The impending crisis; conditions resulting from the concentration of wealth in the United States

Front matter

Class lffi3»£A » Il3 ^ — '^

Book fogyiiglitS^.

C^sxHiGicr DEPosm

Preface

bases of reasonably dealing" with the most vital problem of the national existence. This problem involving conditions that cause the commonly recognized social unrest of the present time is a problem which grows in intensity.

Recognizing the difficulty in solving the problem and the danger of the situation, we should not wonder, if the very persons who are always incHned to make discounts in estabUshed truths, will be profoundly surprised to know from the final conclusions here presented, that the time of discounts has passed away, and that it is now too late to ignore the facts of so serious significance.

If this work should come to be regarded as a general diagnosis of the diseased situation, we may rest assured that there are many thousands of people who will count it their sacred duty to find the proper remedy for curing the disease of the national organism. For it will be seen that the situation is rapidly growing worse every year with the increase of population, and there must be an end to the disease. Surely, if the increase of the national wealth is becoming less than the continual net incomes of the private monopolies, trusts and combinations, it is not difficult to recognize that the situation is already very bad. It is therefore desirable that every one should carefully learn the situation. THE AUTHOR,

Chicago, April i, 1900^

Chapter I. Distribution Of Wealth In The United States

Page.

Preliminary: opinions and views i

Conclusions of Mr. G. K. Holmes, U. S. Census Expert,

illustrated by diagrams and Table 1 5

Conclusions of Mr. Thos. G. Shearman ii

Diagrams, Table II, and explanation 12

Conclusions of Dr. C. B. Spahr 18

Diagrams, Table III, and explanation 20

Chapter II. Statistics Of Wealth Owners

Statistics of aggregate wealth 27

Economic classes of families analysed 28

Holders of wealth, tenants and mortgagors 32

Reciprocal comparison of contradictory classes 39

Comparison of the poor and the rich families 42

Right table resulting from comparisons 45

Comparison of families in tables of different authorities:

averages of family wealth . . ., 47

Illustrative chart showing worth of individuals 50

Chapter III

THE PROPERTIED AND PROPERTYLESS PEOPLE. Fundamental difference in number of resources of the

propertied and propertyless 53

Sources of multiply incomes of the wealth owners » , . , , , 54

vii viii CONTENTS.

(Extent of mechanical forces applied to labor in favor of the wealthy) 57

A propertyless man himself is a source of multiple expenses in favor of the propertied 6i

Primogeniture replaced by dividogenesure, the principle of dividogenesure defined and explained 70

Chapter IV. Abnormity Of The Social Situation

Numbers of the people subject to dividogenesure 78

(Percentage of the homeless population in cities and

towns and of the landless on farms) 79

The propertyless a great nation 83

Bread-winners and others in gainful pursuits 89

Productivity of the American people superior 93

The people labor in favor of speculators 95

(Artificial world a witness for justice and rights) 98

Yearly net gains of the natural monopolies loi

Rates of injustice of dividogenesure expressed in daily incomes derived from millions of dependent individuals by the wealthy few 103

Chapter V. The Mortgagor Families

Loss of rights precedes loss of property no

Statistics of farm and home families in debt in

Percentages and numbers of families in debt in the

United States after 1890: double table 116

Increase of mortgages on acre-tracts and lots 119

Amounts of indebtedness and life of mortgage 121

Per capita debt and average rate percent on the debt. .. . 122

Annual interest charges on debts combined 126

Public and other debts in force after 1890 stated 126

Significance of mortgages: dififerent views 128

Loss of property by foreclosure of mortgages I35

CONTENTS. ix

Chapter VI. Concentration Of Wealth In Monopolies, Etc

Increase of the national wealth in seven years 139

Wages: the doctrine of; artificially kept up; the fall of. . . 141 Net incomes of the natural and mortgagee monopolies

