In the cotton mills of Alabama and Georgia little children six and eight years of age are working twelve hours for a wage of nine cents a day. And how do you think they fare in this fearful race for profits—what do you think is the effect upon them of the continued operation of the “System”? You may remember that I said a little way back that there were people in this country to whom the difference between to-day and to-morrow is simply a difference between life and death. It was such people as these I had in mind.
Look, Mr. Steffens; you go from town to city, and from city to state, and everywhere you show us hordes of political parasites battening on corruption; and you tell us that the fortunes that they make represent but a small portion of what is made by the “big business men” who bribe them. Magee and Quay, you tell us, made thirty millions out of the street railroads of Pittsburg; and all over this land, year in and year out, such sums are being “made.” And soon afterward came Mr. Lawson’s story of how the Standard Oil group “made” forty-six million dollars in a single deal without turning over their hands. Mr. Lawson expatiates upon this way of “making” dollars—he makes reflections which I had often wondered if you were making. I have wondered if you realised entirely that these millions of dollars were real dollars? Dollars that a man might spend, just the same as any other dollars—with which he might purchase food that men had toiled to raise, and houses that men had toiled to build! I am writing these words in October, and the windows of my room look out upon a cornfield. All the year long I have watched a farmer and his son at work in this field—first plowing it, then harrowing it back and forth and across, then planting the corn, patiently, row by row. The field is ten acres in size, and it seemed to me that not a week passed all summer that the farmer was not plowing and weeding it; and now that the fall has come he has cut it stalk by stalk, and stacked it; and now I can see him and his son sitting on the bare, bleak hillside this morning, husking it, ear by ear. That will take them all of two or three weeks, and when the whole thing has been done they will gather up the ears to cart them to town, and the farmer will have five hundred bushels of corn and will get for them two hundred and fifty dollars. And then I read Mr. Lawson’s account of how the Rockefellers “made” forty-six million dollars out of Amalgamated Copper—and strive to realise that what they made was the equivalent of the labour of the farmer and the farmer’s sons and the farmer’s horses in one hundred and eighty-six thousand ten-acre cornfields such as the one I look out upon!
Is it not obvious that if I were to have the power to call a piece of paper one dollar and to put it into circulation, exchanging it for two bushels of corn, I could only do it by diminishing the value of every other dollar in the country a certain small amount? Supposing that the total wealth of the country was one billion dollars, I should diminish every single dollar by one-billionth. Suppose that similarly I “made” one million dollars—by any sort of “making” whatever save by producing some useful thing and increasing the total wealth of the country—I should then tax the holder of every dollar one mill. A man who owned ten thousand dollars would be robbed by me of ten dollars—he would be robbed of it just as literally and as actually as if I had broken into his house and stolen his watch. He would not know that he was robbed, perhaps—all that he would know would be that when he spent his ten thousand dollars he would not get quite so much. In Dun’s and Bradstreet’s the event would be recorded in the statement that the cost of living had risen one-tenth of one per cent. since last week, and that interest rates had similarly declined. And now here is the young girl who works in the sweatshops of Chicago for a wage of forty cents a week, as thousands of them do. The great Amalgamated Copper deal is consummated, Mr. Rockefeller and his fellow-conspirators “make” forty-six million dollars—and the young girl’s wage becomes thirty-nine cents and a fraction. At forty cents she was hanging on for her life; at thirty-nine cents and a fraction she enters the nearest brothel. Here is the little child of eight years toiling from six at night till six in the morning in the midst of throbbing cotton-looms for nine cents. Magee and Quay of Pittsburg “make” thirty million dollars in street railroads—and the little child’s wage becomes eight cents and a fraction. At nine cents he was starving; at eight and a fraction he faints, and the machinery seizes him, and his arm has been torn out of him before anyone can answer his screams. So it is, Mr. Steffens, that there are people in this country to whom the difference between to-day and to-morrow is simply a difference between life and death.
