Contributed OVERTAXATION, MUNICIPAL UTILITIES AND VAST PRIVATE FORTUNES A Great City That Needs the Revenues from its Public Utilities. Financial Mismanagement Brings New York to Verge of Bankruptcy. A Remedy that Would Prove Effective. BY HENRY H. KLEIN* The war in Europe has emphasized the utter helplessness of cities which depend on bankers for their financing. New York City, for example, with an annual income of $192,000,000, is unable to meet its routine expenses without borrowing, and the city must now pay six per cent on a temporary loan of $100,000,000. The failure of other large cities recently to dispose of their bonds, proves that the aid of the bankers is no longer adequate. that the value of all taxable real estate besides the city's own property, is behind the city's bonds. This theory did not contemplate a universal paralysis of business nor the financial exhaustion of the taxpayers. The bankers may be compelled to test their theory by the forced sale of some of their city securities. There is but one way that the city can be saved from financial exhaustion and The City of New York has a permanent that is by the discovery of new revenue interest-bearing debt of more than one to relieve the burden on real estate. It billion dollars, the interest being about is either confiscation of private property $42,000,000 a year. This sum is more through excessive taxation or new wealth than one-quarter of the total amount to provide for the city's needs. If the raised by taxation each year ($150,000,000), the remainder of the annual budget ($192,000,000 in 1914) being made up by income on public property. On the temporary yearly loan in anticipation of taxes, the city receives 2 per cent and pays from 4 to 6 per cent interest, and the bankers use the money which remains in their vaults. Their profits on city deposits are sometimes abnormal. New York City was under no compulsion, except from the bankers, to accept the rate of $5.035 per pound sterling and 20 cents a franc for the $80,000,000 gold debt abroad. The exchange premium means an addition of $2,800,000 to the interest cost of 4 per cent, or a total cost of $6,200,000 for the use of $80,000,000 for one year; equivalent to 7 per cent. The cost of the $80,000,000 for the second year at 6 per cent is $4,800,000, or a total of $11,000,000 interest and premium for two years. In addition, the city is paying $1,200,000 for the use of $20,000,000 for one year, or a total interest and premium of $12,200,000 in two years. The bankers who have acted as the city's financial agents, have financed the constantly increasing debt on the theory *Author of "Standard Oil or the People"; "How to Prevent Economic Disaster in America" and The city can obtain a large share of the profits of local public service corporations such as gas, electric light and transportation, it can save itself from pankruptcy. It can also avoid the ruin of many of its property owners. Up to the present time the bulk of the profits of public service corporations in New York City has gone to swell the already swollen fortunes of only a few people. John D. Rockefeller, for example, owns the largest share of stock in the gas and electric light companies and in the Manhattan Elevated Railroad. The people of New York City pay $60.000,000 a year and the city pays $5,000,000 a year to the lighting companies. If the city instead of Rockefeller received the bulk of the profits of these companies, the cost of government to the taxpayers would be reduced. Rockefeller receives 7 per cent on his . stock in the Manhattan Elevated Railroad, the dividends being guaranteed by the Interborough Company, which earns 23 per cent on inflated capital. The people of New York City pay more than $150,000,000 annually to the local public service corporations. If instead of Rockefeller and a few others, the city derived the bulk of the profits of these corporations, the tax rate would be reduced at least one-third, and the value of real estate would be restored. This change in ownership of public sult in the substitution of public for service corporations can easily be accom- private ownership of the means of distriplished without the cost of a dollar to bution. Brother McKee offers some very the people. If the nation limits private good arguments in support of his belief. fortunes to a certain sum, say $10,000,- In commenting, therefore, upon his ar000, all wealth in excess of that sum ticle I do not wish to be understood as would go back to the nation. The wealth having assumed to criticise, but rather tion from my own view-point of this very to have offered a few thoughts in elaboravital problem. of Rockefeller consists of stocks and bonds in local, State and National public service corporations, industrial corporations, government, State and city bonds, etc. If Rockefeller's fortune were lim- Opposition to the theory from my own ited to ten million dollars the nation experience generally arises from two conwould come into possession of all his tentions: