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diff --git a/.gitattributes b/.gitattributes new file mode 100644 index 0000000..d7b82bc --- /dev/null +++ b/.gitattributes @@ -0,0 +1,4 @@ +*.txt text eol=lf +*.htm text eol=lf +*.html text eol=lf +*.md text eol=lf diff --git a/LICENSE.txt b/LICENSE.txt new file mode 100644 index 0000000..6312041 --- /dev/null +++ b/LICENSE.txt @@ -0,0 +1,11 @@ +This eBook, including all associated images, markup, improvements, +metadata, and any other content or labor, has been confirmed to be +in the PUBLIC DOMAIN IN THE UNITED STATES. + +Procedures for determining public domain status are described in +the "Copyright How-To" at https://www.gutenberg.org. + +No investigation has been made concerning possible copyrights in +jurisdictions other than the United States. Anyone seeking to utilize +this eBook outside of the United States should confirm copyright +status under the laws that apply to them. diff --git a/README.md b/README.md new file mode 100644 index 0000000..a6a6424 --- /dev/null +++ b/README.md @@ -0,0 +1,2 @@ +Project Gutenberg (https://www.gutenberg.org) public repository for +eBook #65818 (https://www.gutenberg.org/ebooks/65818) diff --git a/old/65818-0.txt b/old/65818-0.txt deleted file mode 100644 index 98b8210..0000000 --- a/old/65818-0.txt +++ /dev/null @@ -1,4113 +0,0 @@ -The Project Gutenberg eBook of Letters to Judd, an American -Workingman, by Upton Sinclair - -This eBook is for the use of anyone anywhere in the United States and -most other parts of the world at no cost and with almost no restrictions -whatsoever. You may copy it, give it away or re-use it under the terms -of the Project Gutenberg License included with this eBook or online at -www.gutenberg.org. If you are not located in the United States, you -will have to check the laws of the country where you are located before -using this eBook. - -Title: Letters to Judd, an American Workingman - -Author: Upton Sinclair - -Release Date: July 10, 2021 [eBook #65818] - -Language: English - -Produced by: Tim Lindell, Martin Pettit and the Online Distributed - Proofreading Team at https://www.pgdp.net (This book was - produced from images made available by the HathiTrust - Digital Library.) - -*** START OF THE PROJECT GUTENBERG EBOOK LETTERS TO JUDD, AN AMERICAN -WORKINGMAN *** - - -LETTERS TO JUDD - -_An American Workingman_ - - -_By_ - -UPTON SINCLAIR - - -PUBLISHED BY THE AUTHOR -PASADENA, CALIFORNIA - - - - -This book is written and published as an act of love for America. It is -made out of faith in our country, and in you. - -Our fathers bequeathed to us a great democracy and a great ideal. We -must preserve them. - -This book will not be reviewed in the great press, nor promoted by the -powers that be. If it is read, it will be because the plain people do -their part in passing it about from hand to hand. - -Several times in our history this miracle has happened, the people -have been reached by a message: Tom Paine’s “+The Crisis+,” Helper’s -“+Impending Crisis+,” Henry George’s “+Progress and Poverty+,” -Bellamy’s “+Looking Backward+.” There has been no need greater than the -present. - -This book is an act of service, not of money-making. The work is not -copyrighted, and any one may reprint it. If you want a large edition, -the author’s plates are at your service free of cost. - -Read, and do your part. - - - - -LETTERS TO JUDD - -BY - -UPTON SINCLAIR - - - - -INTRODUCTION - - -Judd is an old carpenter who has done odd jobs on our place for the -past ten years. Just how old he is I don’t know, but he’s pretty old; -his hands are gnarled and calloused and his finger nails chewed up and -broken by hammer blows; there are knotted veins in his forehead and his -hair is grey and thin. But he works like a beaver, and don’t you ever -hint that he should slow up--he will hoot at you, and say that he can -lick any young feller with one hand. He will hitch his harness into -place--he has a rupture, and wears some kind of truss--and will slide -under the house to connect up a gas pipe, and come crawling out with -his hair and eyes full of cobwebs, and my wife will say, “Come out of -there, you old gopher.” He adores her when she talks to him like that, -he would lift the side of the house to please her. The two of them -engage in violent arguments as to how a door ought to be hung or a tree -pruned. “Nobody ever did it like that,” Judd declares--and considers -that sufficient reason. He does it her way, so long as she stands over -him; but if she leaves, he is apt to finish it his way--for, after all, -it is manifest that a man knows better than a woman. - -Ten years ago our home was a row of vacant lots on a hillside, covered -with weeds and rusty cans. Now it is an old-fashioned Southern house -with a long veranda and a row of white columns, surrounded by rose -gardens and grape arbors and fig trees and oranges. The house was made -out of five old houses, bought for a little more than nothing, and -moved onto the place and joined together; the gardens were made by my -wife sticking baby plants into the ground, and holding a hose over them -all day and part of the night. I helped a little; and two school boys -helped after hours; but Judd was the Hercules who did most of this -mighty labor. He would rout us out of bed in the morning, and many a -time we have worked after dark, to get a roof over something before -it rained, or finish a concrete job before it set. What is there we -haven’t done together?--digging ditches and setting fence-posts, hoeing -weeds and pruning trees, laying shingles and tacking down tarpaper, -cleaning old furniture and painting an automobile, moving a garage -and installing a sprinkler system. And always with a presiding female -genius hovering over us, exhorting and appraising, mostly on the debit -side! Never was there such a woman for saving, and for devising, and -for utilizing. Once Judd in his digging came upon a rusty iron spike, -and showed it secretly to me. “Better throw it over the hill quick,” he -said. “If the missus sees that, she’ll start a railroad!” - -When the house was done, there was a party. The living room is -extra fancy, with high, peaked ceiling, and lights way up, dim and -mysterious; in a million years you’d never guess that it was once an -old tailor shop, bought for a hundred dollars, and moved over here, -and the upper floor taken out! Well, our friends came, some of them -rich people in limousines, creating a sensation in our neighborhood. -The neighbors were invited--it is a working-class part of town, and -a few people came, shy and a little distrustful, and picked out -seats with backs to the wall, and sat stiff and silent, while George -Sterling, great poet and genial soul, told us intimate recollections of -Joachim Miller and Ambrose Bierce and Jack London, and other old-time -California writers. - -Judd wore his best clothes, and a stiff collar, and brought a lady -friend in black satin. We were surprised by this, for we knew that Judd -was a widower of many years’ standing; we teased him afterwards about -this lady, and he blushed, but insisted there was “nothing to it”--and -apparently there wasn’t, for he still lives alone in the house he has -built, with a fire-place made of every kind of shiny colored stone you -can find on the beaches of California. There is a porch to this house -and a lot of fancy concrete work, that will last Judd’s life-time and -longer. You must understand, this is no “hard-luck story,” quite the -contrary; Judd has got to be a rich man in the course of ten years, -with war-time wages of a dollar an hour. He put his savings into two -lots, and his spare time into building three houses on them, and now -he has two of them rented, and he goes trout-fishing every spring, and -deer-hunting in the fall, and he took a trip to Texas just to have -the fun of spending some of his money, instead of leaving it all to -his nephews. When he comes now to do odd jobs for us, it is by way -of a favor; and he says, “Well, you got a new book now?” Of course I -always have, and he demands a copy, and insists it must be cloth, and -autographed; and then we have our regular argument as to whether he -shall pay for it, and we compromise on the basis of his paying the -wholesale price. He tells me what he thinks about my writings, and just -what is wrong with my ideas. - -Judd, you understand, is not the least bit of a “radical.” “I got no -use for these ‘reds,’” he says, being a simon pure, hundred per cent -American; there are too many foreigners in the country, and if they -don’t like it, let them get out. But at the same time Judd is nobody’s -fool. For one thing, he is “onto” the politicians; they are a bunch of -crooks, and he proves it, telling me things that are going on right in -Pasadena--he knows from this friend or that who works for the city. -Also, Judd is “onto” the politicians at Washington; of course you can’t -get the facts, because the newspapers won’t print them, but look at -this oil business, and look at the fellows that got a billion dollars -from the government, pretending to make airplanes for the war, and they -never got a single fighting-plane to France. Judd supported the war, -and bought liberty bonds with his savings; but he says that if the -truth was known, we could have kept out of that war, if it hadn’t been -for the munition-makers, and the bankers and their loans to England and -France. - -So you see, we have plenty to talk about while nailing down shingles -and screwing up water-pipe! Once, not so long ago, Judd said to me, -“By golly, I never thought of that!” I answered, “You’d be surprised -to know how many things you never thought of.” Said he: “Why don’t -you write a book for fellows like me? A workingman is tired when he -gets home, and don’t have time for big books, and he don’t know the -long words. But you write something short and easy, and show us little -fellows just how we get it in the neck.” - -Well, there are lots of things one would like to write, and one doesn’t -get around to them all. But every now and then I think about Judd, and -the millions of other Judds there are, scattered over this great land. -I think of things I’d like to say to them, if only I could get to them. -Here it is, Thanksgiving morning of the year 1925; and just why this -morning should have chosen itself, I can’t imagine, but I am sitting at -my typewriter, on the very porch that Judd helped to build, and came -crawling out from under with his hair and eyes full of cobwebs--the old -gopher! I am beginning the book he asked me to write, for him and the -other American workingmen. - - - - -LETTER I - - -MY DEAR JUDD: - -There are some things which you and I and all Americans take for -granted, and don’t have to argue about. For example, every man has a -right to get to heaven in his own way, if he can; we are not going to -meddle with any one’s religion. Also, we believe that all men should be -equal before the law. We don’t mean they all have equal abilities--for -that would be a foolish thing to say; but they all have equal rights -“to life, liberty and the pursuit of happiness.” Also, every man has a -right to what he has produced by his own labor; and it is the business -of government to protect him in this right. - -Speaking generally, we think that men live better if they are let -alone, to work out their own destinies. We don’t want any more -government than there has to be; if the government will see that -the other fellow keeps his hands out of our pockets, we’ll manage -to build our own house, and live in it our own way. That is called -individualism, and you are keen for it, Judd, and I am no less keen. -The only time the government has been on our place in the past ten -years has been when it came to inspect the foundations, the plumbing, -and the fire-stops in the walls of the house; all of which concern the -common welfare. - -If a fellow won’t work, he has no right to anything--we agree to that, -and we will shed no tears over shirkers and loafers. We are defending -the real workers, and we say that such are entitled to the fruits of -their own labor. Let us set that down for the corner-stone of our -thinking; let us make it our test of a sensible and decent world. I -ask you: Are the workers getting what they produce today? Or is some -other fellow getting part of it? Put it the other way about, and ask: -Are there any people in our country getting wealth without producing -it, without doing any useful work? It is obvious that if any man gets a -thing he hasn’t produced, some other man must have produced that thing -and not got it. - -I choose a case which lies nearest to your own heart, Judd--those three -houses that are the security for your old age! You paid your good money -for materials, and you put them together with your own hands, and you -say those houses belong to you. If a fellow came with skids and a -truck and tried to cart one of them off, you would surely stop him. If -a fellow moved into one of them, and refused to move out, you would -surely put him out. The law would back you--and so you believe in the -law! But suppose I were to tell you, Judd, there are ways by which some -fellow might take your houses away from you, and the law would not move -a finger to help you, but on the contrary, would come and turn you out -for the other fellow’s benefit? - -Watch your step, now! Suppose that some man had the power to fix the -prices of the things you have to buy day by day, your food and clothing -and gasoline; and suppose he boosted the prices, so that you found -yourself running short; then you’d have to put a mortgage on one of -the houses; and when the mortgage fell due, if you were still short, -your house would be sold by an auctioneer at a foreclosure sale, and -the law would turn you out. Or let us suppose this man had the power -to dilute the currency of the country, so that every dollar of yours -became worth only half as much as it was before; don’t you see that he -might deprive you of your three houses, one after another? There are a -dozen different ways in which the trick might be worked; and strange -and startling as the idea may seem to you, I assure you that it has -been done many times, and will be done many times more. The world you -live in is full of devices by which your pockets are emptied, without -your ever feeling the touch of the thief’s fingers. - -If a fellow comes along and tries to sell you a gold brick, you laugh -at him; that’s an old one, and you are “on.” If he tries to sell you -a gold mine in Kamchatka, or shares of stock in an oil well--come to -think of it, Judd, I believe you told me you did take some shares in -the Somebody-or-Other Oil Syndicate--twelve hundred dollars, you said -it was! But you’ve learned your lesson now, and nobody can play you for -a sucker again. - -But, Judd, these things I am talking about here are not called -swindling, they are entirely respectable things, with such beautiful -names that you go to the polls and vote for them on election day, and -for some of them you would give your life on the battlefield. For -example, that thing called the “protective tariff”; such a lovely -name, “protective,” it makes you think of a mother watching over an -infant in a cradle! The economists call this tariff a form of “indirect -taxation”; and what do these words mean? Exactly that thing which I -said a minute ago--a device for emptying your pockets without your -feeling the touch of the thief’s fingers! - -Or take that thing called “inflation”; that is, the diluting of the -currency, so that the money in your pocket is less money than it was -before. The bankers all tell you that “inflation” is a most wicked -thing, and you believe them, and are quite sure it couldn’t happen; -while the plain fact is, the bankers have been doing it to you right -along! They have deprived your money of about forty per cent of its -value in the last ten years--and you, my good old friend, thought it -was fine, because the value of your lots went up, and of your houses, -too. It never occurred to you that the price of everything you bought -was going up also; and that the value of your money in the savings-bank -was going _down_; and also the value of your liberty bonds! - -Judd, you get up by an alarm clock at dawn every morning, and boil -yourself some coffee, and gulp down a couple of slices of bread, and -maybe a fried egg, and give your chickens and rabbits their water and -feed, and then you hustle off to work. For forty years that has been -your rule, six days out of seven; you worked like an old mule, eight -or nine hours of it, and then come home and worked till dark on your -own place. There are forty-two million Americans doing much the same -thing, and the total of what they produce is a thumping pile of wealth. -And who is to get it, Judd? How shall it be divided? In the great -cities, in many-storied office buildings, sit white-handed gentlemen at -flat-topped mahogany desks, and these gentlemen have no idea of ever -crawling around in the muck, or sweating in the heat, or freezing their -fingers in the cold, or soiling their white collars and breaking the -crease in their trousers--no, Judd, they have not an idea of it! - -While you are working, these gentlemen have nothing to do but think; -and the subject of their thoughts is one thing and one alone, how -can they get away from you the largest possible share of that -wealth which you are producing by your labor. They call themselves -“great executives,” Judd; and what they execute is the American -workingman. They have devised the most subtle and perfect machine of -exploitation--that is, for getting you to produce wealth while they -consume it--which has ever existed in the history of mankind. I am -going to show that machine to you; I am going to take it apart, just -as if it were an automobile, and let you see exactly how it is built. -I will show you the thing called “stock-watering,” and how it takes -away from you the greater part of your day-by-day earnings. I will show -you the thing called “rigging the market,” and how that conjures the -coins out of your purse--and mind you, old friend, not when you go to -gamble in Wall Street, for you have never done that; but when you go -round the corner to the store and buy a loaf that is made of wheat, or -a shirt that is made of cotton, or any other article that is produced -by machinery and shipped on a railroad. - -Above all I am going to show you that most fascinating piece of -wizardry, our banking system. You were a rancher in your youth; and -some of your relatives are farmers back East. Well, Judd, we have a -thing called the Federal Reserve Bank, and three years ago that bank -reached down into the pockets of the farmers of America, and took -out--how much, do you think? Just about four billions of dollars! And -gave it to whom, do you think? Why, to the big bankers of Wall Street, -and the manufacturers and trust magnates with whom they work hand in -glove. Soon after that I traveled through the Northwest, and in state -after state I found whole counties in which every single farm had been -sold for taxes. Do you think I am claiming too much, Judd, when I tell -you that you really ought to understand how such things can happen? - - - - -LETTER II - - -MY DEAR JUDD: - -The Bible tells us that “man does not live by bread alone.” To hear -some people talk, you would think the Bible said that “man does not -live by bread.” You and I know that he does; and if he is to be -decent and civilized, he needs many other things, a home with several -rooms in it, and clean clothing, and books, and recreation. There is -nothing more destructive of health and happiness than extreme poverty; -the inability to get for yourself and your loved ones the common -necessities of life. - -There are parts of the world where poverty is an infliction of nature; -but that is surely not true of the United States in the year 1925. -We have a country of nearly four million square miles, with greater -variety and wealth of natural resources than any similar area in the -world. We have almost everything needed by modern industry; the bulk -of our imports are luxuries--coffee and bananas and music and French -fashions. We have forty-two millions of workers, all carefully trained -to their jobs, and we have the most highly organized industrial system. -We produce 40 per cent of the world’s iron and steel, 52 per cent of -its coal, 60 per cent of its copper, 75 per cent of its corn, 85 per -cent of its automobiles, and so on through a long list. - -Twenty-seven years ago our government made a study of hand-power as -compared with machine-power in some of the common industries; thus, -making ten plows by hand took 1,180 hours, while making them by -machinery took only 37½ hours; making one hundred pairs of cheap boots -took by hand 1,436 hours, and by machinery only 154 hours. From these -calculations it appeared that machinery had cut human labor, in some -cases 80 per cent, in some cases as high as 95 per cent. That was in -1898; and since then, how much more has been done! We have the Ford -factory, employing 165,000 men, and turning out 2,500,000 cars and -trucks every year, one for twenty days’ labor of a man! In Chicago -are great ovens, worked automatically by electricity, which turn out -14,400 perfect loaves of bread every day. I have a friend who owns -a book-making machine which turns out 64-page books at the rate of -5,000 every hour. One might fill pages with miracles of this sort. We -are now harnessing the rivers and water-falls, and in Maine the tides -of the ocean, and engineers estimate that machine-power provides us -with the equivalent of three billion hard-working slaves. Mr. Roger -W. Babson, who runs a big statistical bureau, presents figures of -machine-production from which it appears that 13 important industries -now average 88 times as much production as by hand-labor. - -Obviously, then, everybody in the country ought to be 88 times as well -off; poverty for the willing worker ought to be one-eighty-eighth of -what it was in 1825. But what is the matter, Judd? For some reason -there is just as much poverty as there ever was, and possibly more! -In the old days nobody starved--that is, unless he was a loafer or a -drunkard. Our ancestors were well fed, and managed to raise families of -ten, and sometimes even twenty sturdy children. How many of the workers -in our mills and mines can afford such a luxury today? - -I have before me a photograph of our national capital at Washington, -with its high white marble dome; the picture is taken over the top of -filthy slum tenements, falling into decay. And this is not a made-up -picture, it is a photograph that you might take from many different -spots in Washington. Or go to New York, the centre of our wealth and -fashion; the school authorities there report that two-thirds of the -children are physically defective, and one-fourth come to school -suffering from hunger and malnutrition; two years ago the State -Planning Commission reported two-thirds of a million people in the city -“miserably housed.” - -In New England are thousands of mill-workers now on strike against -reduction in their starvation wages; here you find the “she-towns”--all -the men have gone away, and you can buy a woman for the price of a -sandwich. In Pennsylvania a hundred thousand miners are on strike to -preserve their wretched livings; they dwell in hovels, and can barely -keep their families. In Georgia and the Carolinas you find the mills -run on the labor of little children; and nearby are palatial estates of -the rich, a happy condition described by a woman poet: - - - The golf-links lie so near the mill - That almost every day - The laboring children can look out - And see the men at play. - - -The defenders of our industrial system will admit these facts, if you -pin them down, but they say that things are getting better all the -time. A professor of Harvard University has just published a book, in -which he tells how our glorious system is rapidly solving all problems; -very certainly and very soon there will be no poor. Well, now, I am -going to make a statement, Judd, and you paste it in your hat, and look -at it every now and then while you are sawing timbers or mixing cement: - - - _The condition of the mass of workers in the United States has - been getting slowly but steadily worse for the past thirty-five - years._ - - -Let us see now. We want to determine what are called “real wages”: that -is to say, wages in relation to the cost of living. It is clear enough -that if your wages rise from four dollars a day to eight, and at the -same time the cost of living doubles, you are no richer than you were -before. That is one way to fool the workingman; but we are not going to -let ourselves be fooled! - -The problem is not a simple one; you have to figure wage-rates in -representative industries over a term of years; and then you have to -figure the average cost of goods for the same period of time. It is -easy to “load” your figures, by giving emphasis to those trades in -which wages rose, or, on the other hand, by featuring those goods whose -prices stayed low. For example, as I write, Secretary Hoover reports -to the President, and the President gives out to the press, a set of -figures showing how the American workers have made some gains in real -wages during the last few years; and these glad tidings are featured -upon the front page of all our great newspapers. And what is it? Simply -a barefaced fraud! Mr. Hoover has figured wholesale prices! He knows -that these prices have gone down, while retail prices have not gone -down correspondingly; also, needless to say, he knows that American -workingmen do not buy their food and clothing at wholesale! - -Prof. Paul H. Douglas of the University of Chicago published in the -Proceedings of the Academy of Political Science (Vol. XI, No. 2), a -very elaborate study of real wages from 1890 to 1924. This is the best -work I had seen, and the results may be summed up in one sentence: real -wages in the United States from 1890 to 1924 suffered a _decrease_ of -five per cent. To phrase it another way: where a workingman could buy -20 pounds of necessaries in 1890, he could buy 19 pounds today. - -These figures caused a sensation; for you can understand that there is -nothing our masters try so hard to keep from their servants as this -very fact. I used the figures throughout these letters; but just as -I am through, and about to send the manuscript to the printer, the -professor writes me a letter, saying that he has revised the work, -and he now shows a gain in real wages during the past four years. The -reason for the change is, he has decided that the earlier figures were -“unduly weighted with pork and beef, which rose much more rapidly than -other commodities.” - -Here you see the very thing I explained. How much pork and beef shall -be figured in the family budget of a workingman? Our fathers ate pork -and beef, and grew to be full sized men; but of course there was no -beef trust in those days. If, now, the cost of pork and beef rise too -fast, the workingman can adjust himself to a coolie diet, those starchy -foods which are cheap and relatively stable in price. But I, for my -part, eat pork or beef once a day, and I claim the same right for you, -Judd! - -This much is certain: in many basic industries there has been a loss. -The new figures which the professor sends me show losses for the -clerical workers and the postal clerks; and the only large gainers -are the teachers, who regard themselves as professional persons, not -as workingmen. Surely those striking textile workers in Massachusetts -have made no gains this year, nor the 158,000 striking miners! Ask the -farmers of the Northwest about their case, and you will hear a loud -shout of denial! Ex-governor Lowden of Illinois stated at a public -banquet in New York that from 1920 to 1924 the American farmer’s return -on his invested capital was three-tenths of one per cent! - -I know there is a great deal of apparent prosperity among our workers -today. But that is due to a new factor--that the worker now spends his -money for things that last, a home, and an auto, and clothing and radio -sets, instead of spending it for beer and whiskey. That is a vast gain -in civilization, but it is not the same thing as a gain in real wages, -and don’t let anybody fool you by this argument. - -To get a clear view of the real truth, ask this question: has the -capitalist suffered a loss of purchasing power during the past -thirty-five years? Merely to suggest such a thing is to raise a laugh! -There are some, like Henry Ford, who are a million times richer -today than they were thirty-five years ago. It is probable that the -Rockefellers are twenty times as rich as in 1890. The total wealth of -our country increased from 65 billions in 1890 to 320 billions in 1922; -and as the workers didn’t get the difference, the rich must have. Here -is what they admit having got, in their income tax statements, during -four years 1921-1924. The number of fortunate ones who got more than -$300,000 a year income increased from 246 to 773. The number of those -with incomes between $100,000 and $300,000 increased from 2,106 to -4,921. The number with incomes between $25,000 and $100,000 increased -from 37,663 to 62,158. Those are the real insiders--and remember, Judd, -they didn’t have to admit any “stock dividends,” nor to pay anything on -the billion or two they have invested in tax exempt securities. - -There is a statement commonly made by Socialists, justifying their -prophecy that our present system is on the way to a breakdown. The -statement is that the rich are growing richer and the poor growing -poorer. I know of no statement which causes more irritation to the -capitalist press; I suppose I have read a thousand editorials in which -the statement is ridiculed, or denounced, or waved aside as out-of-date -and not applying to America. Nevertheless, it is the truth, Judd; all -the workers are growing relatively poorer, and vast groups of them are -growing absolutely poorer, in the terms of what they can buy with their -wages. And this in the headquarters of prosperity, the richest of all -nations, which houses in its treasure-vaults more than half the total -gold-reserves of the world! - - - - -LETTER III - - -MY DEAR JUDD: - -How does it happen that, in this our land of liberty and prosperity, -the rich are growing richer and the poor poorer. - -When you talk about the matter with an economist, he uses many long -words, and tells you about natural processes, controlled by inexorable -laws. Well, Judd, it all depends upon how you look at it, from the -inside or the outside. If you look from the outside, you see economic -processes; but if you look from the inside, you see the actions of men. -Wealth is produced by the actions of men--you know that, because you do -it every day; and wealth is distributed by the actions of men--you also -do that every day. If men, in the course of their dealings, have made -a hell on earth, it has been because they first had a hell in their -hearts; and if they are to make a paradise on earth, they first have to -change their hearts, and then no economic laws will stand in their way. - -First among the “actions of men” which have made poverty in America, -I list our banking system: that is to say, the way men have behaved -and are behaving with regard to money. This banking system has been -constructed, just as artificially as a house is constructed, and its -plan can be summed up in one phrase: to enable those who already have -money to get as much more as possible. Many things about the system may -seem complicated, but if you understand that basic idea, you will never -be fooled. - -One man raises grain, and another saws lumber. It would be awkward to -exchange a stick of timber for so many bushels of wheat, therefore men -have invented money, which is a standard of value, enabling anything -to be exchanged for anything else. The first point to be got clear is -that money is not wealth, but only a symbol of wealth. You can see that -clearly, if you imagine yourself stranded on a barren island with a -million dollars in greenbacks. Would you be rich? You would not! And it -is equally plain that nobody is made richer when the government prints -a new lot of bank-notes. Of course, if you printed the notes yourself, -and put them into circulation, you would be richer; but this wealth -would be got by taking away from the owners of real wealth a certain -percentage of what they owned; there would be a little more money in -circulation, and so the existing stock of goods would have a slightly -higher money-value. - -That is what I refer to as “diluting the currency.” When it is done by -governments, it is known as “inflation,” and it is a favorite trick of -governments in trouble. They print paper money, and spend it for goods, -and the more they print, the less is the value of each unit of money, -the rouble, the mark, the franc, or whatever it is called. The bankers, -of course, are greatly opposed to this method of robbing the owners of -wealth; their objection to the process being based upon the fact that -when the paper money is printed, the government owns it, whereas the -bankers think that they, the bankers, should own it. In this country -they have been able to have their way, and we live under a system which -establishes the bankers as legalized counterfeiters. - -You must understand, Judd, that only about one per cent of modern -business is done upon a basis of cash--gold or silver or greenbacks; -the rest is notes, or bills of exchange, or checks, or some other -form of credit. And the banker is the man who creates this credit. He -sells it to you, for whatever price he sees fit; and it is his royal -privilege to grant or to withhold it. You may have ever so much real -wealth to offer for security, and still meet with refusal; or you may -have merely a pretense of security, and carry off the prize because you -are the nephew of a director. The banker gives you a “pass-book” with -a line of figures written in it, and you go out into the market, and -discover that your banker-made money is just as real as any other money -you find there--as real as the corn the farmer has raised, or the house -the carpenter has built. - -The theory is that the banker is lending the money which his -bank-customers have deposited with him. But see! You take $350 in -greenbacks and put it in the bank, and under our banking laws the -banker can deposit those greenbacks with the Federal Reserve Bank, and -receive a credit of $1,000; and then on the basis of that $1,000 he is -legally permitted to lend out sums amounting to about $10,000 to other -customers of the bank. In other words, $350 deposited by a customer -becomes the basis of bank-loans, not merely of that $350, but of $9,650 -additional, created by our legalized counterfeiter! The outstanding -amount of greenbacks, about a third of billion dollars, thus becomes -the basis of ten billions of dollars of banker-created money--and this -for the national banks alone, without counting all the state banks and -the private banks! - -The headquarters of this greatest graft of all the ages is Wall Street. -The money from all the little banks pours in here, and likewise -the insurance money which our people put up to insure the safety -of their wives and children. It is all at the service of the big -banker-speculators, to be used in manipulating markets, driving prices -up and down, so that the insiders can buy while securities are low and -sell while they are high. Here is concentrated the collective greed of -all America, and men become frenzied with visions of sudden gain; they -sell the goods they hope to have, and buy with the profits they expect -to make, and the fires of avarice are fanned white hot, until the whole -thing bursts like a crucible in a steel mill. - -The financial history of America is the record of a series of great -panics, coming at intervals of from seven to ten years. In these crises -the bankers used to suffer as well as the rest of us; but this was -intolerable to them, and so they put their experts to work. To save -yourself in a panic you must have money--a great deal of money in a -hurry; and where can such money be got? Where, but from our good old -Uncle Sam? So the bankers devised a wonderful new scheme, the Federal -Reserve System; a chain of twelve regional banks with a directing head, -a banker-board, having for its function to watch over our money system -in the interest of the bankers, to lend money freely when they want it -to be cheap, and to call in loans when they are ready for a killing; -above everything else, to watch out for panics, and when these come, to -issue credit to the big insiders, so that they can keep afloat while -the rest of us drown. - -In the summer of 1920, there was a riot of speculation, and this -bankers’ board decided that somebody had to be “deflated”; they -picked out the farmers--who cares anything about the “hicks” out -in the sticks? “Go home and slop the hogs,” was the word of a -banker-legislator in North Dakota to a delegation of farmers. So the -Federal Reserve Board “advised” the farmer banks to lend no more -money to farmers; and one little hint was enough to bring farm prices -crashing. Before the crisis was over, a total of 603,000 farmers had -either lost their farms, or were keeping them on sufferance of their -creditors; and those are government figures, Judd! You know how it was -with produce that year--the farmers in the middle West burned their -corn for fuel, and out here in Southern California it didn’t pay to -gather the orange and lemon crops. But the prices of automobiles and -hardware and lumber and cement did not share this harsh fate; the big -Wall Street banks had all the credit they needed, and they “carried” -their friends, the big manufacturers, whose stocks and bonds repose in -their vaults. They were “sitting pretty,” and waited till the storm was -over, and we were ready to buy their goods at the old fancy prices. - -So you see what I mean, Judd, by my phrase, “legalized counterfeiters.” -The power to issue new credit is the power to dilute the currency, and -merely by the stroke of your pen. All the highwaymen and safe-breakers -and world conquerors of history never carried off as much treasure -as Wall Street has taken from the American people by the use of this -power. In that summer of 1920, the Federal Reserve System took _four -billion dollars_ out of the pockets of our farmers! And now, Judd, I -beg you, when next you hear people say that human ingenuity cannot -cure poverty--_remember how much human ingenuity has done to cause it!_ - - - - -LETTER IV - - -MY DEAR JUDD: - -We are studying our money system, with the idea of understanding how it -causes the rich to grow richer and the poor poorer. - -Money, in its relation to the price of goods, is like a pair of scales -in balance. If you add to the weight in the right-hand pan, it will go -down; also, the same thing will happen if you take away the weight in -the other pan. A bushel of wheat is worth, let us say, one dollar; and -if anything should happen to double the quantity of wheat in the world, -the price of wheat would go to half a dollar. On the other hand suppose -that without changing the amount of wheat in the world, you were to cut -in half the amount of money in the world; then the same thing would -happen, the cost of a bushel of wheat would go to half a dollar. By -reducing the money supply, you lower prices, and make “tight” money; by -increasing the money supply, you raise prices, and make “soft” money. - -Now, the people of our country are divided into two classes, those who -own money, and those who owe it; the creditor class and the debtor -class. It is evident that there is a conflict of interest between these -two classes, as to how much money shall be put into circulation. If -the money supply is increased, money is cheaper, and wages go up, so -it is easier to get money and pay your debts. But the creditor loses -correspondingly, because he cannot buy so much goods with the money -he gets; thus, for the government to put more money into circulation, -is to cancel a percentage of all debts. But on the other hand, if the -amount of money in circulation should be reduced, money will be harder -to get, and it will buy more goods; thus all creditors will be getting -more than is really due them, and a great many debtors will be ruined, -because they cannot pay this extra amount. - -All through our history there has been a struggle between these two -classes. Whichever side controls the government, will shift the -currency supply to favor itself. And which side has controlled? The -answer is, the rich; they have had the money to subsidize political -parties and name candidates and carry elections. Here is a rule of -politics, Judd, which I set down for you to paste in your hat and study -while you are sawing timbers and mixing cement: - - - _Out of fifteen presidential elections since the civil war, - fourteen were carried by that party which had the biggest campaign - fund._ - - -The struggle has centered about what is called the “gold standard.” -All money of our government is supposed to be exchangeable for gold. -Prior to 1873, silver also counted as a standard; but in that year -silver was “demonetized,” and of course that made money very “tight.” -The “Crime of ’73,” this action of the creditor class was called; it -produced a frightful panic, and tens of thousands of men were ruined, -and hundreds driven to suicide. Since poverty breeds poverty, the great -mass of the descendants of these people are still poor, and are told in -the churches that it is the Will of God, and in the newspapers that it -is Economic Law. - -In 1893 we had another severe panic; I was a boy then, and remember -it well. Millions of men were out of work and starving, and the mass -of discontent piled up, and three years later we had the Bryan “free -silver” campaign. I was just beginning to think about politics, and -if today I can be patient with the mass of our deluded workingmen -and farmers, voting for “Coolidge and Prosperity,” it is because I -recollect exactly how I was bamboozled in 1896, so that I would have -voted for “McKinley and Prosperity,” had I been of age. Mark Hanna, the -millionaire corruptionist and banker-boss who paid McKinley’s personal -debts and set him up for our puppet-president, raised a campaign fund -of $16,750,000, and bought that election for his puppet, quite openly -and obviously; so Bryan, who had only $675,000 for his campaign fund, -did not succeed in his scheme of making silver money, and letting all -the business men off with half payments to the bankers. So here again -you see how the “actions of men” kept the rich rich and the poor poor; -and God had nothing to do with it--unless you believe that God was -buying votes for Mark Hanna! - -The maintaining of the “gold standard” as in 1896 would by now have put -the bankers in possession of the entire wealth of our country; and that -was what the bankers intended. But an accident happened--the discovery -of new gold, and the development of large-scale, commercial mining of -low-grade ore. So we got the very thing Bryan had wanted--more money in -circulation; and so the bankers have got only one third of our wealth, -and a mortgage on another third. Also, they have their Federal Reserve -System, whereby they manipulate the currency; they can make “free -silver” today, and “gold standard” tomorrow, and when the next smash-up -comes, they will sweep the board clean. - -As a matter of fact, Judd, the “gold standard” has been nothing but a -pious memory since the World War; the gambling game has run away with -the players, and no sensible man believes that the world’s debts can -ever be paid, in gold or in anything else. Our Federal Reserve notes, -which make up most of our paper money, no longer carry the promise to -pay in gold, or in anything--look at one and see. There are “silver -certificates,” that promise you a silver dollar, but the others -promise nothing. One sort of “paper” is pyramided on another sort of -“paper”--stocks and bonds and promissory notes and bills of exchange -and certificates of deposit and personal checks, all take the place of -currency, and become the basis of new loans and credits and promises -to pay at some future date. The outstanding greenbacks, about a third -of a billion dollars, become the basis of ten billion dollars of -imaginary money; and there are over three billions of Federal Reserve -notes outstanding, and nearly a billion of national banknotes, all -secured by nothing but paper; and there are 25 billions of government -bonds, to say nothing of all state and county and municipal bonds, and -some 19 billions owed to us by foreign nations, all of which paper the -banks have put off on us; and we are adding to the foreign credit a -billion a year, for the reason that we cannot keep our industries going -otherwise. Moreover, we have worked out a system of selling automobiles -and houses and furniture on instalment payments, and there are six or -seven billions of such credits now outstanding, all backed by the banks. - -Such is our “banking system,” Judd; and at every step of every process -you find the banker paying low interest rates for what he borrows, and -collecting high rates for what he lends; at every stage the government -belongs to the banker, not merely to collect his money for him, but -to fix the rates against you, and even against itself. Thus, after -generations of agitation, we succeeded in getting postal savings banks, -to protect the money of the very poor; the government pays the poor at -the rate of 2% for this money--and accepts only $2,500, even at this -low rate! The rest of the money it needs, the government borrows from -the bankers at from 3½% to 5¼%! For those Federal Reserve notes which -the government allows the big bankers to lend out to you, the banks pay -the government about 2½%; and what do they charge for the money they -lend to you? Well, I am paying seven, and have sometimes paid eight; -God grant that you may never be really poor, Judd, and have to pay what -the poor devils pay! It happened a few years ago, by some freak of -chance, that we got an honest Comptroller of the Currency--the official -who is supposed to control the banks; he found he couldn’t and they got -rid of him in a hurry--but not before he issued a report, which would -have given you the facts, had not the newspapers suppressed it. He said: - -“Sworn reports, made by the banks themselves, show that on September -2, 1915, 2,743 national banks, out of a total of 7,613, were guilty -of usury. This at a time when the Federal Reserve banks were offering -money freely to national banks in every part of the country at rates -varying from 3½ to 5%.” - -In Oklahoma, where the legal rate of interest is 6% with 10% as the -maximum under special contract, harassed farmers paid all the way -from 12 to 2400%, with 40% as the average. In the case of one bank, -the comptroller proved that not a single solitary loan had been made -under 15%. He cited one particular case that he asked to be regarded -as typical. In the spring the farmer went to the bank and arranged -for a loan of $200. Out of his necessity he was compelled to pay 55% -interest charge. Unable to meet the note at maturity, he had to agree -to 100% interest in order to get the renewal. The next renewal forced -him up to 125%. For four years the thing went on, and all the drudgery -of the father and the mother and the six children could never keep down -the terrible interest or wipe out the principal. As a finish, the bank -swooped down and sold him out; the wretched man, barefoot and hungry, -went to work clearing a swamp, caught pneumonia and died; the county -buried him, and neighbors raised a purse to send the widow and children -back to friends in Arkansas. - -And what do the banks make out of such exploitation? Well, take one -case; the great First National Bank of New York earned 140% on its -capital in 1925; its stock has gone up to $2950 for a share having a -par value of $100. According to the “Financial Age,” a Wall Street -paper, 49 New York banks averaged 50% dividends in 1925. - -All right, Judd; and now here are three sentences for you to paste in -your hat and learn by heart. - - - FIRST: _Credit is the life blood of industry, and the control of - credit is the control of all society._ - - SECOND: _The private control of credit is the modern form of - slavery._ - - AND THIRD: _The American banking system is the most perfect - contrivance yet devised by the human brain for making the rich - richer and the poor poorer._ - - - - -LETTER V - - -MY DEAR JUDD: - -The next thing we want to understand is the tariff, and how that works -to take money out of the pockets of the poor and put it into the -pockets of the rich. - -The government has to have money, like any other business. We all -desire government services, and should pay our proper share, honestly -and openly calculated. But we haven’t an honest government, nor an -honest social system; nobody wants to pay his share of anything, and -taxes are unpopular; therefore the politicians put their wits to work -and devise what are called “indirect taxes,” ways of getting your money -without your knowing it. Among these ways is the “protective tariff.” - -This was another great issue of the McKinley days, and well I remember -the campaign slogans, devised for tricking the poor voters! “Protection -and Prosperity; the Full Dinner Pail; the Foreigner Pays the Tax!” We -liked the last one especially; we hated the foreigner, and were strong -for making him pay--though just why we should have expected foreigners -to put up the money to support the government of the United States, was -something we might have been puzzled to explain! - -A tariff is a tax imposed on all goods brought into the country. A -protective tariff is a tax high enough to shut out foreign competition, -by raising the cost of imported goods. Who pays the tax? The importer -pays it, and he at once adds it to the price of the goods, so that -the tax is passed on to the person who uses the goods, the ultimate -consumer. He is the man who pays, always and everywhere; and the effect -of the tariff is simply to boost prices in a whole line of commodities. -If the government got all this boost, it wouldn’t be so bad; but the -government gets only a small fraction, and the rest is a fat and juicy -graft for the “protected” manufacturers. - -But, say the newspapers and campaign orators of the “Grand Old Party,” -it is the workingman as well as his boss who is “protected”; if it were -not for the tariff, our wage scales would be dragged down to the levels -of Europe; the labor-sweating foreigner would “dump” his goods on us! -Well, Judd, for the workingman to try to improve his condition by a -tariff, is as if a man should make himself rich by taking money out of -his right-hand pocket and putting it into his left-hand pocket. If you -look only at the left side of this man, you will think he is enjoying -“prosperity”; and that is what the newspapers and the campaign orators -did--and the poor workingman too, alas; for the subject is complicated, -and the workingman does not have much time to think. - -But you can see, Judd, that after the workingman has got his protected -job and has collected his protected wages, he has to go to the stores -and spend his money, and there he pays higher prices for everything -he buys, because all these things have been “protected” from foreign -competition, and the manufacturers of the things have been able to form -trusts and fix the prices at higher levels. Just how much higher are -the levels? The answer is easy; they are always a little higher than -the wages! The whole story was told in the figures I gave you as to the -movement of real wages in our country. Following the example of the -“Grand Old Party,” let me give you a slogan: - - - _The protective tariff in the past thirty-five years has reduced - the real wages of the American workingman by five per cent!