from 1891 to 1897 inclusive 145

Net incomes of monopolizers of rentable houses for the

same period 146

Net incomes of monopolies of rentable farm lands for

the same period 148

Net incomes of some trusts unascertained 151

Net incomes of the owners of offices, hotels and other

rentable properties in the centers of cities 152

Development of trusts in manufacture and mechanical

industries; concentration of capital 154

Net incomes of manufacture and mechanical trades 157

Net incomes of mining monopolies 161

Increase of the propertyless population 164

Grand total of the total-net-incomes of monopolies,

trusts, and combinations in seven years 169

Excess of the net incomes over the total increase of the

national wealth in seven years explained , . 170

National and local taxes for seven years paid 174

Increase of the propertyless and that of national wealth

after 1897 up to 1900 stated 180

Chapter I. Distribution Of Wealth In The United States

When a heavy mass of clouds suddenly rises in a clear sky, every one thinks that a terrific storm is to follow, displaying a great store of pent up forces. And many people ^'^tLes ^"^ never make a single mistake in predicting from so ominous a summer sky what is going to take place. Some similar forecasting is now going on within the consciousness of the people. For nearly every one more or less clearly feels that he is heavily pressed upon by some portent in the national life. And every one whose mental horizon is clear enough and wide enough sees, beyond the outward appearance, that something dangerous is stored in the nation. It may be something so unusually great in its force, something so explosive, something so combustible, that with the new century it may terribly shake the world.

It was quite recently when the "North American" of Philadelphia asked the question, 'What has the Nineteenth Century in store for Philadelphia?" And by its own admission the replies repeiyed were ^mazing. In summing them up^ before spreading them at large before its readers, it said:

^'Substantial business men, whose names are almost household words, solemnly affirm that with

OPINIONS OF the new century will come revolu- BusiNEss tion and bloodshed. Leading law-

MEN.

yers say the tendency will be toward socialism. Bankers join with labor leaders in forecasting the triumph of the single-tax theory and the consequent overthrow of existing social conditions. That such a tremendous undercurrent of dissatisfaction and unrest exists in this city will undoubtedly come as a shock to thousands of conservative citizens. The opinions given are not those of labor agitators or anarchists. They are the careful expressions of men of wealth and of broad education. The revolutionary suggestions were not shouted upon the street in time of riot and excitement, but were given deliberately while the speakers sat in their well furnished offices, surrounded by comforts and evidences of prosperity.*" So then the Nineteenth Century has stored up in the social organism of the nation enough material to produce revolution and bloodshed in the Twentieth Century.

And Mr. Louis Post says in 'The PubHc" of Chicago: ''Our leisurely friends of Philadelphia,

* Quoted from 'The Public," Number 69, July 29, 1899.

who are to be envied, by the way, and not sneered at, for being philosophical enough and sensible enough to keep so much unwholesome hustle out of their Hves — these slow and sober people must have been 'startled' by the above 'revelations' of the Philadelphia North American, that ancient landmark, now in its 128th year.* It was undoubtedly an amazing surprise in view of its age that the answer of its readers was, as you see, 'revolution and bloodshed.*

If similar questions were presented to the thinking public of the various cities of the United States, we might have thousands of like opnions and all of them would be conditioned by sufficient reasons.

One of the most prominent thinkers of the city of Chicagof also quite recently said that "the Twentieth Century will bring to us the bloodiest revolution that human learned^iwen. history ever witnessed." And his assertion was not less amazing than was the affirmation of the substantial business men of Philadelphia. If it were honest and right to expose the names of men whose confidential conversations led to the same or similar assertions, I alone could make a long list of these names.

They all admit that the nation, as an organism, has long been diseased; its nerves have long been

* Louis Post, ibid.

t His name cannot be here given.

abnormally strained. But, like the friends of Philadelphia, they speak about revolution and bloodshed which is but the last and most convulsive stage of any nation's serious disease. And it is true that, when this stage is reached, it is impossible to avoid the most intolerable operation.

But the amazing feature of such opinions is that different men agree in afifirming that revolution and bloodshed is almost unavoid- UNREST. able; yet different men, as I know, assign different causes for such an undesirable event.* Some say it must come because the population increases and the unemployed laborers increase. Others say that the trusts, combinations, and monopolies must ruin the nation. Still others say that progress and poverty, being very rapid in their diverse directions, must rapidly bring the wealthy and the poor into the state of cut-throats against each other. And only very few men understand that all these causes are but secondary, though working to the same horrible end. While the real, effective cause for revolution and bloodshed, with the nation, is the exceedingly unequal distribution of wealth, and its rapid concentration in a very few hands.

It is this situation that our democratic people will not be able to endure, because they are born

* This work will show the real causes of it and the rapid tendency toward it.

