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Q. Are you an American citizen ?-A. I am.

The CHAIRMAN. This committee is appointed to consider the causes of the present depression in business, and to ascertain, if possible, what remedies can be offered as a solution for the existing troubles, and if you will be good enough to confine yourself as far as practicable to these matters, we will be obliged to you.

Mr. DONAI. I will do that, and will state the causes of the present depression as we consider them, and then the remedies. I beg leave to state that I have a pamphlet here entitled “Better Times," one copy of which I can leave in your hands. It is written by me, and was printed by order of the Socialistic Labor party of the United States. This states, in the shortest possible compass, the ideas of that organization, which are, at the same time, the ideas of that organization all over the world. You are aware that we have a powerful organization under this rame in Germany. We have such a one in France, in Austria, and the beginning of it in England, and so in the United States; in fact, nearly all over the world. This pamphlet, then represents these ideas, and to it I refer for such points as should accidentally be left out to-day. The causes of the present stagration in business have been foretold these thirty years by that same party, by the scientific men who founded that party, and they have come now to a great crisis which goes all over the world. The stagnatio does not prevail in the United States alone, but in all those countries in which what we call capitalistic production is introduced, and everywhere from the same causes, and vo remedy that refers only to the legislation of the United States could remedy those causes, because it must be remedied at the same time all over the world, and our party is formed for the purpose of propagating our ideas all over the world, so as to have the same kind of legislation introduced everywhere at the same time, if possible. The first cause of the present stagnation of business is planless production, or production without plan, without regard to the need of the population as to consumption. It is carried on by private capitalists without considering the needs of the world. It presupposes the personal freedom of the laborer, without which labor you could not carry on the production, but at the same time proposes the laborer should be free from his own means of labor-that he should be a man dependent for existence on wages and on selling his laboring efforts every day and every week afresh to some capitalist, who owns those means of labor. We can trace its birth back to about one hundred years ago. But it bas been developed in England first, then in Belgium, then in France, and now it has been developed in all the great civilized countries, and it assumes the shape of over-production, because it is a production without plan. It now brings about over-production, and at the same time the impoverishment, first of the laboring classes, and, as a consequence, the impoverishment of the middle classes, and, as a further consequence, the impoverishment of the small capitalistic class, until at last nothing is left but a very small class of very large capitalists, or share societies. This is the statistically proven scientific view of the facts as they are.

The CHAIRMAN. Please explain to the committee what plan governed the production prior to this plan you refer to in Great Britain one hundred years ago—this planless production that governed Great Britain.

Mr. DONAI. There were some remnants of the feudal production that preceded it. You had at tbat time in England trades unions of the old style, in which there was a master and his fellows and apprentices, and who had its ban-rights in every city, so that no laborer could ever be without the means of existence. Likewise the laborers had some share in the soil. They bad the common lands in every place, on which they could produce something, to which they could fall back if they were not successful in any kind of business. There were in England 285,000 yeomen up to shortly after Cromwell; then that yeomanry was destroyed, because they had furnished the cavalry and the infantry to the army of Cromwell; they were destroyed by the incoming of Charles the Second, and still further by James the Second. Then, when the King of Hanover came in, the government was at that time already in the hands of the rich capitalistic class, consisting of land-holders and the rich commercial men of the cities.

Q. Take the iron business, which I am in myself. Was there any interference whatever in Great Britain, at any time within the last three hundred years, with the production of iron on the part of any one? Was pot apy one free to go into that business ?--A. It was impossible that every one should be able to.

Q. Was there any restriction upon them going into the business -A. There was a moral restriction. You must first be an iron-master.

Q. Was tbere any law which compelled a man to be an iron-master in Great Britain?-A. There was a law.

Q. Will you point it out now !-A. I could not point it out now from the law-books, but if you wish to bave the proof, I will bring it. This was an old-time institation that had lasted through the Middle Ages. They had ban-rights, and for that reason the iron manufacturer, who wisbed to carry out the iron business, had to go somewhere outside of where those rights existed.

