The Southerners were looking for a place in the sun where slavery, as an

institution, might flourish for the profit and power of the

slave-holding class. Their most effective move in this direction was the

annexation of Texas and the acquisition of territory following the

Mexican War. An insistent drive for the annexation of Cuba was cut short

by the Civil War.

Southern sentiment had supported the Louisiana Purchase of 1803 and the

Florida Purchase of 1819. From Jefferson's time Southern statesmen had

been advocating the purchase of Cuba. Filibustering expeditions were

fitted out in Southern ports with Cuba as an objective; agitation was

carried on, inside and outside of Congress; between 1850 and 1861 the

acquisition of Cuba was the question of the day. It was an issue in the

Campaign of 1853. In 1854 the American ministers to London, France and

Madrid met at the direction of the State Department and drew up a

document (the "Ostend Manifesto") dealing with the future of Cuba.

McMaster summarizes the Manifesto in these words: "The United States

ought to buy Cuba because of its nearness to our coast; because it

belonged naturally to that great group of states of which the Union was

the providential nursery; because it commanded the mouth of the

Mississippi whose immense and annually growing trade must seek that way

to the ocean, and because the Union could never enjoy repose, could

never be secure, till Cuba was within its boundaries." (Vol. viii, pp.

185-6.) If Spain refused to sell Cuba it was suggested that the United

States should take it.

The Ostend Manifesto was rejected by the State Department, but it was a

good picture of the imperialistic sentiment at that time abroad among

certain elements in the United States.

The Cuban issue featured in the Lincoln-Douglas Debates in 1858. It was

hotly discussed by Congress in 1859. Only twenty years had passed since

the United States, by force of arms, had taken from Mexico territory

that she coveted. Now it was proposed to appropriate territory belonging

to Spain.

The outbreak of hostilities deferred the project, and when the Civil War

was over, the slave power was shattered. From that time forward national

policy was guided by the leaders of the new industrial North.

The process of this change was fearfully wasteful. The shifting of power

from the old regime to the new cost more lives and a greater expenditure

of wealth than all of the wars of conquest that had been fought during

the preceding half century.

The change was complete. The slaves were liberated by Presidential

Proclamation. The Southern form of civilization--patriarchal and

feudal--disappeared, and upon its ruins--rapidly in the West; slowly in

the South--there arose the new structure of an industrial civilization.

The new civilization had no need to look outward for economic advantage.

Forest tracts, mineral deposits and fertile land afforded ample

opportunity at home. It was three thousand miles to the Pacific and at

the end of the journey there was gold! The new civilization therefore

turned its energies to the problem of subduing the continent and of

establishing the machinery necessary to provide for its vastly

increasing needs. A small part of the capital required for this purpose

came from abroad. Most of it was supplied at home. But the events

involved in opening up the territory west of the Rockies, of spanning

the country with steel, and providing outlets for the products of the

developing industries were so momentous that even the most ambitious

might fulfill his dreams of conquest without setting foot on foreign

soil. Territorial aggrandizement was forgotten, and men turned with a

will to the organization of the East and the exploration and development

of the West.

The leaders of the new order found time to take over Alaska (1868) with

its 590,884 square miles. The move was diplomatic rather than economic,

however, and it was many years before the huge wealth of Alaska was even

suspected.

2. _Hawaii_

The new capitalist interests began to feel the need of additional

territory toward the end of the nineteenth century. The desirable

resources of the United States were largely in private hands and most of

the available free land had been pre-empted. Beside that, there were

certain interests, like sugar and tobacco, that were looking with

longing eyes toward the tempting soil and climate of Hawaii, Porto Rico

and Cuba.

When the South had advocated the annexation of Texas, its statesmen had

been denounced as expansionists and imperialists. The same fate awaited

the statesmen of the new order who were favoring the extension of United

States territory to include some of the contiguous islands that offered

special opportunities for certain powerful financial interests.

The struggle began over the annexation of Hawaii. After numerous

attempts to annex Hawaii to the United States a revolution was finally

consummated in Honolulu in 1893. At that time, under treaty provisions,

the neutrality of Hawaii was guaranteed by the United States. Likewise,

"of the capital invested in the islands, two-thirds is owned by

Americans." This statement is made in "Address by the Hawaiian Branches

of the Sons of the American Revolution, the Sons of Veterans, and the

Grand Army of the Republic to their compatriots in America Concerning

the Annexation of Hawaii." (1897.) These advocates of annexation state

in the same address that: "The revolution (of 1893) was not the work of

filibusterers and adventurers, but of the most conservative and

law-abiding citizens, of the principal tax-payers, the leaders of

industrial enterprises, etc." The purpose behind the revolution seemed

clear. Certain business men who had sugar and other products to sell in

the United States, believed that they would gain, financially, by

annexation. They engineered the revolution of 1893 and they were

actively engaged in the agitation for annexation that lasted until the

treaty of annexation was confirmed by the United States in 1898. The

matter was debated at length on the floor of the United States Senate,

and an investigation revealed the essential facts of the case.

The immediate cause of the revolution in 1893 was friction over the

Hawaiian Constitution. After some agitation, a "Committee of Safety" was

organized for the protection of life and property on the islands.

Certain members of the Hawaiian government were in favor of declaring

martial law, and dealing summarily with the conspirators. The Queen

seems to have hesitated at such a course because of the probable

complications with the government of the United States.

The _U. S. S. Boston_, sent at the request of United States Minister

Stevens to protect American life and property in the Islands, was lying

in the harbor of Honolulu. After some negotiations between the

"Committee of Safety" and Minister Stevens, the latter requested the

Commander of the _Boston_ to land a number of marines. This was done on

the afternoon of January 16, 1893. Immediately the Governor of the

Island of Oahu and the Minister of Foreign Affairs addressed official

communications to the United States Minister, protesting against the

landing of troops "without permission from the proper authorities."

Minister Stevens replied, assuming full responsibility.

On the day following the landing of the marines, the Committee of

Safety, under the chairmanship of Judge Dole, who had resigned as

Justice of the Supreme Court of Hawaii in order to accept the

Chairmanship of the Committee, proceeded to the government building, and

there, under cover of the guns of the United States Marines, who were

drawn up for the purpose of protecting the Committee against possible

attack, a proclamation was read, declaring the abrogation of the

Hawaiian monarchy, and the establishment of a provisional government "to

exist until terms of union with the United States have been negotiated

and agreed upon." Within an hour after the reading of this proclamation,

and while the Queen and her government were still in authority, and in

possession of the Palace, the Barracks, and the Police Station, the

United States Minister gave the Provisional Government his recognition.

The Queen, who had 500 soldiers in the Barracks, was inclined to fight,

but on the advice of her counselors, she yielded "to the superior force

of the United States of America" until the facts could be presented at

Washington, and the wrong righted.

Two weeks later, on the first of February, Minister Stevens issued a

proclamation declaring a protectorate over the islands. This action was

later repudiated by the authorities at Washington, but on February 15,

President Harrison submitted a treaty of annexation to the Senate. The

treaty failed of passage, and President Cleveland, as one of his first

official acts, ordered a complete investigation of the whole affair.

The Senate Committee on Foreign Relations submitted a report on the

matter February 26, 1894. Four members referred to the acts of Minister

Stevens as "active, officious and unbecoming participation in the events

which led to the revolution." All members of the committee agreed that

his action in declaring a protectorate over the Islands was unjustified.

The same kind of a fight that developed over the annexation of Texas now

took place over the annexation of Hawaii. A group of senators, of whom

Senator R. F. Pettigrew was the most conspicuous figure, succeeded in

preventing the ratification of the annexation treaty until July 7, 1898.

Then, ten weeks after the declaration of the Spanish-American War, under

the stress of the war-hysteria, Hawaii was annexed by a joint resolution

of Congress.

The Annexation of Hawaii marks a turning point in the history of the

United States. For the first time, the American people secured

possession of territory lying outside of the mainland of North America.

For the first time the United States acquired territory lying within the

tropics. The annexation of Hawaii was the first imperialistic act after

the annexation of Texas, more than fifty years before. It was the first

imperialistic act since the capitalists of the North had succeeded the

slave-owners of the South as the masters of American public life.

3. _The Spanish-American War_

The real test of the imperial intentions of the United States came with

the Spanish-American War. An old, shattered world empire (Spain) held

Porto Rico, Cuba and the Philippines. Porto Rico and Cuba were of

peculiar value to the sugar and tobacco interests of the United States.

They were close to the mainland, they were enormously productive and,

furthermore, Cuba contained important deposits of iron ore.

Spain had only a feeble grip on her possessions. For years the natives

of Cuba and of the Philippines had been in revolt against the Spanish

power. At times the revolt was covert. Again it blazed in the open.

The situation in Cuba was rendered particularly critical because of the

methods used by the Spanish authorities in dealing with the rebellious

natives. The Spaniards were simply doing what any empire does to

suppress rebellion and enforce obedience, but the brutalities of

imperialism, as practiced in Cuba by the Spaniards, gave the American

interventionists their opportunity. Day after day the newspapers carried

front page stories of Spanish atrocities in Cuba. Day after day the

ground was prepared for open intervention in the interests of the

oppressed Cubans. There was more than grim humor in the instructions

which a great newspaper publisher is reported to have sent his

cartoonist in Cuba,--"You provide the pictures; we'll furnish the war."