_ - - -And what about the farmer? The farmer does not get much protection on -his products, but has to buy vast quantities of manufactured goods at -“protected” prices. Take the United States Census Reports, and study -the growth of farm mortgages from 1890 to 1920. This is the final test, -you understand; for the farmer does not give the banker a mortgage on -his land because he loves the banker, but solely and simply because the -cost of running his farm is greater than the income derived from the -farm. We find that in 1890 there were mortgages on 27.8% of our farms, -and in 1920 on 37.2%. So here is a slogan for the farmers: - - - _The protective tariff has increased the enslavement of the - farmers to the bankers by thirty-three per cent in thirty years!_ - - -And what has been the effect of the protective tariff upon our -politics? That also is easy to answer: it has made them a football to -be kicked about by rival greedy interests; it has made our government -a fat oyster to be opened and eaten at the banquets of trust magnates. -The lobbyists of the big manufacturing interests have swarmed to -Washington with their pockets full of bribes, and our congressmen and -senators have been hogs at a swill-trough. Our political conventions -have been bargain-counters, where candidates have met in secret -hotel-rooms with the agents of the trusts, and have sold their honor -and the welfare of the people. When the campaigns begin, the protected -interests are frightened into putting up huge sums--“frying out -the fat” is the phrase; and then we have red fire and torch-light -processions and banners and a wild hurrah, and the voters are herded to -the polls like sheep--at the standard price of two dollars per sheep. - -I grant you, Judd, that it might have been a reasonable policy for -the American people to tax themselves to build up their industries at -the beginning, when the industries were young and needed help. But -what are we to say when these carefully nourished “infant industries” -grow up into highwaymen that knock us on the head? It happened that in -1917 our country went to war “to make the world safe for democracy”; -and that was surely a time for patriotic sacrifices on the part of -these beneficiaries of protection! From a report of the Secretary of -the Treasury I take a few figures concerning the profits they made in -that year. One woolen mill, hiding behind the carefully constructed -tariff wall, made 1770% on its capital stock; and in case that Wall -Street method of figuring should puzzle you, Judd, I put it into -your kind of figures; you build a house for $1,000, and sell it for -$18,700. Seventeen woolen mills reported profits of over 100% on -their capital stock--that is, the stockholders got back in one year’s -profit the total amount of their investment. The great American Woolen -Company, with its capital stock of $60,000,000, made a net profit of -$28,560,342. Canners of fruits and vegetables, tariff protected, made -as high as 2032%. Clothing and dry goods stores, tariff protected, -made a profit of 9826%. One steel mill, tariff protected, made as high -as 290,999%. This, you will say, must be a joke; but I am quoting the -figures of Secretary of the Treasury McAdoo: the capital stock of the -concern was $5,000, and the net profits were $14,549,952. The great -steel trust, our billion dollar infant, made in two years a net profit -exceeding its capital stock. - -These of course, are war-time profits; but I assure you, Judd, such -things are being done right along, up to this hour. Take our textile -industry, highly protected, and paying starvation wages to its horde -of wretched slaves. The great Amoskeag Company, manufacturing many -kinds of cotton goods, had in 1907 a capital of $4,000,000, which it -has increased to $44,500,000, all out of profits. Last year it made -a net profit of $2,851,131, which is 71% on the original investment. -Or take the bread trust, which feeds--or feeds upon--the poor in our -slum tenements. In 1922 the General Baking Company earned at the rate -of 117% on each share of its original common stock. This stock rose -from $2 in 1916 to $1,350 in 1925; and I assure you that is not a -misprint--it is exactly as written! In this morning’s paper I read how -the president of this company has just paid $200,000 for a box at the -opera; the story tells how he rose from poverty, and we are expected to -be proud of him! - -Some understanding of the tariff robbery having begun to filter down to -the people, our political masters promised us a reform. There was to -be a “scientific” tariff; a commission was to study costs and prices, -and provide exactly the right amount of protection. Well, last year -this commission turned in a report, most “scientific,” showing how the -sugar trust was exploiting the American people and advising the cutting -of their tariff favors. And what did President Coolidge do with the -report? He did his best to suppress the facts; and his action cost us a -total of $53,000,000 in nine months! - -Or again, take aluminum, used in making our kitchen utensils. This -trust was organized in 1888, with a paid up capital of $20,000. Not -one dollar more of real money has ever been put into it; but it has a -tariff protection of 7 cents a pound, and in 1923 the concern paid a -profit of 1000% on the original investment! The company’s circular now -claims assets of $110,000,000, and last year a report of the Federal -Trade Commission declared the company a monopoly which “threatened -competitors with extermination unless obedient to the company’s will.” -The United States Attorney-General declared, in February, 1925, that -this company had violated provisions of the dissolution decree and had -“shown itself indifferent to the provisions of the decree.” - -And what did President Coolidge do about that? The answer is easy--he -always does the same thing, which is nothing. And why? The Aluminum -Company of America is another name for the Mellon family, and the -head of this family, the third richest man in America, is President -Coolidge’s Secretary of the Treasury, the man who determines the -financial policy of our country. Since he took his high office he -has had just one idea, which the entire propaganda department of Big -Business has been hammering into the heads of our people--that the way -to make prosperity for the poor is to reduce the taxes of the rich, so -that the rich will start plenty of industries and pay big wages to the -poor. You may see exactly how it works, when you learn that this rich -law-breaker who sits in our cabinet pays his aluminum workers a wage of -$3.36 per day! Figure the income of such a worker, on the basis of six -days a week at full time, with no holidays whatever; and then consult -last year’s income tax returns, and see what income is acknowledged by -the Honorable Andrew W. Mellon; and so you get a perfect picture of the -Coolidge idea of “prosperity.” It runs as follows: - - - _For a wage-slave of the aluminum trust and his family, $88 a - month; for a law-defying, whiskey-distilling Pittsburgh banker - in the cabinet, $284,000 a month; and to help out the family, - $178,000 a month for his brother!_ - - - - -LETTER VI - - -MY DEAR JUDD: - -Figure to yourself a man pumping water from the ground, filling a tank -to supply his house. There is an abundance of water, and the pump is -big and powerful, and every time the man pushes the handle many gallons -go rushing towards the tank. The man works all day, yet when he goes -to the house in the evening, he discovers there are only a few drops -of water in his tank. Some men have tapped the pipe, all along the -way, and have diverted the water to their own tanks; so the man has to -supply hundreds of gallons to others before he can get a few drops for -himself. Would you not say that it was worth while for that man to find -out about those tap-lines; how much they take off, how they got to be -there, and by what right they remain? - -Well, Judd, that is the position of the American laborer and the -American farmer. The tap-lines are called rent, interest, dividends, -profits, royalty, taxes, tariffs, speculation, manipulation, inflation, -stock dividends, stock watering--a vast tangle of pipes. Let us pay -one more visit to the jungle of Wall Street, and trace a few of these -biggest tap-lines, which make it necessary for you to break your back -all day pumping water for idlers and parasites, before you can get a -mouthful to drink. - -When they teach you about corporation finance in high school and -college, this is how they picture it: Some men put their savings, -earned by honest labor, into a company, and buy machinery, and -manufacture goods, and sell them at a competitive price, and so of -course the profits belong to them, and it all is fair and square, and -a beautiful system, under which the public gets an abundant supply of -cheap goods. Such a pretty picture these capitalists manufacturers of -school text-books prepare--with money they get from Wall Street, and -which they parcel out, in the form of commissions to school boards and -school superintendents! - -But what are the real facts? Well, the first thing the big corporation -financier does is to seek out some form of special privilege, some -opening through which he knows that he can make quick and certain -profits. Understand, I am not talking about the fake schemes, got up -by fellows whose purpose is to unload worthless stocks. The Department -of Justice estimates that such operations have taken three billion -dollars from the public since the war; but that is merely small change, -compared with the gains of the real insiders, the perfectly legal and -respectable gentlemen who finance our business affairs. - -Perhaps it is a franchise or public privilege you are seeking; in -that case you buy it from a legislature or city council. Or perhaps it -is land; in that case you employ shrewd lawyers and commit wholesale -evasions of public land laws. Or you buy tariff favors; or you get a -patent from an inventor by giving him a few shares of stock; or you get -secret favors from railroads or other corporations, by giving stock to -the officials. There are so many ways and combinations of ways, that I -should need a volume to tell about them. Whatever the “good thing” may -be, you get it, and then you take it to your friend the big banker, and -“let him in” on it. He gives you in return a supply of that life-blood -of industry which he dispenses--not real money, of course, but credit, -based upon the real money which other people have deposited in his -bank. With this you can go out and order all kinds of real wealth--an -office, a factory, raw materials, labor--everything will come to you, -Aladdin’s magic was nothing compared to it. Carpenters will come, Judd, -with their saws and hammers and toil for days and months and years; it -is a “job!” - -Profits are certain--you have seen to that; and on the basis of this -certainty you have fixed your capital. Understand, you never put up a -dollar of real money--the big insiders never do, they would laugh at -the idea. You fix your capital as a function of your expected profits. -That sounds complicated, but is really very simple. Wall Street profits -average about 7%; therefore you fix your capital stock at fourteen -times what your profits are going to be. After you get started, and -your graft works, you may find you are making twice what you expected; -if that happens, you call your capital twice as much. If you make -$70,000 during the year, your capital is $1,000,000. If next year you -make $700,000, you increase your capital to $10,000,000. If you make -$7,000,000, your capital becomes $100,000,000. You, poor old laborer, -will surely think I am joking in such a statement; you cannot conceive -such things taking place outside of a dream. Yet, I pledge you my -honor, this is the regular routine of Wall Street today, and I could -fill pages of this book with a list of companies which have done this -very thing, quite as a matter of course. - -Take the Standard Oil Company of New York. I recall how, before the -war, this concern’s stock was quoted on the market at $700 a share, -or seven times its par value. What did that mean? It meant that the -Rockefellers were old-fashioned, and afraid of the new corporation -tricks; they kept their concern at its old capitalization of -$15,000,000, while its profits were 70% on that amount. But the time -came when the public clamor got so intense that the Rockefellers had to -hide like the rest; and what did they do? Well, in 1913, the Standard -Oil Company of New York declared a “stock dividend” of 400%; that is, -it gave its stockholders four additional shares for each one they -already had; so the company now had a capitalization of $75,000,000, -where formerly it had $15,000,000. Naturally, then, its profits didn’t -look so big; they had to be divided among five times as many shares. -And then again, in 1922, the capital was multiplied by three, becoming -$225,000,000. The company now pays 14% and that seems bad enough; but -what would you say if you figured on the old capitalization and knew it -was paying 210% every year! - -This is the device known as “stock dividends”--paste it in your hat, -Judd! And paste this also: Stock dividends are not profits, according -to a decision of the United States Supreme Court! And when you have -diluted down your capitalization like this, you are no longer making -excess profits, and so you no longer have to pay the excess profits -tax! And so, of course, all the corporations hasten to adjust their -paper securities; in 1922, more than $2,328,000,000 dollars were -distributed in the form of “stock dividends” to happy stockholders. -The Standard Oil Company of Indiana paid 2,900% stock dividends in one -year. The Brown & Sharpe Company, which makes tools for carpenters like -you, Judd, paid stock dividends of 16,000% in 1922! Don’t you see how -they’ve got you hog-tied? - -Consider our mighty steel trust, Judge Gary’s pet, and the darling of -our government. I knew intimately the lawyer who was paid a million -dollars to form it, and he showed me a lot of “inside stuff”; for -example, John W. Gates, Wall Street “plunger,” taking a private car -load of steel magnates, prostitutes and champagne bottles on a three -day orgy, riding about the country and buying steel plants for a joke, -at any price the owners cared to ask! Well, when the joke was over, -Morgan took the whole outfit away from him--he didn’t consider Gates a -sufficiently sound man to carry such a great responsibility! So Morgan -employed my friend, James B. Dill, to make the trust law-proof, and he -put out the common stock of $500,000,000, all pure water and a swindle -on the public. I knew an elderly widow who put all she owned into -it, and it went to six cents on the dollar! But out of its monopoly -of raw materials the trust made good in the end--in two years of the -war its net profits were equal to the full amount of the original -capitalization, something over $888,000,000! - -Or take the beef trust. Armour and Company started with $160,000, and -all the rest has come out of profits. In a single year they distributed -stock dividends of $80,000,000! Or take that Aluminum Company of -America, the family pet of the Mellons, that gets so many kinds of -favors from our government; they once declared a stock dividend of -500%, and yet they can only pay their workers $3.36 per day! Or take -the bread trust, Wall Street’s newest peace baby; the General Baking -Company has increased the value of its investment 67,500% in nine -years! And out of what? Well, if you are an insider, and can go to -the right banks and get a sufficient “line” of credit, you can build -huge electric ovens, which will bake bread so fast and so cheaply as -to wipe the little hand bakers off the map; they will come to you as -wage-slaves, and you will have a monopoly of fresh bread in a great -city, and out of your profits you can pay lawyers and aldermen and -editors and labor-sluggers, and be safe against every form of attack. - -There is no use piling up examples, Judd. Suffice it to say, that -every big business in America is owned and run under that system; and -you pay for it. During the war you got your dollar an hour wages, and -you thought it was next door to heaven; but you see, for every dollar -you made, these Wall Street fellows were making tens of millions; and -when it came to the spending of the money, each one of their tens of -millions was just as powerful, just as legal and as sweet-smelling, as -your pitiful one! - - - - -LETTER VII - - -MY DEAR JUDD: - -When I was a youth, trying to find out about my country, one of the -first things I learned was that its politics were corrupt. I lived in -New York City, and saw that corruption all about me, and the hideous -ruin of human lives; naturally I tried to figure out why these things -had to be. The explanation given me in school was that it was the -ignorant foreigners who crowded into our cities; they didn’t understand -our institutions, they sold their votes, and delivered our political -parties into the hands of bosses. - -It happened that I had a certain relative--I won’t tell his name, -suffice it that he was a financial man, on his way to becoming one of -our great millionaires. He wanted to break into New York, so he opened -an office, and gave a big block of stock to Richard Croker, at that -time boss of Tammany Hall; he made another Tammany chieftain the head -of his New York office--and that was all there was to it, he was “in,” -and his firm took over the city’s business along that line, and all -city officials and employes were given to understand that they must -patronize it. Later on my relative--he was very fond of me, and told -me all his doings--named a certain man for treasurer of New York state -on the Democratic ticket; he smiled as he told me what that was going -to mean, his firm would open offices all over the state and would get -the state’s business. After which my worthy relative proceeded to scold -me for my budding “radicalism,” and to assure me that our big business -leaders were all patriots and men of honor. - -Thus I saw the game from the inside, and little by little I came -to understand it. Yes, it was true that the boss paid the ignorant -foreigners for their votes; but where did the boss get the money for -that purpose? The answer, though painful, was plain: he got it from -my relative; he got it from all such business men, seeking all such -favors and privileges from the state. And here was a further fact which -was plain--my relative did not pay the boss for nothing; he intended -to get, and did get, a hundred times as much out of the bargain as he -paid to the boss and to the political machine of the boss. And that, -I found, was the universal rule of this game of graft; the boss was -merely an agent, set up by big business men to run the political -part of their affairs; and as for the ignorant foreigner, he was a -convenience which the business man made use of, in politics as in the -labor market. - -In the old days of the Tweed ring, the politicians used to steal -our money outright; but that is over now, because every politician -knows, just as every business man knows, that it is so much better -to “make” money than to steal it; you can “make” so much more, and -there is no danger of being sent to jail. So nowadays the rule of our -politics is “honest graft.” The chiefs of Tammany Hall do not loot -the treasury; what they do is to receive blocks of stock in paving -companies and construction companies, which do the work for the city -at enormous profits; they own stock in the banks which handle the -city’s funds; they are in on all the big traction deals; they get -up little pet companies, to do this or that service for the public -service corporations--to furnish them with ink erasers, or time-clocks, -or chewing gum, at several times the market price; and all that is -perfectly safe and regular, and instead of sending them to jail we envy -them. - -I open my morning paper, and here is Arthur Brisbane, sneering at some -young men in New York who are starting a paper called “The New Masses”: -nobody in America wants to belong to the “masses,” and the young men -ought to call their paper, “How to Make a Million the First Year.” Yes, -Judd, that is what everybody wants; but can everybody do it? That is -a point which Mr. Brisbane, multi-millionaire real estate speculator, -fails to cover. But you see how it is: the very essence of “making a -million the first year” is that you take it away from other people, who -lose in the great business gamble, and remain the “masses,” in spite of -desperate determination not to. - -There is a charming fable by an old-time Italian named Pestolozzi, -to the effect that the little fishes in the pond held a meeting to -protest against the cruelty of the big pike; and the pike considered -their protest and declared the matter should be remedied by a decree -to the effect that every year two little fishes should be permitted to -become pike. The fable does not tell us how the little fishes took that -offer; but if they had been little American fishes they would have been -delighted, and would have called it “liberty.” - -Whether or not some particular little fish becomes a pike is a matter -of interest to that little fish, but it does not change the social -system. The “masses” remain, and by their labor produce the wealth, and -the “classes” take it away from them. What I am trying to make clear -to you, friend Judd, is that when you admire the possessor of a bit -of juicy graft, what you are really admiring is the power to rob you; -because it is your wealth the robber is getting, there is no other -wealth for him to get. The old-fashioned criminal graft came out of -the tax-payers; and the new fashioned “honest graft” comes out of the -consumers of gas and electricity and telephones and transportation and -all other services. Every dollar of profits, whether legitimate or -illegitimate, is either paid by the consumer, or else it is written -down as obligations, covered by “securities” of some sort, stocks or -bonds, and forever after its claim is sacred, and the courts will -protect its right to draw tribute from the consumer to the end of all -time. - -Take our railroads, for example; the history of American railroads is -a history of bribery and fraud, continued through generations, and of -stock-watering and speculation monstrous beyond belief. The common idea -is that two-thirds of our railroad securities are water. LaFollette -succeeded in getting a provision for a “physical valuation” of the -railroads, and I saw, tucked away in an obscure corner of a newspaper, -the results for two Southern lines--the water was nine dollars out of -ten! So the “physical valuation” project was apparently dropped--at -least, I can’t find out any more about it. And now what has happened? -The courts have decided that the railroads are entitled to a “fair -return” on their present paper values; it is the law of the land that -they are guaranteed 5½% on their securities, and if they fail to earn -that, the government makes it up to them! - -The same principle applies to the public service companies in all our -cities and towns. No matter by what bribery their franchises may have -been gained, no matter how many oceans of water may have been pumped -into their stocks, these values are sacred, and no legislature may pass -a law reducing prices below a “fair return.” We have public service -commissions which are supposed to put a stop to future stock-waterings -and fraud, and to protect the public against unjust rates; but what -are these commissions doing? The answer is, they are selling us out; -and the proof is published daily, in the stock market quotations for -the securities of these corporations. That is one kind of proof to -which there is no answer, Judd; other people may be fooled about money -matters, but the men who buy and sell in Wall Street are not fooled -for long; they watch earnings, and, automatically every stock takes -the ranking to which its dividends entitle it. If public service -commissions are protecting you and me in our rights, then the stocks of -public service corporations are of no use for purposes of speculation -in Wall Street; on the other hand, if Wall Street is scrambling for -them, and boosting the prices of them, it means one thing and one -only--the big thieves have broken down the defenses we built up against -them. - -And what are the facts? Here are the “high” quotations for some of our -biggest public utility corporations, the first figure for the year -1921, and the second for the year 1925; the gains speak for themselves: -American Gas, 49, 79; American Light and Traction, 112, 249; Middle -West Utilities, 24, 112; Public Service Company of N. Illinois, 82, -126; Standard Gas and Electric, 17, 59; Western Power, 30, 86. - -And incredible as it may seem, Judd, here is our old friend the “stock -dividend!” Yes, even in public utilities, they are getting away with -so much that they have to hide it! American Water Works gave five new -shares for one old share; Cities Service Co. the same! Western Power -declared a 50% stock dividend; Columbia Gas and Electric gave three -new shares “of no par value” for one old share. Here is a new trick, -Judd--no par value any more, so you will never be able to say what that -corporation ought to earn! You will never be able to raise the awkward -question how much real money was put into the concern at the start! -They won’t have to declare any more stock dividends, for the old ones -will serve to infinity; as the cheerful phrase has it, the sky is the -limit! - -Look, Judd; three years ago we had a big “power fight” in Southern -California. It was proposed by public-spirited people that the state -should issue bonds for $500,000,000 and develop its own water power. -Our big newspapers raved at the wicked idea; they told you that would -be “Socialism,” and you believed them, and voted down the proposal. So -now the great power companies have the field without a rival; they are -spending the money--and where are they getting it? Selling stocks and -bonds in Wall Street, of course; and on what basis? What basis could -there be--except the fancy prices they intend to charge you for power, -with the permission of the corrupt public authorities of this state? - -And one thing more, Judd; when they come to present their bills--with -the permission of the public service commission--they are going to -include in the items the amount of $501,605.68 which they paid in the -political campaign to bamboozle you! Yes, Judd, they will do that, and -you will never know it, because it will be classified as “organizing -expenses,” or “advertising,” or something like that; and how carefully -do you go into the reports of the public service corporations which -supply you with power? Six power companies admitted before the -legislative investigating committee that they had paid that sum in the -campaign; the Pacific Gas and Electric Company, the old established -rulers of this community, the purchasers of our local government, put -in the tidy sum of $133,933.80. And so here is a sentence to paste in -your hat, Judd: - - - _Not only do they rob you; they make you want to be robbed, and - they make you pay them for teaching you to want to be robbed!_ - - -And one more, Judd--a “slogan” for the next campaign: - - - _Letting yourself be robbed is Americanism; defending yourself - against robbery is Socialism!_ - - - - -LETTER VIII - - -MY DEAR JUDD: - -You read about the rich growing richer and the poor poorer, and you -wonder why the poor have stood it. Why didn’t they “do something.” - -The answer is, they tried to, but the rich wouldn’t let them. It is of -the nature of wealth to be powerful, and to use its power to protect -and perpetuate itself. Jesus said: “Whosoever hath, to him shall be -given; and whosoever hath not, from him shall be taken even that which -he seemeth to have.” You have there the whole of political and economic -science, and no professor in any capitalist university can say it any -better. The history of our country is a record of incessant struggles -on the part of the poor, continually repressed and brought to naught -by the rich. The most powerful weapon in this conflict has been, of -course, the government; the rich have had it, and the poor have been -trying to take it away from them, and have failed. - -In their battle the rich have had four lines of defense. First, the -elections; they put up the money, and subsidize a political party, and -carry on a campaign of falsehood and abuse, and buy votes and stuff -ballot-boxes, and so defeat the poor at the polls. Second, assuming -they fail in this, comes the legislative line of defense; they sow -discord in the ranks of their opponents, they buy up some of their -representatives, they delay action and confuse the public and plant -“jokers” in the bills which are passed. And then comes the third line, -the courts; the rich have named as judges their own retainers and -corporation attorneys, their fellow club-members and table-companions, -thoroughly trained in reference for property; and these judges discover -the “jokers” in the laws, and declare them unconstitutional, null and -void. Fourth, assuming these three lines fail, the rich simply defy the -laws; resting upon the certainty that their government will not punish -them; and it does not. - -Do these seem to you extreme statements? Each one can be proved a -thousand times over by the well-established facts of our history. In a -previous letter I made the assertion that out of fifteen presidential -elections since the civil war, fourteen were carried by the party -which had the biggest campaign fund. Here are the figures, direct from -headquarters--the “Wall Street Journal.” The winning party is listed -first: - -_1868_, Rep. $150,000, Dem. $75,000; _1872_, R. $250,000, D. $50,000; -_1876_, R. $950,000, D. $900,000; _1880_, R. $1,100,000, D. $355,000; -_1884_, D. $1,400,000, R. $1,300,000; _1888_, R. $1,350,000, D. -$855,000; _1892_, D. $2,350,000, R. $1,850,000; _1896_, R. $16,500,000, -D. $675,000; _1900_, R. $9,500,000, D. $425,000; _1904_, R. $3,500,000, -D. $1,250,000; _1908_, R. $1,700,000, D. $750,000; _1912_, D. $850,000, -R. $750,000, Prog. $325,000; _1916_, D. $1,400,229, R. $2,012,535; -_1920_, R. $3,986,383, D. $2,891,252; _1924_, R. $3,359,478, D. -$845,520, Prog. $225,936. Total of winning party, $49,683,369; of -losing party, $14,797,001. - -As to ballot-box stuffing, Judd I am not making any guesses, but -telling you what I have seen with my own eyes. In my ardent youth I -gave my services as election-watcher for the “reform” ticket in New -York City, and came very close to getting my head stove in, for trying -to prevent the counting of illegal ballots by Tammany heelers; the -thing that saved me was the fact that as the returns came in, the -heelers perceived that they had won anyhow, and didn’t need the extra -ballots! Lincoln Steffens, in his book, “The Shame of the Cities,” -tells how in Philadelphia the machine used to vote “dead dogs and -negro babies”; the title of that chapter was “Philadelphia Corrupt -and Contented,” and today you can take out the name Philadelphia, and -insert the name of any big American city you please. - -The poor have never carried a national election in this country since -the civil war, and the reason is simple, they have been too poor. -It costs a million dollars to put a single piece of literature into -the hands of all the voters in our country; and when you figure the -cost of the speakers and the halls and the advertising and the bands -and the red fire and the rockets and the flags and the bunting and -the bunk, you have a total of several times as many millions as ever -got acknowledged in the reports of campaign expenditures turned in -according to law. The poor cannot produce these millions; and even -if they had the money, they could not get the publicity, because the -capitalist papers will not print the arguments of the poor, even as -advertisements--I know, because I have tried it; the radio will not -accept speakers for the poor--I know, because I have tried that also. - -As for the second line of defense, the breaking up of popular movements -and the bedeviling of popular legislation, the proof is the story of -every “reform” movement that has taken office anywhere in the United -States. Never once since the Civil War have the people succeeded in -making effective a major piece of legislation in their own interest; -the proof of which extreme statement lies in the statistics of real -wages in the United States--the fact that in the richest nation in the -world, for the period of its greatest productivity and expansion, the -poor have been growing poorer. We have had campaigns of “muckraking,” -yes; I remember how, many years ago, “Everybody’s Magazine” printed -a boastful editorial, listing all the crusades they had carried on -for the benefit of the people; and I wrote, challenging them to point -out one single practical result which had come of all their efforts, -to show where they had been able to divert a single dollar from the -pockets of the rich into the pockets of the poor; and “Everybody’s” did -not take up that challenge, nor even print it. To complete the story, -note that “Everybody’s” has long since forgotten that it ever had any -interest in social justice, and so has every other magazine of big -circulation in the United States. - -The third line of defense, the courts: that is the most shameful story -of all, and for it I reserve a separate letter. For the moment let me -make just one statement: there is not in the Constitution of the United -States one line which entitles the courts to throw out or to annul an -act of Congress. Such action is pure and absolute usurpation, a power -which the courts have seized; and they have got away with it for one -reason and one only--because it has served the interests of the rich. -On that basis they have vetoed law after law, culminating in the -recent decision which sentenced a million little children to slave out -their lives in cotton mills and coal mines. - -And then, the last line of defense: I say that when the rich do not -like the law, they simply defy it. The proof of that statement is -written on the front pages of our newspapers day by day. The rich are -making no pretense of obeying the prohibition law; I have had drinks -offered to me, in defiance of law, in the offices of leading senators -and government officials. The big bootleggers today are eminent -citizens, on terms of equality with bankers and judges and corporation -attorneys; and yet we speculate about the spread of the crime wave! - -But the crimes that interest me, Judd, are not house-breaking and -safe-cracking, nor even bootlegging; for these take only a few lives, -and destroy only a few characters. What I am after are those crimes -which degrade whole populations, beating down their standards of -life, and depriving them of hope and self-respect; those crimes which -sap the foundations of free institutions. And those are the crimes -of big business--in other words, the crimes committed by bankers and -judges and corporation attorneys. I remind you of the report of a -United States Comptroller of the Currency, published in 1916--to the -effect that out of 7,613 national banks, 2,743, or 36% were “guilty -of usury”--and this “according to sworn reports, made by the banks -themselves!” But do you see any procession of national bankers going to -the federal penitentiaries for robbing the poor? You do not! - -Or take the Sherman Anti-trust law; the most flagrant case in our -history of the nullification of a major statute by the will of the -rich. This was a law forbidding combination in restraint of trade; -it stood in the way of the profits of big business, and big business -simply refused to give those profits up. The trust magnates fought -the government--for thirty-one years that fight has been going on, in -the courts, at the polls, in the kept press, and secretly by intrigue -and bribery. Those public officials who could not be bought have been -slandered and driven out of public life--Theodore Roosevelt, for -example; and the result is that today the law is an absolute dead -letter. The great combinations are being formed, all the way down the -line--the power trust, the bread trust, the radio trust, the movie -trust; they are establishing monopolies and holding up prices and -watering stocks a thousand or ten thousand per cent; and what is the -state of public opinion on the subject? One of the most conspicuous of -the law-breakers, Secretary Mellon of the Aluminum trust, sits in our -cabinet at Washington, and dictates a law cutting his own income taxes -in half, and another law keeping his income taxes secret! - -Or take what happened in the case of the Standard Oil trust. In 1911 -the Supreme Court ordered it to “dissolve,” the purpose being to -restore competition. The concern made a paper “dissolution,” into -thirty-two separate companies, but for some reason these little -companies remained in complete and brotherly harmony: so much so -that in ten years they increased the market value of their stocks -_thirty-five times_, and the dividends paid, including of course the -stock dividends, amounted to _eighteen times the total capital when the -dissolution took place_! In other words, what Standard Oil did was to -make a joke of the law, obeying it on paper and defying it in reality. -Yet, are the securities of this criminal organization any the less -valid, any the less sacred under the law? Are its dollars any the less -real? To ask such a question is to be a “Bolshevik.” - -Throughout our history, ever since the Civil War, we have had scandals, -and government officials have been caught selling out the people to big -business thieves. The “credit mobilier,” the Tweed ring, the railroad -land steals, the Ballinger land steals, the airplane steals, the -war-contract frauds, the Sinclair and Doheny oil steals--one could name -scores of such. Here and there efforts were made to punish the thieves; -but in no case was the stolen money recovered. All those billions of -fraudulent dollars exist today in Wall Street, in the form of perfectly -sound and respectable securities, standing on a par with all other -vested property rights. You, and the rest of our toiling masses, -continue to pay dividends and interest upon them; as the system stands, -and so long as it stands, you must pay tribute to all that mass of -stolen wealth, before ever you can have one penny in your own pocket, -one morsel of food in your own mouth! - - - - -LETTER IX - - -MY DEAR JUDD: - -We know by now what the word “privilege” means. Hundreds of thousands -of people do not have to do useful labor in our society; they draw off -the profits of other people’s labor, and the good things of life flow -to them in a stream so great as sometimes to overwhelm them. And this -flow is guaranteed them for life, and to their descendants to the end -of time. All our political teachings, all our economic calculations, -are based upon the idea that this state of affairs is permanent; the -right of property to draw interest, dividends and profits is inviolable. - -It is easy to understand that the favored ones of privilege believe in -the sacredness of such rights. Once upon a time the priests protected -them, and then the kings; now it is the judges, and here is our modern -form of superstition, the worship of the Dead Hand. Our newspapers know -nobody more wicked than the man who assails the courts; he is a demagog -and an incendiary, and now and then some court reaches out its mighty -hand and claps him into jail. - -Nevertheless, Judd, I take the risk, and point out to you that judges -are men like other rich men. I have never seen statistics as to how -many are ex-corporation-lawyers, but the percentage must be close to -one hundred; for what else is there for a would-be judge to be, except -a corporation lawyer? He must be a “big” lawyer, before he is fit for -the bench; and how else can you be “big”--that is, earn a great deal -of money--except by serving those who have the money? And how are you -going to get your nomination, except by going to see the political -boss who has the giving of nominations? And will the boss give you -this honor, without asking what use you are going to make of it after -you get it? When there are so many millions upon millions of dollars -at stake, depending upon your judicial decisions? Really, Judd, if -you expect things like that to happen, you are as big a dunce as your -industrial masters think you! - -It happens that I once knew intimately a very “big” judge; he was a -member of the Court of Appeals of the State of New Jersey, which is -to say he was one of the five highest judges in a state which was -extremely important, because many of our biggest corporations were -formed under its safe and easy laws. At the same time the “big” judge -was a “big” corporation lawyer on the other side of the Hudson River, -in New York state; in fact, he was the highest paid corporation lawyer -in the city, which was surely going some; he was the author of “Dill -on Corporations,” the standard text-book in every law-school in the -country. I have sat in James B. Dill’s library many an evening, and -watched him smoke big black cigars, and listened to him pour out his -soul. I will tell you the first story of his career, and then I will -tell you the last. - -A young law-graduate, he got a job in the law department of a big -railroad, I think he said the New York Central; he was to defend -accident suits, and the lawyer who took him in charge pulled open a -drawer in his desk and took out a list of the judges of the state. “You -will notice that some of these names are checked,” said the man. “When -we have cases, get them before one of those judges. Those are _our_ -judges.” Said Dill to me: “That was a young man’s first introduction to -the law.” I asked: “Is it as bad as that now?” He answered, “There are -twenty-two judges of the supreme court in New York state, and nineteen -of them are crooked. I can say to each one, ‘I know whose man you are,’ -and not one will dare contradict me.” - -And then the last story. Dill had just been appointed to his high post -in New Jersey, and the day after the news was published, one of his -old college friends came to see him, and brought him an offer from E. -H. Harriman, railroad magnate, to retain his services in New York for -fifty thousand dollars a year, “and you needn’t do any work.” Dill said -to his friend, “What case has Harriman got before the Jersey courts?” -The friend replied that it was just general principles, the great -magnate liked to have friends on the bench. Dill answered, “You tell -Harriman--being a fisherman you can explain what I mean--that a fat -trout does not rise to a fly.” - -Men do not change their skins when they put on black silk robes and -mount the judicial bench. A hard-boiled, hard-fisted attorney for -labor-smashing employers’ associations, such as Butler of Minneapolis, -whose whole political career was an expression of the hateful arrogance -of class-greed--when such a man is raised to the United States Supreme -Court, he does not alter his nature a particle, but goes right on at -his old fighting job and in his old fighting spirit; only now he has -the terrible power to say that acts of Congress are null and void. The -Constitution gives no such power to nullify the will of the people; and -you don’t have to be a “big” lawyer to verify that--you can read the -Constitution for yourself, and see. And then watch the use which these -ex-corporation-lawyers make of this stolen power! To protect the sacred -right of great manufacturing corporations to employ child slaves! And -likewise the right of employers to underpay their women slaves! And -likewise the right of stock dividends to escape taxation! And likewise -the right of judges’ salaries to escape taxation! - -But on the other hand, when the rich pass laws in their own interest, -and these laws are in contradiction to the Constitution, what happens -then? The answer is that the courts uphold these laws--and it matters -not how explicit the provisions of the Constitution may be. The -supposed-to-be sacred Constitution of the United States provides that -“the right of the people to keep and bear arms shall not be infringed”; -and yet the legislature of New York state passed a law forbidding a -man to keep a revolver in his home, and a New York lawyer fought that -law to the highest courts, and was beaten. Here in California the -Constitution provides that “every citizen may freely speak, write, and -publish his sentiments on all subjects, being responsible for the abuse -of that right; and no law shall be passed to restrain or abridge the -liberty of speech or of the press.” How could words be more explicit? -And yet we have a “criminal syndicalism” law, under which seventy -men are now in jail for their political opinions, no other offense -having been even charged against them. I personally, as you know, was -arrested and held “incommunicado” under that law; my offense being -that I started to read the Constitution of the United States, while -standing upon private property with the written permission of the -owner, and after notice to the authorities that I intended to exercise -my constitutional right. - -Let me tell you a curious detail, in connection with that incident. The -day after I came out of jail I happened to meet on the street one of -the highest judges in this state--I know him because I play in tennis -tournaments with his son. The old gentleman patted me on the back and -said: “Go to it, my boy, you are absolutely right!” But when I asked -him to say that publicly, he didn’t think it would be proper; and when -I asked him to join the Civil Liberties Union, and help to protect all -citizens in such rights, he didn’t think that would be proper, either. -You see how even the most liberal of judges is bound by red-tape and -precedent, and leaves it to others to defend the law. - -I have seen in Los Angeles a magazine office raided without warrant -of law, and the editor, a war veteran, manhandled and thrown into -jail--all because the authorities objected to what this editor was -publishing. And not only did the courts permit this, they tried the -man, and would have convicted him if he had not run away. All over the -country such things were done, with the full sanction of the courts. -In New York City federal agents arrested a man and held him in a room -in an office building for three weeks “incommunicado,” and tortured -him until he flung himself out of the window and was smashed on the -pavement below. Two other men began holding meetings of protest against -this outrage, and they were “framed” on a charge of murder, and the -labor movement has so far raised and spent about a quarter of a million -dollars to keep them from being hanged. That is the Sacco-Vanzetti -case, and you may learn about many as bad or worse from the American -Civil Liberties Union, 100 Fifth Avenue, New York. - -And how it is with ordinary civil litigation, in which the poor seek -justice against the rich? Here I do not have to ask you to take my -word, for the scandal is so notorious that even capitalist authorities -have been forced to admit it. You see, there are eminent legal -gentlemen, occupied in crushing the poor in major ways--the tariff, the -trusts, the banking graft, “tight money,” child labor, and so on--but -when it comes to a poor widow seeking justice against an employer -who withholds her wages, these gentlemen think that the law ought to -preserve an aspect of impartiality; it ought not be too obvious that -there is one law for the rich and another for the poor. For example, -a majestic plutocrat like ex-president Taft, now chief justice of our -Supreme Court; when such a weighty personage denounces capitalist -justice, you surely will believe what he says! Here he is, speaking -before the Virginia Bar Association: “We must make it so that the poor -man will have as nearly as possible an equal opportunity in litigating -as the rich man, and, under present conditions, ashamed as we may be of -it, this is not the fact.” - -Notice the delicacy of the phrasing, Judd: “as nearly as _possible_!” -There is nothing “utopian” about our chief justice! Just how possible -it is for impotence to be equal to power, is something which has -not yet been shown to us; but evidently there is some limit to the -possibility, for Dean Pound of the Harvard Law School speaks of the -attitude of the law to the poor as “this neglect which disgraces -American justice.” - -For my part, you understand, I do not expect the poor ever to get -equal justice against the rich; it seems to me absurd to imagine such -a thing happening. The existence of riches in the world, at the same -time as poverty, is in itself the sum of all injustices; and so, if we -really care about justice, we must either make the rich as poor as the -poor, or else make the poor as rich as the rich, or else strike a happy -medium between the two. This last is my solution and I hope to show you -how it can be done. - - - - -LETTER X - - -MY DEAR JUDD: - -We have seen the poor struggling to protect themselves against the rich -in the field of politics, and meeting with no great success. There is -another place where they struggle--in the labor market. Let us see what -happens to them there. - -Seeing the employers combining into larger and larger organizations, it -naturally occurred to the workers to combine, and sell their labor as -a unit. At first the employers made this action a crime, and a great -many working men went to jail, before the right of labor combination -was granted. Even now, it is only grudgingly granted; the employers -in their hearts are still certain that anything which reduces their -profits is a crime, and through their courts they hedge the labor -unions about with all sorts of restrictions. The doctrine of the -present hour is briefly this: that labor organization is all right, -provided it does not accomplish anything. - -You, Judd, are a non-union man. You grew up in small places, and live -now in a suburban neighborhood which is like a small place, in that -everybody knows everybody else, and the people you work for are not -much better off than you are. You can leave your job any time you don’t -like it, and that gives you a sense of freedom. But suppose, Judd, you -had been raised in the slums of a city, and had to do your carpentering -on great buildings, under a firm of contractors; and suppose you found -that your freedom to leave your job involved the necessity of hunting -another job, under some contractor who belonged to the same employers’ -association, and paid the same scale, and followed the same working -rules as your previous boss? You must see that this would make quite a -difference in your sense of “freedom.” - -Or suppose you had grown up in some industrial center, and worked for -the coal trust, or the steel trust, or the beef trust. You have read -“The Jungle,” and know how the wage-slaves of Packingtown lived twenty -years ago. Well, Judd, they are living exactly the same way today. I -said concerning “The Jungle” that “I aimed at the public’s heart, and -by accident I hit it in the stomach”; the public insisted that some -pretense be made that their meat was better, but no one even pretended -that the workers were helped. And the same thing is true of the slaves -of “King Coal”; it did not trouble the American people to learn that -the men who dug their coal were living in privately-owned empires, -where the elemental