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The Weinstock Lectures on The Morals of Trade


THE CONFLICT BETWEEN PRIVATE MONOPOLY AND GOOD CITIZENSHIP.
  By JOHN GRAHAM BROOKS.

COMMERCIALISM AND JOURNALISM.
  By HAMILTON HOLT.

THE BUSINESS CAREER IN ITS PUBLIC RELATIONS.
  By ALBERT SHAW.

       *       *       *       *       *


THE CONFLICT BETWEEN PRIVATE MONOPOLY AND GOOD CITIZENSHIP

BY

JOHN GRAHAM BROOKS

PRESIDENT OF THE NATIONAL CONSUMERS' LEAGUE
AUTHOR OF "THE SOCIAL UNREST,"
"AS OTHERS SEE US," ETC.

[Illustration: Publisher's logo]

BOSTON AND NEW YORK

HOUGHTON MIFFLIN COMPANY

The Riverside Press Cambridge

1909


COPYRIGHT, 1909, BY THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

ALL RIGHTS RESERVED

_Published December 1909_

       *       *       *       *       *

BARBARA WEINSTOCK LECTURES ON THE MORALS OF TRADE


This series will contain essays by representative scholars and men of
affairs dealing with the various phases of the moral law in its bearing
on business life under the new economic order, first delivered at the
University of California on the Weinstock foundation.

       *       *       *       *       *




THE CONFLICT BETWEEN PRIVATE MONOPOLY AND GOOD CITIZENSHIP


For a special purpose, I have had occasion to examine with care the
comments upon American life and institutions made by foreign critics
during the period that extends from the later part of the eighteenth
century up to the present time. If one puts aside the frivolous and
ill-tempered studies and considers alone the fairer and more competent
observers, the least pleasant of all the criticisms is that we are
essentially a lawless people.

If the critic, like de Tocqueville and Miss Martineau, had sympathy and
admiration for us, the revealed lawlessness came as an astonishment,
because it seemed to upset all sorts of pretty theories about democracy.
The doctrinaires had worked out to perfection the idea that a people who
could freely make and unmake their own laws would, for that plain
reason, respect the laws. Of course, a people who had laws thrust upon
them from above would hate them and disobey them. But a democracy would
escape this temptation.

It was apparently an amusement of many of these writers to collect, as
did the jaunty author of "Peter Simple" in his Diary, interminable pages
from our own press to illustrate the general contempt for those laws
which really interfered with pleasures or economic interests. Harriet
Martineau drove through Boston on the day when Garrison was being
dragged through the streets. The flame of her indignation burned high;
but it burned with new heat when she found that the very best of Boston
culture and respectability would not lift a finger or pay a copper to
have the law enforced in Mr. Garrison's favor. Beacon Street and Harvard
professors told her that the victim was a disreputable agitator, richly
deserving what he got. They seemed to think this English lady very
cranky and unreasonable. The mob had the entire sympathy of the best
people in the community, and that should satisfy her. De Tocqueville
had an awakening at a polling-booth in Pennsylvania that in the same
way disturbed all his presuppositions about us.

It is not my purpose to bristle up and strike back at these critics of
American behavior. Amid possible exaggeration, they are telling a great
deal of truth about us. It is a truth that it has its own natural
history. A long adventurous border-life was in some respects the great
fact of the nineteenth century in moulding our national habits. A large
part of the population lived under conditions where no appeal to legal
restraints was possible. There were no courts,--no police. The whole
constructive work of life was thrown so absolutely upon the man fighting
his life-battle alone, that excessive individualistic habits were
formed. Every self-reliant instinct was developed until it became a law
unto itself. They do not, says de Tocqueville of the Americans, ask
help. They do not "appeal." They understand that everything rests with
themselves. Every immigrant of those days had come from what Freeman
calls "overgoverned" countries. They escaped from highly organized
social constraints to have their fling on a continent as illimitable in
extent as it was in the prizes which its natural resources offered. That
such a large proportion of the strong lived this free border-life
through the entire century has resulted in making a standard of
individualistic action almost dominant in the community.