The conflict was precipitated by the blowing up of the United States

battleship _Maine_ as she lay in the harbor of Havana (February 15,

1898). It has not been settled to this day whether the _Maine_ was blown

up from without or within. At the time it was assumed that the ship was

blown up by the Spanish, although "there was no evidence whatever that

any one connected with the exercise of Spanish authority in Cuba had had

so much as guilty knowledge of the plans made to destroy the _Maine_"

(p. 270), and although "toward the last it had begun to look as if the

Spanish Government were ready, rather than let the war feeling in the

United States put things beyond all possibility of a peaceful solution,

to make very substantial concessions to the Cuban insurgents and bring

the troubles of the Island to an end" (p. 273-4).[35]

Congress, in a joint resolution passed April 20, 1898, declared that

"the people of the Island of Cuba are, and of right ought to be, free

and independent.... The United States hereby disclaims any intention to

exercise sovereignty, jurisdiction or control over said island except

for the pacification thereof, and asserts its determination, when that

is accomplished, to leave the government and control of the island to

its people."

The war itself was of no great moment. There was little fighting on

land, and the naval battles resulted in overwhelming victories for the

American Navy. The treaty, ratified February 6, 1899, provided that

Spain should cede to the United States Guam, Porto Rico, Cuba and the

Philippines, and that the United States should pay to Spain twenty

millions of dollars. As in the case of the Mexican War, the United

States took possession of the territory and then paid a bonus for a

clear title.

The losses in the war were very small. The total number of men who were

killed in action and who died of wounds was 289; while 3,949 died of

accidents and disease. ("Historical Register," Vol. 2, p. 187.) The cost

of the war was comparatively slight. Hostilities lasted from April 21,

1898 to August 12, 1898. The entire military and naval expense for the

year 1898 was $443,368,000; for the year 1899, $605,071,000. Again the

need for a larger place in the sun had been felt by the people of the

United States and again the United States had won immense riches with a

tiny outlay in men and money.

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

booty?

There were many who held that the United States was bound to set the

peoples of the conquered territory free. To be sure the specific pledge

contained in the joint resolution of April 20, 1898, applied to Cuba

alone, but, it was argued, since the people of the Philippines had also

been fighting for liberty, and since they had come so near to winning

their independence from the Spaniards, they were likewise entitled to

it.

On the other hand, the advocates of annexation insisted that it was the

duty of the United States to accept the responsibilities (the "white

man's burden") that the acquisition of these islands involved.

As President McKinley put it:--"The Philippines, like Cuba and Porto

Rico, were entrusted to our hands by the providence of God." (President

McKinley, Boston, February 16, 1899.) How was the country to avoid such

a duty?

Thus was the issue drawn between the "imperialists" and the

"anti-imperialists."

The imperialists had the machinery of government, the newspapers, and

the prestige of a victorious and very popular war behind them. The

anti-imperialists had half a century of unbroken tradition; the accepted

principles of self-government; the sayings of men who had organized the

Revolution of 1776; written the Declaration of Independence; held

exalted offices and piloted the nation through the Civil War.

The imperialists used their inside position. The anti-imperialists

appealed to public opinion. They organized a league "to aid in holding

the United States true to the principles of the Declaration of

Independence. It seeks the preservation of the rights of the people as

guaranteed to them by the Constitution. Its members hold self-government

to be fundamental, and good government to be but incidental. It is its

purpose to oppose by all proper means the extension of the sovereignty

of the United States over subject peoples. It will contribute to the

defeat of any candidate or party that stands for the forcible

subjugation of any people." (From the declaration of principle printed

on the literature in 1899 and 1900.) Anti-imperialist conferences were

held in New York, Philadelphia, Chicago, Indianapolis, Boston and other

large cities. The League claimed to have half a million members. An

extensive pamphlet literature was published, and every effort was made

to arouse the people of the country to the importance of the decision

that lay before them.

The imperialists said a great deal less than their opponents, but they

were more effective in their efforts. The President had said, in his

message to Congress (April 1, 1898), "I speak not of forcible

annexation, for that cannot be thought of. That, by our code of morals,

would be criminal aggression." The phrase was seized eagerly by those

who were opposing the annexation of the Spanish possessions. After the

war with Spain had begun, the President changed front on the ground that

destiny had placed a responsibility upon the American people that they

could not shirk. Taking this view of the situation, the President had

only one course open to him--to insist upon the annexation of the

Philippines, Porto Rico and Guam. This was the course that was followed,

and on April 11, 1899, these territories were officially incorporated

into the United States.

Senator Hoar, in a speech on January 9, 1899, put the issue squarely. He

described it as "a greater danger than we have encountered since the

Pilgrims landed at Plymouth--the danger that we are to be transformed

from a republic, founded on the Declaration of Independence, guided by

the counsels of Washington, into a vulgar, commonplace empire, founded

upon physical force."

Cuba remained to be disposed of. With the specific guarantee of

independence contained in the joint resolution passed at the outbreak of

the war, it seemed impossible to do otherwise than to give the Cubans

self-government. Many influential men lamented the necessity, but it was

generally conceded. But how much independence should Cuba have? That

question was answered by the passage of the Cuban Treaty with the "Platt

Amendment" attached. Under the treaty as ratified the United States does

exercise "sovereignty, jurisdiction and control" over the island.

4. _The Philippines_

The territory acquired from Spain was now, in theory, disposed of.

Practically, the Philippines remained as a source of difficulty and even

of political danger.

The people of Cuba were, apparently, satisfied. The Porto Ricans had

accepted the authority of the United States without question. But the

Filipinos were not content. If the Cubans were to have self-government,

why not they?

The situation was complicated by the peculiar relations existing between

the Filipinos and the United States Government. Immediately after the

declaration of war with Spain the United States Consul-General at

Singapore had cabled to Admiral Dewey at Hong Kong that Aguinaldo,

leader of the insurgent forces in the Philippines, was then at

Singapore, and was ready to go to Hong Kong. Commodore Dewey cabled back

asking Aguinaldo to come at once to Hong Kong. Aguinaldo left Singapore

on April 26, 1898, and, with seventeen other revolutionary Filipino

chiefs, was taken from Hong Kong to Manila in the United States naval

vessel _McCulloch_. Upon his arrival in Manila, he at once took charge

of the insurgents.

For three hundred years the inhabitants of the Philippines had been

engaged in almost incessant warfare with the Spanish authorities. In the

spring of 1898 they were in a fair way to win their independence. They

had a large number of men under arms--from 20,000 to 30,000; they had

fought the Spanish garrisons to a stand-still, and were in practical

control of the situation.

Aguinaldo was furnished with 4,000 or 5,000 stands of arms by the

American officials, he took additional arms from the Spaniards and he

and his people cooperated actively with the Americans in driving the

Spanish out of Luzon. The Filipino army captured Iloilo, the second

largest city in the Philippines, without the assistance of the

Americans. On the day of the surrender of Manila, 15-1/2 miles of the

surrounding line was occupied by the Filipinos and 600 yards by the

American troops. Throughout the early summer, the relations between the

Filipinos and the Americans continued to be friendly. General Anderson,

in command of the American Army, wrote a letter to the commander of the

Filipinos (July 4, 1898) in which he said,--"I desire to have the most

amicable relations with you and to have you and your people cooperate

with us in military operations against the Spanish forces." During the

summer the American officers called upon the Filipinos for supplies and

information and accepted their cooperation. Aguinaldo, on his part,

treated the Americans as deliverers, and in his proclamations referred

to them as "liberators" and "redeemers."

The Filipinos, at the earliest possible moment, organized a government.

On June 18 a republic was proclaimed; on the 23rd the cabinet was

announced; on the 27th a decree was published providing for elections,

and on August 6th an address was issued to foreign governments,

announcing that the revolutionary government was in operation, and was

in control of fifteen provinces.

The real intent of the Americans was foreshadowed in the instructions

handed by President McKinley to General Wesley Merritt on May 19, 1898.

General Merritt was directed to inform the Filipinos that "we come not

to make war upon the people of the Philippines, nor upon any party or

faction among them, but to protect them in their homes, in their

employments, and in their personal and religious rights. Any persons

who, either by active aid or by honest submission, cooperate with the

United States in its effort to give effect to this beneficent purpose,

will receive the reward of its support and protection."

The Filipinos sent a delegation to Paris to lay their claims for

independence before the Peace Commission. Meeting with no success, they

visited Washington, with no different result. They were not to be free!

On September 8, 1898, General Otis, commander of the American forces in

the Philippines, notified Aguinaldo that unless he withdrew his forces

from Manila and its suburbs by the 15th "I shall be obliged to resort to

forcible action." On January 5, 1899, by Presidential Proclamation,

McKinley ordered that "The Military Government heretofore maintained by

the United States in the city, harbor, and bay of Manila is to be

extended with all possible dispatch to the whole of the ceded

territory." On February 4, 1899, General Otis reported "Firing upon the

Filipinos and the killing of one of them by the Americans, leading to

return fire." (Report up to April 6, 1899.) Then followed the Philippine

War during which 1,037 Americans were killed in action or died of

wounds; 2,818 were wounded, and 2,748 died of disease. ("Historical

Register," Vol. II, p. 293.)

The Philippines were conquered twice--once in a contest with Spain (in

cooperation with the Filipinos, who regarded themselves as our allies),

and once in a contest with the Filipinos, the native inhabitants, who

were made subjects of the American Empire by this conquest.[36]

5. _Imperialism Accepted_

The Philippine War was the last political episode in the life of the

American Republic. From February 4, 1899, the United States accepted the

political status of an Empire. Hawaii had been annexed at the behest of

the Hawaiian Government; Porto Rico had been occupied as a part of the

war strategy and without any protest from the Porto Ricans. The

Philippines were taken against the determined opposition of the natives,

who continued the struggle for independence during three bitter years.