Q. Take the manufacturer of woolen goods; was there anything to prevent a man

putting up a woolen factory in Great Britain, witbin the last two hundred years, in case be chose to ? Was there anything within two hundred and fifty years, or even longer, in British legislation, to prevent any one who chose to build a woolen factory from building it 1-4. There was nothing, except for cloth-making. The mere production of wool from the sheep was not probibited by law, but the making of anything from that wool was prohibited by the law of the citizens.

Q. Tbat is, the manufacturing of clotbing, but I said of the production of cloth, iron, flax, and linen, whether there was anything in the English laws which prevented any man who had the capital from engaging in that business ?--A. There was not, but there was no iron manufactory on any large scale.

Q. As large a scale as the world demanded ?--A. I wish to ask you if we are here for bistorical discussion, or for the business you proposed to me!

Q. You have given us the bistory of production in England and in Europe, and I ask you a question in regard to it.-A. You asked me the question what was anterior to the time of capitalistic production, and I was proposing to speak ouly upon present circumstances as they are now.

Q. I should be glad if you would confine yourself to that.-A. I will gladly give you any answer to your question if it is to the purpose, but we are getting out of our way, I think. Now, this system of capitalistic production forced in England the laborers in the country into the city. The lands were confiscated; they were fenced in by law in 1689. These men, baving lost their last means of subsistence, were forced to go into the cities. If they were found without the means of subsistence anywhere they were punished, first by being nailed with their ears to some post at a door of justice.

p. This is history you are giving us; will you be good enough to give us the causes ?A. This capitalistic production employs laborers who have not means of labor of their own. They must be furnisbed by some capitalist who has them. The laborer is forced to sell his laboring powers, first to his employer at the rate of the market, and by so trading he must leave a surplus value in the bands of the employer. This system is proposed by us to be reformed, not now, but in the course of time. It is founded on the capitalistic value of the land. You see it go down now in value. How long do you think it will take to bring tbe value of the lands to such a low state that it will be more a burden than a profit to the owner

Q. Would it be an advantage to the laboring class to have it cheap ?--A. Under the present system it is no benetit to the laborer to be a colonist, except merely enabling him to make bis labor useful.

Q. Has capitalistic production in England reduced the value of land :-A. No; the value of land under this system must rise as the land is made transferable.

Q. How does it happen that it has risen in England under capitalistic production, and fallen in the United States under capitalistic production ?-A. I am going to explain tbat. As soon as land is made valuable, when it can be sold or mortgaged, it begins to have a capitalistic value, and it never had it before. From that time on money becomes of great value, because for transactions in land, for sales and mortgages, there is a great sum of money in each case needed. while before that time money was not loaned out at interest, for those who loaned it out at interest were considered usurers, and they were prevented from doing so. Money became of a greater value than it had been, and now first we can speak of the capitalistic production.

Q. You have not answered my question. You said the result of capitalistic production was to reduce the value of land.-A. I am going to show now that, since capitalistic production has increased in ratio money contracts, there is no market for the productions that are brought to market, the value of capital goes down, likewise the value of laud and all stocks.

Q. Is it true that there is depression in Great Britain pow 1-A. Yes, sir.

Q. Has land fallen in Great Britain ?-A. Yes, sir; but land in Great Britain can hardly ever be sold. It is so encumbered by statute law that the great land-holders cannot sell.

Q. Have you ever looked in the London Times to find three and four columns of land offered for sale every day ?-A. Yes, sir; those small portions of land that were bought by some proprietor.

Q. No; large quantities of land.--A. There is a society in England which enables men of small means to hold land so as to make them voters.

Q. No; but sales of land just as it is sold bere, by auction, going on in Great Britain daily in large quantities.-A. Not in such large quantities as it is here.

Q. No; because the country is not so large, but in proportion.-A. This is not to the point. The value of land is going down.

Q. Ia Great Britain l-A. Yes, sir.

Q. You testify to that?-A. Yes, sir. It is going down everywhere. You will find, by comparison with the prices of 1873, that there is such a decrease everywhere, ali over the world. Now, going on in the present way, capital will destroy itself. We, as a body, don't propose to destroy it now.

