.

Mr. Speaker, the labor program of the Federal administration is in keeping with the spirit of the New Deal. All legislative enactments of the Seventy-third and subsequent Congresses, in relation to the national economy, are designed to improve the economic condition of the American people. The economic crisis that gripped the country at the time the present administration came into power demanded quick and heroic action. The legislation enacted was improvised to meet a dire emergency. As the emergency is receding, the New Deal program may very properly be scrutinized, with the object in mind of detecting possible defects and proposing changes wherever necessary in order to bring the entire program in line with sound economics and fundamental principles of democracy. For it must be borne in mind that America was set up to secure to all its citizens the inalienable rights of life, liberty, and the pursuit of happiness. Therefore, any New Deal legislation now in force, or hereafter enacted, must stand the acid test of good law and sound economics.

Blackstone declared that permanent legislation, in order that it may have force and validity, must be in harmony with ethics or natural law. This is the foundation of all sound legislation. It is said that Nature abhors a vacuum, and with equal assurance it may be said that Nature resents assaults upon the majesty of natural law.

Hooker, while contemplating the order of the universe, in a moment of ecstasy cried out:

Law - her seat is the bosom of God; her voice the harmony of the world. All things in Heaven and earth do her homage, the least as receiving her care and the greatest as not exempt from her power.

Wherever man delves into the mysteries of Nature there is found the universality of immutable law. A noted student of modern medical science recently was moved to observe that -

The sum of all folly and the foundation of all corruption is rebellion against the laws and regulations of Nature.

The National Assembly of France 150 years ago, in a similar vein, discoursing upon the excesses and misfortunes of the French people, declared:

Ignorance, neglect, or contempt of human rights are the sole causes of public misfortune and corruption of government.

And so, whether in the field of medicine, sociology, or other branches of science, there is found eternal, immutable law. This fact must be borne in mind by statesmen and lawmakers.

The Department of Justice Building, in the Capital City of the Nation, carries this inscription:

Justice is founded in the rights bestowed by Nature upon man. Liberty is maintained in security of justice.

When it is remembered that America's first claim to greatness lies in the fact that she was established as the land of the free, and also remind ourselves that liberty is maintained only where justice is secure, and that justice rests upon the rights of man, bestowed by Nature, it is clear that the attainment and preservation of the gifts of Nature to man must be the statesman's and the lawmaker's primary and deepest concern. Therefore any civil enactments that violate the elemental rights of man bestowed by Nature are unsound and have no place in the governmental structure of a free people. All New Deal legislation ought to be subjected to the acid test of ethics and natural law. For a social structure that is to endure must be true to justice and liberty. In this light and spirit the labor program of the New Deal ought to be scrutinized and considered. The fixing of arbitrary standards of hours and wages is fraught with difficulty, due to conflict with natural economic law.

But until the conditions in our economic order that breed and foster monopolies are removed, the enactment of legislation designed to establish minimum wages and maximum hours, abolish the curse of child labor and the iniquity of sweatshops and other immoral conditions is inevitable. But that is not enough. Regulation at best is a mere palliative. It will not cure the disease. The root causes of poverty and unemployment must be eradicated. This involves a program based upon sound economic principles, and labor leaders and statesmen are apt to go astray unless they are grounded in the principles of sound economics.

As the labor problem revolves around the wage question, a simple lesson in elementary economics may be of interest. G. Frank Kelly, a distinguished citizen and noted economist, of Scottdale, Pa., discusses the wage question in these words:

"To know the nature of wage is to know that to fix them by statute is an economic impossibility. A man's wage is what he produces, not the amount of his pay. If he produces nothing, he has no wage. No man is entitled to a minimum living or maximum wage, other than what he produces. If a man made a wheelbarrow, that is his wage. If 100 men in a factory, each doing equal work, made 100 barrows, a barrow is still the wage of each, if equal or unequal, each wage is its owner's product. The entrepreneur's wage is his part in production, be it $1 or $100 per day. Economically there is no such thing as profit; all produce is somebody's wage.

