.”
While much of this sentiment failed of crystallization, quite a number
of congressmen were elected on that issue. If the direct primary law,
with which most of the states are now cursed, had been in force at that
time, it is probable that no man could have been nominated for
Congress, by any party, who was not avowedly in favor of inflation by
some method. But the people were saved from themselves exactly as the
Fathers had anticipated. The representatives of the people, being wiser
than the people, refused the people what most of them desired and gave
them what they needed, resumption of specie payment.

Again, in the ’90’s we had a period of depression, and the panacea then
recommended was the free and unlimited coinage of silver, at the ratio
of 16 to 1 with gold. The difference between “greenbackism” and “free
silverism” was simply one of degree. The greenbacker desired the
government to print the dollar mark on a piece of paper, thus producing
currency one hundred percent fiat, while the free silverite asked that
the government stamp the dollar mark upon a piece of silver, thus
producing currency fifty percent fiat.

Fully nine-tenths of the American people desired the free and unlimited
coinage of silver. William McKinley, willing as he was to run for
president on a gold standard platform in 1896, when in Congress had
voted for a clean-cut free silver measure. The lower house of Congress
actually passed a free silver bill. But, exactly as the Fathers
expected, the people’s representatives in the Senate, wiser than the
people who had placed them there, refused the people what ninety
percent of them wanted and gave them what one hundred percent
needed—sound money.

Outside of Russia, there is scarcely a man in all the world who would
now recommend the issuance of irredeemable paper currency, what
three-fourths of the American people wanted in the ’70’s; and there is
not more than one man in all the world who would now recommend the free
coinage of silver, what four-fifths of the American people wanted in
the ’90’s.

The direct primary in 1896 would have nominated a free silver
republican, and a free silver democrat in each and every congressional
district of the United States, and we would have had a solid free
silver House. If the United States senators had been then elected by
the people, preceded by a direct primary, the Senate of the United
States would have been solidly for free silver; and we would have
passed, as everyone now recognizes, to financial ruin. We were saved,
because the United States of America was a republic and not a
democracy—because, if you please, we had representative and not direct
government.

More recently, Germany and the Central Powers made war upon the United
States. This they continued for more than two years. Finally, the
President, in his message of April 2, 1917, advised Congress to
“declare the course of the Imperial German Government to be, in fact,
nothing less than war against the country and the people of the United
States.” A resolution to that effect was thereupon passed on April 6,
1917.

If the proposition of going to war with Germany had been submitted to a
direct vote of the American people, under a referendum, they would have
voted against it, two to one, and in many localities and cities, four
to one. Again we were saved, because we had a republican and not a
democratic form of government. We were saved because our
representatives proved wiser than their constituents.

CHAPTER V

INDEPENDENCE OF THE REPRESENTATIVE

The effect of popular instructions to representatives discussed
and illustrated.

The Fathers never intended that the people should legislate, interpret
the laws or administer justice. They did provide, however, that the
people should choose their legislators, their judges and their
executives. They sought also to render impossible any interference with
the independence of these representatives. Judges are not expected to
inquire of bystanders how questions of law shall be decided, or what
decrees shall be rendered, or what punishments imposed.

The Fathers did not anticipate that executives would hold their ears so
close to the ground as to become nests for crickets. I do not mean to
be understood, however, as intimating that the buzzing of insects has
never been mistaken for the voice of the people. Members of the House
and the Senate were not supposed to conform to Dooley’s definition of a
statesman: “One who watches the procession until he discovers in which
direction it is moving and then steals the stick from the drum major.”
The Fathers expected officials to be as independent of the voters who
select them as officers of a corporation are independent of
stockholders.

In proof that Washington did not consider the delegates to the
Constitutional Convention bound to follow the wishes of the people they
represented I cite what Gouverneur Morris quotes him as saying: “It is
too probable that no plan we propose will be adopted. Perhaps another
dreadful conflict is to be sustained. If to please the people we offer
what we ourselves disapprove, how can we afterward defend our work? Let
us raise a standard to which the wise and the honest can repair; the
event is in the hand of God.”

Suppose the state should engage in banking. A doorkeeper, a bookkeeper
and a president would be necessary. But if the president sought
instruction from the street, the bank would be short-lived. If a body
of stockholders were to enter a bank, as now operated, and demand a
loan without security, either for themselves or for some needy fellow
creature, the president would probably say, “You can have another
president any day you please, but while I am president, you will
furnish collateral.” Otherwise, there would be no bank.

L. Q. C. Lamar used to say to his constituents: “If you desire me to
represent you in Congress, I will do so.” Then, with becoming dignity
and in absolute harmony with the principles of the republic, as
established by the Fathers, he would add, “But do not, for a moment,
suppose you can stand between the plow handles during the day and tell
me how to vote.” Evidently Mr. Lamar expected to study public questions
and to be better informed than his average constituent.

Later, the legislature, recognizing his ability, sent him to the United
States Senate. Here he opposed greenback legislation which was
favorably considered by the people of Mississippi. Thereupon the
legislature passed a resolution demanding either that he vote in
harmony with the sentiment of his state, or resign. He refused to do
either, but continued to speak, and to vote his convictions based on
knowledge. Before his term expired, the wisdom of his course was
recognized and he was re-elected to the Senate by the very men who
had sought to direct his action in a matter wherein they had no
jurisdiction and he had supreme responsibility, and concerning which
they knew nothing, while he knew much.

Following the Civil War impeachment proceedings were instituted against
Andrew Johnson. Because of the known prejudices of the people of Iowa,
Senator Grimes of that state was expected to vote “guilty.” He voted
“not guilty,” and his colleague asked him, “Do you think you are
expressing the sentiment of the people of Iowa?” The grand old Roman
replied: “I have not inquired concerning the sentiment of the people of
Iowa. I vote my convictions.” That would be political suicide today.

A few years ago proceedings to expel a certain senator were pending and
several of his associates, after hearing the evidence submitted to them
in their judicial capacity, expressed the conviction that the accused
was innocent, but, because of the prejudices of their states, they
would have to vote for expulsion. Senator Depew told me of a member who
actually cried as he contemplated voting to expel a man whom he
believed to be innocent.

I would like to ask how long you think the United States of America can
maintain her proud position among the nations of the world, if
oath-bound representatives of the people accept popular sentiment as
the guide of their official conduct.

At the unveiling of the monument to Elijah Lovejoy, a letter was read
from Wendel Phillips containing this sentence: “How cautiously most
slip into oblivion and are forgotten, while here and there a man
forgets himself into immortality.” In these most trying times our
greatest need is men in public life whose ears are always open to
counsel but ever closed to clamor—who will approach pending problems
that threaten our very existence, with no other care but their
country’s weal. The corner stone of freedom, as laid by the Fathers, is
the absolute independence of the representative, coupled with the
unimpeded right of the people to choose again at brief but appropriate
intervals.

HOW WOULD YOU BUILD A SUBMARINE?

Suppose the government should delegate to some congressional district
the responsibility of building a submarine. Would anyone think of
undertaking the task except on the principle of a republic? You would
select some man of mechanical aptitude, plus mechanical experience, and
you would hold him responsible for the result. Would you require your
representative when selected to listen to popular sentiment, as
expressed on the street corners or in the press? Would you have him
submit his plans and blue prints to the “people,” by referendum or
otherwise?

We all admit that some men know more about farming than others, some
more about commerce than others, some more about science than others,
but the sentiment is alarmingly general that in the realm of
statecraft—the most complex subject ever approached—one man is just
as wise as another. At Detroit, Michigan, during the campaign of 1916,
Woodrow Wilson used this language: “So I say the suspicion is beginning
to dawn in many quarters, that the average man knows the business
necessities of the country just as well as the extraordinary man.”

I do not wish to question Mr. Wilson’s sincerity, though I am not
unmindful of the fact that he spent the greater part of his active life
in college work trying to produce “extraordinary men,” and in that
field he was quite successful. Taking issue with his position, but not
with his sincerity, I am going to insult popular sentiment and say that
I believe there are many men competent to select a competent
constructor of a submarine, who are not competent to construct a
submarine, or competent to instruct a constructor of a submarine.

But, suppose the people should build such a craft on the principle of a
democracy, each one doing what seemed to him wise, without dishonesty
or graft. I have no question but that a submarine would be produced
that would “sub,” and I am equally certain that it would stay “subbed.”

I want to ask whether, in your opinion, the ship of state—the
government of the United States—is any less complicated, any less
complex or any less likely to “sub” and stay “subbed,” exactly as each
and every republic for twenty-five hundred years did “sub”—if placed
in the hands of an inexperienced mass of experimenters in statecraft.

Think this out for yourself. This is your government quite as much as
mine, and it will be your government long after the conservative “Old
Guard” have left the field of human activities.

CHAPTER VI

TREND OF THE TIMES

A consideration of the constitutional guarantee that each state
shall have a republican form of government, and the warning of
Washington against making changes in the constitution.

Both the trend of thought and the current of events are away from
representative government and toward direct government.

Legislating by initiative or by referendum, the recall of judges, and
especially the recall of judicial decisions, come dangerously near
constituting a democratic form of government, against which the
Constitution of the United States guarantees. Its language you
remember: “The United States shall guarantee to every state in this
Union a republican form of government.”

Chief Justice Taney, interpreting this section, said: “It rests with
Congress to decide what government is the established one in a state,
for, as the United States guarantees to each state a republican form of
government, Congress must necessarily decide what government is
established in the state before it can determine whether it is
republican or not.”[1]

-----

Footnote 1:

Luther vs. Borden, 7 Howard 1.

Chief Justice Waite used the following language, the vital sentence of
which I have italicized: “All the states had governments when the
Constitution was adopted. In all, the people participated, to some
extent, _through their representatives selected in the manner specially
provided_. These governments the Constitution did not change. They were
accepted precisely as they were and it is therefore to be presumed that
they were such as it is the duty of the states to provide. Thus, we
have unmistakable evidence of what was republican in form within the
meaning of that term as employed in the Constitution.”[2]

-----

Footnote 2:

Minar vs. Happersatt, 21 Wall 112.

It is well to note that this participation in their government, which
the learned Chief Justice mentions, was “_through their
representatives_,” and in no other way.

More than one state has been required to change its constitution before
admission into the Union. Congress refused to admit Arizona under a
constitution providing for the recall of judges and judicial decisions.
It smacked too strongly of direct government. After her admission,
however, she amended her constitution and inserted the socialistic—the
“democratic”—provisions, the elimination of which Congress had made a
condition precedent to admission.

In his work, “The State,” Woodrow Wilson calls attention to the fact
that constitution-making is fast becoming “a cumbrous mode of
legislation.” The record in many states justifies this comment.

At the election of 1918, in the state of California there were
submitted through referendum nineteen proposed amendments to its
constitution, no one of which legitimately belongs in a constitution.
They were simply legislative acts sought to be inserted in the organic
law, or state charter, for the sole purpose of rendering them more
difficult of repeal when proved bad. The “people” had so little
confidence in themselves that they deemed it imprudent to trust to
their wisdom whether a law should be continued when found beneficial or
repealed when its effects were evil, and hence sought to tie their own
hands by placing the act in the constitution instead of in the revised
statutes.

George Washington, with prophetic vision, foresaw and in his immortal
Farewell Address warned against this tendency towards evolutionary
revolution and employed this language, the last sentence of which I
feel certain he would today italicize:

“Towards the preservation of your government and the permanency of your
present happy state, it is requisite not only that you speedily
discountenance irregular opposition to its acknowledged authority, but
also that you resist with care the spirit of innovation upon its
principles, however specious the pretext. _One method of assault may be
to effect in the forms of the Constitution alterations which will
impair the energy of the system and thus to undermine what cannot be
directly overthrown._”

This trend towards a democratic form of government, or direct
government, finds fitting illustration in the fact that if you were to
locate a homestead in any one of several states, prove up and secure
your patent, and someone should contest your title, and the court
should find the land belonged to you, and should render decision
accordingly, the people might reverse this decree and give the land to
the contestant. It is not a question whether they are likely to do such
a thing. The fact that the people in several states have deliberately
provided the machinery by which they can thus defeat justice,
constitutes a perpetual menace that should adversely affect the market
value of all real estate in those states. When title to property is
made to rest upon the sentimental whim of the masses, as distinguished
from a decree of court, liberty itself is rendered unstable and
organized government is abandoned and socialism is substituted.

CHAPTER VII

CONSTITUTIONAL LIBERTY

The necessity for organized government and organized justice as
a guarantee of constitutional liberty is sought to be shown.
Plato’s dream, Macaulay’s dire prediction and a threat.

A democratic form of government precludes the possibility of
constitutional liberty. Constitutional liberty does exist in what
Professor Giddings calls a “democratic state,” but cannot in what the
same author calls a “democratic form of government.” His admittedly
correct differentiation cannot be too often repeated.

“A democratic state,” says this high authority, “is popular
sovereignty,” while “a democratic form of government is the actual
decision of every question of legal and executive detail by a direct
popular vote.”

I grant the formality of a constitution may exist under a democratic
form of government, but where all functions of government are exercised
directly by the people, necessarily there can be no tribunal to enforce
the provisions of a constitution. Let me illustrate.

Suppose, if you will, that an uninhabited island has been discovered,
and a government is about to be formulated preliminary to its
occupation. Undoubtedly, we would agree that the sovereignty of the
island should be vested in the people. This, according to Professor
Giddings, would make it a “democratic state.” The next question would
be whether this sovereignty would be exercised directly or through
representatives. Shall it be a democratic form of government, or a
republican form of government?

Someone would propose that a majority should rule. If I were present, I
would promptly suggest that the rights of majorities always have been,
and always will be, secure. Minorities, not majorities, need
protection. I would ask what protection is to be given me, or anyone
who may prove an undesirable citizen. Will we be thrown into jail and
kept there indefinitely, without trial and without knowing the cause of
our incarceration? Such wrongs were common for centuries and are
perpetrated by bolshevists, and defended by socialists today. Very
likely the assembly would then promise a speedy trial, with right to
summon witnesses, and to be confronted by one’s accusers, and other
safeguards of liberty such as are now guaranteed in the Constitution of
the United States, and that of every state.

But this would not satisfy me. I would ask “How do I know that this
promise will be kept?” Then, doubtless, the right to a writ of _habeas
corpus_ would be promised. And this would not satisfy me. I would ask:
“By whom will it be issued, and by whom enforced?” Before we were
through, it is quite probable we would create a tribunal, clothe it
with greatest dignity, segregate it from the affairs of business and
safeguard it against political influence, and for want of a better
name, we would call it “The Supreme Court of the Island.” This court
would be clothed with authority to grant and enforce not only writs of
_habeas corpus_ but any and all other orders and decrees and judgments
necessary to protect the minority, even though a minority of one, in
his every constitutional right.

TREASON AS AN ILLUSTRATION

Treason is the only crime defined in the Constitution. Prior to the
year 1352 there was great uncertainty in England as to what constituted
treason, and Parliament, for the purpose of restraining the power of
the Crown to oppress the subject by arbitrary construction, passed, in
that year, what is commonly known as the “Statute of Treason.” All acts
that might be construed treasonable were classified under seven
branches. The framers of the Constitution, desiring to protect the
minority, chose only one of the seven and placed a perpetual bar
against any other act being made treason, and further safeguarded the
minority by defining the only basis of conviction. Section 3, Article
III, is as follows:

“Treason against the United States shall consist only in levying war
against them, or in adhering to their enemies, giving them aid and
comfort. No person shall be convicted of treason unless on the
testimony of two witnesses to the same overt act, or on confession in
open court.”

Now, suppose confiscationists, whether styling themselves socialists,
bolsheviki, single-taxers, or non-partisan leaguers, shall get control
and, by referendum, extend the scope of treason to include such
offenses as claiming title to real estate, which all the breed insist
rightfully belongs to the people _en masse_. Far less degrees of what
they consider “crime” were made punishable by death when democracy went
mad in France. Of what use would the express provisions of the
Constitution be if the power to recall decisions, as well as the judges
who render them, is to be exercised by the mass?

Leave it to the people to afford protection from the people and you
might just as well abolish all constitutional guarantees. Were the
people _en_ _masse_ to make the laws, _en masse_ to interpret the laws,
and _en masse_ to enforce the laws, the individual would have no rights
that the people _en masse_ would be bound to respect.

SOVIET RUSSIA AND AMERICAN REVOLUTION

In a widely circulated pamphlet, “A Voice Out of Russia,” the author
speaks of “a certain divine sense in which the Russian revolution
parallels the revolt of the thirteen American colonies, and in which
the proletariat of Russia is striving to accomplish for his world much
the same ideals which our forefathers laid down for theirs. There was,”
he says, “more of the spirit of the people, more of faith and
dependence in the proletariat, in American revolutionary doctrines,
than we seem disposed to admit today; and by the same token, it is
because we have lost our sense of fundamental democracy that we do not
care to admit it.”

“Fundamental democracy” is the correct term. But we have not lost it.
We are simply in danger of getting it. It is exactly what the Fathers
sought to eliminate and prevent.

On the next page of the pamphlet, the author says: “The writers of the
American Constitution certainly strove to do away with the artificial
complexities of politics, and to bring every function of government
within the grasp and comprehension of the whole electorate.”

I submit that that is exactly what the framers of the Constitution did
not seek to do. They created representative government and sought to
guard against direct government. The author quoted, and every other
teacher of revolution, either by peaceful or violent means, is seeking
to establish direct government. When they use the word “democracy,”
they use it in its dictionary sense. They use it as Rousseau,
Robespierre, Lenine, Trotsky and a very large number of others,
including some widely known Americans, use it. Why do liberty-loving
Americans seek to divorce the word “democracy” from its original
meaning and popularize the greatest enemy liberty has ever known?

PLATO’S DREAM

One of the best and most conservative newspapers in the United States
printed late in 1918 a carefully written editorial under the above
title, from which I quote a few disconnected sentences, italicizing the
most important:

“Twenty-five hundred years ago in Athens, Plato, the philosopher, who
is called the ‘father of idealists,’ framed the structure of an ideal
government among men, in the form of a republic. ... When the dust of
Plato was gathered into a Grecian urn, his dream did not die. The
generations harbored and treasured it. Time after time, and in place
after place, republics were formed. Men gave their blood and their
lives to realize the dream of Plato. But always might prevailed over
them. Only America endured to make the dream come true. In these times
there are numerous republics but there is not one among them that does
not owe its existence to the example and the influence of the United
States. Were our republic to crumble, every other on earth would
crumble with it.... Since the adoption of the Constitution in 1789, one
hundred and thirty years have passed and _during that time America has
met and overcome every trial to which the ideal republic could possibly
be subjected_. It has answered every argument against a republican form
of government advanced by the most stubborn objectors.”

The foregoing is historically correct except the last two sentences.
America has stood every test except that which ruined every other
republic. It has not yet encountered _direct government_, towards which
we seem radically tending. It has not withstood what Lord Macauley, a
century ago, predicted would prove our overthrow. He declared the
republic was “all sail and no ballast.” He predicted great speed for a
period; but he warned against the day when those who did not have
breakfast and did not expect dinner would elect our congress and our
president. The demagogue would be abroad in the land and he would say:
“Why do these have and you suffer?”

“Your republic will be pillaged and ravaged in the 20th century, just
as the Roman Empire was by the barbarians of the fifth century, with
this difference, that the devastators of the Roman Empire, the Huns and
Vandals, came from abroad, while your barbarians will be the people of
your own country, and the product of your own institutions.”

If “Coxie’s army” had been led by Eugene Debs, or any one of more than
a score whose names are revered by many, instead of by a patriotic
American, every mile of the road over which it traveled would have
reeked with human gore. Had it resorted to bloodshed at that time,
however, it would not have proceeded far. But socialism has made great
progress since 1895.

Speaking before a Senate committee early in January of this year, the
president of the American Federation of Labor is reported to have said:
“The people will not countenance industrial stagnation after the war.
There can be no repetition in the United States of the conditions that
prevailed from 1893 to 1896 when men and women were hungry for the want
of employment.”

The same veiled threat has been uttered repeatedly by men high in
official position.

Are we face to face with a condition and not a theory? Will laborers
revolt if they fail to secure employment, or when compelled to accept a
lesser wage? Will farmers turn anarchist if they can find no market for
their crops, or when compelled to accept a lesser price? Will bankers
become bomb throwers if unloanable funds accumulate? No, America has
not withstood every trial to which she can possibly be subjected. The
supreme menace stands today with gnashing teeth, glaring into our faces.

CHAPTER VIII

WHAT IS A CONSTITUTION?

The nature of the constitution and the dependence of the
minority thereon and hence the necessity for an independent
judiciary discussed and illustrated.

A constitution is little less than a firm and binding contract between
the majority and the minority, entered into for the sole protection of
the minority, with regularly constituted courts to enforce its
provisions.

The Supreme Court of the United States, from which every root of the
Judiciary Department—one of the three coordinate branches of
government—derives its vitality, is our only continuing and unchanging
bulwark of liberty.

The executive branch, from President down through all the departments,
State, Treasury, War and Navy, is liable to radical change on the
fourth day of March every four years. Either house and both houses of
Congress frequently change in partisan complexion at a single election.
The Supreme Court, the members of which hold by life tenure, remains,
theoretically, at least, unchanged.

Unless the people undermine their liberties by “effecting in the forms
of the Constitution alterations which will impair the energy of the
system,” which Washington warned against, or unless some executive
corrupts the personnel of the Supreme Court by filling vacancies with
socialists, or other revolutionary elements, Anglican liberty, the hope
of the world, is secured in America against everything except
bolshevism. With respect to the courts, Washington’s famous order is
pertinent: “Place none but Americans on guard tonight.”

WHO IS AN AMERICAN?

Who is an American, worthy to be placed on guard tonight? Is he
American born? He may be, and he may have been born beneath any flag
and under any sky. An American is one who believes in and is ready to
defend this _republic_. To be ready to defend our territory, or even
our flag, is not enough.

Though we continue our socialistic bent and either undermine or
overthrow our form of government through peaceful evolution or forceful
revolution, with sword or by ballot, the land will remain. The rains
will water it, the sun warm it, human life will exist, the Stars and
Stripes will still float, but, except from the map, America will be
gone forever.

America is more than fertile fields, more than bursting banks, more
than waving flags. The America in which one must believe, and for which
he must sacrifice, is constitutional liberty and justice according to
law, guaranteed and administered by three coordinate branches of
government. Just in proportion as we weaken the energy of the system
through changes in the Constitution—which Washington so earnestly
warned against—we undermine what thus far no one has succeeded in
overthrowing.

I repeat, three coordinate branches of government with no subordinate
branch! In the America which the world knows, and which we love, laws
must be enacted by the legislative branch, and not by the executive or
by the proletariat. Laws must be interpreted by an independent
judiciary, fearless and unrecallable except by impeachment. And these
laws, whose scope is limited by the Constitution, must be administered
by the executive and not by the legislative branch. Congress has no
more right to direct the manner of execution of its acts than the
president has to direct or coerce the nature of its acts. Let each
coordinate branch keep hands off the sacred prerogatives of the other.
That’s America! And the man who defends her traditions and her
institutions, regardless of his nativity, is an American who can safely
be placed on guard tonight.

AN ACTUAL MENACE

On February 3, 1919, an editorial writer who has testified that he has
six million or more readers, quoted Samuel Gompers, president of the
American Federation of Labor, as saying:

“I mean that the people propose to control their government and do not
intend any longer to have the governing power exercised by judges on
the bench.”

And the editor correctly adds:

“This is as near to an American revolutionary statement as has ever
come from a man as important officially as Mr. Gompers.”

Thus the issue is sharply drawn. This organization, if its president
has been correctly quoted, intends to abolish one of our coordinate
branches of government, to-wit, the courts.

