alternate sections of land instead of five, and all iron and coal found within ten miles of the road which had been previously reserved by congress; also to be allowed to issue their own bonds equal to those of the United States, and the latter's lien to be made subordinate to that of the companies'. All of which was granted July 2, 1864. The companies were thus virtually presented with the roads, as well as permitted to mortgage them and divide the proceeds among the shareholders, many of whom had received their stock chiefly because of their influence in and out of congress. It is said that the contribution to these companies has not been far from $80,000,000, of which over $52,000,000 was paid in bonds and the remainder in lands aggregating about 23,000,000 acres, or $45,000 per mile, besides right of way, iron, coal, timber, etc., largely exceeding the actual cost of the road. The act of 1864 provided that charge for government transportation should be applied to payment of bonds, as well as five per cent of net earnings. On demand by the secretary of the treasury for fulfillment of this feature, the companies applied to congress, which relieved them for the time being and made the secretary pay one-half of the government expenses on the roads. The unpaid interest to the government now equals the original indebtedness, and the managers are asking a new lease of life by an extension of the subsidy bonds due in 1897, and interest reduced from six to two per cent in order to secure a sinking fund with which to redeem. This scheme was happily defeated at the last session, but it is expected another attempt will be made. Ordinarily, when a road fails to liquidate its bonded obligations a receiver is appointed and the bondholders take possession. But this rule does not apply when some of the people act for all the people by legislative methods. Properly, a receiver should have been appointed for these roads the moment they failed to live up to contracts, and they ought, therefore, to be now in the possession of the people.

Such are some of the methods by which our railroad system has been developed, and out of which has grown watered stock, combines, discrimination and irregularity, and frequently extortion. The combines and attempts to combine and consolidation, which feature directly concerns the public, would occupy much time and space to detail. In 1874 the managers of the Erie, Pennsylvania and New York Central met at Saratoga to form a pool, but the refusal of the Grand Trunk and Baltimore and Ohio to enter it upset the project. Pools heretofore had been somewhat successful, when confined to common points or a division of traffic or earnings. In 1878 a pool of western trunk lines was formed comprising forty companies and 25,000 miles of road. It lasted three months, and failed because of all lines seeking their own advantage. The Southern Railway and Steamship Association was for a long time thought to be the ideal combine, because of its general business methods and regulation of rates. It is mentioned favorably by railway writers, but for the past two years it has been a rate disturber and a new association has been formed to take its place, with the expressed pur

pose, as told by its members, to bring about harmonious relations between the great transportation interests of the south and put an end to the ruinous rate cutting. The recent unsuccessful efforts to combine on passenger rates for the large conventions held in the east and the rate wars that followed are familiar to all.

The history of the railway is replete with efforts to combine, lasting for a time and ending in war, and the same methods are being employed daily, with like results. When rates are high or considerable traffic is offered, passenger or freight, the temptation is strong to grant low, secret rates; and high rates also attract the attention of new builders or diminish traffic, and cut down returns. The general business principle and desire enters here, too, that it is more profitable to do a large business on fair returns than a small business on unfair. It is also to the interest of the roads to see that the shippers along their respective routes are treated fairly, as illustrated in the case of New York city, the merchants of which, in 1876, waited upon the New York Central and pointed out the damage that was being done the city by rival roads and the necessity of protecting the Central's own best customer. No complaint was made against the latter's rates, which were deemed fair. A combination was then effected with other roads, fixing a graded series of rates on lines to Philadelphia and Baltimore. This combine lasted less than a month. Finally, after several ineffectual attempts to regulate, the Central declared its intention of restoring the commercial supremacy of New York, and immediately reduced passenger rates between Chicago and Boston from $25.85 to $14.00, and that of the Grand Trunk from $23.85 to $12.50, and freight per hundred tons from 75 to 20 cents and agriculture from 50 to 18 cents. The struggle lasted eight months and the Central finally won. An understanding was then had which fixed rates to the several seaboard cities without favor or superiority to any.

