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ISCARIUS AND U.-tbALUS By Sir Frederick Leigh ton ^ /Sjo
SIR FREDERICK LEIGHTON was boru at Scarborough, England, Dec. 3, 1830. His father was a doctor, but early recognized his sou's bias towaid painting and gave him what he considered the best training for his pro fessiou. At ten his father started him oil a series of grand tours, visiting Rome, Florence, Frankfort, Berlin, Paris, and Brussels. In each of these places he received instructions from the most distinguished masters. He exhibited his first picture (The Procession of Ciniabue's Madonna) at the Royal Academy in 1855. This picture was bought by the Queen. After this he studied iu Paris four years under Ary Scheffen. He became a Royal Academician iu 1869, and on the death of Sir Francis Grant in 1878 he was elected president and was knighted. He was created a baronet in 1886.
Sir Frederick Leightou is a scholar and man of the world as well as an artist, He has gained great distinction in art, both as painter and sculptor. He won the grand medal of honor for sculpture at the Paris Exposition of 1889.
There 12 scarcely one official honor that has nut been conferred upon him.
The Library of Original Sources
The Ideas that have influenced civiliza- tion, in the original documents— translated
University Edition
Edited by
Dr. Oliver J. Thatcher
formerly head of the History Department, University of Chicago
Assisted by more than One Hundred European and American Scholars.
University Research Extension Co.
Milwaukee Wisconsin
EDITOR'S ACKNOWLEDGMENT
ALTHOUGH THE EDITOR only is responsible for the matter included in this set of books, yet he has been greatly assisted by the suggestions he has received from specialists in their own fields. As the editing of the last volumes is not yet finished, it is impossible to give full credit for such advice, but the editor takes this opportunity to acknowledge the important counsel or additional suggestions received from :
A. H. 8AYCE, LL. D., D. D.,
PROFESSOR OF ASSYRIOLOGY, QUEEN'S COLLEGE, OXFORD UNIVERSITY.
CRAWFORD H. TOY, A. M., LL. D.,
PROFESSOR OF ORIENTAL LANGUAGES, HARVARD UNIVERSITY.
WALTER MILLER, A. M.,
PROFESSOR OF CLASSICAL PHILOLOGY, THE LELAND STANFORD JUNIOR UNIVERSITY
HENRY RUSHTON FAIRCLOUGH, PH. D,,
PROFESSOR OF CLASSICAL LITERATURE, THE LELAND STANFORD JUNIOR UNIVERSITY.
FRANK FROST ABBOTT, PH. D.,
PROFESSOR OF LATIN, UNIVERSITY OF CHICAGO.
JOHN CAREW ROLFE, PH. D.,
PROFESSOR OF LATIN, UNIVERSITY OF MICHIGAN.
DANA C. MONRO, A. M.,
DEPARTMENT OF HISTORY, UNIVERSITY OF PENNSYLVANIA.
EDWARD G. BOURNE, PH. D.,
PROFESSOR OF HISTORY, YALE UNIVERSITY.
FERDINAND SCHWILL, PH. D.,
DEPARTMENT OF MODERN HISTORY, UNIVERSITY OF CHICAGO.
HARRY BURNS HUTCHINS, LL. D.,
DEAN OF THE DEPARTMENT OF LAW, UNIVERSITY OF MICHIGAN.
WILLIAM H. WELCH, M. D., LL. D.,
DEAN OF THE MEDICAL FACULTY, JOHNS HOPKINS UNIVERSITY.
THEODORE WILLIAM RICHARDS, PH. D.,
DEPARTMENT OF CHEMISTRY, HARVARD UNIVERSITY.
PAUL REINSCH, PH. D.,
DEPARTMENT OF POLITICAL SCIENCE, UNIVERSITY OF WISCONSIN,
H. H. MANCHESTER, A. B.,
MANAGING EDITOR FOR THE ROBERTS-MANCHESTER PUBLISHING CO
ILLUSTRATIONS
VOLUME X.
PAGE
ISCARIUS AND DAEDALUS (LEIGHTON) Frontispiece
THE KING AND THE BEGGAR MAID (BURNE JONES) 5
KARL MARX 10
BLESSED DAMOZEL (ROSSETTI) 182
ROENTGEN 227
THE PERIODIC LAW (Table) 254 PROSERPINE
TABLE OF CONTENTS
VOLUME X.
PAGE
SOCIAL MOVEMENTS 5
KARL MARX io
Manifesto of the Communist Party n
FRIEDRICH ENGELS 31
Scientific Socialism 31
INTERSTATE COMMERCE COMMISSION 52
The Public Control of Railroads 53
A COMPARISON OF MUNICIPAL AND PRIVATE OWNERSHIP 76
H. W. MACROSTY (FABIAN SOCIETY) 101
English State Socialism 101
SOCIAL CONDITIONS 124
ROBERT SOMERS 124
The South after the War 124
REDFIELD PROCTOR 135
Conditions in Cuba 135
F. H. SAWYER 147
Prospects in the Philippines 147
Life and Character of the Tagals 155
ARCHAEOLOGY 182
F. E. PEISER 184
A Sketch of Babylonian Society 184
PHYSICS 208
JAMES CLERK MAXWELL 208
Electricity a Wave in the Ether 209 M. HENRI POINCARE
The Maxwell and Hertz Theory of Electricity and Light 215
PAGE
W. K. ROENTGEN 227
The X-Rays 227
W. H. PREECE 243 Wireless Telegraphy : the Preece and Marconi Systems 243
CHEMISTRY 253
D. J. MENDELEEF 254
The Periodic Law of the Chemical Elements 255
SIR NORMAN LOCKYER 270
The Chemistry of the Stars 270
BIOLOGY 284
AUGUST WEISMAN 285 The Continuity of the Germ Plasm as the Foundation
of a Theory of Heredity 286
ROBERT KOCH 309
Theory of Bacteria 310
Louis PASTEUR 319
On Fermentation 320
Inoculation for Hydrophobia 323
PSYCHOLOGY 337
DAVID FERRIER 338
Localization of the Functions in the Brain 339
SIR WILLIAM CROOK ES 358
Telepathy 35^
PHILOLOGY 367
THE CONSONANTS (GRIMM'S AND VERNER'S LAWS) 368
THE VOWELS 371
THE DERIVATION OF ENGLISH FROM LATIN 373
CHRONOLOGICAL INDEX
GENERAL ALPHABETICAL AND ANALYTICAL INDEX
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THE KING AND THE BEGGAR MAID By Burne-Jones,
SIR EDWARD BURNK-JONES was borii in Birmingham, England, Aug. 28, 1833, of Welsh extraction. He attended King Edward's Grammar School of that town from 1844-1852, when he entered Exeter College, Oxford, with the intention of taking orders in the Church of England. But though he was touched with the ecclesiastical spirit of the place he seems to have felt no real vocation. for the clerical career and by 1855, while still an undergraduate, his desire to becoin* an artist had crystallized into a resolve. He caine up to London and was introduced to Rossetti, who persuaded him to* abandon the idea of returning to Oxford. He received his inspiration as an artist from Rossetti, but developed his originality and power independently of the schools. His university made him honorary D. C. L. in 1881, his college (Exeter) elected him an honorary fellow in 1882, and in 1885, at the suggestion of Sir Frederic Leighton, he was nominated (without his knowledge) for election at the Royal Academy, and was chosen A. R. A- But he only exhibited one picture there, "The Depths of the Sea," in 1886, and in 1893 resigned his Assooiateship. He was appointed a Chevalier of the Legion of Honor (in '89) and elected member of the Institute of France (in '90). In the early part of his career he exhibited chiefly under the auspices of the Old Water Colour Society, but in 1870 he left that society, of which, however, he was afterwards an honorary member. His pictures were among the chief attractions at the Grosvenor Gallery; but in '87 he severed his connections with that institution and took a prominent part in the establishment of the New Gallery. In 1894 Queen Victoria, on the advice of Mr. Gladstone, conferred a baronetcy upon him. Burne-Jones' art appeals in all its strength and fullness only to people of a certain type of mind and education, but to them he appeals as no other modern painter has done. He also had remarkable talent for decorative work. He furnished cartoons for stained glass windows and designs for tapestry and needlework. He gave much time and thought to his design called "The Tree of Life," executed in mosaic by Salviati for the American church in Rome, for he said, " It is to be in Rome, and is to last for eternity."
He was Rudyard Kipling's uncle. He died June 17, 1898.
SOCIAL MOVEMENTS
PROBABLY the most important social movement of the present time springs from a conception of the state as a social organism in opposition to the Adam Smith conception of it as economically merely a conglom- eration of individuals. On the latter theory each individual should be left to himself, competition should be uncontrolled, the government should keep out of economic affairs. On the former basis, the state is an organism which should control all its parts for the good of the whole.
Such attempts by government to control trade are not new, but the object would seldom be "for the good of the whole" except where was acknowledged the sovereignty of the people. It is interesting to glance back over such attempts to control industry made by governments, and at the same time compare the efforts made by individuals or classes to control it for their own benefit.
In Greece, Sparta by its peculiar laws made itself an agricultural aristocracy with the work done by serfs. Trade was practically anni- hilated. In Athens all were free to come and trade. The government, however, fixed a maximum price on olives, grain, barley meal, bread ; saw that the food was kept pure, and the measures correct; and pre- vented a "corner" on grain by compelling two-thirds of that imported to be put on the market. Here, too, as in Sparta, the traders were for- eigners and not a respected class. The* manual work was done by slaves.
In Italy the land fell into the hands of large slave-holders, who used it for grazing purposes. The government sold imported grain for less than the small Italian farmers could raise it, and thus ruined the
6 SOCIAL MOVEMENTS
small farmer for the benefit of the population at Rome. The Roman senator was forbidden from entering into any speculative trade venture, e. g., commerce, or the farming of the revenue ; but this law was often avoided by joining an association. Almost all large businesses at Rome were carried on by incorporated associations. A man was advised to send out fifty ships with forty-nine other merchants rather than to send out one on his own account. It gave him the benefit of the law of averages, — acted as now does insurance, which was unknown in those days.
Hand labor suffered in social status because of the proximity of slave labor. But this seems to have been lessened to some extent by the existence of trade corporations. Numa is fabled to have divided workmen into nine classes, each of which became a society. Such associations later became regular corporations, and exerted considerable influence on the economics of the time. The membership seems both in the time of the republic and empire to have been voluntary, but they seem to have included practically all free craftsmen in the large cities.
Taken altogether the system of the empire was decidedly paternal. Mines and roads of communication were owned by the government, and the emperor paid very close attention to affairs which we should now consider strictly municipal.
During the middle ages, practically all trades were under control of trade guilds. We read of a weavers' and fullers' guild in England as early as 1130. No one was permitted by the king to follow an occu- pation unless a member of the guild, and an apprenticeship, usually of seven years, was necessary before a man could be admitted to a guild. Merchant guilds also existed early, but liberty in buying and selling was in general given to all in England in 1335. From the twelfth to the eighteenth century the guilds practically regulated industry, sub- ject to the control of the king. In the eighteenth century the guilds did not keep pace with the growth of the great industries, and were fiercely attacked by the laissez-faire school of economists. Their influence waned and the laws in their favor were left uninforced. The law compelling apprenticeship was abolished in 1814, and all trade privileges of the guilds taken away. But not long after this trade unions began to be developed to take their place.
Even before the time of the Tudors it was the custom of the king to give the monopoly of dealing in a certain article to some favorite as a reward. In the time of Elizabeth these monopolies included such
SOCIAL MOVEMENTS 7
things as salt, currants, iron, playing cards, carriage of leather, ashes, coals, bottles, vinegar, etc. The growth of the system roused great discontent, a fierce struggle was waged against it in Parliament in 1601, and Elizabeth promised to revoke the patents. The matter was again brought to a crisis under James I. by the extortion of the licensers of ?nns, and the whole power was taken from the Crown except in the case of patent rights. During the next century Parliament gave exclu- sive power to trade in some certain district to a particular company formed for exploitation or colonization, as, for example, the East India Company or the many American companies, but the economic ideas of Adam Smith at the end of the eighteenth century overthrew even this policy, and since then the government has confined exclusive privileges given to private individuals to patents or copyrights.
Nineteenth century socialism came in with the century. Fourier in 1808 published his theoretical pantheistic view of the world and main- tained that all civilization had been but putting the world farther from its Creator. His phantasies passed without effect, but in 1817 Owen laid a scheme for a socialistic community before the House of Com- mons committee on the poor law. A number of such social communities sprang up, among them the famous Brook Farm in the United States, but practically all were short lived.
In 1831 the workingmen of Lyons, France, rose in revolt under a banner inscribed "Live working or die fighting." A like movement was the Chartist revolts by workingmen in the thirties, for although their demands were political, yet the ground of the discontent was primarily economic. All of these movements had their rise and fall leaving little permanent results except the establishment of trade unions, but showing an important undercurrent in society, when Karl Marx gave a scientific expression to the movement in Germany.
Karl Marx (1818-1883) was of Jewish descent. He was a lawyer, but gave up his profession for social studies. Between 1843 and 1845 he was in Paris, and published several articles on socialism. At this time, also, he met his lifelong friend, Friedrich Engels. In 1845 he was expelled from Paris and settled in Brussels. A society of socialists had been organized as the Communist League and at a congress held in 1847, Marx and Engels gave to the world the famous "Manifesto of the Communist Party" included below.
In 1867 Marx published the first volume of his great work "Das Kapital," The basis of his system is Locke's idea that the source of
SOCIAL MOVEMENTS
value and property is labor. Hence he argues that all surplus product over the necessary subsistence of the laborer belongs to tri2 laborer, but he declares that as a fact this goes to the capitalist.
This theory found an important result in the formation of The International, a league of workmen of the continent which lasted from 1864 to 1872, and in the gradual growth of trade unions.
One of the first organizers of modern trade unions in Germany was Ferdinand Lassalle, but at his death in 1864 his general workingmen's union numbered only 4,610 members.
In a great congress at Eisenach in 1869 representatives of the many outside unions founded the social democratic workingmen's party and a combination was made with the Lassalle party in 1875. The two to- gether by this time numbered 25,000 members. Since this time the socialists have been an important power in German politics.
In England from 1799 to 1824 there had grown up a mass of laws against restriction of trade, as a reaction against the mercantile theory of the eighteenth century. Until 1824 it was a crime to belong to a union. Such restrictions were partly removed in that year and more fully in 1871.
In the United States there were many local unions early in the century, but the first union including all the main trades of a city seems to have been in 1833 'm ^ew York. In 1861 a number of trades had a national organization. After the war organization was again begun and spread rapidly until the panic of '73. From 1877 to 1893 the labor unions seem to have had a rapid growth and the decrease in the panic of '93 was only about 12 per cent., not as great as during previous de- pressions. To-day practically all general trades are well organized, especially in cities of some size.
The necessity of a city water supply, the general spread of lighting by gas, the invention of the railroad in 1814, of the telegraph in 1835, of the telephone in 1878, of the incandescent electric light in 1879, anc^ the introduction of electric street railways all created a class of indus- tries which have been called "natural monopolies." They are all public utilities, and only one is essential in a given field ; that is, each plays an important part in present day civilization, has in fact, become a public necessity, and as each is practically unlimited in possible capacity, it is vastly more economical to have one industry than two or more of the same kind in the same field.
SOCIAL MOVEMENTS 9
Since 1882 another class of partial monopolies has sprung up. In 1882 the Standard Oil Company was organized, which was able to con- trol about 85 per cent, of the total output of refined oil in the United States. Since then a vast number of such combinations have been formed, all aiming to control the most of the output and the prices in their lines. Vast capital, enabling them to wait for returns, better freight rates, which their greater volume of business has enabled them to procure, the cutting off of routine expenses and the expense of com- petitive selling, have all given them an advantage over the small com- petitor.
These are real economic advantages. The evils result chiefly from an ability to charge too high where there is a virtual monopoly; special rates from public utilities such as railroads; and undue influ- ence in city councils and other legislative bodies.
The question of the control of such monopolies is one that is sure to be of the greatest importance in the near future. It involves a direct opposition between the idea of government as made up of individuals with the consequent laissez-faire principles of economy, and the idea of it as a social organism where the whole should supervise all its parts. Most of our ideas of government ownership or control come, though bereft of its most radical features, from the socialism of Marx and Engels. This in a far less extreme form is also the basis of the socialist party of Germany — the strongest single party in numbers in the empire — and of the state socialism represented by the Fabian Society, for example, in England.
V 10-1
KARL MARX
KARL MARX was born of Jewish parents at Treves, in the province of the Rhine, May 5, 1818. He studied at Bonn and Berlin, and began the practice of law, then gave it up, and became editor of a radical news- paper that was suppressed because of its attacks on the Prussian gov- ernment.
He moved to Paris, but was expelled in 1845, and went to Brussels, where he founded a German workingman's association, and issued (with Engels) his famous "Manifesto" given below.
He again became editor of the Rheinische Zeitung at Cologne, but it was again suppressed, and he went to England, where were his head- quarters for the rest of his life.
The International Workingmen's Association was founded in 1864. The first volume of Das Kapital was issued in 1867. Marx starts in with Locke's idea that the basis of property is labor, and works out a theory that in the evolution of society, the employing class has come to appropriate the surplus earnings of labor. This, with his consideration of society as an evolution, are the two most important and influential ideas of the book.
The "Manifesto" was much more radical and heated than this later exposition of his ideas, but he believes in the inevitable assumption by the laboring class of the means of production.
His theories are a part of almost all socialistic writings, and, with- out his radical and unnecessary features, the idea that society is an organism which should control what concerns all for the good of all is playing a prominent part in all present day social thought.
Marx died in London, March 14, 1883.
KARL MARX
SOCIAL MOVEMENTS 11
MANIFESTO OF THE COMMUNIST PARTY
BY KARL MARX AND FRIEDRICH ENGELS
A specter is haunting Europe — the specter of Communism. All the powers of old Europe have entered into a holy alliance to exorcise this specter; Pope and Czar, Metternich and Guizot, French radicals and German police spies.
Where is the party in opposition that has not been decried as com- munistic by its opponents in power ? Where the opposition that has not hurled back the branding reproach of Communism, against the more advanced opposition parties, as well as against its reactionary adver- saries ?
Two things result from this fact.
I. Communism is already acknowledged by all European powers to be in itself a power.
II. It is high time that Communists should openly, in the face of the whole world, publish their views, their aims, their tendencies, and meet this nursery tale of the Specter of Communism with a manifesto of the party itself.
To this end the Communists of various nationalities have assembled in London, and sketched the following manifesto to be published in the English, French, German, Italian, Flemish and Danish languages.
I.
BOURGEOIS AND PROLETARIANS
The history of all hitherto existing society is the history of class struggles.
Freeman and slave, patrician and plebian, lord and serf, guild- master and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, that each time ended either in revolutionary reconstitution of society at large, or in the common ruin of the contend- ing classes.
In the earlier epochs of history we find almost everywhere a com- plicated arrangement of society into various orders, a manifold grada-
12 SOCIAL MOVEMENTS
tion of social rank. In ancient Rome we have patricians, knights, plebeians, slaves; in the middle ages, feudal lords, vassals, guild- masters, journeymen, apprentices, serfs; in almost all of these classes, again, subordinate gradations.
The modern bourgeois society that has sprouted from the ruins of feudal society has not done away with class antagonisms. It has but established new classes, new conditions of oppression, new forms of struggle in place of the old ones.
Our epoch, the epoch of the bourgeois, possesses, however, this dis- tinctive feature : it has simplified the class antagonisms. Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other : Bourgeoisie and Proletariat.
From the serfs of the middle ages sprang the chartered burghers of the earliest towns. From these burgesses the first elements of the bour- geoisie were developed.
The discovery of America, the rounding of the Cape, opened up fresh ground for the rising bourgeoisie. The East Indian and Chinese markets, the colonization of America, trade with the colonies, the in- crease in the means of exchange and in commodities generally, gave to commerce, to navigation, to industry, an impulse never before known, and thereby, to the revolutionary element in the tottering feudal society, a rapid development.
