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Lewis Corey

The Decline of American Capitalism

PART SIX
Concentration of Income and Wealth

CHAPTER XIX
Class Distribution of Wealth

NIRAISM claims that its program means the redistribution and “more democratic” ownership of wealth. That is also the claim of state capitalism in Europe, and of fascism. Meanwhile the concentration of wealth is being augmented; only poverty and misery become “more democratic,” more universal and inescapable.

Similar claims were made, before the World War, by American liberals, who for forty years fought for the taxation of incomes and inheritances to break up the concentration of wealth. They were damned by the embattled owners of great fortunes and their apologists as immoral wretches, anarchist enemies of God and country, a menace to democracy and the republic. For the simple proposal to tax incomes and inheritances! Finally, in 1913 and 1916, the proposals were enacted into Federal law. But the concentration of wealth, and of income, was not broken; it was strengthened.

That the concentration of wealth was at least unshaken during the war and the early post-war years, was proved by the Federal Trade Commission’s study of the distribution of comparable samples of estates in 1912 and 1923. Curiously, however, the Commission, and the ballyhoo men who seized upon its conclusion, used its figures to “prove” the existence of a tendency toward more equal ownership of wealth. Yet even the Commission did not claim much of a change, merely “an apparent trend toward a somewhat wider distribution.” Merely that, in spite of income and inheritance taxes, of heavy war taxation of corporate profits and the higher incomes, of many economic and political changes. But the conclusion itself was unjustified. “In 1912,” according to the Commission’s report, “about 29% of all the probated estates amounted to less than $1,000 each, while in 1923 only 20.8% were less than $1,000. Furthermore, in 1912, the estates of over $100,000 each amounted to 52.6% of the total value of all estates, while in 1923, they amounted to only 45.9% of the total.” [1] These figures prove the opposite of the Commission’s conclusion. In 1923, the purchasing power of money was 45% lower than in 1912; this would nominally raise the value of estates, and the number of small estates would tend to decrease. That is no indication of a more widespread distribution of wealth. And the fall in the value of larger estates merely meant that, to evade inheritance taxes, many fortunes were partly distributed before the death of their owners.

What the Commission did prove, and prove fully, was the existing great inequality of wealth. By including decedents, the overwhelming majority of workers and poorer farmers, who left estates so small that they were not probated (76.5% of all decedents), and assigning these “estates” an estimated average value of $258, just enough to bury the owners, the Commission found that:

• Estates below $500, 79.8% of the total, owned 5.6% of the wealth.
• Estates of $500 to $10,000, 14.9% of the total, owned 12.7% of the wealth.
• Estates of $10,000 to $50,000, 4.2% of the total, owned 23% of the wealth.
• Estates of $50,000 up, 1.1% of the total, owned 58.9% of the wealth. [2]

The “new capitalism” flourishing in 1923-29 also claimed that wealth was being redistributed in favor of the masses. It made no mention of income and inheritance taxes as a means of breaking up the concentration of wealth. It insisted that this was being done by increasingly higher wages and the more equal distribution of income. The claim was refuted by the facts of stationary wages and increasing income inequality. It was also refuted by the upward movement in the value of the larger estates. [1*] Although the number of probated estates fell from 13,011 in 1923 to 8,798 in 1929, their value rose from $2,540 million to $4,108 million, a much greater rise than in production, the national income, and national wealth. Estates of $50,000 up rose from 6,344 and their value from $1,857 to $3,749 million, an increase of 100% compared with 60% in the value of all probated estates. [3] This substantial upward movement in the concentration of wealth was the natural result of an accelerated accumulation of capital, the amassing of industrial and speculative profits, and the multiplication of capital claims. New fortunes were piled up, and the older fortunes grew tremendously.

One aspect of the “new capitalism” was the theory of “trade union capitalism.” [2*] Its assumption was this: if the workers mobilize their “enormous” savings, and invest them in corporate stocks and labor banks, the working class will eventually get control of industry. Workers will become capitalists, and the antagonism between labor and capital will be ended. “Even a barber, if he owns his razor,” said Warren S. Stone, Chief of the Brotherhood of Locomotive Engineers, an enthusiastic advocate of “trade union capitalism” and one of the original labor bankers, “is a capitalist; most workingmen own stocks and bonds.” [4] But only a small group of workers were able to buy stocks. Depression has now expropriated most of them. The labor banks are now a mass of ruins. And the “enormous” savings existed only in the imagination of the apologists. “Each year,” said one labor banker, “our industrial workers save from $6,000 million to $7,000 million in various ways.” [5] This conclusion was reached in a simple (very simple) fashion: one estimate of the national savings was $12,000 million; the workers are more than half the gainfully occupied, so they save that proportion of the national savings!

Workers slightly augmented their absolute share of savings, but not their relative share. Total savings deposits rose from $6,835 million in 1910 to $28,218 million in 1929. Over half the increase, however, was an accumulation of interest, totaling $11,588 million. [6] Another part was a nominal increase, because of the fall in the purchasing power of money. Yet the rise was substantial. [3*] But the savings were primarily those of the bourgeoisie, not the workers. While deposits in mutual savings banks, where workers are most likely to have accounts, rose 165% from 1910 to 1929, they rose 328% for all banks. [7] In the non-mutual banks savings are not really savings, they are mainly the “time” deposits of businessmen; where they are savings, they are overwhelmingly those of the middle class, especially the upper layers. Nor are wage-workers the majority of depositors in mutual savings banks; less than a third in one Philadelphia bank were workers. Another investigation revealed that, among a group of women workers, only one-half had savings accounts; half of them were under $100 and only seven over $500. [8] The ownership of deposits is highly concentrated. In the savings banks and the savings departments of state banks and trust companies of Connecticut, in 1929, the distribution of deposits was as follows:

• The smaller accounts, 1,152,311 or 84.3% of the total, had deposits of $167 million, an average of $145.
• The intermediate accounts, 209,608 or 15.3% of the total, had deposits of $534 million, an average of $2,550.
• The larger accounts, 5,555 or 0.4% of the total, had deposits of $79,000,000, an average of $14,315. [9]

Most workers with savings were included in the smaller accounts, with an average deposit of $145! And in 1933, of 30,556,105 accounts in Federal Reserve banks, with total deposits of $23,542 million, 96.5% of the accounts had 23.7% of the deposits, with an average of $189, while 0.1% of the accounts had 44.6% of the deposits, with an average of $224,000. [10] Use one or the other set of statistics, and the conclusion is the same: the share in savings of the working class was miserably small. It is smaller now, much smaller, because of losses during the depression and mass unemployment.

The share of the workers was larger, in 1929, in the $8,695 million assets of building and loan associations, with their 12,111,209 members. [11] But it was far from a majority share, for most of the members are of the lower middle class. (Never, in any previous depression, were there as many foreclosures of small home-owners as in 1930-34, including workers and professionals.)

