Vanishing Landmarks

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

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

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

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

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

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

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

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

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

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

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

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

RELATIVE REWARDS OF CAPITAL AND LABOR

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

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

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

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

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

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

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

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

Where there is incentive there will always be achievement.

ANOTHER ILLUSTRATION

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

WHAT BECOMES OF WAGES?

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

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

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

A SUMMARY OF ACHIEVEMENT

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

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

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

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

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

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

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

ECONOMIC PHILOSOPHY

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

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

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

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

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