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The American Empire

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Title: The American Empire

Author: Scott Nearing


        
Release date: January 12, 2009 [eBook #27787]

Language: English

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THE AMERICAN EMPIRE

by

SCOTT NEARING

Author of
"Wages in the United States"
"Income"
"Financing the Wage-Earner's Family"
"Anthracite"
"Poverty and Riches," etc.







New York
The Rand School of Social Science
7 East 15th Street
1921

All rights reserved

Copyright, 1921,
by the
Rand School of Social Science

First Edition, January, 1921
Second Edition, February, 1921




CONTENTS


PART I

WHAT IS AMERICA?

CHAPTER                                            PAGE

    I The Promise of 1776                             7

   II The Course of Empire                           14


PART II

THE FOUNDATIONS OF EMPIRE.

A. THE CONQUEST OF AMERICA.

  III Subjugating the Indians                        26

   IV Slavery for a Race                             38

    V Winning the West                               49

   VI The Beginnings of World Dominion               60

B. PLUTOCRACY.

  VII The Struggle for Wealth and Power              74

 VIII Their United States                            88

   IX The Divine Right of Property                  103


PART III

MANIFEST DESTINY.

    X Industrial Empires                            120

   XI The Great War                                 143

  XII The Imperial Highroad                         158


PART IV

THE UNITED STATES--A WORLD EMPIRE.

 XIII The United States as a World Competitor       177

  XIV The Partition of the Earth                    192

   XV Pan-Americanism                               202

  XVI The American Capitalist and World Empire      218


PART V

THE CHALLENGE TO IMPERIALISM.

 XVII The New Imperial Alignment                    229

XVIII The Challenge in Europe                       243

  XIX The American Worker and World Empire          256




The American Empire




I. THE PROMISE OF 1776


1. _The American Republic_

The genius of revolution presided at the birth of the American Republic,
whose first breath was drawn amid the economic, social and political
turmoil of the eighteenth century. The voyaging and discovering of the
three preceding centuries had destroyed European isolation and laid the
foundation for a new world order of society. The Industrial Revolution
was convulsing England and threatening to destroy the Feudal State.
Western civilization, in the birthpangs of social revolution, produced
first the American and then the French Republic.

Feudalism was dying! Divine right, monarchy, aristocracy, oppression,
despotism, tyranny--these and all other devils of the old world order
were bound for the limbo which awaits outworn, discredited social
institutions. The Declaration of Independence officially proclaimed the
new order,--challenging "divine right" and maintaining that "all men are
created equal; that they are endowed by their Creator with certain
unalienable rights; that among these are life, liberty and the pursuit
of happiness. That to secure these rights, governments are instituted
among men, deriving their just powers from the consent of the governed."

Life, liberty and happiness were the heritage of the human race, and
"whenever any form of government becomes destructive of these ends, it
is the right of the people to alter or abolish it, and to institute a
new government laying its foundations on such principles, and organizing
its powers in such form, as to them shall seem likely to effect their
safety and happiness."

Thus the rights of the people were declared superior to the privileges
of the rulers; revolution was justified; and the principles of
eighteenth century individualism were made the foundation of the new
political state. Aristocracy was swept aside and in its stead democracy
was enthroned.


2. _The Yearning for Liberty_

The nineteenth century re-echoed with the language of social idealism.
Traditional bonds were breaking; men's minds were freed; their
imaginations were kindled; their spirits were possessed by a gnawing
hunger for justice and truth.

Revolting millions shouted: "Liberty, Equality, Fraternity!" Sages
mused; philosophers analyzed; prophets exhorted; statesmen organized
toward this end.

Men felt the fire of the new order burning in their vitals. It purged
them. They looked into the eyes of their fellows and saw its reflection.
Dreaming of liberty as a maiden dreams of her lover, humanity awoke
suddenly, to find liberty on the threshold.

Through the ages mankind has sought truth and justice. Vested interests
have intervened. The powers of the established order have resisted, but
the search has continued. That eternal vigilance and eternal sacrifice
which are the price of liberty, are found wherever human society has
left a record. At one point the forces of light seem to be winning. At
another, liberty and truth are being ruthlessly crushed by the
privileged masters of life. The struggle goes on--eternally.

Liberty and justice are ideals that exist in the human heart, but they
are none the less real. Indeed, they are in a sense more potent, lying
thus in immortal embryo, than they could be as tangible institutions.
Institutions are brought into being, perfected, kept past their time of
highest usefulness and finally discarded. The hopes of men spring
eternally, spontaneously. They are the true social immortality.


3. _Government of the People_

Feudalism as a means of organizing society had failed. The newly
declared liberties were confided to the newly created state. It was
political democracy upon which the founders of the Republic depended to
make good the promise of 1776.

The American colonists had fled to escape economic, political and
religious tyranny in the mother countries. They had drunk the cup of its
bitterness in the long contest with England over the rights of taxation,
of commerce, of manufacture, and of local political control. They had
their fill of a mastery built upon the special privilege of an
aristocratic minority. It was liberty and justice they sought and
democracy was the instrument that they selected to emancipate themselves
from the old forms of privilege and to give to all an equal opportunity
for life, liberty and the pursuit of happiness.

Political democracy was to place the management of community business in
the hands of the people--to give them liberty in the control of public
affairs. The highest interest of democracy was to be the interest of the
people. There could be no higher interest because the people were
supreme. The people were to select the public servants; direct their
activities; determine public policy; prescribe the law; demand its
enforcement; and if need be assert their superior authority over any
part of the government, not excepting the constitution.[1]

Democracy, in politics, was based on the idea that public affairs could
best be run by the public voice. However expert may be the hand that
administers the laws, the hand and the heart that renders the final
decision in large questions must belong to the public.[2]

The people who laid the foundations for democracy in France and the
United States feared tyranny. They and their ancestors had been, for
centuries, the victims of governmental despotism. They were on their
guard constantly against governmental aggression in any form. And they,
therefore, placed the strictest limitations upon the powers that
governments should enjoy.

Special privilege government was run by a special class,--the hereditary
aristocracy--in the interest and for the profit of that class. They held
the wealth of the nation--the land--and lived comfortably upon its
produce. They never worked--no gentleman could work and remain a
gentleman. They carried on the affairs of the court--sometimes well,
sometimes badly; maintained an extravagant scale of social life; built
up a vicious system of secret international diplomacy; commanded in time
of war, and at all times; levied rents and taxes which went very largely
to increase their own comfort and better their own position in life. The
machinery of government and the profits from government remained in the
hands of this one class.

Class government from its very nature could not be other than
oppressive. "All hereditary government over a people is to them a
species of slavery and representative government is freedom." "All
hereditary government is in its nature tyranny.... To inherit a
government is to inherit the people as if they were flocks and
herds."[3]


4. _The Source of Authority_

The people were to be the source of authority in the new state. The
citizen was to have a voice because he was an adult, capable of
rendering judgment in the selection of public servants and in the
determination of public policy.

All through history there had been men into whose hands supreme power
had been committed, who had carried this authority with an astounding
degree of wisdom and integrity. For every one who had comported himself
with such wisdom in the presence of supreme authority, there were a
score, or more likely a hundred, who had used this power stupidly,
foolishly, inefficiently, brutally or viciously.

Few men are good enough or wise enough to keep their heads while they
hold in their hands unlimited authority over their fellows. The pages of
human experience were written full of the errors, failures, and abuses
of which such men so often have been guilty.

The new society, in an effort to prevent just such transgressions of
social well being, placed the final power to decide public questions in
the hands of the people. It was not contended, or even hoped that the
people would make no mistakes, but that the people would make fewer
mistakes and mistakes less destructive of public well-being than had
been made under class government. At least this much was gained, that
the one who abused power must first secure it from those whom he
proposed to abuse, and must later exercise it unrestrained to the
detriment of those from whom the power was derived and in whom it still
resided.

The citizen was to be the source of authority. His word, combined with
that of the majority of his fellows, was final. He delegated authority.
He assented to laws which were administered over all men, including
himself. He accepts the authority of which he was the source.


5. _The American Tradition_

This was the American tradition. This was the language of the new, free
world. Life, liberty and happiness; popular sovereignty; equal
opportunity. This, to the people of the old countries was the meaning of
America. This was the promise of 1776.

When President Wilson went to Europe, speaking the language of liberty
that is taught in every American schoolroom, the plain people turned to
him with supreme confidence. To them he was the embodiment of the spirit
of the West.

Native-born Americans hold the same idea. To them the Declaration of
Independence was a final break with the old order of monarchical,
imperial Europe. It was the charter of popular rights and human
liberties, establishing once for all the principles of self-government
and equal opportunity.

The Statue of Liberty, guarding the great port of entrance to America,
symbolizes the spirit in which foreigners and natives alike think of
her--as the champion of the weak and the oppressed; the guardian of
justice; the standard-bearer of freedom.

This spirit of America is treasured to-day in the hearts of millions of
her citizens. To the masses of the American people America stands to-day
as she always stood. They believe in her freedom; they boast of her
liberties; they have faith in her great destiny as the leader of an
emancipated world. They respond, as did their ancestors, to the great
truths of liberty, equality, and fraternity that inspired the eighteenth
century.

The tradition of America is a hope, a faith, a conviction, a burning
endeavor, centering in an ideal of liberty and justice for the human
race.

Patrick Henry voiced this ideal when, a passionate appeal for freedom
being interrupted by cries of "Treason, treason!" he faced the objector
with the declaration, "If this be treason, make the most of it!"

Eighteenth century Europe, struggling against religious and political
tyranny, looked to America as the land of Freedom. America to them meant
liberty. "What Athens was in miniature, America will be in magnitude,"
wrote Tom Paine. "The one was the wonder of the ancient world; the other
is becoming the admiration, the model of the present." ("The Rights of
Man," Part II, Chapter 3.) The promise of 1776 was voiced by men who
felt a consuming passion for freedom; a divine discontent with anything
less than the highest possible justice; a hatred of tyranny, oppression
and every form of special privilege and vested wrong. They yearned over
the future and hoped grandly for the human race.