First, that government ownerwealth in excess of that sum. Federal, ship means political control with all its State and city bonds totalling several accompanying evils of favoritism, spoils hundred million dollars could be can- and extravagance; second, even if it were celled and his holdings in municipal and "a good thing," there is no definite plan intra-state public service corporations offered whereby the transferance of the could be transferred to the cities and privately owned railroads to the governStates in which the properties are located. The nation would retain its holdings in interstate and National railroads and industrial corporations. If this transfer of private property in excess of ten million dollars is general, the Nation, States and cities would each be in receipt of independent incomes almost sufficient to defray the cost of government. The burden on taxpayers would be greatly relieved. The cost of living would also be greatly reduced through a reduction in the cost of commodities, excess profits being unnecessary. The time has come for a halt in the wanton accumulation of vast private fortunes. The safety of the Nation is imperiled and an expeditious and safe solution of economic hardship must be found. The impoverishment of the people is general and the financial ruin of cities through extravagant government and excessive taxation, is impending. Economic freedom and prosperity must be restored and this can only be done through a limitation of private fortunes as outlined. Otherwise the financial structure of America will collapse. Government Ownership of Railroads vs Public or Social Ownership. In the September issue of our Magazine I find a very interesting and instructive contribution from A. McKee, Local Chairman of Lodge 235, entitled "Government Ownership of Railroads as Seen by a Fireman." There can be little or no doubt in the mind of the student of industrial evolution that the ultimate solution of the problem of the distribution of wealth in its varied material forms will finally re ment can be successfully brought about. Both of these contentions are valid, and deserve serious consideration. In the opinion of the writer, government ownership would not improve the situation; public ownership would. Therein lies a very defiuite distinction. Public ownership would rid the system of spoils and party politics by eliminating the incentive that goes with profitmongering and interest-taking. Government ownership would mean interest on deferred payments. Under public or social ownership private owners would receive nothing back but their pro rata share of the physical valuation determined upon, on the ground that they were compelled to transfer their holdings and in most instances had already received back in dividends the equivalent of their original investment. Government ownership would change merely the name. Public ownership means to change the thing. What I wish most emphatically to point out is that public ownership and government ownership are by no means synonymous. It depends altogether as to whether the processes of acquisition and subsequent operation shall be truly democratic or merely acquired ownership by the State or Nation for fiscal purposes. State or National ownership under the present political and economic system would subject the people to the double yoke of exploitation and political slavery. In the last analysis, government ownership could extend itself no further than that which forms the incentive to private ownership, viz., acquisition of values. On the contrary, public or social ownership means, a revolutionary change in which laws, institutions, and moral conceptions must be transformed to meet the need of a new economic condition wherein the sole purpose shall be to function for use agencies. Under stress of public welfare, and not for revenue. Furthermore it property rights should never stand in the means that the whole body of the people way. shall function in a true social ownership and democratic management. History records innumerable circumstances where they have been swept away by a stroke of the pen. The contention between those who favor and those who oppose government The people must stand either for long ownership hinges around questions of drawn out condemnation proceedings, or values, revenues, equipments, bonds, take the short cut of confiscation. The stocks, earnings, and a host of other in- choice is almost imminent. The writer tricate problems, which on the larger hopes that the outcome will be full and grounds of public policy, backed by the complete social ownership. Constitution can be wholly set aside by the people through their governmental W. J. COLCORD, Member Altoona Lodge No. 287. FEDERAL JUDGES AS ARBITRATORS-WHY SO By A. A. GRAHAM, Topeka, Kansas. John D. Rockefeller, Jr., one of the what the verdict. With these anteceboard of managers of his father's millions dents, with this machinery, they are safe invested in The Colorado Fuel and Iron in demanding a speedy