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through machinery, can best pass through a season of distress, and therefore the lesson would be, “ accumulate machinery and capital as fast as you can." Mr. SMART. Yes; but what would it come to ultimately?
The CHAIRMAX. I do not know; but, in the case of England, it has been a benefit to her and she has got the inside track, as you say, of the rest of the world. Will it not be natural for us to do the same thing?
Mr. SMART. I want to place the theory a little more distinctly before you than I have done. My theory is that the industrial world is suffering from the rapid centralization of wealth in the hands of a continually-decreasing number of capitalists; that that centralization is a necessary consequence of the system by which the business of the world is transacted; that it has always been in operation, but that its action has been greatly accelerated by the moderate methods of industry and commerce, and that it has culminated (especially in this country) by the wasteful expenditure and other influences of war. The results of war in Europe and here have been one of the great agencies in bringing about a more rapid culmination than would have taken place otherwise, in the disturbance arising from the introduction of the new factors-from the new methods of industry and business. We have now reached, or are rapidly reaching, a condition of things wherein this process will cause the absorption of most of the national wealth by a very few capitalists, unless some machinery shall be found to reverse the process of centralization, and to affect a redistribution. The interest of all classes, capitalists as well as laborers, necessitates this, or stagnation must continue to increase. I claim that that is true, and that it results simply from the fact that we are allowing men to use their property in a way in which it ought not to be used, and in which it cannot continue to be used without leading to the breaking down of any system which is based upon such a principle. I mean that we are allowing men to use their wealth as a source of wealth-private wealth as a source of private wealth.
The CHAIRMAN. Do you mean to say that your objection is to allowing interest to be paid on capital?
Mr. SMART. Yes, sir.
The CHAIRMAN. With the abolition of profits on accumulated capital (or of interest) there would be such a revolution in affairs, you think, as to distribute property more equitably and more generally among the people; is that your idea?
Mr. SMART. Yes; that is it precisely.
The CHAIRMAX. If we do not do that you think that property will accumulate in very few hands? Mr. SMART. Yes, sir.
The CHAIRMAX. What would be the condition of property accumulated in a few hands in a country where there is universal suffrage?
Mr. SMART. Why, it would be abolished.
The CHAIRMAN. But you think that suffrage is not sufficiently well instructed and
Mr. SMART, I believe it will be by the increase of the disturbance arising from these false relations. The relations between labor and capital are, under the present system, hostile. They are in direct antagonism. Labor is kept entirely dependent on capital.
The CHAIRMAX. And the remedy rests with the people when they have universal suffrage ?
Mr. SMART. Yes, sir.
The CHAIRMAN. And the only reason why they do not apply the remedy is their condition of ignorance? Mr. SMART. Yes, sir. The CHAIRMAN.' And the great thing that we ought to do is to instruct the people ? Mr. SMART. Exactly.
The CHAIRMAN. Give them a knowledge of the truth, and then rely on universal suffrage ?
Mr. SMART. Yes, sir. The CHAIRMAN. I think that you and this committee are at one on that point. Mr. SMART. Are you at one with me in the statement that capitalists should not be allowed to receive interest on their wealth ?
The CHAIRMAX. I am not. . • Mr. RICE. What do you expect to live on when you get to be old and cannot work any more?
Mr. SMART. That question applies to my condition under the present system. Under what I believe to be a true system of society I should be provided for by the nation. She
Mr. RICE. That is, taken care of at the public expense ?
Mr. SMART. By a system of insurance to which every man has to contribute out of his share of the joint earnings of the people. He ought to contribute a sufficient sum to provide for his old age, and also to insure his life for the benefit of his family, and to insure himself against sickness or accident; so that there really ought not to be any necessity for individual savings or accumulations at all.
Mr. RICE. And his family should be taken care of in the same way after his decease! Mr. SMART. Yes; as long as his children are in the condition of minors, they and his widow should be taken care of undoubtedly in the same way.
Mr. RICE. And every family would be taken care of just in the same way; that is, all families would receive the same kind of care?
Mr. SMART. It appears to me so. There is nothing paternal about it. It is simply paying in for mutual benefit. I claim that governments should do what individnals do who are provident in insuring their lives. I do not consider that, if I insure my life, and if the sum for which I am insured is given to my wife and family after I die, they are receiving charity from the insurance company, or that they are in any way paupers. It is simply a wise provision.