Nor did the workers have any “enormous” share in life insurance. That is also highly concentrated. In 1932, 402 individuals (thirty-five more than in 1930) owned policies of over $1,000,000, totaling $640 million. [12] Average insurance for all policyholders was $3,000. For policyholders with incomes from $1,000 to $2,000 the average was only $1,023, and $2,798 for those with incomes from $2,000 to $3,000. [13] But the average policy of the workers was even smaller. According to one estimate, a working class family in 1924 was able to spend an average of only $43 on insurance. [14] The workers’ real stake is in industrial insurance, although a part of it is carried by non-workers. In 1929, industrial policyholders held insurance of $17,902 million, or 17.4% of total life insurance; the value of the average holding was only $360. [15] Workers lose more than they gain, moreover, from industrial insurance. Costs are great. Lapses still greater: they rose from 6% in 1921 to 23% in 1932. In 1929, for every dollar of insurance sold, 67.1% had vanished. For 1928-32 alone, the losses on lapsed policies were $200 million. There is much more profit for the insurance company in 1,000 industrial policies, of which 500 lapse, than in 500 policies, of which only 200 lapse. [16] Life insurance is identified, not only with the unequal distribution of wealth and income, but with all the predatory aspects of capitalism. The companies are plundered by management, whose upper layers get fabulous salaries; they spent $921 million in 1929, while the policyholders received $1,961 million: 32¢ costs for every 68¢ distributed! [17] And, in spite of their mutual character, they are under the control of the financial oligarchy, which manipulates their resources for investment, speculative, and other profitable purposes ...

The average workers’ family, according to one estimate for 1924, saved $122 yearly; 24% of the families had an average deficit of $127. [18]

Small as the workers’ share of the national income is, their share of the national savings is still smaller. This share, in 1928, was only 10% (Table V). It is necessarily small, because all the class-economic relations of capitalism make “saving” a monopoly of the owning and possessing class. [4*]

Wealth changes its forms, as social-economic relations change, but not its main characteristic: it is a claim upon production and income. Concentration in a class of the ownership of the means of production, upon which depends the livelihood of society, means a class monopoly of wealth. In one aspect, as tangible things, wealth represents the product of social labor, the means of satisfying society’s needs; in another aspect, as ownership, it represents an appropriation of the means of labor and of the product of labor, the power of exploiting the producers. New increments of wealth result from the combined labor of society; under the relations of private property the increments become the possession of a class.

Where wealth is capital it is, as a social relation of exploitation, the “right” to appropriate surplus value, the unpaid labor of workers, and convert it into capital as new means for appropriating more surplus value. That is why capitalist production depends upon continual expansion, upon an increasing output and absorption of capital goods. Great fortunes are typical of capitalist wealth. They are not, however, the result of mere direct appropriation of surplus value; fortunes may be acquired and enlarged by theft of natural resources, by speculation and political corruption, by plunder of the wealth, or realized surplus value, of other owners of property, by mere flukes of chance. But all great fortunes are claims upon production and income, upon the unpaid labor of the workers.

Not the “abstinence” or savings of the individual, but the “savings” of society are the source of new capital. Even where savings are the result of abstinence or thrift, they become capital only by commanding and exploiting labor. Individual abstinence plays a very small role in capital accumulation; an impersonal, institutional abstinence, imposed upon the masses by the social relations of capitalist production, is the source of capital. This appears clearly in the three forms of savings:

1. Where savings represent individual abstinence from consumption, they are the least important source of investment capital. It is limited to the savings of the workers, the mass of farmers, and the lower bourgeoisie (who, however, may also appropriate surplus value). This real abstinence produces not more than 15% of the national savings. The savings, moreover, become capital only when they are invested, mainly in the form, of the institutional investments of banks and insurance companies, and yield realized surplus value in the form of interest or profit.
2. The major source of “savings” is the surplus income of the intermediate and upper bourgeoisie. It is this surplus the apologetic economists justify with the theory that “abstinence is the source of capital.” But the capitalists are not abstemious. They enjoy all the good things of life. Their great expenditures, especially on conspicuous competitive consumption, are the direct opposite of abstinence. The surplus, and the consumed part of capitalist income, was originally unpaid labor or product of the workers; it becomes income-yielding and wealth-yielding capital by extorting more unpaid labor. (Speculative profits are either realized surplus value or claims upon prospective surplus value.) In one sense, the surplus income of the bourgeoisie is the product of abstinence, of the abstinence from fuller participation in the fruits of their labor, and from consumption, of the masses of workers and poorer farmers. [5*]
3. On the average, from 40% to 50% of the national savings are the result of business savings, of undistributed profits. Personal abstinence does not contribute to these enormous savings, neither the self-imposed abstinence of the worker, who saves a little for the rainy day, nor the imaginary abstinence of the capitalist. The small businessman who saves a part of his profits performs, it is true, a personal act. But this is of diminishing importance in capitalist production, which becomes increasingly large-scale and corporate; non-corporate enterprises in 1928 contributed not much more than 15% of total business savings. Corporate surplus and undivided profits, in 1927-29, rose $21,300 million, an average of $7,000 million yearly. [19] These are impersonal, institutional savings, independent of individual initiative, a social form of accumulation within the relations of personal property ownership. In the measure that corporate savings are reinvested and yield profits, they augment the income and wealth of stockholders who, in this particular case, have done absolutely nothing, not even to invest.

This impersonal and institutional, or social, character of capital accumulation appears most strikingly in credit. When the management of a corporation gets a bank loan, or when its securities are underwritten and, while still unsold, are used by the investment banker to get credit from a commercial bank, the credit represents only in very small part money saved and deposited in the bank. For banks issue credit beyond their actual resources. Loans become deposits, and these deposits become the basis of more loans. Where formerly bank credit was used largely for commercial and working capital purposes, it is now used largely for fixed capital purposes. According to the estimate of one economist, over 50% of commercial bank credit is used for fixed capital. [20] And the greater part of credit is merely an institutional creation, repayable because of the profits it makes by command over labor, capital equipment, and raw materials. Capital created by credit is obviously the product of social labor. There is neither real nor imaginary abstinence, except the abstinence imposed upon the workers producing surplus value. But so is all capital the product of social labor, although it all becomes private property. In final analysis, the creation of capital is determined by assigning so much social labor to the production of capital goods, an elementary fact disguised and distorted by the ownership, financial, and predatory relations of capitalist production.