rights of American citizens, and even of human -beings, had no existence. - -In such places the only hope of the workers is to organize, and present -a solid front to their masters, and extort better terms by the threat -of withholding their labor. For a hundred years the workers have -been forging that weapon, and trying it out. There are about four -million of them organized, out of the forty-two million wage-earners -of the country, and that seems a pitiful few; but you know about -the leaven in the dough, Judd. Perhaps it never occurred to you to -realize the influence which the organized carpenters--some 315,000 of -them--exercise upon the lives of unorganized carpenters like yourself. -They set a standard, that would otherwise be unknown in the carpenter -world; they make it certain that no boss can get a really big job done -at lower than the union scale--first, because it is hard to get a lot -of skilled men together except through the unions, and second, because -of the constant threat that a union organizer will get in among them. -It is strange to see a man like yourself, rather suspicious of unions, -because of all the poison you absorb from the capitalist press--and yet -at the same time profiting every working hour of your life from the -sacrifices made by union men! Also it is strange to see employers who -fight the unions, and denounce them, and boast of the contentment of -their non-union workers--and make that contentment by paying the union -scale, which otherwise neither the employer nor the men would ever have -dreamed of! Once let the “open shop” bosses have their way, Judd, and -then see how a “free” carpenter’s wages will drop! - -We have seen that there is in America a law for the rich, and quite a -different law for the poor; and that state of affairs is well known to -organized labor, you may be sure. The unions never get far in their -effort to raise their members’ standards, without encountering the iron -fist of the government. I have shown you how the rich defy the laws -they do not like; but let no workingman, union or non-union, ever make -the mistake of trying that! There are jails and prisons, and also there -is the hideous “third degree,” with torture-chambers where workingmen -are taught their “place”--of subjection and impotence. - -Let me give you an illustration, Judd, right here at home, in this -paradise of the “open shop.” We have a group of employers’ federations, -with an iron-clad policy of class warfare. An employer who “panders to -the union element” cannot get any business, he cannot get credit with -the banks--they smash him as you would a louse. And, of course, they -keep a card list of men who belong to unions, they follow a man up--the -grim device known as the “blacklist.” And all this quite openly, it is -the industrial policy of Los Angeles, and its boast. And do you hear -anything about its being a violation of law? Do you see the publisher -of the Los Angeles “Times” being sent to jail for advising employers -not to hire members of the carpenters’ union? No, Judd, you do not see -that! - -So, naturally, the idea occurred to the workers that two could play -at this game. If the employers could refuse to do business with -them, obviously they could refuse to do business with the employers. -So they tried it; and then what happened? Why then there appeared -suddenly a new crime in the calendar of the law; a monstrous form of -wickedness known as the “boycott!” It was a “conspiracy,” a plot to -ruin a business man and deprive him of his property; and the judges -were called upon to forbid it, and they did so. For violation of -such a judge-made “law,” the Danbury hatters--union workingmen of -Connecticut--were fined $240,000; and the United States Supreme Court -upheld that decision. Afterwards union labor succeeded in getting a -law in their favor through Congress, and now the courts are engaged -in paring that down to nothing. Workingmen may boycott their own -employers, but not other employers! But do you ever see employers -limited to blacklisting their own workingmen? - -I have shown you the judges taking by force the right to annul laws of -Congress. Confronting the emergencies of labor strife, these judges -proceeded to invent another weapon, known as the “injunction”; which -means in brief that any ex-corporation-lawyer on the bench will issue -an order forbidding workingmen to do anything that the corporations do -not want them to do; and the workingmen have to obey that order, or -else the judge will send them to jail for any length of time that the -corporation may desire; and there is no jury trial, and no defense, and -no redress--the workingmen just go to jail! - -What these injunction judges have forbidden labor to do makes a catalog -over which you might have a good laugh, if you could forget all the -heartbreak and agony of the poor that is summed up in the preposterous -sentences. All the hopes that were blasted, the pitiful hopes of a -little better food for a sick wife, of a chance to keep the children -in school! Such things are the meaning of a strike to workingmen; and -suddenly a grim personage in a black silk robe lifts a club and smashes -these hopes over the head! As I write, some clothing workers of New -York are on strike, and a judge has issued an injunction, forbidding -them, not merely to picket the shops of their boss, but to go within -ten blocks of the place! In the West Virginia coal fields, they are now -forbidding mass-meetings, forbidding the use of money in unionizing the -mines, and even the use of tent-colonies for the families of miners -who have been ejected from company houses! In Oklahoma they recently -forbade miners to pray! In Minneapolis I talked with a labor man who -had spent six months in jail for violating an injunction, and he gave -me the thing to read, a list of prohibitions that would fill a couple -of pages of this book; as the man said, “I’d have broken the law if I’d -waked up in the night and disliked my boss.” - -And every year they are encroaching a little farther on the rights -of the workers, and of all citizens. They are trying to set up the -principle that it is a conspiracy against the public welfare to -interfere with “essential industries.” Thirty years ago, when Grover -Cleveland sent in Federal troops over the head of Governor Altgeld of -Illinois, and smashed the strike of the railwaymen, and threw Gene Debs -into jail, it was considered quite a startling action. But now we have -got used to things like that, and in 1922 they imprisoned eight railway -leaders in Los Angeles, calling their strike “a conspiracy to interfere -with the mail.” Now President Coolidge, in his message to Congress, -is calling for a law to forbid all such strikes, and take off the -shoulders of the judges the embarrassment of having to create the law! - -And so, once more, Judd, do you see why the rich are growing richer -and the poor poorer? Do you see why the index figures of a university -professor revealed that the wage-earners of America, taken as a -whole, were five per cent poorer today than in 1890? I told you that -riches and poverty are not caused by the Will of God, nor yet by any -implacable Economic Law, but purely and simply by the actions of -men, driven by the basest of all human impulses, which is greed. And -here you see, Judd, exactly what these actions are. Every time an -ex-corporation-lawyer on the bench issues an injunction which smashes -a strike, he is reducing the average real wages of the workers of -America; he is taking away a little more from the poor, and handing -it to the rich--and that is the job for which the rich set him up in -office, and bought him his black silk robe! - - - - -LETTER XI - - -MY DEAR JUDD: - -I don’t know whether you ever played poker, but I did a few times in -my naughty youth. I recall a game known as “freeze-out”; you played -till you lost all your money, and the game ended entirely when one -man got all the chips. That is our social system--a colossal game of -“freeze-out,” with winter and disease and death to clear the players -from the board. Those who lose at the game are the workers of the world. - -You, Judd, must realize that you are in an unusual position for a -worker grown old; you own two lots and three houses, and can live -partly on the rent. But how many others are there like that? Consider -the statement given out this month by the Industrial Accident -Commission of California: “One million men and women of America -suffered disabling accidents in industries this year.” Assuming that a -workingman puts in forty years, as you have done, what are his chances -of getting off without a disabling accident? There being forty-two -million people gainfully employed, the chances would appear to be one -in twenty; but of course only part of the disabling is permanent--the -victims get well, and go back to be disabled again. The number of -accidents increased 30 per cent in 1924, so you see your chances grow -less and less. - -The worst you got, Judd, was a rupture. But suppose you had been one -of the 21,232 to be killed; or suppose you were of the 105,629 who -suffered “permanent partial disability” last year; or suppose that you -had eight or ten children, instead of one or two; or that your wife, -instead of dying in an accident as she did, had been crippled, and left -upon your hands for life. Do you think you or your heirs would still -have the two lots, and the three houses, and the fine American sense of -security? - -Look, old friend, here are some figures worked out from insurance -tables by the National City Bank of New York, the richest bank in the -country. They are trying to persuade people to take out insurance, so -that the money will come back to Wall Street for them to use in stock -gambling. Taking 100 people 25 years old, they ask what will be the -position of these same people at the age of 65; and they say 1 will -be independent, 4 will be well to do, 5 will be working for a meagre -living, 36 will be dead, “many of them for want of attention that money -would have secured,” and 54 will be dependent upon others. “Out of the -entire 100, only 5 will be in satisfactory circumstances.” There you -have a picture of what the richest nation in the world has been able to -achieve in the way of sound human happiness! - -Our Mother Nature is a wasteful parent, who creates many millions of -salmon eggs in order to produce one salmon. It is the same way with -human life also in its dark beginnings; history is a tale of mighty -empires arising only to be destroyed again, and of populations wiped -out by plague and famine and slaughter. But now the light of reason is -beginning to dawn; a few of us have the idea that human energies might -be rationally guided, and that men might cease to spend their time -digging holes in the sand and filling them up again. - -Consider war. Women bear children with much pain, and raise them with -loving care, and then send them out, at the very prime of their lives, -to be blown to pieces by shot and shell. Other men in factories, who -might be making the means of human happiness--automobiles and radio -sets and books and music--these men are making explosives to wipe out -whole cities, and gases to poison the inhabitants. In the late war -we destroyed 30,000,000 human beings and $300,000,000,000 worth of -treasure, the product of a whole generation of useful toil. - -They promised us that this war was to be the last, but what are the -prospects? In 1912 our government spent for defense nearly a quarter -of a billion dollars, and our 1926 budget for the same purpose is more -than three times that amount. In 1920 the Bureau of Standards analyzed -our budget and found that expenses for wars, past and future, composed -93 per cent thereof. Think of it, Judd, a great government spending one -dollar to save life and property, and thirteen dollars to destroy it! -Of course, the military men will say that the thirteen dollars are to -prevent other nations from destroying us, but the obvious fact is that -when we spend this money on armaments we cause other nations to do the -same, so we might as well do our own destruction and have it over with. - -Or consider child labor. We take a million children out of school and -put them into factories and mines, thus stunting them in body and -spirit, and when they grow up into cripples, defectives, criminals -and grafters, we pay ten or a hundred times what we got out of their -childhood labor! Or consider crime, which is caused by the presence of -extreme poverty alongside extreme wealth. Including criminals and those -who catch them, this factor of waste keeps more than 700,000 persons -out of productive work. Or take prostitution, caused by poverty and low -wages of women in industry. There are over a quarter of a million women -in our country who live by spreading vice and disease, and the American -Social Hygiene Association estimates that this costs us $628,000,000 -every year. - -Or consider adulteration, the putting of worthless goods and poisonous -foods upon the market, all for profits, of course. Or the wastes of -advertising--the seekers of profits spending a billion and a quarter -dollars a year, and keeping more than 600,000 people busy all the time, -in order to persuade us to stop buying the worthy products of Jones and -to buy the unworthy products of Smith. This is civil war within our -industry, and one of its weapons is fashion, the making of imbecile -changes in our goods every season, in order that we may be ashamed to -wear our perfectly good clothes after the first year. - -Or take the wastes of mismanagement of industry. The so-called “Hoover -Committee” of the American Engineering Societies made an elaborate -study of this field, and it is interesting to notice that this -employers’ body attributes 50 per cent of the blame to management and -only 25 per cent to labor. They estimate the percentage of waste in a -few great industries: Metal trades, 28 per cent; boots and shoes, 40 -per cent; textiles, 49 per cent; building, 53 per cent; printing, 57 -per cent; men’s clothing, 63 per cent. Notice that figure for building, -Judd, and be sure you get what it means: out of 40 years you put in at -carpentering, 21 years went to no purpose, because those who directed -your labor were making money instead of making houses! - -One great form of industrial waste is men and women willing to work, -and able to work but unable to find work to do. I regard this as the -basic evil, the cause of most of the others, and I believe that it is -an essential part of our present profit system, without which that -system would break down. First, let us see exactly how widespread the -evil is. - -I point out, Judd, that nowhere in these letters have I given you -any Socialist figures about anything; in each case I go to the most -“respectable” authorities, those who are least favorable to my point -of view. In this case of unemployment I consult a volume prepared and -published with money derived from the estate of one of the richest -landlords and money-lenders that ever died in the city of New York. I -refer to the Russell Sage Foundation, and here is the sentence in which -they sum up their final figures on unemployment: “To conclude that, -averaging good and bad years, from 10 to 12 per cent of all workers are -idle all of the time, is probably an understatement of the situation.” -The book calculates the number gainfully employed at 42,000,000, and 12 -per cent of that is over 5,000,000. - -When you talk about five million people out of work it doesn’t mean -much, because we haven’t the mental power to grasp such a thing. Let -us say _one_ person out of work, and see what it means. It so happens -that before I sat down to my typewriter this morning the postman -brought a letter from such a person; twelve miles away from us, in the -great rich city of Los Angeles, a war hero is begging a job, and his -wife and children are starving. This hero encloses a visiting card, -reading, “D. S. C.”--that means “Distinguished Service Cross”--and down -in the corner is “Chevalier Legion d’ Honneur; Croix de Guerre,” the -decorations prized above all things in France. And on the back of the -card he has written: “Ex-soldier, bonus-pest, charity-dependent.” He -encloses newspaper clippings: “Top-sergeant in the suicide squad of -machine gunners,” left for dead on the field, taken to base hospital, -returned to front, made lieutenant, more hospitals and medals--regular -hero stuff, you see, and here he has been hunting any sort of job for -months, and tells me how it goes: - -“Louise the baby is low from malnutrition. Virginia, the oldest, the -invalid around whom my book is written, coughs all night incessantly. -We are making our last stand. As completely isolated as though in the -heart of the Sahara. Today I received my first offer of a good job in -weeks, but it necessitates my providing at least $22 of special tools. -It’s on tractor transmission; I built them shortly after the armistice, -but when I entered Stanford University I was through with mechanics, -and gave away my kit. I took my D. S. C. and other war junk down to -my favorite pawnbroker Saturday but they wouldn’t bring carfare to -Pasadena now.” - -So here, you see, is one of the victims of our great game of -“freeze-out”; and what was his weakness that caused him to lose in the -game? The answer is plain enough--he believed the propaganda of our war -profiteers and went over to France and risked his life and ruined his -health and fortune--while 23,000 able business gentlemen stayed at home -and made themselves into millionaires! “What price Glory,” Judd! - - - - -LETTER XII - - -MY DEAR JUDD: - -I have said that unemployment is a disease of the profit system, -incurable under that system. I am now going to show why, and I consider -these facts the most important in the whole world for a workingman to -understand. They are perfectly simple--any child can grasp them; yet -they are never mentioned in any newspaper, and never taught in any -school. The reason is equally simple--any editor who publishes them, or -any teacher who teaches them, immediately loses his job. - -I put them into a series of short sentences for you to paste all around -the rim of your hat and study while you are sawing timbers and mixing -cement. First, then: - - - _The boss is not in business for his health. Ask him!_ - - -And then, equally easy to verify: - - - _The boss will make no more goods than he can sell at a profit._ - - -And so, plainly enough: - - - _Profits for the boss, wages for the workingman; no profits for - the boss, starvation and death for the workingman._ - - -So far, every business man will agree; in fact, this is the doctrine -they hammered into your head during the Coolidge campaign, and it got -them seven million plurality. All right, then; and now let us suppose, -just for the sake of arguing, that the Coolidge administration believed -in allowing the rich to charge as high prices as they pleased for -goods, and to break strikes and beat down the wages of the poor; what -would happen then? Why, obviously the poor wouldn’t have the money to -buy so much goods or to furnish so much profits for the bosses; it -would be only the rich who had the money, and goods would be more and -more for the rich, and less and less for the poor. Take notice, Judd, -the Secretary of the Treasury estimated that in 1919 the amount spent -for luxuries in our country was $22,700,000,000--and with millions of -families lacking bread! - -But with the flood of goods pouring out from the machines, the rich -find it harder and harder to consume the product; they take to -reinvesting their money, that is, using it to make more machines, to -turn out more goods, to be sold for more profits. But already there -are more goods than can be sold; there are no longer enough profits to -supply the demands of the great mass of heaped-up capital. So comes -a glut of goods, and factories have to shut down, and we have “hard -times.” Just what are “hard times,” Judd? Paste this in your hat now: - - - _Hard times are tenant farmers starving because they have raised - too much food!_ - - -And again: - - - _Hard times are weavers in rags, because they have made too much - clothing!_ - - -And again: - - - _Hard times are carpenters homeless, because they have built too - many houses!_ - - -And finally: - - - _Hard times are workingmen who have finished making the world for - their masters, and are ordered to move on to some other planet!_ - - -You will say, Judd, that such absurd things could never happen. To that -I answer, very simply: - - - _They are happening right now to several million Americans who are - hunting jobs and not finding them!_ - - -This insanity of “hard times” comes periodically in our affairs, in -great waves known as “business cycles”; they are due at intervals of -from seven to ten years, and are just as inevitable as the tides of -the sea. Learned economists study the history of these tides of ruin -and make charts and diagrams of them; but if you state the cause, you -become an outcast from the business world; and so naturally nobody does -state it--except a few outcasts like myself. - -The professors of economics admit that this trouble is caused by -“over-production,” and we must get straight exactly what that means. It -doesn’t mean that we have produced more than we need; on the contrary, -we have millions living below the wage level of common decency--our -average wage is $1,200 a year, and the cost of keeping a family on the -bare necessities is $2,000. But it doesn’t matter how much people need; -the thing that counts is what they can buy. I give you another slogan, -and next time you meet a professor of economics, ask him about it: - - - _If you’ve got the price, you’re a consumer; if you haven’t got - the price, you’re a bum._ - - -Well, since we American consumers can’t buy our own product, the -owners of the product--that is, the rich--have to look elsewhere for -customers, and so comes the hunt for “foreign markets.” Understand -me, I do not object to our going abroad for the things we can’t raise -at home; to exchange automobiles and moving pictures for bananas and -coffee--that is normal business. What I am talking about is a glut of -goods that we can’t sell at home, but must sell abroad, under penalty -of seeing our workers turned off to starve. We don’t take goods in -exchange--oh no, that would break down our home industries, and we -protect them by a high tariff wall. What we take are paper promises to -pay us at some future date; we go on continually selling more than we -buy, and filling our bank vaults with these paper promises, and that is -called a “favorable balance of trade.” - -But all the highly developed nations, Britain and France and Germany -and Italy and Japan, are in exactly the same plight as ourselves; they -also have more goods than their half-starved workers can purchase; they -also are looking for foreign markets, to save their business system -from collapse. Each finds its chance of salvation in selling to the -backward nations, which cannot yet do their own manufacturing. So we -run upon this curious situation: - - - _The existence of American industry depends upon our selling - cotton shirts to Chinamen, who are so poor they can’t afford but - one shirt at a time._ - - -And now, see the next step! Trying to save our own business system, we -threaten ruin to the business system of some other country, say Japan. -Naturally, the business men of Japan don’t like that; so we have trade -rivalry, and out of that we have war. The cause of modern war may be -put into one sentence--and I beg you to realize that it’s no joke, but -the grimmest of grim realities: - - - _If we don’t go to war with other nations, they will take away - from us the chance to sell to Chinamen those cotton shirts of - which our workers have produced so many that they have to go in - rags._ - - -I could go on like that indefinitely, making funny sentences about -this funny system. I could tell the hilarious story of how Britain -and Germany went to war to take away from each other the chance to -sell shirts to Chinamen--and to Hindoos and Persians and Arabs and -Turks, of course. When they had destroyed 30,000,000 human lives -and $300,000,000,000 worth of goods you might think they would have -cured their “over-production” for quite a while; but they had made a -miscalculation, and fought too long, and borrowed too much money from -us, and so their governments are burdened with enormous fixed charges, -and there is chronic unemployment in both Britain and Germany, and -almost a collapse in France. - -And how about us? We have that “favorable balance of trade,” so -ardently desired by the prosperity boosters; indeed, we have got such -a bellyful of it that for the first time we are forced to realize that -it’s nothing but wind. Europe owes us, in one form or another, some -$19,000,000,000, and can’t even pay the interest; they made no pretense -of trying--until they had to borrow some more! Italy came, bowing low -and grinning behind its cap, agreeing to pay several billions in the -course of 65 years--on condition that we lend another $200,000,000 -right off! Germany did the same thing, and France will be doing it, -probably before these words see the light of day. Our great financiers -accept these paper pledges, for the reason that they are stuck with -$19,000,000,000 of them already, and can’t contemplate what will happen -when the whole thing turns out to be wind. We go on adding about a -billion a year, because the only way we can keep our factories going is -to ship our surplus goods abroad--and take nothing back, because that -would stop the factories! - -We promised our people “prosperity,” you remember, if only they would -vote for Coolidge; and they did so, good, patient souls; so now we -have to deliver it. The way of “prosperity” is to keep them working -to feed and clothe Frenchmen and Germans and Italians and Chinamen -and Guatemalans and Haytians--anybody who will send us a beautiful -engraved sheet of paper promising to pay us 65 years from now! To be -exact, Judd, they don’t even have to engrave the paper; we do that in -Wall Street, and they send us a “mission” of white or yellow or black -gentlemen in frock coats, to sign opposite the red seal. So here, Judd, -you have this wonderful jazz system in its final, delirium stage--our -whole people starving themselves on half wages, and sending the surplus -abroad, so that our rich men may fill their vaults with pieces of paper -which they dare not permit to be redeemed! We already have more than -half the gold in the world, and far from taking any more, we have to -ship some abroad now and then, to keep some debtor nation from going -bankrupt! - -Don’t you wish, Judd, that you could find some benevolent storekeeper -to do business with you on this ultra-modern jazz basis? Never, never -can he be persuaded to take your money, but takes only checks, and does -not cash them for 65 years; and if at any time you need money, you -threaten to go broke, and immediately he gives you cash and takes some -more checks; and if ever you try to send him a truckload of goods, to -pay off at least part of the debt, he holds up his hands in a fit of -high-tariff horror and says he couldn’t think of taking goods, it would -ruin the people inside his store who have the jobs of making that same -thing! “For God’s sake, take away your truck,” he exclaims. “Just mail -me another paper promise, and anything in the place is yours!” - -I conclude with one more sentence for you to learn, Judd: - - - _Our present system of “high finance” is a soap-bubble, which - differs from other soap-bubbles in just one respect--it is as big - as the world._ - - - - -LETTER XIII - - -MY DEAR JUDD: - -The essence of our industrial system is the private ownership of the -means of production; with profit for the private owner as the motive -power of industry. The capitalist produces the goods we need, and in -order to get them we pay him everything above the bare means of keeping -us alive and enabling us to raise the next generation. If this system -should break down, it is obvious that we must change to some form of -social ownership of the means of production; instead of having the -capitalist produce for us, we must do it for ourselves, and the motive -power will be, not the desire of the capitalist for profit, but our own -desire for the goods. - -What difference will that make in the industrial system? At first you -might see no difference at all. The worker will go to the factory, -where he will find foremen and superintendents in charge, and a -time-clock keeping tab on him. On Saturday night he will get his pay -envelope, and will take the money and spend it at the stores. The goods -produced in the factory will be shipped to all parts of the world, -to people who pay for them by checks, which go through banks and a -clearing-house--you might follow the whole process, and fail to realize -there had been any change. At only one place would the difference -appear--inside the pay envelopes. There being no longer any absentee -owners, drawing off rent, interest and profits, those who do the work, -whether of hand or brain, will now be the only people to draw anything -out; and consequently there will be considerably more in each pay -envelope. - -Wall Street propagandists are fond of figuring how much goes to labor -and how much to capital, and proving that to wipe out the capitalist -would add only a small percentage, say ten per cent, to the share of -each worker. This is a trick, for the reason that a great part of the -capitalist’s share appears, not as profits, but as various forms of -“fixed charges” against the industry: the interest on bonds, the rent -of land, the royalties to owners of various privileges. To give just -one illustration, the New York Central Railroad crosses a bridge near -Albany, and a private concern owns that bridge, and the railroad pays -one cent for every passenger, a small fortune every year. Our whole -industrial system is a tangle of grafts such as that; the railroads -are plundered by right-of-way companies, sleeping-car companies, -refrigerator-car companies; industrial concerns are plundered by -private railway lines, owned by “insiders,” or by companies having a -“cinch” on repairs or materials or accessories. Just the bookkeeping on -such rights is a vast industry, and the adjusting of them supplies a -living for thousands of lawyers and their clerks. To wipe all that out -will be to dump a mountain’s weight off the back of production. - -But even suppose it was as the Wall Street propagandists argue--that -capital got only ten per cent--would that be the only gain for labor? -No, Judd, it would not; and here is the most important point that I -have to get across to you in these letters. The proposition may seem -difficult, but I beg you to put your mind on it and get it straight, -for it is not too much to say that all freedom and happiness for the -workingman in our time depend upon his understanding these matters, so -that the clever hired writers of privilege cannot befuddle his mind. - -Whatever may be the percentage that goes to capital--whether ten per -cent, as Wall Street claims, or thirty or forty per cent, as I could -prove--nevertheless it is this percentage which causes our industrial -ills today. It is this surplus which, drawn off and re-invested in -more means of production, causes the glut of goods which we know as -“hard times”; it is this surplus which causes speculation and panics, -and turns the worker out to join the ranks of the “unemployed,” and to -beat down the wages of his fellows; it is this surplus which causes the -search for foreign markets, and draws the great industrial nations into -war. Figure to yourself a body having an iron ring riveted about it. At -first this ring makes no difference, but as the body grows it causes -strangulation, and the time comes when for all the agonies of that body -there is but one remedy, to cut the ring. - -Cutting the ring is simply this: to take the surplus product away -from capital and give it to labor; so instantly you have remedied the -evil and relieved the pain. How so? Because labor now becomes able to -consume the entire product of industry. Labor can consume it, because -labor has the money to buy it. Before this, as we have seen, labor got -only part of the money, and so could buy only part of the product; the -rest had to be either wasted by the rich, or sold abroad. But give -labor the full value, the actual equivalent in purchasing power of the -amount of goods produced, and so consumption balances production, and -the factories can work merrily, as many hours as we desire, turning out -for each and every one of us as much goods as we care to consume. The -only restriction is the basic law of social justice--that before any -man consumes anything he must render to the community an equivalent -service. - -The hired men of the exploiters do all they can to confuse this -argument; I hear them laugh that I have some kind of deluded horror of -a surplus. We ought to save, they insist, and provide against a “rainy -day”! Yes, of course--and not merely against rain, but against famine -and earthquake and tornado. I have no objection whatever to a surplus; -the question is, who is to own that surplus--those who do the work, or -those who live as parasites? That makes all the difference; for when -a workingman has made too much wealth for his master, the workingman -is out of a job; but when the workingman has made too much wealth for -himself, the workingman is on a vacation. - -Here is this great rich country of ours, with all its natural -resources, its marvelous machines, its willing and clever workers; and -when we have broken the iron ring we can produce goods for ourselves, -and consume and enjoy them, and stay quietly within our own boundaries. -No longer do we keep our workers on starvation wages, and ship all -our surplus products abroad, to be consumed by Frenchmen and Italians -and Turks and Chinamen and Hindoos, in return for paper promises to -pay money to our capitalists! No longer do we have to go to war, to -seize foreign markets from other capitalists! The workers now own the -factories, and also they own the working capital, and they produce -goods for use, and if we have foreign trade it is because we want -things from abroad, and not because we have to get rid of our surplus -product under penalty of starving. This is what I describe as a Free -Society, Judd; I say that in such a society, with production rationally -planned, and all wastes removed, we should produce wealth in such -quantities, so quickly and so easily--well, you would think I was -joking. But leading engineers have told us that we have, in our machine -power, the constant labor of _three billion slaves_. In thirteen -industries, figured by the capitalist, Mr. Babson, we have _88 times_ -the productive power we used to have by hand labor. Just think what -that ought to mean! - -Or look at it another way. Twenty years ago Sidney A. Reeve, an -engineering expert, calculated how much we wasted by the competitive -production of goods, and in a big book full of tables and charts, he -worked out the figure of 70 per cent waste. We have seen the Hoover -Committee, considering merely the wastes _inside_ each industry, -giving figures as high as 60 per cent of waste. Mr. Stuart Chase, in -his wonderful book, “The Tragedy of Waste,” figures 50 per cent as the -minimum. Well, let us take the minimum, for a start. What does it -mean? I answer: - - - _In a free society what we now have will cost us four hours labor - a day._ - - -And more than that, Judd--something absolutely vital to every poor man -in our country: - - - _In a free society every man may work as many hours as he wants to - work, and get the full value of what he produces._ - - -So now we can make what would have seemed at the beginning a bold claim: - - - _From a free society involuntary poverty will be banished._ - - -And finally--one sentence more--and I beg you to learn this one: - - - _The end of involuntary poverty means the end of most prostitution - and crime, and of all war between civilized peoples._ - - - - -LETTER XIV - - -MY DEAR JUDD: - -It is an interesting thing to study the development of human society -through a long period of history. Men began in small tribes, in which -they were very much alike, and stood on an equal footing. These tribes -fought, and absorbed one another, and grew more complex, with greater -differences among the members; dukedoms and principalities arose, and -then kingdoms, and at last great empires, with rulers and subjects -ranged in classes, and the class lines rigidly drawn. - -It was against such a form of society that our ancestors revolted; they -had a new theory of government, and established a new form--a republic, -owned and run by its citizens, all standing on an equal plane. The -process of evolution in the political world is still going on, and some -day we shall see a world-wide federation of republics, in which the -human race will share equal rights. - -It is fascinating to realize that this same process is going on in the -world of industry. Here also we see the various enterprises struggling, -and some winning and absorbing the others, until today we have -industrial monarchies and empires. It is not merely a figure of speech -when we talk about coal barons and steel kings and emperors of finance, -for these men occupy the same positions and hold the same kind of power -as the rulers of old days. And just as we saw revolutions in the field -of politics, so we shall see them in industry. In fact, the first of -these great revolutions has taken place before our eyes; the workers -of Russia are now trying to show us that a government of industry by -the citizens of industry is a possible thing and a step in progress. -Our capitalist newspapers are sure that they must fail; but even if -they did, that would not upset the argument, for the first political -revolution in England failed, and the first two in France; but that has -not kept a whole string of other countries from turning into republics. - -The way human beings learn is by trying; and we are in the stage of -history where men are getting ready to try democracy in industry. -There will be mistakes, and a great deal of waste and suffering; -nevertheless, we shall press on, and in the end we shall achieve a -higher type of society than anything conceivable under industrial -monarchy, or imperialism such as we have today. - -You remember King Louis of France, the “grand monarch,” who said, -“The state, it is I”; well, imagine the scoffing you would have met -with, if you had talked with some haughty marquis of that court, and -tried to tell him how some day in France the common “riff-raff” would -have votes, and choose parliaments, and decide the issues of war and -diplomacy. He would have been quite sure they could never do it; and as -a matter of fact, they don’t, Judd--but they will; yes, even here in -the United States the people will some day decide! - -Today our great captains of industry are no less certain that common -workingmen cannot possibly have intelligence enough to run factories, -to say nothing of deciding the broad policies of business. The masters -have won the money fight, and got the power, and they mean to hold on -to it, and train their descendants and found great money-dynasties. -But the same thing happens that we saw two hundred years ago with the -French kings--the new generations become enervated and worthless, -and the wealth of the community flows into the lap of idlers and -parasites, who squander it in dissipation and display; the poor become -discontented and rebellious, and the rumble of the approaching deluge -is heard. - -Our capitalist newspapers never get tired of harping upon the failures -of government ownership, the waste and the graft. Private ownership -is the way to efficiency! Well, Judd, there is a lot of present-day -efficiency which I am ready to do without, beginning from this very -hour. For example, efficiency in maiming and killing workers--which -caused one million in our country to be disabled in 1925! Labor today -works under the lash of the slave-driver, and I am willing to see -industry slow down, so that workingmen may be human beings. And then, I -examine the graft under public ownership, and what do I find? Private -owners seeking private profits out of government! Here is a slogan, -Judd: - - - _The cause of graft is not public ownership of industry, but - private ownership of politicians!_ - - -How can we stop that? We have tried the plan of sending the grafters -to jail, but that doesn’t work, for the reason that the grafters buy -the prosecuting officials and the judges; in the few cases where we get -them into jail, they buy the jailers. So I suggest a new plan--that we -take away the motive to graft, by making it impossible for any man to -exploit the labor of his fellows, or to monopolize those things which -are necessary to the life of all. - -Learning industrial democracy is like learning to swim. You stick one -foot into the water, and you see that it sinks, and so you draw it out -in a hurry, and decide, it is impossible for you to stay on top of the -water. And then along comes a man who says: “Yes, you can swim, but not -until you go all the way in.” It seems an absurdity at first, yet it is -the literal truth about government ownership; you can own and run it -all, but you can’t own and run a small part! - -At present private ownership is making all the big profits, and so, -of course, it is paying all the big salaries, and getting most of the -competent men. Not content with that, it is undermining the competition -of government, using its huge resources to buy the political parties, -and nominate incompetent men to public office. That is no wild -statement, but a fact of big business policy. Our masters, who control -the political parties, are afraid to have competent men in public -office, for fear they might take up a notion to do something real for -the public welfare. They prefer a man who can’t kick over the traces, -because he is too feeble. That is why at the last nominating convention -they turned down a really competent and loyal servant of theirs, Mr. -Herbert Hoover, and gave us poor, shy, pitiful Mr. Coolidge, who can -never by any possibility do anything, for the reason that he doesn’t -know what to do. - -When you and I, Judd, and the rest of the useful workers of America, -get ready to run our own business, we can do it. We shall do it, if -for no other reason, because we have to--because we need food in our -cities, and machinery on our farms. We shall hire the best experts -to run our industries; and many of them will be the very men who are -running them now--they will be just as well content to work for the -American people as for Johnny Coaloil, who is now taking a yachting -trip with a dozen chorus girls on the Riviera, or for Mrs. Silly -Splash, who is setting the new fashion in diamond-embroidered bathing -suits at Palm Beach. Yes, Judd, we shall find ways to run our business -without these elegant idlers; and whatever waste there may be won’t be -so bad as having them corrupt a whole generation of our young people -by their vicious folly. If there is graft, we’ll find ways to stop it, -and if more efficiency is needed, we’ll get it--because it will be our -business, and our loss if we fail. - -I’ll go even further, Judd; I’ll assert that the amount of waste -inherent in capitalism is so frightful, that no amount of inefficiency -under a free system can approach it. Remember the “iron ring,” and what -it will mean to us to get into the factories, with the right to run -them for ourselves! Remember our figures on the wastes of competition! -Let us have a “slogan,” for you to paste in your hat and learn, Judd: - - - _To compare the productive powers of a free system with those of - capitalism, is to compare a normal human being with a vicious - maniac._ - - -Just a sentence or two, Judd, to remind us what this maniac has done: - - - _Capitalism, between 1914 and 1918, deliberately destroyed - 30,000,000 human lives, and $300,000,000,000 worth of property!_ - - -And again, Judd: - - - _Capitalism in the United States keeps an average of five million - men out of work all the time!_ - - -And again, Judd: - - - _Capitalism in Europe last summer had nine million men working - hard at learning to destroy the wealth which the rest of the - workers were creating!_ - - -And then paste this sentence in your hat, Judd: - - - _While our population increased 200 per cent in the past 50 years, - capitalism increased our expenditures for mass-slaughter more than - 2400 per cent!_ - - - - -LETTER XV - - -MY DEAR JUDD: - -We are going to take over the industrial plant of the United States, -and run it as one planned enterprise for the benefit of the whole -people. - -Just what do we mean to take? Roughly speaking, all railroads, -telegraphs and telephones, all banks, the mines and large factories, -the large oil fields with pipe-lines and refineries, the large -packing and canning plants, the large warehouses and stores, and what -office buildings are necessary for these enterprises. We do not want -the homes, nor the personal property, nor the automobiles, nor the -livestock; nor, if I have my way, shall we want farms. Some old-time -Socialists will contest this, but the new generation will agree, I -think. The reason is interesting, and it may help to clear up the whole -matter if we begin by considering the problem of the land. - -Karl Marx thought that the farms would go the same way as the -factories; that is, they would get bigger and bigger, under capitalist -ownership. He failed to allow for the essential factor--that no -capitalist can work his employes so hard as the small farmer works his -women and children. So the small farmer has stayed on his small farm; -a free man--except that every year he is deeper in debt to the banker, -and in a larger percentage each year he loses the ownership, and is -merely a tenant, supporting an absentee landlord. The modern Socialist, -recognizing that situation, does not propose to walk into the trap, but -seeks a different solution of the land problem. - -The single taxer comes, urging us to take the burden of taxes off -improvements, which are made by human labor, and put it on the land, -which is the gift of Nature. He points to the rise of land values in -cities, the so-called “unearned increment”; values go up, because -people crowd into the city, and private owners get a colossal increase, -which they have done nothing whatever to earn; their gains make a -heavy burden on production, which the whole community must pay. That -sounded reasonable, and so for a while I was a single taxer; you’ll be -interested to know, Judd, that the reason I gave it up was you! - -We had a big single tax campaign here in California in 1916, and I -put in some hard work at it; among other things I spent a day arguing -with my friend Judd. We were sitting on the roof of the garage, laying -shingles, and all the time I tried to make you “see” the single tax. -But you had read in the Los Angeles “Times” that it would increase -the taxes on your two lots, and that had made you mad; also, you had -read that it would take the taxes off the rich man’s bonds, and off -his wife’s jewels, and that had made you madder. I tried to get you to -see the absurdity of believing that the “Times” could be interested in -keeping any taxes on the rich; I tried to show the actual reason, that -the tax collector couldn’t find the rich man’s bonds, nor his wife’s -jewels. But you didn’t get it, Judd, and when I saw the votes of all -the other Judds in that election, I decided that the single tax is a -tactical blunder. Never again will I be caught proposing to take any -taxes off the rich; from that day forth I have been a multiple taxer--I -want to put just as many kinds of taxes on the rich as the imagination -can invent. - -Joking aside, Judd, I changed my whole strategy as result of that day -on the roof with you. For twelve or thirteen years I had been expecting -to see Socialism brought about by some sort of tax on wealth; but you -made me realize how passionately every human creature hates taxes. -Could one not find some easier way? I realized that all men like money, -the more the merrier; and then came the war, and I saw our government -making money by the billions, just by acts of Congress and the waving -of a presidential pen. Then came the panic, and I saw our wonderful -Federal Reserve System making more billions for the use of the big -bankers and the trusts; so a great light dawned upon me, a heavenly -light! I see now, Judd, that we shall forget taxes altogether, and take -a leaf out of Wall Street’s new book; we shall make as many billions of -new money as the emergency requires, and instead of having Wall Street -put that new money off on us, we shall put it off on Wall Street! - -I know some young workers in our country who call themselves social -revolutionists, and are impatient when they hear me talk about -compensation for the capitalists. These young people feel ugly towards -the capitalists, and for this I do not blame them, seeing how they -have been treated. But the point of my criticism is that these young -enthusiasts want to be ugly to the capitalists in an old-fashioned, out -of date way, with guns and barricades, while I want to be ugly in the -modern way of high finance. - -What is it we really want? Is it to kill the capitalists? No, but -merely to take from them their power to exploit labor. And how do -they get this power? By guns and barricades? They hold it that way, -of course; but inside each modern country they have devised the new -and infinitely more effective scheme of financial manipulation, the -creation of imaginary money with which to buy everything in sight. -And it is this weapon I want to turn against them. Why, for heaven’s -sake, do we want to have insurrections and riots, when by means of this -modern Aladdin’s magic we can walk peaceably into every factory and -take charge? The capitalists have created the magic lamp for us--this -wonderful new Federal Reserve System; all we have to do is to turn -out the present board of bankers’ bankers, and put in a new board of -workers’ bankers, and create a hundred billion dollars of new money, -and pay for the industries, and there you are! Not a court in the land -can stop us, and if any capitalist tries to, he is a revolutionist, and -we have criminal syndicalism laws for him! - -This is “inflation,” we are told; and inflation raises the cost of -goods, and so brings no benefit to the worker. Yes, Judd, but get the -point clear--inflation is one thing if you use it to buy goods, and -quite a different thing if you use it to buy factories. In buying -goods, you buy on a rising market, but in buying factories you buy at a -fixed price, and so it is the owners who suffer the loss. And that is -the beauty of this scheme I am unfolding; these Wall Street gentry have -“passed the buck” to us--and we pass it right back! - -The Russian revolutionists made a grave mistake in their dealings with -world capitalism; they were too honest. They repudiated the debts of -the Tsar’s government--declaring that the money had been spent to -enslave the Russian workers, and they would never repay it. Therefore -world capitalism went to war with Russia, and is still at war, and -that error in tactics has cost the new government many times the -debts of the old regime. But how much more clever were the capitalist -governments of Italy and France! They also owed us money; but they -were so polite--they are the politest people in the world! They owed -it, of course, and they would pay, of course; never would they dream -of failing to pay their debts; but just now they were very poor, and -couldn’t pay, and wouldn’t we please lend them another hundred million -or so? We loaned it--because if they go bankrupt they will also go -Bolshevik, and that scares the gizzard out of our bankers. So these -smooth capitalist nations have never paid us a dollar, but their -credit is still good, and we never think of them as criminals and -murderers--oh, nothing like that, it is all between gentlemen in Wall -Street, and the worthless bonds have been worked off on the general -public, and all is serene! - -So, Judd, I say, let us be gentlemen, too, and pay! Pay any price the -capitalists ask--anything to get them out of the factories, and get -the workers in! It will mean that we support a horde of parasites for -awhile; but we are doing that, anyhow, and can do it better then, -because we shall double production. Young Johnny Coaloil will still be -able to keep his yacht and his chorus girls on the Riviera, and Mrs. -Silly Splash will continue to wear diamond-embroidered bathing suits at -Palm Beach; but notice the difference, Judd--from now on they can buy -nothing but goods with their money, they can no longer buy the means of -production, and so they will not be able to increase their income! - -On the contrary, we can proceed at once to cut it down, by means of -an inheritance tax. We already have such a tax--the Coolidge crowd is -trying to get rid of it at this moment, and likewise the publicity -clause of the income tax, which exposes the big exploiters to -uncomfortable daylight! But we can put it back, Judd; we can make the -provisions that gifts in anticipation of death count as inheritance; -we can register the owners of the bonds, and so wipe out that whole -mass of privilege in a generation or two. I promised to show you how -the useful workers of America can take possession of their industrial -plant, and here is the way. Nothing prevents them but lack of -knowledge; and that is why I am writing these letters! - - - - -LETTER XVI - - -MY DEAR JUDD: - -We have been discussing the problem of how the workers are to get -possession of the industrial machinery of the country. I have proposed -to pay for it; but there are some who insist that the workers should -seize the plant. It has been built by the workers, and taken from -them by fraud; if we purchase it, we merely continue exploitation -under another form; the government replaces the owners as task-master, -and collects the profits and pays them to the owners in the form of -dividends. - -This statement sounds all right, but it overlooks the essential factor -in our business situation--that “iron ring” I have been telling you -about. At the present time not one per cent of our factories are -run at full capacity all the year round; but when we get possession -for the workers, we break the iron ring, and can run them all day -and all night. We have five million unemployed--the average of good -years and bad, you remember--five million men to go to work, to turn -out more goods for themselves and for all. We cut out the wastes and -reduplication; and according to the lowest estimate, we double our -production of goods. - -The plant we propose to buy is worth, roughly, one hundred billion -dollars, and its annual product is twenty billions, possibly thirty; -let us say twenty, to be safe. We pay for it with five per cent bonds, -which means the former owners get five billions a year. If we double -production, we have forty billions a year, which leaves thirty-five -billions for us. In other words, Judd: - - - _We can work half an hour a day for the owners, and four hours a - day for ourselves, and be twice as rich as at present._ - - -So you see why I am in favor of compensation! Not because I love the -owners, but because, as a matter of cold cash, we shall do better that -way. I will go so far as to argue that if we try to pay nothing, we -shall really pay more. If we try to kick the bosses out, and seize the -factories, and run them by workers’ councils--obviously, that may mean -civil war. The bosses have the factories, and they have machine-guns -and airplanes and poison gas--a system for wiping out the lives of -thousands of workers, if necessary. One of the embarrassments of -physical force revolution is that it may fail, and the workers, instead -of getting the factories, may get castor oil and Fascist clubs. There -is a big group of our masters who think that is what the workers need, -and would take delight in administering it. - -I know some young revolutionists who are prepared to die for the -proletariat, in a fine spirit of martyrdom. They are impatient of talk -about money, but I beg them to pause and consider the balance sheet of -Compensation versus Confiscation. Even though they succeed in their -revolution, they surely cannot do it without industrial waste. They -will have to stop the machines while they are fighting; they may shoot -holes in the factories, and even burn some of them down. And just what -will that cost? We are reckoning, you understand, on our possible -double production--forty billions a year. The interest we pay the -owners is five billions a year. So now: - - - _If in the course of our revolution we destroy one-eighth of our - industrial plant, it would have been cheaper to pay the owners for - the whole thing._ - - -Or, suppose we have the good luck to get by without much fighting--what -then? Well, the present management, which knows the industry, and is -keeping the plant going--this management is hired by the owners, and -is loyal to the owners, and will have to be booted out the back door, -which will certainly stop production, cripple it for months, perhaps -years. But if our government comes to the owners in a business deal, -and buys the plant, the management will stay on, as it did when we -took over the railroads during the war. On that basis, we shall not -lose an hour of the plant’s time, nor will the workers lose an hour -of their wages. And how does this figure up, in the balance sheet of -Compensation versus Confiscation? Listen: - - - _If our industrial plant is idle for six weeks, we have lost what - would have paid the owners for a year._ - - -And again, an obvious consequence: - - - _Every day over six weeks that the plant is idle, the workers are - paying from their own pockets!