The Filipinos were fighting for independence--fighting to drive invaders

from their soil. The United States authorities had no status in the

Philippines other than that of military conquerors.

Continental North America was occupied by the whites after a long

struggle with the Indian tribes. This territory was "conquered"--but it

was contiguous--it formed a part of a geographic unity. The Philippines

were separated from San Francisco by 8,000 miles of water;

geographically they were a part of Asia. They were tropical in

character, and were inhabited by tribes having nothing in common with

the American people except their common humanity. Nevertheless, despite

non-contiguity; despite distance; despite dissimilarity in languages and

customs, the soldiers of the United States conquered the Filipinos and

the United States Government took control of the islands, acting in the

same way that any other empire, under like circumstances, unquestionably

would have acted.

There was no strategic reason that demanded the Philippines unless the

United States desired to have an operating base near to the vast

resources and the developing markets of China. As a vantage point from

which to wage commercial and military aggression in the Far East, the

Philippines may possess certain advantages. There is no other excuse for

their conquest and retention by the United States save the economic

excuse of advantages to be gained from the possession of the islands

themselves.

The end of the nineteenth century saw the end of the Republic about

which men like Jefferson and Lincoln wrote and dreamed. The New Century

marked the opening of a new epoch--the beginning of world dominion for

the United States.

FOOTNOTES:

[35] "A History of the American People," Woodrow Wilson. New York,

Harpers, 1902, Vol. V, pp. 273-4.

[36] For further details on the Philippine problem see Senate Document

62, Part I, 55th Congress, Third Session.

VII. THE STRUGGLE FOR WEALTH AND POWER

1. _Economic Foundations_

The people of the United States, through their contests with the

American Indians, the Mexicans and the Filipinos, have established that

"supreme and extensive political domination" which is one of the chief

characteristics of empire.

But the American Empire does not rest upon a political basis. Only the

most superficial portions of its superstructure are political in

character. Imperialism in the United States, as in every other modern

country, is built not upon politics, but upon industry.

The struggle between empires has shifted, in recent years, from the

political and the military to the economic field. The old imperialism

was based on military conquest and political domination. The new

"financial" imperialism is based on economic opportunities and

advantages. Under this new regime, territorial domination is

subordinated to business profit.

While American public officials were engaged in the routine task of

extending the political boundaries of the United States, the foundations

of imperial strength were being laid by the masters of industrial

life--the traders, manufacturers, bankers, the organizers of trusts and

of industrial combinations. These owners and directors of the nation's

wealth have been the real builders of the American Empire.

As the United States has developed, the economic motives have come more

and more to the surface, until no modern nation--not England

herself--has such a record in the search for material possessions. The

pursuit of wealth, in the United States, has been carried forward

ruthlessly; brutally. "Anything to win" has been the motto. Man against

man, and group against group, they have struggled for gain,--first, in

order to "get ahead;" then to accumulate the comforts and luxuries, and

last of all, to possess the immense power that goes with the control of

modern wealth.

The early history of the country presaged anything but this. The

colonists were seeking to escape tyranny, to establish justice and to

inaugurate liberty. Their promises were prophetic. Their early deeds put

the world in their debt. Forward looking people everywhere thrilled at

the mention of the name "America." Then came the discovery of the

fabulous wealth of the new country; the pressure of the growing stream

of immigrants; the heaping up of riches; the rapacious search after

more! more! the desertion of the dearest principles of America's early

promise, and the transcribing of another story of "economic

determinism."

Until very recent times the American people continued to talk of

political affairs as though they were the matters of chief public

concern. The recent growth and concentration of economic power have

showed plainly, however, that America was destined to play her greatest

role on the economic field. Capable men therefore ceased to go into

politics and instead turned their energies into the whirl of business,

where they received a training that made them capable of handling

affairs of the greatest intricacy and magnitude.

2. _Every Man for Himself_

The development of American industry, during the hundred years that

began with the War of 1812, led inevitably to the unification of

business control in the hands of a small group of wealth owners.

"Every man for himself" was the principle that the theorists of the

eighteenth century bequeathed to the industrial pioneers of the

nineteenth. The philosophy of individualism fitted well with the

temperament and experience of the English speaking peoples; the practice

of individualism under the formula "Every man for himself" seemed a

divine ordination for the benefit of the new industry.

The eager American population adopted the slogan with enthusiasm. "Every

man for himself" was the essence of their frontier lives; it was the

breath of the wilderness.

But the idea failed in practice. Despite the assurances of its champions

that individualism was necessary to preserve initiative and that

progress was impossible without it, like many another principle--fine

sounding in theory, it broke down in the application.

The first struggle that confronted the ambitious conqueror of the new

world was the struggle with nature. Her stores were abundant, but they

must be prepared for human use. Timber must be sawed; soil tilled; fish

caught; coal mined; iron smelted; gold extracted. Rivers must be

bridged; mountains spanned; lines of communication maintained. The

continent was a vast storehouse of riches--potential riches. Before they

could be made of actual use, however, the hand of man must transform

them and transport them.

These necessary industrial processes were impossible under the "every

man for himself" formula. Here was a vast continent, with boundless

opportunities for supplying the necessaries and comforts of

life--provided men were willing to come together; divide up the work;

specialize; and exchange products.

Cooperation--alone--could conquer nature. The basis of this cooperation

proved to be the machine. Its means was the system of production and

transportation built upon the use of steam, electricity, gas, and labor

saving appliances.

When the United States was discovered, the shuttle was thrown by hand;

the hammer was wielded by human arm; the mill-stones were turned by wind

and water; the boxes and bales were carried by pack-animals or in

sailing vessels,--these processes of production and transportation were

conducted in practically the same way as in the time of Pharaoh or of

Alexander the Great. A series of discoveries and inventions, made in

England between 1735 and 1784, substituted the machine for the tool; the

power of steam for the power of wind, water or human muscle; and set up

the factory to produce, and the railroad and the steamboat to transport

the factory product.

American industry, up to 1812, was still conducted on the old,

individualistic lines. Factories were little known. Men worked singly,

or by twos and threes in sheds or workrooms adjoining their homes. The

people lived in small villages or on scattered farms. Within the century

American industry was transformed. Production shifted to the factory;

about the factory grew up the industrial city in which lived the tens or

hundreds of thousands of factory workers and their families.

The machine made a new society. The artisan could not compete with the

products of the machine. The home workshop disappeared, and in its place

rose the factory, with its tens, its hundreds and its thousands of

operatives.

Under the modern system of machine production, each person has his

particular duty to perform. Each depends, for the success of his

service, upon that performed by thousands of others.

All modern industry is organized on the principle of cooperation,

division of labor, and specialization. Each has his task, and unless

each task is performed the entire system breaks down.

Never were the various branches of the military service more completely

dependent upon each other than are the various departments of modern

economic life. No man works alone. All are associated more or less

intimately with the activities of thousands and millions of their

fellows, until the failure of one is the failure of all, and the success

of one is the success of all.

Such a development could have only one possible result,--people who

worked together must live together. Scattered villages gave place to

industrial towns and cities. People were compelled to cooperate in their

lives as well as in their labor.

The theory under which the new industrial society began its operations

was "every man for himself." The development of the system has made

every man dependent upon his fellows. The principle demanded an extreme

individualism. The practice has created a vast network of

inter-relations, that leads the cotton spinner of Massachusetts to eat

the meat prepared by the packing-house operative in Omaha, while the

pottery of Trenton and the clothing of New York are sent to the Yukon in

exchange for fish and to the Golden Gate for fruit. Inside as well as

outside the nation, the world is united by the strong hands of economic

necessity. None can live to himself, alone. Each depends upon the labor

of myriads whom he has never seen and of whom he has never heard.

Whether we will or no, they are his brothers-in-labor--united in the

Atlas fellowship of those who carry the world upon their shoulders.

The theory of "every man for himself" failed. The practical exigencies

involved in subjugating a continent and wresting from nature the means

of livelihood made it necessary to introduce the opposite

principle,--"In Union there is strength; cooperation achieves all

things."

3. _The Struggle for Organization_

The technical difficulties involved in the mechanical production of

wealth compelled even the individualists to work together. The

requirements of industrial organization drove them in the same

direction.

The first great problem before the early Americans was the conquest of

nature. To this problem the machine was the answer. The second problem

was the building of an organization capable of handling the new

mechanism of production--an organization large enough, elastic enough,

stable enough and durable enough--to this problem the corporation was

the answer.

The machine produced the goods. The corporation directed the production,

marketed the products and financed both operations.

The corporation, as a means of organizing and directing business

enterprise is a product of the last hundred years. A century ago the

business of the United States was carried on by individuals,

partnerships, and a few joint stock companies. At the time of the last

Census, more than four-fifths of the manufactured products were turned

out under corporate direction; most of the important mining enterprises

were corporate, and the railroads, public utilities, banks and insurance

companies were virtually all under the corporate form of organization.

Thus the passage of a century has witnessed a complete revolution in the

form of organizing and directing business enterprise.

The corporation, as a form of business organization is immensely

superior to individual management and to the partnership.

1. The corporation has perpetual life. In the eyes of the law, it is a

person that lives for the term of its charter. Individuals die;

partnerships are dissolved; but the corporation with its unbroken

existence, possesses a continuity and a permanence that are impossible

of attainment under the earlier forms of business organization.