"But that those may make barrows, thousands of others must toil -produce. The farmer must produce food; others must produce all the personal needs of the barrowmakers and the needs of those who supply them. It is an endless chain - plant and equipment, transportation, housing, food supply, all factors in producing wheelbarrows. The doctor adds to production by keeping men fit, the preacher, poet, and philosopher by maintaining morale. Railroad president and paddy each earns his wage. The total world produce of any year constitutes the total wage of human exertion, mental and physical, white collar and overalls, for that year, and each man's wage is his share in that production.

"Capital takes nothing from labor, but produces and is entitled to its own increment. To take from labor and capital its increment, its part in production, is robbery. Just as a man with a hoe (capital) produces more and is better off than with his hands alone, so it is with every form of capital, including machines. Capital takes nothing from, but aids, labor. How, then, can a statute fix wages when every wage is a fixed entity, the amount of the individual's production? The trouble is we operate under an economic system by which labor and capital are robbed; neither gets what it produces. That capital and labor are natural allies and complements is shown by the fact that when wages are high, interest - return from capital-is high, and vice versa; labor and capital prosper or suffer together. Human enactments in violation of natural law can result only in disaster.

"Henry George in Progress and Poverty shows where and how capital and labor are robbed, who gets the increment earned by labor and capital, and how to establish ourselves so that every worker will get his own produce, his economic wage, and every item of capital its own increment. He shows how every man may have unlimited opportunity of employment with obligation to no man for a job. Unemployment and its concomitants, poverty, and economic slavery, are results of economic error.

True, Mr. Kelly's discussion is academic and, as such, contains no proposals for immediate relief of labor's woes. But in the light of Mr. Kelly's sound reasoning and the logical and conclusive demonstration of the problem by Henry George in his monumental work Progress and Poverty, is it not the part of wisdom to frame pending legislation, in relation not only to the labor problem but to the national economy generally, so that infractions of the rights and liberties of the people will be removed as rapidly as progress along the path of sound economics and true democracy will warrant? Our first concern ought to be, not to set up an artificial Utopia, but, to clear the way for the establishment and development of a society founded upon liberty and justice.

Inasmuch as the labor problem is of peculiar concern to the wage worker, under leave to extend my remarks, I include a copy of a letter addressed to John L. Lewis, in which an effort is made to point out the way labor must travel in order to gain its rights and freedom.