_ - - -Our young revolutionists are going by the Russian model, and that is -natural, because many of them come from there. But Russia had a small -industrial plant, and we have a great one, enormously complicated. -Moreover, Russia had no middle class, while we have a powerful one, -ready to turn out at a moment’s notice and use machine guns and poison -gas in the interest of property rights. The workers’ revolution -succeeded in Russia, because the country was broken by war; but to -bring us to a similar state of disorganization would take decades of -suffering and waste--I venture the guess that it would be twenty times -cheaper to buy the capitalists out, than to bring America to the point -where a physical force revolution could prevail. - -And yet, having said all that, fairness compels me to admit another -side. I have been setting forth the ideal procedure; but this is not an -ideal world, and many times we have to take what we can get, instead of -what we want. Having told you my hopes, I will now tell you my fears. - -The masses of our country are ignorant and unorganized. More than half -of them do not vote at all; a large percentage value their votes at -two dollars each, and the rest take their party as they take their -God--from their grandfathers. They are interested in baseball and -prize fighting, and jazz, and the doings of the “smart set”; they do -not know how to think, and they never read anything but the “kept” -newspapers and magazines, which tell them they are the greatest people -in the world. Never in history has there been so elaborate a system -for the hoodwinking of a hundred million people; and they lap up the -propaganda, and go to the polls and vote their government into a -branch-office of J. P. Morgan and Company. - -But all this does not stop the process of industrial evolution; rather -it speeds it up--giving the rich more money to produce more goods, and -causing the poor to have less money to buy the goods. So the crisis -comes on like a cyclone; and we shall find ourselves with our factories -idle and millions of people starving, and no idea of the next step -to take. There will be no time to teach the masses, no machinery for -reaching them; but the desperate workers in our cities will hear the -voice of the Communist soap-boxer, saying, “Take the factories, and -produce goods for yourselves and your fellows.” The soap-boxer will -ask: “Do you have to starve, because the majority has not voted you -food?” He will ask: “Does a man have to remain a slave because the -majority has not voted him free?” So it may happen that the hungry -workers seize the factories and attempt to run them; and we shall have -to make the best of it and help them to success. - -In such an emergency, the social changes will be sudden and drastic; -and that is the reason why I do not attempt to foretell what the new -industrial forms will be. Just how the business will be managed depends -in great part upon those who now have the power in their hands; they -may choose either to be stubborn and brutal, or to display vision and -a sense of justice, not to say of common prudence. You can see the -difference this makes if you compare the great French revolution of -a century and a half ago with the series of changes that have taken -place in England during the same period. England has become a partly -democratic country in fact, while remaining a monarchy in form; the -reason being that the governing classes never pushed the people to the -last extreme, but made concessions, just enough to keep themselves in -power. - -There is room for a variety of compromises between the workers and -the capitalists, and also between the workers and the state. The -capitalists may permit the setting up of shop committees, with -the right of control over working conditions; they may consent to -representation of the workers in boards which oversee each industry, -with power to make adjustments and enforce decrees. Or both sides may -prefer to call upon the government to do the adjusting. Or again, the -workers may get control of the government, and laws may be passed -providing for the taking over of control by the trade unions. A -practical program has been worked out by the railway brotherhoods, the -Plumb plan; providing for the purchase of the roads by the government, -and their operation by a board representing the government, the -brotherhoods, and the bondholders until the latter have been paid off. -The day may come when the money-masters of this country will wish they -had had the statesmanship to put that plan into operation while there -was time. - -I have argued here for government ownership of industry; but you must -understand--that is not the same thing as operation of industry by -politicians. The people who understand an industry are those who work -in it; and the way to combine democracy with efficiency is to make each -industry a self-governing unit, and confine the part of government to -supervision, and the regulation of prices. Let us have an industrial -constitution and an industrial parliament, and let every man become -a citizen of industry, with a voice in the control, and equal rights -with all other citizens. That is the goal we work towards, and it is a -strictly American goal, in line with American traditions. The practical -steps are, first, to organize the workers in each industry, and make -them class conscious, awake to their own interests; and second, to use -the power of the state to open the books of each industry and expose -the profits, cutting down the share which goes to the idle owners, and -increasing the share which goes to the useful workers. - - - - -LETTER XVII - - -MY DEAR JUDD: - -The social revolution has already happened over one-sixth of the -earth’s surface, and 140,000,000 people are now living in a working -class world. Whatever may be our point of view, we cannot afford to -misunderstand what has happened in Russia, for capitalism has made the -world one, and our efforts to shut ourselves up in our own country are -bound to fail. - -The Russian revolution came as the result of a breakdown in the -midst of war. The great empire was rotten with graft, and after three -years of fighting, had got to a state where it could no longer keep -its railways going, or feed the people in its cities. With starvation -actually upon them, the soldiers, sailors and workers formed unions, -and in October, 1917, they overthrew the government of the Tsar, and -formed a new government--and gave world capitalism the most painful -shock of its career. - -There have been slave revolts all through history, but always blind -and futile, put down with hideous slaughter. But here in the Russian -revolution appeared a new thing; the control was seized by a group -of men who had been trained in Western ideas, and had a theory of -revolutions, and of working-class mastery of society. These men knew -what they wanted, and they tried their plan, and it worked--at least -to the extent that they are still in power, in spite of two years of -war waged upon them by the whole capitalist world, and six more years -of financial blockade, plus the greatest campaign of falsehood in all -history. - -Who were these men? They call themselves Marxians, and apply the -adjective “scientific” to themselves, because they think they have -studied the capitalist system--the laws of its growth and decay, the -forces which are destined to overthrow it, and the kind of society -these new forces will establish. History, says Marx, is a series of -class struggles, and the end is the victory of the working class, and -the beginning of a society in which there are no classes, for the -reason that nobody lives by exploiting anybody else. “Workers of all -countries, unite,” runs the slogan. “You have nothing to lose but your -chains; you have a world to gain.” - -The Marxian theory is, in brief, that the development of large-scale -capitalism brings the workers into factories, where they toil for the -benefit of absentee owners whom they never see; it subjects them to low -wages, long hours and uncertainty of employment, and forces them to -organize and fight for better conditions. In this fight they develop -“class consciousness,” and in the end they are forced by capitalist -breakdown to revolt, and take possession of the factories, and run them -for the benefit of the workers and not of the masters. - -They had a chance to try it in Russia, and they did so; the question -of what they have accomplished is the most fiercely debated of all -questions today. To help us get it straight, understand first, that -they had to do what they did. In other countries--America, England, -France, Germany, Austria--the middle class took charge of the -revolutions; but in Russia there was practically no middle class, it -was the workers or chaos. And second, they took over a busted machine, -a country in collapse after three years of modern war, the most -destructive of all things known this side of hell. And third, they had -to face years of invasion from Europe, America and Japan, fighting on -26 fronts at once; and at the same time civil war, and a blockade, and -financial boycott, and world propaganda, besides two successive years -of famine, something which comes every so often in Russia--caused by -drought, and not by revolutions. - -In spite of all this, Soviet Russia confronts its world of enemies, -eight years young, and proud and confident. It has restored its -agriculture to the pre-war standard, and its industry to nearly 80 per -cent of this standard, with the certainty of passing it in 1926 or 1927 -if peace is maintained. It has turned one-sixth of the earth’s surface -from a militarist empire into a federated group of commonwealths, -governed under a new system, in which the voters are classified -according to their occupations. It has trained a new generation of -young workers, and taken some five hundred thousand of them into its -governing party. It has taught millions of men and women to read and -write, including everybody in its army, and nearly everybody in its -industries. It would seem that all this entitles the new system to -study, and to fair play in the field of thought. - -But Russia is not democratic; so they tell you, Judd--and you are -strong for democracy. Well, I also share that faith; but if, as time -goes on, the workers of the world discover that democracy means -inequality such as we have here in America, while the “dictatorship of -the proletariat” means cultural freedom for the workers and a swiftly -spreading plenty for all--well, Judd, we advocates of democracy will -have a hard time in debates! But the truth is that we have in America -political democracy alongside industrial autocracy; and these two are -making a war upon each other, and we shall have to choose whether our -country is to become a capitalist empire or an industrial republic. - -Russia has never had democracy, nor even the ideal of it, except among -a few dreamers. Less than seventy-five years ago its farm population -were all serfs, bound to the soil. Many of its outlying peoples are -semi-barbarous tribes. Its factories are few and at the time of the -world war they were financed by foreign capital, and run by foreigners. -There came this devastating war, and then a breakdown; and to expect -those who took control to set up at once such a democratic system as we -know in America, is to be absurd. Many who talk about it are dishonest, -for they know that if their own parties get control, they will hold it -by exactly the same means as the Bolsheviks--that is, by force. - -What the Bolsheviks are doing is to educate the workers and peasants, -and then take them into the governing party. The purpose of that party -is to hold power until all the workers have come into it, and the -“Union of Socialist Soviet Republics” includes the whole population of -the former empire of the Tsar. In fact, they expect to include a lot -more, because they think the workers of some other countries are going -to join them; and the rulers and capitalists of those countries fear -the same thing--which is the reason they hate the Bolsheviks, and carry -on such deadly lying about them. - -The British Tories, backed by American bankers, are now conducting -a world-wide intrigue against Russia; and soon they may be calling -the American people to join in a new war “to make the world safe for -democracy.” And what then? The chances are that the American people -will join in, for they dearly love everything that is upper-class -British, and enjoy nothing so much as crushing labor anywhere in the -world. They elected Coolidge in a fervor of patriotism because they -thought--mistakenly--that he had had something to do with smashing -the Boston police strike. As I write, our government is donating a -billion dollars--in the form of a pretended “debt settlement”--to the -Italian government, because Judge Gary and our other masters so love -these black-shirt Fascisti, and look forward to the time when they can -administer the castor-oil treatment to American labor. - -Yes, Judd; and we simply ladled out our money to the Tsarist -adventurers, to every nation and tribe of reactionary that was fighting -Soviet Russia on twenty-six fronts; we dressed up Polish troops in -American uniforms to make war on Russia, and even burned American Red -Cross supplies to keep them from being captured and used for the sick -and starving people of the Soviet republic. We allowed Woodrow Wilson -to send our boys to their death in his private war on a friendly -people--under the command of British officers in Archangel, and helping -the Japanese to take Siberia. - -All that was done, Judd, and done with your money, and under the flag -of your country; and it will be done again when the British Tories are -ready--for the bull-dog never sleeps, and he never lets go his hold. He -has set out to strangle the Soviets, as once he strangled Napoleon--and -for the same reason, to keep his grip on the 300,000,000 serfs of -India. If, when the next attack begins, America does not hasten to -pour out its blood and treasure, it will be for one reason and one -only; because in the meantime it has been possible to reach the plain -people like yourself, and make them understand, and hold back the world -bankers from their next World Crime. - - - - -LETTER XVIII - - -MY DEAR JUDD: - -Our country today is traveling headlong the road which has led every -great empire in history to its doom. And this is no piece of rhetoric, -but a summary of statistics to be found in our census reports. -What ruined Rome was the spread of capitalist imperialism with its -consequences--the undermining of the independent farmers, the growth -of tenantry and absentee landlordism, and the turning of the country -population into city slum-dwellers, uncertain of their employment and -dependent upon public doles. - -And every one of these things is happening right before our eyes. The -price of farm-land is going up, steadily and inexorably; the profits -of agriculture are going to middlemen, speculators, and moneylenders. -Farm mortgages are increasing, farm tenantry is increasing, decade -after decade, with the certainty of a doom. The young men are leaving -the farms and going to the city, to increase unemployment and bring -down wages. The man who wants a city home pays a constantly increasing -tribute to land speculators; while in the business districts land -values double or treble in a decade, and no work can go on until the -landlord’s greed has been appeased. - -Millions of little fellows like yourself, Judd, support that system, -because you own a lot or two, and are making a little profit; just as -millions support the big trusts, because they own a share or two of -stock. They do not see that under a just system they, as producers, -would get many times what they get as petty speculators. Our first -task is to show them, and bring them to our side. We wish to take the -government out of the hands of the capitalist and landlord class; and -then to apply the remedy for land speculation, a tax on land values, -falling heavily on rented land, and still more heavily on land not used -at all. This will set free the soil, and wipe out the gamblers; there -will be plenty of farm-land open for use, and lots near the cities -will be cheap. At the same time both cities and states will have money -for public improvements, bringing high wages, and benefit to all. The -farmer will have abundant markets, because the city population will no -longer be on half rations. The land values tax is the only just one, -because it taxes the wealth created by nature, and not by human labor; -also, it is the only tax which can be fully collected--all others are -taxes on honesty, and we need that commodity badly, and should not tax -it out of existence. - -There is a form of conflict between farmers and organized workers, -because the farmer has to hire labor, and wants it cheap. This conflict -is carefully made use of by the old party politicians, who wish to -plunder the two groups separately. I point out to both farmer and -workingman that their deeper interests are identical; they are the -producers, and supplement each other. The farmers grow food for the -city workers, while the city workers make building materials and -machinery, clothing, newspapers--everything the farmers need. These two -groups form the basis of the new society, and in their political union -lies our hope for the future. - -When I say “workers,” understand that I mean workers of both hand and -brain: housewives and teachers, clerks and stenographers, architects, -chemists and doctors, foremen, superintendents and executives--all who -are actually necessary to the efficient production of wealth. The only -ones not necessary are the owners, in their capacity as exploiters and -parasites. - -I know that many owners also work as managers, and if they are -competent, I respect them, and invite their aid. I should be glad to -see young Rockefeller managing our national oil trust--provided only -that somebody would convert him to the ideal of public service. When -the real crisis comes, some employers will realize that the making -of industrial democracy is a task worthy of all the energy they are -now putting into making millions of dollars--to be used later on in -wrecking the lives of their descendants. - -The useful workers of industry, and those on the land, must get -together. They must have a political party of producers--the plan has -been fully worked out in Minnesota, and the other states have only to -follow. Also we must build up and strengthen the trade unions of both -workers and farmers; for it is not at all certain that the masters of -money will surrender to white paper ballots in whatever number; they -must know that these ballots are backed by nationwide organizations, -capable, determined, and wielding the threat of the mass-strike. - -As part of the process of organizing and drawing together farmers -and workers, we must encourage business co-operation between these -groups. The farmers can feed the workers, and the workers can set -up co-operative factories for their farmer customers. The railway -brotherhoods have made a beginning at this, and so have the clothing -workers. Equally important is labor-banking, to finance such -undertakings. At present a great deal of labor-banking turns out to -be shadow--there is no real control by labor, and all that happens -is, some former labor officials become successful bankers. But that -also will be remedied--the unions will have banks which they actually -control, and whose funds they use for their own enterprises. What -could be more pitiful than the present situation--the workers putting -their billions of savings into capitalist banks, to be shipped on to -Wall Street and there used for robbing labor, and financing anti-labor -newspapers--and even breaking labor strikes! - -At the present time the policies of American labor both political and -industrial, are a generation out of date; our workingmen are like the -Moros in the Philippines, fighting machine-guns with bows and arrows. -The unions are still organized according to crafts; and they face -gigantic combinations of capital, which have merged a hundred different -crafts into one. So of course the unions are beaten or outwitted at -every turn; and membership falls off, and the old officials whistle to -keep their courage up. - -I remember, Judd, that in some of our arguing you asserted that many -labor leaders are corrupt; that is one reason why you are not a union -man. But go and investigate trade union corruption, and you find just -what we found about political corruption. Who puts up the money to -buy labor leaders? The employers, and the employers’ associations! -Wherever you touch this evil in our society, it is one and the same -thing--private wealth seeking to increase itself at the expense of the -poor and weak. In Chicago I once investigated a strike of teamsters, -which had kept the city in an uproar for weeks, and cost several -lives--to say nothing of discrediting the workers. And what was behind -it? A great mail-order house trying to put another mail-order house out -of business, hiring a strike and gangs of sluggers! - -The remedy for that is not to desert the unions, but to put new blood -into them, a new policy and a new ideal. The task of labor is no longer -to get five cents more per hour for its members, or an extra hour -off on Saturdays; it is to reconstruct society, and make a world of -producers, managed by producers, for the benefit of producers. And for -that every worker is needed, and the place where he is needed is in -the union with his fellows. If there are officials without vision, go -in and teach them; point out how the employers have formed trusts, and -how the workers must match them with great industrial unions. If labor -officials are dishonest and betrayers of their cause, kick them out, -and find others who are class conscious and loyal. I know that is easy -to say and hard to do; yet surely, Judd, labor cannot lie down and give -up! Get it straight--this is a changing world, and you can’t stay as -you are; there are forces at work that will beat the workers back into -their age-old status of serfs, unless they have the courage and brain -power to master these forces, and lift themselves to the new status of -citizens of industry. Join, and do your part; and some day the law will -provide that every man who works at a trade becomes automatically a -member of his union, an equal citizen of the industry, with no power to -exploit others, nor fear of being exploited by others. - - - - -LETTER XIX - - -MY DEAR JUDD: - -We have come to the end of our task. I have tried to show you what is -going on in our country, and the job you have to do. - -We are moving towards a new American revolution. That does not mean -riot and tumult, as our enemies try to represent; but neither does it -mean slavish submission to every repression of government. There is -the best American precedent for resistance to tyranny, and those good -ladies who call themselves “Daughters of the American Revolution” would -be shocked speechless if I were to quote to them the authentic words of -Sam Adams and Patrick Henry and George Washington and Thomas Jefferson -on the right of the people to overthrow unjust governments. Said -Abraham Lincoln, in his first inaugural address: “This country, with -its institutions, belongs to the people who inhabit it. Whenever they -shall grow weary of the existing government, they can exercise their -constitutional right of amending it, or their revolutionary right to -dismember or overthrow it.” There can be no question that those words -come precisely under the specifications of the California “criminal -syndicalism” law, and a man who said them today would be sent up for -fourteen years, to cough out his lungs in the jute-mill of San Quentin -prison. - -We have to get rid of the capitalist system. It is close to breaking -down, and will soon be unable to run the factories it has built, or -to bring food to the people in its giant cities. We have got to stop -producing goods for profit, and learn to produce them for the use of -those who work. I have pointed out the way to make that change under -our Constitution. I say: if there is violence, let the capitalists -start it--and then you, Judd, and the rest of the workers, can finish -it! - -Abraham Lincoln hated the slave power, just as I hate the capitalist -power; but he moved carefully, keeping the mass of the people with -him, and pushed the slave power against the wall, until presently -it revolted and began the fighting; then Lincoln called for seventy -thousand men to put down the rebellion, and presently he called for a -million, and before he got through he had freed the slaves, and put -an end to that evil forever. And maybe that is going to happen again; -maybe when we get seriously to work, the capitalists are going to -organize their armed bands of rowdies, as they did in Italy, and as -they are now doing in France and Germany and England, and set out to -thwart the people’s will as expressed at the polls. If that happens, -Judd, let us have the traditions of America, and the moral forces of -America, on our side. - -I am one who believes in those traditions; coming, as I do, of a -line of naval ancestors. My great-grandfather once commanded the -frigate “Constitution,” and I am standing by the old ship--while our -money-masters and their hired political servants are trying to torpedo -it. When I try to read the Constitution of my country in a public -place, and a drunken chief of police throws me into jail, and drunken -newspaper publishers shout with approval--well, Judd, I bide my time. -I once spent two years reading the history of the period prior to the -Civil War, and I know what the moral forces of America are. I know how -long they wait, and how slow they seem to be in getting into motion; -nevertheless, they are there, and I make my appeal to them, and I -expect to hear it answered. I am taking care of my health, with the -idea of living to sing once more the Battle Hymn of the Republic: “Mine -eyes have seen the glory of the coming of the Lord!” - -I have written these letters as an act of service to my country. I -personally am not suffering, as you know; I have won my fight, to -the extent that I am an independent man, and no one can muzzle me. -But how can I be happy in this so-called civilization, where I see -on every hand about me war and the preparation for war, poverty and -the despair which poverty brings, crime and prostitution, suicide and -insanity--such a mass of misery that I cannot face the thought of -it, and all those beauties of nature and art which in my youth set -me a-thrill from top to toe, now mean hardly anything to me, because -of the wrongs I see about me--and all so needless, Judd, so utterly, -utterly needless! - -And something just as bad as the misery of the poor, the decay in the -souls of the rich! To see a whole society chasing false ideals, vanity -and luxury and waste; admiring and imitating wretched parasites, who -have millions of dollars and not one useful thing to do! I know a -few of these people, Judd, their lives touch mine here and there, -and the truth is they are just as unhappy as the poor, and just as -much to be wept over, with their jazz and their bootleggers and their -petting parties and their pitiful empty heads. A brief little hour of -excitement and display--and then so much suffering, and bewilderment, -despair about life, and cynicism about everything sound and true. I -think of the millionaire youth I know, drinking himself to death; and -the gay young society matron with a venereal disease in her blood and -terror in her heart--I feel like calling upon the useful workers of -America to organize and save the rich from the misery of being out of -work! - -What we want, Judd, is a world with neither rich nor poor, but with -people who live by producing, and not by taking what others have -produced. We want to make that sort of world, and we call to our aid -all men and women who are willing to work for it. We want to study this -problem, and fill our minds with real information, and stop reading the -poison press of our enemies. Indeed, Judd, it is not too much to say -that we want to make over our moral and mental life, so that we cease -to admire the ideals of our exploiters--waste and the display of waste, -plundering and the power to plunder. We want to teach ourselves and our -children to admire useful labor, and social vision, and loyalty to the -cause of those who produce. We who serve that cause call one another -“comrade,” or “brother,” or “fellow-worker”; and we invite you to join -our ranks. - - - - -UPTON SINCLAIR - -PASADENA CALIFORNIA - - -March 15, 1926. - -DEAR FRIEND: - -I do not think that since the world began there has ever been a people -so lied to as the American people to-day. There are 110,000,000 of -us, and at least 105,000,000 are completely befuddled by a campaign -of deception, backed by the whole power of American big business, the -newspapers, the magazines, the movies, the radio, the vast machinery of -government, and the two major political parties. I am supposed to be -working on a novel, “Oil,” to the writing of which I had hoped to give -the next year; but I couldn’t stand it, so I took a couple of months -off, to pay a debt which an honest American owes to his ancestors--to -help break the power of the organized knaves who are looting our -country in broad daylight. - -I have written a little book, “Letters to Judd.” It is running serially -in the “American Appeal,” where some of you may be reading it. Judd -is an old carpenter who has worked for us off and on, a typical, -old-fashioned American; I have taken him as the type of person I -want to reach, and have written him a series of nineteen letters, -telling those elementary facts which our ruling classes are trying so -desperately to keep hidden from us all. This is the first time I have -covered our political and social problems fully, since “The Industrial -Republic,” which was published 19 years ago, and has been out of -print more than half that time. My mail is full of letters asking for -something of the sort, so here you have it. - -The book tells why there is poverty in the richest country in the -world. It proves that in America for the past thirty-five years the -rich have been growing richer and the poor poorer, and it shows -exactly what the rich have done to bring this condition about, and -exactly what the poor will have to do to change it. It explains -unemployment and hard times, the money system, inflation, stock -watering and manipulation, the tariff and the trusts. It studies the -world situation, explaining the wars we have had, and showing how the -present system is preparing new ones. It discusses Russia and the -revolution--in short, everything the average man or woman needs to know -about affairs at home and abroad, and all in plain, everyday language. -It is a 100% American book, intended for 100% American readers, and it -is written and published as an act of love for our country. - -A few times past we have had great crises, and it has been found -possible to reach the people by a pamphlet. Paine’s “The Crisis,” and -Helper’s “The Impending Crisis,” “Uncle Tom’s Cabin,” “Progress and -Poverty,” “Looking Backward”--these books have helped to make our -history. I am making a try at this kind of thing; I mean, I have put -aside everything else, and done my best to make a good job, to get the -facts, and make them fool-proof, as well as knave-proof, and to present -them in such a way that anyone can understand them. Thirty years’ study -of our problems has gone into the book, also thirty years of learning -how to write. Having faith in our people, I have borrowed money, and -gone ahead to make the plates and print twelve thousand copies; now I -am appealing to you to do the rest of the job--to see that the “Letters -to Judd” reach the millions of “Judds” who need them. - -The book will be in two editions: first two thousand cloth bound, -price $1, to enable my friends to pay the cost of the undertaking; -and second, ten thousand copies, paper bound, a neatly printed -wire-stitched pamphlet, to be sold at meetings, and passed about among -workingmen and women; this is the form for which I hope to get a -million or two circulation, and I have put the price so low that nobody -will suspect me of making money--15 cents a copy, or ten copies for -a dollar. This 15 cent price for a single paper copy is a price for -meetings and book-stores--I cannot mail the book for that, because, -including postage, wrapping, and overhead, it costs about 15 cents to -handle an order in my office. What I ask you to do is to order at least -10 paper copies to give to your friends, and in addition a cloth copy -for your library. I will take a gamble and say: place a $2 order, for -one cloth and 10 paper copies, and when you have read the book, if you -don’t find it worth distributing, you may send back the whole lot, and -I’ll send back your money. I ask for a prompt response, as I want to -advertise the book, and haven’t the money. Both editions will be ready -for shipment by the time your order gets back to me. - -Our reprint of “The Moneychangers” has been ready for a couple of -months, and if you haven’t seen it, here is a reminder. This novel, -first published in 1908, tells the story of the panic of 1907, how and -why it was brought about by the elder J. P. Morgan. I do not recommend -it as a great work of literature; reading it over, I found many -crudities, some of which I remedied. But I will guarantee it a lively -story, full of facts about Wall Street which the American people do not -yet understand. - -Also, my wife has published a new volume by Mrs. Kate Crane-Gartz, -author of “The Parlor Provocateur.” The new volume is called “Letters -of Protest,” the price is $1 cloth and fifty cents paper. The book is -full of that burning indignation at social injustice, combined with -motherly tenderness, which has made Mrs. Gartz the bewilderment of -the prosecuting officials of Los Angeles county. They want so much to -send her to jail, but they don’t quite dare! I was talking the other -day with a prominent physician of Los Angeles, and he mentioned his -intimate friend, the president of the Better America Federation, the -propaganda society of big business here in California. “He doesn’t love -you, Upton,” said the physician, “but Kate Gartz is the real one who -gets his nanny.” - -The money which has come in from our “Loan Plan” has gone into the -printing and binding of “Bill Porter” and “The Moneychangers,” a part -payment on a new edition of “The Cry for Justice,” a new binding of -“The Jungle,” and finally, this circular. More money is needed for -a new printing and binding of “The Profits of Religion,” and for -advertising the “Letters to Judd.” Also my novel, “Sylvia,” is out of -print, and I’d reprint it if I could afford the luxury. So I tell you -again about this “Sinclair Loan Plan.” Those who believe in my work -and want to promote it lend me what they can afford, and the money -serves as working capital, to pay for the new plates and stock of -books which a publishing business has to keep on hand. The lenders -receive a certificate of indebtedness, and have the right to buy each -year a quantity of my books at half the retail price. Thus, if you -lend ten dollars, you can get $5 worth of books for $2.50. These books -must be ordered in one shipment, so as to save handling costs; under -the Loan Plan you may place one such half-price order every year. The -saving takes the place of interest on your money; it amounts to 25% -interest--a pretty good rate, but not so high as millions of poor -farmers are having to pay to national banks all over the country--see -my “Letters to Judd”! - -I want to cover all the details of this Loan Plan, so as to avoid -having to write long explanations. If you have already come in under -the plan, and have your certificate of indebtedness, you may order -books once in the year 1926, to the amount of one-half of your loan. -Thus, if you have loaned $10, you may order $5 worth of books for -$2.50; you can get, for example, one cloth and ten paper copies of -“Letters to Judd,” one cloth “Mammonart,” one paper “Bill Porter,” and -one paper copy of Mrs. Gartz’s book, all for $2.50. I will throw in a -copy of my wife’s “Sonnets,”--and if you know any place in the world -where you can get as much value in books for the money, I do not! - -If you are not at present at subscriber to the Loan Plan, you are -invited to join. Send $12.50, and you will receive a certificate for a -$10 loan, with the privilege of getting your money back at any time on -thirty days’ notice. Also you will receive $5 worth of books, and will -have the privilege each year of ordering another $5 worth of books for -$2.50. Most of my readers say they don’t want the certificates, but I -send them just the same; paste them in your autograph album, and some -day they may be worth the price in that form, and without hurting the -publishing business! - -Sincerely, - -UPTON SINCLAIR. - -P. S. We have received from our German publishers, the Malik Verlag of -Berlin, five stately volumes, the “Collected Novels of Upton Sinclair.” -From Gossizdat, the State Publishing House of Moscow, we have a list of -various editions of our books which have been issued in Soviet Russia; -counting, not new printings, but separate publications under different -titles, there is a total of sixty-nine. Michael Gold, recently returned -from Russia, writes: “The sort of people who in America know Charlie -Chaplin and Jackie Coogan, in Russia know Upton Sinclair.” We are -advised by the Japanese translator of “The Jungle” that the book has -just been issued, but the government compelled the publisher to recall -all copies, and cut out the last chapters, dealing with Socialism. The -Japanese translation of “Mammonart” is about to appear. From Warsaw -comes an offer from a large publishing house to issue twenty of our -books in a cheap library, at .95 zloty per volume, about thirteen cents -American. A Czechish publisher applies for all books not hitherto -issued. We have a review of “Mammonart” which was broadcasted from the -radio station of the Labour Party of Australia; also a letter from a -Ukrainian writer, telling how our plays are being acted there, and -our novels made into movies. We have established book-store agencies -in London, India and South Africa, and we learn that readers are -circulating our books in Java, Honduras, and Iceland. We await returns -from the U. S. A. - - - - - “Letters to Judd,” cloth $1.00; paper 15 cents, 10 for $1.00. - - “Bill Porter,” a drama of O. Henry in prison. Cloth $1, paper 50 - cents. - - “Mammonart,” an economic interpretation of literature and the - arts. $2 cloth, $1 paper. - - “The Goose-Step,” a study of the American colleges. $2 cloth, $1 - paper. - - “The Goslings,” a study of the American schools. $2 cloth, $1 - paper. - - - The following at $1.50 cloth, $1.00 paper: - - “The Brass Check: A Study of American Journalism.” - - Who owns the press and why? When you read your daily paper, - are you reading facts or propaganda? And whose propaganda? Who - furnishes the raw material for your thoughts about life? Is it - honest material? No man can ask more important questions than - these; and here for the first time the questions are answered in a - book. - - “The Profits of Religion”: A Study of Supernaturalism as a Source - of Income and a Shield to Privilege. The first investigation of - this subject ever made in any language. - - “King Coal”: a novel of the Colorado coal country. - - “They Call Me Carpenter: A Tale of the Second Coming.” - - “Manassas,” called by Jack London, “the best Civil War book I’ve - read.” - - “The Metropolis,” a picture of the “Four Hundred” of New York. - - “The Moneychangers,” a novel of Wall Street. - - “The Journal of Arthur Stirling,” the literary sensation of 1903. - - “The Fasting Cure,” a health study. - - - The following in cloth only, at $1.50: - - “100%: The Story of a Patriot.” - - “The Jungle,” a novel of the Chicago stock-yards; new edition, - cloth-bound. - - “Plays of Protest”: four plays in one volume. - - - The following at $1 in “hard covers”: - - “Samuel the Seeker,” a story of Socialism. - - “Jimmie Higgins,” a novel of the World War, a best seller in - Russia, Italy, France, Germany and Austria. - - “Sylvia’s Marriage,” a novel. - - “Sonnets by M. C. S.,” 25 cents a copy, 8 for $1. - - “Hell” and “Singing Jailbirds,” two plays, 25 cents each. - - “The Parlor Provocateur,” also “Letters of Protest,” two books by - Kate Crane Gartz, with an introduction by M. C. S. Price for each - book, $1.00 cloth, 50 cents paper. - - “The Cry for Justice: An Anthology of the Literature of Social - Protest,” cloth $2.00, paper $1.25. - - “The Book of Life,” a Book of Practical Counsel: Mind, Body, Love - and Society. Price $2. - - “Damaged Goods,” novelized from the play by Brieux; cloth-bound - only, $1.00. - - -We offer for 85 cents a complete set of the following works in the -Haldeman-Julius 5-cent Pocket Library (now ready): “The Jungle” (6 -vols.), “The Millennium” (3 vols.), “The Overman,” “The Pot-Boiler,” -“The Second-Story Man,” “The Nature Woman,” “Prince Hagen,” “The -Machine,” “A Captain of Industry” (2 vols.). - - * * * * * - -Order from Upton Sinclair, Pasadena, California - - - - -Books by Upton Sinclair - - -+The Brass Check+: an exposure of the corruption of the capitalist -press. $1.50 cloth, $1 paper. - -+The Goose-step+: a study of the class control of American -Universities. $2 cloth, $1 paper. - -+The Goslings+: a study of the American schools and what the money -power is doing with them. $2 cloth, $1 paper. - -+Mammonart+: a history of the world’s culture, showing how it serves -the ruling classes. $2 cloth, $1 paper. - -+The Profits of Religion+: how the churches have been used by the -enemies of Jesus. $1.50 cloth, $1 paper. - -+The Book of Life+: a work of practical counsel, Mind, Body, Love and -Society. $2, cloth only. - -+The Cry for Justice+: an anthology of the world’s literature of social -protest, from twenty-two languages and five thousand years of history. -890 pages, 16 illustrations. $2 cloth, $1.25 paper. - - -Novels, at $1.50 cloth and $1 paper - -+The Jungle+: a novel of the Chicago stockyards. - -+King Coal+: a story of the Colorado coal empire. - -+100%+: The Story of a Patriot: the spy system which rules America. - -+They Call Me Carpenter+: how Jesus came to Los Angeles. - -+The Moneychangers+: how Morgan caused the panic of 1907. - -+Jimmie Higgins+: a novel of the Socialist movement in the world war. - -+Manassas+: a novel of the Civil war. - -+Samuel the Seeker+: the misadventures of a young idealist. - - * * * * * - -Order from UPTON SINCLAIR, Pasadena, California - - - - -Books for You to Read - - -If you wish statistics as to social conditions in America, get the -+American Labor Year Book+ for the current year. $3. - -If you wish to know how we squander the wealth-producing powers of our -country, read “+The Tragedy of Waste+,” by Stuart Chase. $2.50. - -The most useful book of general information about the movement for -justice is “+Social Progress+,” a handbook. $2.50. - -The best text book of information about Socialism and related movements -is “+Socialism in Thought and Action+,” by Harry W. Laidler. $2.50. - -The most informative book about Russia is “+The First Time in -History+,” by Anna Louise Strong. $2. - -The most important book about prison conditions in America is “+In -Prison+,” by Kate Richards O’Hare. $2. - -The best book on our banking system is “+The Strangle-Hold+,” by H. C. -Cutting. $2. - -The best book on the late war is “+Shall It Be Again?+” by John Kenneth -Turner. $2.50. - -The best book about our growing imperialist system is “+The American -Empire+,” by Scott Nearing. Cloth, $1; paper, 50 cents. - -Organizations: The Socialist Party, Chicago; the Workers’ (Communist) -Party, Chicago; the League for Industrial Democracy, New York; the -American Civil Liberties Union, New York. - -The best periodicals: for art and literature, the “+New Masses+,” New -York, $2; for general information, the “+Nation+,” New York, $5; for -Socialism, the “+American Appeal+,” Chicago, $1; for Communism, the -“+Workers’ Monthly+,” Chicago, $1.50; for labor, “+Labor+,” Washington, -D. C., $1. - -Any of these books or periodicals may be ordered along with the books -of Upton Sinclair, Pasadena, California. - -*** END OF THE PROJECT GUTENBERG EBOOK LETTERS TO JUDD, AN AMERICAN -WORKINGMAN *** - -Updated editions will replace the previous one--the old editions will -be renamed. - -Creating the works from print editions not protected by U.S. copyright -law means that no one owns a United States copyright in these works, -so the Foundation (and you!) can copy and distribute it in the -United States without permission and without paying copyright -royalties. Special rules, set forth in the General Terms of Use part -of this license, apply to copying and distributing Project -Gutenberg-tm electronic works to protect the PROJECT GUTENBERG-tm -concept and trademark. 