Radicals who had always opposed war, ministers who had spent their lives preaching peace upon earth, scientists whose work had brought them into contact with the peoples of the whole world, public men who believed that the United States could do greater and better work for democracy by staying out of the war, were branded as traitors and were persecuted as zealously as though they had sided with Protestantism in Catholic Spain under the Inquisition.

By a clever move, the plutocrats, wrapped in the flag and proclaiming a crusade to inaugurate democracy in Germany, rallied to their support the professional classes of the United States and millions of the common people.

6. Business in Control

After the declaration of war, the mobilization and direction of the economic war work of the government was placed in the hands of the Council of National Defense, an organized group of the leading business men. The Council consisted of six members of the President's Cabinet, assisted by an Advisory Commission and numerous sub-committees. The "Advisory Commission" of the Council (the real working body) contained four business men, an educator, a labor leader and a medical man. ("The Council of National Defense" a bulletin issued by the Council under date of June 28, 1917.)

Each member of the Advisory Commission had a group of persons cooperating with him. The make-up of these various committees was significant. Among 706 persons listed in the original schedule of sub-committees, 404 were business men, 200 were professional men, 59 were labor men, 23 were public officials and 20 were miscellaneous. It was only in Mr. Gompers' group that labor had any representation, and even there, out of 138 persons only 59 were workers or officials of unions, while 34 were business men and 33 professional men, so that among Mr. Gompers' assistants the business and professional men combined considerably outnumbered the labor men.

The make-up of some of the sub-committees revealed the forces behind the Defense Council. Thus Mr. Willard's sub-committee on "Express" consisted of four vice-presidents, one from the American, one from the Wells-Fargo, one from the Southern and one from the Adams Express Company. His committee on "Locomotives" consisted of the Vice-President of the Porter Locomotive Company, the President of the American Locomotive Company, and the Chairman of the Lima Locomotive Corporation. Mr. Rosenwald's committee on "Shoe and Leather Industries" consisted of eight persons, all of them representing shoe or leather companies. His committee on "Woolen Manufactures" consisted of eight representatives of the woolen industry. The same business supremacy appeared in Mr. Baruch's committees. His committee on "Cement" consisted of the presidents of four of the leading cement companies, the vice-president of a fifth cement company, and a representative of the Bureau of Standards of Washington. His committee on "Copper" had the names of the presidents of the Anaconda Copper Company, the Calumet & Hecla Mining Company, the United Verde Copper Company and the Utah Copper Company. His committee on "Steel and Steel Products" consisted of Elbert H. Gary, Chairman of the United States Steel Corporation; Charles M. Schwab, of the Bethlehem Steel Company; A. C. Dinkey, Vice-President of the Midvale Steel Company; W. L. King, Vice-President of Jones & Loughlin Steel Company, and J. A. Burden, President of the Burden Steel Company. The four other members of the committee represented the Republic Iron and Steel Company, the Lackawanna Steel Company, the American Iron and Steel Institute and the Picklands, Mather Co., of Cleveland. Perhaps the most astounding of all the committees was that on "Oil." The chairman was the President of the Standard Oil Company, and the secretary of the committee gives his address as "26 Broadway," the address of the Standard Oil Company. The other nine members of the committee were oil men from various parts of the country. What thinking American would have suggested, three years before, that the Standard Oil Company would be officially directing a part of the work of the Federal Government?

Comment is superfluous. Every great industrial enterprise of the United States had secured representation on the committees of business men that were responsible for the direction of the economic side of war making.

Then came the Liberty Loan campaigns and Red Cross drives, the direction of which also was given into the hands of experienced business men. In each community, the leaders in the business world were the leaders in these war-time activities. Since the center of business life was the bank, it followed that the directing power in all of the war-time campaigns rested with the bankers, and thus the whole nation was mobilized under the direction of its financiers.

The results of these experiences were far-reaching. During two generations, the people of the United States had been passing anti-trust laws and anti-pooling laws, the aim of which was to prevent the business men of the country from getting together. The war crisis not only brought them together, but when they did assemble, it placed the whole political and economic power of the nation in their hands.

The business men learned, by first hand experience, the benefits that arise from united effort. They joined forces across the continent, and they found that it paid. James S. Alexander, President of the National Bank of Commerce (New York), tells the story from the standpoint of a banker (Manchester Guardian, January 28, 1920. Signed Article.) In a discussion of "the experience in cooperative action which the war has given American banks" he says, "The responsibility of floating the five great loans issued by the government, together with the work of financing a production of materials speeded up to meet war necessities, enforced a unity of action and cooperation which otherwise could hardly have been obtained in many years."

7. Economic Winnings

The war gains of the plutocracy in the field of public control were important, as well as spectacular. Behind them, however, were economic gains—little heralded, but of the most vital consequence to the future of plutocratic power.

The war speeded production and added greatly to the national income, to investable surplus, to profits and thus to the economic power of the plutocrats.

The most tangible measure of the economic advantage gained by the plutocracy from the war is contained in a report on "Corporate Earnings and Government Revenues" (Senate Document 259. 65th Congress, Second Session). This report shows the profits made by the various industries during 1917—the first war year.

The report contains 388 large pages on which are listed the profits ("percent of net income to capital stock in 1917") made by various concerns. A typical food producing industry—"meat packing"—lists 122 firms (p. 95 and 365). Of these firms 31 reported profits for the year of less than 25 percent; 45 reported profits of 25 but under 50 percent; 24 reported profits of 50 but under 100 percent, and 22 reported profits of 100 percent or more. In this case, a third of the profits were more than 25, but less than 50 percent, and half were 50 percent or over.

Manufacturers of cotton yarns reported profits ranging slightly higher than those in the meat packing industry (pp. 167, 168, 379). Among the 153 firms reporting, 21 reported profits of less than 25 percent; 61 reported 25 but less than 50 per cent; 55 reported 50 but under 100 percent, and 16 reported 100 percent or more.

Profits in the garment manufacturing industry were lower than those in yarn manufacturing. Among the 299 firms reporting (pp. 171, 380) 74 gave their profits as less than 25 percent; 121 gave their profits as 25 but under 50 percent; 65 gave profits of 50 but less than 100 percent, and 39 gave their profits as 100 percent or over.

The profits of 49 Steel plants and Rolling Mills (pp. 100, 365) were considerably higher than profits in any of the industries heretofore discussed. Four firms reported profits of less than 25 percent; 13 reported profits of 25 but less than 50 percent; 17 reported profits of 50 but less than 100 percent, and 15 reported profits of more than 100 percent. In this instance two-thirds of the firms show profits of 50 percent or over.

Bituminous Coal producers in the Appalachian field (340 in number, pp. 130 and 372) report a range of profits far higher than those secured in the manufacturing industries. Among these 340 firms, 23 reported profits of less than 25 percent; 45 reported profits of 25 but under 50 percent; 79 reported profits of 50 but under 100 percent; 135 reported profits of 100 but under 500 percent; 21 reported profits of 500 but under 1,000 percent, and 14 reported profits of 1,000 percent and over. In the case of these coal mine operators only a fourth had profits of under 50 percent and half had profits of more than 100 percent.

The profits in these five industries—food, yarn, clothing, steel and coal—are quite typical of the figures for the tens of thousands of other firms listed in Senate Document 259. Profits of less than 25 percent are the exception. Profits of over 100 percent were reported by 8 percent of the yarn manufacturers, by 13 percent of the garment manufacturers, by 18 percent of the meat packers, by 31 percent of the steel plants, and by 50 percent of the bituminous coal mines. A considerable number of profits ranged above 500 percent, or a gain in one year of five times the entire capital stock.

When it is remembered that these figures were supplied by the firms involved; that they were submitted to a tremendously overworked department, lacking the facilities for effective checking-up; and that they were submitted for the purposes of heavy taxation, the showing is nothing less than astounding.

8. Winnings in the Home Field

What has the American plutocracy won at home as a result of the war? In two words it has gained social prestige and internal (economic) solidarity. Both are vital as the foundation for future assertions of power.