What have the courts done to justify such a radical change in our form
of government? When the government was organized the Fathers thought
wise to make express provision that no class should ever become the
special favorite of legislation. The Constitution forbids class
legislation and the courts enforce it. Unless labor union people demand
special exemptions from obligations to which all others are amenable,
or special privileges denied to others, why do they officially make the
revolutionary announcement that the courts are to be abolished? Yet
this very thing has the approval of this most widely known and
best-paid editorial writer in the world. Pressed in a corner, I presume
both would claim that their only desire is to compel the courts
promptly to observe popular sentiment instead of studying legal
principles and, to that end, propose to subject judges to some kind of
recall. And they would doubtless justify all this by the hackneyed
phrase, “the people can be trusted.”

Thus they follow Rousseau and Robespierre. The former declared, “The
general will, the public will, is always right.” The latter said, “The
people is infallible.”

A case that well illustrates this “popular infallibility” as taught by
Rousseau and Robespierre, as well as by their present day disciples,
occurred in a certain county in Iowa, not fifty miles from my home. A
person charged with second degree murder sought his constitutional
right of a fair and impartial trial. He made application for a change
of venue, alleging that his case had been prejudged and that because of
the existing prejudice he could not obtain a fair trial within that
county. Five citizens, the minimum requisite number, supported his
motion by their affidavits. Promptly, two hundred most reputable
citizens filed counter affidavits alleging that there was no prejudice
whatever. The judge believed the five. It is probable that he discerned
evidence of prejudice in the eagerness with which the two hundred
sought to have the case tried in their midst. A change of venue was
granted, and that night these two hundred liberty-loving citizens
decided they would “no longer have the governing power exercised by
judges on the bench,” broke open the jail, hung the accused and would
have done violence to the judge if he had not been spirited away.

If you want the opposite view of “popular infallibility,” so you may
the better determine for yourself, listen to Colonel Henry Watterson, a
democrat of the old school and an American always, in the _Brooklyn
Eagle_ of February 1, 1919:

“The people,” says Colonel Watterson, “_en masse_ constitute what we
call the mob. Mobs have rarely been right—never, except when capably
led. It was the mob of Jerusalem that did the unoffending Jesus of
Nazareth to death. It was the mob in Paris that made the Reign of
Terror. From that day to this, mobs have seldom been tempted, even had
a chance to go wrong, that they have not gone wrong. ‘The people’ is a
fetish. It was the people misled, who precipitated the South into the
madness of secession and the ruin of a hopelessly unequal war of
sections. It was the people, backing if not compelling, the Kaiser, who
committed hari-kari for themselves and their empire in Germany. It is
the people, leaderless, who are now making havoc in Russia. Throughout
the length and breadth of Christendom in all lands and ages, the
people, when turned loose, have raised every inch of hell to the square
inch they were able to raise, often upon the slightest pretext, or no
pretext at all.”

OFFICIAL TIMIDITY AND ITS EFFECTS

In some, perhaps most of the states, candidates for either House of
Congress, knowing in advance that if, by investigation and by listening
to arguments pro and con, they arrive at conclusions based on knowledge
that differ from the impressions of their constituents based on
prejudice, they will never be returned, make more or less formal
announcement that, if elected, they will study no question but, when
ready to vote, will inquire of those who have had neither opportunity
nor desire to inform themselves, and vote as directed. We pay
congressmen and senators of this type—just the same as statesmanlike
representatives—seven thousand, five hundred dollars a year, and they
vote as they are told to vote. If I am correctly informed, in some
states men have been found who will vote as they are instructed for
considerably less money even than that.

While the bill was pending to declare war against Germany, I called
upon a Congressman who, without question, is the ablest man from his
state. He had written to lawyers, bankers, farmers and labor men in his
district, asking how he should vote on that momentous question. He
handed me a package of replies he had received. I returned them and
asked: “Do you agree with the President that Germany is already making
war upon the United States?” “Yes,” he replied, “she has waged war
against us for more than two years.” “Do you think your constituents
know better than you what should be done?” His up-to-date reply was:
“My constituents know nothing whatever about it, but I want to be
re-elected.”

But not every congressman is that subservient. A certain well-known
representative of a strongly German district in Ohio explained his
support of the declaration of war in this language:

“If I were to permit any solicitude for my political future to govern
my action, I might hesitate, but, gentlemen of the House, the only
interest to which I give heed tonight is the interest of the American
people; the only future to which I look is the future of my country.”

A few years ago a bill was pending to revise the tariff and a member of
Congress from a certain industrial district arose and informed the
House that he had written to several labor men in his district and
asked them how he should vote and that he had received a telegram
saying, “Vote for the bill.” He obeyed. This member did not profess to
vote his convictions. In fact, he did not claim to be troubled with
convictions. And I submit that if a man is to vote the sentiment of his
district, rather than his judgment, it is foolish to waste the time of
men of judgment by sending them to Congress. It would be more
appropriate and in far better taste to send men who have nothing else
to do. A thousand dollars a year ought to be enough for a man who bears
no responsibility except to listen well, especially if he be of a
caliber willing to act as a “rubber stamp” for the people at home.

Right here I want to venture an opinion, asking no one to agree with
me: The gravest danger that confronts the United States of America, or
that has confronted her in the last decade, has not been the armed
forces against which we sent our brave boys in khaki, but in the fact
that there are hundreds of representatives, and thousands of ambitious
politicians, who cannot be purchased with the wealth of Croesus, but
who will vote for anything and everything if by so doing they can
advance their political fortunes.

Bolshevism would be crushed and the red flag of anarchy would be no
longer flaunted in the face of Freedom, were it not for this timidity
inspired by those who insist that their representatives shall have no
discretion and no responsibility except as clerks for an irresponsible
populace. This is the doctrine taught in Rousseau’s “Social Contract,”
which Robespierre read every day and which furnished the inspiration
for the French Revolution. His scheme was “pure democracy, unchecked,
unlimited and undefiled by political leadership or political
organization.”

Marat declared: “In a well regulated government the people as a body is
the real sovereign; their deputies are appointed solely to execute
their orders. What right has the clay to oppose the potter?” Again, he
says: “It is a sacred right of constituents to dismiss their
representatives at will.” And again: “Reduce the number of deputies”
(corresponding to our members of Congress) “to fifty; do not let them
remain in office more than five or six weeks; compel them to transact
their business during that time in public.”

This spirit of “pure democracy” which Washington, with prophetic eye,
saw and warned against, wrought its natural and legitimate ruin in
France, is responsible for conditions now existing in Russia and
affords the greatest menace to civilization that the world has ever
seen. I do not consider Washington a pessimist when, near the close of
his “Farewell Address” with heart full of apprehension, he uttered
these words:

“In offering to you, my countrymen, these counsels of an old and
affectionate friend, I dare not hope they will make the strong and
lasting impression I could wish; that they will control the usual
current of the passions, or prevent our nation from running the course
which hitherto has marked the destiny of nations.”

Someone has declared life to be “one succession of choices.” The choice
presented today is: Heed the warnings and return to the teachings of
Washington; or go with Rousseau and Robespierre and enter the port
towards which we are unmistakably headed—the port where lie the
rotting timbers of all previous republics. Representative government
and direct government are inherently incompatible. They are absolutely
antagonistic.

PART SECOND

DANGERS FROM CHANGES IN OUR PURPOSE OF GOVERNMENT

CHAPTER IX

PRELIMINARY

The basis of human happiness most be understood before one can
judge if the policy which our government has pursued is
calculated to afford liberty in the pursuit of
happiness—admittedly the most important of our inalienable
rights—as well as to determine whether the same should be
reversed.

Preliminary to the discussion of the original design of government, and
its gradual reversal of purpose, I want to present as briefly as I may,
some philosophies of life. This I deem important, for only as we
understand the basis of human happiness can we appreciate the wisdom of
the course which the United States pursued for more than one hundred
years, during which it attained the proudest position ever occupied by
any nation.

It is recorded that when the first parents were being expelled from the
Garden of Eden God pronounced this blessing upon the race: “In the
sweat of thy face shalt thou eat bread.” I have heard this referred to
as a curse, but the All-wise Father has never cursed the race. God
seems to be an individualist and not a collectivist. “Whosoever will,”
“The soul that sinneth it shall die,” and many similar passages are as
far removed from socialistic teachings as is possible. They are the
exact opposite. After some years of experience and much observation, I
feel justified in saying that, barring the promise of redemption, the
greatest blessing God Almighty ever pronounced upon the race of man was
when he said: “In the sweat of thy face shalt thou eat bread.”

Then God promulgated a great commandment containing two injunctions,
the first of which the church seeks to enforce. It reads: “Remember the
Sabbath day to keep it holy.” The second, equally important and as
woefully transgressed, says: “Six days shalt thou labor.” I know people
who violate each of these injunctions. They break the Sabbath and will
not work the other six days.

We also read that when God had made the worlds and swung them into
space, he pronounced them “Very good.” It is but reasonable to believe,
and certainly reverent to say, that the Great Jehovah got divine
satisfaction and gratification from his creatorship, and his
sovereignty. When, in the fullness of time, He made man in His own
image, wanting to provide for man’s happiness, He harked back to the
thrill of creatorship and gave man the capacity for the maximum of
happiness from his creatorships, his sovereignties, his achievements.

One needs but little observation to recognize that achievement is the
basis of man’s material happiness. How often we hear men say: “This was
raw prairie. I made this farm.” “I planted this grove.” “I started this
store.” “I established this bank.” “I built this factory.” I remember
very well Sir Thomas Lipton telling me where, as an immigrant with but
fifty cents in his pocket, he spent his first night in New York City.
There is something more than a joke in the statement that “self-made
men are apt to be proud of the job.”

Nothing will develop manhood in a boy like giving him a pig, a calf, a
lamb or even a rabbit. My! how a boy will grow in self-respect when
permitted just to call a colt “his,” and to feel the resultant sense of
proprietorship. The establishment of gardens for boys, and the offering
of prizes for the best acre of corn grown by a boy, is the best “uplift
work” that was ever attempted. Until very recent years the public has
never sought to apply these principles of mental philosophy to the
development of manly character in the young.

As soon as the savage feels this divinely implanted impulse for
ownership and achievement, he is on the road towards civilization.
Then, as he advances, “individualism” becomes more marked and instead
of living in a hut, wearing braided grass and eating his meat and fish
raw, he improves his condition and inequality begins. Is civilization a
failure? It must be if socialism has any place in divine economy.

CHAPTER X

NO COMPETITION BETWEEN THE SEXES

A brief discussion of the distinction between women as voters
and as statesmen.

While this chapter is parenthetical and is not essential to the
argument, yet a discussion of the philosophy of human happiness would
be incomplete without it.

If man had the power of creation his present wisdom would cause him not
only to omit competition between the sexes, but he would avoid the
possibility of even rivalry. The Creator in His wisdom did not put the
sexes in competition and man can neither improve nor amend.

Occasionally a woman develops a beard, but it is so rare that she
usually enters a museum. Many years ago I saw a woman with a
well-defined “Adam’s apple.” But none of us admire either “mannish”
women or “sissy” men.

Woman does not get her happiness from her creatorships or
sovereignties. The normal woman prefers that her husband be the
sovereign, and she his queen. Woman gets her happiness from her
sacrifices. She gives herself to husband, to children, to home, to
church, to hospital, to good deeds, and out of these sacrifices she
gets the maximum of her happiness. A boy asked the butcher for tough
meat and gave this reason: “If I get tender meat, dad’ll eat it all.”
That would be a libel upon woman. We have each seen a thousand times
where mother was getting more happiness in picking the neck and the
back than the children in eating the white meat, while dad grabbed both
upper joints.

But there is another side to this. When dad is refreshed, when his
blood is red, when he is a full-grown normal man, what does dad do? He
bears all the hardships and all the dangers this world holds in store;
he freezes in the arctics, he melts in the tropics, that he may bring
to those he loves the choicest of earth, and adorn his queen with the
brightest jewels that glitter.

I have never supposed that when our early ancestors were confronted
with danger that there was any controversy as to who should defend the
other. I have assumed that she as instinctively sprang to his left, as
he to her right, that _his_ sword arm might be free. His name was John.
Her name was Mary. His brother’s name was Peter; he married Margaret.
Each pair named their son Ole. There being two Oles in the tribe, a
distinguishing name was necessary. Do you suppose there was a family
controversy to determine whether one should be called “Ole Johnson” or
“Ole Maryson”?

No, woman does not wish to be the head of a clan, or to create or to
possess, but she does desire that her husband shall be a chieftain, a
builder and a landlord, and is willing to make any sacrifice to that
end. Woman wants to be loved and, incidentally, let me say, needs to be
told that she is, in the tenderest way, and more than once. If told
sufficiently often, she is even proud to be a slave to the man who
loves her and sometimes is without ever receiving a single post-nuptial
word of endearment.

I doubt if anyone would favor woman’s suffrage if he thought it would
result in changing woman’s nature, or in making her masculine in
manner. “Man’s chiefest inspiration to well-doing is hope of
companionship with that sacred, true and well-embodied soul—a
woman”—only because an All-wise Creator made the sexes as unlike as
possible and still keep them both human.

“For woman is not undeveloped man,
But diverse. Could we but make her as the man,
Sweet love were slain.”

Only one woman has occupied a seat in Congress and I am glad to record
that she remained womanly, and the other members manly. In that respect
the experiment was harmless. She was permitted to violate the rules and
to interrupt a rollcall to explain her vote. Neither the Speaker nor
the members called her to order. Perhaps they would have done so had
she not been crying at the time. During a speech criticising the
enforcement of law against a certain element in her state, she was
asked several questions which, together with her answers, were taken
down by the official stenographer. When she revised the extension of
the notes for the Congressional Record, she again violated the rules
and struck out the questions and answers and explained her conduct by
saying: “I didn’t want them in there.” The congressmen affected, still
chivalrous, did not even ask to have the Record corrected.

It will probably be some years before another woman occupies a seat in
either house, for statesmanship is not gauged by intelligence or purity
of motive, so much as by aptitude crossed on experience. Aptitude for
the law, aptitude for mechanics and aptitude for statecraft, are quite
rare, even among men. Many women have been admitted to the bar, and
while a few have had some practice as attorneys, thus far the sex has
developed no one of marked legal ability. If it should produce a lawyer
or a master mechanic or a statesman, it will not necessarily entitle
the unfortunate to a place in a museum, but it will be about as rare as
anything in a museum.

CHAPTER XI

PURPOSES AND POLICIES OF GOVERNMENT

In this chapter the wisdom of the Fathers is sought to be shown
by the fact that they inaugurated policies and purposes
admirably calculated to develop the individuality of each
citizen, and to afford the greatest opportunity for the maximum
of human happiness.

With these philosophies of human life in our mind, let us pass to the
study of the purpose and policy of our government as shown in its
history.

Imagine, if you will, that we have just won our independence, that the
Constitutional Convention has been held, the matchless document there
formulated has been adopted and that the United States of America has
become a Nation. Then suppose all the people within our domain gather
to determine the purpose and policy of their government. Will we choose
the least possible government, and the greatest measure of liberty, or
shall the United States become a great business concern with all its
citizens on the payroll? Shall government guard the liberties of the
people while they prosecute their business, or shall the government
conduct the business and the citizen guard the government?

Alexander Hamilton will attend this meeting and will make the speech of
his life. Talleyrand declared Hamilton’s to be the greatest intellect
he ever met. In addition to well-nigh matchless mentality he probably
possessed greater vision than any man of his time; and vision is the
natural parent of statesmanship, if indeed it be not statesmanship
itself.

Standing at the cradle of this nation, Alexander Hamilton assures
Talleyrand that either Philadelphia or New York will be ultimately the
financial center of the world. Back in the interior he predicts another
metropolis. Eventually, he declares, the United States will extend to
the Pacific Ocean and yonder on the western coast there will be another
metropolis. If we build to such dimensions these must be our policies.

He continues his speech and tells us that the United States is not only
destined to be the most powerful but likewise the richest nation in the
world. Our unearned increment will exceed the dream of man. These
lands, now worthless, are intrinsically of great value. All the
minerals and all the metals will be found within our borders and these
will measure untold riches. Today we have resources unequalled in any
land, and resourcefulness unmatched by any people, and he reminds us
that resourcefulness, when applied to resources, will produce greatness.

Then someone in the audience rises and announces himself a bolshevist
and moves that the United States retain title to all these wonderful
resources until they attain their maximum value. He proposes that we
tolerate no “land hogs” and permit no one to exploit the resources of
America or make profit out of iron or coal or oil or even a waterpower.

Then a socialist declares this to be a concise statement of his creed
and seconds the motion. Non-partisan leaguers from North Dakota, and
single-taxers from California, also favor it. An anarchist joins to say
that while his people are opposed to any laws, yet if laws are to be
made, they should each prohibit something and none should encourage
anything. Then an I. W. W. declares that this will suit him, provided
he be not required to work. But the proposition is lost.

Then a preamble and resolution is offered to this effect: “Whereas, the
All-wise Creator has decreed that man shall derive his greatest
happiness from his achievements, therefore, with faith both in God and
man and believing in America, be it resolved, that we emblazon upon the
sky where all the world shall see, the great announcement that the
Stars and Stripes shall forever stand for Opportunity!” This is carried
by acclamation and amid applause.

Then another moves that we give notice to every citizen, and to every
person who may desire to become a citizen, that in the pursuit of
guaranteed happiness, each shall have guaranteed liberty to look over
our broad domain, select the biggest thing he dare undertake and, if he
makes it win, it shall belong to him. This motion is carried by a
rising vote.

Then a third man moves that in the development of our resources, the
government shall foster everything, and father nothing. In his speech
supporting the motion, he suggests that if Mr. Hamilton’s prediction
concerning the ultimate greatness of America proves true, men will
engage in commerce; they will build ships and they will build them too
large for our harbors. Then the government, in fostering commerce, will
deepen and widen our waterways, but it will not father commerce and
take over the ships. It will leave to the citizen the right to own the
ship, to fly his flag at its mast and to get the thrill that will
surely come from sailing the biggest ship that cuts the waves of ocean.
Achieve and be happy! This motion is also adopted.

After these hopeful and courageous souls have thus formulated a
progressive policy, a man announces his fear that he does not possess
the necessary vision, and certainly not the requisite courage to
accomplish any great thing and, therefore, intends to become a
wage-earner, and asks the assembled citizenship of America what they
propose to do for him. Being honest with ourselves we are compelled to
admit that we can promise little for the present. We tell him frankly
that if he is simply seeking wages, he might as well remain in the
country of his nativity. We assure him, however, that if he can endure
pioneer hardships until the lands have value, until the mines are
developed, until means of transportation are afforded, until the
unearned increment begins to appear, we will give him better wages than
the world has ever seen. Have we kept faith? Let us see.

RELATIVE REWARDS OF CAPITAL AND LABOR

As late as 1840 men worked twelve hours per day for twenty-five cents,
payable in cornmeal or meat, for there was no money. I can remember
when fifty cents per day was a good wage. Then, when property began to
have value, we started up the spiral stairway of more wage and more
wage and then more wage.

What effect did this have? The world took notice and immigration
increased as wages advanced. In 1907 over one million immigrants landed
on our shores, and more than half with less than the required $35.00 in
cash. The next year 800,000 went back. Some of them had been here
several years and others only a short time, but, in addition to what
they had sent home, they took with them from three hundred to five
thousand dollars each.

How about capital? For nearly one hundred years, foreign capital sought
American opportunity. Foreign capital built our first railways,
established our first banks, erected our first factories. But about
twenty-five years ago it largely ceased to come, for it could do no
better here than elsewhere. Even American capital sought employment in
Mexico, China and in Canada, simply because these countries offered
better rewards for capital. The records of the Immigration Department
contain positive proof that for more than twenty-five years labor in
this country has been relatively better rewarded than capital.
Otherwise capital would have come as labor came.

This great truth ought not to be ignored. The only reason capital
continued to come for one hundred years is because it could do better
here than elsewhere. The only reason that it ultimately went elsewhere
is because it could do better elsewhere. Meantime, immigration, most of
it swelling the ranks of labor, increased solely because labor received
in America a relatively larger share of the profits of business and
enterprise than in any other country on the map.

No one claims that even now labor receives more than its due. I am
simply demonstrating the _relative_ rewards of capital and labor in the
United States and citing positive proof that immigrants who come
seeking opportunity do not pursue a barren hope.

CHAPTER XII

THE RESULT OF THIS POLICY

The policy defined in the preceding chapter is illustrated and
its wisdom shown by the logical results thereof. The source and
constant course of wages is also discussed.

After spending seventy-five years of our national life in the
discussion of state rights, and then four years of bloody fratricidal
war, the fact that the United States of America is a nation and not
simply a confederation of sovereign states was definitely determined.
Occasionally, we still hear people speak of “_these_ United States.”
But there are none. This one is all there is. The term “these United
States” comes dangerously near a treasonable utterance. The court of
last resort rendered its decree at Appomattox that the United States of
America is “one and inseparable, now and forever.”

After this perplexing question was settled, the government proceeded to
foster industry in the largest possible way. For instance, certain men
proposed that, if properly encouraged, they would construct a railroad
to the Pacific coast. They were reminded that only a few years before
it had been said that not even a wagon road could be builded across the
Rocky Mountains. “Yes,” says General Dodge, “but we will build a
railroad.” They asked a subsidy of money, to be returned as soon as
possible, and one-half of a twenty mile strip of land in perpetuity.
They were given both. The land was then worthless. Do you realize that
if the land that was given to the Union Pacific Railroad on condition
that the road should be builded to the Pacific Ocean, had been given to
the Astors, on condition that the Astors should go out and look at it
each year, it would have broken the Astors. There was no way to go out
to see it. In effect, the government kept most of the land for
homesteaders and gave half of certain adjacent tracts to railroads on
condition that they make it worth while for homesteaders to occupy the
reserved portions. What is the result? The Rocky Mountain Empire,
yielding all the minerals, all the metals, lumber, fruits, vegetables,
with millions of people living in happy homes, and all because the
government fostered enterprise and said: “Achieve and be happy.”

Where there is incentive there will always be achievement.

ANOTHER ILLUSTRATION

Permit one more illustration. One thousand can be furnished as well as
one. Certain men proposed to the government that on certain conditions
they would build a silk mill. The government exclaimed: “A silk mill in
the United States! We produce no raw silk.” This was promptly
acknowledged and likewise the higher wages necessary to be paid in
America. Still they promised to build a silk mill if they were
permitted to buy their raw silk wherever they could find it without
paying anything to the government for the privilege, and, provided
further, that foreigners who might bring manufactured silk to this
market, in competition with the product of their mill, should be
required to pay sixty cents out of every dollar received, into the
treasury of the United States for the maintenance of this government,
and go home contented and happy with forty cents. The government
replied: “Go build your mill. If you cannot live on those terms, we
will make the foreigner pay sixty-five cents.” What is the result?
Ninety million dollars’ worth of raw silk is annually imported and
forty-five million dollars are paid in wages to the workmen
manufacturing it. Achieve and be happy!

WHAT BECOMES OF WAGES?

What becomes of this forty-five million dollars in wages annually paid
by the silk mills of America? Every dollar of it is spent. We all spend
all we get. We spend it for necessaries or comforts or luxuries or
taxes or foolishness, or we expend it for a house, or a bond, or we
deposit it in a bank and someone else spends or expends it.

Let us assume that this particular forty-five million dollars of silk
mill wages is paid to western farmers for food. The western farmers
send it east for knit goods and shoes and these factories pay it out
again to labor and labor sends it west again for food. How often will
wages make the circuit?