DISTRIBUTION OF WEALTH.

free, whereas the storing up of wealth in a few hands makes them all economic slaves; deprives them of the privileges they enjoyed; makes ^^^^^ them absolutely dependent upon the think they are mercies of the rich, which, if shown ^^^^ "^^• to them, they may live; if withheld from them, they must starve to death.

Let us see, then, what it is that the Nineteenth Century has stored up, which is to result in such a terrific convulsion in the Twentieth Century.

The following diagrams present the Logical Premises from which the "revolution and bloodshed," as a conclusion, must inevitably follow, provided their action is not checked. Distribution of Wealth in the United States.* m0H

- mm

Millionaires .03 ) aa Rich 8.97 r.UD

Middle... 28

Poor.

^.91

!i!i!i'i!i!ii!i!l!ii

Millionaires.20

Rich.

Middle ....20

Lower.

Poor .

.71

.29

Axr * ^S?-^''^''P^^'^ of Social Reform, p. 1435. Ed. by Rev. Wm. Bhss and published in 1897 by Funk and Wagnalls Company, New York and London.

THE IMPENDING CRISIS.

"These diagrams showing by percentages the population and wealth distribution in the United States, according to tables compiled by George K. Holmes, U. S. Census Expert on Mortgage Statistics, are from the Encyclopedia of Social Reform."

The contents of the above diagrams show on the bases of statistics that in 1890 three hundredths

PERCENTAGES ^^ ^^^ P^^ ^^^^ ^^ *^^ population, OF WEALTH AND which are the millionaires, held 20 per cent of the nation's wealth.

Eight per cent and ninety-seven hundredths of one per cent of the population, which are the rich, held 51 per cent of the wealth. The middle class, consisting of 28 per cent of the population, held 20 per cent of the wealth. The lower class, consisting of II per cent of the population, held 4 per cent of the wealth. And the poor class, consisting of 52 per cent of the population, held but 5 per cent of the national wealth,"^ as this table shows: Table I.

Percentages of People.

Population in Groups.

Percent- Wealth.

Aggregates of Wealth in Dollars.

Distribution

of wealth per

head

in dollars.

18,786 5,617,172

17,534,216 6,888,432

32,563,644

13,007,418,274

33,168,916,461

13,007,418,253

2,601,483,644

3,251,854,565

691,867

59,041

100.00

62,622,250

65,037,091,197

1,036

*This 5 per cent includes personal, unproductive property of all sorts.

This illustrative table represents the exact value of the diagrams on p. 5. And nothing is more interesting in this table than the sad differences in the worth of the groups, and especially when their respective wealth is divided per every head. The right-hand column shows that there are 18,786 persons whose aggregate wealth, if divided equally among them, w^ould give $691,867 to each man, woman, and child. And there are 32,563,644 persons* in the last group, whose wealth, if equally divided among them, can give but $99 to every person. These two groups present the greatest possible extremes of group-poverty and groupopulence.

The other three groups, as their averages clearly show, are intermediary between the two extremes. And if all the wealth of the nation were equally divided among its pop- ^wealtT^ ulation, we could have $1,036 to every man, woman, and child. This per capita wealth indicates that the nation is very rich on the whole, but its riches, as you see, belong to a very few persons.

What then is the difference between a rich man and a poor man, between a rich woman and a poor woman?

If the 32,563,644 men, women and children had

_ * Mind that these statements are of one authority only, VIZ.: Mr. G. K. Holmes.

$100 per capita wealth, then one rich man of the first group of the above table, would be worth more

than 6,918 men of the last group of ^°MEN.°'^ the same table. A rich man's horse

often worth more than 10, 20, 30, or even more, poor men taken together. A rich woman's finger alone worth more than 10 or 20 poor women taken together, because that finger is often embellished with the diamond rings that cost thousands of dollars. A complete ladies' dress or a costume often amounts to more than $5,000, and hence it is worth more than 40 or 50 women taken together with their dresses. Such are the differences between the rich and the poor people when they are valued by the dollar.

But the dollar differences cause a great many other differences between the rich and the poor.

