Evening Star Newspaper, March 3, 1935, Page 37

Little Enterprise Seen Holding Key In Fight to Halt Spread of Socialism (Continued From First Page.) leadership without understanding, re- sponsive not to principles or to con- science, only to the demands of the mob. This fear has depressed busi- ness and paralyzed investment. It has prolonged depression beyond its time. For a year now recovery has been knocking at the door, begging entrance. Let’s try to look briefly and sensibly at our extraordinary complex eco- nomic structure and determine, fl‘ Possible, what we ought to do about it. Desire to Better Conditions. From the cave-man days to the present one great tendency has run through the evolution of economic life —the irresistible tendency for the common man to improve his condi- tion relatively and absolutely. Until our time this continuous im- provement was a slow and irregular development accompanied by oppres- sion, injustice and strife. Since the coming of the machine age it has grown like a prairie-fire. Through in- creasing productivity, due mostly to machines and very little to the work- ers, there has been an extraordinary rise in wage levels and living stand- ards. With this rise of the economic status of the worker there has been a more than corresponding rise in his | social and political importance. The unions and the influence of wage earners as consumers have established the political power of the workers. The primary system and the universal bal- lot, without property or educational qualification, have given the control of government to the masses. The forces of property, of land and capi- tal and vested interests. of the small proprietor and the small home owner, are still powerful, but the balance of power is now in the hands of the masses of wage earners. We have seen this force in violent action in Russia, Germany, Italy, England and the United States in the past 10 years Here lies the danger of injury to pregress. This power has been ob- tained, naturally enough, in advance of economic knowledge. Visionary theorists and self-seeking politicians may guide and direct it into perilous paths. Nobody wants to throw back this tide of democracy. Nobody can. But it needs to learn self control and to gain understanding. It has neither at present. Would Tear Down System. The question of Socialism is an fl- lustration. It is in essence & plan to tear down the system built through thousands of years and substitute for it another that at present has no vis- ible concrete plan. Let's consider the present system and its defects and then look at this proposed substitute. | Left alone, it gives all the groups just about what they are worth to gublic schools, newspapers, labor IRE ROMANCE 8Y EVAN EVANS -—— ——— . CHAPTER XVIL OPEN DOOR. HEN they were standing be- fore the gate, Montana lifted his hand. Rubriz at once stepped up against the wall, flattening himself sgainst it. There he waited while | Montana rapped twice, paused, rapped | twice again, and then three times, rapidly and lightly. There was only & moment’s pause, and then a key was heard turning. Great bolts slid_back. one by one. each making a light clanking sound as it disengaged; and finally the heavy door began to sag outwards. As it opened voices thrust out into the night. “Be tender, Andres.” “Be kind, Andres!” “Be still, you fools!” panted a quick, | harsh answer from close to the door. | It yawned wider, until the lamplight | was glistening over the thick iron | plates which shod the inside of the postern, studded with the heads of a hundred rivets big enough to have been worked into the side of the! mightiest of liners. He who was thrusting the door open could be seen at the same time, one of those men who are big from the waist | up and bowlegged beneath, the legs bending as though to support and bal- ance more easily the top-heavy bulk above. i He wore wrinkled cotton trousers, but above the waist, where his body | became more important, his uniform | grew splendid, also, and wound up in | epauletted shoulders fit to have graced a major, at the least. He wore at his belt a long sheathed knife and a re- | every hall in the place!” | place, also. “How much time has that cost us?” muttered Rubriz. “You've promised me,” answered the Kid. “No murder, Mateo!” “Call it what you want,” said Rubriz, | “put the kind God who watches us knows how much time we've wasted here in His honor, when we might have left them still forever, with a | thrust apiece. Come on, I know the way. I've memorized every turn of He went on, leading straight up s/ flight of stairs which was drilled | through the thickness of the great old walls of the fort of Duraya. i Behind them, all the three men lay | still, but the sergeant was beginning | to move his jaws a little. He stirred them with care, and he began to push | with his tongue against the base of the wadding that kept him from draw- ing a free breath. After a time his tongue seemed to swell with the efforts he had been making. His throat appeared to be closing, also. He had to struggle to get any breath into his lungs. | Then he could not breathe at all. | With this, in a frightful panic, he | heaved himself to his knees so strongly | that the other two were dragged out of | He tugged with all his | might. The twine that bound hid| wrists cut through the skin like dull blades of knives. But every effort he made