A man earns, say, five dollars and spends it at night for food and
clothes. The merchant spends his profit and pays the balance to the
producer of food and clothes. The producer keeps it as a reward for his
toil or pays it for wages. In either event, it goes again for food and
clothes. William McKinley estimated that wages would thus make the
circuit and come back to the wage earner ten times per annum. I believe
the estimate conservative. A million men annually earning one thousand
dollars each, makes one billion dollars in wages. This billion dollars
going to the merchant ten times a year and back to labor as often,
makes an aggregate of ten billion dollars in trade every twelve months.

A SUMMARY OF ACHIEVEMENT

Now, hold your breath. The figures showing the material result of fifty
years of applied common sense, will stagger you.

When the European war began, our farms were producing more than the
farms of any other country on the map. Our mines yielded gold by
trainload annually, and we unloaded from coastwise ships and railways
on the soil of Ohio alone more iron ore than any other country in the
world produced. In fifty years we had builded as many miles of railroad
as all the rest of the world, and these roads, before the government
began fixing rates, were carrying our freight for one-third of what was
charged for like service elsewhere beneath the sky. We cut from our
forests one hundred million feet of lumber for every day of the
calendar year, and annually pumped from the earth beneath 250,000,000
barrels of petroleum, over sixty-five percent of the world’s gross
product. Owing to the rapid exchange of wages for necessaries and
comforts and then again for wages, our domestic trade had become five
times as large as the aggregate international commerce of creation. Our
shops and factories turned out more finished products than all the
shops and all the factories of Great Britain and France and Germany
combined, plus five thousand million dollars’ worth every twelve
months, and we paid out as much in wages as all the rest of the human
family. Achieve and be happy!

I hope you will understand that I am not defending either our form of
government or our policy. George Washington, Alexander Hamilton,
Benjamin Franklin and those other immortal men, may have been
blithering idiots when they chose to create a republic instead of a
democracy. I only cite the fact that they did create a republic. We
_might_ have accomplished more had the government tilled the lands,
built the ships, constructed and operated the railroads, erected the
factories, opened the mines, transacted the business and put everyone
on the public payroll. I only seek to make it clear that this was not
done and that we did fairly well, considering.

During all this period, the government accepted as its appropriate
function the protection of the citizen, while the citizen sought
happiness and secured it through achievement. The government sought to
protect him from murder, but did not always succeed. It tried to shield
him from robbery, but sometimes failed. It aimed to prevent extortion
but was not always successful. It did its best to see that opportunity
should knock once at every door, but did nothing to force an entrance
or insure a second call. Still, notwithstanding errors, weaknesses and
admitted inefficiency, the American citizen has been afforded better
protection against all the evils that assail mankind, than the people
of any other country and, in the pursuit of happiness, Americans have
enjoyed far wider liberty of action, and an infinitely greater percent
of realization.

CHAPTER XIII

ALL DEPENDENT UPON THE PAYROLL

The importance of the American payroll upon which all rely is
emphasized, and the necessity of safeguarding this payroll is
shown together with a lesson in domestic economy.

While the government has kept as few as possible in its employ we are
dependent, directly or indirectly, upon the payroll. Not only the
merchant and the farmer, but the professional man and banker, have
suffered when, for any cause, labor has stood in the bread line. This
is well illustrated by the fact that the American people consumed 5.94
bushels of wheat per capita during 1892, only 3.44 bushels in 1894 and
over 7 bushels in 1906. He who had eaten at the back door as a tramp
fed himself like a prince when every wheel was turning and everyone
working.

These figures are also illuminating: We imported for consumption $12.50
per capita in 1892, only $10.81 in 1896 and $16.49 in 1907. This may
cause surprise when you remember that the minimum per capita
importation of 1896 was when the average tariff duty collected thereon
was only 20.67 percent, while in 1907 the average rate was 23.28
percent. Notwithstanding the higher rate, we actually imported for
consumption sixty percent more merchandise per capita than under the
lower tariff rate. No more indubitable proof can be found that when
labor is employed, and the payroll large, all classes and conditions
prosper.

ECONOMIC PHILOSOPHY

Suppose I build a factory costing, say, one hundred thousand dollars,
and enter an untried field of manufacture. I pay out two hundred
thousand dollars in wages and make a net profit of fifty thousand
dollars. These figures are unimportant except as an illustration. I
have made fifty per cent on my investment and the world says it is too
much. It is too much, notwithstanding the fact that I take all the
risk, make the experiment and demonstrate the possibilities of a new
industry. I also pay a wage at which my employees are glad to work. Not
one of them risks a day’s toil. But, because my profits are large, if
for no other reason, I am certain to have competition next year.

What shall I do with my fifty thousand dollars net profit? I can eat no
more than I have eaten, and I cannot wear more than one suit of clothes
at a time.

I challenge anyone to tell me how I can keep my profit away from labor
except by converting it into cash and locking it in a safe deposit box.
Suppose I give my daughter a big wedding and spend much money for cut
flowers. Cut flowers are nature’s sunshine plus management and labor.
So management and labor get that. But management is compelled to spend
its share as I spend mine, and thus it all goes directly or indirectly
to labor. I build for my daughter a home and fill it with furniture,
china, glass and silver. Both the house and its furnishings consist of
lumber in the forest, ore in the ground, clay in the pit, white sand in
the bank, and other raw materials, plus management, labor and
transportation—and transportation is labor. Thus labor gets all except
the portion which goes to management and capital, and management and
capital are compelled to turn their respective shares into labor.

Here the theoretical socialist and the scientist—I mean the man who
recognizes that nothing is scientific except what stands the test of
experience—part company. The socialist admits that cut flowers are
sunshine plus labor and as sunshine receives no portion he demands that
labor shall have it all. He forgets or refuses to recognize that
without directing energy there would be no greenhouse, water system,
heating plant or other essential of production. Labor and sunshine
never produced anything better than a wild flower. Of course labor may
and frequently does furnish the management. All the necessary equipment
for the production of the various articles I have mentioned is the
result of a directing genius which we call management.

Let no one accuse me of trying to deceive or cajole labor. I not only
admit, but I assert, that there is far more satisfaction, though not
necessarily greater happiness, in drawing dividends than wages. I have
had both experiences. I am an expert, for I have either touched or seen
life at every angle. I have worked to the limit, day after day, from
five in the morning until nine at night for hire, with not to exceed
one hour for the three meals, and have gone to bed happy. For fifteen
years I was at my law office, as a rule, from seven in the morning
until ten at night, and for more than thirty years of my mature life I
never took a day for recreation. My wife and I are now living quite
comfortably from dividends, but we look back upon those strenuous
years, in which this best woman in the world joyfully and even joyously
bore her share, as the happiest period of our lives. Still I repeat,
dividends are better than pay envelopes or checks from clients. And I
am glad they are. The All-Wise must have designed they should be, for
otherwise life would be one dreary humdrum of drudgery, with little
incentive to great effort and greater sacrifice, the universal _quid
pro quo_ in the great one-price store of republics.

In this connection permit me to urge every man whose wakeful hours are
spent in toil, to make it exceedingly clear to his children that there
is more satisfaction in drawing dividends than wages. Let the youth
also know that nearly every one who now draws dividends began by
drawing wages. I can recall very few men whose names are or have been
known beyond the confines of local communities, whether bankers,
lawyers, manufacturers, merchants or railroad presidents, whose hands
have not been calloused with humble toil. This is conspicuously so of
Rockefeller, Carnegie, Wanamaker and Schwab, and was equally true of E.
H. Harriman, C. P. Huntington, J. J. Hill, George M. Pullman, the
McCormicks and practically all others who in days past rendered
conspicuous service in making America.

CHAPTER XIV

AMERICAN FORTUNES NOT LARGE, CONSIDERING

A country of such resources could not be developed as America
has been without great fortunes resulting. Inequality of
results in every field of human endeavor, except the
acquisition of property, is welcomed and approved by everyone.

I am not surprised at the fortunes that have been made in this country.
On the contrary, even greater fortunes might have been reasonably
expected. As I look over the matchless resources of America, the
surface of which as yet has been only scratched, and the matchless
resourcefulness of our people, I marvel that even greater accumulations
have not been made. I have been frequently surprised that I did not
make more myself. But I can account for it, so far as I am concerned. I
heard of a man who said he could write as good poetry as Shakespeare,
“if he had a mind to.” His friends assured him he had discovered his
handicap. That was my difficulty. I had the disposition, and I have had
the opportunity. As I look back over the years of my mature life I
recognize that I have failed to heed opportunities where I might have
made more money than any man has made. But I did not have the vision; I
did not have the courage; I did not have the “mind to.”

I can construct a highway so the worst old scrub of a horse, with his
mane and tail full of cockleburrs, can keep up with a thoroughbred.
Yes, I can. But the mud must needs be very deep and quite thick. When
the mud is sufficiently heavy, one horse can keep up with another. But
when the track is improved, the horse with aptitude for speed will soon
distance the old cockleburred scrub, who would, if he could talk, very
likely insist there is something wrong with our civilization, and
become a socialist.

We all demand good roads, though we all know that if we have good roads
we will have to take someone’s dust. The only way, my friend, to
protect yourself from the other man’s dust is to have the roads so bad
he cannot pass you.

A PARABLE

During the free silver campaign of 1896, a man with a full unkempt
beard and shaggy hair, after several times interrupting the speaker,
finally asked in squeaky voice: “Mr. Speaker, how do you account for
the unequal distribution of wealth?” The answer came with promptness.
“How do you account for the unequal distribution of whiskers?” When the
audience had quieted down, the speaker might have said: “My friend, I
did not make that remark to cause merriment at your expense. I made it
to illustrate a great truth. I was born with equal opportunity and
equal aptitude for whiskers with yourself. But I have dissipated mine.
Whenever I have found myself in possession of any perceptible amount of
whiskers, I have dissipated them. Had I conserved my whiskers, as you
evidently have, I, too, would be a millionaire in whiskers.”

Tell your boys, and the boys you meet, that if ever they become
millionaires in dollars as in whiskers, the chances are it will be
because they conserve. John J. Blair, the pioneer railroad builder west
of the Mississippi River, once told Senator Allison that the wife of
Commodore Vanderbilt had many times cooked for him a five o’clock
breakfast, for which she charged twenty cents. The seed from which all
great fortunes have been grown was hand picked.

In the war between the states more than a million men enlisted on
either side, and at the end of four and one-half years there were fifty
or one hundred multi-millionaires in military achievement and military
glory and ten thousand in unmarked graves. Socialists do not object to
these inequalities. While they seem to welcome millionaires in art, in
music, and in athletics they all point to millionaires in business as
an unanswerable indictment of America’s political system. They rejoice
that it can produce an Edison, but mourn that it can also produce a
Rockefeller. Yet the success of these two wizards is traceable alike to
extraordinary aptitude in their respective fields of achievement, plus
extraordinary application. Neither of these men ever robbed me of a
penny. On the contrary each has contributed to my comfort, thus adding
to the worth of living, and each has cheapened for me the cost of high
living. But for Mr. Edison, or someone of a different name to do what
he has done, I would be deprived of electric light and many other
comforts. But for Mr. Rockefeller, or some one of a different name to
do what Mr. Rockefeller has done, every owner of an oil well would be
pumping his product into barrels in the olden way, hauling it to town
and selling on a manipulated market, while I would be deprived of a
hundred by-products of petroleum, be still paying twenty-five cents per
gallon for poor kerosene, and there would be no such thing known in all
the world as gasoline.

CHAPTER XV

POPULAR DISSATISFACTION

It is as logical that dissatisfaction should develop because of
inequality of results in “money making,” as it is that
inequality in results shall follow inequality of aptitude and
effort. This dissatisfaction has tended strongly to develop
socialistic thought and teaching.

A century and a quarter, during which representatives were chosen
because of actual or supposed aptitude, and retained in office during
long periods—frequently for life—when nearly every industry was
fostered, and none fathered, developed a people, the best paid, the
best fed, the best clothed, the best housed, the best educated,
enjoying more of the comforts of life, far more of its luxuries,
enduring less hardships and privations, than any other in all history;
but it is an even guess if, at the same time, we did not become more
restless, discontented and unhappy.

We were not so much dissatisfied, however, with our own condition,
abstractly considered, as with our relative condition. The man with
rubber heels would have thought himself favored had he not seen someone
with a bicycle, and the man with a bicycle was contented until his
friend got a motorcycle. The man with a motorcycle thought he had the
best the world afforded until he saw an automobile and the man in the
automobile was happy until his neighbor got a yacht. “All this availeth
me nothing so long as I see Mordecai, the Jew, sitting at the king’s
gate.”

I have lived some years in this blessed land and the only criticism I
have ever heard, either of our form of government or our policy, is the
fact that some men have got rich.

I made this statement in a public speech some months ago and asked who
had heard any other. A man answered: “Some people have got poor.” I
admitted that I had known a number of fellows whose fathers had left
them money and who had got poor, but I told the audience that most of
the poor men whom I had known had simply remained poor. I asked my
critic if he had ever fattened cattle. He admitted he had not. Then I
assured him that he would seldom see a steer getting poor in a feed
yard where others were doing well and most were getting fat, but he
would frequently see one that remained poor, notwithstanding his
environments.

Two men were standing by the side of the New York Central Railroad. One
said to the other: “My, see this track of empire! Four tracks, great
Mogul engines taking two thousand tons of freight at a load, passenger
trains making sixty miles an hour. There comes the express!” As the
train passed a cinder lit in the eye of the enthusiast, when
immediately he denounced the road, cursed the management and swore at
all four tracks.

In a country like ours, where conditions have been superb, resources
matchless and resourcefulness unequalled, none should be surprised at
the speed we have developed and no one ought to use language unfit to
print simply because there are cinders in the air. Admittedly there
are. We have all had them in our eyes. They are more than annoying, but
the only way to prevent cinders is to tear up the tracks. And it is
simply surprising the number of good people who are trying to make the
world a paradise through a policy of destruction.

Socialists, near-socialists, bolsheviki, anarchists, I. W. W.’s,
non-partisan leaguers, single taxers, and all the infernal bunch of
disturbers and propagandists of class hatred, unintentionally led and
reinforced by a large percent of the teachers of political economy and
sociology in our colleges and universities, seem bent upon nothing less
than a revolution in both our form of government and our policy of
government. Unless something be speedily done to counteract there
surely will be precipitated in America what France experienced, and
what Russia is now suffering.

WHILE STATESMEN SLEEP THE EVIL ONE SOWS TARES

In the winter of 1898 I attended a much advertised lecture by George D.
Herron, then Professor of Applied Christianity in one of the largest
colleges west of the Mississippi. The lecture was given in the largest
church of Des Moines, on a Sunday evening, and most of the other
churches adjourned their services that they might hear this “remarkable
man.” Several of the leading pastors occupied the pulpit with him and
the pastor of the second largest church in the city introduced the
lecturer, I remember, as “a Man with a Mission.” He spoke at length and
his utterances were applauded by a good percent of the congregation,
and by several of the pastors. Of course the vile life he was living,
and the viler social belief which he then and now entertains, were
unknown, but his far more dangerous teachings were well known to all
and approved by many. The burden of his “mission” was denunciation of
what he called the “Divine Right of Property,” which he compared to the
“Divine Right of Kings” and predicted that as the latter had been
overthrown by revolution, the former must be. It was indeed a “theory
pickled in the preserving juices of pulpit eloquence and laid by
against a day of reckoning.” I speak of this not to criticise the good
people who approved his utterances, many of whom did not comprehend
what was involved, but to show the prevalence of bolshevist teachings
twenty years ago. Unless he has changed he should prove very
satisfactory to the bolshevists of Russia, where at this writing he is
supposed to be at the request of the President.

Quite recently the professor of political economy in one of the
state universities of the Middle West, in the course of his daily
denunciations of the policy of internal improvement as pursued by this
government, and his condemnations of wealth and the possessors thereof,
referred to the grant of land to the Northern Pacific Railroad and
characterized it as a “gigantic steal.” A member of his class who had
had rare privileges interrupted to ask: “If the lands in this grant
were so valuable how do you explain the fact that Jay Cooke, after
financing the Civil War, went broke in selling Northern Pacific
Railroad Bonds, secured by both the road and the lands, at 85 per cent
of par?” The professor inquired where the young man had obtained his
information and was told: “From the memoirs of Jay Cooke.” “Well,” said
the professor, “that is a subject to be considered.” But the next day
he continued sowing seeds of anarchy.

During the winter of 1916 I listened to a lecture by a man of
international reputation before the students of one of our very large
eastern universities. Early in his tirade, improperly called lecture,
he informed the students that there were two ways to make money—“one
to earn it and the other to steal it.” He told them that when they
worked on the street railway they earned their money, but when the
company charged five cents for a ride, it stole its money. The students
applauded. Later he told them that if they wanted to go to Boston over
the New Haven Railroad, and all the workmen should die or strike, they
would get no farther than they could walk; but if all the stockholders
and bond owners were to die, they “might thank God for the dispensation
but they would get to Boston just the same.” The students applauded. He
closed in this language: “They talk about preparedness, and well they
may, for if these conditions continue, preparedness will be necessary
against the internal uprising that is certain to follow.” The students
again applauded.

If there has been any systematic effort made to suppress, nullify or
destroy bolshevistic teachings, not always as bold but of the same
character, with which nearly every college and university is daily
deluged, both from chair and rostrum, I will be glad to know when and
where the counteracting forces have been applied. Many men of wealth
have thought they were advancing the interest of their country and
humanity generally by endowing colleges and universities. We have made
education a fetich and have assumed that all education is alike good.
It would be far better for America to have its youth poisoned with
strychnine than with bolshevism. Poison administered through the
stomach is not contagious, but what has been lodged in the brain at
these hotbeds of socialism spreads, and when it breaks in epidemic no
army can effect a quarantine.

CHAPTER XVI

GREED AND ITS PUNISHMENT

The government very properly interfered to curb aggression and
extortion. That is a most appropriate function of government,
but a very inappropriate end and can be carried too far.

Just cause for complaint did, does and always will exist. The Kingdom
of Heaven has not yet been established by human agencies. Greed of
gain, whetted by indulgence, led to practices in many instances
reprehensible. Some of the big fellows who had achieved great things,
and rightfully owned what they had accomplished, seemed to think they
also owned the little things that others had done. Punishment became
necessary and the government administered it wisely and with lavish
hand. Not a few of the big boys were whipped in the presence of the
infant class, a thing always gratifying to juniors. Thereupon, all the
little people became hilarious over these just punishments and it
became a pastime to get after “those higher up.” One of our
distinguished senators is credited with the statement that the people
changed the motto over their Temples of Justice to “Soak Him.” It soon
became more difficult to secure the acquittal of an innocent man of
affairs, than it had been to convict the guilty. Until time is no more
the pendulum will continue to swing from one extreme to another.

PUNISHMENT A MEANS, NOT AN END

I know of no better illustration of the necessity of punishment and the
desirability of quitting when its purpose is accomplished than an
incident told me by a man who claimed to have been an eye-witness.

Back in the days when young men attended school until they were
married, a theological student attempted to teach in a country district
on the frontier of Ohio. The big boys became obstreperous. He urged
them to treat him respectfully for he said he was studying for the
ministry. The effect was as one might suppose. They carried him out,
they washed his face in the snow, they dipped him in the creek until he
gave up in despair.

Shortly thereafter, another youth applied. The director told him he
could not maintain discipline. He said if he failed, it would cost the
district nothing. Certificates to teach were then unknown. When the
pupils assembled, they found him sitting at his desk reading. They
looked him over, sized him up, thought him an easy mark and commenced
pounding their desks and stamping their feet, and kept it up until nine
o’clock. Then the new teacher laid aside his book, locked the door, put
the key in his pocket and called school to order. The preliminaries
having been unusual, silence was secured. He informed them they need
not attempt to escape, for the windows were nailed down. Then, opening
his carpet bag, he brought forth a revolver, a bowie knife and a
blacksnake whip. Then after warning the pupils not to arise until their
names were called, he summoned John Jones to the floor. With whip in
one hand and revolver in the other, he proceeded to give private
lessons. When through with John he called Bill Smith. He did not need
to ask their names. After going some distance down his list, he told
them they had probably learned more that day than they had ever learned
in any one day in their lives, and perhaps as much as it was wise to
attempt to learn in one day, adding: “When you come again, come
expecting to obey the rules, attend to business and make no false
motions. There will be no further exercises today.” They never knew
whence he came nor where he went. He had performed his mission and
wisely left future tasks to his successor.

I did not inquire concerning the subsequent history of that school, but
I understand human nature enough to know that if his successors were
men without plan or purpose or policy of their own, and only sought to
repeat the popular practices of their predecessor, they permanently
ruined that school. There was but one wise course. Without apologizing
for what had been done, or lowering the standard of discipline, there
should have been a return to the ordinary tasks of the schoolroom
without unnecessary delay, for I declare to you that corporal
punishment is not the purpose for which schools are established, nor
are criminal prosecutions the aim and end for which governments are
instituted among men. Both are essential at times, but let us hope that
captains of industry and business men generally have learned their
lesson sufficiently so that it shall not be necessary to continue
indefinitely what was so admirably done a decade or more ago.

Unless punishment is discriminately administered, demoralization will
follow, and if the big boys are whipped for no other purpose than to
please the little folks, they will probably go fishing. And whenever
the big boys of America take a day off, trouble ensues. Only a very few
years ago, I saw a thousand men standing in line awaiting their turn
for a cup of coffee and a slice of bread at the hands of charity.
Business simply could not stand the lash incessantly applied. It had
taken a day off.

Then the war came, abnormal demands were created and great prosperity
ensued. But before the revival of industry, sufficient time elapsed to
permit a fundamental economic principle to be elucidated in the
greatest school of the world, the school of experience.

CHAPTER XVII

OBSTRUCTIVE LEGISLATION

While supervision and control of big business is essential, the
trend has been in the direction of interference and in many
instances inhibition.

While both political parties, and all administrations, profess great
friendship for business, the treatment that both political parties have
accorded business is well illustrated by the fable of the elephant
that, in going through the jungle, stepped on a mother bird. When the
elephant saw the havoc she had wrought, she called the orphaned chick
and said: “This is deplorable. I did not intend to kill your mother. I
am a mother myself and have the mother instinct. But the deed has been
done and is past recall. Being unable to restore your mother I shall
give my efforts to the task that your mother would perform if she were
living.” So the elephant sat down on the chicks.

The American people have shown great aptitude and achieved unparalleled
success in two distinct fields—baseball and business. During the
period of development and successful prosecution of these two great
national games, the rules of the game were made by experts in the
respective games. Practical bankers made the rules of banking,
experienced traffic men made rules governing transportation, and expert
baseball players formulated the rules of that game. Business has
suffered because of modern methods, and baseball will go where business
had gone prior to the war, should the same policy be pursued and the
committee that is to make the rules of baseball be selected under the
direct primary system, from among those who never play the game, and
seldom see it played, upon a platform demanding that strenuous playing
shall cease, and that the score must be a tie regardless of errors.

Instead of permitting practical bankers to apply fundamental banking
principles, we have forty-nine distinct sets of statutory rules, one
for each state and one for the union of states, enacted by men some of
whom have no more knowledge of banking than they have of aeronautics,
and frequently administered by those whose tenure of office depends
upon the amount of trouble they can make.

We legislate to prevent monopolies and for the ostensible purpose of
encouraging competition, but the rules of banking are well nigh
prohibitive of the creation of new competitive concerns. The president
of one of the largest banking institutions in the United States, whose
operations extend into every state, told me that he had refused a loan
to Phil Armour except upon collateral that could be sold on the stock
exchange of any city, and in the same conversation said there was not a
loan in his institution except upon listed collateral. Only big
concerns can furnish that class of security.