Another source of wealth, independent of personal saving or investment, is the multiplication of capital claims. (Some claims are the result of non-productive investment.) One form of this is the upward movement in land values, capitalizing the growth of population, production, and the national income. Another form is the recapitalization of industry and the inflation of stock values. This may result from speculation, or from capitalizing the general upward movement of production, technological changes, seizure of natural resources, unusually profitable market conditions, formation of monopolist combinations, and monopoly advantages. [6*] This, in certain stages, may be an unusually important source of capitalist wealth; as in 1898-1914, when monopoly recapitalized American industry. It was important in the pre-1929 prosperity: mergers and combinations yielded great profits to promoters and bankers, and inflated capitalization. Monopolist combinations all capitalized increasing production, the rising productivity of labor, and anticipations of higher profits. An investment, in 1922, of $10,000 in the common stocks of a group of corporations rose in eight years to $23,500, an increase of 235%, in addition to yielding cash income of $8,535, an average yearly increase of 16.5%. [21] Independent of new investment, capital and capital claims were augmented, rising faster than production and the national income, engendering maladjustments and disturbances. Many of the gains of recapitalization are wiped out (not the part represented by the profits of bankers and promoters). But the losses are a necessary condition of capitalist accumulation, and they help to concentrate wealth in the ownership of financial capitalists. In the epoch of the upswing of capitalism, moreover, the gains were greater than the losses, enlarging capital claims like a snowball going downhill. It is different in the epoch of decline, when losses tend to outstrip gains; this inflames capitalist passions, makes their fight for profits more ferocious, creates new antagonisms and social explosions ...

As the accumulation of wealth is essentially an impersonal, institutional function of ownership and class exploitation, the share of the working class must be small. It is even smaller than the 10% participation in national savings, because these savings are rainy-day funds, cut into by illness, unemployment, and depression. (If, in depression, a worker uses up his savings, the loss is final. But the losses of the owning class are not necessarily final. If the values of stocks go down, they rise again; if the stocks are sold, what the former owner loses the new owner may gain.) Hence, in 1928, the workers’ share in the income-yielding wealth of the nation was only 4.7% (Table VI), half their share of the national savings. Not only is concentration of wealth greater than of income, it is greater than the statistics indicate. For the workers’ “wealth” is merely a pitifully small reserve against illness, unemployment, and death. The farmers’ share is probably overestimated, and ownership is concentrated in the upper layers; the tenants, share croppers, and poorer farmers, the majority, do not even make a fair living. The share of the lower bourgeoisie is largely bound up with their occupations, their petty business enterprises. Ownership of income-yielding wealth, of capital resources, is a monopoly of the intermediate and upper bourgeoisie, with their 67.7% share massed in corporate ownership and control of industry. Combined they are only 6.9% of the gainfully occupied, the upper bourgeoisie only 0.8%. [7*]

In any class society the ownership of wealth is a monopoly of the ruling class. Its forms change as the mode of production and resulting class-economic relations change. Landholding, the direct exploitation of the producer, was the essential form of pre-capitalist wealth. The commercial revolution in Europe, from the fifteenth to the seventeenth centuries, thrust forth a new type of wealth, derived from trading, mining, speculation, and promotion, while landholding became a new source of wealth by levying tribute upon economic development. Capitalist wealth is based upon the production of surplus value by the workers. Hence it depends upon an increasing output and absorption of capital goods, of new means for the exploitation of labor. But capitalist wealth is also a mass of claims upon production. Great fortunes (cf. ownership of natural resources) may represent simply the “right” to a share in the social wealth, in the surplus value appropriated by others. While all capitalist wealth is derived from the exploitation of labor, fortunes may be amassed by plundering other capitalists of their wealth. These conditions become the more typical as industrial capitalism is transformed into monopoly capitalism. The wealth of the financial oligarchy is merely a mass of paper claims upon production and labor, upon the surplus value appropriated by active capitalists, or, increasingly, by hired management as agents of ownership.

Changes in the form of capitalist wealth parallel class-economic changes which express not only the development of capitalist production and exploitation, but also the historical drive toward a new social order.

While in sixteenth-century Europe and after fortunes were piled up out of trade, promotion, and speculation (including the “primitive accumulation” of the expropriation of peasants from the soil), accumulation in the North American colonies assumed at first the older form of large landholdings. Spaniards acquired fortunes by plundering the Aztec and Inca civilizations, another form of primitive accumulation, and by forcing the Indians to dig gold and silver. But farther north there was only land to wrest from the aborigines. The English kings gave title to vast domains to their favorites, often pauperized aristocrats, who combined with merchant capitalists to exploit the grants. Alongside and within the proprietary grants, great landed estates were created. In the New Netherlands, the Dutch also built up large landholdings; the 700,000-acre estate of Killiaen van Rensselaer was not unusual. These manorial estates were worked with tenants and indentured laborers, and the owners were for years dominant political powers. Farther south, the plantation system was based on Negro slavery; the cultivation of tobacco with slave labor in Virginia produced some of the earliest colonial fortunes. Even after the colonies reverted to the British crown, the accumulation of large landholdings continued, although some of the older ones were broken up. Entailing of land was extensively practiced. The colonial manorial estates represented the transplantation of an essentially feudal type of wealth, but they functioned in an environment which the commercial revolution was rapidly transforming into a capitalist economy; in fact, the estates depended upon trade with England for the profitable disposal of their products.

Another source of wealth was overseas trade, an expression of the world market and developing capitalism. Colonial plunder enriched European merchants and aristocrats, and provided new means for the exploitation of labor. Gold from the New World, while it helped to ruin Spain economically, invigorated the general development of capitalism. (The gold was red with the blood of labor; for, in Mexico and Peru, the working conditions were so terrible that 80% of the Indian miners died every year. [22]) The North American colonies were drawn into the whirlpool of the world market. By 1680, there were thirty merchants in Massachusetts each worth between $50,000 and $100,000. [23] The fur trade, supplying the growing luxury demands of the European aristocracy of blood and money, yielded great wealth, mainly for the absentee masters of the Hudson’s Bay Company in England. The slave trade, never before organized on such a vast scale, was a fertile source of colonial fortunes. Money lending and a crude form of banking developed to meet the needs of commerce, constituting another source of wealth. By the time of the American Revolution, mercantile fortunes were disputing supremacy with landholding fortunes, although land still enjoyed social recognition as a dominant form of wealth. The father of James Fenimore Cooper owned a manorial estate of huge proportions; his boast was that there were “some 40,000 souls holding land directly or indirectly under me.” [24]

The Revolution dispersed some fortunes, particularly among the loyalists whose estates were confiscated as a revolutionary measure; but others became larger and new ones were created, mainly by financiering, speculation, and privateering. One revolutionary privateer later increased his wealth from mercantile and manufacturing enterprises, accumulating $1,800,000. [25] Speculative wealth was greatly augmented when the new Federal government assumed $70,000,000 of national and state debts; most of the bonds were in the hands of a few speculators, who had bought them at 10% to 15% of their face value. [26] Mercantile fortunes, based upon the expansion of trade, agriculture, and industry, grew swiftly after the Revolution, with manufacturing fortunes becoming increasingly more important. Stephen Girard amassed a typically capitalist fortune, derived largely from speculative manipulations in banking, trading, manufacturing, and shipping.