The plutocracy has unified its hold upon the country as a result of the war. Also, it has won an important battle in its struggle with labor. The position held by the American plutocracy at the end of the Great War could hardly be stated more adequately than in a recent Confidential Information Service furnished by an important agency to American business men:

"SHALL VICTORS BE MAGNANIMOUS?

"There is no doubt about it—Labor is beaten. Mr. Gompers was at his zenith in 1918. Since then he has steadily lost power. He has lost power with his own people because he is no longer able to deliver the goods. He can no longer deliver the goods for two reasons. For one thing, peace urgency has replaced war urgency and we are not willing to bid for peace labor as we were willing to bid for war labor. For another thing, the employing class is immensely more powerful than it was in 1914.

"We have an organized labor force more numerous than ever before. Relatively twice as many workers are organized as in 1916. But this same labor force has lost its hold on the public. Furthermore, it is divided in its own camp. It fears capital. It also fears its own factions. It threatens, but it does not dare.

"We said that the employing class was immensely more powerful than in 1914. There is more money at its command. Eighteen thousand new millionaires are the war's legacy. This money capacity is more thoroughly unified than ever. In 1914 we had thirty-thousand banks, functioning to a great degree in independence of each other. Then came the Federal Reserve Act and gave us the machinery for consolidation and the emergency of five years war furnished the hammer blows to weld the structure into one.

"The war taught the employing class the secret and the power of widespread propaganda. Imperial Europe had been aware of this power. It was new to the United States. Now, when we have anything to sell to the American people we know how to sell it. We have learned. We have the schools. We have the pulpit. The employing class owns the press. There is practically no important paper in the United States but is theirs!"

9. The Run of the World

The war gains of the American plutocracy at home were immense. Even more significant, from an imperial standpoint, were the international advantages that came to America with the war. The events of the two years between 1916 and 1918 gave the United States the run of the world.

Destiny seemed to be bent upon hurling the American people into a position of world authority. First, there was the matter of credit. The Allies were reaching the end of their economic rope when the United States entered the war. They were not bankrupt, but their credit was strained, their industries were disorganized, their sources of income were narrowed, and they were looking anxiously for some source from which they might draw the immense volume of goods and credit that were necessary for the continuance of the struggle.[47]

The United States was that source of supply. During the years from 1915 to 1917, the industries of the United States were shifted gradually from a peace basis to a war basis. Quantities of material destined for use in the war were shipped to the Allies. The unusual profits made on much of this business were not curtailed by heavy war taxation. Thus for more than two years the basic industries of the United States reaped a harvest in profits which were actually free of taxation, at the same time that they placed themselves on a war basis for the supplying of Europe's war demand. When the United States did enter the war, she came with all of the economic advantages that had arisen from selling war material to the belligerents during two and a half years. Throughout those years, while the Allies were bleeding and borrowing and paying, the American plutocracy was growing rich.

When the United States entered the war, she entered it as an ally of powers that were economically winded. She herself was fresh. With the greatest estimated wealth of any of the warring countries, she had a public national debt of less than one half of one percent of her total wealth. She had larger quantities of liquid capital and a vast economic surplus. As a consequence, she held the purse strings and was able, during the next two years, to lend to the Allied nations nearly ten billion dollars without straining her resources to any appreciable degree.

The nations of Europe had been so deeply engrossed in war-making that they had been unable to provide themselves with the necessary food. All of the warring countries, with the exception of Russia, were importers of food in normal times. The disturbances incident to the war; the insatiable army demands, and the loss of shipping all had their effect in bringing the Allied countries to a point of critical food scarcity in the Winter of 1916-1917.

The United States was able to meet this food shortage as easily as it met the European credit shortage—and with no greater sacrifice on the part of the American people. Then, too, with the exception of small amounts of food donated through relief organizations, the food that went to Europe was sold at fancy prices. The United States was therefore in a position to lay down the basic law,—"Submit or starve."

With the purse strings and the larder under American control, the temporary supremacy of the United States was assured. She was the one important nation (beside Japan) that had lost little and gained much during the war. She was the only great nation with a surplus of credit, of raw materials and of food.

The prosperity incident to this period is reflected in the record of American exports, which rose from an average of about two billions in the years immediately preceding the war to more than six billions in 1917. In the same year the imports were just under three billions, leaving a trade balance—that is, a debt owing by foreign countries to the United States—of more than three billions for that one year.

10. Victory

The war had been in progress for nearly three years before the United States took her stand on the side of the Allies. At that time the flower of Europe's manhood had faced, for three winters, a fearful pressure of hardship and exposure, while millions among the non-combatants had suffered, starved, sickened and died. The nerves of Europe were worn and the belly of Europe was empty when the American soldiers entered the trenches. They were never compelled to bear the brunt of the conflict. They arrived when the Central Empires were sagging. Their mere presence was the token of victory.

For the first time in history the Americans were matched against the peoples of the old world on the home ground of the old world, and under circumstances that were enormously favorable to the Americans. European capitalism had weakened itself irreparably. The United States entered the war at a juncture that enabled her to take the palm after she had already taken billions of profit without risk or loss. The gain to the United States was immense, beyond the possibility of present estimate. The rulers of the United States became, for the time being, at least, the economic dictators of the world.

The Great War brought noteworthy advantages to the American plutocracy. At home its power was clinched. Among the nations, the United States was elevated by the war into a position of commanding importance. In a superficial sense, at least, the Great War "made" the plutocracy at home and "made" the United States among the nations.

FOOTNOTES:

[45] "The Navy League Unmasked," Speech of December 15, 1915, Congressional Record.

[46] This campaign was conducted by H. P. Davison, one of the leading members of the firm of J. P. Morgan and Co. Later a great war-fund drive was conducted by John D. Rockefeller, Jr. Cleveland H. Dodge of the Phelps-Dodge corporation was treasurer of another fund.

[47] J. Maynard Keynes notes the "immense anxieties and impossible financial requirements" of the period between the Summer of 1916 and the Spring of 1917. The task would soon have become "entirely hopeless" but "from April, 1917" the problems were "of an entirely different order." "The Economic Consequences of the Peace." New York, Harcourt, Brace & Howe, 1920, p. 273.



XII. THE IMPERIAL HIGHROAD

1. A Youthful Traveler

Along the highroad that leads to empire moves the American people, in the heyday of its youth, sturdy, vigorous, energy-filled, replete with power and promise—conquerors who have swept aside the Indians, enslaved a race of black men, subdued a continent, and begun the extension of territorial control beyond their own borders. More than a hundred million Americans—fast losing their standards of individualism—fast slipping under the domination of a new-made ruling class of wealth-lords and plutocrats—journey, not discontentedly, along the imperial highroad.

The preliminary work of empire-building has been accomplished—territory has been conquered; peoples have been subjected and a ruling class organized. The policy of imperialism has been accepted by the people, although they have not thought seriously of its consequences. They have set out, in good faith, as they believe, to seek for life, liberty and happiness. They do not yet realize that, along the road that they are now traveling, the journey will not be ended until they have worn themselves threadbare in their efforts to conquer the earth.

The American people,—lacking in political experience and in world wisdom; ignorant of the laws of economic and social change,—have committed themselves, unwittingly, to the world old task of setting up authority over those who have no desire to accept it, and of exacting tribute from those who do not wish to pay it.

The early stages of the journey led across a continent. The American people followed it eagerly. Now that the trail leads to other continents they are still willing to go.

"Manifest destiny" is the cry of the leaders. "We are called," echo the followers, and the nation moves onward.

There was some hesitancy among the American people during the Spanish War. Even the leaders were not ready then. Now the leaders are prepared—for markets, for trade, for investments. They are indifferent to political conquest, but economically they are prepared to go on—into Latin America; into Asia; into Europe. The war taught them the lesson and gave them an inkling of their power. So they move along the imperial highroad—followed by a people who have not yet learned to chant the songs of victory—but who are destined, at no very distant date, to learn victory's lessons and to pay victory's price. Along the path,—far away in the distance they see the earth like a ball, rolling at their feet. It is theirs if they will but reach out their hands to grasp it!