The poor man is not only poor in ''^^RiGHTS^^'^'" weahh, but he is poorer still in social

rights and privileges. And there is no possibiHty for the poor to rise up out of his poverty. For he has no resources of wealth which the rich people have; and he has no property of his own; for if he is worth but $99, which is really his house-scarb,* he has no productive property at all; he is then absolutely dependent upon the mercy of the wealthy, without which he cannot exist even

*House-scarb means: all domestic or household property that may be carried on from one rentable house to another.

for six months. He cannot acquire higher education and training, because he is encompassed with poverty which furnishes no means for the education that helps men to acquire wealth. Hence, the lack of education keeps the poor in poverty; and this poverty prevents him from getting the helpful education. So that, poverty and ignorance become the bitter enemies of the above millions of individuals in the modern world of progress. Yet the modern poor have a far more potent enemy than poverty and ignorance combined, which we shall see later on.

Meanwhile, we will say here, that the rich are the masters over the poor in the sphere of law, in the sphere of politics, in the club, in the theater, in the church, at home ^^ZTmn^^ and abroad — everywhere; as if all power were given unto them under the heavens over the poor. And how many church-ministers would not give them the same power and the best places in the hereafter? For the very character of sermons in our days depends upon the pleasures of the rich in many churches, because the ministers depend upon the wealthy few more than they depend on the millions of the poor. While all these poor are the rich men's economic slaves, spending half of their labor energy in favor of the wealthy. That is what the Nineteenth Century has provided for the nation.

But the above statistical conclusions were by many regarded as ''roseate" and ''extremely moderate conclusions." And it was in ^^ToStV'^^ consequence of this that Dr. Spahr was obliged to reiterate the expression: "Since the completion of this study, a volume has appeared that must set at rest all question as to the extreme moderation of the estimates reached."* For it was clear that every new investigation of the distribution of wealth confirmed the fact of a more and more rapid concentration of the national wealth in fewer hands than before. And it is the question of poverty, that spreads like contagion, that the Am,erican people have now to deal with, in view of a phenomenal increase of the national wealth which concentrates in the few hands. And it is this question that cannot be set at rest while millions grow poorer and poorer and the propertyless increase in numbers, as we shall soon see.

The people cannot set this question at rest until they know the truth of the different statistical tables, indicating the nation's situation and destiny. And we cannot rest until we make a series of propositions for the purpose of producing more equal distribution of wealth in this country. And

*Dr. C. B. Spahr, Pres. Distribution of Wealth in the U. S. (1896), p. 69; published by Thos. Y. Crowell & Company, Boston.

even then we cannot rest, until our propositions be applied to the irrational life of the nation, with the purpose of working out justice for the people. When we see all this in their actual life, then we shall rest, as the people shall be regaining their freedom, their property, their resources of income, their rights to work and to enjoy the fruits of their toil. The intelligent people cannot and must not rest before they reach a resting place. They cannot always be deceived by the shallow and selfish arguments which prove that the national wealth increases enormously, — for it so increases only with the few and rapidly decreases with the entire people. But the time will come when the tens of millions will no longer vote for men who deprive them of all rights, self-respect and liberty.

As we shall see later on, the 32,563,644 persons of the last group of the table I possessed no real wealth at all even at the census in 1890. For though the diagrams rep- "^vvealth^^ resent them as having had $99 worth of wealth to every head, yet this wealth was personal and not productive.

STATISTICAL CONCLUSIONS OF MR. SHEARMAN.

''An estimate of the distribution of wealth in the United States was made by Mr. Thomas G. Shearman in the To rum' for 1889, and for January, 1891. It was based on careful estimates of the wealth of

THE IMPENDING CRISIS.

RESEARCHES OF MR. SHEARMAN.

the very wealthy, a list of which he gave, and estimates of the division of the remaining wealth of the country between the middle class and the poor based on assessors' returns."* ''Mr. Shearman came to the conclusion that 1.4 per cent of the population own 70 per cent of the wealth; 9.2 per cent of the population own 12 per cent of the wealth; and 89.4 per cent of the population own only 18 per cent of the wealth."!

In these conclusions, we have a still greater twist of facts by wrong handling. Now, to illustrate these conclusions as they stand by another set of diagrams, they will be as follows :

Population;

62,622,250.

The wealthy.. 1.4 Independent.. 9.2

The poor and dependent...

1 '

''I' l ll'l'l'l' l'

The wealth of the wealthy . . .

