.

Mr. Speaker, the "new deal" is under fire. It is being bombarded from all fronts. This is a happy augury. As long as the vested interests remained quiescent there was a just suspicion that the Roosevelt proposals were regarded as ephemeral and ineffective. But at last the "beast", as an eminent reformer some years ago styled the monopoly and predatory interests, has become aroused, and like a wild animal of the jungle is on a rampage to kill and devour everything and everyone that happens to cross his path in his mad desire to exploit his prey. This is an indication that at last the "new deal" proposals are drawing fire; that the predatory interests are fully aware of its full meaning; that to enjoy their privileges in the future as in the past, the "new deal" and all it stands for must be destroyed.

It is well that such is the case. The people must be made conscious of the fact that a mighty struggle is in the making; that the rumblings in the legislative halls of the Capital of the Nation and the capitals of the various States of the Union are the repercussions of a struggle that will not subside until privilege in all its ramifications is abolished and social justice established. Either this, or our institutions and our civilization will be destroyed. What the American people are now witnessing is the beginning of a war that the people are determined to wage against privilege - their common enemy. Let there be no mistake. It will be a struggle of titanic proportions, in which all the forces of privilege will be mustered into service. The people of America will be called, as never before, to prove their mettle. In the years gone by they met crisis after crisis with high courage and indomitable will. These crises were always overcome. The crisis now on must be met and won in the same heroic fashion, for while much was at stake in the crises of the past, much more is involved in the crisis now pending. Then it was a question of repelling a foreign tyrant; of establishing an independent nation; of saving the Union; of abolishing slavery.

But in the crisis now pending it is not merely a question of protecting the integrity of the American Republic but of saving a civilization. This is the meaning of the "new deal." The program of the "new deal" can be interpreted in no other language. The immediate proposals of the "new deal" may be far removed from the essential social needs for a nation of free men. Be it so. As the program unfolds and develops the futility of unwise proposals will become apparent and others must be substituted whose foundations are laid upon the eternal rock of social justice and human freedom. Nothing short of this will satisfy a liberty-loving people. President Roosevelt seems to be in accord with this objective. In his annual message to the Congress he said:

We have not yet weeded out the overprivilcged.

This statement can have no meaning short of the abolition of privilege. The Democrats in 1932 had the same purpose in mind. In the platform adopted at Chicago in 1932 the party declared:

In conclusion, to accomplish these purposes and to recover economic liberty, we pledge the efforts of a great party whose founders announced the doctrine which guides us now in the hour of our country's need "Equal rights to all, special privileges to none."

The meaning of this is clear. It is a promise and a pledge that the Democratic Party, if commissioned by the people to administer the Federal Government, will use the powers of Government toward the establishment of a social order freed from the burden of private privilege. If there are some who enjoy privileges that enable them to levy tribute upon production, the party is pledged to reform such conditions. This is the plain meaning of the closing paragraph of the Democrat platform of 1932.

How, by all that is logical and sound in reason, can economic liberty be established and the citizen insured equal rights without the eradication, root and branch, of every vestige of privilege now existing in the present economic order?

"Privilege" at law is defined as -

A special advantage conferred by special grant lo and enjoyed by some to the exclusion of others.

Our present economic order is an inheritance of the feudal system of the Old World. Many privileges of feudalism have been destroyed, but a few still remain in the present economic order. And before America can boast of real economic freedom so that all may enjoy those inalienable rights of "life, liberty, and the pursuit of happiness", set forth in the Declaration of Independence, the remaining elements of feudalism must be eliminated. Any grants or power of Government granted to individuals or corporations, such as franchises, title to valuable land sites and natural resources, or other concessions of Government are some of the elements of feudalism still remaining.

Who are the privileged?

Are those who enjoy public-utility franchises privileged?

Are those who enjoy title to valuable natural resources privileged?

Are those who enjoy title to valuable land sites privileged?

Are those who enjoy any other concessions or grants of Government in derogation of common right privileged?

