CHAPTER III

THE MAGIC OF PROPERTY

HE ordinary editorial writer is a strong believer in what he calls the sanctity of private property. But as far as highly organized. business is concerned he is a pilgrim to an empty shrine. The trust movement is doing what no conspirator or revolutionist could ever do: it is sucking the life out of private property. For the purposes of modern industry the traditional notions have become meaningless: the name continues, but the fact is disappearing. You cannot conduct the great industries and preserve intact the principles of private property. And so the trusts are organizing private property out of existence, are altering its nature so radically that very little remains but the title and the ancient theory.

owners.

When a man buys stock in some large corporation he becomes in theory one of its He is supposed to be exercising his instinct of private property. But how in fact does he exercise that instinct which we are told is the only real force in civilization? He may never see his property. He may not know where his property is situated. He is not consulted as to its management. He would be utterly incapable of advice if he were consulted. Contact with his property is limited to reading in the newspapers what it is worth each day, and hoping that dividends will be paid. The processes which make him rich in the morning and poor in the evening, increase his income or decrease it,―are inscrutable mysteries. Compare him with the farmer who owns his land, the homesteader or the prospector, compare him with anyone who has a real sense of possession, and you will find, I think, that the modern shareholder is a very feeble representative of the institution of private property.

No one has ever had a more abstract relation to the thing he owned. The absentee landlord is one of the sinister figures of history. But the modern shareholder is not only an absentee, he is a transient too. The week ending January 10, 1914, was generally regarded as a dull one in Wall Street.* Yet on the New York Stock Exchange alone the total sales amounted to 1,777,038 shares. About 340,000 shares of private property in Reading changed hands.

With a few thousand dollars I can be an owner in Massachusetts textile mills on Monday, in Union Pacific on Tuesday. I can flit like a butterfly from industry to industry. I don't even have to use my judgment as to where I shall alight. All I have to do is to choose some well-known stock broker and put myself into his hands. And when I read in books on political economy that any profit I make is a reward for my foresight, my courage in the face of risk, I laugh. I know that I can't have any fore*N. Y. Times Annalist, Jan. 12, 1914.

sight. I don't understand the inner workings of the business world. I'm not allowed to know. That is reserved for specialists like stock brokers and private bankers. In the modern world investing has become a highly skilled profession, altogether beyond the capacities of the ordinary shareholder. The great mass of people who have saved a little money can no more deal with their property on their own initiative than they can deal with disease or war on their own initiative. They have to act through representatives. Just as they need physicians and organized armies, so they have to have stock brokers, financial experts, public service commissions and the rest.

There has been in recent years a great outcry against the concentrated control of credit. It was found that the decision as to how money should be invested had passed away from the people who owned the money. The enormous power of Morgan consisted in his ability to direct the flow of capital. He was the head of a vast system which had

taken out of the hands of investors the task of deciding how their money was to be used. It was no doubt a colossal autocracy. There has been a great effort to break it up, to decentralize the power that concentrated about Morgan. But no one proposes to put back into the hands of the investor the decision as to the financing of industry. The investors are a scattered mob incapable of such decisions. The question of where money is to be applied is a matter for experts to answer. And so reform of the credit system does not consist in abolishing the financial expert. It consists in making him a public servant. The Wilson Currency Bill seems to be an effort to make banking responsive to business needs all over the country. It gives business men a larger control over financial experts. How that control is to be extended to the citizens at large is one of the subtlest problems of democracy. I do not venture here to answer it. I wish rather to keep more closely to the fact that whatever system is devised,