Joshua King Ingalls, “Periodical Business Crises” (1878)

  • Joshua King Ingalls, Periodical Business Crises. New York : Liberator (Co-operative) Print. and Pub. Co., 1878.
  • National Reform Association, Land and labor, their relations in nature how violated by monopoly, Princeton MA, 1877.

Land and Labor, which is probably the text mentioned in the opening letter, has been appended to the text of Periodical Business Crises. It is frequently attributed to J. K. Ingalls and displays some turns of phrase that make that attribution seem very likely.

New York, August 26. 1872.

HON. A. S. HEWITT, Chairman, etc.

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

If, on considering these communications, you shall desire at any future meeting of your Committee, to ask me questions, either to explain any doubtful point, or to test, my general knowledge of the subject, I will cheerfully come before you at any time on being notified at the address above.

Respectfully, etc.,

J. K. Ingalls,

Corresponding-Secretary National Land Reform Association


PERIODICAL BUSINESS CRISES.

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

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

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

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

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

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

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

Had this description of legislation merely enriched the few at the temporary expense of the many, the effects might have been less deplorable. But, while doing this, it has also stimulated speculative greed in all departments of business, and developed the inflation of prices to such a degree, that the reflex shrinkage of prices, must necessarily bring ruin and bankruptcy to thousands, and loss of employment to millions. And must the unfortunate toiler now be told that legislation, which has done so much to hasten and intensify this catastrophe, cannot be expected to do anything to relieve it? Surely workingmen, unschooled in the subtleties of our current “Political Economy,” may be pardoned for having dreamed that a government, which had freely voted such subsidies of land and money to private corporations; such franchises, as actually abdicated its own right of “Eminent Domain,” might devise some practicable relief to the idle hands and starving mouths of those who had produced the wealth thus handed over to organized rapacity.

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

At present, it would seem useless to attempt giving employment to labor where it is. Capital cannot, or will not. Government cannot, if it were disposed, without assuming control of the land which is the final source or means of all useful employments as of all wealth. Many of the industries now carried on in cities are not only useless but harmful to society; and serve no earthly purpose but to encourage the accumulation of the populations in cities and large towns, already swelled to a monstrous disproportion to that of the rural districts. It is possible, however, to do something, in the repeal of laws now existing, which, in the selfish interests of corporations, and large ownerships of the soil, bar the way to the cultivation of the land. It is downright insult to the poor to be told that they “would not go upon the land if it were given them,” when railroad corporations, to whom the land has been given, by the millions of acres, are allowed to put a rate of from three to ten times the government price per acre upon the land the poor require. Their right to occupy those lands, in quantities, limited to their need and ability to cultivate and improve, should never have been questioned by our government, or interfered with in any way, except to define and regulate it. The immense donations of these lands to soulless corporations and oppressive monopolists, was a mistake which will take generations of suffering to remedy.

In relation to the existing depression of business, it is evident to me that the panic, which has now continued some five years, is to be mainly accounted for on general principles. That similar crises have occurred for centuries as stated by parties before the Congressional Committee is a matter of history, and that they return with a periodicity which almost indicates the existence of a “natural law,” as suggested by Prof Bartolemy Price, there can be no question. The present writer has lived through six of those crises, and remembers with vividness, the consequences of them all, except, perhaps, the first, upon the poor and industrious, with whom his fortunes have, in the main, been cast, and for whom his sympathies remain active. They may be designated as those of 1819, 1829, 1837, 1847, I857 and 1873. This last crisis, but for the war, the adoption of a National Currency, and other disturbing influences, should have occurred in 1866 or 1867, and, at the present or following year, would have been ready to occur again, so that we now are really experiencing the reaction belonging to the two periods.

This regularity of return, indicates, doubtless, a cause, wholly independent of any legislative action on tariffs or finance, the war or the introduction of machinery, all of which causes have at most had but the effect of disturbing or delaying, not turning aside the periodic issue.

The writer believes that he can point out an efficient cause, and also show that its removal, or great amelioration, if desirable, lies largely within the range of National Legislation, and legislation too, which shall be instrumental in repealing and modifying existing laws, rather than in making new and untried experiments.

I will commence with propositions, accepted and familiar to all students of Political Economy.

First—The materials of all wealth originate primarily in the earth.

But, Second—It is only by the employment of labor that they can ever be made to constitute true wealth.

And, Third—All who do not possess property in the land, or ready access to it, must draw their subsistence from wages received directly or indirectly from the proprietors of the soil. [See M. Garnier, “View of Smith,” etc.]