There is, first, this natural history of extreme individualistic habits
and of their reactions on our whole national life. There is, further,
the almost universal concentration on wealth-production as a means of
winning what average men most crave in this world. What the strong of
any race work for is not, ultimately, money, it is social power. This
power has many symbols in a monarchy. There are titles and decorations
for which armies of able men will do hard public service for years. This
same passion is as lively in the United States as in Germany, but we
exclude the symbols. Wealth everywhere gives power, but with us it is
almost the only symbol that has wide and practical recognition. This
passion, working in a vigorous people upon the resources which the
United States offers, has intensified the competitive struggle in
industry to a degree hitherto unknown in the world. This struggle has
absorbed the thought and strength of the people to an extent without
known parallel.

It is the magnitude and stress of this competition that have bent and
subdued politics to business ends. The engendered business rivalries in
this game develop qualities that are indifferent to laws.

The last ten years of investigation have disclosed one further reason
for heedlessness of law. The chances of promotion among the abler and
more ambitious young men in the service of large concerns are known to
depend on the fact of a good showing in their departments. Can they keep
down expenses? Can they enlarge and maintain sales? These have been the
supreme tests for rapid and sure promotion. When these are done, few
questions are asked by manager or director. Among the largest interests
in this country, and among all interests that have to do with franchises
and legislation, skill to evade laws may have the highest value in a
fight against competitors. A magnate recently accused of law-breaking
denies it roundly, and it may be with honesty. When the evidence of
long-practiced frauds against the laws in his own business is produced,
he insists that he never knew it. But he also turns on the light: "I do
not ask my heads of departments _how_ they succeed; it is enough for me
that they do succeed." This explains, but does not excuse, the guilt.

I make no use here of theory. I am thinking of definite large business
interests in which the evil will remain as common as it is inevitable so
long as the business is unregulated and its shady practices concealed
from public authorities and public opinion. In some of our huge concerns
it is the traditional procedure to bring the various heads of
departments together at regular intervals and pit them against each
other as if running a race for life. What is the showing that each can
make against the other? Has this one cut down the cost of his product;
has he reduced this or that item of expenditure; has he got the most out
of the workmen under his charge; has he been able to dodge practical
difficulties--legal, sanitary, or any other--that stood in his way?

In this relentless contest before their superiors, the foreman or agent
learns that the one key to favor and advancement is that no other shall
make a better showing. If he can safely get this superior result out of
his labor group, that is one way; if he can reach his end by introducing
children under age, or by any other questionable device, the temptation
is there in the subtlest form it can assume for the average man. When,
recently, a swarm of sharp practices came out in another of the great
concerns whose products reach half the homes of the nation, the man at
the top doubtless told the truth when he replied: "In my position, it is
not my business to know those details. I have no time except for the
results sent in." Thus the president or director stands apart from and
above this underworld of tolerated illegalities.

Here, then, are three reasons for lack of obedience to the law,--the
long border struggle, the excessive concentration upon
wealth-exploitation, and the ways through which successful subordinates
are rewarded in severely competitive industries.

But another, weightier reason must now be added,--namely, our private
monopolies with their influence and reactions on our whole community
life. In the earlier and looser stages of development, when vast
resources still remain unappropriated, private monopoly may aid a city
or a nation. At first no public protection of fish and game is
necessary, but the pressure of population will eventually compel a
common rule to which the individual must submit. As surely as a growing
town sooner or later requires a common water-supply, a common drainage,
common sanitary provisions, and regulated hack charges, just so surely
will the private monopoly somewhere and at some time require strict
social control,--that is, control from the point of view of all of us
and not from that of a few money-makers. A generation ago the stripping
of our forests did not matter vitally. The interests that were to suffer
from this stripping had not appeared. To-day a forestry policy derived
absolutely from the common, social point of view has become a necessity
so commanding that the nation's attention is at last caught. A
generation ago no one had even guessed at the franchise-value of our
streets,--not even those of New York city. After Jacob Sharp had made
these values known, a struggle began which reads like an Arabian tale.
It is a story of business and political corruption that has gone on in
varying degrees in scores of our cities and in scores of great
industries where strong men have been fighting to get control of mines,
forests, lands, and oil, the development of which depended on favorable
transportation. The carrying trade--whether of goods or people--is never
to be omitted in this story. Until very recent years, this mother of
monopolies, the railroad, was thought of as a purely private possession.
A dozen years ago one of our ablest railroad lawyers (often before the
United States Supreme Court with great cases) told me it had long been
one of his intellectual amusements to try to force into the heads of
railroad presidents the fact that their ownership of that kind of
property was profoundly different from the ownership of a horse or a
grocery store. "I finally," he said, "had to give it up." It meant
nothing to them that society had given them stupendous privileges which
qualified their ownership. These franchise-grants once in their pockets,
everything that was built upon them came to be used in any conceivable
game to enrich the owner.