FOOTNOTES:

[1] "It is, Sir, the people's constitution, the people's government,
made for the people, made by the people, and answerable to the
people."--Daniel Webster's reply to Hayne, 1830. "Speeches and
Orations." E. P. Whipple, Boston, Little, Brown and Co., p. 257.

[2] Tom Paine held ardently to this doctrine, "It is always the interest
of a far greater number of people in a Nation to have things right than
to let them remain wrong; and when public matters are open to debate,
and the public judgment free, it will not decide wrong unless it decides
too hastily!" "Rights of Man," Part II, Ch. 4.

[3] "Rights of Man," Thomas Paine. Part II, Chapter 3.




II. THE COURSE OF EMPIRE


1. _Promise and Fulfillment_

A vast gulf yawns between the inspiring promise that a handful of men
and women made to the world in 1776, and the fulfillment of that promise
that is embodied in twentieth century American life. The pre-war
indifference to the loss of liberty; the gradual encroachments on the
rights of free speech, and free assemblage and of free press; the
war-time suppressions, tyrannies, and denials of justice; the subsequent
activities of city, state, and national legislatures and executives in
passing and enforcing laws that provided for military training in
violation of conscience, the denial of freedom of belief, of thought, of
speech, of press and of assemblage,--activities directed specifically to
the negation of those very principles of liberty which have constituted
so intimate a part of the American tradition of freedom,--form a
contrast between the promise of 1776 and the twentieth century
fulfillment of that promise which is brutal in its terrible intensity.

Many thoughtful Americans have been baffled by this conflict between the
aims of the eighteenth century and the accomplishments of the twentieth.
The facts they admit. For explanation, either they may say, "It was the
war," implying that with the cessation of hostilities and the return to
a peace basis, the situation has undergone a radical change; or else
they blame some individual or some organization for the extinction of
American liberties.

Great consequences arise from great causes. A general break-down of
liberties cannot be attributed to individual caprice nor to a particular
legislative or judicial act.

The denial of liberty in the United States is a matter of large import.
No mayor, governor, president, legislature, court, magnate, banker,
corporation or trust, and no combination of these individuals and
organizations could arbitrarily destroy the American Republic.
Underneath personality and partisanship are working the forces which
have stripped the American people of their essential liberties as the
April sun strips the mountains of their snow.

No one can read the history of the United States since the drafting of
the Declaration of Independence without being struck by the complete
transformation in the forms of American life. The Industrial Revolution
which had gripped England for half a century, made itself felt in the
United States after 1815. Steam, transportation, industrial development,
city life, business organization, expansion across the continent--these
are the factors that have made of the United States a nation utterly
apart from the nation of which those who signed the Declaration of
Independence and fought the Revolution dreamed.

These economic changes have brought political changes. The American
Republic has been thrust aside. Above its remains towers a mighty
imperial structure,--the world of business,--bulwarked by usage and
convention; safeguarded by legislation, judicial interpretation, and the
whole power of organized society. That structure is the American
Empire--as real to-day as the Roman Empire in the days of Julius Caesar;
the French Empire under the Little Corporal, or the British Empire of
the Great Commoner, William E. Gladstone.

Approved or disapproved; exalted or condemned; the fact of empire must
be evident even to the hasty observer. The student, tracing its
ramifications, realizes that the structure has been building for
generations.


2. _The Characteristics of Empire_

Many minds will refuse to accept the term "empire" as applied to a
republic. Accustomed to link "empire" with "emperor," they conceive of a
supreme hereditary ruler as an essential part of imperial life. A little
reflection will show the inadequacy of such a concept. "The British
Empire" is an official term, used by the British Government, although
Great Britain is a limited monarchy, whose king has less power than the
President of the United States. On the other hand, eastern potentates,
who exercise absolute sway over their tiny dominions do not rule
"empires."

Recent usage has given the term "empire" a very definite meaning, which
refers, not to an "emperor" but to certain relations between the parts
of a political or even of an economic organization. The earlier uses of
the word "empire" were, of course, largely political. Even in that
political sense, however, an "empire" does not necessarily imply the
domain of an "emperor."

According to the definition appearing in the "New English Dictionary"
wherever "supreme and extensive political dominion" is exercised "by a
sovereign state over its dependencies" an empire exists. The empire is
"an aggregation of subject territories ruled over by a sovereign state."
The terms of the definition are political, but it leaves the emperor
entirely out of account and makes an empire primarily a matter of
organization and not of personality.

During the last fifty years colonialism, the search for foreign markets,
and the competition for the control of "undeveloped" countries has
brought the words "empire" and "imperialism" into a new category, where
they relate, not to the ruler--be he King or Emperor--but to the
extension of commercial and economic interests. The "financial
imperialism" of F. C. Howe and the "imperialism" of J. A. Hobson are
primarily economic and only incidentally political.

"Empire" conveys the idea of widespread authority, dominion, rule,
subjugation. Formerly it referred to political power; to-day it refers
to economic power. In either case the characteristics of empire are,--


     1. Conquered territory.

     2. Subject peoples.

     3. An imperial or ruling class.

     4. The exploitation of the subject peoples and the conquered
     territory for the benefit of the ruling class.


Wherever these four characteristics of imperial organization exist,
there is an empire, in all of its essential features. They are the
acid-test, by which the presence of empire may be determined.

Names count for nothing. Rome was an empire, while she still called
herself a republic. Napoleon carried on his imperial activities for
years under the authority of Republican France. The existence of an
empire depends, not upon the presence of an "emperor" but upon the
presence of those facts which constitute Empire,--conquered territory;
subject peoples; an imperial class; exploitation by and for this class.
If these facts exist in Russia, Russia is an empire; if they are found
in Germany, Germany is an empire; if they appear in the United States,
the United States is an empire none the less surely,--traditions,
aspirations and public conviction to the contrary notwithstanding.


3. _The Preservation of Empire_

The first business of an imperial class is the preservation of the
empire to which it owes its advantages and privileges. Therefore, in its
very essence, imperialism is opposed to popular government. "The
greatest good to the greatest number" is the ideal that directs the life
of a self-governing community. "The safety and happiness of the ruling
class" is the first principle of imperial organization.

Imperialism is so generally recognized and so widely accepted as a
mortal foe of popular government that the members of an imperial class,
just rising into power, are always careful to keep the masses of the
people ignorant of the true course of events. This necessity explains
the long period, in the history of many great empires, when the name and
forms of democracy were preserved, after the imperial structure had been
established on solid foundations. Slow changes, carefully directed and
well disguised, are necessary to prevent outraged peoples from rising
against an imperial order when they discover how they have been sold
into slavery. Even with all of the safeguards, under the control of the
ablest statesmen, Caesar frequently meets his Brutus.

The love of justice; the yearning for liberty; the sense of fair play;
the desire to extend opportunity, all operate powerfully upon those to
whom the principles of self-government are dearest, leading them to
sacrifice position, economic advantage, and sometimes life itself for
the sake of the principles to which they have pledged their faith.

Therein lies what is perhaps one of the most essential differences
between popular government and empire. The former rests upon certain
ideas of popular rights and liberties. The latter is a weapon of
exploitation in the hands of the ruling class. Popular government lies
in the hopes and beliefs of the people. Empire is the servant of
ambition and the shadow of greed. Popular government has been evolved by
the human race at an immense sacrifice during centuries of struggle
against the forms and ideas that underly imperialism. Since men have set
their backs on the past and turned their faces with resolute hope to the
future, empire has repelled them, while democracy has called and
beckoned.

Empires have been made possible by "bread and circuses"; by appealing to
an abnormally developed sense of patriotism; by the rule of might where
largess and cajolery have failed. Rome, Germany and Britain are
excellent examples of these three methods. In each case, millions of
citizens have had faith in the empire, believing in its promise of glory
and of victory; but on the other hand, this belief could be maintained
only by a continuous propaganda--triumphs in Rome, school-books and
"boilerplate" in Germany and England. Even then, the imperial class is
none too secure in its privileges. Always from the abysses of popular
discontent, there arises some Spartacus, some Liebknecht, some Smillie,
crying that "the future belongs to the people."

The imperial class, its privileges unceasingly threatened by the popular
love of freedom--devotes not a little attention to the problem of
"preserving law and order" by suppressing those who speak in the name of
liberty, and by carrying on a generous advertising campaign, the object
of which is to persuade the people of the advantages which they derive
from imperial rule.

During the earlier stages in the development of empire, the imperial
class is able to keep itself and its designs in the background. As time
passes, however, the power of the imperialist becomes more and more
evident, until some great crisis forces the empire builders to step out
into the open. They then appear as the frank apologists, spokesmen and
defenders of the order for which they have so faithfully labored and
from which they expect to gain so much.

Finally, the ambition of some aggressive leader among the imperialists,
or a crisis in the affairs of the empire leads to the next step--the
appointment of a "dictator," "supreme ruler" or "emperor." This is the
last act of the imperial drama. Henceforth, the imperial class divides
its attention between,--


     1. The suppression of agitation and revolt among the people at
     home;

     2. Maintaining the imperial sway over conquered territory;

     3. Extending the boundaries of the empire and

     4. The unending struggle between contending factions of the ruling
     class for the right to carry on the work of exploitation at home
     and abroad.


4. _The Price of Empire_

Since the imperial or ruling class is willing to go to any lengths in
order to preserve the empire upon which its privileges depend, it
follows that the price of empire must be reckoned in the losses that the
masses of the people suffer while safeguarding the privileges of the
few.

As a matter of course, conquered and dependent people pay with their
liberty for their incorporation into the empire that holds dominion over
them. On any other basis, empire is unthinkable. Indeed the terms
"dependencies," "domination," and "subject" carry with them only one
possible implication--the subordination or extinction of the liberties
of the peoples in question.