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You may copy it, give it away or re-use it under the terms -of the Project Gutenberg License included with this eBook or online -at <a href="https://www.gutenberg.org">www.gutenberg.org</a>. If you -are not located in the United States, you will have to check the laws of the -country where you are located before using this eBook. -</div> - -<p style='display:block; margin-top:1em; margin-bottom:1em; margin-left:2em; text-indent:-2em'>Title: Letters to Judd, an American Workingman</p> - <p style='display:block; margin-top:1em; margin-bottom:0; margin-left:2em; text-indent:-2em'>Author: Upton Sinclair</p> -<p style='display:block; text-indent:0; margin:1em 0'>Release Date: July 10, 2021 [eBook #65818]</p> -<p style='display:block; text-indent:0; margin:1em 0'>Language: English</p> - <p style='display:block; margin-top:1em; margin-bottom:0; margin-left:2em; text-indent:-2em; text-align:left'>Produced by: Tim Lindell, Martin Pettit and the Online Distributed Proofreading Team at https://www.pgdp.net (This book was produced from images made available by the HathiTrust Digital Library.)</p> -<div style='margin-top:2em; margin-bottom:4em'>*** START OF THE PROJECT GUTENBERG EBOOK LETTERS TO JUDD, AN AMERICAN WORKINGMAN ***</div> - -<div class="center"><img src="images/front.jpg" alt="front" /></div> - -<hr /> - -<div class="center"><img src="images/title.jpg" alt="title page" /></div> - -<hr /> - -<h1 class="uline"><span class="smcap">Letters to Judd</span></h1> - -<p class="bold"><i>An American Workingman</i></p> - - -<p class="bold space-above"><i>By</i></p> - -<p class="bold2">UPTON SINCLAIR</p> - - -<p class="bold space-above"><span class="smcap">Published by the Author</span><br />PASADENA, CALIFORNIA</p> - -<hr /> - -<div class="center"><img src="images/i002.jpg" alt="dedication" /></div> - -<hr /> - -<p><span class="pagenum"><a name="Page_1" id="Page_1">[Pg 1]</a></span></p> - -<p class="bold2">LETTERS TO JUDD</p> - -<p class="bold">BY</p> - -<p class="bold2"><span class="smcap">Upton Sinclair</span></p> - -<hr class="smler" /> - -<h2>INTRODUCTION</h2> - -<p>Judd is an old carpenter who has done odd jobs on our place for the -past ten years. Just how old he is I don’t know, but he’s pretty old; -his hands are gnarled and calloused and his finger nails chewed up and -broken by hammer blows; there are knotted veins in his forehead and his -hair is grey and thin. But he works like a beaver, and don’t you ever -hint that he should slow up—he will hoot at you, and say that he can -lick any young feller with one hand. He will hitch his harness into -place—he has a rupture, and wears some kind of truss—and will slide -under the house to connect up a gas pipe, and come crawling out with -his hair and eyes full of cobwebs, and my wife will say, “Come out of -there, you old gopher.” He adores her when she talks to him like that, -he would lift the side of the house to please her. The two of them -engage in violent arguments as to how a door ought to be hung or a tree -pruned. “Nobody ever did it like that,” Judd declares—and considers -that sufficient reason. He does it her way, so long as she stands over -him; but if she leaves, he is apt to finish it his way—for, after all, -it is manifest that a man knows better than a woman.</p> - -<p>Ten years ago our home was a row of vacant lots on a hillside, covered -with weeds and rusty cans. Now it is an old-fashioned Southern house -with a long veranda and a row of white columns, surrounded by rose -gardens and grape arbors and fig trees and oranges. The house was made -out of five old houses, bought for a little more than nothing, and -moved onto the place and joined together; the gardens were made by my -wife sticking baby plants into the ground, and holding a hose over them -all day and part of the night. I helped a little; and two school boys -helped after hours; but Judd was the Hercules who did most of this -mighty labor. He would rout us out of bed in the morning, and many a -time we have worked after dark, to get a roof over something before -it rained, or finish a concrete job before it set. What is there we -haven’t done together?—digging ditches and setting fence-posts, hoeing -weeds and pruning trees, laying shingles and tacking down tarpaper, -cleaning old furniture and painting an automobile, moving a garage -and installing a sprinkler system. And always with a presiding female -genius hovering over us, exhorting and appraising, mostly on the debit -side! Never was there such a woman for saving, and for devising, and -for utilizing. Once Judd in his digging came upon a rusty iron<span class="pagenum"><a name="Page_2" id="Page_2">[Pg 2]</a></span> spike, -and showed it secretly to me. “Better throw it over the hill quick,” he -said. “If the missus sees that, she’ll start a railroad!”</p> - -<p>When the house was done, there was a party. The living room is -extra fancy, with high, peaked ceiling, and lights way up, dim and -mysterious; in a million years you’d never guess that it was once an -old tailor shop, bought for a hundred dollars, and moved over here, -and the upper floor taken out! Well, our friends came, some of them -rich people in limousines, creating a sensation in our neighborhood. -The neighbors were invited—it is a working-class part of town, and -a few people came, shy and a little distrustful, and picked out -seats with backs to the wall, and sat stiff and silent, while George -Sterling, great poet and genial soul, told us intimate recollections of -Joachim Miller and Ambrose Bierce and Jack London, and other old-time -California writers.</p> - -<p>Judd wore his best clothes, and a stiff collar, and brought a lady -friend in black satin. We were surprised by this, for we knew that Judd -was a widower of many years’ standing; we teased him afterwards about -this lady, and he blushed, but insisted there was “nothing to it”—and -apparently there wasn’t, for he still lives alone in the house he has -built, with a fire-place made of every kind of shiny colored stone you -can find on the beaches of California. There is a porch to this house -and a lot of fancy concrete work, that will last Judd’s life-time and -longer. You must understand, this is no “hard-luck story,” quite the -contrary; Judd has got to be a rich man in the course of ten years, -with war-time wages of a dollar an hour. He put his savings into two -lots, and his spare time into building three houses on them, and now -he has two of them rented, and he goes trout-fishing every spring, and -deer-hunting in the fall, and he took a trip to Texas just to have -the fun of spending some of his money, instead of leaving it all to -his nephews. When he comes now to do odd jobs for us, it is by way -of a favor; and he says, “Well, you got a new book now?” Of course I -always have, and he demands a copy, and insists it must be cloth, and -autographed; and then we have our regular argument as to whether he -shall pay for it, and we compromise on the basis of his paying the -wholesale price. He tells me what he thinks about my writings, and just -what is wrong with my ideas.</p> - -<p>Judd, you understand, is not the least bit of a “radical.” “I got no -use for these ‘reds,’” he says, being a simon pure, hundred per cent -American; there are too many foreigners in the country, and if they -don’t like it, let them get out. But at the same time Judd is nobody’s -fool. For one thing, he is “onto” the politicians; they are a bunch of -crooks, and he proves it, telling me things that are going on right in -Pasadena—he knows from this friend or that who works for the city. -Also, Judd is “onto” the politicians at Washington; of course you can’t -get the facts, because the newspapers won’t print them, but look at -this<span class="pagenum"><a name="Page_3" id="Page_3">[Pg 3]</a></span> oil business, and look at the fellows that got a billion dollars -from the government, pretending to make airplanes for the war, and they -never got a single fighting-plane to France. Judd supported the war, -and bought liberty bonds with his savings; but he says that if the -truth was known, we could have kept out of that war, if it hadn’t been -for the munition-makers, and the bankers and their loans to England and -France.</p> - -<p>So you see, we have plenty to talk about while nailing down shingles -and screwing up water-pipe! Once, not so long ago, Judd said to me, -“By golly, I never thought of that!” I answered, “You’d be surprised -to know how many things you never thought of.” Said he: “Why don’t -you write a book for fellows like me? A workingman is tired when he -gets home, and don’t have time for big books, and he don’t know the -long words. But you write something short and easy, and show us little -fellows just how we get it in the neck.”</p> - -<p>Well, there are lots of things one would like to write, and one doesn’t -get around to them all. But every now and then I think about Judd, and -the millions of other Judds there are, scattered over this great land. -I think of things I’d like to say to them, if only I could get to them. -Here it is, Thanksgiving morning of the year 1925; and just why this -morning should have chosen itself, I can’t imagine, but I am sitting at -my typewriter, on the very porch that Judd helped to build, and came -crawling out from under with his hair and eyes full of cobwebs—the old -gopher! I am beginning the book he asked me to write, for him and the -other American workingmen.</p> - -<hr /> - -<h2>LETTER I</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>There are some things which you and I and all Americans take for -granted, and don’t have to argue about. For example, every man has a -right to get to heaven in his own way, if he can; we are not going to -meddle with any one’s religion. Also, we believe that all men should be -equal before the law. We don’t mean they all have equal abilities—for -that would be a foolish thing to say; but they all have equal rights -“to life, liberty and the pursuit of happiness.” Also, every man has a -right to what he has produced by his own labor; and it is the business -of government to protect him in this right.</p> - -<p>Speaking generally, we think that men live better if they are let -alone, to work out their own destinies. We don’t want any more -government than there has to be; if the government will see that -the other fellow keeps his hands out of our pockets, we’ll manage -to build our own house, and live in it our own way. That is called -individualism, and you are keen for it, Judd, and I am no less keen. -The only time the government has been on our place in the past ten -years has been when it came to inspect<span class="pagenum"><a name="Page_4" id="Page_4">[Pg 4]</a></span> the foundations, the plumbing, -and the fire-stops in the walls of the house; all of which concern the -common welfare.</p> - -<p>If a fellow won’t work, he has no right to anything—we agree to that, -and we will shed no tears over shirkers and loafers. We are defending -the real workers, and we say that such are entitled to the fruits of -their own labor. Let us set that down for the corner-stone of our -thinking; let us make it our test of a sensible and decent world. I -ask you: Are the workers getting what they produce today? Or is some -other fellow getting part of it? Put it the other way about, and ask: -Are there any people in our country getting wealth without producing -it, without doing any useful work? It is obvious that if any man gets a -thing he hasn’t produced, some other man must have produced that thing -and not got it.</p> - -<p>I choose a case which lies nearest to your own heart, Judd—those three -houses that are the security for your old age! You paid your good money -for materials, and you put them together with your own hands, and you -say those houses belong to you. If a fellow came with skids and a -truck and tried to cart one of them off, you would surely stop him. If -a fellow moved into one of them, and refused to move out, you would -surely put him out. The law would back you—and so you believe in the -law! But suppose I were to tell you, Judd, there are ways by which some -fellow might take your houses away from you, and the law would not move -a finger to help you, but on the contrary, would come and turn you out -for the other fellow’s benefit?</p> - -<p>Watch your step, now! Suppose that some man had the power to fix the -prices of the things you have to buy day by day, your food and clothing -and gasoline; and suppose he boosted the prices, so that you found -yourself running short; then you’d have to put a mortgage on one of -the houses; and when the mortgage fell due, if you were still short, -your house would be sold by an auctioneer at a foreclosure sale, and -the law would turn you out. Or let us suppose this man had the power -to dilute the currency of the country, so that every dollar of yours -became worth only half as much as it was before; don’t you see that he -might deprive you of your three houses, one after another? There are a -dozen different ways in which the trick might be worked; and strange -and startling as the idea may seem to you, I assure you that it has -been done many times, and will be done many times more. The world you -live in is full of devices by which your pockets are emptied, without -your ever feeling the touch of the thief’s fingers.</p> - -<p>If a fellow comes along and tries to sell you a gold brick, you laugh -at him; that’s an old one, and you are “on.” If he tries to sell you -a gold mine in Kamchatka, or shares of stock in an oil well—come to -think of it, Judd, I believe you told me you did take some shares in -the Somebody-or-Other Oil Syndicate—twelve hundred dollars, you said -it was! But you’ve learned your lesson now, and nobody can play you for -a sucker again. </p> - -<p><span class="pagenum"><a name="Page_5" id="Page_5">[Pg 5]</a></span></p> - -<p>But, Judd, these things I am talking about here are not called -swindling, they are entirely respectable things, with such beautiful -names that you go to the polls and vote for them on election day, and -for some of them you would give your life on the battlefield. For -example, that thing called the “protective tariff”; such a lovely -name, “protective,” it makes you think of a mother watching over an -infant in a cradle! The economists call this tariff a form of “indirect -taxation”; and what do these words mean? Exactly that thing which I -said a minute ago—a device for emptying your pockets without your -feeling the touch of the thief’s fingers!</p> - -<p>Or take that thing called “inflation”; that is, the diluting of the -currency, so that the money in your pocket is less money than it was -before. The bankers all tell you that “inflation” is a most wicked -thing, and you believe them, and are quite sure it couldn’t happen; -while the plain fact is, the bankers have been doing it to you right -along! They have deprived your money of about forty per cent of its -value in the last ten years—and you, my good old friend, thought it -was fine, because the value of your lots went up, and of your houses, -too. It never occurred to you that the price of everything you bought -was going up also; and that the value of your money in the savings-bank -was going <i>down</i>; and also the value of your liberty bonds!</p> - -<p>Judd, you get up by an alarm clock at dawn every morning, and boil -yourself some coffee, and gulp down a couple of slices of bread, and -maybe a fried egg, and give your chickens and rabbits their water and -feed, and then you hustle off to work. For forty years that has been -your rule, six days out of seven; you worked like an old mule, eight -or nine hours of it, and then come home and worked till dark on your -own place. There are forty-two million Americans doing much the same -thing, and the total of what they produce is a thumping pile of wealth. -And who is to get it, Judd? How shall it be divided? In the great -cities, in many-storied office buildings, sit white-handed gentlemen at -flat-topped mahogany desks, and these gentlemen have no idea of ever -crawling around in the muck, or sweating in the heat, or freezing their -fingers in the cold, or soiling their white collars and breaking the -crease in their trousers—no, Judd, they have not an idea of it!</p> - -<p>While you are working, these gentlemen have nothing to do but think; -and the subject of their thoughts is one thing and one alone, how -can they get away from you the largest possible share of that -wealth which you are producing by your labor. They call themselves -“great executives,” Judd; and what they execute is the American -workingman. They have devised the most subtle and perfect machine of -exploitation—that is, for getting you to produce wealth while they -consume it—which has ever existed in the history of mankind. I am -going to show that machine to you; I am going to take it apart, just -as if it were an automobile, and let you see exactly how it is built. -I will<span class="pagenum"><a name="Page_6" id="Page_6">[Pg 6]</a></span> show you the thing called “stock-watering,” and how it takes -away from you the greater part of your day-by-day earnings. I will show -you the thing called “rigging the market,” and how that conjures the -coins out of your purse—and mind you, old friend, not when you go to -gamble in Wall Street, for you have never done that; but when you go -round the corner to the store and buy a loaf that is made of wheat, or -a shirt that is made of cotton, or any other article that is produced -by machinery and shipped on a railroad.</p> - -<p>Above all I am going to show you that most fascinating piece of -wizardry, our banking system. You were a rancher in your youth; and -some of your relatives are farmers back East. Well, Judd, we have a -thing called the Federal Reserve Bank, and three years ago that bank -reached down into the pockets of the farmers of America, and took -out—how much, do you think? Just about four billions of dollars! And -gave it to whom, do you think? Why, to the big bankers of Wall Street, -and the manufacturers and trust magnates with whom they work hand in -glove. Soon after that I traveled through the Northwest, and in state -after state I found whole counties in which every single farm had been -sold for taxes. Do you think I am claiming too much, Judd, when I tell -you that you really ought to understand how such things can happen?</p> - -<hr /> - -<h2>LETTER II</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>The Bible tells us that “man does not live by bread alone.” To hear -some people talk, you would think the Bible said that “man does not -live by bread.” You and I know that he does; and if he is to be -decent and civilized, he needs many other things, a home with several -rooms in it, and clean clothing, and books, and recreation. There is -nothing more destructive of health and happiness than extreme poverty; -the inability to get for yourself and your loved ones the common -necessities of life.</p> - -<p>There are parts of the world where poverty is an infliction of nature; -but that is surely not true of the United States in the year 1925. -We have a country of nearly four million square miles, with greater -variety and wealth of natural resources than any similar area in the -world. We have almost everything needed by modern industry; the bulk -of our imports are luxuries—coffee and bananas and music and French -fashions. We have forty-two millions of workers, all carefully trained -to their jobs, and we have the most highly organized industrial system. -We produce 40 per cent of the world’s iron and steel, 52 per cent of -its coal, 60 per cent of its copper, 75 per cent of its corn, 85 per -cent of its automobiles, and so on through a long list.</p> - -<p>Twenty-seven years ago our government made a study of hand-power as -compared with machine-power in some of the <span class="pagenum"><a name="Page_7" id="Page_7">[Pg 7]</a></span>common industries; thus, -making ten plows by hand took 1,180 hours, while making them by -machinery took only 37½ hours; making one hundred pairs of cheap -boots took by hand 1,436 hours, and by machinery only 154 hours. From -these calculations it appeared that machinery had cut human labor, in -some cases 80 per cent, in some cases as high as 95 per cent. That -was in 1898; and since then, how much more has been done! We have the -Ford factory, employing 165,000 men, and turning out 2,500,000 cars -and trucks every year, one for twenty days’ labor of a man! In Chicago -are great ovens, worked automatically by electricity, which turn out -14,400 perfect loaves of bread every day. I have a friend who owns -a book-making machine which turns out 64-page books at the rate of -5,000 every hour. One might fill pages with miracles of this sort. We -are now harnessing the rivers and water-falls, and in Maine the tides -of the ocean, and engineers estimate that machine-power provides us -with the equivalent of three billion hard-working slaves. Mr. Roger -W. Babson, who runs a big statistical bureau, presents figures of -machine-production from which it appears that 13 important industries -now average 88 times as much production as by hand-labor.</p> - -<p>Obviously, then, everybody in the country ought to be 88 times as well -off; poverty for the willing worker ought to be one-eighty-eighth of -what it was in 1825. But what is the matter, Judd? For some reason -there is just as much poverty as there ever was, and possibly more! -In the old days nobody starved—that is, unless he was a loafer or a -drunkard. Our ancestors were well fed, and managed to raise families of -ten, and sometimes even twenty sturdy children. How many of the workers -in our mills and mines can afford such a luxury today?</p> - -<p>I have before me a photograph of our national capital at Washington, -with its high white marble dome; the picture is taken over the top of -filthy slum tenements, falling into decay. And this is not a made-up -picture, it is a photograph that you might take from many different -spots in Washington. Or go to New York, the centre of our wealth and -fashion; the school authorities there report that two-thirds of the -children are physically defective, and one-fourth come to school -suffering from hunger and malnutrition; two years ago the State -Planning Commission reported two-thirds of a million people in the city -“miserably housed.”</p> - -<p>In New England are thousands of mill-workers now on strike against -reduction in their starvation wages; here you find the “she-towns”—all -the men have gone away, and you can buy a woman for the price of a -sandwich. In Pennsylvania a hundred thousand miners are on strike to -preserve their wretched livings; they dwell in hovels, and can barely -keep their families. In Georgia and the Carolinas you find the mills -run on the labor of little children; and nearby are palatial estates of -the rich, a happy condition described by a woman poet: </p> - -<p><span class="pagenum"><a name="Page_8" id="Page_8">[Pg 8]</a></span></p> - -<div class="center"><div class="poem"><div class="stanza"> -<div>The golf-links lie so near the mill</div> -<div class="i1">That almost every day</div> -<div>The laboring children can look out</div> -<div class="i1">And see the men at play.</div> -</div></div></div> - -<p>The defenders of our industrial system will admit these facts, if you -pin them down, but they say that things are getting better all the -time. A professor of Harvard University has just published a book, in -which he tells how our glorious system is rapidly solving all problems; -very certainly and very soon there will be no poor. Well, now, I am -going to make a statement, Judd, and you paste it in your hat, and look -at it every now and then while you are sawing timbers or mixing cement:</p> - -<blockquote><p><i>The condition of the mass of workers in the United States has -been getting slowly but steadily worse for the past thirty-five -years.</i></p></blockquote> - -<p>Let us see now. We want to determine what are called “real wages”: that -is to say, wages in relation to the cost of living. It is clear enough -that if your wages rise from four dollars a day to eight, and at the -same time the cost of living doubles, you are no richer than you were -before. That is one way to fool the workingman; but we are not going to -let ourselves be fooled!</p> - -<p>The problem is not a simple one; you have to figure wage-rates in -representative industries over a term of years; and then you have to -figure the average cost of goods for the same period of time. It is -easy to “load” your figures, by giving emphasis to those trades in -which wages rose, or, on the other hand, by featuring those goods whose -prices stayed low. For example, as I write, Secretary Hoover reports -to the President, and the President gives out to the press, a set of -figures showing how the American workers have made some gains in real -wages during the last few years; and these glad tidings are featured -upon the front page of all our great newspapers. And what is it? Simply -a barefaced fraud! Mr. Hoover has figured wholesale prices! He knows -that these prices have gone down, while retail prices have not gone -down correspondingly; also, needless to say, he knows that American -workingmen do not buy their food and clothing at wholesale!</p> - -<p>Prof. Paul H. Douglas of the University of Chicago published in the -Proceedings of the Academy of Political Science (Vol. XI, No. 2), a -very elaborate study of real wages from 1890 to 1924. This is the best -work I had seen, and the results may be summed up in one sentence: real -wages in the United States from 1890 to 1924 suffered a <i>decrease</i> of -five per cent. To phrase it another way: where a workingman could buy -20 pounds of necessaries in 1890, he could buy 19 pounds today.</p> - -<p>These figures caused a sensation; for you can understand that there is -nothing our masters try so hard to keep from their servants as this -very fact. I used the figures throughout these letters; but just as -I am through, and about to send the manuscript to the<span class="pagenum"><a name="Page_9" id="Page_9">[Pg 9]</a></span> printer, the -professor writes me a letter, saying that he has revised the work, -and he now shows a gain in real wages during the past four years. The -reason for the change is, he has decided that the earlier figures were -“unduly weighted with pork and beef, which rose much more rapidly than -other commodities.”</p> - -<p>Here you see the very thing I explained. How much pork and beef shall -be figured in the family budget of a workingman? Our fathers ate pork -and beef, and grew to be full sized men; but of course there was no -beef trust in those days. If, now, the cost of pork and beef rise too -fast, the workingman can adjust himself to a coolie diet, those starchy -foods which are cheap and relatively stable in price. But I, for my -part, eat pork or beef once a day, and I claim the same right for you, -Judd!</p> - -<p>This much is certain: in many basic industries there has been a loss. -The new figures which the professor sends me show losses for the -clerical workers and the postal clerks; and the only large gainers -are the teachers, who regard themselves as professional persons, not -as workingmen. Surely those striking textile workers in Massachusetts -have made no gains this year, nor the 158,000 striking miners! Ask the -farmers of the Northwest about their case, and you will hear a loud -shout of denial! Ex-governor Lowden of Illinois stated at a public -banquet in New York that from 1920 to 1924 the American farmer’s return -on his invested capital was three-tenths of one per cent!</p> - -<p>I know there is a great deal of apparent prosperity among our workers -today. But that is due to a new factor—that the worker now spends his -money for things that last, a home, and an auto, and clothing and radio -sets, instead of spending it for beer and whiskey. That is a vast gain -in civilization, but it is not the same thing as a gain in real wages, -and don’t let anybody fool you by this argument.</p> - -<p>To get a clear view of the real truth, ask this question: has the -capitalist suffered a loss of purchasing power during the past -thirty-five years? Merely to suggest such a thing is to raise a laugh! -There are some, like Henry Ford, who are a million times richer -today than they were thirty-five years ago. It is probable that the -Rockefellers are twenty times as rich as in 1890. The total wealth of -our country increased from 65 billions in 1890 to 320 billions in 1922; -and as the workers didn’t get the difference, the rich must have. Here -is what they admit having got, in their income tax statements, during -four years 1921-1924. The number of fortunate ones who got more than -$300,000 a year income increased from 246 to 773. The number of those -with incomes between $100,000 and $300,000 increased from 2,106 to -4,921. The number with incomes between $25,000 and $100,000 increased -from 37,663 to 62,158. Those are the real insiders—and remember, Judd, -they didn’t have to admit any “stock dividends,” nor to pay anything on -the billion or two they have invested in tax exempt securities.</p> - -<p>There is a statement commonly made by Socialists, justifying<span class="pagenum"><a name="Page_10" id="Page_10">[Pg 10]</a></span> their -prophecy that our present system is on the way to a breakdown. The -statement is that the rich are growing richer and the poor growing -poorer. I know of no statement which causes more irritation to the -capitalist press; I suppose I have read a thousand editorials in which -the statement is ridiculed, or denounced, or waved aside as out-of-date -and not applying to America. Nevertheless, it is the truth, Judd; all -the workers are growing relatively poorer, and vast groups of them are -growing absolutely poorer, in the terms of what they can buy with their -wages. And this in the headquarters of prosperity, the richest of all -nations, which houses in its treasure-vaults more than half the total -gold-reserves of the world!</p> - -<hr /> - -<h2>LETTER III</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>How does it happen that, in this our land of liberty and prosperity, -the rich are growing richer and the poor poorer.</p> - -<p>When you talk about the matter with an economist, he uses many long -words, and tells you about natural processes, controlled by inexorable -laws. Well, Judd, it all depends upon how you look at it, from the -inside or the outside. If you look from the outside, you see economic -processes; but if you look from the inside, you see the actions of men. -Wealth is produced by the actions of men—you know that, because you do -it every day; and wealth is distributed by the actions of men—you also -do that every day. If men, in the course of their dealings, have made -a hell on earth, it has been because they first had a hell in their -hearts; and if they are to make a paradise on earth, they first have to -change their hearts, and then no economic laws will stand in their way.</p> - -<p>First among the “actions of men” which have made poverty in America, -I list our banking system: that is to say, the way men have behaved -and are behaving with regard to money. This banking system has been -constructed, just as artificially as a house is constructed, and its -plan can be summed up in one phrase: to enable those who already have -money to get as much more as possible. Many things about the system may -seem complicated, but if you understand that basic idea, you will never -be fooled.</p> - -<p>One man raises grain, and another saws lumber. It would be awkward to -exchange a stick of timber for so many bushels of wheat, therefore men -have invented money, which is a standard of value, enabling anything -to be exchanged for anything else. The first point to be got clear is -that money is not wealth, but only a symbol of wealth. You can see that -clearly, if you imagine yourself stranded on a barren island with a -million dollars in greenbacks. Would you be rich? You would not! And it -is equally plain that nobody is made richer when the government prints -a new lot of bank-notes. Of course, if you printed the notes yourself, -and put them into circulation, you would be richer;<span class="pagenum"><a name="Page_11" id="Page_11">[Pg 11]</a></span> but this wealth -would be got by taking away from the owners of real wealth a certain -percentage of what they owned; there would be a little more money in -circulation, and so the existing stock of goods would have a slightly -higher money-value.</p> - -<p>That is what I refer to as “diluting the currency.” When it is done by -governments, it is known as “inflation,” and it is a favorite trick of -governments in trouble. They print paper money, and spend it for goods, -and the more they print, the less is the value of each unit of money, -the rouble, the mark, the franc, or whatever it is called. The bankers, -of course, are greatly opposed to this method of robbing the owners of -wealth; their objection to the process being based upon the fact that -when the paper money is printed, the government owns it, whereas the -bankers think that they, the bankers, should own it. In this country -they have been able to have their way, and we live under a system which -establishes the bankers as legalized counterfeiters.</p> - -<p>You must understand, Judd, that only about one per cent of modern -business is done upon a basis of cash—gold or silver or greenbacks; -the rest is notes, or bills of exchange, or checks, or some other -form of credit. And the banker is the man who creates this credit. He -sells it to you, for whatever price he sees fit; and it is his royal -privilege to grant or to withhold it. You may have ever so much real -wealth to offer for security, and still meet with refusal; or you may -have merely a pretense of security, and carry off the prize because you -are the nephew of a director. The banker gives you a “pass-book” with -a line of figures written in it, and you go out into the market, and -discover that your banker-made money is just as real as any other money -you find there—as real as the corn the farmer has raised, or the house -the carpenter has built.</p> - -<p>The theory is that the banker is lending the money which his -bank-customers have deposited with him. But see! You take $350 in -greenbacks and put it in the bank, and under our banking laws the -banker can deposit those greenbacks with the Federal Reserve Bank, and -receive a credit of $1,000; and then on the basis of that $1,000 he is -legally permitted to lend out sums amounting to about $10,000 to other -customers of the bank. In other words, $350 deposited by a customer -becomes the basis of bank-loans, not merely of that $350, but of $9,650 -additional, created by our legalized counterfeiter! The outstanding -amount of greenbacks, about a third of billion dollars, thus becomes -the basis of ten billions of dollars of banker-created money—and this -for the national banks alone, without counting all the state banks and -the private banks!</p> - -<p>The headquarters of this greatest graft of all the ages is Wall Street. -The money from all the little banks pours in here, and likewise -the insurance money which our people put up to insure the safety -of their wives and children. It is all at the service of the big -banker-speculators, to be used in manipulating markets,<span class="pagenum"><a name="Page_12" id="Page_12">[Pg 12]</a></span> driving prices -up and down, so that the insiders can buy while securities are low and -sell while they are high. Here is concentrated the collective greed of -all America, and men become frenzied with visions of sudden gain; they -sell the goods they hope to have, and buy with the profits they expect -to make, and the fires of avarice are fanned white hot, until the whole -thing bursts like a crucible in a steel mill.</p> - -<p>The financial history of America is the record of a series of great -panics, coming at intervals of from seven to ten years. In these crises -the bankers used to suffer as well as the rest of us; but this was -intolerable to them, and so they put their experts to work. To save -yourself in a panic you must have money—a great deal of money in a -hurry; and where can such money be got? Where, but from our good old -Uncle Sam? So the bankers devised a wonderful new scheme, the Federal -Reserve System; a chain of twelve regional banks with a directing head, -a banker-board, having for its function to watch over our money system -in the interest of the bankers, to lend money freely when they want it -to be cheap, and to call in loans when they are ready for a killing; -above everything else, to watch out for panics, and when these come, to -issue credit to the big insiders, so that they can keep afloat while -the rest of us drown.</p> - -<p>In the summer of 1920, there was a riot of speculation, and this -bankers’ board decided that somebody had to be “deflated”; they -picked out the farmers—who cares anything about the “hicks” out -in the sticks? “Go home and slop the hogs,” was the word of a -banker-legislator in North Dakota to a delegation of farmers. So the -Federal Reserve Board “advised” the farmer banks to lend no more -money to farmers; and one little hint was enough to bring farm prices -crashing. Before the crisis was over, a total of 603,000 farmers had -either lost their farms, or were keeping them on sufferance of their -creditors; and those are government figures, Judd! You know how it was -with produce that year—the farmers in the middle West burned their -corn for fuel, and out here in Southern California it didn’t pay to -gather the orange and lemon crops. But the prices of automobiles and -hardware and lumber and cement did not share this harsh fate; the big -Wall Street banks had all the credit they needed, and they “carried” -their friends, the big manufacturers, whose stocks and bonds repose in -their vaults. They were “sitting pretty,” and waited till the storm was -over, and we were ready to buy their goods at the old fancy prices.</p> - -<p>So you see what I mean, Judd, by my phrase, “legalized counterfeiters.” -The power to issue new credit is the power to dilute the currency, and -merely by the stroke of your pen. All the highwaymen and safe-breakers -and world conquerors of history never carried off as much treasure -as Wall Street has taken from the American people by the use of this -power. In that summer of 1920, the Federal Reserve System took <i>four -billion dollars</i> out of the pockets of our farmers! And now, Judd, I -beg you, when<span class="pagenum"><a name="Page_13" id="Page_13">[Pg 13]</a></span> next you hear people say that human ingenuity cannot -cure poverty—<i>remember how much human ingenuity has done to cause it!</i></p> - -<hr /> - -<h2>LETTER IV</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>We are studying our money system, with the idea of understanding how it -causes the rich to grow richer and the poor poorer.</p> - -<p>Money, in its relation to the price of goods, is like a pair of scales -in balance. If you add to the weight in the right-hand pan, it will go -down; also, the same thing will happen if you take away the weight in -the other pan. A bushel of wheat is worth, let us say, one dollar; and -if anything should happen to double the quantity of wheat in the world, -the price of wheat would go to half a dollar. On the other hand suppose -that without changing the amount of wheat in the world, you were to cut -in half the amount of money in the world; then the same thing would -happen, the cost of a bushel of wheat would go to half a dollar. By -reducing the money supply, you lower prices, and make “tight” money; by -increasing the money supply, you raise prices, and make “soft” money.</p> - -<p>Now, the people of our country are divided into two classes, those who -own money, and those who owe it; the creditor class and the debtor -class. It is evident that there is a conflict of interest between these -two classes, as to how much money shall be put into circulation. If -the money supply is increased, money is cheaper, and wages go up, so -it is easier to get money and pay your debts. But the creditor loses -correspondingly, because he cannot buy so much goods with the money -he gets; thus, for the government to put more money into circulation, -is to cancel a percentage of all debts. But on the other hand, if the -amount of money in circulation should be reduced, money will be harder -to get, and it will buy more goods; thus all creditors will be getting -more than is really due them, and a great many debtors will be ruined, -because they cannot pay this extra amount.</p> - -<p>All through our history there has been a struggle between these two -classes. Whichever side controls the government, will shift the -currency supply to favor itself. And which side has controlled? The -answer is, the rich; they have had the money to subsidize political -parties and name candidates and carry elections. Here is a rule of -politics, Judd, which I set down for you to paste in your hat and study -while you are sawing timbers and mixing cement:</p> - -<blockquote><p><i>Out of fifteen presidential elections since the civil war, -fourteen were carried by that party which had the biggest campaign -fund.</i></p></blockquote> - -<p>The struggle has centered about what is called the “gold<span class="pagenum"><a name="Page_14" id="Page_14">[Pg 14]</a></span> standard.” -All money of our government is supposed to be exchangeable for gold. -Prior to 1873, silver also counted as a standard; but in that year -silver was “demonetized,” and of course that made money very “tight.” -The “Crime of ’73,” this action of the creditor class was called; it -produced a frightful panic, and tens of thousands of men were ruined, -and hundreds driven to suicide. Since poverty breeds poverty, the great -mass of the descendants of these people are still poor, and are told in -the churches that it is the Will of God, and in the newspapers that it -is Economic Law.</p> - -<p>In 1893 we had another severe panic; I was a boy then, and remember -it well. Millions of men were out of work and starving, and the mass -of discontent piled up, and three years later we had the Bryan “free -silver” campaign. I was just beginning to think about politics, and -if today I can be patient with the mass of our deluded workingmen -and farmers, voting for “Coolidge and Prosperity,” it is because I -recollect exactly how I was bamboozled in 1896, so that I would have -voted for “McKinley and Prosperity,” had I been of age. Mark Hanna, the -millionaire corruptionist and banker-boss who paid McKinley’s personal -debts and set him up for our puppet-president, raised a campaign fund -of $16,750,000, and bought that election for his puppet, quite openly -and obviously; so Bryan, who had only $675,000 for his campaign fund, -did not succeed in his scheme of making silver money, and letting all -the business men off with half payments to the bankers. So here again -you see how the “actions of men” kept the rich rich and the poor poor; -and God had nothing to do with it—unless you believe that God was -buying votes for Mark Hanna!</p> - -<p>The maintaining of the “gold standard” as in 1896 would by now have put -the bankers in possession of the entire wealth of our country; and that -was what the bankers intended. But an accident happened—the discovery -of new gold, and the development of large-scale, commercial mining of -low-grade ore. So we got the very thing Bryan had wanted—more money in -circulation; and so the bankers have got only one third of our wealth, -and a mortgage on another third. Also, they have their Federal Reserve -System, whereby they manipulate the currency; they can make “free -silver” today, and “gold standard” tomorrow, and when the next smash-up -comes, they will sweep the board clean.</p> - -<p>As a matter of fact, Judd, the “gold standard” has been nothing but a -pious memory since the World War; the gambling game has run away with -the players, and no sensible man believes that the world’s debts can -ever be paid, in gold or in anything else. Our Federal Reserve notes, -which make up most of our paper money, no longer carry the promise to -pay in gold, or in anything—look at one and see. There are “silver -certificates,” that promise you a silver dollar, but the others -promise nothing. One sort of “paper” is pyramided on another sort of -“paper”—stocks and bonds and promissory notes and bills of exchange -and<span class="pagenum"><a name="Page_15" id="Page_15">[Pg 15]</a></span> certificates of deposit and personal checks, all take the place of -currency, and become the basis of new loans and credits and promises -to pay at some future date. The outstanding greenbacks, about a third -of a billion dollars, become the basis of ten billion dollars of -imaginary money; and there are over three billions of Federal Reserve -notes outstanding, and nearly a billion of national banknotes, all -secured by nothing but paper; and there are 25 billions of government -bonds, to say nothing of all state and county and municipal bonds, and -some 19 billions owed to us by foreign nations, all of which paper the -banks have put off on us; and we are adding to the foreign credit a -billion a year, for the reason that we cannot keep our industries going -otherwise. Moreover, we have worked out a system of selling automobiles -and houses and furniture on instalment payments, and there are six or -seven billions of such credits now outstanding, all backed by the banks.</p> - -<p>Such is our “banking system,” Judd; and at every step of every process -you find the banker paying low interest rates for what he borrows, and -collecting high rates for what he lends; at every stage the government -belongs to the banker, not merely to collect his money for him, but -to fix the rates against you, and even against itself. Thus, after -generations of agitation, we succeeded in getting postal savings banks, -to protect the money of the very poor; the government pays the poor at -the rate of 2% for this money—and accepts only $2,500, even at this -low rate! The rest of the money it needs, the government borrows from -the bankers at from 3½% to 5¼%! For those Federal Reserve notes -which the government allows the big bankers to lend out to you, the -banks pay the government about 2½%; and what do they charge for the -money they lend to you? Well, I am paying seven, and have sometimes -paid eight; God grant that you may never be really poor, Judd, and have -to pay what the poor devils pay! It happened a few years ago, by some -freak of chance, that we got an honest Comptroller of the Currency—the -official who is supposed to control the banks; he found he couldn’t -and they got rid of him in a hurry—but not before he issued a report, -which would have given you the facts, had not the newspapers suppressed -it. He said:</p> - -<p>“Sworn reports, made by the banks themselves, show that on September -2, 1915, 2,743 national banks, out of a total of 7,613, were guilty -of usury. This at a time when the Federal Reserve banks were offering -money freely to national banks in every part of the country at rates -varying from 3½ to 5%.”</p> - -<p>In Oklahoma, where the legal rate of interest is 6% with 10% as the -maximum under special contract, harassed farmers paid all the way -from 12 to 2400%, with 40% as the average. In the case of one bank, -the comptroller proved that not a single solitary loan had been made -under 15%. He cited one particular case that he asked to be regarded -as typical. In the spring the farmer went to the bank and arranged -for a loan<span class="pagenum"><a name="Page_16" id="Page_16">[Pg 16]</a></span> of $200. Out of his necessity he was compelled to pay 55% -interest charge. Unable to meet the note at maturity, he had to agree -to 100% interest in order to get the renewal. The next renewal forced -him up to 125%. For four years the thing went on, and all the drudgery -of the father and the mother and the six children could never keep down -the terrible interest or wipe out the principal. As a finish, the bank -swooped down and sold him out; the wretched man, barefoot and hungry, -went to work clearing a swamp, caught pneumonia and died; the county -buried him, and neighbors raised a purse to send the widow and children -back to friends in Arkansas.</p> - -<p>And what do the banks make out of such exploitation? Well, take one -case; the great First National Bank of New York earned 140% on its -capital in 1925; its stock has gone up to $2950 for a share having a -par value of $100. According to the “Financial Age,” a Wall Street -paper, 49 New York banks averaged 50% dividends in 1925.</p> - -<p>All right, Judd; and now here are three sentences for you to paste in -your hat and learn by heart.</p> - -<blockquote><p><span class="smcap">First</span>: <i>Credit is the life blood of industry, and the -control of credit is the control of all society.</i></p> - -<p><span class="smcap">Second</span>: <i>The private control of credit is the modern form -of slavery.</i></p> - -<p><span class="smcap">And Third</span>: <i>The American banking system is the most -perfect contrivance yet devised by the human brain for making the -rich richer and the poor poorer.</i></p></blockquote> - -<hr /> - -<h2>LETTER V</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>The next thing we want to understand is the tariff, and how that works -to take money out of the pockets of the poor and put it into the -pockets of the rich.</p> - -<p>The government has to have money, like any other business. We all -desire government services, and should pay our proper share, honestly -and openly calculated. But we haven’t an honest government, nor an -honest social system; nobody wants to pay his share of anything, and -taxes are unpopular; therefore the politicians put their wits to work -and devise what are called “indirect taxes,” ways of getting your money -without your knowing it. Among these ways is the “protective tariff.”</p> - -<p>This was another great issue of the McKinley days, and well I remember -the campaign slogans, devised for tricking the poor voters! “Protection -and Prosperity; the Full Dinner Pail; the Foreigner Pays the Tax!” We -liked the last one especially; we hated the foreigner, and were strong -for making him pay—though just why we should have expected foreigners -to put up the money to support the government of the United States, was -something we might have been puzzled to explain! </p> - -<p><span class="pagenum"><a name="Page_17" id="Page_17">[Pg 17]</a></span></p> - -<p>A tariff is a tax imposed on all goods brought into the country. A -protective tariff is a tax high enough to shut out foreign competition, -by raising the cost of imported goods. Who pays the tax? The importer -pays it, and he at once adds it to the price of the goods, so that -the tax is passed on to the person who uses the goods, the ultimate -consumer. He is the man who pays, always and everywhere; and the effect -of the tariff is simply to boost prices in a whole line of commodities. -If the government got all this boost, it wouldn’t be so bad; but the -government gets only a small fraction, and the rest is a fat and juicy -graft for the “protected” manufacturers.</p> - -<p>But, say the newspapers and campaign orators of the “Grand Old Party,” -it is the workingman as well as his boss who is “protected”; if it were -not for the tariff, our wage scales would be dragged down to the levels -of Europe; the labor-sweating foreigner would “dump” his goods on us! -Well, Judd, for the workingman to try to improve his condition by a -tariff, is as if a man should make himself rich by taking money out of -his right-hand pocket and putting it into his left-hand pocket. If you -look only at the left side of this man, you will think he is enjoying -“prosperity”; and that is what the newspapers and the campaign orators -did—and the poor workingman too, alas; for the subject is complicated, -and the workingman does not have much time to think.