somewhat to modify its previous interpretation of the Anti-Trust Law
itself, and not merely its application; since otherwise, if the trusts
come under federal jurisdiction, the law might wipe out the new trusts,
as it did the old, instead merely of regulating them. In view of the
recently published memoirs of Senator Hoar, there can be no doubt that
the Supreme Court has interpreted the law forbidding the restraint of
trade more strictly than was originally intended in the bill which Hoar
himself drew up. Congress meant to refer to agreements in restraint of
trade in a narrow, technical sense, while the court has interpreted this
law as if it were to apply to every agreement which merely regulates
production or sale in any place. But this unnecessarily severe
construction of the law by the unexpected verdict of the court can of
course be set aside by a further Congressional measure, and therefore
offers no difficulty.
The Administration might proceed in still another way. A good deal has
been said of greater publicity in public affairs, and in the last few
years energetic measures have already been taken at the instance of the
President. Many of the evils of trusts lie in their concealment of the
conditions under which they have been organized; and the new Department
of Commerce is empowered to take official testimony concerning all such
matters, and to demand this under oath. Whether this will be an ultimate
gain is doubted by many, since those acquainted with the matter say that
the secrets of modern book-keeping make it impossible to inspect the
general condition of a large industrial concern when its promoters
desire to conceal the truth. While if one were to go back of the books
and lay bare every individual fact to the public eye, the corporations
would be considerably injured in their legitimate business. And in any
case, this new effort at publicity has so far no judicial sanction. One
large trust has already refused to give the information desired because
its counsel holds the Congressional law to be unconstitutional, and this
matter will have to be settled by the Supreme Court.
The most thoughtful minds are coming slowly to the opinion that neither
tariff provisions nor legislation is necessary, but that the matter will
eventually regulate itself. The great collapse of market values has
opened the eyes of many people, and the fall in the price of commodities
manufactured by trusts works in much the same direction. People see,
more and more, that most of the evils are merely such troubles as all
infant organisms pass through. The railroads of the country were also at
first enormously overcapitalized, but the trouble has cured itself in
the course of time. The surpluses have been spent on improvements, and
railroad shares to-day represent actual values. Such a change has in
fact already set in among the trusts. Paternal regulation by the
government, which prescribes how industry shall go on, is always
essentially distasteful to Americans. Exact regulative measures which
shall be just cannot be framed beforehand by any government. Even Adam
Smith believed, for instance, that the form of organization known as a
stock company was suitable for only a few kinds of business. The
American prefers to submit all such questions to the actual business
test. All experimental undertakings are sifted by natural selection, and
the undesirable and unnecessary ones fall through. It is true that many
lose their property in such experiments, but that is only a wholesome
warning against thoughtless undertakings and against hasty belief that
the methods profitable in one field must be profitable in every other.
It is true that here and there a man will make large profits rather too
easily, but Roosevelt has well said that it is better that a few people
become too rich than that none prosper.
The development of affairs shows most of all that prices can be inflated
for a short time, but that they slowly come back to a reasonable figure
so long as there are no real monopolies. The experience of the last ten
years teaches, moreover, that the most important factor which works
against the trusts is the desire for independence on the part of
capitalists, who do not for a long time willingly subordinate themselves
to any corporation, but are always tempted to break away and start once
more an independent concern.
And comparing the situation in 1904 with that of 1900, one sees that in
spite of the seeming growth of the trust idea, the trusts themselves
have become more solid by the squeezing out of fictitious valuations;
they are more modest, content themselves with less profits, and they are
much less dangerous because of the competition which has grown up around
them. The trusts which originally ruled some whole industry through the
country are to-day satisfied if they control two-thirds of it. A single
fundamental thought remains firm, that the development of industry
demands a centralized control. This idea works itself out more and more,
and would remain in spite of any artificial obstruction which might be
put before it. But the opposite tendencies are too deeply rooted in
human nature, in Anglo-Saxon law, and in the American’s desire for
self-initiative, to let this centralization go to dangerous limits.
But those who will not believe that the trusts, with their enormous
capitals, can be adequately restrained in this way, may easily content
themselves with that factor which, as the last few years have shown,
speaks more energetically than could Congress itself—this is organized
labour. The question of capital in American economy is regulated finally
by the question of labour.
_The Labour Question_
As the negro question is the most important problem of internal
politics, so the labour question is the most important in American
economic life; and one who has watched the great strikes of recent
years, the tremendous losses due to the conflicts between capital and
labour, may well believe that, like the negro question, this is a
problem which is far from being solved. Yet this may not be the case.