Mr. RICE. Who would pay that insurance ?
Mr. SMART. I must go a little more in detail, I believe, in order to show that the nation collectively must become the possessor of all the means of labor.
Mr. RiCE. That is, the nation should be the great capitalist!
Mr. SMART. Yes; meaning of course by the nation the whole people collectively. I see no reason why it should not be so. And when that comes to be so we shall cease to have to pay anything for the use of capital.
Mr. Rice. Then, Mr. Hewitt, yourself, and I would each receive the same insurance from the nation when we became superannuated or unable to work, or unwilling to Work:
Mr. SMART. No, sir; my idea is that the superannuation allowance would be proportioned to wages.
The CHAIRMAN. Who would be the employer ?
Mr. SMART No; you have got to conceive the system in operation in order to conceive the method' by which the distribution of wages will be effected. It is clear enough to my mind. According to my ideal of the system, I think we shall have (just as we have the Post-Office Department) each one of our industrial and business interests formed into a department.
Mr. RICE. Do we not have a great many office-holders now?
Mr. SMART. If I work for a railroad company the officers who control me are not responsible to me. Now, I want them made responsible to me; I want any man who has control of my life or my labor to be responsible directly to me.
The CHAIRMAN. It is complained now that members of Congress are very negligent and do not understand the interests of the community. That is, within the present narrow circle within which we move. Now, when the nation has to regulate everything, including the wages of every employé, how do you think that members of Congress can be expected to have wisdom enough for all that? • Mr. SMART. I do not want members of Congress to do it.
The CHAIRMAN. Who is to do it?
The CHAIRMAN. If you explain how that is to be done we will sit here till midnight. Mr. SMART. Then I will do my best. Our present government is not at all the gov. ernment to which I look forward. We have got a government of men who meet to legislate on private business at the public expense, and in the name of the public. It is nearly all private business that is done now in Congress, and in the State legislatures. How can we expect the government to be otherwise than corrupt! 'Is not the whole business of the country corrupt? How can you expect the men who represent the business interests of the country to form anything but a corrupt government!' They form a government for the express purpose of taking care of their own interests. There is no man willing to go to Congress or to the State legislatures from any regard for public interest.
The CHAIRMAN. Are they not elected by universal suffrage ?
The CHAIRMAN. Did you not say that universal suffrage was a check against the evils of a bad government! Mr. SMART. Yes. The CHAIRMAN. Then why are they allowed to exist now? Mr. SMART. Because the people through centuries have been so educated in a false idea with regard to property that they do not know where the wrong is.
The CHAIRMAN. Then the difficulty is with the people not being well represented ? Mr. SMART. I do not find any fault with the representatives. They are doing precisely what it is in human nature to do. I find no fault with business men who take advantage of every opportunity to sell goods at two or three times as much as they cost them. They do it on business principles, and yet everybody must know that it is downright robbery.
The CHAIRMAN. You would have officials under your system !
Mr. SMART. Yes; but there is a great difference between people choosing their representatives to sit in Washington, and choosing representatives under the system which I advocate. Now very few of them know anything about the men who represent them.
Mr. RICE. You would have no officials except those whom you knew about? Mr. SMART. I should have no opportunity to vote for any persons whom I did not know.
Mr. Rice. How would you know, for instance, about the Representative from Ore
Mr. SMART. I would have nothing to do with him. Suppose I was in the post-office department in New York City. My idea is that I should have to vote for the officers of the post-office department in New York. If I am a member of a community where there are schools I should have a vote in reference to the management of those schools. I should have a vote in everything in which I have an interest.
Mr. Rice. That is, you would choose your post-office officials just as you would choose your school officials ? Mr. SMART. Yes, sir. Mr. Rice. Are your school officials perfect men now ! Mr. SMART. They are not Mr. RICE. Are they any better than post-office officials?
Mr. SMART. No; I do not know that they are. But, supposing they are no better, I do not think that that affects the principle which I am advocating. What I want to show is, that a man ought not to be called upon to vote for a person as to whom he does not know whether he is fit for the position or not. I want men simply to vote for them who come immediately over them. Mr. Rice. But there must be somebody at the head of a department? Mr. SMART. Yes, sir.