As stated by Adam Smith, “the produce of labor constitutes the natural recompense or wages of labor.” Mr. Ricardo, who seems not to have understood that the monopoly of the land was the creature of civil, not natural law, held the natural rate of wages to be a sum which would barely support the laborer, and enable him to reproduce his kind. On the contrary, however, until property is assumed in the land by the strong in muscle or brain, the whole produce of labor belongs to the laborer and is his natural reward. But, as Dr. Smith says, “as soon as the land becomes private property, the landlord demands a share of almost all the products which the laborer can either raise or collect from it.” From this experience, and this artificial condition of labor in relation to the land comes all the fallacies of the “usufruct of wealth,” and all those customs and laws which exact and sanction usury or interest, speculative profits, and incomes from the mere possession of wealth.

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

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

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

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

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

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

It is important to distinguish, in the use of the term “capital,” between that which is actively, or productively employed, and that which serves the possessor in deriving a revenue from it without taking the trouble to employ it. The man who puts his property into some industrial or commercial business, accompanies it with his personal efforts in administration, and other useful service. He assumes risks and responsibilities which. justly entitle him to share liberally in the production resulting;, but the secured creditor does nothing of this, and is no more entitled to a share of the results, than if he had placed his gold with a Safe Deposit Company, and for which he would have had to pay, instead of receiving a premium. This distinction must be borne in mind, when we refer to the losses of capital sustained in these crises. It is the capital employed in business, or which has been loaned without security or with imperfect security, which has been swallowed up. The fully secured capital, on the other hand, has not suffered; but has relatively, at least, been greatly increased by these revulsions.

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

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

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

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

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

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

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

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

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

The complete remedy of the great evils of our industrial system, the efficient limitation of private property in land, or the full assumption of its control. by the state, county or township, will require the concurrent action of the several states; but much can be done by the general government to discourage and render less baneful the tendencies here pointed out. While our system of land monopoly remains, and the interest on money upheld mainly from that basis continues, there should be required from the states a uniform system of bankruptcy as required by the Constitution, which will give every facility, in an inexpensive way, and not to the ruin of debtor and creditor, in the interest of officials and attorneys, as under our late bankrupt law, to effect composition between debtors and creditors; so that the failures this system makes inevitable in returning periods should be as evenly distributed as possible over the whole term, and not be allowed to attain the prodigious proportions, which derange all stability of business, and bring disaster and ruin on the industrious and frugal man of business as well as the reckless and extravagant.

Much could be done by refusing to enforce claims for the payment of interest, except where payment of the principal was withheld for the purpose of injuring the party to whom the debt was owing, or for arrears of wages not exceeding one month. Granting credit and incurring debt are in no wise necessary transactions. They give no increase to social, wealth, nor any healthful stimulus to productive industry. The government may rightfully refuse to rectify the mistakes which people make as to whom they will trust, or the value of the securities they may take. Laws in regard to exemption of homestead and necessary household effects, with mechanics’ tools, etc., exist already in many states, and their spirit should be incorporated into our National Code, so that its laws should never be employed to reduce its citizens to beggary and want, in consequence of being caught in the meshes of a system from which bankruptcy opens the only door of escape, and the period of whose return can be foretold with an accuracy almost equal to that which predicts the return of the tides.

A measure I can largely endorse is one suggested by the bill introduced by Mr. Wright, of Pennsylvania, at the last session of Congress, to promote settlement upon the public lands. Whether government may properly assist the industrious poor, who seek relief by securing gratuitous transportation, over j roads it has paid to construct, and then bestowed on private corporations, to be run for private gain, will doubtless be disputed by those in whose interests these lavish subsidies have been made; but we can hardly expect such objections to weigh with those who feel themselves thus deprived of their natural birthright, and are so deeply suffering in consequence.

If Congress shall see fit to go further and supply the settlers with means, as Mr. Wright’s bill proposes, to begin a home and achieve independent self-employment, and thus emancipate themselves from servile labor, it should so carefully guard its measures us that there will be no opportunity that the aid thus rendered shall be perverted or misapplied.

In this connection, I wish to call attention to a recent decision of the Department of the Interior in regard to the right of preemption by actual settlers on certain unsold railroad lands, which, by the acts chartering those companies are re-opened to settlement under the pre-emption act. The railroad companies interested in the decision have already signified their intention of disregarding or contesting that decision. It is publicly reported that at least one of those companies, viz: “The Kansas Pacific,” has anticipated the consequence of the decision by having transferred its lands to a portion of its managing members, who have gone outside and formed an organization to bargain with themselves as was done by the “Credit Mobilier,” of infamous notoriety.