Suppose you were to build a packing house costing one million dollars
and should make a bond issue of five hundred thousand dollars so as to
have collateral. The officers of no bank would care to lend on those
bonds. To do so would be to rely upon their judgment, and some little
bank examiner would report that the bank had loaned on collateral that
had no market value. Thereupon the Banking Department would write
criticising the loan and directing that the letter be read to the board
and a certain number of directors sign a reply. The course of least
resistance is to refuse all loans except to monopolies or upon stock
exchange collateral.

Not long ago a friend applied to one of the large banking institutions
in New York City for a loan upon unlisted securities. The president
took from his desk a certificate of stock of a certain railroad and
said: “I do not believe this stock worth the paper it is printed on,
but I will lend money upon it. I believe your securities are absolutely
good but I will not lend a dollar upon them.”

The reason was sensible, and the banker was wise when banking laws and
the rules of banking departments are considered. The railroad stock was
listed and dealt in every hour. Hence the public assumed it had value,
and it could be sold on the stock exchange for a price that fluctuated
little. Its intrinsic value, if any, was problematic, but it did have a
market value. The security offered was not listed. In the opinion of
the banker it had abundant intrinsic value, but since it did not have a
market value on the stock exchange, he did not feel justified in
inviting criticism from the Banking Department by relying upon his
judgment. It is difficult for a new concern to get credit and without
credit no concern can live.

BECAUSE ONE HORSE KICKS SHALL WE HAMSTRING THE WHOLE DROVE?

To a greater or less degree, the same policy has been applied to nearly
all important branches of business. The rules for the operation of
railroads and insurance companies are both complex and conflicting. The
books have to be kept to conform to the legislative requirements of
every state in which the concern does business.

A certain express company formerly employed one attorney at two
thousand dollars a year. It now maintains a legal department occupying
an entire floor of an office building, and the officers of the company
are in daily consultation lest they violate some state or federal
statute and go to the penitentiary.

The president of an insurance company told me that if he did in
Missouri what he was required to do in Texas, the penitentiary would
await him, while if he omitted it in Texas, his punishment would be
equally modest.

Severity of punishment in the United States has not yet reached the
limit witnessed in France late in the eighteenth century when direct
government was carried to its logical extreme. At that time the death
penalty was prescribed for those who took food products out of
circulation and kept them stored without daily and publicly offering
them for sale. Failing to make a true declaration of the amount of
goods on hand for eight days, and retaining a larger stock of bread
than was necessary for daily wants, were punishable by death. Death
also awaited the farmer who did not market his grain weekly and the
merchant who failed to keep his shop open for business. We may or may
not go to this extreme in America. I do not at the moment recall any
punishment at the present time in this country more severe than six
months in jail and a fine of five hundred dollars for spitting on the
sidewalk.

CHAPTER XVIII

THE INEVITABLE RESULT

As soon as the government changed its policy and denied
exceptional rewards for exceptional risks virile Americans
refused to assume these risks and internal improvements ceased.
A distinction is drawn between pioneer capital and improvement
capital.

The effect of this changed attitude toward internal improvement and
business generally is exactly what every thoughtful person foresaw. No
railroad construction worth mentioning has been begun in the last
decade. A few unimportant extensions have been made. About five years
ago, John D. Spreckels attempted the construction of a road from San
Diego to the Imperial Valley, but a possible six percent return, if it
proved a success, and total loss if it failed, did not prove inviting
to capital. Facing disaster, he turned it over to one of the old
established lines to be builded on the accumulated credit of that
system.

The United States was never in such great need of additional
transportation as during the last ten years and never before was so
little done to supply it. James J. Hill, the great empire builder of
the Northwest, used to furnish figures to prove that we must invest two
billion dollars new capital per annum to keep pace with the development
of the country. It did not require a sage or a seer to discern that if
we multiplied production from farm and factory, mill and mine,
indefinitely, and failed to provide transportation facilities, we would
ultimately reach a time when crops would rot on the ground while those
who had grown them would be freezing and coal miners starving. Truly,
the American people are “kin-folks.”

For more than three years, liberty hung in the balance simply because
the United States, with all her development, had failed to keep her
transportation facilities abreast of her production.

We had no merchant marine and during the entire period of the war were
dependent largely upon the Allies to transport our troops and our
munitions. Adverse marine laws had been passed rendering it impossible
to sail an American ship in deep sea transportation except at great
loss even if the ship had cost nothing whatever. It became necessary
for the government to take possession of the railroads in order to
avoid the effect of statutes filled with restrictive and prohibitive
provisions. If the railroads had been operated under private ownership
as the government is now operating them, every railroad president in
the United States would be in the penitentiary. The roads asked an
increase of fifteen percent in freight rates, which raised a furore of
objection from both shipper and public, and it was denied. Government
control and operation resulted in a loss of seventy million dollars the
first month. Then both freight and passenger rates were increased
twenty-five percent, generally, and in many instances, one hundred
percent, and no one murmured. And still the loss continues. _It was
four hundred million dollars the first year of government operation._

WILL WE EVER BUILD MORE ROADS?

If someone should predict that the last railroad ever to be built in
the United States of America, has been built, are you prepared to
question its correctness? Will it be necessary to change our policy if
more roads are to be builded?

Listen! Will you invest money in railroad construction, knowing that if
it succeeds you will be allowed no more than six or eight percent on
the money wisely spent, and that if, through misfortune or want of
foresight, it fails, you will lose everything? The theory of public
utility commissions generally, is that if money is unwisely invested it
ought to be lost, and when it is wisely invested, it should earn about
six percent.

Suppose you and I install a hydraulic power plant and build our dam
according to plans and specifications prepared by a reputable engineer.
Then a flood destroys it and demonstrates that the money was _unwisely
spent_ and, therefore, according to these commissions, should be lost.
If the dam stands the strain, and if it was wisely placed, and if it be
economically operated, we will be allowed six percent. Are you ready to
join in an enterprise of this character? If you will not, who will?

Suppose a promoter presents to you an engineer’s report made from a
preliminary survey of a railroad extending, let us say, from St. Louis,
around through Arkansas and Texas to Galveston. I am informed that such
a report exists, and that it shows that the road will go through the
largest body of uncut white oak in the world, extensive pine forests,
tap that belt of zinc ore extending south from Joplin, Missouri, make
available large coal measures, iron deposits and agricultural areas now
obtainable at less than twenty dollars per acre, but which with proper
transportation facilities, and a progressive citizenship, would be
worth two hundred dollars per acre. The engineer estimates that
the road when completed will earn twenty percent on the cost of
construction, and you are asked to buy some of the stock at par. The
statutes of most states forbid the sale of even initial stock issues
for less than par. How much of this stock will you take? Will your
neighbors and friends want some? How much stock in an unbuilt railroad
do you think can be sold at any price when good farm lands adjacent can
be bought at twenty-five percent of par?

While the wisdom of the modern law-maker prohibits the sale of stock at
less than par few if any statutes have been enacted, limiting the price
at which bonds may be sold. Suppose you are offered bonds instead of
stock. Possibly you can get the bonds at less than par. What will you
pay, and how large a block do you desire? Remember, the road has not
yet been built. The money must be placed in the bank to be used in
construction and you must wait for your interest until the road has
earned it. If you will not buy, will your neighbors?

It will help to solve these problems if you recognize early in your
calculations that men with much money are not much bigger fools than we
with little. If you and I will not invest in railroad construction
under present conditions, men of means and experience will not, and the
last railroad ever to be built beneath the Stars and Stripes is now in
operation unless—unless!

THE OLD WAY

During the half century and more of the unparalleled growth and
development of the United States, bonds of unbuilt railroads were
offered with fifty percent or more of stock as a bonus. The estimates
indicated that the roads would earn not only interest on the bonds but
dividends on the stock, and a portion of the unearned increment
resulting from development was in this way awarded to those who took
the risks. Investors were thus encouraged to expect reasonable returns,
plus fifty percent or more of water. The promoters who had paid the
expenses of preliminary surveys (often abandoned as worthless) also
labored with hopes of great gain if they should discover a meritorious
proposition. Those who bought and occupied the lands contiguous to new
roads endured some hardships but took no risks and yet expected to add
at least four hundred percent of water to their investments. They
realized in most instances more than one thousand percent profit on the
original cost.

Does anyone doubt that a return to the policy of apportioning unearned
increment equitably among those who shall in any way contribute to the
general result will revive internal improvements? No one asks, and no
one would consent, that all the unearned increment should go to the
stockholders of a railroad. Every one favors governmental supervision
and control of rates. The point where a few diverge from the mass is in
recommending that those whose vision and courage are solely responsible
for development, shall have an equitable share of the unearned
increment.

Lest I be misunderstood, I desire to state parenthetically that I have
never owned a railroad bond or a share of railroad stock; and I have
never promoted a railroad or been employed in any capacity by a
railroad. Most of what little I now possess, I have made by watering
the capitalization of real estate. Occasionally, in times past, when I
have known of a railroad about to be constructed, and have recognized
an opportunity to make a little money through another man’s vision, on
another man’s courage and at the other man’s risk, I have purchased a
little contiguous real estate, watered the capitalization from one
hundred to one thousand percent, and then insisted that the road should
haul me and my produce at cost plus six percent.

PIONEER CAPITAL

Does it occur to you that pioneer capital should be accorded pioneer
rewards? Pioneer people make sacrifices, endure hardships, suffer
privations; but in America they take no risks and their rewards have
been certain and speedy. But their rewards would be neither certain nor
speedy did not pioneer capital precede them, blaze the way and assume
all risks. During the period when pioneer capital was liberally
rewarded, development outstripped the imagination of men. It will do
the same again if given like encouragement.

I assume that a return of six percent would be ample on capital, let us
say, to construct an additional track for the Pennsylvania Railroad
between New York and Philadelphia. That would be improvement capital.
Would the same rate be satisfactory for money invested in an unbuilt
road into an undeveloped country? To state the case is to state the
argument, and yet no railroad commissioner has yet been created with
both the wisdom and the courage to stand openly for a distinction
between development capital and pioneer capital. Unless returns are
permitted large enough to induce a reasonable man to take a risk none
will take it, for the unreasonable man has no money to risk.

In a preceding paragraph I referred to the attempt of Mr. Spreckels to
build a railroad across, or rather through, and much of the way under,
the most barren succession of mountain peaks and defiles I have ever
seen. An automobile road has been built at great expense across the
mountain. Nine-tenths of the way not a green leaf or living thing—not
even a bird or insect—will be seen.

Mr. Spreckels is a very wealthy man. He is supposed to own over
fifty-one percent of the gas, electric light, street railways and
ferries of San Diego. He does not, however, consume fifty-one percent
of the food cooked by the gas he generates; he does not enjoy fifty-one
percent of the light that illuminates that beautiful little city; he
does not take fifty-one percent of the rides on street car or ferry;
and not one percent of the unearned increment, the advance in the value
of property occasioned by his public-spirited enterprises, inures to
him. Having more money than he can use and more than his children can
legitimately spend, why does he risk everything on a railroad involving
an aggregate of more than twenty miles of tunnel through solid granite?
I will tell you why.

For some reason, let us hope a sufficient reason, the All-wise Father
has implanted in certain natures somewhat more than the average vision,
somewhat more than the average courage, somewhat more than the average
desire to achieve, and He seems to have ordained that these men shall
be happy only when achieving. Service expresses the thought admirably
when he put into the mouth of the returning Klondiker:

“Yes, there’s gold and it’s haunting and haunting;
It lures me on as of old.
But it isn’t the gold that I’m wanting,
So much as just finding the gold.”

So it has ever been, and thus it is and ever will be. These daring,
progressive souls risk their past, their present, their future and the
future of their families, upon gigantic propositions, the consummation
of which makes the appellation, “I am an American,” the proudest boast
of man.

CHAPTER XIX

UNEARNED INCREMENT

Originally the government permitted each to enjoy the natural
advance in the value of his holdings—the unearned increment.
In recent years it has discriminated and in certain classes of
investments has sought to limit rewards to the equivalent of
reasonable interest rates.

The first piece of land I ever owned was a half interest in one hundred
and sixty acres. My law partner and I got four hundred and eighty
dollars together and we bought one hundred and sixty acres at three
dollars per acre. We put part of it under plow, rented it and within a
few years, sold it. That land is no more productive today than when we
sold it, but the rascal who owns it has watered the capitalization
until when I buy a pound of butter or a dozen eggs I am helping to pay
him a dividend on two hundred and fifty dollars per acre. We watered it
a little, ourselves. We sold it, I remember, for twelve dollars and
fifty cents an acre. That was the first dollar I had ever received that
I had not earned in the hardest way. It was the first dollar of
unearned increment that ever came my way. It was the first water, so to
speak, I had ever tasted. I liked it.

I remember when John Trumm purchased that land of us. If he had said to
me: “The country is new, population sparse, commerce limited; if these
conditions change and the land advances in value, to whom will belong
the unearned increment?” Very promptly I should have told him it would
belong to him. There was not only a competency but a speculation in the
purchase of that land.

But suppose he had said to me: “If I do not buy this land, I shall put
my money into the Chicago, Milwaukee & St. Paul Railroad that is now
building through the county. The country is new, the population sparse
and commerce limited. If these conditions change and the railroad
advances in value, to whom will belong the unearned increment?” In my
innocence, I should have told him it would belong to him. I might have
warned him that if it resulted like the first three attempts to build a
railroad across Iowa, he would lose every dollar he invested, but if
the time had then arrived, and if the road was built economically and
operated efficiently, and did prove a success, it doubtless would
advance in value and the unearned increment would belong to those who
had shown great vision, taken great risk and exercised great skill.

SOME CONCRETE CASES

I recall a man who purchased in an early day large bodies of Iowa land
at from three to five dollars per acre. His rentals must have equalled
twenty percent per annum on his investment. Then he watered the
capitalization and sold these lands at seventy-five dollars per acre.
They are now worth over two hundred dollars per acre. But, even at
seventy-five dollars, they made him a millionaire, financially. Then he
assailed the railroads for watering their capitalization, though money
invested in a railroad never yielded a quarter as large returns as his
land investments netted. His opposition to railroads, however, made him
a millionaire, politically.

Some years ago a man asked me to join him and some friends in promoting
a railroad to the coal fields of Alaska. I asked him who owned the coal
and was told that anyone could have all he cared to buy at a nominal
price. I called attention to a statute that forbade the same men owning
both the railroad and the coal. Then I proposed that I take the coal
and let him and his friends build the railroad. If they succeeded, I
would then go to the Interstate Commerce Commission and get a rate that
would give them six percent on their investment and I would take all
the profit. I reminded him that the public thought six percent was
enough for money invested in railroads. The road has never been built.

I met a friend not long ago who, in explaining that the world had been
good to him, told me that some years before he had bought a large body
of badly located but excellent timber back in the mountains of
Washington, at fifteen cents per thousand on the stump. Then a railroad
was built up to his holdings. That was some years ago and during the
period of national development. When the road was completed, he went to
the Interstate Commerce Commission and got a rate so that he was then
selling his timber, which cost him fifteen cents per thousand, for five
dollars per thousand, while those who builded the road are presumably
getting six or eight percent on their investment and will until the
timber is exhausted, when their road will be worthless. My friend is
not a reactionary but is far-sighted. I think he said he studied
finance from the standpoint of a farmer.

A few years ago, at a Chamber of Commerce dinner in New York, Myron K.
Jessup asked me if I knew that he was once president of a railroad in
Iowa. The road extended from Dubuque to Farley. I asked him if he
remembered when an engineer by the name of Smith made a preliminary
survey from Farley to Sioux City, and reported that there was nothing
west of Iowa Falls worth building a railroad into. “Remember it!” said
he. “He made that report to me.”

Think of it. A man living and in good health in 1906 who was old enough
to be the president of a railroad at a time when two-thirds of the
north half of Iowa was considered not worth developing. Ultimately the
road was constructed and I happened to be at Storm Lake when the last
spike was driven connecting the two ends of the road. This was in 1870.
That whole stretch of country could have been bought at that time at an
average of less than five dollars per acre. I remember riding forty
miles without seeing a house. The lands I saw that day could not have
been sold for two dollars and are now worth two hundred dollars per
acre.

These lands were worthless without the railroad and the railroad
relatively worthless without the lands. The lands, exclusive of
improvements, have paid in rentals more than twenty percent on their
cost and their present value is ninety-nine-one-hundredths water. No
money invested in railroads or any other industry ever yielded returns
comparable with that.

The wealth of the United States, estimated at two hundred and fifty
billion dollars, is probably ninety percent water. Farm lands, timber
lands, mineral lands, oil lands, town lots, originally cost very
little. Deducting improvements, interest and taxes from rents and
returns already received, plus the market value, and the difference is
the unearned increment or the water that has been added to the original
capitalization.

Suppose, if you please, we are just opening a new country. What policy
would you recommend? Would you expect each one to attempt everything?
Or would you encourage a division of labor and enterprise? I fancy we
would follow the policy the Fathers adopted. We would encourage the
improvements of lands, the construction of transportation facilities,
the building of mills and factories, of stores and banks, the opening
of mines and the development of water power, and then we would tacitly
agree that whoever contributed in any manner to the common good should
share equitably in the resultant unearned increment.

CHAPTER XX

BUSINESS PHILOSOPHIES

This is a preliminary chapter intended to show that management
is the most essential factor in every business proposition.
Several illustrations are given, and some advice offered.

Before discussing government construction, ownership and operation of
railroads, and other so-called public utilities, I want to call
attention to some well-known but seldom recognized principles.

All business stands on three legs. No business can stand on two legs.
Notwithstanding the persistent nonsense that has emanated from press
and platform, from pulpit and professor’s chair, by thoughtless
politician and thoughtful demagogue, capital and labor, unaided, have
never accomplished anything and never will. But management, plus
capital, plus labor, have done wonders and still greater achievements
await the cooperation of this irresistible trinity.

Some have tried to make it appear that the public constitutes a fourth
leg. While the public has rights, and affords markets, business
succeeds only when the public does not interfere.

Take the case of the farmer. His lands, his tools, his teams and other
livestock, constitute his capital. He performs the labor, furnishes the
management, and all goes well. Occasionally a farmer prospers when he
furnishes only capital and management, notwithstanding Benjamin
Franklin’s proverb: “He who on a farm would thrive, must either hold
the plow or drive.” The one absolutely indispensable element of success
in farming is management. No man ever prospered on a farm simply
because he worked. He must wisely manage if he lifts the mortgage. When
the farmer’s management fails, the sheriff becomes his land agent, and
it matters not how productive his land, or how willing his team, or how
fruitful his flock or how hard he works.

You never knew a merchant to fail except when his management buckled.
You may have thought some failures were due to want of capital; but
even in these instances management was solely at fault, for it
attempted too much with its available capital. Barring accidental and
incidental fortune, good or ill, management or the want of it is the
prime factor in every success and in every failure.

The president of a certain Chicago federation of labor, after listening
to this thought, brought a party of friends to my platform and in the
course of a brief visit said: “They have talked to us about capital and
labor, capital and labor, nothing but capital and labor. We knew there
was another guy in there but we couldn’t find him.” Then he added: “And
you have got to pay that guy, too.”

ILLUSTRATIVE INSTANCES

Some years ago and during the period of evolution in harvest machinery,
Marsh Brothers put upon the market what was known as the Marsh
Harvester. It was the first radical improvement upon the old self-rake.
Two men rode upon the machine and bound the grain as it was cut. For
some reason, perhaps disagreement among the interested parties, the
concern was reorganized into three independent companies and certain
territory was allotted to each. A local preacher by the name of Gammon
took one allotment, associated with him William Deering, and the
largest manufacturing plant then in the world was built where nothing
had stood before. The other two concerns took equally favorable
territory, operated under the same patents, obtained their capital in
the same market, hired labor at the same wage, and utterly failed. Five
years thereafter nothing remained except court records to show they had
ever existed.

Did capital build the Deering plant? It did not. Did labor do it? By no
manner of means. The germ of management in the brain cells of William
Deering, which no crucible would disclose and no scalpel reveal, was
wholly and alone responsible. Do you suggest that able subordinates and
efficient labor were in part responsible? My answer is that William
Deering was wholly responsible for having able subordinates and
efficient labor. Andrew Carnegie said to me: “I have never been able to
discover wherein I have been more clever than others except in
selecting men cleverer than I.” That is the acme of clever management,
and affords the only certainty of success.

During a congressional investigation of the meat industry the president
of one of the “big five” packing houses appeared, and in the course of
his examination testified that while holding a position of considerable
responsibility to which he had been gradually advanced, he was asked to
organize a company to take over a certain concern, the stock of which
was selling at about ten dollars per share. The necessary capital was
tendered and he was offered a salary of one hundred and fifty thousand
dollars per year, quite a large block of stock gratis and an option on
thirty-five thousand shares at ten dollars per share, which he
subsequently exercised. When asked if he thought his salary was
unreasonably large, he called attention to the fact that within ten
years his company had become one of the five largest in the world and
that its stock had advanced from ten dollars per share to par.
Thereupon the chairman of the committee remarked that while he was
opposed to large salaries, he thought that one hundred and fifty
thousand dollars per annum was not excessive for this particular
witness. Did capital accomplish that? Did labor? No, management did it.

SUPPOSE A CASE

In a certain city a thousand men are out of employment. In a bank in
that city a million dollars are out of employment. In the foothills
near the city fifty million tons of coal are out of employment. The
unemployed men see the opportunity and offer their joint note for the
money with which to develop a coal mine. But the officers of the bank
will not lend money that does not belong to them upon the signature of
a thousand men, each out of employment. Then management walks in and
says to the president of the bank: “I am a practical coal operator. I
have had experience, and have associated with me a board of directors,
each a successful coal producer. In proof that we understand what we
are undertaking, here is the report of the best-known coal engineer in
the world, who at our expense has bored every square rod of that tract
of coal, showing the exact number of tons available. Here also is an
assay showing the quality of the coal. It is worth so much per ton on
the track. It will cost so and so to put it on the track. After we have
invested a million dollars of our own money, we want to borrow a
million to complete the development and for working capital.” By giving
a majority of the stock, and all the bonds of the company as
collateral, and by each director signing the note, the money is
obtained. The hitherto idle men are now employed and a great industry
results. Query: Locate the cause. Is it capital? Capital languished and
earned nothing. Is it labor? Labor was in rags and labor’s children
were crying for bread. That coal field is developed, the wealth of the
nation increased, homes are warmed, furnaces made to glow, wheels to
turn, by management, plus capital, plus labor. It is so everywhere, in
each and every instance, in this and all other lands.

Capital can usually be had upon approved security, and labor is most
always available at a satisfactory wage, but management, the one
essential of every achievement, is the most difficult thing in the
world to find and, when discovered, imposes its own conditions and
names its reward.

A WORD OF ADVICE

If teachers of economics and of sociology would somewhat oftener and
more generally teach the Benjamin Franklin brand of common sense and
make their classes understand that there are in the United States
vastly more twenty-five thousand dollar jobs than there are twenty-five
thousand dollar men to fill them, bolshevism would diminish as rapidly
as it has increased under the opposite tuition. Where do our editors
and newspaper writers come from? Whence the principals of our high
schools, teachers in our colleges, preachers and lawyers? Ninety
percent of them are from our colleges and universities, and those who
graduate with socialistic and bolshevistic tendencies have usually
imbibed them either from imported professors or from American
professors who have received their Ph.D’s in Germany.

