Twentieth Century Socialism Part 18

One thing, however, we want to bear in mind, that although farmers suffer by the demonetization of silver and wage-earners suffer by the demonetization of silver, and no change in the amount of silver and gold used as currency takes place without somebody suffering, the financiers and all those who handle money are in a position so to conduct their affairs as to profit by these changes. Meanwhile the rest of the community are in such a position that they have not the knowledge and even if they had the knowledge, would probably not have the ability, to do anything but lose by them.

The average citizen has no knowledge on these subjects whatever, and is therefore at the mercy of financial heretics. He was misled by the greenback craze in the 80's, by the silver craze in the 90's, and is subject to further delusions so long as coin remains the medium of exchange and coin is controlled by a few individuals whose only interest in it is to make out of it the largest fortune possible.

It must not be imagined that an attempt has been made to furnish anything like an exhaustive account of the opportunities which financiers have for profiting at the expense of the public. To do so would require a volume as large as this one devoted entirely to this subject.

For example, at this very time of writing,[129] the papers inform us that Mr. Morgan is hurrying back from Europe to settle the question whether a dividend is to be paid on the common stock of the United States Steel Company. It is known that Mr. Morgan received a very large block of this stock as his compensation for promoting the trust.

If he still has enough of this stock to make the payment of a dividend of importance to him, or if he wants to sell at a high price, he will be naturally influenced by this motive to declare a dividend. If, on the other hand, he who best of all knows how prosperous the Company is, desires to purchase more of this stock at a low price, he will be tempted not to declare a dividend. The stock will fall and he will be able to make a large profit by purchasing.

In this manner directors are always able, if they choose, to make money on the declaration of doubtful dividends; and this can be done without its being possible to impute any blame to them, for a declaration of a dividend is always a matter of judgment. It is wise to put aside a certain part of the profits as a reserve to meet hard times, and just how much shall be put aside as a reserve and how much shall be paid out for dividends are matters on which it is very difficult for the best-intentioned men to agree. The directors, however, who control the company can make up their minds beforehand whether they will declare a dividend or not. If they propose to pa.s.s a dividend, they can sell as much as the market permits and buy back later at reduced prices. If they decide to declare a dividend, they can buy as much as the market permits and sell later at advanced prices.

Again, there seems to be no standard of morality amongst bankers as regards the profits they make. In the ordinary walks of life, a man is expected to be able to explain what the services are for which he receives any considerable sum of money. This, however, does not seem to be the case with bankers. In 1893, the United States Congress appointed a committee to investigate the rumor that over a million dollars had been remitted to J.P. Morgan & Company, Winslow Lanier & Company and J. & W. Seligman for the purpose of corrupting Congress.

Messrs. Morgan, Lanier and Seligman were obliged to admit that a sum of $1,200,000 had been divided among them, "apparently for the use of their names and for nothing else." When asked if it had been remitted for the purpose of corrupting Congress, they denied it; when asked if they were still in possession of this sum, they admitted they were; when asked what the services were for which they had received this sum, they navely stated that they did not know.[130] Such an admission made by a lawyer would be ground for having him disbarred.

The very moral or immoral att.i.tude that permits of bankers receiving enormous sums of money without being able to explain why these moneys were paid to them, pervades the whole financial atmosphere.

The directors of our large corporations corrupt our legislatures; they endow universities and pervert our education; they support the churches and prevent them from preaching the doctrines of Christ; they determine elections so as to secure legislators whom they can control.

They are masters, not only of our whole system of production and distribution, but of our government and our laws. And this democracy which in theory is a government of the people, by the people, and for the people, turns out to be a government of the people, by financiers, for financiers.

Nor does it seem possible to put an end to this condition of things so long as our system of production and distribution is compet.i.tive; for gold and silver have proved to be altogether the best mediums of exchange, and some medium of exchange we must have in order to carry on trade so long as that trade is left to individual initiative as at present.

The whole community pays tribute to those who have gold and silver and those who handle it, and these last have a personal interest contrary to the interest of the public at moments of the greatest emergency.

Compet.i.tive conditions have subjected the whole currency of the country to the control of a few men who thereby are masters of our commerce, our manufactures, our exports, our politics, our religion.

In view of the fact that this small group practically governs the country in matters of legislation, and by virtue of a sort of cla.s.s solidarity between the judges and the possessing cla.s.s, governs the courts also, the men who determine the making and executing of our laws should, in a democracy such as ours, be elected by the people.

But they are not elected by the people and they are not removable by the people. They are irremovable usurpers; they are created by economic conditions and, as long as these economic conditions last, they will continue to enjoy the power they now exercise.

FOOTNOTES:

[115] An article by Charles A. Conant in the _Atlantic Monthly_, Jan., 1908.

[116] _Atlantic Monthly_, Charles A. Conant, Jan., 1908, p. 101.

[117] Insurance Year Book: Life and Casualty sections, 1909, p. 236-7.

[118] Statistical abstract of the U.S., 1908.

[119] "Monetary and Banking Systems." By Maurice L. Muhleman, formerly U.S. Deputy a.s.sistant Treasurer at New York.

[120] Ibid.

