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Guaranteeing Your Income F. A. Harper

What Would You Call Mr. Hoiles? Thaddeus Ashby

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Compoo,', Aklon, OJ ..o THB A Monthly Making an Article For The writing of an expository piece-like "Guar­ anteeing Your Income"-is a construction job, reeman Libertarians not unlike the building of a house. It starts with an idea. Whether or not the house or the article will meet with acceptance depends on Editor FRANK CHODOROV the pertinence of the idea. In the case of the Managing Editor MABEL WOOD house, the need for it is the first consideration: Business Manager IVAN R. BIERLY will it satisfy the chosen tenant? As for the article, the writer is primarily concerned with readers: will they be interested? The idea for many an article germinates in VOL. 5, NO. 11 Contents MAY 1955 the newspapers. What people are doing is an indication of what people are thinking about, and the article will get attention if it promises Editorials to add something to that line of thought. Prominent in the headlines this last year has Why Teach Freedom? ...... 458 been something called the Guaranteed Annual The Morals of Yalta 453 Wage. To an economist like Dr. Harper, there "Play Ball"...... 460 seemed to be something ominous in GAW; the little that appeared in the newspapers, in the Articles way of detail, suggested that the plan would impinge on the nation's economy. Guaranteeing Your Income F. A. HARPER 461 But what is the plan? For several months Capitalism for the Many EDWARD MAHER 466 Dr. Harper made inquiries, and all he could Death and Taxes-Except for Coops .. LEONARD E. READ, JR. 469 learn indicated that there is no specific plan, A Strange Alliance REV. EDMUND A. OPITZ 471 Tale of a Coat CARTOON 473 only generalities. The labor press was most The Experiment-"Noble in Purpose" JOHN T. FLYNN 474 evasive; about all one could get from it was Sources of Tax Reduction HARLEY L. LUTZ 477 that the details of the GAW would he worked Even Lincoln Said It MALLORY CROSS JOHNSON 479 out in labor-management conferences. What Would You Call Mr. Hoiles? .....THADDEUS ASHBY 481 That was meager material for an article. But the expository writer depends not so much Books on the known facts as he does on the fitting of these facts into a pattern of thought, or A Reviewer's Notebook JOHN CHAMBERLAIN 484 philosophy; he has to find the bricks and mortar He Adds Little to Philosophy FRANK S. MEYER 486 of his article in his stored-up learning and The Rathole HELMUT SCHOECK 486 The Cost Was High OSCAR W. COOLEY 487 understanding. "Robber Barons" DEAN RUSSELL 487 Having assured himself that the theme is The Unreal Dream WILLIAM HENRY CHAMBERLIN 488 timely and important, the task before the writer Oil and Imperialism HAL LEHRMAN 488 is the arduous one of selecting words, sentences Diplomacy of Brawl SUZANNE LA FOLLETTE 489 and paragraphs, and putting them in an order God Is Liberty F. R. BUCKLEY 490 that will both entice and entertain the reader. Trade or War PAUL L. POIROT 490 Nobody likes to "push" himself through a piece Stubborn Finland RICHARD M. PALMER 491 of reading matter. Well Worth Reading...... 492 To my knowledge, "Guaranteeing Your In­ Washington, D. C FRANK c. HANIGHEN 464 come" was rewritten twice, and I have no doubt that the final draft underwent additional scrub­ Readers Also Write 456 bing. But the labor paid off. EDWARD MAHER has been an advertising agency copy chief and editor of Liberty. LEONARD E. READ, JR. is with the California The FREEMAN is published monthly at Orange, Conn., by The Irvington Press, Inc., Irvington-an-Hudson, N.Y. Copyrighted in the United States, 1955, by The Irvington Cotton Oil Corporation. This, his first attempt Press, Inc., Leonard E. Read, President; Fred Rogers Fairchild, Vice President; Claude Robinson, Secretary; Lawrence Fertig, Treasurer; Henry Hazlitt and Leo Wolman. at article writing, shows promise. Entered as second class matter at the Post Office at Orange, Conn. HARLEY L. LUTZ, Professor Emeritus of Public RATES: Fifty cents a copy; five dollan!! a year; nine dollars for two years. Finance at Princeton University, is now Tax SUBSCRIPTION SERVICE: Send subscription orders, correspondence and instruc­ Consultant for the NAM. tions for change of address to: MALLORY CROSS JOHNSON ran across this piece The FREEMAN of Lincolniana while doing research work for Subs'cription Department the FREEMAN and built an article around it. Irvington-on-Hudson, N.Y. CHANGE OF ADDRESS; Send old address (exactly as printed on wrapper of your copy) and new address, with zone number, if any. The FREEMAN is devoted to the promul­ EDITORIAL AND GENERAL OFFICES: Address the FREEMAN, Irvington-on­ Hudson, N.Y. The editors cannot be responsible for unsolicited manuscripts unless reo gation of the libertarian philosophy: the turn postage, or better, a stamped, self-addressed envelope is enclosed. Manuscripts free market place, limited government and must be typed double-spaced. Articles signed with a name or initials do not necessarily represent the opinion of the editors. the dignity of the individual. Printed in U.S.A. by Wilson H. Lee Co., Orange, Conn. If your car ~as T~ompson IJro~ucts ~all joints IT ~ILL HUG THE ROAD BETTER, STEER EASIER, RIDE SMOOTHER AND REQUIRE LESS SERVICING. HERE'S THE STORY:

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Products Consumers and industries alike COUlzt on Thompson for the newest and MANUFACTURERS OF AUTOMOTIVE, AIRCRAFT, the best. Thompson Products, Inc., General Offices, Cleveland 17, Ohio. INDUSTRIAL AND ELECTRONIC PRODUCTS. FACTORlH~S IN SlX'I'fi'F.N f:ITJES. And April, Too After giving us such a splendid issue e10der . on the UN, I was bit fearful you would tt have a little let-down with your April a so wrITe' issue. But you did no such thing. Practically every article in the issue R is par or above. Readers Also Re1ad The only sadness to me is that far ROMANY is Real Clay Tile. Not In your January issue, you ran a short too few Americans see and read the metal, not. plastic, not a painted note about my recent article in the FREEMAN. surface. The all Clay body is fired Harvard Business Review. The article GEORGE W. MACAULEY in excess of 2,000 deg. F. to assure dealt with racketeering in union health Grand Rapids, Mich. strength and unlimited wear. The and welfare funds, and your note said that anyone wanting single copies could hard glazed face with its mod­ Re-public ,Money get one by writing to me. As of this ern "Cushion Edge" is one of the The tax-exempt status of Foundations date we have had 463 requests for is based, I believe, on the grounds that easiest surfaces to keep clean and singie copies. A few requests for the usage of the Foundations' income sanitary. Acid cannot discolor. quantity were referred to the Review, is to be limited to educational, health Fumes cannot penetrate. which sold them. and kindred "humanitarian" matters. The 463 requests to me came from Colors to please every desire. [See editorial "Public Money Is Private every state in the union except Oregon. Property," April.] More than 34 lovely fade-proof Sixteen academic institutions were rep­ When, however, there is proof that colors to choose from, many exclu­ resented, also 17 high schools. The such expenditure of money is diverted sive with ROMANY. remainder were business people. I just to areas of propaganda, political or thought you would like to know how Experienced Ceramic Tile Contrac­ "social," the Foundations are not en­ widespread your readership is. titled to claim tax-exemption, and such tors everywhere are available to Chicago, Ill. A. A. IMBERMAN income should be construed as "public install ROMANY Tile quickly and money." So reasons the Report of the efficiently. Reece Committee. The U,N Issue Your attempt to draw an analogy I wish to extend my belated congratu­ I.III~ .I~"'I' with church-exemptions is ludicrous, lations on your March issue. In at­ for such exemptions are due to the C~ CI••••C 1'111 tending to my studies in the field of churches, as churches per se; Founda­ Member: Tile Council of America Political Science at Stanford Uni­ tions are legally limited to non-propa­ CANTON 2. OHIO versity, I find deliberately neglected ganda fields. that thought to which your magazine The government, which is the people, gives honest expression. One professor, has a right to claim monies unjustly when questioned about this particular kept on a false tax-deduction which, "Monumental!" issue on One Worldism and the United when applied to Foundations, is a colos­ Nations, declared it to be of little sal figure. "Well Worth $1.50" benefit to the student interested in the Scarsdale, N. Y. 1. H. SCHAUMBER subject. And he went on with the "Of Lasting Value/l typical argument that isolationism was dead and that the articles presented Hear, Hearing! were written by authors who were un­ The article "No Heroes, No Villains," These are a few of the comments on realistic and living in the past. His (April) should get a hearing in the retort is a fair example of the in­ high schools and colleges of our coun- tellectual climate on this campus. I try. The students of today should be ficinian have yet to find here the new trend given a correct picture of our sick toward conservatism which Raymond literary world ... Mr. F. R. Buckley's Moley recently stated is springing up for March 1955 article is a superb diagnosis of the on the college campuses. sickness. May I again extend my congratula­ 72 pages 17 articles Boynton Beach, Fla. PEGGY WINK tions and also express my great respect devoted to the single topic of for your courage and your decisive­ ness in the midst of literature guided That article you ran in April, "No ONE WORLDISM by the confusion of thought which has Heroes, No Villains," nlakes a lot of sense to anybody who hasn't read and the been accumulating and taking new forms throughout so many, many either of the two plays or the novel UNITED NATIONS years. discussed. Anybody who has read these works will know that the writer talks Stanford, Cal. PATRICIA GALLAGHER Prices in quantity (postpaid to through his balmy hat and doesn't any single address) know his literature fronl a hole in the . . . a great and timely exposure of ground. 5 copies $2.00 10 copies $'3.50 .~ that death trap, the United Nations. You ask some of your intellectual 100 or more $.30 a copy If every American, or even one tenth contributors. Ask John Chamberlain or order from: of the population could read it, it would E. Merrill Root or Max Eastman, for kill that treasonable fraud ... example. They'll tell you what a cock­ The FREEMAN I am sending herewith for thirty eyed article you ran. Irvington-on-Hudson, N. Y. copies of the March issue. HOWARD E. SELTZER Portland, Oregon C. R. WEEDE New York, N. Y. It seems to me by Philip M. McKenna President, Kennametal Inc., Latrobe, Pa.

ACK in the year 1933, our Government, deliber­ I know something about tools. I invented and B ately and without sound reasons, took us off the produced tools of hard cemented carbides ... the Gold Standard. The price of gold was increased. hardest metal man has created. During World The stage was set for inflation. Today, our dollar War II and the Korean War, Kennametal* tools will buy only about halfwhat the 1939 dollar would. helped triple metal cutting output, increased the Every year for 13 years, between 1939 and 1952, production of coal and other minerals, improved our dollar lost 5 percent of what was left of its buy­ the durability of machinery and increased the ing power. For two years-1953 and 1954-the drop efficiency of industry. Since then, in civilian pro­ in value leveled off; but this year the down trend duction, these tools have increased industrial pro­ has started again. ductivity by as much as 10 times, at lowered costs. If this continues another decade, we may see the In terms of a Gold Coin Standard, these tools re­ day when our dollar will not buy a loaf of bread. duced prices. But because we did not have such a Our savings accounts will be practically wiped out, standard, the savings in costs made possible by our insurance almost worthless, and our pension Kennametal could not be passed on to the public plans so low in value that we will not dare retire. in the form of lower prices. Instead, these savings It seems to me that it is time to go forward with merely helped to prevent prices from going higher. the Gold Coin Standard ... the only tested and If we are to make real progress in this country of proved, sound tool of measurement. It permits us ours, and be able to measure that progress in terms to measure reliably not only all our day-to-day of the past, the present and the future, we must activities, but our plans for the future. With a Gold have a standard of measure. The best such standard Coin Standard as the base for all our activities, we that man has tried is the Gold Coin Standard. know at any time how much our labor will be able I want to talk with you again on this vitally basic to buy, and how much our insurance, savings subject. In the meantime, give these thoughts your accounts and bonds are worth. We can make plans deepest consideration. Talk them over with your soundly and safely for our future and that of our friends and neighbors ... in fact, anyone who will children. And the .Gold Coin Standard permits us listen. And do not exclude from your conversations to make promises for future deliveries, as well as public officials and candidates for public office who to measure promises made by others. That includes certainlyshould knowwhat theirneighbors thinkand the promises and actions of our Government as it what they expect of persons holding or aspiring to does individuals and corporations. public office. KENNAMETAL INC., Latrobe, Penna. In other words, the Gold Coin Standard is a vital *Kennametal is the registered trademark of a series of hard carbide alloys of tool of measurement. tungsten-titanium and tantalum.

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MAY 1955 Why Teach Freedom?

STUDENT writes: "I have read the pamphlets strong case for government ,manipulation of the you sent me, also most of the books you rec­ economy; to him it is dogma, even though his com­ Aommended. I am more convinced than ever fortable living is derived from the free market that the planned economy is a dangerous delusion place. The story of a book is a case in point. In God and that man's greatest good can be achieved only and Man at Yale, William F. Buckley, Jr. pointed through freedom. But I am troubled by the reaction out that the textbooks used in the freshman course of my professor when I try to talk to him along in economics decried the free 'economy and extolled these lines. He is an honest thinker: I am sure of planning; the alumni bought his book, but also that. Also, I am sure that he has read more about increased their contributions to Yale. I have found the free economy than I have. Why is it that he audiences heavily sprinkled with "upper-bracket" rejects the premises I present to him and refuses to ,men quite cool to the proposition that the income­ a,ccept the facts 1 Can you explain this to me1" tax amendment ought to be repealed on the ground I can't, not unless I call upon an hypothesis that that it violates the right of property, while is hardly provable. For many years I have strug­ audiences consisting mainly of wage 'earners and gled with the problem the student has put to me: small businessmen ask to be organized for action. why are some people libertarians, why are others Not that all rich men are Socialists, nor all poor of equal learning and background Socialists1 It men are libertarians, but that you cannot account isn't a matter of education. Once I attended the for their attitudes along economic lines. closing session of a course given by the noted Neither education, background nor income can laissez-faire economist, Ludwig von Mises, and explain either the Socialist or the libertarian. listened to the reactions of his students. It was ,a Whenever you try any of these criteria you are gab-fest. Some gave distinct evidence of rejecting faced with cases that refute your premise; you all they had learned from him in fift,een previous find that both types come from penthouses and lectures, even what they had presumably read in slums, that they include Ph.D.'s and illiterates. his book. 'Others were enthusiastic ,exponents of You are driven to the conclusion that if there is his thesis. Why1 a causative principle it ,must be found somewhere The bureaucratic Socialist, of course, must be in the make-up of the person rather than in en­ excluded from this speculation. In his case, social­ vironmental influences. Psychology does not help, ism is ,a job, not necessarily a 'conviction. I knew a for it too seeks explanations for mental attitudes thoroughgoing libe1'ltarian who entered the bureau­ in conditioning and shies away from the realm of cratic service out of economic necessity; within six 'inherent traits or temperament. So, the best you months he sang the collectivist tune. can do is to describe the Socialist-or the liber­ In the same class with the bureaucrat is the pro­ tarian-as you have known him, and to leave the fessor whose job depends on his going along with "why" of him alone; it is beyond undeTstanding. the head of the department, or whose income is in The characteristic that invariably identifies part derived as a "consultant" on government proj­ Socialists is an urgency to improve other people. ects. I have known one or two such who, in private It is a passion that blinds them to the fact of conversation, had some strong reservations on the i.mmutable individuality and leads to faith in the collectivism they taught in class. These, like the therapy of for,ce. It is utterly irrational; so much bureaucrats, are "bought-en" Socialists; their so that they find it necessary to cover up the im­ cases can be easily explained. pulse with an inordinate display of logic. When But how do you account for the socialistic atti­ you examine their arguments you find them based tude of those whose economic status ought to in­ on axioms which support their inherent drive. In cline them to the opposite point of view1 I know short, they are so constituted that they cannot let a very successful stockbroker who makes out a other people alone.

458 THE FREEMAN Perhaps it is an inner need that impels the case for libertarian thought will be most difficult. Socialist to his ideology, for I have never met an Hence, the reason for seeking out the natural advocate of government intervention who did not libertarians through education is to prevent, by admit, inadvertently, his own capacity for com­ constant and intelligent reiteration of its tenets, missariat functions. He always has a plan, to which the suppression of the philosophy of freedom and others must submit, and his certainty that the plan the driving of its advocates underground. will 'produce the contemplated results does not per­ mit him to brook criticism. Always he is the fanatic. If you disagree with him it is not because you are in error, it is because you are sinful. You are not The Morals 01 Yalta' an ignoramus; you are a "class-conscious capi­ talist," or a "reactionary," or at least an "anti­ IF YOU were a prof.essional politician, you would social." Why is it that name-calling is stock argu­ describe the recently revealed doings at Yalta ment with all Socialists? as "necessary under the conditions," "consistent That this inclination toward social improvement with the realities," "justified under the circum­ through force is an innate, not an acquired, char­ stances." That is, if you were of one persuasion. acteristic is proven by the attitude of many ex­ If you were of the other persuasion, you would Socialists. I know a writer of repute who, though label the action taken at y,alta as "unwarranted," he has rid himself intellectually of all Marxism, "indef.ensible," "diplomatic defeat." of which he once was an articulate advocate, still Since you are not a professioDal politician, but insists that large fortunes ought to be regulated. just a work-a-day citizen, the words that come to Compulsion is in his innards. Former Communists your mind when you read what Stalin, Churchill find it difficult to accept fully the faith of the and Roosevelt agreed upon sound like "perfidy," libertarian in social improvement through in­ "inhuman," "sell-out," "rotten." dividual improvement; some kind of political regu­ That is, you use a moral yardst:ick for your lation might work, though political regulation need judgment, while the politician thinks in terms of not lead to the Moscow excesses. It is not true that expediency or political necessity. To you, Yalta "once a Socialist always a Socialist"; but intel­ was "good" or "bad." To him, the effect of the lectual conversion does not automatically rule out revelations on his party's fortunes is the determin­ the possibility of an atavism. ing factor. If, then, the socialistic attitude-and, by impli­ This does not: ,mean that the politician, as a cation, that of the libertarian-stems from an in­ person, is less moral than you are; he too would gredient of personality, why put so much stress not rob a widow, murder his best friend or cheat on education? The libertarian is particularly con­ at cards. But in his particular business he cannot cerned over the spread of socialistic doctrine in use evaluations based on 'abstract principle; he the schools and in the public press, and is most cannot afford the luxury of ethics. Only that is anxious to bring his own philosophy into opposi~ "good" which is politically propit~ous. tion. On the face of it, this concern seems un­ The importance of amorality in politics, espe­ warranted, for an innate tendency toward freedom cially international politics, is demonstrated by will not be changed by words into an acceptance the record of Yalta. of slavery. Mr. Stalin got everything he wanted because he Basically, this is true. But a character trait, like was singularly free of inhibitions and prohibitions. a seed, germinates best under proper cultivation, He was the consummate politician. He knew of no and the inclination toward freedom is strengthened rules that debarred hitting below the belt, if that by intellectual conviction; as in the case of the kind of fighting suited his purpose, and nothing student who wrote me. There are many who, like in the way of ideals or tradition or popular opinion this young man, are instinctively repelled by gov­ affected his maneuvers. The Anglo-Saxons, on the ernment intervention but who crave intellectual other hand, could not~ play the gan1e straight be­ support for their inclination. It is to them that cause they were burdened with "democratic" re­ the proponent of libertarianis,m must address him­ straints or with ideas that had nothing to do with self; the Socialist is beyond redemption. That is the business at hand. to say, the libertarian teaches not to "make" liber­ Mr. Ghurchill was in no position to haggle or tarians, but to find them. even to bring up the original excuse for England's Likewise, the socialist teacher does not make entry into the war, "to save Poland." The empire converts; he merely confirms the socialistic in­ over which he presided, as he well knew, was totter­ clination of his willing students. And there the ing, and he was under pressure to save it from intellectual battle between the two schools of complete collapse; this was far more important thought might rest. than the f.ate of displaced persons. Besides, concern But socialism is not an intellectual pursuit, it for his vote-begotten crown made it necessary to is primarily a drive for political power; and if its present his war-weary electorate with a speedy proponents succeed in enthroning themselves, the "victery." He paid the price the dictator demanded.