In this connection I also want to say a word to parents: Would it not
be well early in the life of your boy to impress upon him that he will
probably get out of life something fairly commensurate with what he
puts into life? You might also suggest that if he will observe he will
probably discover that those who complain most because the world has
been stingy with them, are seldom able to show a receipt for much that
they have contributed to the world. If instead of giving wholesome
guidance you permit to go unchallenged the teachings which your boy is
certain to get in the school room, in the pew, at the theater and the
movie, on the street, and especially from the demagogue, that those who
make money are invariably dishonest, those who accumulate wealth are
scoundrels and that those who amass fortunes should be in the
penitentiary, I will go security for your son that he will never
disgrace his parents by getting the family name on the letterhead of
any big institution, or in the Directory of Directors.

CHAPTER XXI

THE GOVERNMENT’S HANDICAP

In this chapter an argument is made that no government, and
especially no republic, can supply the necessary management for
business enterprises. The effect of popular and political
interference with public business is illustrated.

The principal reason why government business operations are always
financial failures is that no republic can supply the all-essential
third leg. Its management is always defective. It can furnish capital,
it can employ labor, but in a government where the people have a voice,
management always buckles.

Senator Aldrich was frequently quoted as saying that the government
could save three hundred million dollars per annum if it would apply
business principles to its affairs. The distinguished senator never
said that. What he did say was that the government _would_ save three
hundred million dollars per annum if it _could_ apply business
principles. Experience had taught the senator what experience has
taught everyone who has had experience and what observation has taught
the observing: that it cannot be done.

During the campaign of 1916, I sat on the platform and heard the then
candidate for governor of a great middle-west state tell an audience
that if he were elected governor, he would apply business principles to
state affairs. I followed him and told his hearers that, if elected, he
would do nothing of the kind. In the first place, it was impossible,
and, secondly, they would not consent to it even if it were possible. I
reminded them that I knew better than their candidate, for I had tried
it. I did suggest, however, that simply because business principles
cannot be applied to public affairs, is no excuse for conducting public
affairs in a thoroughly unbusinesslike manner. It is not necessary to
violate every business principle because some cannot be applied.

The candidate was elected, as he deserved to be, and has made one of
the best, many say the best, governor his state ever had. But he will
have to admit that he cannot remove officials simply for inefficiency,
and he cannot make appointments in the face of public opposition,
however fit and worthy the applicant. In a thousand ways he cannot
exercise the independent discretion which he would if president of a
bank or the head of some industrial corporation.

When I took charge of the Treasury Department I found an appraiser at
one of the principal ports who had outlived his usefulness. He was not
dishonest. Dishonesty is the least of all evils of government service.
He was simply inefficient. He had a good army record, was a very
reputable gentleman, highly esteemed, absolutely honest, and Mr.
McKinley had made him appraiser. There were many evidences of
inefficiency. Importers at far distant ports were entering their
merchandise at this city and shipping them back home, manifestly for
the purpose of evading the payment of appropriate duties. I have no
doubt that the government was losing a million dollars or more a year
through the inefficiency of this good man.

President Roosevelt authorized a change. I informed the two senators
from that state what had to be done, and asked them to select the best
man they could find and I would arrange a vacancy to meet their
convenience. President Lincoln is credited with saying that when he had
twenty applicants for a position and appointed one, he made nineteen
enemies and one ingrate. I wanted to protect these senators from
nineteen enemies.

They found an excellent man and I had the old appraiser come to
Washington. He fully recognized his utter failure, and willingly
resigned. We parted friends. The inexperienced will suppose that was
the end of the incident. It was not. It was the beginning of it. The
removal was declared to be purely a political deal. The President was
criticized, I was abused and the two senators maligned. Every prominent
Grand Army man in the country was asked to protest, and most of them
did, until this dear old fellow was made to believe he had been imposed
upon. He published his grievances in an extended interview and in about
three months died of a broken heart.

The people will not consent that public affairs shall be conducted as
business is conducted. Had this man been in the employ of a business
enterprise in any large city, his removal would not have elicited so
much as a notice that he had resigned for the purpose of giving
attention to his “long-neglected private affairs.”

Public opposition to the application of business principles to
government affairs is well illustrated in the location and erection of
public buildings. Chicago has a federal building which was intended to
accommodate, and does hold, not only the post office, but serves as
court house, custom house and shelters all other federal offices. It
cost nine million dollars and is ill-suited for anything. There are
plenty of architects who can design a court house, or a post office, or
an office building, but no one has yet appeared, and no one ever will
be found, who can combine the three without ruining all.

During the period of construction, the Chicago post office occupied
temporary quarters on the lake front in a wooden building, veneered
with brick, built expressly for the purpose. Unquestionably it was the
most convenient, and therefore the best post office in the United
States. This of course is from the standpoint of a business man.
Everyone connected with it regretted its abandonment for the huge,
imposing but outrageous new building. The architect’s pride centered in
its enormous dome. All the mail had to be taken from the basement up a
steep incline and, until they began using heavy gasoline trucks, it
required four horses to pull out from under the building what one horse
could haul to the depot.

Pittsburgh wanted a building equally imposing, and Congress
appropriated a million dollars to buy a site. That sum would pay for
nothing suitable in the central part of the city. The newspapers had
all purchased property at the top of the hill, in the newer part of the
city, and the Secretary of the Treasury was expected to locate the
Federal Building accordingly. He did not do so and for this reason:
There were no street cars going near the proposed site. It was before
the advent of gasoline trucks and the mail would have to be hauled up
the long inclines by teams. In slippery weather a team of horses,
unless freshly shod, cannot climb that hill with an empty wagon.

Inspired by the experience at Chicago, the Secretary decided to give
Pittsburgh the best post-office service in the world. An entire block
near the principal depot was purchased, at fifty percent or more above
its market value. But that was relatively cheaper than anything else
offered, and less proportionately than what the government is usually
compelled to pay. A suitable site for a business enterprise employing a
like number of people, and doing an equal volume of business, would be
tendered on a silver platter. The people’s government never got
“something for nothing” until we entered the war. What it then got and
where it got it is quite generally surmised.

The intention was to erect a steel-framed post office, not more than
three stories high, with wide court, so the light would be abundant,
install a system of pneumatic or electric carriers, with tubes
extending to all the depots and substations of the city. This, I
submit, is exactly what any business concern would have done. But it
was not satisfactory. A perfect furore was raised, every bit of which
had its root either in a hope of profit through the location of the
building, or in a desire for a big and imposing public building with an
enormous dome. The people thought it a shame that Pittsburgh should be
asked to put up with the expenditure of a fraction of the money that
had been thrown away in Chicago, and the fact that one hour would be
saved in the distribution and delivery of every piece of mail, did not
palliate the offense. A post office erected solely for the purpose of
efficient mail service will satisfy no community.

There are quite a large number of ports of entry where the entire
revenue collected is not enough to pay the expenses of the office. In
my annual reports I recommend that several of these be abolished, but
no congressman from those states would support such a recommendation
and no congressman from any other state would favor it lest economies
applicable to his own locality would be thus invited. Everyone insists
upon economy in government matters, but all demand that it be exercised
in a distant state, and preferably in some territory or in the District
of Columbia where the franchise is denied.

Many will remember William S. Holman of Indiana, for many years
chairman of the Committee on Appropriations. He was not only an able
man but a wise and economical statesman, and merited the appellation by
which he was internationally known, “The Watchdog of the Treasury.” The
Committee on Rivers and Harbors, desiring his support, inserted an item
for dredging a creek extending into Holman’s district, so ships could
come to central Indiana. Of course Mr. Holman wanted to be returned and
was therefore compelled to support the bill. He even made a short
speech in favor of this particular item. When he closed, Tom Reed arose
to remark in his inimitable drawl,

“’Tis sweet to hear the honest watchdog’s bark,
Bay deep-mouthed welcome as he draws near home.”

A SELF-EVIDENT FACT

No government subordinate or bureau chief ever got into difficulty
except when he did something. No one ever knew a refusal to act, or a
delay in acting, to be the subject of judicial or legislative
investigation. Pigeonholes all filled is infinitely safer than a few
signed documents. This is fully recognized throughout the whole realm
of public service and the result is logical—everything of a decisive
nature is deferred as long as possible.

In 1906 Congress authorized the Secretary of the Treasury to settle a
claim for ice sold to the government for the use of the Union Army in
1863. I am the only official who, in more than forty years, could have
been impeached for action taken in connection with that knotty problem.

Subordinates in corporations and private business are criticised and
lose their positions for failure to act. With the government, men are
discharged and disgraced only when they do act. Unless a clerk or
bureau chief or head of a department is caught red-handed, so there can
be no question of guilt, there is no way to rid the department of an
incubus without great difficulty. What I am trying to emphasize is a
fact that everyone knows, few recognize, fewer still admit and many
deny, to-wit: That government, state and municipal affairs are
necessarily conducted upon entirely different principles from ordinary
business.

TWO ARMY INCIDENTS

I am indebted to an army officer for the following, which I have not
verified and therefore cannot vouch for, but I give it simply because
it is absolutely true to life.

During the Indian insurrections in Texas, a certain officer got word to
his quartermaster that he must have supplies and ammunition at a given
point on the Rio Grande River without delay or his detachment would be
annihilated. The quartermaster must have been a civilian for,
regardless of red tape and formality, he proceeded to act. He found a
boat and sought to engage it. But the river was low and the owner dared
not attempt the trip. “But,” said the quartermaster, “if you do not go,
those men will be annihilated.” “If I do go,” said the owner, “my boat
will be annihilated, and it’s the only boat I have. You have more men.”

Rather than fail, the quartermaster purchased the boat for twelve
thousand dollars. He loaded it with supplies and ammunition, started it
up the river and made his report. Promptly, the department at
Washington refused to ratify the purchase, and reprimanded the
quartermaster severely for exceeding his authority in purchasing a
boat. I submit that the department was right. No member of Congress
would vote to give a quartermaster authority to buy a river steamer.
Even the Secretary of the Navy would need congressional authorization.
Fortunately, the boat returned and the quartermaster tried to get the
man to take it back. He refused. Then the quartermaster found a
purchaser, sold the boat for twelve thousand five hundred dollars, paid
the purchase price and sent five hundred dollars to Washington.
Promptly the department refused to ratify the sale and again
reprimanded the quartermaster because he had sold a boat without
authority. And the department was again right. Congress never has given
and never will give authority to a quartermaster or anyone to sell a
boat or anything else except after prolonged condemnation proceedings,
and then at auction. Any corporation, under like circumstances, would
have made that quartermaster a vice-president. Instead his pay was held
up, and he faced court martial until some comptroller risked his
official life and reputation by closing the account, also in violation
of law.

If I remember correctly, it was Colonel Phillips of the regular army
who gave me this chapter from his experience: While in command at a
frontier post he was asked by the department to make a recommendation
concerning a certain matter. Following the regulations, he referred the
matter to his quartermaster. The quartermaster reported favorably
to the colonel in command, and he, as colonel, joined in the
recommendation and sent it to Washington. In due time he received
instructions to proceed and, again obeying regulations, he directed the
quartermaster to carry out the instructions of the department. This was
done and the quartermaster so reported to the colonel in command, and
the colonel approved this report and forwarded it to the department.
All of this was regular and would afford no occasion for comment but
for the fact that Colonel Phillips, the officer in command, was also
quartermaster. He had asked himself what had best be done, made his
report to himself, approved the report made to himself, joined in his
own recommendation, then directed himself what to do, reported to
himself that it had been done and then, as commander of the post, had
transmitted all the papers to the department, which, in course of time,
were approved, and one more closed incident in the military affairs of
the United States of America resulted. He had signed the same paper
seven times and there had been no way to abbreviate.

I submit that if he had been in charge of railroad operations, some
congestion of freight would have resulted while all these necessary
formalities were being worked out.

I want it definitely understood that in recording these instances, no
criticism is intended. No material improvement ever can be made without
throwing wide open every conceivable door and shutter through which
fraud and corruption not only can creep but leap and run. I give them
for no other purpose than to prove established principles to which
there are few if any exceptions, to-wit: That a republic in business is
an ass.

CHAPTER XXII

THE POST OFFICE

The common belief that the Post Office Department is conducted
along approved business methods is sought to be dissipated.

The advocates of government ownership continually remind you that the
Post Office Department is a government managed affair. It is, and I
think I am perfectly safe in saying that until the government took
control of the railroads, cables, telegraph and telephone lines,
commenced building ships and constructing airplanes, it was the worst
managed institution on the face of the earth. And it has mattered
little, if any, which political party has had control of its affairs.

For six years every new post office erected in the United States has
borne upon its corner stone this inscription: “William G. McAdoo,
Secretary of the Treasury.” As you have seen this evidence of official
prominence in city after city in every state of the Union, have you
wondered why the name of the Postmaster General did not appear above,
or below, or at least on the rear of the building? It is simply because
the Postmaster General has nothing in the world to do with the
selection of sites, erection of buildings, or in their care or
improvement. The Treasury Department buys and pays for the sites,
prepares the plans, erects the buildings, repairs them, lights them,
heats and janitors them. It also pays the rent of post office quarters
where the government has not been as yet foolish enough to build. The
Treasury Department also audits the accounts of all postmasters and not
one dollar of all this expense is charged to postal receipts. Even the
salary of the Postmaster General and all his clerks is paid from
appropriations independent of postal revenues. Then, with no rent to
pay, no coal or current to buy, with janitor and elevator service
gratis and accounts audited, the Post Office Department has run behind
an aggregate of something over two hundred million dollars. Any express
company would be glad to take the Post Office Department off the hands
of the government if it could have free rent, free coal, the salaries
of their principal officers paid and all their accounts audited gratis,
for sixty-five per cent of what it now costs the government to take
care of our mail service.

RIVERS AND HARBORS

Under the Constitution, Congress has charge of all navigable streams
and harbors and it has spent billions in their improvement. Colonel
Hepburn once made the statement on the floor of the House that the
appropriations for the improvement of the channel of the Mississippi
River between St. Louis and the Gulf were sufficient to have built a
ship canal of boiler iron between these two points. No one ever
questioned the correctness of the statement.

A recent River and Harbor bill contained an appropriation to dredge the
channel of a stream in Texas where the government’s engineers reported
there was only one inch of water. Another brook in Arkansas with only
six inches of water, got an appropriation. I assume that two more votes
were necessary. I might add for the reader’s information that any
stream in the United States can be made navigable in law by a joint
resolution of the two Houses of Congress saying that it is navigable.
Lawyers would call that navigable _de jure_ but many of them cannot be
made navigable _de facto_ however much is expended in dredging and
widening.

CHAPTER XXIII

CIVIL SERVICE

The sole purpose of discussing the Civil Service System in this
connection is to show what must ensue if the government
continues its trend and enlarges its business operations.
Partisan politics cannot be eliminated, neither does the Civil
Service secure the most efficient. Concrete and actual
instances are given as illustrations.

So much has been said in favor of Civil Service by its friends, and so
much criticism offered by those who know little about it, that I am
impelled to submit a few observations drawn from five years’ experience
at the head of a department having, a portion of the time, as high as
twenty thousand people on its payroll, over ninety percent of whom were
in the classified service.

It is not my purpose to criticise or commend. I do intend, however, to
make reasonably clear some of the inevitable conditions that would
ensue if the government should remain operator or should become owner
and operator of railroads, merchant ships, express, cable, telegraph
and telephone companies, and other public utilities, constructor of
airplanes, merchant ships, and logically producers of all materials and
supplies therefor.

Everyone concedes that to avoid complete partisan prostitution of these
widely-extended and diversified interests, every agent, servant and
employee, with the possible exception of unskilled laborers, would have
to be covered under Civil Service. This would palliate the evil but, as
we shall presently see, would not prevent political manipulation and
influence, and would render efficient service absolutely impossible.

It will be idle to approach this subject without recognizing a very
marked distinction between business operations and government service.
Business is conducted primarily for the profit that legitimately
results. The wise man knows, however, that the better the service, the
more certain his rewards. The merchant who best serves his customers
will have the most customers to serve, and the lawyer who best protects
his clients will have the largest and the most lucrative practice.
Service and profit are seldom divorced. If it be true, as has been
said, that a grateful people will make a beaten path to the door of him
who improves a mousetrap, it is also equally true that the world’s
financial rewards are liberal beyond calculation to him who renders any
substantial service.

This principle does not apply to government matters. Here the ultimate
end is not profit, but power. While a political party may hope to be
continued if its service is acceptable, it has no right to expect its
administration will be acceptable if it neglects the ordinary methods
by which approval is secured—which is politics. In politics,
everything reasonable and honest is made to serve the ends of politics,
exactly as in business everything reasonable and honest is made to
contribute to profit.

A most natural result of public service is loyalty to superiors. This
is true in a very marked degree in all government departments. If
government clerks were to vote, I suppose three-fourths of them would
support the party in power, without regard to which party it happened
to be. One-half of the balance would fear even to vote lest they might
cause offense and prejudice their promotion—the sole consideration
with many department clerks—while only a comparative few would openly
support the opposite party and some of these would subsequently regret
it.

A case is current where an official who is supposed not to be devoid of
future political ambition, said to a friend who had witnessed the
obsequious servility of subordinates: “There are two million of these
and every one is a voter.”

You will recognize that no promotion, demotion or dismissal within a
business organization invites newspaper comment or criticism from
friend or foe. In government service the exact opposite is the rule.
When constituents inform a congressman that someone from his district
has had his salary reduced, the whole delegation from that state get
busy. Let it be known that some clerk has been longer in a department
than another who has received more promotion, and an explanation is
certain to be demanded, and it is relatively useless to urge
inefficiency as the cause. In such cases the public ascribes but two
causes, politics and favoritism.

While “offensive partisanship” is publicly forbidden, it is generally
recognized on the inside that no activity of a partisan character is
“offensive” so long as it is quiet, and is exercised in favor of the
party in power. Public officials, of the rank of postmasters, customs
and internal revenue collectors, and district attorneys are not
expected to be delegates to political conventions, but I have never
known their superiors, when of the same political faith, to object to
their being in the town while the convention is in session, maintaining
suitable headquarters at the hotel, and even volunteering valuable
advice to those who happen to call, as well as to those who are sent
for.

But politics is not the only weakness of the system. The public has
been taught to believe that Civil Service examinations result in
securing the most efficient. This is a serious delusion.

Those who take civil service examinations usually find their names
rejected or upon the eligible list within six months. It takes about
that long to classify. Any time within two years thereafter the
applicant is liable to be certified and called.

When a requisition is made the Commission certifies three names. It is
not at all likely that they are the three whose examinations show them
the best qualified. That question is not considered—applicants either
pass or fail. They are simply the three names at the head of the list
from the state whose quota is not exhausted. The officer calling for
the clerk examines the records of the certified names and makes a
selection. Thereupon the applicant is notified to present himself at a
given place where the minimum salary—in normal times seven hundred
dollars per annum—awaits him. Even though he took his examination only
twelve months before, the chances are he declines, giving as his reason
that he is now getting a thousand dollars with good prospects of
promotion.

It is only a question of time, however, when some applicant will be
found who, during the period between examination and certification,
varying from six months to two years and six months, has been unable to
get a job at seven hundred dollars and he jumps at the chance to “serve
his country.”

You knew this must be the way but probably you had not stopped to
analyze it. The Civil Service screen is so constructed as to catch the
small fish and allow the large ones to escape. And there is no way
known to man to change it without opening wide the door for favoritism,
which the Civil Service system is supposed to close and effectively bar.

Nevertheless some of the clerks and employees selected in this way
develop a good degree of efficiency and prove far better than anyone
would expect from an inspection of the machinery by which they are
secured. With scarcely an exception they are honest and conscientious
toilers, with very little ambition. A few have ambition but these
should, and usually do, soon resign.

I have in mind a business organization with several thousand on
its payroll. Its operations extend from ocean to ocean and its
employees include geologists, chemists, engineers of every kind,
purchasing agents, salesmen, superintendents of both construction and
transportation, clerks, clear down to unskilled laborers. Everyone
connected with the organization is made to understand that any
position is open to him provided he can show greater efficiency than
the incumbent. While most of the force have grown up within the
organization, not all have been started at the minimum salary nor
promoted because of length of service. The former is insisted upon, and
the latter urged, by all friends of Civil Service.

Imagine such a concern as I have described, depending upon an outside
commission to examine and certify the people whom it might employ in
its clerical and technical force, and being bound by its own by-laws
not to employ anyone selected in any other way. No business concern
could face competition and survive under such a system. Yet everyone
recognizes that when applied to government affairs, Civil Service is
not only the best but the only way. I am not criticising it. I am only
showing the inevitable result if we change the purpose of government
from the greatest liberty institution in the world to a corporation for
the transaction of business.

During five years that I recruited the force of the Treasury Department
from names certified by the Civil Service Commission, nothing occurred
to engender ill feeling. The members of the Commission and the officers
of the Treasury Department understood each other perfectly and
sympathized. Every member of the Commission sought as best he
could—subject, of course, to the restrictions and limitations of his
office—to serve the Treasury Department, and the Secretary of the
Treasury, believing in Civil Service, reciprocated. There were,
however, some rather plain and expressive letters exchanged. Believing
that letters that actually passed between departments are the best
proof of conditions as they exist, I have inserted in the Appendix the
material correspondence covering four distinct cases.

Some of the letters were answered by personal interviews but enough
remains to show the cordial feeling that existed, as well as the nature
of the contentions. It also reveals the earnestness with which the
Secretary of the Treasury sought some relaxation in the rules which
friends of the system, as well as the members of the Commission, insist
must be rigidly enforced, and which were rigidly enforced.

The last case cited relates to a request for experienced lawyers for
special agents of the Treasury Department. The necessity for these will
be apparent to every experienced business man.

Many of the tariff rates are _ad valorem_, the duty being levied upon
the foreign market value of the imported merchandise. Importers are
required to enter their goods at the price at which such articles are
usually bought and sold in the country of their origin. Undervaluation
by unscrupulous importers is the most common way of defrauding the
government. Cases of alleged undervaluation are tried by the Board of
General Appraisers, at which the importers are represented by lawyers
who make a specialty of this class of cases. They are not only men of
experience but many of them possess great natural aptitude. Some, I
suppose, make as high as fifty thousand dollars per annum. The
government is represented by attorneys who receive, if I remember
correctly, three thousand dollars per annum, and the cases are usually
prepared by special agents, or special employees, who receive from
fifteen hundred to two thousand dollars per annum. The government is at
a tremendous disadvantage. I have heard it estimated that the Treasury
loses two hundred million dollars per annum through undervaluations. I
think this is excessive but unquestionably it runs into tens of
millions.

I desired several country lawyers who had had actual experience in
trying cases, and asked the Civil Service Commission to provide an
eligible list. The need of capable men in this particular branch of the
service is well illustrated by the following incidents.

Certain importers were entering their merchandise, which had been paid
for in Indian rupees, as costing the bullion value of rupees, about
twenty cents. England was maintaining the parity of the rupee at about
fifty cents in our money. The Secretary of the Treasury certified that
the rupee was worth fifty cents and directed that duties be collected
accordingly. As was anticipated, the importers all paid under protest
and one of them prosecuted an appeal. A decision against the government
was rendered by the Board of General Appraisers and by all the courts
including the Supreme Court of the United States. I ordered that
another case be made and gave instructions how it should be prepared.
Again, much to my surprise, the government was defeated. Investigation
showed that the second case had been prepared exactly like the first.
More detailed instructions were given and the government was
successful, and more than one million dollars that had been paid by
importers under protest, was saved to the government and at least two
hundred thousand dollars per annum from then until now. Any country
lawyer with a general practice would have known how to prepare and
present the case in the first instance.