All such irregularities will be looked upon by the student as but evolutionary steps toward regularity, and are teaching the successful railroad manager that dishonest methods do not pay, that the interests of the public are their interests. But railroad managers, as a class, are not honest, unfortunately. A recent writer, who was in a position to know, said of them: “The continual effort to secure advantage over one another has bred a general spirit of distrust, bad faith and cunning, until railroad officials have become hardly better than a race of horse-jockeys on a large scale. There are valuable exceptions, but, taken as a whole, the tone is indisputably low. The leading idea in the mind of the manager is that some one is always cheating him. If he enters into an agreement his life is passed in watching the other parties to it, lest by some cunning device they keep it in form and break it in spirit. Peace with him is always a condition of semi-warfare." The army of agents constantly competing for traffic is not conducive to perfected combinations. The suspicious manager is too readily open to rumors. The retainers are always seeking war in which business will be brisk, while the corporations strive for combination. Here

are two influential forces whose interests are widely divergent, all of which makes interesting the present attempt of the several trunk lines to combine.

But

Competition is the natural regulator of industry. Its sphere is in exchanging values at cost. The basis of cost is unrestricted or free labor. As labor is restricted so is competition and the exchange of values unequal. The inequality between the railway companies and the general producer is in favor of the former. There is no exchange of equal values. The competition in vogue is not upon a labor cost basis. Only one party thereto is subjected to the law, while the other has certain legal privileges which allow him to elect the basis upon which the exchange shall be made. That basis is not labor cost. Far from it. The actual cost is expense of operation, but to this is added interest on debt and loans, taxes, rentals and dividends, all of which the general producer must sustain. So that the competition between railways is done upon a basis of extraordinary dimensions. The income of the several roads of Massachusetts for 1894 was $70,421,840.45, and the expenses $72,245,401.63, leaving a deficit of $1,823,561.18 to be taken from the surplus account. these expenses included returns to the sources just mentioned of $27,780,596.19. Thus was the competition between these roads limited by causes which represent that amount, as well as exclusive rights. The excess of earnings over actual expenses was $19,663,617.59, which was divided among the sources mentioned. It would seem that, no matter what railway earnings may be, if finances are needed for extension or improvement, the printing press is called into requisition and bonds and stocks are issued and sanctioned by the state railway commission, whose approval is required, and evidently not hard to get. The practice, however, is looked upon as legitimate in business circles. The increase of stock and bonded indebtedness of these roads for the same year amounted to $23,630,079.60. It would matter not to the people how much such indebtedness was increased was it not for the interest contracted thereon, which turns our thoughts to the money monopoly and the time when it will be impossible to draw interest from money wherever placed. Notwithstanding these adverse influences the average freight rate of 3.11 cents per ton per mile in 1871 fell by constant and rapid gradations to 1.33 cents per ton per mile in 1894, a reduction of 57 per cent, and for the same period on passenger rates from 2.51 cents per mile to 1.80 cents, a reduction of 28 per cent since 1871. For the whole country the average rate per ton per mile has gradually fallen from 1.236 cents in 1882 to a trifle more than four-fifths of a cent (0.851) in 1894. The passenger rate per mile for the same time has fallen from 2.447 cents to 2.030 cents. In European countries the charge per ton per mile is said to be double that of the United States.

The power of the railroads to exploit the producers, such as it is, is largely because of general commercial weakness. We have an excess of products seeking a low market. The producer and consumer are widely and artificially separated in respect to our most import

ant products. The producer has many pressing obligations; he cannot wait, and must sell. The railroad is thus enabled oftentimes to fix its own terms. It is thus entirely a one-sided bargain, and the only factor that prevents downright extortion is the competition of rival roads or the inability of the managers to combine. How different it would be could, for instance, the farmers select their own time for transportation and sale. It is the shipper that employs the railway, and naturally he ought to be in a position to have a voice in the fixing of rates, and he would was it not for special privilege. The Standard Oil company, with its immense product, despite the managers, has fixed its own rates and virtually controlled the railroad. In return for the many powers granted to the railroads the law-makers have given to the producer an interstate commerce commission-an attempt to regulate an evil rather than abolish it. But such patchwork is a governmental art.

