The Twentieth Century American / Being a Comparative Study of the Peoples of the Two Great Anglo-Saxon Nations

by Harry Perry Robinson

The tendency in the United States even in the last twenty years has not been in the direction of a concentration of wealth, but towards its diffusion in a degree unparalleled in any country in the world. The point in which the United States is economically almost immeasurably superior to England is not in the number of her big fortunes but in the enormously greater well-to-do-ness of the middle classes—the vastly larger number of persons of moderate affluence, who are in the enjoyment of incomes which in England would class them among the reasonably rich.

Consolidation and amalgamation are the necessary and unavoidable tendencies of modern business. As surely as the primitive partnership succeeded individual effort and as, later, corporations were created to enlarge the sphere of partnerships, so is it certain that the industrial units which will fight for control of trade in the much larger markets of the modern world will represent vastly larger aggregations of capital than (except in extraordinary and generally state-aided institutions) were dreamed of fifty years ago. That must be accepted as a certainty. It does not by any means necessarily follow that this process entails a concentration of wealth in fewer hands; on the contrary the larger a corporation is, the wider proportionally, as a general rule, is the circle of the shareholders in whom the property is vested. But presuming the commercial growth of the United States to continue for half a century yet on the lines on which it has developed in the last two decades, the country will then, not so much by any concentration of wealth, but by the mere filling up of the commercial field (so that by increase in the intensity of competition the opportunity for the small or new trader to force his way to the surface will be more curtailed, and the gulf between owner or employer and non-owner or employed will become greater and more permanent)—if, I say, that growth should continue for another fifty years then will the conditions in America approximate to those in England. This it is against which the masses in America are more or less blindly and unconsciously fighting to-day. The comparison with European conditions is generally not formulated in the individual mind; but an approach to those conditions is what the masses of America see—or think they see—in the tendency towards greater aggregations of corporate power. It is not the process of aggregation, but the protest against it, which is peculiar to the United States: not the trust-power but the hatred of it.

This being so, for Englishmen or other Europeans to speak of all manifestations of the process itself as "American" is not a little absurd. Besides which, to so speak of it in the tone which is generally adopted is extremely impolite to a kindred people whose good-will Englishmen ought to, and do, desire to keep.

The thing is best illustrated by taking a single example. The term "Trust" is, of course, very vaguely used, being generally taken, quite apart from its proper significance, to mean any form of combination, corporate aggregation, or working agreement which tends to extend control of a company or individual, or group of companies or individuals, over a larger proportion of a particular trade or industry. In the United States, with the possible exception of the Standard Oil Company (which is not properly a trust), the form of corporate power against which there has been the most bitterness is that of the railways, and the specific form of railway organisation most fiercely attacked has been the Pool or Joint Purse—which is, in all essentials, a true trust. In 1887 the formation of a Pool, or Joint Purse Agreement, was made illegal in the United States; but Englishmen can have no conception of the popular hatred of the word "Pools" which exists in America or of the obloquy which has been heaped upon railway companies for entering into them. Few Englishmen on the other hand have any clear idea of what a Joint Purse Agreement is; and they jog along contentedly ignorant that this iniquitous engine for their oppression is in daily use by the British railway companies.

My personal belief is that the prohibition of pools in America was a mistake: that it would have been better for the country from the first to have authorised, even encouraged, their formation, as in England, under efficient governmental supervision. But the point is that the majority of the American people thought otherwise and no other manifestation of the trust-tendency has been more virulently attacked than the—to English ideas—harmless institution of a joint purse. And whether the American people ultimately acted wisely or unwisely, they were justified in regarding any form of association or agreement between railways with more apprehension than would be reasonable in England. It is not possible here to explain why this is so, except to say broadly that the longer distances in America and the lack of other forms of transportation render an American community, especially in the West, more dependent upon the railway than is the case in England. The conditions give the railway company a larger control over, or influence in, the well-being of the people.

An excellent illustration of the difference in the point of view of the two peoples has been furnished since the above was written by the announcements, within a few weeks of each other in December 1907, of the formation of two "working agreements" between British railway companies,—that namely between the Great Northern and Great Central railways and that between the North British and Caledonian. In the former case the Boards of Directors of the two companies merely constituted themselves a Joint Committee to operate the two railways conjointly. In the latter, not many details of the agreement were made public, except that it was intended to control competition in all classes of traffic and, as the first fruits thereof, there was an immediate and not unimportant increase in certain classes of passenger rates. Neither agreement has, I think, yet received the sanction of the proper authorities, but the public generally received the announcement of both with approval amounting almost to enthusiasm. Of these agreements the former, certainly, and presumably the latter, would be flagrantly illegal in the United States. If, moreover, an attempt were made in America to arrive at the same ends in some roundabout way which would avoid technical illegality, the outburst of popular indignation would make it impossible. Personally I sympathise with the English view and believe both agreements to be not only just and proper but in the public interest; but it is certain that they would have created such an uproar in the United States that English newspapers would inevitably have reflected the disturbance, and English readers would have been convinced that once more the Directorates of American railways were engaged in a nefarious attempt to use the power of capital for the plundering and oppression of the public. In the still more recent debate (February 1908) in the House of Commons, the views expressed by both Mr. Lloyd George and Mr. Bonar Law in favour of the lessening of competition between railway companies would have exposed them to the hysterical abuse of a large part of the American press. Both those gentlemen would have been openly accused of being the tools of (if not actually subsidised by) the corporations, and (but for Mr. Bonar Law's company) Mr. Lloyd George's attitude would, I think, be sufficient to ruin an Administration. These statements contain no reflection on the American point of view. The conditions are such that that point of view may, in America, be the right one. But the absurdity is that Englishmen hear these things, or read of them as being said in the United States, and thereupon assume that terrible offences are being perpetrated; whereas nothing is being done which in England would not receive the approval of the majority of sensible men and be temperately applauded by the spokesmen of both the great parties in Parliament. It is not, I say again, the Trust-power, but the hatred of it, which is peculiar to America.

The same is true of the field as a whole. Things harmless in England might be very dangerous in America. We have so far considered the trust power only as a commercial and industrial factor—in its tendency, by crystallisation or consolidation in the higher strata, to depress the economic status of the industrial masses and to make the emergence of the individual trader into independence more difficult. In this aspect capital is immensely more dominant in England than in America. But there is a political side to the problem.

In the United States, owing to the absence of a throne and an established aristocracy, there is, as it were, no counterpoise to the power of wealth. This is, in practice, the chief virtue of the throne in the British constitution, that, in its capacity as the Fountain of Honour, it prevents wealth from becoming the dominant power in the country and thereby (which Americans are slow to understand) is the most democratic of forces, protecting the proletariat in some measure against the possibility of unhindered oppression by an omnipotent capitalism. The English masses are already by the mere impenetrability of the commercial structure above them much worse off than the corresponding masses in the United States. What their condition might be if for a generation the social restraint put upon wealth by the power of the throne and the established aristocracy were to be relaxed, it is not pleasant to consider. Nor need it be considered.[335:1]