MAY 1955 459 Mr. Roosevelt was even more handicapped. Tug­ choice, which is anathema to socialis~n, is brutally ging at his elbow was a powerful "unconditional expressed. Fans are free men. surrender" bloc, to whom the urge to put the There may come a time when some congressman Morgenthau Plan in operation was far more im­ from Brooklyn, annoy~d by the ineptitude of the portant than the freedom of the Baltic peoples. Dodgers, will put through a parity bill. When that Allied with this bloc was another that saw in the happens, when baseball is put under the aegis of ascendancy of the Soviets the fulfillment of all the Department of Welfare, and the Secretary (a their dreams; they bothered him no end. More lady, by precedent) rules that the Yankees must troublrsome still was his own "moral" obsession­ ~ot be better than the Orioles, or that Antonelli the establishment of an international insurance and the bat boy must receive the same salaries, company, with the U.S.S.R. on the board of direc­ then we shall know that national decadence has tors, that would guarantee world peace forever. finally set in. In that case, the game will not he It was this obsession that seems to have been the baseball; it will be beisbol. taproot of all the immoralities of Yalta. The importance of this idiom of American in­ The consummate politician won; the play-actors dividualism is underlined by the efforts of our lost. This result had to be. In international politics Socialists to eradicate it. The Life Adjustment the winner is always the one who, putting aside Educationists (nee "progressives") are ,all for all make-believe, such as principles, ideals, abstrac­ abolishing baseball and other competitive sports, tions, plays according to the rule of immediate and substituting such goosestep activities as class expediency and let the devil take the hindmost. calisthenics and group dancing. The purpose, of Power is always the ace in the hole, Woodrow course, is to squelch the urge for individual excel­ Wilson's "fourteen points" notwithstanding. lence and to prepare the youth of the country for The politician knows this only too well. It is we the acceptanee of' collectivistic ideas. It is in line who insist on reading moral values into politics, with the abolition of report cards ,: that record the who make of the game something that it is not and achievement of the individual student, and with cannot be. Weare the "kibitzers" who like to inter­ the egalitarian practice of advancing the pupil fere in the amoral game'; for that reason we must with his age group, regardless of his intellectual not know what's going on, then or until our inter­ deficiencies. ference ,can no longer be effective. To appease us But, so long as there is a vacant lot in the mortals (Stalin was fortunately not in that posi­ vicinity, and baseball is kept free of the slimy tion), the politician will, make a display of moral hand of politics, these efforts will be unavail­ purposes in the preambles to his acts, or in his ing. For the American boys will repair to it as public pronouncements; but he will turn out to be soon as the bell rings the end of the tedious "self­ a poor politician if he takes these purposes into expression" day and start picking up sides. And the game. Bill will be picked to do the pitching because he And when the records of the multitudinous inter­ has shown that he can throw the ball harder than national pourparlers that have been held since 1945 any other boy in the neigborhood. Butch, the sec­ are made public, we run-of-the-:mill people will ond best, will be relegated to the bench. When the -find much in them that will strike us as just as teams are chosen there will be some who have not perfidious, just as rotten, as were the doings at made the grade. There will be heartaches, of course; Y,alta. So it always was; so it will always be. but life is beset with such misfortunes, and it is time the future man learns to face them. He will pick up his glove and start on another lot to work his way up to the "first" team. That's how top­ "Play Ball" notchers are made. To be sure, it's the team that wins the games, HE COUNTRY is still sound; baseball is still a not the individual members. And no one recog­ T national passion. This observation is not in­ nizes this more than the thoroughgoing individual­ tended to be facetious. Quite the contrary; for it ist. He knows that the team consists of nine players, should be evident that so long as Americans re­ but he also knows that the team is not better than spond with spirit to the highly competitive, in­ they are, individually. It is to advance the fortunes tensely individualistic sport of the diamond, so­ of the group that he strives to make himself the cialism will have hard going. The adulation of a best shortstop in the league. It is as a competitor, Willie 'Mays, the exortation to "take the bum out," not as an egalitarian, that he adds to the glory of the keen interest in batting averages -and the argu­ his outfit. The best team player is the fiercest in­ ments over the relative skills of Duke Snider and dividualist. Tris Speaker give proof that at heart we are not And we who must enjoy the game vicariously egalitarians: we adore the champ, we relegate the give evidence of our innate individualism not only bush leaguer to the bushes. More than that, we by cheering the feats of these perfectionists but register our unabashed preference for the "best" also by paying them in accordance with perform­ at the impartial turnstiles; there the freedom of ance. Baseball proves we are not Socialists.

460 THE FREEMAN Guaranteeing Your Income

By F. A. HARPER

A friend asked me to look into this so-called guar­ state unemployment payments are available to anteed income plan; to obtain a copy of the "model cover a part of the guarantee. contract" and see what its provisions are. "Where will the money come from?" Out of his So I wrote to a noted labor authority and to current income from his sales, except that a s:maII several other places. It seems that a model contract reserve fund is to be set up to be used for the doesn't exist. At least I could not find one. The 52-week pay guarantee, in amounts and under spec­ nearest I could come to it was a yellow pamphlet ifications to be negotiated with each contract. from the UAW-CIO entitled "Preparing A Guaran­ "Who is to administer the plan?" A Board with teed Employment Plan. ... That Fits U.A.W. an equal number of representatives of the employer Members Like a Glove." The main ideas of the and the union, plus an "impartial chairman to plan are explained therein. break deadlocks." (One wonders how he could break "Who is to participate?" All workers in any a deadlock without being partial.) company that signs such a contract with the union And so it goes. Most of these specifications, as are in it. If as one of them you object, you can't has been said, are left for determination by nego­ stay out. tia,tion with each contract. And so it is futile' to "What do I get out of it?" If you are called to try to appraise the plan in terms of such things work at all during any week, you are to be paid as whether payment rates are too high or not high the full week's wage even if you are laid off during enough, or whether reserve'S are adequate. Any part of the week-even if laid off ,an hour after precise specification becomes subject to specific arriving on the job Monday morning. And in event attack, and so the UAW-CIO states that such of a longer shutdown, you are to continue to details are flexible. Apparently, they do not want receive pay for as much as a 52-week layoff. But to endanger their general objective by stating de­ such detailed specifications are still subject to tails in advance. The union leaders firmly demand, change by negotiation for each individual contract. however, that some sort of guaranteed annual in­ "WhllJt wage am I to receive while not working?" come plan be instituted on the best ter,ms obtain­ You are to receive full pay for the week when you able in the contract. are laid off during the week. And if the layoff continues, or you are laid off for weeks at a time, The "Ifs" in the Picture you are to receive enough to enable you to main­ tain "the same living standards as when fully em­ The plan has unquestionable appeal to an em­ ployed," whatever that may mean. But these details ployee. Who doesn't prefer some income to none are also subject to negotiation. at all? That is only a human urge we all must "Does everyone get the full pay guarantee of 52 endure, like the desire that a recently deceased weeks unemployment?" N'o. If you are a new uncle shall have been industrious, frugal, and char­ worker, you first have to build up "seniority sta­ Hable toward all, especially tow'ard his poor nephew. tus." This means that you must first work two Last year the union had pressed a similar pro­ years, or some such length of time to be deter­ posal, which was then stated in terms of "wage mined by negotiation, before you attain the full guarantee." Then someone apparently discovered 52-week pay status. New workers have lesser claims that employees' families live the year around, and to layoff pay-less than 52 weeks-proportionately the proposal evolved into: "Wages the year round by the length of time they have worked. because families live the year round." Perhaps next "After having drawn unemployment pay for a year it will evolve further and become: "Income year on this basis, and having gone back to work, for life because a person lives during his entire

does a new 52-w1eek claim come into existence at lifetime." once?" No. It has to be rebuilt oveT a period of Would the plan mean more income to you as an two years, or so, as with a new worker. employee over the next few years than you would "Can I work at any other job during the layoff?" get without it? That is where several "ifs" enter Yes, if the powers-that-be decide it is "suitable" the picture, which should be thought out carefully. work for you. They will assume control of that, First, 'Suppose that your job is one where next in other words. But you will get guaranteed income year you were to have had full-time work on the payments only if needed to supplement your other job anyhow. In that event the plan would be of pay and bring it up to the "living standard" figure. no use to you; and worse than that, you would "Who pays the costs?" The employer, except as lose by it because money that your employer could

MAY 1955 461 have used to pay you a higher wage would have throned as a middleman, it will take a cut. like any to be used to pay the administrative costs of the other middleman and will also then be in position plan and to build up the res,erve fund required. to call the tune with union members who would, Now suppose that next year you are to be laid in effect, become government employees. Both com­ off for part of the year. Then, seemingly, you would pany officials and union officials would then be gain from the plan because you would be receiving acting as agents of the government. pay for the time laid off, whereas otherwise you The question then really becomes this: would would he receiving nothing. But ... you rather have your employer keep back further Where does the employer get this money he is money with which to pay any benefits under a to pay you? A part of it is to come from him on guaranteed income plan, or would you prefer to a "pay-as-you-go basis," which is a profound way get it now in current wages, to be used by you of saying that he is expected to reach down into in whatever way you deem safest and best in his pocket for it at the mom,ent of payment, as guaranteeing your own future income? Would you he does for the church on Sunday. The other part r,ather have it managed by your boss and your comes from a reserve fund which the employer is union under this plan-or perhaps through them supposed to have built up over the years. But it by the government-or would you rather manage hasn't been, so he must start that only after the if for yourself? plan is started. The reserve fund comes fro,m his Under the proposed plan of guaranteed income, pocket, too. So it all ,comes out of the ,employer's if you don't like the way it is being operated and pocket. want to change it, you-and others of like mind­ must either gain control of the union or buyout Sales-and Your Wages the owner. If you manage your own guaranteed income plan, however, you can change it the Now how does it get iIito the employer's pocket moment you decide how to improve its safety; and in the first place? This is important because unless in event of need you can draw on your own private it is to come from a safe and continuing source fund as li~htly or as heavily as you wish, according you, as an employee, would be foolish to rely upon to your prospects as you see them. it in time of need. It comes from the sales of How about s'afety in the holding of your reserve what is produced under his management. Unless fund? Woula it be safer to keep it yourself? What he can keep his outgo-including wages-below will the company do with the fund? Will they keep income from sales, there can be no fund and no it idle so that inflation will go on robbing it of continuing pay.ments. If wages and other costs its worth? What if the 'company uses the fund to have been taking all the traffic could bear anyhow, overexpand and then goes broke with the first there is no slack to be taken up to pay the costs major depression-precisely at the time when you of any pay-as-you-go guaranteed income. were depending on the fund to pay you some in­ Couldn't your employer obtain this money from come? Or what if the company goes broke for ,any his day-to-day operations? Perhaps. But that other reason-fund or no fund? Do you prefer to means that he will have to pay you less now as tie your future to one company in that way, or wages than he otherwise' could have paid, in order would it be safer for you to buy shares of owner­ to be able to meet these contracted obligations for ship in several sound companies with your own guaranteed, income. This applies not only to the guaranteed income fund? pay-as-you-go part, but the reserve fund as well. When your company lays off part of its force, They reduce what he is able to pay you as a current who gets laid off first-the better or the poorer wage, just as an increase in any other cost would workers? The poorer ones, of course. And presum­ do-an increase in taxes, or coal prices, or freight ing you are not one of these, do you want them rates. It should be noted that all available cash to be paid from the reserve fund you have helped of all United States manufacturing corporations build up, so that when a :more serious layoff hits, would carry their payrolls only about three months. the fund will have been spent, leaving nothing to Then they would be without any working cash fulfill the guarantee of income-your income? whatsoever with which to carryon their businesses. Suppose that through lower wages than could So somebody's current wage rates will have to have been paid, you have helped build up a sizable carry the burden of the costs involved. If the em­ reserve fund in one company and then want to ployee's income is to be guaranteed, somebody will change jobs. Do you suppose that either the com­ have to guarantee the market to the employer. And pany or the union is going to allow you to with­ nobody but consumers can do that, however devious draw any of the fund and take it with you? Or and concealed may be the picture as presented to will the plan come to operate under national union us. The money can't really come from company re­ control of all the res,erve funds of all employees ? serves or from the government. The government Do you 'want to give anyone power to freeze you has no independent source of income; all it pays to your job, or to control where you shall go? out ,must first be taken from 'Consumers. And if Under the proposed plan, when you are laid off this is forgotten, and the government is once en- somebody besides yourself becomes empowered to

4:62 THE FREEMAN decide whether or not another job available to you anteed income, I would not, of cour:se, prohibit any during the layoff period is ,a "suitable" job. It really voluntary arrangement which both employer may be suitable to you, but if it is not suitable and employees of a given company may want. Such to those in control you will be forced to remain an arrangement is just another way of getting paid, unemployed 'even though you want to work at some­ and if both parties want it that way they should thing available to you. That forces you to live on be allowed to do so. It would be nothing more than "your reserves" unnecessarily, thus weakening like shifting part of the pay to a Christmas bonus. your protection against ,additional layoffs. Firms like Nunn...Bush and Procter & Gamble have 'Or what is to prevent some unscrupulous fellaw­ had a type of guaranteed income for a long enough employees from quietly getting unapproved and un­ time to say that some plan can be made to work known jobs on the side during periods of layoff? successfully, if both sides really want it. What I They would then be getting pay from another job question is only the forcing of any plan on either while at the same time drawing unemployed "guar­ side by undue pressure or economic threat from the anteed incom,e" from the fund you helped build up. other side. And I doubt that any guaranteed in­ That would erode your protection. come plan can be found that will be any panacea against the forces of unemployment on a national Precisely' the Wrong Plan basis. There is something incongruous when a union T'he whole thing boils down to the fact that the threatens a major work stoppage (strike) in the costs of any such plan of guaranteed income must, hope of gaining protection against work stoppages; in essence and in the long run, be paid by th~ em­ when they are ready to spend $2,5 million of their ployees. No matter 'how the plan is stated, the em­ members' ,money in the process; when the "gain" ployer cannot really pay it out of his share bec'ause promised is probably neither a gain nor the way his funds are insuffi,cient to do it if he is to con­ to -attain their laudable objective of continuous tinue to operate a thriving business, safely financed. gainful employment for all who really want to work. It cannot really be paid by the 'employer personally. And it is especially incongruous, if, as reported, H'e just deducts it from the pay check, that is -all. the union has not bothered to canvass its members Who wants to work if he would be paid for not on the matter of whether they prefer to have their working? Under this plan it would be possible to union and company officials manage their s'ecurity get three y,ears pay for two years work. And there reserves, or do it for themselves. is no way under God's heaven to produce three This incongruity, as well as many of the problems years product in two years time. So, since what I have raised about thls plan, would be dispelled isn't produced just isn't available, the level of living if the union would ,merely put it to the vote of their would have to suffer. No guarante'e to maintain a members, as in the following proposition: living standard without 'Work could supply even a loaf of bread that hasn't been produced. Proposed, that the UAW-CIO set up its own Unemployment ,always is the result of a consumer guaranteed income plan; that the union dues be increased by whatever amount may be necessary rebellion against the priee of the product. This to pay all the costs of the unemployment wage and means that it is a consumer rebellion against wage the costs of its administration. rates, really, because current pay for the nation as a whole is 'about five-sixths of the total cost of 'This would allow the union to operate the plan producing things. Careful students of these mat­ ,as efficiently as they can. It would avoid any inter­ ters, like Senator Paul Douglas and Professor A. C. ference from employers who may have diverse in­ Pigou of Britain, have told us that unemploy,ment terests from that of union members. It would can be reduced by as much as three or four per eliminate the necessity of such a thing as an "im­ cent, merely by reducing wage ra.tes only one per partial" member of a com,mittee of diverse interests. cent. 'That course of action, if the union officials It would allow the preservation of a member's would only adopt it with an enthusiasm equal to rights in the fund when-still as a union member that for the guaranteed income plan, would aS8ure -he moves to another job in the same union. No continuous employment for most eV'eryone. It would paralyzing strike would be required to force the prevent the necessity of any mass progr,am of plan upon any employer, since it would no longer guaranteed income. be any of the employer's business. And the $25 So the guaranteed incom'e plan amounts to doing million to be devoted to pressing for this plan precisely the wrong thing. Since it is about the could be put into the fund as a nest egg, rather sa,me thing as a wage increase in times when the than to dissipate it in trying to start this plan. consumer is already protesting against the high price of the product, it gives further upward pres­ sure to prices when the product is already not Reprints of this article may be secured from the selling. Who is going to guarantee the market for FREEMAN, Irvington-on-Hudson, N. Y. at the follow­ products already overpriced and unsold? ing prices: 10 copies $1.00, 25 copies $2.00, 50 copie~ In casting doubt on the proposed plan of guar- $3.50, 100 copies $6.00, 1,000 copie8 $J,.5.00.

MAY 1955 463 WA.SHINGTON, D.C • by FrankO.

