Ownership and sovereignty; an outline of the true republic

Prefatory Note

In presenting " Ownership and Sovereignty " to its readers, I am permitted, in behalf of its author, now in a foreign country, to publish the following letter from Wendell Phillips, — one man at least for whom both the thinking and toiling masses of the American people have the most hearty respect ; for they understand, more or less clearly, that he has devoted the firmest brain, the most alert conscience and the most eloquent tongue of his age, to asserting the rights of man and expounding the duties of a free government. For such service he has asked literally nothing in return : — no political office, no gifts or perquisites, and not even the appreciation of his contemporaries.

The opinion of an ordinary public man, on a work like this,— any of our nominally " great statesmen " and the like, — would not be worth the room to print it. It would be given with one eye cocked on the next election, and the other on the bank-deposit of some gigantic monopolist whom the " great statesman " might fear to offend. But no suggestion of this sort is possible in connection with the peerless fame of Wendell Phillips. His word stands for something — means something.

It will be observed that Mr. Phillips does not merely recognize the profound ability of our author and the great value of his work, but does him the honor, also, to suggest some very interesting negative criticism of certain details in the working-out of his system. In the absence of Mr. Smith, I shall venture to say that no inventive mechanic, drafting a new machine, — especially one so vast and complicated as "the true republic,"— would expect to cover all the details exactly as they would appear in the ultimate, perfected engine of government. Such particulars always require the wisdom, the ingenuity and the corrective patience of the whole human race. Mr. Smith would simply maintain that a true republic is a definite and unmistakable thing, both in principle and practical application, and must inevitably be developed, with the nature of man and his surroundings, substantially in accordance with the outline here given.

E. G. C.

LETTER FROM WENDELL PHILLIPS.

My Dear Clark :

Thank you for ;i sight of your friend Reeves Smith's

"OWNERSHIP AND SOVEREIGNTY."

It is certainly an able statement and profound discussion of a very dillieult problem; and his suggestions for its solution are ingenious and of great value. Especially do I admire his definitions of terms and things ; and this is a rare talent A correct delinition is often half way to the solution of a problem.— Take, for instance, his definition of Rent.

I have never seen my way to a reorganization of society. Take all the attractive methods suggested, and it seems to mc that, after every one of them had been accomplished, we should look back to our present system regretting thai the change had been made. Still, the discussion is one of immense value, and I study every method offered with profound interest.

Mr. Smith's approval of soft money marks him a child of the coming era. Bui I think his plan for the working of such a system too artificial. It is not selfacting enough, — has not within it the needed element of self-regulation Interchangeable Bonds and Currency strike mc better.

I fear his " Perpetual Elections " would not work. Recognizing as I do .the evident advantage, in some respects, of his plan, it seems to me human nature is not, and never will be, ready for it. No matter what be the method by which the people create a Government, the machine once set up must be given a deli nite term of life. Somewhere in Society there must be something that gowifii and has time to mature its plans — otherwise society is a quicksand. I agree that the representation of minorities is absolutely necessary in any just government ; and doubtless something to secure this will be our next stept. Until then our system is incomplete and works evil. But his plan lakes out too many rivets.

The study of the French Revolution is evidence enough for me that two chambers of legislation are indispensable. Since that experiment the one-chamber plan does noi bear argument. I stand wholly with Washington in Laboulaye's story. When Jefferson, just home from France, was advocating, at the tea-table, t lie superiority of one chamber, Washington said : "Sir, you have just proved the superiority of two chambers by your own act. You poured your tea from the cup into the saucer to cool. We want two chambers to cool things. No, we cannot gel along without the saucer in our system.'

1 seem to have done nothing but criticise. But please remember I never should have troubled you with such detailed criticism had I not regarded your friend's essay as one of rare ability and great value ; sure to sel many men to thinking and likely to win the assent of many.

Cordially,

WENDELL PHILLIPS.

I'. S. " Your introduction, by the way, is an admirable piece of literary work — cogent, crisp, clear, and of grand sweep. You have condensed and marshalled the plan and statements of your author in so masterly a manner thatthe reader is even tempted to mistake his clear perception of what is maintained for sufficient evidence of its truth. You cannot tail to help your author in making converts. Your pen ought never to have retired from journalism."