2. Liability, under the corporation, is limited by the amount of the

investment. The liability of an individual or a partner engaged in

business was as great as his ability to pay. The investor in a

corporation cannot lose a sum larger than that represented by his

investment.

3. The corporation, through the issuing of stocks and bonds, makes it

possible to subdivide the total amount invested in one enterprise into

many small units.[37] These chances for small investment mean that a

large number of persons may join in subscribing the capital for a

business enterprise. They also mean that one well-to-do person may

invest his wealth in a score or a hundred enterprises, thus reducing the

risk of heavy losses to a minimum.

4. The corporation is not, as were the earlier forms of organization,

necessarily a "one man" concern. Many corporations have upon their

boards of directors the leading business men, merchants, bankers and

financiers. In this way, the investing public has the assurance that the

enterprise will be conducted along business lines, while the business

men on the board have an opportunity to get in on the "ground floor."

The corporation has a permanence, a stability, and a breadth of

financial support that are quite impossible in the case of the private

venture or of the partnership. It does for business organization what

the machine did for production.

The corporation came into favor at a time when business was expanding

rapidly. Surplus was growing. Wealth and capital were accumulating.

Industrial units were increasing in size. It was necessary to find some

means by which the surplus wealth in the hands of many individuals could

be brought together, large sums of capital concentrated under one

unified control, the investments, thus secured, safeguarded against

untoward losses, and the business conservatively and efficiently

directed. The corporation was the answer to these needs.

"United we stand" proved to be as true of organizers and investors as it

was of producers. The corporation was the common denominator of people

with various industrial and financial interests.

The corporation played another role of vital consequence. It enabled the

banker to dominate the business world. Heretofore, the banker had dealt

largely with exchange. The industrial leader was his equal if not his

superior. The organization of the corporation put the supreme power in

the hands of the banker, who as the intermediary between investor and

producer, held the purse strings.

4. _Capitalist against Capitalist_

The early American enterprisers--the pioneers--began a single-handed

struggle with nature. Necessity forced them to cooperate. They

established a new industry. The factory brought them together. They

organized their system of industrial direction and control. The

corporation united them. They turned on one another in mortal combat,

and the frightfulness of their losses forced them to join hands.

The business men of the late nineteenth century had been nurtured upon

the idea of competition. "Every man for himself and the devil take the

hindermost" summed up their philosophy. Each person who entered the

business arena was met by an array of savage competitors whose motto was

"Victory or Death." In the struggle that followed, most of them suffered

death.

Capitalist set himself up against capitalist in bitter strife. The

railroads gouged the farmers, the manufacturers and the merchants and

fought one another. The big business organizations drove the little man

to the wall and then attacked their larger rivals. It was a fight to the

finish with no quarter asked or given.

The "finish" came with periodic regularity in the seventies, the

eighties and the nineties. The number of commercial failures in 1875 was

double the number of 1872. The number of failures in 1878 was over three

times that of 1871. The same thing happened in the eighties. The

liabilities of concerns failing in 1884 were nearly four times the

liabilities of those failing in 1880. The climax came in the nineties,

after a period of comparative prosperity. Hard times began in 1893.

Demand dropped off. Production decreased. Unemployment was widespread.

Wages fell. Prices went down, down, under bitter competitive selling,

to touch rock bottom in 1896. Business concerns continued to fight one

another, though both were going to the wall. Weakened by the struggle,

unable to meet the competitive price cutting that was all but the

universal business practice of the time, thousands of business houses

closed their doors. The effect was cumulative; the fabric of credit,

broken at one point, was weakened correspondingly in other places and

the guilty and the innocent were alike plunged into the morass of

bankruptcy.

The destruction wrought in the business world by the panic of 1893 was

enormous. The number of commercial failures for 1893 jumped to 15,242.

The amount of liabilities involved in these failures was $346,780,000.

This catastrophe, coming as it did so close upon the heels of the panics

that had immediately preceded it, could not fail to teach its lesson.

Competition was not the life, but the death of trade. "Every man for

himself" as a policy applied in the business world, led most of those

engaged in the struggle over the brink to destruction. There was but one

way out--through united action.

The period between 1897 and 1902 was one of feverish activity directed

to coordinating the affairs of the business world. Trusts were formed in

all of the important branches of industry and trade. The public looked

upon the trust as a means of picking pockets through trade conspiracies

and the boosting of prices. The Sherman Anti-Trust Law had been passed

on that assumption. In reality, the trusts were organized by far seeing

men who realized that competition was wasteful in practice and unsound

in theory. The idea that the failure of one bank or shoe factory was of

advantage to other banks and shoe factories, had not stood the test of

experience. The tragedies of the nineties had showed conclusively that

an injury to one part of the commercial fabric was an injury to all of

its parts.

The generation of business men trained since 1900 has had no illusions

about competition. Rather, it has had as its object the successful

combination of various forms of business enterprise into ever larger

units. First, there was the uniting of like industries;--cotton mills

were linked with cotton mills, mines with mines. Then came the

integration of industry--the concentration under one control of all of

the steps in the industrial process from the raw material to the

finished product,--iron mines, coal mines, blast furnaces, converters,

and rail mills united in one organization to take the raw material from

the ground and to turn out the finished steel product. Last of all there

was the union of unlike industries,--the control, by one group of

interests, of as many and as varied activities as could be brought

together and operated at a profit. The lengths to which business men

have gone in combining various industries is well shown by the recent

investigation of the meat packing industry. In the course of that

investigation, the Federal Trade Commission was able to show that the

five great packers (Wilson, Armour, Swift, Morris and Cudahy) were

directly affiliated with 108 business enterprises, including 12

rendering companies; 18 stockyard companies; 8 terminal railway

companies; 9 manufacturers of packers' machinery and supplies; 6 cattle

loan companies; 4 public service corporations; 18 banks, and a number of

miscellaneous companies, and that they controlled 2000 food products not

immediately related to the packing industry.[38]

Business is consolidated because consolidation pays--not primarily,

through the increase of prices, but through the greater stability, the

lessened costs, and the growing security that has accompanied the

abolition of competition.

Again the forces of social organization have triumphed in the face of an

almost universal opposition. American business men practiced competition

until they found that cooperation was the only possible means of

conducting large affairs. Theory advised, "Compete"! Experience warned,

"Combine"! Business men--like all other practical people--accepted the

dictates of experience as the only sound basis for procedure. Their

combination solidified their ranks, preparing them to take their places

in a closely knit, dominant class, with clearly marked interests, and a

strong feeling of class consciousness and solidarity.

It was in the consummation of these combinations, integrations and

consolidations that the investment banker came into his own as the

keystone in the modern industrial arch.

5. _The Investment Banker_

The investment banker is the directing and coordinating force in the

modern business world. The necessities of factory production demanding

great outlays of capital; the immense financial requirements of

corporations; the consolidation of business ventures on a huge scale;

the broadened use of corporate securities as investments--all brought

the investment banker into the foreground.

Before the Spanish War, the investment banker financed the trusts. After

the war he was entrusted with the vast surpluses which the concentration

of business control had placed in a few hands. Business consolidation

had given the banker position. The control of the surplus brought him

power. Henceforth, all who wished access to the world of great

industrial and commercial affairs must knock at his door.

This concentration of economic control in the hands of a relatively

small number of investment bankers has been referred to frequently as

the "Money Trust."

Investment banking monopoly, or as it is sometimes called, the "Money

Trust" was examined in detail by the Pujo Committee of the House of

Representatives, which presented a summary of its report on February 28,

1913. The committee placed, at the center of its diagram of financial

power, J. P. Morgan & Co., the National City Bank, the First National

Bank, the Guaranty Trust Co., and the Bankers Trust Co., all of New

York. The report refers to Lee, Higginson & Co., of Boston and New

York; to Kidder, Peabody & Co., of Boston and New York, and to Kuhn,

Loeb & Co., of New York, together with the Morgan affiliations, as being

"the most active agents in forwarding and bringing about the

concentration of control of money and credit" (p. 56).

The methods by which this control was effected are classed by the

Committee under five heads:--

1. "Through consolidations of competitive or potentially competitive

banks and trust companies which consolidations in turn have recently

been brought under sympathetic management" (p. 56).

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

competitive institutions.

3. Through interlocking directorates.

4. "Through the influence which the more powerful banking houses, banks,

and trust companies have secured in the management of insurance

companies, railroads, producing and trading corporations and public

utility corporations, by means of stock holdings, voting trusts, fiscal

agency contracts, or representation upon their boards of directors, or

through supplying the money requirements of railway, industrial, and

public utility corporations and thereby being enabled to participate in

the determination of their financial and business policies" (p. 56).

5. "Through partnership or joint account arrangements between a few of

the leading banking houses, banks, and trust companies in the purchase

of security issues of the great interstate corporations, accompanied by

understandings of recent growth--sometimes called 'banking

ethics'--which have had the effect of effectually destroying competition

between such banking houses, banks, and trust companies in the struggle

for business or in the purchase and sale of large issues of such

securities" (p. 56).

Morgan & Co., the First National Bank, the National City Bank, the

Bankers Trust Co., and the Guaranty Trust Co., which were all closely

affiliated, had extended their control until they held,--

118 directorships in 34 banks with combined resources of

$2,679,000,000.

30 directorships in 10 insurance companies with total assets of

$2,293,000,000.

105 directorships in 32 transportation systems having a total

capital of $11,784,000,000.

63 directorships in 24 producing and trading companies having a

total capitalization of $3,339,000,000.

25 directorships in 12 public utility corporations with a total

capitalization of $2,150,000,000.