</p> - -<p>But you can see, Judd, that after the workingman has got his protected -job and has collected his protected wages, he has to go to the stores -and spend his money, and there he pays higher prices for everything -he buys, because all these things have been “protected” from foreign -competition, and the manufacturers of the things have been able to form -trusts and fix the prices at higher levels. Just how much higher are -the levels? The answer is easy; they are always a little higher than -the wages! The whole story was told in the figures I gave you as to the -movement of real wages in our country. Following the example of the -“Grand Old Party,” let me give you a slogan:</p> - -<blockquote><p><i>The protective tariff in the past thirty-five years has reduced -the real wages of the American workingman by five per cent!</i></p></blockquote> - -<p>And what about the farmer? The farmer does not get much protection on -his products, but has to buy vast quantities of manufactured goods at -“protected” prices. Take the United States Census Reports, and study -the growth of farm mortgages from 1890 to 1920. This is the final test, -you understand; for the farmer does not give the banker a mortgage on -his land because he loves the banker, but solely and simply because the -cost of running his farm is greater than the income derived from the -farm. We find that in 1890 there were mortgages on 27.8% of our farms, -and in 1920 on 37.2%. So here is a slogan for the farmers:</p> - -<blockquote><p><i>The protective tariff has increased the enslavement of the -farmers to the bankers by thirty-three per cent in thirty years!</i><span class="pagenum"><a name="Page_18" id="Page_18">[Pg 18]</a></span></p></blockquote> - -<p>And what has been the effect of the protective tariff upon our -politics? That also is easy to answer: it has made them a football to -be kicked about by rival greedy interests; it has made our government -a fat oyster to be opened and eaten at the banquets of trust magnates. -The lobbyists of the big manufacturing interests have swarmed to -Washington with their pockets full of bribes, and our congressmen and -senators have been hogs at a swill-trough. Our political conventions -have been bargain-counters, where candidates have met in secret -hotel-rooms with the agents of the trusts, and have sold their honor -and the welfare of the people. When the campaigns begin, the protected -interests are frightened into putting up huge sums—“frying out -the fat” is the phrase; and then we have red fire and torch-light -processions and banners and a wild hurrah, and the voters are herded to -the polls like sheep—at the standard price of two dollars per sheep.</p> - -<p>I grant you, Judd, that it might have been a reasonable policy for -the American people to tax themselves to build up their industries at -the beginning, when the industries were young and needed help. But -what are we to say when these carefully nourished “infant industries” -grow up into highwaymen that knock us on the head? It happened that in -1917 our country went to war “to make the world safe for democracy”; -and that was surely a time for patriotic sacrifices on the part of -these beneficiaries of protection! From a report of the Secretary of -the Treasury I take a few figures concerning the profits they made in -that year. One woolen mill, hiding behind the carefully constructed -tariff wall, made 1770% on its capital stock; and in case that Wall -Street method of figuring should puzzle you, Judd, I put it into -your kind of figures; you build a house for $1,000, and sell it for -$18,700. Seventeen woolen mills reported profits of over 100% on -their capital stock—that is, the stockholders got back in one year’s -profit the total amount of their investment. The great American Woolen -Company, with its capital stock of $60,000,000, made a net profit of -$28,560,342. Canners of fruits and vegetables, tariff protected, made -as high as 2032%. Clothing and dry goods stores, tariff protected, -made a profit of 9826%. One steel mill, tariff protected, made as high -as 290,999%. This, you will say, must be a joke; but I am quoting the -figures of Secretary of the Treasury McAdoo: the capital stock of the -concern was $5,000, and the net profits were $14,549,952. The great -steel trust, our billion dollar infant, made in two years a net profit -exceeding its capital stock.</p> - -<p>These of course, are war-time profits; but I assure you, Judd, such -things are being done right along, up to this hour. Take our textile -industry, highly protected, and paying starvation wages to its horde -of wretched slaves. The great Amoskeag Company, manufacturing many -kinds of cotton goods, had in 1907 a capital of $4,000,000, which it -has increased to $44,500,000, all out of profits. Last year it made -a net profit of $2,851,131, which is 71% on the original investment. -Or take the bread trust, which<span class="pagenum"><a name="Page_19" id="Page_19">[Pg 19]</a></span> feeds—or feeds upon—the poor in our -slum tenements. In 1922 the General Baking Company earned at the rate -of 117% on each share of its original common stock. This stock rose -from $2 in 1916 to $1,350 in 1925; and I assure you that is not a -misprint—it is exactly as written! In this morning’s paper I read how -the president of this company has just paid $200,000 for a box at the -opera; the story tells how he rose from poverty, and we are expected to -be proud of him!</p> - -<p>Some understanding of the tariff robbery having begun to filter down to -the people, our political masters promised us a reform. There was to -be a “scientific” tariff; a commission was to study costs and prices, -and provide exactly the right amount of protection. Well, last year -this commission turned in a report, most “scientific,” showing how the -sugar trust was exploiting the American people and advising the cutting -of their tariff favors. And what did President Coolidge do with the -report? He did his best to suppress the facts; and his action cost us a -total of $53,000,000 in nine months!</p> - -<p>Or again, take aluminum, used in making our kitchen utensils. This -trust was organized in 1888, with a paid up capital of $20,000. Not -one dollar more of real money has ever been put into it; but it has a -tariff protection of 7 cents a pound, and in 1923 the concern paid a -profit of 1000% on the original investment! The company’s circular now -claims assets of $110,000,000, and last year a report of the Federal -Trade Commission declared the company a monopoly which “threatened -competitors with extermination unless obedient to the company’s will.” -The United States Attorney-General declared, in February, 1925, that -this company had violated provisions of the dissolution decree and had -“shown itself indifferent to the provisions of the decree.”</p> - -<p>And what did President Coolidge do about that? The answer is easy—he -always does the same thing, which is nothing. And why? The Aluminum -Company of America is another name for the Mellon family, and the -head of this family, the third richest man in America, is President -Coolidge’s Secretary of the Treasury, the man who determines the -financial policy of our country. Since he took his high office he -has had just one idea, which the entire propaganda department of Big -Business has been hammering into the heads of our people—that the way -to make prosperity for the poor is to reduce the taxes of the rich, so -that the rich will start plenty of industries and pay big wages to the -poor. You may see exactly how it works, when you learn that this rich -law-breaker who sits in our cabinet pays his aluminum workers a wage of -$3.36 per day! Figure the income of such a worker, on the basis of six -days a week at full time, with no holidays whatever; and then consult -last year’s income tax returns, and see what income is acknowledged by -the Honorable Andrew W. Mellon; and so you get a perfect picture of the -Coolidge idea of “prosperity.” It runs as follows: </p> - -<p><span class="pagenum"><a name="Page_20" id="Page_20">[Pg 20]</a></span></p> - -<blockquote><p><i>For a wage-slave of the aluminum trust and his family, $88 a -month; for a law-defying, whiskey-distilling Pittsburgh banker -in the cabinet, $284,000 a month; and to help out the family, -$178,000 a month for his brother!</i></p></blockquote> - -<hr /> - -<h2>LETTER VI</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>Figure to yourself a man pumping water from the ground, filling a tank -to supply his house. There is an abundance of water, and the pump is -big and powerful, and every time the man pushes the handle many gallons -go rushing towards the tank. The man works all day, yet when he goes -to the house in the evening, he discovers there are only a few drops -of water in his tank. Some men have tapped the pipe, all along the -way, and have diverted the water to their own tanks; so the man has to -supply hundreds of gallons to others before he can get a few drops for -himself. Would you not say that it was worth while for that man to find -out about those tap-lines; how much they take off, how they got to be -there, and by what right they remain?</p> - -<p>Well, Judd, that is the position of the American laborer and the -American farmer. The tap-lines are called rent, interest, dividends, -profits, royalty, taxes, tariffs, speculation, manipulation, inflation, -stock dividends, stock watering—a vast tangle of pipes. Let us pay -one more visit to the jungle of Wall Street, and trace a few of these -biggest tap-lines, which make it necessary for you to break your back -all day pumping water for idlers and parasites, before you can get a -mouthful to drink.</p> - -<p>When they teach you about corporation finance in high school and -college, this is how they picture it: Some men put their savings, -earned by honest labor, into a company, and buy machinery, and -manufacture goods, and sell them at a competitive price, and so of -course the profits belong to them, and it all is fair and square, and -a beautiful system, under which the public gets an abundant supply of -cheap goods. Such a pretty picture these capitalists manufacturers of -school text-books prepare—with money they get from Wall Street, and -which they parcel out, in the form of commissions to school boards and -school superintendents!</p> - -<p>But what are the real facts? Well, the first thing the big corporation -financier does is to seek out some form of special privilege, some -opening through which he knows that he can make quick and certain -profits. Understand, I am not talking about the fake schemes, got up -by fellows whose purpose is to unload worthless stocks. The Department -of Justice estimates that such operations have taken three billion -dollars from the public since the war; but that is merely small change, -compared with the gains of the real insiders, the perfectly legal and -respectable gentlemen who finance our business affairs.</p> - -<p>Perhaps it is a franchise or public privilege you are seeking;<span class="pagenum"><a name="Page_21" id="Page_21">[Pg 21]</a></span> in -that case you buy it from a legislature or city council. Or perhaps it -is land; in that case you employ shrewd lawyers and commit wholesale -evasions of public land laws. Or you buy tariff favors; or you get a -patent from an inventor by giving him a few shares of stock; or you get -secret favors from railroads or other corporations, by giving stock to -the officials. There are so many ways and combinations of ways, that I -should need a volume to tell about them. Whatever the “good thing” may -be, you get it, and then you take it to your friend the big banker, and -“let him in” on it. He gives you in return a supply of that life-blood -of industry which he dispenses—not real money, of course, but credit, -based upon the real money which other people have deposited in his -bank. With this you can go out and order all kinds of real wealth—an -office, a factory, raw materials, labor—everything will come to you, -Aladdin’s magic was nothing compared to it. Carpenters will come, Judd, -with their saws and hammers and toil for days and months and years; it -is a “job!”</p> - -<p>Profits are certain—you have seen to that; and on the basis of this -certainty you have fixed your capital. Understand, you never put up a -dollar of real money—the big insiders never do, they would laugh at -the idea. You fix your capital as a function of your expected profits. -That sounds complicated, but is really very simple. Wall Street profits -average about 7%; therefore you fix your capital stock at fourteen -times what your profits are going to be. After you get started, and -your graft works, you may find you are making twice what you expected; -if that happens, you call your capital twice as much. If you make -$70,000 during the year, your capital is $1,000,000. If next year you -make $700,000, you increase your capital to $10,000,000. If you make -$7,000,000, your capital becomes $100,000,000. You, poor old laborer, -will surely think I am joking in such a statement; you cannot conceive -such things taking place outside of a dream. Yet, I pledge you my -honor, this is the regular routine of Wall Street today, and I could -fill pages of this book with a list of companies which have done this -very thing, quite as a matter of course.</p> - -<p>Take the Standard Oil Company of New York. I recall how, before the -war, this concern’s stock was quoted on the market at $700 a share, -or seven times its par value. What did that mean? It meant that the -Rockefellers were old-fashioned, and afraid of the new corporation -tricks; they kept their concern at its old capitalization of -$15,000,000, while its profits were 70% on that amount. But the time -came when the public clamor got so intense that the Rockefellers had to -hide like the rest; and what did they do? Well, in 1913, the Standard -Oil Company of New York declared a “stock dividend” of 400%; that is, -it gave its stockholders four additional shares for each one they -already had; so the company now had a capitalization of $75,000,000, -where formerly it had $15,000,000. Naturally, then, its profits didn’t -look so big; they had to be divided among five times as many shares.<span class="pagenum"><a name="Page_22" id="Page_22">[Pg 22]</a></span> -And then again, in 1922, the capital was multiplied by three, becoming -$225,000,000. The company now pays 14% and that seems bad enough; but -what would you say if you figured on the old capitalization and knew it -was paying 210% every year!</p> - -<p>This is the device known as “stock dividends”—paste it in your hat, -Judd! And paste this also: Stock dividends are not profits, according -to a decision of the United States Supreme Court! And when you have -diluted down your capitalization like this, you are no longer making -excess profits, and so you no longer have to pay the excess profits -tax! And so, of course, all the corporations hasten to adjust their -paper securities; in 1922, more than $2,328,000,000 dollars were -distributed in the form of “stock dividends” to happy stockholders. -The Standard Oil Company of Indiana paid 2,900% stock dividends in one -year. The Brown & Sharpe Company, which makes tools for carpenters like -you, Judd, paid stock dividends of 16,000% in 1922! Don’t you see how -they’ve got you hog-tied?</p> - -<p>Consider our mighty steel trust, Judge Gary’s pet, and the darling of -our government. I knew intimately the lawyer who was paid a million -dollars to form it, and he showed me a lot of “inside stuff”; for -example, John W. Gates, Wall Street “plunger,” taking a private car -load of steel magnates, prostitutes and champagne bottles on a three -day orgy, riding about the country and buying steel plants for a joke, -at any price the owners cared to ask! Well, when the joke was over, -Morgan took the whole outfit away from him—he didn’t consider Gates a -sufficiently sound man to carry such a great responsibility! So Morgan -employed my friend, James B. Dill, to make the trust law-proof, and he -put out the common stock of $500,000,000, all pure water and a swindle -on the public. I knew an elderly widow who put all she owned into -it, and it went to six cents on the dollar! But out of its monopoly -of raw materials the trust made good in the end—in two years of the -war its net profits were equal to the full amount of the original -capitalization, something over $888,000,000!</p> - -<p>Or take the beef trust. Armour and Company started with $160,000, and -all the rest has come out of profits. In a single year they distributed -stock dividends of $80,000,000! Or take that Aluminum Company of -America, the family pet of the Mellons, that gets so many kinds of -favors from our government; they once declared a stock dividend of -500%, and yet they can only pay their workers $3.36 per day! Or take -the bread trust, Wall Street’s newest peace baby; the General Baking -Company has increased the value of its investment 67,500% in nine -years! And out of what? Well, if you are an insider, and can go to -the right banks and get a sufficient “line” of credit, you can build -huge electric ovens, which will bake bread so fast and so cheaply as -to wipe the little hand bakers off the map; they will come to you as -wage-slaves, and you will have a monopoly of fresh bread in a great -city, and out of your profits you can pay lawyers and<span class="pagenum"><a name="Page_23" id="Page_23">[Pg 23]</a></span> aldermen and -editors and labor-sluggers, and be safe against every form of attack.</p> - -<p>There is no use piling up examples, Judd. Suffice it to say, that -every big business in America is owned and run under that system; and -you pay for it. During the war you got your dollar an hour wages, and -you thought it was next door to heaven; but you see, for every dollar -you made, these Wall Street fellows were making tens of millions; and -when it came to the spending of the money, each one of their tens of -millions was just as powerful, just as legal and as sweet-smelling, as -your pitiful one!</p> - -<hr /> - -<h2>LETTER VII</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>When I was a youth, trying to find out about my country, one of the -first things I learned was that its politics were corrupt. I lived in -New York City, and saw that corruption all about me, and the hideous -ruin of human lives; naturally I tried to figure out why these things -had to be. The explanation given me in school was that it was the -ignorant foreigners who crowded into our cities; they didn’t understand -our institutions, they sold their votes, and delivered our political -parties into the hands of bosses.</p> - -<p>It happened that I had a certain relative—I won’t tell his name, -suffice it that he was a financial man, on his way to becoming one of -our great millionaires. He wanted to break into New York, so he opened -an office, and gave a big block of stock to Richard Croker, at that -time boss of Tammany Hall; he made another Tammany chieftain the head -of his New York office—and that was all there was to it, he was “in,” -and his firm took over the city’s business along that line, and all -city officials and employes were given to understand that they must -patronize it. Later on my relative—he was very fond of me, and told -me all his doings—named a certain man for treasurer of New York state -on the Democratic ticket; he smiled as he told me what that was going -to mean, his firm would open offices all over the state and would get -the state’s business. After which my worthy relative proceeded to scold -me for my budding “radicalism,” and to assure me that our big business -leaders were all patriots and men of honor.</p> - -<p>Thus I saw the game from the inside, and little by little I came -to understand it. Yes, it was true that the boss paid the ignorant -foreigners for their votes; but where did the boss get the money for -that purpose? The answer, though painful, was plain: he got it from -my relative; he got it from all such business men, seeking all such -favors and privileges from the state. And here was a further fact which -was plain—my relative did not pay the boss for nothing; he intended -to get, and did get, a hundred times as much out of the bargain as he -paid to the boss and to the political machine of the boss. And that, -I found, was the universal rule of this game of graft; the boss was -merely an<span class="pagenum"><a name="Page_24" id="Page_24">[Pg 24]</a></span> agent, set up by big business men to run the political -part of their affairs; and as for the ignorant foreigner, he was a -convenience which the business man made use of, in politics as in the -labor market.</p> - -<p>In the old days of the Tweed ring, the politicians used to steal -our money outright; but that is over now, because every politician -knows, just as every business man knows, that it is so much better -to “make” money than to steal it; you can “make” so much more, and -there is no danger of being sent to jail. So nowadays the rule of our -politics is “honest graft.” The chiefs of Tammany Hall do not loot -the treasury; what they do is to receive blocks of stock in paving -companies and construction companies, which do the work for the city -at enormous profits; they own stock in the banks which handle the -city’s funds; they are in on all the big traction deals; they get -up little pet companies, to do this or that service for the public -service corporations—to furnish them with ink erasers, or time-clocks, -or chewing gum, at several times the market price; and all that is -perfectly safe and regular, and instead of sending them to jail we envy -them.</p> - -<p>I open my morning paper, and here is Arthur Brisbane, sneering at some -young men in New York who are starting a paper called “The New Masses”: -nobody in America wants to belong to the “masses,” and the young men -ought to call their paper, “How to Make a Million the First Year.” Yes, -Judd, that is what everybody wants; but can everybody do it? That is -a point which Mr. Brisbane, multi-millionaire real estate speculator, -fails to cover. But you see how it is: the very essence of “making a -million the first year” is that you take it away from other people, who -lose in the great business gamble, and remain the “masses,” in spite of -desperate determination not to.</p> - -<p>There is a charming fable by an old-time Italian named Pestolozzi, -to the effect that the little fishes in the pond held a meeting to -protest against the cruelty of the big pike; and the pike considered -their protest and declared the matter should be remedied by a decree -to the effect that every year two little fishes should be permitted to -become pike. The fable does not tell us how the little fishes took that -offer; but if they had been little American fishes they would have been -delighted, and would have called it “liberty.”</p> - -<p>Whether or not some particular little fish becomes a pike is a matter -of interest to that little fish, but it does not change the social -system. The “masses” remain, and by their labor produce the wealth, and -the “classes” take it away from them. What I am trying to make clear -to you, friend Judd, is that when you admire the possessor of a bit -of juicy graft, what you are really admiring is the power to rob you; -because it is your wealth the robber is getting, there is no other -wealth for him to get. The old-fashioned criminal graft came out of -the tax-payers; and the new fashioned “honest graft” comes out of the -consumers of gas and electricity and telephones and transportation and -all other<span class="pagenum"><a name="Page_25" id="Page_25">[Pg 25]</a></span> services. Every dollar of profits, whether legitimate or -illegitimate, is either paid by the consumer, or else it is written -down as obligations, covered by “securities” of some sort, stocks or -bonds, and forever after its claim is sacred, and the courts will -protect its right to draw tribute from the consumer to the end of all -time.</p> - -<p>Take our railroads, for example; the history of American railroads is -a history of bribery and fraud, continued through generations, and of -stock-watering and speculation monstrous beyond belief. The common idea -is that two-thirds of our railroad securities are water. LaFollette -succeeded in getting a provision for a “physical valuation” of the -railroads, and I saw, tucked away in an obscure corner of a newspaper, -the results for two Southern lines—the water was nine dollars out of -ten! So the “physical valuation” project was apparently dropped—at -least, I can’t find out any more about it. And now what has happened? -The courts have decided that the railroads are entitled to a “fair -return” on their present paper values; it is the law of the land that -they are guaranteed 5½% on their securities, and if they fail to -earn that, the government makes it up to them!</p> - -<p>The same principle applies to the public service companies in all our -cities and towns. No matter by what bribery their franchises may have -been gained, no matter how many oceans of water may have been pumped -into their stocks, these values are sacred, and no legislature may pass -a law reducing prices below a “fair return.” We have public service -commissions which are supposed to put a stop to future stock-waterings -and fraud, and to protect the public against unjust rates; but what -are these commissions doing? The answer is, they are selling us out; -and the proof is published daily, in the stock market quotations for -the securities of these corporations. That is one kind of proof to -which there is no answer, Judd; other people may be fooled about money -matters, but the men who buy and sell in Wall Street are not fooled -for long; they watch earnings, and, automatically every stock takes -the ranking to which its dividends entitle it. If public service -commissions are protecting you and me in our rights, then the stocks of -public service corporations are of no use for purposes of speculation -in Wall Street; on the other hand, if Wall Street is scrambling for -them, and boosting the prices of them, it means one thing and one -only—the big thieves have broken down the defenses we built up against -them.</p> - -<p>And what are the facts? Here are the “high” quotations for some of our -biggest public utility corporations, the first figure for the year -1921, and the second for the year 1925; the gains speak for themselves: -American Gas, 49, 79; American Light and Traction, 112, 249; Middle -West Utilities, 24, 112; Public Service Company of N. Illinois, 82, -126; Standard Gas and Electric, 17, 59; Western Power, 30, 86.</p> - -<p>And incredible as it may seem, Judd, here is our old friend the “stock -dividend!” Yes, even in public utilities, they are getting away with -so much that they have to hide it! American Water<span class="pagenum"><a name="Page_26" id="Page_26">[Pg 26]</a></span> Works gave five new -shares for one old share; Cities Service Co. the same! Western Power -declared a 50% stock dividend; Columbia Gas and Electric gave three -new shares “of no par value” for one old share. Here is a new trick, -Judd—no par value any more, so you will never be able to say what that -corporation ought to earn! You will never be able to raise the awkward -question how much real money was put into the concern at the start! -They won’t have to declare any more stock dividends, for the old ones -will serve to infinity; as the cheerful phrase has it, the sky is the -limit!</p> - -<p>Look, Judd; three years ago we had a big “power fight” in Southern -California. It was proposed by public-spirited people that the state -should issue bonds for $500,000,000 and develop its own water power. -Our big newspapers raved at the wicked idea; they told you that would -be “Socialism,” and you believed them, and voted down the proposal. So -now the great power companies have the field without a rival; they are -spending the money—and where are they getting it? Selling stocks and -bonds in Wall Street, of course; and on what basis? What basis could -there be—except the fancy prices they intend to charge you for power, -with the permission of the corrupt public authorities of this state?</p> - -<p>And one thing more, Judd; when they come to present their bills—with -the permission of the public service commission—they are going to -include in the items the amount of $501,605.68 which they paid in the -political campaign to bamboozle you! Yes, Judd, they will do that, and -you will never know it, because it will be classified as “organizing -expenses,” or “advertising,” or something like that; and how carefully -do you go into the reports of the public service corporations which -supply you with power? Six power companies admitted before the -legislative investigating committee that they had paid that sum in the -campaign; the Pacific Gas and Electric Company, the old established -rulers of this community, the purchasers of our local government, put -in the tidy sum of $133,933.80. And so here is a sentence to paste in -your hat, Judd:</p> - -<blockquote><p><i>Not only do they rob you; they make you want to be robbed, and -they make you pay them for teaching you to want to be robbed!</i></p></blockquote> - -<p>And one more, Judd—a “slogan” for the next campaign:</p> - -<blockquote><p><i>Letting yourself be robbed is Americanism; defending yourself -against robbery is Socialism!</i></p></blockquote> - -<hr /> - -<h2>LETTER VIII</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>You read about the rich growing richer and the poor poorer, and you -wonder why the poor have stood it. Why didn’t they “do something.” </p> - -<p><span class="pagenum"><a name="Page_27" id="Page_27">[Pg 27]</a></span></p> - -<p>The answer is, they tried to, but the rich wouldn’t let them. It is of -the nature of wealth to be powerful, and to use its power to protect -and perpetuate itself. Jesus said: “Whosoever hath, to him shall be -given; and whosoever hath not, from him shall be taken even that which -he seemeth to have.” You have there the whole of political and economic -science, and no professor in any capitalist university can say it any -better. The history of our country is a record of incessant struggles -on the part of the poor, continually repressed and brought to naught -by the rich. The most powerful weapon in this conflict has been, of -course, the government; the rich have had it, and the poor have been -trying to take it away from them, and have failed.</p> - -<p>In their battle the rich have had four lines of defense. First, the -elections; they put up the money, and subsidize a political party, and -carry on a campaign of falsehood and abuse, and buy votes and stuff -ballot-boxes, and so defeat the poor at the polls. Second, assuming -they fail in this, comes the legislative line of defense; they sow -discord in the ranks of their opponents, they buy up some of their -representatives, they delay action and confuse the public and plant -“jokers” in the bills which are passed. And then comes the third line, -the courts; the rich have named as judges their own retainers and -corporation attorneys, their fellow club-members and table-companions, -thoroughly trained in reference for property; and these judges discover -the “jokers” in the laws, and declare them unconstitutional, null and -void. Fourth, assuming these three lines fail, the rich simply defy the -laws; resting upon the certainty that their government will not punish -them; and it does not.</p> - -<p>Do these seem to you extreme statements? Each one can be proved a -thousand times over by the well-established facts of our history. In a -previous letter I made the assertion that out of fifteen presidential -elections since the civil war, fourteen were carried by the party -which had the biggest campaign fund. Here are the figures, direct from -headquarters—the “Wall Street Journal.” The winning party is listed -first:</p> - -<p><i>1868</i>, Rep. $150,000, Dem. $75,000; <i>1872</i>, R. $250,000, D. $50,000; -<i>1876</i>, R. $950,000, D. $900,000; <i>1880</i>, R. $1,100,000, D. $355,000; -<i>1884</i>, D. $1,400,000, R. $1,300,000; <i>1888</i>, R. $1,350,000, D. -$855,000; <i>1892</i>, D. $2,350,000, R. $1,850,000; <i>1896</i>, R. $16,500,000, -D. $675,000; <i>1900</i>, R. $9,500,000, D. $425,000; <i>1904</i>, R. $3,500,000, -D. $1,250,000; <i>1908</i>, R. $1,700,000, D. $750,000; <i>1912</i>, D. $850,000, -R. $750,000, Prog. $325,000; <i>1916</i>, D. $1,400,229, R. $2,012,535; -<i>1920</i>, R. $3,986,383, D. $2,891,252; <i>1924</i>, R. $3,359,478, D. -$845,520, Prog. $225,936. Total of winning party, $49,683,369; of -losing party, $14,797,001.</p> - -<p>As to ballot-box stuffing, Judd I am not making any guesses, but -telling you what I have seen with my own eyes. In my ardent youth I -gave my services as election-watcher for the “reform” ticket in New -York City, and came very close to getting my head stove in, for trying -to prevent the counting of illegal ballots by<span class="pagenum"><a name="Page_28" id="Page_28">[Pg 28]</a></span> Tammany heelers; the -thing that saved me was the fact that as the returns came in, the -heelers perceived that they had won anyhow, and didn’t need the extra -ballots! Lincoln Steffens, in his book, “The Shame of the Cities,” -tells how in Philadelphia the machine used to vote “dead dogs and -negro babies”; the title of that chapter was “Philadelphia Corrupt -and Contented,” and today you can take out the name Philadelphia, and -insert the name of any big American city you please.</p> - -<p>The poor have never carried a national election in this country since -the civil war, and the reason is simple, they have been too poor. -It costs a million dollars to put a single piece of literature into -the hands of all the voters in our country; and when you figure the -cost of the speakers and the halls and the advertising and the bands -and the red fire and the rockets and the flags and the bunting and -the bunk, you have a total of several times as many millions as ever -got acknowledged in the reports of campaign expenditures turned in -according to law. The poor cannot produce these millions; and even -if they had the money, they could not get the publicity, because the -capitalist papers will not print the arguments of the poor, even as -advertisements—I know, because I have tried it; the radio will not -accept speakers for the poor—I know, because I have tried that also.</p> - -<p>As for the second line of defense, the breaking up of popular movements -and the bedeviling of popular legislation, the proof is the story of -every “reform” movement that has taken office anywhere in the United -States. Never once since the Civil War have the people succeeded in -making effective a major piece of legislation in their own interest; -the proof of which extreme statement lies in the statistics of real -wages in the United States—the fact that in the richest nation in the -world, for the period of its greatest productivity and expansion, the -poor have been growing poorer. We have had campaigns of “muckraking,” -yes; I remember how, many years ago, “Everybody’s Magazine” printed -a boastful editorial, listing all the crusades they had carried on -for the benefit of the people; and I wrote, challenging them to point -out one single practical result which had come of all their efforts, -to show where they had been able to divert a single dollar from the -pockets of the rich into the pockets of the poor; and “Everybody’s” did -not take up that challenge, nor even print it. To complete the story, -note that “Everybody’s” has long since forgotten that it ever had any -interest in social justice, and so has every other magazine of big -circulation in the United States.</p> - -<p>The third line of defense, the courts: that is the most shameful story -of all, and for it I reserve a separate letter. For the moment let me -make just one statement: there is not in the Constitution of the United -States one line which entitles the courts to throw out or to annul an -act of Congress. Such action is pure and absolute usurpation, a power -which the courts have seized; and they have got away with it for one -reason and one only—because it has served the interests of the rich. -On that basis they have<span class="pagenum"><a name="Page_29" id="Page_29">[Pg 29]</a></span> vetoed law after law, culminating in the -recent decision which sentenced a million little children to slave out -their lives in cotton mills and coal mines.</p> - -<p>And then, the last line of defense: I say that when the rich do not -like the law, they simply defy it. The proof of that statement is -written on the front pages of our newspapers day by day. The rich are -making no pretense of obeying the prohibition law; I have had drinks -offered to me, in defiance of law, in the offices of leading senators -and government officials. The big bootleggers today are eminent -citizens, on terms of equality with bankers and judges and corporation -attorneys; and yet we speculate about the spread of the crime wave!</p> - -<p>But the crimes that interest me, Judd, are not house-breaking and -safe-cracking, nor even bootlegging; for these take only a few lives, -and destroy only a few characters. What I am after are those crimes -which degrade whole populations, beating down their standards of -life, and depriving them of hope and self-respect; those crimes which -sap the foundations of free institutions. And those are the crimes -of big business—in other words, the crimes committed by bankers and -judges and corporation attorneys. I remind you of the report of a -United States Comptroller of the Currency, published in 1916—to the -effect that out of 7,613 national banks, 2,743, or 36% were “guilty -of usury”—and this “according to sworn reports, made by the banks -themselves!” But do you see any procession of national bankers going to -the federal penitentiaries for robbing the poor? You do not!</p> - -<p>Or take the Sherman Anti-trust law; the most flagrant case in our -history of the nullification of a major statute by the will of the -rich. This was a law forbidding combination in restraint of trade; -it stood in the way of the profits of big business, and big business -simply refused to give those profits up. The trust magnates fought -the government—for thirty-one years that fight has been going on, in -the courts, at the polls, in the kept press, and secretly by intrigue -and bribery. Those public officials who could not be bought have been -slandered and driven out of public life—Theodore Roosevelt, for -example; and the result is that today the law is an absolute dead -letter. The great combinations are being formed, all the way down the -line—the power trust, the bread trust, the radio trust, the movie -trust; they are establishing monopolies and holding up prices and -watering stocks a thousand or ten thousand per cent; and what is the -state of public opinion on the subject? One of the most conspicuous of -the law-breakers, Secretary Mellon of the Aluminum trust, sits in our -cabinet at Washington, and dictates a law cutting his own income taxes -in half, and another law keeping his income taxes secret!</p> - -<p>Or take what happened in the case of the Standard Oil trust. In 1911 -the Supreme Court ordered it to “dissolve,” the purpose being to -restore competition. The concern made a paper “dissolution,” into -thirty-two separate companies, but for some reason these little -companies remained in complete and brotherly <span class="pagenum"><a name="Page_30" id="Page_30">[Pg 30]</a></span>harmony: so much so -that in ten years they increased the market value of their stocks -<i>thirty-five times</i>, and the dividends paid, including of course the -stock dividends, amounted to <i>eighteen times the total capital when the -dissolution took place</i>! In other words, what Standard Oil did was to -make a joke of the law, obeying it on paper and defying it in reality. -Yet, are the securities of this criminal organization any the less -valid, any the less sacred under the law? Are its dollars any the less -real? To ask such a question is to be a “Bolshevik.”</p> - -<p>Throughout our history, ever since the Civil War, we have had scandals, -and government officials have been caught selling out the people to big -business thieves. The “credit mobilier,” the Tweed ring, the railroad -land steals, the Ballinger land steals, the airplane steals, the -war-contract frauds, the Sinclair and Doheny oil steals—one could name -scores of such. Here and there efforts were made to punish the thieves; -but in no case was the stolen money recovered. All those billions of -fraudulent dollars exist today in Wall Street, in the form of perfectly -sound and respectable securities, standing on a par with all other -vested property rights. You, and the rest of our toiling masses, -continue to pay dividends and interest upon them; as the system stands, -and so long as it stands, you must pay tribute to all that mass of -stolen wealth, before ever you can have one penny in your own pocket, -one morsel of food in your own mouth!</p> - -<hr /> - -<h2>LETTER IX</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>We know by now what the word “privilege” means. Hundreds of thousands -of people do not have to do useful labor in our society; they draw off -the profits of other people’s labor, and the good things of life flow -to them in a stream so great as sometimes to overwhelm them. And this -flow is guaranteed them for life, and to their descendants to the end -of time. All our political teachings, all our economic calculations, -are based upon the idea that this state of affairs is permanent; the -right of property to draw interest, dividends and profits is inviolable.</p> - -<p>It is easy to understand that the favored ones of privilege believe in -the sacredness of such rights. Once upon a time the priests protected -them, and then the kings; now it is the judges, and here is our modern -form of superstition, the worship of the Dead Hand. Our newspapers know -nobody more wicked than the man who assails the courts; he is a demagog -and an incendiary, and now and then some court reaches out its mighty -hand and claps him into jail.</p> - -<p>Nevertheless, Judd, I take the risk, and point out to you that judges -are men like other rich men. I have never seen statistics as to how -many are ex-corporation-lawyers, but the percentage must be close to -one hundred; for what else is there for a would-be judge to be, except -a corporation lawyer? He must be a “big”<span class="pagenum"><a name="Page_31" id="Page_31">[Pg 31]</a></span> lawyer, before he is fit for -the bench; and how else can you be “big”—that is, earn a great deal -of money—except by serving those who have the money? And how are you -going to get your nomination, except by going to see the political -boss who has the giving of nominations? And will the boss give you -this honor, without asking what use you are going to make of it after -you get it? When there are so many millions upon millions of dollars -at stake, depending upon your judicial decisions? Really, Judd, if -you expect things like that to happen, you are as big a dunce as your -industrial masters think you!</p> - -<p>It happens that I once knew intimately a very “big” judge; he was a -member of the Court of Appeals of the State of New Jersey, which is -to say he was one of the five highest judges in a state which was -extremely important, because many of our biggest corporations were -formed under its safe and easy laws. At the same time the “big” judge -was a “big” corporation lawyer on the other side of the Hudson River, -in New York state; in fact, he was the highest paid corporation lawyer -in the city, which was surely going some; he was the author of “Dill -on Corporations,” the standard text-book in every law-school in the -country. I have sat in James B. Dill’s library many an evening, and -watched him smoke big black cigars, and listened to him pour out his -soul. I will tell you the first story of his career, and then I will -tell you the last.</p> - -<p>A young law-graduate, he got a job in the law department of a big -railroad, I think he said the New York Central; he was to defend -accident suits, and the lawyer who took him in charge pulled open a -drawer in his desk and took out a list of the judges of the state. “You -will notice that some of these names are checked,” said the man. “When -we have cases, get them before one of those judges. Those are <i>our</i> -judges.” Said Dill to me: “That was a young man’s first introduction to -the law.” I asked: “Is it as bad as that now?” He answered, “There are -twenty-two judges of the supreme court in New York state, and nineteen -of them are crooked. I can say to each one, ‘I know whose man you are,’ -and not one will dare contradict me.”</p> - -<p>And then the last story. Dill had just been appointed to his high post -in New Jersey, and the day after the news was published, one of his -old college friends came to see him, and brought him an offer from E. -H. Harriman, railroad magnate, to retain his services in New York for -fifty thousand dollars a year, “and you needn’t do any work.” Dill said -to his friend, “What case has Harriman got before the Jersey courts?” -The friend replied that it was just general principles, the great -magnate liked to have friends on the bench. Dill answered, “You tell -Harriman—being a fisherman you can explain what I mean—that a fat -trout does not rise to a fly.”</p> - -<p>Men do not change their skins when they put on black silk robes and -mount the judicial bench. A hard-boiled, hard-fisted attorney for -labor-smashing employers’ associations, such as Butler<span class="pagenum"><a name="Page_32" id="Page_32">[Pg 32]</a></span> of Minneapolis, -whose whole political career was an expression of the hateful arrogance -of class-greed—when such a man is raised to the United States Supreme -Court, he does not alter his nature a particle, but goes right on at -his old fighting job and in his old fighting spirit; only now he has -the terrible power to say that acts of Congress are null and void. The -Constitution gives no such power to nullify the will of the people; and -you don’t have to be a “big” lawyer to verify that—you can read the -Constitution for yourself, and see. And then watch the use which these -ex-corporation-lawyers make of this stolen power! To protect the sacred -right of great manufacturing corporations to employ child slaves! And -likewise the right of employers to underpay their women slaves! And -likewise the right of stock dividends to escape taxation! And likewise -the right of judges’ salaries to escape taxation!</p> - -<p>But on the other hand, when the rich pass laws in their own interest, -and these laws are in contradiction to the Constitution, what happens -then? The answer is that the courts uphold these laws—and it matters -not how explicit the provisions of the Constitution may be. The -supposed-to-be sacred Constitution of the United States provides that -“the right of the people to keep and bear arms shall not be infringed”; -and yet the legislature of New York state passed a law forbidding a -man to keep a revolver in his home, and a New York lawyer fought that -law to the highest courts, and was beaten. Here in California the -Constitution provides that “every citizen may freely speak, write, and -publish his sentiments on all subjects, being responsible for the abuse -of that right; and no law shall be passed to restrain or abridge the -liberty of speech or of the press.” How could words be more explicit? -And yet we have a “criminal syndicalism” law, under which seventy -men are now in jail for their political opinions, no other offense -having been even charged against them. I personally, as you know, was -arrested and held “incommunicado” under that law; my offense being -that I started to read the Constitution of the United States, while -standing upon private property with the written permission of the -owner, and after notice to the authorities that I intended to exercise -my constitutional right.</p> - -<p>Let me tell you a curious detail, in connection with that incident. The -day after I came out of jail I happened to meet on the street one of -the highest judges in this state—I know him because I play in tennis -tournaments with his son. The old gentleman patted me on the back and -said: “Go to it, my boy, you are absolutely right!” But when I asked -him to say that publicly, he didn’t think it would be proper; and when -I asked him to join the Civil Liberties Union, and help to protect all -citizens in such rights, he didn’t think that would be proper, either. -You see how even the most liberal of judges is bound by red-tape and -precedent, and leaves it to others to defend the law.</p> - -<p>I have seen in Los Angeles a magazine office raided without warrant -of law, and the editor, a war veteran, manhandled and thrown into -jail—all because the authorities objected to what this<span class="pagenum"><a name="Page_33" id="Page_33">[Pg 33]</a></span> editor was -publishing. And not only did the courts permit this, they tried the -man, and would have convicted him if he had not run away. All over the -country such things were done, with the full sanction of the courts. -In New York City federal agents arrested a man and held him in a room -in an office building for three weeks “incommunicado,” and tortured -him until he flung himself out of the window and was smashed on the -pavement below. Two other men began holding meetings of protest against -this outrage, and they were “framed” on a charge of murder, and the -labor movement has so far raised and spent about a quarter of a million -dollars to keep them from being hanged. That is the Sacco-Vanzetti -case, and you may learn about many as bad or worse from the American -Civil Liberties Union, 100 Fifth Avenue, New York.</p> - -<p>And how it is with ordinary civil litigation, in which the poor seek -justice against the rich? Here I do not have to ask you to take my -word, for the scandal is so notorious that even capitalist authorities -have been forced to admit it. You see, there are eminent legal -gentlemen, occupied in crushing the poor in major ways—the tariff, the -trusts, the banking graft, “tight money,” child labor, and so on—but -when it comes to a poor widow seeking justice against an employer -who withholds her wages, these gentlemen think that the law ought to -preserve an aspect of impartiality; it ought not be too obvious that -there is one law for the rich and another for the poor. For example, -a majestic plutocrat like ex-president Taft, now chief justice of our -Supreme Court; when such a weighty personage denounces capitalist -justice, you surely will believe what he says! Here he is, speaking -before the Virginia Bar Association: “We must make it so that the poor -man will have as nearly as possible an equal opportunity in litigating -as the rich man, and, under present conditions, ashamed as we may be of -it, this is not the fact.”</p> - -<p>Notice the delicacy of the phrasing, Judd: “as nearly as <i>possible</i>!” -There is nothing “utopian” about our chief justice! Just how possible -it is for impotence to be equal to power, is something which has -not yet been shown to us; but evidently there is some limit to the -possibility, for Dean Pound of the Harvard Law School speaks of the -attitude of the law to the poor as “this neglect which disgraces -American justice.”</p> - -<p>For my part, you understand, I do not expect the poor ever to get -equal justice against the rich; it seems to me absurd to imagine such -a thing happening. The existence of riches in the world, at the same -time as poverty, is in itself the sum of all injustices; and so, if we -really care about justice, we must either make the rich as poor as the -poor, or else make the poor as rich as the rich, or else strike a happy -medium between the two. This last is my solution and I hope to show you -how it can be done.</p> - -<hr /> - -<p><span class="pagenum"><a name="Page_34" id="Page_34">[Pg 34]</a></span></p> - -<h2>LETTER X</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>We have seen the poor struggling to protect themselves against the rich -in the field of politics, and meeting with no great success. There is -another place where they struggle—in the labor market. Let us see what -happens to them there.