July 14, 1937 Mr. John L. Lewis, Washington, D. C. My Dear Mr. Lewis: It seems to be written in the stars that those who are influential in the labor movement are targets for abuse, ridicule, and misrepresentation. There is no dart too poisonous, no lie too vicious, no punishment too cruel for their traducers. And it also seems to be written in the stars that "If the blind lead the blind, both shall fall into the ditch." Hence the task of directing the movements of the toilers in their struggle for better things is both unpleasant and difficult. On the one hand, calumny and abuse; on the other, tribulation and danger. And so it is with extreme pleasure that I listened last evening to your discourse on the present labor situation. Poise and restraint and good common sense characterized your every utterance. This is reassuring and full of promise. It is an indication that at last labor leaders are seeking not only unionization of labor but social reforms that will open the way for the establishment of a social order based on the principles of freedom and justice, of equal rights for all, special privileges for none. If these ideals are to be achieved, then those who are charged with the responsibility of leadership must confine their activities strictly within the limits of the ethics of the social problem. It is only by doing so that the movement can gain the moral sanction of mankind and thus achieve its coveted goal. This fact has been emphasized time and again throughout labor's bitter struggle. On this point no one has been more outspoken than Henry George. In 1894, in a speech delivered at a Cooper Union labor meeting called to protest the sending of Federal troops to Chicago in the railroad strike of that year, he said: "Let me tell you what I have told you many times before. It is something I must tell you or I would be dishonest. This whole great organized-labor movement is on a wrong line - a line on which no large and permanent success can possibly be won. Trade unions, with their necessary weapon, the strike, have accomplished something and may accomplish something but it is very little and at a great cost. The necessary endeavor of the strike to induce or to compel others to stop work is in its nature war; and, furthermore, it is a war that must necessarily deny a fundamental principle of personal liberty - the right of every man to work when, where, for whom, and for what he pleases. Those who denounce labor organizations and their works use this moral principle against you. Stated alone, it is their strength and your weakness. "But above the wrongs which strikes involve there is a deeper, wider wrong, which must be recognized and asserted if the labor movement is to obtain the moral strength that is its due. It is the great denial of liberty to work which provokes these small denials of liberty to work. It is the shutting up by monopolization of the natural God-given opportunities for work that compels men to struggle and fight for the opportunity to work, as though the very chance of employment were a prize and a boon. "The key to the labor question is the land question. The giant of monopolies is the monopoly of land. That which no man made, that which the Almighty Father gives us, that which must be used in all production, that which is the first material essential of life itself must be made free to all." There can be no blinking the facts. Labor and labor leaders must constantly be conscious of their moral responsibility. To employ tactics that violate the moral rights of any of the parties concerned will expose the movement to devastating attack. The right of every man to work when, where, for whom, and for what he pleases, as George points out, is a fundamental right that cannot be violated with impunity. Likewise, it is a fundamental principle of sound morals that the sanctity of rightful private property must be respected. Therefore, when striking workers, in the prosecution of a strike, feel called upon to violate the personal liberty of the individual to work and the rights of owners of private property, the cause of labor is due to suffer irreparable loss. Such violations of fundamental rights are seized upon by the foes of labor and exploited to discredit the movement. The emissaries of privilege and those whose god is gold are ever alert to take advantage of the mistakes of labor and labor leaders. Under present economic conditions it may be a far cry to implore strikers to observe religiously the rights of the owners of private property and man's natural right to work. Strikers and labor leaders may feel that under certain circumstances this is impossible. Yet the personal liberty of the individual and the sanctity of private property are of the very essence of right and justice, and so it behooves strikers and labor leaders alike to observe the ethics of the labor problem. They must learn to think of the problem not so much in terms of strikes as in its deeper meaning. The equities are all on the side of labor. The stars in their courses are in league with right and justice. This is the strength of labor. If labor leaders will but hold aloft the standard of eternal truth, all right-feeling and right-thinking men will rally to their support. It is regrettable that the labor problem in its aspects as to poverty and unemployment, and the equitable distribution of wealth does not command that degree of penetrating study and analysis at the hands of labor leaders that its importance merits. There is too much loose thinking concerning this all-important problem. If that were not so, how could the problem of unemployment and poverty so long remain? Almost half a century has elapsed since the great railroad strike of 1894. Labor and labor leaders, before and since have been milling and mulling about, but to little or no avail. Today labor is the victim of exploitation, the same as in the years gone by. This is understandable only upon the theory that there is neither intelligent action nor study in relation to the labor problem. A copybook proverb reminds us that "The recognition of one's own ignorance is the forerunner of knowledge." This applies with equal force to the cause of labor. Labor is bound to fail in its