Arthur Jerome Eddy.

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3 1 1930

JAN 9 194S


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1859 — J 920

^Qu 'est~ce que la propriete?
La propriete, c'est le vol."




Arthur Jerome Eddy

Author of "The Law of Combinations," "The
New Competition," Etc., Etc.








Published July, 1921







^ I Introduction 1

^v II The Average Fortune 28

vv"^ III An Economic Fiction 35

IV Only for Life 64

V The Russell Sage Fortune 83

^ VI The Marshall Field Fortune . . . .118

-H. VII The Carnegie Fortune 147

^ VIII Wealth in Possession ...... 167

IX Land 174

X Luxuries 201

XI A Logical Consequence — Who Pays Taxes ? 245

I3r ^u\)nt gierome €DDr

" The Law of Combinations."
*' Two Thousand Miles on an Automobile.'-
''Delight, the Soul of Art."
''Recollections and Impressions

of James A. McNeill Whistler."
"Tales of a Small Town."
' ' The New Competition. ' '
* ' Cubists and Post-Impressionism. ' '


The manuscript of the following pages was
completed and prepared for publication just
before the death of the author, which occurred
in New York on July 21, 1920.

Any man who is concerned with the funda-
mentals of thought in any department — whether
in philosophy, morals, politics, religion, the
physical sciences, or art — grows weary of the
multitude of books which only thresh over
again the straw of old ideas, and contribute
nothing of vitally new suggestion toward solv-
ing the problems of our life. But now and
again it happens that one comes upon a book
which bears the impress of really independent
vision and original thought. Then one knows
that one has found a teacher, a leader.

Such a teacher and intellectual leader was
Arthur Jerome Eddy. The originality of his
ideas is as surprising as the ease and clear-
ness with which he expressed them, and the
number of fields in which he was a master.

His leading quality was a certain alert open-
ness of soul, a youthful responsiveness to the
challenge of new ideas, new experiments, new


valuations. His writings are full of tliis spirit
of generous acceptance, balanced by a splendid
sanity, wliich never allowed the enthusiasm of
welcome to overbear a sound critical judgment.

So intensely individual is his method of
analysis that the reader feels as though he
were seeing for the first time the subject of
which the author treats. His books on eco-
nomic and social problems, and their ethical
implications, carry to the mind of every in-
structed reader the conviction of their large
and lasting significance.

In The New Competition, and in this boo"k
on Property, Mr. Eddy recognizes many evils
that the conservative is usually unwilling to
admit. He condemns many existing practices
in business as being immoral, inhuman, and
at the same time uneconomic, inefficient, and
unnecessary. He would probe the conscience
of the man of business. He will not tolerate
the perpetuation of the standards of the jungle,
nor permit men to defend them by the parrot-
cry that struggle is the law of life. But
instead of counselling the destruction of the
entire competitive system and the substitution
of some new and inherently unworkable


scheme, woven out of the large inexperience of
the utopist, Mr. Eddy challenges the existing
order to do ivhat it claims to do, and to show
its capacity for self-reformation.

His remedy for many of the underhanded
tricks that still prevail in the industrial world
is simply open competition — honorable rivalry
on the basis of full exchange of information
among the competitors and their customers
and employees. He would move in the opposite
direction to that which the law so unfortu-
nately followed when it undertook, by the Sher-
man Act and subsequent legislation, to perpet-
uate competition of the jungle type, and
prevent, in ordinary businesses, that rational
cooperation which the law itself has since been
compelled to establish among the railroads.

The underlying principle of Mr. Eddy's theo-
ries of competition and property is this — that
all business exists for the service of the com-
munity. Certain great human needs must be
met, either by the voluntary labor and cooper-
ation of individuals, or by the action of the
community through the state. The socialist
would have the state do everything. His
opponent maintains that the community is bet-


ter served by what is called ' ' private enter-
prise," because, in tlie latter, those who under^
take the service assume the risk. Their own
success or failure is inexorably bound up with
that of their undertakings. The blunders and
miscarriages of the state do not involve the
loss and failure of the officials responsible for
them. The money used in state undertakings
is not the property of those who handle it.
That is why they are, in general, careless, lax,
and wasteful in their dealings with it.

Mr. Eddy is at his best in dealing with the
alleged ' ' natural right ' ' to property. His
criticism of Henry George's attempt to estab-
lish a distinction between property in land and
property in things is, to my thinking, unan-
swerable. There is no ' ' natural right ' ' to
property of any description. The right to any
property whatsoever is conferred by society.
Its basis is not in nature, but in social expedi-
ency. The community permits each of us to
enjoy exclusive control over certain parcels of
land and things because — and only because — it
gets more efficient service out of such land and
things than it otherwise could.