The investment banker had become, what he was ultimately bound to be,

the center of the system built upon the century-long struggle to control

the wealth of the continent in the interest of the favored few who

happened to own the choicest natural gifts.

6. _The Cohesion of Wealth_

The struggle for wealth and power, actively waged among the business men

of the United States for more than a century, has thus by a process of

elimination, subordination and survival, placed a few small groups of

strong men in a position of immense economic power. The growth of

surplus and its importance in the world of affairs has made the

investment banker the logical center of this business leadership. He,

with his immediate associates, directs and controls the affairs of the

economic world.

The spirit of competition ruled the American business world at the

beginning of the last century, the forces of combination dominated at

its close. The new order was the product of necessity, not of choice.

The life of the frontier had ingrained in men an individualism that

chafed under the restraints of combination. It was the compelling

forces of impending calamity and the opportunity for greater economic

advantage--not the traditions or accepted standards of the business

world--that led to the establishment of the centralized wealth power.

American business interests were driven together by the battering of

economic loss and lured by the hope of greater economic gains.

Years of struggle and experience, by converting a scattered,

individualistic wealth owning class into a highly organized, closely

knit, homogeneous group with its common interests in the development of

industry and the safeguarding of property rights, have brought unity and

power to the business world.

Individually the members of the wealth-controlling class have learned

that "in union there is strength"; collectively they are gripped by the

"cohesion of wealth"--the class conscious instinct of an associated

group of human beings who have much to gain and everything to lose.

FOOTNOTES:

[37] The 169 largest railroads in the United States have issued

84,418,796 shares of stock. ("American Labor Year Book," 1917-18, p.

169.) Theoretically, therefore, there might be eighty-four millions of

owners of the American railroads.

[38] Summary of the Report of the Federal Trade Commission on the Meat

Packing Industry, July 3, 1918, Wash., Govt. Print., 1918.

VIII. THEIR UNITED STATES

1. _Translating Wealth into Power_

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

power.

At the end of their era of competition, the leaders of American business

found themselves masters of such vast stores of wealth that they were

released from the paralyzing fear of starvation, and were guaranteed the

comforts and luxuries of life. Had these men sought wealth as a means of

satisfying their physical needs their object would have been attained.

The gratification of personal wants is only a minor element in the lives

of the rich. After they have secured the things desired, they strive for

the power that will give them control over their fellows.

The possession of things, is, in itself, a narrow field. The control

over productive machinery gives him who exercises it the power to enjoy

those things which the workers with machinery produce. The control over

public affairs and over the forces that shape public opinion give him

who exercises it the power to direct the thoughts and lives of the

people. It is for these reasons that the keen, self-assertive, ambitious

men who have come to the top in the rough and tumble of the business

struggle have steadily extended their ownership and their control.

2. _The Wealth of the United States_

The bulk of American wealth, which consists for the most part of land

and buildings, is concentrated in the centers of commerce and

industry--in the regions of supreme business power.

The last detailed estimate of the wealth of the United States was made

by the Census Bureau for the year 1912. At that time, the total wealth

of the country was placed at $187,739,000,000. (The estimate for 1920 is

$500,000,000,000.) Roughly speaking, this represented an estimate of

exchangeable values. The figures, at best, are rough approximations.

Their importance lies, not in their accuracy, but in the picture which

they give of relationships.

The Total Wealth of the United States, Classified by Groups, with the

Percentage of the Total Wealth in Each Group[39]

_Total Estimated

Wealth_

_Amount_

(000,000 _Per Cent_

_Wealth Groups_ _Omitted_) _of Total_

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

2. Public Utilities (railroads, street

railways, telegraph, telephone,

electric light, etc.) 26,415 14

3. Live Stock and Machinery (live

stock, farm implements and manufacturing

machinery) 13,697 7

4. Raw Materials, Manufactured Products,

Merchandise (including

gold and silver bullion) 24,193 13

5. Personal Possessions (clothing,

personal adornments, furniture,

carriages, etc.) 12,758 7

Total of all groups $187,739 100

The bulk of the exchangeable wealth of the United States consists of

"productive" or "investment" property. If, to the total of 110 billions

given by the Census as the value of real property, are added the real

property values of the public utilities, the total will probably exceed

three quarters of the total wealth of the United States. If, in

addition, account is taken of the fact that much of the wealth classed

as "raw materials, etc.," is the immediate product of the land (coal,

ore, timber), some idea may be obtained of the extent to which the

estimated wealth of the country is in the form of land, its immediate

products, and buildings. Furthermore, it must be remembered that great

quantities of ore lands, timber lands, waterpower sites, etc., are

assessed at only a fraction of their total present value.

The personal property of the country is valued at less than one

fourteenth of the total wealth. It is in reality a negligible item, as

compared with the value of the real property, of the public utilities,

and of the raw materials and products of industry.

The wealth of the United States is in permanent form--land and

improvements; personal possessions are a mere incident in the total. In

truth, American wealth is in the main productive (business) wealth,

designed for the further production of goods, rather than for the

satisfaction of human wants.

3. _Ownership and Control_

Who owns this vast wealth? It is impossible to answer the question with

anything like definiteness. Figures have been compiled to show that five

per cent of the people own two-thirds to three-quarters of it; that the

poorest two-thirds of the people own five per cent of it, and that the

well-to-do or middle class own the remainder. These figures would make

it appear that more than one-fourth of the population is in the middle

class. If the income-tax returns are to be trusted this proportion is

far too high. On all hands it is admitted that the wealth of the

country is concentrated in the hands of a small fraction of the people

and the important wealth--that is, the wealth upon which production,

transportation and exchange depends--is in still fewer hands.

Neither the total wealth of the country, nor that portion of the total

which is owned directly by the propertied class is of most immediate

moment. Ownership does not necessarily involve control. A puddler in the

Gary Mills may own five shares of stock in the Steel Corporation without

ever raising his voice to determine the corporation policy. This is

ownership without control. On the other hand, a banking house through a

voting trust agreement, may control the policy of a corporation in which

it does not own one per cent of the stock. This is control without

ownership. Ownership may be quite incidental. It is control that counts

in terms of power.

Most of the property owners in the United States play no part in the

control of prices or of production, in the direction of economic policy,

or in the management of economic affairs.

Theoretically, stockholders direct the policies of corporations, and,

therefore, each holder of 5 or 10 shares of corporate stock would play a

part in deciding economic affairs. Practically, the small stockholder

has no part in business control.

The small farmer--the small business man of largest numerical

consequence--has been exploited by the great interests for two

generations. Despite his numbers and his organizations, despite his

frequent efforts, through anti-trust laws, railway control laws, banking

reform laws, and the like, he has little voice in determining important

economic policies.

The small savings bank depositor or the holder of an ordinary insurance

policy is a negative rather than a positive factor in economic control.

Not only does he exercise no power over the dollar which he has placed

with the bank or with the insurance company, but he has thereby

strengthened the hands of these organizations. Each dollar placed with

the financier is a dollar's more power for him and his.

Suppose--the impossible--that half of the families in the United States

"own property." Subtract from this number the small stockholders; the

holders of bonds, notes and mortgages; the small tradesman; the small

farmer; the home owner and the owner of a savings-bank deposit or of an

insurance policy--what remains? There are the large stockholders, the

owners and directors of important industries, public utilities, banks,

trust companies and insurance companies. These persons, in the

aggregate, constitute a fraction of one per cent of the adult population

of the United States.

Start with the total non-personal wealth of the country, subtract from

it the share-values of the small stockholders; the values of all bonds,

mortgages and notes; the property of the small tradesman and the small

farmer; the value of homes--what remains? There are left the stocks in

the hands of the big stockholders; the properties owned and directed by

the owners and directors of important industries, public utilities,

banks, trust companies and insurance companies. This wealth in the

aggregate probably makes up less than 10 per cent of the total wealth of

the country and yet the tiny fraction of the population which owns this

wealth can exercise a dictatorial control over the economic policies

that underlie American public life.

4. _The Avenues of Mastery_

While control rests back directly or indirectly upon some form of

ownership, most owners exercise little or no control over economic

affairs. Instead they are made the victims of a social system under

which one group lives at the expense of another.

Against this tendency toward control by one group or class (usually a

minority) over the lives of another group or class (usually a majority)

the human spirit always has revolted. The United States in its earlier

years was an embodiment of the spirit of that revolt. President Wilson

characterized it excellently in 1916. Speaking of the American Flag, he

said,--"That flag was originally stained in very precious blood, blood

spilt, not for any dynasty, nor for any small controversies over

national advantage, but in order that a little body of three million men

in America might make sure that no man was their master."[40]

Against mastery lovers of liberty protest. Mastery means tyranny;

mastery means slavery.

Mastery has always been based upon some form of ownership. There is in

the United States a group, growing in size, of people who take more in

keep than they give in service; people who own land; franchises; stocks

and bonds and mortgages; real estate and other forms of investment

property; people who are living without ever lifting a finger in toil,

or giving anything in labor for an unceasing stream of necessaries,

comforts and luxuries. These people, directly or indirectly, are the

owners of the productive machinery of the United States.