</p> - -<p>Seeing the employers combining into larger and larger organizations, it -naturally occurred to the workers to combine, and sell their labor as -a unit. At first the employers made this action a crime, and a great -many working men went to jail, before the right of labor combination -was granted. Even now, it is only grudgingly granted; the employers -in their hearts are still certain that anything which reduces their -profits is a crime, and through their courts they hedge the labor -unions about with all sorts of restrictions. The doctrine of the -present hour is briefly this: that labor organization is all right, -provided it does not accomplish anything.</p> - -<p>You, Judd, are a non-union man. You grew up in small places, and live -now in a suburban neighborhood which is like a small place, in that -everybody knows everybody else, and the people you work for are not -much better off than you are. You can leave your job any time you don’t -like it, and that gives you a sense of freedom. But suppose, Judd, you -had been raised in the slums of a city, and had to do your carpentering -on great buildings, under a firm of contractors; and suppose you found -that your freedom to leave your job involved the necessity of hunting -another job, under some contractor who belonged to the same employers’ -association, and paid the same scale, and followed the same working -rules as your previous boss? You must see that this would make quite a -difference in your sense of “freedom.”</p> - -<p>Or suppose you had grown up in some industrial center, and worked for -the coal trust, or the steel trust, or the beef trust. You have read -“The Jungle,” and know how the wage-slaves of Packingtown lived twenty -years ago. Well, Judd, they are living exactly the same way today. I -said concerning “The Jungle” that “I aimed at the public’s heart, and -by accident I hit it in the stomach”; the public insisted that some -pretense be made that their meat was better, but no one even pretended -that the workers were helped. And the same thing is true of the slaves -of “King Coal”; it did not trouble the American people to learn that -the men who dug their coal were living in privately-owned empires, -where the elemental rights of American citizens, and even of human -beings, had no existence.</p> - -<p>In such places the only hope of the workers is to organize, and present -a solid front to their masters, and extort better terms by the threat -of withholding their labor. For a hundred years the workers have -been forging that weapon, and trying it out. There are about four -million of them organized, out of the forty-two million wage-earners -of the country, and that seems a pitiful few;<span class="pagenum"><a name="Page_35" id="Page_35">[Pg 35]</a></span> but you know about -the leaven in the dough, Judd. Perhaps it never occurred to you to -realize the influence which the organized carpenters—some 315,000 of -them—exercise upon the lives of unorganized carpenters like yourself. -They set a standard, that would otherwise be unknown in the carpenter -world; they make it certain that no boss can get a really big job done -at lower than the union scale—first, because it is hard to get a lot -of skilled men together except through the unions, and second, because -of the constant threat that a union organizer will get in among them. -It is strange to see a man like yourself, rather suspicious of unions, -because of all the poison you absorb from the capitalist press—and yet -at the same time profiting every working hour of your life from the -sacrifices made by union men! Also it is strange to see employers who -fight the unions, and denounce them, and boast of the contentment of -their non-union workers—and make that contentment by paying the union -scale, which otherwise neither the employer nor the men would ever have -dreamed of! Once let the “open shop” bosses have their way, Judd, and -then see how a “free” carpenter’s wages will drop!</p> - -<p>We have seen that there is in America a law for the rich, and quite a -different law for the poor; and that state of affairs is well known to -organized labor, you may be sure. The unions never get far in their -effort to raise their members’ standards, without encountering the iron -fist of the government. I have shown you how the rich defy the laws -they do not like; but let no workingman, union or non-union, ever make -the mistake of trying that! There are jails and prisons, and also there -is the hideous “third degree,” with torture-chambers where workingmen -are taught their “place”—of subjection and impotence.</p> - -<p>Let me give you an illustration, Judd, right here at home, in this -paradise of the “open shop.” We have a group of employers’ federations, -with an iron-clad policy of class warfare. An employer who “panders to -the union element” cannot get any business, he cannot get credit with -the banks—they smash him as you would a louse. And, of course, they -keep a card list of men who belong to unions, they follow a man up—the -grim device known as the “blacklist.” And all this quite openly, it is -the industrial policy of Los Angeles, and its boast. And do you hear -anything about its being a violation of law? Do you see the publisher -of the Los Angeles “Times” being sent to jail for advising employers -not to hire members of the carpenters’ union? No, Judd, you do not see -that!</p> - -<p>So, naturally, the idea occurred to the workers that two could play -at this game. If the employers could refuse to do business with -them, obviously they could refuse to do business with the employers. -So they tried it; and then what happened? Why then there appeared -suddenly a new crime in the calendar of the law; a monstrous form of -wickedness known as the “boycott!” It was a “conspiracy,” a plot to -ruin a business man and deprive him of his property; and the judges -were called upon to forbid it,<span class="pagenum"><a name="Page_36" id="Page_36">[Pg 36]</a></span> and they did so. For violation of -such a judge-made “law,” the Danbury hatters—union workingmen of -Connecticut—were fined $240,000; and the United States Supreme Court -upheld that decision. Afterwards union labor succeeded in getting a -law in their favor through Congress, and now the courts are engaged -in paring that down to nothing. Workingmen may boycott their own -employers, but not other employers! But do you ever see employers -limited to blacklisting their own workingmen?</p> - -<p>I have shown you the judges taking by force the right to annul laws of -Congress. Confronting the emergencies of labor strife, these judges -proceeded to invent another weapon, known as the “injunction”; which -means in brief that any ex-corporation-lawyer on the bench will issue -an order forbidding workingmen to do anything that the corporations do -not want them to do; and the workingmen have to obey that order, or -else the judge will send them to jail for any length of time that the -corporation may desire; and there is no jury trial, and no defense, and -no redress—the workingmen just go to jail!</p> - -<p>What these injunction judges have forbidden labor to do makes a catalog -over which you might have a good laugh, if you could forget all the -heartbreak and agony of the poor that is summed up in the preposterous -sentences. All the hopes that were blasted, the pitiful hopes of a -little better food for a sick wife, of a chance to keep the children -in school! Such things are the meaning of a strike to workingmen; and -suddenly a grim personage in a black silk robe lifts a club and smashes -these hopes over the head! As I write, some clothing workers of New -York are on strike, and a judge has issued an injunction, forbidding -them, not merely to picket the shops of their boss, but to go within -ten blocks of the place! In the West Virginia coal fields, they are now -forbidding mass-meetings, forbidding the use of money in unionizing the -mines, and even the use of tent-colonies for the families of miners -who have been ejected from company houses! In Oklahoma they recently -forbade miners to pray! In Minneapolis I talked with a labor man who -had spent six months in jail for violating an injunction, and he gave -me the thing to read, a list of prohibitions that would fill a couple -of pages of this book; as the man said, “I’d have broken the law if I’d -waked up in the night and disliked my boss.”</p> - -<p>And every year they are encroaching a little farther on the rights -of the workers, and of all citizens. They are trying to set up the -principle that it is a conspiracy against the public welfare to -interfere with “essential industries.” Thirty years ago, when Grover -Cleveland sent in Federal troops over the head of Governor Altgeld of -Illinois, and smashed the strike of the railwaymen, and threw Gene Debs -into jail, it was considered quite a startling action. But now we have -got used to things like that, and in 1922 they imprisoned eight railway -leaders in Los Angeles, calling their strike “a conspiracy to interfere -with the mail.” Now President Coolidge, in his message to Congress, -is calling for a law to forbid<span class="pagenum"><a name="Page_37" id="Page_37">[Pg 37]</a></span> all such strikes, and take off the -shoulders of the judges the embarrassment of having to create the law!</p> - -<p>And so, once more, Judd, do you see why the rich are growing richer -and the poor poorer? Do you see why the index figures of a university -professor revealed that the wage-earners of America, taken as a -whole, were five per cent poorer today than in 1890? I told you that -riches and poverty are not caused by the Will of God, nor yet by any -implacable Economic Law, but purely and simply by the actions of -men, driven by the basest of all human impulses, which is greed. And -here you see, Judd, exactly what these actions are. Every time an -ex-corporation-lawyer on the bench issues an injunction which smashes -a strike, he is reducing the average real wages of the workers of -America; he is taking away a little more from the poor, and handing -it to the rich—and that is the job for which the rich set him up in -office, and bought him his black silk robe!</p> - -<hr /> - -<h2>LETTER XI</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>I don’t know whether you ever played poker, but I did a few times in -my naughty youth. I recall a game known as “freeze-out”; you played -till you lost all your money, and the game ended entirely when one -man got all the chips. That is our social system—a colossal game of -“freeze-out,” with winter and disease and death to clear the players -from the board. Those who lose at the game are the workers of the world.</p> - -<p>You, Judd, must realize that you are in an unusual position for a -worker grown old; you own two lots and three houses, and can live -partly on the rent. But how many others are there like that? Consider -the statement given out this month by the Industrial Accident -Commission of California: “One million men and women of America -suffered disabling accidents in industries this year.” Assuming that a -workingman puts in forty years, as you have done, what are his chances -of getting off without a disabling accident? There being forty-two -million people gainfully employed, the chances would appear to be one -in twenty; but of course only part of the disabling is permanent—the -victims get well, and go back to be disabled again. The number of -accidents increased 30 per cent in 1924, so you see your chances grow -less and less.</p> - -<p>The worst you got, Judd, was a rupture. But suppose you had been one -of the 21,232 to be killed; or suppose you were of the 105,629 who -suffered “permanent partial disability” last year; or suppose that you -had eight or ten children, instead of one or two; or that your wife, -instead of dying in an accident as she did, had been crippled, and left -upon your hands for life. Do you think you or your heirs would still -have the two lots, and the three houses, and the fine American sense of -security?</p> - -<p>Look, old friend, here are some figures worked out from <span class="pagenum"><a name="Page_38" id="Page_38">[Pg 38]</a></span>insurance -tables by the National City Bank of New York, the richest bank in the -country. They are trying to persuade people to take out insurance, so -that the money will come back to Wall Street for them to use in stock -gambling. Taking 100 people 25 years old, they ask what will be the -position of these same people at the age of 65; and they say 1 will -be independent, 4 will be well to do, 5 will be working for a meagre -living, 36 will be dead, “many of them for want of attention that money -would have secured,” and 54 will be dependent upon others. “Out of the -entire 100, only 5 will be in satisfactory circumstances.” There you -have a picture of what the richest nation in the world has been able to -achieve in the way of sound human happiness!</p> - -<p>Our Mother Nature is a wasteful parent, who creates many millions of -salmon eggs in order to produce one salmon. It is the same way with -human life also in its dark beginnings; history is a tale of mighty -empires arising only to be destroyed again, and of populations wiped -out by plague and famine and slaughter. But now the light of reason is -beginning to dawn; a few of us have the idea that human energies might -be rationally guided, and that men might cease to spend their time -digging holes in the sand and filling them up again.</p> - -<p>Consider war. Women bear children with much pain, and raise them with -loving care, and then send them out, at the very prime of their lives, -to be blown to pieces by shot and shell. Other men in factories, who -might be making the means of human happiness—automobiles and radio -sets and books and music—these men are making explosives to wipe out -whole cities, and gases to poison the inhabitants. In the late war -we destroyed 30,000,000 human beings and $300,000,000,000 worth of -treasure, the product of a whole generation of useful toil.</p> - -<p>They promised us that this war was to be the last, but what are the -prospects? In 1912 our government spent for defense nearly a quarter -of a billion dollars, and our 1926 budget for the same purpose is more -than three times that amount. In 1920 the Bureau of Standards analyzed -our budget and found that expenses for wars, past and future, composed -93 per cent thereof. Think of it, Judd, a great government spending one -dollar to save life and property, and thirteen dollars to destroy it! -Of course, the military men will say that the thirteen dollars are to -prevent other nations from destroying us, but the obvious fact is that -when we spend this money on armaments we cause other nations to do the -same, so we might as well do our own destruction and have it over with.</p> - -<p>Or consider child labor. We take a million children out of school and -put them into factories and mines, thus stunting them in body and -spirit, and when they grow up into cripples, defectives, criminals -and grafters, we pay ten or a hundred times what we got out of their -childhood labor! Or consider crime, which is caused by the presence of -extreme poverty alongside extreme wealth. Including criminals and those -who catch them, this factor<span class="pagenum"><a name="Page_39" id="Page_39">[Pg 39]</a></span> of waste keeps more than 700,000 persons -out of productive work. Or take prostitution, caused by poverty and low -wages of women in industry. There are over a quarter of a million women -in our country who live by spreading vice and disease, and the American -Social Hygiene Association estimates that this costs us $628,000,000 -every year.</p> - -<p>Or consider adulteration, the putting of worthless goods and poisonous -foods upon the market, all for profits, of course. Or the wastes of -advertising—the seekers of profits spending a billion and a quarter -dollars a year, and keeping more than 600,000 people busy all the time, -in order to persuade us to stop buying the worthy products of Jones and -to buy the unworthy products of Smith. This is civil war within our -industry, and one of its weapons is fashion, the making of imbecile -changes in our goods every season, in order that we may be ashamed to -wear our perfectly good clothes after the first year.</p> - -<p>Or take the wastes of mismanagement of industry. The so-called “Hoover -Committee” of the American Engineering Societies made an elaborate -study of this field, and it is interesting to notice that this -employers’ body attributes 50 per cent of the blame to management and -only 25 per cent to labor. They estimate the percentage of waste in a -few great industries: Metal trades, 28 per cent; boots and shoes, 40 -per cent; textiles, 49 per cent; building, 53 per cent; printing, 57 -per cent; men’s clothing, 63 per cent. Notice that figure for building, -Judd, and be sure you get what it means: out of 40 years you put in at -carpentering, 21 years went to no purpose, because those who directed -your labor were making money instead of making houses!</p> - -<p>One great form of industrial waste is men and women willing to work, -and able to work but unable to find work to do. I regard this as the -basic evil, the cause of most of the others, and I believe that it is -an essential part of our present profit system, without which that -system would break down. First, let us see exactly how widespread the -evil is.</p> - -<p>I point out, Judd, that nowhere in these letters have I given you -any Socialist figures about anything; in each case I go to the most -“respectable” authorities, those who are least favorable to my point -of view. In this case of unemployment I consult a volume prepared and -published with money derived from the estate of one of the richest -landlords and money-lenders that ever died in the city of New York. I -refer to the Russell Sage Foundation, and here is the sentence in which -they sum up their final figures on unemployment: “To conclude that, -averaging good and bad years, from 10 to 12 per cent of all workers are -idle all of the time, is probably an understatement of the situation.” -The book calculates the number gainfully employed at 42,000,000, and 12 -per cent of that is over 5,000,000.</p> - -<p>When you talk about five million people out of work it doesn’t mean -much, because we haven’t the mental power to grasp such a<span class="pagenum"><a name="Page_40" id="Page_40">[Pg 40]</a></span> thing. Let -us say <i>one</i> person out of work, and see what it means. It so happens -that before I sat down to my typewriter this morning the postman -brought a letter from such a person; twelve miles away from us, in the -great rich city of Los Angeles, a war hero is begging a job, and his -wife and children are starving. This hero encloses a visiting card, -reading, “D. S. C.”—that means “Distinguished Service Cross”—and down -in the corner is “Chevalier Legion d’ Honneur; Croix de Guerre,” the -decorations prized above all things in France. And on the back of the -card he has written: “Ex-soldier, bonus-pest, charity-dependent.” He -encloses newspaper clippings: “Top-sergeant in the suicide squad of -machine gunners,” left for dead on the field, taken to base hospital, -returned to front, made lieutenant, more hospitals and medals—regular -hero stuff, you see, and here he has been hunting any sort of job for -months, and tells me how it goes:</p> - -<p>“Louise the baby is low from malnutrition. Virginia, the oldest, the -invalid around whom my book is written, coughs all night incessantly. -We are making our last stand. As completely isolated as though in the -heart of the Sahara. Today I received my first offer of a good job in -weeks, but it necessitates my providing at least $22 of special tools. -It’s on tractor transmission; I built them shortly after the armistice, -but when I entered Stanford University I was through with mechanics, -and gave away my kit. I took my D. S. C. and other war junk down to -my favorite pawnbroker Saturday but they wouldn’t bring carfare to -Pasadena now.”</p> - -<p>So here, you see, is one of the victims of our great game of -“freeze-out”; and what was his weakness that caused him to lose in the -game? The answer is plain enough—he believed the propaganda of our war -profiteers and went over to France and risked his life and ruined his -health and fortune—while 23,000 able business gentlemen stayed at home -and made themselves into millionaires! “What price Glory,” Judd!</p> - -<hr /> - -<h2>LETTER XII</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>I have said that unemployment is a disease of the profit system, -incurable under that system. I am now going to show why, and I consider -these facts the most important in the whole world for a workingman to -understand. They are perfectly simple—any child can grasp them; yet -they are never mentioned in any newspaper, and never taught in any -school. The reason is equally simple—any editor who publishes them, or -any teacher who teaches them, immediately loses his job.</p> - -<p>I put them into a series of short sentences for you to paste all around -the rim of your hat and study while you are sawing timbers and mixing -cement. First, then:</p> - -<p><span class="pagenum"><a name="Page_41" id="Page_41">[Pg 41]</a></span></p> - -<blockquote><p><i>The boss is not in business for his health. Ask him!</i></p></blockquote> - -<p>And then, equally easy to verify:</p> - -<blockquote><p><i>The boss will make no more goods than he can sell at a profit.</i></p></blockquote> - -<p>And so, plainly enough:</p> - -<blockquote><p><i>Profits for the boss, wages for the workingman; no profits for -the boss, starvation and death for the workingman.</i></p></blockquote> - -<p>So far, every business man will agree; in fact, this is the doctrine -they hammered into your head during the Coolidge campaign, and it got -them seven million plurality. All right, then; and now let us suppose, -just for the sake of arguing, that the Coolidge administration believed -in allowing the rich to charge as high prices as they pleased for -goods, and to break strikes and beat down the wages of the poor; what -would happen then? Why, obviously the poor wouldn’t have the money to -buy so much goods or to furnish so much profits for the bosses; it -would be only the rich who had the money, and goods would be more and -more for the rich, and less and less for the poor. Take notice, Judd, -the Secretary of the Treasury estimated that in 1919 the amount spent -for luxuries in our country was $22,700,000,000—and with millions of -families lacking bread!</p> - -<p>But with the flood of goods pouring out from the machines, the rich -find it harder and harder to consume the product; they take to -reinvesting their money, that is, using it to make more machines, to -turn out more goods, to be sold for more profits. But already there -are more goods than can be sold; there are no longer enough profits to -supply the demands of the great mass of heaped-up capital. So comes -a glut of goods, and factories have to shut down, and we have “hard -times.” Just what are “hard times,” Judd? Paste this in your hat now:</p> - -<blockquote><p><i>Hard times are tenant farmers starving because they have raised -too much food!</i></p></blockquote> - -<p>And again:</p> - -<blockquote><p><i>Hard times are weavers in rags, because they have made too much -clothing!</i></p></blockquote> - -<p>And again:</p> - -<blockquote><p><i>Hard times are carpenters homeless, because they have built too -many houses!</i></p></blockquote> - -<p>And finally:</p> - -<blockquote><p><i>Hard times are workingmen who have finished making the world for -their masters, and are ordered to move on to some other planet!</i></p></blockquote> - -<p>You will say, Judd, that such absurd things could never happen. To that -I answer, very simply:</p> - -<blockquote><p><i>They are happening right now to several million Americans who are -hunting jobs and not finding them!</i></p></blockquote> - -<p>This insanity of “hard times” comes periodically in our affairs, in -great waves known as “business cycles”; they are due at<span class="pagenum"><a name="Page_42" id="Page_42">[Pg 42]</a></span> intervals of -from seven to ten years, and are just as inevitable as the tides of -the sea. Learned economists study the history of these tides of ruin -and make charts and diagrams of them; but if you state the cause, you -become an outcast from the business world; and so naturally nobody does -state it—except a few outcasts like myself.</p> - -<p>The professors of economics admit that this trouble is caused by -“over-production,” and we must get straight exactly what that means. It -doesn’t mean that we have produced more than we need; on the contrary, -we have millions living below the wage level of common decency—our -average wage is $1,200 a year, and the cost of keeping a family on the -bare necessities is $2,000. But it doesn’t matter how much people need; -the thing that counts is what they can buy. I give you another slogan, -and next time you meet a professor of economics, ask him about it:</p> - -<blockquote><p><i>If you’ve got the price, you’re a consumer; if you haven’t got -the price, you’re a bum.</i></p></blockquote> - -<p>Well, since we American consumers can’t buy our own product, the -owners of the product—that is, the rich—have to look elsewhere for -customers, and so comes the hunt for “foreign markets.” Understand -me, I do not object to our going abroad for the things we can’t raise -at home; to exchange automobiles and moving pictures for bananas and -coffee—that is normal business. What I am talking about is a glut of -goods that we can’t sell at home, but must sell abroad, under penalty -of seeing our workers turned off to starve. We don’t take goods in -exchange—oh no, that would break down our home industries, and we -protect them by a high tariff wall. What we take are paper promises to -pay us at some future date; we go on continually selling more than we -buy, and filling our bank vaults with these paper promises, and that is -called a “favorable balance of trade.”</p> - -<p>But all the highly developed nations, Britain and France and Germany -and Italy and Japan, are in exactly the same plight as ourselves; they -also have more goods than their half-starved workers can purchase; they -also are looking for foreign markets, to save their business system -from collapse. Each finds its chance of salvation in selling to the -backward nations, which cannot yet do their own manufacturing. So we -run upon this curious situation:</p> - -<blockquote><p><i>The existence of American industry depends upon our selling -cotton shirts to Chinamen, who are so poor they can’t afford but -one shirt at a time.</i></p></blockquote> - -<p>And now, see the next step! Trying to save our own business system, we -threaten ruin to the business system of some other country, say Japan. -Naturally, the business men of Japan don’t like that; so we have trade -rivalry, and out of that we have war. The cause of modern war may be -put into one sentence—and I<span class="pagenum"><a name="Page_43" id="Page_43">[Pg 43]</a></span> beg you to realize that it’s no joke, but -the grimmest of grim realities:</p> - -<blockquote><p><i>If we don’t go to war with other nations, they will take away -from us the chance to sell to Chinamen those cotton shirts of -which our workers have produced so many that they have to go in -rags.</i></p></blockquote> - -<p>I could go on like that indefinitely, making funny sentences about -this funny system. I could tell the hilarious story of how Britain -and Germany went to war to take away from each other the chance to -sell shirts to Chinamen—and to Hindoos and Persians and Arabs and -Turks, of course. When they had destroyed 30,000,000 human lives -and $300,000,000,000 worth of goods you might think they would have -cured their “over-production” for quite a while; but they had made a -miscalculation, and fought too long, and borrowed too much money from -us, and so their governments are burdened with enormous fixed charges, -and there is chronic unemployment in both Britain and Germany, and -almost a collapse in France.</p> - -<p>And how about us? We have that “favorable balance of trade,” so -ardently desired by the prosperity boosters; indeed, we have got such -a bellyful of it that for the first time we are forced to realize that -it’s nothing but wind. Europe owes us, in one form or another, some -$19,000,000,000, and can’t even pay the interest; they made no pretense -of trying—until they had to borrow some more! Italy came, bowing low -and grinning behind its cap, agreeing to pay several billions in the -course of 65 years—on condition that we lend another $200,000,000 -right off! Germany did the same thing, and France will be doing it, -probably before these words see the light of day. Our great financiers -accept these paper pledges, for the reason that they are stuck with -$19,000,000,000 of them already, and can’t contemplate what will happen -when the whole thing turns out to be wind. We go on adding about a -billion a year, because the only way we can keep our factories going is -to ship our surplus goods abroad—and take nothing back, because that -would stop the factories!</p> - -<p>We promised our people “prosperity,” you remember, if only they would -vote for Coolidge; and they did so, good, patient souls; so now we -have to deliver it. The way of “prosperity” is to keep them working -to feed and clothe Frenchmen and Germans and Italians and Chinamen -and Guatemalans and Haytians—anybody who will send us a beautiful -engraved sheet of paper promising to pay us 65 years from now! To be -exact, Judd, they don’t even have to engrave the paper; we do that in -Wall Street, and they send us a “mission” of white or yellow or black -gentlemen in frock coats, to sign opposite the red seal. So here, Judd, -you have this wonderful jazz system in its final, delirium stage—our -whole people starving themselves on half wages, and sending the surplus -abroad, so that our rich men may fill their vaults with pieces of paper -which they dare not permit to be redeemed! We already<span class="pagenum"><a name="Page_44" id="Page_44">[Pg 44]</a></span> have more than -half the gold in the world, and far from taking any more, we have to -ship some abroad now and then, to keep some debtor nation from going -bankrupt!</p> - -<p>Don’t you wish, Judd, that you could find some benevolent storekeeper -to do business with you on this ultra-modern jazz basis? Never, never -can he be persuaded to take your money, but takes only checks, and does -not cash them for 65 years; and if at any time you need money, you -threaten to go broke, and immediately he gives you cash and takes some -more checks; and if ever you try to send him a truckload of goods, to -pay off at least part of the debt, he holds up his hands in a fit of -high-tariff horror and says he couldn’t think of taking goods, it would -ruin the people inside his store who have the jobs of making that same -thing! “For God’s sake, take away your truck,” he exclaims. “Just mail -me another paper promise, and anything in the place is yours!”</p> - -<p>I conclude with one more sentence for you to learn, Judd:</p> - -<blockquote><p><i>Our present system of “high finance” is a soap-bubble, which -differs from other soap-bubbles in just one respect—it is as big -as the world.</i></p></blockquote> - -<hr /> - -<h2>LETTER XIII</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>The essence of our industrial system is the private ownership of the -means of production; with profit for the private owner as the motive -power of industry. The capitalist produces the goods we need, and in -order to get them we pay him everything above the bare means of keeping -us alive and enabling us to raise the next generation. If this system -should break down, it is obvious that we must change to some form of -social ownership of the means of production; instead of having the -capitalist produce for us, we must do it for ourselves, and the motive -power will be, not the desire of the capitalist for profit, but our own -desire for the goods.</p> - -<p>What difference will that make in the industrial system? At first you -might see no difference at all. The worker will go to the factory, -where he will find foremen and superintendents in charge, and a -time-clock keeping tab on him. On Saturday night he will get his pay -envelope, and will take the money and spend it at the stores. The goods -produced in the factory will be shipped to all parts of the world, -to people who pay for them by checks, which go through banks and a -clearing-house—you might follow the whole process, and fail to realize -there had been any change. At only one place would the difference -appear—inside the pay envelopes. There being no longer any absentee -owners, drawing off rent, interest and profits, those who do the work, -whether of hand or brain, will now be the only people to draw anything -out; and consequently there will be considerably more in each pay -envelope. </p> - -<p><span class="pagenum"><a name="Page_45" id="Page_45">[Pg 45]</a></span></p> - -<p>Wall Street propagandists are fond of figuring how much goes to labor -and how much to capital, and proving that to wipe out the capitalist -would add only a small percentage, say ten per cent, to the share of -each worker. This is a trick, for the reason that a great part of the -capitalist’s share appears, not as profits, but as various forms of -“fixed charges” against the industry: the interest on bonds, the rent -of land, the royalties to owners of various privileges. To give just -one illustration, the New York Central Railroad crosses a bridge near -Albany, and a private concern owns that bridge, and the railroad pays -one cent for every passenger, a small fortune every year. Our whole -industrial system is a tangle of grafts such as that; the railroads -are plundered by right-of-way companies, sleeping-car companies, -refrigerator-car companies; industrial concerns are plundered by -private railway lines, owned by “insiders,” or by companies having a -“cinch” on repairs or materials or accessories. Just the bookkeeping on -such rights is a vast industry, and the adjusting of them supplies a -living for thousands of lawyers and their clerks. To wipe all that out -will be to dump a mountain’s weight off the back of production.</p> - -<p>But even suppose it was as the Wall Street propagandists argue—that -capital got only ten per cent—would that be the only gain for labor? -No, Judd, it would not; and here is the most important point that I -have to get across to you in these letters. The proposition may seem -difficult, but I beg you to put your mind on it and get it straight, -for it is not too much to say that all freedom and happiness for the -workingman in our time depend upon his understanding these matters, so -that the clever hired writers of privilege cannot befuddle his mind.</p> - -<p>Whatever may be the percentage that goes to capital—whether ten per -cent, as Wall Street claims, or thirty or forty per cent, as I could -prove—nevertheless it is this percentage which causes our industrial -ills today. It is this surplus which, drawn off and re-invested in -more means of production, causes the glut of goods which we know as -“hard times”; it is this surplus which causes speculation and panics, -and turns the worker out to join the ranks of the “unemployed,” and to -beat down the wages of his fellows; it is this surplus which causes the -search for foreign markets, and draws the great industrial nations into -war. Figure to yourself a body having an iron ring riveted about it. At -first this ring makes no difference, but as the body grows it causes -strangulation, and the time comes when for all the agonies of that body -there is but one remedy, to cut the ring.</p> - -<p>Cutting the ring is simply this: to take the surplus product away -from capital and give it to labor; so instantly you have remedied the -evil and relieved the pain. How so? Because labor now becomes able to -consume the entire product of industry. Labor can consume it, because -labor has the money to buy it. Before this, as we have seen, labor got -only part of the money, and so could buy only part of the product; the -rest had to be<span class="pagenum"><a name="Page_46" id="Page_46">[Pg 46]</a></span> either wasted by the rich, or sold abroad. But give -labor the full value, the actual equivalent in purchasing power of the -amount of goods produced, and so consumption balances production, and -the factories can work merrily, as many hours as we desire, turning out -for each and every one of us as much goods as we care to consume. The -only restriction is the basic law of social justice—that before any -man consumes anything he must render to the community an equivalent -service.</p> - -<p>The hired men of the exploiters do all they can to confuse this -argument; I hear them laugh that I have some kind of deluded horror of -a surplus. We ought to save, they insist, and provide against a “rainy -day”! Yes, of course—and not merely against rain, but against famine -and earthquake and tornado. I have no objection whatever to a surplus; -the question is, who is to own that surplus—those who do the work, or -those who live as parasites? That makes all the difference; for when -a workingman has made too much wealth for his master, the workingman -is out of a job; but when the workingman has made too much wealth for -himself, the workingman is on a vacation.</p> - -<p>Here is this great rich country of ours, with all its natural -resources, its marvelous machines, its willing and clever workers; and -when we have broken the iron ring we can produce goods for ourselves, -and consume and enjoy them, and stay quietly within our own boundaries. -No longer do we keep our workers on starvation wages, and ship all -our surplus products abroad, to be consumed by Frenchmen and Italians -and Turks and Chinamen and Hindoos, in return for paper promises to -pay money to our capitalists! No longer do we have to go to war, to -seize foreign markets from other capitalists! The workers now own the -factories, and also they own the working capital, and they produce -goods for use, and if we have foreign trade it is because we want -things from abroad, and not because we have to get rid of our surplus -product under penalty of starving. This is what I describe as a Free -Society, Judd; I say that in such a society, with production rationally -planned, and all wastes removed, we should produce wealth in such -quantities, so quickly and so easily—well, you would think I was -joking. But leading engineers have told us that we have, in our machine -power, the constant labor of <i>three billion slaves</i>. In thirteen -industries, figured by the capitalist, Mr. Babson, we have <i>88 times</i> -the productive power we used to have by hand labor. Just think what -that ought to mean!</p> - -<p>Or look at it another way. Twenty years ago Sidney A. Reeve, an -engineering expert, calculated how much we wasted by the competitive -production of goods, and in a big book full of tables and charts, he -worked out the figure of 70 per cent waste. We have seen the Hoover -Committee, considering merely the wastes <i>inside</i> each industry, -giving figures as high as 60 per cent of waste. Mr. Stuart Chase, in -his wonderful book, “The Tragedy of Waste,” figures 50 per cent as the -minimum. Well,<span class="pagenum"><a name="Page_47" id="Page_47">[Pg 47]</a></span> let us take the minimum, for a start. What does it -mean? I answer:</p> - -<blockquote><p><i>In a free society what we now have will cost us four hours labor -a day.</i></p></blockquote> - -<p>And more than that, Judd—something absolutely vital to every poor man -in our country:</p> - -<blockquote><p><i>In a free society every man may work as many hours as he wants to -work, and get the full value of what he produces.</i></p></blockquote> - -<p>So now we can make what would have seemed at the beginning a bold claim:</p> - -<blockquote><p><i>From a free society involuntary poverty will be banished.</i></p></blockquote> - -<p>And finally—one sentence more—and I beg you to learn this one:</p> - -<blockquote><p><i>The end of involuntary poverty means the end of most prostitution -and crime, and of all war between civilized peoples.</i></p></blockquote> - -<hr /> - -<h2>LETTER XIV</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>It is an interesting thing to study the development of human society -through a long period of history. Men began in small tribes, in which -they were very much alike, and stood on an equal footing. These tribes -fought, and absorbed one another, and grew more complex, with greater -differences among the members; dukedoms and principalities arose, and -then kingdoms, and at last great empires, with rulers and subjects -ranged in classes, and the class lines rigidly drawn.</p> - -<p>It was against such a form of society that our ancestors revolted; they -had a new theory of government, and established a new form—a republic, -owned and run by its citizens, all standing on an equal plane. The -process of evolution in the political world is still going on, and some -day we shall see a world-wide federation of republics, in which the -human race will share equal rights.</p> - -<p>It is fascinating to realize that this same process is going on in the -world of industry. Here also we see the various enterprises struggling, -and some winning and absorbing the others, until today we have -industrial monarchies and empires. It is not merely a figure of speech -when we talk about coal barons and steel kings and emperors of finance, -for these men occupy the same positions and hold the same kind of power -as the rulers of old days. And just as we saw revolutions in the field -of politics, so we shall see them in industry. In fact, the first of -these great revolutions has taken place before our eyes; the workers -of Russia are now trying to show us that a government of industry by -the citizens of industry is a possible thing and a step in progress. -Our capitalist newspapers are sure that they must fail; but even if -they did, that would not upset the argument,<span class="pagenum"><a name="Page_48" id="Page_48">[Pg 48]</a></span> for the first political -revolution in England failed, and the first two in France; but that has -not kept a whole string of other countries from turning into republics.</p> - -<p>The way human beings learn is by trying; and we are in the stage of -history where men are getting ready to try democracy in industry. -There will be mistakes, and a great deal of waste and suffering; -nevertheless, we shall press on, and in the end we shall achieve a -higher type of society than anything conceivable under industrial -monarchy, or imperialism such as we have today.</p> - -<p>You remember King Louis of France, the “grand monarch,” who said, -“The state, it is I”; well, imagine the scoffing you would have met -with, if you had talked with some haughty marquis of that court, and -tried to tell him how some day in France the common “riff-raff” would -have votes, and choose parliaments, and decide the issues of war and -diplomacy. He would have been quite sure they could never do it; and as -a matter of fact, they don’t, Judd—but they will; yes, even here in -the United States the people will some day decide!</p> - -<p>Today our great captains of industry are no less certain that common -workingmen cannot possibly have intelligence enough to run factories, -to say nothing of deciding the broad policies of business. The masters -have won the money fight, and got the power, and they mean to hold on -to it, and train their descendants and found great money-dynasties. -But the same thing happens that we saw two hundred years ago with the -French kings—the new generations become enervated and worthless, -and the wealth of the community flows into the lap of idlers and -parasites, who squander it in dissipation and display; the poor become -discontented and rebellious, and the rumble of the approaching deluge -is heard.</p> - -<p>Our capitalist newspapers never get tired of harping upon the failures -of government ownership, the waste and the graft. Private ownership -is the way to efficiency! Well, Judd, there is a lot of present-day -efficiency which I am ready to do without, beginning from this very -hour. For example, efficiency in maiming and killing workers—which -caused one million in our country to be disabled in 1925! Labor today -works under the lash of the slave-driver, and I am willing to see -industry slow down, so that workingmen may be human beings. And then, I -examine the graft under public ownership, and what do I find? Private -owners seeking private profits out of government! Here is a slogan, -Judd:</p> - -<blockquote><p><i>The cause of graft is not public ownership of industry, but -private ownership of politicians!</i></p></blockquote> - -<p>How can we stop that? We have tried the plan of sending the grafters -to jail, but that doesn’t work, for the reason that the grafters buy -the prosecuting officials and the judges; in the few cases where we get -them into jail, they buy the jailers. So I<span class="pagenum"><a name="Page_49" id="Page_49">[Pg 49]</a></span> suggest a new plan—that we -take away the motive to graft, by making it impossible for any man to -exploit the labor of his fellows, or to monopolize those things which -are necessary to the life of all.</p> - -<p>Learning industrial democracy is like learning to swim. You stick one -foot into the water, and you see that it sinks, and so you draw it out -in a hurry, and decide, it is impossible for you to stay on top of the -water. And then along comes a man who says: “Yes, you can swim, but not -until you go all the way in.” It seems an absurdity at first, yet it is -the literal truth about government ownership; you can own and run it -all, but you can’t own and run a small part!</p> - -<p>At present private ownership is making all the big profits, and so, -of course, it is paying all the big salaries, and getting most of the -competent men. Not content with that, it is undermining the competition -of government, using its huge resources to buy the political parties, -and nominate incompetent men to public office. That is no wild -statement, but a fact of big business policy. Our masters, who control -the political parties, are afraid to have competent men in public -office, for fear they might take up a notion to do something real for -the public welfare. They prefer a man who can’t kick over the traces, -because he is too feeble. That is why at the last nominating convention -they turned down a really competent and loyal servant of theirs, Mr. -Herbert Hoover, and gave us poor, shy, pitiful Mr. Coolidge, who can -never by any possibility do anything, for the reason that he doesn’t -know what to do.</p> - -<p>When you and I, Judd, and the rest of the useful workers of America, -get ready to run our own business, we can do it. We shall do it, if -for no other reason, because we have to—because we need food in our -cities, and machinery on our farms. We shall hire the best experts -to run our industries; and many of them will be the very men who are -running them now—they will be just as well content to work for the -American people as for Johnny Coaloil, who is now taking a yachting -trip with a dozen chorus girls on the Riviera, or for Mrs. Silly -Splash, who is setting the new fashion in diamond-embroidered bathing -suits at Palm Beach. Yes, Judd, we shall find ways to run our business -without these elegant idlers; and whatever waste there may be won’t be -so bad as having them corrupt a whole generation of our young people -by their vicious folly. If there is graft, we’ll find ways to stop it, -and if more efficiency is needed, we’ll get it—because it will be our -business, and our loss if we fail.</p> - -<p>I’ll go even further, Judd; I’ll assert that the amount of waste -inherent in capitalism is so frightful, that no amount of inefficiency -under a free system can approach it. Remember the “iron ring,” and what -it will mean to us to get into the factories, with the right to run -them for ourselves! Remember our figures on the wastes of competition! -Let us have a “slogan,” for you to paste in your hat and learn, Judd: </p> - -<p><span class="pagenum"><a name="Page_50" id="Page_50">[Pg 50]</a></span></p> - -<blockquote><p><i>To compare the productive powers of a free system with those of -capitalism, is to compare a normal human being with a vicious -maniac.</i></p></blockquote> - -<p>Just a sentence or two, Judd, to remind us what this maniac has done:</p> - -<blockquote><p><i>Capitalism, between 1914 and 1918, deliberately destroyed -30,000,000 human lives, and $300,000,000,000 worth of property!</i></p></blockquote> - -<p>And again, Judd:</p> - -<blockquote><p><i>Capitalism in the United States keeps an average of five million -men out of work all the time!</i></p></blockquote> - -<p>And again, Judd:</p> - -<blockquote><p><i>Capitalism in Europe last summer had nine million men working -hard at learning to destroy the wealth which the rest of the -workers were creating!</i></p></blockquote> - -<p>And then paste this sentence in your hat, Judd:</p> - -<blockquote><p><i>While our population increased 200 per cent in the past 50 years, -capitalism increased our expenditures for mass-slaughter more than -2400 per cent!</i></p></blockquote> - -<hr /> - -<h2>LETTER XV</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>We are going to take over the industrial plant of the United States, -and run it as one planned enterprise for the benefit of the whole -people.</p> - -<p>Just what do we mean to take? Roughly speaking, all railroads, -telegraphs and telephones, all banks, the mines and large factories, -the large oil fields with pipe-lines and refineries, the large -packing and canning plants, the large warehouses and stores, and what -office buildings are necessary for these enterprises. We do not want -the homes, nor the personal property, nor the automobiles, nor the -livestock; nor, if I have my way, shall we want farms. Some old-time -Socialists will contest this, but the new generation will agree, I -think. The reason is interesting, and it may help to clear up the whole -matter if we begin by considering the problem of the land.</p> - -<p>Karl Marx thought that the farms would go the same way as the -factories; that is, they would get bigger and bigger, under capitalist -ownership. He failed to allow for the essential factor—that no -capitalist can work his employes so hard as the small farmer works his -women and children. So the small farmer has stayed on his small farm; -a free man—except that every year he is deeper in debt to the banker, -and in a larger percentage each year he loses the ownership, and is -merely a tenant, supporting an absentee landlord. The modern Socialist, -recognizing that situation, does not propose to walk into the trap, but -seeks a different solution of the land problem.</p> - -<p>The single taxer comes, urging us to take the burden of taxes<span class="pagenum"><a name="Page_51" id="Page_51">[Pg 51]</a></span> off -improvements, which are made by human labor, and put it on the land, -which is the gift of Nature. He points to the rise of land values in -cities, the so-called “unearned increment”; values go up, because -people crowd into the city, and private owners get a colossal increase, -which they have done nothing whatever to earn; their gains make a -heavy burden on production, which the whole community must pay. That -sounded reasonable, and so for a while I was a single taxer; you’ll be -interested to know, Judd, that the reason I gave it up was you!