stagnant ones, will have laws providing for this reasonable standard. The education of public opinion must continue, but inasmuch as the process is slow the abolition of child labor in certain sections seems unlikely to be brought about by the legislatures of those States, and since the Keating-Owen Act has been declared unconstitutional there seems to be no device by which this reproach to our country can be removed except that of taxing child labor out of existence. This method is embodied in an amendment to the Federal revenue bill, which would impose a tax of 10 per cent on all goods made by children.

Probably the foregoing proposals comprise everything that is likely to have practical value in a program of immediate social reconstruction for America. Substantially all of these methods, laws, and recommendations have been recognized in principle by the United States during the war, or have been indorsed by important social and industrial groups and organizations. Therefore they are objects that we can set before the people with good hope of obtaining a sympathetic and practical response. Were they all realized a great step would have been taken in the direction of social justice. When they are all put into operation the way will be easy and obvious to still greater and more beneficial results.

Ultimate and Fundamental Reforms

Despite the practical and immediate character of the present statement, we can not entirely neglect the question of ultimate aims and a systematic program; for other groups are busy issuing such systematic pronouncements, and we will all need something of the kind as a philosophical foundation and as a satisfaction to our natural desire for comprehensive statements.

It seems clear that the present industrial system is destined to last for a long time in its main outlines. That is to say, private ownership of capital is not likely to be supplanted by a collectivist organization of industry at a date sufficiently near to justify any present action based on the hypothesis of its arrival. This forecast we recognize as not only extremely probable but as highly desirable; for, other objections apart, socialism would mean bureaucracy, political tyranny, the helplessness of the individual as a factor in the ordering of his own life, and in general social inefficiency and decadence.

Main Defects of Present System

Nevertheless, the present system stands in grievous need of considerable modifications and improvement. Its main defects are three: Enormous inefficiency and waste in the production and distribution of commodities; insufficient incomes for the great majority of wage earners, and unnecessarily large incomes for a small minority of privileged capitalists. The evils in production and in the distribution of goods would be in great measure abolished by the reforms that have been outlined in the foregoing pages. Production will be greatly increased by universal living wages, by adequate industrial education, and by harmonious relations between labor and capital on the basis of adequate participation by the former in all the industrial aspects of business management. The wastes of commodity distribution could be practically all eliminated by co-operative mercantile establishments and co-operative selling and marketing associations.

Cooperation and Copartnership

Nevertheless, the full possibilities of increased production will not be realized so long as the majority of the workers remain mere wage earners. The majority must somehow become owners, or at least in part, of the instruments of production. They can be enabled to reach this stage gradually through cooperative productive societies and copartnership arrangements. In the former the workers own and manage the industries themselves; in the latter they own a substantial part of the corporate stock and exercise a reasonable share in the management. However slow the attainment of these ends, they will have to be reached before we can have a thoroughly efficient system of production, or an industrial and social order that will be secure from the danger of revolution. It is to be noted that this particular modification of the existing order, though far-reaching and involving to a great extent the abolition of the wage system, would not mean the abolition of private ownership. The instruments of production would still be owned by individuals, not by the State.

Increased Incomes for Labor

The second great evil, that of insufficient income for the majority, can be removed only by providing the workers with

more income. This means not only universal living wages, but the opportunity of obtaining something more than that amount for all who are willing to work hard and faithfully. All the other measures for labor betterment recommended in the preceding pages would likewise contribute directly or indirectly to a more just distribution of wealth in the interest of the laborer.

Abolition and Control of Monopolies

For the third evil mentioned above, excessive gains by a small minority of privileged capitalists, the main remedies are prevention of monopolistic control of commodities, adequate Government regulation of such public-service monopolies as will remain under private operation, and heavy taxation of incomes, excess profits, and inheritances. The precise methods by which genuine competition may be restored and maintained among businesses that are naturally competitive can not be discussed here, but the principle is clear that human beings can not be trusted with the immense opportunities for oppression and extortion that go with the possession of monopoly power. That the owners of public-service monopolies should be restricted by law to a fair or average return on their actual investment has long been a recognized principle of the courts, the legislatures, and public opinion. It is a principle which should be applied to competitive enterprises likewise, with the qualification that something more than the average rate of return should be allowed to men who exhibit exceptional efficiency. However, good public policy, as well as equity, demands that these exceptional business men share the fruits of their efficiency with the consumer in the form of lower prices. The man who utilizes his ability to produce cheaper than his competitors for the purpose of exacting from the public as high a price for his product as is necessary for the least efficient business man is a menace rather than a benefit to industry and society.