The feudal system of industry, under which industrial production was monopolized by close guilds, now no longer sufficed for the grow- ing wants of the new markets. The manufacturing system took its place. The guild masters were pushed on one side by the manufactur- ing middle class; division of labor between the different corporate guilds vanished in the face of division of labor in each single workshop.
Meantime the markets kept ever growing, the demand ever rising. Even manufacture no longer sufficed. Thereupon steam and machinery revolutionized industrial production. The place of manufacture was taken by the giant, Modern Industry, the place of the industrial middle class, by industrial millionaires, the leaders of the whole industrial armies, the modern bourgeois.
Modern industry has established the world's market, for which the discovery of America paved the way. The market has given an im- mense development to commerce, to navigation, to communication by land. This development has, in its turn, reacted on the extension of industry ; and in proportion as industry, commerce, navigation and rail-
SOCIAL MOVEMENTS 13
ways extended, in the same proportion the bourgeoisie developed, increased its capital, and pushed into the background every class handed down from the middle ages.
We see, therefore, how the modern bourgeoisie is itself the product of a long course of development, of a series of revolutions in the modes of production and of exchange.
Each step in the development of the bourgeoisie was accompanied by a corresponding political advance of that class. An oppressed class under the sway of the feudal nobility, an armed and self-governing association in the mediaeval commune, here independent urban repub- lic (as in Italy and Germany), there taxable "third estate" of the monarchy (as in France), afterwards, in the period of manufacture proper, serving either the semi-feudal or the absolute monarchy as a counterpoise against the nobility, and, in fact, corner-stone of the great monarchies in general, the bourgeoisie has at last, since the establish- ment of Modern Industry and of the world's market, conquered for itself, in the modern representative State, exclusive political sway. The executive of the modern State is but a committee for managing the common affairs of the whole bourgeoisie.
The bourgeoisie, historically, has played a most revolutionary part.
The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his "natural supe- riors," and has left remaining no other nexus between man and man than naked self-interest, callous "cash payment." It has drowned the most heavenly ecstacies of religious fervor, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation.
The bourgeoisie has stripped of its halo every occupation hitherto honored and looked up to with reverent awe. It has converted the( physician, the lawyer, the priest, the poet, the man of science, into its paid wage laborers.
The bourgeoisie has torn away from the family its sentimental veil, and has reduced the family relation to a mere money relation.
The bourgeoisie has disclosed how it came to pass that the brutal
14 SOCIAI, MOVEMENTS
display of vigor in the middle ages, which Reactionists so much admire, found its fitting complement in the most slothful indolence. It has been the first to show what man's activity can bring about. It has accom- plished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals ; it has conducted expeditions that put in the shade all former exoduses of nations and crusades.
The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered forms was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionizing of production, uninterrupted disturbance of all social conditions, ever- lasting uncertainty and agitation, distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away ; all new- formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life and his relations with his kind.
The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle every- where, settle everywhere, establish connections everywhere.
The bourgeoisie has through its exploitation of the world's market given a cosmopolitan character to production and consumption in every country. To the great chagrin of Reactionists, it has drawn from under the feet of industry the national ground on which it stood. All old- established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilized nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones, industries whose products are con- sumed, not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the productions of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and self-suffi- ciency, we have intercourse in every direction, universal inter-depend- ence of nations. And as in material, so also in intellectual production. The intellectual creations of individual nations become common prop- erty. National one-sidedness and narrow-mindedness become more and
SOCIAL MOVEMENTS 15
more impossible, and from the numerous national and local literatures, there arises a world literature.
The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilization. The cheap prices of its commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians' intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production ; it compels them to introduce what it calls civilization into their midst, i. e., to become bourgeois themselves. In one word, it creates a world after its own image.
The bourgeoisie has subjected the country to the rule of the towns. It has created enormous cities, has greatly increased the urban popula- tion as compared with the rural, and has thus rescued a considerable part of the population from the idiocy of rural life. Just as it has made the country dependent on the towns, so has it made barbarian and semi- barbarian countries dependent on the civilized ones, nations of peasants on nations of bourgeois, the East on the West.
The bourgeoisie keeps more and more doing away with the scat- tered state of the population, of the means of production, and of prop- erty. It has agglomerated population, centralized means of production, and has concentrated property in a few hands. The necessary conse- quence of this was political centralization. Independent, or but loosely connected provinces, with separate interests, laws, governments and sys- tems of taxation, became lumped together into one nation, with one gov- ernment, one code of laws, one national class interest, one frontier, and one customs tariff.
The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature's forces to man, machinery, application of chemistry to industry and agriculture, steam navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalization of rivers, whole populations conjured out of the ground — what earlier century had even a presentiment that such productive forces slumbered in the lap of social labor?
We see then : the means of production and of exchange on whose foundation the bourgeoisie built itself up, were generated in feudal society. At a certain stage in the development of these means of pro-
16 SOCIAL, MOVEMENTS
duction and of exchange, the conditions under which feudal society pro- duced and exchanged, the feudal organization of agriculture and manufacturing industry, in one word, the feudal relations of property, became no longer compatible with the already developed productive forces ; they became so many fetters. They had to be burst asunder.
Into their place stepped free competition, accompanied by a social and political constitution adapted to it, and by the economical and politi- cal sway of the bourgeois class.
A similar movement is going ori before our own eyes. Modern bourgeois society with its relations of production, of exchange, and of property, a society that has conjured up such gigantic means of produc- tion and of exchange, is like the sorcerer, who is no longer able to control the powers of the nether world whom he has called up by his spells. For many a decade past the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeoisie and of its rule. It is enough to mention the commercial crises that by their periodical return put on its trial, each time more threateningly, the existence of the bour- geois society. In these crises a great part not only of the existing products, but also of the previously created productive forces, is peri- odically destroyed. In these crises there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of overproduction. Society suddenly finds itself put back into a state of momentary barbarism ; it appears as if a famine, a universal war of devastation had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed ; and why ? because there is too much civilization, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property ; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they over- come these fetters, they bring disorder into the whole of bourgeois soci- ety, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises ? On the one hand, by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more
SOCIAL MOVEMENTS 17
extensive and more destructive crises, and by diminishing the means whereby crises are prevented.
The weapons with which the bourgeoisie felled feudalism to the ground are now turned against the bourgeoisie itself.
But not only has the bourgeoisie forged the weapons that bring death to itself ; it has also called into existence the men who are to wield those weapons — the modern working class — the proletarians.
In proportion as the bourgeoisie, i. e., capital, is developed, in the same proportion is the proletariat, the modern working class, developed ; a class of laborers who live only so long as they find work, and who find work only so long as their labor increases capital, — These laborers, who must sell themselves piecemeal, are a commodity, like every other article of commerce, and are consequently exposed to all the vicissitudes of competition, to all the fluctuations of the market.
Owing to the extensive use of machinery and to division of labor, the work of the proletarians has lost all individual character, and, conse- quently, all charm for the workman. He becomes an appendage of the machine, and it is only the most simple, most monotonous, and most easily acquired knack, that is required of him. Hence, the cost of pro- duction of a workman is restricted almost entirely to the means of sub- sistence that he requires for his maintenance, and for the propagation of his race. But the price of a commodity, and therefore also of labor, is equal to its cost of production. In proportion, therefore, as the repul- siveness of the work increases, the wage decreases. Nay, more, in pro- portion as the use of machinery and division of labor increases, in the same proportion the burden of toil also increases, whether by prolonga- tion of the working hours, by increase of the work exacted in a given time, or by increased speed of the machinery, etc.
Modern industry has converted the little workshop of the patri- archal master into the great factory of the industrial capitalist. Masses of laborers, crowded into the factory, are organized like soldiers. As privates of the industrial army they are placed under the command of a perfect hierarchy of officers and sergeants. Not only are they slaves of the bourgeois class, and of the bourgeois State, they are daily and hourly enslaved by the machine, by the overlooker, and, above all, by the indi- vidual bourgeois manufacturer himself. The more openly this despot- ism proclaims gain to be its end and aim, the more petty, the more hateful and the more embittering it is.
The less skill and exertion of strength is implied in manual labos.
18 SOCIAIv MOVEMENTS
in other words, the more modern industry becomes developed, the more is the labor of men superseded by that of women. Differences of age and sex have no longer any distinctive social validity for the working class. All are instruments of labor, more or less expensive to use, according to age and sex.
No sooner is the exploitation of the laborer by the manufacturer so far at an end that he receives his wages in cash, than he is set upon by the other portions of the bourgeoisie, the landlord, the shopkeeper, the pawnbroker, etc.
The lower strata of the middle class — the small tradespeople, shop- keepers, and retired tradesmen generally, the handicraftsmen and peas- ants— all these sink gradually into the proletariat, partly because their diminutive capital does not suffice for the scale on which modern industry is carried on, and is swamped in the competition with the large capitalists, partly because their specialized skill is rendered worthless by new methods of production. Thus the proletariat is recruited from all classes of the population.
The proletariat goes through various stages of development. With its birth begins its struggle with the bourgeoisie. At first the contest, is carried on by individual laborers, then by the workpeople of a factory, then by the operatives of one trade, in one locality, against the individual bourgeois who directly exploits them. They direct their attacks not against the bourgeois conditions of production, but against the instru- ments of production themselves ; they destroy imported wares that com- pete with their labor, they smash to pieces machinery, they set factories ablaze, they seek to restore by force the vanished status of the workman of the middle ages.
At this stage the laborers still form an incoherent mass scattered over the whole country, and broken up by their mutual competition. If anywhere they unite to form more compact bodies, this is not yet the consequence of their own active union, but of the union of the bour- geoisie, which class, in order to attain its own political ends, is compelled to set the whole proletariat in motion, and is moreover yet, for a time, able to do so. At this stage, therefore, the proletarians do not fight their enemies, but the enemies of their enemies, the remnants of absolute monarchy, the land owners, the non-industrial bourgeois, the petty bour- geoisie. Thus the whole historical movement is concentrated in the hands of the bourgeoisie ; every victory so obtained is a victory for the bourgeoisie.
SOCIAL MOVEMENTS 19
But with the development of industry the proletariat not only increases in number; it becomes concentrated in greater masses, its strength grows and it feels that strength more. The various interests and conditions of life within the ranks of the proletariat are more and more equalized, in proportion as machinery obliterates all distinctions of labor, and nearly everywhere reduces wages to the same low level. The growing competition among the bourgeois, and the resulting commer- cial crises, make the wages of the workers ever more fluctuating. The unceasing improvement of machinery, ever more rapidly developing, makes their livelihood more and more precarious ; the collisions between individual workmen and individual bourgeois take more and more the character of collisions between two classes. Thereupon the workers begin to form combinations (Trades' Unions) against the bourgeois; they club together in order to keep up the rate of wages; they found permanent associations in order to make provision beforehand for these occasional revolts. Here and there the contest breaks out into riots.
Now and then the workers are victorious, but only for a time. The real fruit of their battles lies not in the immediate result, but in the ever improved means of communication that are created in modern industry and that place the workers of different localities in contact with one another. It was just this contact that was needed to centralize the numerous local struggles, all of the same character, into one national struggle between classes. But every class struggle is a political struggle. And that union, to attain which the burghers of the middle ages, with their miserable highways, required centuries, the modern proletarians, thanks to railways, achieve in a few years.
This organization of the proletarians into a class, and consequently into a political party, is continually being upset again by the competition between the workers themselves. But it ever rises up again ; stronger, firmer, mightier. It compels legislative recognition of particular inter- ests of the workers, by taking advantage of the divisions among the bourgeoisie itself. Thus the ten-hours' bill in England was carried.
Altogether, collisions between the classes of the old society further, in many ways, the course of development of the proletariat. The bour- goeoisie finds itself involved in a constant battle. At first with the aris- tocracy; later on, with those portions of the bourgeoisie itself whose interests have become antagonistic to the progress of industry; at all times with the bourgeoisie of foreign countries. In all these countries it sees itself compelled to appeal to the proletariat, to ask for its help, and
20 SOCIAL MOVEMENTS
thus to drag it into the political arena. The bourgeoisie itself, therefore, supplies the proletariat with weapons for fighting the bourgeoisie.
Further, as we have already seen, entire sections of the ruling classes are, by the advance of industry, precipitated into the proletariat, or are at least threatened in their conditions of existence. These also supply the proletariat with fresh elements of enlightenment and progress.
Finally, in times when the class struggle nears the decisive hour, the process of dissolution going on within the ruling class, in fact within the whole range of old society, assumes such a violent, glaring character, that a small section of the ruling class cuts itself adrift and joins the revolutionary class, the class that holds the future in its hands. Just as, therefore, at an earlier period, a section of the nobility went over to the bourgeoisie, so now a portion of the bourgeoisie goes over to the proletariat, and in particular, a portion of the bourgeois ideologists, who have raised themselves to the level of comprehending theoretically the historical movement as a whole.
Of all the classes that stand face to face with the bourgeoisie to-day, the proletariat alone is a really revolutionary class. The other classes decay and finally disappear in the face of modern industry ; the proletariat is its special and essential product.
The lower middle class, the small manufacturer, the shopkeeper, the artisan, the peasant, all these fight against the bourgeoisie to save from extinction their existence as fractions of the middle class. They are therefore not revolutionary, but conservative. Nay, more, they are reactionary, for they try to roll back the wheel of history. If by chance they are revolutionary, they are so only in view of their impending transfer into the proletariat; they thus defend not their present, but their future interests, they desert their own standpoint to place them- selves at that of the proletariat.
The "dangerous class," the social scum, that passively rotting class thrown off by the lowest layers of old society, may here and there be swept into the movement by a proletarian revolution ; its conditions of life, however, prepare it far more for the part of a bribed tool of reac- tionary intrigue.
In the conditions of the proletariat, those of old society at large are already virtually swamped. The proletarian is without property; his relation to his wife and children has no longer anything in common with the bourgeois family relations; modern industrial labor, modern
SOCIAL MOVEMENTS 21
subjection to capital, the same in England as in France, in America as in Germany, has stripped him of every trace of national character. Law, morality, religion are to him so many bourgeois prejudices, behind which lurk in ambush just as many bourgeois interests.
All the preceding classes that got the upper hand sought to fortify their already acquired status by subjecting society at large to their con- ditions of appropriation. The proletarians cannot become masters of the productive forces of society, except by abolishing their own pre- vious mode of appropriation, and . thereby also every other previous mode of appropriation. They have nothing of their own to secure and to fortify ; their mission is to destroy all previous securities for, and insurances of, individual property.
All previous historical movements were movements of minorities, or in the interest of minorities. The proletarian movement is the self- conscious, independent movement of the immense majority, in the inter- est of the immense majority. The proletariat, the lowest stratum of our present society, cannot stir, cannot raise itself up, without the whole super-incumbent strata of official society being sprung into the air.
Though not in substance, yet in form, the struggle of the proletariat with the bourgeoisie is at first a national struggle. The proletariat of each country must, of course, first of all settle matters with its own bourgeoisie.
In depicting the most general phases of the development of the proletariat, we traced the more or less veiled civil war, raging within existing society, up to the point where that war breaks out into open revolution, and where the violent overthrow of the bourgeoisie lays the foundation for the sway of the proletariat.
Hitherto every form of society has been based, as we have already seen, on the antagonism of oppressing and oppressed classes. But in order to oppress a class certain conditions must be assured to it, under which it can at least continue its slavish existence. The serf, in the period of serfdom, raised himself to membership in the Commune, just as the petty bourgeois, under the yoke of feudal absolutism, managed to develop into a bourgeois. The modern laborer, on the contrary, instead of rising with the progress of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth. And here it becomes evident that the bourgeoisie is unfit any longer to be the ruling class in society and to impose its conditions of
22 SOCIAL MOVEMENTS
existence upon society as an overriding law. It is unfit to rule because it is incompetent to assure an existence to its slave within his slavery, because it cannot help letting him sink into such a state that it has to feed him instead of being fed by him. Society can no longer live under this bourgeoisie; in other words, its existence is no longer compatible with society.
The essential condition for the existence, and for the sway of the bourgeois class, is the formation and augmentation of capital ; the con- dition for capital is wage-labor. Wage-labor rests exclusively on com- petition between the laborers. The advance of industry, whose involuntary promoter is the bourgeoisie, replaces the isolation of the laborers, due to competition, by their revolutionary combination, due to association. The development of modern industry, therefore, cuts from under its feet the very foundation on which the bourgeoisie produces and appropriates products. What the bourgeoisie therefore produces, above all, are its own grave diggers. Its fall and the victory of the pro- letariat are equally inevitable.
II.
PROLETARIANS AND COMMUNISTS
In what relation do the Communists stand to the proletarians as a whole ?
The Communists do not form a separate party opposed to other working class parties.
They have no interests separate and apart from those of the pro- letariat as a whole.
They do not set up any sectarian principles of their own by which to shape and mould the proletarian movement.
The Communists are distinguished from the other working class parties by this only : I. In the national struggles of the proletarians of the different countries, they point out and bring to the front the com- mon interests of the entire proletariat, independently of all nationality. 2. In the various stages of development which the struggle of the work- ing class against the bourgeoisie has to pass through, they always and everywhere represent the interests of the movement as a whole.
The Communists, therefore, are on the one hand, practically the most advanced and resolute section of the working class parties of
SOCIAL MOVEMENTS 23
every country, that section which pushes forward all others; on the other hand, theoretically they have over the great mass of the prole- tariat the advantage of clearly understanding the line of march, the conditions, and the ultimate general results of the proletarian move- ment.
The immediate aim of the Communists is the same as that of all the other proletarian parties : formation of the proletariat into a class, over- throw of the bourgeois supremacy, conquest of political power by the proletariat.
The theoretical conclusions of the Communists are in no way based on ideas or principles that have been invented, or discovered, by this or that would-be universal reformer.
They merely express, in general terms, actual relations springing from an existing class struggle, from a historical movement going on under our very eyes. The abolition of existing property relations is not at all a distinctive feature of Communism.
All property relations in the past have continually been subject to historical change, consequent upon the change in historical conditions.
The French revolution, for example, abolished feudal property in favor of bourgeois property.
The distinguishing feature of Communism is not the abolition of property generally, but the abolition of bourgeois property. But mod- ern bourgeois private property is the final and most complete expression of the system of producing and appropriating products, that is, based on class antagonisms, on the exploitation of the many by the few.
In this sense the theory of the Communists may be summed up in the single sentence : Abolition of private property.
We Communists have been reproached with the desire of abolish- ing the right of personally acquiring property as the fruit of a man's own labor, which property is alleged to be the groundwork of all per- sonal freedom, activity and independence.
Hard-won, self-acquired, self-earned property ! Do you mean the property of the petty artisan and of the small peasant, a form of prop- erty that preceded the bourgeois form? There is no need to abolish that ; the development of industry has to a great extent already destroyed it, and is still destroying it daily.
Or do you mean modern bourgeois private property ?
But does wage labor create any property for the laborer ? Not a bit. It creates capital, i. e., that kind of property which exploits wage-labor,
24 SOCIAL MOVEMENTS
and which cannot increase except on condition of begetting a new supply of wage-labor for fresh exploitation. Property in its present form is based on the antagonism of capital and wage-labor. Let us examine both sides of this antagonism.
To be a capitalist, is to have not only a purely personal, but a social status in production. Capital is a collective product, and only by the united action of many members, nay, in the last resort, only by the united action of all members of society, can it be set in motion.
Capital is therefore not a personal, it is a social power.
When, therefore, capital is converted into common property, into the property of all members of society, personal property is not thereby transformed into social property. It is only the social character of the property that is changed. It loses its class character.
Let us now take wage-labor.
The average price of wage-labor is the minimum wage, i. e., that quantum of the means of subsistence, which is absolutely requisite to keep the laborer in bare existence as a laborer. What, therefore, the wage-laborer appropriates by means of his labor, merely suffices to pro- long and reproduce a bare existence. We by no means intend to abolish this personal appropriation of the products of labor, an appropriation that is made for the maintenance and reproduction of human life, and that leaves no surplus wherewith to command the labor of others. All that we want to do away with is the miserable character of this appro- priation, under which the laborer lives merely to increase capital, and is allowed to live only in so far as the interest of the ruling class requires it.
