BACK AT THE OLD GAME.

Editorial Reply by the Editor of
The World.

In another column appears a letter from the Secretary of the Home Market Club characterizing The World as a defender of the British Empire's supremacy because we have ventured to protest against a restoration of the old Dingley tariff schedules to increase the cost of living and further rob the consumer for the profit of favored industries.

What The World's repeatedly expressed opinions about the constitutionality of tariff legislation or about the futility of tariffs merely for revenue have to do with the matter we cannot guess, but they seem very impressive to the Secretary of the Home Market Club.

The whole economic situation of the world has been changed by the war. The United States has become the great creditor nation with a bal

ance of trade in its favor which is becoming a danger to everybody concerned, including ourselves. The rest of the world cannot long continue to buy of us unless it can sell to us, and the prevailing high level of prices is producing most serious economic dis

turbances at home. Yet the old-fashioned protectionists refuse to believe that anything has happened during the last five years.

With the control of the world markets in their hands, they are still relying upon tariff schedules to do for them what they are unwilling to do by enterprise and initiative. They had for forty years "the industrial independence" that they are talking about. Everybody had a vivid illustration of what it meant when the war began in 1914 and all American industry was instantly dislocated. The high-protection theory of industrial independence remains what it has always been-mulcting the domestic consumer and dumping the surplus abroad at low prices.

to us.

If an Englishman owed you a thousand dollars and claimed that he was

practically bankrupt and unable to pay the debt, would you consider it a fair proposition if he should say: "Let me have your job, let me do your work, receive your pay, and when I have in this way obtained the thousand dollars I will pay your debt"? Would you be any better off if you should give up your work, with the salary attached to it, and allow the Englishman to do your work, receive

the salary, pay you one thousand dollars and receive a receipt in full for his indebtedness to you? That, in a nutshell, is the significance of the proposition which free traders persist in making. They claim that we should receive foreign goods in payment of the debts that are owed to us. We cannot accept foreign goods, above and beyond our normal needs, without putting our own working people out of employment and paralyzing the industries of the country.

It would be better to cancel all of

the debts that are owed to us rather than to disorganize our industries and throw millions of men into idleness. The need of the time is full employment and full production. We must keep our working people busy or the devil will find mischief for the idle hands to do. Any large degree of unemployment in this country would fan into a flame the discontent of the day, and we would be plunged into a revolution that would shake our institutions to their foundations.

In the fiscal year 1914, the last normal year before the great war, the total value of our manufactured products was $24,000,000,000. Our total imports for that year were $1,906,000,000, making our total consumption $25,906,000,000, of which imports formed about 7 per cent. Was there more work for our wage earners in 1914 than they could attend to? Had the imports doubled it would have meant serious unemployment with its inevitable menace to peace and order. There can be no other result from a sudden increase of competitive imports.

From all these countries imports fell off during the war, total imports from all Europe for the fiscal year 1919 being only $373,000,000. We could increase our European imports from the 1919 figure to the amount. imported in 1914 without serious consequences, and, due to our increased production which amounts now probably to about $40,000,000,000, we could perhaps increase these imports to an outside figure of $1,000,000,000, provided our production and consumption remain somewhere near the present levels, which can hardly be expected to be the case, however.

Increased importations have as a rule accompanied a period of adequate protection. An adequate tariff gives general employment, good wages and an increase of purchasing power by the people, making it possible for larger purchases of foreign articles and luxuries. With an adequate protective tariff in place of the present Underwood-Simmons law our industries would thrive, good wages would be paid, and our people would buy more goods abroad than they could afford to under a low tariff designed particularly to encourage importations. There might, under a low tariff, be an increase of importations for a few months, then imports would fall off and drop below the normal level because of the declining purchasing power of our people. Low tariffs

mean loss of employment, which results inevitably in the falling off of our power to purchase foreign goods, and also our power of producing goods, so both imports and exports decline.

A program that would increase the importations of raw materials that we do not produce in sufficient quantities and of non-competitive manufactured goods, which would not be used as a substitute for our own products and thus decrease our own production, would do little if any harm. The best way for the European nations to recover industrially and financially is to utilize all of their raw material resources, manufacture as much as possible of the products which they need for home consumption, and sell the surplus manufactured products in countries that have no means of producing these goods for themselves. With law and order restored in Europe, the tide of foreign travel will turn toward her shores once more and Europe will receive from our tourists large sums of money which will help toward liquidating the debt.