That farmer about whose work I spoke will take his two hundred and fifty dollars to the bank for deposit; and in the line before the window will be a young spendthrift idler with a month’s income from his father’s estate, and a politician with a bribe for a street railway franchise; and to the banker all these deposits will stand upon equal terms, they will all be equally “good,” and will claim and get interest at the same rate. The farmer will have to content himself with a lower rate, because of the competition of the others; and next week, when the activities of some speculator in Wall Street bring about a failure of the bank, he will get not a bit more out of the wreck than the other two. And then he will go back and toil for another year, to raise a similar crop—and what will he find then? Why this: the forty-six millions of the Standard Oil gang will have survived all mischances, and having by their enormous mass attracted profits, will have become fifty millions, or even sixty; and the thirty millions of Magee and Quay will have become thirty-five. All the untold millions of the capital of the country will have increased similarly; and the investment field will have become more crowded yet, and the prizes fewer yet, and the chances more hazardous yet; and the cost of living will be a little higher yet; and the interest rate a little lower yet, and wages a little lower yet; and the whole of human society will be toiling a little harder yet to pay the profits upon that heaped-up mass of wealth. More men will be taking to drink, and more women will be taking to brothels—more to suicide, madness, vagabondage and crime. The race for profits will be a little more fierce, social ostentation will be a little more vulgar, political corruption will be a little more shameless, strikes and riots will be a little more common, the socialists will be a little more active—and you, Mr. Lincoln Steffens, will be a little more saddened at the sight of your country’s downward career.
I have noticed the very curious fact about your views, that all your hope of betterment is in the future—it is always how we can prevent new stealing, never how we can punish the past. And so those thirty million dollars of Magee and Quay, the forty-six millions of the Amalgamated deal—they are safe and beyond recall forever? Mr. Lawson talks about “restitution”; do you think he will ever bring it about—do you see any signs of it so far? And yet those forty-six million dollars, assuming that they grow at ten per cent., a small earning for such a sum—year after year they will be, roughly speaking, as follows: 46, 51, 56, 63, 69, 76, 84, 92, 101, 111, 122, 134, 147, 162, 178, 196, 216, 238, 262, 288, 318, and so on. In other words, the heirs of the “Amalgamated” financiers will twenty years from now have multiplied that sum nearly seven times, and be receiving nearly seven times as much tribute from the sewing-girl in the Chicago slums and the children in the Georgia cotton mill. I, Mr. Steffens, am one of those who look upon all profits, rent, interest, and dividends as a survival of barbarism, the last but not the least of the devices whereby the strong enslave the weak and profit by their toil; but I assume that you are not one of these—that you are one of the class I heard described by a speaker the other night, “who think that the first dollar is a male dollar and the second a female, and that when you put them in the bank together they bring forth dimes and nickels, which in the course of the years grow up to be dollars as big as their parents.” Yet even so, you can not but recognise the distinction between legitimate and illegitimate children. You can not—to drop an inconvenient metaphor—claim that society can by any possibility whatever be required to go on paying tribute to that stolen forty-six millions—the three hundred and eighteen millions of twenty years from now. It is a maxim of law, Mr. Steffens, that there is no wrong without its redress.
And if you grant this and begin to examine the millions in that light—what perplexities you come upon! Only take the tariff, for instance—is there a dollar invested in the business of this country to-day which has not profited by that, and which is therefore not made up out of the tiny contributions of thousands of persons who not only do not own that dollar, but do not own any other dollar? And then consider that the beginnings of most of our great fortunes were made in Civil War times, when the nation in its extremity paid two dollars for every dollar in value it received! And consider the chaos of political corruption that followed, the twenty years of plundering of every variety that American ingenuity could invent, from Black Friday to the Western land grabs and railroad steals! Try to figure how many crimes are represented by the Vanderbilt millions, how many by the Goulds’s; think of the commercial assassinations represented by the word Standard Oil—the secret rebates and discriminations, the wholesale buyings of legislatures and elections; think of the whole institution of corruption of the present day, of the “System,” intrenched in village and town, city, and state, and nation, owning both parties, the executive, the legislative, and the judicial branches of the Government, the schools, the colleges, the pulpits, the press, literature, and art, and public opinion—making it, not figuratively and hyperbolically, but literally, simply, and indisputably the fact that there is not to-day in the land a place where a man can take a dollar and invest it, and get back a copper cent that is not tainted with corruption, polluted by violence, treason, and crime, and stained with the blood and tears of uncounted thousands of agonised women and children!