In bourgeois society living labor is but a means to increase accumu- lated labor. In Communist society accumulated labor is but a means to widen, to enrich, to promote the existence of the laborer.
In bourgeois society, therefore, the past dominates the present ; in Communist society the present dominates the past. In bourgeois society capital is independent and has individuality, while the living person is dependent and has no individuality.
And the abolition of this state of things is called by the bourgeois : abolition of individuality and freedom ! And rightly so. The abolition of bourgeois individuality, bourgeois independence, and bourgeois free- dom is undoubtedly aimed at.
By freedom is meant, under the present bourgeois conditions of pro- duction, free trade, free selling and buying.
But if selling and buying disappears, free selling and buying dis-
SOCIAL MOVEMENTS 25
appears also. This talk about free selling and buying, and all the other "brave words" of our bourgeoisie about freedom in general, have a meaning, if any, only in contrast with restricted selling and buying, with the fettered traders of the middle ages, but have no meaning when opposed to the Communistic abolition of buying and selling, of the bourgeois conditions of production, and of the bourgeoisie itself.
You are horrified at our intending to do away with private prop- erty. But in your existing society private property is already done away with for nine-tenths of the population ; its existence for the few is solely due to its non-existence in the hands of those nine-tenths. You reproach us, therefore, with intending to do away with a form of prop- erty, the necessary condition for whose existence is the non-existence of any property for the immense majority of society.
In one word, you reproach us with intending to do away with your property. Precisely so : that is just what we intend.
From the moment when labor can no longer be converted into capi- tal, money, or rent, into a social power capable of being monopolized, i. e., from the moment when individual property can no longer be trans- formed into bourgeois property, into capital, from that moment, you say, individuality vanishes !
You must therefore confess, that by "individual" you mean no other person than the bourgeois, than the middle class owner of prop- erty. This person must, indeed, be swept out of the way, and made impossible.
Communism deprives no man of the power to appropriate the prod- ucts of society : all that it does is to deprive him of the power to subju- gate the labor of others by means of such appropriation.
It has been objected, that upon the abolition of private property all work will cease and universal laziness will overtake us.
According to this, bourgeois society ought long ago to have gone to the dogs through sheer idleness ; for those of its members who work, acquire nothing, and those who acquire anything, do not work. The whole of this objection is but another expression of tautology, that there can no longer be any wage-labor when there is no longer any capital.
All objections against the Communistic mode of producing and appropriating material products have, in the same way, been urged against the Communistic modes of producing and appropriating intel- lectual products. Just as, to the bourgeois, the disappearance of class property is the disappearance of production itself, so the disappearance
V 10—2
26 SOCIAL MOVEMENTS
of class culture is to him identical with the disappearance of all culture.
That culture, the loss of which he laments, is, for the enormous majority, a mere training to act as a machine.
But don't wrangle with us so long as you apply to our intended abolition of bourgeois property, the standard of yout bourgeois notions of freedom, culture, law, etc. Your very ideas are but the outgrowth of the conditions of your bourgeois production and bourgeois property, just as your jurisprudence is but the will of your class made into a law for all, a will, whose essential character and direction are determined by the economical conditions of existence of your class.
The selfish misconception that induces you to transform into eternal laws of nature and of reason, the social forms springing from your present mode of production and form of property — historical relations that rise and disappear in the progress of production — the misconcep- tion you share with every ruling class that has preceded you. What you see clearly in the case of ancient property, what you admit in the case of feudal property, you are of course forbidden to admit in the case of your own bourgeois form of property.
Abolition of the family! Even the most radical flare up at this infamous proposal of the Communists.
On what foundation is the present family, the bourgeois family, based ? On capital, on private gain. In its completely developed form this family exists only among the bourgeoisie. But this state of things finds its complement in the practical absence of the family among the proletarians, and in public prostitution.
The bourgeois family will vanish as a matter of course when its complement vanishes, and both will vanish with the vanishing of capital.
Do you charge us with wanting to stop the exploitation of children by their parents ? To this crime we plead guilty.
But, you will say, we destroy the most hallowed of relations, when we replace home education by social.
And your education ! Is not that also social, and determined by the social conditions under which you educate, by the intervention, direct or indirect, of society by means of schools, etc.? The Communists have not invented the intervention of society in education ; but they do seek to alter the character of that intervention, and to rescue education from the influence of the ruling class.
The bourgeois clap-trap about the family and education, about the hallowed co-relation of parent and child become all the more disgusting,
SOCIAL MOVEMENTS 27
as, by the action of modern industry, all family ties among the prole- tarians are torn asunder, and their children transformed into simple articles of commerce and instruments of labor.
But you Communists would introduce community of women, screams the whole bourgeoisie in chorus.
The bourgeois sees in his wife a mere instrument of production. He hears that the instruments of production are to be exploited in com- mon, and naturally can come to no other conclusion than that the lot of being common to all will likewise fall to the women.
He has not even a suspicion that the real point aimed at is to do away with the status of women as mere instruments of production.
For the rest nothing is more ridiculous than the virtuous indigna- tion of our bourgeois at the community of women which, they pretend, is to be openly and officially established by the Communists. The Com- munists have no need to introduce community of women ; it has existed almost from time immemorial.
Our bourgeois, not content with having the wives and daughters of their proletarians at their disposal, not to speak of common prostitutes, take the greatest pleasure in seducing each other's wives.
Bourgeois marriage is in reality a system of wives in common, and thus, at the most, what the Communists might possibly be reproached with, is that they desire to introduce, in substitution for a hypocritically concealed, an openly legalized community of women. For the rest it is self-evident that the abolition of the present system of production must bring with it the abolition of the community of women springing from that system, i. e., of prostitution, both public and private.
The Communists are further reproached with desiring to abolish countries and nationality.
The workingmen have no country. We cannot take from them what they have not got. Since the proletariat must first of all acquire political supremacy, must rise to be the leading class of the nation, must constitute itself the nation, it is, so far, itself national, though not in the bourgeois sense of the word.
National differences and antagonisms between peoples are daily more and more vanishing, owing to the development of the bourgeoisie, to freedom of commerce, to the world's market, to uniformity in the mode of production and in the conditions of life corresponding thereto.
The supremacy of the proletariat will cause them to vanish still faster. United action, of the leading civilized countries at least, is one of the first conditions for the emancipation of the proletariat.
28 SOCIAI, MOVEMENTS
In proportion as the exploitation of one individual by another is put an end to, the exploitation of one nation by another will also be put an end to. In proportion as the antagonism between classes within the nation vanishes, the hostility of one nation to another will come to an end.
The charges against Communism made from a religious, a philo- sophical, and, generally, from an ideological standpoint are not deserv- ing of serious examination.
Does it require deep intuition to comprehend that man's ideas, views, and conceptions, in one word, man's consciousness, changes with every change in the conditions of his material existence, in his social relations and in his social life?
What else does the history of ideas prove, than that intellectual production changes its character in proportion as material production is changed ? The ruling ideas of each age have ever been the ideas of its ruling class.
When people speak of ideas that revolutionize society they do but express the fact that within the old society the elements of a new one have been created, and that the dissolution of the old ideas keeps even pace with the dissolution of the old conditions of existence.
When the ancient world was in its last throes the ancient religions were overcome by Christianity. When Christian ideas succumbed in the eighteenth century to rationalist ideas, feudal society fought its death battle with the then revolutionary bourgeoisie. The ideas of religious liberty and freedom of conscience merely gave expression to the sway of free competition within the domain of knowledge.
"Undoubtedly," it will be said, "religious, moral, philosophical and juridical ideas have been modified in the course of historical develop- ment. But religion, morality, philosophy, political science, and law, constantly survived this change."
"There are besides eternal truths, such as Freedom, Justice, etc., that are common to all states of society. But Communism abolishes eternal truths, it abolishes all religion and all morality, instead of consti- tuting them on a new basis : it therefore acts in contradiction to all past historical experience."
What does this accusation reduce itself to ? The history of all past society has consisted in the development of class antagonisms, antagon- isms that assumed different forms at different epochs.
But whatever form they may have taken, one fact is common to all
SOCIAIy MOVEMENTS 29
past ages, viz., the exploitation of one part of society by the other. No wonder, then, that the social consciousness of past ages, despite all the multiplicity and variety it displays, moves within certain common forms, or general ideas, which cannot completely vanish except with the total disappearance of class antagonisms.
The Communist revolution is the most radical rupture with tra- ditional property relations ; no wonder that its development involves the most radical rupture with traditional ideas.
But let us have done with the bourgeois objections to Communism.
We have seen above that the first step in the revolution by the work- ing class is to raise the proletariat to the position of the ruling class ; to win the battle of democracy.
The proletariat will use its political supremacy to wrest, by degrees, all capital from the bourgeoisie ; to centralize all instruments of produc- tion in the hands of the State, *'. e., of the proletariat organized as the ruling class ; and to increase the total of productive forces as rapidly as possible.
Of course, in the beginning this cannot be effected except by means of despotic inroads on the rights of property and on the conditions of bourgeois production; by means of measures, therefore, which appear economically insufficient and untenable, but which, in the course of the movement, outstrip themselves, necessitate further inroads upon the old social order and are unavoidable as a means of entirely revolutionizing the mode of production.
These measures will, of course, be different in different countries.
Nevertheless in the most advanced countries the following will be pretty generally applicable :
1. Abolition of property in land and application of all rents of land to public purposes.
2. A heavy progressive or graduated income tax.
3. Abolition of all right of inheritance.
4. Confiscation of the property of all emigrants and rebels.
5. Centralization of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.
6. Centralization of the means of communication and transport in the hands of the State.
7. Extension of factories and instruments of production owned by the State ; the bringing into cultivation of waste lands, and the improve- ment of the soil generally in accordance with a common plan.
30 SOCIAL MOVEMENTS
8. Equal liability of all to labor. Establishment of industrial armies, especially for agriculture.
9. Combination of agriculture with manufacturing industries; gradual abolition of the distinction between town and country, by a more equable distribution of the population over the country.
10. Free education for all children in public schools. Abolition of children's factory labor in its present form. Combination of education with industrial production, etc., etc.
When, in the course of development, class distinctions have dis- appeared and all production has been concentrated in the hands of a vast association of the whole nation, the public power will lose its politi- cal character. Political power, properly so called, is merely the organ- ized power of one class for oppressing another. If the proletariat during its contest with the bourgeoisie is compelled, by the force of circum- stances, to organize itself as a class, if, by means of a revolution, it makes itself the ruling class, and, as such, sweeps away by force the old conditions of production, then it will, along with these conditions, have swept away the conditions for the existence of class antagonisms, and of classes generally, and will thereby have abolished its own supremacy as a class.
In place of the old bourgeois society with its classes and class antagonisms we shall have an association in which the free development of each is the condition for the free development of all.
31
FRIEDRICH ENGELS
FRIEDRICH ENGELS was born at Barmen, Germany, 1820. H« was a lifelong friend of Karl Marx and with him is one of the founders of German socialism. Since 1842 he lived mostly in England. He died in 1896.
SCIENTIFIC SOCIALISM
The new German philosophy culminated in the Hegelian system. In this system — and herein is its great merit — for the first time the whole world, natural, historical, intellectual, is represented as a process, i. e., as in constant motion, change, transformation, development; and the attempt is made to trace out the internal connection that makes a continuous whole of all this movement and development. From this point of view the history of mankind no longer appeared as a wild whirl of senseless deeds of violence, all equally condemnable at th<* judgment seat of mature philosophic reason, and which are best for- gotten as quickly as possible; but as the process of evolution of man himself. It was now the task of the intellect to follow the gradual march of this process through all its devious ways, and to trace out the inner law running through all its apparently accidental phenomena.
That the Hegelian system did not solve the problem it propounded is here immaterial. Its epoch-making merit was that it propounded the problem. This problem is one that no single individual will ever be able to solve. Although Hegel was — with Saint Simon — the most en- cyclopaedic mind of his time, yet he was limited, first, by the necessarily limited extent of his own knowledge, and, second, by the limited extent and depth of the knowledge and conceptions of his age. To these limits a third must be added. Hegel was an idealist. To him the thoughts within his brain were not the more or less abstract pictures of actual things and processes, but, conversely, things and their evolution were only the realised pictures of the "Idea," existing somewhere from eternity before the world was. This way of thinking turned everything
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upside down, and completely reversed the actual connection of things in the world. Correctly and ingeniously as many individual groups of facts were grasped by Hegel, yet, for the reasons just given, there is much that is botched, artificial, laboured, in a word, wrong in point of detail. The Hegelian system, in itself, was a colossal miscarriage — but it was also the last of its kind. It was suffering, in fact, from an internal and incurable contradiction. Upon the one hand, its essential proposition was the conception that human history is a process of evolu- tion, which, by its very nature, cannot find its intellectual final term in the discovery of any so-called absolute truth. But, on the other hand, it laid claim to being the very essence of this absolute truth. A system of natural and historical knowledge, embracing everything, and final for all time, is a contradiction to the fundamental law of dialectic reasoning. This law, indeed, by no means excludes, but, on the contrary, includes the idea that the systematic knowledge of the external universe can make giant strides from age to age.
The perception of the fundamental contradiction in German ideal- ism led necessarily back to materialism, but nota bene, not to the simply metaphysical, exclusively mechanical materialism of the eighteenth cen- tury. Old materialism looked upon all previous history as a crude heap of irrationality and violence ; modern materialism sees in it the process of evolution of humanity, and aims at discovering the laws thereof. With the French of the eighteenth century, and even with Hegel, the con- ception obtained of Nature as a whole, moving in narrow circles, and forever immutable, with its eternal celestial bodies, as Newton, and unalterable organic species, as Linnaeus taught. Modern materialism embraces the more recent discoveries of natural science, according to which Nature also has its history in time, the celestial bodies, like the organic species that, under favourable conditions, people them, being born and perishing. And even if Nature, as a whole, must still be said to move in recurrent cycles, these cycles assume infinitely larger dimen- sions. In both aspects, modern materialism is essentially dialectic, and no longer requires the assistance of that sort of philosophy which, queen- like, pretended to rule the remaining mob of sciences. As soon as each special science is bound to make clear its position in the great total- ity of things and of our knowledge of things, a special science dealing with this totality is superfluous or unnecessary. That which still sur- vives of all earlier philosophy is the science of thought and its laws- formal logic and dialectics. Everything eise is subsumed in the posi- tive science of Nature and history.
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Whilst, however, the revolution in the conception of Nature could only be made in proportion to the corresponding/ positive materials fur- nished by research, already much earlier certain historical facts had occurred which led to a decisive change in the conception of history. In 1831, the first working-class rising took place in Lyons; between 1838 and 1842, the first national working-class movement, that of the English Chartists, reached its height. The class struggle between pro- letariat and bourgeoisie came to the front in the history of the most advanced countries in Europe, in proportion to the development, upon the one hand, of modern industry, upon the other, of the newly- acquired political supremacy of the bourgeoisie. Facts more and more strenuously gave the lie to the teachings of bourgeois economy as to the identity of the interests of capital and labour, as to the universal harmony and universal prosperity that would be the consequence of un- bridled competition. All these things could no longer be ignored, any more than the French and English Socialism, which was their theoret- ical, though very imperfect, expression. But the old idealist conception of history, which was not yet dislodged, knew nothing of class struggles based upon economic interests, knew nothing of economic interests ; pro- duction and all economic relations appeared in it only as incidental, subordinate elements in the "history of civilisation."
The new facts made imperative a new examination of all past his- tory. Then it was seen that all past history, with the exception of its primitive stages, was the history of class struggles ; that these warring classes of society are always the products of the modes of production and of exchange — in a word, of the economic conditions of their time ; that the economic structure of society always furnishes the real basis, starting from which we can alone work out the ultimate explanation of the whole superstructure of juridical and political institutions, as well as of the religious, philosophical, and other ideas of a given historical period. Hegel had freed history from metaphysics — he had made it dia- lectic ; but his conception of history was essentially idealistic. But now idealism was driven from its last refuge, the philosophy of history ; now a materialistic treatment of history was propounded, and a method found of explaining man's "knowing" by his "being," instead of, as heretofore, his "being" by his "knowing."
From that time forward Socialism was no longer an accidental dis- covery of this or that ingenious brain, but the necessary outcome of the struggle between two historically developed classes— the proletariat and the bourgeoisie. Its task was no longer to manufacture a system of
34 SOCIAL MOVEMENTS
society as perfect as possible, but to examine the historico-economic succession of events from which these classes and their antagonism had of necessity sprung, and to discover in the economic conditions thus cre- ated the means of ending the conflict. But the Socialism of earlier days was incompatible with this materialistic conception as the con- ception of Nature of the French materialists was with dialectics and modern natural science. The Socialism of earlier days certainly crit- icised the existing capitalistic mode of production and its consequences. But it could not explain them, and therefore could not get the mastery of them. It could only simply reject them as bad. The more strongly this earlier Socialism denounced the exploitation of the working-class, inevitable under Capitalism, the less able was it clearly to show in what this exploitation consisted and how it arose. But for this it was neces- sary— (i) to present the capitalistic method of production in its his- torical connection and its inevitableness during a particular historical period, and therefore, also, to present its inevitable downfall; and (2) to lay bare its essential character, which was still a secret. This was done by the discovery of surplus-value. It was shown that the appro- priation of unpaid labour is the basis of the capitalist mode of produc- tion and of the exploitation of the worker that occurs under it; that even if the capitalist buys the labour-power of his labourer at its full value as a commodity on the market, he yet extracts more value from it than he paid for; and that in the ultimate analysis this surplus-value forms those sums of value from which are heaped up the constantly increasing masses of capital in the hands of the possessing classes. The genesis of capitalist production and the production of capital were both explained.
These two great discoveries, the materialistic conception of history and the revelation of the secret of capitalistic production through sur- plus-value, we owe to Marx. With these discoveries Socialism became a science. The next thing was to work out all its details and relations.
The materialist conception of history starts from the proposition that the production of the means to support human life and, next to pro- duction, the exchange of things produced, is the basis of all social structure ; that in every society that has appeared in history, the manner in which wealth is distributed and society divided into classes or orders, is dependent upon what is produced, how it is produced, and how the products are exchanged. From this point of view the final causes of all social changes and political revolutions are to be sought, not in men's brains, not in man's better insight into eternal truth and justice, but in
SOCIAL MOVEMENTS 35
changes in the modes of production and exchange. They are to be sought, not in the philosophy, but in the economics of each particular epoch. The growing perception that existing social institutions are unreasonable and unjust, that reason has become unreason, and right wrong, is only proof that in the modes of production and exchange changes have silently taken place, with which the social order, adapted to earlier economic conditions, is no longer in keeping. From this it also follows that the means of getting rid of the incongruities that have been brought to light, must also be present, in a more or less developed condition, within the changed modes of production themselves. These means are not to be invented by deduction from fundamental principles, but are to be discovered in the stubborn facts of the existing system of production.
What is, then, the position of modern Socialism in this connexion ?
The present structure of society — this is now pretty generally con- ceded— is the creation of the ruling class of to-day, of the bourgeoisie. The mode of production peculiar to the bourgeoisie, known, since Marx, as the capitalist mode of production, was incompatible with the feudal system, with the privileges it conferred upon individuals, entire social ranks and local corporations, as well as with the hereditary ties of sub- ordination which constituted the framework of its social organisation. The bourgeoisie broke up the feudal system and built upon its ruins the capitalist order of society, the kingdom of free competition, of personal liberty, of the equality, before the law, of all commodity owners, of all the rest of the capitalist blessings. Thenceforward the capitalist mode of production could develop in freedom. Since steam, machinery, and the making of machines by machinery transformed the older manufac- ture into modern industry, the productive forces evolved under the guidance of the bourgeoisie developed with a rapidity and in a degree unheard of before. But just as the older manufacture, in its time, and handicraft, becoming more developed under its influence, had come into collision with the feudal trammels of the guilds, so now modern industry, in its more complete development, comes into collision with the bounds within which the capitalistic mode of production holds it confined. The new productive forces have already outgrown the capital- istic mode of using them. And this conflict between productive forces and modes of production is not a conflict engendered in the mind of man, like that between original sin and divine justice. It exists, in fact, objectively, outside us, independently of the will and actions even of the men that have brought it on. Modern Socialism is nothing but the
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reflex, in thought, of this conflict in fact; its ideal reflection in the minds, first, of the class directly suffering under it, the working-class.