only stifled him the more. This he realized. There were two pairs of hands be- sides his own, ready with a gesture to pluck the strangling thing from his mouth, but all those hands were help- | less as his own. | The sergeant remembered an old-! | folk tale of his youth. And suddenly ( THE SUNDAY STAR, WASHINGTON, D. C, MARCH 3, 1935—PART TWO. society. Men do not set their own shares In the social income nor the shares of other men. The value of their contribution to production sets the returns of all groups. The only wage levels in this country deter- mined by men are those set by law or by monopoly trade unions, and in both cases they are notoriously wrong lev- els, from the unearned salaries of po- litical job holders to the building trades wages that have retarded re- covery. There has been no more sinister de- velopment in our time than the po- litically fostered notion that low wages and 1ow earning power are due to ex- ploitation. Employers have no power to exploit workers and most of them would have too much brains to want to do it if they could. Millions of men are the victims of adversity and even more millions are the victims of eco- nomic conditions which give them less than their personal merits might justi- fy if the conditions were otherwise. But all groups get roughly what their productive power earns. ‘There are grave defects in the sys- tem. The owners of land and capital receive in general just about what their property or their services are worth to society. But this does not work out fairly in many respects. Land is essential to life and extremely lim. ited. It automatically increases rapid- ly in value with growth of population. ‘The payment for it is not for services but merely for ownership. We reach a stage where a very large share of the total income is going to people who produce nothing. They merely hang on to land and receive an unearned income from the toil of those who work. Profits Shared. Profits and interest go to those who provide capital, money, credit and management. In a rich country like | ours the share going to these groups is large, though not so large as in poorer countries. It is diffused widely, going not only to the rich but to the middle classes and even to the poor. The actual rate of return to capital is low. and much of it yields no return. But the extraordinary expansions of finance and industry in this country under & laissez-faire policy has per- mitted very serious abuses. Men have risen to positions of power in banking, investment, industry and trade which have enabled them, with their legal and political henchmen, to obtain tremendous returns from manipula- tion, insiders’ control, monopoly and general financial piracy. So much for exploitation, which does not exist in any serious degree, and for unearned wealth, which does exist but is a relatively minor problem. There remain four very grave evils in our present system. One is purely mechanical. The whole system breaks down in depression, causing grievous distress. A second is individual. In our competitive system we all live in the shadow of insecurity. Failure, bankruptcy, unemployment, loss of earning power are grim specters in nearly all lives. The third is biological. A very large part of our population are not able through their own sad | lack of ability or character to earn a decent wage. The fourth is incidental. ‘There are vast waste, lost motion, unnecessary failure and reduplication in the present system. These four defects, admittedly seri- ous, are not the organic troubles of our economic system. Believe it or not, every one of them can be re- moved, or reduced to small dimen- sions, without altering the present system. In fact, in & blind and grop- ing fashion we are on the way to eliminating them now. But that is another story. Deeper than these four economic evils there is a force inside the system gnawing at its vitals. Free competi- volver, and he carried a rifle slung | he saw that to stuggle was to kill him- | tion is the essence of our economic ! unsatisfactory. Government regula- tion is inherently unscientific and in-! efficient, frequently corrupt. Free! competition adjusts production and price to the needs of society. But regulation of monopoly has no guide but cost of production, and cost varies with output. Regulation must substi- tute for the automatic control by competition clumsy and arbitrary guesswork decisions as to production, prices and service, ‘The alternative to private owner- ship under regulation is government ownership, and government owner- ship is Socialism. Socialism is a system in which the state owns all land and capital, substituting for com- | petition as the regulator of produc-| tion and consumption its own per-| sonal decisions and substituting for| self-interest as an incentive to ac-| tivity some other force the Socialists have not yet discovered. There is/ nothing in history or analysis to show‘l how much a system would work. Socialism is complete government ownership of all business, no more, no | less. It must regulate production and therefore consumption. Government in the United States has never been able to run any busi- ness, however small, with efficiency and economy. The postal system is an example. It has been socialist for more than a hundred years, and it is today a sad object lesson in misman- agement and venal politics. Moves Toward Socialism, | But