With the onsweep of capitalist enterprise, wealth represented by large agricultural landholdings definitely receded in importance. The protests of tenants forced the adoption of legislation to break up the manorial domains, and the earlier abolition of entail and primogeniture had a similar effect. As large agricultural landholdings dwindled in the East, great landed wealth came to consist of urban realty holdings, whose value was increased enormously with the rapid growth of cities. Similar fortunes arose in the West – in Chicago, Cincinnati, and St. Louis. Speculation in the new lands of the frontier began to assume more importance as a source of great wealth. Land ownership levied its tribute upon economic development and population growth. According to one estimate, in 1846, of the nineteen New York millionaires who owned a total of $65,000,000, eight, including John Jacob Astor and E. van Rensselaer, were landowners and seven were merchants. But the original wealth of Astor, whose fortune was the largest in its time, came from the fur trade and the oriental trade, and it was multiplied by speculation in urban real estate. Of the seventy-eight fortunes of $500,000 and over, twenty-six were owned by merchants, seventeen by landowners, five by manufacturers, and seven by bankers and brokers. [27]

The merchant capitalist was now the dominant type. Great wealth based directly on manufactures was still rare; a contemporary chronicle said of one rich man that he had “managed, strange to say, to obtain large profits and wealth” from manufactures. Of nine Boston millionaires, in 1845, only two were engaged in the manufacture of goods. But the designation merchant now covered a multitude of interests. While merchants seldom pioneered manufacturing enterprises, which were considered risky, they financed the distribution of the products and secured thereby a large share of the profits. Thus, in 1834, 85% of the Boston merchants were closely connected with manufactures. [28] Differentiation proceeded steadily, however; many merchants became industrial capitalists and others abandoned trade for finance. The great American investment banking houses were originally mercantile firms. George Peabody gave up trade for international banking and acquired a fortune of nearly $10,000,000 out of the American need for foreign capital. [29] The founder of the House of Morgan was a merchant. Banking was transformed by developing industry’s greater need for fixed capital. Merchants and bankers promoted railroads, whose rapid development was an important source of economic change and capital accumulation. The railroads offered an unexcelled opportunity for piling up profits, both “legitimate” and illegitimate; and Jacob Little, reputed inventor of short sales, was already demonstrating how a fortune might be made by railroad manipulation and speculation. The characteristic forms of modern wealth began to emerge, based upon the development of industrial and financial capitalism.

Modern capitalist fortunes appeared much earlier in England, because of the more rapid tempo of industrial development. Immense wealth had poured into England from overseas trade and chartered companies, such as the Africa Company and the East India Company, most of which combined trade, slaving, and colonial plunder. The great wealth stolen by English adventurers in India led to the use of the Indian term nabobs to designate the newly rich. Security speculation, made possible by the rise of joint-stock companies, culminated in the organization in 1711 of the South Sea Company, whose promoters were mainly wealthy merchants. When the South Sea bubble burst, as its predecessor the Mississippi bubble had burst in France, thousands of people were ruined, but some insiders reaped large profits. Meanwhile, in the nooks and crannies of the English economy, forces were accumulating which were to create new riches, to change the form and increase the size of great fortunes. The industrial revolution not only multiplied wealth but also accentuated its concentration. Wealth directly connected with the industrial revolution, in its earlier stages, was made by new men; only after the new industries were successfully established did they prove attractive to the conservative, play-safe owners of older fortunes. But the industrial revolution also enriched aristocratic landowners whose lands contained coal, iron, and other minerals, and whose ancestral privileges enabled them to levy tribute upon economic progress. The earliest of the new capitalist fortunes arose in the coal and iron industries. Although Henry Cort, whose processes transformed iron making, died a poor man, the ironmasters who violated his patents secured great wealth. In the districts of South Wales, where the new industrialism flourished most vigorously, and where labor and social conditions, according to one authority, combined “the worst features of the industrial revolution,” [30] capitalists in a few years amassed huge wealth from the most merciless exploitation of labor and the needs of industry. Another crop of rich men was produced by the textile industry, which ruthlessly expropriated craftsmen and sweated women and children, and also disrupted the village economy of India based on handicraft weaving. Great wealth was also acquired by exploiting railroads, especially in the form of speculation. Investment bankers (Rothschilds, Barings) garnered great profits from promotion, and from the export of capital for government loans and the financing of railroad construction on the continent, in the United States, and in Latin America. Never before had wealth poured forth in such a torrent as in capitalist England between 1815 and 1850, and never were the conditions of the working class more miserable. At the same time, land fortunes were still powerful; even after the Reform Bill of 1832, land represented political power and social prestige. While aristocratic landowners had their wealth increased beyond the dreams of their ancestors by industrial and urban growth and by corporate investments, industrial and commercial capitalists bought landed estates in order to qualify for titles and social position: the parvenu spirit of the bourgeois!

Capitalist development on the European continent paralleled English development on a smaller scale. As the financial manipulations of the Rothschilds spread beyond Germany, they became the most powerful factor in the realms of international finance. Their function was essentially the mobilization for capitalist investment and exploitation of the wealth of the feudal aristocracy based on pre-capitalist forms of exploitation. Industrialism and corporate enterprise encouraged promotion and speculation, all forms of the financial plundering of economic progress. The Credit Mobilier, which offered competition to the Rothschilds, paid fabulous dividends in the 1850’s, and then crashed. France under the tragic mountebank, Louis Napoleon, was the paradise of corrupt and predatory speculators and adventurers (including the emperor); other fortunes were made by industrial capitalists in coal, iron, and textiles. All over the continent railroads were built, enriching their promoters, not the builders. Railroad construction was often beyond immediate economic needs, imposing new burdens upon the workers and peasants; but promoters raked in the profits. Holland was no longer the important power it had been in the sixteenth and seventeenth centuries, but the Dutch merchant capitalists continued to draw wealth from the exploitation of their colonial possessions. The rapid industrialization of Germany was the basis of many great fortunes. Aristocracy in Germany, almost as much as in England, allied itself with capitalism and enormously increased its wealth. Thus the feudal landowners of Upper Silesia piled up great fortunes by the capitalist exploitation of coal, iron, and other minerals on their estates. In 1913, of the five greatest fortunes in Germany, three were owned by landholding aristocrats; in England, the Duke of Westminster had an income of 200,000, mainly from rents. [31]