Now, in what does this conflict consist ?
Before capitalistic production, /. e., in the Middle Ages, the system of petty industry obtained generally, based upon the private property of the labourers in their means of production; in the country, the agriculture of the small peasant, freeman or serf; in the towns, the handicrafts organized in guilds. The instruments of labour — land, agricultural implements, the workshop, the tool — were the instruments of labour of single individuals, adapted for the use of one worker, and, therefore, of necessity, small, dwarfish, circumscribed. But, for this very reason they belonged, as a rule, to the producer himself. To con- centrate these scattered, limited means of production, to enlarge them, to turn them into the powerful levers of production of the present day — this was precisely the historic role of capitalist production and of its upholder, the bourgeoisie. In the fourth section of "Capital" Marx has explained in detail, how since the fifteenth century this has been historically worked out through the three phases of simple co-operation, manufacture and modern industry. But the bourgeoisie, as is also shown there, could not transform these puny means of production into mighty productive forces, without transforming them, at the same time, from means of production of the individual into social means of pro- duction only workable by a collectivity of men. The spinning-wheel, the handloom, the blacksmith's hammer, were replaced by the spinning- machine, the power-loom, the steam-hammer ; the individual workshop, by the factory implying the co-operation of hundreds and thousands of workmen. In like manner, production itself changed from a series of individual into a series of social acts, and the products from indi- vidual to social products. The yarn, the cloth, the metal articles that now came out of the factory were the joint product of many workers, through whose hands they had successively to pass before they were ready. No one person could say of them : "I made that ; this is my product."
But where, in a given society, the fundamental form of production is that spontaneous division of labour which creeps in gradually and not upon any preconceived plan, there the products take on the form of commodities, whose mutual exchange, buying and selling, enable the individual producers to satisfy their manifold wants. And this was the case in the Middle Ages. The peasant, e. g., sold to the artisan agricul- tural products and bought from him the products of handicraft. Into
SOCIAIy MOVEMENTS 37
this society of individual producers, of commodity-producers, the new mode of production thrust itself. In the midst of the old division of labour, grown up spontaneously and upon no definite plan, which had governed the whole of society, now arose division of labour upon a definite plan, as organised in the factory; side by side with individual production appeared social production. The products of both were sold in the same market, and, therefore, at prices at least approximately equal. But organisation upon a definite plan was stronger than spon- taneous division of labour. The factories working with the combined social forces of a collectivity of individuals produced their commodities far more cheaply than the individual small producers. Individual pro- duction succumbed in one department after another. Socialised pro- duction revolutionised all the old methods of production. But its revolutionary character was, at the same time, so little recognised, that it was, on the contrary, introduced as a means of increasing and developing the production of commodities. When it arose, it found ready-made, and made liberal use of, certain machinery for the pro- duction and exchange of commodities; merchants' capital, handicraft, wage-labour. Socialised production thus introducing itself as a new form of the production of commodities, it was a matter of course that under it the old forms of appropriation remained in full swing, and were applied to its products as well.
In the mediaeval stage of evolution of the production of commod- ities, the question as to the owner of the product of labour could not arise. The individual producer, as a rule, had, from raw material be- longing to himself, and generally his own handiwork, produced it with his own tools, by the labour of his own hands or of his family. There was no need for him to appropriate the new product. It belonged wholly to him, as a matter of course. His property in the product was, therefore, based upon His own labour. Even where external help was used, this was, as a rule, of little importance, and very generally was compensated by something other than wages. The apprentices and journeymen of the guilds worked less for board and wages than for education, in order that they might become master craftsmen them- selves.
Then came the concentration of the means of production and of the producers in large workshops and manufactories, their transformation into actual socialised means of production and socialised producers. But the socialised producers and means of production and their prod- ucts were still treated, after this change, just as they had been before,
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i. e., as the means of production and the products of individuals. Hith- erto, the owner of the instruments of labour had himself appropriated the product, because, as a rule, it was his own product and the assistance of others was the exception. Now the owner of the instruments of labour always appropriated to himself the product, although it was no longer his product, but exclusively the product of the labour of others. Thus, the products now produced socially were not appropriated by those who had actually set in motion the means of production and actually produced the commodities, but by the capitalists. The means of production, and production itself, had become in essence socialised. But they were subjected to a form of appropriation which presupposes the private production of individuals, under which, therefore, every one owns his own product and brings it to market. The mode of production is subjected to this form of appropriation, although it abolishes the conditions upon which the latter rests.
This contradiction, which gives to the new mode of production its capitalistic character, contains the germ of the whole of the social antagonisms of to-day. The greater the mastery obtained by the new mode of production over all important fields of production and in all manufacturing countries, the more it reduced individual production to an insignificant residuum, the more clearly was brought out the incom- patibility of socialised production with capitalistic appropriation.
The first capitalists found, as we have said, alongside of other forms of labour, wage-labour ready-made for them on the market. But it was exceptional, complementary, accessory, transitory wage-labour. The agricultural labourer, though, upon occasion, he hired himself out by the day, had a few acres of his own land on which he could at all events live at a pinch. The guilds were so organised that the journey- man of to-day became the master of to-morrow. But all this changed, as soon as the means of production became socialised and concentrated in the hands of capitalists. The means of production, as well as the product, of the individual producer became more and more worthless ; there was nothing left for him but to turn wage-worker under the capitalist. Wage-labour, aforetime the exception and accessory, now became the rule and basis of all production ; aforetime complementary, it now became the sole remaining function of the worker. The wage- worker for a time became a wage-worker for life. The number of these permanent wage-workers was further enormously increased by the .breaking-up of the feudal system that occurred at the same time, by the disbanding of the retainers of the feudal lords, the eviction of the
SOCIAL MOVEMENTS 39
peasants from their homesteads, etc. The separation was made com- plete between the means of production concentrated in the hands of the capitalists on the one side, and the producers, possessing nothing but their labour-power, on the other. The contradiction between socialised production and capitalistic appropriation manifested itself as the antag- onism of proletariat and bourgeoisie.
We have seen that the capitalistic mode of production thrust its way into a society of commodity-producers, of individual producers, whose social bond was the exchange of their products. But every soci- ety, based upon the production of commodities, has this peculiarity : that the producers have lost control over their own social inter-relations. Each man produces for himself with such means of production as he may happen to have, and for such exchange as he may require to satisfy his remaining wants. No one knows how much of his particular article is coming on the market, nor how much of it will be wanted. No one knows whether his individual product will meet an actual demand, whether he will be able to make good his cost of production or even to sell his commodity at all. Anarchy reigns in socialised production.
But the production of commodities, like every other form of pro- duction, has its peculiar, inherent laws inseparable from it; and these laws work, despite anarchy, in and through anarchy. They reveal themselves in the only persistent form of social inter-relations, i. e.} in exchange, and here they affect the individual producers as compulsory laws of competition. They are, at first, unknown to these producers themselves, and have to be discovered by them gradually and as the result of experience. They work themselves out, therefore, independ- ently of the producers, and in antagonism to them, as inexorable natural laws of their particular form of production. The product governs the producers.
In mediaeval society, especially in the earlier centuries, production was essentially directed towards satisfying the wants of the individual. It satisfied, in the main, only the wants of the producer and his family. Where relations of personal dependence existed, as in the country, it also helped to satisfy the wants of the feudal lord. In all this there was, therefore, no exchange ; the products, consequently, did not assume the character of commodities. The family of the peasant produced almost everything they wanted ; clothes and furniture, as well as means of sub- sistence. Only when it began to produce more than was sufficient to supply its own wants and the payments in kind to the feudal lord, only
40 SOCIAL MOVEMENTS
then did it also produce commodities. This surplus, thrown into so- cialised exchange and offered for sale, became commodities.
The artisans of the towns, it is true, had from the first to produce for exchange. But they, also, themselves supplied the greatest part of their own individual wants. They had gardens and plots of land. They turned their cattle out into the communal forest, which, also, yielded them timber and firing. The women spun flax, wool, and so forth. Production for the purpose of exchange, production of com- modities, was only in its infancy. Hence, exchange was restricted, the market narrow, the methods of production stable ; there was local ex- clusiveness without, local unity within ; the mark in the country, in the town, the guild.
But with the extension of the production of commodities, and es- pecially with the introduction of the capitalist mode of production, the laws of commodity-production, hitherto latent, came into action more openly and with greater force. The old bonds were loosened, the old exclusive limits broken through, the producers were more and more turned into independent, isolated producers of commodities. It became apparent that the production of society at large was ruled by absence of plan, by accident, by anarchy; and this anarchy grew to greater and greater height. But the chief means by aid of which the capitalist mode of production intensified this anarchy of socialised production, was the exact opposite of anarchy. It was the increasing organisation of pro- duction, upon a social basis, in every individual productive establish- ment. By this, the old, peaceful, stable condition of things was ended. Wherever this organisation of production was introduced into a branch of industry, it brooked no other method of production by its side. The field of labour became a battle-ground. The great geographical discov- eries, and the colonisation following upon them, multiplied markets and quickened the transformation of handicraft into manufacture. The war did not simply break out between the individual producers of particular localities. The local struggles begat in their turn national conflicts, the commercial wars of the seventeenth and the eighteenth centuries.
Finally, modern industry and the opening of the world-market made the struggle universal, and at the same time gave it an unheard-of virulence. Advantages in natural or artificial conditions of production now decide the existence or non-existence of individual capitalists, as well as of whole industries and countries. He that falls is remorselessly cast aside. It is the Darwinian struggle of the individual for existence transferred from Nature to society with intensified violence. The con-
SOCIAL MOVEMENTS 41
ditions of existence natural to the animal appear as the final term of human development. The contradiction between socialised production and capitalistic appropriation now presents itself as an antagonism be- tween the organisation of production in the individual ivorkshop and the anarchy of production in society generally.
The capitalistic mode of production moves in these two forms of the antagonism immanent to it from its very origin. It is never able to get out of that "vicious circle," which Fourier had already discovered. What Fourier could not, indeed, see in his time, is, that this circle is gradually narrowing; that the movement becomes more and more a spiral, and must come to an end, like the movement of the planets, by collision with the centre. It is the compelling force of anarchy in the production of society at large that more and more completely turns the great majority of men into proletarians; and it is the masses of the proletariat again who will finally put an end to anarchy in production. It is the compelling force of anarchy in social production that turns the limitless perfectibility of machinery under modern industry into a compulsory law by which every individual industrial capitalist must perfect his machinery more and more, under penalty of ruin.
But the perfecting of machinery is the making human labour super- fluous. If the introduction and increase of machinery means the displace- ment of millions of manual, by a few machine workers, improvement in machinery means the displacement of more and more of the machine- workers themselves. It means, in the last instance, the production of a number of available wage-workers in excess of the average needs of capital, the formation of a complete industrial reserve army, as I called it in 1845, available at the times when industry is working at high pressure, to be cast out upon the street when the inevitable crash comes, a constant dead weight upon the limbs of the working-class in its struggle for existence with capital, a regulator for the keeping of wages down to the low level that suits the interests of capital. Thus it comes about, to quote Marx, that machinery becomes the most powerful weapon in the war of capital against the working-class ; that the instru- ments of labour constantly tear the means of subistence out of the hands of the labourer ; that the very product of the worker is turned into an instrument for his subjugation. Thus it comes about that the economis- ing of the instruments of labour becomes at the same time, from the outset, the most reckless waste of labour-power, and robbery based upon the normal conditions under which labour functions ; that machin- ery, "the most powerful instrument for shortening labour-time, becomes
V 10-3
42 SOCIAL MOVEMENTS
the most unfailing means for placing every moment of the labourer's time and that of his family at the disposal of the capitalist for the pur- pose of expanding the value of his capital" ("Capital," English edition, p. 406) . Thus it comes about that over-work of some becomes the pre- liminary condition for the idleness of others, and that modern industry, which hunts after new consumers over the whole world, forces the con- sumption of the masses at home down to a starvation minimum, and in doing thus destroys its own home market. "The law that always equi- librates the relative surplus population, or industrial reserve army, to the extent and energy of accumulation, this law rivets the labourer to capital more firmly than the wedges of Vulcan did Prometheus to the rock. It establishes an accumulation of misery, corresponding with accumulation of capital. Accumulation of wealth at one pole is, there- fore, at the same time, accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole, i. e., on the side of the class that produces its own product in the form of cap- ital." (Marx' "Capital" [Sonnenschein & Co.], p. 661.) And to ex- pect any other division of the products from the capitalistic mode of production is the same as expecting the electrodes of a battery not to decompose acidulated water, not to liberate oxygen at the positive, hydrogen at the negative pole, so long as they are connected with the battery.
We have seen that the ever-increasing perfectibility of modern machinery is, by the anarchy of social production, turned into a com- pulsory law that forces the individual industrial capitalist always to improve his machinery, always to increase its productive force. The bare possibility of extending the field of production is transformed for him into a similar compulsory law. The enormous expansive force of modern industry, compared with which that of gases is mere child's play, appears to us now as a necessity for expansion, both qualitative and quantitative, that laughs at all resistance. Such resistance is offered by consumption, by sales, by the markets for the products of modern industry. But the capacity for extension, extensive and inten- sive, of the markets is primarily governed by quite different laws, that work much less energetically. The extension of the markets cannot keep pace with the extension of production. The collision becomes inevitable, and as this cannot produce any real solution so long as it does not break in pieces the capitalist mode of production, the col- lisions become periodic. Capitalists production has begotten another "vicious circle."
SOCIAL MOVEMENTS -13
As a matter of fact, since 1825, when the first general crisis broke out, the whole industrial and commercial world, production and ex- change among all civilised peoples and their more or less barbaric hangers-on, are thrown out of joint about once every ten years. Com- merce is at a standstill, the markets are glutted, products accumulate, as multitudinous as they are unsalable, hard cash disappears, credit vanishes, factories are closed, the mass of the workers are in want of the means of subsistence, because they have produced too much of the means of subsistence; bankruptcy follows upon bankruptcy, execution upon execution. The stagnation lasts for years ; productive forces and products are wasted and destroyed wholesale, until the accumulated mass of commodities finally filter off, more or less depreciated in value, until production and exchange gradually begin to move again. Little by little the pace quickens. It becomes a trot. The industrial trot breaks into a canter, the canter in turn grows into the headlong gallop of a perfect steeplechase of industry, commercial credit, and speculation, which finally, after breakneck leaps, ends where it began — in the ditch of a crisis. And so over and over again. We have now, since the year 1825, gone through this five times, and at the present moment (1877) we are g°mg through it for the sixth time. And the character of these crises is so clearly defined that Fourier hit all of them off, when he described the first as "crise plethorique," a crisis from plethora.
In these crises, the contradiction between socialised production and capitalist appropriation ends in a violent explosion. The circulation of commodities is, for the time being, stopped. Money, the means of cir- culation, becomes a hindrance to circulation. All the laws of production and circulation of commodities are turned upside down. The economic collision has reached its apogee. The mode of production is in rebellion against the mode of exchange.
The fact that the socialised organisation of production within the factory has developed so far that it has become incompatible with the anarchy of production in society, which exists side by side with and dominates it, is brought home to the capitalists themselves by the violent concentration of capital that occurs during crises, through the ruin of many large, and a still greater number of small, capitalists. The whole mechanism of the capitalist mode of production breaks down under the pressure of the productive forces, its own creations. It is no longer able to turn all this mass of means of production into capital. They lie fal- low, and for that very reason the industrial reserve army must also lie
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fallow. Means of production, means of subsistence, available labourers, all the elements of production and of general wealth, are present in abundance. But "abundance becomes the source of distress and want" (Fourier), because it is the very thing that prevents the transformation of the means of production and subsistence into capital. For in capital- istic society the means of production can only function when they have undergone a preliminary transformation into capital, into the means of exploiting human labour-power. The necessity of this transformation into capital of the means of production and subsistence stands like a ghost between these and the workers. It alone prevents the coming together of the material and personal levers of production ; it alone for- bids the means of production to function, the workers to work and live. On the one hand, therefore, the capitalistic mode of production stands convicted of its own incapacity to further direct these productive forces. On the other, these productive forces themselves, with increasing energy, press forward to the removal of the existing contradiction, to the aboli- tion of their quality as capital, to the practical recognition of their character as social productive forces.
This rebellion of the productive forces, as they grow more and more powerful, against their quality as capital, this stronger and stronger command that their social character shall be recognised, forces the capitalist class itself to treat them more and more as social produc- tive forces, so far as this is possible under capitalist conditions. The period of industrial high pressure, with its unbounded inflation of credit, not less than the crash itself, by the collapse of great capitalist establish- ments, tends to bring about that form of the socialisation of great masses of means of production, which we meet with in the different kinds of joint-stock companies. Many of these means of production and of dis- tribution are, from the outset, so colossal, that, like the railroads, they exclude all other forms of capitalistic exploitation. At a fur- ther stage of evolution this form also becomes insufficient. The pro- ducers on a large scale in a particular branch of industry in a particular country unite in a "Trust," a union for the purpose of regulat- ing production. They determine the total amount to be produced, parcel it out among themselves, and thus enforce the selling price fixed beforehand. But trusts of this kind, as soon as business becomes bad, are generally liable to break up, and, on this very account, compel a yet greater concentration of association. The whole of the particular industry is turned into one gigantic joint-stock com-
SOCIAL MOVEMENTS 45
pany; internal competition gives place to the internal monopoly of this one company. This has happened in 1890 with the English alkali production, which is now, after the fusion of 48 large works, in the hands of one company, conducted upon a single plan, and with a capital of £6,000,000.
In the trusts, freedom of competition changes into its very opposite — into monopoly ; and the production without any definite plan of cap- italistic society capitulates to the production upon a definite plan of the invading socialistic society. Certainly this is so far still to the benefit and advantage of the capitalists. But in this case the exploitation is so palpable that it must break down. No nation will put up with produc- tion conducted by trusts, with so barefaced an exploitation of the com- munity by a small band of dividend-mongers.
In any case, with trusts or without, the official representative of capitalist society — the State— will ultimately have to undertake the di- rection of production. This necessity for conversion into State-property is felt first in the great institutions for intercourse and communication — the post-office, the telegraphs, the railways.
If the crises demonstrate the incapacity of the bourgeoisie for man- aging any longer modern productive forces, the transformation of the great establishments for production and distribution into joint-stock companies, trusts, and State property, show how unnecessary the bour- geoisie are for that purpose. All the social functions of the capitalists are now performed by salaried employees. The capitalist has no further social function than that of pocketing dividends, tearing off coupons, and gambling on the Stock Exchange, where the different capitalists despoil one another of their capital. At first the capitalistic mode of production forces out the workers. Now it forces out the capitalists, and reduces them, just as it reduced the workers, to the ranks of the surplus population, although not immediately into those of the indus- trial reserve army.
But the transformation, either into joint-stock companies and trusts, or into State-ownership, does not do away with the capitalistic nature of the productive forces. In the joint-stock companies and trusts this is obvious. And the modern State, again, is only the organisation that bourgeois society takes on in order to support the external conditions of the capitalist mode of production against the encroachments, as well of the workers as of individual capitalists. The modern State, no mat- ter what its form, is essentially a capitalistic machine, the state of the
46 SOCIAL MOVEMENTS
capitalists, the ideal personification of the total national capital. The more it proceeds to the taking over of productive forces, the more does it actually become the national capitalist, the more the citizens does it exploit. The workers remain wage-workers — proletarians. The cap- italist relation is not done away with. It is rather brought to a head. But, brought to a head, it topples over. State-ownership of the pro- ductive forces is not the solution of the conflict, but concealed within it are the technical conditions that form the elements of that solution.