Obviously these constitute some of the overprivileged, and, according to the declaration of the Democratic Party platform of 1932, their privileges must be abolished.

How is this to be accomplished? That is the task ahead for the Democrats and the "new deal." To fail in this is to proclaim incompetence and defeat. But there need be no defeat. The task, though simple, will be long and weary and arduous.

The privileges enjoyed by the public-utility companies deserve special attention. President Roosevelt has a clear understanding of the nature of the privileges enjoyed by the public-utility companies. In his book, Looking Forward, he says:

A false public policy has been spread through the land, through the use of every means, from the innocent school teacher down to others far less innocent.

Let us go back to the beginning of the subject. What is a public utility? Let me take you back 300 years to King James, of England. The reign of this King is remembered for many great events, two of them in particular. He gave us a great translation of the Bible and the inception of a great public policy. It was in the days when Shakespeare was writing and when the English were settling Jamestown that a public outcry arose in England from travelers who sought to cross the deeper streams by means of ferryboats. Obviously these ferries, which are needed to connect the highway on one side with the highway on the other, were limited to specific points. They were, therefore, monopolistic in their nature. The ferryboat operators, because of their privileged position, had the chance to charge whatever the traffic would bear, and bad service and high rates had the effect of forcing much trade and travel into long detours or to the dangers of attempting to ford the streams. The greed and avarice of some of these ferryboat owners remained a public issue for many years, until in the days of Lord Hale a statement of public policy was set forth by the great chief justice.

The law lord said that the ferrymen's business was quite different from other businesses, that the ferry business was, in fact, vested with a public character, that to charge excessive rates was to set up obstacles to public use, and that the rendering of good service was a necessary and public responsibility.

"Each ferry," said Lord Hale, "ought to be under a public regulation, to wit, that it gives attendance at due time, a boat in due order and take but reasonable toll."

In those simple words Lord Hale laid down a standard which, in theory at least, has been the definition of common law with respect to the authority of government over public utilities from that day to this.

With the advance of civilization many other necessities of a monopolistic character have been added to the list of public utilities - such necessities as railroads, street railways, pipe lines, and the distribution of gas and electricity. This principle was accepted, firmly established, and became a basic part of our theory of government.

It will be observed that all public utilities are vested with a public character and therefore are engaged in the administration of public functions. The managers of public utilities are agents of the Government and subject to governmental control and supervision. If a public utility fails in the administration of its proper function, or if its administration is inefficient or corrupt and dishonest, the people have a moral right to assume the functions administered by the utilities. There are those who complain bitterly if the Government makes the slightest gesture at strict regulation or public ownership of public utilities, and cry out in holy horror that the Government is going into private business. The reverse is the truth. Private business, when it enters the utility field, embarks in Government business. Any good and efficient government is bound to provide the people with public-utility service.

In my home town of Beaver, Pa., the municipality owns and operates its own water system. What is true of Beaver is true of many other cities and towns. The Government may, if it sees fit, delegate such functions to a private individual or corporation. Frequently this is done, but in every such instance the natural or artificial person delegated is the agent of the Government, subject to its control and supervision. This is a well-recognized principle of American jurisprudence. It is well expressed in Kale's Rule that "any business affected with a public use is subject to public regulation and control." This principle was exhaustively discussed by Jeremiah S. Black, eminent jurist and statesman, in a speech before a Pennsylvania Senate committee in 1883. Judge Black said:

It is the duty of every commercial, manufacturing, or agricultural State to open thoroughfares of trade and travel through her territory. For that purpose she may take the property of citizens and pay for the work out of her own treasury. When it is done she may make it free to all comers', or she may reimburse the cost by levying a special tax upon those who use it; or she may get the road built and opened by a corporation or an individual, and pay for it by permitting the builder to collect tolls or taxes from those who carry and travel on it. Pennsylvania has tried all these methods with her turnpikes, canals, and railroads. Some have been made at her own cost and thrown open; on others made by herself she placed officers to collect a special tax; others have been built for her by contract, in which some natural or artificial person agreed to do the work for the privilege of appropriating the taxes which she authorized to be levied.