</p> - -<p>We had a big single tax campaign here in California in 1916, and I -put in some hard work at it; among other things I spent a day arguing -with my friend Judd. We were sitting on the roof of the garage, laying -shingles, and all the time I tried to make you “see” the single tax. -But you had read in the Los Angeles “Times” that it would increase -the taxes on your two lots, and that had made you mad; also, you had -read that it would take the taxes off the rich man’s bonds, and off -his wife’s jewels, and that had made you madder. I tried to get you to -see the absurdity of believing that the “Times” could be interested in -keeping any taxes on the rich; I tried to show the actual reason, that -the tax collector couldn’t find the rich man’s bonds, nor his wife’s -jewels. But you didn’t get it, Judd, and when I saw the votes of all -the other Judds in that election, I decided that the single tax is a -tactical blunder. Never again will I be caught proposing to take any -taxes off the rich; from that day forth I have been a multiple taxer—I -want to put just as many kinds of taxes on the rich as the imagination -can invent.</p> - -<p>Joking aside, Judd, I changed my whole strategy as result of that day -on the roof with you. For twelve or thirteen years I had been expecting -to see Socialism brought about by some sort of tax on wealth; but you -made me realize how passionately every human creature hates taxes. -Could one not find some easier way? I realized that all men like money, -the more the merrier; and then came the war, and I saw our government -making money by the billions, just by acts of Congress and the waving -of a presidential pen. Then came the panic, and I saw our wonderful -Federal Reserve System making more billions for the use of the big -bankers and the trusts; so a great light dawned upon me, a heavenly -light! I see now, Judd, that we shall forget taxes altogether, and take -a leaf out of Wall Street’s new book; we shall make as many billions of -new money as the emergency requires, and instead of having Wall Street -put that new money off on us, we shall put it off on Wall Street!</p> - -<p>I know some young workers in our country who call themselves social -revolutionists, and are impatient when they hear me talk about -compensation for the capitalists. These young people feel ugly towards -the capitalists, and for this I do not blame them, seeing how they -have been treated. But the point of my criticism is that these young -enthusiasts want to be ugly to the capitalists in an old-fashioned, out -of date way, with guns and<span class="pagenum"><a name="Page_52" id="Page_52">[Pg 52]</a></span> barricades, while I want to be ugly in the -modern way of high finance.</p> - -<p>What is it we really want? Is it to kill the capitalists? No, but -merely to take from them their power to exploit labor. And how do -they get this power? By guns and barricades? They hold it that way, -of course; but inside each modern country they have devised the new -and infinitely more effective scheme of financial manipulation, the -creation of imaginary money with which to buy everything in sight. -And it is this weapon I want to turn against them. Why, for heaven’s -sake, do we want to have insurrections and riots, when by means of this -modern Aladdin’s magic we can walk peaceably into every factory and -take charge? The capitalists have created the magic lamp for us—this -wonderful new Federal Reserve System; all we have to do is to turn -out the present board of bankers’ bankers, and put in a new board of -workers’ bankers, and create a hundred billion dollars of new money, -and pay for the industries, and there you are! Not a court in the land -can stop us, and if any capitalist tries to, he is a revolutionist, and -we have criminal syndicalism laws for him!</p> - -<p>This is “inflation,” we are told; and inflation raises the cost of -goods, and so brings no benefit to the worker. Yes, Judd, but get the -point clear—inflation is one thing if you use it to buy goods, and -quite a different thing if you use it to buy factories. In buying -goods, you buy on a rising market, but in buying factories you buy at a -fixed price, and so it is the owners who suffer the loss. And that is -the beauty of this scheme I am unfolding; these Wall Street gentry have -“passed the buck” to us—and we pass it right back!</p> - -<p>The Russian revolutionists made a grave mistake in their dealings with -world capitalism; they were too honest. They repudiated the debts of -the Tsar’s government—declaring that the money had been spent to -enslave the Russian workers, and they would never repay it. Therefore -world capitalism went to war with Russia, and is still at war, and -that error in tactics has cost the new government many times the -debts of the old regime. But how much more clever were the capitalist -governments of Italy and France! They also owed us money; but they -were so polite—they are the politest people in the world! They owed -it, of course, and they would pay, of course; never would they dream -of failing to pay their debts; but just now they were very poor, and -couldn’t pay, and wouldn’t we please lend them another hundred million -or so? We loaned it—because if they go bankrupt they will also go -Bolshevik, and that scares the gizzard out of our bankers. So these -smooth capitalist nations have never paid us a dollar, but their -credit is still good, and we never think of them as criminals and -murderers—oh, nothing like that, it is all between gentlemen in Wall -Street, and the worthless bonds have been worked off on the general -public, and all is serene!</p> - -<p>So, Judd, I say, let us be gentlemen, too, and pay! Pay any price the -capitalists ask—anything to get them out of the <span class="pagenum"><a name="Page_53" id="Page_53">[Pg 53]</a></span>factories, and get -the workers in! It will mean that we support a horde of parasites for -awhile; but we are doing that, anyhow, and can do it better then, -because we shall double production. Young Johnny Coaloil will still be -able to keep his yacht and his chorus girls on the Riviera, and Mrs. -Silly Splash will continue to wear diamond-embroidered bathing suits at -Palm Beach; but notice the difference, Judd—from now on they can buy -nothing but goods with their money, they can no longer buy the means of -production, and so they will not be able to increase their income!</p> - -<p>On the contrary, we can proceed at once to cut it down, by means of -an inheritance tax. We already have such a tax—the Coolidge crowd is -trying to get rid of it at this moment, and likewise the publicity -clause of the income tax, which exposes the big exploiters to -uncomfortable daylight! But we can put it back, Judd; we can make the -provisions that gifts in anticipation of death count as inheritance; -we can register the owners of the bonds, and so wipe out that whole -mass of privilege in a generation or two. I promised to show you how -the useful workers of America can take possession of their industrial -plant, and here is the way. Nothing prevents them but lack of -knowledge; and that is why I am writing these letters!</p> - -<hr /> - -<h2>LETTER XVI</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>We have been discussing the problem of how the workers are to get -possession of the industrial machinery of the country. I have proposed -to pay for it; but there are some who insist that the workers should -seize the plant. It has been built by the workers, and taken from -them by fraud; if we purchase it, we merely continue exploitation -under another form; the government replaces the owners as task-master, -and collects the profits and pays them to the owners in the form of -dividends.</p> - -<p>This statement sounds all right, but it overlooks the essential factor -in our business situation—that “iron ring” I have been telling you -about. At the present time not one per cent of our factories are -run at full capacity all the year round; but when we get possession -for the workers, we break the iron ring, and can run them all day -and all night. We have five million unemployed—the average of good -years and bad, you remember—five million men to go to work, to turn -out more goods for themselves and for all. We cut out the wastes and -reduplication; and according to the lowest estimate, we double our -production of goods.</p> - -<p>The plant we propose to buy is worth, roughly, one hundred billion -dollars, and its annual product is twenty billions, possibly thirty; -let us say twenty, to be safe. We pay for it with five per cent bonds, -which means the former owners get five billions a year. If we double -production, we have forty billions a year, which leaves thirty-five -billions for us. In other words, Judd: </p> - -<p><span class="pagenum"><a name="Page_54" id="Page_54">[Pg 54]</a></span></p> - -<blockquote><p><i>We can work half an hour a day for the owners, and four hours a -day for ourselves, and be twice as rich as at present.</i></p></blockquote> - -<p>So you see why I am in favor of compensation! Not because I love the -owners, but because, as a matter of cold cash, we shall do better that -way. I will go so far as to argue that if we try to pay nothing, we -shall really pay more. If we try to kick the bosses out, and seize the -factories, and run them by workers’ councils—obviously, that may mean -civil war. The bosses have the factories, and they have machine-guns -and airplanes and poison gas—a system for wiping out the lives of -thousands of workers, if necessary. One of the embarrassments of -physical force revolution is that it may fail, and the workers, instead -of getting the factories, may get castor oil and Fascist clubs. There -is a big group of our masters who think that is what the workers need, -and would take delight in administering it.</p> - -<p>I know some young revolutionists who are prepared to die for the -proletariat, in a fine spirit of martyrdom. They are impatient of talk -about money, but I beg them to pause and consider the balance sheet of -Compensation versus Confiscation. Even though they succeed in their -revolution, they surely cannot do it without industrial waste. They -will have to stop the machines while they are fighting; they may shoot -holes in the factories, and even burn some of them down. And just what -will that cost? We are reckoning, you understand, on our possible -double production—forty billions a year. The interest we pay the -owners is five billions a year. So now:</p> - -<blockquote><p><i>If in the course of our revolution we destroy one-eighth of our -industrial plant, it would have been cheaper to pay the owners for -the whole thing.</i></p></blockquote> - -<p>Or, suppose we have the good luck to get by without much fighting—what -then? Well, the present management, which knows the industry, and is -keeping the plant going—this management is hired by the owners, and -is loyal to the owners, and will have to be booted out the back door, -which will certainly stop production, cripple it for months, perhaps -years. But if our government comes to the owners in a business deal, -and buys the plant, the management will stay on, as it did when we -took over the railroads during the war. On that basis, we shall not -lose an hour of the plant’s time, nor will the workers lose an hour -of their wages. And how does this figure up, in the balance sheet of -Compensation versus Confiscation? Listen:</p> - -<blockquote><p><i>If our industrial plant is idle for six weeks, we have lost what -would have paid the owners for a year.</i></p></blockquote> - -<p>And again, an obvious consequence:</p> - -<blockquote><p><i>Every day over six weeks that the plant is idle, the workers are -paying from their own pockets!</i></p></blockquote> - -<p>Our young revolutionists are going by the Russian model, and that is -natural, because many of them come from there. But<span class="pagenum"><a name="Page_55" id="Page_55">[Pg 55]</a></span> Russia had a small -industrial plant, and we have a great one, enormously complicated. -Moreover, Russia had no middle class, while we have a powerful one, -ready to turn out at a moment’s notice and use machine guns and poison -gas in the interest of property rights. The workers’ revolution -succeeded in Russia, because the country was broken by war; but to -bring us to a similar state of disorganization would take decades of -suffering and waste—I venture the guess that it would be twenty times -cheaper to buy the capitalists out, than to bring America to the point -where a physical force revolution could prevail.</p> - -<p>And yet, having said all that, fairness compels me to admit another -side. I have been setting forth the ideal procedure; but this is not an -ideal world, and many times we have to take what we can get, instead of -what we want. Having told you my hopes, I will now tell you my fears.</p> - -<p>The masses of our country are ignorant and unorganized. More than half -of them do not vote at all; a large percentage value their votes at -two dollars each, and the rest take their party as they take their -God—from their grandfathers. They are interested in baseball and -prize fighting, and jazz, and the doings of the “smart set”; they do -not know how to think, and they never read anything but the “kept” -newspapers and magazines, which tell them they are the greatest people -in the world. Never in history has there been so elaborate a system -for the hoodwinking of a hundred million people; and they lap up the -propaganda, and go to the polls and vote their government into a -branch-office of J. P. Morgan and Company.</p> - -<p>But all this does not stop the process of industrial evolution; rather -it speeds it up—giving the rich more money to produce more goods, and -causing the poor to have less money to buy the goods. So the crisis -comes on like a cyclone; and we shall find ourselves with our factories -idle and millions of people starving, and no idea of the next step -to take. There will be no time to teach the masses, no machinery for -reaching them; but the desperate workers in our cities will hear the -voice of the Communist soap-boxer, saying, “Take the factories, and -produce goods for yourselves and your fellows.” The soap-boxer will -ask: “Do you have to starve, because the majority has not voted you -food?” He will ask: “Does a man have to remain a slave because the -majority has not voted him free?” So it may happen that the hungry -workers seize the factories and attempt to run them; and we shall have -to make the best of it and help them to success.</p> - -<p>In such an emergency, the social changes will be sudden and drastic; -and that is the reason why I do not attempt to foretell what the new -industrial forms will be. Just how the business will be managed depends -in great part upon those who now have the power in their hands; they -may choose either to be stubborn and brutal, or to display vision and -a sense of justice, not to say of common prudence. You can see the -difference this makes if you compare the great French revolution of -a century and a half<span class="pagenum"><a name="Page_56" id="Page_56">[Pg 56]</a></span> ago with the series of changes that have taken -place in England during the same period. England has become a partly -democratic country in fact, while remaining a monarchy in form; the -reason being that the governing classes never pushed the people to the -last extreme, but made concessions, just enough to keep themselves in -power.</p> - -<p>There is room for a variety of compromises between the workers and -the capitalists, and also between the workers and the state. The -capitalists may permit the setting up of shop committees, with -the right of control over working conditions; they may consent to -representation of the workers in boards which oversee each industry, -with power to make adjustments and enforce decrees. Or both sides may -prefer to call upon the government to do the adjusting. Or again, the -workers may get control of the government, and laws may be passed -providing for the taking over of control by the trade unions. A -practical program has been worked out by the railway brotherhoods, the -Plumb plan; providing for the purchase of the roads by the government, -and their operation by a board representing the government, the -brotherhoods, and the bondholders until the latter have been paid off. -The day may come when the money-masters of this country will wish they -had had the statesmanship to put that plan into operation while there -was time.</p> - -<p>I have argued here for government ownership of industry; but you must -understand—that is not the same thing as operation of industry by -politicians. The people who understand an industry are those who work -in it; and the way to combine democracy with efficiency is to make each -industry a self-governing unit, and confine the part of government to -supervision, and the regulation of prices. Let us have an industrial -constitution and an industrial parliament, and let every man become -a citizen of industry, with a voice in the control, and equal rights -with all other citizens. That is the goal we work towards, and it is a -strictly American goal, in line with American traditions. The practical -steps are, first, to organize the workers in each industry, and make -them class conscious, awake to their own interests; and second, to use -the power of the state to open the books of each industry and expose -the profits, cutting down the share which goes to the idle owners, and -increasing the share which goes to the useful workers.</p> - -<hr /> - -<h2>LETTER XVII</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>The social revolution has already happened over one-sixth of the -earth’s surface, and 140,000,000 people are now living in a working -class world. Whatever may be our point of view, we cannot afford to -misunderstand what has happened in Russia, for capitalism has made the -world one, and our efforts to shut ourselves up in our own country are -bound to fail.</p> - -<p>The Russian revolution came as the result of a breakdown in<span class="pagenum"><a name="Page_57" id="Page_57">[Pg 57]</a></span> the -midst of war. The great empire was rotten with graft, and after three -years of fighting, had got to a state where it could no longer keep -its railways going, or feed the people in its cities. With starvation -actually upon them, the soldiers, sailors and workers formed unions, -and in October, 1917, they overthrew the government of the Tsar, and -formed a new government—and gave world capitalism the most painful -shock of its career.</p> - -<p>There have been slave revolts all through history, but always blind -and futile, put down with hideous slaughter. But here in the Russian -revolution appeared a new thing; the control was seized by a group -of men who had been trained in Western ideas, and had a theory of -revolutions, and of working-class mastery of society. These men knew -what they wanted, and they tried their plan, and it worked—at least -to the extent that they are still in power, in spite of two years of -war waged upon them by the whole capitalist world, and six more years -of financial blockade, plus the greatest campaign of falsehood in all -history.</p> - -<p>Who were these men? They call themselves Marxians, and apply the -adjective “scientific” to themselves, because they think they have -studied the capitalist system—the laws of its growth and decay, the -forces which are destined to overthrow it, and the kind of society -these new forces will establish. History, says Marx, is a series of -class struggles, and the end is the victory of the working class, and -the beginning of a society in which there are no classes, for the -reason that nobody lives by exploiting anybody else. “Workers of all -countries, unite,” runs the slogan. “You have nothing to lose but your -chains; you have a world to gain.”</p> - -<p>The Marxian theory is, in brief, that the development of large-scale -capitalism brings the workers into factories, where they toil for the -benefit of absentee owners whom they never see; it subjects them to low -wages, long hours and uncertainty of employment, and forces them to -organize and fight for better conditions. In this fight they develop -“class consciousness,” and in the end they are forced by capitalist -breakdown to revolt, and take possession of the factories, and run them -for the benefit of the workers and not of the masters.</p> - -<p>They had a chance to try it in Russia, and they did so; the question -of what they have accomplished is the most fiercely debated of all -questions today. To help us get it straight, understand first, that -they had to do what they did. In other countries—America, England, -France, Germany, Austria—the middle class took charge of the -revolutions; but in Russia there was practically no middle class, it -was the workers or chaos. And second, they took over a busted machine, -a country in collapse after three years of modern war, the most -destructive of all things known this side of hell. And third, they had -to face years of invasion from Europe, America and Japan, fighting on -26 fronts at once; and at the same time civil war, and a blockade, and -financial boycott, and world propaganda, besides two successive years -of famine, <span class="pagenum"><a name="Page_58" id="Page_58">[Pg 58]</a></span>something which comes every so often in Russia—caused by -drought, and not by revolutions.</p> - -<p>In spite of all this, Soviet Russia confronts its world of enemies, -eight years young, and proud and confident. It has restored its -agriculture to the pre-war standard, and its industry to nearly 80 per -cent of this standard, with the certainty of passing it in 1926 or 1927 -if peace is maintained. It has turned one-sixth of the earth’s surface -from a militarist empire into a federated group of commonwealths, -governed under a new system, in which the voters are classified -according to their occupations. It has trained a new generation of -young workers, and taken some five hundred thousand of them into its -governing party. It has taught millions of men and women to read and -write, including everybody in its army, and nearly everybody in its -industries. It would seem that all this entitles the new system to -study, and to fair play in the field of thought.</p> - -<p>But Russia is not democratic; so they tell you, Judd—and you are -strong for democracy. Well, I also share that faith; but if, as time -goes on, the workers of the world discover that democracy means -inequality such as we have here in America, while the “dictatorship of -the proletariat” means cultural freedom for the workers and a swiftly -spreading plenty for all—well, Judd, we advocates of democracy will -have a hard time in debates! But the truth is that we have in America -political democracy alongside industrial autocracy; and these two are -making a war upon each other, and we shall have to choose whether our -country is to become a capitalist empire or an industrial republic.</p> - -<p>Russia has never had democracy, nor even the ideal of it, except among -a few dreamers. Less than seventy-five years ago its farm population -were all serfs, bound to the soil. Many of its outlying peoples are -semi-barbarous tribes. Its factories are few and at the time of the -world war they were financed by foreign capital, and run by foreigners. -There came this devastating war, and then a breakdown; and to expect -those who took control to set up at once such a democratic system as we -know in America, is to be absurd. Many who talk about it are dishonest, -for they know that if their own parties get control, they will hold it -by exactly the same means as the Bolsheviks—that is, by force.</p> - -<p>What the Bolsheviks are doing is to educate the workers and peasants, -and then take them into the governing party. The purpose of that party -is to hold power until all the workers have come into it, and the -“Union of Socialist Soviet Republics” includes the whole population of -the former empire of the Tsar. In fact, they expect to include a lot -more, because they think the workers of some other countries are going -to join them; and the rulers and capitalists of those countries fear -the same thing—which is the reason they hate the Bolsheviks, and carry -on such deadly lying about them.</p> - -<p>The British Tories, backed by American bankers, are now conducting -a world-wide intrigue against Russia; and soon they may<span class="pagenum"><a name="Page_59" id="Page_59">[Pg 59]</a></span> be calling -the American people to join in a new war “to make the world safe for -democracy.” And what then? The chances are that the American people -will join in, for they dearly love everything that is upper-class -British, and enjoy nothing so much as crushing labor anywhere in the -world. They elected Coolidge in a fervor of patriotism because they -thought—mistakenly—that he had had something to do with smashing -the Boston police strike. As I write, our government is donating a -billion dollars—in the form of a pretended “debt settlement”—to the -Italian government, because Judge Gary and our other masters so love -these black-shirt Fascisti, and look forward to the time when they can -administer the castor-oil treatment to American labor.</p> - -<p>Yes, Judd; and we simply ladled out our money to the Tsarist -adventurers, to every nation and tribe of reactionary that was fighting -Soviet Russia on twenty-six fronts; we dressed up Polish troops in -American uniforms to make war on Russia, and even burned American Red -Cross supplies to keep them from being captured and used for the sick -and starving people of the Soviet republic. We allowed Woodrow Wilson -to send our boys to their death in his private war on a friendly -people—under the command of British officers in Archangel, and helping -the Japanese to take Siberia.</p> - -<p>All that was done, Judd, and done with your money, and under the flag -of your country; and it will be done again when the British Tories are -ready—for the bull-dog never sleeps, and he never lets go his hold. He -has set out to strangle the Soviets, as once he strangled Napoleon—and -for the same reason, to keep his grip on the 300,000,000 serfs of -India. If, when the next attack begins, America does not hasten to -pour out its blood and treasure, it will be for one reason and one -only; because in the meantime it has been possible to reach the plain -people like yourself, and make them understand, and hold back the world -bankers from their next World Crime.</p> - -<hr /> - -<h2>LETTER XVIII</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>Our country today is traveling headlong the road which has led every -great empire in history to its doom. And this is no piece of rhetoric, -but a summary of statistics to be found in our census reports. -What ruined Rome was the spread of capitalist imperialism with its -consequences—the undermining of the independent farmers, the growth -of tenantry and absentee landlordism, and the turning of the country -population into city slum-dwellers, uncertain of their employment and -dependent upon public doles.</p> - -<p>And every one of these things is happening right before our eyes. The -price of farm-land is going up, steadily and inexorably; the profits -of agriculture are going to middlemen, speculators, and moneylenders. -Farm mortgages are increasing, farm tenantry is<span class="pagenum"><a name="Page_60" id="Page_60">[Pg 60]</a></span> increasing, decade -after decade, with the certainty of a doom. The young men are leaving -the farms and going to the city, to increase unemployment and bring -down wages. The man who wants a city home pays a constantly increasing -tribute to land speculators; while in the business districts land -values double or treble in a decade, and no work can go on until the -landlord’s greed has been appeased.</p> - -<p>Millions of little fellows like yourself, Judd, support that system, -because you own a lot or two, and are making a little profit; just as -millions support the big trusts, because they own a share or two of -stock. They do not see that under a just system they, as producers, -would get many times what they get as petty speculators. Our first -task is to show them, and bring them to our side. We wish to take the -government out of the hands of the capitalist and landlord class; and -then to apply the remedy for land speculation, a tax on land values, -falling heavily on rented land, and still more heavily on land not used -at all. This will set free the soil, and wipe out the gamblers; there -will be plenty of farm-land open for use, and lots near the cities -will be cheap. At the same time both cities and states will have money -for public improvements, bringing high wages, and benefit to all. The -farmer will have abundant markets, because the city population will no -longer be on half rations. The land values tax is the only just one, -because it taxes the wealth created by nature, and not by human labor; -also, it is the only tax which can be fully collected—all others are -taxes on honesty, and we need that commodity badly, and should not tax -it out of existence.</p> - -<p>There is a form of conflict between farmers and organized workers, -because the farmer has to hire labor, and wants it cheap. This conflict -is carefully made use of by the old party politicians, who wish to -plunder the two groups separately. I point out to both farmer and -workingman that their deeper interests are identical; they are the -producers, and supplement each other. The farmers grow food for the -city workers, while the city workers make building materials and -machinery, clothing, newspapers—everything the farmers need. These two -groups form the basis of the new society, and in their political union -lies our hope for the future.</p> - -<p>When I say “workers,” understand that I mean workers of both hand and -brain: housewives and teachers, clerks and stenographers, architects, -chemists and doctors, foremen, superintendents and executives—all who -are actually necessary to the efficient production of wealth. The only -ones not necessary are the owners, in their capacity as exploiters and -parasites.</p> - -<p>I know that many owners also work as managers, and if they are -competent, I respect them, and invite their aid. I should be glad to -see young Rockefeller managing our national oil trust—provided only -that somebody would convert him to the ideal of public service. When -the real crisis comes, some employers will realize that the making -of industrial democracy is a task worthy<span class="pagenum"><a name="Page_61" id="Page_61">[Pg 61]</a></span> of all the energy they are -now putting into making millions of dollars—to be used later on in -wrecking the lives of their descendants.</p> - -<p>The useful workers of industry, and those on the land, must get -together. They must have a political party of producers—the plan has -been fully worked out in Minnesota, and the other states have only to -follow. Also we must build up and strengthen the trade unions of both -workers and farmers; for it is not at all certain that the masters of -money will surrender to white paper ballots in whatever number; they -must know that these ballots are backed by nationwide organizations, -capable, determined, and wielding the threat of the mass-strike.</p> - -<p>As part of the process of organizing and drawing together farmers -and workers, we must encourage business co-operation between these -groups. The farmers can feed the workers, and the workers can set -up co-operative factories for their farmer customers. The railway -brotherhoods have made a beginning at this, and so have the clothing -workers. Equally important is labor-banking, to finance such -undertakings. At present a great deal of labor-banking turns out to -be shadow—there is no real control by labor, and all that happens -is, some former labor officials become successful bankers. But that -also will be remedied—the unions will have banks which they actually -control, and whose funds they use for their own enterprises. What -could be more pitiful than the present situation—the workers putting -their billions of savings into capitalist banks, to be shipped on to -Wall Street and there used for robbing labor, and financing anti-labor -newspapers—and even breaking labor strikes!</p> - -<p>At the present time the policies of American labor both political and -industrial, are a generation out of date; our workingmen are like the -Moros in the Philippines, fighting machine-guns with bows and arrows. -The unions are still organized according to crafts; and they face -gigantic combinations of capital, which have merged a hundred different -crafts into one. So of course the unions are beaten or outwitted at -every turn; and membership falls off, and the old officials whistle to -keep their courage up.</p> - -<p>I remember, Judd, that in some of our arguing you asserted that many -labor leaders are corrupt; that is one reason why you are not a union -man. But go and investigate trade union corruption, and you find just -what we found about political corruption. Who puts up the money to -buy labor leaders? The employers, and the employers’ associations! -Wherever you touch this evil in our society, it is one and the same -thing—private wealth seeking to increase itself at the expense of the -poor and weak. In Chicago I once investigated a strike of teamsters, -which had kept the city in an uproar for weeks, and cost several -lives—to say nothing of discrediting the workers. And what was behind -it? A great mail-order house trying to put another mail-order house out -of business, hiring a strike and gangs of sluggers! </p> - -<p><span class="pagenum"><a name="Page_62" id="Page_62">[Pg 62]</a></span></p> - -<p>The remedy for that is not to desert the unions, but to put new blood -into them, a new policy and a new ideal. The task of labor is no longer -to get five cents more per hour for its members, or an extra hour -off on Saturdays; it is to reconstruct society, and make a world of -producers, managed by producers, for the benefit of producers. And for -that every worker is needed, and the place where he is needed is in -the union with his fellows. If there are officials without vision, go -in and teach them; point out how the employers have formed trusts, and -how the workers must match them with great industrial unions. If labor -officials are dishonest and betrayers of their cause, kick them out, -and find others who are class conscious and loyal. I know that is easy -to say and hard to do; yet surely, Judd, labor cannot lie down and give -up! Get it straight—this is a changing world, and you can’t stay as -you are; there are forces at work that will beat the workers back into -their age-old status of serfs, unless they have the courage and brain -power to master these forces, and lift themselves to the new status of -citizens of industry. Join, and do your part; and some day the law will -provide that every man who works at a trade becomes automatically a -member of his union, an equal citizen of the industry, with no power to -exploit others, nor fear of being exploited by others.</p> - -<hr /> - -<h2>LETTER XIX</h2> - -<p><span class="smcap">My dear Judd</span>:</p> - -<p>We have come to the end of our task. I have tried to show you what is -going on in our country, and the job you have to do.</p> - -<p>We are moving towards a new American revolution. That does not mean -riot and tumult, as our enemies try to represent; but neither does it -mean slavish submission to every repression of government. There is -the best American precedent for resistance to tyranny, and those good -ladies who call themselves “Daughters of the American Revolution” would -be shocked speechless if I were to quote to them the authentic words of -Sam Adams and Patrick Henry and George Washington and Thomas Jefferson -on the right of the people to overthrow unjust governments. Said -Abraham Lincoln, in his first inaugural address: “This country, with -its institutions, belongs to the people who inhabit it. Whenever they -shall grow weary of the existing government, they can exercise their -constitutional right of amending it, or their revolutionary right to -dismember or overthrow it.” There can be no question that those words -come precisely under the specifications of the California “criminal -syndicalism” law, and a man who said them today would be sent up for -fourteen years, to cough out his lungs in the jute-mill of San Quentin -prison.</p> - -<p>We have to get rid of the capitalist system. It is close to breaking -down, and will soon be unable to run the factories it has built, or -to bring food to the people in its giant cities. We have got to stop -producing goods for profit, and learn to produce them<span class="pagenum"><a name="Page_63" id="Page_63">[Pg 63]</a></span> for the use of -those who work. I have pointed out the way to make that change under -our Constitution. I say: if there is violence, let the capitalists -start it—and then you, Judd, and the rest of the workers, can finish -it!</p> - -<p>Abraham Lincoln hated the slave power, just as I hate the capitalist -power; but he moved carefully, keeping the mass of the people with -him, and pushed the slave power against the wall, until presently -it revolted and began the fighting; then Lincoln called for seventy -thousand men to put down the rebellion, and presently he called for a -million, and before he got through he had freed the slaves, and put -an end to that evil forever. And maybe that is going to happen again; -maybe when we get seriously to work, the capitalists are going to -organize their armed bands of rowdies, as they did in Italy, and as -they are now doing in France and Germany and England, and set out to -thwart the people’s will as expressed at the polls. If that happens, -Judd, let us have the traditions of America, and the moral forces of -America, on our side.</p> - -<p>I am one who believes in those traditions; coming, as I do, of a -line of naval ancestors. My great-grandfather once commanded the -frigate “Constitution,” and I am standing by the old ship—while our -money-masters and their hired political servants are trying to torpedo -it. When I try to read the Constitution of my country in a public -place, and a drunken chief of police throws me into jail, and drunken -newspaper publishers shout with approval—well, Judd, I bide my time. -I once spent two years reading the history of the period prior to the -Civil War, and I know what the moral forces of America are. I know how -long they wait, and how slow they seem to be in getting into motion; -nevertheless, they are there, and I make my appeal to them, and I -expect to hear it answered. I am taking care of my health, with the -idea of living to sing once more the Battle Hymn of the Republic: “Mine -eyes have seen the glory of the coming of the Lord!”</p> - -<p>I have written these letters as an act of service to my country. I -personally am not suffering, as you know; I have won my fight, to -the extent that I am an independent man, and no one can muzzle me. -But how can I be happy in this so-called civilization, where I see -on every hand about me war and the preparation for war, poverty and -the despair which poverty brings, crime and prostitution, suicide and -insanity—such a mass of misery that I cannot face the thought of -it, and all those beauties of nature and art which in my youth set -me a-thrill from top to toe, now mean hardly anything to me, because -of the wrongs I see about me—and all so needless, Judd, so utterly, -utterly needless!</p> - -<p>And something just as bad as the misery of the poor, the decay in the -souls of the rich! To see a whole society chasing false ideals, vanity -and luxury and waste; admiring and imitating wretched parasites, who -have millions of dollars and not one useful thing to do! I know a -few of these people, Judd, their lives<span class="pagenum"><a name="Page_64" id="Page_64">[Pg 64]</a></span> touch mine here and there, -and the truth is they are just as unhappy as the poor, and just as -much to be wept over, with their jazz and their bootleggers and their -petting parties and their pitiful empty heads. A brief little hour of -excitement and display—and then so much suffering, and bewilderment, -despair about life, and cynicism about everything sound and true. I -think of the millionaire youth I know, drinking himself to death; and -the gay young society matron with a venereal disease in her blood and -terror in her heart—I feel like calling upon the useful workers of -America to organize and save the rich from the misery of being out of -work!</p> - -<p>What we want, Judd, is a world with neither rich nor poor, but with -people who live by producing, and not by taking what others have -produced. We want to make that sort of world, and we call to our aid -all men and women who are willing to work for it. We want to study this -problem, and fill our minds with real information, and stop reading the -poison press of our enemies. Indeed, Judd, it is not too much to say -that we want to make over our moral and mental life, so that we cease -to admire the ideals of our exploiters—waste and the display of waste, -plundering and the power to plunder. We want to teach ourselves and our -children to admire useful labor, and social vision, and loyalty to the -cause of those who produce. We who serve that cause call one another -“comrade,” or “brother,” or “fellow-worker”; and we invite you to join -our ranks.</p> - -<hr /> - -<p><span class="pagenum"><a name="Page_65" id="Page_65">[Pg 65]</a></span></p> - -<h2>UPTON SINCLAIR</h2> - -<p class="bold">PASADENA<br />CALIFORNIA</p> - -<p class="right">March 15, 1926.</p> - -<p><span class="smcap">Dear Friend</span>:</p> - -<p>I do not think that since the world began there has ever been a people -so lied to as the American people to-day. There are 110,000,000 of -us, and at least 105,000,000 are completely befuddled by a campaign -of deception, backed by the whole power of American big business, the -newspapers, the magazines, the movies, the radio, the vast machinery of -government, and the two major political parties. I am supposed to be -working on a novel, “Oil,” to the writing of which I had hoped to give -the next year; but I couldn’t stand it, so I took a couple of months -off, to pay a debt which an honest American owes to his ancestors—to -help break the power of the organized knaves who are looting our -country in broad daylight.</p> - -<p>I have written a little book, “Letters to Judd.” It is running serially -in the “American Appeal,” where some of you may be reading it. Judd -is an old carpenter who has worked for us off and on, a typical, -old-fashioned American; I have taken him as the type of person I -want to reach, and have written him a series of nineteen letters, -telling those elementary facts which our ruling classes are trying so -desperately to keep hidden from us all. This is the first time I have -covered our political and social problems fully, since “The Industrial -Republic,” which was published 19 years ago, and has been out of -print more than half that time. My mail is full of letters asking for -something of the sort, so here you have it.</p> - -<p>The book tells why there is poverty in the richest country in the -world. It proves that in America for the past thirty-five years the -rich have been growing richer and the poor poorer, and it shows -exactly what the rich have done to bring this condition about, and -exactly what the poor will have to do to change it. It explains -unemployment and hard times, the money system, inflation, stock -watering and manipulation, the tariff and the trusts. It studies the -world situation, explaining the wars we have had, and showing how the -present system is preparing new ones. It discusses Russia and the -revolution—in short, everything the average man or woman needs to know -about affairs at home and abroad, and all in plain, everyday language. -It is a 100% American book, intended for 100% American readers, and it -is written and published as an act of love for our country.</p> - -<p>A few times past we have had great crises, and it has been found -possible to reach the people by a pamphlet. Paine’s “The Crisis,” and -Helper’s “The Impending Crisis,” “Uncle Tom’s Cabin,” “Progress and -Poverty,” “Looking Backward”—these books have helped to make our -history. I am making a try at this kind of thing; I mean, I have put -aside everything else, and done my best to make a good job, to get the -facts, and make them fool-proof, as well as knave-proof, and to present -them in such a way that anyone can understand them. Thirty years’ study -of our problems has gone into the book, also thirty years of<span class="pagenum"><a name="Page_66" id="Page_66">[Pg 66]</a></span> learning -how to write. Having faith in our people, I have borrowed money, and -gone ahead to make the plates and print twelve thousand copies; now I -am appealing to you to do the rest of the job—to see that the “Letters -to Judd” reach the millions of “Judds” who need them.</p> - -<p>The book will be in two editions: first two thousand cloth bound, -price $1, to enable my friends to pay the cost of the undertaking; -and second, ten thousand copies, paper bound, a neatly printed -wire-stitched pamphlet, to be sold at meetings, and passed about among -workingmen and women; this is the form for which I hope to get a -million or two circulation, and I have put the price so low that nobody -will suspect me of making money—15 cents a copy, or ten copies for -a dollar. This 15 cent price for a single paper copy is a price for -meetings and book-stores—I cannot mail the book for that, because, -including postage, wrapping, and overhead, it costs about 15 cents to -handle an order in my office. What I ask you to do is to order at least -10 paper copies to give to your friends, and in addition a cloth copy -for your library. I will take a gamble and say: place a $2 order, for -one cloth and 10 paper copies, and when you have read the book, if you -don’t find it worth distributing, you may send back the whole lot, and -I’ll send back your money. I ask for a prompt response, as I want to -advertise the book, and haven’t the money. Both editions will be ready -for shipment by the time your order gets back to me.</p> - -<p>Our reprint of “The Moneychangers” has been ready for a couple of -months, and if you haven’t seen it, here is a reminder. This novel, -first published in 1908, tells the story of the panic of 1907, how and -why it was brought about by the elder J. P. Morgan. I do not recommend -it as a great work of literature; reading it over, I found many -crudities, some of which I remedied. But I will guarantee it a lively -story, full of facts about Wall Street which the American people do not -yet understand.</p> - -<p>Also, my wife has published a new volume by Mrs. Kate Crane-Gartz, -author of “The Parlor Provocateur.” The new volume is called “Letters -of Protest,” the price is $1 cloth and fifty cents paper. The book is -full of that burning indignation at social injustice, combined with -motherly tenderness, which has made Mrs. Gartz the bewilderment of -the prosecuting officials of Los Angeles county. They want so much to -send her to jail, but they don’t quite dare! I was talking the other -day with a prominent physician of Los Angeles, and he mentioned his -intimate friend, the president of the Better America Federation, the -propaganda society of big business here in California. “He doesn’t love -you, Upton,” said the physician, “but Kate Gartz is the real one who -gets his nanny.”</p> - -<p>The money which has come in from our “Loan Plan” has gone into the -printing and binding of “Bill Porter” and “The Moneychangers,” a part -payment on a new edition of “The Cry for Justice,” a new binding of -“The Jungle,” and finally, this circular. More money is needed for -a new printing and binding of “The Profits of Religion,” and for -advertising the “Letters to Judd.” Also my novel, “Sylvia,” is out of -print, and I’d reprint it if I could afford the luxury. So I tell you -again about this “Sinclair Loan Plan.” Those who believe in my work -and want to promote it lend me what they can afford, and the money -serves as working capital, to pay for the new plates and stock of -books<span class="pagenum"><a name="Page_67" id="Page_67">[Pg 67]</a></span> which a publishing business has to keep on hand. The lenders -receive a certificate of indebtedness, and have the right to buy each -year a quantity of my books at half the retail price. Thus, if you -lend ten dollars, you can get $5 worth of books for $2.50. These books -must be ordered in one shipment, so as to save handling costs; under -the Loan Plan you may place one such half-price order every year. The -saving takes the place of interest on your money; it amounts to 25% -interest—a pretty good rate, but not so high as millions of poor -farmers are having to pay to national banks all over the country—see -my “Letters to Judd”!</p> - -<p>I want to cover all the details of this Loan Plan, so as to avoid -having to write long explanations. If you have already come in under -the plan, and have your certificate of indebtedness, you may order -books once in the year 1926, to the amount of one-half of your loan. -Thus, if you have loaned $10, you may order $5 worth of books for -$2.50; you can get, for example, one cloth and ten paper copies of -“Letters to Judd,” one cloth “Mammonart,” one paper “Bill Porter,” and -one paper copy of Mrs. Gartz’s book, all for $2.50. I will throw in a -copy of my wife’s “Sonnets,”—and if you know any place in the world -where you can get as much value in books for the money, I do not!</p> - -<p>If you are not at present at subscriber to the Loan Plan, you are -invited to join. Send $12.50, and you will receive a certificate for a -$10 loan, with the privilege of getting your money back at any time on -thirty days’ notice. Also you will receive $5 worth of books, and will -have the privilege each year of ordering another $5 worth of books for -$2.50. Most of my readers say they don’t want the certificates, but I -send them just the same; paste them in your autograph album, and some -day they may be worth the price in that form, and without hurting the -publishing business!</p> - -<p class="center">Sincerely,</p> - -<p class="right"><span class="smcap">Upton Sinclair</span>.</p> - -<p>P. S. We have received from our German publishers, the Malik Verlag of -Berlin, five stately volumes, the “Collected Novels of Upton Sinclair.” -From Gossizdat, the State Publishing House of Moscow, we have a list of -various editions of our books which have been issued in Soviet Russia; -counting, not new printings, but separate publications under different -titles, there is a total of sixty-nine. Michael Gold, recently returned -from Russia, writes: “The sort of people who in America know Charlie -Chaplin and Jackie Coogan, in Russia know Upton Sinclair.” We are -advised by the Japanese translator of “The Jungle” that the book has -just been issued, but the government compelled the publisher to recall -all copies, and cut out the last chapters, dealing with Socialism. The -Japanese translation of “Mammonart” is about to appear. From Warsaw -comes an offer from a large publishing house to issue twenty of our -books in a cheap library, at .95 zloty per volume, about thirteen cents -American. A Czechish publisher applies for all books not hitherto -issued. We have a review of “Mammonart” which was broadcasted from the -radio station of the Labour Party of Australia; also a letter from a -Ukrainian writer, telling how our plays are being acted there, and -our novels made into movies. We have established book-store agencies -in London, India and South Africa, and we learn that readers are -circulating our books in Java, Honduras, and Iceland. We await returns -from the U. S. 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