}■ .70

J Independent.. .12

Dependent and the poor

.18

Conclusions of Unrestrained Averages of 1890.

*Encyclopedia of Social Reform, p. 1388. tibidem, p. 1388.

DISTRIBUTION OF WEALTH.

These diagrams indicate by percentages the exact conclusions of Mr. Shearman in respect to the population and the wealth distribution in this country. The author averages of these conclusions obviously put too much salt of his own into his averages; for, by parceling out the wealth of a number of the well-to-do and rich people, he succeeded in persuading his readers, that, in America, the body of tens of millions of propertyless people, the paupers and the tramps, do not possess, on an average, less than $200 worth of wealth for each person, including women and children of all ages. Whereas, in reality, the wealth from which he made the fictitious averages, belongs to a very few persons of the nation. While an astonishing majority of the people, as we shall see, have no rights whatever to this wealth.

Let us again illustrate the conclusions in a tabular way for the sake of definiteness :

Table 11.*

Percent, of population.

Population in economic groups.

Percent.

of wealth.

Aggregates of wealth per group in dollars.

Wealth per

head in dollars.

1.4 9.2

89.4

876,710 5,761,242

55,984,298

70 12

45,525,973,867

7,804,450,932

11,706,676,398

51,928

1,354

100.00

62,622,250

65,037,091,197

1,036

*This table gives you the exact equivalent of diagrams found on p. I2.

The first glance at this table and a glance at the table on page 6 show the reader that Mr. Shearman divided the population into three TF^VEVEoTL^^^o^^Ps; and Mr. Holmes divided it into five groups. The bases of division are economic in both tables; but the lines of division are very different with the one statistical authority and the other. If we examine these lines, we shall find that Mr. Holmes' fifth group consists of over 32^ million persons who, taken together, had been worth a little over 3 billion dollars; so that, each person of the group could have about $99 worth of wealth, as the average of table I shows. The next higher group of the same author, which comprises nearly 7 million persons, had, on an average, more wealth to each person, than each person could have in the fifth group, hence the per capita wealth of the fourth group of people was $377. While the group still higher up in wealth, which consists of little over 17-I million persons, and which had over 13 billion dollars' worth of wealth, could have $741 to every head, that is, if this wealth were equally divided among them. The second group of Mr. Holmes' division consists of over 5^ million persons, among whom the poorest ones had, probably not less than $5,000 worth of wealth, as their average worth of over $59,000 shows. Such a division of the population into five economic groups, if every family is rightly and honestly valued, presents an immense amount of truth to the public judgment.*

But what Mr. Shearman really did with his estimates and conclusions is this : Seeing that the extent of poverty is appalling, he made the division hne in the group of aveI^age.^ well-to-do people; he thus made the group of the very poor extend so far as to comprise nearly 56 million persons; and then, by dividing the wealth of the well-to-do persons among all these millioiis, he obtained an average of $209 worth of wealth to every pauper, to every tramp, to every man, woman and child,^ — who have had no wealth, and have had no rights whatever to the wealth they are nominally represented as entitled to.

Consequently, his distribution of wealth among the third group of people is merely on paper, is nominal, is showy, and it does not correspond to reality with reference ^DlsTRmiTTioN'^ to more than 35 milHon persons as represented in Mr. Holmes' distribution of this wealth. Mr. Shearman might as well follow the example of Mr. Carroll D. Wrightf and, by a single effort in calculation, divide among all individuals the 70 per cent of wealth that belongs to his 1.4 per cent of the people. In doing that, he might apportion more than $1,000 worth of it to

* So far, we give honor to Mr. Holmes in advance. t One of the best authorities in statistics.

every penniless individual, and then might say, Why, we are all rich, we are the most civilized and righteous people in the world ! But such an effort, and such an assertion, however, would not at all alter the real situation; no more than Galileo, when in view of the danger of death, signing the Jesuit

verdict in favor of the non-revolution ^^GAULEo'^° of our planet round the sun, could

thereby stop the actual revolution of the earth; for the earth's progressive motion went on, in spite of the ardent desire and policy of the Jesuits to make it stand still by a verdict. Nothing but an indescribable shock of the earth against another heavenly body can change its principles of motion.

