In America, the revelations of the life insurance investigation told all the world what Wall Street previously knew: that big corporations contribute to both Republican and Democratic parties and practically control the action of the Democratic side of our legislatures as well as the Republican. Nothing could have been more transparent than the influence of financiers in the decision whether Cannon and the rules that make Cannon supreme in Congress were to be maintained. The Wall Street Group, which had a lobby in Washington, appealed to the Republican majority not to disorganize their party by fighting against Cannon personally, promising that the Republican party would alter the rules that gave him his present autocratic power; and when in compliance with this promise, Cannon was reëlected and the rules came up, the same lobby secured enough Democratic votes to maintain the rules in spite of the adverse votes of the insurgent Republicans, the argument then used being that the tariff bill could not be passed unless the rules were maintained.
Again, after Taft had, on three separate occasions, solemnly promised the people, if he were elected, a revision downward of the tariff, the same lobby secured a revision of the tariff upwards. We are assured by Messrs. Aldrich and Payne that the revision is a revision downward. How, then, will they explain the extraordinary haste with which ships sought to reach this port before the new tariff came into effect?[190] Were these ships hurrying to port in order to escape the payment of a low tariff? It may be answered that although the tariff was raised as regards certain articles, it was lowered as regards others. To this I have but to quote the Reviews of Reviews for September, 1909, and the articles entitled, "The Payne-Aldrich Tariff," which follow in subsequent numbers. The Review of Reviews is quoted rather than other periodicals because it is recognized as a supporter of the so-called Roosevelt policies and, therefore, cannot be accused of Socialistic tendencies. It is seldom that the Interests have gone so far as to elect a presidential candidate on a definite promise and deliberately, as soon as the candidate was elected, to violate their promise. But the Interests have at this moment such control over our politics that they can even do this; and it seems very doubtful whether this treachery will ever be materially punished.
If, as I believe, it is important that the competitive system be allowed to survive in the coöperative commonwealth, it is obvious that it can only be tolerated on the condition that the community be safe from such political control as this. And for this reason it seems to me essential that the use of gold as currency be limited; and that as regards the exchange of all the necessaries of our existence, we should have a currency that entirely escapes the control of the financier. This is the reason why I have insisted on the use of store checks which are just as convenient and secure as our present greenbacks.
There seems to be no other way of eliminating the undemocratic autocracy of the financier than by some such system as the one above described; that is to say, the issue by the state of orders on the public stores to the extent of the goods in the public stores, which may in their general appearance differ but little from the greenback of to-day: Instead of reading "Good for $1.00 gold currency," they will read "Good for $1.00 at the public stores." This public store currency will eliminate the use of gold and silver throughout the socialized industries and as regards all agricultural products except a very small portion. Every socialized industry and every farmer will furnish to the state the bulk of his produce—that is, the minimum exacted by the state—in exchange for this kind of currency.[191] It is only the surplus—the amount produced by the farmer and factory above the minimum established by the state—that the farmer and the factory will be at liberty to sell for gold instead of exchanging for public store notes; and of this surplus the farmer and factory will be free to sell as much as they choose for public store notes, so that gold and silver will constitute a small part of the medium of exchange. This system will have the following advantages:
It will practically eliminate the present control of political and economic conditions by financiers. So long as the currency used in exchanging necessaries and comforts is rescued from the control of financiers, it is a matter of comparative indifference whether the financiers control the currency used in the manufacture and distribution of luxuries, for such control will have practically no effect upon the things necessary to human existence.
It will give to the state the use of the gold coin which is now accumulated in its treasury for the redemption of its notes; and the state will use this large gold fund for the purchase of the products of other nations.[192]
Let us see how this proposed system of store notes will work in a given manufacture:
The state will order the steel guild to manufacture thirty million tons of pig iron (the amount produced in 1907 was a little over twenty-six millions); and will allot to the steel guild for the supply of steel six hundred and sixty million dollars in store notes, this being calculated at the rate of $20 a ton. (The price in 1907 was a little over $22.) These $660,000,000 will be paid to the steel guild in the following manner:
Every week a number of store orders will be issued to the amount of the wages of the week and of the fixed charges. At stipulated periods the steel guild will furnish the state pig iron so that the state will never have advanced to the guild store orders amounting to more than the value of the pig iron in the store, an exception of course being made for the first few weeks that the industry proceeds upon this basis. Upon the delivery of pig iron at these stated periods, the state will deliver the difference between the weekly amounts already paid and the price of the pig iron delivered. If deliveries of pig iron can be made once a month, this will enable a repartition of a part of the profits so that the workers will not have to wait until the end of the year before they receive their profits, the final dividend being paid at the expiration of each year.
Such an order as the above will serve the following purposes and have the following consequences: the steel guild will have a definite order for a definite amount of pig iron to manufacture. It will know exactly how many men it will need to manufacture this pig iron. It will employ a few more men than those employed in 1910. The state will issue to the steel guild weekly the amount of store notes necessary to pay the wages upon the same scale as in 1910. Men engaged in the Steel Trust at the moment of transference will continue to work and receive the same rate of wages; but they will be entitled to their share of the profits after the amounts due annuitants and the amounts necessary to create a fund for old age and sickness have been deducted. Obviously, this first order of thirty million tons is far larger than the country uses, because a large part of the product of 1907 was exported. The amount thus exported will be at the disposal of the state either to export, or exchange for foreign products, or to set aside as a reserve upon which the state can draw in case of deficit.