This solution can only consist. in the practical recognition of the social nature of the modern forces of production, and therefore in the harmonising the modes of production, appropriation, and exchange with the socialised character of the means of production. And this can only come about by society openly and directly taking possession of the pro- ductive forces which have outgrown all control except that of society as a whole. The social character of the means of production and of the products to-day reacts against the producers, periodically disrupts all production and exchange, acts only like a law of Nature working blindly, forcibly, destructively. But with the taking over by society of the productive forces, the social character of the means of production and of the products will be utilised by the producers with a perfect un- derstanding of its nature, and instead of being a source of disturbance and periodical collapse, will become the most powerful lever of produc- tion itself.
Active social forces work exactly like natural forces : blindly, for- cibly, destructively, so long as we do not understand, and reckon with, them. But when once we understand them, when once we grasp their action, their direction, their effects, it depends only upon ourselves to subject them more and more to our own will, and by means of them to reach our own ends. And this holds quite especially of the mighty productive forces of to-day. As long as we obstinately refuse to under- stand the nature and the character of these social means of action — and this understanding goes against the grain of the capitalist mode of pro- duction and its defenders — so long these forces are at w'ork in spite of us, in opposition to us, so long they master us, as we have shown above in detail.
But when once their nature is understood, they can, in the hands of the producers working together, be transformed from master demons into willing servants. The difference is as that between the destructive force of electricity in the lightning of the storm, and electricity under
SOCIAL MOVEMENTS &
command in the telegraph and the voltaic arc ; the difference between a conflagration, and fire working in the service of man. With this recog- nition at last of the real nature of the productive forces of to-day, the social anarchy of production gives place to a social regulation of production upon a definite plan, according to the needs of the com- munity and of each individual. Then the capitalist mode of appro- priation, in which the product enslaves first the producer and then the appropriator, is replaced by the mode of appropriation of the products that is based upon the nature of the modern means of pro- duction ; upon the one hand, direct social appropriation, as means to the maintenance and extension of production — on the other, direct individ- ual appropriation, as means of subsistence and of enjoyment.
Whilst the capitalist mode of production more and more completely transforms the great majority of the population into proletarians, it creates the power which, under penalty of its own destruction, is forced to accomplish this revolution. Whilst it forces on more and more the transformation of the vast means of production, already socialised, into State property, it shows itself the way to accomplishing this revolution. The proletariat seises political power and turns the means of production into State property.
But, in doing this, it abolishes itself as proletariat, abolishes all class distinctions and class antagonisms, abolishes also the State as State. Society thus far, based upon class antagonisms, had need of the State. That is, of an organisation of the particular class which was pro tempore the exploiting class, an organisation for the purpose of pre- venting any interference from without with the existing conditions of production, and therefore, especially, for the purpose of forcibly keeping the exploited classses in the condition of oppression corresponding with the given mode of production (slavery, serfdom, wage-labour). The State was the .official representative of society as a whole ; the gathering of it together into a visible embodiment. But it was this only in so far as it was the State of that class which itself represented, for the time being, society as a whole; in ancient times, the State of slave-owning citizens; in the middle ages, the feudal lords; in our own time, the bourgeoisie. When at last it becomes the real representative of the whole of society, it renders itself unnecessary. As soon as there is no longer any social class to be held in subjection; as soon as class rule, and the individual struggle for existence based upon our present anarchy in production, with the collisions and excesses arising from these, are
48 SOCIAL MOVEMENTS
removed, nothing more remains to be repressed, and a special repressive force, a State, is no longer necessary. The first act by virtue of which the State really constitutes itself the representative of the whole of society — the talking possession of the means of production in the name of society — this is, at the same time, its last independent act as a State. State interference in social relations becomes, in one domain after an- other, superfluous, and then dies out of itself; the government of per- sons is replaced by the administration of things, and by the conduct of processes of production. The State is not ''abolished." It dies out. This gives the measure of the value of the phrase "a free State," both as to its justifiable use at times by agitators, and as to its ultimate scientific insufficiency; and also of the demands of the so-called anar- thists for the abolition of the State out of hand.
Since the historical appearance of the capitalist mode of production, the appropriation by society of all the means of production has often been dreamed of, more or less vaguely, by individuals, as well as by sects, as the ideal of the future. But it could become possible, could become a historical necessity, only when the actual conditions for its realisation were there. Like every other social advance, it becomes practicable, not by men understanding that the existence of classes is in contradiction to justice, equality, etc., not by the mere willingness to abolish these classes, but by virtue of certain new economic conditions. The separation of society into an exploiting and an exploited class, a ruling and an oppressed class, was the necessary consequence of the deficient and restricted development of production in former times. So long as the total social labour only yields a produce which but slightly exceeds that barely necessary for the existence of all ; so long, therefore, as labour engages all or almost all the time of the great majority of the members of society — so long, of necessity, this society is divided into classes. Side by side with the great majority, exclusively bond slaves to labour, arises a class freed from directly productive labour, which looks after the general affairs of society ; the direction of labour, State business, law, science, art, etc. It is, therefore, the law of division of labour that lies at the basis of the division into classes. But this does not prevent this division into classes from being carried out by means of violence and robbery, trickery and fraud. It does not prevent the ruling class, once having the upper hand, from consolidating its power 'at the expense of the working-class, from turning their social leadership into an intensified exploitation of the masses.
SOCIAL MOVEMENTS 49
But if, upon this showing, division into classes has a certain his- torical justification, it has this only for a given period, only under given social conditions. It was based upon the insufficiency of production. It will be swept away by the complete development of modern produc- tive forces. And, in fact, the abolition of classes in society presupposes a degree of historical evolution, at which the existence, not simply of this or that particular ruling class, but of any ruling class at all, and, therefore, the existence of class distinction itself has become an obsolete anachronism. It presupposes, therefore, the development of production carried out to a degree at which appropriation of the means of produc- tion and of the products, and, with this, of political domination, of the monopoly of culture, and of intellectual leadership by a particular class of society, has become not only superfluous, but economically, politically, intellectually a hindrance to development.
This point is now reached. Their political and intellectual bank- ruptcy is scarcely any longer a secret to the bourgeoisie themselves. Their economic bankruptcy recurs regularly every ten years. In every crisis, society is suffocated beneath the weight of its own productive forces and products, which it cannot use, and stands helpless, face to face with the absurd contradiction that the producers have nothing to consume, because consumers are wanting. The expansive force of the means of production bursts the bonds that the capitalist mode of pro- duction had imposed upon them. Their deliverance from these bonds is the one pre-condition for an unbroken, constantly-accelerated devel- opment of the productive forces, and therewith for a practically unlim- ited increase of production itself. Nor is this all. The socialised appropriation of the means of production does away, not only with the present artificial restrictions upon production, but also with the positive waste and devastation of productive forces and products that are at the present time the inevitable concomitants of production, and that reach their height in the crises. Further, it sets free for the community at large a mass of means of production and of products, by doing away with the senseless extravagance of the ruling classes of to-day, and their political representatives. The possibility of securing for every member of soci- ety, by means of socialised production, an existence not only fully suffi- cient materially, and becoming day by day more full, but an existence guaranteeing to all the free development and exercise of their physical and mental faculties — this possibility is now for the first time here, but it is here.
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With the seizing of the means of production by society, production of commodities is done away with, and, simultaneously, the mastery of the product over the producer. Anarchy in social production is replaced by systematic, definite organisation. The struggle for individual exist- ence disappears. Then for the first time, man, in a certain sense, is finally marked off from the rest of the animal kingdom, and emerges from mere animal conditions of existence into really human ones. The whole sphere of the conditions of life which environ man, and which have hitherto ruled man, now comes under the dominion and control of man, who for the first time becomes the real, conscious lord of Nature, because he has now become master of his own social organisation. The laws of his own social action, hitherto standing face to face with man as laws of Nature foreign to, and dominating, him, will then be used with full understanding, and so mastered by him. Man's own social organisation, hitherto confronting him as a necessity imposed by Nature and history, now becomes the result of his own free action. The ex- traneous objective forces that have hitherto governed history, pass under the control of man himself. Only from that time will man himself, more and more consciously, make his own history — only from that time will the social causes set in movement by him have, in the main and in a constantly growing measure, the results intended by him. It is the ascent of man from the kingdom of necessity to the kingdom of freedom.
Let us briefly sum up our sketch of historical evolution.
I. Mediaeval Society. — Individual production on a small scale. Means of production adapted for individual use; hence primitive, un- gainly, petty, dwarfed in action. Production for immediate consump- tion, either of the producer himself or of his feudal lord. Only where an excess of production over this consumption occurs is such excess offered for sale, enters into exchange. Production of commodities, therefore, only in its infancy. But already it contains within itself, in embryo, anarchy in the production of society at large.
II. Capitalist Revolution. — Transformation of industry, at first by means of simple co-operation and manufacture. Concentration of the means of production, hitherto scattered, into great workshops. As a consequence, their transformation from individual to social means of production — a transformation which does not, on the whole, affect the form of exchange. The old forms of appropriation remain in force. The capitalist appears. In his capacity as owner of the means of pro- duction, he also appropriates the products and turns them into com-
SOCIAL MOVEMENTS 51
modities. Production has become a social act. Exchange and appro- priation continue to be individual acts, the acts of individuals. The social product is appropriated by the individual capitalist Fundamental contradiction, whence arise all the contradictions in which our present day society moves, and which modern industry brings to light.
A. Severance of the producer from the means of production. Condemnation of the worker to wage-labour for life. Antagonism be- tween the proletariat and the bourgeoisie.
B. Growing predominance and increasing effectiveness of the laws governing the production of commodities. Unbridled competition. Contradiction between socialised organisation in the individual factory and social anarchy in production as a whole.
C. On the one hand, perfecting of machinery, made by competi- tion compulsory for each individual manufacturer, and complemented by a constantly growing displacement of labourers. Industrial reserve- army. On the other. hand, unlimited extension of production, also com- pulsory under competition, for every manufacturer. On both sides, unheard of development of productive forces, excess of supply over demand, over-production, glutting of the markets, crises every ten years, the vicious circle : excess here, of means of production and prod- ucts— excess there, of labourers, without employment and without means of existence. But these two levers of production and of social well- being are unable to work together, because the capitalist form of pro- duction prevents the productive forces from working and the products from circulating, unless they are first turned into capital — which their very superabundance prevents. The contradiction has grown into an absurdity. The mode of production rises in rebellion against the form of exchange. The bourgeoisie are convicted of incapacity further to manage their own social productive forces.
D. Partial recognition of the social character of the productive forces forced upon the capitalists themselves. Taking over of the great institutions for production and communication, first by joint-stock com- panies, later on by trusts, then by the State. The bourgeoisie demon- strated to be a superfluous class. All its social functions are now per- formed by salaried employees.
III. Proletarian Revolution. — Solution of the contradictions. The proletariat seizes the public power, and by means of this transforms the socialised means of production, slipping from the hands of the bour- geoisie, into public property. By this act, the proletariat frees the
52 SOCIAL MOVEMENTS
means of production from the character of capital they have thus far borne, and gives their socialised character complete freedom to work itself out. Socialised production upon a pre-determined plan becomes henceforth possible. The development of production makes the exist- ence of different classes of society thenceforth an anachronism. In proportion as anarchy in social production vanishes, the political author- ity of the State dies out. Man, at last the master of his own form of social organisation, becomes at the same time the lord over Nature, his own master — free.
To accomplish this act of universal emancipation is the historical mission of the modern proletariat. To thoroughly comprehend the his- torical conditions and thus the very nature of this act, to impart to the now oppressed proletarian class a full knowledge of the conditions and of the meaning of the momentous act it is called upon to accomplish, this is the task of the theoretical expression of the proletarian move- ment, scientific Socialism,
INTERSTATE COMMERCE COMMISSION
As A RESULT of the report of the special Senate committee on Inter- state Commerce, the Interstate Commerce Act was passed February 4, 1887. The considerations that led to its passage are given below in the committee's report. The main provisions of the act are these : —
The act applies to interstate transportation only; it decrees that charges must be reasonable; that there shall be no unjust discrimination between shippers, in charges or service ; nor between connecting lines ; a common carrier cannot receive any greater compensation in the aggre- gate, under substantially similar circumstances for a shorter than longer distance over the same line in the same direction ; pooling is made un- lawful ; schedules and charges must be posted, and ten days' notice given of an advance, three days of a reduction in rates; an interstate com- merce commission of five commissioners, appointed by the President, is established; this may sit as a court to hear complaints, and its deci- sions and finding of fact shall be taken as prima facie evidence ; officers may be compelled to testify, but their evidence shall not be used against
SOCIAL MOVEMENTS 53
them in any criminal proceedings. In case of disobedience United States courts may be petitioned.
THE PUBLIC CONTROL OF RAILROADS
The introduction of the railroad brought into the world an untried and powerful force, the possibilities of which are even yet but imper- fectly understood, and its operation brought important questions which of necessity were met and decided blindly, without the advantage of precedent or experience, and without any adequate appreciation of the unforeseen and manifold changes that have since resulted through its agency. During what may be termed the era of construction the chief consideration that influenced the people and the legislatures of Great Britain and America was how to secure railroads, not how to control them. It was many years before the necessity of control became appar- ent or the matters over which control was needed became understood. The construction of railroads was at first authorized by special charters. When the first charters were granted it was supposed that the railroad would be merely a modification of or an improvement upon the public highway; that it would simply furnish a line of communication open to all, like a canal, and that it could be used at pleasure, as a water route it used, by all who might be disposed to place upon it means of carriage. It was also supposed that the railroad would be used only for the carriage of passengers, and not for the transportation of freight, except perhaps to a limited extent. How thoroughly this misconception prevailed is illustrated by a report made to the New York legislature as late as 1835, in which the four leading engineers of that state expressed the following remarkable opinion :
The railroads admit of advantageous use in districts where canals, for the want of water, would be impracticable. They will probably be preferred where high velocities are required, and for the transportation of passengers, and, under some circumstances, for the conveyance of light goods.
The supposed analogy between the railroad and the public highway in their relations to the community gave direction to the earlier legisla- tion of England and the United States. And even when the discovery was made that there was an element of monopoly inseparably connected with the business of transportation by rail, the earlier efforts at regula-
54 SOCIAL MOVEMENTS
tion were directed at the limitation of the profits of the corporation rather than towards the protection of the shipper.
The widely varying methods which have been adopted by different Governments in dealing with the problems of railway development and regulation may be grouped as follows :
1. The policy of private ownership and private management —
(a) Without interference or supervision by the Government.
(b) Subject to compulsory and penal legislation for control and regulation of rates.
(c) Subject to investigation by a commission with advisory pow- ers, and depending largely upon public opinion for the enforcement of its recommendations.
(d) Subject to investigation by a commission with power to fix and regulate rates.
2. Exclusive State ownership and Government management.
3. State ownership and private management under Government supervision and control.
4. Partial State ownership and management in competition with private ownership and management.
Regulation through state ownership has been practically unknown in the United States. It is of foreign origin and is foreign to the char- acter of our institutions. The time may come when the people of the United States will be forced to consider the advisability of placing the railways of the country completely under the control of the General Government, as the postal service is, and as many believe the telegraph service should be. This would seem to be the surest method of securing the highest perfect and the greatest efficiency of the railroad system in its entirety, and the best method of making it an harmonious whole in its operation and of bringing about that uniformity and stability of rates which is the greatest need of trade and commerce. But the dangers to be apprehended from the giving of such vast additional power to the Government will always prove a formidable barrier to the adoption of such a policy, and this committee sees no necessity for considering its advantages or disadvantages until other methods of regulation more American in spirit have at least been given a trial and have proved unsatisfactory. Nor is it deemed important to investigate in detail the experience of those European nations in which the policy of State own- ership or management in one form or another has prevailed.
In those nations the railroad question has presented itself under different conditions, and has admitted of methods of regulation wholly impracticable in the United States, by reason of the marked differences in the organization of the machinery of government and in the customs,
SOCIAL MOVEMENTS 05
temper, and habits of thought of the people. The English railroad system, however, has grown up under conditions more nearly resem- bling those prevailing upon this side of the Atlantic than those existing in any other country. It has been developed under the operation of the principle of private ownership and management, subject to Parliament- ary control, and substantially all of the methods of regulation proposed in this country had first been tested there. The English people early undertook the legislative regulation of their railroads. They have been considerably in advance of us in dealing with the difficulties that have been encountered, and have given the subject no little attention.
For these reasons the experience of England is of more interest and value to us than that of those nations in which the policy of state ownership has been more or less generally adopted, and these reasons seem to warrant a glance at the efforts which have been made in that country for more than fifty years to unravel the complications of the railroad question, and to hit upon a satisfactory method of enforcing the performance of public obligations and of adjusting the relations be- tween the railroads and the people. The information on these subjects herewith submitted is based largely upon the statements contained in the numerous reports which have been made by Parliamentary com- mittees.
THE COURSE OF RAILROAD LEGISLATION IN ENGLAND WORKINGS OF THE
ENGLISH COMMISSION THE PRESENT STATUS OF AFFAIRS
When railroad construction began in England that country already had quite a complete system of canals, with which the new methods of transportation came immediately into active competition. By the char- ters first granted the railroads were required to admit to their lines the cars and locomotives of other companies and individuals, and the acts usually prescribed the maximum tolls to be charged for such service. These were regulations which it had been found necessary to apply to the canals, in the management of which abuses had been complained of somewhat similar to those that afterwards characterized the manage- ment of railways. Competition between the different carriers who were expected to use the route was relied on to secure to the public needful facilities and fair rates under these provisions. But this was not the result, and within ten years after the opening of the first railway it was generally recognized that a railroad must be to some extent a monopoly, because the service to be performed was of such a nature that the high-
56' SOCIAL MOVEMENTS
est degree of efficiency would be attained and the convenience of the public would be best subserved by committing the work to but one carrier. It is worthy of remark that even at that early period in railroad history the future direction of the development of the system was clearly foreseen by at least one man.
In the words of Mr. Sterne :
I have in hand a speech delivered in the House of Commons by Mr. James Morrison on the I7th of May, 1836. Mr. Morrison was the A. T. Stewart of England, and died leaving a fortune of four or five million pounds sterling. He was a- member of Parliament, and he told his associates, as early as 1836, that their maximum rates would be of no value, that the economies of railway transportation from decade to decade, and the improvement of railway transportation and the devel- opment of railway traffic, would make their maximum rates ridiculously high, and would be an excuse for extortion in individual instances. Indeed, the clear understanding which he had of the railway problem, as early as 1836, was absolutely marvelous. But no attention was paid to his recommendation ; it was voted down. They recognize now, how- ever, that Mr. Morrison was one of the few men who then foresaw the railway problems of the present as they are now developing.
The new questions raised by this discovery of the element of monop- oly in railroad transportation were considered by a Parliamentary com- mittee, of which Sir Robert Peel was a member, and which reported in 1840 that the method of competition which has been described was impracticable ; that monopoly upon each line was inevitable, that a single management of each railway was expedient, and that these changed conditions made necessary the protection of the public interests, for the reason "that the interest of the companies was, to a certain extent only, that of the public." At the same time the committee expressed the belief that "an enlightened view of their own interests would always compel managers of railroads to have due regard to the general advant- age of the public."
It was supposed that the principles of free trade would apply in the construction and operation of railroads, and it was quite naturally expected that this business would be subject to the same natural laws of competition that governed and regulated other commercial enter- prises and operations.
While these theories held sway parallel lines were looked to as an effective means of regulation. Parliament encouraged the building of competing lines, and this policy brought on a period of great activity in railroad construction and speculation. But the effects of competition between different lines were not what had been anticipated, and attracted
SOCIAL MOVEMENTS 57
so much attention that in 1844 another committee, headed by Mr. Glad- stone, was appointed, which took under consideration the question of competition and management, and submitted in all five reports. The second report recommended the appointment by Parliament of private bill committees to examine into the propriety of proposed competing schemes, and the third expressed the following conclusions :
That the indefinite concessions made to the earlier companies had become unnecessary ; that competition between railways would do more harm to the companies than good to the public; that the effect of monopoly upon the public directly and upon the railways indirectly ought to be guarded against, and that in authorizing new lines Parlia- ment should reserve certain powers to be exercised after a time.
