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The bill having reduced potash prices, the
mine owners threatened to recoup themselves by reducing wages. But
the members of the Reichstag were not to be balked by such threats;
they could legislate about wages just as easily as about prices and
allotments. So they amended the bill by providing that if any owner
should reduce wages without the consent of his employees, his
allotment should be restricted in the corresponding proportion....

"While the law is indeed decidedly Socialistic in tendency, it is
not yet Socialism. It hedges private property about with sharper
restrictions than would be thought justifiable in countries where,
as in the United States, the creed of individualism is still
vigorous; and yet it is, in effect, hardly more than a piece of
social reform legislation, though a more radical one than we have
hitherto seen....

"In Germany, 'the individual withers' and the world of State and
Society, with its multifarious demands upon him, 'is more and
more.' This is, of course, a Socialistic tendency, but the
substitute that the Germans are finding for unlimited competition
is not radical Socialism, but organization....

"The State, of course, takes hold of the individual life more
broadly, with more systematic purpose. The individual's health is
cared for, his house is inspected, his children are educated, he is
insured against the worst vicissitudes of life, his savings are
invested, his transportation of goods or persons is undertaken, his
need to communicate with others by telegraph or telephone is
met--all by the paternal State or city.

"Twenty-five years ago the Prussian government was spending only
about $13,500 a year on trade schools; now it is spending above
three million dollars on more than 1300 schools....

"The Prussian State had also long been an extensive owner of coal,
potash, salt, and iron mines. In 1907 a law was passed giving the
State prior mining rights to all undiscovered coal deposits. In
general, however, it must cede those rights to private parties on
payment of a royalty; but the law makes an exception of 250
'maximum fields,' equal to about 205 square miles, in which the
State itself will exercise its mining rights. It has recently
reserved this amount of lands adjacent to the coal fields on the
lower Rhine and in Silesia. The State has already about 80 square
miles of coal lands in its hands, from which it is taking out about
10,000,000 tons of coal a year. Its success as a mine owner,
however, appears to be less marked than as a railway proprietor;
experienced business men even assert that the State's coal and iron
mines would be operated at a loss if proper allowances were made
for depreciation and amortization of capital, as must be done in
the case of private companies. The State also derives comparatively
small revenues from its forest and farming lands of some 830,000
acres, which were formerly the property of the Crown....

"The most important State tax is that on _incomes_, which is in all
cases graduated down to a very low rate on the smallest income; in
Prussia there is no tax on incomes less than $214. The cities also
collect the bulk of their revenues from incomes, using the same
classification and sliding scale as the State.

"A highly interesting innovation in taxation is the 'unearned
increment' tax on land values, first adopted by
Frankfort-on-the-Main in 1904, and already applied by over 300
German cities and towns....

"The bill before the Reichstag [since become a law--W. E. W.]
extends sick insurance to farm laborers and household servants, a
change which will raise the burden of this system for employers
from $24,000,000 to $36,000,000. The bill also provides for
pensioning the widows and orphans of insured laborers at an
estimated additional expense of about $17,000,000....

"A better result of the insurance systems than the modest pensions
and the indemnities that they pay is to be found in their excellent
work for protecting health and prolonging life. Many offices have
their own hospitals for the sick, and homes for the

"All these protective measures have already told effectively upon
the death rate for tuberculous diseases. In the three years ending
with 1908, deaths from pulmonary tuberculosis dropped from 226.6 to
192.12 per 100,000.

"The accident system has also had a powerful effect in stimulating
among the physicians and surgeons the study of special ways and
means for treating accident injuries, with reference to preserving
intact the strength and efficiency of the patient....

"Bismarck once, in a speech in the Reichstag, explicitly recognized
the laborer's right to work. Some twenty German cities have given
practical effect to his words by organizing insurance against
nonemployment; and the governments of Bavaria and Baden have taken
steps to encourage this movement. Under the systems adopted, the
laborer pays the larger part of the insurance money, and the city
the rest; in a few cases money has been given by private persons to
assist the insurance."[82] [N.B. The word "Socialistic" is used by
Mr. Dreher in the sense of "State Socialism," as opposed to what he
calls "radical Socialism."]


