The Machine Breakers

: The Iron Heel

It was just before Ernest ran for Congress, on the socialist ticket,

that father gave what he privately called his "Profit and Loss" dinner.

Ernest called it the dinner of the Machine Breakers. In point of fact,

it was merely a dinner for business men--small business men, of

course. I doubt if one of them was interested in any business the total

capitalization of which exceeded a couple of hundred thousand dollars.

The were truly representative middle-class business men.



There was Owen, of Silverberg, Owen & Company--a large grocery firm with

several branch stores. We bought our groceries from them. There were

both partners of the big drug firm of Kowalt & Washburn, and Mr.

Asmunsen, the owner of a large granite quarry in Contra Costa County.

And there were many similar men, owners or part-owners in small

factories, small businesses and small industries--small capitalists, in

short.



They were shrewd-faced, interesting men, and they talked with simplicity

and clearness. Their unanimous complaint was against the corporations

and trusts. Their creed was, "Bust the Trusts." All oppression

originated in the trusts, and one and all told the same tale of woe.

They advocated government ownership of such trusts as the railroads

and telegraphs, and excessive income taxes, graduated with ferocity,

to destroy large accumulations. Likewise they advocated, as a cure for

local ills, municipal ownership of such public utilities as water, gas,

telephones, and street railways.





Especially interesting was Mr. Asmunsen's narrative of his tribulations

as a quarry owner. He confessed that he never made any profits out of

his quarry, and this, in spite of the enormous volume of business

that had been caused by the destruction of San Francisco by the big

earthquake. For six years the rebuilding of San Francisco had been going

on, and his business had quadrupled and octupled, and yet he was no

better off.



"The railroad knows my business just a little bit better than I do," he

said. "It knows my operating expenses to a cent, and it knows the terms

of my contracts. How it knows these things I can only guess. It must

have spies in my employ, and it must have access to the parties to all

my contracts. For look you, when I place a big contract, the terms

of which favor me a goodly profit, the freight rate from my quarry to

market is promptly raised. No explanation is made. The railroad gets my

profit. Under such circumstances I have never succeeded in getting the

railroad to reconsider its raise. On the other hand, when there have

been accidents, increased expenses of operating, or contracts with less

profitable terms, I have always succeeded in getting the railroad to

lower its rate. What is the result? Large or small, the railroad always

gets my profits."



"What remains to you over and above," Ernest interrupted to ask, "would

roughly be the equivalent of your salary as a manager did the railroad

own the quarry."



"The very thing," Mr. Asmunsen replied. "Only a short time ago I had my

books gone through for the past ten years. I discovered that for

those ten years my gain was just equivalent to a manager's salary. The

railroad might just as well have owned my quarry and hired me to run

it."



"But with this difference," Ernest laughed; "the railroad would have had

to assume all the risk which you so obligingly assumed for it."



"Very true," Mr. Asmunsen answered sadly.



Having let them have they say, Ernest began asking questions right and

left. He began with Mr. Owen.



"You started a branch store here in Berkeley about six months ago?"



"Yes," Mr. Owen answered.



"And since then I've noticed that three little corner groceries have

gone out of business. Was your branch store the cause of it?"



Mr. Owen affirmed with a complacent smile. "They had no chance against

us."



"Why not?"



"We had greater capital. With a large business there is always less

waste and greater efficiency."



"And your branch store absorbed the profits of the three small ones. I

see. But tell me, what became of the owners of the three stores?"



"One is driving a delivery wagon for us. I don't know what happened to

the other two."



Ernest turned abruptly on Mr. Kowalt.



"You sell a great deal at cut-rates.* What have become of the owners of

the small drug stores that you forced to the wall?"



* A lowering of selling price to cost, and even to less than

cost. Thus, a large company could sell at a loss for a

longer period than a small company, and so drive the small

company out of business. A common device of competition.



"One of them, Mr. Haasfurther, has charge now of our prescription

department," was the answer.



"And you absorbed the profits they had been making?"



"Surely. That is what we are in business for."



"And you?" Ernest said suddenly to Mr. Asmunsen. "You are disgusted

because the railroad has absorbed your profits?"



Mr. Asmunsen nodded.



"What you want is to make profits yourself?"



Again Mr. Asmunsen nodded.



"Out of others?"



There was no answer.



"Out of others?" Ernest insisted.



"That is the way profits are made," Mr. Asmunsen replied curtly.



"Then the business game is to make profits out of others, and to prevent

others from making profits out of you. That's it, isn't it?"



