Sunday, March 25, 2007

J. K. Ingalls, Reminiscences, Chapter 13

Joshua King Ingalls, Reminiscences of an octogenarian in the fields of industrial and social reform. New York : M.L. Holbrook ; London : L.N. Fowler, 1897.

CHAPTER XIII.

The testimony delivered before Mr. Hewitt's Labor Committee in 1878 was in part as follows:

Hon. A. S. Hewitt, Chairman Congressional Labor Committee:

Dear Sir:—On the day I was invited before your Committee, I was unable to remain until my name was called. I have, therefore, prepared a paper, and would be glad to, have it submitted to the Committee. I also enclose a "Memorial of the National Land Reform Association," which has already been mailed to the Members of both Houses of Congress. That contains sufficient suggestions upon our: Public Land Policy, and also some useful hints as to Finance.

Respectfully, etc.,

J. K. INGALLS,

Corresponding Secretary National Land Reform Association.

The real causes which produce periodical depression of business and destitution of the producing classes are to be sought in the imperfect knowledge of the general principles of civil and economic law, [79] and in the chronic misgovernment resulting therefrom, rather than in any of those superficial circumstances, or matters of legislation, which have chanced to accompany or immediately precede those revulsions

It is illogical, for instance, to refer them to the cost of our civil war, or the destruction of property by it; for nothing is more familiar to the student of history than the rapidity with which nations often recover from the devastations and losses of war, when he spirit of the people is not broken by oppressive and unequal law. Instance the recuperative power exhibited by France in her recovery from her late war with Germany, and her indemnity of a Millard to her successful foe. In our case, the loss must have been mainly replaced within eight years after its close, or else it is difficult to understand how there could exist an over-production, which throws labor out of employment. That it is not a disproportionate production, as claimed by Prof. Sumner, before your Committee, is proved by the fact, that the depression is not confined to a class of interests or industries, but pervades all, with unimportant exceptions. Could the Professor's astute thought have been directed to the manifest disproportionate distribution which occurs from causes t shall attempt to point out, it would not have been so fruitless.

Theories of Protection or Free Trade may be applied in explanation of the suffering in special lines of business or of industry, but that they can effect such general consequences, is simply absurd, and even if such unreasonable results could be logically ascribed to them, we should still be no nearer a solution of our problem, because the nations representing the extremes of these respective theories are equally as great sufferers as ourselves.

That the increased employment of machinery has had the result of displacing labor to a considerable extent is doubtless true; but it is also true that the construction of such machinery and its requirements of constant superintendence and repair, has absorbed much of that displaced labor, while it has greatly cheapened and extended the consumption of the manufactures it has apparently over-produced.

Its present use is not so much to be deplored on account of the numbers it displaces from special employments, as for the unequal [80] distribution of the results of its production, and which awards to labor not a moiety of what it produces, while to capital, in the form of profit, interest and rent, it surrenders the remainder, and thus enables great numbers to live upon the product without labor or service to society of any kind whatever.

We have, then, no recourse, but to look into our system of civil and economical legislation, to solve our problem. We are told, with great deliberation and show of knowledge, that "nothing can be done by legislation to relieve the present distress," and if w e are compelled, logically, or otherwise, to accept this conclusion, as regards labor and the condition of the poor, may we not be allowed to enquire into the workings of that legislation which has been so lavishly bestowed, particularly during the last fifteen years, upon speculative schemes, to aid moneyed corporations and enterprising adventurers of every description; and to give fortunes to those who live by profits and interest drawn from the products of industry?

From the first our legislation, State and National, has been under the influence of a Lobby, constantly increasing in its unscrupulous and relentless grasp of power, and which has often become thoroughly organized for the promotion of schemes of aggrandizement wholly incompatible with the public good.

And must the unfortunate toiler now be told that legislation, which has done so much to hasten and intensify this catastrophe, cannot be expected to do anything to relieve it? Surely workingmen, unschooled in the subtleties of our current "Political Economy," may be pardoned for having dreamed that a government, which had freely voted such subsidies of land and money to private corporations; such franchises, as actually abdicated its own right of "Eminent Domain," might devise some practicable relief to the idle hands and starving mouths of those who had produced the wealth thus handed over to organized rapacity.