Introduction

By EDWARD GORDON CLARK

When this volume was about, to be published, the author placed it in nvy hands, desiring a few suggestions connected with its literary form, such as a man who had spent much of his life among books might give to a friend whose energies had been chiefly devoted to grappling with the practical thought and toil of the business world. While complying with my friend's request, his work has so grown upon my mind that a volume, small in size and wholly unpretentious in style, appears to me the largest generalization ever born of political economy, and destined to take the next five hundred years, at least, into the grasp of its profound and comprehensive thought. As Adam and David stand in the history of Israel, so Adam Smith and David Smith must stand, to date, in the annals of their special science.

This, of course, is saying a great deal, — so much that it may easily be mistaken for exaggeration, especially in the hopeful, not to say glorious daj r s which have produced a Henry George. For has not this gentleman endowed his age with that magnificent work, " Progress and Poverty ?" Not in New York or London, nor in Paris, Dublin or Leipsic, lias Mr. George's book found a more attentive and admiring reader than myself. It is not merely what the cumbrous intellect of the London Times describes as containing " many shrewd suggestions, and criticism of economic doctrine which future writers on political economy must either refute or accept :" it is rather as the Philadelphia Star puts it, "a trumpetcall to a struggle which cannot long be avoided ;" or as the Episcopal Register says, "a startling novelty shown to be simple ; socialism become conservative ; revolution turned reasonable."

Moreover, Mr. George's theory, — that the land of the world belongs to the people of the world, — has only to be stated and explained to stand self-evident forever. A farm worth a hundred dollars, or even a desert worth nothing, may soon become worth a hundred millions of dollars, by the mere settlement upon it of some thousands of industrious people. What puts the increased value into that piece of land ? The presence alone of all those people. Then who should enjoy the increment they produce ? Unmistakably all those people. In short, since Mr. George has lived and written, the land-tenures of the world have died: moral justice, the soul of them, has departed, leaving only the stately corpse of conventional law. It may take a few centuries to bury this corpse, even in America. But the funeral is certain.

Yet even Henry George, as it appears to me, must be considered a mastd'ty specialist in political economy, rather than the exhaustive philosopher of the whole field. He has swept away the old cobweb, spun by Adam Smith,— that vi Introduction.

wages necessarily spring from capital, instead of from the Labor which it&ell earns them at every step. He has swept away the other old cobweb spun by Malthas, — that the increase of human beings must outrun the food for their subsistence. As these cobwebs go into the ash-barrel of myths and superstitions, a full money-bag can no longer look on a hungry and ragged child of toil, with the self-satisfying soliloquy that an empty stomach and a shivering body fulfil] the requirements of fate or the laws of God. Henceforth, in political economy, there is no room for a hog, and no excuse for a thief.

Thus the negative work of "Progress and Poverty" is complete, while its literary entertainment is a rival of romance. Nor do I question for a moment the greatness of its positive contribution to the march of events. That, too, is perfect, as far as it goes. If the law of God's actual justice were applied to land, a large province of the millenium would be secured. Let us honor the guide who leads us to that province ; but let us not fail to occupy the whole realm.

To reclaim the lost rights of the people to the common ownership of land, — to tax out of it the increment which legal larceny has turned over to individuals, — however just this reform may be, is it tuleqante? Is it all?

Let us see.

According to what may be called the abstract definition of land by Mr. George, that term includes " not merely the surface of the earth as distinguished from the water and the air, but the whole material universe outside of man himself." But is it this abstract land that Mr. George purposes to tax V Is it this sum of all natural wealth that he would restore to its common owners, by legal confiscation through the tax collector V Certainly not. It is actual, not abstract land, — land in the ordinary sense, — which he means at this point. It is the speculator's reservations, the farm and the city lot,— the acres of the nations.

And here let us pause ; let us think. Is it the population of the world, with their needs and desires, whose presence has created the chief value of these acres ? No doubt of it. Henry George has settled that matter. But is it not also the presence of the people, with their needs and desires, and with the competition among them, that creates the chief value of everything else, as well as of land ? How little value would attach to labor itself, — all the labor of modern civilization, — were it not for the presence off men ami women to utilize its products !

Then, again, have not the rich bowels of the land been taken out of it, for thousands of years, and turned into other forms of wealth V Do they not glitter as diamonds, and pass current as coins ? Arc they not piled up in the walls of castles and palaces, ware-houses and dwellings, throughout the nations ¥ Do they not span the rivers as bridges, and ride the oceans underpressure of sail and steam? And how is land to be rightly taxed, with this superior half of it omitted V The question is its own answer. The thing cannot be done.