struggle for freedom and justice as long as it remains ignorant of the root cause of its miseries and wrongs. As yet labor has no intelligent conception of the cause of its woes and troubles. Henry George - than whom there is none who had a greater insight and fundamental understanding of the labor problem - depicts the stupidity of labor in one of his noted books in these allegorical words: "Near the window by which I write, a great bull is tethered by a ring in his nose. Grazing round and round, he has wound his rope about the stake until now he stands a close prisoner, tantalized by rich grass he cannot reach, unable even to toss his head to rid him of the flies that cluster on his shoulders. Now and again he struggles vainly, and then, after pitiful bellowings, relapses into silent misery. "This bull, a very type of massive strength, who, because he has not wit enough to see how he might be free, suffers want in sight of plenty, and is helplessly preyed upon by weaker creatures, seems to me no unfit emblem of the working masses." The truth of the word picture of the condition of the laboring masses is brought home to everyone who stops to think. Be it said, however, to the credit of labor, that in this respect it is no worse than the supposedly wise and learned. By way of illustration, let it be known that Thomas Huxley, the great English scientist, while contemplating the unhappy lot of the working masses of the world, cried out in despair: "I do not hesitate to express the opinion that if there is no hope of a large improvement of the condition of the greater part of the human family win the advance of progress, I should hail the advent of some kindly comet which would sweep the whole affair away as a desirable consummation." A few years ago Dr. Nicholas Murray Butler, president of Columbia University, asked this searching question: "Why is it that with all the progress which the world is making in so many directions - science, letters, fine arts, every form of industry, commerce, transportation - why is it that there still exists so much want, so much of all that, which, for lack of a better name, may be summed up under the word 'poverty'?" And King Edward VIII, on a visit to Glasgow, after inspecting the slums of that great industrial city and the Queen Mary as she was about to embark on her maiden voyage across the Atlantic, made this timely observation: "How can you reconcile a world that can produce such a mighty ship as the Queen Mary to the slums that we have just visited?" These incidents, coupled with the many fantastic proposals of educators, lawmakers, and statesmen as to remedies for the economic ills of society, indicate the confusion and bewilderment concerning this most important of all problems. It is quite true that movements and plans are sponsored by earnest men and women in the hope of solving the puzzling problem of poverty. Today labor leaders and governments are feverishly engaged in efforts to find a remedy. Both labor leaders and governments are seeking to improve the economic conditions of the working people. They are anxious that labor receive a larger share of the national income; that the fruits of their toil be more fairly shared; that their condition be improved. Much confusion, however, prevails as to methods. The thought is common that, due to our highly mechanized and technical methods of production, there must be a high degree of governmental control of industry, especially in relation to wages, hours of work, prices, unfair trade practices, etc. In the very nature of things, such programs involve labor and industry in a mesh of rules and regulations, restrictions and bureaucratic control that are extremely irritating and well-nigh intolerable. Perhaps a measure of supervision of labor and working conditions under our modern intensive industrial methods may be helpful. But before relying upon legislative regulations, might it not be the part of wisdom for labor and labor leaders to intelligently analyze the economic problem, in the hope of discovering a solution that would be free from the irritation and annoyance incident to Government regulation? Tom L. Johnson, a noted industrialist and former Member of Congress from Cleveland, Ohio, in discussing the economic problems of his time, had occasion to say: "The evils of which there is such loud complaint (unfair trade practices, hard times, etc.) are due to the restrictions created and the special privileges granted by law. And the true remedy will be found in removing the restrictions and in abolishing the special privileges." The problem today is the same as in Johnson's day, and therefore there is much in his observation for labor leaders to think about. The prosperity of labor depends upon production. In turn production depends upon amiable relations between labor and capital, free and divorced from unwise restrictions and unjust burdens. Labor and capital must have a free field in which to function, and that implies that the first and primary factor in production - namely land - must be accessible to these two factors on terms of equity and justice. This being a necessary condition of maximum production, is it not foolish to impose conditions that harrass and impede the full and free activity of industry? Restrictions that interfere with the free and uninterrupted activities of labor and capital result in smaller output. Do not the demands of labor for regulation, in the face of these facts, simply confirm the truth of the simile herein related and reveal its stupidity comparable to that of the bull? Labor's true destiny is freedom, and its leaders must be wise enough to direct its movements so as to remove whatever obstacles are in the way and to prevent further obstacles from being put in the way of labor's true destiny. Today labor and capital are in an unconscionable war, destroying each other's power and usefulness in a stupid attempt to improve their relative positions. This is the height of folly. There is no natural basis for strife between capital and labor. The efficiency of labor and capital to produce wealth is possible only by working together in the spirit of comradeship and cooperation. Any interference with the orderly relation that