the postal system is a natural l monopoly of such character that gov- | ernment ownership is preferable to private ownership under regulation. There are many such enterprises. We | have gone far in the direction of socialism already. The list is impres- sive, especially when we include en- terprises in which government owner- ship is as yet only beginning: Streets, roads, bridges, waterways, docks, har- bors, ferries, parks, beaches, irrigation | and flood control, waterworks, light and power plants, street rallways and subways, public schools and libraries, | colleges and universities, protection of crops and live stock, money, banking and credit, hospitals and medical services, This is only a partial list. We are not yet a socialist state. And it does not include the many extraordinary manufacturing and construction ac- tivities our Government has recently embarked on. All the institutions listed are run at a loss to the Gov- ernment or to the public, when the books are accurately kept. They are paid for out of the marvelous produc- | tivizy of private enterprise. As the jarea of socialism increases, the vol- Iu.me of private enterprise to support it is diminished. And this is the final answer on| socialism in our time. The move- | ment toward industrial concentration is resistless. Monopoly is the outcome. Monopoly means regulation. and this tends to lead to government owner- | ship. There is thus a socialist tide in | the affairs of men. Even though it | moves slowly, it comes, of itself, faster than we can prepare for it. We | should not encourage it at this time, | but should resist it while we get ready | for it. We must develop decency and | efficiency in government. We must find economists with brains and knowledge to direct production and | consumption. We do not have them now, conspicuously not in Government | service, but they will be developed in | time. We must find some substitute ilor the profit-motive. The only one so far developed in America is the desire | to feed at the Government trough. | The people must be educated to the point where they will realize that they cannot vote themselves into idleness | and luxury, even though they may tive system wherever it operates with vitality and success. Where compe- tition is completely a failure or is non-existent, regulation should be the first recourse. Government owner- ship should be the last resort. It has been emphasized that there is n inherent tendency toward monop- oly. But competition still operates over a tremendous area. There is a subtle and powerful economic prin ciple that governs the rapidity of in- dustrial concentration. It has not even been considered by a government that announces itself as committed same time declares that economists change economic principles every 5 or 10 years. It is the principle that large- scale enterprise is more economical somewhat in proportion to the degree in which machinery is used in the enterprise. Where equipment is a high cost in the industry, the ten- dency to concentration is great, as in the manufacture of sugar or chemical or steel or electrical equij ment. Where labor constitutes JY\OU'” We're Spccializing in Ultra Chic Spring SUITS for WOMEN —All the smart women | major cost, the trend to monopoly to economic planning and at the|is small, as in the production of millinary or coats and suits, in the “gservice trades” or in the garage business. ‘This principle explains many things. It is the feason why the independent can still survive in the face of the chain stores and why the fine shoe industry remains highly competitive. It has a special application to that lost child in the wilderness of eco- nomic planning, the N. R. A, ‘The whole code system should be D7 abolished. Whether there be some more or less empty concession to the | minimum wage and maximum hours | sentiment is immaterial. Wherever competition still prevails it should be encouraged. The little fellow and the little enterprise have been the found- ers of American economic progress. They remain today the chief agencies for “the continuance of the t order as against the development of & soclalistic state for which we are not prepared. W ] a i ear A S are wearing suits this season And Kann’s is ready with a varied assortment of correct, styles—Man tailored, smartly youthful chic tallleurs and softly detailed dressmaker models. All hand finished and beauti- fully tailored . . . of Forst- mann’s tweeds and men's wear fabrics. Pin stripes and checks. Navy and black. Sizes 36 to 46, 35, to 45'%. Other women'’s suits, $16.95 to $29.75. Ksaon's—Second Floor. UIT over his shoulder, for that was the constant rule with all the men of that wary old fox, Gen. Estrada “Senorita—Rosita—my dear!” whis- pered the panting voice of the ser- geant as he thrust himself at last through the gap of the opening door self. If he were to make headway of any kind, he would have to relax him- self in every muscle first. Then he might be able to breathe. | system. It provides the incentive that | keeps the social engine moving. Even | more, it automatically regulates all g economic activities with a precision . S0 he dropped down. His face was | that is marvelous. Machine produc- in the dust, but this did not matter. | tion, which maintains our civilization, He could feel the pressure of the |tends to end this competition which glnto the dark of the night