Ernest had to repeat his question before Mr. Asmunsen gave an answer,

and then he said:



"Yes, that's it, except that we do not object to the others making

profits so long as they are not extortionate."



"By extortionate you mean large; yet you do not object to making large

profits yourself? . . . Surely not?"



And Mr. Asmunsen amiably confessed to the weakness. There was one other

man who was quizzed by Ernest at this juncture, a Mr. Calvin, who had

once been a great dairy-owner.



"Some time ago you were fighting the Milk Trust," Ernest said to him;

"and now you are in Grange politics.* How did it happen?"



* Many efforts were made during this period to organize the

perishing farmer class into a political party, the aim of

which was destroy the trusts and corporations by drastic

legislation. All such attempts ended in failure.



"Oh, I haven't quit the fight," Mr. Calvin answered, and he looked

belligerent enough. "I'm fighting the Trust on the only field where it

is possible to fight--the political field. Let me show you. A few years

ago we dairymen had everything our own way."



"But you competed among yourselves?" Ernest interrupted.



"Yes, that was what kept the profits down. We did try to organize, but

independent dairymen always broke through us. Then came the Milk Trust."



"Financed by surplus capital from Standard Oil,"* Ernest said.



* The first successful great trust--almost a generation in

advance of the rest.



"Yes," Mr. Calvin acknowledged. "But we did not know it at the time.

Its agents approached us with a club. "Come in and be fat," was their

proposition, "or stay out and starve." Most of us came in. Those that

didn't, starved. Oh, it paid us . . . at first. Milk was raised a cent a

quart. One-quarter of this cent came to us. Three-quarters of it went to

the Trust. Then milk was raised another cent, only we didn't get any

of that cent. Our complaints were useless. The Trust was in control. We

discovered that we were pawns. Finally, the additional quarter of a cent

was denied us. Then the Trust began to squeeze us out. What could we do?

We were squeezed out. There were no dairymen, only a Milk Trust."



"But with milk two cents higher, I should think you could have

competed," Ernest suggested slyly.



"So we thought. We tried it." Mr. Calvin paused a moment. "It broke us.

The Trust could put milk upon the market more cheaply than we. It could

sell still at a slight profit when we were selling at actual loss.

I dropped fifty thousand dollars in that venture. Most of us went

bankrupt.* The dairymen were wiped out of existence."



* Bankruptcy--a peculiar institution that enabled an

individual, who had failed in competitive industry, to

forego paying his debts. The effect was to ameliorate the

too savage conditions of the fang-and-claw social struggle.



"So the Trust took your profits away from you," Ernest said, "and you've

gone into politics in order to legislate the Trust out of existence and

get the profits back?"



Mr. Calvin's face lighted up. "That is precisely what I say in my

speeches to the farmers. That's our whole idea in a nutshell."



"And yet the Trust produces milk more cheaply than could the independent

dairymen?" Ernest queried.



"Why shouldn't it, with the splendid organization and new machinery its

large capital makes possible?"



"There is no discussion," Ernest answered. "It certainly should, and,

furthermore, it does."



Mr. Calvin here launched out into a political speech in exposition of

his views. He was warmly followed by a number of the others, and the cry

of all was to destroy the trusts.



"Poor simple folk," Ernest said to me in an undertone. "They see clearly

as far as they see, but they see only to the ends of their noses."



A little later he got the floor again, and in his characteristic way

controlled it for the rest of the evening.



"I have listened carefully to all of you," he began, "and I see plainly

that you play the business game in the orthodox fashion. Life sums

itself up to you in profits. You have a firm and abiding belief that

you were created for the sole purpose of making profits. Only there is a

hitch. In the midst of your own profit-making along comes the trust

and takes your profits away from you. This is a dilemma that interferes

somehow with the aim of creation, and the only way out, as it seems to

you, is to destroy that which takes from you your profits.



"I have listened carefully, and there is only one name that will

epitomize you. I shall call you that name. You are machine-breakers. Do

you know what a machine-breaker is? Let me tell you. In the eighteenth

century, in England, men and women wove cloth on hand-looms in their own

cottages. It was a slow, clumsy, and costly way of weaving cloth,

this cottage system of manufacture. Along came the steam-engine and

labor-saving machinery. A thousand looms assembled in a large factory,

and driven by a central engine wove cloth vastly more cheaply than

could the cottage weavers on their hand-looms. Here in the factory was

combination, and before it competition faded away. The men and women who

had worked the hand-looms for themselves now went into the factories

and worked the machine-looms, not for themselves, but for the capitalist

owners. Furthermore, little children went to work on the machine-looms,

at lower wages, and displaced the men. This made hard times for the men.