Mr. Eddy's strength, and that which con-


stitutes his clearest title to a hearing, is the
fact that, being an idealist, he was also a man
of immense practical experience. A lawyer by\
profession — declared by the highest authorities
to have been one of the most brilliant at the
American bar — he had devoted years of work ,
to the organization of great business undertak- /
ings. He pointed out the path on which
advance is actually taking place. He was no
unpractical radical theorist.

His finest insight is his clear perception that
the evils which afflict society are, after all, due
not to external conditions, but to unpurged /
defects in human nature itself. He is well'
aware that these defects would produce similar
or worse evils in any system that could con-
ceivably be substituted for the present one.
Deceit, unfair competition, stupidity, under-
handed dealing, inhuman lack of consideration
for one's neighbor — these are faults inher-
ent in human nature, not in ' ' capitalism. ' ' They
are not produced by the profit-seeking motive,
nor are they remedied by merely taking that
motive away. Human nature, with its faults and
virtues, is vastly independent of its surround-
ings. It makes them ; it is not made by them. It


can vitiate or ennoble any social, industrial,
or political order. Expellas furcd — even the
fiirca of communism or socialism — tamen
usque recurret.

The appreciation of Mr. Eddy's teachings,
and his fame as a constructive thinker, will
continue to increase as his thought — so far in
advance of his time — conquers the attention to
which its worth entitles it.

To all who knew him, Mr. Eddy's death was
an inexpressible personal loss; to his country
it was the loss of a great intellectual and moral
asset. From such radiant spirits as his we
catch the faith that makes progress possible.

Horace J. BRmoES.
Chicago, June, 1921.




*' Qu 'est-ce que la proprietef '^ (AMiat
is property?)

'^ La propriete, c'est le vol." (Prop-
erty is theft.) >)

Proudhon''s famous question and answer are
at tlie basis of modern communistic theories.

If it be true that property is theft, then
property rights should be abolished.

But, the historical fact is that the develop-
ment of property rights has steadily accom-
panied the progress of mankind.

Communities, peoples, nations have attained
strength and prosperity precisely to the extent
they have extended the rights of the individual
to control not only the fruits of his own labors,
but — in the sense of guiding and managing —
the fruits of the labors of others.

If '* property is theft," progress is based on

The extreme socialist, communist, or anar-

2 Property

chist, does not shrink from this conclusion —
that progress and our entire civilization are
based upon injustice/

But, how can justice come out of injustice?
How can progress come out of wrong?

The very terms of the question force the con-
clusion that we are deceived regarding either
the ivrong or the progress.

If there has been true progress its basis has
been right; if the fundamental institution of
society — property — is really wrong then there
has been no true progress.

There are three ways out of the dilemma:

1. Property is right and progress real.

2. Property is wrong and progress unreal.

3. Property is both right and wrong;
progress is both real and unreal.

Most men argue so strongly in favor of the
first proposition that property rights are held

* It should be noted and conceded in passing that the
debate often turns on the definition and conception of the
word " progress " — one side taking it in its mere material
sense, the other in its more cultural and ideal sense, deny-
ing the world has spiritually and ideally progressed not-
withstanding its apparent material prosperity; obviously
that debate admits of no definite conclusion, it being a
conflict of sentiments, opinions, convictions.

Introduction S

by them to be sacred, almost as sacred as a
man's right to his life.

Comparatively few men argue in favor of
the second proposition ; even Proudlion was
obliged to admit that though he considered
property theft, still it was an institution that
could not be disturbed suddenly.

An increasing number of thinkers hold that
while the institution of property has been on
the whole a vital factor in the progress of man-
kind it is by no means perfect, and, like every
social institution, is open to criticism and cor-

♦> ♦ ♦

In short, property is not the evil it is said to
be, otherwise progress would not be so real as
it imdoubtedly has been.

On the other hand true progress may have
been checked because of imperfect or over-
recognition of property rights.

All of which leads to the conclusion that the
first duty of the man who would reform society
is to clear up his ideas regarding property.

It is easy enough to say, ** Property is
theft," but difficult to prove the assertion.

4 Propertfj

It is easy enough to say, ** Property is
sacred," but equally difficult to prove it so.

The truth probably lies between the two ex-
treme positions — property is neither theft nor
sacred, it is just human, and, like all things
human, imperfect.

♦ ♦ ♦

To say "Property is theft," is like saying
** Law is crime." But every paradox contains
some truth.

♦ ♦ ♦

At the very outset of any consideration of
the matter of accumulation and distribution of
wealth, we are met by prejudices that stand in
the way of cool, patient, and thorough investi-

The greatest of these prejudices is that of
the man who has less against the man who has
more simply because Tie has more.