With the negro pessimism is justified, because the difficulties are not
only unsolved, but seem unsolvable. The labour question, however, has
reached a point in which a real organic solution is no longer
impossible. Of course, prophecies are dangerous; and yet it looks as if,
in spite of hard words, the United States have come to a condition in
which labourers and capitalists are pretty well satisfied, and more so
perhaps than in any other large industrial nation. It might be more
exact to say that the Americans are nearer the ideal condition for the
American capitalist and the American labourer, since the same question
in other countries may need to be solved on wholly different lines.
In fact, the American problem cannot be looked into without carefully
scrutinizing how far the factors are peculiar to this nation. Merely
because certain general factors are common to the whole industrial
world, such as capital, machinery, land values, labour, markets, and
profits, the social politician is inclined to leave out of account the
specific form which the problem takes on in each country. The
differences are chiefly of temperament, of opinions, and of mode of
life.
It is, indeed, a psychological factor which makes the American labour
question very different from the German problem. This fact is neglected,
time after time, in the discussions of German theorists and business
men. It is, for instance, almost invariably affirmed in Germany that the
American government has done almost nothing toward insuring the labourer
against illness, accident, or old age, and that therefore America is in
this respect far inferior to Germany. It can easily be foreseen, they
say, that American manufacturers will be considerably impeded in the
world’s market as soon as the progress of civilization forces them to
yield this to the working-man.
The fact is that such an opprobrium betrays a lack of understanding of
American character. The satisfaction felt in Germany with the laws for
working-men’s insurance is fully justified; for they are doubtless
excellent under German conditions, but they might not seem so
satisfactory to the average American nor to the average American
labourer. He looks on it as an interesting economic experiment,
admirable for the ill-paid German working-man, but wholly undesirable
for the American. The accusation that the American government fails in
its duty by not providing for those who have served the community, is
the more unjust, since America expends on the average $140,000,000 in
pensions for invalid veterans and their widows, and is equally generous
wherever public opinion sees good cause for generosity.
It cannot be doubted that the American labourer is a different sort of
creature from the Continental labourer; his material surroundings are
different, and his way of life, his dwelling, clothes and food, his
intellectual nourishment and his pleasures, would seem to the European
workmen like luxuries. The number of industrial labourers in the year
1880 was 2.7 million, and they earned $947,000,000; in 1890 it was 4.2
million earning $1,891,000,000; and in 1900 there were 5.3 million
labourers earning $2,320,000,000; therefore, at the time of the last
census, the average annual wage was $437. This average figure, however,
includes men, women, and children. The average pay of grown men alone
amounts to $500. This figure gives to the German no clear idea of the
relative prosperity of the working-man without some idea of the relation
between German and American prices.
One reads often that everything is twice as expensive in America as in
Germany, while some say that the American dollar is worth only as much
as the German mark—that is, that the American prices are four times the
German; and still others say that American prices are not a bit higher
than German. The large German-American steamships buy all their
provisions of meat in New York rather than in Hamburg or Bremen, because
the American prices are less. If one consults, on the other hand, a
doctor or lawyer in New York, or employs a barber or any one else for
his personal services, he will find it a fact that the American price is
four times as high as the German. The same may be said of articles of
luxury; for bouquets and theatre tickets the dollar is equal to the
mark. It is the same with household service in a large town; an ordinary
cook receives five dollars per week, and the pay of better ones
increases as the square of their abilities. Thus we see at once that an
actual comparison of prices between the United States and Europe cannot
be made. A dollar buys five marks’ worth of roast beef and one mark’s
worth of roses.
In general, it can be said that the American is better off as regards
all articles which can be made in large quantities, and worse off in
articles of luxury and matters of personal service. The ready-made suit
of clothes is no dearer in America than in Germany and probably better
for the price, while the custom-made suit of a first-class tailor costs
about four times what it would cost in Germany. All in all, we might say
that an American who lives in great style and spends $50,000 a year can
get no greater material comforts than the man in Germany who spends a
third as much—that is, 70,000 marks. On the other hand, the man who
keeps house with servants, but without luxuries, spending, say, $5,000 a
year, lives about like a man in Germany who spends 10,000 marks—that is,
about half as much. But any one who, like the average labourer, spends
$500 in America, unquestionably gets quite as much as he would get with
the equal amount of 2,100 marks in Germany.