Properly informed persons no longer discuss whether it is right and
moral to allow railroad magnates to do as they like--to act as if these
properties were strictly a private possession. We know, at last, how
society has suffered from leaving this form of ownership so long without
social control. We have seen the devastating conflict between
unregulated possession of this kind of property and all the higher
welfare of the community. If we add to the railway the common city
monopolies of lighting and transportation; if we add industries in iron
and steel, much of our mining, oil, and forest exploitation, all of
which, in connection with railways, take on inevitably the form of
monopoly, we have the whole buccaneer-group that has done upon our
politics the deadly work, which we know so well that its retelling is a
thing to avoid from very weariness.

Though a dozen other cities would serve as well, look for a moment at
the monopoly of the New York street-railways. A people, careless and
ignorant of their own interests, so far give away the rights in their
streets, that a few men get them into their possession. With the grip
once fast upon this power, it becomes not a machinery primarily to serve
the people: primarily it becomes an enginery to filch vast unearned
increments from the public. It becomes a device for gambling, with the
dice so heavily loaded in your favor that you cannot lose. You change
power from one kind to another; you merge one line with another or with
the whole; you create holding companies; and at every change you
recapitalize. Your million dollars is turned into five or ten or twenty
millions, in order that multiplied dividends taken from the public may
drop into private pockets. Every bit of bookkeeping meant for the public
eye is a mass of jugglery. If you are frightened by the challenge of an
indignant public, the most important records are destroyed. Surplus
funds belonging to the stockholders are freely loaned to personal
friends or put to private speculative ventures.

This shell-game has gone on decade after decade, so gayly that it seems
as if it were a delight to the American people to have their pockets
picked. And yet, let us say it over and over again, the pocket-picking
is not the worst of it. That the people's money should be used to
debauch their own chosen representatives in city and state legislatures
is the uttermost evil. Part and parcel of the uttermost evil is the
resulting suspicion and distrust that eat their way deep through the
masses of the wage-earning world. Not to mention their own trade papers,
or the socialistic sheets with the scandals of high and low finance,
wage-earners have only to read the capitalistic sheets, presidential
messages, and summarized reports from scores of legislative committees,
in order to believe that almost everything investigated--insurance, city
traction companies, mining syndicates, railway finance--is heavy with
rottenness. Any one interested enough to run through the files of the
distinctively labor press at the present moment, will find a body of
convinced opinion about those who control us industrially that has an
extremely ugly look. The labor-world is drawing the only natural
inference it can from the data given.

How often we have seen within a year or two the lament that the
efficiency of labor has lessened in many of our great industries! What
in Heaven's name can we expect? If that labor-world believes what is
everywhere cried on the housetops about the crooked exploiting devices
of these monopolies, why should not its interest and its fidelity fall
off? The law of cause and effect will work here as it works elsewhere in
the universe. Labor is learning that unfair industrial privilege flouts
every essential principle of democratic government. The real iniquity of
it is hidden from us until we see that secrecy, cunning, and
unscrupulousness may be good pecuniary assets. Yes, this has to be
plainly stated. A man who should happen to have the people's interest
really at heart could not be an active partner in the worst of these
monopolies. The unscrupulous, the men bent upon the stock-watering game
and their own immediate enrichment, would crowd the honest men to the
wall. Every line of least resistance is with the get-rich-quick type of
manager. To hold his power and to corrupt us politically; to appropriate
continuous unearned increment through overcapitalization, he must work
not for the public good, but largely against it. In most free
competitive business there is no such inherent antagonism between
private and public good.