In 1892 the Farmers' Alliance, in the northwest, acting upon the above principle, issued a request to its members to withhold their wheat. (According to the press a similar movement is now on foot). The advice was followed by those in a position to do so, who were very few in number, for the great mass proved power'less to act upon it. In the Dakotas, during the harvest of 1889, farmers were even compelled to sell their seed to meet the usurer, sending it to Minneapolis and Chicago. Subsequently the state appropriated $30,000 to buy the seed wheat back to prevent actual destitution, taking a mortgage on the prospective crop for reimbursement, the farms being already mortgaged. The farm mortgage and the interest fall due when the crop is ripe. Money, then, must be had on the instant to transport the crop and to realize thereon. The farmer applies for sale to his representative in Chicago, who can thus practically fix his own price because of the farmers' plight. If unsatisfactory to the latter, he can apply to the nearest banker, who, in Dakota, is limited to a legal rate of 8 per cent interest. But, by a skillful and fraudulent arrangement, the rate is raised to 12 per cent. This is done by issuing a mortgage at 8 per cent and then taking an extra note for a stipulated sum. Thus the banker agrees to lend $1,000 at 8 per cent on a first mortgage. He then draws a note for $40 on a second mortgage, which amounts to 4 per cent extra, but interest is not mentioned. Not satisfied with this, the farmer may apply to the elevator man-is, in fact, often advised to do so by the banker during the higgling process of bluff, as all three, the Chicago buyer, the banker and elevator man, are in collusion and the elevator is generally owned by the railroad. Paying interest to two or three different parties at exorbitant rates, as well as being obliged to sell at any price, as a determining factor in the fixing of rates, the farmer, it can be readily seen, in the language of the street, is not in it. The producers generally are at a disadvantage. The supply of commodities is much greater than the commercial demand; the natural demand is dwarfed. Hence weakness and demoralization.

The chief evils that have grown out of the present privileged railway system, as given in the report of the senate committee of 1886, boiled down, are discrimination between individuals and localities and fixing rates to meet dividends and interest charges instead of cost. This latter is an evil produced by the scarcity or monopoly of money, and is just as true of all lines of business at the present time which are benefited thereby. Discrimination and irregularity are of the greatest evils, and a bona fide combination for the purpose of securing regular and fair rates cannot be discountenanced any more than a labor organization. An intelligent directory of such a combination acting upon a knowledge of the wars and failures of the past to guide them, susceptible to public opinion, must know just what its position is, wherein its strength and weakness, that the community's interest and that of the railroad are similar and interdependent, and therein consists its limits, bounded always by the temptation of any individual road to take advantage of high rates and special offers. The history of the railway has taught:

That high rates, even of combines, are an open temptation to its members; that large offers of t affic will break such rates; that they diminish traffic and cut returns.

That the prosperity of the railway depends upon the prosperity of the community, or vice versa; that their interests are one; that unjust rates or discrimination drives trade to other localities.

Under free conditions would be added to this:

A reduction of the dependency of one community upon another, and the consequent greater ability of each locality to supply its own wants, thus diminishing influence of transportation.

Counter combinations among shippers and the liability of such combinations building their own roads. Let the money that now goes to pay princely salaries, interest on water and dividends be saved by the shippers. Let them consolidate their interests and they could well undertake such a project or find some one who would gladly do it for them.

The Cardiff Convention.