and fair trial. Co., in testifying before a congressional The importance of this testimony of committee, April 5, 1914, at Washington, young John is very great from another investigating the coal strikes in Colorado, standpoint,-that of giving us a comparispoke officially for the capitalistic view son between the Rockefeller conscience of arbitration, when he said he would not be willing to have these differences submitted to arbitration, unless by a board of federal judges. Young John also said his "conscience acquitted him" in all he had done in the Colorado coal strike situation. Laboring men and the rank and file of the people generally are afraid of the federal courts and federal judges. We ordinarily look upon our cases as good as lost, if removed to a federal court. Even if we win, our costs and expenses will be so high as to leave us nothing or next to nothing, provided we live to the end of the litigation. Perhaps the trouble is because our consciences are not right. A timid conscience has no place in a federal court. and the judicial of the federal type,-for courts have consciences, as we read in the ancient laws; and this the judges will not deny. Arbitrators should always be selected for their fairness and lack of interest in the matter involved. We have no doubt young John has a conscience in this matter; but before the public should adopt the federal judges, at least as a standing board of arbitration in any matters, and most especially in labor disputes, we should have some more laws declared in the case on the general propositions and principles involved: Would federal judges feel a clear conscience in accepting appointments as arbitrators in cases between capital and labor? Would their consciences acquit By the way, did any one ever hear of a them also that they had been honestly time or an occasion when or where the chosen because Rockefeller knew them to conscience of either the old John or the be impartial, fair, honest, just, indeyoung John ever convicted him? I do pendent? If selected, would they be not remember that I ever did. They al- courts of conscience or of fact and law? ways try their cases in the court of con- Would they, in any case, allow themscience their own conscience, and there selves to be troubled with compunctions? is never much doubt about the result. Do they now believe that the laborer is They altogether compare with a trial worthy of his hire? Do they believe that where a man, although he be defendant, a workman should be able to make a livmay yet be the judge, the jury and the ing for himself and family; and, if so, law, to determine how the case be tried, what kind of a living? Do they believe what witnesses called, the evidence, that the workman should live at all, as against the ultimate conscience of capital Under present conditions the army can in bringing in soldiers to shoot down and be used against the people in an unequal kill men in the battle for bread? Have contest. Our constitutional rights of they determined how many hundred per life, liberty and the pursuit of happiness cent profit capital ought to make on the are now subject to the supervising arms original investment? Are they concerned of our military establishment. much as to the methods employed in making these gains? What interest do they feel in the future welfare of our children, of the community, of the State? Before we agree to accept federal judges as arbitrators, they should tell us about these things as matter of law, so we will have the books to "pull on them," and know how to proceed in future cases. Ohio Congressman's Plea for Labor The Clayton Bill (H. R. 15657) has become a law and courts can no longer class labor organizations as trusts and suppress them accordingly. (Not that the courts have been suppressing the trusts, for the Sherman Anti-Trust Law thus far has been made effective against labor organizations only.) Amongst those who were active in securing the Why So Few Army Enlistments. For several years army enilstments • have been falling off, and the government passage of the provisions of the bill exhas not been able to keep full the ranks of our very small standing army. Our War Department has been very much exercised over this condition. Many inducements have been held out, advantages shown, and immunities offered, even that soldiers deserting, or doing other acts, formerly punished by long terms of imprisonment at posts or in penitentiaries, are now to be dealt with as matters of local discipline only. 1. Has prosperity made us so opulent that we will no longer undergo martial fatigues? No, because we are generally poor, and now suffering from low wages, dull times, lack of work, high cost of living and many other evils. Such conditions formerly increased the number of enlistments in the army and navy, but not this time. empting labor and farmer organizations from being classed as trusts, was Congressman Clement Brumbaugh of Columbus, Ohio, who represents the Twelfth Ohio District, and who as a member