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The Commoner.
VOLUME 10, NUMBER4
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5
EDUCATIONAL SERIES
A Comedy in Three Acts By a Republican Editor
Act I. Seono Tho White House. Dramatis
poraonac Tho president, aovcral cabinet mem
bers and a group of newspaper correspondents,
tho usual chosen dispensers of "inspired infor
mation." Time Monday morning.
TIiIb act is dovotod to the thrilling of tho
nudiouco of 80,000,000 by tho distribution of
declarations of the firm, fixed policy of tho na
tional administration. Of these, tho following
excerpts sorvo as fair examples:
ProHhlcnt Tuft and Attorney General 'Wlelcor
Hlinin uru planning to bring before tlio bar of Jus
tice all cornorntlotiH, bltf and little, rejjanlleHH of all
alliance, which the department of Justice In con
vinced are doing bunlneHH Illegally. . . ,
It Ih not believed that the Hteel trust, which
ProHhlimt Itoonevelt characterized as a Vgood
trust," and whose dealings ho openly countenanced,
will escape. In fact, It Is said In authoritative
circles that It will be one of tho first corporations
munitioned to answer.
The department of Jusllco already has much
ovldence against It, furnished by Samuel Gompers,
who has been requested to furnish tho department
with further evidence which ho. says he posaesses.
President Taft has seen much of tho evidence sub
mitted, and It Is said ho Is convinced that It war
rants action.
Tho president and attorney general havo boon
duly warned that the courso hero outlined Is ono
calculated to disturb business and precipitate a
condition In the commercial world tending to dis
astrous results. It has been pointed out authorita
tively to both of them that Wall .Street Is very
uneasy over the situation and that a condition
somewhat akin to that at tho closo of lt)07 muy
bo brought about.
It may bo tin Id, however, that, In tho view of tho
administration, If there Is any disturbance, It will
bo Hlmply because those Immediately concerned
have paid no attention to what has boon said re
peatedly In public by both Mr. Taft and Mr. Wlclc
orsham, or -have deliberately mado up their minds
to go on In tho courso they aro now pursuing, de
spite the frequency and authority of tho warnings
thoy havo had.
Act IT. Scono Tho Now York stock exchange.
Dramatis porsonao Tho big and little brokers,
lambs, wolves, Rock Island and Hocking Coal
and Iron washormon. In tho wings the stago
managers from. tho offices of J. P. Morgan and
Standard Oil. Time Tuesday morning.
Tho intonso dramatic action forcasting a tragic
closo to tho drama is thus detailed by the chorus
of tickors:
Tho most sovoro break in stocks slnco tho unex
"pected January depression sot In occurred In tho
forenoon today. At times tho market was In a
Htato'of Boml-domorallzatlon, all because as tho
street had It, Prosldont Taft was to begin forth
with a truBt bursting policy.
Stocks wero thrown over without regard to In
trinsic morlt, furious selling attending tho initial
trading, and no diminution In tho pace occurred
unttl after midday. Tho volumo in that tlmo broko
5ioAAACpriV thls sI?ftr or lnstl salos exceeding
859,000. It was a tlmo for cool and unhysterlcal
Judgment, but tho exigencies of tho occasion loft
no alternative to tho man with exhausted margins
than to part with his holdings. It was this forced
liquidation, supplemented by tho effect of tho
Washington scare and oxtenslvo outpouring of
stocks by operators for the fall, that knocked all
support from under tho markot.
Pressure was sovoro and camo from all sources,
bolnsr directed especially against United States
steel and Union Pnclllc. but fell violently upon
stocks coming under tho head of trusts. Tho latter
of course, was in responso to tho widespread an
prohonslon over tho administration's attitude.
Act III. Tho happy ending.' Scene Tho
White Houso. Dramatis porsonao Tho presi
dent, various cabinet members, James J. i-lill
creator with J. P. Morgan's aid of the Northern
Securities company; one official mouthpiece in
llou of tho flrst-act group of correspondents
SdnJnob of messengers bringing bulletins of
wall Street's awful state of mind. Time Tues
day afternoon.