What progress has been made in this session of supremacy" was not entirely absent from their Gongress in the direction of party realignment­ minds. But the fact is that Senator Eastland that political Nirvana so ardently desired by (Miss.) in a three-hour speech emphasizing this conservatives? Little, if anything, is the answer constitutional issue offered an opportunity to of hitherto hopeful observers. In previous years, conservative Republicans to rally to his banner. there were many occasions and quite a few issues The voting shows that while eleven Democrats, which brought significant votes reflecting not all~outherners, voted "against," only two Repub­ only similar ideas but also some parliamentary licans (both Westerners)-Welker of Idaho and cooperation between conservative Democrats and Langer of North Dakota-joined them. It was a Republicans. One can re-call united front votes matter of surprise to find Jenner, Dirksen and on such issues as modification of the T,aft-Hartley Bricker on the other side. Act, the passage of the M,cCarran-Walter im­ Where are the "wild jackasses" of yesteryear? migration bill, and various tax and appropriation In the twenties, during the succession of Repub­ measures. lican Administrations, that picturesque phrase But in recent months, the renowned North­ was coined to describe the unruly Republicans South "coalition" flunked (or perhaps the word of the West. Offhand, veterans among political is "funked") on two big constitutional issues. observers can rec,all the independence of such The first was the vote on the censure of Senator Senators as Norris, Howell, Brookhart, the two McCarthy-the underlying issue of whi,ch (what­ La Follettes (father and son), Nye, Frazier, etc. ever the popular emotional accompaniments) was Party conformity meant much less than it does to the right of the Congress to investigate how their political successors today. Often such out­ funds were spent by the Executive. On that, breaks of party independence were "good politics" conservative Republicans, generally of the "Taft" among the constituents who resented the "East­ persuasion, risked much by standing by their ern, Wall Street" crowd in command of the GOP. guns and voting against the congressional con­ But isn't the same sectional sentiment still visible demnation of the Wisconsin Senator. Most of west of the Appalachians? Many signs point to it. these men usually counted on at least a dozen Yet the representatives in Congress seem to reflect Southern Democratic conservatives to go along it to a much smaller degree than thirty years ago. on such tests. In thls case, not a single Democrat Why? One answer is-the power of the Executive north or south of the Mason-Dixon line did so. has increased enormously during intervening The story is that the Democrati,c leadership con­ years, and the individuality and freedom of legis­ sidered it vital to follow this course for a purely lators has correspondingly been frustrated. party reason-to widen the split in the GOP. It is rumored that the Democratic leadership had to Major L'Enfant, the architect who laid out Wash­ put pressure on several Southerners to persuade ington originally and designed the Capitol, faced them to conform. the Legislature's imposing building toward the That took place in the closing days of the last East-reportedly because he thought the city session. In this, the 84th Congress, the conser­ would grow in that direction. The reverse hap­ vative Republicans shirked the traditional role in pened-the main part of the city grew up to the the case of the confirmation of Judge Harlan for West. Thus, while the Capitol architecturally has the Supreme Court. That Eisenhower appointee its back to the White House, politically it faces had evaded answering a question from critical West-toward the Executive Mansion and the Senators designed to bring out his thinking on the Executive Agencies, from which all rewards flow. Bricker Amendment issue-predominance of the It is true that patronage plums are not as Constitution over treaty law. numerous (by reason of Civil Service and other Some Southern Senators invoked this in their regulations) as formerly. But that is a bit decep­ statements or speeches against the Harlan con­ tive. A Senator may seek only one plum, a judge­ firmation. It may be that the thought of "white ship for his principal backer out i~ his state.

464 THE FREEMAN That Senator, therefore, compromises his voting premium today on Capitol Hill. Whatever else it positions on various issues, indeed his whole legis­ did, the noisy Fulbright investigation of the stock lative attitude, just to obtain that important favor market inspired some healthy thinking about from the Executive. It has happened. fiscal matters. The Senator from Arkansas de­ Sometimes, the member of Congress himself veloped an intense worry lest the operators at has a personal stake in his own legislative com­ Broad and Wall should go into debt buying promising. In the press gallery, cyni,cs early in securities. Many people here immediately asked the first months spotted Republican members why liberals like Fulbright display no such con­ whose line perceptibly shifted to harmonize with cern about Big Government's tendency to in­ White House prejudices and jocularly referred crease its own fiscal obligations. A wholesome look to them as "Judge This" or "Judge That." In at our federal debt structure followed. that hardboiled gallery, it was unnecessary to That debt now has a temporary ceiling of $281 say that the support of certain members (facing billion, with a scheduled return to the former election) for the Bricker Amendment or Joe ceiling of $275 billion by June 30. But mean­ McCarthy would diminish in direct ratio to the while, the Administration seeks to increase the increase in Democratic strength in their con­ actual debt-for instance, by obligating the fed­ stituencies; and that GOP members wi,th un­ eral government to the extent of $25 billion for certain chances of re-election harbored hopes for roads. But that sum would not be added to the a nice Presidential appointment. Since November, official debt. Senator Byrd exclaimed: "If the a number of accommodating "lame ducks" have federal government can properly borrow money received rewards for submissiveness. in this fashion without recording it as debt, and Not only patronage, but also the various kinds spend it without budgetary control, it may be of favors which legislators-pressed by local in­ expected that similar proposals will be made for terests in their constituencies-seek from the financing endless outlays which may be desirable Spending Power buttress the sway exerted by for education, hospitals, public health, etc. It the latter over policies on Capitol Hill. The creates fis'cal confusion ... and destroys con­ tendency to spend in order to elect has not gone fidence in government credit. You cannot avoid out with Harry Hopkins and Har,ry Truman. financial responsibility by legerdemain." Washington watched with cynical amusement the Administration's orders for coal from Kentucky But even if Byrd's view eventually prevails, mines to help Senator Cooper's re-election bid. is the federal debt burden to be measured only A prominent New Deal Capitol columnist re­ in the range of $275-81 billion? Any Capitol Hill cently rema,rked that, despite his reputation for legislator will remind you that our houses of "leaving Congress alone," Eisenhower wields parliament have obligated us for what are called much stronger power over Congress than his continuing obligations. For instance, the Defense predecessor. In place of "Eisenhowe,r," he might Department has piled up some $49 billion (last well have said "the Palace Guard." Few observers June's figures) for goods for which it has con­ would disagree. The subtle but dominating in­ trac,ted. These have to be paid for during the fluence of the Executive is constantly working next few years. for legislative Gleichschaltung. In one case, the Then there are the "contingent liabilities." In­ White House by its tentacles in the constituency deed, so numerous and complex are these obliga­ got a "libeTal" Republican named as administra­ tions that no one here ventures an estimate of tive assistant to the member of Congress, who their approximate magnitude. One of these is Fed­ traditionally has been anti-liberal. The change eral Deposit insurance-$106 billion; and about in that member's oratorical flavor was wondrous $66 billion of other insurance. Also, just recently to see. In another, some invitations to White the Hoover Commission eSltimated the total loans, House social functions performed miracles with guarantees, committments, etc., of all agencies in the wife of another "fundamentalist" Republican the Federal Housing field at about $49 billion. member; the results showed up in the voting. Additionally, one must not forget the obligations As for the Democrats, party discipline also of the Veterans Administration, the Commodity reduces the independence of many Senators and Credit Corporation, the Expor1t-Import Bank, the Congressmen whose natural bent would be to Foreign Operations Administration, the Farmers "play ball" with conservative Republicans. One Home Administration, ,and many others. Naturally, conservative Democratic Senator was heard to ex­ these are "contingent," but no one knows how plain his vote for the Rayburn twenty-dollar tax much of this debt the federal government might cut. "The vote was scheduled for the day after eventually have to meet. In view of this thought­ I was to receive funds for my subcommittee. The provoking pic1ture, a legislator like Senator Ful­ whip said I ought to vote for the 'Cut. I loathed it, bright who would like to impose extraordinary but I had to do it. So I got the funds. prudence on investors might well launch another In view of the above picture, it should be no inquiry to provide an answer to the question: surprise that valor and independence rate no "How much do we really owe?"

MAY 1955 465 Capitalism for the Many

Hundreds oj thousands oj average Americans By EDWARD MAHER have become part owners in industry through investment plans Jor people oj modest means.

Like many people, William H. Reinhardt of Oak­ as well as her husband. They are buying their own land, California, used to think of Wall Street as a home, by "periodic payments out of income." After mysterious place where bulls and bears swindle providing themselves adequately with life insurance each other between spells of fleecing lambs. But and a steady nest egg in the savings bank foremer­ that was before he became a capitalist himself. gencies, they are able to set aside $100 a month Mr. Reinhardt is a middle-aged counter clerk in from their combined salaries for the purchase of a hardware store. One day last fall he and his wife corporate stock. walked into the Oakland office of an invest­ They chose Remington-Rand largely because Mrs. ment firm and arranged to buy shares of common Reinhardt works there. In November the stock stock in Remington-Rand, Inc., on a monthly pay­ was selling around $30 a share, so their first ment basis. By this act they joined hundreds of month's payment bought them three and a frac­ thousands of other people of modest means who tion shares after deducting the broker'scommis­ are becoming members of what Socialists call the sion of $6. As the stock price has fluctuated dur­ "investor class" in a movement which is accelerat­ ing subsequent months, their $100 payments have ing rapidly and which holds great economic, social bought them a greater or lesser number of shares. and political significance for the future of the So it will go during the months and years ahead nation. as long as the Reinhardts continue their MIP It used to be that common stocks were owned by agreement. the very wealthy. But high income and estate taxes on the one hand, and higher wages plus the Not for Speculators entrance into this area of insurance· companies and private retirement funds on the other, have MIP is predicated on ,steady, long-range invest­ changed the situation. The pool of money is now ing at regular intervals regardless of the ups and larger than ever, but a larger proportion of it is downs of the stock market. It is not for speculators owned by tens of millions of little investors. It is or the fellow looking for a quick profit, but for the their savings which must provide the capital consistent, methodical saver who has a dependable needs of a rapidly expanding economy. income and some cash in reserve so that he is un­ The need for investment capital is only part of likely to be in a position where he has to sell his the story. In a world torn by conflicting economic holdings when the market is down. If he uses good and political ideologies, it is essential for the judgment-and free advice which he.can get from American people to understand how their free his broker-in selecting stocks in companies which capitalistic system works. There is no better way will grow as the nation grows, any temporary than by acquiring part ownership of it. downs in price should be more than compensated So reasoned G. Kei,th Funston, the 44-year-old for by long-term increase in value. If the market former Trinity College president, when he became goes lower he will get mor,e shares for 'each regular president of the N,ew York Stock Exchange in 1951. payment, thus reducing the average cost of the He decided that, since the American people were shares he holds. accustomed to the installment-plan method of pur­ The Reinhardts intend to hold onto their stock, let chasing automobiles, household equipment and their investment earn dividends, which in turn, other items requiring relatively large outlay, they plan to plow back into more stock. Mr. Rein­ the way to attract millions of new investors was hardt says: "We don't sell stock; we buy it. Rem­ to enable people to buy a share of American busi­ ington-Rand is a good company and we think it and ness on the same basis. its profits will grow." Accordingly, the Exchange developed a Monthly The one big difference between buying, say, a Investment Plan, now known as MIP, and launched few shares of General Motors through MIP and the it in J,anuary 1954. To see how it works, let's look installment plan purchase of a TV set or a car is at Mr. and Mrs. Reinhardt, who, together, became that credit is not involved in the former transaction. the twenty-five thousandth purchaser under the The buyer of stocks "on time" is never in debt for plan. his holdings; instead of paying interest his money As they have no children, Mrs. Reinhardt works, begins earning income for him immediately.

466 THE FREEMAN The minimum MIP agreement is $40 every three tion of Investment Clubs which was founded in months, which is getting it down to where anyone 1951. The association, with headquarters in the who can set aside $3 a week can become an investor. National Building in Detroit, is a nonprofit organ­ An agreement, of course, may be canceled by the ization which supplies instructions, accounting purchaser at any time. In this event, he can hold kits and other paraphernalia for getting a club his accumulated shares or he can have them sold under way, plus frequent bulletins of information at the market price and get an immediate check and advice---,all for $1 a year per club member. for the proceeds, less broker's commission. It is not necessary to join the national association MIP buyers are coming from all walks of life in order to form a club. One was organized last and showing considerable variety in their selection April by a policeman in an eastern city. He inter­ of stocks. A Long Island aircraft worker, alert to ested nine other men at the station house, and they the rapid development of the area around him, is agreed to put in a minimum of $5 per month each buying Long Island Lighting Company at the rate or any multiple thereof,each man getting pro rata of $40 a quarter. A Columbia University professor credit on ,the club's books for his contributions. of English is buying Socony-Vacuum, Radio After discussing the merits of various companies, Corporation and Phelps-Dodge on three quarterly they decided to buy du Pont and General Electric plans of $50 each. A salesman for International in alternate months, using MIP, and to reinvest all Business Machines in Providence, Rhode Island, is dividends. acquiring his own company's stock at the rate of The club's founder and president considers an $40 every three months. investment plan to be vital for people in his calling. President Funston of the Stock Exchange as­ "After 30 or 35 years on the job," he says, "we re­ serts: "The MIP, which will enable millions of tire on a pension. But what with possible inflation, people to acquire a direct ownership in our leading who knows what it will buy? By putting a little corporations on a pay-as-you-go basis, is the most money into common stock regularly we'll have a significant contribution to personal financial plan­ better chance of making out than if we just depend ning in recent years." on our pensions." As the idea spreads, housewives and secretaries, elevator operators and truck drivers, lawyers and The Growth of Mutual Funds accountants, factory workers and farmers, are realizing that a few dollars a week, which might In addition to MIP and the investment clubs, an­ otherwise just slip through their fingers, can start other factor operating to spread the grass-roots them on the road to financial improvement. ownership of American business is the spectacular MIP is frequently used as a supplement to the growth of mutual funds. A mutual fund is an in­ investment clubs which are springing up all over vestment company which sells its own stock to the the country and catching interest abroad. An in­ public and invest.s the money thus gathered in stocks vestment club is simply a group of people-neigh­ and bonds. Each share of mutual-fund stock repre­ bors, friends or co-workers-who decide to chip sents part ownership of the securities thus bought, in a fixed amount each at regular intervals for the and profits and dividends from these securities joint purchases ·of se,curities. Usually the amount are passed on to owners of the mutual fund stock. is $10 a month, but it may be less or more. Membership is held to a small number-ten to fifteen as a rule-otherwise the club would spend all its time arguing about what stocks to buy, and it would be difficult to get agree­ ment. Meetings are held once a month at which individual mem­ bers who have been assigned to study the status and prospects of various companies make their reports. The club then decides by majority vote which to buy. Often the operations of a com­ pany are followed for months before the club members con­ clude it is a good investment. . The investing principles usu­ ally followed are those advo­ cated by the National Associa-

MAY 1955 467 There are about 125 such funds now operating, pounded semi-annually, while it builds up and many of them highly specialized. The· investor can then sells him shares at $20 below the market buy shares in a fund which is interested in the price at the time payment is completed. stocks of companies with seemingly great growth General Electric and several other companies potent,ial, or in one which emphasizes immediate give stock to their employees. For example, under dividend income. He can choose electronics, avia­ the General Electric Savings and Stock Bonus Plan, tion, steel, tobacco or motors-there is a fund which payroll deductions up to $10 a week may be author­ specializes in each. Or he can have the safety of ized by an employee toward the pur,chase of U. S. wide diversification by selecting one of the many savings bonds. Employees who deposit their bonds general funds. In fact, one of the features of the with the company and leave them there for five mutual funds is that an investor can thus buy 'a years get their bonds back with all accrued inter­ small interest in many industries, instead of putting est plus a bonus in GE stock equal to 15 per cent his eggs all in one basket. of the price they paid for the bonds. Furthermore, Of course, the person who contem'plates putting they get whatever dividends the stock contingently his funds into a "mutual" should seek advice from credited to them may have earned during the a sound banker as to which fund he should choose. period. Some have a less conservative poHcy than others. 'TWE'llty thousand GE employees became share­ To attract small investors, many of the funds holders in 1954, and an additional 40,000 will be­ have programs for buying out of income. They call come shareholders this year. The company is aim­ these "accumulation plans" and they work much the ing to have 60 per cent of all employees become same as MIP, being based on payments of $25, $50 shareholders in four years' time. or $100 at ~egular intervals. At the end of 1954, As of March of this year, an American Institute some 212,000 such plans were in effect, with new of Public Opinion Survey found that 6,900,000 ones being started at the rate of six to seven thou­ U. S. adults claim to own stocks listed on a stock sand a month. ex:change. "Widespread ownership of stock, even in small The National Association of Manufacturers, amounts, should increase public understanding of spokesman for 20,000 companies em'ploying 85 per the American economy and induce people to pay cent of the nation's industrial labor, believes the more attention to the poHcies of business and spread of stock owneTship will be a big boost to the government," says Dr. Leo Wolman, professor of cause of economic understanding in this complex economics at Columbia University. "It ought to age. Henry G. RU,er, 3rd, president of NAM, says: have a good effect on labor-management relations "There's nothing like owning a few shares of stock because when workeTs share in the ownership of to lead a person to take an interest in what's hap­ business they will be inclined to identify their pening to the nation's economy. As this movement own interests with the prosperity of the business grows, I look for people everywhere to adopt a much by which they are employed. This new relationship more enlightened attitude toward government is bound to have a wholesome effect on labor rela­ spending, taxatio'il and other factors which affect tions since employees concerned with the success business growth and expansion." of a company may be expected to subJect union Undoubtedly, too, as ownership of large enter­ as well as business policies to careful s'Crutiny." prise comes to lie more and more in the hands of every,day people, there will be a growing aware­ Company Stock-Purchase Plans ness on the part of industrial management of its responsibilities to the rest of the community. Many individual corporations are making part­ The most impressive fact about this grass-roots owners of their own workers. The American Tele­ investing movement is: millions of working people phone & Telegraph Company has sold stock to in the United States have reached a level of in­ more than a quarter of a million of its employees, come where they can become the owners of the over 40 per cent of the total. Offerings are made enterprises they work for-not in the Marxian from time to time under a generous buying ar­ sense of state ownership, but through true, private, rangement. Any employee may elect to pur,chase individual ownership. stock at the rate of one share for each $500 of This is a new kind of capitalism for the world annual wages, to be paid for by a payroll deduc­ to contemplate-capitalism for the many, not the tion of $5 a month for each share. The company few. Communism or socialism will have a hard time pays 2 per cent interest on the money, com- matching it.

468 THE FREEMAN Death and Taxes- Except for Coops

Cooperatives today are Big Business, yet they By LEO'NARD E. READ, JR. operate under special privileges most unjust to corporations that pay high taxes on earnings.