2. An Imperial People

This is the American people—locked in the arms of mighty economic and social forces; building industrial empires; compelled, by a world war, to reach out and save "civilization,"—capitalist civilization,—a people that, by its very ancestry, seems destined to follow the course of empire.

The sons and daughters of the native born American stock are, in the main, the descendants of the conquering, imperial races of the modern world. During recent times, three great empires—Spain, France and Great Britain—have dominated western civilization. It was these three empires that were responsible for the settlement of America. The past generation has seen the German empire rise to a position that has enabled her to shake the security of the world. The Germans were among the earliest and most numerous settlers of the American colonies. Those who boast colonial ancestry boast the ancestry of conquerors. The Anglo-Saxon-Teutonic races, the titular masters of the modern world; the races that have spread their power where-ever ships sail or trade moves or gain offers, furnished the bulk of the early immigrants to America.

The bulk of the early immigration to the United States was from Great Britain and Germany. The records of immigration (kept officially since 1820) show that between that year and 1840 the immigrants from Europe numbered 594,504, among them there were 358,994 (over half) from the British Isles, and 159,215 from Germany, making a total from the two countries of 518,209, or 87 percent of the immigrants arriving in the twenty-year period. During the next twenty years (1840-1860) the total of immigrants from Europe was 4,050,159, of which the British Isles furnished 2,386,846 (over half) and Germany 1,386,293, making, for these two countries, 94 percent of the whole immigration. Even during the years from 1860 to 1880, 82 percent of those who migrated to the United States hailed from Great Britain and Germany. American immigration, from 1820 to 1880, might, without any violence to facts, be described as Anglo-Teutonic, so completely does the British-German immigrant dominate this period.

Literally, it is true that the American people have been sired by the masters and would-be masters of the modern earth.

3. A Place in the Sun

The Americans, like many another growing people, have sought a place in the sun—widening their boundaries; grasping at promised riches. Unlike other peoples they have accomplished the task without any real opposition. Their "promised land" lay all about them, isolated from the factional warfare of Europe; virgin; awaiting the master of the Western World.

The United States has followed the path of empire with a facility unexampled in recent history. When has a people, caught in the net of imperialism, encountered less difficulty in making its imperial dream come true? None of the foes that the American people have encountered, in two centuries of expansion, have been worthy of the name. The Indians were in no position to withstand the onslaught of the Whites. The Mexicans were even less competent to defend themselves. The Spanish Empire crumpled, under attack, like an autumn leaf under the heel of a hunter. Practically for the taking, the American people secured a richly-stocked, compact region, with an area of three millions of square miles—the ideal site for the foundation of a modern civilization.

The area of the United States has increased with marvelous rapidity. At the outbreak of the Revolution (1776) the Colonies claimed a territory of 369,000 square miles. The Northwest Territory (275,000 square miles) and the area south of the Ohio River (205,000 square miles) were added largely as a result of the negotiations in 1782. The official figures for 1800 give the total area of the United States as 892,135 square miles. The Louisiana Purchase (1803) added 885,000 square miles at a cost of 15 millions of dollars. Florida, 59,600 square miles, was purchased from Spain (1819) for 5 millions of dollars; Texas, 389,000 square miles was annexed in 1845; the Oregon Country, 285,000 square miles, was secured by treaty in 1846; New Mexico and California, 529,000 square miles, were ceded by Spain (1848) and a payment of 15 millions was made by the United States; in 1853 the Gadsen Purchase added 30,000 square miles at a cost of ten millions of dollars. This completed the territorial possessions of the United States on the mainland (with the exception of Alaska) making a continental area of 3,026,798 square miles. Between 1776 and 1853 the area of the United States was increased more than eight fold. What other nation has been in a position to multiply its home territory by eight in two generations?

These vast additions to the continental possessions of the United States were made as the result of a trifling outlay. The most serious losses were involved in the Mexican War when the casualties included more than 13,000 killed and died of wounds and disease. The net money cost of the war did not exceed $100,000,000. In return for this outlay—including the annexation of Texas—the United States secured 918,000 square miles of land.[48]

There is no way to estimate the loss of life or the money cost of the Indian Wars. For the most part, the troops engaged in them suffered no more heavily than in ordinary police duty, and the costs were the costs of maintaining the regular army. The total money outlay for purchases and indemnities was about 45 millions of dollars. Within a century the American people gained possession of one of the richest portions of the earth's surfaces—a portion equal in area to more than three times the combined acreage of Belgium, France, Germany, Italy, Japan and the British Isles[49]—in return for an outlay in money and life that would not have provided for one first class battle of the Great War.

Additions to the territory of the country were made with equal facility during the period following the Civil War. Alaska was purchased from Russia for $7,200,000; from Spain, as a result of the War of 1898, the United States received the Philippines, Porto Rico, and some lesser islands, at the same time paying Spain $20,000,000; Hawaii was annexed and an indemnity of $10,000,000 was paid to Panama for the Canal strip. During the second half of the nineteenth century, 716,666 square miles were added to the possessions of the United States. The total direct cost of this territory in money was under forty millions. These gains involved no casualties with the exception of the small numbers lost during the Spanish-American and Philippine Wars.

One hundred and thirty years have witnessed an addition to the United States of more than two and a half million square miles of contiguous, continental territory, and three-quarters of a million square miles of non-contiguous territory. The area of the United States in 1900 was four times as great as it was in 1800 and more than ten times as great as the area of the Thirteen Original Colonies. For the imperialist, the last century and a half of American history is a fairyland come true.

Other empires have been won by the hardest kind of fighting, during which blood and wealth have been spent with a lavish hand. The empire of the French, finally crushed with the defeat of Napoleon, was paid for at such a huge price. The British Empire has been established in savage competition with Holland, Spain, France, Russia, the United States, Germany and a host of lesser powers. The empires of old—Assyria, Egypt, Rome—were built at an intolerable sacrifice. So terrible has been the cost of empire building to some of these nations that by the time they had succeeded in creating an empire the life blood of the people and the resources of the country were devoured and the empire emerged, only to fall an easy prey to the first strong-handed enemy that it encountered.

No such fate has overtaken the United States. On the contrary her path has been smoothed before her feet. Inhabiting a garden spot, her immense territory gains in the past hundred and fifty years have been made with less effort than it has cost Japan to gain and hold Korea or England to maintain her dominion over Ireland.

Once established, the old-world empire was not secure. If the territory that it possessed was worth having, it was surrounded by hungry-eyed nations that took the first occasion to band together and despoil the spoiler. The holding of an empire was as great a task as the building of empire—often greater because of the larger outlay in men and money that was involved in an incessant warfare. Little by little the glory faded; step by step militarism made its inroads upon the normal life of the people, until the time came for the stronger rival to overthrow the mighty one, or until the inrushing hordes of barbarians should blot out the features of civilization, and enthrone chaos once more.

How different has been the fate of the people of the United States! Possessed of what is probably the richest, for the purposes of the present civilization, of any territory of equal size in the world, their isolation has allowed them more than a century of practical freedom from outside interference—a century that they have been able to devote to internal development. The absence of greedy neighbors has reduced the expense of military preparation to a minimum; the old world has failed to realize, until within the last few years, what were the possibilities of the new country; vitality has remained unimpaired, wealth has piled up, industry has been promoted, and on each occasion when a greater extent of territory was required, it has been obtained at a cost that, compared with the experience of other nations, must be described as negligible.

So simple has been the process of empire building for the United States; so natural have been the stages by which the American Empire has been evolved; so little have the changes disturbed the routine of normal life that the American people are, for the most part, unaware of the imperial position of their country. They still feel, think and talk as if the United States were a tiny corner, fenced off from the rest of the world to which it owed nothing and from which it expected nothing.

The American Empire has been built, as were the palaces of Aladdin, in a night. The morning is dawning, and the early risers who were not even awakened from their slumbers by the sound of hammer and engine, are beginning to rub their eyes, and to ask one another what is the meaning of this apparition, and whether it is real.

