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tutions than it can be done by the Federal Government, that no enlightened man would like to make a proposition to tax the people for purposes of the kind.
Mr. WINGATE. Would there be any objection to an institution of that kind like West Point or the Naval Academy !
The CHAIRMAN. Yes, unless for a definite purpose. We maintain those two institutions for those branches of the public service that must be carried on by the government.
Mr. WINGATE. There is another point which ought to be spoken of, namely, the want of thrift in workinginen. That is one of the greatest troubles to be contended against, and it is hard to say how it can be overcome.
The CHAIRMAN. It cannot be done by legislation. Mr. WINGATE. I suppose not, except by legislation to prevent savings-banks and other such institutions from being mismanaged.
The CHAIRMAN. The people of the State of New York and of other States have done their best to prevent mismanagement, but there are inherent defects in human nature which cannot be guarded against.
Mr. Wingate. I have nothing more to say except that one of the greatest causes in producing the present condition of the workingmen in this city is the element of corruption, the Tweedism that has prevailed here, and which has imposed enormous taxes on the community. The practical effect of it is that whereas a few years ago it was quite common to find mechanics owning their own homes in this city, it is now quite different, and to-day they are forced to live in tenements and to pay high rents.
Mr. Rice. Has universal suffrage a tendency to cure that evil?
The CHAIRMAN. Have you read the recent discussion between Mr. Gladstone and other leading men, in the Contemporary Review, in which they say that they are driven to the conclusion that the common sense of the great mass of the people is better than the wisdom of the wisest man ?
Mr. WINGATE. Yes; of the enlightened and instructed people.
The ('HAIRMAN. No; they go farther. They say that the instinct of the great mass sceins to be better than the wisdom of the statesman.
Mr. WINGATE. My experience is different.
STATEMENT OF MR. FRANCIS B. THURBER.
NEW YORK, August 4, 1878. Mr. Francis B. THURBER appeared by invitation of the committee, and stated, in answer to the chairman, that he resided in New York, carried on business here, and was a member of the firm of H. K. & F. B. Thurber, transporters of food-produce.
The CHAIRMAN. Your business is conducted on a very large scale, I believe? Mr. THURBER. Yes. The Chairman. In regard to the subject which the committee has to inqnire intothe causes of the depression in business and a suggestion of the remedies that will bring about a better remuneration for labor-every gentleman, of course, has his own special line of experience and stndy. The committee cannot exactly tell in each case how to begin interrogatories. We should be glad if you would begin yourself by making such a statement as will enable ns to put questions to you.
Mr. THURBER. When I was told yesterday afternoon that I was to be heard this morning, I put together, in a general way, some thoughts which I have had on this subject; and this morning I had the manuscript set np in type in order that I might present my views to you consecutively, thinking that you would make inquiries on special points, and perhaps draw out some further information. With the permissioa of the committee I will read the matter which I have jotted down and bad printed.
Mr. Thurber thereupon read tbe following paper :
I have some diffidence in appearing before your committee, where many older and wiser men than myself have already appeared; men who have not only thonght nach upon the subject under consideration, but some of whom possess the ability to express their thoughts in a clear and forcible manner. But I have been encouraged by the diversity of views here expressed, and which have been given publicity through the press, some of which I concur in and others from which I dissent, and if you will allow ine I will state as briefly as possible, in a general way, what seems to me the chief causes for the nugatisfactory state of production and commerce generally, and the consequent complaints of the laboring classes. The general depression in business and the distress among the poorer classes have prevailed for several years, and it is not contined to this country alone, but exists all over the world. In a trip around the world which I took in 1976 and 1877, I found the same complaint everywhere of depressed industries, nnremunerative business, and distress ainong the working classes. It is therefore, I think, fair to assume that there are some general causes beyond the purely local ones to which many are disposed to attribute our misfortunes, although these in different countries and localities,, of course, have a greater or less effect. I do not think that those are the wisest counselors who would attribute all our ills to the introduction of labor-supplanting machinery, or abuses in corporate organizations, or to the currency, or the tariff
, or intemperance, and many other elements which have been brought to the attention of your conmittee, many of which have a greater or less bearing. In a general way I believe, however, that the primary causes of the ills which both the laboring and other classes are complaining of are the development of steam and electricity, which, in connection with labor-saving machinery, have within a comparatively few years revolutionized production and commerce, altered our manners and customs of life, and now absorb the attention of statesmen of the day in the adjustment of organic laws to meet the changed condition of the age in which we live.