Tho stago is dark. Qloom prevails. There
seems no hope of saving tho widowed and or
phaned stockholders from their deadly poril Tho
comic relief is afforded by tho ever-entertaining
Hill, preparatory to tho thrilling tableau of
Taft to the Ilescuo. The missing paper is pro
ducedthe one that started tho trouble in tho
first act, of courso, having been a forgery by
the villains of tho piece. And tho curtain falls
and the somewhat amused, somewhat disappoint
ed audience disperses after tho issuance of the
official statement that explains everything:
No statement was Issued, either from ti.n'H
aoy general's ollleo or the White IIouso !,,Si.n0r"
that the purpose of the udinliffi
onco to prosecutions under tho anti-trust iiwGV:
havo no foundatlono ZluS?!:
tratlon Is exactly as already stated in tho presi
dent's message. K , , , .,
Tho portion of tho message referred to, of course,
Is tho following: , , .
Tho question which I wish in this message, to
bring clearly to tho consideration and discussion
of congress is whether, in order to avoid such a
posslblo business danger, something can not bo
done by which the business combinations may uo
offered a means, without great financial disturb
ance, of changing the character, organization and
extent of their business into ono within tho lines
of the law under federal control and supervision,
securing compliance with the anti-trust statutes.
Now, as one of the audience, let us remark
casually that it seems somewhat incon
sistent that a' four-point fall in steel common
should cause cabinet consultations and a re
versal of executive policy within twenty-four
hours, while a ten-point advance in eggs or meat
calls only for some deliberate, academic dis
cussion. Of courso, the melodramatic method chosen
by Wall Street to bring a president to reason
has proved effective in the past. On one occa
sion McKinley hurriedly assured the controllers'
of "Big Business," who incidentally control tho
"intrinsic values" of securities chalked up daily
by Wall Street, that tho administration did not
intend to have its resounding recommendations
put into effect by congress and the courts in any
disturbing way.
It took much more time and trouble to check
Roosevelt by the same means. But it finally
worked in his case, too. It cost a panic. But,
in the end, Standard Oil won the destruction of
its most formidable enemies, the steel trust ab
sorbed its worst-feared rival and the Aldrich
Vreoland currency bill was passed.
lloosovelt's real friends could not approve his
sanctioning of those offenses even under the
pressuro of the fear of worse and prolonged
injury to the country. But he did succumb.
And if President Taft has responded so promptly
to a mere stock market flutter shifted his
courso because of a simple slap on the wrist
there should, perhaps, be neither surprise nor
disappointment were there not such vivid mem
ory of certain paragraphs in his speech of ac
ceptance at Cincinnati, July 28, 1909:
The chief function of tho next administration, in
iny judgment, is distinct from and a progressiva
development of that which 1ms been performed by
President Roosevelt. '
The chief function of tho next administration
Is to complete and perfect tho machinery by which
these standards (tho moral standards sot by Roose
velt) may bo maintained, by which tho lawbreak
ers may bo promptly restrained and punished.
Wo were inclined to consider the program of
procedure against the trusts announced on Mon
day as not only a patriotic fulfillment of pledces
but as good politics. fa '
With the cost of living the chief, vital na
tional issue in the mind of every citizen; with
a congress to be elected next November; with
not a single achievement of this administration
during the year of its life to point to except the
passage of a tariff bill which, rightly or wrongly
js regarded by the majority of the people as
largely responsible for their present household
expenses a direct and genuine drive against
lawbreaking trusts seemed a wise, tactical move
ment from a party standpoint.
It would be an exceedingly useful thing for
republican representatives in all the states west
of tho Atlantic seaboard to frank home and re
fer to on the hustings when setting forth their
reasons for re-election.
But steel common dropped four whole points
in a day. And chalkmarks, like beef and orm
do not keep well in cold storage. So the comedy
of forty-eight hours was acted.