4. The Will to Power

The forces of America are the forces of Empire,—the geography, the economic organization, the racial qualities—all press in the direction of imperialism. There is logic behind the two centuries of conquest in which the American people have been engaged; there is logic in the rise of the plutocracy. Now it remains for the rulers of America to accept the implications of imperialism,—to thrill with the will to power; to recognize and strengthen imperial purpose; to sell imperialism to the American people—in other words to follow the call of manifest destiny and conquer the earth.

The will to power is very old and very strong. Economic and social necessity on the one hand, and the driving pressure of human ambition and the love of domination on the other, have given it a front place in human affairs. The empires of the past were driven into being by this ardent force. As far back as history bears a record, one nation or tribe has made war on its more fortunately situated neighbor; one leader has made cause against his fellow ruler. The Egyptians and Carthaginians have conquered in Africa; the Persians, Assyrians and Babylonians conquered in Asia; the Macedonians, Greeks, Romans, Spanish, Dutch, French, and British built their empires on one or more of the five continents. Conqueror has succeeded conqueror, empire has followed empire. Spoils, domination, world power, have been the objects of their campaigns.

Each great nation grew from small beginnings. Each arose from some simple form of tribal or clan organization—more or less democratic in its structure; containing within itself a unified life and a simple folk philosophy.

From such plain beginnings empires have developed. The peasants, tending their fertile gardens along the borders of the Nile; the vine dressers of Italy, the husbandmen and craftsmen of France and the yeomen of Merry England had no desire to subjugate the world. If tradition speaks truth, they were slow to take upon themselves anything more than the defense of their own hearthstones. It was not until the traders sailed across the seas; not until stories were brought to them of the vast spoil to be had, without work, in other lands, that the peasants and craftsmen consented to undertake the task of conquest, subjugation and empire building.

The plain people do not feel the will to power. They know only the necessities of self-defense. It is in the ambitions of the leisure classes that the demands of conquest have their origin. It is among them that men dream of world empire.[50]

The plain people of the United States have no will to power at the present time. They are only asking to be let alone, in order that they may go their several ways in peace. They are babes in the world of international politics. For generations they have been separated by a great gulf of indifference from the remainder of the human race, and they crave the continuance of this isolation because it gives them a chance to engage, unmolested, in the ordinary pursuits of life.

The American people are not imperialists. They are proud of their country, jealous of her honor, willing to make sacrifices for their dear ones. They are to-day where the plain folk of Egypt, Rome, France and England were before the will to power gripped the ruling classes of those countries.

Far different is the position of the American plutocracy. As a ruling class the plutocracy feels the necessity of preserving and enlarging its privileges. Recently called into a position of leadership, untrained and in a sense unprepared, it nevertheless understands that its claim to consideration depends upon its ability to do what the ruling classes of Egypt, Rome, France and England have done—to build an empire.

Almost unconsciously, out of the necessities of the period, has come the structure of the American Empire. In essence it is an empire, although the plain people do not know it, and even the members of the plutocracy are in many instances unaware of its true character. Yet here, in a land dedicated to liberty and settled by men and women who sought to escape from the savage struggles of empire-ridden Europe, the foundations and the superstructure of empire appear.

1. The people of the United States have conquered and now hold possession of approximately three million square miles of continental territory that has been won by armed force from Great Britain, Mexico, Spain, and the American Indians. (The entire area of Europe is only 3,800,000 square miles.)

2. The people of the United States have conquered and now hold under their sway subject people who have enjoyed no opportunity for self-determination. A whole race—the African Negroes—was captured in its native land, transported to America and there sold into slavery. The inhabitants of the Philippine Islands were conquered by the armed forces of the United States and still are subject people.

3. The United States had developed a plutocracy—a property holding class, that is, to all intents and purposes, the imperialist class—controlling and directing public policy.

4. This plutocratic class is exploiting continental United States and its dependencies. After years of savage internal strife, it has developed a high degree of class consciousness, and led by its bankers, it is taking the fat of the land. The plutocrats, who have made the country their United States, are at the present moment busy disposing of their surplus in foreign countries. As they build their industrial empires, they broaden and deepen their power.

Thus is the round of imperialism complete. Here are the conquered territory, subject people, an imperial ruling class, and the exploitation, by this class, of the lands and peoples that come within the scope of their power. These are the attributes of empire—the characteristics that have appeared, in one form or another, through the great empires of the past and of the present day. Differing in their forms, they remain similar in the principles that they represent. They are imperialism.

5. Imperial Purpose

The building of international industrial empires by the progressive business men of the United States lays the foundation for whatever political imperialism is necessary to protect markets, trade and investment. Gathering floods of economic surplus are the driving forces which are guided by ambition and love of gain and power.

The United States emerged from the Great War in a position of unquestioned economic supremacy. With vast stores of all the necessary resources, amply equipped with capital, the country has entered the field as the most dangerous rival that the other capitalist nations must face. Possessed of everything, including the means of providing a navy of any reasonable size and an army of any necessary number, the United States looms as the dominating economic factor in the capitalist world.

Imperial policy is frequently bold, rough and at times frankly brutal and unjust. Where subject peoples and weaker neighbors submit to the dictates of the ruling power there is no friction. But where the subject peoples or smaller states attempt to assert their rights of self-determination or of independence, the empire acts as Great Britain has acted in Ireland and in India; as Italy and France have acted in Africa; as Japan has acted in Korea; as the United States has acted in the Philippines, in Hayti, in Nicaragua, and in Mexico.

Plain men do not like these things. Animated by the belief in popular rights which is so prevalent among the western peoples, the masses resent imperial atrocities. Therefore it becomes necessary to surround imperial action with such an atmosphere as will convince the man on the street that the acts are necessary or else that they are inevitable.

When the Church and the State stood together the Czar and the Kaiser spoke for God as well as for the financial interests. There was thus a double sanction—imperial necessity coupled with divine authority. Those who were not willing to accept the necessity felt enough reverence for the authority to bow their heads in submission to whatever policy the masters of empire might inaugurate.

The course of empire upon which the United States has embarked involves a complete departure from all of the most cherished traditions of the American people. Economic, political and social theories must all be thrust aside. Liberty, equality and fraternity must all be forgotten and in their places must be erected new standards of imperial purpose that are acceptable to the economic and political masters of present day American life.

The American people have been taught the language of liberty. They believe in freedom for self-determination. Their own government was born as a protest against imperial tyranny and they glory in its origin and speak proudly of its revolutionary background. Americans are still individualists. Their lives and thoughts both have been provincial—perhaps somewhat narrow. They profess the doctrine "Live and let live" and in a large measure they are willing and anxious to practice it.

How is it possible to harmonize the Declaration of Independence with the subjugation of peoples and the conquest of territory? If governments "derive their just powers from the consent of the governed," and if it is the right of a people to alter or to abolish any government which does not insure their safety and happiness, then manifestly subjugation and conquest are impossible.

The letter and the spirit of the Declaration of Independence contradict the letter and spirit of imperial purpose word for word and line for line. There can be no harmony between these two theories of social life.

6. Advertising Imperialism

Since the tradition of the people of the United States and the necessities of imperialism are so utterly at variance, it becomes necessary to convince the American people that they should abandon their traditions and accept a new order of society, under which the will to power shall be substituted for liberty and fraternity. The ruling class of imperial Germany did this frankly and in so many words. The English speaking world is more adroit.

The first step in the campaign to advertise and justify imperialism is the teaching of a blind my-country-right-or-wrong patriotism. In the days preceding the war the idea was expressed in the phrase, "Stand behind the President." The object of this teaching is to instill in the minds of the people, and particularly of the young, the principles of "Deutschland ueber alles," which, in translation, means "America first." There are more than twenty million children in the public schools of the United States who are receiving daily lessons in this first principle of popular support for imperial policy.

Having taken this first step and made the state supreme over the individual will and conscience, the imperial class makes its next move—for "national defense." The country is made to appear in constant danger from attack. Men are urged to protect their homes and their families. They are persuaded that the white dove of peace cannot rest securely on anything less than a great navy and army large enough to hold off aggressors. The same forces that are most eager to preach patriotism are the most anxious about national preparedness.