Not all corporations pay income! taxes. Not all on their earnings. The question is, how come? dividends are added to income for tax purposes. It all began on October 3, 1913, six months Not that these corporations and stockholders are after the SIxteenth A,mendment got into the Con­ evading taxes. Far from it. They ,simply enjoy stitution. IOn that day, Congress passed a R'evenue a special exemption. Act, which provided for a 1 per cent tax "on These are not 'eleemosynary institutions. They the entire net income arising or accruing from are businesses that, like those which have to pay all sources during the calendar year to every cor­ from 30 per cent to 52 per cent of their profits poration, joint stock company or association. .. to the government, operate to produce goods and Provided, however, that nothing in this Section render services and hope to do so at a profit. shall apply to labor, agricultural, or horticultural They are business corporations, in every way, orgamizations, or," etc. The reason advanced for and are different from the non-exempt corpora­ the exemption those days was to aid the farmer; tions only in that they are called cooperatives it is believed, on the other hand, that political or mutual companies. Because they are so called, considerations played their part in 'creating this they save in the aggregate an estimated one and special privilege. However, nobody paid much at­ a half billion dollars in taxes on incomes. tention to the exemption, because the tax itself This privileged group of corporations include -1 per cent-was insignificant; it did not give farm and consumer coops, mutual fire and cas­ the coops any special edge in the competitive ualty associations, savings and loan associations, market. credit unions, ,mutual savings banks, national farm loan associations, and ;so on. Farm and consumer Increased Taxes for Non-Coops coops alone own and operate thousands of pro­ cessing and manufacturing plants and market Things have changed since 1913. The main just about all the commoditi'es used on the farm change, of course, has been the increase in taxes and in the home. They operate cotton gins, but­ which corporations that do not be,ar the coop­ ter and milk plants, cotton-seed and soybean erative label must pay. Under the present law, crushing ,mills, canneries, food freezing plants, the nonprivileged corporation must send to the rice mills, chees'e factories, wineries, sugar mills, federal government 52 cents out of every $1 of flour and cereal mills. They 'make heavy farm ma­ income it has earned during the year. 'Out of chinery and home appliances. They run paint fac­ the remaining 48 cents it must pay its stock­ tories and chicken hatcherie,s, saw mills and oil holders something (or investors will shy away refineries. They manufacture drugs and cosmetics. from the corporation's securities) and use the They even operate funeral parlors. balance to do something about its obsolete ma­ Coops now handle .approximately 75 per cent of chinery, or for expansion. Obviously, the compet­ all fluid milk, 40 per cent of the nation's butter, ingcoop has an advamtage; it can plow back into 50 per cent of the grain sold locally, 60 per cent the business all of its earnings. (It also can plow of the fruit and vegetable markets. In California back the "dividends" it "pays" its stockholders; and Arizona 85 per cent of the citrus fruit mar­ how that is done will be discussed later.) Taken keting is done by coops. Coops operating under as a whole, the coops today have a minimum of the aegis of the Rural EI'ectrification Administra­ about 1.5 billion dollars for expansion, which their tion, as well as under state and loca'l government competitors do not have. It follows that if the agencies, generate and sell about 20 per cent of coops were efficient in their management and pro­ the 'electric power used in the country. Their gressive in their policies, they could in time put banking operations run into the billions. In short, the taxpaying corporations out of business. coops qualify as Big Business. The statut.ory exemption of "labor, agricultural Yet these particular corporations pay no taxes or horticultural organizations" was broadened in

MAY 1955 46! later legislation to include a host of other coops: Congress has passed no law which allows the mutual savings banks; building and loan associa­ deduction of pat.ronage dividends from taxable tions; mutual irrigation, telephone, insurance and income. However, the Treasury Department justi­ real estate companies; also religious, ,educational fies its failure to tax this income on the ground and charitable organizations. As taxes on corpora­ that it represents a rebate, or an additional cost tions rose, coops and mutual companies prolif­ on the goods sold. The only income tax that must erated, and some of them that qualified for the be paid by the "non-exempt" coop is on such exemption (under Section 101 of the Internal small amount.s as are paid in cash dividends on Revenue Code) went in for operations hardly stock, and on reserves which have not been al­ contemplated by the lawmakers. located to patrons. Naturally, the general prac­ Not long ago, universities and charit.able or­ tice of the "non-exempt" coop is to "payout" ganizations were buying up and engaging in all practically all profits in patronage dividends. sorts of businesses because they could operate them tax-free. The competing taxpayers in these Governmental Generosity businesses were aroused. Congress took notice; possibly the loss of revenue impelled them to pass The solicitude of the government for coops goes legislation to halt the practice, but in the debate beyond tax exemption in the case of those doing the point was raised that the e~emption privilege a banking business. Federal credit agencies ac­ could ultimately result in the elimination of private tually finance the purchase of equipment and build­ business. The argument is just as true in the ings by mutual banking enterprises. This, of case of coops and certain mutual organizations, course, is done with ,money supplied by the tax­ but no effort was made to put them on a par paying competing business'es. Through such gov­ with their competitors, tax-wise. ernment.al generosity, coops have built up for their exclusive use a complete credit system: the The "Patronage Dividend" Central Bank for Cooperatives and the Twelve District Banks for Cooperatives. These can offer In addition to the exemption enjoyed by the their member-customers, because of subsidies and coops as corporations, the members, who are in exemptions, all sorts of loans at interest rates effect stockholders, can avoid under Treasury rul­ that the private taxpaying banks find it almost ings the payment of taxes on dividends issued to impossible to meet. them. These dividends are not required to be, It is obvious that the favorable position en­ and seldom are, paid in cash. A share of profits joyed by coops makes competition with the,m most is credited to each member's account, and in lieu difficult, and that selling out to the coops is in of cash the member receives common stock, "re­ many cases the only escape from failure. Oft.en volving fund certificates/' "certificates of equity," the competing corporations are of necessity com­ or paper of similar designations. Aside from com­ pelled to shift their status from taxpayers to mon stock, these instruments inmost cases bear tax-e~empt coops. Meanwhile, new coops are or­ no interest; they are usually redeemable at a ganized to take advantage of the special privi­ future date, or at the discretion of the coop's lege. In the beginning, coops were largely confined board of directors. The "patronage dividend" is to rural sections; they have now invaded the in reality a device whereby the coop receives full cities, particularly in the industrial secti8ns. credit for returning its profits to members or Unions have set up coops for the benefit of their patrons, but is able to keep the actual cash in members, offering food, oil, automobile equipment its capital structure, tax free. The patrons, who and nearly everything the worker uses, at prices are in reality stockholders, do not declare the which reflect the tax-exempt privilege. How can dividends as income because the dividends are in the t.axpaying store exist in such a set-up? a non-negotiable form and have no tangible mar­ Whether or not coops are useful or legitimate ket value. is not the issue. Nobody can off,er any argument There are a considerable number of coops which against their existence. Certainly one must re­ do not operate in accordance with the statute, cognize the right of any doctor to be his own and thes'e are called "non-exempt cooperatives." lawyer, or any farmer or group of farmers to op­ (The "non-exempt" status relieves the coop of erate a merchandising business. The only question a requirement that tax-exempt coops must do at at issue is the special privilege enjoyed by the coops. least 50 per cent of their business with membeors.) They are nothing but businesses, in every sense They file regular corporate income-tax returns of the word, receiving a special dispensation from and claim they pay income taxes just as private the government because they operate according corporations do. However, thanks to what Congress to a semllintic formula. Equity and justiee demand and the courts call "great liberality," the Treasury that either they be taxed the same as other Department allows these coops to deduct or exclude businesse.s or-which would be far better for the from their taxable incomes the amount.s allocated or nation's economy-the others be accorded the distributed as dividends on patronage. 3ame exemption that they enjoy.

470 THE FREEMAN A Strange Alliance

Any union of Christianity and socialism By REV. EDMUND A. OPITZ must be "a hybrid of love and violence."

Christian socialism is a little more than a century scores of later socialist organizations and jour­ old; under different labels and in various dilu­ nals in the churches of England and America. A tions it is still very much with us. Nearly every slogan once popular among Christian Socialists modern denomination supports an official agency sums up, rather too neatly, the rationale of their whose weight is behind political intervention. program: "Chris,tianity is the religion of which Interdenominational agencies do likewise. socialism is the practice." The Church is an institution which proclaims A counterpart movement in these United States, love as the law of life and aims at saving the originating in the post Civil War period, was soul, the personality, the nature of man; but it is called the "social gospel." C. H. Hopkins writes in cahoots with those who promise to improve that it "involved a cri,ticism of conventional man's environment by political control of his Protestantism, a progressive theology and social economic life. Political control means the legal philosophy, and an active program of propagan­ use or threat of violence, and socialism cannot do dism and reform." without it. Christian socialism is a hybrid of love Early Christian :socialism was non-Marxist, and and violence. Marx complained that "Christian socialism is but Before this union could be consummated, a con­ the holy water with which the priest consecrates siderable accommodation had to be made on the the heartburnings of the aristocrat." But by the religious side. Many people in the nineteenth cen­ turn of the century, according to Hopkins, Chris­ tury had just enough exposure to religion to tian socialism in America had be,come both Marx­ immunize them against the real thing. Some of ist and political. The Christian Socialist Fellow­ them were in Church. They neglected theology ship, founded in 1906, pledged loyalty to the because of their preoccupation with social ques­ International Socialist Movement as a means of tions, and tended to restrict religion to ethics. realizing the social ideal of Jesus. Its publication God, in their view, was an active agent within reached as many as twenty thousand clergymen. the social order, "a guarantor of progress and the Within the first decade or so of the twentieth assurance of a steady movement in history toward century, most of the larger denominations ap­ a cooperative commonwealth." They accepted the pointed official social action agencies or com­ c-oncept of "a social organism," from which it missions, but "the climax of official recognition followed that the salvation of the individual soul of social Christi~nity was attained in the organ­ ceased to have meaning-there could be no salva­ ization of the Federal Council of the Churches tion for the individual apart from that of "society of Ghrist in America in 1908," writes Hopkins. as a whole." H. F. May, in a church history, says that by This is a long way from the Gospel ethic. In the means of the Federal Council, "Social Gospel opinion of Ernst Troeltsch, the greatest modern advocates were able to put American Protestant­ authority on Christian social teachings, the "first ism officially and repeatedly on record in com­ outstanding characteristic [of the Gospel ethic] paratively concrete terms as a warm supporter is an unlimited, unqualified individualism. ... of labor's cause." Thi,s absolute individualism leads to just as abso­ Today there are not many doctrinaire Socialists lute a fellowship of love among those who are left, in the churches or out. Socialism has been united in God." Political control of some people put into practice, and the results are not quite up by others cannot be justified in terms of this to the promise. Besides, socialistic theory has ethic, or the theology which it implies. been so badly riddled that only a few hardy bigots It w,as in 1848 that F. D. Maurice, Charles King­ cling to it. So the present strategy of the social­ sley and other English churchmen launched a izers, whether their motives are religious or movement designed to vindicate for the Kingdom secular, is to adopt a pragmatic approach to social of Christ, as they put it, its "true authority over problems. This is more slippery than socialism. the realms of industry and trade, [and] for Reinhold Niebuhr says in a recent book, "We socialism its true character as the great Christian need a pragmatic attitude toward every institu­ revolution of the nineteenth century." This group tion of property and government ..." And John sponsored cooperatives and founded a working­ C. Bennett, writing about the Evanston report on men',s coIIege, and it provided an incentive for a Responsible Society says7 HThe emphasis

MAY 1955 471 has been on a pragmatic approach to economic nomic activities should be undertaken for the problems which takes for granted a great deal of sake of the whole society, and economic power state action but which also seeks to give an im­ should be under the control of the whole society." portant place to private centers of economic power Semantic confusion is a prominent plank in every .. ." The practical import of playing socialism by social action program. ear is to endorse political improvisation on purely The group also labors under the delusion that expedient grounds, to the neglect of moral con­ it is a tiny persecuted minority. Liston Pope says, siderations. Thus, if it is politically feasible to "With the virtual disappearance of the communist rob a minority of Peters to pay a majority of left and the others who have departed the move­ Pauls, the fa,ct that the Pauls have votes is the ment, the Christians who believe in social action determining factor. find themselves in camps farthest out. The left, except for Christian social action, virtually has 'SemanticConfusion dis;appeared in the United States." What has really happened, of course, is that the so-called The pragmatic approach to social problems is left has disappeared as a protest group, only to characteristic of the organization known as emerge as the current conservatism. But although Christian Action whose chairman is John C. Ben­ they are powerfully entrenched everywhere, the nett of Union Theological Seminary, and whose social actionists still speak in the accents of honorary chairmen are Reinhold Niebuhr of martyrdom. Union and Liston Pope of Yale Divinity School. Before one can apply moral principles to any Christian Action stems from the Fellowship of situation he must have some understanding of the SociaHst Christians, an organization founded in technicalities involved. There are certain inherent 1932. This group was composed of men who be­ demands and imperatives in a socialist organiza­ lieved themselves to be both Christian and social­ tion of society, and these must be known before a ist, but who-to stress their primary loyalty-put man can determine whether or not ,they conflict the accent on Christian and made socialist an with his system of values. Socialism makes its adjective. But the socialist faith gradually evap­ immediate impact on economic life. Comes the o:rarb.ed, leaving the pragmatic experimental revolution,and gov,ernment takes over the nation's approach as a residue. The group changed its productive property; its factories, farms, banks, name as well as its platform and emerged as mines, communication systems and whatever else Christian Action in 1951. Perhaps it is significant the State wants. Government, the monopolist, con­ to observe that Christian is now the adjective, and trols production and, consequently, consumption. the stress is on action. In point of fact, production is only indirectly Christian A,ction was formed in 1951 because of controlled under socialism; people are controlled. the conviction that "liberal America needs a The lives of the vast majority are under the strong and informed voice on social policy to guidance and direction of those who wield polit­ combat the inroads of both communism and of i,cal power. This is a denial of the right of every r~action." The organization's literature further man to make and carry out his own peaceful states that "Protestantism needs a new under­ decisions, of his right to be free to follow the standing of the relation of the gospel of Jesus dicta,tes of his conscience. The theory of natural Christ to decisions on social issues, and of its rights is displa,ced by the theory that human own prophetic role in American society." Chris­ beings have no rights ex,cept those provisionally tian Action's understanding of this prophetic role lent them by the State. may be gleaned from the pages of its quarterly, 'The person ·cannot be 'Sovereign in a collec­ Christianity and Society: to find religious sanc­ tivized 'Society, and this fact is of great signif­ tions for the New and Fair Deals, to underwrite icance for the Christian. The idea of natural and promote the social changes that have oc­ rights or personal sovereignty is a secularized curred in this country in the past twenty years. version of the Christian idea of man; it merely ANew York seminary professor, speaking for the makes the Christian idea available for political group says, "We accept with gratitude the results implementation. It is impossible to plan a society of the New Deal rev@lution in America." from the top down and still maintain the fiction What is the current ideology of Christian Ac­ that people have a right to plan their own lives; tion? John Bennett writes, "Christian Action human rights must be denied in practice and in knows that the whole topography of 'left' and theory in a socialized society. 'right' has changed, that no political discussion But, having gone thus far, socialist theory must based upon it makes any sense today. The most take a further step. H·aving denied human rights, fateful development has been the Stalinist be­ it must seek some sort of cosmic sanction for trayal of the left." After laying down a stricture putting some men at the disposal of other men. It in one sentence and breaking it in the next, he finds this cosmic sanction in some sort of mate­ goes on to say, "even democratic socialism is no rialismwhich denies the God-.concept. Christian self-sufficient solution to our problems.... Eco- socialism is a contradiction in terms.

472 THE FREEMAN Tale of a Coat

CHA'1GITY

1: NEeD A COAT- GIVE ME YOURS!

'J:Ihe WELFAR.:m STA.TE

(Reprints of this cartoon may be secured at one dollar a hundred from the FREEMAN, Irvington-on-Hudson, N. Y.) The Experiment­ "Noble in Purpose"

Twenty-three years of government tinkering with our By JOHN T. FLYNN free economy-in the name of "prosperity"-have lelt us with a fifty-cent dollar and a huge national debt.

During the last twenty-three years we have been merely to compare the actual meaning of these moving through an experiment that has been called figures. But in practice the government did not "noble in purpose"-namely, to guarantee prosper­ tax its citizens on the basis of per capita income. ity to a nation through government action. It may It taxed them on the basis of actual individual in­ be divided into two sectors-the First New Deal come, 'with taxes which began at 20 per cent for of President Roosevelt and the War Deal of Presi­ the lowest taxable income and rose to 91 per cent dents Roosevelt, Truman and Eisenhower. of incomes in excess of $300,000. Looked at superficially, the experiment seems to The results obtained seem great when stated in have been successful. In 1929 there were 31,000,000 terms of dollars, but not in terms of purchasing non-agricultural workers employed. In 1953 there power-first because the dollar had shrunk to half were 49,660,000. In 1929 the national income was its value in the market place and, second, because $87,355,000,000. In 1940 it was 132 billion and the government confiscated vast billions in taxes in 1953 it was something over 307 billion. and other billions in loans. One thing, however, was It would be a shocking travesty on truth to leave accomplished-unemployment was practically ex.. the matter with this statement. In the first place, tinguished. This was not done until the United the increase in income is not accurately revealed States entered the war at the end of 1941. in these bald figures. The income in 1929 was in very different dollars from the income of 1953 or Failure of New Deal Planning 1954. Our dollars are only fifty-cent dollars com­ pared with the 1929 dollars. What is more, the From March 1933 to December 1941-a period population has increased. The per capita income of eight and a half years-Mr. Roosevelt and his of the nation in 1929 was $700. In 1953 it was N'ew Deal had ample time in which to demonstrate $1,900. But these 1953 dollars had a very different the thesis that the government could take over purchasing power. In other words, the per capita the planning and direction and financing of the income of the nation was $700 in 1929; it was $600 economic system and produce prosperity. His in actual purchasing power in 1940 after Mr. Roose­ failure in those first eight and a half years was velt had been in office for eight years. By 1945, complete. He admitted it. Confronted with this when the war ended, it was $1,300-that is, 1,300 disaster he cried out: "Nobody tells me what to do." fifty-cent dollars or $650 in actual purchasing In his four-year term President Hoover had spent power, the dollar having been cut in half as a buy­ an average of $3,700,000,000 a year. In his eight ing dollar by the vast borrowing of the war and years (1933 to 1941) Roosevelt spent an average its inevitable inflation. By 1950 the per capita in­ of $7,500,000,000 a year, 'almost half of it borrowed come was 1,500 fifty-cent dollars, or $750 in actual money. purchasing power. By 19,54 it was $1,900 in fifty­ In 1932, when Roosevelt was elected, there were cent dollars, or $950 compared with p-rewar pur­ on relief 4,155,000 households, containing 16,620,­ chasing power. 000 persons. In 1940, eight years later, there were This small rise of $250 in average per capita 4,227,000 households on relief, containing 16,908,­ purchasing power was accomplished by fantastic 000 persons. In this period farm employment fell borrowing by the federal government. The income off and has never recovered. of the nation was increased from roughly 87 billion There were 11,586,000 unemployed in 1932 when to 300 billion. But it took two dollars to buy what Roosevelt was elected. In 1939, in spite of all the one would buy in 1929. And this income of 300 spending and borrowing, there were still 11,369,000 billion fifty-cent dollars was not all clear. After the unemployed. In the next year, as the European war citizen got this income, the government proceeded got under way and Roosevelt began to turn to war to share it with him, taking a heavy bite in taxes. I measures, there were still 10,656,000 unemployed. have been using a figure based on per capita income These are the figures of the American Federation