[78] Special Correspondence of _New York Evening Post_, dated Sidney,
Dec. 12, 1909.

[79] The data upon which this chapter is based is also obtained chiefly
from Mr. Victor Clark's "Labour Movement in Australasia," and "State
Socialism in New Zealand," by Stewart and Le Rossignol.

[80] Victor S. Clark, _op. cit._

[81] Stewart and Rossignol, _op. cit._

[82] The _Atlantic Monthly_, July, 1911.



Many reformers admit that no reforms can bring us towards democracy as
long as class rule continues. Henry George, for example, recognizes that
his great land reform, the government appropriation of rent for public
purposes, is useless when the government itself is monopolized, "when
political power passes into the hands of a class, and the rest of the
community become merely tenants."[83] In precisely the same way every
great "State Socialist" reform must fail to bring us a single step
towards real democracy, as long as classes persist.

That strongly marked social classes do exist even in the United States
is now admitted by Dr. Lyman Abbott, Andrew Carnegie, and by innumerable
other, by no means Socialistic, observers.

"The average wage earner," says John Mitchell, "has made up his mind
that he must remain a wage earner. He has given up the hope of a kingdom
to come where he will himself be a capitalist."[84] This feeling is
almost universally shared by manual wage earners, and very widely also
by salaried brain workers. Large prizes still exist, and their influence
is still considerable over the minds of young men. But, as was pointed
out recently in an editorial of the _Saturday Evening Post_, they are
"just out of reach," and the instances in which they actually
materialize are "so relatively few as to be negligible." Even if these
prizes were a hundred fold more numerous than they are, the children of
the wage earners would still not have a tithe of the opportunity of the
children of the well-to-do.

To-day in the country opportunities are no better than in the towns. The
universal outcry for more farm labor can only mean that such laborers
are becoming relatively fewer because they are giving up the hope that
formerly kept them in the country, namely, that of becoming farm owners.
Already Mr. George K. Holmes of the United States Bureau of Statistics
estimates that in the chief agricultural section of the country, the
North Central States, a man must be rich before he can become a farmer,
and so rapidly is this condition spreading to other sections that Mr.
Holmes feels that the only hope of obtaining sufficient farm labor is to
persuade the children of the farmers to remain on the farms.

"Fifty years ago," said _McClure's Magazine_ in a recent announcement,
which sums up some of the chief elements of the present situation, "we
were a nation of independent farmers and small merchants. To-day we are
a nation of corporation employees." There can be no question that we are
seeing the formation in this country of very definitely marked economic
and social classes such as have long prevailed in the older countries of
Europe. And this class division explains _why the political democracies
of such countries as France, Switzerland, the United States, and the
British Colonies show no tendency to become real democracies_. Not only
do classes defend every advantage and privilege that economic evolution
brings them, but, what is more alarming, they utilize these advantages
chiefly to give their children greater privileges still. Unequal
opportunities visibly and inevitably breed more unequal opportunities.

The definite establishment of industrial capitalism, a century or more
ago, and later the settlement of new countries, brought about a
revolutionary advance towards equality of opportunity. But the further
development of capitalism has been marked by steady retrogression. Yet
nearly all capitalist statesmen, some of them honestly, insist that
equality of opportunity is their goal, and that we are making or that we
are about to make great strides in that direction. Not only is the
establishment of equality of opportunity accepted as the aim that must
underlie all our institutions, even by conservatives like President
Taft, but it is agreed that it is a perfectly definite principle. Nobody
claims that there is any vagueness about it, as there is said to be
about the demand for political, economic, or social equality.

It may be that the economic positions in society occupied by men and
women who have now reached maturity are already to some slight degree
distributed according to relative fitness; and, even though this fitness
is due, not to native superiority, but to unfair advantages and unequal
opportunity, it may be that a general change for the better is here
impossible until a new generation has appeared.

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Keywords: effect, cities, incomes, political, unequal, opportunities, rights, radical, reform, better
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