The imperial class--a minority--depends for its continued supremacy upon
the ownership of some form of property, whether this property be slaves,
or land, or industrial capital. As Veblen puts it: "The emergence of the
leisure class coincides with the beginning of ownership." ("Theory of
the Leisure Class," T. Veblen, New York. B. W. Huebsch, 1899, p. 22.)
Necessarily, therefore, the imperial class will sacrifice the so-called
human or personal rights of the home population to the protection of its
property rights. Indeed the property rights come to be regarded as the
essential human rights, although there is but a small minority of the
community that can boast of the possession of property.

The superiority of ruling class property rights over the personal rights
and liberties of the inhabitants in a subject territory is taken as a
matter of course. Even in the home country, where the issue is clearly
made, the imperial class will sacrifice the happiness, the health, the
longevity, and the lives of the propertyless class in the interest of
"law and order" and "the protection of property." The stories of the
Roman populace; of the French peasants under Louis XIV; of the English
factory workers (men, women and children) during the past hundred years,
and of the low skilled workers in the United States since the Civil
War, furnish ample proof of the correctness of this contention. The
life, liberty and happiness of the individual citizen is a matter of
small importance so long as the empire is saved.

A crisis in imperial affairs is always regarded, by the ruling class, as
a legitimate reason for curtailing the rights of the people. Under
ordinary circumstances, the imperial class will gain rather than lose
from the exercise of "popular liberties." Indeed, the exercise of these
liberties is of the greatest assistance in convincing the people that
they are enjoying freedom and thus keeping them satisfied with their
lot. But in a period of turmoil, with men's hearts stirred, and their
souls aflamed with conviction and idealism, there is always danger that
the people may exercise their "unalienable right" to "alter or abolish"
their form of government. Consequently, during a crisis, the imperial
class takes temporary charge of popular liberties. Every great empire
engaged in the recent war passed through such an experience. In each
country the ruling class announced that the war was a matter of life and
death. Papers were suppressed or censored; free speech was denied; men
were conscripted against will and conscience; constitutions were thrust
aside; laws "slumbered"; writers and thinkers were jailed for their
opinions; food was rationed; industries were controlled--all in the
interest of "winning the war." After the war was won, the victors
practiced an even more rigorous suppression while they were "making the
peace." Then followed months and years of protests and demands, until,
one by one, the liberties were retaken by the people or else the
war-tyranny, once firmly established, became a part of "the heritage of
empire." In such cases, where liberties were not regained, the plain
people learned to do without them.

Liberty is the price of empire. Imperialism presupposes that the people
will be willing, at any time, to surrender their "rights" at the call of
the rulers.


5. _The Universality of Empire_

Imperialism is not new, nor is it confined to one nation or to one race.
On the contrary it is as old as history and as wide as the world.

Before Rome, there was Carthage. Before Carthage, there were Greece,
Macedonia, Egypt, Assyria, China. Where history has a record, it is a
record of empire.

During modern times, international affairs have been dominated by
empires. The great war was a war between empires. During the first three
years, the two chief contestants were the British Empire on the one hand
and the German Empire on the other. Behind these leaders were the
Russian Empire, the Italian Empire, the French Empire, and the Japanese
Empire.

The Peace of Versailles was a peace between empires. Five empires
dominated the peace table--Great Britain, France, Italy, Japan and the
United States. The avowedly anti-imperial nations of Europe--Russia and
Hungary--were not only excluded from the deliberations of the Peace
Table, but were made the object of constant diplomatic, military and
economic aggression by the leading imperialist nations.


6. _The Evolution of Empire_

Empires do not spring, full grown, from the surroundings of some great
historic crisis. Rather they, like all other social institutions, are
the result of a long series of changes that lead by degrees from the
pre-imperial to the imperial stage. Many of the great empires of the
past two thousand years have begun as republics, or, as they are
sometimes called, "democracies," and the processes of transformation
from the republican to the imperial stage have been so gradual that the
great mass of the people were not aware that any change had occurred
until the emperor ascended the throne.

The development of empire is of necessity a slow process. There are the
dependent people to be subjected; the territory to conquered; the
imperial class to be built up. This last process takes, perhaps, more
time than either of the other two. Class consciousness is not created in
a day. It requires long experience with the exercise of imperial power
before the time has come to proclaim an emperor, and forcibly to take
possession of the machinery of public affairs.


7. _The United States and the Stages of Empire_

Any one who is familiar with its history will realize at once that the
United States is passing through some of the more advanced stages in the
development of empire. The name "Republic" still remains; the traditions
of the Republic are cherished by millions; the republican forms are
almost intact, but the relations of the United States to its conquered
territory and its subject peoples; the rapid maturation of the
plutocracy as a governing class or caste; the shamelessness of the
exploitation in which the rulers have indulged; and the character of the
forces that are now shaping public policy, proclaim to all the world the
fact of empire.

The chief characteristics of empire exist in the United States. Here are
conquered territory; subject peoples; an imperial, ruling class, and the
exploitation by that class of the people at home and abroad. During
generations the processes of empire have been working, unobserved, in
the United States. Through more than two centuries the American people
have been busily laying the foundations and erecting the imperial
structure. For the most part, they have been unconscious of the work
that they were doing, as the dock laborer, is ordinarily unconscious of
his part in the mechanism of industry. Consciously or unconsciously, the
American people have reared the imperial structure, until it stands,
to-day, imposing in its grandeur, upon the spot where many of the
founders of the American government hoped to see a republic.

The entrance of the United States into the war did not greatly alter
the character of the forces at work, nor did it in any large degree
change the direction in which the country was moving. Rather, it brought
to the surface of public attention factors of American life that had
been evolving unnoticed, for generations.

The world situation created by the war compelled the American imperial
class to come out in the open and to occupy a position that, while
wholly inconsistent with the traditions of American life, is
nevertheless in keeping with the demands of imperial necessity. The
ruling class in the United States has taken a logical step and has made
a logical stand. The masters of American life have done the only thing
that they could do in the interests of the imperial forces that they
represent. They are the victims, as much as were the Kaiser and the Czar
on the one hand, and the Belgians and the Serbs on the other, of that
imperial necessity that knows no law save the preservation of its own
most sacred interests.

Certain liberal American thinkers have taken the stand that the
incidents of 1917-1918 were the result of the failure of the President,
and of certain of his advisers, to follow the theories which he had
enunciated, and to stand by the cause that he had espoused. These
critics overlook the incidental character of the war as a factor in
American domestic policy. The war never assumed anything like the
importance in the United States that it did among the European
belligerents. On the surface, it created a furore, but underneath the
big fact staring the administration in the face was the united front of
the business interests, and their organized demands for action. The
far-seeing among the business men realized that the plutocratic
structure the world over was in peril, and that the fate of the whole
imperial regime was involved in the European struggle. The Russian
Revolution of March 1917 was the last straw. From that time on the
entrance of the United States into the war became a certainty as the
only means of "saving (capitalist) civilization."

The thoughtful student of the situation in the United States is not
deceived by personalities and names. He realizes that the events of
1917-1918 have behind them generations of causes which lead logically to
just such results; that he is witnessing one phase of a great process in
the life of the American nation--a process that is old in its principles
yet ever new in its manifestations.

Traditional liberties have always given way before imperial necessity.
An examination of the situation in which the ruling class of the United
States found itself in 1917, and of the forces that were operating to
determine public policy, must convince even the enthusiast that the
occurrences of 1917 and the succeeding years were the logical outcome of
imperial necessity. To what extent that explanation will account for the
discrepancy between the promise of 1776 and the twentieth century
fulfillment of that promise must appear from a further examination of
the evidence.




III. SUBJUGATING THE INDIANS


1. _The Conquering Peoples_

The first step in the establishment of empire--the conquest of territory
and the subjugation of the conquered populations,--was taken by the
people of the United States at the time of their earliest settlements.
They took the step naturally, unaffectedly, as became the sons of their
fathers.

The Spanish, French, and English who made the first settlement in North
America were direct descendants of the tribes that have swept across
Europe and portions of Asia during the past three or four thousand
years. These tribes, grouped on the basis of similarity in language
under the general term "Aryan," hold a record of conquest that fills the
pages of written history.

Hunger; the pressure of surplus population; the inrush of new hordes of
invaders, drove them on. Ambition; the love of adventure; the lure of
new opportunities in new lands, called them further. Meliorism,--the
desire to better the conditions of life for themselves and for their
children--animated them. In later years the necessity of disposing of
surplus wealth impelled them. Driven, lured, coerced, these Aryan tribes
have inundated the earth. Passing beyond the boundaries of Europe, they
have crossed the seas into Africa, Asia, America and Australia.

Among the Aryans, after bitter strife, the Teutons have attained
supremacy. The "Teutonic Peoples" are "the English speaking inhabitants
of the British Isles, the German speaking inhabitants of Germany,
Austria-Hungary and Switzerland, the Flemish speaking inhabitants of
Belgium, the Scandinavian inhabitants of Sweden and Norway and
practically all of the inhabitants of Holland and Denmark."
("Encyclopedia Britannica.")

This Teutonic domination has been established only by the bitterest of
struggles. During the time when North America was being settled, the
English dispossessed first the Spanish and later the French. Since the
Battle of Waterloo--won by English and German troops; and the Crimean
War--won by British against Russian troops--the Teutonic power has gone
unchallenged and so it remains to-day.

The dominant power in the United States for nearly two centuries has
been the English speaking power. Thus the Americans draw their
inspiration, not only from the Aryan, but from the English speaking
Teutons--the most aggressive and dominating group among the Aryans.

Three hundred years ago the title to North America was claimed by Spain,
France and Great Britain. The land itself was almost entirely in the
hands of Indian tribes which held the possession that according to the
proverb, is "nine points of the law."

The period of American settlement has witnessed the rapid dispossession
of the original holders, until, at the present time, the Indians have
less than two per cent of the land area of the United States.[4]

The conquest, by the English speaking whites, of the three million
square miles which comprise the United States has been accomplished in a
phenomenally short space of time. Migration; military occupation;
appropriation of the lands taken from the "enemy;" settlement, and
permanent exploitation--through all these stages of conquest the country
has moved.