I would most earnestly urge Congress to adopt immediate legislation which will so reinforce the decision of Secretary Schurz on that question, as. will make it impossible for any court to entertain a doubt as to its lawfulness, and forever prevent the success of so stupendous a public swindle, as that said to have been devised by the companies.

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


Land and Labor;

THEIR RELATIONS IN NATURE—HOW VIOLATED BY MONOPOLY.

From human labor flows all the enjoyments, refinements, and achievements of life, which distinguish Man from the inferior kingdoms of Nature. But with Man’s agency alone, exertion is fruitless. Unless he can act upon passive material no product can result. It is the earth which forms the great laboratory where his powers can be exercised, and his activities be given scope. The mere statement of the industrial problem involves the necessity of recognizing Man and the Soil, as the primal agents of all production.

We cannot insist too strongly upon this fact; for the moment we enter the sphere of existing society or-government, we find the subject treated not as one of natural relation, but as a question of property. We have only just ceased to recognize “property in Man.” This limit alone have we established—after all our terrible struggles—to the power of property. That, and not Man, is still king, and lawgiver, and judge. It owns every thing but Man, and has but just relinquished ownership of him. Its control over earth and every material thing is absolutely unlimited. If we had a law which maintained the right of wealth to own men of every caste and color, and indeed to make them slaves, we should have, in a slightly disguised form, what we actually have through our laws of land tenure.

The relation between Man and the Earth is vital. It is a relation effected by no labor, and one which no money or wealth has purchased. What right has society to confer on an individual or class an unlimited control over that to which control can be enjoyed only to a limited extent in nature? It has long been known to students of law, and has been for ages, that title to land as private property has no basis in reason. Blackstone admits this in so many words; and both he, and others following him, attempt to justify the monopoly system of tenure on the ground that by occupation man mixes up his labor with the land in such manner that it becomes justly property. Later writers, especially on Political Economy, have seen the untenableness of this argument, and so adopting Adam Smith’s grand statement that “labor is the original price paid for all things,” have been forced to the conclusion that right of private property has no basis in reason, but on the right of the individual to control his own labor product.

John Stuart Mill, though he only discusses the tenure of land incidentally, remarks about rents, that “if air, light, electricity, and the chemical agents, could like land be engrossed and appropriated, rent would be exacted from them also.” But, he says, that as “ the essential principle on which private property is based is to assure to all persons what they have produced by their labor, it cannot apply to what is not labor product, the raw material of the earth.” And he suggests that the true grounds of private property in land is the outlay of labor in clearing and preparing the land, and the fruits of which cannot be reaped in a short time; and as one would not make this outlay for another’s benefit, he should be secured in possession. But he admits that “this reason is only valid when the proprietor is the improver;” adding, that “by no sound theory of private property was it ever contemplated that the proprietor of land should be merely a sinecurist, quartered upon it.” He draws as a necessary sequence the conclusion that landed property in England is very far from fulfilling the conditions which render its existence economically justifiable; and declares that in Ireland these conditions were “ not complied with at all, since owners do nothing but drain the land of its produce.” [1]

Mr. Mill has himself sufficiently answered the claim to property in land on account of improvement; and could the thought have been suggested to his mind, that the laws, giving control beyond the capacity of the proprietor to improve, was the grand error to be corrected, he must have seen the necessity of applying the simple and beneficent principle of Limitation. Following other economists however, he seems to accede without question to the claim of the capitalist to “profits,” and finds it necessary to introduce another element into the right of private property than that of the control of the labor product, though frequently asserting that it rests upon no other ground. His premise is, that “capital is the result of labor and abstinence,” but the logic by which the inference is drawn that capital is therefore entitled to profits, is as obscure, as it is inconsistent with his fundamental proposition. It will not be difficult to show that abstinence has its appropriate exercise and pay wholly separate from profits, rent and usury, which are merely bribes to greed; while the pretended ends would be better effected by spontaneous impulse and enlightened self-interest, were not our laws so made and interpreted as to sever the natural relation which labor sustains to “the raw material of the earth.”

Abstinence in the use of the labor product merely relates to a wise foresight as to the individual or social good to be derived by forbearing to consume now and here the things in our possession. The bees, the ants and squirrels, exercise this virtue, by laying by in the fruitful season the food they do not then need, and are rewarded by the sustenance it yields in seasons which produce no food. Abstinence is paid by the prolonged enjoyment of that which is in excess of present ability to enjoy. Through conservation it is effected, and its reward secured. Not more in quantity or quality is the natural return of things whose consumption is deferred; but usually less. Without our system of bribes, begotten of monopoly, abstinence would often pay labor for assistance in conserving; seldom if ever require pay from labor for yielding assistance in producing.