naturally hinders the productive process, reduces the output, and therefore diminishes the earnings of labor. Labor produces its own wage fund. When this fact is borne in mind, it becomes clear that every reduction in earnings, in the final settlement of the account and the distribution of the products among the three factors in production, namely, land, labor, and capital, it (labor) must bear its share of the loss. It is quite true that labor is illy paid and robbed of a large share of the fruits of its toil. But the capital employed in the productive process and used by labor is not the robber. On the contrary, capital, in common with labor, is filched by the same robber. Would it not be more to the point to hunt, run down, and destroy, if possible, the robber responsible for the injustice and wrong that labor suffers? It is only by doing this that labor can ever hope to enjoy the full fruits of its toil and those natural and God-given rights for which humanity has struggled from time immemorial. Who are the robbers? Obviously the restrictions created and the special privileges granted by law, as pointed out by Tom Johnson. They are the culprits. Until the craft of legal exploitation is destroyed, no matter how diligent labor may be in its efforts of organization, striking, picketing, and all the rest, it will continue to be despoiled and robbed. By way of illustrating the truth of the foregoing and the assertion of Henry George that the great workshop which the Almighty Father gave to the children of men must be opened up to all on equal terms, please observe an interesting fact in American history. The founding fathers, presumably for good and sufficient reasons, located the seat of government of the infant Republic in a little village on the banks of the Potomac. At the time the District of Columbia was set apart as the seat of the Federal Government it was an unimproved tract of land, with few attractions, little value, and scarcely any inhabitants. The selection of this tract of land as the seat of government of a growing and promising Nation, however, gave the 10 square miles of land in the District of Columbia unusual prominence and importance. Not only the eyes of the youthful Nation, but the eyes of the world, were directed toward the little plot of land on the Potomac, and from that early and inauspicious beginning to the present day it has been growing in wealth, beauty, population, importance, interest, and, most of all, as a profitable camping ground for land monopolists. The increase in population and the city's magnificent development have been accompanied by a social phenomenon that labor leaders and statesmen cannot afford to overlook if they expect their efforts in behalf of labor reform and social justice to bear fruit. When it is recalled that those 10 square miles of land in the District of Columbia at the inception of the Government were practically valueless, and then note the difference in value of the same 10 square miles due solely to the labor and activities of the people and the services rendered by Government, one begins to get a glimpse of the social phenomenon responsible for the fabulous increase in the value of the 10 square miles of land in the District of Columbia and the relation of the labor problem to the land question. What are the facts concerning the land and the labor question of the District of Columbia? First. The District contains 10 square miles, or 64,000 acres. Second. At the time of the organization of the Government the District was uninhabited and the land had little or no value. Third. Today the District has a population of 600,000 and the 64,000 acres of land have a value of more than $1,000,000,000, or substantially $20,000 an acre. Fourth. The land value of the District is a social value due to the presence and social activities of the people and services rendered by the Government. Fifth. The profits annually arising from the land values in the District of Columbia are upward of $50,000,000. Sixth. The profits thus arising are appropriated by the landowners of the District and constitute a ransom exacted from every worker in the District. Bearing these facts in mind, what, may we ask, are the moral implications of the problem and the effect upon the workers? Is it not clear that the land value and the profits arising therefrom are due to the presence and activities of the people and the services rendered by Government, and therefore, as was observed by Ramsay Macdonald, former Prime Minister of England, that - "These profits, being ground rent, are a toll, not a payment for services. By it social values are transferred from social pools into private pockets, and it becomes the means of vast economic exploitation. Rent is obviously a common resource. Differences in fertility and value of site must be equalized by rent, but it ought to go to a common fund and be spent in the common interest." The failure on the part of labor leaders and lawmakers to observe the phenomenon manifested in the increase of the value of land with the increase of population and the administration of orderly government is responsible for the slow and unsatisfactory progress of the labor movement. The aim of the labor leaders is to improve the condition of the working masses by increasing their purchasing power. This is a laudable ambition. We cannot have prosperity unless the buying power of the working people will be increased. But the mere increase of wages without protection from the exactions of monopoly will not increase their buying power. Suppose that in the District of Columbia, by act of Congress, the wages and salaries of all Federal employees and public officials were increased 100 percent. Who would ultimately reap the benefits? Obviously the monopolists, of which the larger group is the landowner. Now, suppose it were possible, by virtue of favorable labor legislation and every device of organized labor, that the wages of the workers throughout the Nation would likewise be increased 100 percent. Would labor enjoy the increase? Obviously not. The increased wages would be absorbed by the extra demands of the monopolists, and the last estate of labor would be no better than the first. Is that not