Historically there have been a number of stages in the development of

mastery. First, there was the ownership of the body. One man owned

another man, as he might own a house or a pile of hides. At another

stage, the owner of the land--the feudal baron or the landlord--said to

the tenant, who worked on his land: "You stay on my land. You toil and

work and make bread and I will eat it." The present system of mastery is

based on the ownership by one group of people, of the productive wealth

upon which depends the livelihood of all. The masters of present day

economic society have in their possession the natural resources, the

tools, the franchises, patents, and the other phases of the modern

industrial system with which the people must work in order to live. The

few who own and control the productive wealth have it in their power to

say to the many who neither own nor control,--"You may work or you may

not work." If the masses obtain work under these conditions the owners

can say to them further,--"You work, and toil and earn bread and we will

eat it." Thus the few, deriving their power from the means by which

their fellows must work for a living, own the jobs.

5. _The Mastery of Job-Ownership_

Job-ownership is the foundation of the latest and probably the most

complete system of mastery ever perfected. The slave was held only in

physical bondage. Behind serfdom there was land ownership and a

religious sanction. "Divine right" and "God's anointed," were terms used

to bulwark the position of the owning class, who made an effort to

dominate the consciences as well as the bodies of their serfs.

Job-ownership owes its effectiveness to a subtle, psychological power

that overwhelms the unconscious victim, making him a tool, at once easy

to handle and easy to discard.

The system of private ownership that succeeded Feudalism taught the

lesson of economic ambition so thoroughly that it has permeated the

whole world. The conditions of eighteenth century life have passed,

perhaps forever, but its psychology lingers everywhere.

The job-holder has been taught that he must "get ahead" in the world;

that if he practices the economic virtues,--thrift, honesty,

earnestness, persistence, efficiency--he will necessarily receive great

economic reward; that he must support his family on the standard set by

the community, and that to do all of these essential things, he must

take a job and hold on to it. Having taken the job, he finds that in

order to hold it, he must be faithful to the job-owner, even if that

involves faithlessness to his own ideas and ideals, to his health, his

manhood, and the lives of his wife and children.

The driving power in slavery was the lash. Under serfdom it was the

fear of hunger. The modern system of job-ownership owes its

effectiveness to the fact that it has been built upon two of the most

potent driving forces in all the world--hunger and ambition--the driving

force that comes from the empty stomach and the driving force that comes

from the desire for betterment. Thus job-owning, based upon an automatic

self-drive principle, enables the job-owner to exact a return in

faithful service that neither slavery nor serfdom ever made possible.

Job-owning is thus the most thorough-going form of mastery yet devised

by the ingenuity of man.

Unlike the slave owner and the Feudal lord the modern job-owner has no

responsibility to the job-holder. The slave owner must feed, clothe and

house his slave--otherwise he lost his property. The Feudal lord must

protect and assist his tenant. That was a part of his bargain with his

overlord. The modern job-owner is at liberty, at any time, to

"discharge" the job-holder, and by throwing him out of work take away

his chance of earning a living. While he keeps the job-holder on his

payroll, he may pay him impossibly low wages and overwork him under

conditions that are unfit for the maintenance of decent human life.

Barring the factory laws and the health laws, he is at liberty to impose

on the job-holder any form of treatment that the job-holder will

tolerate.

There is no limit to the amount of industrial property that one man may

own. Therefore, there is no limit to the number of jobs he may control.

It is possible (not immediately likely) that one coterie of men might

secure possession of enough industrial property to control the jobs of

all of the gainfully occupied people in American industry. If this

result could be achieved, these tens of millions would be able to earn a

living only in case the small coterie in control permitted them to do

so.

Job ownership is built, of necessity, on the ownership of land,

resources, capital, credit, franchises, and other special privileges.

But its power of control goes far beyond this mere physical ownership

into the realms of social psychology.

The early colonists, who fled from the economic, political, social and

religious tyranny of feudalism, believed that liberty and freedom from

unjust mastery lay in the private ownership of the job. They had no

thought of the modern industrial machine.

The abolitionists who fought slavery believed that freedom and liberty

could be obtained by unshackling the body. They did not foresee the

shackled mind.

The modern world, seeking freedom; yearning for liberty and justice;

aiming at the overthrow of the mastery that goes with irresponsible

power, finds to its dismay that the ownership of the job carries with

it, not only economic mastery, but political, social and even religious

mastery, as well.

6. _The Ownership of the Product_

The industrial overlord holds control of the job with one hand. With the

other he controls the product of industry. From the time the raw

material leaves the earth in the form of iron ore, crude petroleum,

logs, or coal, through all of the processes of production, it is owned

by the industrial master, not by the worker. Workers separate the

product from the earth, transport it, refine it, fabricate it. Always,

the product, like the machinery, is the possession of the owning class.

While industry was competitive, the pressure of competition kept prices

at a cost level, and the exploiting power of the owner was confined to

the job-holder. To-day, through combinations and consolidations,

industry has ceased to be competitive, and the exploiting power of the

job-owner is extended through his ownership of the product.

The modern town-dweller is almost wholly in the hands of the private

owners of the products upon which he depends. The ordinary city dweller

spends two-fifths of his income for food; one-fifth for rent, fuel and

light, and one-fifth for clothes. Food, houses, fuel (with the exception

of gas supply in some cities), and clothing are privately owned. The

public ownership of streets and water works, of some gas, electricity,

street cars, and public markets, is a negligible factor in the problem.

The private monopolist has the upper hand and he is able through the

control of transportation, storage, and merchandising facilities, to

make handsome profits for the "service" which he renders the consumer.

7. _The Control of the Surplus_

The wealth owners are doubly entrenched. They own the jobs upon which

most families depend for a living. They own the necessaries of life

which most families must purchase in order to live. Further, they

control the surplus wealth of the community.

There are three principal channels of surplus. First of all there is the

surplus laid aside by business concerns, reinvested in the business,

spent for new equipment and disposed of in other ways that add to the

value of the property. Second, there are the 19,103 people in the United

States with incomes of $50,000 or more per year; the 30,391 people with

incomes of $25,000 to $50,000 per year and the 12,502 people with

incomes of $10,000 to $25,000 per year. (Figures for 1917.) Many, if not

most of these rich people, carry heavy insurance, invest in securities,

or in some other way add to surplus. In the third place there are the

small investors, savings-bank depositors, insurance policy holders who,

from their income, have saved something and have laid it aside for the

rainy day. The masters of economic life--bankers, insurance men,

property holders, business directors--are in control of all three forms

of surplus.

The billions of surplus wealth that come each year under the control of

the masters carry with them an immense authority over the affairs of the

community. The owners of wealth owe much of their immediate power to

the fact that they control this surplus, and are in a position to direct

its flow into such channels as they may select.

8. _The Channels of Public Opinion_

No one can question the control which business interests exercise over

the jobs, the industrial product, and the economic surplus of the

community. These facts are universally admitted. But the corollaries

which flow naturally from such axioms are not so readily accepted. Yet

given the economic power of the business world, the control over the

channels of public opinion and over the machinery of government follows

as a matter of course.

The channels of public opinion--the school, the press, the pulpit,--are

not directly productive of tangible economic goods, yet they depend upon

tangible economic goods for their maintenance. Whence should these goods

come? Whence but from the system that produces them, through the men who

control that system! The plutocracy exercises its power over the

channels of public opinion in two ways,--the first, by a direct or

business office control; and second, by an indirect or social prestige

control.

The business office control is direct and simple. Schools, colleges,

newspapers, magazines and churches need money. They cannot produce

tangible wealth directly, and they must, therefore, depend upon the

surplus which arises from the productive activities of the economic

world. Who controls that surplus? Business men. Who, then, is in a

position to dictate terms in financial matters? Who but the dominant

forces in business life?

The facts are incontrovertible. It is not mere chance that recruits the

overwhelming majority of school-board members, college trustees,

newspaper managers, and church vestrymen, from the ranks of successful

business and professional men. It is necessary for the educator, the

journalist, and the minister to work through these men in order to

secure the "sinews of war." They are at the focal points of power

because they control the sources of surplus wealth.

The second method of maintaining control--through the control of social

prestige--is indirect, but none the less effective. The young man in

college; the young graduate looking for a job; the young man rising in

his profession, and the man gaining ascendancy in his chosen career are

brought into constant contact with the "influential" members of the

business world. It is the business world that dominates the clubs and

the vacation spots; it is the business world that is met in church, at

the dinner tables and at the social gathering.

The man who would "succeed" must retain the favor of this group. He does

so automatically, instinctively or semi-consciously--it is the common,

accepted practice and he falls in line.

The masters need not bribe. They need not resort to illegal or unethical

methods. The ordinary channels of advertising, of business acquaintance

and patronage, of philanthropy and of social intercourse clinch their

power over the channels of public opinion.

9. _The Control of Political Machinery_

The American government,--city, state and nation--is in almost the same

position as the schools, newspapers and churches. It does not turn out

tangible, economic products. It depends, for its support, upon taxes

which are levied, in the first instance, upon property. Who are the

owners of this property? The business interests. Who, therefore, pay the

bills of the government? The business interests.

Nowhere has the issue been stated more clearly or more emphatically than

by Woodrow Wilson in certain passages of his "New Freedom." As a student

of politics and government--particularly the American Government--he

sees the power which those who control economic life are able to

exercise over public affairs, and realizes that their influence has

grown, until it overtops that of the political world so completely that

the machinery of politics is under the domination of the organizers and

directors of industry.