of Congress has proven himself a friend of labor as his record, as given by the Joint Legislative Bureau of the four Brotherhoods, will show. In his speech in supporting these amendments in Congress, Mr. Brumbaugh spoke in part as follows: "I desire to state that personally I favor the plainest and most explicit decof labor. laration possible in behalf of the rights I think this is best for both sides concerned and interested in this matter, and I shall vote for this amendment. "Mr. Chairman, it is gratifying, indeed, to those of us who have been the friends and champions of labor and labor laws for years, both here and elsewhere, and who at the same time have wanted this great advance made in justice not only to labor but to honest employers of labor as well, to see this great question settled in this sensible, reasonable, amicable manner, in this spirit of fairness to all concerned, and thus see this tardy justice done to the great cause of labor, of the people as a whole and the growth upon which the prosperity and happiness and grandeur of our great Nation must ever rest. No nation can be or ought to be strong and great and secure that does not respect and honor its laboring men The most honorable and dignified thing in all this world for any man or woman is honest labor, whether of hand or heart or brain; for did not the give to honest labor a halo of honor and Nazarene Carpenter, the Christ Himself, dignity that no rank of birth or wealth can equal or enjoy? 2. Is patriotism dying out among us or now dead, so that we would not repel an invading foe? No, by no means. 3. Are we willing to bear arms against our brothers battling for bread, kill our parents at the command to "Fire," starve children we should nurture, make wives widows in domestic murder to further strengthen the trusts, enrich and increase monopolies, reduce wages, impoverish the people, enrich for eigners, to send our capital to Europe to rehabilitate the fortunes of decaying and women. royalty, exalt political demagogues at home, and support the idle rich? No, no, no. Young men are now reluctant to put themselves in a place where their "patriotism" will find an expression in shooting down the employes of great railway systems, of great industrial plants, and of mines, men battling at great odds for bread. "Extremely gratifying to me, indeed, is man above the dollar and to be able to it to see Congress place the hear the heartbeats of humanity above BRAZEN EXTORTION BY FOOD MONOPOLISTSEUROPEAN WAR PRETEXT TO PLUNDER THE PEOPLE OF THE UNITED STATES. Investigations Bring Some Relief But are Feebly Inadequate--Government Should have Authority to Exercise Powers of Permanent Protection. It is bad enough that the idle rich should do no work and live upon the industry of others, but when in exercising their monopolistic prerogative of absorbing the wealth of the nation by plundering its people through the medium of extortionate profits they do not hesitate to inflict misery and hardship and oppression upon the really useful element of society, it is certainly time that the "system" whereby such ends can be accomplished be shattered. If "big business" wants to goad the people into open revolt against its plan of daylight robbery from which the people's government is evidently unable to protect them, it is surely taking the right step to accomplish that purpose. The food monopolies say to the people in effect, "Here is the food, you must pay us so much for it. We know this is greatly in excess of a highly profitable selling price. We know we did nothing to produce this food but we are privileged and can compel you to pay tribute to us. We know that by compelling you to pay our prices we are making you give us a lot of money for nothing, but we can force you to do so and you must do it," and in the face of this extortion the "big business" press of the country is silent, but when wage earners stand collectively and say to the employing classes, "If you want our labor you will have to pay us a just wage for it, and if you don't pay us a fair wage you cannot have it," immediately the same press howls “revolution" and demands the suppression of the workers by the sternest measures at the command of government. But Congress has been "investigating" and the investigation speed of Congress is such that before it arrives at a conclusion millionaires will be millions of dollars richer and wage earners of all kinds, railroad men, shopmen, day laborers, factory girls, washer women, etc., will have been collectively poorer by that amount, which means they will have suffered deprivations and many of them discomforts and hardships in order to contribute a share of this vast sum that the fabulous fortunes of the rich idlers may be increased by more millions-that the powers of wealth and privilege may be the more firmly established-the more securely entrenched. When is it going to stop? When will the people rule? When will the greedy despots that monopolize the nation's food supply be dethroned? |