Meanwhile the plain people are taught to regard themselves and their civilization as superior to anything else on earth. Those who have a different language or a different color are referred to as "inferior peoples." The people of Panama cannot dig a canal, the people of Cuba cannot drive out yellow fever, the people of the Philippines cannot run a successful educational system, but the people of the United States can do all of these things,—therefore they are justified in interfering in the internal affairs of Panama, Cuba and the Philippines. When there is a threat of trouble with Mexico, the papers refer to "cleaning up Mexico" very much as a mother might refer to cleaning up a dirty child.

Patriotism, preparedness and a sense of general superiority lead to that type of international snobbery that says, "Our flag is on the seven seas"; or "The sun never sets on our possessions"; or "Our navy can lick anything on earth." The preliminary work of "Education" has now been done; the way has been prepared.

One more step must be taken, and the process of imperializing public opinion is complete. The people are told that the imperialism to which they have been called is the work of "manifest destiny."

7. Manifest Destiny

The argument of "manifest destiny" is employed by the strong as a blanket justification for acts of aggression against the weak. Each time that the United States has come face to face with the necessity of adding to its territory at the expense of some weak neighbor, the advocates of expansion have plied this argument with vigor and with uniform success.

The American nation began its work of territorial expansion with the purchase of Louisiana. Jefferson, who had been elected on a platform of strict construction of the Constitution, hesitated at an act which he regarded as "beyond the Constitution." (Jefferson's "Works," Vol. IV, p. 198.) Quite different was the language of his more imperialistic contemporaries. Gouverneur Morris said, "France will not sell this territory. If we want it, we must adopt the Spartan policy and obtain it by steel, not by gold."[51] During February, 1803, the United States Senate debated the closing of the Mississippi to American commerce. "To the free navigation of the Mississippi we had an undoubted right from nature and from the position of the Western country,"[52] said Senator Ross (Pennsylvania) on February 14. On February 23rd Senator White (Delaware) went a step farther: "You had as well pretend to dam up the mouth of the Mississippi, and say to the restless waves, 'Ye shall cease here, and never mingle with the ocean,' as to expect they (the settlers) will be prevented from descending it."[53] On the same day (February 23rd) Senator Jackson (Georgia) said: "God and nature have destined New Orleans and the Floridas to belong to this great and rising Empire."[54]

God, nature and the requirements of American commerce were the arguments used to justify the purchase, or if necessary, the seizure of New Orleans. The precedent has been followed and the same arguments presented all through the century that followed the momentous decision to extend the territory of the United States.

Some reference has been made to the Mexican War and the argument that the Southwest was a "natural" part of the territory of the United States. The same argument was made in regard to Cuba and by the same spokesmen of the slave-power. Stephen A. Douglas (New Orleans, December 13, 1858) was asked:

"How about Cuba?"

"It is our destiny to have Cuba," he answered, "and you can't prevent it if you try."[55]

On another occasion (New York, December, 1858) Douglas stated the matter even more broadly:

"This is a young, vigorous and growing nation and must obey the law of increase, must multiply and as fast as we multiply we must expand. You can't resist the law if you try. He is foolish who puts himself in the way of American destiny."[56]

President McKinley stated that the Philippines, like Cuba and Porto Rico, "were intrusted to our hands by the Providence of God" (Boston, February 16, 1899), and one of his fellow imperialists—Senator Beveridge of Indiana—carried the argument one step farther (January 9, 1900) when he said in the Senate (Congressional Record, January 9, 1900, p. 704): "The Philippines are ours forever.... And just beyond the Philippines are China's illimitable markets. We will not retreat from either. We will not repudiate our duty to the archipelago. We will not abandon our opportunity in the Orient. We will not renounce our part in the mission of our race, trustee, under God, of the civilization of the world."

Manifest destiny is now urged to justify further acts of aggression by the United States against her weaker neighbors. The Chicago Tribune, discussing the Panama Canal and its implications, says editorially (May 5, 1916): "The Panama Canal has gone a long way towards making our shore continuous and the intervals must and will be filled up; not necessarily by conquest or even formal annexation, but by a decisive control in one form or another."

Here the argument of manifest destiny is backed by the argument of "military necessity,"—the argument that led Great Britain to possess herself of Gibraltar, Suez and a score of other strategic points all round the earth, and to maintain, at a ruinous cost, a huge navy; the argument that led Napoleon across Europe in his march of bloody, fatal triumph; the argument that led Germany through Belgium in 1914—one of the weakest and yet one of the most seductive and compelling arguments that falls from the tongue of man. Because we have a western and an eastern front, we must have the Panama Canal. Because we have the Panama Canal, we must dominate Central America. The next step is equally plain; because we dominate Central America and the Panama Canal, there must be a land route straight through to the Canal. In the present state of Mexican unrest, that is impossible, and therefore we must dominate Mexico.

The argument was stated with persuasive power by ex-Senator Albert J. Beveridge (Collier's Weekly, May 19, 1917). "Thus in halting fashion but nevertheless surely, the chain of power and influence is being forged about the Gulf. To neglect Mexico is to throw away not only one link but a large part of that chain without which the value and usefulness of the remainder are greatly diminished if indeed not rendered negligible." By a similar train of logic, the entire American continent, from Cape Horn to Bering Sea can and will be brought under the dominion of the United States.

Some destiny must call, some imperative necessity must beckon, some divine authority must be invoked. The campaign for "100 percent Americanism," carefully thought out, generously financed and carried to every nook and corner of the United States aims to prove this necessity. The war waged by the Department of Justice and by other public officers against the "Reds" is intended to arouse in the American people a sense of the present danger of impending calamity. The divine sanction was expressed by President Wilson in his address to the Senate on July 10, 1919. The President discussed the Peace Treaty in some of its aspects and then said, "It is thus that a new responsibility has come to this great nation that we honor and that we would all wish to lift to yet higher service and achievement. The stage is set, the destiny disclosed. It has come about by no plan of our conceiving but by the hand of God who has led us into this war. We cannot turn back. We can only go forward, with lifted and freshened spirit to follow the vision."

8. The Open Road

The American people took a long step forward on November 2, 1920. The era of modern imperialism, begun in 1896 by the election of McKinley, found its expression in the annexation of Hawaii; the conquest of Cuba and the Philippines; the seizure of Panama, and a rapid commercial and financial expansion into Latin America. In 1912 the Republicans were divided. The more conservative elements backed Taft for reelection. The more aggressive group (notably United States Steel) supported Roosevelt. Between them they divided the Republican strength, and while they polled a total vote of 7,604,463 as compared with Wilson's 6,293,910, the Republican split enabled Wilson to secure a plurality of 2,173,512, although he had less than half of the total vote.

President Wilson entered office with the ideals of "The New Freedom." He was out to back the "man on the make," the small tradesman and manufacturer; the small farmer; the worker, ambitious to rise into the ranks of business or professional life. With the support, primarily, of little business, Wilson managed to hold his own for four years, and at the 1916 election to poll a plurality, over the Republican Party, of more than half a million votes. He won, however, primarily because "he kept us out of war." April, 1917, deprived him of that argument. His "New Freedom" doctrines, translated into international politics (in the Fourteen Points) were roughly handled in Paris. The country rejected his leadership in the decisive Congressional elections of 1918, and he and his party went out of power in the avalanche of 1920, when Harding received a plurality nearly three times as great as the highest one ever before given a presidential candidate (Roosevelt, in 1904). Every state north of the Mason and Dixon Line went Republican. Tennessee left the Solid South and joined the same party. The Democrats carried only eleven states—the traditional Democratic stronghold.

The victory of Harding is a victory for organized, imperial, American business. The "man on the make" is brushed aside. In his place stands banker, manufacturer and trader, ready to carry American money and American products into Latin America and Asia.

Before the United States lies the open road of imperialism. Manifest destiny points the way in gestures that cannot be mistaken. Capitalist society in the United States has evolved to a place where it must make certain pressing demands upon neighboring communities. Surplus is to be invested; investments are to be protected, American authority is to be respected. All of these necessities imply the exercise of imperial power by the government of the United States.

Capitalism makes these demands upon the rulers of capitalist society. There is no gainsaying them. A refusal to comply with them means death.