It is not strange that onr laws should not have kept up with these great changes, and that now and then there should come a period when an imperative demand should arise for the readjust ment of some of the laws governing society. Steam power and macbinery have vastly increased the producing capacity of the world, and it is but datural that markets should be more frequently overstocked than when the producing capacity was less. An overstocked market means a commercial crisis with all its attendant phenomena of declining prices, idle manufactories, and distress among operatives. It means that trade will be dull with merchants who supply those operatives with the necessaries of life, because the purchasing power of the working classes is greatly reduced; and in short it means a state of ihings just such as we and all the rest of the world have been passing through. The only remedy for this is to wait until consumption catches up with production again. This, in the present instance I believe, is nearly accomplished, and that we are about entering on a new era of prosperity. How long this will last, however, depends on circumstances. It will certainly not last as long as if the prodncing capacity of the world was smaller, and I think that we may ceriainly look forward for more frequent periods of commercial depression, with their accompanying labor troubles, in the future than we have had in the past. The laboring classes are therefore greatly interested in the question of production, and it is a legitimate seqnence that they should seek to limit the number of hours of labor, or, in other words, increase the price which must be given for doing a certain amount of work, and also to limit the treniendous competition which they have sustained from machinery driven by the great forces of nature. I believe tbat there is a substantial basis for the dissatisfaction which exists among the working classes, and that, while some of their demands may be cbimerical and impracticable, that others again are quite just, and must in one form or another be recognized. I believe that the legislation of the last quarter of a century has been more largely in the interest of capital and corporations than it bas in the interest of the people, and that the poorer and middle classes are sustaining more than their share of the taxation necessary to the support of government. Capital naturally evades taxation wherever practicable, but there are some forms of taxation which cannot be evaded, and which fall with almost equal weight upon the rich and the poor.
For instance, our tariff taxes a portion of what we eat, drink, and wear, and our domestic productions which the tariff does not reach are taxed by our internal revenue, and largely by charges for transportation. This is one phase of taxation not generally appreciated or understood, but which is borne alike by the poor and rich. Every dollar in the shape of transportation charges exacted beyond what will pay a fair return for the capital paid in providing transportation facilities, is a direct, and, in my opinion, an unjust tax upon the public. How great this tax is may be inferred from the fact that the receipts of the railroads of this state as given in the report of the State engineer and surveyor exceed $90,000,000 annually, and I have seen it stated, and I believe it to be true, that probably one-half of this sum would pay 10 per cent. interest on the capital actually paid by stock and bond holders in providing these facilities. The entire revenues of the State derived from taxation are in the neighborhood of $3,000,000, and a great hue and cry is raised whenever it is proposed to increase this sum even for the most necessary purposes, while all the time the public are sustaipiog a taxation in the shape of excessive charges for transportation many times greater than the entire anouut required for the expense of government. Of course the cost of transportation of persons and property is thereby greatly enhanced, and the price of leading articles of food made much higher than they should be. As one person can consume but about a given quantity of the necessaries of life, the poor man pays nearly as much of this tax as the rich man. The poor man is always the largest tax-payer in proportion to his means. If government is bad, and taxes are increased thereby, the owner of real estate generally adds them to the rent which he exacts from his tenant, who thus inevitably pays a large share of the taxes, even though he has no surplus store laid by "against a rainy day," and has to depend upon his daily labor for subsistence.