But in all these cases the proprietary right remained in the State and was held by her in trust for the use of the people. Those who run the railroads and canals are always public agents. It is impossible to look at them in any other light or to conceive how a different relation could exist, because a railroad which is not managed by public agents cannot be a public highway.

At that time Black discussed the railroad problem, as it was the one outstanding public utility. Since that time other public necessities of a monopolistic character have been added to the list of public utilities. But the principle is the same as in the case of the railroads. When the Government enters the field of rendering public-utility service it is not invading the field of private enterprise. It is attending to its own business. On the contrary, if private enterprise enters the public-utility field, it is engaging in public business and performing a government function, and because of this fact government not only has the right but is in duty bound to regulate and control public utilities operated by a natural or artificial person and, if necessary, assume its normal and natural function of rendering such service to the people directly.

This necessarily is due to the fact that in those fields of human endeavor where competition is impossible the people t as a whole, through their government, must assume control or operation. Louis F. Post, in his Ethics of Democracy, truly says:

Where monopoly is inevitable the service which is subject to it must be assumed by the public to the end that in other vocations competition may be freed. Private monopoly in anything tends to destroy competition in all things.

Regulation thus far has been more or less of a failure. Public ownership is proving successful in many localities. The simplest method, however, would be to tax for public use the full value of the franchises enjoyed and capitalized by the public-utility companies. But whatever method may be employed, the objective must be the abolition of the burden of private privilege, not only as it relates to public utilities but to all other concessions of government that enable tne possessors to exact tribute from labor and industry.

There are those who bourbon-fashion and tory-like are condemning the "new deal", and in this pastime it is becoming quite popular to invoke the protection of the Constitution of the United States. This has been the fashion and practice of the favorites of privilege and their spokesmen throughout the years of our national life. The Constitution of the United States is introduced with a preamble that reads as follows:

We, the people of the United States, in order to form a more perfect Union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

Since the preamble breathes the very soul of our free institutions, it would seem that all the inhabitants of the thirteen original States were embraced and protected under the Constitution. Yet at the time of the adoption of the Constitution only a privileged group of the people inhabiting the thirteen original States enjoyed the rights and privileges as citizens. In the celebrated Dred Scott case it is asserted that -

The words "people of the United States" and "citizens" are synonymous terms and mean the same thing. They both describe the political body, who, according to our republican institutions, form the sovereignty and who hold the power and conduct the Government through their representatives. They are what we familiarly call "the sovereign people", and every citizen is one of this people and a constituent member of this sovereignty.

The population of the United States, at the time of the adoption of the Constitution, was approximately 3,000,000 people. The population consisted mainly of members of the white, or Caucasian race, but it also included members of the Negro race. Only the male population of the white or Caucasian race enjoyed the full rights of citizenship. The white female members of the population were denied their political freedom for more than 100 years of our existence as a nation, and members of the Negro race were even denied the status of a human being. All this under a state document that has been hailed as a paragon of virtue and one that provoked encomiums from the greatest and wisest statesmen of the nations of the earth.

What is the explanation of such incongruities?

Here is a nation, established under the aegis of freedom, and yet under its protecting care there are found human beings in slavery, and a large portion of the white race, whose political freedom and status is limited and restricted. Looking back over the years, it seems like a dream, yea, a nightmare, that a supposedly intelligent, fair, just, and free people could have been guilty of moral lapses such as the history and development of the American Nation reveal. Yet the explanation is simple. Right conduct on the part of individuals, as of nations, is based upon morals, and morals are a matter of growth and development. They are those intangible things that emanate from the spirit. They are not fixed and definite quantities, but change with time and the progress of ideas.