The names of Rothschild and Rockefeller are
sweet morsels in the mouth of the ranting
socialist, communist, and anarcliist; the phdl-
osopMcal socialist, communist, and anarchist
should be above that sort of thing, but even he
cannot refrain from pointing to some huge for-


tune as if mere size of some man's fortmie
added force to Ms argument.

Logically speaking whether a man has a bil-
lion, or a million, or ten thousand matters not
so long as he has more than the average.

In fact a billion in the United States may
mean less to the community than a hundred
thousand in a remote colony.

The story is told that one day a man rushed
up to Rothschild and exclaimed angrily:

** You have a million pounds."


** You've no right to so much money."

*' Who should have it?"

** The people."

*' Of England or the world? "

"Of — of the world," the man faltered.

*'A11 right, take your share out of this and
distribute the balance where it belongs," and
the banker handed the man a penny.

♦ ♦ ♦

Rockefeller's alleged billion distributed
among the people of the United States would

6 Property

give each man, woman, and child, less than ten

That would not go far toward eliminating

Then, too, by what right would the people of
the United States exclude other nations and
races from participating in the distribution?
The money of the Standard Oil Company has
been drawn from the four quarters of the globe.

And if the people of the United States may
exclude other nations and races from partici-
pating, why may not the people of Ohio, where
the company started, exclude the people of
Illinois, Alaska, Hawaii?

♦ ♦ ♦

In the United States some cities and some
states are far richer than others. In the world
some nations and some lands are far richer
than others.

If there is to be an equalization of wealth
where shall the distribution end?

The people of New York State make their
money with the aid and cooperation of not only
all the other states but of Canada, Europe, and
more distant countries.


The people of the United States aecumulate
wealth by the direct cooperation of all other
peoples to the remotest races of darkest Africa.

Whatever our v/ealth, it is due to the exer-
tions and sacrifices of others as well as our-

It follows, therefore, that a perfectly just
distribution cannot be made within the con-
fines of a single nation, any more than within
the confines of a single state, city, or village.
The thorough-going communist must be con-
sistent; he must urge the white farmers and
workmen of the northern states to share their
homes and farms with the ten million negroes
of the South.

Between the existing distribution with all its
inequalities and any scheme of distribution
that falls short of taking into consideration all
mankind the result would be simply a differ-
ence in the degree of injustice.
»*• *• «**

The most thorough-going communist is will-
ing to divide his neighbor's goods, he may even
be willing to divide his own — if he has any,
but he is thoroughly selfish when it comes to

8 Propcrtjj

sharing his country's goods with the rest of
the world, with the millions of Asia and

j Africa, not to overlook the Esquimaux and
South Sea Islanders, who are also our brothers

j in theory if not in law.

Communism, and most other projects for re-
form, begin and stop at home.

♦ ♦> ♦

While the suggestion to distribute equally
the wealth of the United States among the peo-
ple of the United States may arouse some —
not much as a matter of fact — interest among
those who have less than the per capita aver-
age, it arouses no enthusiasm whatsoever
among those who have more; while the sug-
gestion that the distribution should be carried
to its logical extreme and the wealth of this
country be cast in one common fund for dis-
tribution to the entire world, would arouse
simply ridicule.

In short it may be human nature to like to
share the fortunes of others, but it is not
human nature to cheerfully relinquish to stran-
gers and enemies what we consider our own.

Introduction 9

Ask the average farmer if he would favor
dividing up Rockefeller's fortune among those
who have less, and he might answer, '' Yes."

Ask him if he would favor sharing his farm
with those who have nothing and he would
surely reply, ** No."

This human weakness in favor of despoiling
the other fellow is illustrated in the provisions
of the income tax laws of this and other coim-
tries, wherein small incomes are exempt or sub-
jected to low taxes, and large incomes are pro-
gressively seized by ingeniously devised sur-

Suggestions are made to so increase the sur-
taxes on incomes and estate or inheritance
taxes as to practically confiscate large incomes
and large fortunes. In other words to utilize
the taxing power to equalize fortunes.

Most of these suggestions are opposed by
reasoning that is far more fallacious than that
urged in support of them. They are denounced
as demagogical, which is true, but that charge
is cheap, easily made and has nothing to do
with the merits, if any, of the suggestions.

10 Property

They are opposed as revolutionary, radical,
socialistic, etc., etc., but these epithets simply
obscure the real issue ; they settle nothing.

Not a few objections are based upon a denial
of the government's right to confiscate all or a
portion of a man's income, but that position is
hopelessly untenable. If the government can
collect a graduated income ta,x, increasing from
one to sixty per cent, it can mal^e the gradua-
tion from one to one hundred per cent. There
is no limit to the rigM.