Our immense war debt constitutes a particular reason why incomes and excess profits should continue to be heavily taxed. In this way two important ends will be obtained-the poor will be relieved of injurious tax burdens and the small class of specially privileged capitalists will be compelled to return a part of their unearned gains to society.

A New Spirit of Vital Need

"Society," said Pope Leo XIII, "can be healed in no other way than by a return to Christian life and Christian institutions." The truth of these words is more widely perceived to-day than when they were written, more than 27 years ago. Changes in our economic and political systems will have only partial and feeble efficiency if they be not reinforced by the Christian view of work and wealth. Neither the moderate reforms advocated in this paper nor any other program of betterment or reconstruction will prove reasonably effective without a reform in the spirit of both labor and capital. The laborer must come to realize that he owes his employer and society an honest day's work in return for a fair wage and that conditions can not be substantially improved until he roots out the desire to get a maximum of return for a minimum of service. The capitalist must likewise get a new viewpoint. He needs to learn the long-forgotten truth that wealth is stewardship; that profit making is not the basic justification of business enterprise; and that there are such things as fair profits, fair interest, and fair prices. Above and before all, he must cultivate and strengthen within his mind the truth which many of his class have begun to grasp for the first time during the present war, namely, that the laborer is a human being, not merely an instrument of production, and that the laborer's right to a decent livelihood is the first moral charge upon industry. The employer has a right to get a reasonable living out of his business, but he has no right to interest on his, investment until his employees have obtained at least living wages. This is the human and Christian, in contrast to the purely commercial and pagan, ethics of industry.

REPORT OF THE COMMITTEE ON RECONSTRUCION OF THE AMERICAN FEDERATION OF LABOR, AS INDORSED BY

THE EXECUTIVE COUNCIL'

The world war has forced all free peoples to a fuller and deeper realization of the menace to civilization contained in autocratic control of the activities and destinies of mankind.

1 From Report. Hearings, Committee on Education and Labor, U. S. Senate on Senate Resolution 382. January 4, 1919, Washington, D. C.

It has caused a world-wide determination to overthrow and eradicate all autocratic institutions, so that a full measure of freedom and justice can be established between man and man and nation and nation.

It has awakened more fully the consciousness that the principles of democracy should regulate the relationship of men in all their activities.

It has opened the doors of opportunity through which more sound and progressive policies may enter.

New conceptions of human liberty, justice, and opportunity are to be applied.

The American Federation of Labor, the one organization representing labor in America, conscious that its responsibilities are now greater than before, presents a program for the guidance of labor, based upon experience and formulated with a full consciousness of the principles which have successfully guided American trade-unionism in the past.

Democracy in Industry

Two codes of rules and regulations affect the workers-the law upon the statute books and the rules within industry. The first determines their relationship as citizens to all other citizens and to property.

The second largely determines the relationship of employer and employee, the terms of employment, the conditions of labor, and the rules and regulations affecting the workers as employees. The first is secured through the application of the methods of democracy in the enactment of legislation, and is based upon the principle that the laws which govern a free people should exist only with their consent.

The second, except where effective trade-unionism exists, is established by the arbitrary or autocratic whim, desire, or opinion of the employer and is based upon the principle that industry and commerce can not be successfully conducted unless the employer exercises the unquestioned right to establish such rules, regulations, and provisions affecting the employees as self-interest prompts.

Both forms of law vitally affect the workers' opportunities in life and determine their standard of living. The rules, regulations, and conditions within industry in many instances affect them more than legislative enactments. It is, therefore, essential that the workers should have a voice in determining