Part 17

The struggle for wealth and power, actively waged among the business men of the United States for more than a century, has thus by a process of elimination, subordination and survival, placed a few small groups of strong men in a position of immense economic power. The growth of surplus and its importance in the world of affairs has made the investment banker the logical center of this business leadership. He, with his immediate associates, directs and controls the affairs of the economic world.

The spirit of competition ruled the American business world at the beginning of the last century, the forces of combination dominated at its close. The new order was the product of necessity, not of choice. The life of the frontier had ingrained in men an individualism that chafed under the restraints of combination. It was the compelling forces of impending calamity and the opportunity for greater economic advantage--not the traditions or accepted standards of the business world--that led to the establishment of the centralized wealth power. American business interests were driven together by the battering of economic loss and lured by the hope of greater economic gains.

Years of struggle and experience, by converting a scattered, individualistic wealth owning class into a highly organized, closely knit, homogeneous group with its common interests in the development of industry and the safeguarding of property rights, have brought unity and power to the business world.

Individually the members of the wealth-controlling class have learned that "in union there is strength"; collectively they are gripped by the "cohesion of wealth"--the class conscious instinct of an associated group of human beings who have much to gain and everything to lose.

FOOTNOTES:

The 169 largest railroads in the United States have issued 84,418,796 shares of stock. ("American Labor Year Book," 1917-18, p. 169.) Theoretically, therefore, there might be eighty-four millions of owners of the American railroads.

Summary of the Report of the Federal Trade Commission on the Meat Packing Industry, July 3, 1918, Wash., Govt. Print., 1918.

VIII. THEIR UNITED STATES

1. Translating Wealth into Power

The first object of the economic struggle is wealth. The second is power.

At the end of their era of competition, the leaders of American business found themselves masters of such vast stores of wealth that they were released from the paralyzing fear of starvation, and were guaranteed the comforts and luxuries of life. Had these men sought wealth as a means of satisfying their physical needs their object would have been attained.

The gratification of personal wants is only a minor element in the lives of the rich. After they have secured the things desired, they strive for the power that will give them control over their fellows.

The possession of things, is, in itself, a narrow field. The control over productive machinery gives him who exercises it the power to enjoy those things which the workers with machinery produce. The control over public affairs and over the forces that shape public opinion give him who exercises it the power to direct the thoughts and lives of the people. It is for these reasons that the keen, self-assertive, ambitious men who have come to the top in the rough and tumble of the business struggle have steadily extended their ownership and their control.

2. The Wealth of the United States

The bulk of American wealth, which consists for the most part of land and buildings, is concentrated in the centers of commerce and industry--in the regions of supreme business power.

The last detailed estimate of the wealth of the United States was made by the Census Bureau for the year 1912. At that time, the total wealth of the country was placed at $187,739,000,000. (The estimate for 1920 is $500,000,000,000.) Roughly speaking, this represented an estimate of exchangeable values. The figures, at best, are rough approximations. Their importance lies, not in their accuracy, but in the picture which they give of relationships.

The Total Wealth of the United States, Classified by Groups, with the Percentage of the Total Wealth in Each Group

Total Estimated Wealth

Amount (000,000 Per Cent Wealth Groups Omitted) of Total

1. Real Property (land and buildings) $110,676 59

2. Public Utilities (railroads, street railways, telegraph, telephone, electric light, etc.) 26,415 14

3. Live Stock and Machinery (live stock, farm implements and manufacturing machinery) 13,697 7

4. Raw Materials, Manufactured Products, Merchandise (including gold and silver bullion) 24,193 13

5. Personal Possessions (clothing, personal adornments, furniture, carriages, etc.) 12,758 7

Total of all groups $187,739 100

The bulk of the exchangeable wealth of the United States consists of "productive" or "investment" property. If, to the total of 110 billions given by the Census as the value of real property, are added the real property values of the public utilities, the total will probably exceed three quarters of the total wealth of the United States. If, in addition, account is taken of the fact that much of the wealth classed as "raw materials, etc.," is the immediate product of the land (coal, ore, timber), some idea may be obtained of the extent to which the estimated wealth of the country is in the form of land, its immediate products, and buildings. Furthermore, it must be remembered that great quantities of ore lands, timber lands, waterpower sites, etc., are assessed at only a fraction of their total present value.

The personal property of the country is valued at less than one fourteenth of the total wealth. It is in reality a negligible item, as compared with the value of the real property, of the public utilities, and of the raw materials and products of industry.

The wealth of the United States is in permanent form--land and improvements; personal possessions are a mere incident in the total. In truth, American wealth is in the main productive (business) wealth, designed for the further production of goods, rather than for the satisfaction of human wants.