The advocate of land monopoly has never met the question on the broad basis of human rights. In the intricate mazes of trade, finance, demand and supply, with which political economists seek to smother natural rights with conventional technicalities, the truthful issue is eluded. In our scientific age, too, it is fashionable to ignore theory, and “glittering generalities,” as the Declaration is called, which gave this mighty nation a place in history. But far as this affectation may be carried, I venture you have never heard one of those immaculate scientists whisper a doubt as to the complete sacredness of the rights of capital. That has a material side, which the senses can appreciate. Human rights, on the other hand, are abstract—cannot be weighed in the balance, nor measured by the sensuous standards of science. We do not need to discuss this question on this basis. If the existence of rights are denied, the existence of relations cannot be. Man exists, and science is bound to respect the relations under which he exists. Through necessity, the earth is made the basis whereon all his exertion depends—the focal point, where become concentrated all the elements of co-operative Nature. The heat, the light, the air and the moisture indispensable to all production and life, form with him no other point of contact. Without a place he cannot be, much less have opportunity to employ his faculties. An allotment of earth is then a pre-requisite to any effort to systematize human industry. Not only is science unable to give any solution to a single phase of the industrial problem, without respecting this prime relation in Nature, but science itself can have no standing.

And this argument loses none of its force, by denying all rights to men. If they are to be treated as beasts of burden, this relation must be kept good, or production cannot proceed. Even the serfdom of Russia was based upon the principle that Man could not be severed from the soil. And when she emancipated her serfs, she was too just to do as republican America did—leave the soil they had enriched with their blood in the hands of their former masters. [2] Our system of land tenure is incompatible with any system of society which has ever existed upon the earth. It is especially so in a popular form of government, where freedom is professedly guaranteed to all; for it enables one man to become the proprietor of the entire domain of a State, and confers on him the power to treat all its citizens as tenants at will, and to extort such tribute as his cupidity suggests within their ability and endurance. For though no person actually acquires this power, a class virtually does. The rent of land and usury of money proceeds in duplicate geometrical ratio through successive periods, while production only proceeds in progression by equal differences; or addition of equal amounts. And the land does not increase at all, but is relatively diminished with the increase of population. [See Appendix and illustration.] The problem is one therefore not wholly abstract, but fraught with the deepest importance, whether viewed as a question of human rights, or merely as one of political economy.

The operations of land monopoly follow as an inevitable result from our laws of tenure. What are termed prosperous times for business, stimulate and encourage it; adverse times are its opportunities, which are improved to widen its grasp, and always the process of absorption goes on. Its results are seen in the reduction of mankind to homeless vagabonds, who change their abodes from house to house and place to place, like nomadic savages. Houses and stately palaces are reared, on monopolized land, it is true, but not for those who rear them. Idleness, arrogance, and luxurious dissipation are developed at one extreme; vice, envy, brutality and ignorance at the other.

It may be thought by some, that it operates only in over-populated districts, and that labor can escape its clutch by migrating to some new-made country. But there is no escape. The moment we have placed our foot upon the soil in the far West, we find labor already forestalled by speculation. In place of having neighbors on adjoining farms, we find them “held for a rise.” Thus the smallest town, village, or hamlet in the West is repeating on a scale commensurate with its importance in trade, the mad process of absorption. The pioneer himself catches the gambling mania, and instead of keeping his forty or fifty acres, and applying all his means to making a comfortable home and to enriching his soil, he spreads himself and means over the greatest possible space, to the detriment of his own and the general good.

The effect of land monopoly on labor is instant and constant. It accompanies labor wherever it goes, and hedges it in by obstructions which yield not until the laborer is compelled to part with the fruits of his effort. It outrages the essential principle of the law of property—security in the ownership of our labor product—by intercepting effort, and thus compelling the man to sell his labor, before it has opportunity to realize production. We must not wait till our lands are all taken up and become scarce, before we apply the principle of limitation. We need it now, not less in the West than in the East. For then emigration would not be fraught with such hardships, exposure and privation as now; but instead of settling in a country devoid of every element of comfort and civilization, the emigrant could find his free home, or place to rear one, in comparatively populous neighborhoods, and the means now spent and often lost in wild speculation, would be applied in making his home more comfortable, and his industry more efficient.