I am fully aware of the dangers and difficulties which attend legislative interference in questions of this nature. Had our remonstrances for more than a quarter of a century been heeded, the immense domain, now held by railroad corporations, or organizations growing out of land grants, would have been in the hands of hardy pioneers, whose identity of interests with the best good of the [81] nation, and the independence which self-employment begets, would have been a perfect safeguard and barrier against the extreme agitation in business or in politics which now threatens the stability of our institutions. Abundant supply of food would have been secured: a steady increasing market for our products of the shop and factory, and a healthful, because stable, growth of all our industries.

Society, by its civil laws and positive enactments in regard to real estate, has sanctioned and reinforced this assumption or usurpation of the elder and stronger brother, instead of protecting the interest of the minor and weaker. But the time has now come, especially in this republican land, which has embraced the theory of making all "equal before the law," to take the administration out of the hand of him who has so grossly violated his trust, and re-apportion this patrimony in the interest of all.

The result of this assumption of private control over unlimited extent of the soil, is first, to enable the owner to exclude from its occupancy or cultivation, all other persons, who will not pay him tribute in money or in kind. This removes him entirely from the operation of the law of competition in the exchange of services, while the wages laborer, as Mr. Thornton bas shown, is alone subjected to a forced and unnatural competition. Land monopoly places a "monopoly price" upon everything produced or gathered from the land. I am aware this point is denied by writers who have followed Ricardo, but I am also aware of the specious, not to say superficial reasonings, which they employ to evade a point Dr. Smith made irrefutable.

Accumulations of wealth (or stock) under the operation of this arbitrary control of the soil and the ability to purchase into this class monopoly, has given to money its unwarranted power to obtain an income for mere time use. Now, while the accumulations thus withdrawn from the productions of labor are constantly returned to business, by being reinvested in productive industry and healthful enterprise, the hurtful consequences which follow are not apparent, but, as the process of accumulation and absorption goes on, extravagance and peculation gradually develop themselves, until they assume absolute control of all industry as well as trade. Confidence is then weakened. Capital is withdrawn from investment. Prices [82] fall, and a general shrinkage of values of all the products of labor, and, necessarily of wages, takes place.

The terms of these crises are sometimes considerably extended, and their results intensified, by the employment of an expanded circulating medium and of business credits. This reacts upon the real estate market, running up lands in favored locations to fabulous prices, and so, when the extreme has been reached, there being no farther recourse, the crash comes. With the day of payment, property has to be sacrificed to meet obligations, shrinkages take place, which fall wholly on that portion of the capital employed which is not subject to the liens of secured debt. The ruin of the debtor is completed, and to the loss of all creditors who are unsecured. The means of employing labor are lost to those who would employ it, and the laborer is thrown out of work. Now, this crisis, which brings such disaster to business and suffering to labor, becomes the harvest time of all such capitalists as have managed to keep their credits well secured; properties often falling into the hands of the parties who sold them, at one-half the price originally paid.

Dr. Smith describes such capitalist as a "person who has a capital from which he wishes to derive a revenue without taking the trouble to employ it himself." ["Wealth of Nations," c. 4, closing paragraph.] In other words, one who wishes to obtain the services of others without rendering any service himself in return. By the time these crises occur, this purpose has become a mania—to derive an income from labor without even giving it employment.

It will be found that these crises have occurred since the formation of our government (and Mr. Horace White says, for the last two hundred and fifty years), at quite regular intervals of about ten years, which neither protective legislation, free trade acts, change of the financial systems, nor even very destructive foreign or civil wars have been able greatly to vary. Now, this period is about the same as that in which a debt at seven per cent. per annum, compound interest, becomes doubled. That is to say, that if the whole capital of the nation is loaned at seven per cent., and the interest compounded, in a little more than ten years the entire capital of the country will be required to pay its own interest. Hence, repudiation of the principal becomes inevitable, or else the endless perpetuity [83] of the debt, absorbing the complete wealth of society in every decade. Fortunately for mankind, the former obtains to a large extent, and thus periodically, though extensive bankruptcies and suspensions, the clogs are removed from the wheels of industry and of business, and they are allowed to move on again, till the return of another period.

Mr. White is evidently misled by his references to the failures of the last five years. The whole number of bankruptcies may show not much over five per cent. He does not say that it shows only five per cent. of the capital previously employed which has been wiped out during that time. An estimate of the general loss to the country through failures, suspensions of Banking, Insurance and Railroad Companies, and various speculative enterprises, would probably treble that rate, and, taken in connection with the reduction of the capitals through shrinkage of values of corporations, firms and individuals still remaining solvent, with foreclosures on properties, which have not been sold for enough to meet the mortgages, and all those sums previously paid on property which has been lost on foreclosures, fifty per cent. would be a much nearer estimate to the amounts cancelled without consideration than five per cent. Statistics on all these items would be difficult to obtain, but that losses in the various forms in which they have occurred constitute a large proportion of the capital employed in 1873, does not admit of question.