The privileged monopoly is found not only in the lighting and
transportation combinations in cities like New York, Philadelphia, St.
Louis, and Chicago: it is in a whole nest of industries--oil, mining,
and timber--which are interknit with our railroad system.

Here is the real antagonism between monopoly and good citizenship.
Anthracite coal is not a business apart--it is a railroad business; and
if there are abuses, they cannot be corrected apart from railroad
regulation. There is nothing that we now need to know so thoroughly as
that the railroad is the one key to the control of all monopolies,
including those that often last just long enough to gut the properties
according to get-rich-quick principles. The waste of the public wealth
under this concentrated stimulus is the darkest economic fact, as the
ugliest political fact is the corruption of officials and legislators.
Think of a product so vital to the future as the forests; and then
picture, if you can, the waste and despoiling of this strictly common
wealth that has gone on, and still goes on, in connection with
unregulated railroad affiliations,--properties, larger than several
Eastern states, stolen, and then burned, and skinned, and devastated, so
that two generations cannot repair the loss! And now by highest federal
authority we are warned that our timber supply cannot last twenty-five
years without a new controlling policy.

Yet it is not, of course, the monopoly that is the evil. It is solely
the way in which we have allowed the monopolies to be owned and
controlled. We have admitted a kind of irresponsible proprietorship that
has so debased political methods in the United States that we are made
at the present moment (in this one respect) a warning to the world.

Last year a social investigator returned from New Zealand. He said: "I
found their able men chiefly anxious to avoid the example of the United
States. Their problem is to develop a rich and prosperous industrial
life, but escape the rottenness of American politics. Whether they
succeed or fail, their purpose is great." Their plan is to use the
strength of the government to prevent the formation of private
monopolies such as have debauched our politics until we have become a
mockery among the nations.

How long we ourselves have talked of political corruption as if it were
separable from the privileged monopolies in business! That we now see
this sorry partnership as it is, and are daily more and more aroused by
it, and bent on its dissolution, is the surest sign of progress, as it
is the surest sign that democracy need not fail.

Again and again we wonder how long it will require for the sovereign
people to learn a lesson so simple. How many more facts or revelations
do we need?

The other day a liberal theologian told me that he had been preaching
some elemental truths about a larger religious life. A sturdy old
listener, who knew they were truths, but didn't quite like to adjust
himself, said to the preacher: "I guess that's all true that you've been
preaching; but--I don't more'n half believe it."

We, too, know these truths about the monopolies; but we still
hesitate,--we still act as if we didn't "more'n half believe it." But if
the monopoly as such is not an evil,--if the evil is the practice of
political abuse by irresponsible private ownership,--what are our
alternatives when the question of remedies is raised? Are we forced to
the logic of the socialist,--that the city or state should take these
monopolies out of the categories of private property, owning and
managing them directly for the people? The socialist tells us that these
combined interests in transportation--mines, oil, timber, etc.--have
become a power with which city and state cannot cope; that we are at the
present moment governed by these monopoly interests, and shall continue
so to be governed until the state has absolute possession of them.

To this claim of the socialists, one reply is obvious. Every immediate
political duty now before us is committed to the principle of
regulation. For some years we are going to try that. We are not going to
assume that mines, oil, timber, elevators, and our vast transportation
system with its connecting monopolies, are all to be taken under state
proprietorship and managed as our postal system is now managed. For any
future worth discussing, we are going to use our strength to regulate
these monopolies in the public interest. In that decade when the people
are at last convinced that these monopolies are more powerful than
government; that we have no hope of curbing them into obedience before
the law,--in that decade the cry will go up for government ownership on
a scale far wider than that of railways and telegraphs.