[121] According to computations made by Mr. James H. Brookmire on quotations of twenty representative railroad stocks, these reached at the highest point in 1906, 138. In March, these securities had gone down to 98.

[122] N.Y. _Press_, Oct. 22, 1907.

[123] See N.Y. _Times_, Jan. 30, 1909.

[124] N.Y. _Times_, February 1, 1909.

[125] The N.Y. _Times_, Jan. 7, 1909.

[126] N.Y. _Sun_, Jan. 17, 1908.

[127] Ibid., Jan. 30, 1908.

[128] "A Money Market Primer," by George Clare. Recommended by the Council of the Inst.i.tute of Bankers. Revised edition, London, 1896, p.

123.

[129] July 16, 1909.

[130] House Reports, 52d Congress, 2d Session, v. 3, No. 2615, p. 5.

CHAPTER VII

CAN THE EVILS OF CAPITALISM BE ELIMINATED BY COoPERATION?

One of our ablest captains of industry has lately collected articles and addresses on this subject in a book ent.i.tled, "Problems of the Day." If we were to eliminate from this book the errors under which Mr. Carnegie labors as to what Socialism is, we could make of it an admirable piece of Socialist propaganda. For Mr. Carnegie, although denouncing Socialism in every page, believes in giving the workingman an interest in the factory, and carries his belief in this system so far that he actually looks forward to the day when labor will reach "an equality with the millionaire as his partner in business."[131] He cites as an example of what could be done in this direction the Filene stores of Boston, the capital stock of which he says is held "exclusively by employees." Now this is exactly the system which modern Socialism wants to bring into existence. Because, therefore, Mr. Carnegie does not belong to the Platonic School of Socialism which suggests the breaking-up of the home and is denounced by all practical Socialists of to-day; and because he disapproves of the abolition of wealth, as do all practical Socialists of to-day, he deserves to occupy a front rank in our Socialist army for having put his finger upon the real evil--compet.i.tion; and for having pointed the way to the real solution--the subst.i.tution, of cooperation for compet.i.tion all through our industrial system.

One thing, however, Mr. Carnegie has failed to appreciate: namely, that when all our industries are organized on the principle of the Filene stores--when, as Mr. Carnegie explains, the capital stock of every industry and department store is held exclusively by employees, the worker will not be the partner of the millionaire--he will have superseded him. I am afraid this is not what Mr. Carnegie wants, at least not in his day. But when he really wants this as much as in his book he seems to want it, Mr. Carnegie will be qualified to be a member of the Socialist party.

There is an important distinction to be made between cooperation and cooperatives, because cooperatives may be divided into two very different cla.s.ses: capitalistic cooperatives and socialistic cooperatives.

The capitalistic cooperatives are either the efforts of capitalists to secure the fidelity of employees by giving them a minute share in the profits of the business, or the efforts of employees to benefit themselves by eliminating capitalists without eliminating capitalism; in other words, the fact that such cooperatives undertake to produce or distribute commodities under the compet.i.tive _regime_, converts them into capitalists.

In marked contrast to these are the cooperative stores of Belgium, organized in part to improve the condition of those engaged in them, but also with the view of putting an end to capitalism altogether.

These are performing a work of inestimable value to Socialism and the Socialist party in Belgium, while materially helping those who belong to them, they at the same time hold up as the standard aimed at, not the mere material improvement of themselves, but the ultimate triumph of an ideal.

The field for cooperation is so vast that it cannot be traversed in the scope of this work. I shall close this subject therefore with the suggestion that all cooperatives--even the capitalistic--are good and useful, for they tend to educate. It is true that they may also occasion evil; as for example, the Steel Trust when it encourages employees to purchase stock, while it discourages and destroys trade-union organization, and thereby creates an aristocracy of labor which tends to prevent the sense of solidarity in labor ranks that Marxians regard as essential to the triumph of the Socialist cause.

But the evil it does is probably compensated by the good. Incidentally it furnishes us Socialists with a triumphant answer to Mr. Carnegie: Here in his city of Pittsburg which he built up with his genius, is the principle of cooperation adopted which he regards as the solution of all our ills; yet it is this very Pittsburg that to-day furnishes to the whole world the most abominable picture of exploitation ever presented.[132] We Socialists are indeed fortunate that this picture has been drawn not by ourselves, but by those who are to-day the most intelligently opposing us.

FOOTNOTES:

[131] "Problems of the Day," by Andrew Carnegie, p. 76.

[132] The Pittsburg Survey, published by the Russell Sage Foundation.

BOOK III

_WHAT SOCIALISM IS_

Socialism is too vast a subject to be brought within the four corners of any one definition. It is as impossible for a definition to convey an idea of Socialism as for an empty theater to convey the comedies, the idylls, and the tragedies nightly enacted on its boards. A definition can at best barely give the mechanism of Socialism; it cannot furnish a picture of the effect of that mechanism in eliminating misery, in promoting progress, in making character. This must be painted on a canvas--and on a large canvas--and on many canvases--for, as has been already urged, Socialism is not a simple thing; it is a highly complex thing; and it is only when we have grasped _all_ that Socialism will effect--when we have studied its economic results, its political results, its scientific results, and its ethical results--that we can appreciate this new Gospel of the Poor.