To show with greater distinctness, the operation of the principle which produces these crises, let us suppose that, instead of the large proportion of the capital of the country, which is let out at interest, the land should be so loaned, and further suppose that, instead of the annual percentage being paid in money, it was stipulated to be paid in kind. That, as interest on money is paid in money, so the rent or interest on land should he paid in land. A man borrowing land on such conditions, would, in a dozen year s or so, pay back as interest all he had borrowed, and must of necessity, repudiate the principal—become bankrupt in land. For it is evident that in the period in which the payments of interest would amount to a sum equal to the principal, an amount of land equal to itself, could be required to be returned to the owner for its own use; and, [84] as the amount of land in any town, state, nation, or the world, is a fixed and definite one, the operation of any such stipulation, as a rule, would be impossible, and besides producing untold embarrassment and suffering, must end at last in repudiation. A system of contracts like the above, would be held in any court as invalid, because they involved conditions well known to be impossible.

But the operation of our credit system, and payment of interest on capital to those who take no care in its employment, virtually involves the same consequences. With the accumulations of interest upon a given sum, the possessor can purchase a given amount of land in every period, corresponding to the amount of the principal invested. This enables the capitalistic class, as distinguished from the industrial or commercial class, to control the ownership of the land just as effectually as the titled nobility of any country ever did. Already in our older states, the number of landholders are rapidly decreasing, although the general population, particularly in cities, is largely on the increase, thus continually augmenting the dependent or wages class, and rendering any emancipation therefrom more and more hopeless.

Access to cheap lands has, on each recurrence of a crisis, heretofore opened an avenue to our surplus labor when thrown out o' employment and also extended the market for our manufactures thus operating both ways, greatly to relieve the depression. But all our great railway facilities have not kept pace with the rapacity of the land-monopolies, and a settler now, to obtain public land must take himself twenty or thirty miles from any thoroughfare, and wholly out of social and congenial life.

All our boasted improvement in facilities for travel have not helped the dependent laborer. His natural powers will carry him as far as his days' wages will transport him on our subsidized railroads.

Government may wisely repeal all such laws as facilitate the alienation of the public lands. It may refuse to sanction contracts pledging the homestead for debt, or to enforce the collection of any debt, the amount of the principal of which has been once paid in interest. It may provide for the rapid payment of the public [86] debt, or its change from an interest-bearing to a non-interest-bearing one.

In fact, the war debt has already been repaid. Much of it has been twice paid, and some of it has been three and four times paid, in the form of interest and premiums. To legislate so that this species of property may be maintained at par, after being three times paid, while all other property has depreciated one-half, or more, is to villainously discriminate between classes of people who hold different kinds of property, and in favor of those who render no service to society. That the public faith should he held sacred; that the validity of contracts should be scrupulously respected; none will deny. But public faith is due to the humblest as well as to the proudest of its citizens, and as fully to a doer of a day's work as to a holder of a government bond. If either cannot be paid without ruin to the other, the situation is one that demands compromise and composition.

The taking or paying of interest has been condemned by every moralist, from Aristotle and Moses to John Ruskin, of our own time. In every seven years, Moses, the great Jewish lawgiver, provided for the cancellation of all debts, and at the fiftieth year by the re-apportionment of the land. In our times of rapid accumulation, debts on interest should be held cancelled at least after ten years payment of interest. It is seen now on economic principles, that the system of usance is as destructive to our material prosperity, as it has ever been regarded detrimental to morals and the discharge of human duty. Government then, should discourage, not sanction it, and clearly define the kind and nature of the contracts it will attempt to enforce.

The superstition of the trader or money-lender should no more form a basis for legislation than that of a religious devotee, who wants God put in the Constitution, that his views of what he conceived to be His will may be enforced upon the people.

Much could be done by refusing to enforce claims for the payment of interest, except where payment of the principal was withheld for the purpose of injuring the party to whom the debt was owing, or for arrears of wages not exceeding one month. Granting credit and incurring debt are in no wise economic acts or necessary transactions. [86] They give no increase to social wealth, nor any healthful stimulus to productive industry. The government may rightfully refuse to rectify the mistakes which people make as to whom they will trust, or the value of the securities they may take.