the fate of labor today? Increasing wages is always followed by increase in rent and other monopoly exactions. Labor leaders and well-meaning statesmen should not deceive themselves. As long as land monopoly and other major monopolies continue to thrive and flourish by the exercise of the exploiting power that is inherent in monopolies, labor will remain illy paid and poverty continue to stalk through the land. Restriction and special privilege are the twin evils that strangle industry and oppress and rob labor. For relief and escape, why not hearken to the voice of Nature and Nature's God? There are certain natural laws governing our national life. If we would govern our lives according to these laws, we would abolish poverty and secure prosperity and peace for all." Thus wrote Filangieri more than 100 years ago in a treatise on The Science of Legislation. All that labor and labor leaders need for the achievement of their ends is justice, and justice is the natural law. Let us bear in bind that natural law can be trusted, where attempts to order the world by human legislation are bound to go astray. Labor has been exploited from the beginning of time. The primary and fundamental reason of the unhappy lot of labor is due to the fact that our economic system is saturated with legal privilege. Privilege is the mother of monopoly, and monopoly is the instrument by which the few exploit the many. As long as monopoly remains in private hands labor will be exploited in spite of the organization or unionization of labor, or governmental control of industry. There are many monopolies, but the major ones may be listed as follows: Land monopolies, public-utility monopolies, money and credit monopolies, and patent monopolies. It is estimated that the tribute exacted by those who control these major monopolies amounts to more than one-third of the national income. Inasmuch as the struggle of labor leaders is to increase the buying power of those who toil, is it not clear that if the exactions of these monopolies were abolished the purchasing power of the laboring masses would be increased many billions of dollars annually? The exploitation of the privileged few can be abolished by the simple process of shifting the incidence of taxation from the products of labor and industry to privilege. This is the simple, natural, and efficient way. It is eminently right and just. It meets every demand of good morals. It is in accord with sound economics. It is in harmony with the natural order. It would remove the regulatory irritations and vexations from labor and industry. It would free both labor and industry from the ever-increasing burden of unjust taxation. It would promote peace and concord between capital and labor. And for the first time in all history labor would enjoy its rightful place in the industrial world and receive its full rewards. The grip of monopoly upon the economic life of the people is a deadly cancer. This deadly disease cannot be removed by the methods now generally employed and suggested either by labor leaders or governments. Its roots and tentacles are too deeply rooted in the very element upon which life, liberty, and the pursuit of happiness depends. That element is land. As Henry George pointed out in his Cooper Union speech almost 50 years ago, the land must be made free to all. What is involved in the land question? First. Land is the basis of all production. There can be no work, no human activity of any kind without access to land. Second. Land is the factor in production that measures with scientific exactitude the share of production that belongs to society. Third. To permit the share of production that properly and rightfully belongs to society to be appropriated by private individuals or corporations unbalances the natural economic equilibrium. Fourth. The disturbance of the economic equilibrium is responsible for the concentration of the wealth in the hands of the few and the consequent unemployment and poverty. Fifth. Land is the element in the productive process which, when free and accessible to all on equal terms, together with the abolition of all other monopolies in private hands, will regulate, naturally and normally, labor and industry, and establish social justice in the Nation. This is the great truth that labor and labor leaders must recognize. The lot of the workers cannot be permanently improved as long as the iniquity of private monopolies and special privileges remain wherewith the favored few lay their heavy hands of toll and tribute upon labor. Unless the power of monopoly that holds in its grasp the economic life of the people is destroyed and the rights of the people to their natural God-given inheritance restored, there can be no permanent solution of the labor problem. The struggle for social justice has been weary and bitter, and no doubt will continue so for many years to come. And therefore every right-feeling person is in sympathy with the present efforts of the labor leaders to improve, even if only temporarily, the condition of labor. But labor leaders must not be content with temporary advances. They must plan a long-range program - a program that will include the fundamental reforms herein suggested and bring about the abolition of legal privilege in private hands. Such a program will encounter bitter and stubborn opposition on the part of the beneficiaries of privilege. But this fact makes it all the more important that labor leaders find their bearings. The working masses need, and have a right to expect, intelligent direction on the part of their leaders. "Social reforms", said Henry George, "are not secured by noise and shouting, by complaints and denunciations, by the formation of parties or the making of revolutions, but by the awakening of thought, by the progress of ideas. Until there is correct thinking, there cannot be right action, and when there is correct thinking, right action will follow." And so let it be repeated, that labor leaders must be sure of their ground. They must have wisdom and understanding. "Wisdom is the principal thing; therefore get wisdom. And with all thy getting, get understanding." With kindest personal regards, I am, Very sincerely yours, Charles R. Eckert