Their standard of living fell. They starved. And they said it was

all the fault of the machines. Therefore, they proceeded to break the

machines. They did not succeed, and they were very stupid.



"Yet you have not learned their lesson. Here are you, a century and a

half later, trying to break machines. By your own confession the trust

machines do the work more efficiently and more cheaply than you can.

That is why you cannot compete with them. And yet you would break those

machines. You are even more stupid than the stupid workmen of England.

And while you maunder about restoring competition, the trusts go on

destroying you.



"One and all you tell the same story,--the passing away of competition

and the coming on of combination. You, Mr. Owen, destroyed competition

here in Berkeley when your branch store drove the three small groceries

out of business. Your combination was more effective. Yet you feel the

pressure of other combinations on you, the trust combinations, and you

cry out. It is because you are not a trust. If you were a grocery trust

for the whole United States, you would be singing another song. And the

song would be, 'Blessed are the trusts.' And yet again, not only is your

small combination not a trust, but you are aware yourself of its lack

of strength. You are beginning to divine your own end. You feel

yourself and your branch stores a pawn in the game. You see the powerful

interests rising and growing more powerful day by day; you feel their

mailed hands descending upon your profits and taking a pinch here and

a pinch there--the railroad trust, the oil trust, the steel trust, the

coal trust; and you know that in the end they will destroy you, take

away from you the last per cent of your little profits.



"You, sir, are a poor gamester. When you squeezed out the three small

groceries here in Berkeley by virtue of your superior combination, you

swelled out your chest, talked about efficiency and enterprise, and sent

your wife to Europe on the profits you had gained by eating up the three

small groceries. It is dog eat dog, and you ate them up. But, on the

other hand, you are being eaten up in turn by the bigger dogs, wherefore

you squeal. And what I say to you is true of all of you at this table.

You are all squealing. You are all playing the losing game, and you are

all squealing about it.



"But when you squeal you don't state the situation flatly, as I have

stated it. You don't say that you like to squeeze profits out of others,

and that you are making all the row because others are squeezing your

profits out of you. No, you are too cunning for that. You say something

else. You make small-capitalist political speeches such as Mr. Calvin

made. What did he say? Here are a few of his phrases I caught: 'Our

original principles are all right,' 'What this country requires is a

return to fundamental American methods--free opportunity for all,' 'The

spirit of liberty in which this nation was born,' 'Let us return to the

principles of our forefathers.'



"When he says 'free opportunity for all,' he means free opportunity to

squeeze profits, which freedom of opportunity is now denied him by the

great trusts. And the absurd thing about it is that you have repeated

these phrases so often that you believe them. You want opportunity

to plunder your fellow-men in your own small way, but you hypnotize

yourselves into thinking you want freedom. You are piggish and

acquisitive, but the magic of your phrases leads you to believe that you

are patriotic. Your desire for profits, which is sheer selfishness, you

metamorphose into altruistic solicitude for suffering humanity. Come

on now, right here amongst ourselves, and be honest for once. Look the

matter in the face and state it in direct terms."



There were flushed and angry faces at the table, and withal a measure

of awe. They were a little frightened at this smooth-faced young fellow,

and the swing and smash of his words, and his dreadful trait of calling

a spade a spade. Mr. Calvin promptly replied.



"And why not?" he demanded. "Why can we not return to ways of our

fathers when this republic was founded? You have spoken much truth, Mr.

Everhard, unpalatable though it has been. But here amongst ourselves let

us speak out. Let us throw off all disguise and accept the truth as Mr.

Everhard has flatly stated it. It is true that we smaller capitalists

are after profits, and that the trusts are taking our profits away from

us. It is true that we want to destroy the trusts in order that our

profits may remain to us. And why can we not do it? Why not? I say, why

not?"



"Ah, now we come to the gist of the matter," Ernest said with a pleased

expression. "I'll try to tell you why not, though the telling will be

rather hard. You see, you fellows have studied business, in a small way,

but you have not studied social evolution at all. You are in the

midst of a transition stage now in economic evolution, but you do not

understand it, and that's what causes all the confusion. Why cannot you

return? Because you can't. You can no more make water run up hill than

can you cause the tide of economic evolution to flow back in its channel

along the way it came. Joshua made the sun stand still upon Gibeon, but

you would outdo Joshua. You would make the sun go backward in the sky.

You would have time retrace its steps from noon to morning.