The "Historical Register of the United States Army" (F. B. Heitman,
Washington, Govt. Print., 1903, vol. 2, pp. 298-300) contains a list of
114 wars in which the United States has been engaged since 1775. The
publication likewise presents a list of 8600 battles and engagements
incident to these 114 wars. Two of these wars were with England, one
with Mexico and one with Spain. These, together with the Civil War and
the War with Germany, constitute the major struggles in which the United
States has been engaged. In addition to these six great wars there were
the numerous wars with the Indians, the last of which (with the
Chippewa) occurred in 1898. Some of these Indian "wars" were mere
policing expeditions. Others, like the wars with the Northwest Indians,
with the Seminoles and with the Apaches, lasted for years and involved a
considerable outlay of life and money.

When the Indian Wars were ended, and the handful of red men had been
crushed by the white millions, the American Indians, once possessors of
a hunting ground that stretched across the continent, found themselves
in reservations, under government tutelage, or else, abandoning their
own customs and habits of life, they accepted the "pale-face" standards
in preference to their own well-loved traditions.

The territory flanking the Mississippi Valley, with its coastal plains
and the deposits of mineral wealth, is one of the richest in the world.
Only two other areas, China and Russia, can compare with it in
resources.

This garden spot came into the possession of the English speaking whites
almost without a struggle. It was as if destiny had held a door tight
shut for centuries and suddenly had opened it to admit her chosen
guests.

History shows that such areas have almost always been held by one
powerful nation after another, and have been the scene of ferocious
struggles. Witness the valleys of the Euphrates, the Nile, the Danube,
the Po and the Rhine. The barrier of the Atlantic saved North America.

Had the Mississippi Valley been in Europe, Asia or Northern Africa, it
would doubtless have been blood-soaked for centuries and dominated by
highly organized nations, armed to the teeth. Lying isolated, it
presented an almost virgin opportunity to the conquering Teutons of
Western Europe.

Freed by their isolated position from the necessity of contending
against outside aggression, the inhabitants of the United States have
expended their combative energies against the weaker peoples with whom
they came into immediate contact,--


     1. The Indians, from whom they took the land and wrested the right
     to exploit the resources of the continent;

     2. The African Negroes who were captured and brought to America to
     labor as slaves;

     3. The Mexicans, from whom they took additional slave territory at
     a time when the institution of slavery was in grave danger, and

     4. The Spanish Empire from which they took foreign investment
     opportunities at a time when the business interests of the country
     first felt the pressure of surplus wealth.


Each of these four groups was weak. No one of them could present even
the beginnings of an effectual resistance to the onslaught of the
conquerors. Each in turn was forced to bow the knee before overwhelming
odds.


2. _The First Obstacle to Conquest_

The first obstacle to the spread of English civilization across the
continent of North America was the American Indian. He was in possession
of the country; he had a culture of his own; he held the white man's
civilization in contempt and refused to accept it. He had but one
desire,--to be let alone.

The continent was a "wilderness" to the whites. To the Indians it was a
home. Their villages were scattered from the Atlantic to the Pacific,
from the Gulf to Alaska; they knew well its mountains, plains and
rivers. A primitive people, supporting themselves largely by hunting,
fishing, simple agriculture and such elemental manual arts as pottery
and weaving, they found the vast stretches of North America none too
large to provide them with the means of satisfying their wants.

The ideas of the Indian differed fundamentally from those of the white
man. Holding to the Eastern conception which makes the spiritual life
paramount, he reduced his material existence to the simplest possible
terms. He had no desire for possessions, which he regarded--at the
best--as "only means to the end of his ultimate perfection."[5] To him,
the white man's desire for wealth was incomprehensible and the white
man's sedentary life was contemptible. He must be free at all times to
commune with nature in the valleys, and at sunrise and sunset to ascend
the mountain peak and salute the Great Spirit.

The individual Indian--having no desire for wealth--could not be bribed
or bought for gold as could the European. The leaders, democratically
selected, and held by the most enduring ties of loyalty to their tribal
oaths, were above the mercenary standards of European commerce and
statesmanship. Friendly, hospitable, courteous, generous, hostile,
bitter, ferocious they were--but they were not for sale.

The attitude of the Indian toward the land which the white men coveted
was typical of his whole relation with white civilization. "Land
ownership, in the sense in which we use the term, was unknown to the
Indians till the whites came among them."[6] The land devoted to
villages was tribal property; the hunting ground surrounding the village
was open to all of the members of the tribe; between the hunting grounds
of different tribes there was a neutral territory--no man's land--that
was common to both. If a family cultivated a patch of land, the
neighbors did not trespass. Among the Indians of the Southwest the
village owned the agricultural land and "periodically its governor,
elected by popular vote, would distribute or redistribute the arable
acres among his constituents who were able to care for them."[7] The
Indians believed that the land, like the sunlight, was a gift of the
Great Spirit to his children, and they were as willing to part with the
one as with the other.

They carried their communal ideas still farther. Among the Indians of
the Northwest, a man's possessions went at his death to the whole tribe
and were distributed among the tribal members. Among the Alaskan
Indians, no man, during his life, could possess more than he needed
while his neighbor lacked. Food was always regarded as common property.
"The rule being to let him who was hungry eat, wherever he found that
which would stay the cravings of his stomach."[8] The motto of the
Indian was "To each according to his need."

Such a communist attitude toward property, coupled with a belief that
the land--the gift of the Great Spirit--was a trust committed to the
tribe, proved a source of constant irritation to the white colonists who
needed additional territory. As the colonies grew, it became more and
more imperative to increase the land area open for settlement, and to
such encroachments the Indian offered a stubborn resistance.

The Indian would not--could not--part with his land, neither would he
work, as a slave or a wage-servant. Before such degradation he preferred
death. Other peoples--the negroes; the inhabitants of Mexico, Peru and
the West Indies; the Hindus and the Chinese--made slaves or servants.
The Indian for generations held out stolidly against the efforts of
missionaries, farmers and manufacturers alike to convert him into a
worker.

The Indian could not understand the ideas of "purchase," "sale" and
"cash payment" that constitute essential features of the white man's
economy. To him strength of limb, courage, endurance, sobriety and
personal dignity and reserve were infinitely superior to any of the
commercial virtues which the white men possessed.

This attitude of the Indian toward European standards of civilization;
his indifference to material possessions; his unwillingness to part with
the land; and his refusal to work, made it impossible to "assimilate"
him, as other peoples were assimilated, into colonial society. The
individual Indian would not demean himself by becoming a cog in the
white man's machine. He preferred to live and die in the open air of his
native hills and plains.

The Indian was an intense individualist--trained in a school of
experience where initiative and personal qualities were the tests of
survival. He placed the soles of his moccasined feet firmly against his
native earth, cast his eyes around him and above him and melted
harmoniously into his native landscape.

Missionaries and teachers labored in vain--once an Indian, always an
Indian. The white settlers pushed on across mountain ranges and through
valleys. Generations came and went without any marked progress in
bringing the white men and the red men together. When the Indian, in the
mission or in the government school did become "civilized," he gave over
his old life altogether and accepted the white man's codes and
standards. The two methods of life were too far apart to make
amalgamation possible.


3. _Getting the Land_

The white man must have land! Population was growing. The territory
along the frontier seemed rich and alluring.

Everywhere, the Indian was in possession, and everywhere he considered
the sale of land in the light of parting with a birth-right. He was
friendly at first, but he had no sympathy with the standards of white
civilization.

For such a situation there was only one possible solution. Under the
plea that "necessity knows no law" the white man took up the task of
eliminating the Indian, with the least friction, and in the most
effective manner possible.

There were three methods of getting the land away from the Indian--the
easiest was by means of treaties, under which certain lands lying along
the Atlantic Coast were turned over to the whites in exchange for larger
territories west of the Mississippi. The second method was by purchase.
The third was by armed conquest. All three methods were employed at some
stage in the relations between the whites and each Indian tribe.

The experience with the Cherokee Nation is typical of the relation
between the whites and the other Indian tribes. (Annual Report of the
Bureau of Ethnology. Vol. 5. "The Cherokee Nation," by Charles C.
Royce.)

The Cherokee nation before the year 1650 was established on the
Tennessee River, and exercised dominion over all the country on the east
side of the Alleghany Mountains, including the head-waters of the
Yadkin, the Catawba, the Broad, the Savannah, the Chattahoochee and the
Alabama. In 1775 there were 43 Cherokee towns covering portions of this
territory. In 1799 their towns numbered 51.

Treaty relations between the whites and the Cherokees began in 1721,
when there was a peace council, held between the representatives of 37
towns and the authorities of South Carolina. From that time, until the
treaty made with the United States government in 1866, the Cherokees
were gradually pushed back from their rich hunting grounds toward the
Mississippi valley. By the treaty of 1791, the United States solemnly
guaranteed to the Cherokees all of their land, the whites not being
permitted even to hunt on them. In 1794 and 1804 new treaties were
negotiated, involving additional cessions of land. By the treaty of
1804, a road was to be cut through the Cherokee territory, free for the
use of all United States citizens.

An agitation arose for the removal of the Cherokees to some point west
of the Mississippi River. Some of the Indians accepted the opportunity
and went to Arkansas. Others held stubbornly to their villages.
Meanwhile white hunters and settlers encroached on their land; white men
debauched their women, and white desperadoes stole their stock. By the
treaty of 1828 the United States agreed to possess the Cherokees and to
guarantee to them forever several millions of acres west of Arkansas,
and in addition a perpetual outlet west, and a "free and unmolested use
of all the country lying west of the western boundary of the above
described limits and as far west as the sovereignty of the United States
and their right of soil extend" (p. 229). The Cherokees who had settled
in Arkansas agreed to leave their lands within 14 months. By the treaty
of 1836 the Cherokees ceded to the United States all lands east of the
Mississippi. There was considerable difficulty in enforcing this
provision but by degrees most of the Indians were removed west of the
river. In 1859 and 1860 the Commissioner of Indian affairs prepared a
survey of the Cherokee domain. This was opposed by the head men of the
nation. By the Treaty of 1866 other tribes were quartered on land owned
by the Cherokees and railroads were run through their territory.