Understand, that all the money spent in land speculation, and all the interest paid on such investments—however profitable to a few —are to their full extent a tax on labor, and a loss to society. For the effort thus rewarded is wholly misapplied, and tends to prevent and embarrass—not aid—useful production. Nothing but human industry wisely employed adds any thing to the wealth or well being of society. Whatever takes or consumes any portion of that wealth, without returning an equivalent, by just so much impoverishes mankind, and this loss must be restored by those who work. If it were not for the monstrous fallacy, which leads the poor as well as the rich to imagine that something could be made without labor—that gambling, theft and speculation could supply human want; and could the ignorant toilers fully realize that from the product of their labor was wrung every profit of speculation, with every dollar paid for interest and rent, and which, in all, amounts to an aggregate equal to one-half of all they produce, the system could not stand for a day. With one voice they would demand that law should no longer protect one man or class in a monopoly of the earth, to the exclusion of other men, and that no mere construction of law in itself indefinite, should falsely award possession by proxy, and assume only one man to be where dozens, hundreds and thousands actually are in possession.

There is not a single ground, capable of logical statement, why society should protect one member to the exclusion of others, in unlimited possession of that which is no labor product, but a gratuity of nature, and which cannot be held or enjoyed except to a limited extent in natural relations. For though it may be claimed that in society certain rights are yielded by the individual to obtain greater security for the enjoyment of those reserved, it has never been claimed, I think, that society could confer an extension of natural rights to an unlimited extent, at the expense of the other members, involving an extinction of all natural rights. The relation between man and the soil is complemental. In nature one man can only appropriate a limited space. In society he can be protected in doing no more, without coming into false relations with others. A prime relation in nature must be violated by the dispossession of persons, before they could be held under obligation to the monopolist for the privilege of occupancy. His claim on society as against its members cannot justly hold to what in a state of nature he could not appropriate.

To accomplish this reform no statute need be enacted. It is only required that unjust laws should be repealed, or rendered inoperative. Since Society has been guilty of establishing monopolies, she must disestablish or repeal them. She must no longer protect them in their assumption of powers. For that these monopolies exist mainly by assumed powers under mere construction of law, is as true now as in the days of chattel slavery. There is really no law which will stand the test of a logical analysis, for land monopoly, any more than there ever was for slavery. Society is bound to protect all its members; not one, at the expense of all. The protection of all is best secured, by the very principle which we have at last applied to property in man, and which in the relation between man and woman, limits the protection accorded to marital unions to one of each sex. Rationally there is required the same limit to the protection which society accords its members in their relation to the elements of nature, without whose co-operation man lies helpless, and wholly unable to prolong his existence. It may, nay must protect the member in his house, in the peaceable enjoyment of means to employ his activities, and in his control of his labor product. But any extension of this protection, involving the dispossession of another member, is protection to none, but bald usurpation, and makes society itself a conspirator for the subjugation and destruction of those she claims to protect.

Where lies the objection to the needed limitation to laws of property in land? Who objects that it is unfair or injurious to him? Must not the objector announce his desire to enjoy conferred powers to be used for exclusive and oppressive purposes-—not to promote the production of wealth in society, but to prevent it, until labor pays to him the demanded tribute; and that these powers may be transmitted as an heir-loom to his posterity, that they may be clothed with the same authority to tax the labor of others now unborn ? When will we see, what is so clearly true, that all rent of land, all interest to capital, all profits and dividends of whatever kind, not representing actual service rendered, are but a tax on industry, paid to privileges secured by barbarous custom and class legislation, and which are wholly destitute of any foundation in the well-established principles of law!

Privilege, franchise to do wrong, to be able to live without labor, to consume without producing, is the object sought to be established —and which is actually effected by yielding to this impious claim of one man to exclude his brother from the prolific bosom of his mother, Earth, and the impartial bounty of his Infinite Father. This power unlimited destroys all conceptions of the dignity of labor and all principles of morality. The theory which defends it should be entitled, “Begging made easy, theft made respectable, and robbery made safe.”