Constitutional objections might be urged in
this country, but such objections at most would
simply mean the amending of constitutions,
and the definite assertion of rights denied.

The power resides in the people and they
may do as they please with laws and constitu-

* Here again is a generalization that would require a
small volume to qualify properly. Profoundly speaking it
is far from true to say " the power resides in the people
to do as they please with laws and constitutions." It is
even truer to say " the people are poiverless to do as they
please with laws, constitutions, institutions," as powerless
as they are to alter their language, habits, modes of
thought, etc., overnight. V/e live under governments and
social conditions that have slowly developed through the
centuries. We may jostle them by revolutions, we rnay

Introduction 11


The man who asserts his right to hold either
all or any part of his property, on the ground
the community has no right to interfere with
him, destroys the basis of his argument in that
he takes away the very foundation of all rights
the assent of the conununity.

If no better arguments can be urged in favor
of large incomes, then those who have them
might just as well make up their minds to lose
them. But the reason why large incomes have
not been confiscated long ago is because there
are economic reasons for their existence, and
these reasons have controlled throughout the
ages, though — curiously enough — they have
never been systematically set forth.
♦ ♦ ♦

If ' ' swollen fortunes ' ' — as the phrase goes
— are an economic evil it is clumsy and ineffec-
tive to attempt to remedy the evil by such
crude devices as inheritance and income taxes ;

modify them by wise action, but to say they are subject
to our will, our caprice, is to say what is obviously not so.
However, for the purposes of the argument in this book
it may be conceded the people have the power to do as
they please with laws, constitutions, institutions, that they
may do what they please regarding all so-called property

IS Property

as clumsy and ineffective as if the state at-
tempted to remedy 'piracy, not by suppressing
it, but by taking part of the plunder.

The " swollen fortune " is a fact in our eco-
nomic development.

There may be but one hilUonaire but there
are any number of millionaires, thousands of
Jiundred-thousandaires and hundreds of thou-
sands ten-tJiousandaires.

From the point of view of the man who has
nothing, an American farmer with ten thousand
has a " swollen fortune," and it is swollen far
beyond the farmer's pro rata share of the
country's wealth.

The " swollen fortune " is not a thing of ab-
solute magnitude, but entirely a matter of com-
parative size.

♦ ♦!♦

If the ideal community should make its capi-
tal or any one city more attractive than an-
other, or should indulge in a single expense for
the purpose of making life more agreeable in
any locality, or more agreeable for one man,
woman, or child than for another there is in-
equality of distribution of advantages which is
practically the same as, and theoretically, more
unjust than, inequality in the distribution of
private property.

All dreams of great and glorious communi-
ties, states, commonwealths, wherein private
property does not exist, and everything is held
in common, involve inequalities in the distribu-
tion of advantages and pleasures that are fully
as great as any that now exist.

That is to say, the greater the glories of the
Utopia the greater the concentration of advan-

Introduction 15

tages in favored localities — in the spotlights
of the dream. A ntopia with no concentration
of advantages, no great cities, no great build-
ings, monuments, museums, pleasure resorts,
theaters, orchestras, etc., etc., would not be a
Utopia to fire the imagination.

It must not be forgotten that to the man in
the coal mine, to the man ploughing the field,
to the negro in the cotton fields, to the miner
in Alaska, to the sailor, the fisherman, the
stoker in the hold, the collector of garbage, all
the gorgeous and beautiful buildings, amuse-
ments, and enterprises of the Utopian common-
wealth would be as remote and unrelated as
are the buildings and pleasures of existing
states and commonwealths ; they would read of
them but never enjoy them.

Furthermore it must not be forgotten in this
connection that inequality is the law of life.

Perfect equality, if attainable, would mean
stagnation, death; a placid, rippleless sea; a
currentless, motionless air; a still and silent

16 Property

The sliglitest action, change, growth, devel-
opment, means disturbance of equality.

It is idle to talk of equality between youth
and age, men and women, race and race, the
feeble and the strong, the fool and the wise

The truth is two human beings cannot be
found w^ho are equal in all respects, equal in
physical and mental equipment; in desires,
emotions, impulses; above all in those subtle
qualities that go to make up what we call 'per-

Thinking men who admit this seek refuge
from the consequences of the admission by say-
ing that what is meant by ''equality" is
'' equality before the laiv," a sounding phrase
that is used to discourage further inquiry and
analysis, but wliich means nothing.

Men are no more equal before the law than
in other respects, and to the extent the law
treats them as equal, recognizes no distinction
between the weak and the strong, the stupid
and the intelligent, the confiding and the crafty,
to that extent is the law both blind and defi-

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