Diplomacy, money and the military forces had done their work. The first
treaty, made in 1721, found the Cherokee nation in virtual possession of
the mountainous regions of Southeastern United States. The twenty-fourth
treaty (1866) left them on a tiny reservation, two thousand miles from
their former home. Those twenty-four treaties had netted the State and
Federal governments 81,220,374 acres of land (p. 378). To-day the
Cherokee Nation has 63,211 acres.[9]

A great nation of proud, independent, liberty-loving men and women,
came into conflict with the whites of the Carolinas and Georgia; with
the state and national governments. "For two hundred years a contest
involving their very existence as a people has been maintained against
the unscrupulous rapacity of Anglo-Saxon civilization. By degrees they
were driven from their ancestral domain to an unknown and inhabitable
region" (p. 371). Now the contest is ended. The white men have the land.
The Cherokees have a little patch of territory; government support; free
schools and the right to accept the sovereignty of the nation that has
conquered them.

The theory upon which the whites proceeded in taking the Indian lands is
thus stated by Leupp,--"Originally, the Indians owned all the land;
later we needed most of it for ourselves; therefore, it is but just that
the Indians should have what is left."[10]


4. _The Triumph of the Whites_

The early white settlers had been, in almost every instance, hospitably
or even reverentially welcomed by the Indians, who regarded them as
children of the Great White Spirit. During the first bitter winters, it
was the Indians who fed the colonists from their supplies of grain;
guided them to the better lands, and shared with them their knowledge
of hunting, fishing and agriculture. The whites retaliated with that
cunning, grasping, bestial ferocity which has spread terror through the
earth during the past five centuries.

In the early years, when the whites were few and the Indians many, the
whites satisfied themselves by debauching the red men with whiskey and
bribing them with baubles and trinkets. At the same time they made
offensive and defensive alliances with them. The Spanish in the South;
the French in the North and the English between, leagued themselves with
the various tribes, supplied them with gunpowder and turned them into
mercenaries who fought for hire. Heretofore the Indian had been a free
man, fighting his wars and feuds as free men have done time out of mind.
The whites hired him as a professional soldier and by putting bounties
on scalps, plying the Indians with whiskey and inciting them by every
known device, they converted them into demons.

There is no evidence to show that up to the advent of the white men the
Indian tribes did any more fighting among themselves than the nobles of
Germany, the city states of Italy or the other inhabitants of western
Europe. Indeed there has recently been published a complete translation
of the "Constitution of the Five Nations," a league to enforce peace
which the Indians organized about the year 1390, A. D.[11] This league
which had as its object the establishment of the "Great Peace" was built
upon very much the same argument as that advanced for the League of
Nations of 1919.

When the whites first came to North America, the Indians were a
formidable foe. For years they continued to be a menace to the lonely
settler or the frontier village. But when the white settlers were once
firmly established, the days of uncertainty were over, and the Indians
were brushed aside as a man brushes aside a troublesome insect. Their
"uprisings" and "wars" counted for little or nothing. They were inferior
in numbers; they were poorly armed and equipped; they had no reserves
upon which to draw; there was no organization among the tribes in
distant portions of the country. The white millions swept onward. The
Indian bands made a stand here and there but the tide of white
civilization overwhelmed them, smothered them, destroying them and their
civilization together.

The Indians were the first obstacle to the building of the American
Empire. Three hundred years ago the whole three million square miles
that is now the United States was theirs. They were the American people.
To-day they number 328,111 in a population of 105,118,467 and the total
area of their reservations is 53,489 square miles. (Statistical Abstract
of the U. S., 1918, pp. 8 and 776.)

FOOTNOTES:

[4] The total number of square miles in Indian Reservations in 1918 was
53,490 as against 241,800 square miles in 1880. (Statistical Abstract of
the United States, 1918, p. 8.)

[5] "The Indian of To-day," C. A. Eastman. New York, Doubleday, 1915, p.
4.

[6] "The Indian and His Problem," F. E. Leupp. New York, Scribners,
1910, p. 23.

[7] Ibid., p. 24.

[8] Ibid., p. 10.

[9] "Referring to your inquiry of November 20, 1919, concerning the
Cherokee Indian Reservation, you are advised that the Cherokee Indian
country in the northeastern part of Oklahoma aggregated 4,420,068 acres.

"Of said area 4,346,223 acres have been allotted in severalty to the
enrolled members of said Cherokee Indian Nation, Oklahoma. Twenty-two
thousand eight hundred and eighty acres were disposed of as town lots,
or reserved for railway rights of way, churches, schools, cemeteries,
etc., and the remaining area has been sold, or otherwise disposed of as
provided by law.

"The Cherokee tribal land in Oklahoma with the exception of the possible
title of said Nation to certain river beds has been disposed of.

"In reference to the Eastern band of Cherokees, you are advised that
said Indians who have been incorporated hold title in fee to certain
land in North Carolina, known as the Qualla Reservation and certain
other lands, aggregating 63,211 acres."--Letter from the Office of
Indian Affairs. Dec. 9, 1919, "In re Cherokee land."

[10] "The Indian and His Problem," F. E. Leupp. New York, Scribners,
1910, p. 24.

[11] See Bulletin 184, New York State Museum, Albany, 1916, p. 61.




IV. SLAVERY FOR A RACE


1. _The Labor Shortage_

The American colonists took the land which they required for settlement
from the Indians. The labor necessary to work this land was not so
easily secured. The colonists had set themselves the task of
establishing European civilization upon a virgin continent. In order to
achieve this result, they had to cut the forests; clear the land; build
houses; cultivate the soil; construct ships; smelt iron, and carry on a
multitude of activities that were incidental to setting up an old way of
life in a new world. The one supreme and immediate need was the need for
labor power. From the earliest days of colonization there had been no
lack of harbors, fertile soil, timber, minerals and other resources.
From the earliest days the colonists experienced a labor shortage.

The labor situation was trebly difficult. First, there was no native
labor; second, passage from Europe was so long and so hazardous that
only the bold and venturesome were willing to attempt it, and third,
when these adventurers did reach the new world, they had a choice
between taking up free land and working it for themselves and taking
service with a master. Men possessing sufficient initiative to leave an
old home and make a journey across the sea were not the men to submit
themselves to unnecessary authority when they might, at will, become
masters of their own fortunes. The appeal of a new life was its own
argument, and the newcomers struck out for themselves.

Throughout the colonies, and particularly in the South where the
plantation culture of rice and tobacco, and later of cotton, called for
large numbers of unskilled workers, the labor problem was acute. The
abundance of raw materials and fertile land; the speedy growth of
industry in the North and of agriculture in the South; the generous
profits and expanding markets created a labor demand which far
outstripped the meager supply,--a demand that was met by the importation
of black slaves from Africa.


2. _The Slave Coast_

The "Slave Coast" from which most of the Negroes came was discovered by
Portuguese navigators, who were the first Europeans to venture down the
West coast of Africa, and, rounding the "lobe" of the continent, to sail
East along the "Gold Coast." The trade in gold and ivory which sprang up
as a result of these early explorations led other nations of Europe to
begin an eager competition which eventually brought French, Dutch,
German, Danish and English commercial interests into sharp conflict with
the Portuguese.

Ships sailing from the Gold Coast for home ports made a practice of
picking up such slaves as they could easily secure. By 1450 the number
reaching Portugal each year was placed at 600 or 700.[12] From this
small and quite incidental beginning there developed a trade which
eventually supplied Europe, the West Indies, North America and South
America with black slaves.

Along the "Slave Coast," which extended from Cape Verde on the North to
Cape St. Martha on the South, and in the hinterland there lived Negroes
of varying temperaments and of varying standards of culture. Some of
them were fierce and warlike. Others were docile and amenable to
discipline. The former made indifferent slaves; the latter were eagerly
sought after. "The Wyndahs, Nagoes and Pawpaws of the Slave Coast were
generally the most highly esteemed of all. They were lusty and
industrious, cheerful and submissive."[13]

The natives of the Slave Coast had made some notable cultural advances.
They smelted metals; made pottery; wove; manufactured swords and spears
of merit; built houses of stone and of mud, and made ornaments of some
artistic value. They had developed trade with the interior, taking salt
from the coast and bartering it for gold, ivory and other commodities at
regular "market places."

The native civilization along the West coast of Africa was far from
ideal, but it was a civilization which had established itself and which
had made progress during historic times. It was a civilization that had
evolved language; arts and crafts; tribal unity; village life, and
communal organization. This native African civilization, in the
seventeenth, eighteenth and early nineteenth centuries was confronted by
an insatiable demand for black slaves. The conflicts that resulted from
the efforts to supply that demand revolutionized and virtually destroyed
all that was worthy of preservation in the native culture.

When the whites first went to the Slave Coast there was comparatively
little slavery among the natives. Some captives, taken in war; some
debtors, unable to meet their obligations, and some violators of
religious rites, were held by the chief or the headman of the tribe. On
occasion he would sell these slaves, but the slave trade was never
established as a business until the white man organized it.

The whites came, and with guile and by force they persuaded and
compelled the natives to permit the erection of forts and of trading
posts. From the time of the first Portuguese settlement, in 1482, the
whites began their work with rum and finished it with gun-powder. Rum
destroyed the stamina of the native; gun-powder rendered his intertribal
wars more destructive. These two agencies of European civilization
combined, the one to degenerate, the other to destroy the native tribal
life.