The Labor and Finance Reformer will urge the pressing necessity of reforms in their several fields. No one acknowledges this more readily than the land reformer. But why has the working man any necessity to sell his labor for wages, and on terms unequal and oppressive ? Simply because he is excluded by monopoly from access to the elements through which his labor is made available. It is for this reason that he is compelled to yield to an oppressive system of exchange, in which he has to render service to the monopolist, but for which he receives no service in return, but only privilege. He is compelled to exchange his labor, or rather its products, for the mere freedom to use what is his by natural birthright. Our Finance is corrupt for the same reason. Monopoly, and monopoly alone, introduces fictitious values in our exchange, and false weights and measures into our circulating medium; and they can only be eliminated by removing the monopoly which creates them. “Cost the limit of price,” was a grand conception, and heroically promulgated—but it can have no practical significance so long as the “cost” is partly made up of rent, interest, or whatever other tribute to privilege. When a man receives a hundred dollars for his labor, even in gold, he does not know, has no possible means of knowing, whether it represents the equal service of another, or the mere absorption of a sinecurist, who has bestowed neither labor nor care, nor the slightest equivalent for the thing exchanged. Twice in every exchange, in buying and again in selling, the actual producer is subjected to be victimized by monopoly and its parasites. No change of mode or material in mediation will avail to secure equitable exchange or truthfulness in the representative of values, until all class prerogative and special privilege are destroyed by removing the grand monopoly on which they rest. While the essential relations which labor sustains in nature to the passive element are severed by arbitrary enactment, and subject to mercenary traffic, we can only have extortion, gambling, and fraud in, the estimates and awards of labor, however unexceptionable may be the basis or instrumentality of interchange. While privilege can be weighed against service by a monopolist class, scarcity or surplus of the circulating medium can effect nothing favorable to labor. Kellogg’s new monetary system might temporarily facilitate production, and thus increase for a while the demand for labor, but the ultimate result would be the same as our greenback and National Bank issue—to facilitate monopoly in a still greater ratio.

Monopoly everywhere plays against labor with loaded dice. It does not observe the common rules of “fairness among gamblers,” or “honor among thieves.” Those gigantic swindles termed grants to railroads, with which areas equal to whole States are given over to rapacious greed, are effected through purchased Congressmen—the loaded dice in this case. Here, not labor alone, but the future homes of the toiling millions who shall people that domain in the future, and develope its wealth, are placed in pretended poise with some fancied good to be derived from the existence of roads which are to be run in the private interests of soulless corporations. Staid conservatism does not like this cropping out of its own essential tendencies, and is ashamed to own so precocious an offspring; but all the political corruption we deplore is but the legitimate issue of the falses which underlie our system of industry and trade everywhere. It is not the fault of those who advocate limitation that our public domain is squandered. We have done what could be done to save those virgin prairies to the people who shall till them. But it is futile to attempt to repress and control monopoly while it is allowed to nestle itself under the forms of law. We need not expect less, but more corruption, until the system destroys itself, or we are able to divest it of all legal claim. The engrossment of our public domain by gigantic monopolies is a foregone conclusion—and we may as well, once for all, sound the rallying cry of Repeal! Repeal!! and effective LIMITATION!

 

[1] A complete answer to the claim of extended exclusive property in land, on the ground of outlay of labor applied in preparation and improvement, is found in the logical sequence of such claim, that it can hold no longer than is required to secure the return of such outlay; and that if improvement gives title, deterioration must destroy it. A man whose only claim to exclusive ownership is the increased productiveness of the land, exhausts his title when he allows the land to become less productive. An old industrial adage, “the tools to him who can best use them,” might be improved by adding—“the land to him who can best cultivate it, and improve its productiveness.”

[2] In a recent speech of Horace Greeley, delivered in Cooper Union, he related an incident at Richmond, in which himself and Gerrit Smith were associated. The freedmen had insisted that these long-time champions of human freedom should speak to them about the land Whatever might have been their incapacity to understand the sophistries of Protection, or the deceptions of Free Trade, there was one relation of labor they did understand; they must have land, or virtually remain slaves. These gentlemen, instead of responding to this most reasonable demand, labored to show them how, by denying themselves of tobacco and rum, they could in a few years buy back all the land monopolists had stolen from them. We do not remember once hearing these gentlemen, during the antislavery agitation recommending slaves to save their liquor or tobacco money to buy freedom with ! But would such a recommendation have been more unfeeling, or insulting to our common humanity! One of these men had been enabled by our laws to inherit a million of acres. Was that from the proceeds of the liquor and tobacco he had not used?

Both these gentlemen had been engaged in the temperance movement for more than a generation, yet had not learned that overworked and disheartened men would use rum and tobacco, and that the traffic in and use of both articles, were at the same time the fruits and natural allies of heartless monopoly. They ought to have known, too, that the idleness begotten of monopolized wealth as often debauches the rich as it degrades the poor; and that to preach temperance to the poor, as a means of remedying the injustice of unequal laws, would involve the necessity of preaching intemperance and luxurious living to the rich, which Gibbon says, “seems, in our present social state, to be the only means of remedying the excessive accumulation of wealth in the hands of a few.”