The same is true of the nation. Once the principle of concentration of wealth is left unimpeded

in its action, it must work out its end; DANGER. it must of living necessity produce

revolution and bloodshed. And neither the extremely moderate statisticians, nor the false averages, of even of the meanest falsehood, can prevent its action toward such a horrible result.

''You remember the French revolu- '"t^oTromT"' tion?" asked Hon. Jno. S. Crosby

of his audience in Binghamton,* N. Y., and then he said: "In France all the lands had come intO' the hands of a few people, the king

* Reported in Binghamton Independent of Aug. 12, 1899.

and nobles, and a majority of the people were depending on them for a living. The time came when these down-trodden people rose up and Paris streets ran with blood. Your country will have the same experience if you keep on fooHng with the laws of God.

''Rome was once the mistress of the whole wodd. She lorded it over the other countries. But she fell, and Pliny, her historian, lays the cause of her downfall to land monopoly."'^^ And so it was with ancient Egypt; so it was with ancient Assyria, and so it was with the Byzantine Empire, those great and powerful nations that perished for similar misconduct in relation to themselves.

Exactly so, this young nation alsO' irrationally strides in the way of Rome. The concentration of her wealth in a few hands is now more rapid than it was before the last '^^^"a^ion"^ census. That census brought about astonishing conclusions, yet the nation rushes as fast as she can to her ruin. And who can locate the weight of responsibility for her end? Every one seems to think about his selfish interests. Consequently, nothing has been done in the past tO' evade the ruin; nothing but the greatest national harm is being done in the present; and no fundamental measure, no rational remedy, no serious

* "The Public," Chicago, No. 74, Sept., 1899.

means appear for delaying it in the future. While .««.«.. r,o^.».^,.« the Los^ical Premisesf for revolution

LOGICAL PRER.11SES °

FOR THE YEAR and bloodshed have been estabhshed in the nation's life, and their forces have been working to that inexorable end.

Now we are ready to present another conclusion that the statisticians of 1890 reached. It deals with the numbers of famihes, leaving out the individual inhabitants.

We have been assured that the U. S. nation in 1890 consisted of 12,690,152 families, and that each family, on an average, consisted of little less than 5 members, namely : 4.93 members.* The distribution of the national wealth among families, therefore, was expressed as follows :

''Less than half the families in America are prop-

ertyless; nevertheless, seven-eighths of the families

hold but one-eighth of the national

"nation^ z£;^a/^/j/' and vice versa. ''While one

per cent of the families hold more

(wealth) than the remaining ninety-nine," says Dr.

C. B. Spahr.l

At last we have struck in these conclusions a t The diagrams and statistical tables supply the life contents for these premises.

* The exact statistics of the Eleventh Census, 1890, have given the average at about 4.93 members to a family, which means that in each 100 families 93 have 5 and 7 have only 4 members. In 1880 this average was 5.04, and in 1870, 5.09 members to a family.

t Ibid., p. 69. — I italicize these conclusions. See Enc. of Sec. R., p. 1389.

piece of more serious reality. ''Less than half the families in the United States are propertyless/' Here you are! "Less than half."

Yet even here, we are far from the ^oTREAUif fulness of truth. It seems as if the statisticians themselves were afraid to reveal the full truth to the people. And there are many intelligent persons who believe that the pure and complete truth should be known only to God Omniscient, while His creatures must be content to know but particles of truth mixed with falsehood.

As long, however, as the U. S. nation remains a democratic nation, and as long as responsibility for its prosperity or distress and disaster rests upon a majority of its people, c'fTheTopJe. this people ought to know not particles, but the whole truth of the conditions of their existence. Otherwise the least possible minority of the sharks in human form or the wolves in sheep's skin, may devour or ruin the greatest bulk of the people.

Let us then illustrate here one of the above conclusions, while leaving the two others for later discussion.

^ "Seven-eighths of the families hold but one-eighth of the national wealth," and vice versa, as the diagrams on the following page indicate, where the 12,690,152 families represent 62,622,250 individuals as in the preceding diagrams,

THE IMPENDING CRISIS.

Poor families .

Rich families.

These diagrams represent exactly the truth of the conclusion : "Seven-eighths of the families of this nation held but one-eighth of the national wealth ;* or seven-eighths of the nation's wealth was held by but one-eighth of the families.

The table on the next page illustrates some of the details of the above conclusion.