As regards the currency question, it seems to me that its importance is overrated by those who are clamoring for an increase in the circulating medium. These men uverlook the fact that the great bulk of exchanges are performed by checks and drafts, and that both the paper and metallic money issued by the government do but a compuratively small amount of service in this way. All the paper and metallic currency in the country would not be sufficient to do the business which is transacted between the banks of this city by the aid of the checks and drafts which, through the clearing. bouse, are exchanged between them. Commercial credits also to a considerable extent assist in moving and exchanging the great staples of commerce. Wbile, of course, it is possible to make currency so scarce that there will not be enough to affect the smaller exchanges which are done in a retail way, and the scarcity way be so great that it may occasion considerable inconvenience to the public, yet I do not think that this is the case at the present time to any great extent in this country.
As regards the tarift, while it is no doubt true that class interests are to some extent favored at the expense of the general pnblic, it is iu my opivion a great deal better to let it stand as it is than to be constantly tinkering at it and keeping the commercial community in suspense over proposed changes which might not be any improvement. Among the troubles which the commercial classes in this country have to meet are the frequent proposals for changes in the policy of administrations and political parties. Especially is this true of Presidential elections, of wbich the excitenvent and turmoil of one is no sooner over than the agitation for another is begun. The Presidential term should be lengthened to at least six years, which I believe would be a step in the interest of both capital and labor.
As regards the evils of intemperance, they are no doubt very great, and particularly so among the laboring classes. I believe that legislation may do something in the way of taxing heavily all spirituons liquors, but I think more may be done by substi. tuting a lighter class of stimulants for those beretofore so largely used, and by creating a public sentiment in favor of temperance in its truest rense. Just how much legislation can aid in this as in other phases of the general subject remains to be seen. Legislation can do something, but not everything. It cau investigate the evils of intemperance, and take such action as may seem wise thereon. It can examine into the effect of the labor-saving or labor-displacing machine, which is a non consumer, and tax it or its product in favor of the human laborer, who 18 a cousumer. It can correct radical wrongs in our tariff. It can investigate abuses which are alleged to exist in our transportation system, wbich are very great, aul which great corporate interests that control our transportation system have thus far, to a great extent, prevented light being thrown upon; and upon the result of such investigation legislation can provide such gulations as will be just to all interests. The laboring classes of to-day, perhaps, expect too much from legislation, but certain it is that they are determined to have something, and I believe tho sentiment of the community is generally in favor of giving them all that is right and practicable.
The condition of the laborer of to-day is greatly improved over that of the laborer of a half a century ago, and justly so. All civilized nations have made great strides forward in providing the material comforts of life. Whether the laboring classes have shared in this improvement to an equal or reasonable extent with the classes controlling capital is for your committee to ascertain. My own opinion is that they have not, and that some changes in our present laws will have to be made to meet the great changes wbich have, almost unnoticed and un recognized, taken place during the last quarter of a century.
The CHAIRMAN. I understood you to say that legislation limiting the bours of labor was one thing which the working classes had a right to expect. Did you make it as broad as that?
Mr. THURBER. I meant to say that it was one of the things which had been asked by the laboring classes, and which, in my opinion, seemed quite natural. I think tbat there will come, sooner or later, either a limitation of the work done by machinery, or else there will not be enough work left to go around among the laboring classes. I mean work that is done by manual labor.
The CHAIRMAN. In other words, you think that what we term wealth or commodities will be produced by machinery in such excessive quantities that there will be very much less work for labor to do?
Mr. THURBER. I think that the circle of manual labor will continue to be narrowed, and that the tenilency is in that direction.
The CHAIRMAN. That is a statement that the wealth of the world is being more rapidly added to than it could by by manual labor ?
Mr. THURBER. I believe that that is true.
Mr. THURBER. If properly distributed, I think that it is a great blessing. I think that in a few hands and not properly distributed it tends to dissatisfy the community generally, and that it may result in very grave troubles.
The Chairman. You say “properly distributed." These articles of wealth are mul
tifarious, such as are consumed by society. The moment something is wanted machinery will be set to work in making it. How can there be any improper distribution of it? The more aboudant it is the cheaper it will be. I you make it absolutely so abundant that every body can have it and enjoy it, then there can be no improper distribution of it. In other words, is not the tendency to a proper distribution exactly proportionate to the cheapness with which commodities are produced ?