Mr. Rice. And there must be some officials there connected with the general management of the department ?
Mr. SMART. Yes, sir.
Mr. Rice. Should you know those ? Can you always know all of these important officials
Mr. Smart. I do not think that I should have to vote for any of them, excepting those with whem I come in direct contact.
Mr. RICE. That is, a sort of aristocracy at the top would choose those principal officers?
Mr. SMART. No, sir. Take the post-office of New York for an example. I believe that the men who carry the letters from house to house and from store to store should elect the person who has the management of that department, and that those who distribute letters should choose the persons to control their labor, and choose them from among their own number.
Mr. Rice. Then you would inevitably come to an onter ring somewhere.
Mr. SMART. Yes. Then these heads of minor departments in the post-office would elect the persons to whom they have to look for directions and instructions, and must be responsible to them. And again those persons, the heads and superior officers in the New York post-office, would elect the man who presides over the New York post-office; and so it would go on until postmasters throughout the country shall elect the head of the department in Washington. I will take the building department as an example. There is a head of that department, who finds, when making up his estimates for the next year, that there is a deficiency in a certain class of workmen-that there are not as many stone-masons as are needed in his department, and that it is difficult to get
men to go into that business, because the work of stone-inasons is very laborious and exhausting. He finds, on the other hand, that he has got too many carpenters, about as many plasterers as he needs, and abont a fair average of painters. But he has got too many carpenters, and not enough stoneentters. What does he do! He raises the wages of his stonecutters and lowers the wages of the carpenters for the next year. The result is that, of course, there will be a greater tendency to go into the stoneeutting department than into the carpentering department, because men would rather do a little more laborions work if they get more wages for it.
The CHAIRMAX. I understand that, according to your theory, this superintendent of the building department would be elected by the employés ?
Mr. SMART. Yes.
The CHAIRMAX. Suppose that the carpenters very much ontmimber the stonecutters, and that the superintendent proposes to put down the wages of the carpenters and to put up the wages of the stonecutters. How long do you think that man would be left as superintendent of tbat department ?
Mr. SMART. The man who is at the head of the department is not to be eleeted by the employés.
The CHAIRMAX. Who puts him in ?
Mr. SMART. He is elected by the heads of the various departments-by the head of the carpenters' department, or head of the bricklayers' department, the head of the stonecutters' department, &c. They elect the man at the head of the building department.
The CHAIRMAX. And the subs will have nothing to do with the regulation of wages?
Mr. Swart. I am only speaking of two or three degrees. I suppose the subs would be elected by the men.
The CHAIRMAX. Well, the men find that wages are going to be rednced in any one of these departments, and they will go around and say, “Look here, this is only the beginning of a general reduction; they have picked us out first, but it will come to all of you; you must stand by us."
Mr. SMART. But you leave out one important element in the question, which is, that no one can have an interest in reducing the wages. All are united in interest.
The CHAIRMAN. Then it does not make any difference how much a man gets; and what is the object of reducing or increasing wages?
Mr. Smart. I mean to say that the person who presides over a department, having no interest in reducing the wages of men, will not reduce them.
The CHAIRMAN. But the men who are working have an interest in the wages, and when this question of reduction comes up they will resist the reduction, and will go around and make combinations and say to the men in other departments, “Help us now, and when your turn comes we will help you."
Mr. SMART. Of course, that is a thing to be thought about, and I will not pretend to say that I can explain it.
Mr. Rice. Would not this be the answer: what matters it to the carpenter whether his wages are smaller or larger? He saves nothing; he can accumulate nothing!
Mr. SMART. I think that a carpenter or any other man would be naturally desirous of earning as much as he can.
Mr. Rice. Why? He cannot get any interest on his capital !
Mr. SMART. He may have an interest in saving. He may have the object of going to Europe next year; or he may have a sick boy, and he may say, “I want to relieve my boy from work altogether." He may want to pursue some study. He may wish to devote the first ten years of his life to labor, in order for the rest of his life to pursue his favorite study. Now, I want to propose that we reach this condition of things without any violence. We have got to reach it, and I propose that we shall try and devise some means by which we can effect a transition from now to then without too much disturbing the existing order of things, and without causing any injustice to anybody. That is what I come here for to suggest a kind of legislation which I think will attain that object.