outside. | blood thrusting up in his cheeks. His|is the motor-force and the regulator Where are you, my sacred beauty?” | neck was swelling. Even to open his | of economic activity. In machine The blow that fell on him made & eyes was difficult. industry large-scale enterprise is more | dull sound, because it struck on the | He_ began to think of death, but as | efficient and business enterprise is padding of muscles just over the | he visualized it, and as he determined | concentrated into ever larger units. Juncture of head and neck. Even|that he would beat out his brains | Competition among the industrial then, only the extraordinary flesh of | against the rock to shorten the agony, | glants is not only wasteful; in any Bergt. Andres prevented him from sus- | he suddenly discovered that a needle permanent form it is impossible. Rail- taining a fracture of the spinal col- | of coldness was thrusting into the | ways and power plants and telephones umn or the neck vertebrae, because | fever of his throat. } are “natural” monopolies. But in mel Rubriz had struck from the side and | And then he realized that it was a | final analysis the enterprises thn! with much enthusiasm. | Whiff of air. It drew in audibly | make steel and mine coal and produce Montana, gliding forward from the | through the horrible slaver that filled | flour and shoes tend to become mo- | opposite side, received the toppling | his mouth. His whole throat was |nopolies, as well as the chain stores| weight in his arms and laid it in a |growing cooler. ; | and the milk distributors. This sounds | heg% oo e T o | And presently he knew that his life | like Karl Marx or Stuart Chase, but Vell, close the door, at least,” said | Was saved. And he could actually | both of these are right some of the| & voice inside the door, “or we'll have | breathe. By degrees he was going to | time. to come and look out, Andres!” reduce the burning agony of fire in| “We've counted to 10, and the door | his lungs i is still not closed. Poor Andres, is Instead of pausing to thank God‘ this our fault or yours?” for this deliverance, with the stub- The two began to laugh. | borness of & hero, or of a brute, he in. | Een Wworse, the regulator of produc- | “Let me go first!” said one. stantly commenced making fresh | tion and consumption is gone. Only Keep back, you fool! I've started |efforts to work the gag from his | tWO courses are open. One is intimate already. | mouth. J— regulation by government. The other They came, scuffling, and struck | Rubris, tomorrow, does a dance. is government ownership. Both are their shoulders against the door, which | shuddered open with a slight groan= | for All Your Painting Jobs ing of the hinges. Into the widening | There’s a Kind for Every Purpose! vote out the few who now are idle and luxurious. | Correct Present System. The sensible course is to correct the abuses and weaknesses in our present system as well as we can. 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Monopoly is the end of competition. | ‘The main incentive to progress is 10st. | shaft of light which was allowed to escape into the night in this manner, stepped the masked face of Montana, Wwith Rubriz scarcely behind him. | ‘Their leveled revolvers drove the | soldiers back in a confusion. But they | did not actually flee. Rubriz was cursing them by all the names of his favorite saints. “Run, you rats! Run, dog-stealers! Run, brindled swine—and give me a chance to jump on you behind and pull back your heads to cut your | throats the better! Ay, runm, fools! | Don't stand waiting!” But they could not run. The husky | 8obbing of his breath paralyzed them, for he seemed like a man already drinking blood. | Montana, unaided, lifted up the | bulk of the fallen sergeant, dragged | him inside the door, and let his loos- ened weight spill down on the floor, Staring at him, he pulled the door shut again to keep in the telltale, broadening arm of light that advanced into the darkness. | Montana stepped over him and saw that Rubriz had turned his men against the wall and had takeg away their weapons. He was rapidly tying thelr wrists together. One of the soldiers was only a boy. He began to weep in a small, weak Voice, getting out the name of a saint or of Heaven every now and then. “Soldiers? I could make a better | soldier out of wet cornmeal!” said Rubriz. “Such men as these to be in | the uniforms of soldiers.” “Gag 'em,” said Montana, and set to work. ‘The second soldier began to scream. He got out one half-breath of sound before Rubriz beat out the voice with a stroke of his fist and then began to thrust a wadded piece of cloth be- tween the teeth of the guard. “Not too deep and not too hard,” cautioned Montana. “We don’t want to have dead men behind us, amigo.” “Will you tell me how to gag a man?” exclaimed Rubriz, angrily. “Remember, Montana, that I was gag- ging men while you were still in the cradle, and I have gagged them ever since. If any man in the world has the touch, I am he.” He finished trussing his man as he spoke. They turned to the sergeant. He was barely breathing. And because of that, Montana took charge of the gagging, making sure that the wad of cloth was worked well inside the mouth, but the tongue was not thrust back into the thrqat, with a chance of strangling poor Andres. Now three soldiers of Gen. 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