It is a matter of public notoriety, that our Patent Laws are no longer serviceable as a means of encouraging useful invention; but are mainly availed of to foster monopoly, and promote rapacious schemes, through combinations, which use them to terrorize those employed in legitimate business through fears of vexation and costly litigation. Those laws should either be wholly repealed, or so modified as to render monopoly of the manufacture, or of trade in patented articles impossible. This might be done by allowing the inventor to collect from those who made or sold a limited fee for a limited time; without interfering in any way with the regular course of competition in any business. As now interpreted, our Patent Laws are a source of immense evil, injurious to commerce and every sphere of industry, and constitute a nuisance, which should be abolished.

In 1883 I was before the Senatorial Committee on Education and Labor and submitted the following:

I am requested by the Executive Committee of the National Land Reform Association, to submit to your consideration the following statements and suggestions.

1.—The sustenance of human life and the satisfaction of material human wants, are wholly supplied by human labor, from the land and its resources.

2.—All social wealth is the product of labor, intelligently directed; but without land and the opportunities which occupancy of the land affords, man's exertions can produce nothing or even be put forth.

Hence the right of life upon the earth for any and every human being depends upon his right to occupy the land, and to improve it opportunity to labor. It also follows that whoever lives without labor of his own, lives from off the labor of others.

From the earliest times productive labor has been burdened and despoiled. Ownership of the laborer, in barbaric days, was the method by which the dominant class appropriated to itself the greater share of all industrial productions. With the disappearance of that servitude, [87] however, the appropriation of the products of labor, by those who do no labor has not ceased. The man who owns the land, eventually owns those who live and labor upon it, and is able to appropriate as large a share of the production as if he owned their persons. From our laws of private ownership or land, unlimited as at present, grows the privilege to exclude all persons, and to prohibit the application of labor, except upon such terms as shall please the owner.

The founders of our government supposed they had remedied the evils attending the British Landlord system, when they prohibited titles of nobility, and abolished the ancient right of primogeniture and of entail; but the potency of all these adhere to the system of private property in land, which we have retained, but which ignores the restraints or responsibilities which characterize the Feudal system.

There are numerous estates of great magnitude in our country which are growing larger each year, and which date back to the last century. More than one of these in this city has steadily advanced for three quarters of a century, and is now in possession of the fourth generation, and is virtually entailed by the possessor deeding in his lifetime the property, mainly to his eldest or favorite son.

The friction of this system of industry and trade falls mainly upon the relation between wage worker and employer. The pressure under which both at times suffer and which induces the antagonism between them, lies deeper than the inequality of compensation. Unless the employer is also capitalist and landholder, or in combination with these, as in the large corporations, he cannot, however disposed, greatly wrong labor, and cannot seriously oppress it at all, but that it is homeless and landless, on account of a monopoly of the only opportunity of employment, the land. This alone causes the constant increase of the class of wage workers, for which there is no corresponding increase of demand.

I have thus briefly sketched the forces which operate to produce the poverty and distress of the disinherited toilers upon our common inheritance. That personal indolence and improvidence contribute to the destitution and suffering which exist I do not deny; but they are often if not mainly induced by the system of wages itself, [88] which divorces the worker from any personal interest in that which he produces, and also by the spectacle which our society presents, where honest labor is despised, and luxury is the reward, not of toil, but of idleness and vice, and also by the success of the cunning and unprincipled, who succeed without either honesty or labor, in acquiring wealth and position.

I deem it useless to devise schemes to remedy these evils. Only a return to natural law, and a scientific adjustment of the two primal agents in production, land and labor, and the restoration of man to his normal environment, can effect any salutary change.

Our national domain is already well-night given over to monopoly. Enough to form seven States like New York has been bestowed upon corporations, and the right of eminent domain nearly abdicated by our Congress.

I hold this tendency even more dangerous to our national well-being than the wild speculation in lands which seized the wealthy men of our country at the close of the last century, and until the passage of the Homestead Act. These efforts were intended as speculations, and were liable to tumble, as they did. This however, is a maturer purpose to establish large estates and a general system of rentals, or of bonanza farming, which makes the cultivator of the soil necessarily a tenant or wage worker. So far has the system operated to depress the condition of labor, that our corporation magnates, and even your committee deem it worthy of remark, if found that labor is better paid in this country than in the tax-ridden and ill-governed countries of Europe.