The Treasury Department has several special agents in Europe whose
business it is to look after and discover evidence of undervaluation,
as well as other frauds upon the revenues of the country. The
Department knew that certain merchandise was viciously undervalued, but
the special agents all failed to get material evidence. Special
employees were not then under Civil Service and I got an up-state
lawyer from New York to accept a position as special employee, sent him
to Europe and he came back with evidence that secured advances in
valuations which saved the government perhaps fifty thousand dollars a
year from one importer alone.

Appendix “D” will show the material correspondence concerning this
particular request for experienced trial lawyers. My first request is
dated September 20, 1905; my second, October 14th of the same year.
Finally the Commission replied and its first letter bears date of
December 2, 1905. It mentions oral requests also having been made.
Several examinations were held but up to the time I left the Treasury
Department, March 4, 1907, no eligible list had been provided
containing a single lawyer who had ever prepared or tried a case in any
court. The department needed at least six, could have profitably used
twelve, but could not and did not get one. If interested read Appendix
“D.” You will detect enough spice to give it a flavor not its own.

The correspondence set out in Appendix “C” has reference to a tobacco
examiner. Tobacco intended for Florida was being imported from Cuba at
a certain inland city and then shipped back to Tampa and Key West. The
duty on unstemmed wrapper tobacco was at that time $1.85 per pound and
only 35 cents per pound on unstemmed filler tobacco. When any bale of
tobacco contained more than fifteen per cent wrapper, the entire bale
was dutiable as wrapper. There was a further provision that tobacco
from two or more provinces or dependencies, if mixed, should be
dutiable at $1.85 per pound, regardless of its character. Naturally, a
tobacco examiner should know something about tobacco. In fact, that is
the only subject that a tobacco examiner need know anything about. The
correspondence will show the efforts made to secure one and the desire
of the Civil Service Commission to aid, as well as the disaster which
it believed would follow if the Treasury Department was allowed any
voice in the manner of the examination or in classification of those
who took the same.

Appendix “B” has reference to a tea examiner, another position that, in
the opinion of the Secretary of the Treasury, should be filled by an
expert.

The correspondence with reference to a tobacco examiner began some time
in 1904. My first rejection of each of the three names certified as
being eligible is dated December 15, 1904. The request for a tea
examiner was made somewhat later. I quote a paragraph from the Civil
Service Commission’s letter of December 9, 1905, which, though written
with special reference to the request for eligible trial lawyers,
mentions both tobacco and tea examiners:

“Your attention is also invited to the recent examination for tea
examiner and tobacco examiner at the Port of ——. Owing to objections
by your Department to eligibles certified, it became necessary to hold
three examinations before a selection was made for tobacco examiner and
two examinations before a selection was made for tea examiner. The
examinations finally resulted in the selection of the temporary
employees, who, in the judgment of the Commission, after careful
investigation, have no unusual qualifications for the duties to be
performed and came in at the advanced age of sixty-three years. It
seemed to the Commission so apparent that the examinations in question
had not resulted in securing to the government the services of the most
suitable competitors, that it became necessary for it to recommend to
the President that it be relieved of all responsibility for these
examinations and on November 18th, the President placed in the excepted
class, one examiner of tea and one examiner of tobacco at the Port of
——, which employees do not now have the status of competitive
employees.”

It will be noted that the Civil Service Commission itself finally
recognized such a weakness in the system that it consented and even
recommended that Treasury officials be permitted to select _one_
examiner of tea and _one_ examiner of tobacco at _one_ port, though the
last phrase quoted seems to betray a slight apprehension of disaster
resulting from there being in the United States two examiners, each
requiring very accurate and technical qualifications, “who do not now
have the status of competitive employees.”

Appendix “A” is limited to two letters written by the Secretary of the
Treasury to the Civil Service Commission refusing to approve rules and
regulations which it proposed to promulgate, unless the President so
directed. I will add that the President did not so direct. In this
instance, as in the last two, the Secretary of the Treasury had his way.

DIPLOMATIC SERVICE.

While on this subject, I cannot refrain from discussing Civil Service
as applied to our diplomatic and consular service.

There is quite a widespread demand that everything shall be taken out
of politics, and a presumption is indulged, that, if this were done,
all of the evils which now inhere in representative government would be
cured. Undoubtedly men have been rewarded for political service with
appointments to foreign fields, and some of these appointees have been
wanting both in business experience and education as well as in
aptitude. On the other hand, it is most unfortunate if only those who
are disqualified for positions of responsibility are interested in
politics. If every public position at home and abroad were to be filled
with those who either take no interest in public affairs, or by those
who are incapable of exerting any political influence, do you think the
service would be materially improved?

The further criticism is indulged that administrations make foreign
appointments from among their party friends, and utterly ignore
adherents of the opposite political faith. Has it ever occurred to you
that when a man is unable to find as good and able men among those who
believe in political doctrines which he advocates as are available
among his opponents, he ought in justice to himself to renounce
allegiance to the party he believes in, and join the ranks of those
with whom he disagrees?

Undoubtedly, the United States has sent some chumps abroad, but anyone
who has lived long in Washington must have recognized that other
countries also occasionally have chumps in their diplomatic service.
After some years’ observation, I asked John Hay, then Secretary of
State, whose experience at home and observation abroad better qualified
him to speak than any other man in America, how our diplomatic and
consular service compared with that of other countries. Promptly and
without hesitation, he said: “It is universally recognized everywhere
that American foreign service is the best in the world.”

One might as well expect to develop a successful trial lawyer by
confining him to a law school all his life, or a successful business
man by keeping him indefinitely in a business college, as to expect to
produce an efficient representative of American interests abroad by
requiring him to spend the most virile period of his life in studying
how to represent these interests and all the while keeping him out of
touch with the interests which he is to represent. A lawyer should
understand his client’s business, if possible, better than his client.
If he is to represent mining interests, he should know metallurgy, all
processes of mining, reduction of ores and mining practices, as well as
mining laws. Before a man can successfully, advantageously and wisely
represent American interests abroad, he must understand American
interests at home. He must have a practical knowledge of what Americans
require in foreign countries, and the natural effect at home of the
things he is trying to do abroad.

When confined to clerical positions, Civil Service is a lesser evil
than anything else that has been tried, but it falls far short of
being a panacea. When applied to positions requiring scientific,
professional, technical or expert knowledge, it is an utter failure. If
the government extends beyond its appropriate functions, and enters the
business arena, Civil Service will result, first, in the greatest
possible inefficiency; second, in political manipulation and control of
everything, and, third, in transforming a hitherto virile and
self-reliant people into a race of pap seekers. If the government
pursues its present trend and enters one field of business activity
after another it will logically end with everyone on the government
payroll and all of us working for the rest of us and taxing ourselves
to pay pensions to ourselves. When a government once enters the field
of paternalism there is no place where it can logically stop.

CHAPTER XXIV

CIVIL SERVICE RETIREMENT

Before increasing the business activities of the government and
creating an enormous army of government officials, clerks and
employees, all under Civil Service, it is well to consider some
feasible plan of retirement, for it is a question that will not
down.

The discussion of Civil Service as applied to governmental industrial
operations will be incomplete unless it includes the question of
retirement. Shall those who have been for many years on the government
payroll be pensioned? With few exceptions that is what the present
Civil Service employees desire. They claim to have served their country
as faithfully, and much longer, than soldiers in the army, and
therefore are entitled to equal recognition and honor.

Most thoughtful people are able to note some marked differences. Few
who are physically fit fail when they seek admission to the army or
navy, but I have known quite a number who have sought government
positions in vain. In addition to this the pay of the soldier is very
meagre, while that of civil service clerks, in normal times, is at
least fifty per cent higher than the same grade of service commands in
the business world. The question resolves itself therefore into this
proposition: Shall those who have secured government positions and held
them for thirty years, when there have been thirty thousand other
citizens equally patriotic, and equally competent, who have sought
government employment in vain, be rewarded and pensioned because of
their good fortune, and at the expense of their less favored brothers
and sisters?

The same argument applies to old age pensions. Most red-blooded
Americans are willing to assume responsibility for the support of
themselves and their families, and gladly contribute in some fair and
equitable manner, through appropriate processes of taxation, towards
pensioning those who bear arms in defense of our common flag, and for
the dignity of our country, and they are also willing to pay their
share towards the maintenance of the helpless and the unfortunate few.
But it is no evidence of yellow that some object to the burden of
paying pensions to men and women who have no other claim thereto than
that they have grown old and have failed to provide for themselves.

Take the case home and apply it to yourself and your family. Do you
desire the government to promise you and your children a pension
independent of the manner in which you and they acquit yourselves? Or
would you prefer to face the future in the belief that if you win,
through merit, the rewards of victory will be yours to enjoy, and if
you lose you will be expected to suffer the consequences. In other
words do you desire the government to pension you simply because you
hold a poor hand or play a good hand badly? What effect do you think
the promise of old age pension would have upon the rising generation?
Is not the youth of America already sufficiently wanting in
self-reliance?

The only other way thus far proposed by which the government shall
support its employees in old age, is by means of guardianship. This
plan seems to proceed upon the theory that those who are fortunate
enough to secure government positions, are necessarily unable to look
after their own affairs, and therefore are entitled to a guardian. The
proposition is that the government shall take charge of a portion of
the earnings of this favored set of American citizens—withhold part of
their salary and deal it out to them as a mother does candy to her baby
lest it overeat or consume it too soon. It is a pretty weak citizen who
needs a guardian, and those who do—provided they are _compos mentis_
and fourteen years of age—are entitled under the laws of most states
to select their own.

Five years’ experience led me to recognize that new clerks as a rule
are better than old ones. Those who come with any enthusiasm whatever
make very rapid advancement in efficiency, but in a very few years the
enthusiasm vanishes and hope of advancement is based entirely on
seniority of service.

Before leaving the Department I recommended—and am now more convinced
than ever of its wisdom—that government positions should be filled, as
now, under the rules of Civil Service but that all new clerks should
come facing a statute limiting the periods of their service to five
years. Five years of government service, especially in the city of
Washington, is in itself an education. In addition there are excellent
night schools where clerks can and do pursue their studies. Before
Civil Service was inaugurated thousands secured appointments in
Washington, graduated in law or medicine and went forth familiar with
the official atmosphere and prepared to give the lie to those in every
town who teach that the Capitol of the Nation is a den of thieves. John
W. Gates got his start in life as a sixty dollar per month clerk in the
Post Office Department and spent his evenings writing letters for
Senator John A. Logan, and meeting the big men of the nation who called.

A limited period in college is of great advantage but it would ruin any
boy to keep him year after year in the same classes, going over the
same subjects, reciting to the same tutors, getting nothing new and all
the while segregated from all practical things of life. Why give these
plums of official position—and they are no less plums because secured
under Civil Service—to young men and women for life when they might be
passed around with great advantage to that larger body of equally
deserving citizens who would be benefited by a brief experience in
public service.

The present force should be permitted to complete the tenor of their
natural lives in the service. The new rule if adopted should apply only
to those taken on after the enactment of the law limiting the period of
service to five years. Exceptions would have to be made in cases
requiring technical, professional or scientific knowledge. Provision
would also have to be made whereby by executive order, on the
recommendation of heads of departments, the specially competent could
be retained.

CHAPTER XXV

PROPERTY BY COMMON CONSENT

The desire that the government shall enlarge its functions so
as to prevent large accumulations, has led to the verge of
confiscation of property. Several proposed methods of partial
or total confiscation are discussed.

Originally no one held property by common consent, and in the very
early history of the race I suppose no one gave a thought to what we
now call “property rights.” Even now savages seldom claim ownership to
anything beyond a dog, weapons of the chase, possibly a horse or a
canoe. Gradually the divinely implanted desire for ownership,
sovereignty, independence, led the more advanced to assert exclusive
rights, but still they held little if anything by common consent. Each
held what he could by force. Under these conditions civilization had
its birth.

As the race advanced and began to feel the throb of God-like impulses,
and to live in harmony with divine law, consent to proprietorship
developed. For several centuries, in all civilized countries, with here
and there a relapse into barbarism like the French Revolution of the
18th century, and the Russian Revolution of the 20th century, property
rights and some measure of personal liberty have gone hand in hand and
have been quite generally recognized and respected.

CONSENT WITHDRAWN

For the first time in the history of an English speaking people consent
to personal ownership is being gradually withdrawn. Unless you have
studied popular audiences, analyzed current magazine articles and
scrutinized modern legislation, probably you have little conception of
the proportion, even among the respectable and high minded, who are
committed to some degree of confiscation.

At a joint debate on single tax under the auspices of an organization
like many styled “Academy of Political Science” or “Political Science
Club” or “Science of Government League,” which in this instance was an
adjunct of one of our very large universities, I called for a direct
expression from the audience upon the clear-cut proposition of
confiscation of all private property. Two-thirds of the audience
promptly responded in its favor. That audience was composed of
“high-brows.” They were men and women who read magazines, attended
lectures, belonged to “uplift” associations and indulged in mental
processes which they thought was thinking. I had had similar
experiences in joint debates on socialism, but had never before struck
a bunch of incipient anarchists of such apparent respectability.

Some years ago I had the privilege of addressing an association of
Socialist Clubs at Cooper Union. While I have addressed many better
read audiences I have never seen one that had read more. Many of them
did little else but read. In addition they were a most sincere and good
intentioned body of men and women. There are, as every one knows who
has come in contact with them, somewhat more than fifty-seven varieties
of socialists, every one of which was well represented that evening.
They were courteous, they were respectful, they listened with manifest
interest; but it was easily discernible that they considered our
civilization wrong and harmful in the extreme. One could see it, feel
and taste it. The very atmosphere conveyed to every sense the
unmistakable evidence that that great body of men and women thoroughly
believed that what they termed “Capitalism” had its heel upon their
necks. They were not rebellious, but it was evident they did not intend
anyone to be misled into supposing that they were unconscious of their
conditions, or that they intended to acquiesce longer than necessary.

In the campaign of 1918 the “single-taxers” of California made their
third and great attempt to confiscate land values in that beautiful
state. The issue of July 20th of “The Great Adventure,” an official
organ of the single-tax propaganda, printed upon its front page in
heavy double leaded type this announcement: “_Single tax will put these
big land values into the public treasury and leave the Ground Hogs
nothing to rent but the actual value of their buildings._”

The January, 1918, number of “Everyman,” another of their official
organs, contained a well-considered article lauding conditions in
Russia, and promising the same for California. I quote briefly: “The
people of Russia, who only yesterday were semi-starving slaves to a
tinsel aristocracy, are now for the first time living upon their own
lands, in their own homes, and working in their own fields and
factories. They have dispossessed landlords and profiteers; and all who
work have plenty. People do not starve where there is none to take the
food out of their mouths. Famine is a result of human exploitation.
When the people of any country go hungry it is because they are denied
access to natural resources. The people of Russia have taken their
natural resources, and also their industries and they will not go
hungry.... Out of darkest Russia has come the great light of actual
freedom; and there is every reason to hope she will soon have the
weakest government in the world, which means, of course, the strongest,
bravest, truest and most united people.... That is what we are striving
to do in California, but we won’t stop with the land. We will only
begin there. We could not stop there; the tide is too strong. It will
bear us on into the new world of economic friendship.”

The same issue of “Everyman” gave a word picture, for the truth of
which it vouched, of what it termed “Zapataland”—90,000 square miles
in Mexico—where it claimed confiscation had wrought its legitimate
and beneficial results. It claimed the same conditions would be
accomplished in California through the adoption of the single tax
amendment to the Constitution as had been wrought in Mexico with the
musket. It says: “In Zapataland they have no need for money. Is it food
you want? Go to the market and help yourself. Do you need shoes or a
hat? Go and take what you need! Have you a fancy for jewelry? Go make
your selection.... In some of the centers the women of Zapataland
clamored for finger rings and bracelets. The elders consulted. They
melted down some of the church ornaments, and in a few months baskets
full of the envious shining trinkets were in all the Plaza shops. Help
yourself.... Labor is plentiful. Everybody wants to work at least a few
hours a day—they insist upon it. ‘Give me that shovel! You have been
digging there for a couple of hours or more. Let me dig awhile.’ ‘Here,
you, stop straining yourself. Go and rest. I am stronger than you.’...
In Mexico, the propaganda was carried on with ‘30-30’s’. The Zapata
army went from valley to valley, from village to village, and
dispossessed the owners.”

Such stuff is well calculated to deceive almost anyone except those who
have seen a Mexican. For three successive campaigns California was
flooded with that class of literature, its boasted purpose being
confiscation. The organization back of the propaganda, with ample
endowment, purposes to use California as an object lesson and to extend
the principle throughout the nation.

For the benefit of any who thus far have not appreciated the gravity of
this most plausible attack upon property rights, and therefore have not
studied the question, I make the following brief statement of the case
as it appeals to a very large number.

Henry George, the great apostle of single tax, was a very able man. I
do not say he was a very wise man. Great intellects frequently lead to
great errors.

Every advocate of single tax legislation has been a faithful disciple
of Henry George. No one has added a new argument, stated an old
argument with greater force, or reached a different conclusion. None of
his followers has ever apologized for anything Henry George ever said,
or refused to stand or fall with the great originator of the scheme.
Therefore, to quote Henry George is to quote the best authority, and
all authority.

I propose, therefore, to make a few extracts from Henry
George’s standard work on the subject—the great text book of
single-taxers—“Progress and Poverty.”

He begins and ends his argument with the proposition that God made the
land, the sea, and the air, for his children collectively, and has
never granted the exclusive right to any part thereof to king or
subject. All pretended grants and conveyances, therefore, have been
fictitious. Relying upon this argument, he holds that all natural
resources still belong to the people collectively, and confiscation in
the interest of all is justified.

On page 401 of “Progress and Poverty,” he says: “But a question of
method remains. How shall we do it? We should satisfy the law of
justice. We should meet all economic requirements by at one stroke
abolishing all private titles, declaring all lands public property,
and letting it out to the highest bidder in lots to suit.”

On page 403 he says: “I do not propose either to purchase, or to
confiscate property in land. The first would be unjust; the second
needless. Let the individuals who now hold it still retain, if they
want to, possession of what they are pleased to call their land; let
them continue to call it their land; let them buy, and sell, and
bequeath and devise it. We may safely leave them the shell, if we
take the kernel. It is not necessary to confiscate land; it is only
necessary to confiscate rent.”

Again, on the same page, he says: “We already take some rent in
taxation. We have only to make some changes in our mode of taxation
to take it all.”

Thus it will be seen that Henry George, with all his intellect, was
mentally dishonest. His heart-beats were sympathetic, but his mind
wobbled. He was able to perceive nothing dishonest when I sold my
acres, or my lot, invested the proceeds in stocks and bonds, and then
by my vote exempted my property from taxation, and placed all the
burdens of government on the purchaser of my land.

He would have seen no injustice in a government of the people
establishing Rural Credit Banks, as has been done, loaning millions,
with mortgages as security, upon lands purchased from the government,
then inducing widows and orphans to buy securities issued against these
mortgages, and finally taxing the value of the real estate away, thus
leaving the widows and orphans to beg their bread from door to door.

The American people are inherently and intuitively honest and just. Do
you think it would be just, after the people, through their Congress
and their president, had granted the homesteader a patent title in fee
simple, now to tax its value away? As Henry George says, the effect is
the same as confiscation. He calls it “taking the kernel and leaving
the shell.”

CHAPTER XXVI

EQUALITY OF INCOME

The inevitable effect of equality of income, assuming it could
be accomplished, is discussed.

Two or three years ago George Bernard Shaw had a prize article in the
“Metropolitan” in which he advocated “Equality of Income” as a panacea
for all the ills that afflict civilization. I remember he urged that if
all had equal incomes the race would be improved; for there would be
greater freedom of selection. He seemed to deplore the fact that under
present conditions “men and women meet in parks and other public
places, recognize natural affinity” so promptly responded to by some
but are nevertheless kept apart because of this iniquitous inequality
of income. However much the man may be attracted by the personality of
the lady he will not humble himself to make advances if she gives
evidence of being financially beneath him; while his advances will be
spurned if he bears the marks of a more meagre income than she enjoys.

It was the same old free-love doctrine, and the author argued at length
to show that inequality of income thus seriously interferes with the
free course of “natural affinity” and hence retards the coming of the
“superman.” He did not in that article suggest how he would equalize
incomes. Suppose we study, for a moment, not how to accomplish it, but
the effect of its consummation.

If equality of income would be a panacea now—if it would solve the
ills we have and prevent others—it would have worked well from the
beginning. Imagine therefore that instead of following the divinely
implanted impulse to acquire, to hold, to exercise sovereignty, to
achieve, the race had remained as it was when it had no income, and
therefore when no inequality of income existed. Would churches and
cathedrals have been built? Would colleges and universities have been
founded? Would art and literature have flourished? Would America have
been discovered? Equality of income would have left Queen Isabella with
no jewels to sell with which to purchase the Santa Maria. In fact there
would have been no Santa Maria to purchase. The race would have
remained where the race started. Inequality of income began when
incomes began. Inequality of income marks the birth of civilization,
and if civilization ever dies “_equality of income_” should be the
title of its dirge.

The wealth of the United States is about twenty-five hundred dollars
per capita. Assume, if you please, that all our property could be and
has been converted into cash. Then assume that the rest of the world is
able and willing to supply our every need and our every want so long as
our money lasts! We would eat up and wear out the accumulation of the
centuries in about three years; and henceforth would go about clothed
in skins, and our own skins at that. The world lives from the income
and accretion resulting from the accumulations of the ages, but in
order to make it effective it must be kept in circulation, going first
to labor, thence to the producer—the manager—by way of the merchant,
and again to labor.

CHAPTER XXVII

AN HISTORICAL WARNING

The teachings of Rousseau, which logically resulted in the
French revolution, wherein the confiscation of property was the
prime purpose, is compared with some of the teachings of today.
History that should constitute an ample warning is cited.

We have been sowing what Rousseau was permitted to sow and from which
was reaped the French revolution. The “Social Contract” taught that
property as understood today did not exist. The citizen simply held it
in trust for society. For under the “Social Contract” each “surrenders
himself up absolutely, just as he actually stands, he and all his
resources, of which his property forms a part.” The next logical step
in the revolution was to discharge or recall the trustee, and thus vest
the property again in society itself. That was done. George W. Hinman
in “Can We Learn Anything from History?” summarizes this recall of
trusteeships as follows: “Society proceeded to recall its trustees as
fast as ‘Society’ needed the property. It recalled the trusteeships of
all the church property, $800,000,000; of all the property of exiles,
$600,000,000; of all the property of the guillotined and condemned,
$200,000,000; of all the property of hospitals and charitable
institutions, $200,000,000; of all the state domains sold and rented in
the last three hundred years, $400,000,000; of all the gold and silver
vessels and specie, $100,000,000; of all the property of other
institutions, valuables and common goods, $700,000,000. Then it
recalled the trusteeships of coats and trousers, growing crops, pots,
kettles, pans and mattresses. In one town it recalled the trusteeship
of ten thousand pairs of shoes from ten thousand pairs of feet, and
thus condemned ten thousand former custodians of this property to go
about their tasks barefooted in the snow.”

Not only this but the government extended confiscation by means of
income tax until the whole of every income in excess of six hundred
dollars was to be taken. Taine, the historian, summarizes thus:
“Whatever the grand terms of liberty, equality and fraternity may be,
with which the revolution graces itself, it is in its essence a
transfer of property. In this alone consists its chief support, its
enduring energy, its primary impulse and its historical significance.”

Hinman summarizes thus: “The people in a body is infallible; unlike
individuals it can make no mistakes. Therefore we should not trust
government to individual representatives or agents but to the pure and
direct democracy. But we cannot have direct democracy at its purest
without equality of condition. To get equality of condition we must get
equality of property. To get equality of property we must correct the
inequalities of the past and present. Therefore to correct these
inequalities we invent the theory of trusteeship of property, recall
the trustees, and take possession of all unequal properties in the name
of society.