The traders, adventurers, buccaneers and pirates that gathered along the
Slave Coast were not able to teach the natives anything in the way of
cruelty, but they could and did give them lessons in cunning, trickery
and double dealing. Early in the history of the Gold Coast the whites
began using the natives to make war on commercial rivals. In one famous
instance, "the Dutch had instigated the King of Fetu to refuse the
Assins permission to pass through his territory. These people used to
bring a great deal of gold to Cape Coast Castle (English), and the Dutch
hoped in this way to divert the trade to their own settlements. The King
having complied and plundered some of the traders on the way down, the
Assins declared war against him and were assisted by the English with
arms and ammunition. The King of Sabol was also paid to help them, and
the allied army (20,000 strong) inflicted a crushing defeat on the
Fetus."[14]

On another occasion, the Dutch were worsted in a war with some of the
native tribes. Realizing that if they were to maintain themselves on the
Coast they must raise an army as quickly as possible, they approached
the Fetus and bargained with them to take the field and fight the
Komendas until they had utterly exterminated them, on payment of $4,500.
But no sooner had this arrangement been made than the English paid the
Fetus an additional $4,500 to remain neutral![15]

Before 1750, when the competition for the slaves was less keen, and the
supply came nearer to meeting the demand, the slavers were probably as
honest in this as they were in any other trade with the natives. The
whites encouraged and incited the native tribes to make war upon one
another for the benefit of the whites. The whites fostered kidnaping,
slavery and the slave trade. The natives were urged to betray one
another, and the whites took advantage of their treachery. During the
four hundred years that the African slave trade was continued, it was
the whites who encouraged it; fostered it; and backed it financially.
The slave trade was a white man's trade, carried on under conditions as
far removed from the conditions of ordinary African life as the
manufacturing and trading of Europe were removed from the manufacturing
and trading of the Africans.


3. _The Slave Trade_

With the pressing demand from the Americas for a generous supply of
black slaves, the business of securing them became one of the chief
commercial activities of the time. "The trade bulked so large in the
world's commerce in the seventeenth and eighteenth centuries that every
important maritime community on the Atlantic sought a share, generally
with the sanction and often with the active assistance of its respective
sovereign."[16]

The catching, holding and shipping of Negroes on the African coast was
the means by which the demand for slaves was met. With a few minor
exceptions, the whites did not engage directly in slave catching. In
most instances they bought their slaves from native brokers who lived in
the coast towns. The brokers, in turn, received their slaves from the
interior, where they were captured during wars, by professional raiding
parties, well supplied with arms and ammunition. Slave-catching, begun
as a kidnaping of individuals, developed into a large-scale traffic that
provided the revenue of the more war-like natives. Villages were
attacked and burned, and whole tribes were destroyed or driven off to
the slave-pens on the coast. After 1750, for nearly a hundred years, the
demand for slaves was so great and the profits were so large that no
pains were spared to secure them.

The Slave Coast native was compelled to choose between being a
slave-catcher or a slave. As a slave-catcher he spread terror and
destruction among his fellows, seized them and sold them to white men.
As a slave he made the long journey across the Atlantic.

The number of slaves carried away from Africa is variously estimated.
Claridge states that "the Guinea Coast as a whole supplied as many as
from 70,000 to 100,000 yearly" in 1700.[17] Bogart estimates the number
of slaves secured as 2,500 per year in 1700; 15,000 to 20,000 per year
from 1713 to 1753; in 1771, 47,000 carried by British ships alone; and
in 1768 the slaves shipped from the African coast numbered 97,000.[18]
Add to these numbers those who were killed in the raids; those who died
in the camps, where the mortality was very high, and those who committed
suicide. The total represents the disturbing influence that the slave
trade introduced into the native African civilization.

In the early years of the trade the ships were small and carried only a
few hundred Negroes at most. As the trade grew, larger and faster ships
were built with galleries between the decks. On these galleries the
blacks were forced to lie with their feet outboard--ironed together, two
and two, with the chains fastened to staples in the deck. "They were
squeezed so tightly together that the average space allowed to each one
was but 16 inches by five and a half feet."[19] The galleries were
frequently made of rough lumber, not tightly joined. Later, when the
trade was outlawed, the slaves were stowed away out of sight on loose
shelves over the cargo. "Where the 'tween decks space was two feet high
or more, the slaves were stowed sitting up in rows, one crowded into the
lap of another, and with legs on legs, like rider on a crowded
toboggan." (Spears, p. 71.) There they stayed for the weeks or the
months of the voyage. "In storms the sailors had to put on the hatches
and seal tight the openings into the infernal cesspool." (Spears, p.
71.) The odor of a slaver was often unmistakable at a distance of five
miles down wind.

The terrible revolt of the slaves in the West Indies, beginning in
1781, gave the growing anti-slavery sentiment an immense impetus. It
also gave the slave owners pause. The cotton-gin had not yet been
invented. Slavery was on a shifty economic basis in the South. Great
Britain passed the first law to limit the slave trade in 1788; the
United States outlawed the trade in 1794. In 1824 Great Britain declared
the slave trade piracy. During these years, and during the years that
followed, until the last slaver left New York Harbor in 1863, the trade
continued under the American flag, in swift, specially constructed
American-built ships.

As the restrictions upon the trade became more severe in the face of an
increasing demand for slaves, "the fitting out of slavers developed into
a flourishing business in the United States, and centered in New York
City." _The New York Journal of Commerce_ notes in 1857 that "down-town
merchants of wealth and respectability are extensively engaged in buying
and selling African Negroes, and have been, with comparatively little
interruption for an indefinite number of years." A writer in the
_Continental Monthly_ for January, 1862, says:--"The city of New York
has been until of late the principal port of the world for this infamous
commerce; although the cities of Boston and Portland, are only second to
her in distinction." During the years 1859-1860 eighty-five slavers are
reported to have fitted out in New York Harbor and these ships alone had
a capacity to transport from 30,000 to 60,000 slaves a year.[20]

The merchants of the North pursued the slave trade so relentlessly
because it paid such enormous profits on the capital outlay. Some of the
voyages went wrong, but the trade, on the whole, netted immense returns.
At the end of the eighteenth century a good ship, fitted to carry from
300 to 400 slaves, could be built for about $35,000. Such a ship would
make a clear profit of from $30,000 to $100,000 in a single voyage. Some
of them made as many as five voyages before they became so foul that
they had to be abandoned.[21] While some voyages were less profitable
than others, there was no avenue of international trade that offered
more alluring possibilities.

Sanctioned by potentates, blessed by the church, and surrounded with the
garments of respectability, the slave trade grew, until, in the words of
Samuel Hopkins (1787), "The trade in human species has been the first
wheel of commerce in Newport, on which every other movement in business
has depended.... By it the inhabitants have gotten most of their wealth
and riches." (Spears, p. 20.) After the vigorous measures taken by the
British Government for its suppression, the slave trade was carried on
chiefly in American-built ships; officered by American citizens; backed
by American capital, and under the American flag.

The slave trade was the business of the North as slavery was the
business of the South. Both flourished until the Proclamation of
Emancipation in 1863.


4. _Slavery in the United States_

Slavery and the slave trade date from the earliest colonial times. The
first slaves in the English colonies were brought to Jamestown in 1619
by a Dutch ship. The first American-built slave ship was the _Desire_,
launched at Marblehead in 1636. There were Negro slaves in New York as
early as 1626, although there were only a few hundred slaves in the
colonies prior to 1650.

Since slave labor is economical only where the slaves can be worked
together in gangs, there was never much slavery among the farmers and
small business men of the North. On the other hand, in the South, the
developing plantation system made it possible for the owner to use large
gangs of slaves in the clearing of new land; in the raising of tobacco,
and in caring for rice and cotton. The plantation system of agriculture
and the cotton gin made slavery the success that it was in the United
States. "The characteristic American slave, indeed, was not only a
Negro, but a plantation workman."[22]

The opening years of the nineteenth century found slavery intrenched
over the whole territory of the United States that lay South of the
Mason and Dixon line. In that territory slave trading and slave owning
were just as much a matter of course as horse trading and horse owning
were a matter of course in the North. "Every public auctioneer handled
slaves along with other property, and in each city there were brokers,
buying them to sell again, and handling them on commission."[23]

The position of the broker is indicated in the following typical bill of
sale which was published in Charleston, S. C., in 1795. "Gold Coast
Negroes. On Thursday, the 17th of March instant, will be exposed to
public sale near the exchange ... the remainder of the cargo of negroes
imported in the ship _Success_, Captain John Conner, consisting chiefly
of likely young boys and girls in good health, and having been here
through the winter may be considered in some degree seasoned to the
climate."[24]

Such a bill of sale attracted no more attention at that time than a
similar bill advertising cattle attracts to-day.

During the early colonial days, the slaves were better fed and provided
for than were the indentured servants. They were of greater money value
and, particularly in the later years when slavery became the mainstay of
Southern agriculture, a first class Negro, acclimated, healthy, willing
and trustworthy, was no mean asset.

Toward the end of the eighteenth century slavery began to show itself
unprofitable in the South. The best and most accessible land was
exhausted. Except for the rice plantations of South Carolina and
Georgia, slavery was not paying. The Southern delegates to the
Constitutional Convention, with the exception of the delegates from
these states, were prepared to abolish the slave trade. Some of them
were ready to free their own slaves. Then came the invention of the
cotton gin and the rise of the cotton kingdom. The amount of raw cotton
consumed by England was 13,000 bales in 1781; 572,000 bales in 1820; and
3,366,000 bales in 1860. During that period, the South was almost the
sole source of supply.

The attitude of the South, confronted by this wave of slave prosperity,
underwent a complete change. Her statesmen had consented, between 1808
and 1820, to severe restrictive laws directed towards the slave trade.
After cotton became king, slaves rose rapidly in price; land, once used
and discarded, was again brought under cultivation; cotton-planting
spread rapidly into the South and Southwest; Texas was annexed; the
Mexican War was fought; an agitation was begun for the annexation of
Cuba, and Calhoun (1836) declared that he "ever should regret that this
term (piracy) had been applied" to the slave trade in our laws.[25]

The change of sentiment corresponded with the changing value of the
slaves. Phillips publishes a detailed table of slave values in which he
estimates that an unskilled, able-bodied young slave man was worth $300
in 1795; $500 to $700 in 1810; $700 to $1200 to in 1840; and $1100 to
$1800 in 1860.[26] The factors which resulted in the increased slave
prices were the increased demand for cotton, the increased demand for
slaves, and the decrease in the importation of negroes due to the
greater severity of the prohibitions on the slave trade.