But the more skilled artisan gets $900 on the average—that is, about
three times as much as the German skilled workman; so that, compared
with the wages of higher-paid classes, the working-men are paid
relatively much more than in Europe. The average labourer lives on the
same plane as the German master artisan; and if he is dissatisfied with
the furnishings of his home it is not because he needs more chairs and
tables, but because he has a fancy for a new carpet or a new bath-tub.
In this connection we are speaking always of course of the real
American, not the recent immigrants from Southern and Eastern Europe,
who are herded together in the worst parts of large cities, and who sell
their labour at the lowest rate. The native American labourer and the
better class of German and Irish immigrants are well clothed and fed and
read the newspapers, and only a small part of their wages goes for
liquor.
More important than the economic prosperity of the American working-man,
though not wholly independent of it, is the social self-respect which he
enjoys. The American working-man feels himself to be quite the equal of
any other citizen, and this not merely in the legal sense. This results
chiefly from the intense political life of the country and the
democratic form of government, which knows no social prerogatives. It
results also from the absence of social caste. There is a considerable
class feeling, but no artificial lines which hinder any man from working
up into any position. The most modest labourer knows that he may, if he
is able, work up to a distinguished position in the social structure of
the nation.
And the most important thing of all is probably the high value put on
industry as such. We have spoken of this in depicting the spirit of
self-initiative. In fact, the background of national conceptions as to
the worth of labour must be the chief factor in determining the social
condition of the working-man. When a nation comes to that way of
thinking which makes intellectual activities the whole of its culture,
while economic life merely serves the function of securing the—outward
comforts of the nation as it stretches on toward its goal of culture,
then the industrial classes must content themselves with an inferior
position, and those who do bodily labour, with the least possible amount
of personal consideration. But when a nation, on the other hand,
believes in the intrinsic worth of industrial culture, then the labour
by which a man lives becomes a measure of his moral worth, and even
intellectual effort finds its immediate ethical justification only in
ministering to the complex social life; that is, only so far as it is
industry.
Such now is the conception of the American. Whether a person makes laws,
or poetry, or railway ties, or shoes, or darning-needles, the thing
which gives moral value to his life’s work is merely its general
usefulness. In spite of all intellectual and æsthetic differences, this
most important element of activity is common to all, and the manual
labourer, so far as he is industrious, is equal to those who work with
their brains. On the other hand, the social parasite, who perhaps has
inherited money and uses it only for enjoyment, is generally felt to be
on a lower plane than the factory hand who does his duty. For the
American this is not an artificial principle, but an instinctive
feeling, which may not do away with all the thousand different shadings
of social position, but nevertheless consigns them to a secondary place.
One may disapprove of such an industrial conception of society, and like
better, for example, the æsthetic conception of the Japanese, who teach
their youth to despise mercantile business and tastefully to arrange
flowers. But it is clear that where such an industrial conception
prevails in a nation the working-man will feel a greater self-respect
and greater independence of his surroundings, since the millionaire is
also then only a fellow-workman.
Undoubtedly just this self-respect of the American labourer makes him
the great industrial force which he is. The American manufacturer pays
higher wages than any of his competitors in the markets of the world and
is not disconcerted at this load, because he knows that the
self-respecting working-man equalizes the difference of price by more
intense and intelligent labour. It is true that the perfection of
labour-saving machinery is a tremendous advantage here, but after all it
is the personal quality of the working-man which has brought about that
in so many industries ten American workmen do more than fifteen or, as
experts often say, twenty Italian workmen. The American manufacturer
prefers to hire a hundred heads rather than a thousand hands, even if
the wages are equal, and even the greedy capitalist prefers the labourer
who is worth thirty dollars a week to one who is worth only twenty. The
more the working-man feels himself to be a free co-operator, the more
intelligently does he address himself to the work. We hear constantly of
improvements which artisans have thought out, and this independent
initiative of theirs does not in the least impair the discipline of
industry. American discipline does not mean inferiority and the giving
up of one’s own judgment, but is a free willingness to co-operate and,
for the common end, to intrust the leadership to some one else. This
other person is exalted to the trustworthy position of leader by the
desire of those concerned, so that each man is carrying out his own will
in obeying the foreman.