"In the face of labor-saving machinery, of organized production, of the

increased efficiency of combination, you would set the economic sun

back a whole generation or so to the time when there were no great

capitalists, no great machinery, no railroads--a time when a host of

little capitalists warred with each other in economic anarchy, and when

production was primitive, wasteful, unorganized, and costly. Believe me,

Joshua's task was easier, and he had Jehovah to help him. But God has

forsaken you small capitalists. The sun of the small capitalists is

setting. It will never rise again. Nor is it in your power even to make

it stand still. You are perishing, and you are doomed to perish utterly

from the face of society.



"This is the fiat of evolution. It is the word of God. Combination is

stronger than competition. Primitive man was a puny creature hiding in

the crevices of the rocks. He combined and made war upon his carnivorous

enemies. They were competitive beasts. Primitive man was a combinative

beast, and because of it he rose to primacy over all the animals. And

man has been achieving greater and greater combinations ever since. It

is combination versus competition, a thousand centuries long struggle,

in which competition has always been worsted. Whoso enlists on the side

of competition perishes."



"But the trusts themselves arose out of competition," Mr. Calvin

interrupted.



"Very true," Ernest answered. "And the trusts themselves destroyed

competition. That, by your own word, is why you are no longer in the

dairy business."



The first laughter of the evening went around the table, and even Mr.

Calvin joined in the laugh against himself.



"And now, while we are on the trusts," Ernest went on, "let us settle

a few things. I shall make certain statements, and if you disagree

with them, speak up. Silence will mean agreement. Is it not true that

a machine-loom will weave more cloth and weave more cheaply than a

hand-loom?" He paused, but nobody spoke up. "Is it not then highly

irrational to break the machine-loom and go back to the clumsy and more

costly hand-loom method of weaving?" Heads nodded in acquiescence. "Is

it not true that that known as a trust produces more efficiently and

cheaply than can a thousand competing small concerns?" Still no one

objected. "Then is it not irrational to destroy that cheap and efficient

combination?"



No one answered for a long time. Then Mr. Kowalt spoke.



"What are we to do, then?" he demanded. "To destroy the trusts is the

only way we can see to escape their domination."



Ernest was all fire and aliveness on the instant.



"I'll show you another way!" he cried. "Let us not destroy those

wonderful machines that produce efficiently and cheaply. Let us control

them. Let us profit by their efficiency and cheapness. Let us run them

for ourselves. Let us oust the present owners of the wonderful machines,

and let us own the wonderful machines ourselves. That, gentlemen, is

socialism, a greater combination than the trusts, a greater economic and

social combination than any that has as yet appeared on the planet. It

is in line with evolution. We meet combination with greater combination.

It is the winning side. Come on over with us socialists and play on the

winning side."



Here arose dissent. There was a shaking of heads, and mutterings arose.



"All right, then, you prefer to be anachronisms," Ernest laughed. "You

prefer to play atavistic roles. You are doomed to perish as all atavisms

perish. Have you ever asked what will happen to you when greater

combinations than even the present trusts arise? Have you ever

considered where you will stand when the great trusts themselves combine

into the combination of combinations--into the social, economic, and

political trust?"



He turned abruptly and irrelevantly upon Mr. Calvin.



"Tell me," Ernest said, "if this is not true. You are compelled to form

a new political party because the old parties are in the hands of the

trusts. The chief obstacle to your Grange propaganda is the trusts.

Behind every obstacle you encounter, every blow that smites you, every

defeat that you receive, is the hand of the trusts. Is this not so? Tell

me."



Mr. Calvin sat in uncomfortable silence.



"Go ahead," Ernest encouraged.



"It is true," Mr. Calvin confessed. "We captured the state legislature

of Oregon and put through splendid protective legislation, and it was

vetoed by the governor, who was a creature of the trusts. We elected a

governor of Colorado, and the legislature refused to permit him to take

office. Twice we have passed a national income tax, and each time the

supreme court smashed it as unconstitutional. The courts are in the

hands of the trusts. We, the people, do not pay our judges sufficiently.

But there will come a time--"



"When the combination of the trusts will control all legislation, when

the combination of the trusts will itself be the government," Ernest

interrupted.



"Never! never!" were the cries that arose. Everybody was excited and

belligerent.



"Tell me," Ernest demanded, "what will you do when such a time comes?"



"We will rise in our strength!" Mr. Asmunsen cried, and many voices

backed his decision.



"That will be civil war," Ernest warned them.



"So be it, civil war," was Mr. Asmunsen's answer, with the cries of all

the men at the table behind him. "We have not forgotten the deeds of our

forefathers. For our liberties we are ready to fight and die."