5. _Slavery for a Race_

The American colonists needed labor to develop the wilderness. White
labor was scarce and high, so the colonists turned to slave labor
performed by imported blacks. The merchants of the North built the ships
and carried on the slave trade at an immense profit. The plantation
owners of the South exploited the Negroes after they reached the states.

The continuance of the slave trade and the provision of a satisfactory
supply of slaves for the Southern market depended upon slave-catching in
Africa, which, in turn, involved the destruction of an entire
civilization. This work of destruction was carried forward by the
leading commercial nations of the world. During nearly 250 years the
English speaking inhabitants of America took an active part in the
business of enslaving, transporting and selling black men. These
Americans--citizens of the United States--bought stolen Negroes on the
African coast; carried them against their will across the ocean; sold
them into slavery, and then, on the plantations, made use of their
enforced labor.

Both slavery and the slave trade were based on a purely economic
motive--the desire for profit. In order to satisfy that desire, the
American people helped to depopulate villages,--to devastate, burn,
murder and enslave; to wipe out a civilization, and to bring the
unwilling objects of their gain-lust thousands of miles across an
impassable barrier to alien shores.

FOOTNOTES:

[12] "History of the Gold Coast," W. W. Claridge. London, Murray, 1915,
vol. I, p. 39.

[13] "American Negro Slavery," U. B. Phillips. New York, Appleton, 1908,
p. 43.

[14] "A History of the Gold Coast," W. W. Claridge. London, Murray,
1915, vol. I, p. 144.

[15] Ibid., p. 150.

[16] "American Negro Slavery," U. B. Phillips. New York, Appleton, 1918,
p. 20.

[17] "History of the Gold Coast," W. W. Claridge. London, Murray, 1915,
vol. I, p. 172.

[18] "Economic History of the U. S.," E. L. Bogart. New York, Longmans,
1910 ed., p. 84-5.

[19] "The American Slave Trade," J. R. Spears. New York, Scribners,
1901, p. 69.

[20] "The Suppression of the American Slave Trade," W. E. B. DuBois. New
York, Longmans, 1896, p. 178-9.

[21] "The American Slave Trade," J. R. Spears. New York, Scribners,
1901, p. 84-5.

[22] "American Negro Slavery," U. B. Phillips. New York, Appleton, 1918,
p. VII.

[23] Ibid., p. 190.

[24] Ibid., p. 40.

[25] Benton, "Abridgment of Debates." XII, p. 718.

[26] "American Negro Slavery," U. B. Phillips. New York, Appleton, 1918,
p. 370.




V. THE WINNING OF THE WEST


1. _Westward, Ho!_

The English colonists in America occupied only the narrow strip of
country between the Alleghanies and the Atlantic Ocean. The interior was
inhabited by the Indians, and claimed by the French, the Spanish and the
British, but neither possession nor legal title carried weight with the
stream of pioneers that was making a path into the "wilderness," crying
its slogan,--"Westward, Ho!" as it moved toward the setting sun. The
first objective of the pioneers was the Ohio Valley; the second was the
valley of the Mississippi; the third was the Great Plains; the fourth
was the Pacific slope, with its golden sands. Each one of these
objectives developed itself out of the previous conquest.

The settlers who made their way across the mountains into the valley of
the Ohio, found themselves in a land of plenty. The game was abundant;
the soil was excellent, and soon they were in a position to offer their
surplus products for sale. These products could not be successfully
transported across the mountains, but they could be floated down the
Ohio and the Mississippi--a natural roadway to the sea. But beside the
Indians, who claimed all of the land for their own, there were the
Spaniards at New Orleans, doing everything in their power to prevent the
American Colonists from building up a successful river commerce.

The frontiersmen were able to push back the Indians. The Spanish
garrisons presented a more serious obstacle. New Orleans was a well
fortified post that could be provisioned from the sea. Behind it,
therefore, lay the whole power of the Spanish fleet. The right of
navigation was finally obtained in the Treaty of 1795. Still friction
continued with the Spanish authorities and serious trouble was averted
only by the transfer of Louisiana, first to the French (1800) and then
by them to the United States (1803). Napoleon had agreed, when he
secured this territory from the Spaniards, not to turn it over to the
United States. A pressing need of funds, however, led him to strike an
easy bargain with the American government which was negotiating for the
control of the mouth of the Mississippi. Napoleon insisted that the
United States take, not only the mouth of the river, but also the
territory to the West which he saw would be useless without this outlet.
After some hesitation, Jefferson and his advisers accepted the offer and
the Louisiana Purchase was consummated.

The Louisiana Purchase gave the young American nation what it needed--a
place in the sun. The colonists had taken land for their early
requirements from the Indians who inhabited the coastal plain. They had
enslaved the Negroes and thus had secured an ample supply of cheap
labor. Now, the pressure of population, and the restless, pioneer spirit
of those early days, led out into the West.

Until 1830 immigration was not a large factor in the increase of the
colonial population, but the birth-rate was prodigious. In the closing
years of the eighteenth century, Franklin estimated that the average
family had eight children. There were sections of the country where the
population doubled, by natural increase, once in 23 years. Indeed, the
entire population of the United States was increasing at a phenomenal
rate. The census of 1800 showed 5,308,483 persons in the country. Twenty
years later the population was 9,638,453--an increase of 81 per cent. By
1840 the population was reported as 17,069,453--an increase of 77 per
cent over 1820, and of 221 per cent over 1800.

The small farmers and tradesmen of the North were settling up the
Northwest Territory. The plantation owners of the South, operating on a
large scale, and with the wasteful methods that inevitably accompany
slavery, were clamoring for new land to replace the tracts that had
been exhausted by constant recropping with no attempt at fertilization.

Cotton had been enthroned in the South since the invention of the cotton
gin in 1792. With the resumption of European trade relations in 1815 the
demand for cotton and for cotton lands increased enormously. There was
one, and only one logical way to meet this demand--through the
possession of the Southwest.


2. _The Southwest_

The pioneers had already broken into the Southwest in large numbers.
While Spain still held the Mississippi, there were eager groups of
settlers pressing against the frontier which the Spanish guarded so
jealously against all comers. The Louisiana Purchase met the momentary
demand, but beyond the Louisiana Purchase, and between the settlers and
the rich lands of Texas lay the Mexican boundary. The tide of migration
into this new field hurled itself against the Mexican border in the same
way that an earlier generation had rolled against the frontier of
Louisiana.

The attitude of these early settlers is described with sympathetic
accuracy by Theodore Roosevelt. "Louisiana was added to the United
States because the hardy backwoods settlers had swarmed into the valleys
of the Tennessee, the Cumberland and the Ohio by hundreds of
thousands.... Restless, adventurous, hardy, they looked eagerly across
the Mississippi to the fertile solitudes where the Spaniard was the
nominal, and the Indian the real master; and with a more immediate
longing they fiercely coveted the Creole provinces at the mouth of the
river."[27] This fierce coveting could have only one possible
outcome--the colonists got what they wanted.

The speed with which the Southwest rushed into prominence as a factor
in national affairs is indicated by its contribution to the cotton-crop.
In 1811 the states and territories from Alabama and Tennessee westward
produced one-sixteenth of the cotton grown in the United States. In 1820
they produced a third; in 1830, a half; and by 1860, three-quarters of
the cotton raised. At the same time, the population of the
Alabama-Mississippi territory was:--


       200,000 in 1810.
       445,000 in 1820.
       965,000 in 1830.
     1,377,000 in 1840.


Thus thirty years saw an increase of nearly seven-fold in the population
of this region.[28]

Meanwhile, slavery had become the issue of the day. The slave power was
in control of the Federal Government, and in order to maintain its
authority, it needed new slave states to offset the free states that
were being carved out of the Northwest.

Here were three forces--first the desire of the frontiersmen for "elbow
room"; second the demand of King Cotton for unused land from which the
extravagant plantation system might draw virgin fertility and third, the
necessity that was pressing the South to add territory in order to hold
its power. All three forces impelled towards the Southwest, and it was
thither that population pressed in the years following 1820.


3. _Texas_

Mexico lay to the Southwest, and therefore Mexico became the object of
American territorial ambitions. The district now known as Texas had
constituted a part of the Louisiana Purchase (1803); had been ceded to
Spain (1819); had been made the object of negotiations looking towards
its purchase in 1826; had revolted against Mexico and been recognized
as an independent state in 1835.

Texas had been settled by Americans who had secured the permission of
the Mexican Government to colonize. These settlers made no effort to
conceal their opposition to the Mexican Government, with which they were
entirely out of sympathy. Many of them were seeking territory in which
slavery might be perpetuated, and they introduced slaves into Texas in
direct violation of the Mexican Constitution. The Americans did not go
to Texas with any idea of becoming Mexican subjects; on the contrary, as
soon as they felt themselves strong enough, they declared their
independence of Mexico, and began negotiations for the annexation of
Texas to the United States.

The Texan struggle for independence from Mexico was cordially welcomed
in all parts of the United States, but particularly in the South.
Despite the protests of Mexico, public meetings were held; funds were
raised; volunteers were enlisted and equipped, and supplies and
munitions were sent for the assistance of the Texans in ships openly
fitted out in New Orleans.

No sooner had the Texans established a government than the campaign for
annexation was begun. The advocates of annexation--principally
Southerners--argued in favor of adding so rich and so logical a prize to
the territory of the United States, citing the purchase of Louisiana and
of Florida as precedents. Their opponents, first on constitutional
grounds and then on grounds of public policy, argued against annexation.

Opinion in the South was greatly aroused. Despite the fact that many of
her foremost statesmen were against annexation, some of the Southern
newspapers even went so far as to threaten the dissolution of the Union
if the treaty of ratification failed to pass the Senate.