Therefore the American nation, under the urge of economic necessity; guided half-intelligently, half-instinctively by the plutocracy, is moving along the imperial highroad, and woe to the man that steps across the path that leads to their fulfillment. He who seeks to thwart imperial destiny will be branded as traitor to his country and as blasphemer against God.

FOOTNOTES:

[48] "New American History," A. B. Hart. American Book Co., 1917, p. 348.

[49] The total area of these countries, exclusive of their colonies, is 807,123 square miles.

[50] See "Theory of the Leisure Class," Thorstein Veblen. New York, Huebsch, 1918, Ch. 10.

[51] "A History of Missouri," Louis Houck. Chicago, R. R. Donnelly & Sons, 1908, vol. II, p. 346.

[52] "History of Louisiana," Charles Gayarre. New Orleans, Hansell & Bros., Ltd., 1903, vol. III, p. 478.

[53] Ibid., p. 485.

[54] Ibid., p. 486.

[55] McMaster's "History of the American People." Vol. VIII, p. 339.

[56] Ibid., p. 339.



XIII. THE UNITED STATES AS A WORLD COMPETITOR

1. A New World Power

Youngest among the great nations, the United States holds a position of immense world power. Measured in years and compared with her sister nations in Europe and Asia, she is a babe. Measured in economic strength she is a burly giant. Young America is, but mighty with a vast economic strength.

An inexorable destiny seems to be forcing the United States into a position of international importance. Up to the time of the Spanish War, she played only a minor part in the affairs of the world. The Spanish War was the turning point—the United States as a borrowing nation gave way then, to the United States as an investing nation. Economic forces compelled the masters of economic life to look outside of the country for some of their business opportunities.

Since the Civil War the United States has been preparing herself for her part in world affairs. During the thirty years that elapsed between 1870 and 1900 she emerged from a position of comparative economic inferiority to take a position of notable economic importance. Between the years 1870 and 1900 the population of the United States increased 97 per cent. During the same period the annual production of wheat increased from 236 million bushels to 522 million bushels; the annual production of corn from 1,094 to 2,105 million bushels; the annual production of cotton from 4,352 to 10,102 thousand bales; the annual production of coal from 29 to 241 million tons; the annual production of petroleum from 221 to 2,672 million gallons; the annual production of pig iron from 1,665 to 13,789 thousand tons; the annual production of steel from 68 to 10,188 thousand tons; the annual production of copper from 12 to 271 thousand tons, and the production of cement (there is no record for 1870) rose from two million barrels in 1880 to 17 million barrels in 1900. Thus while the production of food more than kept pace with the increase of population, the production of those commodities upon which the new industry depends—coal, petroleum, iron, steel, copper and cement—increased many times more rapidly than the population. During one brief generation the United States, with almost unbelievable rapidity, forged ahead in the essentials for supremacy in the new world of industry.

By the time of the Spanish War (1898) American industries had found their stride. During the next fourteen years they were overtaking their European competitors in seven league boots. Between 1900 and 1914 while the population of the United States increased by 30 per cent,—

Wheat production increased 70 per cent Corn production increased 27 " " Cotton production increased 58 " " Coal production increased 90 " " Petroleum production increased 317 " " Pig Iron production increased 69 " " Steel production increased 131 " " Copper production increased 89 " " Cement production increased 406 " "

The United States was rushing toward a position of economic world power before the catastrophe of 1914 hurled her to the front, first as a producer (at immense profits) for the Allies, and later as the financier of the final stages of the War.

The economic position that is now held by the United States among the great competing nations of the world can be in some measure suggested—it cannot be adequately stated—by a comparison of the economic position of the United States and some of the other leading world empires.

Neither the geographical area of the United States nor the numerical importance of its people justifies its present world position. The country, with 8 per cent of the area and 6 per cent of the population of the world, looms large in the world's economic affairs,—how large will appear from an examination of certain features that are considered essential to economic success, such as resources, capital, products, shipping, and national wealth and income.

2. The Resources of the United States

The most important resource of any country is the fertile, agricultural land. Figures given in the Department of Agriculture Year Book for 1918 (Table 319) show the amount of productive land,—including, beside cultivated land, natural meadows, pastures, forests, woodlots, etc., of the various countries according to pre-war boundary lines. The total of such productive land for the 36 leading countries of the world was 4,591.7 million acres. Russia, including Siberia, had almost a third of this total (1,414.7 million acres). The United States came second with 878.8 million acres, or 19 per cent of the total available productive land. Third in the list was Argentine with 537.8 million acres. British India came fourth with 465.7 million acres. Then there followed in order Austria-Hungary, Germany, France, Australia, Spain and Japan. Austria-Hungary, Germany and France combined had almost exactly four hundred million acres of productive land or less than half the productive area of the United States.

The United States, in the area of productive land, is second only to Russia. In the area of land actually under cultivation, however, it stands first, with Russia a close second and British India a close third,—the amounts of cultivated land in each of these countries being 293.8 million acres, 279.6 million acres, and 264.9 million acres respectively. These three countries together contain 64 per cent of the 1,313.8 million acres of cultivated land of the world. The United States alone contains 22 per cent of the total cultivated land.

The total forest acreage available for commercial purposes is greatest in Russia (728.4 million acres). The United States stands second with 400 million acres and Canada third with 341 million acres. The Chief of Forest Investigations of the United States Department of Agriculture (Letter of Oct. 11, 1919) places the total forest acreage of both Brazil and Canada ahead of the United States. In the case of Brazil no figures are available showing what portion of the 988 million acres of total area is commercially available. Canada with a total forest acreage of 800 million acres has less timber commercially available than the United States with a total forest area of 500 million acres.

The iron ore reserves of the world are estimated at 91,000 million tons ("Iron Ores," Edwin C. Eckel. McGraw Hill Book Co., 1914, pp. 392-3). Of this amount 51,000 millions are placed in Asia and Africa; 12,000 million tons in Europe, and 14,800 million tons in North America. The United States alone is credited with 4,260 million tons or about 5 per cent of the world's supply. The United States Geological Survey (Bulletin 666v) estimates the supply of the United States at 7,550 million tons; the supply in Newfoundland, Mexico and Cuba as 7,000 million tons, and that in South America as 8,000 million tons as against 12,000 million tons for Europe. This estimate would give the United States alone 8 per cent of the iron ore of the world. It would give North America 15 per cent and the Western Hemisphere 25 per cent, as against 15 per cent for Europe.

Iron ore furnishes the material out of which industrial civilization is constructed. Until recently the source of industrial power has been coal. Even to-day petroleum and water play a relatively unimportant role. Coal still holds the field.

The United States alone contains 3,838,657 million tons—more than half of the total coal reserves of the world. ("Coal Resources of the World." Compiled by the Executive Committee, International Geological Congress, 1913, Vol. I, p. XVIII ff.) North America is credited with 5,073,431 million tons or over two-thirds of the world's total coal reserves (7,397,553 millions of tons). The coal reserve of Europe is 784,190 million tons or about one-fifth of the coal reserves of the United States alone.

Figures showing the amount of productive land and of timber may be verified. Those dealing with iron ore and coal in the ground are mere estimates and should be treated as such. At the same time they give a rough idea of the economic situation. Of all the essential resources,—land, timber, iron, copper, coal, petroleum and water-power,—the United States has large supplies. As compared with Europe, her supply of most of them is enormous. No other single country (the British Empire is not a single country) that is now competing for the supremacy of the world can compare with the United States in this regard, and if North America be taken as the unit of discussion, its preponderance is enormous.

3. The Capital of the United States

The United States apparently enjoys a large superiority over any single country in its reserves of some of the most essential resources. The same thing is true of productive machinery.

Figures showing the actual quantities of capital are available in only a small number of cases. Estimates of capital value in terms of money are useless. It is only the figures which show numbers of machines that really give a basis for judging actual differences.

