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United States and where the machinery of production is as highly developed as it is here, it is a confession of failure to admit that any one who really tries should be unable to earn a living wage. The fact that there are some among us who are so very rich and so many who are so very poor has led to the general assumption that the total amount of money made each year in this country is sufficient for everyone's needs if it were only distributed better. This is not as true as is generally supposed. According to the income tax returns for 1916 there were only 437,036 people in the United States who had incomes of more than $3,000. Of these, 307,700 had incomes of less than $10,000. If all the income of the 437,036, which amounted to about $6,800,000,000, were divided amongst the population of the United States it would amount to about $70 apiece. There is no doubt that endeavors to attain a somewhat better distribution of the nation's income should be made, but the more fundamental thing is to make a programme for an enlargement of the national income so that the standard of living in this country, already higher than in most other parts of the world, can be still further raised and so that the nation will be rich enough to keep the lowest level of life among us out of the depths that its ignorance and our neglect has allowed it to reach. A constructive national programme of increased production and more equitable distribution is needed with us as well as in Great Britain. If it is planned and put into operation like the Federal Reserve banking system, we can have it with little trouble. If it is not done that way we shall probably have years of some other Mr. Bryan with some industrial 16 to I to reckon with.

Will Things Be the Same After the War?

NA year of war we have achieved a great

supply of the country. It fixes the price of wheat, and of various other commodities and stands ready to commandeer any material or any manufacturing plant that it wants, just as it drafts men for the army.

In war time what used to be considered the rights of private business do not exist. But in truth the Government always had the right to do in either peace or war anything which it has done now. In peace times we did not consider these measures necessary.

In war we

do. There is, however, quite a tendency to feel that if these extensions of Government activity are useful in war they would be equally effective in peace.

If we were able and willing during peace to pay as much for the added production as we have to do and are glad to do in war, the analogy might hold good. But if in peace we should build cantonments or shipyards or factories at the prices we pay in war the country could not long survive. The two factors which make Government control necessary in war time are arbitrary power and unlimited money. It is against public policy that any private organization should have either of these attributes. The Government has both. Therefore, when things must be done rapidly, on a big scale, and regardless of expense the Government must step in.

But when the emergency is over and a new set of conditions comes into force, these particular Government attributes are not necessarily beneficial. Normally it is advantageous to the country to have production and transportation conducted with the greatest economy and as little arbitrary power as possible. How much the Government can do and meet these requirements is a question which will have to be decided without regard to Government activity in war. The first test of the desire for Government ownership and operation is likely to come over the railroads. Railroad rates practically amount to taxation. The power

number of what in peaceful times would to fix these rates amounts to the power to tax.

be considered monumental changes with little discussion and less opposition.

No man can now export or import anything without a license; one has even to give a good excuse before being allowed to leave the country personally. No company can issue securities in large quantity without Government permission. The Government has taken control of all railroads and shipping. It has formed a monopoly to control the whole sugar

hands of private companies who are not responsible to the Government-which is why the Interstate Commerce Commission supervised rates. On the other hand the Commission's policy of being responsible for keeping rates down without much consideration for the maintenance or improvement of the roads has pretty well shown itself to be a failure. To go back to Commission control on the old basis

would be to invite disaster to the roads. To go back to unregulated private control would be to invite abuse of the public. Almost all experience here and abroad has been that Government ownership and operation is inefficient in the long run. What is left? There are still various ways of coöperating between public and private organization which have given evidence of being better than either, separately. The public ownership and the private operation of the New York and Boston subways has been an improvement over any other transportation arrangements in those cities. The private ownership and operation of the Baltimore street railways with the provision that all profits above a reasonable per cent. shall be divided between the railroad company and the city has worked admirably. Under this arrangement, if the car lines are charging unduly, the city has the power to reduce fares but it is not likely to do so unreasonably because such a reduction would cut off the revenue the city gets from its division of the profits and make a direct tax necessary to make up this loss. The car lines also are less likely to declare more dividends than is wise if they have to divide with the city. The tendency has been to put back money into the property for maintenance and improvement. This practise means good public service.