By 1890, the more industrial nations of Europe England, Germany, France, Belgium were actively engaged in the struggle for imperialist supremacy, which led inexorably to the catastrophe of the World War. Imperialism, the predatory aspect of the industrialization of the world’s economy, the expression of the developing forces of capitalist decline, became a most important factor in the accumulation of wealth. Capitalist industry came increasingly to depend upon the export of capital and the exploitation of economically backward countries as the source of cheap raw materials and even cheaper labor. Immense profits were made in China by financiers, promoters, speculators, and ordinary adventurers. Construction of railroads in Asia, Africa, and Latin America yielded profits which in many ways suggested tribute levied upon the conquered. [8*] Loans were knowingly made to the corrupt governments of economically backward peoples, and wasted; interest and principal were repaid by the blood and agony of the workers and peasants. A cabal of Belgian aristocrats, financiers, and speculators, led by King Leopold, drew immeasurable wealth from the horrible exploitation of men, women, and children in the Congo, including “disciplinary” massacres and mutilations. French and Belgian financiers drew wealth from the construction of the Trans-Siberian and the Chinese Eastern railroads. (The Soviet Union expropriated these properties, but the financiers had unloaded the losses onto small investors.) In Africa the British South Africa Company of Cecil Rhodes extorted profitable concessions from the natives, and inextricably merged his wealth and business interests with the politics of imperialism. The basis of empire, said Rhodes, is “philanthropy plus 50%” [32] His imperialist schemes led directly to Britain’s war with the Boers. An aspect of imperialism was the augmenting of competitive armaments; the most brutal, unscrupulous, and predatory capitalists flocked to the munitions industries, creating and exploiting war scares, some amassing incredibly large fortunes. (American capitalists, on a smaller scale, did the same thing in Latin America.) Munitions capitalists during the World War traded with the enemy and provided means to kill “their own” soldiers – for a profit.

The mounting needs of European industry for overseas raw materials produced some native fortunes. A landholding family in Chile increased its wealth to $70,000,000 by capitalist exploitation of minerals, and a Bolivian family amassed over $200,000,000 from ownership of tin mines. [33] But, by and large, the natural resources of economically backward countries, and their profits, were seized by foreign capitalists. In these countries the older type of landholding fortunes persisted, although modified by capitalist influence. Personal exploitation of political power yielded immense wealth to the inner clique of Porfirio Diaz in Mexico and to Juan Vicente Gomez of Venezuela. The Venezuelan, when he became president in 1908, was a poor man; twenty years later his private fortune was enormous. The native exploiters of both countries “made” their money by an alliance with foreign capitalists, involving robbery of natural resources and the most brutal suppression of workers and peasants. All this involved some of the most brutal forms of primitive accumulation.

Great as were the European fortunes created by capitalist development, they were smaller than those piled up in the United States after the Civil War, which strengthened capitalism economically and liberated it politically. Relatively unhampered by older vested interests and the culture of an older civilization, with an almost “pure” acquisitive ideology justifying unrestricted money-making, American capitalism drew upon the apparently inexhaustible natural resources of an undeveloped continent, exploiting them with the aid of large and poorly-paid masses of immigrant labor provided by Europe.

The seizure and exploitation of vast natural resources, a form of primitive accumulation, was of fundamental importance in the formation of many American fortunes. Most of the natural resources were originally part of the public domain, which in 1860 still consisted of 1,048 million acres. But they came into private capitalist ownership by “the benevolent paternalism” of a government, according to one bourgeois historian, which “sold its natural resources for a song, gave them away, or permitted them to be stolen without a wink or nod ... The public land office of the United States was little more than a center for the distribution of plunder.” [34] Not only capitalists became rich by exploiting natural resources; somnolent farmers acquired wealth overnight by the discovery of minerals or oils in their lands.

Speculation was a mighty source of wealth in the Civil War, exploiting the war needs of the government, and connected with political corruption. The founder of the Armour dynasty made a killing speculating in pork. Jay Cooke built up his fortune financiering in government bonds. In the period immediately after the Civil War many fortunes were wrested from the railroads. Yet the legitimate construction costs of the great American railroads were more than paid for by Federal, state, and municipal contributions of $700 million and grants of 155 million acres of public lands. [35] Cornelius Vanderbilt’s great wealth came almost exclusively from speculating in railroads and watering their stock as an accompaniment of consolidation; he left $100 million and one of his sons left $200 million. More than $40,000,000 were extorted from the Union Pacific Railroad in excess construction costs; the profits were distributed among promoters and politicians. [36] Jay Gould’s fortune of $72,000,000 came mainly from railroad manipulation and speculation; it was identified with no constructive achievement. Many others exploited the railroads in similar fashion. When speculation, mismanagement, thievery, and unbridled competition drove the railroads into bankruptcy, wages were cut and workers on strike brutally suppressed, while thousands of small investors were ruined; but reorganizations yielded large profits to financiers and promoters. Part of the Morgan money and power came from this source. Other great fortunes (Hill, Harriman) were piled up by speculation in railroads and their consolidation into over-capitalized systems from 1895 to 1905. Underlying it all was a mounting production and realization of surplus value.

While the older fortunes did as a rule no economic pioneering, parasitically satisfied with safe investment and income, the onward sweep of technology and general economic progress revolutionized one industry after another; men of small means, who entered the new industries at an early stage, amassed large fortunes by shrewdly capitalizing new developments and inventions. (Inventors seldom became wealthy. In Wall Street they said: “It’s the third or fourth man who cleans up on inventions.”) The Armours in meat-packing, Cyrus McCormick in agricultural implements, George Westinghouse in electrical manufacturing, Andrew Carnegie and Henry Clay Frick in iron and steel – all levied tribute on technical-economic changes and tribute on labor. Conditions in the iron and steel and coal regions of Pennsylvania were typical; workers were held in a sort of feudal bondage, shackled by the law of the masters, and killed, if they went on strikes, by the masters’ police.

The 1860’s-90’s was the epoch of the industrial capitalist, who participated directly in industry. But only within limits; for the speculator was everywhere and the financial capitalist made his appearance with the development of monopolist combinations. Technological changes, large-scale production, and competition drove inexorably to industrial concentration and corporate combination. The profits of monopoly were tremendous; the Standard Oil Company, with an original capitalization of $1,000,000, between 1882 and 1906 paid out $548 million in dividends, while other millions were represented by reinvested profits and cash resources. [37] Equally tremendous were the profits of trustification; the series of combinations in the steel industry, which culminated in the United States Steel Corporation, yielded the promoters profits of at least $150 million. [38] Profits of this type were often fortuitous; in order to prevent the revival of ruinous competition and to form the steel trust, Carnegie was paid $447 million for his interests, twice what he would have accepted two years previously. By 1900, the industrial capitalist was swiftly receding into the limbo of small-scale industry or was becoming a financial capitalist, with interests in a multitude of enterprises, promoting, speculating, financing, not engaged directly in production. The Standard Oil multi-millionaires, an oligarchy dominated by John D. Rockefeller, were now promoters, speculators, and bankers on a large scale; “their resources are so vast,” said one financier, “there is an utter absence of chance” in their manipulations. [39] Another source of great fortunes (Morgan, Stillman) was investment banking, growing with the expansion of corporate enterprise and trustification and allied with promotion and speculation. For the separation of ownership and management vested control increasingly in the financial capitalists and the great banks. Industrial concentration was paralleled by centralization of financial control, of which the dominant institutional expression was the House of Morgan.