Live stock on farms, the chief form of agricultural capital, is reported for the various countries in the Year Book of the United States Department of Agriculture. The United States (1916) heads the list with 61.9 million cattle; 67.8 million hogs; 48.6 million sheep and goats, and 25.8 million horses and mules,—204 million farm animals in all. The Russian Empire (including Russia in Asia) is second (1914) with 52.0 million cattle; 15.0 hogs; 72.0 million sheep and goats, and 34.9 horses and mules,—174 million farm animals in all. British India (1914) reports more cattle than any other country (140.5 million); she is also second in the number of sheep and goats with 64.7 millions, but she has no hogs and 1.9 million horses. Argentina (1914) reports 29.5 million cattle; 2.9 million sheep and goats; and 8.9 million horses and mules. The number of animals on European farms outside of Russia is comparatively small. Germany (1914), United Kingdom (1916), Austria-Hungary (1913), and France (1916) reported 61.8 million cattle, 46.6 million hogs, 60.8 million sheep and goats, and 11.5 million horses and mules, making a total of 180.7 million farm animals. These four countries with a population of about 206 million persons, had less live stock than the United States with its population (1916) of about 100 millions.

It would be interesting to compare the amount of farm machinery and farm equipment of the United States with that of other countries. Unfortunately no such figures are available.

The figures showing transportation capital are fairly complete. (Statistical Abstr. 1918, pp. 844-5.) The total railroad mileage of the world is 729,845. More than one-third of this mileage (266,381 miles) is in the United States. Russia (1916) comes second with 48,950 miles; Germany (1914) third, with 38,600 miles and Canada (1916) fourth with 37,437 miles.

The world's total mileage of telegraph wire (Ibid.) is 5,816,219, of which the United States has more than a fourth (1,627,342 miles). Russia (1916) is second with 537,208 miles; Germany (1914) is third with 475,551 miles; and France fourth with 452,192 miles.

The Bureau of Railway Economics has published a compilation on "Comparative Railway Statistics" (Bulletin 100, Washington, 1916) from which it appears that the United States is far ahead of any other country in its railroad equipment. The total number of locomotives in the United States was 64,760; in Germany 29,520; in United Kingdom 24,718; in Russia (1910) 19,984; and in France 13,828. No other country in the world had as many as ten thousand locomotives. If these figures also showed the locomotive tonnage as well as the number, the lead of the United States would be even more decided as the European locomotives are generally smaller than those used in the United States. This fact is clearly brought out by the figures from the same bulletin showing freight car tonnage (total carrying capacity of all cars). For the United States the tonnage was (1913) 86,978,145. The tonnage of Germany was 10.7 millions; of France 5.0 millions; of Austria-Hungary 3.8 millions. The figures for the United Kingdom were not available.

The United States also takes the lead in postal equipment. (Stat. Abstr., 1918, pp. 844-5.) There are 324,869 post offices in the world; 54,257 or one-sixth in the United States. The postal routes of the world cover 2,513,997 miles, of which 450,954 miles are in the United States. The total miles of mail service for the world is 2,061 millions. Of this number the United States has 601.3 millions.

The most extreme contrast between transportation capital in the United States and foreign countries is furnished by the number of automobiles. Facts and Figures, the official organ of the National Automobile Chamber of Commerce (April, 1919) estimates the total number of cars in use on January 1, 1917 as 4,219,246. Of this number almost six-sevenths (3,500,000) were in use in the United States. The total number of cars in Europe as estimated by the Fiat Press Bureau, Italy, was 437,558, or less than one-seventh of the number in use in the United States. Automobile distribution is of peculiar significance because the industry has developed almost entirely since the Spanish-American War and therefore since the time when the United States first began to develop into a world power.

The world's cotton spindleage in 1919 is estimated at 149.4 million spindles. (Letter from T. H. Price 10/6/19.) Of this total Great Britain has 57.0 millions; the United States 33.7 millions; Germany 11.0 millions; Russia 8.0 millions, and France and India each 7.0 millions.

No effort has been made to cite figures showing the estimated value of various forms of capital, because of the necessary variations in value standards. Enough material showing actual quantities of capital has been presented to prove that in agriculture, in transportation, in certain lines of manufacturing the United States is either at the head of the list, or else stands in second place. In transportation capital (particularly automobiles) the lead of the United States is very great.

If figures were available to show the relative amounts of capital used in mining, in merchandising, and in financial transactions they would probably show an equally great advantage in favor of the United States. In this connection it might not be irrelevant to note that in 1915 the total stock of gold money in the world was 8,258 millions of dollars. More than a quarter (2,299 millions) was in the United States. The total stock of silver money was 2,441 millions of dollars of which 756 millions (nearly a third) was in the United States. (Stat. Abstr., 1918, pp. 840-1.)

4. Products of the United States

Figures showing the amounts of the principal commodities produced in the United States are far more complete than those covering the resources and capital. They are perhaps the best index of the present economic position of the United States in relation to the other countries of the world.

The wheat crop of the world in 1916 was 3,701.3 million bushels. Russia, including Siberia, was the leading producer with 686.3 million bushels. The United States was second with 636.7 million bushels or 17 per cent of the world's output. British India, the third wheat producer, had a crop in 1916 of 323.0 million bushels. Canada, with 262.8 million bushels, was fourth on the list. Thus Canada and the United States combined produced almost exactly one-fourth of the world's wheat crop.

As a producer of corn the United States is without a peer. The world's corn crop in 1916 was 3,642.1 million bushels. Two-thirds of this crop (2,566.9 million bushels) was produced in the United States.

The position of the United States as a producer of corn is almost duplicated in the case of cotton. The Statistical Abstract published by the British Government (No. 39, London, 1914, p. 522) gives the world's cotton production as 21,659,000 bales (1912). Of this number the United States produced 14,313,000—almost exactly two-thirds. British India, which ranks second, reported a production of 3,203,000 bales. Egypt was third with 1,471,000 bales.

About one-tenth of the world's output of wool is produced in the United States. World production for 1917 is placed at 2,790,000 pounds. (Bulletin, National Association of Wool Manufacturers. 1918, p. 162.) Australia heads the list with a production of 741.8 million pounds. Russia, including Siberia, comes second with 380.0 million pounds. The United States is third with 285.6 million pounds and Argentina fourth with 258.3 million pounds.

The United States leads the world in timber production. "Last winter we estimated that the United States has been cutting about 50 per cent of the total world's supply of lumber." (Letter from Chief of Forest Investigation. U. S. Forest Service. Oct. 11, 1919.) The same letter gives the present annual timber cut. The United States 12.5 billion cubic feet; Russia 7.1 billion cubic feet; Canada 3.0 billion cubic feet; Austria-Hungary 2.7 billion cubic feet.

A third of the iron ore produced in the world in 1912 came from the United States. The world's production in that year was 154.0 million tons (British Statistical Abstract, No. 39, p. 492). The United States produced 56.1 million tons or 36 per cent of the whole; Germany produced 32.7 million tons; France 19.2 million tons; the United Kingdom 14.0 million tons. No other country is reported as producing as much as ten million tons.

The position of the United States as a producer of iron and steel was greatly enhanced by the war. The Daily Consular and Trade Reports (July 9, 1919, p. 155) give a comparison between the world's steel and iron output in 1914 and 1918. In 1914 the United States produced 23.3 million tons of pig iron; Germany produced 14.4 million tons; the United Kingdom 8.9 million tons, and France 5.2 million tons. The United States was thus producing 45 per cent of the pig iron turned out in these four countries. For 1918 the pig iron production of the United States was 39.1 million tons. That of the other three countries was 22.0 million tons. In that year the United States produced 64 per cent of the pig iron product of these four countries. An equally great lead is shown in the case of steel production. In 1914 the United States produced 23.5 million tons of steel. Germany, the United Kingdom and France produced 27.6 million tons. By 1918 the production of the United States had nearly doubled (45.1 million tons).

The total pig iron output of the world for 1917 was placed at 66.9 millions of tons. The world's production of steel in 1916 was placed at 83 million tons. The United States produced considerably more than half of both commodities. ("The Mineral Industry During 1918." New York, McGraw Hill Book Co., 1919, pp. 379-80).