Doubtless there will be various prosecution
of trusts-as trusts. But there will be no im,
polite procedure against officers and directors
as individuals. There need be no more droS
of four points in steel common-whatever han-
An!ericanbaCOn and -&A
TIMELY QUOTATION
Senator Gore says the tariff onables one man
o get without earning what another man eSS
SoUtriShtlnR ?laJ iS ft terse statement of a
gloat tiiitli. Charleston News and Courier
. The Commoner will bp glad to have its r'eid
ers suggest for publication in this column !?
tAn!011, that ma,y Borvloelble Ss no o
the American people. v
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Practical Tariff Talks
The ramifications of a tariff are world-wide.
The only justification ever claimed for the pro
tective system is that it will build up home man
ufactures and thereby afford employment for
American workmen. The changes have been
rung on this so long that many believe it. Yet
there is ample proof that the high tariffs of the
last twelve years have operated in exactly a con
trary direction. Take the cotton schedule-. The
average protection given manufacturers is more
than double the total labor cost of, the industry.
In other words, the wages of the operatives
could be doubled and the rates still equal the
total labor cost. The large profits that are made
in this industry are due to the fact that the
protection is excessive, but this industry, not
withstanding these facts, is in such a condition
that the manufacturers can not go out into the
world's markets and compete unless they sell
at a figure greatly below the price theyhnake
the American consumer. 'The result is to cur--tail
the number of cotton mills in this country,
and naturally the number of persons- who are.
employed therein.
It is not the cotton schedule, however, which,
is responsible for this condition, which necessi
tates the shipping abroad of 70 per cent of our
cotton, but the other schedules whicli vr tly in
crease the initial cost of a factory. To this is
due the fact that of the 130,000,000 spindles
in the world we have but 25,000,000, while
England has more than twice that number. Of
the output of our spindles in 1905 less than
10 per cent was sent to neutral markets or ex
ported. A true American policy would dictate
that all of our raw cotton be made into goods
at home, but there is a pause. One reason is.
that the buildings and machinery cost more.
If $100,000 worth of machinery were necessary
to fit up an English mill, it would cost $145,000
in this country, because of the 45 per cent
tariff levied on machinery.
, .
Take the building itself. The lumber in' it.
carries a 17 per cent tariff, the doors and. win
dow frames 35 per cent, the window glas- 41 to
87 per cent according to size, the common brick
20 per cent, paint 20 to 39 per cent. If $500,
000 is invested in a cotton mill in England,
it would cost to duplicate 't in this country, be
cause of the tariff on the materials in the build
ing and on the machinery with which it is fit-'
ted, in the neighborhood of $775,000 The
tariff also increases the operating cost 'of the
American factory. For every $100 worth ot
belting used by the English owner the American,
must pay 120; for every $100 .worth of oil the.
C0SJ S Uni'' for every W wori of coal the
cost is $121; for every $1,00, worth of coke the1
?nn2i Jr eVGry 00 sPent for 'abor.
in England $150 is expended here, made neces
sary by the fact that the tariff on what the la
borer must buy to live enhances the amount he
must receive as his wage. e
But here is the crux of it: To preserve the
American market to the American cotton man
ufacturer it is necessary that the tariff on cStoff
manufactures be made so high that foreign conn"
petition is practically barred. All of this o?
course is at the expense of the consumer He
it is who foots the bill, for the additional in it St
expense due to the tariff and the adde L o?epJS
tag cost due to the same thing, and still
he must pay a high price for the goods manS
factured because the man who makes them
wants' to get a chance to compete for businS
in neutral markets with the Bngliahman Th
result of this policy as it affects the Son man
?hnStUlngiindUB?y is that ifc Pands no fSSS
than the demands of the home market whn
the great bulk of our raw cotton rn'w V9
shipped abroad at a price fixed bv th 3
there. This cotton England turns ,J ?Qman '
and with them captures i"tto SStrirmafSte
There is no future in the oxnorf trnL '
American cotton manu factum W ml i01" th
tern that makes for big profits' on!
at home makes.it impossible fo? MmVnV
the world market. This may o? mav w ,ent!r
the interest of the cotton umanufSLr t,be, ft
is certainly not in the intwotthl W ! '
men, since it transfers the work thov P S
. otherwise do at horn, to England to bedone
C. Q. D. "
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