At this point I do not wish to hedge or shuffle. That the younger of my
hearers will see far more government and city ownership than we now
have, seems to me so obvious that the discussion of it is not even
interesting. Our government must have an economic basis strong enough
and broad enough to give it footing against all unfair private monopoly.
But this degree of government ownership does not land us in Socialism.
It may, indeed, protect us from every dangerous excess which Socialism
carries with it.

When the German government secures a large mining property with the
distinct understanding that, if necessary, it shall be worked in the
public interest to break a private coal monopoly, we have an
illustration of one step which our own government ought also to take.
The object, in this case, is not to go into a new business, but to break
monopoly power, actual or threatened. Or consider that brave experiment
station, New Zealand! Her Compulsory Arbitration may fail; she may be
forced to an industrial pace slower than we like; but the main purpose
of her social policy is sound to the core; and we are now trying
clumsily to imitate it. Yet we are still afraid--we "don't more'n half
believe it." Her purpose is to use the power of city and state in New
Zealand to prevent the private fleecing of the people through monopoly.
Whether it is her land policy or her insurance policy, the aim is to
check at their source inherent monopoly abuses.

One is forever hearing that New Zealand is being given over hand and
foot to Socialism. The only trouble with the statement is that it is not
true. If you tax a vast estate down there so that it must be cut into
small holdings upon which some twenty times more people can live than
lived on the private estate, and if this added population is encouraged
to win more and more interest and profit-bearing forms of wealth, you
have a situation in which the thoroughpaced socialists may be entirely
out of the game.

The essence of the socialist's logic is, that all interest on money and
all profits on goods made for the market (as well as all rent) are
inherently vicious and antisocial so long as they drop into private
pockets. There is no distinction between the greedy _abuses_ of
capitalism through organized privilege and the possible _uses_ of
capitalism under regulation.

But think of this issue as we may, we are as a fact now committed to
regulation--committed to a long and hard struggle to bring monopoly
evils under social control. This is now our situation and our problem.

Yet how easy it is to put these evils into phrases! How hard it is to
relate ourselves to definite and effective proposals for the elimination
of the evils! Such proposals have nevertheless been at last put before
us with coherence and with deliberation. They have been put before the
American people with a clearness which cannot be shirked without bad
faith on our part. They have been brought within the sphere of practical
politics, where their decision now waits upon the choice of the people
as a whole.

This commanding policy for future as well as for present interests, for
the entire people as well as for the few, has been stated in its
integrity in two messages from President Roosevelt. Men may differ about
the Philippines; about our military and naval ambition; about
nature-fakirs and race-suicide; but about the ordered and constructive
purpose to curb the abuses of our ill-regulated private monopolies,
there should be no disagreement among sane and disinterested men. No one
has ever yet shown genius enough to do disagreeable duties agreeably to
all men. To the end of time, if we ourselves are inconvenienced, we
shall probably say: "Of course this thing ought to be done,--but it
should be done in some other way." The various methods of railroad
regulation may irritate us, but that the railroad must be brought so far
under public control as to obey the law and serve all men with
approximate fairness, no human being who is intellectually and morally
awake can longer deny.

To begin this great task with the machinery of transportation was the
first clear duty. Scarcely one of the gigantic abuses can be touched
apart from these highways of distribution. We have but just waked up to
the plain stupidity of giving away so recklessly all sorts of franchise
grants, and are beginning to see the equal stupidity of parting madly
with such an overwhelming part of the main and primary sources of
wealth--mines, forests, water-power, oil deposits, and ground areas in
large towns. These are the sure nesting-places of monopoly, and
therefore, of all the fantastic extremes of wealth which make puppets of
our politicians and set before the youth of the nation snobbish and
materialistic ideals. This policy, be it remembered, does not ask, as
the socialists do, for all forests, all mines, or all the water-power.
It asks that the hand of government control be kept firmly upon such
portions of these resources as are susceptible to vicious monopoly. All
this is possible along the lines of state regulation, without even
raising the question of universal ownership. We have a chief executive
who sees what the evils are and dares to face them. Yet the courage
involved is not his highest gift; but, rather, the intelligence with
which he has so stated and grouped the issues as to give us a coherent
administrative policy that works toward equality and not away from it.