“That is the whole cycle; that is the great revolution! Twenty-five
years in preparation, eleven years in actual practice, fourteen years
in immediate consequences; fifty years all told and that is sum,
substance and essence from the beginning to the end, a transfer of
property! A transfer of property without compensation! A confiscation
of property beyond appeal and beyond recall! There were movements also
against the church, and against the family, but the transfer of
property far surpassed them both in size and in significance.

“That the convulsions attending the movement were more spectacular than
the movement itself; that a million persons were stabbed, drowned,
shot, beheaded and hunted to death within the borders of the nation;
that wars were started that strewed Europe with 5,000,000 dead; that
the oppression was far more ferocious than under Louis XIV, that the
waste of government was arithmetically four times greater than under
the most wasteful monarchy; that a whole nation was bathed in blood,
bankrupted in morals, and rotted in character to the core—all of these
things, hideous and appalling as they may be, distracting and absorbing
as they may be, are still but as colossal incidents. _The chief
movement through this sea of blood and wilderness of death was the
transfer of property._”

Nevertheless, Robespierre—the bloodiest man who had ever lived, the
bloodiest man who ever has lived outside of Russia, and the bloodiest
man who ever will live unless socialism gets control in the United
States—was an idealist. He resigned the bench rather than pronounce
sentence of death upon a convicted criminal. He read Rousseau’s “Social
Contract” every day. He was the leader in the “uplift” movement of the
age in which he lived and sought to produce Utopian conditions of
“liberty, equality and fraternity” throughout France. While an
Internationalist he sought to reform and transform France before
extending his field of influence.

But being self-willed as well as self-opinionated, at the first
appearance of opposition he threw down the challenge. There was “some
fight in him and he liked it.” He appealed directly to the people and
condemned to the guillotine everyone who had the temerity to resist his
efforts to ameliorate human conditions. While seeking everywhere for
property to confiscate, and heads to guillotine, he made the most
elaborate speech of his career:

“Our purpose is to substitute morality for egotism, honesty for honor,
principles for customs, duties for proprieties, the empire of reason
for the tyranny of habit, contempt of vice for indifference to
misfortune, dignity for insolence, nobility for vanity, love of glory
for love of money, good people for society, merit for intrigue, genius
for intellectual brilliancy, the charm of contentment for the satiety
of pleasure, the majesty of man for the high breeding of the great, a
magnanimous, powerful and happy people for amiable, frivolous and
wretched people; that is to say, every virtue and miracle of the
republic in the place of the vices and absurdities of the monarchy.”

I submit that is pretty good rhetoric and excellent diction. Though it
means absolutely nothing it must have sounded well to the proletariat.
The people idolized Robespierre for a while at least, as they always
idolize an orator who has great command of indefinite and high-sounding
language. Idolizing an idealist they followed him and were led to the
extremes of democracy. The whole population of France was transformed
into an organized mob, doing everything that a mob can do but, in the
main, preserving the forms of law.

CHAPTER XXVIII

CAPITAL AND LABOR

Among the dangers threatening the republic is the warfare which
admittedly exists between capital and labor, the manifest
tendency of which is in the direction of bolshevism. Some
citations are made showing its imminence.

One need not to have read the preceding pages to know that the United
States is fast approaching a crisis. Industrial and social unrest is
everywhere apparent. Capital and labor are at grips in many places,
while management, the all-essential factor, seems helpless to
accomplish reconciliation.

When given free rein, capital enforced unbearable terms. This resulted
in legislation forbidding combinations for the purpose of limiting
output or advancing prices of the products of labor. Thus far labor has
enjoyed express exemptions from anti-trust laws, and it is now making
unbearable exactions. I would like to warn labor unions that they are
liable to exceed the limits of prudence. Admittedly Congress has the
same power to forbid combinations of labor as it had to prohibit
combinations of capital. Combinations of every kind are beneficial so
long as their purpose is legitimate.

There is an old fable of a man who had an ox that he worked with a
donkey. One day the ox refused to work and at night he asked the donkey
how matters had progressed without him. “I had a very hard day, but I
got through with it,” said the donkey. “Did the boss say anything about
me?” asked the ox. “Not a word,” said the donkey. The next night the ox
again inquired and received the same reply: “A very hard day, but
completed.” “Did the boss say anything about me?” asked the ox. “Not a
word,” said the donkey, “but coming home he stopped in and talked
awhile with the butcher.” It might be well for us all to understand
that if one million or ten million bankers, if one million or ten
million farmers, or if one million or ten million organized labor men
should ever attempt to rule America in the interest of any one class,
and should assume to dictate the terms on which production can be
continued, it will be only a question of time when one hemisphere will
be freed from organized coercion. But every organization of labor,
every combination of capital, and every association of farmers, might
be dissolved and it would not more than temporarily relieve the
situation. It is a condition that confronts us and no amount of
theorizing will improve it.

Recently an official of the Department of Labor, in a carefully
prepared article, made the profound declaration that warfare between
capital and labor will continue until justice is assured. Grant, if
you please, that a court of exact justice could be created, with a
judge wiser than Solomon on the bench. Its decisions would satisfy
neither capital nor labor. Arbitration boards occasionally seek to do
exact justice. They usually ignore that element and aim simply to
effect a workable compromise, that will temporarily save the
situation. When the terms are accepted and acquiesced in, both sides
profess to be satisfied, but neither side is satisfied. Capital
thinks it is entitled to everything because without capital labor
would starve, and it demands that labor remove its shoes from off its
feet in its presence. Labor thinks _it_ is entitled to everything
because without labor capital would languish. It goes further and
declares capital to be a myth. It says that all so-called wealth is
the product of labor; and if labor had not been robbed there would be
no accumulated wealth—and all such socialistic and anarchistic
nonsense which emanates largely from German-bred or German-educated
teachers of political economy and sociology, emphasized by a large
number of public speakers both within and without the church, and by
demagogues generally. Hence “labor claims the full proceeds of its
service less enough to keep the tools and machinery in repair.” It
asks that capital remove its shoes. Both capital and labor ignore the
most important factor of production—management.

A century and more of matchless development, wherein money getting had
been the chief aim of life, especially with those possessing aptitude
and enough energy to pay the price of achievement, divided the people
into classes. Those possessing aptitude for acquisition won wealth,
those with aptitude for discovery won distinction, those possessing
aptitude for statesmanship, or for war, won fame. Many of those who won
wealth became arrogant, overbearing, snobbish and some of them
despisedly mean. Logically—for everything in this world proceeds from
cause to effect—those who did not possess the particular type of
aptitude necessary for acquisition, together with those who were
unwilling to pay the price, denounced riches and the possessors
thereof. Some of these became envious, threatening, even rebellious,
and not a few despisedly mean. The result is a different America than
the one our fathers knew, and it does not require an old fogy to see
it. A man is not a pessimist simply because he recognizes self-evident
facts. Noah came far nearer being a statesman than a pessimist. History
simply repeats itself. Macauley, singing of the “brave days of old,”
says:

“Then none was for a party,
Then all were for the State,
Then the rich man helped the poor
And the poor man loved the great.”

Now the poor man first envies the rich man and then hates him, the rich
man hates the richer, and the richer snubs the would-be rich. As a
matter of fact, there was never as much sympathy for the poor as now,
never as much being done for him as at present. But sympathy and
charity are not what he needs, as I hope to be able to show.

IS THE SITUATION HOPELESS?

If the human race has reached a condition where further progress is
impossible, and nothing but class antagonisms are left, it would seem
that a second occasion has arisen when Jehovah might “repent that he
had made man.” Patriotism demands a solution, without which no sane man
dares hope for anything except what the socialist predicts in language
more ominous than any direct threat.

Permit a few excerpts from a chapter, “The Revolution,” added by its
author to a pamphlet containing a debate on socialism, and which he
used extensively in his campaign for Congress in 1916. The author is a
man of excellent presence and seeming patriotism. I believe him to be
as sincere in his belief as any evangelist of the olden times. He
commends the vision of Ignatius Donneley in prophesying the approaching
cataclysm: “The people cannot comprehend it. They look around for their
defenders—the police, the soldier, where are they? Will not this
dreadful nightmare pass away? No, never! This is the culmination—this
is the climax, the century’s aloe blooms today.” He adds: “These are
the grapes of wrath which God has stored up for the day of His
vengeance; and now He is tramping them out and this is the red
juice—look you—that flows so thick and fast in the very gutters....
Evil has but one child—DEATH. For years you have nourished and
nurtured evil. Do you complain if her monstrous progeny is here, with
sword and torch? What else did you expect? Did you think she would
breed angels?” And then after explaining that he does not speak “these
bitter words in the spirit of a challenge, but with the kindliest,
deepest feeling of love for all humanity, and with the most fervent and
patriotic feelings of veneration for my country—the grandest country
in the world, but now being systematically robbed,” he warns “the
masters of the bread” thus: “I warn them that if they want ‘red hell’
with all the accompanying fireworks—with all the attendant brutality,
and crime, and suffering, and misery, and degradation, and sorrow and
death, with the destruction of their cities and the wiping out of their
so-called civilization, they can have it just when they most desire. It
is up to them. The revolutions of the past will be but kindergarten
affairs compared to the revolution now pending and coming when some one
strikes a match in the powder house.”

CHAPTER XXIX

CAN THE CRISIS BE AVERTED?

Our troubles have all resulted from false teachings which are
leading us farther and farther afield. The very rich will spend
nothing to correct the public mind and legislation seems
powerless to afford a remedy.

All this might have been prevented and possibly even now can be
avoided. It has been brought upon us in part by false education but
largely through evolution in our form of government, in our purpose of
government, and in industrial conditions. It could have been prevented
by correct education both inside and outside the schoolroom. It may
possibly be avoided by a speedy return to fundamental Americanism. But
whatever happens, no citizen can boast of patriotism until he has
sought a remedy; and no one is a patriot who will not sacrifice
everything to save the situation.

In this connection let me warn you not to expect any considerable
portion of the necessary work to be done by the very rich. They have so
long believed, and their experience has justified the conviction that
money will buy anything, that many of them seem to think their wealth
will enable them to buy liberty of a mob. A mob is always venal but it
can never be bribed by what it has the power to take. Did the wealthy
of France escape? They were the first to die. Have the rich of Russia
been spared? They have been the first to suffer. Possibly the rich may
be able to buy their choice of being mutilated before or after death.
The history of all revolutions of the kind that seems impending
justifies the prediction that the more money a man has the greater
certainty of his torture and ultimate death. Quite recently a very rich
man was asked to contribute to a campaign of education against
bolshevism. He wrote a patronizing letter acknowledging the importance
of the work, but expressed the opinion that it should be financed, not
by the rich, but by men worth thirty or forty thousand dollars.
“Accursed be the gold that gilds the narrow forehead of the fool.”

LEGISLATION OFFERS NO REMEDY

It is recorded that the children of Israel once upon a time got into
serious difficulty through worshipping a golden calf while Moses was on
the mountain getting the Moral Law. If American civilization is
idolatrous—and it seems not to be free from that sin—the object of
its worship is statute law, to the neglect of underlying principles
which make most laws unnecessary. In the last ten years over sixty-five
thousand statutes have been enacted by Congress and the state
legislatures and approved by executives. Meanwhile the evil we are now
considering, in common with most others recognized a decade ago, has in
the main increased. Neither the laws of nature, nor the laws of
economics, nor the laws of society, can be reversed by statute. We have
proceeded upon the theory that a republic can accomplish anything by
popular edict, but the tides come in whether prohibited by sovereign
king or by sovereign people.

A DIAGNOSIS

Before a disease can be treated with any hope of success, its cause, no
less than its manifestations, must be studied. American industries and
internal improvements were begun with American labor. I can remember
when girls in northern New England spent their winters in the factories
at Lowell and Manchester and returned to teach school during the
summer. When our industries outgrew the supply of American labor,
agents were sent abroad and immigrants were brought over under
contract. When Congress forbade the admission of contract labor, and
wages still advanced, the world heard of it and a polyglot mass of all
kindreds and tribes and complexions came flocking to our shores,
because, as we have seen elsewhere in this volume, labor was better
rewarded here than elsewhere, and relatively better rewarded than
capital. Naturally, American-bred boys and girls did not fancy working
side by side with foreigners who did not speak the English language,
who had not imbibed American ideas and were strangers to American
standards of living. So they ceased to accept work, and commenced
looking for situations.

I visited a mill in Passaic, New Jersey, where the rules were posted in
five languages, and a teacher in one of the schools told me there were
nineteen languages spoken in her room. In thousands of establishments,
laborers, many of whose names are unpronounceable, are known by
numbers. Think of an American citizen, outside of a penitentiary, being
identified and known by number. Will any wage satisfy that man? What
wage or salary will you accept and be known to your boss only by
number, and stand in line and accept a pay envelope at the end of the
week as “437”? An increased wage may temporarily satisfy the intellect
of a man thus environed but it will not satisfy his heart hunger.

There are only two demands that a laborer knows how to make: He can ask
shorter hours, and he can demand more wages, but neither will satisfy,
for neither is the thing he needs. Would you like to know what it
is for which the very soul of every man—laborer no less than
capitalist—cries and without which he will not be appeased? You do not
need to be told. You have only to hark back to the days of your youth.
You have only to study mental philosophy, using your own inner
consciousness as a text book, and you will find the answer. What the
American laborer demands, what the American citizen, regardless of his
surroundings, needs, is recognition. He wants a voice. His very being
demands some measure of responsibility. He needs to feel that in some
way he has contributed to results and that someone besides himself
knows it. God save America from a generation in whom these divinely
implanted aspirations have been stifled.

Being unable to formulate these longings, the laborer limits his
demands to the two things which the walking delegate tells him are the
only things necessary—shorter hours and more pay. When he gets them
the real need of his being remains untouched and he repeats his demand.
When his employer seeks to do something for him, instead of _doing
something together with him_, he resents both his charity and his
sympathy, and spurns his advice.

Men who are required to deal with men ought to give primary study to
human nature, and omit the study of angelic nature until they join the
angels. Suppose we continue this analysis of human nature for therein
we may find the seed of truth that shall, if nurtured, fructify in
blessing to us all.

A few years ago the Chamber of Commerce of one of our very large cities
gave a Lincoln Day Banquet at which the speaker of the House of
Representatives of Congress was the guest of honor. Among other wise
philosophies that fell from his lips was this: “I do not know your
personal genesis but I will guess that less than fifty years ago nine
out of ten of the intelligent, virile leaders of production, who own
and represent capital, as well as the high officials of your state, and
of the nation, who sit at this table, were bright-faced schoolboys in
the common schools, ‘building castles in Spain.’ If this Chamber shall
repeat this banquet a half century hence, you can find your successors
in the public schools of today ‘building castles in Spain.’” The
thought I gather is not the trite expression that “The youth of today
is the adult of tomorrow,” nor that the public school is the nursery of
greatness. The thought I get is that he who is destined to achieve
prominence in any walk of life is the youth who “builds castles in
Spain,” who imagines, who hopes, and who goes out to fight for the
fulfillment of his dreams.

What is the probability of a man who cannot speak the English language,
and who receives nothing more tangible than a pay envelope and its
contents, handed to him by number, sitting by the cot of his son and
inspiring the imagination of the coming American? If he says anything,
is he not likely to say—are there not a million homes where this is
the only appropriate thing that can be said: “My boy, I am sorry that I
brought you into the world. I see nothing in life for you. The future
is not only dumb but awful dark.”

The kind of men who made this country were told a different story at
their trundle beds. They were inspired with hope, for their parents
were full of hope. They were filled with expectation, for they knew
their parents were expectant. If we revive contented, hopeful
Americanism we must inspire “castle building.” We must fill the youth
with hope and whet his imagination to keenest edge until he will
intuitively seek literature instead of twaddle with which to express
his aspiration.

“I stand at the end of the past, where the future begins I stand,
Emperors lie in the dust, others shall rise to command;
But greater than rulers unborn, greater than kings who have reigned
Am I that have hope in my heart and victories still to be gained.
Under my feet the world, over my head the sky,
Here at the center of things, in the living presence am I.”

CHAPTER XXX

INDUSTRIAL REPUBLICS

While democracy as a form of government spells ruin, democracy
in society spells America in her best estate. The possibility
of industrial republics is suggested.

While talking about democracy in government we seem to have lost our
conception of democracy in society. What better can we expect from
democracy in government than France’s experience, when the voice of the
people was declared to be the voice of God? But social democracy is a
very different thing from a democratic form of government, and has well
nigh become a lost blessing.

When the socialist talks about “Industrial Democracy” he means a
democratic form of government, with all industries under popular
management. That is one extreme. The capitalist demands industrial
autocracy. That is the other extreme.

In a previous chapter I have tried to show that when the Fathers formed
this government, their experiences, as well as their knowledge of
history led them to fear the monarch. The French Revolution was about
to burst into what its promoters promised should be the purest form of
democracy which the world had ever seen, and the Fathers were justly
apprehensive. Dreading the mass quite as much as they feared the
monarch, they chose the middle course. They chose representative
government.

I wonder if there be a middle course between industrial autocracy and
industrial democracy. Is it possible for business concerns and
manufacturing plants to create within their organizations industrial
republics where each employee shall have some actual voice, and through
their representatives sitting in deliberative bodies, analogous to our
legislative branch, originate and recommend or approve reforms and
improvements subject, of course, to a veto by a cabinet?

Many methods of profit sharing have been tried and they have usually
worked advantageously, but admittedly they fall far short of the
requirements. So-called cooperative industrial concerns have been
created with some measure of success, yet the real problem remains
untouched and as complex as ever. Labor has never established a
cooperative industry worthy of the name, except as Mallock shows in
“The Limits of Pure Democracy,”[3] when the actual operation of
the concern has been placed in the hands of an oligarch whose
administration is as arbitrary as that of any captain of industry. Only
in that way has it been possible to supply management, the most
essential element, as we have seen, in any enterprise. Labor has
sometimes found the capital, but capital and labor without management
are impotent. A goodly number of corporations have encouraged and even
assisted their workmen to buy stock, which is a very good and
meritorious policy. It may tend to alleviate but it fails to cure.

-----

Footnote 3:

Published by E. P. Dutton & Company, New York.

Mallock clearly shows that every successful government unites the
elements of autocracy and democracy. Even the Imperial German
Government granted certain powers to the people, while the Constitution
of the United States clothes the president with powers in certain
respects rivaling those of the kaiser. The power of veto which the
Constitution vests in the president exceeds any prerogative possessed
by the king of England. On the other hand the power to make war rests
with Congress, while in Great Britain it requires no parliamentary
act. Mallock enlarges upon this thought and shows that socialist
organizations and labor unions are successful only because they are
arbitrarily managed. Their so-called leaders are, in fact, oligarchs.
The Russian Revolution, like the French Revolution, was avowedly of
democratic origin, but in fact both were as despotic as anything the
world has ever seen. The strength and grandeur of the government of the
United States, as established by the Constitution, lies in the most
happy combination and blending of these two fundamental principles,
popular sovereignty and centralized strength.

The primary difficulty in solving the so-called labor question lies, I
think, in failing to recognize the individuality—the personality of
the employee. Some tiny share of profits is offered in lieu of
increased wages and it is accepted as a mere sop. The offer of stock at
a price below the market, with easy payments, is looked upon as a cheap
way of tying the hands of the employee, and as an insurance against
strikes. I think I am safe in saying that in a very large majority of
cases where any of these methods have been tried the men have resented
them, and in some instances spurned them. Then the employer concludes
that labor will not accept decent treatment, closes his ears, his mouth
and his heart and proceeds to get all he can and to give as little as
can possibly be forced out of him.

If the basis of masculine happiness is, as I have tried to show, the
divinely implanted desire for creatorship, sovereignty and achievement,
then we will find it impossible to satisfy the subconscious longings of
the human heart with shorter hours, increased wages, or with some
slight share of profits in lieu of increased wages. If I am right in my
analysis the pathway of access to the real man in the overalls—and a
real man is in the overalls and must be discovered—is by some scheme
that will necessarily recognize him as a real, thinking and potential
entity.

Most humans prefer to be called “citizens” rather than “subjects.”
Autocrats speak of their subjects. In republics there are no subjects.
All are fellow citizens. If this thought can be carried into the
industrial world, the “citizens” therein will find their heart hunger
appeased, their hope inspired and they will lift their heads into the
clearer atmosphere of industrial opportunity, and possibility of
ultimate social recognition. If the theory of evolution has any
foundation in fact the species began to lift its head with the first
impulse of hope, and its whole body stood erect when the consciousness
dawned of being human. A free, brave and hopeful people never went mad.
Desperation and failure of recognition is the parent of revolution.
Most anyone will fight when called “it.”

Pardon a little personal observation which has direct bearing upon
increased efficiency resulting from no other cause than recognition and
hope. Forty years ago immigrants from both Germany and Sweden came from
Castle Garden to my town every few days. They had been born “subjects”
and they toiled after their arrival as they had toiled before as
“subjects.” They moved with the air of “subjects.” In my imagination I
can see those German families coming up the middle of the street in
wooden shoes, single file, the man ahead empty handed except his long
pipe, the wife close behind with a baby in her arm, and a big bundle on
her head, and the children in regular succession according to age,
which seldom varied more than two years. There must have been some hope
in the man’s heart or he would not have left his native country. But
neither his gait nor his other movements betrayed it. These immigrants
immediately sought and secured employment, but they were not worth much
the first month or so. It did not take long, however, until it would
dawn upon them that opportunity had actually knocked at their door. A
few Sunday afternoons on the porch of friends who had left the
Fatherland as poor as they, and who were now comfortably situated, plus
a wage scale of which hitherto they had only been told, transformed
those big fellows. I am not exaggerating when I say they would do
without urging from fifty to one hundred percent more work six months,
and often six weeks, after their arrival than when they came. They had
begun “building castles in Spain.” They were dreaming dreams and the
central figure in every vision was a home of their own, and personal
recognition. Instead of being subjects they had determined to become
citizens.

Can this transformation still be wrought? If it can all danger is past.
Of one thing I am certain. It cannot be done by legislation.

CONCLUSION

I came to man’s estate thoroughly believing that the Constitution of
the United States is the greatest chart of liberty ever penned by man;
and nothing that I have seen, nothing that I have heard, and nothing
that has transpired in all my mature life has shaken my faith.

I think I must have been born an optimist. From earliest recollection I
have liked the rooster that crows in the morning better than the owl
that hoots in the nighttime. And what is best of all, the surroundings
of my childhood and youth were exceedingly hopeful. I have seen few
hours of discouragement and none of despondency. Despising the
pessimist, I have resolved, and am resolved, that nothing shall dim my
hope or weaken my confidence either in my country or in the American
people, and yet in spite of myself I sometimes feel a very unwelcome
impulse.

I observe the teachings of Jefferson forsaken and instead of the
minimum of government and the maximum of liberty, more and more of
government and less and less of liberty. I see ignored the warnings of
Washington against weakening the energy of our governmental system by
making changes in the Constitution. I mark the trend away from
representative government towards direct government, a policy that has
wrought ruin whenever and wherever it has been tried. I note the
growing disrespect for authority in the home, in the school and on the
street, coupled with certain slurs at the forms of law, as well as for
judgments and decrees rendered in harmony therewith, emphasized by bald
and naked threats to undermine and, if possible, overthrow our entire
judicial system. I overhear the subtle suggestion to our youth that
they need give no thought for the morrow, for the government will soon
insure employment; that it is folly to make themselves efficient, for
the government will sooner or later guarantee wages regardless of
merit; that they need not practice thrift, for the government will
ultimately pension their old age regardless of profligate habits or
vicious living. I discover a growing recognition of capitalistic,
industrial and even servant classes, with attempts at class
legislation, all subversive of republican ideas, republican traditions
and republican institutions. When I realize that all this is as yet
only a verdant growth from socialistic, not to say anarchistic seed
sown broadcast with scarcely a protest, and knowing that a harvest must
yet be garnered, I am at times apprehensive.