"We know," writes Mr. Wilson in "The New Freedom," "that something

intervenes between the people of the United States and the control of

their own affairs at Washington. It is not the people who have been

ruling there of late" (p. 28). "The masters of the government of the

United States are the combined capitalists and manufacturers of the

United States.... Suppose you go to Washington and try to get at your

government. You will always find that while you are politely listened

to, the men really consulted are the men who have the biggest

stakes--the big bankers, the big manufacturers, the big masters of

commerce, the heads of railroad corporations and of steamship

corporations.... Every time it has come to a critical question, these

gentlemen have been yielded to and their demands have been treated as

the demands that should be followed as a matter of course. The

government of the United States at present is a foster-child of the

special interests" (p. 57-58). "The organization of business has become

more centralized, vastly more centralized, than the political

organization of the country itself" (p. 187). "An invisible empire has

been set up above the forms of democracy" (p. 35). "We are all caught in

a great economic system which is heartless" (p. 10).

This is the direct control exercised by the plutocracy over the

machinery of government. Its indirect control is no less important, and

is exercised in exactly the same way as in the case of the channels of

public opinion.

Lawyers receive preferment and fees from business--there is no other

large source of support for lawyers. Judges are chosen from among these

same lawyers. Usually they are lawyers who have won preferment and

emolument. Legislators are lawyers and business men, or the

representatives of lawyers and business men. The result is as logical as

it is inevitable.

The wealth owners control the machinery of government because they pay

the taxes and provide the campaign funds. They control public officials

because they have been, are, or hope to be, on the payrolls, or

participants in the profits of industrial enterprises.

10. _It is "Their United States"_

The man fighting for bread has little time to "turn his eyes up to the

eternal stars." The western cult of efficiency makes no allowances for

philosophic propensities. Its object is product and it is satisfied with

nothing short of that sordid goal.

The members of the wealth owning class are relieved from the food

struggle. Their ownership of the social machinery guarantees them a

secure income from which they need make no appeal. These privileges

provide for them and theirs the leisure and the culture that are the

only possible excuse for the existence of civilization.

The propertied class, because it owns the jobs, the industrial products,

the social surplus, the channels of public opinion and the political

machinery also enjoys the opportunity that goes with adequately assured

income, leisure and culture.

The members of the dominant economic class hold a key--property

ownership--which opens the structure of social wealth. Those who have

access to this key are the blessed ones. Theirs are the things of this

world.

The property owners enjoy the fleshpots. They hold the vantage points.

The vital forces are in their hands. Economically, politically,

socially, they are supreme.

If the control of material things can make a group secure, the wealth

owners in the United States are secure. They hold property, prestige,

power.

The phrase "our United States" as used by the great majority of the

people is a misnomer. With the exception of a theoretically valuable but

practically unimportant right called "freedom of contract," the majority

of the wage earners in the United States have no more excuse for using

the phrase "our United States" than the slaves in the South, before the

war, for saying "our Southland."

The franchise is a potential power, making it theoretically possible for

the electorate to take possession of the country. In practice, the

franchise has had no such result. Quite the contrary, the masters of

American life by a policy of chicanery and misrepresentation, advertise

and support first one and then the other of the "Old Parties," both of

which are led by the members of the propertied class or by their

retainers. The people, deluded by the press, and ignorant of their real

interests, go to the polls year after year and vote for representatives

that represent, in all of their interests, the special privileged

classes.

The economic and social reorganization of the United States during the

past fifty years has gone fast and far. The system of perpetual (fee

simple) private ownership of the resources has concentrated the control

over the natural resources in a small group, not of individuals,

but of corporations; has created a new form of social master, in

the form of a land-tool-job owner; has thus made possible a type of

absentee-landlordism more effective and less human than were any of its

predecessors and has decreased the responsibility at the same time that

it has augmented the power of the owning group. These changes have been

an integral part of a general economic transformation that has occupied

the chief energies of the ablest men of the community for the past two

generations.

The country of many farms, villages and towns, and of a few cities, with

opportunity free and easy of access, has become a country of highly

organized concentrated wealth power, owned by a small fraction of the

people and controlled by a tiny minority of the owners for their benefit

and profit. The country which was rightfully called "our United States"

in 1840, by 1920 was "their United States" in every important sense of

the word.

FOOTNOTES:

[39] "Estimated Valuation of National Wealth, 1850-1912," Bureau of the

Census, 1915, p. 15.

[40] "Addresses of President Wilson," House Doc. 803. Sixty-fourth

Congress, 1st Session (1916), p. 13.

IX. THE DIVINE RIGHT OF PROPERTY

1. _Land Ownership and Liberty_

The owners of American wealth have been molded gradually into a ruling

class. Years of brutal, competitive, economic struggle solidified their

ranks,--distinguishing friend from enemy; clarifying economic laws, and

demonstrating the importance of coordination in economic affairs.

Economic control, once firmly established, opened before the wealth

owning class an opportunity to dominate the entire field of public life.

Before the property owners could feel secure in their possessions, steps

must be taken to transmute the popular ideas regarding "property rights"

into a public opinion that would permit the concentration of important

property in the hands of a small owning class, at the same time that it

held to the conviction that society, without privately owned land and

machinery, was unthinkable.

Many of the leading spirits among the colonists had come to America in

the hope of realizing the ideal of "Every man a farm, and every farm a

man." Upon this principle they believed that it would be possible to set

up the free government which so many were seeking in those dark days of

the divine right of kings.

For many years after the organization of the Federal Government men

spoke of the public domain as if it were to last indefinitely. As late

as 1832 Henry Clay, in a discussion of the public lands, could say, "We

should rejoice that this bountiful resource possessed by our country,

remains in almost undiminished quantity." Later in the same speech he

referred to the public lands as being "liberally offered,--in

exhaustless quantities, and at moderate prices, enriching individuals

and tending to the rapid improvement of the country."[41]

The land rose in price as settlers came in greater numbers. Land booms

developed. Speculation was rife. Efforts were made to secure additional

concessions from the Government. It was in this debate, where the public

land was referred to as "refuse land" that Henry Clay felt called upon

to remind his fellow-legislators of the significance and growing value

of the public land. He said, "A friend of mine in this city bought in

Illinois last fall about two thousand acres of this refuse land at the

minimum price, for which he has lately refused six dollars per acre....

It is a business, a very profitable business, at which fortunes are made

in the new states, to purchase these refuse lands and without improving

them to sell them at large advances."[42]

A century ago, while it was still almost a wilderness, Illinois began to

feel the pressure of limited resources--a pressure which has increased

to such a point that it has completely revolutionized the system of

society that was known to the men who established the Government of the

United States.

This early record of a mid-western land boom, with Illinois land at six

dollars an acre, tells the story of everything that was to follow. Even

in 1832 there was not enough of the good land to go around. Already the

community was dividing itself into two classes--those who could get good

land and those who could not. A wise man, understanding the part played

by economic forces in determining the fate of a people, might have said

to Henry Clay on that June day in 1832, "Friend, you have pronounced the

obituary of American liberty."

Some wise man might have spoken thus, but how strange the utterance

would have sounded! There was so much land, and all history seemed to

guarantee the beneficial results that are derived from individual land

ownership. The democracies of Greece and Rome were built upon such a

foundation. The yeomanry of England had proved her pride and stay. In

Europe the free workers in the towns had been the guardians of the

rights of the people. Throughout historic times, liberty has taken root

where there is an economic foundation for the freedom which each man

feels he has a right to demand.

2. _Security of "Acquisitions"_

Feudal Europe depended for its living upon agriculture. The Feudal

System had concentrated the ownership of practically all of the valuable

agricultural land in the hands of the small group of persons which ruled

because it controlled economic opportunity. The power of this class

rested on its ownership of the resource upon which the majority of the

people depended for a livelihood.

The Feudal System was transplanted to England, but it never took deep

root there. When in 1215 A. D. (only a century and a half after the

Great William had made his effort to feudalize England) King John signed

the Magna Carta, Feudalism proper gave way to landlordism--the basis of

English economic life from that time to this.

The system of English landlordism (which showed itself at its worst in

the absentee landlordism of Ireland) differed from Feudalism in this

essential respect,--Feudalism was based upon the idea of the divine

right of kings. English landlordism was based on the idea of divine

right of property. English landlordism is the immediate ancestor of the

property concept that is universally accepted in the business world of

to-day.

The evils of Feudalism and of landlordism were well known to the

American colonists who were under the impression that they arose not

from the fact of ownership, but from the concentration of ownership. The

resources of the new world seemed limitless, and the possibility that

landlordism might show its ugly head on this side of the Atlantic was

too remote for serious consideration.

With the independence of the United States assured after the War of

1812; with the growth of industry, and the coming of tens of thousands

of new settlers, the future of democracy seemed bright. Daniel Webster

characterized the outlook in 1821 by saying, "A country of such vast

extent, with such varieties of soil and climate, with so much public

spirit and private enterprise, with a population increasing so much

beyond former examples, ... so free in its institutions, so mild in its

laws, so secure in the title it confers on every man to his own

acquisitions,--needs nothing but time and peace to carry it forward to

almost any point of advancement."[43]

"So free in its institutions, so mild in its laws, so secure in the

title it confers on every man to his own acquisitions,"--the words were

prophetic. At the moment when they were uttered the forces were busy

that were destined to realize Webster's dream, on an imperial scale, at

the expense of the freedom which he prized. Men were free to get what

they could, and once having secured it, they were safeguarded in its

possession. Property ownership was a virtue universally commended.

Constitutions were drawn and laws were framed to guarantee to property

owners the rights to their property, even in cases where this property

consisted of the bodies of their fellow men.