Our total authorized loans to the Allies amount to $10,000,000,000, of which $9,102,000,000 have been paid over. Here is a huge debt which Europe owes to us, and it is not the total amount of Europe's indebtedness to us either. How much per year of this amount would the advocates of "payment in goods" have us take in the form of imports? As I have said, our total imports from Europe in 1914 were $614,000,000. Our power of absorbing imports without injury to our own industries does not exceed 10 per

cent of our total consumption. We might import less from Japan, South America, Canada, Mexico, etc., and give a larger share of our imports to Europe, but there would be serious danger to us, to the stability of our industries, and to our national security, in any abnormal increase of total imports. The future holds serious problems which must be faced and solved. One of the most serious is the financial rehabilitation of the nations devastated by war. There is no new economic alchemy. The only hope of the nations of the earth is work, work, work.

Reports have recently been published that pay ore has been found in some Welsh gold mines. If England can produce gold in unexpected quantities she has found one unforeseen means of paying her debt. If her coal miners will settle down to work so that she can export coal to countries that do not produce it, she will help in this way to reduce her debt. But if she should manufacture and export huge quantities of chemicals, cotton, woolens and worsteds to the United States, she would speedily reduce her debt to us, but the process would impoverish us.

There is no such tremendous disparity in the war expenses of England, France and the United States. England's expenditures were $38,000,000,000; France $26,000,000,000; the United States $22,000,000,000, or if we include the loans to the Allies, $32,000,000,000. After our expenditures in money and men to save Europe and incidentally to save ourselves, there is no particular force in

claiming that we must sacrifice our industries, throw our working men into idleness, invite disorder and possibly revolution in order that England and France may escape their just

share of war debts incurred in an effort to save their very lives.

The time has not yet come when it is a crime to care most for the United States and to think of America first.

The demand of organized labor led by the brotherhoods, for the socialization of $18,000,000,000 worth of private property calls for serious consideration.

Government ownership of railways is not a new scheme, it has been tried out in many countries, and always with failure.

The socialization of the railways of Europe and the Australian states is characterized by very poor service, high freight rates, low wages, loss of taxes and politicalization.

Italy under private ownership, enjoyed good service, the nation received taxes and the owners dividends. Under socialization, since. 1905, she has had poor service, no receipts from taxes, high rates, and has lost about $40,000,000 a year.

The Austrian railways under public ownership were even worse; they lost $50,000,000 annually. In Australia In Australia the freight rates are three times as high as they are in this country, wages are 35 per cent less, the service is poor, there are no taxes for the states and the losses reach nearly $50,000,ooo a year.

Under private ownership we enjoyed the cheapest freight rates in the world and the highest wages. Freight rates in 1870 averaged 1.889 cents per ton per mile; in 1910 they had been reduced to .72 cents per ton per mile, a decrease of nearly 250 per cent; during that same period we increased the wages of railway employes by one dollar a day.

CAPITALIZATION.

The charge has been made by the socialists and by organized labor, that our railways are over-capitalized. As a matter of fact they are under-capitalized. They could not be duplicated today for twenty-five billion dollars. While our railways were constructed by labor that was paid more than double the wages of a like kind of labor in Europe, yet our roads are capitalized at only one-half the sum that those socialized lines are. The following table shows this:

Germany (Socialized) capitalization per mile, $120,355.

France (Socialized) 5,600 miles, capitalization per mile, $155,000.

Italy (Socialized) capitalization per mile, $158,185.

Belgium (Socialized) capitalization per mile, $192,770.

Austria (Socialized) capitalization per mile, $122,054.

Switzerland (Socialized) capitalization per mile, $116,692.

Russia (Socialized) capitalization per mile, $84,299.

That means, if it means anything at all, the socialization of industry, and it is none the less an economic crime against the people because the President said it, than it would be if a soap-box agitator said it.

We tried public management for the full year of 1918, and we have

Thus, we see that our rates average less than half the socialistic rates of Europe.

If in 1916 the people of this nation had been forced to pay the German rate for freight transportation, our freight bill that year would have been five million dollars a day more than it was.

Good service is far more important even than rates and, although the socialized railways give the very worst service in the world, yet their rates are the highest.

Every public owned railway in the world is politicalized from end to end, and because of this the service is inefficient.

THE BROTHERHOOD CLAIMS. The brotherhood chiefs quote President Wilson as asking for the "genuine democratization of industry."

socialistic control cost the people two billion dollars more than it cost us under private ownership in 1917. And this vast sum was added to all the things we buy; it increased the high cost of living by one hundred dollars per family. Moreover, we had the very worst service that we have ever had, as every shipper and traveling man well knows.

OWNERSHIP.

In their demands for the socialization of this vast property, the brotherhood chiefs assert that the railways have been run for the benefit of the few, and they say, that with socialization they will be operated for the benefit of the many. A greater untruth was never uttered. More than a million men and women are owners of stocks and bonds of the railways of this nation, and five million other families are indirectly interested through the investment of their money by savings banks, insurance companies and so on; twenty-five millions of our people are financially interested in the American railways.

What the railway workers want is to become the real profiteers in the business of transportation. They seek to tax every man, woman and child in the nation for their benefit. Mr. Lee, one of their leaders, says that