The above table of the net incomes shows the conclusions that must deeply astonish the thinking people. It shows that a “terrible change has occurred in the conditions of life in America within fifteen or twenty years.” But this concentration of wealth has taken place within seven years, when the national expenditures for wars and the incomes of monopolies and trusts started to increase. The latter obtained $26,070,192,190.
Think of this total concentration of the wealth in seven years! It is twenty-six thousand seventy millions of dollars’ worth of wealth. |TOTAL LOSS OF WEALTH.| While the total increase of the national wealth, during the same time, only amounted to $21,787,908,803, which was entirely concentrated in the hands of monopolies and combinations, together with the additional concentration of yet another amount of $4,282,283,387. This astonishing fact indicates that the net income of about one million families in the United States has been greater by $4,282,283,387 than the total increase of the wealth collectively produced by the nation during the period under consideration.
The whole increase of the wealth then has been lost in favor of the few. But what does this over four billion dollars difference between the total increase and the total net incomes of the monopolies and combinations mean in view of the situation? Where does this over four billion dollars’ worth of wealth come from?
This surplus amount of $4,282,283,387 of the net incomes certainly cannot mean anything else than that the families, unconnected with monopolies, trusts, and other combinations were quickly eating up |LOSS OF THE PREVIOUS WEALTH.| themselves. They not only have absolutely lost all that they produced during the time of seven years, but have also lost $4,282,283,387 worth of the wealth which they owned in 1890. So that the aggregate of about $9,260,228,000 worth of wealth which was owned by the 11,190,152 “families worth $5,000 and under”[[160]] in that year, must have been greatly reduced by monopolies, trusts and combinations. There cannot be any doubt, too, that hundreds of thousands of the “families worth $5,000 and over”[[160]] have also suffered from the same causes. Hence, the absolute loss of $4,282,283,387 worth of the previously owned wealth must have been shared by all in favor of the very few families whose undoubted prosperity has indeed been unusual. For they have concentrated the enormous total of over $26,000,000,000 worth of the people’s wealth in seven years, and have thus made the greatly increased population much poorer in 1897 than it was in the year 1890.
And this fact of growing poverty has not been unsuspected. For, if Mr. W. H. Mallock, in trying to prove the contrary, admits “that the rich” in England “do grow |THE POOR GROW ABSOLUTELY POORER.| richer and the poor grow relatively poorer, because their numbers increase, although it seems that in the distribution of wealth a greater share (of it) falls on their part.”[[161]] As for the United States, it was also said that “since 1873 the poor have grown relatively, if not absolutely poorer.”[[162]] The method used here for establishing this fact leaves no doubt that the rich in both countries do grow absolutely richer and the well-to-do and the poor in the United States do grow relatively and absolutely poorer: accordingly, “the largest fortunes” in this country “are increasing most rapidly,” says Dr. Charles R. Henderson.[[163]]
The reasons why “the largest fortunes are increasing most rapidly” have already been indicated in this and in the preceding chapters. The most potent of these |THE REASONS WHY THE RICH GROW ABSOLUTELY RICHER.| reasons are: 1. The profoundly unjust and abnormal principle of dividogenesure, which further and further underrates the value of human labor energy and overrates the value of mechanical forces in favor of the wealthy. 2. The too high percentages for loans and capital, which deprive mortgagors of the fruits of their labor and cause the losses of property. 3. Abnormal excess of selling prices over cost of production, and lowering prices on raw materials. 4. Different frauds and extortions carried on by means of “watering-stock” and so on. All these and other unjustifiable means are freely used by monopolies and combinations against the general well-being of the United States people who are constantly robbed and speculated upon by a very few members of the nation.
As an example of the stock-watering by railroad monopolies, I introduce here the exact paragraphs of Dr. Spahr who, after representing the table of figures of stocks and bonds and the cost of railroads to original investors, says:
“It should be observed, however, that the sum upon which the public is paying interest is not the total capitalization of the railroads, nor even the stocks and bonds not |EXTORTION FROM THE PUBLIC.| held by other railroads, but rather the sum upon which five per cent net is realized by the roads. This sum in 1890 was $6,627,000,000.[[164]] Not from the standpoint of socialism, but from the standpoint of common morality, which condemns as robbery both the refusal of the public to pay interest upon capital actually lent it, and the compelling of the public to pay interest on capital never lent it, the two thousand and odd millions of railroad capital representing no investment[[165]] is simply capitalized extortion.
“But not even the fruits of this extortion have gone to the original investors. The expenditures of railroads and the dividends they declare |DIRECTORS OF THE HIGHWAYS.| have been so largely in the hands of loosely controlled directors, that railroad construction, railroad purchases, and railroad speculation have all served as means to divert the property of the stockholders on the outside, into the pockets of the managers on the inside. Nearly all the profits of this extortion from the public have passed into the hands of a comparatively few men intrusted with the management of the public highways.”[[166]] These passages simply indicate another way of extortion from the public of the wealth it creates.
In addition to these crooked ways of concentrating all that the public has and all it produces, |THE TAXES.| let us examine the amounts of the direct and indirect taxes paid by the wealthy and the poor during the same time of seven years. Upon this subject Dr. Spahr speaks as follows: