Our Benevolent Feudalism

PREFACE

The germ of this book was contained in an article published in the Independent, April 3, 1902. The wide interest which that article awakened prompted the elaboration and arrangement of its briefly considered and somewhat disjointed parts into the present form.

The chapters on “Our Makers of Law” and “Our Interpreters of Law” have been carefully read by a member of the New York Bar who has made a special study of the matters treated therein. Some of the decisions cited in the latter chapter are admitted to be those of subordinate courts in comparatively unimportant States. The intention, however, was to give a general view of judicial interpretation; and for that reason it became necessary to cite decisions of inferior as well as superior courts, and those from semi-industrial as well as industrial States.

As the book goes to press, the news is published that the anthracite magnates have yielded and made concessions to public sentiment. It is an act in harmony with the wiser forethought of most of the magnates of to-day, and it strengthens the general seigniorial position immeasurably.

CHAPTER I
Utopias and Other Forecasts

“The old order changeth, yielding place to new.” But what the new order shall be is a matter of some diversity of opinion. Whoever, blessed with hope, speculates upon the future of society, tends to imagine it in the form of his social ideals. It matters little what the current probabilities may be – the strong influence of the ideal warps the judgment. To Thomas More, though most tendencies of his time made for absolutism, the future was republican and communistic; and to Francis Bacon the present held the promise of a new Atlantis, despite the growing arrogance of the Crown and the submissiveness of the people.

The great diversity of social ideals produces a like diversity of social forecasts. All the soothsayers give different readings of the signs. Even those of the same school, who build the future in the light of the same dogmas, differ in regard to particulars of form and structure. How many forecasts of one sort or another have been given us, it is impossible to say. Mr. H. G. Wells, in a footnote to his “Anticipations,” complains of their scarcity. “Of quite serious forecasts and inductions of things to come,” he says, “the number is very small indeed; a suggestion or so of Mr. Herbert Spencer’s, Mr. Kidd’s ‘Social Evolution,’ some hints from Mr. Archdall Reid, some political forecasts, German for the most part (Hartmann’s ‘Earth in the Twentieth Century,’ e. g.), some incidental forecasts by Professor Langley (Century Magazine, December, 1884, e. g.), and such isolated computations as Professor Crookes’s wheat warning and the various estimates of our coal supply, make almost a complete bibliography.” But surely the Utopians, from Plato to Edward Bellamy, have given us “quite serious forecasts”; there is something of serious prophecy in both Karl Marx and Friedrich Engels, much more in Tolstoi and Peter Kropotkin; and the “Fabian Essays” are charged with it. Mr. Henry D. Lloyd’s “Wealth against Commonwealth” closes with a brilliant and eloquent picture of a regenerated society, and Mr. Edmond Kelly’s “Individualism and Collectivism” is in large part prophetic. All the social reformers who write books or articles give us engaging pictures of things as they are to be; and though the Philosophical Anarchists deal rather more largely with polemics than with prophecy, the Socialists are conspicuously definite and serious in their forecasts. Even the popular scientists – the astronomers, biologists, and anthropologists – often run into prediction; and in the pages of Richard A. Proctor, E. D. Cope, and Grant Allen, and of such living men as M. Camille Flammarion, Mr. Alfred Russell Wallace, and Professor W. J. McGee, we have frequent depictions of certain phases of the future.

Doubtless, any reader can add to this list. Of a surety, we have had no lack of forecasts of one sort or another; and now we have some new contributions, – Mr. Wells’s “Anticipations,” Mr. Benjamin Kidd’s “Principles of Western Civilization,” two brief but sententious papers by Professor John B. Clark, on “The Society of the Future” and “A Modified Individualism” (published in the Independent), a definite Socialist prediction by Mr. Henry D. Lloyd, and a semi-Socialist one by Mr. Sidney Webb.

I

Mr. Wells, in his lecture before the Royal Institution last January, put forth the thesis that, just as we can picture the general aspects of the earth in mesozoic times by a study of geology and paleontology, so by a study of the present sociological drift can we picture the society of a hundred years hence. He thereupon gives us “Anticipations” as a result of the more or less rigorous working out of this method. There is much to be said for the method, and its right employment might probably give us something of great value. Unfortunately, Mr. Wells forgets his thesis, and plunges into pure vaticination. He writes with a spirited aggressiveness, and his pictures are often vivid and impressive. But the greater part of his revelation is of a state of things which seems far removed from what would be produced by any current tendencies, actual or latent.