The swiftly rising stream of national wealth was deflected into other, if minor, channels – politics, patent medicines, journalism, the law. Politics favored predatory capitalists more than corrupt politicians; it served the capitalist class in general and special capitalist groups in particular. But there were many chances for the politician; they expected, and got, something in return for handing over the nation’s natural resources to capitalists or for giving them tariff benefits. “If I had my way,” said one politician, “I would put the manufacturers over the fire and fry all the fat out of them.” [40] Millionaires who looted traction systems (Yerkes, Ryan) worked hand in hand with municipal political machines, stealing franchises and plundering the public. The clash of predatory interests gave lawyers their opportunity, especially the corporation lawyer, who twisted the law (e.g., the “due process” clause enacted in the interest of the Negro, but distorted to protect the “rights” of capital) and swayed courtrooms on behalf of his corporate clients. Journalism cashed in on advertising, capitalized public prejudices, and protected capitalist interests; the mercenary struggle for circulation between Hearst and Pulitzer contributed to the making of the Spanish-American War. Under the forms of bourgeois democracy, class rule needs the services of journalism and the law, and they get their share of the spoils. The beginnings of American imperialism, from 1880 to 1900, swelled the stream of capitalist wealth. In Chile and Peru, Henry Meiggs and William R. Grace (the “Pirate of Peru”) made substantial fortunes exploiting natural resources, promoting railroads, organizing banks, mixing in dirty, murderous politics. Minor C. Keith, the “American Cecil Rhodes,” piled up immense wealth as the spearhead of American economic, financial, and political penetration of the Caribbeans, creating an empire fertilized with the blood of peons, ruled over by the monopolist combination, the United Fruit Company, with its banana and other plantations, its railroads, ships, and banks, protected by the might of the American government. [41] ...

In 1892, the New York Tribune published a list of 4,047 American fortunes of $1,000,000 and over, which shows quite clearly the change in the dominant form of wealth since 1845. [42] Of the 4,047 millionaires, 1,140 or 28% secured their wealth from manufactures. The next largest group, merchandising, numbering 986 millionaires, included, however, great merchants engaged in other enterprises as well; thus of Marshall Field’s $120 million estate, his interest in Marshall Field and Company was valued at $3,400,000, the balance including investments in (besides real estate) 150 industrial, public utility, and financial corporations. There were 468 fortunes connected with real estate; 410 with transportation and communication, including 186 railroad magnates; 356 with banking, brokerage, and insurance; 286 with mining, of which seventy-two were based on the production, refining, and transportation of oil; and 168 with forest ownership and lumber manufacture. Of the eighty-four millionaires who derived their fortunes from “agriculture,” forty-seven were Western cattle ranchers, a group of whom President Theodore Roosevelt’s land commission said that “hardly a single title is untainted by fraud;” fifteen were owners of plantations in the South, and six owned plantations in Latin America. The professions contributed seventy-three fortunes of $1,000,000 and over; sixty-five of them belonged to lawyers, mostly corporation lawyers, and only three were based on accumulations of patent royalties.

What manner of men were these millionaires, who got into their hands the greater part of the wealth produced by the labor of a nation? Their attitude toward labor was expressed by the management of the Carnegie Steel Company, who provoked the bloodshed at Homestead in order to crush unionism, and one of whom said: “If a workman sticks up his head, hit it.” [43] Their general attitude was expressed by Cornelius Vanderbilt: “Law? What do I care for the law? Hain’t I got the power?” And by J. Pierpont Morgan: “I owe the public nothing. Men owning property should do what they like with it.” [44] ... [9*]

From 1900 to 1914, the accumulation of great wealth, because of the slowing down of the rate of economic development and the growth of monopoly capitalism, became increasingly dependent upon the recapitalization of industry, upon promotion and speculation. As concentration of income was augmented, and fortunes became still more swollen, financial capitalists tightened their grip upon corporate industry. The combination movement swept onward, piling up paper claims upon production and income. The “water” in the United States Steel Corporation, whose capitalization of $1,400 million was based upon tangible assets of only $682 million, was a typical case of capitalizing monopoly advantages and profits. Imperialism, moreover, became more important as a source of wealth.

The early years of the World War were a godsend to the American accumulators of great wealth, exploiting the agony of Europe. Scores of new millionaires were created after the United States marched forth “to make the world safe for democracy.” European developments were similar. Then revolution and inflation changed the distribution of wealth. The communist revolution in Russia confiscated and socialized wealth, along with the expropriation of the bourgeois and feudal classes. The Succession States broke up many of the large estates of the old aristocracy. Inflation wiped out much of the wealth of the middle class, but financial and speculative capitalists were enriched.

The devastating inflation in Germany liquidated many fortunes, and few escaped intact, particularly those based on “fixed” investments; but out of the general ruin a few monstrously large fortunes arose. Inflation and deflation produced similar results in other European countries on a smaller scale. Post-war France illustrated beautifully how abstinence is the source of great wealth. In the “recovered” provinces of Alsace-Lorraine, industrial enterprises expropriated from the Germans, worth 8,000 gold francs were sold secretly to a score or two of Frenchmen for 180 million paper francs. One of the beneficiaries was the Comité des Forges, the steel trust, which received tremendously valuable iron mines and works. [45] In general, because of economic crisis and decline, the accumulation of wealth in post-war Europe consisted mainly of the redistribution and concentration of existing wealth; new fortunes usually arose out of speculation, financiering, and the recapitalization of industry by means of monopolist combinations, national and international.

In the United States the post-war period was characterized by an increasing concentration of wealth and the augmenting of great fortunes. Mergers, combinations, and speculation yielded enormous profits. Foreign investments became an increasingly important source of capitalist wealth. On the basis of income-tax statistics there were, in 1929, probably 30,000 American millionaires, compared with 7,000 in Great Britain. In this same year, 504 multi-millionaires with incomes of $1,000,000 up [46] held claims to wealth amounting to over $30,000 million, or nearly one-third more than the national wealth of Italy. This immense wealth was in the form of paper claims upon production and income. Marx said that wealth in the capitalist mode of production takes the form of an immense accumulation of commodities; from another angle, it may be said to-day that capitalist wealth takes the form of an immense accumulation of paper. In the great American fortunes, landownership is relatively unimportant except in the case of some fortunes based on urban realty (ownership of natural resources by corporations is, of course, extremely important). The wealth is represented by investments in a broadly diversified group of corporate enterprises, with a backlog of government bonds. In 1929, incomes of $5,000 up reported ownership of $5,373 million of tax-exempts [47], in addition to other government bonds. In the case of fortunes with yearly incomes of $100,000 to $150,000, their wealth consisted 58.3% of stocks and bonds, including foreign securities, and 91.9% in the case of fortunes with incomes of $1,000,000 up. [48]

The characteristic form of modern capitalist wealth – paper claims upon production and income – contrasts sharply with older types of fortunes. The wealth of the feudal aristocracy was associated with land, that of industrial capitalists with particular enterprises; both had a tangible form and definite habitation. Contemporary capitalist fortunes, on the contrary, are liquid, mobile, intangible, a mass of paper rights to ownership. At the basis of this development are the concentration of industry, the separation of ownership, management, and control, and the transformation of the industrial capitalist into the financial capitalist. One aspect of these developments is the increasing importance of the passive, wholly parasitic rentier, the mere clipper of coupons. It has been estimated that individual trusts managed by banks for their owners, whose only function is to receive and spend the income, are worth over $25,000 million. The value of such trusts, for national banks alone, rose from $922 million in 1926 to $4,319 million in 1930. [49] Ownership here is separated even from administration; private income is drawn from collectively produced and collectively managed wealth.