So much for the letter. If there is anyone who, after reading it, is still of the opinion that the people should pay the tribute demanded twenty years from now, there is nothing more that I can say to him—except to give a few statistics by way of further elucidation, showing him how many more millions of dollars there will be to enter their claim. There will be, for instance, the four hundred and fifty million dollars of the Astor family—all invested in New York City real estate, and at the rate of growth of the city, certainly destined to be a billion dollars in twenty years from date. There is the half billion dollars of Mr. Rockefeller, increasing by a most conservative estimate at the rate of ten per cent. per year, and therefore destined to be over four billions at that time. And then there are the railroads of the country. We are now being prepared for a decision to be some day delivered by the Supreme Court, to the effect that any rate regulation which interferes with dividends is confiscation, and therefore unconstitutional. And yet we know that railroad capitalisation is simply a function of earning-power; that what the financiers have uniformly done was to charge all the traffic would bear, and then water their stock until the rate of dividends came down to the market average. The capitalisation of the railroads of the country, fixed upon this basis, is thirteen billion dollars, whereas their actual cost was only six or seven billions. To give one or two samples of this process, the Western Maryland Railroad was bought up by the Goulds, and watered from nine millions up to fifty-one millions. The Central Railroad of Georgia, which cost less than seven millions, has now been watered up to fifty-five millions. Assuming that the watering were to stop to-day, and that the railroads simply re-invested their dividends at the present rate of six per cent., in twenty years we should be paying interest upon over forty billion dollars.
From a brokerage circular which recently came in my mail, I have clipped a few more instances of the workings of trust finance. The argument of the circular is that I need not be frightened at their offer to make my money earn more than six per cent.—that over a hundred per cent. is “being frequently earned by legitimate business.” Thus the Diamond Match Company recently paid ten per cent. on a capitalisation of fifteen million dollars, when its original capitalisation had been only six million dollars. The Western Union Telegraph Company began in 1858 with only three hundred and eighty-five thousand dollars, yet in 1874 it paid one hundred and fourteen per cent. on seventeen million dollars. Anyone who had invested one thousand dollars in this stock in 1858 would by 1890 have received fifty thousand dollars in stock dividends and one hundred thousand dollars in cash dividends. The present capital is over ninety-seven millions—“and the greater part of the equipment has been created out of the earnings of the company!” In the case of the Prudential Life Insurance Company (owing, though the circular does not state it, to a little deal between United States Senator Dryden and the New Jersey State Legislature) for every one thousand dollars originally paid in, the stockholders now own twenty-two thousand dollars’ worth of stock and received annual cash dividends of twenty-two hundred dollars, or two hundred and twenty per cent. upon their original investment!
And then, to diversify the subject, let us consider the tariff, and its variegated plunderings. In a letter to the New York Evening Post of Oct. 26th, 1904, Mr. J. R. Dunlap gave some figures showing the “scandalous taxes imposed by trusts upon the people”:
“Now, to show how the Dingley duty of eight dollars per ton on steel rails taxes American railroads and hence reaches deep into the pockets of shippers and travellers on American railroads, I need only cite the fact that, during the year 1903 our American railroads purchased from the steel pool exactly three million forty-six thousand eight hundred and thirty-six tons of new steel rails (see statistical abstract, Department of Commerce and Labour). The price to foreign railroads being, say twenty dollars per ton—as we now know—and the pool price to American railroads being twenty-eight dollars per ton, that means that the American people, during the single year last past, contributed a clean net profit of twenty-four million three hundred and seventy-four thousand six hundred and eighty-eight dollars to the rail pool—by reason, presumably, of their “patriotic” belief in the Dingley duties! And during the past six years—since the Dingley Bill was enacted—these same American railroads have been forced to contribute to the few members of the rail pool exactly one hundred and two million six hundred and twenty-one thousand two hundred and fifty-six dollars, or eight dollars per ton on twelve million eight hundred and twenty-seven thousand six hundred and fifty-seven tons of rails bought and used. Dividing that stupendous sum of protection profit (one hundred and two million six hundred and twenty-one thousand two hundred and fifty-six dollars) by eighty million of population, we see that the rail pool alone—to say nothing of other combinations “sheltered” by the Dingley duties—has collected a tax of exactly one dollar and twenty-eight and one-quarter cents ($1.28¼) for every man, woman, and child in America, white and coloured.