So, after all, it is "land" in Mr. George's abstract definition,— land with every thing on it and connected with it,— which really belongs to the people ; which really obtains nearly all the value it possesses through the presence, the needs and desires of the people as a whole ; and the common ownership of which should tored to the children of the people, through the peaceful conquest of the tax roll. But land in this sense is Bimply the wealth of the globe.

And just here is the beginning of this book, "Ownership and Sovereignty." .lust here, too, 18 the beginning of ownership and sovereignty in the nature of things, and the beginning of political economy in the system of David Reeves Smith.

Introduction. vii

Id the constitution of the universe exist two elements, the conscious and the unconscious ; or, we may say all sentient life and all the estate of matter. But. the estate of matter has no object in itself. Its only use is to be possessed by the sentient, the conscious, — to counterpart the needs and desires of living creatures. The title, then, of the conscious to the unconscious, vests directly in the structure of the Absolute ; and man, standing at the head of sentiency and consciousness, is the paramount possessor and tenant of the earth. But, simply because this primary title vests in the fundamental nature of man and matter, his possession is joint and common. No one man has the holding. The birthright of every human being is his equal share. Practically, indeed, as well as logically, there is no otiier ground on which to stand. For. if man's possession of the earth were not a common right, the occupation and monopoly of one man could even exclude and destroy another's life ; and the continuance of such exclusion and destruction would leave neither life nor title in anybody. Such, indeed, has been the precise historical fact, through all the " good old times" of blood rapine and murder.

By these presents, therefore, — the construction of the universe and the will of God, — be it known that mankind jointly hold the original, indefeasible title deed to all the kingdoms of the world.

But what about the improvements which have been made upon the primitive holding ? — the forests cleared, the fields planted, the cities built V To whom do these improvements accrue ? To him, certainly, who made them, so far as they include the exact value of his intelligence, enterprise and labor. They may be called his, indeed, for himself and his heirs, so long as the natural rent be paid to mankind for his building-spot and his original materials. For mankind is no English-Irish landlord, draining the life-blood of his tenants to make him rich and then turning them out on the road to starve. The common ownership of all wealth constitutes mankind a landlord, and the only landlord whose tenures rest on moral law. But what is the principle of moral law which governs this laudlord himself ? He must s6 rent his holdings,— so distribute his wealth, — that, while the common-estate shall be managed to the best possible advantage in the interest of all, every individual shall reap the full reward of what he sows. The common ownership of the earth by all the .people means the special life-ownership of some share by each person. One right is the corollary of the other ; and the largest share of ownership belongs naturally to the person competent to make it most productive, and so to pay the highest rent to the landlord, — the people.

There is no trouble, therefore, about the just distribution of property. That is easy enough, when the principle of it is once understood. And it will take care of itself as soon as mankind, — the present dull, easy-going creature, — knows that he is the heir to an unlimited estate, and insists upon taxing out of the individual squatters who occupy his possessions, the natural rent due to himself

And here, to use the language of the streets, the author of this book " comes right down to business." There is no uncertainty about the amount of this natural rent. That, too, is fixed in the constitution of the universe : is as definite as any rule of arithmetic.

The people own the earth. But the people die. Generations ef owners succeed eaeh other. Man comes into the world bringing no property, and he can take none away. His ownership ends with himself. All men, however, are not only created equal, in the sense that they are equally endowed with certain fundamental rights, but they are, at the same time, most unequally endowed with capacity, — the capacity, for instance, to acquire wealth. No doubt some men viii Introduction.

are born to be rich, ami sonic poor. But, under just social conditions, th tinctioD would be, like all other natural distinctions, a general blessing. If, under