Mr. Kidd’s predictions lack somewhat in definiteness of outline, and need not here concern us. Tolstoi, on the other hand, is specific. He dreams of a return to a more primitive manner of production, and a social change toward a status of Anarchist-Communism. He scoffs at the enormous diversity of wants made necessary by the growing intelligence and refinement of the race, and urges mankind to live more simply. “The town must be abandoned, the people must be sent away from the factories and into the country to work with their hands; the aim of every man should be to satisfy all his wants himself.” But the counsel falls upon heedless ears. Urged to live more simply, the race, impelled by natural and irresistible laws, yearly increases the sum of its wants. Science, art, and industry constantly pile up new commodities. Mankind finds that through them it secures longer and healthier, if not happier lives. It recognizes that by this increase of wants more human beings are employed, and that by a slight diminution thereof tens of thousands are thrown into idleness. And finally it recognizes that by a division of labor, in which natural aptitude in particular directions is sought to be secured, the greatest and most economical production follows. Under Anarchist-Communism and the performance of labor in the direction of each individual attempting to create the things needful for himself, there would be entailed upon us a productive waste vastly greater than that heretofore compelled by capitalism, diffusing a degree of want and consequent wretchedness at present unknown. There is no present indication that mankind will take this step.

Something better is to be said for Peter Kropotkin’s ideal of a communistic union of shop industry and agriculture. In remote places, outside the current of factory industrialism, there are still survivals of this union, though the communistic feature is generally wanting. Doubtless, under any form of society, even a well-regulated State Socialism, this union would to some extent persist. But if there are any present tendencies toward its growth, they are but feeble and isolated. Kropotkin’s recent book, “Fields, Factories and Workshops,” which was intended to sound the glad timbrel of rejoicing over the expansion of this movement, turns out to be a rather pitiful threnody on the decline and death of petty industries throughout Europe. Moreover, it is one thing to argue the persistence of this manner of production in scattered places, and quite another to argue it the dominant manner of production in a transformed society of the future. Of the coming of such a society the evidences are painfully scant.

We have also the Single-Taxers, the followers of the late Henry George, who are quite as fertile in prophecy as in polemics. They dream of a millennium through the imposition of a tax on the economic value of land, and the abolition of all other taxes and duties of whatsoever kind. Free competition is their shibboleth; and it is no less the shibboleth of the Neo-Jeffersonians, the followers of Mr. Bryan. Except for the fact that these two schools are somewhat Jacobinical, their general notions of the coming society do not differ greatly from the notions of the orthodox economists. All of these desire, or think they desire, free competition. Arising out of an era of competition, Professor Clark sees a coming order wherein the rich “will continually grow richer, and the multi-millionnaires will approach the billion-dollar standard; but the poor will be far from growing poorer… It may be that the wages of a day will take him [the worker] to the mountains, and those of a hundred days will carry him through a European tour.”

The dreadful spectre of monopoly, however, arises to threaten these visions. Most of the orthodox economists acknowledge a possible danger from it, but the Single-Taxers and Jeffersonians are sure it is a real and growing menace. Says Professor Clark, “Between us and the régime of monopoly there ranges itself a whole series of possible measures stopping short of Socialism, and yet efficient enough to preserve our free economic system.” It is a “free economic system” which all these are bent on having, – the economists determined on preserving it, the others on establishing it; for the Single-Taxers, with their bête noir of private ownership of land, and the Jeffersonians, with their bêtes noirs of railroads and trusts, deny that our economic system is at present “free.” Doubtless they are both right; but if there be one fact in the realm of political economy fairly established, it is that the era of competition, whether free or unfree, is dead, and the means of its resurrection are unknown to political science. With old men the dream of its revival is warrantable, for it springs from that retrospective mood of age which gilds past times, and that attendant mood which recreates and projects them into some imagined future; but with the younger generation visions of free competition are but as children’s dreams of wild forests and shaggy animals – the atavistic reminders of experiences unknown to the individual, though knit into the fibre of the race. The subject is one far better suited to the domain of a psychologist like Dr. Stanley Hall than to the scope of this book.