☞ The following Resolutions were offered at the late meeting of the Labor League in Tammany Hall, and advocated in an extended speech, by J. K. Ingalls—

Resolved, That laws conferring upon wealth unlimited power to monopolize the soil are in violation of clearly-defined relations existing in nature, are incompatible with civil rights and the social and moral instincts of mankind, and are likewise destructive in tendency to those normal incentives to industry and frugality upon which the progress and well-being of the race depend.

Resolved, That the moralist should not longer waste his strength in labors which merely sever the offshoots of this baleful system, but boldly strike at the root of the evil which underlies the inverted civilization of our times, and that the labor reformer should direct his thoughts, first of all, to rescuing from the grasp of lordly privilege the material agencies of production now monopolized.

Resolved, That limitation to property in land, and the raw material supplied by nature, is the initial step in the solution of the industrial problem, and that this can be best secured through comprehensive repeal, or by provision in tslhe organic law, with prospective operation only, by which no one will be disturbed in the possession of what is already held, but which will hereafter leave all unprotected in acquiring, either by purchase or inheritance, any more land than they can improve and cultivate.

Resolved, That thus a peaceful and beneficent reform will be effected, and the ultimate “agrarian division” be avoided, which causes capital such well-grounded alarm, and which monopoly is doing so much to hasten and render inevitable.

EXPLANATION.—The above diagram represents the “progression of numbers,” by figures of proportional solid blocks. The lower series shows the graduated increase by “equal differences,” as 0, 1, 2, 3, 4, 5, 6, 7, 8, 9, &c., the difference between each term and its succeeding term being 1, either up or down the scale. Were the difference 2, the series would be 0, 2, 4, 6, 8, &c. and the succeeding term being always found by adding the difference, whatever it may be, to the given term, or in the descending scale by subtracting the same.

The upper series represents “progression by equal ratios;” as 1, 2, 4, 8, 16, 32, 64, 128, 256, 512, 1024, 2048, 4096, &c. the ratio being 2; each term being found by multiplying the last found term by 2, or in the descending scale, by dividing the same by 2. In different series the difference or ratio may differ, but in the same series they are equal.

CORRELATION OF USURY AND MONOPOLY.

In the Diagram on the opposite page, the lower line or series of figures shows the proportion where the equal difference is one, and truly represents industrial production. One day’s product added to another, makes two; to two, makes three, etc. Products cannot be multiplied but by multiplying the workers.

The upper series shows progression where the equal ratio is two, and accurately represents the process of absorption, and illustrates the rule of compound increase, by which wealth accumulates in the hands of capitalists, enforced through the power conferred by land monopoly, and arbitrary control of the passive elements of nature.

The diagram presents, simultaneously to the eye, the relative values of the respective series, and the corresponding facilities for accumulation conferred by our laws on PROPERTY—which has no power to produce anything, but is itself a labor product—over LABOR, which produces all things.

A system of such fearful power as Usury, with its tendencies to subvert all public and private morals, and to debauch and oppress useful industry, could never sustain itself in being but through special laws, and the growth of unrighteous monopolies. By many writers, the great capacity for production which accumulated wealth or capital affords to labor, is regarded as a sufficient reason why it should be entitled to dividends. They however leave out two elements in the problem, or they would be unable to draw this deduction. In the first place, they compare the labor aided by capital with labor deprived by monopoly of its right of access to the “ raw material of the earth.” And in the second place they ignore the fact that all forms of capital are subject to constant decay; the produce of agricultural labor, especially, to a rapid diminution, which in a short season amounts to a total loss. They forget to state that all this value has constantly to be reproduced and kept good by labor, and that the capitalist has no other mode possible for the conservation of his wealth, but to employ it productively; when, therefore, he makes terms with labor, which requires more than return of service for service, of labor for labor, and value for value, he is either imposing upon the ignorance, or he is taking advantage of the unfortunate condition of the laborer. This, however, he would be unable to do, but for the enjoyment of monopolies, which place the laborer at a disadvantage, so that his necessities compel him to accept terms, which the capitalist finds no necessity to make equal.