This Baltimore experience at least furnishes an interesting suggestion for the future solution of our railroad problem, under which our former attempts to prevent railroad combinations need not be continued.

After the war there will probably be a good many Government owned and operated ships which will remain in that status unless they become too expensive. If they should begin to lose much money they would probably revert to private management as have the railroads built by the various states.

There is little reason to suppose that price fixing, export licensing, and similar purely war measures will continue after the war.

On the other hand, graduated taxes which will bear heavily on large incomes and on inheritances have probably and properly come to stay. There must be good rewards for energy, ability, and genius, but there is no reason why we should overpay our successful men. The country could have had all of Mr. Carnegie's ability for a third the sum it paid him. If there had been a high tax on large incomes it might encourage Rockefellers or

Schwabs to retire earlier than they now do, but this is unlikely, for after a certain point is reached these men continue in business not so much for the money as for the sake of the game and the feeling of power and success.

After this war, as after other wars, taxes will be high and labor will be scarce. If we are wise we shall make a better distribution of taxes than heretofore, and also devise some system of education or improvements in production for making labor more productive and better paid and with better opportunities than it has had.

If conditions following the Civil War are any criterion of what will happen when this war is finally over, a boom period will set in which will somewhat obscure the necessity for these improvements. With labor scarce from five or six years of little immigration, with wages and prices high, and many great tasks waiting to be done, there will probably be what are called "good times" and plenty of work for all. But the world will not continue to buy from us at abnormally high prices any longer than it can help, and sometime a period of readjustment will come-poor business, falling wages, strikes, unemployment and misery. The test of our statecraft is the plans which we make for the periods of stress.

A Way For Those at Home to Help

F

OR the ninety-nine million people in the United States who don't go to France the most important problem is the proper financing of the war. With that problem is closely associated the winning of the war. Our John D. Rockefellers cannot pay the bill. They may have little more ready cash than you have. Their fortunes are invested; and before they could loan them to the Government they would have to find some one with cash to buy their securities. They could borrow money on them at the bank, but that is not the way the war should be financed. Furthermore, the combined fortunes of all our millionaires would pay the bills for only a short time. The entire savings of the nation are needed to win the war.

As our education in regard to the war's demands progresses the truth of this is becoming more generally accepted. There are still some, however, who feel that they are doing their duty if they subscribe for Liberty Loans by borrowing at the banks, and spend a corresponding part of their income for a

pleasure car. The pleasure car is used as the popular illustration of an unnecessary expenditure. Eighty per cent. of the cars in this country, however, cost less than a thousand dollars, and a good percentage of those have a high utility value to their owners. There are other things which are better examples of luxuries than the automobiles; things we can well do without along with the car bought solely for pleasure riding. A part of the public seems still uncertain as to what policy should be adopted in regard to such expenditures. For that reason it is encouraging to have a report covering that point from a committee of the ablest economists of the country, issued by authority of Secretary McAdoo. This committee was appointed to study the question of why the cost of the war and the cost of living are rising so rapidly. It was composed of Professor Irving Fisher, Yale, chairman; Professor E. W. Kemmerer, Princeton; Professor B. M. Anderson, Jr., Harvard; Dr. Royal Meeker, United States Commissioner of Labor Statistics; Professor Wesley Clair Mitchell, Columbia, and Professor Warren M. Persons, Colorado College. Its conclusion regarding Government loans and unessential personal expenditures was illustrated thus:

"If I buy Government securities by giving up the purchase of a pleasure automobile the Government can buy a military truck with the same money, and the labor and capital which would have made the pleasure car for me will make the truck for the army instead. That is the right way.