The campaign of 1844 was fought on the issue of annexation and the
election of James K. Polk was a pledge that Texas should be annexed to
the United States. During the campaign, the line of division on
annexation had been a party line--Democrats favoring; Whigs opposing.
Between the election and the passage of the joint resolution by which
annexation was consummated, it became a sectional issue,--Southern Whigs
favoring annexation and Northern Democrats opposing it.

So strong was the protest against annexation, that the treaty could not
command the necessary two-thirds vote in the Senate. The matter was
disposed of by the passage of a joint resolution (March 1, 1845) which
required only a majority vote in both houses of Congress. President Polk
therefore took office with the mandate of the country and the decision
of both houses of the retiring Congress, in favor of annexation.

Mexico, in the meantime, had offered to recognize the independence of
Texas and to make peace with her if the Texas Congress would reject the
joint resolution, and refuse the proffered annexation. This the Texas
Congress refused, and with the passage, by that body, of an act
providing for annexation, the Mexican minister was withdrawn from
Washington, and Mexico began her preparations for war.

President Polk had taken office with the avowed intention of buying
California from Mexico. The rupture threatened to prevent him from
carrying this plan into effect. He therefore sent an unofficial
representative to Mexico in an effort to restore friendly relations.
Failing in that, he and his advisers determined upon war as the only
feasible method of obtaining California and of settling the diplomatic
tangle involved in the annexation of Texas.


4. _The Conquest of Mexico_

The Polk Administration made the Mexican War as a part of its
expansionist policy.

"Although that unfortunate country (Mexico) had officially notified the
United States that the annexation of Texas would be treated as a cause
of war, so constant were the internal quarrels in Mexico that open
hostilities would have been avoided had the conduct of the
Administration been more honorable. That was the opinion of Webster,
Clay, Calhoun, Benton, and Tyler.... Mexico was actually goaded on to
war. The principle of the manifest destiny of this country was invoked
as a reason for the attempt to add to our territory at the expense of
Mexico."[29]

After the annexation of Texas it became the duty of the United States to
defend that state against the threatened Mexican invasion.

Mexican troops had occupied the southern bank of the Rio Grande. General
Zachary Taylor with a small force, moved to a position on the Nueces
River. Between the two rivers lay a strip of territory the possession of
which was one of the sources of dispute between Mexico and Texas. What
followed may be stated in the words of one of the officers who
participated in the expedition: "The presence of the United States
troops on the edge of the territory farthest from the Mexican
settlements was not sufficient to provoke hostilities. We were sent to
provoke a fight, but it was essential that Mexico begin it" (p. 41).
"Mexico showing no willingness to come to the Nueces to drive the
invaders from her soil, it became necessary for the 'invaders' to
approach to within a convenient distance to be struck. Accordingly,
preparations were begun for moving the army to the Rio Grande, to a
point near Matamoras. It was desirable to occupy a position near the
largest center of population possible to reach without actually invading
territory to which we set up no claim whatever" (p. 45).[30]

The occupation, by the United States troops, of the disputed territory
soon led to a clash in which several United States soldiers were killed.
The incident was taken by the President as a sufficient cause for the
declaration of a state of war. The House complied readily with his
wishes, passing the necessary resolution. Several members of the Senate
begged for a delay during which the actual state of affairs might be
ascertained. The President insisted, however, and the war was declared
(May 13, 1846).

The declaration of war was welcomed with wild enthusiasm in the South.
Meetings were called; funds were raised; volunteers were enlisted,
equipped and despatched in all haste to the scene of the conflict.

The North was less eager. There were protests, petitions,
demonstrations. Many of the leaders of northern opinion took a public
stand against the war. But the news of the first victories sent the
country mad with an enthusiasm in which the North joined the South.

The United States troops, during the Mexican War, won brilliant--almost
unbelievable successes--against superior forces and in the face of
immense natural obstacles. Had the war been less of a military triumph
there must have been a far more widely-heard protest from Polk's enemies
in the North. Successful beyond the wildest dreams of its promoters, the
victorious war carried its own answer to those who questioned the
worthiness of the cause. Within two years, the whole of Mexico was under
the military control of the United States, and that country was in a
position to dictate its own terms.

The demands of the United States were mild to the extent of generosity.
Under the treaty the annexation of Texas was validated; New Mexico and
Upper California were ceded to the United States; the lower Rio Grande
was fixed as the southern boundary of Texas, and in considerations of
these additions to its territory, the United States agreed to pay Mexico
fifteen millions of dollars.

Under this plan, Mexico was paid for territory that she did not need and
could not use, while the United States gave a money consideration for
the title to land that was already hers by right of conquest, and of
which she was in actual possession.

The details of the treaty are relatively unimportant. The outstanding
fact is that Mexico was in possession of certain territory that the
ruling power in the United States wanted, and that ruling power took
what it wanted by force of arms. "The war was one of conquest in the
interest of an institution." It was "one of the most unjust ever waged
by a stronger against a weaker nation."[31]

Congressman A. P. Gardner of Massachusetts summarized the matter very
pithily in his debate with Morris Hillquit (New York, April 2, 1915),
"We assisted Texas to get away from Mexico and then we proceeded to
annex Texas. Plainly and bluntly stated, our purpose was to get some
territory for American development." (Stenographic report in the _New
York Call_, April 11, 1915.)


5. _Conquering the Conquered_

The work of conquering the Southwest was not completed by the
termination of the war. Mexico ceded the territory--in the neighborhood
of a million square miles--but she was giving away something that she
had never possessed. Mexico claimed title to land that was occupied by
the Indians. She had never conquered it; never settled it; never
developed it. Her sovereignty was of the same shadowy sort that Spain
had exercised over the country before the Mexican revolution.

The new owners of the Southwest had a very different purpose in mind. No
empty title would satisfy them. They intended to use the land. The
Indians--already in possession--resented the encroachments of the
invaders, but they fared no better than the Mexicans, or than their
red-skinned brothers who had contended for the right to fish and hunt
along their home streams in the Appalachians. The Indians of the
Southwest fought stubbornly, but the wars that meant life and death to
them were the merest pastime for an army that had just completed the
humiliation of a nation of the size and strength of Mexico. The Indians
were swept aside, and the country was opened to the trapper, the
prospector, the trader and the settler.

The Mexican War was a slight affair, involving a relatively small outlay
in men and money. The total number of American soldiers killed in the
war was 1,721; the wounded were 4,102; the deaths from accident and
disease were 11,516, making total casualties of 5,823 and total losses
of 15,618.[32]

The money cost of the Mexican War--the army and navy appropriations for
the years 1846 to 1849 inclusive--was $119,624,000. Obviously the net
cost of the war was less than this gross total,--how much less it is
impossible to say.

No satisfactory figures are available to show the cost in men and money
of the Indian Wars in the Southwest. "From 1849 to 1865, the government
expended $30,000,000 in the subjugation of the Indians in the
territories of New Mexico and Arizona."[33] Their character may be
gauged by noting from the "Historical Register" (Vol. 2, p. 281-2) the
losses sustained in the four Indian Wars of which a record is preserved.
In the Northwest Indian Wars (1790 to 1795) 896 persons were killed and
436 were wounded; in the Seminole War (1817 to 1818) 46 were killed and
36 were wounded; in the Black Hawk War (1831-2) the killed were 26 and
the wounded 39; in the Seminole War (1835-1842) 383 were killed and 557
wounded. These were among the most serious of the Indian Wars and in all
of them the cost in life and limb was small. Judged on this standard,
the losses in the Southwest, during the Indian Wars, were, at most,
trifling. The total outlay that was involved in the conquest of the vast
domain would not have covered one first class battle of the Great War,
and yet this outlay added to the territory of the United States
something like a million square miles containing some of the richest and
most productive portions of the earth's surface.

This domain was won by a process of military conquest; it was taken from
the Mexicans and the Indians by force of arms. In order to acquire it,
it was necessary to drive whole tribes from their villages; to burn; to
maim; to kill. "St. Louis, New Orleans, St. Augustine, San Antonio,
Santa Fe and San Francisco are cities that were built by Frenchmen and
Spaniards; we did not found them but we conquered them." "The Southwest
was conquered only after years of hard fighting with the original
owners" (p. 26). "The winning of the West and the Southwest is a stage
in the conquest of a continent" (p. 27). "This great westward movement
of armed settlers was essentially one of conquest, no less than of
colonization" (p. 370).[34] None of the possessors of this territory
were properly armed or equipped for effective warfare. All of them fell
an easy prey to the organized might of the Government of the United
States.

FOOTNOTES:

[27] "The Winning of the West," Theodore Roosevelt. New York, Putnam's,
1896, vol. 4, p. 262.

[28] "American Negro Slavery," U. B. Phillips. New York, Appleton, 1918,
pp. 171-2.

[29] "History of the United States," James F. Rhoades. New York,
Macmillan, 1906, vol. I, p. 87.

[30] "Personal Memoirs," U. S. Grant. New York, Century, 1895, vol. I.

[31] "Personal Memoirs," U. S. Grant. New York, Century, 1895, vol. I,
pp. 115 and 32.

[32] "Historical Register of the United States Army," F. B. Heitman.
Washington, Govt. Print., vol. 2, p. 282.

[33] "The Story of New Mexico," Horatio O. Ladd. Boston, D. Lothrop Co.,
1891, p. 333.

[34] "The Winning of the West," Theodore Roosevelt. Vol. I, p. 26, 27,
and Vol. II, p. 370.




VI. THE BEGINNINGS OF WORLD DOMINION


1. _The Shifting of Control_

During the half century that intervened between the War of 1812 and the
Civil War of 1861 the policy of the United States government was decided
largely by men who came from south of the Mason and Dixon line. The
Southern whites,--class-conscious rulers with an institution (slavery)
to defend,--acted like any other ruling class under similar
circumstances. They favored Southward expansion which meant more
territory in which slavery might be established.

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.

The matter appears most clearly in the case of an heir to an estate. The
father dies, leaving his son the title deeds to a piece of city land. If
he has no confidence in his son's busi

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