Modern wealth is separated from direct participation in industry; its owners are absentee capitalists, with management and control assuming institutional forms. Because of this the possession of wealth does not carry responsibilities with regard to the sources from which it is derived. The lord of the manor had definite obligations, either legal or customary, to the tenants on his land, the serfs who cultivated his domains, and his household servants. Where the industrial capitalist recognized obligations to the workers in his factory or the consumers of his product, they were forced upon him by his identification with a particular enterprise. The modern financial capitalist, whose fortune is scattered in scores of corporate enterprises and perhaps in almost as many countries, effectively escapes such responsibilities. Even if he owns a large block of securities in a particular enterprise, he may plead that the responsibility is not his but that of management. Thus, in 1926, when John D. Rockefeller, Jr. was asked to influence the management of a railroad, which was waging ruthless war upon its striking workers, the unctuous son of an unctuous father replied:

“The facts are that the combined holdings of our family, together with those of the funds to which this stock may have been given, represent considerably less than 25% of the stock of this company. [He was, however, the largest single stockholder.] Only two of the twelve directors can be regarded in any sense as representatives of our interests. The management of this company is entirely in the hands of the board of directors and, no matter what my personal views may be, I don’t control the situation.” [50]

This is a clear example of relations of private claims to ownership persisting within what are essentially collective or social forms of production and management. Wealth has assumed a form which makes it ripe for expropriation and socialization: the wealth expropriated from the producers reverts to them in the form of social property, serving the whole of society. For the antagonism between the two opposites, proletariat and wealth, is, in the words of Marx, resolved by the synthesis of socialism, in which both private property and the proletariat disappear ...

An expression of private property and class rule, the unequal distribution of wealth results in great fortunes at one extreme and poverty at the other. All legislative efforts to break down the concentration of wealth have failed; it increased tremendously in the United States following the introduction of income and inheritance taxes. The revolutionary bourgeoisie, which objected to great feudal fortunes and in many cases confiscated them, considered the “free ownership” of property equivalent to social equality; but bourgeois private property constituted the starting point of accumulations greatly exceeding the feudal fortunes. In the United States the middle class from 1880 to 1914 waged bitter war upon “tainted wealth” and “unearned increment,” but this class defended the system of private property out of which great fortunes arose.

The augmenting of capitalist wealth depends upon an increasing output and absorption of capital goods, the means for the exploitation of labor and the production and realization of surplus value and profit. Under the conditions of decline, with the output of capital goods and capital accumulation moving downward, wealth decreases relatively, if not absolutely. Unemployment and lower wages make still smaller the workers’ share of the national wealth. Concentration moves upward, on a lower level. More than ever capital claims and speculation become the source of capitalist wealth. But in the measure that wealth tends to decrease, the struggle for a larger share among the capitalists becomes more intense, aggravating the maladjustments and instability of capitalist production. Wealth takes more and more the form of debt, particularly of public debts. This is an old trend acquiring new vigor. The government debts of the world rose from $7,500 million in 1815 to $30,000 million in 1900 and $250,000 million in 1933, a stupendous increase even after making allowances for the changes in the purchasing power of money. The total public debts of the United States, which rose from $4,850 million in 1912 to $36,822 million in 1932, yielded an interest of $1,500 million; a similar amount was yielded by the national debt of England. [51] Since ownership of government bonds is “bunched” in small groups, and taxation covers the whole of society, the burden of public debts is enormous. [10*] They tend to increase, moreover, as the capitalist state makes larger and larger expenditures to overcome crisis and economic decline, and to prepare for war under the conditions of intensified imperialist rivalry. Not only does the distribution of wealth become more unequal, it also becomes more parasitic, for in the form of debt it is a first claim upon the diminishing fruits of labor. Wealth now tends to increase in the hands of the few only by an absolute lowering of standards of living among the many.

Both the forms of capitalist wealth and its unequal distribution are underlying forces in the creation of cyclical crisis and breakdown, and the decline of capitalism. But those very forces are simultaneously an expression of developments which make possible a new social order. Capitalist wealth as a mere mass of paper claims upon production and income grows out of the socialization of production, the possibility of its transformation into social property, or socialism. And the very conditions of large-scale industry, resulting in the separation of ownership and management, make the industrial proletariat increasingly the carrier of a new social order. In this new order, the work of production does not pile up great fortunes whose only function is to own and exploit.

 
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Footnotes

1*. According to Robert R. Doane, The Measurement of American Wealth (1933), p.33, the share of the national wealth owned by incomes of $10,000 up rose from 38.7% in 1921 to 42.6% in 1929; the share of all incomes below $3,000 fell from 31.9% to 29%, and of incomes of $3,000 to $10,0000 from 29.4% to 28.4%.

2*. This subject is discussed more fully in Chapter XXVI, The American Revolution.

3*. New savings, interest, and insurance, in line with the tendency of capital and capital claims, increased much more than production and the national income, and more in 1919-29 than in preceding periods. Thus savings do their bit to intensify maladjustments and disproportions. And this is true also of those savings which are “rainy-day” funds. Only when the provision for illness, old age, and disability is socialized, in a socialist society, will it stop being a disturbing factor, for then it is done according to plan and the balanced needs of industry.

4*. The workers’ small share in savings and insurance disposes of the argument that they have a large indirect interest in corporate ownership. Moreover, the banks and insurance companies own not much over 5% of total corporate stock.

5*. “The capitalist does not become enriched as does the miser in proportion to his personal labor and his personal abstinence from consumption, but to the extent to which he can put the screw on other’s labor power, and to which he can enforce upon the worker the renunciation of all the pleasures of life. Although, therefore, the capitalist’s extravagance never has the genuine character of unbridled prodigality which was typical of certain feudal magnates, and although behind it there lurk sordid avarice and anxious calculation, none the less his prodigality grows proportionately with his accumulation, without the one necessarily putting an end to the other.” Karl Marx, Capital, v.I, p.635.