474 THE FREEMAN of Labor, at that time the most reliable survey perity for everybody "from the cradle to the grave," available. the answer must be in the affirmative. But the Roosevelt's tragic failure was his inability to means is one which any civilized citizen must con­ note that the task before him was to restore and template with terror. There is only one magic gov­ improve the -conditions within which the system of ernment rabbit-and that is war. private enterprise could function at its highest But out of this experience we have learned what efficiency. Its health had been greatly impaired wiser men have known for centuries; that wars in the years preceding: the crash. Mr. Hoover had launched not for defense but to produce.economic pointed out these defects. But in 1931, two years booms actually produce only disasters-endless after he entered the White House, a Democratic disasters and, among them, when the fever abates, Congress was installed in power, ablaze with eager­ deeper and more terrible depressions. The onset ness to exploit the depression-which came as a of this disease and its tragic consequences are present from Fate to the Democrats to open the way easily traceable in our own experience-which has for their control of the government in 1932. Mr. not yet come to its end, though the end is discerni­ Hoover's warnings, given cautiously to business ble through the fog. leaders, about the wild stock speculation, easy The problem, of course, of the bedeviled politician credit, bad banking practices, abuses of the corpo­ caught in a depression is to create jobs and widely rate system went unheeded. When the Democrats dispersed income. This he usually does by two of the got control of Congress, the great problem of the oldest instrumentalities in history-putting great economic safety of the nation became a mere foot­ masses of men into the armed services, putting ball for politicians who saw an opportunity to dis­ other millions into the war factories, and paying credit their political enemies and a vision of re­ the bills with confiscatory taxes and government turn to power. borrowing. The borrowing is absolutely essential to the Whole monstrous trick. Now let us see how Politicians Prolonged the Depression it has worked for us and where it has left us. The figures are eloquent. No student of government can afford to lose In 1929, 31,296,000 persons were employed in sight of the sobering fact that the powers of govern­ non-agricultural pursuits. In 1940 this was little ment, however small or great, will always be improved. But by 1941 we became entangled in the wielded by politicians whose supreme business is European war. Mr. Roosevelt, who had complained to at'tain office and use it to promote themselves that "no one tells me what to do," now needed no and their party. From the moment Hoover lost further advice. Non-agricultural employment rose control of the House, his ability to accomplish any­ rapidly. By 1942 it had risen to 44,500,000. More thing constructive against the depression was gone. than 13 million additional people had been put to There is not the slightest doubt that the depression work-3,555,791 of them in the armed services, of 1929 could have been kept within narrow bounds at sixty dollars a month and keep. At the peak of but for the unhappy mischance that put the powers the war employment, there were 45,000,000 em­ of Congress into the hands of a group of politicians ployed. Over 12 million of these were in the armed interested not in curing the depression but in riding services. the whirlwind into power. They attained this end The government had found work for the idle in just as the disorder was rising to a dramatic climax, the war effort-civil and military. In 1929 the as President Roosevelt was being ushered into the government employed 851,233 persons in the White House. civilian and armed services. In 1945, when the war No honest student of this episode can bl4nd him­ ended, the number employed by the government in self to the fact that, .. as already outlined, President civilian and armed services stood at 15,692,000. Roosevelt made no headway against the depression in his first two terms. An incredible array of The War Economy alphabetical bureaus was turned loose on almost every sector of the social, economic and political General employm.ent rose rapidly because of the system. Yet no serious impression was made on great numbers working in the defense industries. the depression. None was made until Hitler launched But in addition to these, the great streams of in­ his attack on Poland and thus brought Europe once come in the hands of workers created a market for again into war-the second World War. Out of all sorts of civilian goods. Whether our government that war Mr. Roosevelt got his magic rabbit which flung itself into the arms of war in flight from would produce a wild, disorderly brood of some­ the Old Devil Depression or not is of no conse­ thing called "recovery." If it has had any value quence here. What is relevant is that eleven years whatever, it is in making available to our genera­ after the crash of 1929 private employ,ment had tion the knowledge of the one kind of government not increased. In fact, in 1940 total employment, action that can create a boom. When, therefore, we including government civil and military, had risen are asked if government can assume the obligation only slightly. No important impression was made of creating and sustaining a high degree of pros- on the depression in the eleven years preceding

MAY 1955 475 Pearl Harbor, notwithstanding the expenditure of huge drafts of inflationary money gas., The war $29,500,000,000 in borrowed money in addition to boom we have witnessed was created, not by taxa­ the taxes collected. The boom came with the war in tion, but by the immense confiscation of private Europe. It .cost a staggering sum in taxes and an incomes under the guise of loans and by borrowing increase in the debt from 48 billion to 258 billion at the banks. When Mr. Roosevelt was elected, the as of the end of the war, and 278 billion as I write. national debt was $19,400,000,000. He had in­ What we have done is to create an increase in creased it to $48,961,000,000 by the time we entered the per capita national income from $700 in the war. In the years from 1941 to 194,6, the 1929 to $1,900 in 1953, but actually $950 in real government borrowed from 11 to 65 billion dollars purchasing power compared with 1929 because a year for a total of 226 billion in five years. these are really fifty-cent dollars. To do this we Taxes, of course, figure in this, in that the had to take an estimated fifteen million young men government went back to the vast streams of in­ and women from their jobs and schools into the come thus created to tax them again and spend armed services. We had to pile on the backs of.the them again. This policy has been continued to A'merican people a debt of 278 billion dollars, with date by President Eisenhower. In 1953, the federal a continuing interest charge of six or seven billion government employed 6,047,000 persons in the civil dollars a year as far ahead as we can see-an in­ and military establishments, as compared with terest charge twice as great ,as the total cost of only 851,233 in 1929. As a matter of fact, there government in 1930. The ,costliest price we paid are as many or more people employed in the civil was 407,000 men killed and 670,000 wounded in and military establishments as there were in 1946, World War Two, and another 33,000 dead and the year after the war ended. In the meantime the 103,000 wounded in the Korean War. And tragic nation is saddled with a debt of 278 billion dollars. almost beyond understanding is the appalling fact And the interest on this alone----$6,475,000,000 for that communist Russia got one-half of Europe this year-is more than the total cost of all the and two-thirds of Asia as the prize, while we re­ federal government activities, including the Army main trapped in a series of foreign complications and Navy, two years after Mr. Roosevelt took with war clouds still drifting over us from every office. continent. There is no sign of an end to this desperate policy. In 1953 and 1954 the federal budgets were An Ancient Gimmick almost twice as great as in 1947, two years after World War Two. This is likely to be true also for Of course, the reckless war spending created a the year 1955, when all reports are in. But the boom here, but a thoroughly unhealthy boom. The problem is that the one great scarecrow that has immense prosperity created during and after the been used throughout history to make people sub­ war was not due to government taxation or even mit to taxes and debt is now missing. That is actual to government borrowing from citizens. Had the war-though it is clear our government flirts government limited itself to taxing and spending dangerously with that grim boondoggle. War scares there would have been no war boom. It was due to and fantastic invasions of the economic system government borrowing at the banks. The secret of are used as substitutes for actual war itself. How this ancient gimmick has been known since John will it all end? It will end precisely as the orgy Law created the first deposit bank under Louis XV. of private debt, including bank loans, ended in Nation after nation has blown up booms by wars 1929. How long will it last? Who can tell? Will it fought on bank loans. And in every case they have end in the collapse of the .system of free enterprise paid the penalty in depressions and even extinc­ -which has already withstood the shock of one tion in the end. dreadful depression and a great and terrible war? Certainly government can aid the private enter­ Does any leader or any group have a program for prise system by creating a hospitable environment the restoration of the free .system within the within which it can function at its highest efficiency. American RepubUc ? 'The time grows short.. Or are But all we have seen here has been an angry and we, like England, France, Italy, Spain and almost disordered war on· the free economic system, first every country in Europe, to sink down into the by taxing it to feebleness and then reviving it with prison of a socialist State?

The State makes use of money which it extort.s from me to unjustly impose fr,esh constr1aint:s upon me; this is the case ... when it pretends to regulate my morals and my manners, to limit my labor or my expenditure, to fix the price of my merchandis,e or the rate of my wages. With the coin which I do not owe it and which it steals from me it defrays the expense of the persecution which it, in­ flicts upon me. Let us beware of the encroachments of the State, ,and suffer it to be nothing more than a watchdog. HIPPOLYTE TAINE (1828-1893)

476 THE FREEMAN Sources of Tax Reduction

Analyzing the President's Economic Report, an expert By HARLEY L. LUTZ on tax problems shows why total production cannot be increased by getting the government into business.

That the President's annual Economic Report to Economic production is the peculiar domain of Congress should place major emphasis on what the private capital and effort. Government encroach­ government has done was to be expected. After all, ment into that domain is not condueive to a larger it was prepared by a governmental agency, the total, particularly in a society which is as well Council of Economic Advisors. But, in so doing, the equipped as is our own with private managerial Report does reveal at different points and in various competence and all else that contributes to pro­ ways a philosophy of government that attracts at­ ductive efficiency. Long ago Adam Smith observed tention; it undertakes, rather unsuccessfully, to that the functions of sovereign and trader could not steer a course between free enterprise and a planned be merged without detriment to the perfor!mance economy. And sinee the Council of Eeonomic Ad­ of one function or the other. The business of gov­ visors is a governmental ageney, the views and ernment is to govern, and our society will advance proposals of the Report carry a weight that no most rapidly if the public functions and services nongovernmental organization could carry in ex­ are kept within that sphere, and if the portion of pressing its vie\vs. total resources drawn into public use is held to the The tone of the report is set, on page 2, by an minimum required for the efficient performance of enumeration of basic tenets which are said to under­ the necessary public services. lie the Administration's economic actions and its future program. Four of the six propositions ad­ The "Money Pump~~ D,elusion vaneed there deal with what the federal govern­ ment is doing or intends to do, and only two relate This conception of the nature and function of to the private economy as a matter of major con­ the budget rejects the doctrine that the chief pur­ eern. Another example of the emphasis on the pose of the budget, and of the spending and taxing superior role of government is in this sentence power, is to pump money into or out of the econ­ from page 48: "Budget polieies can help to promote omy as determined by the aims and intentions of the objeetive of maximum production by wisely a superplanning agency. Adam Smith said that allocating resources first, between private and pub­ when a ruler attempted to superintend the industry lic uses, second, among various governmental pro­ of private people and to direct it toward the em­ grams." ployments most suitable to the interest of the This is a disturbing statement because, in my society, he was undertaking a duty in the attempt­ view, it points directly toward the planned, and ing to perform which he must always be exposed eventually the socialized, economy. It says in so to innumerable delusions, and for the proper per­ many words that maximum production can be pro­ formance of which no human wisdom or knowl­ moted by permitting the budgeting authority, in edge could ever be sufficient. its superior wisdom, to determine the allocation of I would direct particular attention to the gap total resources between private and public uses. between certain expressions of our national ob­ From this it follows that if the budget authority j ectives and aspirations, on one hand, and the should decide to increase the public share of tofal omission from the Report of adequate reeognition resources, the private share would be correspond­ of the actions required if these lofty and \vorthy ingly diminished. Concretely applied, this means ends are to be attained. that if in its superior wisdom the government On page 4 is this statement: "Our economic fu­ should increase its budget in order to apply more ture depends on the full use of the great treasure of it to the production of particular goods such as house of intelligence, skill, energy and confidence steel, rubber, aluminum, electric power, or other of the American people." And again, from the same things, there would be less private resources and page: "... unless there are satisfactory jobs for a smaller total of private production than would those who seek useful employment, and unless otherwise be the case. It is impossible to avoid the human labor is devoted increasingly to the pro­ implication that total production can he incre'ased duction of goods and services that improve the by getting the government into business through quality of life, our gains in productivity may be absorption via the budget of a larger share of dissipated." total resources. One more statement, this one on page 6:

MAY 1955 477 Public policy must also protect incentives and ago. Maybe there can be something next year, if encourage a spirit of enterprise and innovation expenditures are reduced. As for next year, the among people. The man or woman who, in the hope Report says, page 49: of personal betterment, works harder, designs a new product, creates a new method, invests in a Congress might then consider enacting a general, new business, moves to a better job, or sugges,ts though modest, reduction in taxes and, at the same a new idea to his employer must believe that the time, continue the program which was begun last rewards of initiative and effort are worth while. year of reducing barriers to the free flow of funds Through all of its policies the government must into risk-taking and job-creating investments. encourage enterprising action by business managers, investors and workers, in an environment that is In my judgment, here is another weakness of the kept basically free and competitive. Economic Report, namely, the failure to carry These are splendid statenlents of our personal through from the perfectly clear perception of the and national objectives and aspirations. They are bad effects of heavy taxes to a firm and definite entitled to command, and I believe that they do position on the necessity of prompt corrective ac­ command, universal approval and support. With a tion. The removal of other barriers to the free flow platform such as these passages provide, anyone of funds into risk-taking and job-ereating invest­ who continued to read through the report would ments is a desirable step but it will be relatively expect to find an equally forthright and construc­ futile unless there is also removed the very ob­ tive program where'by the objectives set out there structive barrier of the high taxes on incomes, and are to be attained. the gross discriminations of the steeply progressive In this respect, however, the report is disap­ rates of taxes on individual incomes. pointing. It fails to recognize adequately the great The Factor of E,conomic Growth importance of private capital formation as one of the most essential conditions for the provision of There are two sources of tax reduction. The satisfactory jobs, for the increased production of traditional measure of such reduction has been goods and services that improve the quality of life, the amount by which the public spending has been, and for the desired advance of the level of well­ or can be, reduced. The Economic Report places being. There are references to the things that gov­ the principal prospect for tax cuts on this tradi­ ernment is doing to aid small business, to curb tional basis. monopoly, to expand so-called "public" assets, and Another source of tax reduction which hitherto to extend social security bene,fits. These and the has been generally disregarded is econom'ic growth other actions described, which constitute a com­ of the eountry. This factor has been recognized bination of policing and paternalistic measures, in the President's recentmessage.s. The National may have beneficial effects. They cannot possibly Associ.ation of Manufacturers has recently pub­ serve however, as adequate substitutes for the lished a new tax program which proposes to utilize growth of the nation's stock of the private capital the growth factor as a source of tax reduction. This which increases our productive potential. is, of necessity, a long-range program, the pro­ This lack of emphasis on, or adQ'quate recognition j ections of which are based on the historic growth of, the importance of steady growth of our capital trend without regard to the annual variations or is the more surprising in view of the rate at which temporary reversals of that trend. As a first step, the labor force is growing, and of the capital in­ a series of reductions in the rates of corporation vestment which i.s required, on the average, to pro­ and individual taxes is projected over a five-year vide a productive, well-paid job for each new period. worker. It is equally amazing to find that, al­ The two points at which the tax-rate reductions though there is a clear grasp of the bearing of would be made, unde'r this plan, are the corporation heavy taxes on incentive and the provision of job tax rate and the progressive element of the in­ opportunities, there is so little concern about the de­ dividual rate scale. By a series of annual reductions fects of the federal tax structure. On page 49 it over five years the top rate in each case could be is said: brought down to 35 per cent. On the assumption It should nevertheless be recognized that present that there would be, on the average over this period, taxes are still a heavy burden. Lower taxes would a continuation of economic growth at the historic tend to encourage work, promote more efficient busi­ rate of 3 per eent, there would be provided as ness practices, and create more jobs through new much revenue through the period as is now ob­ investments. tained from the present high rates. This is an excellent description of an important As an illustration, if the federal revenue re­ line of action that must be taken if we are to have quirement over the next five years were not to ex­ that glorious economic future which, on page 4, ceed, say $60 billion a year, this level of revenue we are told may be ours. But on the subject of tax could be maintained because of the expansion of relief, the report offers stones instead of bread. the taxable corporate and individual income bases, It is said that there can be no tax reductions this even with the proposed annual rate reductions. year, not even those that were agreed upon a year The possibility of a serious military crisis cannot

478 THE FREEMAN be ruled out in any period, much less the present; The plan does not deal expressly with the first but this ever-present possibility provides no reason bracket rate of the individual tax, but it is em­ to forego constructive planning for national growth phasized that during and after the execution of the and prosperity. If and when the nation should plan, every opportunity of further tax reduction again be faced with a great military crisis, it arising from budget cuts or a more rapid rate of will he better prepared to meet the situation if economic growth than the plan assumes, should be investment and production have been maximized applied to a reduction of the first bracket rate. in the meantime. If it be said that inasmuch as the plan assume~ The reason for concentrating the reductions that continued growth, why should the available tickets are realizable from the growth factor on the high for tax reduction be used in this particular way, rates of income tax is that these rates are the most my answer is that there is no assurance that the penalizing on incentive, effort, enterprise and capi­ growth will continue, and especially is this so if tal formation. The case for action here fits per­ we do not work and plan for it. The Report says, fectly with the excellent 'Statements which I have correctly, that there is no way of lifting more already read from the Report concerning the re­ than a corner of the veil that separates the present lease of our creative energies, the provision of from the future, and that we shall achieve the enough satisfactory jobs, the importance of letting grand economic future awaiting us only by wise every industrious, ambitious, creative person management of our national household. The best realize that the rewards of his effort will yield assurance we can give that economic growth will personal betterment. The reduction of penalizing, continue is to remove the barriers and impediments discriminatory taxes is the one effective and con­ most likely to prevent it. Chief among these impedi­ vincing way of demonstrating that we really mean ments is the ball and chain of high and discrimina­ what is said on this matter. tory tax rates.

Even Lincoln Said It By MALLORY CROSS JOHNSON

If you don't understand the problem of the "public Dick, who is taxed to pay Tom in part; and Tom, debt," you are in good company. Abraham Lincoln who finally gets his money back-all three find their didn't understand it either. In a message to Con­ dollars are worth only fifty cents compared to ten gress, December 6, 1864, he wrote: "Men readily years ago when they first began to "borrow money perceive that they can not be much oppressed by from themselves." a debt which they owe to themselves." Where has the other fifty cents gone? Why does This idea has often been repeated, ,especially it take a dollar to buy things that cost fifty cents since 1933. It is a standard reply to those who ex­ ten years before? Until Tom, Dick and Harry figure press anxiety about the size and rapid growth of out how the government operates its shell game­ our public debt: 278 billion dollars, and still grow­ begin to wonder what happened to that other fifty ing. cents--the game will continue to work. The "other In Lincoln's day nobody bothered about the fifty cents" was spent chiefly on goods that have national debt because there wasn't any to speak of. been destroyed or used up: ships, planes, ammuni­ Before the Civil War, the federal government gen­ tion, barracks; or given away in the form of ma­ erally balanced its budget; a few small debts were chineryfor Russians, food for Greeks, tractors for cleared up within a few years. Lincoln's remark Hindus, a movie industry for Indonesians, pensions about the people owing the national debt "to them­ for Frenchmen, dentures and wigs for Englishmen. selves" was purely academic. The money was spent and is gone. It cannot be re­ When the government spends .money, it first has turned to us any more than the things it paid for to get it from someone who has earned it-by tax­ can be returned. ation or borrowing. To repay what it borrows from If they understood it better, Tom, Dick and Harry Tom, the government must get the amount by might say to their officials: "All right, we'd have taxing Dick (and Tom). When the government paid for the reasonable costs of war if we'd been doesn't dare raise taxes enough to pay Tom all it asked to; we're not so sure we want to give money owes him, it waters the currency by printing dollars to everyone in the world who asks for it, if we or granting credit to itself backed by its own won't get any of it back. Of course we'll give, bonds: this is inflation, a deceitful form of taxa­ through private charities, to those who are really tion. Then Harry, who has retired on his savings; starving. But regardless of what we would or

MAY 1955 479 wouldn't have paid for, we don't like being fooled. hundred and fifty. What happened to the other You were lying when you promised to return our fifty? The government spent it, just as you spent money. There's something about this debt business your money on your coat. The only differ,ence is, if that doesn't s·eem right." you spend it you have the coat. If the government It isn't right. You won't get back one cent, yet spends it, Englishm·en get wigs, Indonesians get you have precious little to say about how it will be movies, and more bureaucrats get a living without spent. The government propagandists will do all produeing anything. t.hey can to convince you that you do have a say Maybe you think this money is being well spent. about where the money goes, and that you do owe Maybe not. But whatever your opinion, don't kid it to yourself. They will insist you can control yourself. Whether you think it outrageous or ad­ spending by the way you vote; but politicians have mirable doesn't affect the truth of the matter: that been promising to balance the budget for more than is, a fraud is being perpetrated on the public (you twenty years, and breaking their promises with and me) by the government. Our bank deposits, life monotonous regularity. Voters continually elect of­ insurance premiums, and other forms of personal ficials who say they'll spend no more than they savings are heavily "inv,ested," in the form of gov­ take in. No candidate to my knowledge has ever ernment bonds, in this debt "we owe to ourselves." been elected on the promise that he would g·et us Therefore, we as a group can collect on those sav­ further into debt. ings only to the extent w·e pay another premium (tax) enabling the government to redeem those The Deht We "Owe Ourselves~' bonds, so the insurance companies and banks can fulfill their obligations to us. Isn't "owing it to But how can you "owe it to yourself"? Suppose ourselves" wonderful! It only costs us double. you had saved a hundred dollars, put it in the bank, What do you think of the neighbor who borrows then spent half to buy a new coat. Would you go five dollars from you and never pays it back? The home and say to your wife: "I bought a new coat kind who always promises to give it to you "next for fifty dollars today, dear. Since I owe myself the time"-but next time he "hasn't got it on him fifty dollars, that, plus the fifty left in the bank, right now." H,e's hardly the kind you would will­ is still worth a hundred, so we're no worse off t.han ingly lend money to, is he? When politicians come to before." Sounds silly, doesn't it? The only way to beg, borrow, or tax more dollars from you, insisting bring your bank balance up to a hundred dollars that you can't be much oppressed by a debt which again is to earn fifty dollars more and deposit it. you "owe yourself"-don't believe them. Face the That is what the government has us do. Since we fact bravely that if you want your government to are the only source of the government's money, it dispense "benefits" to all the world (including your­ s·ends us out to earn what it owes us, which it then self), the money is coming out of your pocket-and takes from us to pay ourselves back. Then it says: staying out. "Now you have been repaid; you have your hundred Whether or not we approve of inflation and a dollars again." But before we recovered the hundred 278 billion dollar debt, let us ,stop deceiving our­ dollars in our account we had to earn, besides the selves and face the truth. Certainly we owe that to first hundred, another fifty-which adds up to a ourselves.