The Trades Union Congress just held at Cardiff, Wales, at which Messrs. Gompers and McGuire attended as fraternal delegates of the A. F. of L., was composed of 290 delegates, representing 979, 194 paid-up members. The parliamentary committee, composed of thirteen members, of which David Holmes is chairman, and John Burns, vice-chairman, is the eyes and ears of the movement between conventions. In dealing with the unemployed question, this committee concludes its report: "Your committee, taking a comprehensive view of the subject, are convinced that the whole question of the unemployed can never be solved by any tinkering with the subject by a select committee in the house of commons, or even providing relief in special cases and during special seasons of the year. They are convinced that the state of the land laws of the country and the numerous monopolies

which exist must be changed and removed before any real remedy will be secured so as to reduce the large army of unemployed, who are, unfortunately, though no fault of their own, now found starving in the large cities and towns of the country."

The committee also remarks: "In the recent parliamentary elections which have taken place your committee observe with deep regret that some of our trusted colleagues have suffered defeat at the polls, and, taken as a whole, the general results are anything but satisfactory to the trade unionists of the country. We deplore most sincerely that in many constituencies some of the truest friends of labor have been turned out and their places taken by men who are antagonistic to the policy and aspirations of trade unionism. We are sorry to believe, but the force of circumstances drives us to the conclusion, that among the working classes there are too many 'faddists,' and each 'fad' has got its followers, and, as a result, the workingclass vote of the country is broken up into factions. As a consequence the great and endearing principles which ought to be sacred to the workers suffer most seriously, and in our concluding words we would strongly impress upon this congress the urgent necessity of pulling ourselves together, reorganizing our forces and preparing for battle in the days that are to come."

Economic Tendencies in United States. BY W. C. OWEN.

It is, in my opinion, less possible in America than elsewhere to measure the strength or tendencies of the socialist movement by the membership of organizations or the circulation of literature. The country is too big, and is not, in reality, inhabited by any one nation, but by a swarm of people from all quarters of the globe, speaking an immense variety of tongues, possessed by an immense variety of old-country habits and opinions, and gradually adapting themselves to new environments. The vast climatic differences between the northern and the southern states necessarily add to this variety. It is not a country, but a continent, with which one has to deal.

Strenuous efforts are being continuously made by the governing class to inculcate the spirit of patriotism and to popularize that centralization toward which governments, and those who look to government for the protection of their privileges, inevitably lean. In my own individual judgment this tendency receives support from the following sources: First, from the fact that the settlement of so extensive a countryundertaken, as it has been, in what is essentially the age of large enterprises-has inoculated the people generally with a fondness for the big. The colossal dazzles. Secondly, there is the fact that the very necessity of covering so large an area has forced commerce to work through the medium of gigantic combinations. Thirdly, the civil war gave; as wars always give, an enormous impetus to official centralization. Fourthly, the protective tariff, with the multiplication of officials that it engenders and the paternalism that

it implies, has tended constantly to make centralization of power not merely a popular idea, but an established fact.

As against these must be set: First, the obvious fact that the pitching of an enormous mass of individuals from all ranks and conditions of life into an entirely new set of circumstances in an entirely new country, throws them upon their own resources and infallibly begets an elasticity of organization and a strongly individualistic type. Secondly, the fact, already alluded to, that climatic differences of environment in the present, and differences of speech, of habits and of traditions inherited from the past, make the welding process incomparably difficult.

This cuts both ways. On the one hand, it renders it practically impossible for the people to act together as a unit, and therefore makes them an easy prey to the unscrupulous adventurer-political or economic. Public opinion, so strong in the country districts of the old world, where everybody knows everybody and loss of repuation means family ostracism, with all the great material loss which that implies, cuts here a very feeble figure. Hence the legislator who goes back unblushingly upon his pledges; the financier who swindles his way to fortune; the employer who leaves out of consideration all questions of humanity in the treatment of his employes; all these can afford to be entirely of Iago's opinion as to the actual worth of reputation. Sentiment is not greatly mixed with business here, because there is no public opiuion to raise sentiment to the capacity of a social force.

This is the bad side; but, if you regard socialism— which I do-as coming along the lines of freedom, and as being an impossibility until old prejudices and traditions have been completely broken with; if you believe that it will be the outcome of individual initiative, rebelling against the old restraints and translating its rebellion into fact through the medium of a series of more or less hazardous experiments, then this lack of public opinion, as a chrystalized and fossilized force, has its great and obvious compensations.