The movement toward the protection of property rights has been

progressive. Webster as a representative of the dominant interests of

the country a hundred years ago rejoiced that every man had a secure

title to "his own acquisitions," at a time when the property of the

country was generally owned by those who had expended some personal

effort in acquiring it. It was a long step from these personal

acquisitions to the tens of billions of wealth in the hands of

twentieth century American corporations. Daniel Webster helped to bridge

the gap. He was responsible, at least in part, for the Dartmouth College

Decision (1816) in which the Supreme Court ruled that a charter, granted

by a state, is a contract that cannot be modified at will by the state.

This decision made the corporation, once created and chartered, a free

agent. Then came the Fourteenth Amendment with its provision that "no

state shall make or enforce any law which shall abridge the privileges

or immunities of citizens of the United States; nor shall any state

deprive any person of life, liberty or property, without due process of

law." The amendment was intended to benefit negroes. It has been used to

place property ownership first among the American beatitudes.

Corporations are "persons" in the eyes of the law. When the state of

California tried to tax the property of the Southern Pacific Railroad at

a rate different from that which it imposed on persons, the Supreme

Court declared the law unconstitutional. This decision, coupled with

that in the Dartmouth College Case secured for a corporation "the same

immunities as any other person; and since the charter creating a

corporation is a contract, whose obligation cannot be impaired by the

one-sided act of a legislature, its constitutional position, as property

holder, is much stronger than anywhere in Europe." These decisions "have

had the effect of placing the modern industrial corporation in an almost

impregnable constitutional position."[44]

Surrounded by constitutional guarantees, armed with legal privileges and

prerogatives and employing the language of liberty, the private property

interests in the United States have gone forward from victory to

victory, extending their power as they increased and concentrated their

possessions.

3. _Safeguarding Property Rights_

The efforts of Daniel Webster and his contemporaries to protect

"acquisitions" have been seconded, with extraordinary ability, by

business organizers, accountants, lawyers and bankers, who have

broadened the field of their endeavors until it includes not merely

"acquisitions," but all "property rights." Daniel Webster lived before

the era of corporations. He thought of "acquisitions" as property

secured through the personal efforts of the human being who possessed

it. To-day more than half of the total property and probably more than

three-quarters of productive wealth is owned by corporations. It

required ability and foresight to extend the right of "acquisitions" to

the rights of corporate stocks and bonds. The leaders among the property

owners possessed the necessary qualifications. They did their work

masterfully, and to-day corporate property rights are more securely

protected than were the rights of acquisitions a hundred years ago.

The safeguards that have been thrown about property are simple and

effective. They arose quite naturally out of the rapidly developing

structure of industrialism.

_First_--There was an immense increase in the amount of property and of

surplus in the hands of the wealth-owning class. After the new industry

was brought into being with the Industrial Revolution, economic life no

longer depended so exclusively upon agricultural land. Coal, iron,

copper, cement, and many other resources could now be utilized, making

possible a wider field for property rights. Again, the amount of surplus

that could be produced by one worker, with the assistance of a machine,

was much greater than under the agricultural system.

_Second_--The new method of conducting economic affairs gave the

property owners greater security of possession. Property holders always

have been fearful that some fate might overtake their property, forcing

them into the ranks of the non-possessors. When property was in the form

of bullion or jewels, the danger of loss was comparatively great. The

Feudal aristocracy, with its land-holdings, was more secure.

Land-holdings were also more satisfactory. Jewels and plate do not pay

any rent, but tenants do. Thus the owner of land had security plus a

regular income.

The corporation facilitated possession by providing a means (stocks and

bonds) whereby the property owner was under no obligation other than

that of clipping coupons or cashing interest checks upon "securities"

that are matters of public record; issued by corporations that make

detailed financial reports, and that are subject to vigorous public

inspection and, in the cases of banks and other financial organizations,

to the most stringent regulation.

_Third_--Greater permanence has been secured for property advantages.

Corporations have perpetual, uninterrupted life. The deaths of persons

do not affect them. The corporation also overcame the danger of the

dissipation of property in the process of "three generations from shirt

sleeves to shirt sleeves." The worthless son of the thrifty parent may

still be able to squander his inheritance, but that simply means a

transfer of the title to his stocks and bonds. The property itself

remains intact.

_Fourth_--Property has secured a claim on income that is, in the last

analysis, prior to the claim of the worker.

When a man ran his own business, investing his capital, putting back

part of his earnings, and taking from the business only what he needed

for his personal expenses, "profits" were a matter of good fortune.

There were "good years" and "bad years," when profits were high or low.

Many years closed with no profit at all. The average farmer still

handles his business in that way.

The incorporation of business, and the issuing of bonds and stocks has

revolutionized this situation. It is no longer possible to "wait till

things pick up." If the business has issued a million in bonds, at five

per cent, there is an interest charge of $50,000 that must be met each

year. There may be no money to lay out for repairs and needed

improvements, but if the business is to remain solvent, it must pay the

interest on its bonds.

Businesses that are issuing securities to the public face the same

situation with regard to their stocks. Wise directors see to it that a

regular rate, rather than a high rate of dividends, is paid. Regularity

means greater certainty and stability, hence better consideration from

the investing public.

_Fifth_--The practices of the modern economic world have gone far to

increase the security of property rights.

Business men have worked ardently to "stabilize" business. They have

insisted upon the importance of "business sanity;" of conservatism in

finance; of the returns due a man who risks his wealth in a business

venture; and of the fundamental necessity of maintaining business on a

sound basis. After centuries of experiment they have evolved what they

regard as a safe and sane method of financial business procedure. Every

successful business man tried to live up to the following

well-established formula.

First, he pays out of his total returns, or gross receipts, the ordinary

costs of doing business--materials, labor, repairs and the like. These

payments are known as running expenses or up-keep.

Second, after up-keep charges are paid he takes the remainder, called

gross income, and pays out of it the fixed charges--taxes, insurance,

interest and depreciation.

Third, the business man, having paid all of the necessary expenses of

doing business (the running expenses and the fixed charges), has left a

fund (net income) which, roughly speaking, is the profits of the

business. Out of this net income, dividends are paid, improvements and

extensions of the plant are provided for.

Fourth, the careful business man increases the stability of his

business by adding something to his surplus or undivided profits.

The operating statistics of the United Steel Corporation for 1918

illustrate the principle:

1. Gross Receipts $1,744,312,163

Manufacturing and Operating expenses

including ordinary repairs 1,178,032,665

---------------

2. Gross Earnings $ 566,279,498

Other income 40,474,823

---------------

$ 606,754,321

General Expense, (including commission

and selling expense, taxes, etc.) 337,077,986

Interest, depreciation, sinking fund, etc. 144,358,958

--------------

3. Net Income $ 125,317,377

Dividends 96,382,027

--------------

4. Surplus for the year $ 28,935,350

Total surplus 460,596,154

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

1. Paid its running expenses,

2. Paid its fixed obligations,

3. Divided up its profits,

4. And kept a nest egg.

The effectiveness of such means of stabilizing property income is

illustrated by a compilation (published in the _Wall Street Journal_ for

August 7th, 1919) of the business of 104 American corporations between

December 31, 1914, and December 31, 1918. The inventories--value of

property owned--had increased from 1,192 millions to 2,624 millions of

dollars; the gain in surplus, during the four years, was 1,941

millions; the increase in "working capital" was 1,876 millions. These

corporations, representing only a small fraction of the total business

of the country, had added billions to their property values during the

four years.

These various items,--up-keep; depreciation; insurance; taxes; interest;

dividends and surplus,--are recognized universally by legislatures and

courts as "legitimate" outlays. They, therefore, are elements that are

always present in the computation of a "fair" price. The cost to the

consumer of coffee, shoes, meat, blankets, coal and transportation are

all figured on such a basis. Hence, it will be seen that each time the

consumer buys a pair of shoes or a pound of meat, he is paying, with

part of his money, for the stabilizing of property.

Fifth. Property titles under this system are rendered immortal. A

thousand dollars, invested in 1880 in 5 per cent. 40 year bonds, will

pay to the owner $2,000 in interest by 1920, at which time the owner

gets his original thousand back again to be re-invested so long as he

and his descendants care to do so. The dollar, invested in the business

of the steel corporation, by the technical processes of bookkeeping, is

constantly renewed. Not only does it pay a return to the owner, but

literally, it never dies.

The community is built upon labor. Its processes are continued and its

wealth is re-created by labor. The men who work on the railroad keep the

road operating; those who own the railroad owe to it no personal fealty,

and perform upon it no personal service. If the worker dies, the train

must stop until he is replaced; if the owner dies, the clerk records a

change of name in the registry books.

The well-ordered society will encourage work. It will aim to develop

enthusiasm, to stimulate activity. Nevertheless, in "practical America"

a scheme of economic organization is being perfected under which the

cream of life goes to the owners. They have the amplest opportunities.

They enjoy the first fruits.

4. _Property Rights and Civilization_

Under these circumstances, it is easy to see how "the rights of

property" soon comes to mean the same thing as "civilization," and how

"the preservation of law and order" is always interpreted as the

protection of property. With a community organized on a basis which

renders property rights supreme in all essential particulars, it is but

natural that the perpetuation of these rights should be regarded as the

perpetuation of civilization itself.

The present organization of economic life in the United States permits

the wealth owners through their ownership to live without doing any work

upon the work done by their fellows. As recipients of property income

(rent, interest and dividends) they have a return for which they need

perform no service,--a return that allows them to "live on their

income."

The man who fails to assist in productive activity gives nothing of

himself in return for the food, clothing and shelter which he

enjoys,--that is, he lives on the labor of others. Where some have sowed

and reaped, hammered and drilled, he has regaled himself on the fruits

of their toil, while never toiling himself.