6*. “Those millions of new capital resources were not a result of savings and abstinence, but only capitalization ... Technical progress made production cheaper, and this cheapening of processes did not reduce prices as was the case in the last thirty years of the nineteenth century; the gain in the present century has been absorbed in the process of capitalization. Thus the private capital, which is really only a right to income without effort, a multiple of a free income, has been increased without the real and social capital being proportionally augmented by saving.” L.V. Birck, Theories of Overproduction, Economic Journal, March 1927, p.26.

7*. The depression wiped out much wealth and increased the concentration of ownership of the remainder. In 1929, 99% of the people owned only 17% of the nation’s liquid wealth (cash, savings deposits, insurance, stocks and bonds); by 1932 their share had dwindled to less than 6%. “This is the most rapid, drastic, and gigantic dissipation, redistribution, and transformation of capital that has, in all probability, ever taken place in so short a period in any individual economy in the history of modern times ... That it represents nothing more than a picturesque incident in another of our great ‘shifts’ of capital is gravely doubtful. It has been far too broad and deep and penetrating this time to allow of easy escape.” Robert R. Doane, The Measurement of American Wealth (1933), pp.28-32.

8*. Conditions were typical in Mexico, where British, French, and American financial adventurers plundered the Mexican people. Thus the Vera Cruz Railroad, capitalized at $40,000,000, could have been built for $10,000,000, yet paid dividends of 5% to 12%. Corruption and construction frauds were widespread. One source of extra profits was unnecessary mileage, using the longest, most crooked routes, to get the government subsidy. Matias Romero, Railways in Mexico (1882) p.8. Mexico was one of the earliest stamping grounds of American imperialism.

9*. “Man is a beast of prey. The tactics of his living are those of a splendid beast of prey, brave, crafty, and cruel ... A beast of prey is everyone’s foe. Never does he tolerate an equal in his den. Here we are at the root of the truly royal idea of property. Property is the domain in which one exercises unlimited power, the power that one has gained in battling, defended against one’s peers, victoriously upheld. It is not a right to mere having, but the sovereign right to do as one wills with one’s own.” Oswald Spengler, Man and Technics (1932), pp.26, 28. The Prussian Junker and the capitalist are geistige brothers under the skin.

10*. Most public expenditures, out of which public debts arise, are non-constructive. Only 1.3% of the expenditures of the national government in the United States (1927) was for social services, including education, 9.6% in France, and 15.6% in Britain (1929). On the other hand, the American expenditures on war (including pensions and debt interest and retirement, most of the debt being incurred for war purposes) were over 70%, the French 69%, and the British 70%. Paul Studenski, Public Expenditures, Economic Foundations of Business (1932), p.450. The percentages are not wholly comparable because of differences in government functions; thus the national government in the United States, unlike the French and the British, has little to do with education. But they are indicative of the general situation.

Notes

1. Federal Trade Commission, National Wealth and Income (1926), p.59.

2. Federal Trade Commission, National Wealth, p.58.

3. Bureau of Internal Revenue, Statistics of Income, 1923, p.42; 1929, p.54.

4. Silas Bent, Labor’s Window on Wall St., The Nation’s Business, June 1924, p.25.

5. Albert F. Coyle, One of Labor’s Greatest Hopes, Labor Age, May 1926, p.3.

6. M.R. Neifeld, True Effect of Depression on Savings, Annalist, April 1931, p.635.

7. Department of Commerce, Statistical Abstract of the United States, 1931, p.275.

8. New York Times, January 15, 1927.

9. Neifeld, True Effect of Depression, Annalist, April, 1931, p.635.

10. Small Depositors, Small Borrowers, Business Week., July 29, 1933, p.19.

11. Statistical Abstract, 1931, p.279.

12. New York Times, October 9, 1932.

13. National Bureau of Economic Research, Recent Economic Changes, 2 vols. (1929), v.II, p.486.

14. Paul H. Nystrom, Economics of Consumption (1929), p.504.

15. Statistical Abstract, 1931, p.308.

16. Maurice Taylor, The Social Cost of Industrial Insurance (1933), pp.138, 152.

17. Statistical Abstract, 1931, p.309.

18. Nystrom, Consumption, p.502.

19. Statistics of Income, 1931, p.48.

20. H.G. Moulton, The Financial Organization of Society (1924), p.488.

21. Frederick C. Mills, Recent Economic Tendencies in the United States (1932), pp.492-96.

22. Isador Lubin, Mining Labor, Encyclopedia of the Social Sciences, v.X (1933), p.505.

23. Victor S. Clark, History of Manufactures in the United States, 2 vols. (1928), v.I, p.145.

24. Vernon Parrington, The Romantic Revolution in America (1927), p.224.

25. Gustavus Myers, History of the Great American Fortunes, 3 vols. (1909-10), v.I, p.58.

26. Charles A. and Mary Beard, Rise of American Civilization, 2 vols. (1928), v.I, p.342.

27. Computed from material in M. Y. Beach, The Wealth and Biography of the Wealthy Citizens of the City of New York (1855).

28. John R. Commons and Associates, History of Labour in the United States, 2 vols. (1918), v.I, p.305.

29. Lewis Corey, The House of Morgan (1930), p.42.

30. J.L. and B.B. Hammond, The Rise of Modern Industry (1925), p.158.

31. J. Burnley, Studies in Millionaires, Chambers Journal, March 1901, p.215.

32. Howard Hensman, Cecil Rhodes (1901), p.150.

33. Burnley, Millionaires, Chambers Journal, March 1901, p.215.

34. Charles and Mary Beard, American Civilization, v.II, pp.170, 199.

35. W.Z. Ripley, Railroads, Rates and Regulation (1912), pp.37-39.

36. Corey, House of Morgan, p.144.

37. Eliot Jones, The Trust Problem in the United States (1922), p.89.

38. Bureau of Corporations, Report ... on the Steel Industry (1911), p.112.

39. Henry Clews, Fifty Years in Wall St. (1908), p.746.

40. Franklin Pierce, The Tariff and the Trusts (1907), p.122.

41. M.A. Marsh, Keith, Minor Cooper, Encyclopedia of the Social Sciences, v.VIII (1932), pp.553-54; John Dos Passos, The 42nd Parallel (1930), Emperor of the Caribbean, pp.249-52.

42. New York Tribune, February 11, 1892.

43. Ida Tarbell, The Life of Elbert H. Gary (1925), p.154.

44. Corey, House of Morgan, pp.282, 301.

45. New Republic, February 21, 1934, 30-31.

46. Statistics of Income, 1929, p.15.

47. Statistics of Income, 1929, p.18.

48. Robert R. Doane, The Measurement of American Wealth (1933), p.29.

49. New York Times, October 2, 1932.

50. Editorial, Does Responsible Ownership Function, New Republic, April 21, 1926, p.266.

51. New York Times, January 29, 1934.

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