The two chief forms of power upon which modern industry depends are petroleum and coal. The United States is the largest producer of both of these commodities. The world's production of petroleum in 1917 was 506.7 million barrels (Mineral Resources, 1917, Part II, p. 867). Of this amount the United States produced 335.3 million barrels or 66 per cent of the total. The second largest producer, Russia, and the third, Mexico, are credited with 69 million barrels and 55.3 million barrels respectively.

As a coal producer the United States stands far ahead of all other nations. The United States Geological Survey (Special Report, No. 118) placed the total coal production of the world in 1913 at 1,478 million tons. Of this amount 569.9 million tons (38.5 per cent) were produced in the United States. The production for Great Britain was 321.7 million tons; for Germany 305.7 million tons; for Austria-Hungary 60.6 million tons. No other country reported a production of as much as fifty million tons. In 1915 the United States produced 40.5 per cent of the world's coal; in 1917 44.2 per cent; in 1918 46.2 per cent.

Copper has become one of the world's chief metals. Two-thirds of all the copper is produced in the United States. Copper production in 1916 totaled 3,107 million pounds (Mineral Resources in the United States, 1916, part I, p. 625). The production for the United States was 1,927.9 million pounds (62 per cent of the whole). The second largest producer, Japan, turned out 179.2 million pounds.

The precious metals, gold and silver, are largely produced in the United States. The world's gold production for 1917 was 423.6 million dollars (Mineral Resources, 1917, p. 613). Africa produced half of this amount (214.6 million dollars). The United States was second with a production of 83.8 million dollars (20 per cent of the whole). The same publication (p. 615) gives the world's silver production in 1917 as 164 million ounces. 77.1 million ounces (43 per cent) were produced in the United States. The second largest producer was Mexico, 31.2 million ounces; and the third Canada, with 22.3 million ounces. These three North American countries produced 76 per cent of the world's output of silver.

Judge Gary, speaking at the Annual Meeting of the Iron and Steel Institute (1920) put the situation in this summary form:—

As frequently stated, notwithstanding the United States has only 6% of the world's population and 7% of the world's land, yet we produce:

20% of the world's supply of gold, 25% of the world's supply of wheat, 40% of the world's supply of iron and steel, 40% of the world's supply of lead, 40% of the world's supply of silver, 50% of the world's supply of zinc, 52% of the world's supply of coal, 60% of the world's supply of aluminum, 60% of the world's supply of copper, 60% of the world's supply of cotton, 66% of the world's supply of oil, 75% of the world's supply of corn, 85% of the world's supply of automobiles.

With the exception of rubber, practically all of the essential raw materials and food products upon which modern industrial society depends are produced largely in the United States. With less than a sixteenth of the world's population, the United States produced from a fifth to two-thirds of most of the world's essential products.

5. Shipping

The rapid increase in the foreign trade of the United States created a demand for American shipping facilities. Before the Civil War the United States held a place as a maritime nation. Between the Civil War and the war with Spain the energies of the American people were devoted to internal improvement. With the advent of expansion that followed the Spanish-American War, came an insistent demand that the United States develop a merchant marine adequate to carry its own foreign trade.

The United States Commissioner of Navigation in his report for 1917 (p. 78) gives the net gross tonnage of steam and sailing vessels in 1914 as 45 million tons in all. The tonnage of Great Britain was 19.8 million tons; of Germany 4.9 million tons; of the United States 3.5 million tons; of Norway 2.4 million tons; of France 2.2 million tons; of Japan 1.7 million tons, and of Italy 1.6 million tons.

The war brought about great changes in the distribution of the world's shipping. Germany was practically eliminated as a shipping nation. The necessity of recouping the submarine losses, and of transporting troops and supplies led the United States to adopt a ship-building program that made her the second maritime country of the world. Lloyd's Register of Shipping gives the steam tonnage of the United Kingdom as 18,111,000 gross tons in June, 1920. For the same month the tonnage of the United States is given as 12,406,000 gross tons. Japan comes next with a tonnage of 2,996,000 gross tons. According to the same authority the United Kingdom had 41.6 per cent of the world's tonnage in 1914 and 33.6 per cent in 1920; while the United States had 4.7 per cent of the world's tonnage in 1914 and 24 per cent in 1920.

6. Wealth and Income

The economic advantages of the United States enumerated in this chapter inevitably are reflected in the figures of national wealth and national income. While these figures are estimates rather than conclusive statements they are, nevertheless, indicative of a general situation.

During the war a number of attempts were made to approximate the pre-war wealth and income of the leading nations. Perhaps the most ambitious of these efforts was contained in a paper on "Wealth and Income of the Chief Powers" read before the Royal Statistical Society. (See The London Economist, May 24, 1919, pp. 958-9.) This and other estimates were compiled by L. R. Gottlieb and printed in the Quarterly Journal of Economics for Nov. 1919. Mr. Gottlieb estimates the pre-war national wealth of Great Britain, France, Italy, Japan, Russia, Belgium, Germany, Austria-Hungary, Turkey and Bulgaria at 366,100 million dollars. At the same time the wealth of the United States was estimated at 204,400 million dollars. Thus the wealth of the United States was equal to about 36 per cent of the total wealth of the great nations in question.

The same article contains an estimate of pre-war national incomes for these great powers. The total is placed at 81,100 million dollars. The income for the United States is placed at 35,300 million dollars, or more than 43 per cent of the total.

The war has made important changes in the wealth and income of the principal powers. The wealth and income of Europe have been reduced, while the wealth and income of the United States have been greatly increased. This increase is rendered doubly emphatic by the demoralization in foreign exchange which gives the American dollar a position of unique authority in the financial world.

The latest wealth estimates (Commerce and Finance, May 26, and July 28, 1920) in terms of dollars at their purchasing-power value, makes the wealth of the whole British Empire 230 billions of dollars; of France, 100 billions; of Russia, 60 billions; of Italy, 40 billions; of Japan, 40 billions; of Germany, 20 billions, and of the United States, 500 billions. These figures are subject to alteration with the alteration of the exchange rates, but they indicate the immense advantage that is possessed by the business men of the United States over the business men of any or of all of the other nations of the world.

Before the war, the British were the chief lenders in the international field. In 1913 Great Britain had about 20 billions of dollars of foreign investments, as compared with 9 billions for France and about 6 billions for Germany. At the end of 1920, the British foreign investments had shrunk to a fraction of their former amount, while the United States, from the position of a debtor nation, had become the leading investing nation of the world, with over 9 billions of dollars loaned to the Allied governments; with notice loans estimated at over 10 billions; with foreign investments of 8 billions, and goods on consignment to the extent of 2 billions.

The United States therefore began the year 1921 with a greater financial lead, by several times over, than that which she held before the war, when she was credited with a greater wealth and a larger income than that of any other nation in the world. The extent of the advantage enjoyed by the United States at the end of 1920 cannot be stated with any final accuracy, but its proportions are staggering.

7. The Economic Position of the United States

Economically the United States is a world power. She occupies one of the three great geographical areas in the temperate zone. If she were to include Canada, Mexico and Central America—the territory north of the Canal Zone—she would have the greatest unified body of economic advantage anywhere in the world.

The United States is rich in practically all of the important industrial resources. She has a large, relatively homogeneous population, a great part of which is directly descended from the conquering races of the world. Almost all of the essential raw materials are produced in the United States, and in relatively large quantities. The period since the Spanish War has witnessed a rapid increase in wealth production. The war of 1914 resulted in an even greater increase in shipping. The investable surplus is greater in the United States than in any other nation, and in amount as well as in percent the national debt is less than that in any other important nation except Japan. Economically the position of the United States is unique. The masters of her industries hold a position of great advantage in the capitalist world.



XIV. THE PARTITION OF THE EARTH

1. Economic Power and Political Authority

Economically the United States is a world power. Her world position in politics follows as a matter of course.

While the American people were busy with internal development, they played an unimportant part in world affairs. They were not competing for world trade, because they had relatively little to export; they were not building a merchant marine because of the smallness of their trading activities; they were not engaged in the scramble after undeveloped countries because, with an undeveloped country of their own, calling continually for enlarged investments, they had little surplus capital to employ in foreign enterprises.