To group those sources of monopoly that may still be saved; to show how
this retention will fortify the government in its great struggle to
regulate privileged capital,--is a service that should command the
intellectual and moral sympathy of an entire people. It is a policy
broadly public and social, as against any lower and partial interest. It
is a policy for the whole and for the many, rather than for the
monopoly-coddled few. It is a policy that looks to the future rather
than to the possible dividends of the next six months. Not separable
from it is the President's proposal to put upon these huge accretions a
decent inheritance tax. He does not spoil his case by conventional or
academic timidities. He does not ask this tax merely as a fiscal device,
but as a measure that makes for more rational, social equalities. He
asks it in order that the common wealth may grow larger and the
top-heavy fortunes (the larger portion of which privilege has made) may
be lessened for the common good. The fatuous outcry that this is to be
opposed because it is "Socialism" will, of course, continue, although
the most conservative governments in the world have long proclaimed it
with such conspicuous success, from the public point of view, that it
is no longer questioned.

With jaunty prodigality we have scattered these primary sources of
wealth precisely as we scattered transportation and other franchises
upon which dangerous private monopolies were built. The kind of mistakes
that have been made with the franchises, we have in this generation come
to see clearly. In the teeth of extreme difficulties, we are trying to
protect the public through legislative control of these corporations. We
are learning the same lesson in our forestry. We have the lesson still
to learn in remaining mines, oil-lands, water-powers, and
phosphate-beds. Nothing in the statesmanship of President Roosevelt will
more surely win him laurels in the future than his pluck and
consistency in forwarding this policy, which stands for the whole people
and for the future. It is as serenely above party as it is above
corporate or private interest.

The warring and balancing of sectional, partial, and immediate interests
will always have their claims; but the next clearest step in
civilization is to learn the political habit of acting also for the
social whole. Social politics, so called, already has this character.
The forestry legislation of Switzerland or Germany has its inspiration
in the thought for the whole people and for future generations.

Many years ago I heard a discussion in Germany among three
art-teachers,--two of them with a world-wide fame,--that was as new to
me as it was amazing. They seemed to agree that the art of the sculptor
reached its height in the Age of Phidias; that never again would men
give shape to figures fit to be put, let us say, beside the Elgin
Marbles. As some nineteen centuries passed by, another art came to its
finest flowering in the Italian Cinquecento, when Raphael, Da Vinci, and
Michael Angelo added color to form. They agreed that never again would
paintings be produced fit to be classed with the Sistine Madonna.
Another two centuries passed, and the Bachs began the great music which
these three modern artists thought of as the reigning art of our time.
Here came their question, "What is to be the next and coming art that
shall compare with the Greek period, with the Cinquecento, and with
modern music?" One thought it would be the theatre. He wrote, I believe,
a pamphlet to prove this. I do not recall the guess of either of the
others; but I venture to make my own guess.

Art is knowledge in its applications; and to apply our experience and
our knowledge to the shaping of a higher social justice is also an art.
It is an art already showing itself in the field of politics and social
reconstruction; a politics, enriched and ennobled by ideals of
citizenship, freed at last from that party machinery whose boss has
been the puppet of business men fighting for monopoly privilege. It
will be a politics not for the few or the favored; not alone for the
strong and successful; but a politics for the common weal, for the
common and inclusive good of every citizen according to his good will
and honest endeavor.

Here is a sphere for art as much nobler than that of sculptor or painter
as the destinies of human life and society are higher than those of any
inanimate object, even though carved by Phidias or painted by Raphael.
It is, above all, an art that should touch by its inspiration the
gallantry of the whole student class. The very breath of it is the
shaping and directing of those conditions out of which may emerge a
society in which the spirit of justice and equal opportunity will be
realized at least so far that it will be no longer a mockery among
honest men.


The Riverside Press

CAMBRIDGE. MASSACHUSETTS

U. S. A