The reason that Negro slavery was tolerated in the nation that was "conceived in liberty and dedicated to the proposition that all men are created equal", is due to that lack of moral growth and development that ought to characterize a civilized people and that must go hand in hand with material progress if civilization is to endure. In the Dred Scott case Justice Taney in his opinion said:

They -

Referring to the Negroes -

had for more than a century before been regarded as beings of an inferior order, and altogether unfit to associate with the white race, either in social or political relations; and so far inferior, that they had no rights which the white man was bound to respect; and that the Negro might justly and lawfully be reduced to slavery for his benefit. He was bought and sold, and treated as an ordinary article of merchandise and traffic, whenever a profit could be made by it. It was regarded as an axiom in morals as well as in politics, which no one thought of disputing, or supposed to be open to dispute; and men in every grade and position in society daily and habitually acted upon it in their private pursuits, as well as in matters of public concern, without doubting for a moment the correctness of this opinion.

It was the common opinion of mankind at the time the American Nation was founded that a white female was incompetent to exercise the right of franchise, and, likewise, that a Negro was an inferior being that had no rights that the white man was bound to respect. This, as Justice Taney says, was an axiom in morals as well as in politics, that no one thought of disputing. I refer and quote from Justice Taney's opinion in the Dred Scott case to emphasize the importance of correct thinking based upon proper moral concepts. In order that our present economic ills may be corrected by proper social reforms, it is necessary that popular opinion and the feeling in relation to existing wrongs and social institutions be changed. Lincoln, in speaking of the Dred Scott decision, said:

Somebody has to reverse that decision and we mean to reverse if.

Every schoolboy is familiar with the story as to how that decision was reversed. The more humane, civilized, and orderly way of reversing decisions of the Supreme Court or changing fundamental law is through the process of education. One of the essentials of good citizenship is active, clear thinking. An eminent American has well said that social reforms are only secured by the awakening of thought, by the progress of ideas, and made the very striking observation that:

Until there is correct thinking there cannot be right action, and when there is correct thinking right action will follow.

For 50 years or more the American people have been confronted with a very serious problem - the problem of the honest and equitable distribution of the products of labor and industry. Statesmen, philosophers, and educators have grappled with this problem in vain for many years. But if our civilization and our institutions are to endure, the problem must be solved and solved right. And for the right solution of this problem, the accepted and prevailing opinion as to some of our social institutions must be changed. Wealth is distributed inequitably because of the unjust exactions of privilege. The plundering of privilege today, as the denial of women's rights and Negro slavery in the days past, has the protection of the Constitution and the sanction of public opinion. This protection and sanction are unfounded in good morals, sound economics, or sound law.

The United States News, a Washington weekly paper and severe critic of the "new deal", carries on its editorial page a saying of George Washington to the effect that:

In proportion as the structure of a government gives force to public opinion, it is essential that public opinion should be enlightened.

This is fine. But if public opinion is to be enlightened, then the truth, the whole truth, and nothing but the truth must be told. And so let us get down to brass tacks as to the cause of our present day economic ills.

Recently this paper discussed the iniquities of the "new deal" in an editorial under the caption "Share-the-loot." This, it would seem, is an unhappy reference to the American tax fund. It would be more in keeping with the truth to refer to the tribute that privilege collects from labor and industry as loot. But, be this as it may, the unjust distribution of the products of labor and industry is the primary cause of our social and economic troubles. Therefore let us look into the problem and see how wealth is distributed under present methods of distribution.

As a piece of so-called "constructive criticism" the United States News offers as a simple alternative to the "new deal's" effort to correct our present economic ills the following:

Repeal the spoils system and introduce the merit system; to prevent the concentration of the Nation's wealth in political hands; and to give willing men a chance to work in industry.

What is the value of this gesture of reform?