The CHAIRMAN. Have you got that kind of legislation mapped out!
Mr. SMART. I will. I think that we want to redistribute and employ the people who are thrown out of employment, and who are going to be more and more thrown out of employment, and also to redistribute the capital which is (in the same proportion)
thrown out of employment and is idle. We want to bring them together again in some way or another. I propose (what has been proposed by others, but in a different way) that colonies shall be established in the territories of the nation, and that Congress shall consider some way of recommending to the States, so that the States can organize colonies, borrowing from capitalists the capital necessary to start those colonies in operation. I do not mean a loan of money to the people, but to place them in co-operative societies. Co-operative State colonies are my remedy for the present evils, with the idea that the co-operative colonies in charge of the sister States will become co-operative States ont in the West, and will come into the Union on the co-operative basis-the very basis that I and my friends, and our associate democrats in Germany, are trying to get the government of the nation established on. By drafting out our idle people and capital in that way we make them active; and, at all events, we are trying a tentative experiment-to employ capital profitably to capitalists, and to employ labor. These colonies will be very soon self-supporting, and will be able to pay the interest of the debt which the State has guaranteed on their bebalf. The State shonla have control of its colonies until they are in a self-supporting condition, and, when they will be able to pay off their debt, then they can start on their own hook with their own wealth, and they will no longer have to pay anything to capitalists for the use of their capital. They will be themselves the capitalists. That is my proposition briefly stated:
And now I ask another thing: that some means shall be adopted, either by the nation or in some other way, for the appointment of a commission, not consisting of politicians (although I should like to see some of the gentlemen of this committee on such a commission), not consisting of statesmen simply, but consisting of representative men in every department of public industry, so that all the interests of society shall be represented upon it by the ablest men. That commission should sit permanently and take the whole subject of the social question into consideration.
The CHAIRMAN. This commission, of course, will study all the facts and try to arrive at the truth?
Mr. SMART. Yes.
The CHAIRMAN. You admit that this whole subject is in a very chaotic condition and is very little understood ? Mr. SMART. Yes. .
The CHAIRMAN. In every country in the world there are very enlightened men in all ranks of society investigating this very subject. The results are being considered in a series of books very remarkable in thcir character and effecting an entire change in the literature of the day. I refer to the books written by Mr. Fawcett, Professors' Caims, Schultze Delitsch, and the new school of German econotnists, and of French economists. They are examining the whole field of manufactures and of co-operative associations themselves. Is there any commission that you can imagine that can be appointed in this country that could compare for one moment with these men, and with the accumulation of experience that is going on throughout the civilized globe on this very subject?
Mr. SMART. I think that it would be a'valuable aid, and that such a commission would be better competent to deal with the subject than those men who, unde the name of political economists, have been making it their special study.
The CHAIRMAN. Take Schultze Delitsch, who has spent his life doing this verything which you have been describing, and who has worked out the problem in Germany, and has seenred the passage of a law (itself a marvel of legislation) under which cooperation societies in Gerniany are working. If you are familiar with the results of his experience you must know that he has run against very serious difficulties. For example, breaches of trust have occurred in the last two or three years among the cooperative associations in a way that has caused great discord among them. He cannot get honest men in these associations. Now, when the world is groping in the dark, with men who are terribly in earnest trying'to solve this social problem, how can you hope to accomplish in a day with a legislative commission more than this accnnmlated experience has been able to accomplish ?
Mr. SMART. I think I can hope so, becanse this commission which I propose would be composed of persons of practical experience and knowledge in all the necessary branches. They would be co-ordinate by being brought in contact with each other. John Stuart Mill himself, with all his actual experience in those matters, when he came to deal with the relation between capital and labor, what did he know about thern?
The CHAIRMAX. But he was one of the very earliest of men who arrived at the conelusion that if there ever was to be a solution of the difficulties between capital and labor it must be through co-operative agencies.
Mr. SMART. I grant that. We recognize the same thing, but we say that it cannot be done locally-that local co-operation is only a joint stook co-operation-that the Rochdale co-operation, for instance, is only a partnership. We say that it must be national, and that it must include all other co-operative societies.