In a word, conditions are still unsettled beyond all description, and this, as it seems to me, is the one great reason why movements, with fixed, rigid programmes make no substantial headway.

In a pamphlet written in 1892, and criticising the management and general course of the socialist labor party, I pointed out that the matter with that movement was simply that it did not move. I showed, by the party's own official figures, that the question of holding a congress in the United States was submitted to a vote throughout the country, and that the fifty-nine places at which it professed to have an organization could only show 961 votes. When it is considered that the party has been in existence for a number of years, that it appeals especially to the German and other foreign immigration, and that, in contradistinction to the anarchist movement, it lays the greatest stress on organization, this speaks poorly for the party's progress.

The same held good with the nationalist movement, which, under the leadership of Edward Bellamy,

endeavored to present the state socialism of Karl Marx in a form more palatable to American taste. It had surprising popularity for about twelve months; but, though the lines of thought that it engendered still find their echo in the councils of the populists (the revolt movement of the farmers), its philosophy is, in my judgment, already on the wane.

The history of the single tax movement, headed by Henry George, teaches the same lesson. About 1886, and so long as it remained a programless but indignant protest against the iniquity of monopoly of land, it acquired an extraordinary popularity. When it passed into the stage of a political movement, with a specific cure-all platform, it lapsed into almost immediate obscurity.

Illustration might be piled on illustration from the history of the prohibition, and similar "purity" movements in which the old Puritan spirit still fatuously indulges. But the task would be tedious. I hold that movements are successful or unsuccessful in proportion to their suitability or unsuitability to the conditions that surround them. Now conditions in the United States are still everywhere in the experimental stage. Opinions are forming, not formed; the public mind is not, and cannot possibly he, ripe for any programme that professes to settle all the affairs of the nation from Alpha to Omega and to reduce the philosophy of life to a few simple formulæ. This seems to me to be the weakness of state socialism in this country-a weakness that will be absolutely fatal.

If, however, the set programme invariably breaks down, the individual experiment multiplies amazingly. Most enlightened people feel strongly nowadays upon the " woman question," and it is certainly in this country that the aspirations towards sexual freedom, equality and independence find their most vigorous expression. Granted, for the sake of argument, that the constantly increasing number of divorces and the family scandals with which the daily papers teem, have their regretable side; yet it must also be conceded that they testify most eloquently to the stirring of new emotions and desires-be they only those of general dissatisfaction with the existing order. But the actual truth is that the emancipation movement, which, on one side, makes itself audible in vehement demands for the right of suffrage and visible in the adoption of dress methods that horrify the old regime—is also expressing itself in sexual arrangements that may be gently described as "latitudinarian." In fact, the latitude continually grows.

This is basic: It implies a steady set towards "liberty," an insistance on the right to shape one's life, not according to Mrs. Grundy, but according to oneself. The fact that, in this country, the vast majority of occupations are open to women, and that it is often easier for a woman than it is for a man, to earn a living will necessarily push this movement on to lengths not yet foreseen. Industrial invention aids. For the working classes," the factory machine; for the middle class, the bicycle and typewriter. All these are pioneers that clear the way.

One complains loudly of the politicians and of the ceaseless meddling of their empiric legislation. In reality, they do but respond to the perpetually impatient demand for fresh experiment. "The disorderly house must be suppressed." "The disorderly house is a necessity." Clash of conflicting interests and opinions, arguments, ad nauseam; a dozen different experiments in a dozen different cities. "The saloon must also be suppressed." The prohibitionists would take us back to the insufferable blue-laws of two centuries ago." More clash and argument. These and kindred subjects are being actually fought out with an amazing vitality in all our industrial centers; out of the medley, politicians, blackmailers, and all who love to fish in muddy waters, make their respective hauls; but also out of it a public opinion is being gradually formed. It is ceaseless debate, but always nota bene debate on the strictly practical, the terrestrial, the near-at-hand. Theology has very little hold; the pulpit becomes continually more and more a political and sociological rostrum.