Therefore, everything which in any wise savours of compassion is
entirely out of the question for him. In fact, the friendly benevolence,
however graciously expressed, intended to remind the workman that he is
after all a human creature, perhaps the friendly provision of a house to
live in or of some sort of state help for his family, must always be
unwelcome to him, since it implies that he is not able, like other
fathers of a family, to be forethoughtful and provident. He prefers to
do everything which is necessary himself. He insures himself in a
life-insurance company and, like anybody else, he looks out for his own
interests—tries to improve his conditions by securing good contracts
with his employer, by arranging organizations of his fellow-workmen, and
by means of his political rights. But whatever he accomplishes, he
enjoys it because he has worked in free competition against opposing
interests. Any material benefits which he might purchase by enduring the
patronizing attitude of capitalists or legislators would be felt to be
an actual derogation.
And thus it happens that social democracy, in the technical sense, makes
no advance among American workmen. The American labourer does not feel
that his position is inferior; he knows that he has an equal opportunity
with everybody else, and the idea of entire equality does not attract
him, and would even deprive him of what he holds most valuable—namely,
his self-initiative, which aims for the highest social reward as a
recognition of the highest individual achievement. American society
knows no unwritten law whereby the working-man of to-day must be the
same to-morrow, and this gives to the whole labour question in America
its distinction from the labour question in European aristocratic
countries. In most cases the superiors have themselves once been
labourers. Millionaires who to-day preside over the destinies of
thousands of working-men have often themselves begun with the shovel or
hod. The workman knows that he may set his ambition as high as he likes,
and to exchange his equal opportunity for an equality of reward would
mean for him to sink back into that social condition in which industry
is thought to be only a means to something else, and not in itself a
valuable activity. Although Bellamy may already dream of the common
umbrella, his native country is probably further from social democracy
than any country in Europe, because the spirit of self-initiative is
here stronger than anywhere else, and because the general public is
aware that no class distinctions cut it off from the highest positions
in the country. It knows that everything depends on industry, energy,
and intelligence.
This does not hinder the working-men, in their fight for better
conditions of labour, from adopting many socialistic tenets. The
American calls it socialism even to demand that the government own
railways, telegraph lines, express companies, or coal-fields, or that
the city conduct tramways, or gas or electric-light works. Socialism of
this sort is undoubtedly progressing, although the more extravagant
ideas find more wordy orators to support them than hearers to give
belief. It is also very characteristic that the labour leaders do not
make such agitation their life work, but often after a few years go over
to one or another civil occupation. The relation between working-man and
capitalist, moreover, is always felt to be temporary. A man is on one
side of the line to-day and on the other to-morrow. There is no firm
boundary between groups of men, but merely a distribution in temporary
groups; and this separates the American labour unions from even the
English unions, with which otherwise they have much in common.
Many other conditions by which the American working-man’s life is
separated from the Englishman’s are of an economic sort. It is
remembered, for instance, how successful the English unions have been in
establishing co-operative stores, while in America they have failed in
this. The department shops in the large cities have been able to sell
cheaper and better goods, and have been in every way more popular. But
enough of comparing America with the Old World—we must discuss the
actual situation in the New.
The labour movement of the United States really began in the third
decade of the last century. Of course, only the North is in question; in
the South slavery excluded all alliances and independent movements for
improving the condition of the manual labourer. There had been small
strikes as early as the eighteenth century, but the real movement began
with the factories which were built during the nineteenth.
From the very beginning the demand for shorter hours and higher wages
were the main issues. At the same time the American world was filled
more or less with fantastic notions of co-operation, and these
influenced the course of affairs. Boston and New York were the centres
of the new movement. As early as 1825 in New York there appeared the
first exclusively labour newspaper, the “Labour Advocate”; it commenced
a literature which was to increase like an avalanche. The labourers
figured independently in politics in 1830, when they had their own
candidate for governor. But all political endeavours of the working
people have been mere episodes, and the chief labour movements of the
century have taken place outside of politics; the leading unions have
generally found that their strength lay in renouncing political
agitation. Only when legal measures for or against the interests of
labourers have been in question, has there been some mixing in with
politics, but the American workmen have never become a political party.
At the beginning of the thirties, working-men of different industries
united for the first time in a large organization, such as later became
the regular form. But at the outset of the movement there appeared also
the opposite movement from the side of the capitalists. For instance, in
1832 merchants and shipholders in Boston met solemnly to declare it
their duty to oppose the combinations of working people which were
formed for the illegal purpose of preventing the individual workman from
making a free choice as regards his hours of labour, and for the purpose
of making trouble with their employers, who already paid high wages.