Under any equitable system of law, the person having capital to conserve, would find a necessity to recombine it with labor in order to prolong its existence; equally as great as the person who labored would find, for means to render his labor productive. But when society grants privilege to a class to control the earth and raw material, it is no wonder that labor must accept the conditions of capital or starve, and that the capitalist is not only able to throw the entire onus of maintaining his decaying property in tact upon the laborer, but to lay all labor under additional tribute—a tribute which shall still farther isolate wealth, and beget increasing dependence of the industrial class upon its accumulations.

Monopoly and usury, therefore, are correlated inversions, producing and reproducing each other. No one can justify usury without justifying the monopoly from which it springs and to which it tends. And all denunciation of usury which is not aimed at monopoly of the land, and other legalized wrongs, is mere blind raving against an evil, the cause of which is unseen.

We assume the universally received axiom, that “Labor has produced all things” justly held as property, and that nothing but services can be equitably exchanged. When therefore a false element is introduced into the question of awards, which bestows the greater share of labor’s product upon those who do not labor, we are enabled to calculate its potency and define its true character. Whoever will glance at the illustration, can see how impossible it is for such a system to operate, without subverting all just principles of distribution, and subjecting labor to the grossest injustice. It will be seen that if one man starts with an amount of capital, equal to what another can earn or produce in a period required to double the capital at compound interest, he will have absorbed just as much as the labor of one man has produced. At the end of the second period he will have quadrupled his investment, and at the end of the 12th period he will have multiplied it 4,096 times, having accumulated, within the last period alone, 2,048 times the original sum invested, or the amount the laborer can have produced in that period. If by invention, discoveries, or other favoring circumstances, production has increased, it has at most been able only to change the difference. If in generations it should come to be double what it had previously been, it would only give production 2 in the 12th period to balance the 2,048 of the monopolist. Necessarily, by the operation of the absorptive series, labor never gets more than a moiety of what it produces; so that though skilled labor may be rewarded more nearly what is just, the unskilled laborer is placed at a far greater disadvantage than our illustration shows, if really we can draw any comparison, under a system whose possibilities for wrong seem almost infinite.

It will be objected that such progress in accumulation is morally impossible, nature having certain corrective laws of compensation. This is doubtless true. But since the evil springs from social misdirection, more than from individual action, the interval of her correction is so long, and the compensation so wide, that anything like justice to the individual is impossible. The operation cannot absorb more than labor produces, and cannot take away from labor more than everything; but this does not prove that the accumulations do not proceed as the illustration shows, or are any the less oppressive to labor; the natural wages of which, according to Ricardo, under this system, is a bare subsistence, with ability to keep its members by reproduction undiminished.

The least per centage to the capitalist, not the pay for service rendered, involves accumulation by equal ratios, in periods of greater or lesser length. To this no production of industry is equal which the world ever has or can know. Such exaction is therefore wholly without any logical foundation, and is as unscientific as it is oppressive and unjust. Its presence in our industrial system must therefore be referred to causes flowing from unequal conditions, and from misapprehension of economic law, and not from any necessity in the development of the laws of reciprocation.

Taken in connection with our system of land tenure—without which, its existence would hardly be possible—this system acquires a power so fearful, that no friend of his race can contemplate it without detestation and horror. The accelerated velocity with which it enables the avaricious and unprincipled to achieve the complete monopoly of the earth, is far more dangerous and destructive of human rights than any “divine right” of kings, or any mere law of entail or right of primogeniture can possibly be.

It is to be understood, that when we speak of the operation of this method of accumulation, we suppose the capitalist to have the ability to supply his own wants by his own efforts. If his income from usance merely supplies what he consumes, extravagantly or otherwise, then he is a sinecurist, quartered by this system upon society, whose industry is rendered tributary to the support of a person wholly useless to society. Whatever income truly represents service, however insignificant or far-fetched, is not, in any strict sense, usance. Services, in exchange, division, assurance, etc. are equitably exchangable with services in actual production. But the services of forbearance, abstinence, patience, generosity, or toleration, are moral, and require the award of moral, not economic law. To confound the two, as political economists do, is to invert and violate both. The award of moral worth is not luxurious ease, any more than it is poverty or martyrdom; but is elevation of soul, respect from others, and mental enjoyment, derived from the contemplation of human progress, and the improved condition of mankind it has aided to promote.

☞ This, with other Tracts on Land Limitation, &c. can be had of the Executive Committee of the National Land Reform Association, 510 Pearl street, or of J. K. INGALLS, 5 Worth street—price ten cents each, one dollar per dozen, or five dollars per hundred.

All money received will be expended in publishing and circulating this and other documents presenting the claims of the Reform.

About Shawn P. Wilbur 2295 Articles
Independent scholar, translator and archivist.