Mr. THURBER. I do not think it is.
The CHAIRMAN, Can Mr. Astor, for example, consume by any possibility more than a certain amount of these conmodities? When he has clothed himself, housed himself, and fed himself in the most expensive manner possible, can be make any personal inroad, to any extent, on this great mass of wealth produced by machinery? Would there not be still outside of him an unlimited mass for tbe public? How would Mr. Astor control that surplus, and what would be do with it ? Would he lock it up?
Mr. THURBER. He might distribute it more or less fairly, avd might lock up a large part of it.. He might distribute it in a manner satisfactory and so as to confer a benefit on the community.
The CHAIRMAX. Would it not be an intolerable nuisance to Mr. Astor to make a great warehouse of himself, and does he, in fact, do any such thiug? The moment he gets soniet bing, does he not try to get somebody to take it off his bands, and to pay hin, for it either in rent or in purchase-money? Must be not strive to get rid of these very things that are the products of lalor and machinery?
Mr. THURBER. I do not thivk that the tendency of human nature is to distribute. The general tendency is to acquire anıl to lock up.
The CHAIRMAN. Mr. Astor is the owner of some hundred houses in New York City. Suppose he locked up the front doors of those houses and did not let anybody in, as a matter of course, they would be of no good to him. The distribution that he makes of them is to get tenants for them. So with every other kind of procluce. What a man cannot consume himself le immediately tries to distribute, and the community gets its share of it.
Mr. THURBER. I think that it is the same with real estate as with merchandise, and that it is the desire of every body to dispose of it with profit.
The CHAIRMAN. Suppose that the houses accumulate in New York to such an extent, owing to the perfection of machinery, that Mr. Astor could not find tenants for his houses, wonld not the result be that everybody would be able to have a house without paying rent for it?
Mr. THURBER. In the event of such a supposition being realized, that would be the result.
The CHAIRMAN. Then the more you approach to that state of things by the increase of the wealth of society, the lower will be the rate at wbich produce will reach the hands of the consumer and the more perfect will be the distribution. If things become valueless and you can have no revenue from them, as a inatter of course everybody can take possession of them. Therefore the increase of wealth to which you have objected (by saying that machinery may do so much that there will be too much of everything, and that there will be no labor employed) is the very best thing to insure distribution through all the classes of the community, because it reduces the value of the commodity, and, therefore, reduces the inducement to take care of it.
Mr. 'THURBER. I do not think that that follows necessarily.
The CHAIRMAX. Is not that the tendency of the increase of wealth ! You say that the condition of the workingmen at the present day is much better than it was tifty years ago. How has that happened? Has it not coine out of tbis increase of wealth ?
Mr. THURBER. It has; but you misapprehend me. I do not think that there is so much danger in the increase of wealth as there is in the way of its being evenly distributed
The CHAIRMAN. But, as it becomes of less value (for the more of it there is, the cheaper it is), as it becomes more abundant and, therefore, cheaper, is not the tendency to a better and more equitable distribution than it was before, when it was dearer and less abondant! Is pot that the inevitable result of cheapening commodities?
Mr. THCRBER. That may be true as an abstract principle, but it does not follow that it will meet the question which I raise as to whether the working classes have shared in the general abundance that has been conferred by the great powers of steam, electricity, and labor-saving machinery, in an equitable degree.
The Chairman. If you find that their condition is getting steadily better during one, two, three, or four hundred years; and if, in every age, you find the average condition of the workingman better than it was in the previous age, is he not getting some share of those advantages ?
Mr. THURBER. He is, undoubtedly; and it depends upon the relative share which he is getting whether it is sufficient or not.
The CHAIRMAN. The share which he gets proceeds either from natural or artificial causes. Of course you do not want to interfere with the natural causes. Now, can yon point ont to the committee any artificial causes that prevent the laborer from getting his fair share of the results ?