Finally, we have the Socialists, with their prophecy of the early establishment of a coöperative commonwealth. It is a noble picture, in its best expression based upon the extreme of faith in the coming generations of mankind, however its draughtsmen may criticise the wisdom and justice of the present. There is no doubt that now a ground-swell of Socialist conviction moves like a tide “of waters unwithstood”; everywhere one notes its influences. Even so conservative a scholar as Professor Henry Davies, lecturer on the history of philosophy in Yale University, can write, “There is no doubt that the next form of political activity to claim attention is the socialistic, as it is the most popular and serious of any now before the educated minds of this country.” Its propaganda is carried on untiringly, and that its results are feared is evident from the equal aggressiveness of a counter-propaganda maintained by the ingenious defenders of the present régime against the whole form and spirit of Socialism. But though socialist conviction spreads, the substance sought for seems as far away as ever. It would seem, for the most part, to be but a lukewarm conviction, much like that for which the Laodiceans were so widely famed. Present tendencies make for other forms of production, for a vastly different social régime.

II

The dominant tendencies will be clearly seen only by those who for the time detach themselves from their social ideals. What, then, in this republic of the United States, may Socialist, Individualist, and Conservative alike see, if only they will look with unclouded vision? In brief, an irresistible movement – now almost at its culmination – toward great combinations in specific trades; next toward coalescence of kindred industries, and thus toward the complete integration of capital. Consequent upon these changes, the group of captains and lieutenants of industry attains a daily increasing power, social, industrial, and political, and becomes the ranking order in a vast series of gradations. The State becomes stronger in its relation to the propertyless citizen, weaker in its relation to the man of capital. A growing subordination of classes, and a tremendous increase in the numbers of the lower orders, follow. Factory industry increases, and the petty industries, while still supporting a great number of workers, are in all respects relatively weaker than ever before; they suffer a progressive limitation of scope and function and a decrease of revenues. Defenceless labor – the labor of women and children – increases both absolutely and relatively. Men’s wages decline or remain stationary, while the value of the product and the cost of living advance by steady steps. Though land is generally held in somewhat smaller allotments, tenantry on the small holdings, and salaried management on the large, gradually replace the old system of independent farming; and the control of agriculture oscillates between the combinations that determine the prices of its products and the railroads that determine the rate for transportation to the markets.

In a word, they who desire to live – whether farmers, workmen, middlemen, teachers, or ministers – must make their peace with those who have the disposition of the livings. The result is a renascent Feudalism, which, though it differs in many forms from that of the time of Edward I, is yet based upon the same status of lord, agent, and underling. It is a Feudalism somewhat graced by a sense of ethics and somewhat restrained by a fear of democracy. The new barons seek a public sanction through conspicuous giving, and they avoid a too obvious exercise of their power upon political institutions. Their beneficence, however, though large, is but rarely prodigal. It betokens, as in the case of the careful spouse of John Gilpin, a frugal mind. They demand the full terms nominated in the bond; they exact from the traffic all it will bear. Out of the tremendous revenues that flow to them some of them return a part in benefactions to the public; and these benefactions, whether or not primarily devoted to the easement of conscience, are always shrewdly disposed with an eye to the allayment of pain and the quieting of discontent. They are given to hospitals; to colleges and churches which teach reverence for the existing régime, and to libraries, wherein the enforced leisure of the unemployed may be whiled away in relative contentment. They are never given, even by accident, to any of the movements making for the correction of what reformers term injustice. But not to look too curiously into motives, our new Feudalism is at least considerate. It is a paternal, a Benevolent Feudalism.

CHAPTER II
Combination and Coalescence

I

We have, first, the enormous growth of industrial, commercial, and financial combinations. A crude idea of the extent to which concentration in manufactures had grown up to May 31, 1900, may be gained from Census Bulletin No. 122. In this report only those aggregations are considered which consisted of “a number of formerly independent mills which have been brought together into one company under a charter obtained for that purpose.” Several of the new security-holding stock companies are included, but “many large establishments comprising a number of mills which have grown up, not by combination with other mills, but by erection of new plants or the purchase of old ones,” are not considered, nor are gas and electric lighting plants, or pools, and “gentlemen’s agreements.”

The list contains records of 183 corporations, with 2029 active and 174 idle plants, an average of 11 active plants each. The actual capital invested in these corporations, exclusive of that for 56 of the idle plants, was $1,458,522,573, and the authorized capitalization was $3,607,539,200. These combinations employed 24,585 salaried officers and clerks, and an average of 399,192 wage-earners. The 1047 officers received an average of $6,825.28 yearly and the wage-earners, $487.32. There were 40 combinations in iron and steel, with 447 plants; 28 in liquor and beverages, with 219 plants; 21 in food and allied products, with 273 plants; 15 in clay, glass, and stone products, with 180 plants, and 14 in chemicals, with 248 plants. The gross value of the manufactured product of these combinations, as given by the census, was $1,661,295,364. Excluding hand trades, government establishments, educational, eleemosynary, and penal workshops, and shops with a product of less than $500, this total represented 14 per cent of the value of the manufactured product for the whole country.