The idea of state ownership as an effective means of regulation captivated this committee, which became convinced that the people must in one way or another pay for whatever transportation facilities they enjoyed, and that the main question was how to secure by legisla- tion "the greatest amount of accommodation at the least cost." And the general conclusion reached by the committee in its final report was that regulation was to be depended upon rather than competition. These reports led to the passage in 1844 °f a ^aw looking to the ultimate acqui- sition of the railways by the Government, and prescribing the terms of their purchase at the expiration of twenty-one years should that policy be decided upon.
During this interval another unexpected characteristic of railway management came prominently into notice. The addition of too many competing lines developed a tendency toward amalgamation, and veri- fied George Stephenson's axiomatic statement that "Where combination is possible, competition is impossible." Accordingly, in a report made by the Board of Trade of the United Kingdom relative to the numerous amalgamations proposed in 1845, it was recommended that amalgama- tions should not be permitted by Parliament when the purpose was to avoid competition, but only between branches and main lines or when continuous lines were formed, and then only after due consideration.
Another committee, appointed in 1846, discovered that where amalgamations had not been authorized the roads often reached the same end through private working arrangements, some of which virtu- ally amounted to consolidation, and that they avoided competition wherever practicable. On the recommendation of this committee that it was necessary to establish a department of the Government to take "supervision of the railways and canals, with full power to enforce such
Y 10-4
58 SOCIAL MOVEMENTS
regulations as may from time to time appear indispensable for the accommodation and general interests of the public," the railway com- mission was created, but was only allowed to exist until 1851, when its duties were transferred to the Board of Trade. Meantime the efforts at amalgamation grew more and more determined, and the process went on by the consent of Parliament, notwithstanding all the restrictions imposed upon it, and despite the growing public dread of its effects.
Still another committee inquired into this vexed question of amal- gamation, and its elaborate reports upon the subject brought about the passage of the "canal and railway traffic act" of 1854, usually known as the Cardwell act, which has been the model of much of our State legis- lation against unjust discrimination. The purpose of the act was to prevent undue preferences, and to compel interchange of traffic between railways and between railways and canals upon equal terms. This act established two important principles that have since been generally fol- lowed. One was that every company should be compelled to afford the public the full advantages of the convenient interchange of traffic from one line to another. The second was that the companies were under obligations to and should be required to make equal rates to all under the same circumstances.
The time when the state could take possession of the roads came in 1865, and a royal commission was appointed, which gathered a great deal of evidence and went into the questions presented quite fully. The most important conclusions of the commission have been summarized as follows :
That it is not expedient for the Government to avail itself of its reserved right to purchase railways.
That Parliament should not interfere with the incorporation and financial affairs of railway companies, leaving such matters to be dealt with, under the "joint stock companies act," limiting its own action to regulating the construction of the lines and the relations between the public and the companies so incorporated.
That railway companies should be bound to run at least two trains a day for third-class passengers.
That it would be "inexpedient, even if it were practicable, to adopt any legislation which would abolish the freedom which railway com- panies enjoy of charging what sum they deem expedient within their maximum rates, when properly defined, limited as that freedom is by the traffic act."
That railway companies should be required to make stated reports to the Board of Trade in such form as the board may require.
Finally in 1872, a joint select committee was appointed and made a most thorough investigation of the railroad question. The report of this
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committee passed in review the history of England's legislation during its experience of forty years. It was shown that little had been accom- plished, although thirty-three hundred acts had been passed and an expenditure of some ^80,000,000 had been imposed upon the companies. It was also shown that the process of amalgamation had gone on with little regard to the recommendations of committees, commissions, and Government departments, and the result was that "while committees and commissions carefully chosen have, for the last thirty years, clung to one form of competition after another, it has, nevertheless, become more and more evident that competition must fail to do for railways what it does for ordinary trade ; and that no means have yet been devised by which competition can be permanently maintained." Nor did the committee see any reason "to suppose that the progress of combination has ceased, or that it will cease until Great Britain is divided between a small number of great companies." At the same time, however, the committee made it evident that in the past amalgamation "had not brought with it the evils that were anticipated, but that in any event long and varied experience had fully demonstrated the fact that while Parliament might hinder and thwart, it could not prevent it, and it was equally powerless to lay down any general rules determining its limits or character."
Other important conclusions were reached by the committee as follows :
That competition between railways existed only to a limited extent and could not be maintained by legislation.
That combination was increasing and likely to increase.
That competition by sea should be secured by preventing railway companies from getting control over public harbors.
That canals were of advantage in securing competition ; that their facilities for through shipments should be increased, and that no canal should be placed directly or indirectly under the control of any railway company.
That a system of equal mileage rates, or charges in proportion to distance, was inexpedient, and impracticable for the following reasons :
(a) It would prevent railway companies from lowering their fares and rates, so as to compete with traffic by sea, by canal, or by shorter or otherwise cheaper railways, and would thus deprive the public of the benefit of competition, and the company of a legitimate source of profit.
(b) It would prevent railway companies from making perfectly fair arrangements for carrying at a lower rate than usual goods brought in larger and constant quantities, or for carrying for long distances at a lower rate than for short distances.
(c) It would compel a company to carry for the same rate over a
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line which has been very expensive in construction, or which, from gradients or otherwise, is very expensive in working, at the same rate at which it carries over less expensive lines.
In short, to impose equal mileage on the companies would be to deprive the public of the benefit of much of the competition which now exists, or has existed, to raise the charges on the public in many cases where the companies now find it to their interest to lower them, and to perpetuate monopolies in carriage, trade, and manufacture in favor of those rates and places which are nearest or least expensive, where the varying charges of the companies now create competition. And it will be found that the supporters of equal mileage, when pressed, often really mean, not that the rates that they pay themselves are too high, but that the rates that others pay are too low.
Pressed by these difficulties, the proposers of equal mileage have admitted that there must be numerous exceptions, e. g., where there is sea competition (i. e., at about three-fifths of the railway stations of the United Kingdom), where low rates for long distances will bring a profit, or where the article carried at low rates is a necessary, such as coal. It is scarcely necessary to observe that such exceptions as these, while inadequate to meet all the various cases, destroy the value of "equal mileage" as a principle, or the possibility of applying it as a general rule.
That the fixing of legal rates based upon the actual cost of the rail- ways and calculated to yield only a fair return upon such cost was impracticable.
That the plan of maximum charges had been a failure, and that such rates afforded little real protection to the public, since they were always fixed so high that sooner or later it became the interest of the companies to carry at lower rates.
That there should be publicity of rates and tolls.
That the new tribunal was needed to take supervision of the trans- portation interests of the Kingdom, and with authority to enforce the laws relating to railways and canals, to hear complaints and adjust dif- ferences, and to advise Parliament upon questions of railway legislation.
This investigation, by making plain the lessons taught by many years of experience, was especially valuable in at least bringing about a general recognition of the fact that the relations between the railways and the community require special treatment and cannot be defined or governed in accordance with the natural laws regulating ordinary com- mercial intercourse. It was evident that the policy adopted by the committee, if followed out to its conclusion, might lead in time to a few great corporations obtaining an absolute monopoly of the business of transportation by rail throughout the entire Kingdom, and even to finally placing the control of these most important interests in the hands of a small number of individuals, whose powers might become greater than those of the Government itself. Nevertheless, without "being able to indicate how the relations between the Government and these great monopolies would or should ultimately be adjusted, the com-
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mittee did not appear to believe that the time was ripe to check the development of the railway system of Great Britain by extreme meas- ures, and was content to recommend the establishment of a special tribunal as the first step to be taken in inaugurating the policy of special treatment which it had become apparent must be adopted to meet the exigencies of the situation.
This recommendation was complied with by the creation of what is known as the railway commission of 1873, which was at first given a tenure of but five years, but which has since been continued. This tri- bunal is chiefly judicial in character; it is, in fact, a separate railway court, composed of three commissioners or judges, and has jurisdiction over all matters in relation to the interchange of traffic, and to all con- tracts between railway companies, as well as complaints of undue pref- erence and of other violations of railway laws. The most recent official declaration concerning this commission is found in the report of the select committee of twenty-seven members, appointed by the House of Commons, in 1882, to inquire into its working and the rates charged by railways and canals. After an investigation, lasting several months, this committee reported that the tribunal should be made permanent as well as special, and say :
The railway commission has, to a great extent, been hindered in its work by the temporary character with which it has hitherto been invested. At the same time your committee are convinced that the establishment of the commission has been of great public advantage, not merely in causing justice to be speedily done in those cases which have been brought before it, but also in preventing differences from arising as between railway companies and the public. Its utility is not to be measured solely by the instances in which it has been called upon to "hear and determine," but also by the deterrent and controlling influ- ence of its existence.
Representatives of the railway companies, backed up by legal gen- tlemen of eminence, have urged upon your committee that it is not desirable to continue the special tribunal in its present form, but that the court should be reconstituted by the appointment of a single judge, to be selected from the bench or the bar, aided by assessors wherever other than legal knowledge is required. From the traders and the general public, on the other hand, no demand has come for such a change ; on the contrary, the general tenor of their evidence exhibits satisfaction with the services rendered to the public by the existing railway com- mission.
Accordingly the committee recommended :
That the railway commission be made permanent, and a court of record.
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That the powers and jurisdiction of the railway commission be extended to cover —
(OF) All questions arising under the special acts or the public statutes for regulating railway or canal traffic affecting passengers or goods.
(&) The making of orders which may necessitate the co-operation of two or more railway or canal companies within the statutory obliga- tions of the companies.
(c) Power to order through rates on the application of traders, but no such order to impose on a railway company a rate lower than the lowest rate of such railway company for similar articles under simi- lar circumstances.
(d) The revision of traffic agreements both of railways and canals, in as large a measure as the powers formerly exercised by the Board of Trade.
(e) The granting of damages and redress for illegal charges and undue preferences.
(/) The commissioners to have power, on the joint application of parties, to act as referees in rating appeals.
That the railway commissioners should deliver separate judgments when not unanimous.
One appeal to be granted as of right from the judgments of the commission, and "prohibition" as well as "certiorari" to be forbidden.
In conclusion, the committee "report that on the whole of the evi- dence they acquit the railway companies of any grave dereliction of their duty to the public. It is remarkable that no witnesses have appeared to complain of 'preferences' given to individuals by railway companies as acts of private favor or partiality, such as were more or less frequent during the years immediately preceding the act of 1854. Your committee find that the rates for merchandise on the railways of the United Kingdom are, in the main, considerably below the maxima authorized by Parliament, although these charges appear to be higher for the longer distances than on many continental lines. But on the other hand, the service of our home railways is performed much more rapidly than on the continent."
For later and more complete information concerning the English Railway Commission than could elsewhere be obtained the committee is indebted to the recently published work on "Railroad Transportation," by Mr. Arthur T. Hadley, of New Haven, who has made a very careful study of the English railway system and legislation. The results of his investigations are herewith presented in condensed form. He states the general situation as to legislation in the following paragraphs :
With the act of 1873 the general railroad legislation may be said to have closed. The movements which the public had feared for thirty years had now pretty much expended their force. Amalgamations
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which were confidently expected in 1872 did not take place after all. Joint-purse arrangements became less important instead of more import- ant, because railroads found that they could maintain rates without them.
It is not exactly true to say that "in Great Britain the discussion of the railroad problem may be considered as over for the time being." The railroad problem has ceased to be a bugbear ; but it has become all the more a question for practical discussion. Vague fears with regard to the growth of the railway power have given place to pointed com- plaints as to its abuse in individual instances. The period of general legislation has passed. Mr. Adams is right in saying, "As a result of forty years of experiment and agitation Great Britain has on this head come back very nearly to its point of commencement." He is not quite right in adding, "It has settled down on the doctrine of laissez-faire." It might better be said that it has settled down on the policy of specific laws for specific troubles.
After briefly mentioning the three experiments in the line of rail- way commissions attempted in England, in 1840, 1844, and 1846, Mr. Hadley says :
We have seen what were the events which led to the passage of the regulation of railways act in 1873. The commission appointed under that act was to consist of three members ; one of them a railroad man, one a lawyer. They received a salary of £3,000 each. They were to decide all questions arising under the act of 1854, and subsequent acts connected with it. They were further empowered to arbitrate between railroads in a variety of cases ; to compel companies to make through rates which should conform to the intention of the act of 1854; to secure publicity of rates ; to decide what constitutes a proper terminal charge, and some other less important matters. On questions of fact their decision was to be final; on questions of law it was to be subject to appeal. The railway commissioners themselves were to determine what were questions of fact and what were questions of law. Subsequent acts have made but slight changes in these powers.
The commission consisted of able men — Sir Frederick Peel, Mr. Price, formerly of the Midland Railway, and Mr. Macnamara ; the last- named died in 1877, and was succeeded by Mr. A. E. Miller. They went to work with energy, and in a spirit which promised to make the experiment a signal success. And it was at first supposed to be such a success. People judged by the reports of the commission itself; and they were the more prone to believe these reports because it was so desirable to find an easy solution of perplexing questions of railroad policy. Mr. Adams, writing in 1878, said, "The mere fact that the tri- bunal is there; that a machinery does exist for the prompt and final decision of that class of questions, puts an end to them. They no longer exist." That represented the general public opinion on the subject at the time ; it represents the general impression in America down to the present time.
In 1878, the very year when Mr. Adams wrote, the original term of the commission expired. People supposed that it would be made
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permanent. Instead of that the renewals have been for much shorter periods, leaving the commissioners a precarious tenure, and showing- dissatisfaction somewhere.
A Parliamentary investigation on railroad rates in i88i-'82 showed the grounds of dissatisfaction only too clearly. The testimony revealed a state of things almost unsuspected by the general public, and giving an entirely different explanation of the fact that the commissioners had so few cases to deal with. The substance is that the power of the com- mission satisfies nobody. It has power enough to annoy the railroads, and not power enough to help the public efficiently.
The railway commission was a court, not an executive body, but to all intents and purposes a court of law. And in establishing this new court, in addition to those already existing, Parliament had two ends in view : ( I ) To have a tribunal which would and could act when others would or could not. (2) To avoid the expense, delay, and vexation incident to litigation under the old system. Neither end was well ful- filled.
(i) The commission could not act, partly from want of jurisdic- tion, partly from want of executive power. Its jurisdiction did not cover by any means the whole ground. The provisions about terminals, arbitration, working agreements, etc., amounted to very little. Its real power was under the act of 1854. It could under this act require com- panies to furnish "proper facilities," and it could prevent their giving "preferences." But it could not compel a company to comply with special acts or special provisions of its charter. This is a serious diffi- culty, because the question of proper facilities was closely connected with charter requirements, and the railroad could almost anywhere raise the point of want of jurisdiction.
Nor could it enforce its decrees. Passive resistance of the railroads and jealousy on the part of the old established courts combined to pro- duce this effect. For instance, under the act of 1854, if the railways refused to comply with the decisions of the court of common pleas, they were liable to a fine of $1,000 for every day's delay. The London, Chatham and Dover Railway refused to comply with one of the com- mission's decisions, and claimed that they were not liable to any such fine, although all the powers of the court of common pleas, under the act of 1854, had been transferred to the railway commission by the act of 1873. The court of exchequer actually sustained the railroad ; and it was not until 1878 that by a decision of the Queen's bench the railway commission really had the power to do anything if a company chose to disregard its orders.
The injunctions of the commission, at best, only affect the future; for any remedy for the past there must be a new complaint and trial before a regular court. And so it often happens that a railroad, after exhausting all its means of resistance, obeys the decisions of the com- mission in reference to one particular station, without taking any notice of it at other stations where the same principle is involved. Thus, in the case of the manure traffic of Aberdeen, after long litigation, the rate was decided to be illegal. The railroad then reduced its Aberdeen rates, but continued its old schedule of charges at other points on its route
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where there were not organized interests strong enough to make a fight. On the face of the act of 1873 the decisions of the commission, as to what were questions of fact or questions of law, appeared to be final. But by writ of mandamus from a court of appeal the decision on this point could be at ©nee taken out of the hands of the commission by com- pelling them "to state a case," which could then be made the subject of action in the higher court. So this important power was made of no effect.
(2) Complaints before the commission are not quite so slow or costly as they were before the courts, but they are bad enough to pre- vent most men from undertaking them. Sir Frederick Peel himself admits that the expense frightens people away from making complaints. But this is by no means the worst. The testimony before the Parlia- mentary committee of i88i-'82 is full of matter to startle those who argue that because there are few complaints before the commission there are few men that have grievances. Men have good reason to think twice before they enter a complaint.
In the Aberdeen manure case, already referred to, the Aberdeen men, successful at every point, lost more money than they gained. Every important case is so persistently appealed that the original promptness or cheapness of railway commission practice counts for nothing. But the indirect results are yet worse. A complainant is a marked man, and the commission cannot protect him against the ven- geance of the railroads. A town fares no better. It complains of high terminal charges, and the company retorts by raising the local tariff for that place 100 per cent. A coal mine complains of freight rates, and the company refuses to carry for it on any terms ; it has ceased, it says, to be a common carrier of coal. Even the war department is afraid. It has grievances, but it dare not make them public for fear of reprisals. "It is quite clear," says the secretary of the Board of Trade, "that it is a very formidable thing to fight a railway company."
It is not easy to see what can be done in the face of these difficulties, so different from anything which we see in most American States. Our commissioners, with fewer powers, have infinitely more power. The reason is, that in America to defy such an authority involves untold dangers, public sentiment being irritable and unrestrained, whereas in England it involves no danger at all, public sentiment being long-suffer- ing and conservative.
The lawyers say, strengthen the legal element in the commission. Some of the railroad men say so too, because they think that a commis- sion formed on the model of the old courts would interfere no more than the old courts. On the other hand, many men desire the appoint- ment of a public prosecutor to relieve individuals of the danger and odium of bringing complaints, or that chambers of commerce may be allowed to undertake such prosecutions. Others go still further and urge that the powers of the commission be increased, and that they be allowed to determine on general grounds what constitutes a reasonable rate. The commission itself would be glad to do that, but such a thing, however cautiously carried out, would involve the granger principle of fixing rates. It seems unlikely that Parliament will make any of these
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proposed changes, except to give chambers of commerce the right to prefer charges.
We have dwelt on the dark side of the picture, because there is a general impression in this country that the English railway commission is a complete success. It must not be inferred that it is a complete fail- ure. It has in the first nine years of its existence passed judgment on one hundred and ten cases. Only seventeen of these have been appealed, and in eleven of them the commissioners have been sustained. The decisions have, as a rule, been marked by good sense and impartiality. The direct good to the complainants may have been small, but the indi- rect good to the public was, doubtless, great. The commission has made serious and generally successful efforts to enforce a law in cases where it would otherwise have been a dead letter. These particular cases may have given more trouble than they were worth. But the very existence of such a power constitutes a check upon arbitrary action in general. We cannot assume, as many do, that the few complaints preferred before the commission represent anything like the amount of well-founded grievances. But we can assume that the chance for such complaints to be made and heeded makes the railroad managers more cautious in giving occasion for them. Although no one is fully satisfied with what the commission has done, the great majority of shippers are obviously of the opinion that it has prevented much evil which would otherwise have gone unchecked.
In concluding his sketch of the English railroad legislation, Mr. Hadley shows that the system of special rates to develop business has grown up in the same way as in America ; that the chief source of public complaint is not extortionate rates, but different rates; that the low through rates are occasioned by the competition of water routes, which has existed at three-fifths of the stations in the United Kingdom ; that the railroads have been obtaining control of the canals, and even of the open water routes in some cases, by securing possession of the landing places and harbor facilities, but are unable to control the water routes between London and foreign countries ; that while the courts have suc- ceeded in almost entirely stopping discriminations between individuals, personal favoritism, and the payment of rebates, the discriminations against localities and certain lines of business have become more con- spicuous ; and he sums up the present state of things, as follows :
(1) The roads may make what special rates they please; but if they make a rate to one man they must extend the same privilege to all others in like circumstances. If they have been secretly paying rebates to one shipper, they may be compelled to refund to any other shipper similarly placed the same rebates on all his shipments since the special contract with the one shipper began.