This same tendency to individual experiment has necessarily led to numerous endeavors to solve the social problem by the way of colonization schemes. They have almost invariably proved themselves dismal failures; partly, as I believe, because the arbitrary authority of the leaders, inseparable from the state socialistic lines upon which they have been projected, has been found unendurable, and partly because the semi-monastic character of such enterprises is opposed to the spirit of the age. More particularly must this

be the case in the United States, where there is always a marked predilection for the comparatively social life of towns as opposed to country isolation.

One notes also to-day an increasing tendency to individual experiment in the department of distribution, and what is known as the "labor exchange movement is already beginning to attract attention. At this point it may be remarked that it is the distributive, rather than the productive, side of political economy that is now engrossing thought, the money question being that which is most vehemently discussed on every hand. "Practical politics" as yet confine themselves to the struggle for free silver, but the discussion will obviously go much further. At present the governmentalists (the old-time greenbackers, and fiat money advocates generally,) are in an overwhelming majority; but the individualists, who pattern after Proudhon, are, in my judgment, steadily gaining ground.

After all, here as elsewhere, the old problems still occupy the attention of the players. To-day, as at the birth of the republic, the contest is between the centralization and aristocratic tendencies, of which Alexander Hamilton was the foremost champion, and the decentralization and democratic thought promulgated by the Jeffersonian school. Under the guise of federal vs. state rights, protection vs. free trade, paternalism vs. self-government, special privileges vs. equality of opportunity, state socialism vs. anarchism, under these and other dresses, shaped to the changed requirements of the day, the old disputants still occupy the boards.

I have given only general reflections, for the nature of the subject is such as to render statistical treatment almost an impossibility. I believe, however, that the centralization system is breaking down; that the politiCal machine-so corrupt, so slow, so expensive and so obviously inadequate to the tasks it undertakes-is becoming more unpopular every day; that the tide which set in with the militarism of the civil war is already on the ebb, and that the development of the immediate future will be toward an individualism which will demand, with constantly increasing strength and clearness of expression, "Equal opportunities for all;" and then: "Hands off!"

How can it be otherwise? Centralized government by the few (whose extremest type is the oriental despot) is only possible in countries where the methods of production and exchange, and life in all its active phases, are primitive and simple. As industries differentiate and social complexity increases, individual freedom is more imperatively required. “Vires acquirit cundo," and the liberty which gives birth to new industries and social institutions grows in vigor as its own children attain to vigorous growth.

In my judgment, therefore, socialism in the United States will grow along the lines of individual freedom; and state socialism, with its highly centralized proclivities, will gradually lapse into decay.

An Astonishing Fact.

BY EUGENE HOUGH.

Nothing in all the history of labor organizations is so astounding to the student of such history as the fact that one of the largest and most useful divisions of labor should be left without even an attempt to organize it; with absolutely no effort systematically made to show them the road to salvation. There they stand, numbering millions of earth's strongest and most needed children, seemingly forgotten by God and man. They stand waiting and ready for someone to speak the word "union."

The farm laborers are that body. Of unions and leagues and alliances of farmers there is no lack; of union, league or alliance of farm laborers there is not one. While all other trades, crafts or callings are uniting for protection and mutual uplifting, are shortening their work-day and in many ways asserting their right to share in the benefits of advancing civilization, the farm laborer is retrograding into a precarious and uncertain condition, fast assuming an aspect worse than that of peonage. Manhood crushed, intellect dulled, morals depraved, all aspirations dead, they are the mere subjects of the caprices of their employers, who trade upon their loyalty and integrity, and use them just as they do their oxen and mules-as a means of exploitation.

The first step toward freedom is for the slave to know that he is a slave. The next step is to know that there is a better and freer condition for him. Both of these things have to be forced upon the notice of a slave, often at great risk to him who dares to make the