Q. When capital gets to be worthless and destroys itself, then every one can hare it?-A. The government will be forced to take it.

Q. Wbat motive has any one to take care of it 1-A. Becanse by that time we will have become wise enough to see that it is to our advantage to never have any individual owners of land.

Q. Is it an advantage to the poor man to have such a course of legislation as makes capital fall in value, so that the poor man can get it; is that of any value to the poor man ?-A. Legislation needn't do it.

Q. I ask you this question. You say the present state of things is making capital worthless. When it gets to be worthless, or nearly so, there is no motive to take care of it. Will it be an advantage to the workingman to have capital in such a condition that he can have all he wants of it for nothing ?-A. By that time land and capital will be so far worthless that people will have the insight to see that it was by private ownership of capital and land that great distress has come on us, and they will then own it and force the government by legislation to own it in common.

Q. Don't you think that if this committee could produce a scheme by which every man could have all the capital he wants it would be hailed with great delight by the peeople of this country I-A. Not by the present class of lawgivers.

Q. But by the people ?-A. My dear sir, circumstances will so work a change that in a few years they will be lawgivers—the people themselves—and then they will know of a plan how to do it.

Q. But you have come here to tell us what tbat plan is. Please do so.-A. So I have come now to the second point.

Q. You tell us that the present system of capitalistic production is making capital of no value, so that every one will be able, sooper or later, to get all he wants for nothing!-A. No, sir; the law of communities will not allow that.

Q. Some one will think it valuable still and keep it 1-A. How could any single person take it by the present law ?

Q. Why, won't he abandon it if it bas no value!-A. The property-holders themselves will be able to offer it to the government or people at large for sale at such moderate rates as they can get for it.

Q. You recommend the government to buy the property ?-A. It will take all the property.

Q. Where will it get the money to buy it ?-A. It will give an annuity to those property-holders as long as they live.

Q. You intend that the laboring classes sball earn the money to pay an annuity to property-holders who have property now!-A. As the people will be the owners of all the capital then, who should prevent them to do with greater ease what they cannot do now, namely, to reward those property-owners who give up their property with an annuity! We now feed them with two-thirds of that wbich is earned, and then we need not do that. Consequently, we will be able to reward those who voluntarily give up their property.

Q. But if it is worthless, all property will be equally worthless.-A. Then it will acquire no value from the fact of its being a means of support and of progress for all communities; the laboring class will then be able to keep more than we now keep.

Q. You have given us one cause-planless production. Now, proceed with the other.-A. This planless production, of course, has a consequence-an under consumption. If the laborer sells his working force to the capitalist for only part of what it is worth, he must, of course, become poorer. He may get along for some time, wages may be high enough as long as there is a constant market for the produce of his employers; but when the time has arrived that six or seven or more great capitalistic countries are competing in the world's market, that there is no more market for all that is produced, and long before that time bas arrived, the wages of the laborer will have gone down greatly, and after having eaten up during such term of financial papics the savings-after baving lost his property in land which many of them had acquired, or in savings banks that have failed, or in a hundred ways that small capitalists are destroyed-after baving came down so low that they cannot have any more buying power, their purchasing power is so small that the production must in consequence be diminished, so that those alternate to be the cause and the effect. Less production, less consumption; less consumption, less production; and during all that time the under class sinking down into poverty. I think you cannot deny the facts as they are.

Q. Did that state of things exist in 1857 and 1858?-A. From 1873 until now, and every year worse than before.

Q. Did it exist in 1857 and 1858? Was there great depression in business, great non-production, great non-consumption ?-A. It had not then begun. The Uuited States had not yet entered upon their stage of capitalistic production on a large scale. You found in New England small factories employing fifty hands say. That was the most of it; I saw it with my own eyes. So that you can now see with your own eses tbat millions of men, or say at least many hundred thousands of men wbo were small

capitalists are now no longer so. I am from Newark. There were building societies there that laid out cities, that paid for the lots, paid for the land first; they were just beginning to build when the concern became bankrupt, because most of those laborers can now no more save up enough to build. Most of those building associations tbat we had in the neighborhood of Newark, (whole cities consisting of such building associations), are now impoverished to such a degree as never to hope any more to be capitalists. Now as to the means to facilitate the transition without greatly changing the laws as they are. The first of these means is the general introduction of an eight-hour law.