(2) It is held by the railway commissioners that two shippers are similarly placed and must be similarly treated when the cost to the railroad of handling the goods for one is the same as for the other ; and, conversely, unless some special reason can be shown, the railroad has no
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right to put a less favorably situated shipper on an equality with a more favorably situated one.
(3) But the last Parliamentary committee )ias refused to indorse these principles, and has said that a preference is not unjust so long as it is the natural result of fair competition.
THE NECESSITY OF NATIONAL REGULATION OF INTERSTATE COMMERCE
The two propositions which the committee has kept prominently in view throughout the entire investigation have been whether any legis- lation for the regulation of interstate transportation is necessary or expedient, and, if so, in what manner can the public interest be best subserved by legislation on that subject.
The consideration of the first proposition may seem to be a work of supererogation, for it is the deliberate judgment of the committee that upon no public question are the people so nearly unanimous as upon the proposition that Congress should undertake in some way the regula- tion of interstate commerce. Omitting those who speak for the railroad interests, there is practically no difference of opinion as to the necessity and importance of such action by Congress, and this is fully substanti- ated by the testimony accompanying this report, which is a fair con- census of public sentiment upon the question. The committee has found among the leading representatives of the railroad interests an increasing readiness to accept the aid of Congress in working out the solution of the railroad problem which has obstinately baffled all their efforts, and not a few of the ablest railroad men in the country seem disposed to look to the intervention of Congress as promising to afford the best means of ultimately securing a more equitable and satisfactory adjust- ment of the relations of the transportation interests to the community than they themselves have been able to bring about.
The evidence upon this point is so conclusive that the committee has no hesitation in declaring that prompt action by Congress upon this important subject is almost unanimously demanded by public sentiment.
This demand is occasioned by the existence of acknowledged evils incident to and growing out of the complicated business of transporta- tion as now conducted, evils which the people believe can be checked and mitigated, if not wholly remedied, by appropriate legislation. The committee recognizes the justice of this demand, and believes that action by Congress looking to the regulation of interstate transportation is necessary and expedient, for the following reasons :
i. The public interest demands regulation of the business of
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transportation because, in the absence of such regulation, the carrier is practically and actually the sole and final arbiter upon all disputed ques- tions that arise between shipper and carrier as to whether rates are rea- sonable or unjust discrimination has been practiced.
It is argued by railroad representatives that arbitrary or oppressive rates cannot be maintained; that they are adjusted and sufficiently regu- lated by competition with rival roads and with water routes, by com- mercial necessities, by the natural laws of trade, and by that self-interest which compels the corporations to have due regard to the wants and the opinions of those upon whom they must depend for business ; that such discriminations as exist are for the most part unavoidable ; that the owners and managers of the property are the best judges of the con- ditions and circumstances that affect the cost of transportation and should determine the compensation they are entitled to receive ; and that, in any event, the common law affords the shipper an adequate remedy and protection against abuse or any infringement of his rights.
This answer fails to recognize the public nature and obligations of the carrier, and the right of the people, through the Governmental authority, to have a voice in the management of a corporation which performs a public function. Nor do the facts warrant the claim that competition and self-interest can be relied upon to secure the shipper against abuse and unjust discrimination, or that he has an available and satisfactory remedy at common law.
If it is found that the common law and the courts do not, in fact, afford to the shipper an effective remedy for his grievances, we have no need to inquire to what extent grievances may exist. The complicated nature of countless transactions incident to the business of transporta- tion make it inevitable that disagreements should arise between the parties in interest, and it is neither just nor proper that disputed ques- tions materially affecting the business operations of a shipper should be left to the final determination of those representing an opposing financial interest. When such disagreements occur the shipper and the carrier are alike entitled to a fair and impartial determination of the matters at issue, and by all the principles governing judicial proceedings the most fair-minded railroad official is disqualified by his personal interest in the result from giving such a determination. If, however, there existed an impartial tribunal to which the shipper could readily appeal, he would find less occasion for appealing from the decision of the carrier, and the differences between shipper and carrier would be more likely to be adjusted amicably without such an appeal.
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The simple fact that the shipper is now obliged to submit to the adjudication of his complaint by the other party in interest, the party by whom he supposes himself to have been aggrieved, is in itself suffi- cient to demonstrate the necessity of such legislation as will secure to the shipper that impartial hearing of his complaints to which he is entitled by all the recognized principles of justice and equity.
Evidence is not wanting to prove that the remedy at common law is impracticable and of little advantage to the ordinary shipper. It has been found so by the people of the States in dealing with their local traffic, and, as has been shown, their recognition of the fact has been authoritatively recorded in nearly every State in the Union by statutory enactments, and in many of them by the establishment of commissions, in the effort to provide for the shipper that prompt and effective remedy which it has been found by experience that recourse to the common law has failed to afford. The reasons for this failure apply with even greater force to the more complicated transactions of interstate com- merce than to State traffic, because the former involve more perplexing questions and are affected by a greater diversity of varying conditions. The legislation of the States, the reports of the State commissions, the records of the courts, the evidence of shippers, and, in short, the whole current of testimony, is to the same effect; and the fact stated is also admitted by some of the highest railroad authorities. Mr. Fink says :
In many cases where small amounts are involved, which do not justify legal proceedings against the company, the aggrieved parties are prevented from prosecuting their claims. * * * Ordinary courts are not properly constituted for that purpose, and the time required for the adjudication of claims is so long and the expense so great as to defeat the very object for which proceedings are instituted.
Leaving out of consideration the natural disinclination of the aver- age shipper to engage in litigation with a corporation which may have the power to determine his success or failure in business, and to enter the lists against an adversary with ample resources and the best legal talent at its command and able to wear out an opponent by the tedious delays of the law, it is plain that the shipper is still at a great disad- vantage in seeking redress for grievances under the common law, which places upon the complainant the burden of proof and requires him to affirmatively establish the unreasonableness of a given rate or the fact of an alleged discrimination. What such an undertaking practically involves is indicated by the following extract from the statement of Mr. Kernan, the chairman of the New York commission, which sums up the whole case :
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Assuredly there have been and do exist unreasonable rates and un- just discriminations. This much will be admitted by all ; it will not be denied even by any carrier. Why, then, have not the courts enjoined the continuance of the wrongs and enforced the payment of damages ? Why, again, is it that substantially no suits ever have been brought and that so few decisions in this country exist ? It is not because of defects in the law or in the constitution of the courts, but it is because the subject is one which neither client nor lawyer, judge nor jury, can unravel or deal with intelligently within the compass of an ordinary trial and with such knowledge of the matter as men generally well educated possess. Let a man take the testimony in five volumes before the Hepburn committee ; read one hundred pages of the clear and able statements of Mr. Blanch- ard, for instance ; con over the facts and figures he gives, and then let him try to reach a conclusion upon the question under discussion. Some conception will thus be obtained of what a lawsuit is which involves the reasonableness of rates, or the existence of an unjust discrimination, or a local rate as compared with a through rate. As the onus is upon the complainant, add to his difficulties the fact that his adversary has nearly all the evidence in his possession, locked up in books and in the memory and intelligence of experts who have made the subject their study. The expense involved, the uncertainty to be faced, and the difficulties to be overcome in an ordinary suit at law have made that remedy obsolete and useless.
All these considerations, fully corroborated as they are by the evi- dence submitted, have satisfied the committee that the common law wholly fails to afford an effective remedy against unreasonable or dis- criminating rates, and that, without additional legislation, the carrier is practically the sole and only judge of the rights of the producer and shipper in respect to transportation.
2. It is the duty of Congress to undertake the regulation of the business of transportation, because of admitted abuses in its manage- ment and of acknowledged discriminations between persons and places in its practical operation — evils which it is possible to reach and remedy only through the exercise of the powers granted by the Constitution to Congress, and against which the citizen is entitled to the protection and relief the national authority can alone afford.
Attention will be called hereafter to these causes of complaint ; and it is perhaps only necessary to suggest here that the railroad argument against legislation on the ground that competition, the laws of trade, and an "enlightened self-interest" afford all needful protection and the most effective regulation, is predicated upon the conditions which pre- vail at the great commercial centers and in favored localities where competition is most active, and applies more particularly to the larger shippers, who are always able to take care of themselves and at such
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points can usually depend for protection and fair treatment upon the eagerness of the corporations to capture all the business possible. But it should be the aim of the law to protect the weak, and it is at the great number of non-competitive interior points, scattered all over the land, at which even the protection elsewhere afforded by competitive influences is not found, and where the producer and shipper are most completely in the power of the railroads, that additional safeguards are most needed.
3. National legislation is necessary to remedy the evils com- plained of, because the operations of the transportation system are, for the most part, beyond the jurisdiction of the States, and, until Congress acts, not subject to any governmental control in the public interest.
The States have no power to regulate interstate commerce, and it appears from the evidence that even their control of their own domestic traffic is restricted and frequently made inoperative by reason of its intimate intermingling with interstate commerce and by the present freedom of the latter from any legislative restrictions. Some of the difficulties of effective State regulation in the absence of national legis- lation have been pointed out elsewhere in this report, and illustrations have been given of the greater volume and importance of interstate as compared with State traffic. National supervision would supplement, give direction to, and render effective State supervision, and is espe- cially necessary as the only method of securing that uniformity of regu- lation and operation which the transportation system requires for its highest development.
The clearly-established fact that, by reason of the constitutional division of powers between the States and the General Government, the States have been able only to partially control the business of trans- portation within their own borders has been the principal inciting cause of the popular demand for national regulation, and is sufficient, in the judgment of the committee, to call for such action by Congress as will make effective the means of regulation found necessary and adopted by the States.
4. National legislation is also necessary, because the business of transportation is essentially of a nature which requires that uniform system and method of regulation which the national authority can alone prescribe.
The key-note to all the decisions of the United States Supreme Court concerning the power to regulate commerce is found in the declaration made in Cooley v. Board of Wardens, and frequently
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referred to in other cases, that " whatever subjects of this power are in their nature national, or admit only of one uniform system or plan of regulation, may justly be said to be of such a nature as to require exclu- sive legislation by Congress;" and, as is said by the court in the late case of Gloucester Ferry Company v. Pennsylvania, "it needs no argu- ment to show that the commerce with foreign nations and between the States, which consists in the transportation of persons and property between them, is a subject of national character, and requires uniformity of regulation. Congress alone, therefore, can deal with such transporta- tion."
5. The failure of Congress to act is an excuse for the attempts made by the railroads to regulate the commerce of the country in their own way and in their own interests by whatever combinations and methods they are able to put into operation.
Through the absence of national legislation the railroads of the United States have been left to work out their own salvation. The practical results of their efforts have been by no means encouraging, as the present depressed condition of the railway interests bears witness, nor do they claim to have made any substantial progress during the past fifteen or twenty years. It is true that in this period the railroads have accomplished wonders in reducing the cost of transportation, in remov- ing the limitations of distance from trade between remote localities, and in building up and widely extending the general commerce of the coun- try. But, notwithstanding all these marvelous achievements, for which due credit should be given, the solid fact still claims consideration, that the inequalities and discriminations which characterize the operations of the system in its entirety are now as pronounced as in the earlier stages of its development.
In the recognized existence of these evils and in the failure of the national authority to offer any remedy, railroad managers Have found their justification for seeking a remedy through methods which have not commended themselves to the public judgment and which have threatened even greater dangers to the body-politic. In the absence of national legislation, the railroads have naturally resorted to the only methods by which they could unaided secure any degree of stability and uniformity in their charges — consolidations and confederation. The final outcome of continued consolidation would be the creation of an organization more powerful than the Government itself and perhaps be- yond its control. The same result might follow the successful develop-
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ment of the policy of confederation or pooling, if unrestricted by Gov- ernmental supervision, and either would be inimical to the public inter* est. But while this would be the logical outcome of the existing tendency of railway organization and management, there are satisfactory reasons for believing that it will not be the actual result, and that this policy has substantially reached the limit to which it can be carried. In a sense it may be true that the railroad properties of the country are to-day largely within the control of a comparatively small circle, yet the colos- sal combinations which have been effected find other gigantic combina- tions equally as powerful successfully contending for the traffic of the territory they seek to control. The vast geographical extent of the country, its immense resources, the diverse interests of different sec- tions, the abundance of capital, the commanding influence and the enter- prise of the great commercial centers, the impossibility of controlling 35,000 miles of free water-routes — all these considerations lessen the dangers to be apprehended from future consolidations and combinations, and at the same time show how difficult it will be for the railroads to work out the problem alone and unaided.
Experience and investigation have up to this time failed to indicate how the inequalities and discriminations complained of, which have grown into and become a fundamental part of the system upon which the business of the entire country is conducted, are to be done away with without a serious disturbance of every individual and public busi- ness interest. To equalize through and local rates, and to give them that degree of uniformity and stability so greatly needed, must neces- sarily involve a complete readjustment and reconstruction of the com- mercial relations and business methods of the whole country. How this is to be accomplished is the secret which underlies the satisfactory solu- tion of the railroad problem.
That a problem of such magnitude, importance, and intricacy can be summarily solved by any master-stroke of legislative wisdom is beyond the bounds of reasonable belief. That the railroads, unaided or unrestrained, can or will eventually work out its solution seems highly improbable, judging from past experience, and cannot reasonably be expected. That a satisfactory solution of the problem can ever be secured without the aid of wise legislation the committee does not believe.
V 10-5
U SOCIAL MOVEMENTS
THE CAUSES OF COMPLAINT AGAINST THE RAILROAD SYSTEM.
The complaints against the railroad system of the United States expressed to the committee are based upon the following charges :
1. That local rates are unreasonably high, compared with through rates.
2. That both local and through rates are unreasonably high at non-competing points, either from the absence of competition or in con- sequence of pooling agreements that restrict its operation.
3. That rates are established without apparent regard to the actual cost of the service performed, and are based largely on "what the traffic will bear."
4. That unjustifiable discriminations are constantly made between individuals in the rates charged for like service under similar circum- stances.
5. That improper discriminations are constantly made between articles of freight and branches of business of a like character, and between different quantities of the same class of freight.
6. That unreasonable discriminations are made between localities similarly situated.
7. That the effect of the prevailing policy of railroad management is by an elaborate system of secret special rates, rebates, drawbacks, and concessions, to foster monopoly, to enrich favored shippers, and to pre- vent free competition in many lines of trade in which the item of trans- portation is an important factor.
8. That such favoritism and secrecy introduce an element of un- certainty into legitimate business that greatly retards the development of our industries and commerce.
9. That the secret cutting of rates and the sudden fluctuations that constantly take place are demoralizing to all business except that of a purely speculative character, and frequently occasion great injustice and heavy losses.
10. That, in the absence of national and uniform legislation, the railroads are able by various devices to avoid their responsibility as car- riers, especially on shipments over more than one road, or from one State to another, and that shippers find great difficulty in recovering damages for the loss of property or for injury thereto.
11. That railroads refuse to be bound by their own contracts, and arbitrarily collect large sums in the shape of overcharges in addition to the rates agreed upon at the time of shipment.
12. That railroads often refuse to recognize or be responsible for the acts of dishonest agents acting under their authority.
13. That the common law fails to afford a remedy for such griev- ances, and that in cases of dispute the shipper is compelled to submit to the decision of the railroad manager or pool commissioner, or run the risk of incurring further losses by greater discriminations.
14. That the differences in the classifications in use in various parts of the country, and sometimes for shipments over the same roads in different directions, are a fruitful source of misunderstandings, and are often made a means of extortion.
SOCIAL MOVEMENTS 75
15. That a privileged class is created by the granting of passes, am* that the cost of the passenger service is largely increased by the extent of this abuse.
16. That the capitalization and bonded indebtedness of the roads largely exceed the actual cost of their construction or their present value, and that unreasonable rates are charged in the effort to pay divi- dends on watered stock and interest on bonds improperly issued.
17. That railroad corporations have improperly engaged in lines of business entirely distinct from that of transportation, and that undue advantages have been afforded to business enterprises in which railroad officials were interested.
18. That the management of railroad business is extravagant and wasteful, and that a needless tax is imposed upon the shipping and trav- eling public by the unnecessary expenditure of large sums in the main- tenance of a costly force of agents engaged in a reckless strife for competitive business.
THE ESSENCE OF THE COMPLAINTS
It will be observed that the most important, and in fact nearly all, of the foregoing complaints are based upon the practice of discrimina- tion in one form or another. This is the principal cause of complaint against the management and operation of the transportation system of the United States, and gives rise to the question of greatest difficulty in the regulation of interstate commerce.
It is substantially agreed by all parties in interest that the great desideratum is to secure equality, so far as practicable, in the facilities for transportation afforded and the rates charged by the instrumentali- ties of commerce. The burden of complaint is against unfair differences in these particulars as between different places, persons, and commodi- ties, and its essence is that these differences are unjust in comparison with the rates allowed or facilities afforded to other persons and places for a like service under similar circumstances.
The first question to be determined, apparently, is whether the inequalities complained of and admitted to exist are inevitable, or whether they are entirely the result of arbitrary and unnecessary dis- crimination on the part of the common carriers of the country ; and the consideration of this question suggests an inquiry as to the proper basis upon which rates of transportation should be establishe'd.
76
A COMPARISON OF MUNICIPAL AND PRIVATE OWNERSHIP
BY THE COMMISSIONER OF LABOR, 1894
As stated in the preface, this report is designed to bring out the essential facts relating to private and municipal ownership of water- works, gas works, and electric-light plants. By private ownership is meant ownership by individuals, companies, or private corporations, and by private plants is meant plants owned, controlled, and operated by such individuals, companies, or corporations. By municipal owner- ship is meant ownership by cities, towns, villages, etc., and by munici- pal plants is meant plants owned, controlled, and operated for the public account by such public corporations. It has not been intended to fur- nish the means whereby the details of business and the results of the operation of specific plants could be identified and any use made of such knowledge that might be prejudicial to the interests of such plants. It has rather been the intention of the Department to secure the fullest possible information in regard to the business and production of as large a number of such plants as could be canvassed in a reasonable time, aiming always to cover representative plants, and in a sufficient num- ber to afford a reliable representation of the varying conditions found in these public utilities, both under private and under municipal own- ership and control. The agitation of the subject of private and munici- pal ownership during the last few years quite naturally rendered the task of securing data from private corporations difficult. It was found necessary early in the investigation to make the specific statement that the names of plants would not be published in connection with the data furnished, or the city, town, or State in which located. Without this pledge by the Department the investigation could not have been prose- cuted successfully, inasmuch as the greatest objection was constantly encountered to furnishing the details of private business if they were to • be presented in such a manner as to enable particular plants to be iden- tified. With this pledge it was found possible to secure reports from
SOCIAL MOVEMENTS 77
quite a large proportion of the private water, gas, and electric-light plants in the United States, both large and small, thus furnishing data representative of every condition for purposes of comparison with simi- lar plants operating under municipal ownership. It will readily be seen that for the purpose of statistical comparison the names and loca- tion of plants would add but little to the value of the figures given, while with the omission of such means of identification reliable figures could be secured relating to plants under private or corporate ownership and control.
As has been intimated, not all of the plants in the United States have been covered by the investigation. The Department pursued its usual course in the collection of the data, sending its special agents to the various plants throughout the country, and securing the data by their personal inspection of the plants and of the details of their busi- ness, the various facts being taken directly from the records of the plants so far as such were in existence. At the beginning of the inves- tigation it was realized that it would be impossible to make a canvass of all of the plants in the country with the limited force at the disposal of the Department and present the facts while comparatively fresh. It was therefore determined to cover as great a number of the plants as possible within the time which could be devoted to the work. In no cases have leased plants, or plants established in factories, etc., for the sole use of the owner, been included. Quite a large proportion of both the private and municipal plants were canvassed, and it is believed that the data presented in the tables are fairly representative of the varying conditions found throughout the country.