such conditions, any one individual should even bring the whole globe into his hands, the people could have no righl to complain, 80 long as he [><"'<l hU I them. The more money he could make for himself, the more he would make for them. He would simply be the best tenant to whom they could lease their estate. Again, the rent being paid, the people would have no right to say what should be done with the excess of it,— the individual's profit. This would be private accumulation ; and, both in strict justice and as a stimulant to thrift, the individual should unmistakably have the right to consume or bequeath his property according to his will and pleasure. Still, all men die, we remember ; and, according to the structure of the Absolute itself, all property reverts to the people with the death of each generation. Here are two opposite facts, — the right of the people to individual property on the death of its owner, and the individual's right to dispose of his own accumulations. But the solvent of these opposites, — the one principle in which they both coalesce, — is very simple when once discovered. The people as a unit have no common use for their property ; individuals have innumerable uses for it. What the people want is security, and the interest on their wealth, — the rent of their estate, Then, who cares by whom the estate is held ? Well, two men in a hundred die each year ; or let us call this the average death-rate, which is merely a question of statistics. If this is the death-rate, then just two per cent, of all individual property falls back yearly into the common estate. The people, however, have no right to demand the reversion direct. If the rent has been paid, the property must go to the rightful heirs, and the future rent be collected of them. In other words, the people's interest in special reversionary property, as in all property, lies in the rent of it. With an annual death-rate of two citizens in a hundred, the natural rent of the people's estate,— the annual tax on all wealth, — would of course be exactly two per cent, advalorem.

The general principle here announced has come into the world to stay. It is one of those truths which, once discovered, taunts us with blindness that we have not always seen it. It is self-evident : that is, it has become a necessary birth in the evolution of reason and nature on this planet. But how is the momentous principle to be applied V

I shall preface the answer to this question by some personal reference to the author of "Ownership and Sovereignty." Mr. Smith has recently left the United , repairing hastily to Mexico, to superintend tin erection of machinery and the working of miners. He is a civil and mechanical engineer. His inventive scope and constructive ability are such that he considers nothing impossible which he believes should be done. To build :i steam-ship, to tunnel the Andes, or to erect " The True Republic," would he, to his mind, a definite pier* ol work, which he could do, and would contract to do, in so much time for 80 much money. I do not say that his contracts would invariably end in accordance with his calculations ; but lie woul 1 never touch any project until he had laid it out in every detail, and had considered every objection ever offered to il I will add that, at different times in his lite, Mr Smith has come in personal and business contact with nearly all races of men, and, trusting no conventional authority, has studied at firsl hand their systems of society and government. His earliest remembrances are connected with a circle of financiers and speculators who wcrt- prominent in developing the resources of our own Western States, and he has told me that, when eight years of age, — an unnoticed child, amusing

Introduction. ix

himself with toys, — he perfectly understood, from the conversation of those around him, the business methods by which the great lines of railway have been laid across the American Continent, He has since put such operations into practice himself, especially in South America. He has been familiar with the success of great undertakings. He has been familiar also with the obstacles to all grand achievements, as well as with the inertia and selfishness of men, and the little-greatness of nearly all politicians under the sun. Finally, Mr. Smith has known what it is to be rich, — the pet of millionaires and populace ; and he has known what it is to be poor, and to sympathize with men, women and little children, who work too hard that others may not work at all, and who have too little to eat, to wear, and to keep them warm. Let no sucking babe, therefore, among editors, traders, or so-called statesmen, imagine this book to be impracticable, because it is philosophical and universal. Mr. Smith knows the exact calibre of such criticism. He has' both anticipated and ignored a good deal more of it than men of the usual size, at the present day, will be apt to offer.

In an epoch not only of the omnipresent newspaper, but of the telegraph and telephone as well, how much has been done toward the next revolution in government, the next regeneration of society, when the fundamental law of the movement has been absolutely determined ! This law is here. This book necessitates an addition to the American Declaration of Independence. All men are "created equal:" — they are "endowed by their Creator with certain inalienable rights, among which are life, liberty" and property.

The author of " Ownership and Sovereignty" would doubtless maintain that, with a hundred thousand dollars to establish an organ, ancl with time to spare for ten years, he could bring the American public to a comprehension of the natural right of each citizen to an indefeasible joint-share of his country's wealth, and could prepare the question for the practical treatment of a political issue. He fully appreciates the almost ludicrous terror with which a tax on wealth, in proportion to the holding of it, inspires the rich. Still, since Adam Smith's enunciation of the principle, who has ever really doubted that " the subjects of every State ought to contribute toward the support of the government as nearly as possible in proportion to their respective abilities ; that is, in proportion to the revenue which they respectively enjoy under the protection of the State ?" Man's inherent rights of property acknowledged, and the functions of government understood, this old canon of political science would cover the whole process of collecting the people's natural rent, — the annual death-rate tax on individual assets. That such a tax could be collected, and redistributed for the public good, if the American people should will it done, is no more doubtful than that the Income Tax was collected and redistributed, a few years ago.