Mr. THURBER. Yes; I think one cause is this: You have spoken of Mr. Astor as a man representing large wealth in one department of life. You might speak of Mr. Vanderbilt as a man representing large wealth in another department of life. Mr. Astor has acquired wealth in one way, and Mr. Vanderbilt in another. I think that you might take the Vanderbilt estate to-day as a type of a great many estates throughont the United States that represent the general facts in a lesser degree. When Mr. Vanderbilt gave up his steamship business and began the railroading business be was a comparatively poor man, his estate being estimated, as I have heard, at from five to ten inillions.
The CHAIRMAN. Is that the standard, in the grocery trade, of poverty and wealth?
Mr. THURBER. We are talking about all these things comparatively. In fifteen years after that, at the time of bis death, his estate was estimated at from eighty to a hundred millions. Now, I contend that that is more than a natural or legitimate increase. I conteud that it was accumnlated by an abuse of the transportation system ay it now exists. It was accumulated by taking from the pocket of every man in the community a certain amount of tax in the shape of increased freight, beyond the sum which would have yielded a fair return on the capital of his railroad.
The CHAIRMAN. Next to yonr place of business is a corner grocery, and the man who is there may have been carrying on bnsiness for twenty or twenty-tive years. At the end of that time he finds that be bas accumulated nothing. He sees you move into bis neighborhood, build a great establishment, and carry on business, selling the same products that he sells ; and he finds that, in the course of a few years, Mr. Thurber bas amassed a million of dollars. He says: “Now, look bere ; Mr. Thurber has put a tax on food products, the very basis on which society rests, on the things we eat; while I have been here carrying on business and got nothing. Mr. Thurber has taken out of this community a million of dollars, which is a great deal more than he had a right to do."
Mr. THURBER. I think tbat, on that supposition, the chairman makes a mistake, which is a very common one. In the first place there is a substantial difference between private enterprise and corporate enterprise. Corporations are granted certain privileges which private individuals have not, among them the right of eminent domain, the right to compel every body to dispose of the property which the corporation wants at a certain valuation, even against his will. Yon give to a corporation certain privileges and impose certain duties. Again, the law of supply and demand works more legitimately in small business than in such a large business as providing facilities for transportation. A railroad is by nature a monopoly, to a certain extent. You cannot rely to the same extent upon the law of supply and demand to regulate the charges of transportation, and opposition to it is not so readily provided. It requires the gathering together of a large capital; and when you gather it and build an opposition line of railroad, the territory through which it runs will not perhaps be able to support two railroads. So that the same rule of supply and demand does not apply in the same degree in the one case as it does in the other. In the one case you can legitimately say that if one individual had tried as bard as the other individual, he might have accomplished the same result. I do not think that you can say that as applying to a railroad, or to any great organization of that character. I think that the general tendency of the times is toward large organizations. You may take it in the grocery business or any other line of busi
The economies accomplished by great organizations have a bearing to a certain extent.
The CHAIRMAN. In every business the cheaper you can do it, the better for the community ?
Mr. THURBER. Yes. But that principle cannot be held to rule in the same degree with private enterprise and with great transportation corporations.
The CHAIRMAN. Take the case of the New York Central Railroad Company. Is not that company to-day, and has it not been for the last two years, taking and delivering freights at a rate very much less than it was doing before Mr. Vanderbilt took hold of the line 1
Mr. THURBER. Yes, undoubtedly. The CHAIRMAN. Thereby cheapening the cost to the community. Have the people of the city of New York lost by this cheapening of the cost of transportation ?
Mr. THURBER. I think that wben you conipare the relative cost of transportatioa with other things, and when the case is bronght to bear upon it, you will find that it has not been cheapened to the same degree as other things have been cheapened; and you will find that the possibilities of transporting goods cheaply bave been so much greater that it afforded an infinitely greater scope for the reduction of charges in that direction than has been offered for the reduction of prices in food products, or in many other products. The question of how cheaply goods can be transported bas been rem ceiving new light constantly from the time of the first invention of railroads down to the present day. This applying of steam to transportation gave such a tremendons margin of profit in the first place, that you can constantly keep reducing the margin