If the merit system were substituted for the spoils system, if government - municipal, State, and Federal-were administered honestly and economically so that not a dollar were stolen or wasted, would that give men a chance to work in industry? No one would so contend. The problem of giving men a chance to work in industry is involved in the problem of distributing the products produced by labor honestly and equitably among those whose toil produced them. It is axiomatic that he who makes should have. Wealth is produced by the application of labor to the natural resources. This is the only way wealth can be brought into existence. There is no other, and since labor is the creator of all wealth, natural justice decrees that it belongs to labor. Lincoln, in his day, said:

Inasmuch as most good things are produced by labor, it follows that all such things belong to those whose labor has produced them. But it has happened in all ages of the world that some have labored and others, without labor, have enjoyed a large proportion of the fruits. This is wrong and should not continue.

This is sound logic. Lincoln's Emancipation Proclamation struck the shackles from 3,000,000 bondsmen. But it did not insure the Negro or any other worker the full share of the products of his toil. The laborer today, as in all the ages past, is still deprived of a large portion of the fruits of his labor.

It happens that under the operation of our economic set-up there is a more pronounced and intensive "share the loot" enjoyed by the privileged few than any period in the history of the world. This is made possible by improved methods of production and the operation of the feudal principles remaining in our present-day economic system. Albert Jay Nock, in an article published in the Atlantic Monthly, explains the operation in this wise:

So long as the State stands as an impersonal mechanism which can confer an economic advantage at the mere touch of a button, men will seek by all sorts of ways to get at the button, because law-made property is acquired with less exertion than labor-made property. It is easier to push the button and get some form of State-created monopoly like a land title, a tariff, concession, or franchise, and pocket the proceeds, than it is to accumulate the same amount by work.

By virtue of the power enjoyed by those who, by the mere touch of a governmental button, obtain concessions, call upon labor and industry to place annually a large quantity of the products of industry in their hands. Such concessions consist of valuable land sites, tariffs, franchises, and other powers and grants of government in derogation of common right. In addition to the tribute labor and industry are called upon to pay privilege, they also are called upon to pay a huge sum to government as taxes, with this difference, however, that the wealth placed in "political hands" maintains our schools, our highways, our courts, our fire and police departments, our Army and Navy - in short, all the services of government - municipal, State and Federal, as well as feeding the hungry and unemployed; while the wealth paid to the few as exactions of privilege, is tribute - loot, if you please - pure and simple, for which labor and industry do not receive one penny in return either in services or goods.

And it is well to bear in mind also that, while the wealth placed in "political hands" as taxes is approximately $12,000,000,000 or $13,-000,000,000 annually, the wealth taken as tribute by the privileged is approximately one-third of the national income.

Now what are the facts about "share-the-wealth" and "share-the-loot" proposals, about which so much is heard these days?

Those who are guided by principles of right and justice have no sympathy whatever with any share-the-wealth schemes. They want the rich to have every penny that rightfully belongs to them, just as they want the laborer to receive and enjoy the full fruits of his toil. And under a just government there will be no occasion to "share-the-loot." What all of us ought to be concerned about is the distribution of the products of labor honestly and equitably, and in the consideration of this problem, we might with profit recall the straight and simple logic of Abraham Lincoln, when he said:

Since wealth is the product of labor, it ought to belong to those whose labor has produced it.

And also remind ourselves of the further observation he made that -

To secure to each laborer the whole product of his toil as nearly as possible is a worthy object of any government.

It would seem that the Tories and the Tory press of today, as in the days gone by, are more concerned about maintaining and perpetuating the privileges that enable some to plunder the producers of wealth rather than enlighten the public mind as counseled by George Washington.

Since January 1 last I have been living at the Hotel Washington in this city. The Hotel Washington is one of a group of buildings constituting a city block, bounded on the north by F Street, east by Fourteenth Street, south by Pennsylvania Avenue, and west by Fifteenth Street. The land upon which this group of buildings is located contains 89,973 square feet, or approximately 2 acres. Upon these 2 acres of land there are employed upward of 1,000 people. A large percentage of the employed is in the service group, such as are found in hotels and restaurants. Having been a guest of one of the hotels for the last 6 months, I very naturally became acquainted somewhat with the operation of the different enterprises in this particular city block, and here is the one outstanding fact: The activity of these 2 acres of land consists of the labor of the men and women who manage and perform the necessary work incident to the operation of the different enterprises. In short, it is the labor - the toil - of the men and women employed on the 2 acres of land in question that is responsible for the services offered and rendered to the public, and it, and it alone, with the aid of capital - that is, the buildings and equipment necessary to carry on the different enterprises - produces the earnings or income of the various businesses located in this city block.