ANew Libertarian Magazine

The staff of the FREEMAN is most pleased to welcome a new libertarian magazine. The first issue will appear this month. Titled Ideas on Liberty, it is published by the Foundation for Economic Education, Irvington-on-Hudson, New York. This bi-monthly, 96 page, pocket-sized journal of opinion will contain from fifteen to twenty articles on the general subjects of economics, government, religion, law and education. The articles will be about half originals and half reprints from other sources-both classical and current. The originals may be staff-written or contributed. Ideas on Liberty will be sent to each person on the Foundation's mailing list. If you are not on that list, you may get a complimentary copy on request.

480 THE FREEMAN What Would You Call Mr. Hoiles?

By THADDEUS ASHBY

I wrote to a friend, asking about R. C. Hoiles who had offered me a job writing editorials for one of his newspapers. "Know only rumors about him," my friend re­ plied. "... rumor says he owns ten newspapers ... is the richest man in Orange County, Cali­ fornia ... hated by people who don't know him ... loved by those who do know him ... may R. C. Hailes get, your dander up ... will give you the freedom to write as you please so long as you answer "He admits to being 'biased' about his grrund­ questions without evasion about what you children." believe. . ." As for those editors who "grind their teeth to But who is R. C. Hoiles? Briefly, he is chief the roots as they handle his copy," I can tell you executive and philosophic mentor of Freedom about that: I was editor of the Colorado Springs Newspapers, an empire that stretches from Gazette Telegraph editorial page for two years Bucyrus, Ohio, down through five Texas cities, and handled Mr. Hoiles' column six days a week. includes one paper each in New Mexico and Colo­ The only time I ground my teeth was when his rado, bounces through two California cities. At dictated sentences ran into non-stop marathons. 76, Hoiles is looking around for new territory. Time thought some editors grind their teeth over Why Hoiles is hated is interesting. But first, his ideas. I never met them. The ones I knew who hates him? qualified as such ardent individualists themselves Time calls him "terrible-tempered." The N a­ they either agreed with Hoiles or went even farther tion's Schools says Hoiles pours "poison into the than he did with their individualistic ideas. public consciousness." The Milwaukee Journal classes him among the "bigoted, stingy and luna­ A Foe of Compulsion tic" elements. McCall's magazine says that Hoiles is "lacking in public spirit," "eccentric," and a Hoiles won much of his fame in the field of "menace to public education." The Milwaukee ideas by opposing tax-supported schools. He con­ Journal reports that "his editors and printers tends they are immoral because they are based grind their teeth to the roots as they handle his on compulsion. "Teachers can't discuss tax-sup­ copy." Time says "He shouts his letters and ported schools intelligently because they are vic­ columns to a long-suffering secretary..." tims of the system. How can an inmate of a house The "long-suffering" secretary, who has taken of prostitution discuss chastity? It is no more dictation from Hoiles for nine years and seems possible to make constructive suggestions about to grow prettier in his service, notices these things tax-supported schools than about murder, arson, about her boss: robbery or any other crime. The only constructive "Every morning a new rosebud in his lapel, suggestion would be to discontinue murder, etc." picked from his rose garden. Hoiles has a standing offer of $500 to any su­ "The twinkle in his eye when he asks for your perintendent of schools in the circulation area of reaction to an idea he's mulling over-to 'have the Freedom Newspapers who will answer several it tested.' questions within a limit of one minute for each "His keen interest in marriage and children­ question. Since he is a firm believer in the Golden and even the little romances that sometimes bud Rule, two of the questions are: in an office. I well remember his interest when I If Bill Smith sets up a private school and forces received roses for my desk in my 'courting days.' John Jones to either help pay for its upkeep or "He stresses and demonstrates his belief that leave town-would he be violating the Golden an employee is an 'associate' who doesn't work Rule? If the majority of the community set up for an employer, but with him. their own school and force the minority to either

MAY 1955 481 help pay for its upkeep or leave town-would they hectic times, all of those who worked with Mr. be violating the Golden Rule? The point of the Hoiles did so because they knew he had guts questions is that "the government has no right and because he inspired loyalty, hard work and to do anything which is immoral for the individual admiration. Almost at once, Mr. Hoiles could be to do." the most lovable yet the most exasperating man; As yet, no school superintendent has tried to the most stimulating and the most depressing, pick up the $500. depending upon the current operation of his ex­ One of the first things Hoiles does when he ceptionally active mind and intellectual pursuits." buys a newspaper is to refuse to sign a closed Time says that Hoileshas a Stone Age philo­ shop contract with the union. He has a strike on sophy, but concedes "one touch of liberalism in his hands. (Characteristically, when the union the Hoiles record: during the war, he campaigned struck his plant in Santa Ana, California, Hoiles to give the Japanese-Americans a break." walked back and forth with the men on the pic­ That's not quite his only touch of liberalism. ket line, trying to make them see his point of Hoiles is completely liberal in the classical, view.) You would think that the men thrown out Frederic Bastiat sense. He opposes the Smith of jobs would be filled with hatred for him. Here Act and all laws which outlaw Communists. He is the testimony I got from one of his make-up opposes the McCarran Act and often fights for men: better treatment of "wetbacks" as well as all "I was in sympathy with the union. Of course, other immigrants. Crusading for a liberal immi­ I quit when the strike was called. I went to gratiOinpolicy, Freedom Newspapers often quote Pueblo to work on a union paper. I soon got tired the poem on the base of the Statue of Liberty: of it. I could do as much work in an hour as Give me your tired, your poor, a union man did all day. They told me to slow Your huddled masses yearning to breathe free. down. Then, one warm day I opened a window Send these, the homeless, tempest-tossed to me, and was promptly informed by the shop steward I lift my lamp beside the golden door! that there was a union man who got paid for Hoiles fights the draft and UMT because he opening windows, and was I trying to throw him is convinced that all initiated force is wrong: out of work? I came back to Hoiles. I like working he's against the draft, emergency or no emer- here and wouldn't go back to a union shop under any circumstances." Principle is ever the guiding star with Hoiles, whether iill a contest with the union or in his The Faith of R. C. Hoiles relation with advertisers. At one time he was running news stories about a group of local busi­ I have faith that to the degree we have free nessmen who had formed what constituted an trade and no immigration.quotas we will have anti-chain-store organization. The reporter was peace and good will amongst men. called into the front office and asked whether the I have faith that our country would be better stories were true. The reporter said he would protected by voluntary soldiers than hy drafted vouch for them. "Wait a minute," said Hoiles. soldiers. I· have faith that our ,government would better A few minutes later there came from the inner protect every person's unalienable rights if it office this bold c"hallenge to Hoiles' biggest ad­ was supported on a voluntary hasis rather than vertisers: by taxes. "You can take your advertising out of my paper. I have faith that we will he better educated by That's your business. But I'm running this paper voluntary, competitive schools than by govern­ and I'll say what is to be printed in it. If the ment schools. stories are true, and we think they have news I have faith that competition will create both value, they're going to be rUin whether you like material and spiritual developm.ent. it or not." I have faith in Illyself and llly wife and In his early days Hoiles exposed a case of children and grandchildren, and in all men who corruption involving a Cleveland paving contract­ will answer questions without evasion ahout what they are advocating. ing firm. Shortly afterward he was awakened by I have faith that man is perfectable even if a terrific explosion which ripped off the front of he is fallihle. his home. A little later a hired hoodlum wired a I have faith in work. few sticks of dynamite under the hood of Hoiles' I have faith that life is good. car. Hoiles tramped on the starter, heard some I have faith that a governm.ent is a good gov­ coughing illl the motor and drove to a filling ernment that only does what each and every in­ station. A white-faced mechanic discovered the dividual has a moral and ethical right to do. dynamite, which had not, God knows why, ex­ I have faith that gaining understanding of ploded. nature's laws is the best way to be useful to One of Hoiles' associates wrote during the days one's self and to his fellow-man. of the bombing and dynamiters: "During these

482 THE FREEMAN gency..In fact, he believes the draft created the with admiration. "There's one man who made me emergency. "We wouldn't get into foreign wars change my mind," he'll say, marvelling at the without draft.ed men forced to fight them." He event. believes we are absolutely wrong to defend For­ He still talks about Frank Chodorov as "one mosa (or Europe) with drafted men and tax man who proved me wrong." The issue was taxes. money. "If men want to volunteer to fight for "Taxes are all right," Hoiles used to say, "as Formosa, that's their right." long as people pay them voluntarily; I believe in Another liberalism of Hoiles which Time missed voluntary taxes." is his uncompromising belief in free trade. He "That's a contradiction in terms," Chodorov frequently denounces self-alleged libertarians who said. "The one thing that distinguishes taxes from advocate protectionism. Hoiles often quotes: "I voluntary cont.ributions is the element of force. am for free trade because I believe that mankind There's no such thing as voluntary taxes." will trade or fight." "If goods do not cross bor­ Hoiles thought that over, screwing up his face. ders, soldiers will." "You're right," he admitted. "Then I'm against Time called Hoiles a "prune face"-it was the all taxes." He has been 'ever since. nearest thing to complete accuracy Time said Of all the columns by R. C. Hoiles I remember, about him. He wouldn't win a beauty contest. I thought the one called "The Faith of R. C. He wouldn't win a popularity contest either. "I'm Hoiles" was the best, for it sums up those indi­ not entered in either one," Hoiles says. His face vidualist beliefs which make his enemies call him is usually all squeezed up int.o a question mark. a "crackpot" and his friends revere him. Some "Why?" is one of his mottoes. excerpts from it are in the box on page 482. Once a big publisher in the West asked me : "Define Your Terms!"" "What kind of man is Hoiles? Is he a genius or a scoundrel? I've heard both." He will sit and talk to you all day if you have I thought a while. "He's the kindest man I something to say. He probes at you, coming in ever met," I said. "You've heard he's against from all sides. "Define your terms if you would tax-supported schools, tax-supported old age pen­ discourse with me," he says. When you're through sions, social security, child labor laws, taxes of defining them, you know a lot more about what alny kind. You've heard how he throws labor unions you believe than you did before. He sharpens out on their ears. But I say he is kind because your wits. he respects men as individuals. You feel he wants Though a good golfer and able to move com­ to find the best that's in you and drag it out of fort.ably in the country club set, Hoiles remains you where you both can st.and and admire it. the most unsophisticated millionaire I ever met. He looks for the truth in a man." Sitting at a table for six in his club, he talked I remember how I met him. I was ~ steel­ polities with me all through dinner, ignoring worker. I had spent my days working as a second everybody else at the table. We discussed Bastiat's helper on the open hearth, my nights writing a theory of value-none of the golf-bridge set knew novel about it, and my meals drinking beer. I what in blazes we were talking about, but Hoiles came down with a mild case of t.b. After a year paid them no heed. recuperating, I felt ready to go back to work on When he finds a man with an idea he is off the novel. like a hound after a fox. If you know any young I first read about Hoiles in that vitriolic article libertarians seeking a career in the newspaper in Time, which made him sound like the meanest business, send them to Hoiles; if they want to man alive. I thoroughly agreed with the senti­ work he might find a place for them; if he does ments Time attribut.ed to Hoiles, especially his they will learn to work, while taking part in opposition to tax-supported schools. I sent Hoiles the practical battle of man vs. State. four articles on schools. He bought them. Then I Hoiles may find some young-minded libertarian asked him to finance the novel I was working on. at a party; he then loses all track of time. Like He wrote back and said he wouldn't subsidize me a philosopher in the Athenian grove, he will con­ but he would give me a job writing editorials in tinue asking questions as long as your batteries Colorado Springs; the climate would be good for return his bright fire. His wife has to tell him me. He believed that a steady job with responsi­ that the guests are leaving and won't he say bility would do more for me and my novel than goodbye to them and go to bed? "Oh? In a mo­ a subsidy. ment," he says, and turns back to you, asking, Maybe you wouldn't call Hoiles a charitable "But how do you know Jesus act.ually said 'Render man. But he has a capacity for bringing out a unto Caesar'?" man's best self. I call this the highest kindness. Intelligent men find it a pleasure to argue with William Johnson, editor of Faith and Freedom, Hoiles. He will, on rare occasions when proved wrote to Hoiles on his seventy-fifth birthday: "If wrong, change his position. Whenever this hap­ there were a typical individualist, you would be pens he talks about it for years, shaking his head my standard."

MAY 1955 483 ~ A Reviewer's Notebooki By JOHN CHAMBERLAIN J ~ ~

Once upon a time, for my sins, I observing creator of character that of her sex was against her. At any spent a month for Fortune Mag­ he can triumph over a defective rate, nobody thought of training azine reading practically every sense of values. The portrait of Bess to take over, whether in her novel about a businessman that Willis Wayde is sensitively done­ own name or in the name of what­ had ever been written in the United but the intellectual schematization ever husband she might acquire. States. The amount of concentrated of the book through which Willis The family circumstances being bilge that I passed through my Wayde moves is all wrong! The what they were, old Henry Har­ mind is horrendous to contem­ Romans had a saying about money, court did the best he could when plate even in distant retrospect. "non olet"-it does not smell. But he turned to young Willis Wayde, Practically every young novelist the "commercial instinct," which is the son of a mechanical engineer who eame out of a family that what Willis Wayde had from birth, from the West who had advised the made its living by business seemed mayor may not smell, depending Harcourt Mill to acquire the Klaus to be fighting a Freudian war with upon the uses to which it is put. patents. Young Willis was dazzled his father. If the old man was in Mr. Marquand understands the a bit by the rigidities and subtle finance, then the son saw him as workings of the "commercial in­ distinctions of Clyde society. Since a pirate like Dreiser's Frank Cow­ stinct" wherever it appears, the "commercial instinct" was in­ perwood. If Pop was a big shot in whether it is in an older genera­ born with Willis, he proceeded to railroading, he was a power maniac tion of businessman or among the use it to gain personal acceptance like the Collis P. Huntington of modern bre'ed. But Mr. Marquand, in Clyde. But Bess Harcourt was Frank Norris' The Octopus. If he who hails from that "settled" part ambivalent about Willis. He was an belonged to Rotary or Kiwanis, he of the United States which one attractive boy, no doubt, but he was a Babbitt. If he was a war finds in the old communities to the was certainly no aristocrat. His manufacturer, he loaded the gov­ north of Boston, has an inherited external humility, a protective thing ernment down with defective air­ or an ingrained prejudice. To him with Willis while he was learning planes or paper shoes. And so it "non olet"-it does not smell-ap­ his way around in Clyde, made went, through a long and dreary plies only to money which is in­ Bess think of Uriah Heep. Bess catalogue of villainy. herited. Money which is in process couldn't take that. The penchant for stereotypes has of contemporaneous creation in­ Uriah Heep or not, it took Willis had a forty-year run, and it is only evitably involves the making of to save the Harcourt Mill. This recently that one or two brave souls compromises by businessmen-and happened years after Willis had among our novelists have come to this compromising is what offends gone to New York and New Jersey. ques,tion it. Three years ago, in Mr. Marquand's patrician nostrils. He did it by the process of merg­ Executive Suite, Cameron Hawley ing Harcourt with his own Rahway dared suggest that businessmen So the patrician proceeds to mis­ Belt. And then he did the un­ might proceed from a variety of read his own story. Marquand forgivable thing: he put both Rah­ motivations, just like other human rightly sees that the third and way and Harcourt into the larger beings. Executive Suite ·may have fourth generations of Harcourts in firm of Simcoe, with headquarters been rough-hewn as a work of art, Clyde, Massachusetts, are not up to in Chicago- and closed down the but it was the first refreshing running the old Harcourt Mill, an Harcourt factory in Clyde because treatment of a business theme ancient integer in the rubber belt­ it was an inefficient unit. since Sinclair Lewis' Dodsworth ing industry, with the efficiency To Bill and Bess Harcourt, this and Booth Tarkington's The Pluto­ that makes for good wages and ,vas an outrageous failure of crat, both of which included a fair decent profits. Old Henry Harcourt noblesse oblige toward a whole set measure of sympa,thy for the life of is the last of his· breed with the of Clyde retainers who had worked conjuring productivity out of a "commercial ins,tinc.t." Son Bryson for years in the old factory. More­ matching of men and money. And Harcourt hasn't got it-he is an over, Willis' wife Sylvia, the now that John P. Marquand has got­ outdoor man who prefers yachting daughter of a Harvard geology ten around to the subject of busi­ at Marblehead to worrying about professor, thought it a bit cold­ nes,,; in Sincerely, Willis Wayde rubber belting patents. As for blooded on Willis' part. But Willis' (511 pp., Boston: Little, Brown, grandson Bill, he is a nice guy, attitude was that business was $3.95), we have another departure but he just doesn't want to be business. You had to do what was from the stereotype. bothered. Bill's sister Bess might good for the stockholders, and you It is a departure, however, only have made a good inheritor of the had to make a profit or go under. because Mr. Marquand is such an Harcourt Mill, but the mere fact As a patrician, Mr. Marquand is