Q. That is the first remedy ?-A. We don't mean to say that it is the law alone which makes the change.

Q. I understand you to think that the other suggestions made abont co-operation would be impracticable until a general arrangement of society throughout the world had taken place !-A. Co-operation on a large scale is impossible.

Q. Now be good enongh to go on-tirst the eight-hour law.-A. This eight-bonr law would be a dead letter, even if it could be then pursued everywhere in all the StatesI mean Congressional legislation; but we propose by our own efforts to bring about an eight-hour labor law all over the country. Our organizations of trades unions, as well as of the social labor party, carried this through more and more by engaging among themselves not to labor any longer than eight hours.

Q. Is there any law on the statute-book which prevents workingmen from making that agreement with each other 1-A. There is no law anywhere, but I do not dispute that there might be such a law and a good righteous law. The most valuable property the country can have is the laboring force of the community. To save that from destruction is just as holy a purpose, and as necessary, perhaps, as to carry on a defense of the country by arms. You bave no holier ground to stand upon than to save labor from destruction. To let one single person go down by famine, or to starve, is the greatest crime a nation can commit, and I don't consider that any constitution should stand in the way of a law that would prevent people working themselves to death for starvation wages.

Q. You think the Constitution should be amended ?-A. Yes, sir; and if you want to amend the Constitution, we guarantee to furnish you the votes to do so; all we want from the hands of Congress is a favorable consideration of that which we demand.

By Mr. THOMPSON: Q. You would limit the hours of labor, because the welfare of the laborers, of our citizens, demands it. Now, are there not some persons who are unfitte i for certain classes of labor? Would you remedy that and prevent them engaging in a business that was detrimental to their health ?--A. I should consider it the duty of the lawgivers to prevent any unhealthy business from being carried on.

Q. One man can perform a labor that would be injurious to another ?-A. You cannot by law prevent one single person, but you could prevent employers that employ men at uphealthy labor from doing so.

Q. Are there not men that can perform one kind of labor that another man is urifitted, pbysically, to perform ! Many a man can make a watch that could not act as a sailor, or act in a rolling-inill, or in a puddle-furnace. Would you have a law to prevent a man that was so physically constituted that to perform a certain labor would be injurious to him from doing it; and if you would, how would you ascertain the mode of doing it ?--A. How does that apply to the question here?

Q. You said a moment ago it is a holy duty for the government to protect any laborer, as holy as it is to save the life of the nation by arms, and therefore you say the government should prevent a mau laboring more than eight hours, because more labor than that is detrimental to him as a man.-A. I would auswer here that the government should not prevent him from laboring, but from being employed longer than eight hours—from the necessity to sell himself for longer than eight bours. If the government and the workingmen all over the country work hand in hand they may bave in one or two years a law making it lawful all over the country to employ no person at any wages to labor for longer than eight hours a day. The people will belp you at that. The government will then have the right to do it. Well, then, have I not answered your question in this respect

Q. No; you have not answered it at all. In order to protect a man's life, you limit bis hours of labor to eight hours a day. Now, you find a man, for instance, working in a farpace who is not able to work in a furnace, but could do some other work; do you propose to prevent him from trying to do what he is not able to perform I-A. That is not the same principle at all. What we want to do is to prevent all the labor. ing people from being allowed to sell their labor to ary unhealthy occupation for any greater length of time, or to any occupation for too great a length of time. What you want me to auswer is whether I consider it a duty of the government to force individuals to abstain froin onhealthy labor. I do not consider that a dury of the government, but I consider it a duty of the people thems:lves to see to it by education of the masses, which is almost at the bottom of all oor reform, that such insight should be instilled into the mind of every fellow-workman as to induce him to abstain from labor for which he is not fitted. I think I have answered your question.