The spring of 1900 was, however, but the mid-morning of the combination movement. Only 63 of these companies had been formed previous to 1897, while more than 50 per cent of them were formed during the eighteen months from January 1, 1899, to June 30, 1900. Since then the movement has swept forward like a great tide. The consolidations of manufacturing companies for the first five months of 1901 alone probably exceeded $2,000,000,000 in capitalization. The great steel “trust” (to use the popular term), an $88,000,000 tin-can trust, still other trusts in tobacco machinery, carpets, coal and coke, witch-hazel, glass lamps and electric glass fittings, ship-building, cotton duck, agricultural implements, and watches, had their birth during this period. More recently came the steel-castings trust, subordinate to the steel corporation, a recombination in tobacco, and very lately a new ship-building combination, a $120,000,000 harvester trust, and a cotton compress trust. The capital invested in manufacturing combinations is now probably two and one-half times what it was in May, 1900; and it is a reasonable guess that nearly one-third of the manufactured product of the country, outside of the petty trades, comes from the combinations.

Of the magnitude of some of these concerns the average mind can form but an inadequate idea. The figures expressing it are comparable with those of star distances, which must be transmuted into light-years to make them conceivable. A New York newspaper has recently made some computations on the great steel trust, which help to bring home to us a realization of its size and power. Its yearly net profits are now double the amount of the total revenues of the United States Government in the year Lincoln was elected. Its wage-roll carries on an average of the round year over 158,000 names – an army of employees larger by 45,000 than serves the National Government in every branch of its civil service, classified and unclassified, except only fourth-class postmasters. Its wage-payments for last year aggregated nearly $113,000,000, more by $13,000,000 than the huge annual city budget of Greater New York. Its annual production of steel is 10,000,000 tons, 67 per cent of the total production of the country; and its freight payments for the year 1901 amounted to more than $54,000,000.

During the same period financial, commercial, mining, and transportation trusts have also had their splendid inning. We read of an accident-insurance trust with a capitalization of $50,000,000, the great shipping trust, the $120,000,000 jobbing hardware trust, the Interurban Street Railway stock-holding combination, the beef trust, a $50,000,000 lead merger, a recombination in copper, and a universal oil trust. Moody’s Manual of Corporation Securities for 1902 gives a list of 82 industrial and mercantile consolidations effected between January 1, 1899, and September 1, 1902, each of which is capitalized at $10,000,000 or more, the whole aggregating a capitalization of $4,318,005,646. Thirty-nine of these, with $1,232,947,790 authorized capital, were formed during 1899; 7 with $186,110,400 capital, in 1900; 20 with $2,141,197,456 capital in 1901, and 16 with $757,750,000 capital during the first eight months of 1902. The list is admittedly incomplete. “It embraces only the so-called gigantic combinations which have been forming in the past three and one-half years. A complete list, without regard to date of formation, and including both large and small,” says this authority, “would probably aggregate 850 different-going combinations, and would easily foot up over $9,000,000,000 of capitalization. Including railroad consolidations, such a list would make a total of over $15,000,000,000 outstanding capitalization.” As for the railroads, the formation of the Northern Securities Company, the recent assimilation of the Louisville and Nashville, and the “reorganization” of the Rock Island show the same drift. Five men, according to a recent statement of Interstate Commerce Commissioner J. A. Prouty, control all the railroads of the country; and Mr. John W. Gates, a financier who may be supposed to know something on that head, has more recently declared, according to a newspaper interview, that two men are really in control. “I believe that the time is not far distant,” declared Professor Francis L. Patton, former head of Princeton University, in a recent address before the Presbyterian Social Union of Chicago, “when there will not be a thing that we eat, drink, or wear that will not be made by a trust.” He might have gone farther and fared as well; for the theatrical trust determines what dramas we shall witness; the pulp trust, the typefounders’ trust, the news trust, and the school-book trust exert a most direct bearing on what we read and what our reading costs us; and finally the undertakers’ trust determines the style and cost of our burial.