484 THE FREEMAN obviously on the side of Bess and aeternitatis-and he comes close through the Paul Castelars of this Bill Harcourt. What he does not to turning his own Point of No world when "society," as repre­ see is that the young Harcourts Return into Sophoclean drama. sented by a corrupt or weakling had forfeited their right to be crit­ Whether he is writing about south­ D.A. and a complaisant police, re­ ical of Willis Wayde when they re­ ern "Shintoists," or about "you fuses to be the agent of Divine fused to take responsibility for the can't go home again" refugees wbo Justice. property they would some day in­ seek success in New York City, or The moral ambiguity of Cas­ herit. The true aristocrat does not about a novelist who has climbed telar's position is accepted by Mr. turn over his ultimate moral deci­ up out of the "mudsill" world of de Toledano as one of those indi­ sions to an agent; he stays with Alabama white trash only to dis­ vidual crosses that must be borne his responsibilities, and lives or cover that he has a touch of the in an age that refuses to make dies by the result. The trouble tarbrush through an octoroon moral sense of its own predicament. with both Bess and Bill was that mother, Mr. Basso comprehends The dilemma is the old one of John they wanted it both ways. They that everyone is caught in the same Brown. Was he saint, or was he liked the money which Willis Wayde sadness. The record of humanity fanatic? And if fanatic, was he made for them. But they were un­ is a struggle to make patterns God's chosen vessel nonetheless? willing to do the hard work that against the enduring dark, and There are no pat answers to any of was necessary if the fate of the nobody can escape the human lot. these questions, but human beings Harcourt IVlill were to remain in The most that any novelist can do must on occasion try to answer their own hands. is map the contours of the darkling them. Right or wrong, P'aul Cas­ Marquand understands the "why" plain where the ignorant armies telar is a figure of transcendant of Willis Wayde's decisions. But clash by night. importance to our time. And it is he can't resist making fun of the part of our time's disease that most man for being a business climber. Novels can be written in two fun­ of our literary media refuse to look He does this by giving Bess the damental ways-the "social" way our Paul Castelars in the face. last word in the book. The last of Henry James, which Marquand They are part of the corruption word should have been Willis', and Basso both accept as their par­ that has let the murder of Carlo however. For Bess, after all, is the ticular convention, and the poetic­ Tresca go unsolved and unavenged. fundamentally stupid victim of a symbolic way of Nathaniel Haw­ perverted code that only recognizes thorne. Ralph de Toledano's Day Having used up my space on the energy when it is ancestral. Bess of Reckoning (179 pp., New York: most provocative of the recent should have married Willis in the Henry Holt, $3) is in the latter novels, I haven't room to deal justly first place, as her grandfather tradition. Mr. de Toledano's meth­ or adequately with Clinton Ros­ wished in his secret heart. If she od is to concentrate so much real­ siter's Conservatism in America had, the Harcourt lVIill would have ity in a single vehicle that it be­ (327 pp., New York: Knopf, $4). slugged it out with both Rahway comes not reality but poetic alle­ Like other books of its type, this and Simcoe and won the battle. gory. raises more questions than it set­ And she would have remained in Into a story about communist tles. Rossiter writes a fluent, agree­ the driver's seat, a true aristocr,at immoralism and the individual an­ able prose; he has learning; and instead of a phoney one. swer thereto, Mr. de Toledano has he is obviously on the side of the thrown the Carlo Tresca case, the angels in the contemporary strug­ As always, Mr. Marquand carries Juliet Poyntz case, the Krivitsky gle against communism. But he lacks off hi5 novel with deft command of case and the Trotsky case, pIus a any clear conception of the depend­ his flashback technique. The meth­ number of overtones of the Spanish ence of the good community on od is not original with him, but Civil War. Since the Western individual variation. he is such a master of it he has world, through some process of Rossitel" prizes certain phrases made it peculiarly his own. And corruption which few people have such as the "primacy of the com­ he has set a style: for example, the wit or the patience to under­ munity," but he offers no principle, Hamilton Basso's recent The View stand, has manifestly welshed on nor even any good rule of thumb, from Pompey's Head (409 pp., New its duty to bring the murderers of by which an individual may distin­ York: Doubleday, $3.95) reads, in Tresca, Poyntz, Krivitsky and guish between the community as a its conceptual outline, like a south­ others to justice, Mr. de Toledano's society of free men and the com­ ern version of Marquand's Point of Paul Castelar decides to take jus­ munity as a constrictive social No Return. But Mr. Basso's values tice into his own hands. This is mechanism which throttles for the are sounder than Marquand's hap­ always dangerous to do, for it im­ sake of throttling. His conservatism pen to be in Sincerely, Willis Wayde. plies that there are times when the is' distinctly "without tears." The To Mr. Basso, both ancestor wor­ functions of prosecution, judge, good and bad points of it should ship and commercial climbing are jury and hangman must be exer­ be discussed at essay length-and variant forms of a single human cised by a single individual who the essay would have to come to urge-the urge to establish one's is willing to accept a terrible re­ grips with a more important ques­ own personal identity in a world sponsibility. Mr. de Toledano's tion: is the issue really between that can be harsh and alien no point is that evil must be con­ "conservatism" and "liberalism," matter where one is born. Mr. fronted somehow-and he appar­ or is it between coercion and the Basso sees his characters sub specie ently believes that God speaks voluntary way of life?

MAY 1955 485 The American principle - derived He Adds Little to Philosophy from natural law, which places the The Public Philosophy, by Walter As with the relationship between inalienable value of ea,ch individual Lippmann. 189 pp. Boston: Little, the executive and legislative, so above all other politicalconsidera Brown & Company. $3.50 with some of his other conclusions. tions-is that power should btl The inalienable right of the in­ shackled by checks and balance~. dividual viS-a-vis the State, which so that the individual remains free "The public philosophy" is appar­ and government restricted and ently Mr. Lippmann's private lan­ is the underlying principle of the American Constitution, becomes limited. The true disease of our guage for "natural law." With the commonwealth is not Mr. Lipp­ major premise of his thesis one can transformed into the civic duty to bridle the power of the "ruled" and mann's romance of the pitiably en­ fully agree: that the possibility of feebled exe,cutive. It is the attrition constitutional democracy depends strengthen the "rulers." Freedom of speech and the rights of prop­ of that principle (and of its corol­ upon the acceptance of permanently lary, that the economy must remain valid principles of morals and pol­ erty become privileges to be granted by the State within the free of gQvernment control). A re­ itics as supreme over the desires turn to that principle is undoubted­ and power of majorities no less limits of the necessities of the "good society." From beginning to ly of the gravest urgency for the than of minorities. The larger part welfare of the Republic, but Mr. of the book is devoted to the state­ end the book refuses to recognize Lippmann's rhetoric is a will 0' the ment of this premise, a statement that such an entity as the individual wisp, leading the unwary reader which has been made much better exists. The entire realm of dis­ not toward but still farther away before and to which MOr. Lippmann course is that of social groups­ from it. FRANK S. MEYER adds little, if anything. "masses," "rulers," "the ruled," Nor can one disagree with his "the corporate nation." minor premise, that a de,cay in the Despite all his discussion of nat­ understanding of these principles, ural law and his appeals to the The Rathole together with the growth of an anti­ Founding Fathers, what in actual­ constitutional subservience to the ity Mr. Lippmann seems to be con­ Billions, Blunders and Baloney: The majority, has brQught about a seri­ cerned with is the aggrandizement Fantastic Story of How Uncle ou! danger to the very survival of an "elite" and the further re­ Sam Is Squandering Your Money of constitutional democracy. m'oval of checks upon their power. Overseas, by Eugene W. Castle. It is not necessary to disagree with 278 pp. New York: Devin-Adair The conclusions, however, which him when he attacks unlimited Company. $3.50 he draws from his premises made power in the hands of "the people" this reader, at least, wonder if Mr. and of the demagogues who speak In fast-moving style this book gives Lippmann had studied the same in their name, to condemn his mid­ everything the title promises. Chief American Constitution and the same twentieth-century vers/ion of the target for Mr. Castle's wit is the philosophical sources that the rest philosopher king, his demand for United States Information Agency. of us have-and whether he lives in full governmental power for those Last Mar,ch USIA requested $~8,­ the same twentieth-century world who possess "the inwardness of the 500,006 for the coming fiscal year. we do. His main practical con­ ruling man. .. the noble master On that occasion James Reston of clusion, that the result of the rise of his own weaker and meaner pas­ the New York Times wrote: "The in the power of the masses in the sions." United States spends more money United States and the Western The American idea is equally and energy on Government informa­ democra,cies has been a strengthen­ hostile to either kind of power. It tion and propaganda than any na­ ing of the legislative armand an is hostile to power; and the fram­ tion in the Western world, yet is "enfeeble,ment, verging on paraly­ ers of the American Constitution more widely misunderstood than sis" -of the executive, would seem created the first governmental any other leading nation." in the light of the history of the structure in history consciously More t:klan half of Mr. Gastle's past fifty years to be a flat contra­ designed to protect the individual book focuses on this s·ad fact. After diction of the facts. Never have by preventing the ,concentration of reading his story of incredible nai­ Presidents held in their hands any­ power, whether in "aristocratic" or vete and waste, one has the key to thing like the cumulatively increas­ "democratic" hands. The issue to­ Mr. Reston's puzzle. ing power of Theodore Roosevelt, day is not whether power should There may be a few errors in the Woodrow Wilson, Franklin Roose­ rest in the hands of majorities or recount. But as a whole Mr. Castle velt, Harry Truman and Dwight of minorities; nor were the con­ aims well. Besides its main theme, Eisenhower. It is true that there is clusions the Founding Fathers the book also shows why govern­ a "functional derangement" in our drew from their understanding of ment agencies are so permanent. political society, but it is the exact the natural law, of which Mr. Lipp­ For instance, USIA bureaucrats as­ reverse of that which Mr. Lipp­ mann writes so glibly, concerned sign the agency's top brains to the mann invents. It is the enormously with that issue. The true issue, worthy cause of selling the American swollen power of the exeeutive. then and now, was and is between taxpayer on the absolute need for an This is the effect of crude democ­ those who stand for the aggrandize­ agency which costs him almost 90 racy and the attrition of constitu­ ment of power, in whosesoever million dollars a year. tionality, and this is the "derange­ hands it may rest, and those who I wish Mr. Castle had scanned ment" from whiich we suffer. wish to check power and control it. and printed some of the stuff the

486 THE FREEMAN "Voi,ce" beamed out in recent years. The Cost Was High produce more, at no cost to the tax­ At any rate, several years ago I payer. Farmers of the Southea~t are listened to it in Europe. Among What Price Federal Reclamation? applying supple,mental water to their other beauties there was one broad­ by Raymond Moley. 72 pp. W'ash­ land, boosting crop yields. In In­ cast which featured in detail ,a dog's ington, D. C.: American Enter­ diana it has been proved that irri­ funeral in New York. prise Association, 1012 14th Street gation of light soils doubles the yield The smaller part of the book N. W. $1.00 of corn. By heavier fertilization, use pleads for ending "foreign aid." of improved seeds and better control Mr. Castle asks why we should Reclamation-the word calls up a of weeds, the production of American spend money, for instance, to teach vision of arid deserts transformed farms in the last fifteen years has natives somewhere how to read into verdant farms .by the magic of been increased 40 per cent, and (most likely free pamphlets brought water. Uninhabited wastes become agronomists state that this is just in by Moscow) if our own children busy, populous ,countrysides. The a beginning. get less and less education because g.rim day of ,mass hunger, foreseen Moley might well have pointed out of inadequate s'chools? by Malthus, is pushed further into that the government's reclamation It is interesting that "liberal" re­ the future. program is not only extravagant but viewers of the book took the merci­ After reading Raymond MoleyJs is a major assault on freedom. Like less attack on USIA much better account of a h.alf century of social­ other government excursions into than the brief and quite moderate ized reclamation in the United production, it uses money taken from criticism of the foreign-aid mania. States, one suspects the vision is a all the taxpayers to finance addi­ "Point Four" must be dear to them. mirage. tional competition for some of them.. As Qxpected, a frank book on so When the first reclamation act Being forced to subsidize your com­ delicate a topic got hit with the full was passed in 1902, the farmer was petitor is not the Ameriean enter­ arsenal of the collectivistic book-' given ten years in which to pay priser's idea of fair play. review circuit. And that is cant,: the cost of reclaiming his land. This OSCAR W. COOLEY ridi'cule and hypocrisy. For in­ period was soon doubled, and in the instance, the Saturday Review piece "1920's it was raised to forty years. took offense at Mr. Castle's blunt In 1939 all pretense that reclamation language. Singled out were his would pay for itself was' given up. "Robber Barons" words "rathole, giveaway, slush The reason, ,apparently, is the cost. The Banditti of the Plains, by A. S. fund, do-gooders, shakedown, One­ For example, the three million Mercer. 195 pp. Norman: The Worlders." Yet the very same re~ acres or so whi'ch the Reclamation University of Oklahoma Press. view saw fit to hurl against Mr. Bureau plans to bring to fruition $2.00 Castle: "R·anting, sneering, the by 1959 will cost Cac/cording to the charming objectivity of the Daily Bureau's own estimates, which in The Banditti of the Plains could be Worker. He fouls himself up at a the past have proved to be about offered as proof that the "robber baron~" higher rate than permissable even one-third of the actual cost) an did exist; that the big cat­ to a cub." average of $700 an acre. True, this tle owners of fifty to a hundred Fortunately, American anthropol­ includes the cost of power develop­ years ago unquestionably resorted ogists working abroad report ever ment, but it does not include in­ to murder to impose their wins more evidence showing the whole terest on investment, which over the upon the "little people" who estab­ "Point Four"approa,ch was utterly years will run to several times the Hshed homes and farms on the cat­ tle ranges. Yes, it could be so used. unrealistic and possibly detrimen­ construction ,cost. tal to all concerned. Apparently, Never since the program was But the main point that this book proves is the unquestionable fact what kept those countries unde­ started has Congress required farm­ that the "robber barons"-in in­ veloped was Cand is) a social cli­ ers to pay interest on the govern­ dustry as well as in agriculture­ mate of the kind our "liberals" and ment',s investment in bringing water could not have operated without Britain's Socialists are so eager to to their land. On some proJects which the help of government. Our offi­ foment and expand everywhere. It combine power with irrigation, that cials-presidents, senators, gov­ is the almost universal myth that part of the power earnings which ernors and sheriffs-either joined any success of someone must mean should constitute interest on invest­ in with or tolerated this evil of loss to someone else. ment in power facilities is being some persons using legal or illegal Ironically, "underdeveloped coun­ used to amortize the irrigation plant. violence to impose their wills upon tries"-that is, their leaders­ This practice was branded by Sena­ other persons. Unfortunately, this pledge themselves the more em­ tor Knowland as "double-dealing" evil still exists, though now in phatically to socialism the louder and "financial sleight-of-hand." quite another form. DEAN RUSSELL the United States talks about her Is reclamation of arid lands the "obligation" to keep them from col­ practical way for growing America lapsing economically. Ever since to keep the pantry full? Moley thinks the new Asian aid program cropped not. He points out that in the sub~ FREE, ENTERPRISE up in Washington, Nehru's India humid East, South and Middle West BOOKSELLERS displayed an even bolder, almost there is unused' farm land equal to SEND FOR PRICE ILlST OF BOOKS obsessive commitment to the lux­ six times the 'arid acres' which the ON FREE ENTERPRISE, SOCIALISM. Bureau has earmarked for watering. ury of a socialist society. Box 497 Fox River Grove, Ill. HELMUT SCHOECK And land now in use c'an be made to

MAY 1955 487 The Unreal Dream original dreamers of the socialist market for caviar from Persian faith failed to reckon with the reali­ sturgeon. When an early shah gave Reflections on the Failure of So­ ties of human nature. The aggres­ a British firm the tobacco monop­ ciali~,m, by Max Eastman. 128 pp. sive, competitive, pugnacious ele­ oly, his enraged subjects forgot he New York: Devin-Adair Com­ ments in the make-up of the normal vvas "the Breathing Image of God." pany. $2.75 being were overlooked. First they stopped smoking. Then Sometimes a powerful and passion­ Eastman tosses away the unreal they assassinated him. Exclusive ate refutation of a wrong idea turns dream of a social order from which concessions were handed around into an affirmative vindication of a the element of individual and group for nearly everything. One of them, to the French for archaeological right idea. Burke started out to ex­ struggle and competition is ban­ diggings, raised the first hard clue pose the fallacies of the ideologues ished. What he proposes is to ex­ to petroleum-and thereby pro­ of the French Revolution-fallacies tend the check-and-balance theory voked large amount of history. which were restated more than a. which dominates the political in­ a It all began in 1901 with the ill­ century later by the leaders of the stitutions of the American Constitu­ famed concession to Australian pro­ Russian Bolshevik Revolution. He tion to economic and social life. In motor William Knox D'Arcy of "spe­ ended by presenting a memorable economics, as in politics, no one cial and exclusive privileges to pros­ picture of an organic society which power or interest should be all­ pect, obtain, exploit, develop, pre­ does not spring from the mina of powerful. He shows a keen sense pare, export and sell natural gas, some facile theorist, but is enriched of the necessity of giving the right petroleum, asphalt and mineral wax and strengthened by a hundred economic answer if freedom is to throughout the Persian Empire for ties of history and tradition. prevail in the age-old struggle sixty years." These rights were When Friedrich Hayek wrote The against tyranny. As he puts it, and spirited over to a British company. Road to Serfdom he set up impor­ he possesses in unusual measure Young Churchill, converting the tant signposts for the road to free­ the gifts of elegant expression and Navy from coal to oil, put His Maj­ dom. And Max Eastman, in a bril­ lucid exposition: esty's Government in as partne'f. liant and penetrating exposure of "We can choose a system in which Rivals when the field was clear, the reasons for the moral and ma­ the amount and kind of goods pro­ England and Russia collaborated terial failure of socialism, comes up duced is determined by the imper­ when third parties threatened. Twice with some very challenging and sonal mechanism of the market, they partitioned Iran into ever stimulating ideas as to what should issuing its decrees in the form of fluctuating prices. Or we can choose wider "zones of influence." In World be the goals of a free society. In War One they joined against the rejecting the false utopia of col­ a system in which this is deter­ Germans, who were spreading lectivism, he offers the dream of mined by commands issuing from a personal authority, backed by armed rumors that the Kai.ser had oblig­ a state of affairs where free citizens ingly turned Moslem. Later every­ "are normally found to be posses­ force. .. We have to choose. And the choice is between freedom and body wanted Iranian oil, even the sors of land or capital or both." Japanese. American oil companies, Forty years ago Max Eastman tyranny." suc~ WILLIAM HENRY CHAMBERLIN invited by the Iranians to save them editor of a radical magazine from Anglo-Russian attentions, cessively known as the Masses and were tricked or bamboozled off. the Liberator, believed that Marx­ In 1946, after failing to extort ian socialism was a scientific blue­ Oil and Imperialism an oil concession, the Red Army print for the enlargement of human grabbed at all of Azerbaijan-and Oil Diplomacy: Powderkeg in Iran, opportunity and liberty. Now his failed again, this time due to Ameri­ by Nashrollah Saifpour Fatemi. disillusionment is complete; his re­ can firmness. Five years later the 405 pp. New York: Whittier cantation is without reservations. Iranians firmed up, too, and blasted He characterizes the whole idea of Books, Inc. $4.50 out the Anglo-Iranian Oil Company, extending freedom, or justice, or It is 'written that a people with­ along with Britain. In August 1954 equality, or any other civilized out history is a happy people. Iran agreed to let an international value to the lower classes through Iranians might still be enjoying the consortium reopen giant Abadan. common ownership of the means of blissful, unchronicled obscurity to Dr. Fatemi reports an appalling production as "a delusive dream, a which they were entitled after eclipse amount of imperialist iniquity. Red bubble that had taken over a cen­ of their ancient Persian splendors machinations occupy a large place, tury to burst." -if only they had not been af­ but British knaveries even more, "When I am denounced as a turn­ flicted with the kind of riches presumably because the British coat by the true believers it does ,vhich attracts modern international ·were most successful. His evidence indeed bring a blush to my cheek, burglars: oil. confirms that the Anglo-Iranian Oil but only because it took me so long For most of the last hundred Company was intolerably arrogant; to turn my coat." years, a compulsion to bestow London unconscionably bullying. A principal reason why socialist or withhold foreign economic con­ But the Iranian story still re­ experiments failed, from the blood­ cessions has enlivened Persian rec­ mains to be told. Except for barest less experiment of Robert Owen in ords. In 1867 the imperial Russians nlention, the author ignores entirely New Harmony, Indiana, to the san­ nluscled in on Caspian Sea fishing, the local greed, corruption, fanati­ guinary tyranny of the Soviet which explains why the Soviets, not cism and sheer Parliamentary bed­ Union and Red China, is that the the Iranians, still hold the world lam which contributed so much to