Q. Would it not be better to carry on the education of the working classes to restrict the hours of labor tban to pass any enforced legislation for that purpose ?-A. If we should wait too long to see the fruit of this kind of legislation such as we need, we would have to wait very long, and meanwhile the capitalistic production will have so far broken down that the duty of legislating for a better state of affairs is at hand. We cannot wait for that, for times are urgent.

By the CHAIRMAN: Q. I understand you to say that the smaller manufacturers are being closed up, and that the large ones are swallowing up the little ones I-A. They are decreasing in number, but increasing in size.

Q. How is capitalistic production breaking down wben it is increasing in size ?-A. That is quite easy to see. because when the production is so very large the market is 60 filled with merchandise that the manufacturers must stop producing; they must stop for quarter or half the year. The laborers are starving meanwhile. The communities are taxed to support them, and so the capitalists are forced to pay more taxes. They are threatened by force, and you cannot prevent it, for the people are starving, and you have to pay the military and police to keep down the starving people. And all those expenses will render large capital a burden to the owner more than a profit.

Q. Still, notwithstanding that state of things, you say it is growing all the time? A. Yes, sir,

Q. You mean to say that this extra tax bas not yet affected them-that it has not yet reached them ?-A. It has long ago begup to do it.

Q. Take Krupp's works. They have been growing for the last ten years constantly. Why does not Mr. Krupp feel this taxation ?-A. You, perhaps, don't know that he has a monopoly. He is, by the way, half bankrupt, and has put the greatest portion of his fortune, in his wife's name, in the English Bank, and he would have closed his business long ago but for having a monopoly, namely, that of casting steel guns, the making of wbich cannot be carried on by anybody than by him with such effect.

Q. Do not Sir William Armstrong and Mr. Whitworth, in England, make cast-steel guns?-A. They have bugun to do so, but don't sell as many as he does.

Q. Don't they make them -A. Yes, sir.

Q. Have they not bern making them ever since 1860 ?-A. I believe they are making them of Bessemer steel.

Q. Are you sure Mr. Krupp does not make them of Bessemer steel ?-A. He may do that now; for all I know that is possible; but his cast-steel guns bave formed his renown, and have made him so prosperous.

Q. I understand you to say he is bankrupt !-A. He must be bankrupt as long as he has put away most of his property iu his wife's naine.

Q. When a man gives property to his wife is it an evidence that he is bankruptiA. He intends to be bankrupt. But what is that to the purpose !

Q. You said that capitalistic production was destroying itself, and was growing at such a rate that the great manufacturers were all ruined ?-A. I didn't say so.

Q. Are going to be ruined ?-A. The greatest mann facturers are these which live along when all the others are ruined. They can stand it for a while longer, but then thoy will feel it when no one can buy their merchandise.

Q. If I were the sole manufacturer of iron in the world, don't you think I could stand it?-A. If you bad no buyers you could not stand it.

Q. People will want iron for plowshares and reapers, &c., will they not?--A. If you have no money to buy with ?

Q. The man who raises grain will sell grain and get money to buy my iron, and if I had a monopoly, it would not hurt me, would it?-A. The sales would be diminished from year to year.

Q. But if I sold what there was to sell, it would not hurt me?-A. If you were the largest manufacturer you might not feel it at once, but by that time I tell you the community would not brook it any longer, and therefore it is wiser to prevent than to increase danger.

Q. Monopoly is what yon are opposed to?-A. Well, capitalistic production is not imaginable without monopoly. Monopoly is shared in, say, by a decreasing number of capitalists.

Q. Can you point out anything in the laws of the United States which creates a monopoly of capital or business I-A. All your lawy under which the Pacific railroads have been built were all to create monopolies; and most of your land.grant laws, laws by wbich land was donated away-for instance, under the swamp-land acts ; these laws were all for monopolists. Laws by which subsidies are paid or were to be paid, would be laws of monopolies.

Q. Can you point out any existing statute which creates a monopoly, or which gives

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