"The wrong method is employed if I insist upon buying that pleasure car and so can buy the Government securities only by borrowing the money at a bank. I have sacrificed nothing out of current money income. I have simply increased the money income of the Government. The bank which lends me the money does so by writing down a "deposit" to my credit on its books, which "deposit" I transfer to the Government. This "deposit" provides purchasing power without providing or releasing anything to be purchased. The result is that instead of labor and capital turning from the making of pleasure cars to the making of motor trucks they are called upon to make both. I give the Government my check to buy the truck, but at the same time I enter the market to prevent

the Government from getting it. In short, the public, by its paper subscriptions, appears generous to its Government, but is selfishly refusing to make the actual sacrifice."

The relation between war loans and the increasing cost of living, which shows further why it is not the proper way for John D. Rockefeller to borrow on his securities and loan the money to the Government, was covered by the committee as follows:

"Loans to the Government made not from savings but from borrowings will tend to increase bank credits. Further extension of bank credit will chiefly bring about a rise in commodity prices. And the rise in prices which come about from this sort of lending is cumulative. As the prices of war supplies rise the money cost grows and the Government has to borrow more. Bigger loans by us to the Government require bigger loans to us from the banks. This further expansion of bank credit favors a further rise of commodity prices, starting the whole process over again in a vicious circle.

"But rising commodity prices present only one of a series of evils which will follow if we continue far on the wrong side. In the wild scramble to buy-the public competing against the Government and the producer trying to satisfy both-there is increasing difficulty in getting supplies. getting supplies. There occurs railway congestion, car shortage, coal famine (for instance, from using up coal in non-essential industries and from using the cars needed to move it), and other dislocations.

"The best and quickest way of finding the right road the road of thrift-is by reducing consumption and increasing production, by repressing non-essentials and by organizing a redirection of industry. President Wilson has well said: 'It is our duty to protect our people, so far as we may, against the very serious hardships and evils which would be likely to arise out of the inflation which would be produced by vast loans.' And again: 'Now is the time for America to correct her unpardonable fault of wastefulness and extravagance.'

For those who are still in doubt as to the policy they should follow in regard to expenditures during the war, the answer is: Save all you can and loan the money to the Government for it to spend.

BUSINESS VENTURES vs. INVESTMENTS

Every month the WORLD'S WORK publishes in this part of the magazine an article on investments and the lessons to be derived therefrom

M

R. PERCIVAL S. HILL, president of the American Tobacco Company, started work for the Durham Tobacco Company in 1894 because his partner in the carpet business put his money into a Colorado placer mining company and endorsed its notes to the tune of a few hundred thousand dollars.

Thus do events shape the lives of mortals; and thus did Mr. Hill get some costly investment experience due to the action of this partner, now dead. Other experiences have served to emphasize the lesson of that one.

"All the money I have put into business ventures other than my own," said Mr. Hill, "has earned me little or no return. If I had invested in safe securities all the money I have put into other businesses, and reinvested the interest and dividend returns, I would be worth more to-day than I am.

"Not every man can have a business of his own; it is the average man who works on a salary who most needs investment advice. If he would start while young and save a certain percentage of his income, put it in good securities, not with the idea of making a profit on them, but for the regular returns they pay, and each year reinvest that interest, he would soon find that he is accumulating enough to make him comfortable later on. The first year it may be only $100; the next year it will be $106. When he once gets well started he will keep it up, for the results are soon very evident.

"I have in mind three cases where savings are invested in a certain stock, and each year the dividends are used to buy additional shares of the stock. The growth of such investments in fifteen years is surprising. One will not get rich by this method but one will be sure of protection from want in later life. The man who risks his money in a business about which he knows nothing has not one chance in a hundred of making a

profit. He should put his money into a business only when he knows all about it himself.

Mr. Hill himself has not saved in this way. He had a rich father, and in his youth the necessity of saving was not impressed on him. He now practices what he preaches, however, for he is educating his children to save regularly and invest safely.

"It is one of the most important lessons that our young people can learn," he believes. "This war, with its lessons in saving and experience in investing in Government bonds, is going to be a great educational factor of permanent benefit for this country. I feel very decidedly the need and importance of this kind of education.