Now, let us see who gets the earnings or income. How is the income distributed? These 2 acres of land, irrespective of the improvements, are assessed at $4,346,309 for tax purposes. The owners of the land naturally would expect a net return of not less than 6 percent per annum on the capitalized value of the 2 acres, say $5,000,000, which would amount to $300,000 per year. This income might very easily advance to $400,000 or §500,000, depending upon the general condition of business. Now, what contribution, either in the form of capital or labor, has been made by the owners of the 2 acres - as landowners - toward the income of the different enterprises located in this city block? The land is not the product of labor nor the creation of any man or group of men. It is the gift of nature or God. The value attaching to the 2 acres is not the result of the labor of the owners. It is due to the presence and activity of the people and the services rendered by Government.

For all practical purposes, the owners might be residents of some far-off land, and yet in spite of their absence, their income, without contributing even so much as a penny toward the earnings or income of the enterprises on the 2 acres of land, are probably receiving $300,000, or perhaps $400,000, or maybe $500,000 annually.

The simple story of this city block as a unit in our economic structure discloses these facts:

First. That the city block contains approximately 2 acres of land that are assessed for tax purposes at $4,346,309.

Second. That on the 2 acres of land are several buildings and a number of smaller ones and are assessed for tax purposes at $2,467,200.

Third. That there are employed on the 2 acres of land approximately 1,000 men and women.

Fourth. That it is the labor of the 1,000 men and women that makes the 2 acres of land an active wealth-producing unit in the economic structure.

Fifth. That out of the gross earnings and income due to the labor of the 1,000 men and women, it is fair to assume that the owners of the 2 acres of land receive, without lifting a finger, $300,000 or $400,-000, or perhaps §5000,000 annually.

In the light of these facts it is clear that both labor and capital are called upon to make a very substantial contribution to private privilege. It goes without saying that, as long as this practice prevails, labor will be deprived of a large share of its fruits and in a large measure explains the poverty of the working masses. Manifestly, if the burden of private privilege were removed from the backs of the workers, their wages would be materially increased, and with the wages of each worker increased, their purchasing power and consumption of goods in turn would likewise be increased. With the increase of consumption, industry would revive and business and trade in general take on new life and vigor.

Our economic troubles will not be solved until the exactions of private privilege will be effectively arrested. The simple and natural way to bring about this desirable consummation is by using the taxing power sanely and wisely. It has been said that the power to tax is not only the power to destroy but also the power to keep alive. The "new deal" tax program is a crude attempt to bring about a fairer adjustment of the tax burden. In order to accomplish the ends sought, the present tax program of the "new deal", as well as the tax systems of the various States, must be fundamentally reformed. A sane and just tax system must conform to the well-settled canons of taxation, to wit:

First. That it bear as lightly as possible on production.

Second. That it be easily and cheaply collected.

Third. That it be certain.

Fourth. That it bear equally.

Such a system demands the exemption of the products of labor and industry from taxation, and in lieu thereof contemplates the collection of the profits issuing from privileges as represented by titles to valuable land sites, public-utility franchises, and other governmental concessions for public revenue. Such a program is not only in keeping with sound, just, and natural taxation, ,but will go far toward weeding out the overprivileged and solving the problem of want in the midst of plenty.

Let us ever bear in mind that the "new deal" has not fulfilled its mission nor accomplished its purpose so long as the overprivileged are not weeded out, nor the pledge and promise of the Democratic platform of 1932 redeemed, unless economic liberty is restored to our people and the doctrine of "equal rights to all, special privileges to none" made part and parcel of our national policy and social institutions.