The following table shows the total number of water, gas, and electric-light plants, private and municipal, in the United States, so far as could be ascertained ; the number for which schedules were secured and which form the basis for this report ; the total investment and the value of product in municipal water, gas, and electric-light plants in the United States, and the total investment and the value of product in the plants, both private and municipal, which are included in this report :
78
SOCIAL MOVEMENTS
NUMBER OF, TOTAL INVESTMENT IN, AND VALUE OP PRODUCT IN, WATER, GAS, AND ELECTRIC-UGHT PLANTS IN THE UNITED STATES.
|
Waterworks. |
Gas works. |
Electric-light plants. |
||||
|
Private. |
Municipal. |
Private. |
Municipal. |
Private. |
Municipal. |
|
|
Number in th« United States.. |
i,539 375 24.37 $267,752,468 $116,710,833 43-59 $ 25,665,669 $ 11,416,186 44-48 |
i,787 659 36.88 $513,852,568 463,574,312 90.22 $ 45,506,130 42,508,490 93-41 |
95i 356 3743 $330,346,274 152,669,792 46.22 $ 73,446,133 33,938,262 46.21 |
J4 ii 78.57 $ 1,918,120 1,395,373 72.75 $ 487,355 43I,672 88.57 |
2,572 632 24.57 $265,181,920 113,917,815 42.96 $ 56,490,652 24,267,460 42.96 |
460 320 69.57 $ 12,902,677 10,908,929 84.55 $ 3,531,605 2,909,199 82.38 |
|
Number included in this report |
||||||
|
Per cent included in this report |
||||||
|
Total investment in all plants in the United States |
||||||
|
Total investment in plants included in this report.. |
||||||
|
Percent of total invest- ment represented by plants included in this |
||||||
|
Value of product in all plants In the United States |
||||||
|
Value of product in plants included in this report Per cent of total value of product represented by plants included in this report |
||||||
Of the 3,326 waterworks in the United States it was found that 46.27 per cent were owned and operated by private individuals, firms, and corporations, while 53.73 per cent were owned and operated by the cities, towns, and villages in which they were located; of the 965 gas works, 98.55 per cent were owned privately, while but 1.45 per cent were municipally owned; and of the 3,032 electric-light plants, 84.83 per cent were private and 15.17 per cent were municipal. As will be seen, this report covers 24.37 Per cent of tne private waterworks in the United States and 36.88 per cent of those under municipal ownership and control; 37.43 per cent of the private and 78.57 per cent of the municipal gas works, and 24.57 Per cent °f the private and 69.57 per cent of the municipal electric-light plants. Of the 1,539 privately owned waterworks, about 32 per cent were located in towns or villages which had less than 1,000 population at the census of 1890, while about 25 per cent of the 1,787 municipally owned plants were so located. Of the 951 privately owned gas works, about one-third of I per cent were located in towns and villages which had less than 1,000 population at the census of 1890, while of the municipally owned plants none were so located. So far as the electric-light plants are concerned, about 9 per cent of the 2,572 privately owned plants were located in towns and villages which had less than 1,000 population at the census of 1890, while about 9 per cent of the 460 municipally owned plants were so
SOCIAL MOVEMENTS 79
located. About one-fourth of all the waterworks in the United States are located in small towns and villages, while a very small proportion of the gas works and about one-tenth of the electric-light plants are so located. Inquiry was made in regard to the waterworks located in these small towns and villages, and as a rule they were found to be of an unimportant and inexpensive character and were established largely for purposes of fire protection. No plants, water, gas, or electric-light, which are located in towns and villages which had less than 1,000 pop- ulation at the census of 1890 have been included in the tables which are given in this report.
The table also furnishes a very close estimate of the total amount invested in municipal plants in the United States, based on returns directly from the plants. The municipal waterworks for which full data are included in this report represent 90.22 per cent of the total investment in such municipal works in the United States, the munici- pal gas works represent 72.75 per cent, and the municipal electric- light plants represent 84.55 Per cent- So far as private works are concerned it was found necessary to secure this estimate as to total investment from various sources. Nevertheless, it is thought to be fairly accurate and shows that the private waterworks for which full data are included in this report represent 43.59 Per cent °f the total investment in such private works in the United States, that the pri- vate gas works represent 46.22 per cent, and that the private electric- light plants represent 42.96 per cent. In this connection it should be stated that the figures given as the investment represent the actual cost of the plants and the amounts expended on the same for extensions and betterments up to the end of the fiscal year for which reports were made.
This table also shows the value of the product during the fiscal year of the plants included in the report and an estimate of the total value of product for the year in all plants in the United States. From this it appears that 75.77 per cent of the total value of water, 46.49 per cent of the total value of gas, and 45.28 per cent of the total value of electricity produced by the whole number of the plants in the United States was produced by the plants for which full details are given in this report. The year covered is usually a fiscal year ending in 1898, although for some plants the year ends as far back as 1897. This is due to the necessary length of time which was devoted to the canvass by the agents of the Department, as the data were in every case secured cover-
80
SOCIAL MOVEMENTS
ing the business of the last year for which complete information could be had at the time of the visit of the agent to the plant.
WATER WORKS
SALARIES AND WAGES
As is seen by reference to Table VI, separate figures for salaries and wages have not been secured for all of the 1,034 plants covered, a portion or all of the wage cost being included in salaries in some plants and vice versa. For 326 private plants and 561 municipal plants, how- ever, the accounts were kept separately and accurate data were obtained. The short table which follows is based on the plants reporting separately as to the cost of salaries and wages during their last fiscal year, and shows, for each of the groups adopted in the general tables, the average cost of salaries and wages per 1,000,000 gallons of water furnished for both private and public consumption.
AVERAGE COST OF SALARIES AND WAGES PER 1,000,000 GALLONS OF WATER
FURNISHED.
|
Water furnished (gallons). |
Private plants. |
Municipal plants. |
||||
|
Num- ber re- port- ing. |
Average cost per 1,000,000 gallons. |
Num- ber re- port- ing. |
Average cost per 1,000.000 gallons. |
|||
|
Sala- ries. |
Wages. |
Sala- ries. |
Wages. |
|||
|
i J7 22 3 23 3 21 22 20 5 II 12 53 37 20 72 13 |
$34-25 36.72 25.07 14.40 16.58 12.42 10.18 6.12 10.94 4.91 7.01 3 oo J;3S 4-54 4-03 3-73 2.57 i-57 1.87 |
$821.92 120.63 56.51 39-70 31-99 23.19 18.49 13.70 I5-I4 12.00 8.96 4.60 6.67 8.38 6.16 8.42 5.60 4-92 5.07 3-74 |
||||
|
i ooo ooo and under 5,000,000 |
3 7 7 1 5 22 18 7 '1 22 45 30 14 3° 4 |
$31-07 3i.i5 42-33 16.33 19.99 16.41 11.94 12.81 II. 12 8-75 10.22 ".75 8.63 5.93 5-14 4-43 3-9° 7.03 |
$41.26 53-03 48.25 37-12 43.83 16.61 11.28 11.96 9 52 8.63 7-97 10.27 9.22 6-49 4-78 4.40 3-89 6-59 |
|||
|
50*000*000 and under 75 000,000. |
||||||
|
75*000*000 and under 100,000,000, . |
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|
150,000,000 a 75, '_„ '" |
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|
175,000,000 a , '-_/ |
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|
200,000,000 » . 5 '^^ |
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|
250,000,000 a 5 >^» ooo* |
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The first two groups in the above table are made up of plants fur- nishing less than 5,000,000 gallons of water per year, and, as will be found later on, the municipal plants in these groups have little if any revenue from the sale of water to private users, being maintained
SOCIAIy MOVEMENTS 81
mainly for fire protection. As a consequence the salary and wage cost per 1,000,000 gallons as well as all other costs mu^st necessarily be large. For this reason it may be well to exclude at least these two groups from consideration in using this table. Beginning with the group of plants furnishing 5,000,000 and under 10,000,000 gallons per year, it is seen that so far as salaries are concerned the average cost in the private plants is in excess of the average in the municipal plants, and in the next group this is also true, this cost in the private plants being almost three times that in the municipal plants. In the next group the average sal- ary cost is almost the same in both kinds of plants, while in the remain- ing fourteen groups containing private plants this cost is larger in the private plants than in those under municipal ownership and control. As regards wage cost it is seen that in the group of plants furnishing 5,000,000 and under 10,000,000 gallons per year the average cost in the municipal plants exceeds that in the private plants, while in each of the next three groups this cost in the private plants is larger than in those municipally owned. In each of the next five groups, however, the aver- age wage cost per 1,000,000 gallons during the year is larger in the municipal plants than in the private, while in each of the next four it is smaller. In each of the next three groups this average wage cost is smaller in the private plants, while in the last group affording com- parison it is considerably smaller in the six municipal plants entering into the average than in the four private plants in this group.
COST OF PRODUCTION
In this connection it has been deemed advisable to summarize the results as to cost of production and, accordingly, a table has been made, showing, for the private and municipal plants falling under each of the groups used in the general tables, the average cost of production during the year per 1,000 gallons of water furnished for private and public con- sumption. In order that these two classes of plants may be placed on the same basis in this table, two columns showing cost have been made for the plants under private or corporate ownership and control and two for those under municipal ownership and control. The first of these columns shows the average cost of production excluding depreciation, taxes, and interest on the total investment (cost of plant). Deprecia- tion is to some extent a theoretical element, and for this reason some may wish to see the figures with this element excluded; taxes have
82 SOCIAI, MOVEMENTS
been excluded in the case of private plants and in the few cases where they appear as an actual charge in municipal plants, because taxes are not usually a cost in municipal plants; while interest on the total investment is excluded because of the fact that private or corporate owners do not usually borrow the funds for the investment and pay interest on the same, as is done by municipalities, but issue and sell stock for this purpose. Bonds, it is true, are also sometimes issued by private plants, and in such cases there is a regular interest charge ; but the practice is far from uniform. With these elements eliminated in both classes of plants, only the actual costs for administration, labor, supplies, and repairs and renewals are taken into consideration. The second column showing cost for each of the two classes of plants, on the other hand, includes depreciation, taxes, and interest on the total investment (cost of works). Interest has in all cases been estimated at the rate paid by the city on its last issue of bonds. Private and municipal plants are thus put upon the same basis. The assumption of this rate as applied to private plants is justified by the probability that the municipality could raise funds for the establishment of such a plant at the rate paid upon its last issue of bonds, and that therefore for a fair comparison the same rate should be used for both classes of plants. Some private plants, it is true, will be found paying interest charges in excess of this estimate, because of the fact that bonds have been issued at a higher rate of interest or in excess of the cost of the plant. In the case of municipal plants the question may be raised as to why taxes are here shown. It is well understood that municipal plants seldom pay taxes, but in order to furnish a fair basis for com- parison estimates have been inserted representing the taxes that would have been collected from these plants had they been owned by private individuals or corporations. It will be seen at once that plants owned and operated by municipalities take the place of just so much private property from which taxes would be received to the amount estimated, the ownership on the part of cities involving a definite decrease in the amount of taxable property. The estimates are based on the judgment of the local assessors as to the assessed value of the plants considered. The table giving the average cost of production per 1,000 gallons of water furnished, for both private and municipal plants, follows.
SOCIAL MOVEMENTS
83
AVERAGE COST OF PRODUCTION PER 1,000 GALLONS OF WATER FURNISHED.
|
Private plants. |
Municipal plants. |
|||||
|
Average cost of produc- tion per 1,000 gallons. |
Average cost of produc- tion per 1,000 gallons. |
|||||
|
Water furnished (gallons). |
Num- ber |
Excluding |
Including deprecia- |
Num- ber |
Excluding |
Including deprecia- |
|
re- port- injr. |
tion, taxes, and |
tion, taxes, and estimated |
re- port- ing. |
deprecia- tion and inter- |
tion, estimated taxes, in- |
|
|
interest on |
est on total |
terest on |
||||
|
total in- |
investment |
total invest |
||||
|
vestment. |
ment, etc. |
|||||
|
Under 1,000,000 |
5 |
$i 0574 |
$2 3908 |
|||
|
$o 6928 |
2088 |
8?8q |
||||
|
5 000,000 and under 10,000,000. . . |
12 12 IO 12 5° |
.1382 .0962 .1020 .0585 |
•4092 .3066 .2471 .1874 |
35 45 $ 105 52 |
• 1503 .1158 .1018 .0848 .0606 042^ |
.4486 •3050 .2636 .2911 •1754 .1180 |
|
10,000,000 and under 15,000,000 |
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|
25,000.000 and under 50,000,000 50 ooo ooo and under 75 ooo ooo. |
||||||
|
75,000,000 and under 100,000,000. . . 100,000,000 and under 1 25,000,000. . 125,000,000 and under 150,000,000. . |
20 9 |
.0511 .0368 •0377 |
.1520 .1084 .1285 |
24 23 22 |
.0461 .0342 .0381 |
.1371 .1015 .1265 |
|
150,000,000 and under 175,000,000.. 175,000,000 and under 200,000,000. . |
1 |
.0408 .0470 |
.1108 |
6 12 |
.0164 .0254 |
.0879 .0845 |
|
200,000.000 and under 250,000,000. . 250.000,000 and under 500,000 ooo. . |
23 51 |
.0363 .0251 |
:Jrei |
3 |
.0269 .0227 |
.1046 .0858 |
|
500,000,000 and under 750,000,000. . |
30 |
.0206 |
.0762 |
33 |
.0252 |
.0902 |
|
750,000,000 and under 1,000,000,000 1,000,000,000 and under 5,000,000,000. . |
14 30 |
.0194 .0176 |
.0672 .0651 |
20 78 |
•0195 • 0175 |
•0745 .0639 |
|
5,000,000,000 and under 10,000,000,000 . 10,000.000,000 or over. . . . |
4 |
.0291 |
.1163 |
6 13 |
.0107 .0167 |
.0444 .0476 |
Taking up first the comparison of these groups exclusive of depre- ciation, taxes, and interest on the total investment and dropping from consideration the first two groups for the reasons stated in the text in connection with the short table preceding relating to cost of salaries and wages, it is seen that in the group of plants furnishing 5,000,000 and under 10,000,000 gallons of water during the year, as well as in the group following, the average cost was greater in the private plants than in the municipal, while in the next group the opposite is true. In the sixth group the cost was greater in the private plants, while in the following group the result was again reversed. In the next eight groups, with one exception, the cost was greater in the private plants, in the group following it was greater in the municipal plants, while in the next two groups it was practically the same in both classes of plants. In the last group having private plants the average cost of production exclusive of the elements mentioned above was $0.0291 per 1,000 gal- lons in the four private plants and $0.0107 in the six municipal plants, or more than two and one-half times as great in the private as in the municipal plants.
Taking up the two columns showing the average cost of production per 1,000 gallons during the year in private and municipal plants includ-
SOCIAL MOVEMENTS
ing depreciation, taxes, and interest on the total investment, it is seen that, beginning with the group of plants furnishing 5,000,000 and under 10,000,000 gallons of water during the year, the first twelve groups, with one exception, show a greater cost in the private plants than in those under municipal ownership and control, while the next three groups show a cost in the municipal plants in excess of that in the pri- vate plants. In the last two groups in which comparison can be made the cost in the private plants exceeds that in the municipal, this excess in the case of the last group being quite large.
A short table showing the range of costs in the last five groups of the preceding table has also been prepared. This table follows and shows the lowest and highest, as well as the average cost, in each class of plants (private and municipal) in each of the five groups which con- tain plants having the largest production.
LOWEST, HIGHEST, AND AVERAGE COST OF PRODUCTION PER x,ooo GALLONS OF WATER FURNISHED IN FIVE GROUPS OF PLANTS.
|
Water furnished (gallons). |
Private plants. |
||
|
Number. |
Lowest, highest, and average cost of produc- tion per 1,000 gallons. |
||
|
Excluding deprecia- tion, taxes, and inter- est on total invest- ment. |
Including deprecia- tion, taxes, and esti- mated interest on total investment. |
||
|
500,000,000 and under 750,000,000 |
30 H 30 4 |
80 . oo52-$o . 0398-50 . 0206 .0096- .0264- .0194 .0029- .0379- .0176 .0049- .0448- .0291 |
$o . 0288-$o . i 890- $o . 0762 .0187- .1235- .0672 .0162- .1509- .0651 .0247- .1886- .1163 |
|
i,ooo,oou,ooo and under 5,000,000,000 5,000,000,000 and onder 10,000,000,000 |
|||
|
Water furnished (gallons). |
Municipal plants. |
||
|
Number. |
lowest, highest, and average cost of produc- tion per i,ooo gallons, |
||
|
Excluding deprecia- tion and interest on total investment. |
Including deprecia- tion, estimated taxes, interest on total in- vestment, etc. |
||
|
500,000,000 and under 750,000,000 |
38 20 1 13 |
$o . oo57-$o . o675-$o . 0252 .0078- .0511- .0195 .0028- .0370- .0175 .0044- .0163- .0107 .0084- .0363- .0167 |
$o.oi6o-$o.3354- $0.0902 .0265- .2142- .0745 .0171- .2627- .0639 .0130- .0729- .0444 .0262- .1265- .0476 |
|
750,000,000 and under 1,000,000,000 1,000,000,000 and under 5,000,000,000 5,000,000,000 and under 10,000,000,000 10,000,000,000 or over |
|||
As regards actual prices — those based on the total quantity of water sold and the total income from the same — it may be interesting to exam- ine the short table which follows. This table shows the average price received per i,ooo gallons for all water sold by private and municipal plants, classified according to the groups adopted in the general tables. The cost of production is not considered here, and for this reason the
SOCIAL MOVEMENTS
water furnished by municipal plants for public use is not included. The results have been found by using simply the absolute figures as to the quantity of water sold by each of the two classes of plants, and the income derived from such sale.
AVERAGE PRICE PER 1 ,000 GAIJ,ONS OF WATER SOI,D.
|
Water furnished (gallons). |
Private plants. |
Municipal plants. |
||
|
Number. |
Average price per i,ooo gallons of water sold. |
Number. |
Average price per 1,000 gallons of water sold. |
|
|
5 35 35 45 % i°5 52 24 23 22 6 12 I 20 1 13 |
$0.5608 .2031 •1579 •1445 .1090 .1108 .0840 •0743 .0792 .0639 .0640 .0580 .0693 .0889 .0615 .0708 .0610 •0593 .0471 .0526 |
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|
i ooo ooo and under 5,000,000 |
5 12 T2 10 12 5° % 20 9 "3 23 52 30 14 30 4 |
$0.4476 .3476 .2521 .2372 .2164 • 1524 .1281 .1183 •0973 .1059 .0902 .0981 .0963 .0705 .0589 .0618 •0563 .1136 |
||
|
5 ooo ooo and under 10,000,000 |
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|
10 000,000 and under 15,000,000 |
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|
20 ooo ooo and under 25 000,000 .... |
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|
50 000,000 and under 75,000,000 |
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|
o , ,000 an unaer 250,00 , . . |
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|
5 i ,000 an<i un e 5° ' _ o'_ * ' ' ' |
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|
5,000,000,000 and under 10,000,000,000 |
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An examination of the table shows that in every group of plants except two the average price charged per 1,000 gallons is smaller in municipal than in private plants. This table when studied in connection with a preceding short table (above), showing the cost of production per i, ooo gallons of water furnished for consumption, affords some interesting comparisons. In that table and this one the same figures are used in private pbnts as to the quantity of water considered. The figures as to price and cost of production should, therefore, be properly comparable. The figures in that table are first given as showing the cost of production excluding depreciation, taxes, and interest on the investment or cost of works, and next given including these elements. Taking the column showing the latter statement it is seen that interest is included and that the column therefore shows the figures at which the water could be sold and yield a dividend or profit on the amount of the total investment equal to the rate of interest paid on the last issue of city bonds. It would naturally be supposed that the average prices secured by private plants would at least be as large as these figures, but a comparison shows that in none of the groups does the average price charged