"The American Tobacco Company tries to encourage saving and investing among its employees. It offers them its preferred stock and allows them five years in which to pay for it by systematic saving. The stock is bought in the market, and the employees are allowed a reduction in the price depending on the length of their service with the company. The amount they can buy is based on their ability to pay for it in five years, and no one is permitted to take more than $1,000 worth in this way."

Thus has the company for years endeavored to encourage regular savings among those in its ranks and educate them by experience in the matter of investing. In regard to the best investment that one can make to-day, Mr. Hill said:

"Liberty Loan bonds are by far the best security that a person can buy. No one will make a mistake in buying all of them he can. The man of small income and the farmer should be urged especially to invest in these bonds. They will start them on the road to financial independence. They are the safest security in the world, and I am sure they will sell at a good premium over the issue price after the war."

WHAT NEXT IN RUSSIA?

Prospects of a Counter Revolution Inspired by Hunger-A Wealthy Peasantry Eating the Food It Used to Sell to the Cities-Disillusion of the People and the Likelihood of Another Popular Upheaval

W

BY

ROGER LEWIS

(Recently Associated Press Correspondent in Petrograd)

HENEVER I feel tempted to hazard a prediction about Russia, my mind runs back to a certain dismal winter afternoon in Petrograd early in March, 1917. Guy Beringer, correspondent for Reuter's News Agency in Russia, and I were playing English billiards in a clubhouse on the Morskaya. Beringer suddenly laid down his cue and remarked with utter irrelevancy but great feeling: "I tell you that nothing is going to happen in this forsaken country. I can't see a particle of use in being miserable in Petrograd. It's a good time for me to go to the Crimea for a holiday."

The door opened and a uniformed attendant entered, betraying more emotion than it is commonly supposed possible for Slavic features or club servants to express.

"It's begun," he announced incoherently. "The Cossacks are charging the crowds in the streets. . . . Revolution.

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Reuter's correspondent was by no means the only person guilty of a mistaken judgment in this matter. The fine art of prophecy has won distinction for very few people in this war. Certainly no one has received any credit on this account in Russia. When the London Times reached Petrograd with glowing accounts of the brilliant Russian maneuver which was to envelop Lodz in the early part of the war, this city rested more firmly than ever in the hands of the Germans. Instead of trains bearing an entire corps of German prisoners into Russia, which the Times correspondent had vividly put before his readers, the trains were going in the other direction and carrying tens of thousands of Russian prisoners into Germany. When the American newspapers containing an optimistic statement concerning the unconquerable spirit of the Russian armies and the prospect of a general advance made their belated appearance in

Russia, these armies, totally demoralized, were in headlong flight into the interior of the country. And to quote just one more instance out of a hundred, shortly after Washington received from Ambassador Francis in Petrograd, who was exceptionally well informed, the reassuring information that Russia was at last emerging from her difficulties, the country had plunged into an abyss of madness far exceeding anything which had gone before.

This introduction need deceive no one. The following prediction carries with it no guarantees. I wish only to lay before the reader my own sources of information and to see whether all signs do not point unmistakably in one direction. It may simplify matters to set down three main alternatives which, I believe, cover the possibilities, and to decide which of these is the most plausible.

The first is a gradual disintegration of Russia into independent states, later perhaps to become loosely federalized. The second is a perpetuation of a régime of ultra-radicalism. performing its political antics before a partly sympathetic but somewhat nettled audience. The third is a sudden or a gradual reversion to a relatively conservative governmentan ebb-tide of extreme radicalism, dragging the Bolsheviki and their political platform back into the depths from which they were cast up by the tempest of revolution.

As this is being written, the renewal of German military operations on the Eastern Front introduces a fresh possibility—the possibility of a German subjugation of western Russia and a careful German surveillance and control over Russia's internal problems. But whether the German armies continue their advance into Russia or the German Government concludes a definite peace treaty with the Bolshevist Government it is impossible to regard the situation thus created as permanent or even stable. If Germany makes peace with

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