The only legislation that we would suggest is the repeal of all land laws, so as to leave no protection to land titles not based on personal occupancy, and give no one power to take back two values where only one has been received, or to tax labor for privilege to work with the natural forces, or to pay for any natural product. This principal of limitation to private property in land, or reduction to the same status as personal property, can be effected without any derangement of business, or individual distress. Let such repeal or change of the law be prospective. After a certain date let no title be recorded which does not specify that said tract is within the prescribed limit, and is only required for occupancy and cultivation [89] by the owner personally. Let such repeal have no effect during the life-time of present owners, who will be empowered to transfer their lands to persons only who with such transferred land will not have in excess of the determined limit. Let the executors, on the death of large landholders, have, say two years to make such disposal of the surplus, after heirs or legatees are secured in their proportions under the limitation.

By such a change in the system of land tenure no wrong would be wrought to any, as a full generation would be required to complete it. It would secure the greatest benefit to all who desirous of making themselves independent homes, are capable of self-employment, and are willing to work. The use of the land belongs to the living, and the dead should have no extended control over it.

The general government cannot perhaps, carry out this reform to its completion, but it can, and indeed has already recognized the principal of limitation to the acquirement of the public land as under the Homestead Act. Had that Act been framed in accordance with our recommendation and been carried out in good faith, the interests of our country and the condition of labor here would have been greatly improved. The lands would have been taken up consecutively, so that the patient and industrious settler would always have been near to markets and all social and educational facilities. Railroads would have been built as fast as needed without subsidies, and without the revolting spectacle of corruption we now behold. Now we have immense tracts interposed between settlers and settlements, which renders acquirement under the Homestead Act most difficult, and keeps the homesteader ten to twenty miles away from transportation The lands which were given these corporations under the flimsy pretext that they were a public benefit, are now held from the settlers at a price far above the price the Government asks for its remaining land.

Congress can at least undo some of its unfortunate work. It can put what yet remains unsquandered wholly under the operation of the Homestead Act. The grants made in betrayal of the trust which committed the patrimony of the coming generations to Congress, than all be declared forfeited, especially where strict compliance with the terms has not been observed, and where the land has not passed into the hands of innocent parties. [90]

In view of the past, however, the outlook is not encouraging, that under the sway of parties, Congress will do anything but foster giant corporations, grant subsidies and shape legislation generally to favor capitalistic adventures who flock the lobby and cry "give! give!" but who are first to volunteer the advice that no legislation is required to protect or counsel the working man that he has liberty of contract and full freedom to work and save and become a millionaire, and should ask nothing more; and that the only way in which the government can possibly benefit him is to secure capital and corporations in their monopolies by high tariffs, steamship subsidies, railroad grants and franchises, and privileges to bankers to furnish a circulating medium, while keeping open the doors to the wholesale importation of the depressed laborers of all other countries. [See testimony of Jay Gould and John Roach, recently given before this Committee.]

It will be well for us to reflect that we are rapidly pursuing the course which, though absorption of the lands, debased the citizenship of the Roman republic, and brought in the empire under the Caesars, nineteen hundred years ago. Unless the course is changed the indications are that ere the twentieth century shall have dawned an organized oligarchy will control our government wholly, or conspire for its overthrow. The heart sickens to contemplate the struggle which the misled people are certain to make to regain their sovereignty when they clearly see the peril in which it stands.

All which is respectfully submitted.

J. K. INGALLS, Secretary.

Mr. Blair, chairman of the Committee, in questioning me, enquired how the large estates, as those like Mr. Astor's wronged the workingmen? If they could not buy houses or lots to build houses on of Mr. Astor as cheaply as of other parties? I replied that they `-could not buy of him at all. That he bought real estate, but had none to sell, in the sense of parting with ownership He had them to rent, or sell by the month or year on terms which would require in ten or twelve years their value to be returned to him, the property still remaining his; in twenty-five years, thrice their value and in fifty years, when by Hebrew law, the Jubilee came and all land was [91] freed and all debts cancelled, fifteen times the value would have been paid, and still the property would be Mr. Astor's.

I did not urge this as any fault of Mr. Astor's, but only of our laws of tenure, which placed no limit to the acquirement of land, and that it would probably be found that even MT. Astor failed to avail himself of the full power of the situation.

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