But I am reminded that this is the people’s government. If they want it
this way it is their business and not mine. If they make a mistake they
are abundantly able to respond in consequences. All of which is true,
but the fact that it is true, and awfully true, only emphasizes the
importance of alert men in the watch towers.

Recognizing the existence of the greatest crisis of all time, a crisis
wherein all that we call Christian civilization is imperiled, and being
unable to hold my peace I have produced what I hope shall be considered
an argument. I have tried to prove scientifically that the fathers were
wise beyond their generation. Nothing is scientific that will not stand
the test of application. I consider the unschooled George Stevenson a
scientist of the first order. He thought out, and worked out, a safety
lamp for the protection of coal miners, who during every hour of their
toil stood in imminent danger of explosions. Then to prove that he was
scientifically correct he had himself lowered into the mine in the
nighttime, and, standing there alone, thrust his lighted lamp into the
escaping gas. The achievements of the past afford proof positive that
our form of government, our policy and our purpose of government were
scientifically correct. It cannot be exploded or overthrown. Its only
danger is from those of its own household, the children of its own
institutions, who may undermine it.

Even the most casual reader must have discovered that in a very marked
degree we have departed from the teachings of the Fathers. This we have
done first in our form of government, and secondly in our purpose of
government, both of which tend strongly to bolshevism, sometimes called
socialism, and sometimes called “pure democracy.” It might as well be
called Rousseauism. The name is immaterial. The thing itself is the
same old snake that first charms, then strangles, covers its victim
with ooze and swallows at leisure.

There is little in the book except what the writer considers has direct
bearing upon one or the other of two major proposition. First:
Representative government was the correct principle when established,
and therefore is correct now and will be correct to the end of time.
Second: The government was originally correct in granting liberty of
action to the citizens and in limiting its own activities to strictly
governmental functions. Third: Each and every departure from correct
principles or wise policies has led by one pathway or another in the
direction of bolshevism.

No people will ever outgrow correct principles of government any more
than they will correct principles of agriculture. The fact that times
have changed, that inventions have revolutionized industry and that
improved methods of transportation have annihilated space, do not in
the slightest degree make erroneous a correct principle of government
any more than they render false a principle of nature. If the law of
gravitation were a provision of the Federal Constitution, there were
many in the United States who would have sought to amend it when the
“Titanic” went down. They would have argued that when the principle was
promulgated by the Great Law Giver, there were neither icebergs nor
steamships.

The argument that the people are wiser now than they were is false. The
Constitutional Convention contained a larger proportion of college
graduates than any convention that has since assembled anywhere, and
some of the wisest, and safest and most experienced were not college
men. The people who came to America prior to 1787 came for motives as
lofty as have actuated those of recent years, and in character, breadth
of purpose and intelligence they compare favorably with immigrants of
today. In addition, they had many advantages which we do not possess.
They had time to think, the prime essential of greatness. They had
neither the inclination nor the opportunity to read news items from all
over the globe in three or four editions of a metropolitan newspaper,
which professedly prints only news, but prints it several times each
day. Meditation is necessary for a statesman whether he be required to
discharge his responsibility in the halls of legislation or permitted
to do so at the polls.

In defending our form of government, I have submitted a brief argument
for an independent judiciary. This should be unnecessary in any country
enjoying and professing adherence to Anglican liberty. In justification
I plead the growing disrespect for, and the multiplied attacks upon,
our whole judicial system.

I have also sought to show by the record, as well as by some reference
and analysis of human aspirations and emotions, that the governmental
policy pursued for many years was correct, and therefore is and will be
correct forever. If I have failed to make it clear that for more than
one hundred years the government fostered every industry and fathered
none, I have made poor use of the material at hand. I have sought to
show that the government merely safeguarded the liberties of the
people, while her citizens pursued their happiness and won it in
achievement, which, in regular sequence, made the nation great. If the
argument has any force, it should lead irresistibly to the conclusion
that if America expects to make further advancement, the only sure way
is to return to these fundamental principles.

I have referred to and briefly discussed bolshevist or socialist
doctrines, including confiscation of property, only because they are
all involved in the departure from the policy of the fathers. When the
Republic changed its course little by little away from granting liberty
and affording opportunity and began to restrict and to absorb what the
citizen had formerly enjoyed, the way was opened for all the elements
of revolution. To understand the gravity of the situation one must
study the logical effect, and to comprehend the effect some reference
to similar movements in France and Russia is necessary.

I have sought to strengthen the argument against governmental
interference in purely secular affairs by showing the unavoidable
handicap the government is under when it enters the field of business.
This has occasioned some analysis of the Civil Service system, with
illustrations of its actual operations.

That my country will return to its original form and purpose, I am more
than hopeful; yea, I am confident. It must be that the United States
will revert to representative government in its original simplicity. It
cannot be otherwise than that a wise citizenship will again select
their representatives because of aptitude and will retain them in
positions of responsibility until they shall have acquired efficiency
through experience, gauging their worth, the while, by results rather
than by subservient obedience. An ambitious people, resourceful and
hopeful, virile and expectant will certainly take their government out
of business, and confine its operations to the legitimate functions of
government. All the traditions of the past, all the teachings of the
Fathers, all the warnings of history are against paternalism. No
government ever made or will make a people great except as it
guarantees liberty whereby the people shall make themselves great. No
people ever have made or will make themselves great by relying upon
their government to do for them the things which the Almighty
intended—yea decreed—that they should do for themselves.

APPENDIX A

UNSKILLED LABORERS

Treasury Department, Nov. 11, 1903.

To Civil Service Commission:

Your letter of November 4th relative to the adoption of rules governing
the employment of laborers in the Federal Service at Boston is at hand.
I will have occasion to take the matter up with the President, and if
he desires the rules signed I shall be glad to comply. Otherwise I
shall decline.

My principal objection is the fact that paragraph 6, “Definition of
Classified Work,” contained in the regulations governing the employment
of classified laborers, adopted July 23, 1903, has proved very
impracticable. In fact that Department not only violates these rules
every day, but ignores them and is compelled to do so. I am also
advised that the Civil Service Commission not only violates them, but
ignores them. I respect the Commission for doing this, and my respect
would not be diminished if it would repeal such regulations as have to
be ignored by the very men who promulgate them. The fact that they are
thus ignored by the Civil Service Commission is supported by the clear
and repeated statement of a member of the Commission, made in my office.

And this is not all. It is well nigh impossible to secure from the
skilled laborer register of the Commission persons who are willing to
perform the menial service which is required of unskilled laborers. The
rule referred to forbids our taking unskilled laborers from our payroll
to perform this menial service, and permit them incidentally to perform
service that requires a knowledge of reading and writing. We are now in
the midst of a prolonged correspondence with the Civil Service
Commission over a case arising at San Francisco where the offense was
that an unskilled laborer, assigned to handle merchandise, was
permitted to go to a pile of bales and boxes on the docks and select a
package that was needed for examination, and exercised his ability to
read the number on the package. Had some skilled laborer gone with the
unskilled laborer, to read the number, and had then informed the
unskilled laborer that that package bore the desired number, all would
have been well. Under the rules for which you are contending it
requires two men to get a package, when either one can get it alone,
and then it takes a man and a stenographer in this office to conduct
the correspondence that grows out of the offense of allowing either one
to do it unaided by the other. If the President wants this condition
inaugurated at Boston and other ports, as well as at San Francisco, I
shall be very glad to see that it is done.

I will be very glad to co-operate with the Civil Service Commission to
improve the service in this Department, not only in Boston but in every
port. I am a firm believer in Civil Service, and, I may add, in the
machinery of Civil Service but I am more interested in improving the
product than in perfecting the machine. So far as I am concerned I will
not voluntarily sign and promulgate rules for the mere sake of signing
and promulgating rules. I will co-operate to the fullest extent in
anything that will improve the service.

Very respectfully,
LESLIE M. SHAW.

REQUIREMENTS FOR MALE UNSKILLED LABORERS

Treasury Department, Jan. 26, 1904.

To the Civil Service Commission:

Your letter of the 14th inst, submitting for approval a statement of
physical requirements for male unskilled laborers is received.

I am unalterably opposed to a graduated scale of physical ability. If a
man of medium weight, 130 lbs., and minimum height, 5 ft. 3 in., and
with strength to carry a minimum weight, 150 lbs., is to be marked 70,
as you propose, then a man weighing 200 lbs., 6 ft. tall, and able to
carry 200 lbs., would I supposed be marked 80; and a man weighing 300
lbs., 6 ft. 5 in. in height, and able to carry 500 lbs., should be
marked 100. No one would have such a man around. He would be physically
incompetent. Either a man is physically competent or he is not. Most of
the defects referred to as sufficient to justify rejection are all
right. I have no objection to a list of competents being made and from
that list we will select. But I would rather base my judgment upon the
appearance of an applicant who would come into the office and say “good
morning” and retire than all the physical examinations that the Civil
Service Commission can give.

I do not care to prolong the correspondence; I simply will not consent
to accept unskilled laborers on a graduated scale of physical ability.
I do not care whether a man can lift 150 lbs. or 400 lbs. when there be
only 10 lbs. to lift.

Very respectfully,
LESLIE M. SHAW.

APPENDIX B

TEA EXAMINER

Treasury Department, Dec. 15, 1904.

To the Civil Service Commission:

I am in receipt of your communication of November 21st certifying three
names from which to select a Tea Examiner.

I hereby file objection to each and all of the persons so certified
because of mental unfitness for the position for which they apply.

There is no tariff duty on tea and the sole purpose of examination of
tea is to protect the American people from cheap and deleterious
preparations. A competent tea examiner must be able to pour hot water
on a sample of tea and by tasting, tell within five cents per pound of
what it is worth, and to determine accurately whether the sample is
composed of tea or of some imitation or preparation thereof, and
whether it has been adulterated. Whether he can speak the English
language or sign his name is immaterial. If he knows tea, and is honest
and incorruptible, the American people will get protection. These men
know no more about tea than you or I and they are as unfit for the
place as either of us.

In proof of the foregoing, one of the names certified is that of a
clerk in the Customs Service and is known to this Department to be
wholly unfit for Tea Examiner. He is a clerk and not a Tea Expert.

Another is a bookkeeper, and has been continuously thus employed since
1886, and knows nothing about tea and does not pretend to.

The third is now an opener and packer in the Customs Service and admits
that all he knows about tea is the fact that he once sold coffee. The
serious side of this matter is the absolute and literal truth of the
foregoing.

Some conception of the importance of the position may be gained from
the fact that over three hundred packages of alleged tea have been
excluded in the last ninety days at that port alone.

Very respectfully,
LESLIE M. SHAW.

The balance of the correspondence is unimportant in view of the
Commissioner’s letter of Dec. 9, 1905, practically one year thereafter,
quoted page 173, and in which the Commission states that after two
examinations, on its recommendation the place was excepted by the
President and filled independent of Civil Service.

APPENDIX C

TOBACCO EXAMINER

Treasury Department, December 15, 1904.

To the Civil Service Commission:

I am in receipt of your letter of the 12th inst. certifying three names
eligible for selection as Tobacco Examiner at the port of ————.

I hereby file objections to each and all because of mental unfitness
for the position for which they apply.

The Tariff Duty on unmanufactured tobacco is in part as follows:

Per lb.
Wrapped Tobacco, unstemmed $1.85
Wrapped Tobacco, stemmed 2.50
Filler Tobacco, unstemmed .35
Filler Tobacco, stemmed .50
Filler Tobacco, if packed or mixed
with more than 15 per cent of
wrapper tobacco, unstemmed 1.85
If stemmed 2.50
Tobacco, the product of two or more
countries or dependencies when
mixed, unstemmed 1.85
If stemmed 2.50

This is sufficient to show the importance of the position and the
necessity of having an expert tobacco man as examiner. No one of these
certified is competent. The first is a clerk and stenographer. He has
been a letter carrier and is now a clerk in the Customs House at
$1,200.00 per annum. He is a professional Civil Service Examination
taker, and admits having “crammed” as he terms it for this examination.
He has never had anything to do with the tobacco business except that
he was once stenographer to a tobacco merchant.

The second is a storekeeper and clerk in the Customs Service. He has
had no experience whatever in tobacco except to have seen bales of
tobacco while storekeeper for the government.

The third has been a cigar maker but does not pretend to know anything
about the tobacco business except a little experience in making cigars
from tobacco purchased by others, and that in a very small way. He is
in my judgment wholly unprepared to protect the revenues of the
government against the frauds continually attempted by unscrupulous
importers, who pursue the line of least resistance, and bring their
tobacco to the port where deception is least likely to be detected. He
is equally unprepared to protect the honest importer from competition
with the unscrupulous.

In kindness but in honesty let me say that the man who conducted the
examinations has no conception whatever of the qualifications needed in
a tobacco examiner.... These applicants may be nice men, and they may
wear good clothes, and they may speak good English, and may be men of
integrity, but no one of them is fit to hold the very important
position to which he aspires, and for the simple reason that he knows
nothing at all about the only thing he needs to know anything about,
to-wit: Tobacco!

Very respectfully,
LESLIE M. SHAW.

The balance of the correspondence is unimportant in view of the
Commission’s statement in its letter of Dec. 9, 1905, quoted page 173,
that after three examinations the President on request had excepted one
tobacco examiner and the place had been filled independent of
examinations.

APPENDIX D

Correspondence between the Secretary of the Treasury and the
Civil Service Commission _in re_ Trial Lawyers.

Treasury Department, Sept. 20, 1905.

To the Civil Service Commission:

Gentlemen:

I wish you would hold an examination for special agents at the earliest
possible moment. As I explained to your Mr. —— the other day, the
Department needs some special agents with legal training. Not all
special agents need legal training, but there are many times when cases
have to be prepared for presentation to the Board of General
Appraisers, or to the Court, where legal experience is almost
essential. I will give you an illustration: Not long ago I needed to
send a man to Europe to investigate alleged undervaluations in crockery
and chinaware. I had the matter investigated by three special agents
and special employees with no satisfactory results. They did not know
what was essential, and did not seem to know evidence when they saw it.
I then appointed an experienced lawyer as special employee and sent him
over. The evidence he collected ought to secure a fifty percent advance
on these goods.

I want to urge that in this instance you prepare the questions so as to
exclude everyone who is not an experienced lawyer. I also desire to see
the questions before the examination is held. I want to cooperate with
the Commission, and I urge the Commission to cooperate with me in
getting material absolutely necessary to good administration.

Very truly yours,
LESLIE M. SHAW,
Secretary of the Treasury.

SECOND LETTER

Treasury Department, October 14, 1905.

To the Civil Service Commission:

Gentlemen:

How are you progressing preparatory to the examination for special
agents? I am very anxious that this shall be done at the earliest
possible moment. I have a well-defined policy that I would like to put
in operation before I retire.

Very truly yours,
LESLIE M. SHAW.

FIRST LETTER FROM THE COMMISSION

December 2, 1905.

The Honorable
The Secretary of the Treasury:

Sir:

Referring to the examination for special treasury agents which you
desire this Commission to hold and with respect to which you make oral
inquiry today, the Commission has the honor to state that the questions
on government, law, and customs matters prepared by your Department
have been given careful consideration. It is the opinion of the
Commission that the questions are of such a character that they might
be answered by a person without testing his qualifications for the
position of Special Treasury Agents, and that, on the other hand,
failure to answer the questions would not indicate lack of
qualification for such position.

The Commission is sincerely desirous of co-operating with your
Department in securing competent persons for the service, but it does
not believe that an examination along the lines indicated in the
material submitted by your Department would have the desired effect.

The Commission very seriously doubts whether the position of Special
Agent can be filled as satisfactorily by open competitive examinations
as by transfer or promotion of trained and experienced employees in the
service who are familiar with the workings of your Department and
especially with customs matters.

Very respectfully,
————
Commissioner.

REPLY TO FOREGOING

Treasury Department, December 5, 1905.

To the Civil Service Commission:

I am in receipt of your letter of the 2nd relative to an examination
for Special Agents to the Treasury Department.

I know you will pardon me if I insist that I know better the necessary
qualifications of Special Agents than any person who knows nothing
about it whatever. If there were experienced employees in the service
who could be transferred I certainly should do so rather than to await
an examination. You will remember a personal interview I had with you
about this some months ago, and several requests, some of them personal
and some of them in writing followed by the preparation of the
questions in this Department, still followed by oral inquiry to which
you courteously refer. I will explain again that I need some lawyers in
the Special Agent Force. The government loses millions every year (and
I speak within bounds) for want of suitable preparation of cases for
presentation to the Board of General Appraisers. I want men who know
evidence when they see it and who know how to present a case. I do not
want a physician or a preacher, but I do want and must have lawyers. I
care very little whether they know anything about Customs matters or
not—they can learn that but they may know everything about Customs
matters and cannot become lawyers. I have clerks in the Department who
have graduated in law but that does not make a lawyer of a man. I know
what the Department needs, and I want that need supplied. Please advise
whether you will hold the required examinations or whether I will have
to fill the vacancies with incompetent clerks, or by executive order.
If you will join in a request that suitable men be put into this
important work by executive order I will let the Civil Service
Commission make the nominations from a list which I will furnish, or I
will ask them to furnish the list and I will make the nominations. I am
not trying to escape the Civil Service, for I heartily believe in it
when so applied as to bring material that can be used to bring results.
I appreciate your expressed desire to co-operate and I only ask that
you make it good by co-operating.

Very truly yours,
LESLIE M. SHAW.

LETTER FROM THE COMMISSION

December 9, 1905.

The Secretary of the Treasury:

The Commission has the honor to acknowledge the receipt of your letter
of the 5th inst. in which are indicated your wishes with respect to the
proposed examination for Special Agents.

In reply your attention is invited to the general questions on
government, law and customs matters which have been submitted to the
Commission by your Department. Of the fifty-three questions so
submitted, fifteen are of a general character and could be readily
answered by any law student. Only three relate to evidence in any form.
These are of such an elementary character that they may be found in any
text book on the subject and are not sufficient to bring out a
satisfactory knowledge of evidence. There are thirty-seven questions
bearing directly upon customs matters although your letters indicate
that a knowledge of the subject is not to be required of applicants.
After careful consideration of the matter and in view of your recent
letter it is believed that the questions submitted by your Department
are not suitable for an examination of Special Agents.

_After discussing the responsibility which the Commission must bear the
letter proceeds_:

In this connection your attention is invited to an examination for law
clerk, Class 4, held for your Department in April, 1903. This
examination was prepared along the lines indicated by you and your
statement that only graduates of reputable law colleges who had had at
least three years practical experience subsequent to graduation would
be acceptable to the Department, was incorporated in the announcement.
The examination consisted principally of practical questions in law and
the preparation of opinions upon stated cases. Of the 367 persons who
competed only 20 attained eligibility. The results of this examination
were very unsatisfactory to the Commission and to a large number of the
competitors who felt that injustice had been done them. It is
understood that several persons who were regarded by the officials of
the Treasury Department as qualified for the position failed in the
examination. A large number of appeals from the ratings were received,
some of them being from men who were graduates of the best law schools
in the country and who had many years experience in the practice of law
in the general field.

_Then follows reference to examinations for Tobacco and Tea Examiners
quoted in Chapter_ XXIII; _and the letter closes as follows_:

The Commission is strongly of opinion that in the entire force of the
Treasury Department, comprising as it does many thousand employees,
persons can be found who possess suitable qualifications for Special
Agents.

Very respectfully,
————
Commissioner.

Treasury Department, December 11, 1905.

To the Civil Service Commission:

For three months I have been trying to get some lawyers on the eligible
list that I may improve the Special Agent Service, and I am this near
success: I have had the solicitor for this Department prepare a list of
questions to be submitted with others which the Commission may be
pleased to prepare. I have not examined the questions. They were
prepared by Judge O’Connell, who has been a practicing lawyer of
extensive experience for twenty years, and has several times served on
the committee to examine applicants for admission to the Supreme Court
of his state. These questions your Commission refused to use and
declined to prepare others. You tell me that I must fill the vacancies
from clerks in the Department. This I will never do. The vacancies will
remain while I remain unless I can fill them in a way that in my
judgment will improve the service. Possibly some clerk in your
Department can prepare a better list of questions than Judge O’Connell
has submitted. If so I have no objection. In fact I have no objection
to any course you may be pleased to pursue and I have no further
suggestions to make. I only ask that some time within a year or so the
Civil Service Commission get a few lawyers within reach for the special
service where lawyers are necessary. The government loses millions
every year for the want of men in the Special Agent force, competent to
prepare cases for submission to the Board of General Appraisers. If the
Commission shall elect to assist me in the premises I shall appreciate
it very much, and if it declines to act in the future, as it has
declined in the past I shall submit, unless I can devise some other way
to improve the service.

Very truly yours,
LESLIE M. SHAW.

COMMISSION’S REJOINDER DATED DEC. 20, 1905.

We are clear that vacancies in the position as Special Agent cannot be
satisfactorily filled by open competitive examinations....

... If it be your desire as indicated in your letter that we should
hold an examination for law clerk we will do so; and if you wish to
make use of that register in filling vacancies in the position as
Special Agent, it is of course your privilege to do so.

Very respectfully,
————
Commissioner.

Thereupon the Secretary of the Treasury made request:

“Replying to your letter of December 20th handed to me by your Mr. ——
and in harmony with our verbal understanding I request that the Civil
Service Commission hold an examination, giving it such name as it may
deem appropriate but so arranged as to exclude all but graduates from
law colleges, and who in addition have had not less than three years
experience in active practice including trial of cases in _Nisi Prius_
Courts. I desire to make use of these clerks as Special Agents. They
should be eligible for appointment direct or by immediate transfer
without waiting six months. I need them now, and will be pleased if the
Commission will expedite the examination in every possible way.”

On December 29, 1905, the Commission submitted draft of an announcement
of an examination for law clerks in the Treasury Department and added:
“It is requested that the announcement be returned to this office at
your earliest convenience with such suggestions as you may desire to
make in regard thereto.”

Suggestions were made January 4, 1906.

“I suggest that you eliminate from the first paragraph the following:

‘In making certifications to positions in the Customs Branch of the
Treasury Department, consideration will be given to experience showing
familiarity with Customs Law and practice in Customs Cases.’

There is not a lawyer in the United States who has had experience in
Customs Cases whom I would appoint Special Agent, except those who are
earning five times what the position will pay. There are some in the
cities, and especially in New York, quite a number of disreputable
fellows who have had some experience in practice in Customs Cases, but
there is not a New York lawyer of experience in Customs Cases whom I
would appoint Special Agent except as I say those who would not accept.
I care nothing for familiarity or practice in Customs Cases. What I
want is a man competent to practice in Customs Cases, and with
integrity enough to justify his appointment.”

As already stated, without fault of the Commission no lawyer who had
ever tried a case in any court was ever made eligible and the Secretary
of the Treasury could secure one only from the eligible list. There was
an eligible list of law clerks but no list of lawyers.

TRANSCRIBER’S NOTES

This text has been preserved as in the original, including archaic and
inconsistent spelling, punctuation and grammar, except as noted below.

Obvious printer’s errors have been silently corrected.

Text in italics in the original work is represented herein as _text_.

Small capitals are shown herein as all capitals.

Footnotes have been renumbered and then moved to directly below the
paragraphs to which they belong.

“Tallyrand” was changed to “Talleyrand”

“cocklebur” was changed to “cockleburr”

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