488 THE FltEEMAN Iran's disaster. Further, the book is ment, and at the end manipulated by This seems a forlorn hope. For a triumph of bad structure. Two Litvinov into a pro-Soviet "popular the crowd is the bulwark of the out of twenty-two chapter,g seem to front" whose influence still poisons Fourth Estate (including radio and have benefited from rewriting. The Western thinking. And he regards television) which is at once its rest are jumbled beyond the per­ the UN as an organization which manipulator and the means through missible limit. Dr. Fatemi quotes has already made a reality of the which it exercises power. Upon without attribution, introduces Orwellian slogan, "War is Peace." that power depends the fate of names without identification, and He points out that Soviet expan­ politicians, in the West at least. plunges forward without possibility sion could easily have been stopped The politicians do not dare ignore of pursuit. HAL LEHRMAN in 1944 and 1945. But Roosevelt the crowd, and the Fourth Estate and Churchill, instead, gave Stalin must continue to ID,anipulate it, for all the aces. Although it is now that is the condition of its own im­ Diplomacy of Brawl too late to recover our vast losses, portance. we can at least, he suggests, play Besides, where are the experts? Popular Diplomacy and War, by our remaining cards with greater Mr. Huddleston himself cites the Sisley Huddleston. 285 pp. West skill. The crowd must stay silent appalling ignorance of modern dip­ Rindge, N. H.: Richard R. Smith, and leave the game to the experts. lomats. Certainly the counsel of Inc. $3.50 Sisley Huddleston had watched the diplomats at work for forty years and had covered their conferences between world wars. In this book, Ludwig von Mises comments which was his last, he attributes to "the advent of the masses" the dis­ on Max Eastman's new book: asters that have overtaken mankind "In this thoughtful essay Max Eastman explains why socialism since World War One. was bound to fail and why it really failed. He analyzes the re­ Diplomacy, he says, is no longer sentment and envy that made such self-styled fighters for free­ the affair of experts, negotiating dom as Bernard Shaw and the Webbs turn into uncritical cham­ secretly in the world's foreign of­ pions of Stalinism. His book is the most devastating critique of fices and often, like Disraeli before the fashionable bigotry of our age." the Berlin Congress of 1878, avert­ ing war while the war spirit is ram­ pant. Our present diplomats are Reflections "clamor boys"-prime ministers, foreign ministers, ambassadors-at­ large-who fly from capital to capi­ on the tal and conference to conference, holding futile conversations and FAILURE cloaking their futility in mendacious communiques. Mr. Huddleston defines the diplo­ of macy of true statecraft as "the art of doing just enough ... to achieve SOCIALISM national objectives that must in the nature of the case be limited." But by MAX EASTMAN the crowd, he says, ignores limita­ The' progresSiive disillusionment of Max Eastman with socialism and com­ tions. It is excitable, emotional, bel­ munism is fascinatingly documented in this new book. It is unmistakably ligerent. The crowd and its manipu­ the most beautifully written, most carefully reasoned and most per­ lators-the demagogues, the press, suasively argued case against Marxian and Fabian Socialist ideology that radio, television-"have all but has yet appeared. ruined scientific statecraft, rational "... it should be the most useful of all means to bring some reason diplomacy, and the prospect of world into the nlinds of thousands of college students and others who think it is not only smart to be a Socialist but safe..." Raymond Moley peace." The crowd, he says, was at the only $2.75 Conference of Versailles, both ------through the press and through the THE DEVIN-ADAIR COMPANY bloodthirsty wartime promises of the 23 East 26th Street, New York 10, N.Y. peacemaking politicians. Its pres­ Gentlemen: Please send me. __ .....copies of REFLECTIONS ON THE sures resulted in an unviable and FAILURE OF SOCIALISM by Max Eastman t vengeful treaty which led inevitably o $2.75 enclosed 0 Please send your catalog to a second world war. He deals Nalne (,please print) .. caustically with the League of N'a­ Street tions, always an obstacle to a quiet City Zone State . and reasonable European readjust- those rated experts has helped us It is not possible rationally to justify purely philosophical interpretation little in recent years; vide the fundamental moral notions such as and discarding outmoded empirical futile and expensive "containment" ... inalienable right, or the intrinsic examples. Maritain replaces twelfth­ policy of our "top expert" on Rus­ dignity of the human person." That's century analogies to the physical sia, Mr. George F. Kennan. why conservatives who are skeptical world with twentieth-century ones Possibly there is no answer to of the Divine should read this book. which help us follow the reasoning. the problem that Mr. Huddleston It is not necessary to be a philos­ ·The only fault one can find with poses, but it must be said that he opher. As M. Maritain shows, there what he did to Aquinas is that he has posed it courageously and ably. are approaches to God quite apart sometimes failed to do it to himself. His book goes far toward explain­ from the philosophical. There is, .In the section of his book dealing ing the tragic dilemma of our time. for example, the "natural or pre­ with Thomistic approaches to God, SUZANNE LA FOLLETTE philosophic knowledge of God," an he is sometimes noetic in his choice intuitive approach which cannot of language (he uses this word him­ help but be apparent to the person self; it means "purely intellectual who asks himself, as M. Maritain apprehension"). My three diction­ God Is Liberty makes us ask ourselves, I exist? aries yielded to me that entropy . The question mark refers not to means "a mathematical factor which Approaches to God, by Jacques the truth of our existence, a fact is a measure of the unavailable Maritain. 128 pp. New York: which the author calls "formidable, energy 'in a thermodynamic system" Harper and Brothers. $2.50 i- sometimes elating, sometimes sicken­ (huh?), but no amount of search ~ndividualism without belief in God ing or maddening," but to the im­ enlightened me on his use of univo­ [s a philosophical basket case. In­ plications which naturally arise city. For your information, when dividualists who argue their inter­ out of this fact. M. Maritain devel­ you run across ananke stenai, it pretation of politics or history with­ ops these implications in such an in­ means dire necessity; you may still :put the certitude of God, a certitude formal way that we come easily to wonder whether it was necessary to ln His· existence which must be as an intuitive knowledge of God, be so dire. F. R. BUCKLEY physically real as a banged-up shin, which, in its own way, is as precise talk rubbish; usually at length. If as mathematics. God is -not acknowledged, the prem­ There are other ways of knowing Trade or War ises become ridiculous. M. Maritain God without struggling for the puts it: "[without belief in God] discipline of philosophy. God is im­ How Can Europe Survive? by Hans manent in the artistic personality, F. Sennholz. 336 pages, including in the creation of beauty. He is na­ index. New York and Toronto: D. Van Nostrand. $4.00 Add this tural to the moralist. And the person inclined to mystical experience be­ Lest the title mislead, this book CONTRARY comes a "friend" of God, predis­ should be of interest to every per­ posed to discover Him. It remains son whose urge is to live at liberty dimension only a matter of seeing how such and in peace. In the title and text, to your traits in our character lead us logi­ Europe is hardly more than the cally to God. M. Maritain is success.. stage. Any other geographic setting LIBERTARIAN ful in nudging us from such un.. would also serve to mirror the eter­ viewpoint formalized inertia to the full nal drama of individuals seeking recognition of "the natural desire to ways and means for survival and see that First Cause whose exist.. "When everybody thinks alike­ progress within society. ence is shown to us through the "How big is society?" men ask Everyone is likely to be wrong!" natural approaches to God [which] themselves, and many have thought is, in human reason, the mark of T his in a nutshell is the Theory of Contrary that a United States of Europe was . Opinion developed by Humphrey B. Neill, the possibility ... of a knowledge ;Llbefltaria~, and America's No. 1 Contrarian. His the proper answer. In this study, weekly Nedl Letters' of pontrarr Opinion apply the 'jI:'h~o.ry. tocu:;;re~t affaus-busmess. economic, and of God superior to reason...." Dr. Sennholz critically examines f~~~~~lew~~~~t~ l~st":~:tt e~~~;1t~J~a~ti~~~,t-;g~~t M. Maritain does not neglect such recent theories of unification ,sOClo-economlC matters. And it's a matter of record that. Contrary Opinion has been the right opinion philosophy. With a jolt, he takes us as the Federal Union of Democra­ at I[;lmes· when it really mattered. into the perplexities of Thomas cies of Clarence Streit, the Socialist Try Neill Letters fol'l 10 weeks Aquinas. The jolt comes from the Movement for the United States of and get this 112.-page book fact that Thomas Aquinas is so Europe, and the European Federa­ FREE wonderfully clear when edited by list Union. He also .analyzes the Published by Ca:l1:ton, Jacques Maritain. He modernizes Benelux Economic Union, the Euro­ the Libertarian book publishJng house. Neill's the great theologian's five philosophi­ pean Payments Union, the Euro­ "The Art of Contrary Thinking" tells the de­ cal proofs of the existence of God pean Coal and Steel Community, velopment and applica­ tion of the Theory of without doing violence to them. A the North Atlantic Treaty Organi­ Conl!;rary Opinion. It's yours FREE with a 10­ comparison with the original can zation, and similar attempts at par­ week trial subscription to Neill Letters. Send be made through the appendix; it tialapplication of the larger plans $5 today to - Neill Letters of Con­ will show that M. Maritain has re­ for European federation. trary Opinion, Box 555, Saxtons River. Vermont tained the thunderous logic of Though invaluable as text and Aquinas while pruning terms of reference for students of finance

490 THE FREEMAN and trade, those particular chapters willing to trade in other lands. The Then came the Winter War of do not make scintillating reading. only help needed from any govern­ 1939-40-a war which American The author had no choice; political ment is that it protect life, liberty Communists and their kissing cous­ history is bound to be dull when and property without prejudice, and ins would dearly love to be allowed there is nothing to record but repe­ stop meddling with the freedom to to forget. The rampant bear was titian of the same old mistake. With move and~the freedom to trade pri­ flung to his haunches by a fierce infinite patience he explains how vate property and sound money. little adversary. Mannerheim's su­ that mistake is embodied in eaeh But governments will never volun­ perb generalship had made up lor of the latest attempts at the polit­ teer to curb their own powers. That his country's lack of military prep­ ical integration of nations. If gov­ has to be done by people who have aration and for a time seemed likely ernment indulges special interests faith in their own competitive abi­ to overcome the Soviet Army. The within its own sphere of national lities. Dr. Sennholz has given the field marshal, in this part of his sovereignty-if it is a "Welfare" explanations, ideas and principles memoirs, makes authoritative and State-then it is a mistake to as­ upon which to build such faith. enlightening comment on the old sume a common interest with any PAUL L. POIROT ques,tion of whether Stalin deliber­ other "Welfare" State. ately threw inferior troops at the A nation which attempts tariff Finns in order to dupe Hitler on protection and price support for Stubborn Finland the real quality of the Red Army. its agriculture or industry, or In this war Finland survived as places restraints upon the move­ The Memoirs of Field Marshal a nation, but Finnish earth and ment of people and capital into Mannerheim, by Carl Gustav people were cleaved from the fa­ and out of the country, or other­ Baron von Mannerheim. 540 pp. therland. The Finns, Mannerheim wise interferes with trade at home New York: E. P. Dutton and writes, took solace in their bereave­ and abroad, can hardly expect the Company, $5.75 ment from what had happened to people of other nations to support Latvia, Esthonia and Lithuania­ those designs to injure them. Nor People ill to the point of pain with they parleyed (as we are doing) and can international cartels and simi­ reading about how we-the West­ disappeared down the red gullet. lar treaty efforts ever lead toward have knuckled under to the Com­ peaceful unification, because those munists again are entitled to some In 1941, when Finland again measures also involve a use of literary relief. There is a fine pal­ battled Russia, it stood with a force, the ,consequences of which liative dose of it. for them in the strange ally. Some people might like are counterforce and war. memoirs of Finland's Field Marshal Mannerheim to be more apologetic Those who gain political power Mannerheim. about the German collaboration, but in time of war are reluctant to Mannerheim's book is an account then they are people who never felt return that power to the people. of his country's stubborn and virtu­ queasy about our love-feast with Instead, they try to persuade the ally unique habit of standing up to the Soviet Union. Victorious Russia, people that government is their the Soviet Union. He tells of the still bent on bleeding Finland into great defender, and pretend that troubl,e this habit has got Finland helplessness, put away the sword private enterprise instead of war into, and (more important) of the and resorted to the leech. Manner­ has failed. In the periods of hard­ troubles it has spared her. The old heim's memoirs do not tell all the ship which accompany and follow warrior-patriot explains the inspi­ story of how the free world suffered wars, the people still trust govern­ ration for F

'1\/1" A -,;r ... A ~ ~ ,f n .. EDUCATION other cousin of the Soviet proletariat. lat.ion before they become effective Technically trained people are es­ The Uncommon Man is to be whittled as domestic law, and which should sential to business, but no more so down to size. It is the negation of not, are impractical. A blanket pro­ than the liberal arts graduate who individual dignity and a slogan of hibition is necessary if freedom and can look beyond day-to-day problems mediocrity and uniformity." Free­ sovereignty are to survive. with a mind broadened by the knowl­ dom is not won, it is not retained, by The Increasing Need for a Constitu­ edge of modern -economic, social and the monstrous uniformity of the tional Amendment on Treaties and mass. It is the individual of talent Executive Agreements, by Frank E. political conditions. Business is dis­ Holman. 31 pp. The Argus Press, covering that education is a different who is at once the flower and the Seattle, Wash. Single copy free thing from trade school proficiency, trunk of liberty. and a more valuable thing in top Freedom ... Triumph of the Un­ ECONOMICS management. The trained thinkers common Man, by Ben Moreell. 14 pp. Public Relations Department, Jones By 1975, the only chance for respect­ business needs know that free enter­ & Laughlin Steel Corporation, Pitts­ able living by growing numbers of prise is essential to a democratic burgh 30, Pa. Single copy free older citizens is a current accelera­ philosophy. The challenge business tion of real savings and investment faces is to find ways of keeping these ONE WORLD programs. Building the supply of concepts foremost. By a vote of the Supreme Court, 5 capital goods fast enough to keep Leaders For Leadership, by David F. to 3, President Truman was con­ ahead of a surging population is the Austin. 12 pop. Write to: J. Carlisle strained from seizing the steel in­ one way to have a _rising standard MacDonald, Ass't to Chairman, dustry. Those judges who dissented, of living. This requires a lot more United States Steel Corp., 71 Broad­ did so on the grounds that certain business investment and a lot less way, New York 6, N. Y. Free provisions of the UN Charter gave dependence on the social s,ecurity the President the authority for an scheme of taxing others for one's SMEARS action which would otherwise prove livelihood. The greater the number Although Facts Forum has con­ unconstitutional. According to these of individuals with personal savings sistently backed radio programs three judges, we are bound to the and with shares in cooperative in­ carefully designed to present both UN by treaty, and treaty overrides dustrial programs, the greater the sides of current topics, this organi­ internal law. Recently, in Rice vs. assurance that proper distribution of zation has been the target of sanc­ Sioux City Memorial Park, the Su­ the production of the future will be timonious liberals in a gutter cam­ preme Court split 4-4 on the same achieved. paign directed at taking the pro­ interpretation. The Constitution was Economie Challenge of Longevity, grams off the .airways and ruining upheld by the grace of one judge. by Allen W. Rucker. Harvard Busi­ Facts Forum. The liberals are in full Can we afford to do without the ness Review, Nov-Dec, 1954. 12 pp. battle dress, using the weapons most Reprints: Harvard Business Review, Bricker Amendment any longer? dear and most familiar to the'm­ Soldiers Field, Boston 63, Mass. $1.00 How long will we have a choice? the distorted fact,' the personal slur, the blatant lie. What makes Drew Repair the Broken Chain-Pass the LABOR Bricker Amendment, by Clarence Pearson, Marquis Childs, the Herald Abuses of power by labor leaders E. Manion. 4 pp. Manion Forum of must be eliminated or our govern­ Tribune and the Daily Worker wax Opinion, South Bend, Ind. 10 cents so wroth is that the conservative ment will be changed to labor social­ side of an argument is presented From an editorial in the New York ism. Constitutional liberties and the along with the liberal side. Compari­ Times, April 8, 1953: "The resolu­ free economy of a free people will sons must be odious-to them. tion is dangerous because it forbids disappear. Labor leaders demand any treaty that would allow any for­ monopoly control of all employments; Case History of a Smear Camp,aign, this is the Marxian socialist dicta­ by Hardy Burt and Associates. 28 eign power or any international or­ pp. .Dallas, Texas: Facts Forum. ganization to control the constitu­ torship of the proletariat disguised Single copy free tional rights of American citizens as an 'evolutionary instead of a re­ within the United States." This quo­ volutionary program. The truth is FREEDOM tation refers, of course, to the pro­ that lawlessness by organized labor Herbert Hoover warns: "Among the posed Bricker Amendment. The edi­ reflects the increasing lawlessness of delusions offered us by fuzzy-minded torial is shocking evidence that an the American people. people is that imaginary creature, amendment must be passed. At­ Lawlessness in High Places, by Don­ the Common Man. It is dinned into tempts to define which executive ald R. Richberg. 20 pp. Donald R. Richberg, 1000 Vermont Avenue, us that this is the Century of the agreements should be required to N. W., Washington 5, D. C. Single Common 'Man. The whole idea is an- receive the sanction of national legis- copy free Don't Feel Bad

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