Now, if the birth-right to property is as much a natural right of mankind as the right to life, liberty and the pursuit cf happiness, it is plain enough that the " true republic " is yet a thing of the future, whatever may be orated, on the fourth of July, about the star-spangled banner or the American eagle. The fact is that the natural right of every citizen of a country to a certain amount of its w r ealth is the one right which makes all other rights tenable, and the one right alone which can preserve any of the rest. The nations of the world have all dodged and denied this fact, to the best of their blind ability : so we dig in their graves to day, to find what little is left of them and their logic. But, while announcing the principle of natural ownership as the very corner-stone of any true political constitution, a man as fully informed as the author of this book w r ou:d never mistake that corner- stone for the whole foundation of the structure.

x Introduction.

Without an upright system of money, for instance,- one adequate to cover on all occasions the exchanges of a country's products, — no government can possibly insure a people either liberty or prosperity. Open Berkey on the "Money Question." What a tragedy is there, behind that commonplace title, and those cold facts and figures ! The whole national war-debt of the United States needlessly but purposely doubled ; the ensuing "hard times" deliberately manufactured; citizens and soldiers turned into tramps ; women and children ragged and starving ! Why ? Merely that Wall street might over-fatten its full pockets, through the cunning use of an effete superstition, an exploded humbug, — that gold, and gold alone, is " honest money." The only dollar of utter scoundrelism, —the only dollar that is never founded on anything else than false pretenses, — is a bank bill with a " specie basis," — a promise to pay in gold, when the promisor knows that he never has, and never can have, ten cents in gold behind his dollar, the moment the gold is generally demanded :— when he knows, in short, that the limit of the world's gold-crop makes the keeping of his promise a physical impossibility. From 1814 to 1873, the people of the United States were buried ten times,— once every six years, — under suspended banks, and their play of " the honest gold dollar," with the gold left out. It is a play borrowed, against the protests of Benjamin Franklin, Thomas Jefferson and John Adams, from the aristocracy of England and their handy bank, by which they sinuously "call in," every few years, the fruits of nearly all the enterprise and labor of their kingdom, without the trouble of robbery by force of arms, which was the more manly method of their forefathers.

In 1861, Thaddeus Stevens attempted to break up this game of shylocks' thimble-rig, as far as his own country was concerned. The government wanted materials of war, and the people pledged their lives and property to supply the want. The "great commoner" not only understood money, but he had no wish to steal it. So he could afford to stand on simple integrity and common-sense. He proposed what ? Substantially to issue demand-notes of the United States, based on all the gold in the country, and then on all the lands, houses, staples and manufactures, — the measure of value to be the gold dollar, and the notes to be ultimately redeemable in gold, if anybody should ever be idiotic enough to want them "redeemed." But a note drawn and endorsed by every American citizen, always due, and current for all commodities and all duties, — when would sucli a note have to go to any Hebrew junk-box, in search of a redeemer ? A limit to the issue, regulated by government as the agent of the drawers and indorsers, — this would of course be needed ; and nothing else. As far as Thaddeus Stevens was able to procure the creation of such money, it laughed at gold, and rendered it a nuisance, as for six hundred years did the " soft money" certificates, — the "rag-baby flats",— of the Bank of Venice.

But Mr. Stevens' effort, as he himself said, "produced a howl among the money-changers as hideous as that sent forth by their Jewish cousins when they were kicked out of the temple." The truth was, the banking oligarchy of the North saw before them a money, not perfect perhaps, but so righteous at least that no question of its redemption could arise among the people at all. But the oligarchy knew they could not control it. They could not inflate it a thousand per cent, beyond the whole amount of specie in the country, baiting industry to plant and build, and then turning round with the scoop of contraction, shrinking all values, and shoveling into their vaults whatsoever their simple-minded debtors had ventured to produce. The legitimate business of loaning capital for interest would still be left to them ; but they would no longer hold the power both to

Introduction. xi

rule and ruin the people, at pleasure. This prerogative they determined to keep as the priee of their " patriotism," — the bribe for their support of the Union. So Thaddeus Stevens was finally obliged to own, with tears of sorrow and wrath, that he had surrendered his country to the " bullion-mongers," as something a trifle better than surrendering it to the slave-holders. The author of the present book, familiar with every system of currency and exchange known to civilization, explains and demands "Just Money;" by which it will be seen that he means simply the natural money of labor and of democracy, — the money of the people, by the people, for the people, — without which, in some form, a genuine republic is not.