Ernest smiled.



"Do not forget," he said, "that we had tacitly agreed that liberty in

your case, gentlemen, means liberty to squeeze profits out of others."



The table was angry, now, fighting angry; but Ernest controlled the

tumult and made himself heard.



"One more question. When you rise in your strength, remember, the reason

for your rising will be that the government is in the hands of the

trusts. Therefore, against your strength the government will turn the

regular army, the navy, the militia, the police--in short, the whole

organized war machinery of the United States. Where will your strength

be then?"



Dismay sat on their faces, and before they could recover, Ernest struck

again.



"Do you remember, not so long ago, when our regular army was only fifty

thousand? Year by year it has been increased until to-day it is three

hundred thousand."



Again he struck.



"Nor is that all. While you diligently pursued that favorite phantom

of yours, called profits, and moralized about that favorite fetich of

yours, called competition, even greater and more direful things have

been accomplished by combination. There is the militia."



"It is our strength!" cried Mr. Kowalt. "With it we would repel the

invasion of the regular army."



"You would go into the militia yourself," was Ernest's retort, "and

be sent to Maine, or Florida, or the Philippines, or anywhere else,

to drown in blood your own comrades civil-warring for their liberties.

While from Kansas, or Wisconsin, or any other state, your own comrades

would go into the militia and come here to California to drown in blood

your own civil-warring."



Now they were really shocked, and they sat wordless, until Mr. Owen

murmured:



"We would not go into the militia. That would settle it. We would not be

so foolish."



Ernest laughed outright.



"You do not understand the combination that has been effected. You could

not help yourself. You would be drafted into the militia."



"There is such a thing as civil law," Mr. Owen insisted.



"Not when the government suspends civil law. In that day when you

speak of rising in your strength, your strength would be turned against

yourself. Into the militia you would go, willy-nilly. Habeas corpus, I

heard some one mutter just now. Instead of habeas corpus you would get

post mortems. If you refused to go into the militia, or to obey after

you were in, you would be tried by drumhead court martial and shot down

like dogs. It is the law."



"It is not the law!" Mr. Calvin asserted positively. "There is no such

law. Young man, you have dreamed all this. Why, you spoke of sending the

militia to the Philippines. That is unconstitutional. The Constitution

especially states that the militia cannot be sent out of the country."



"What's the Constitution got to do with it?" Ernest demanded. "The

courts interpret the Constitution, and the courts, as Mr. Asmunsen

agreed, are the creatures of the trusts. Besides, it is as I have said,

the law. It has been the law for years, for nine years, gentlemen."



"That we can be drafted into the militia?" Mr. Calvin asked

incredulously. "That they can shoot us by drumhead court martial if we

refuse?"



"Yes," Ernest answered, "precisely that."



"How is it that we have never heard of this law?" my father asked, and I

could see that it was likewise new to him.



"For two reasons," Ernest said. "First, there has been no need to

enforce it. If there had, you'd have heard of it soon enough. And

secondly, the law was rushed through Congress and the Senate secretly,

with practically no discussion. Of course, the newspapers made no

mention of it. But we socialists knew about it. We published it in our

papers. But you never read our papers."



"I still insist you are dreaming," Mr. Calvin said stubbornly. "The

country would never have permitted it."



"But the country did permit it," Ernest replied. "And as for my

dreaming--" he put his hand in his pocket and drew out a small

pamphlet--"tell me if this looks like dream-stuff."



He opened it and began to read:



"'Section One, be it enacted, and so forth and so forth, that the

militia shall consist of every able-bodied male citizen of the

respective states, territories, and District of Columbia, who is more

than eighteen and less than forty-five years of age.'



"'Section Seven, that any officer or enlisted man'--remember Section

One, gentlemen, you are all enlisted men--'that any enlisted man of the

militia who shall refuse or neglect to present himself to such mustering

officer upon being called forth as herein prescribed, shall be subject

to trial by court martial, and shall be punished as such court martial

shall direct.'



"'Section Eight, that courts martial, for the trial of officers or men

of the militia, shall be composed of militia officers only.'



"'Section Nine, that the militia, when called into the actual service

of the United States, shall be subject to the same rules and articles of

war as the regular troops of the United States.'



"There you are gentlemen, American citizens, and fellow-militiamen. Nine

years ago we socialists thought that law was aimed against labor. But it

would seem that it was aimed against you, too. Congressman Wiley, in the

brief discussion that was permitted, said that the bill 'provided for

a reserve force to take the mob by the throat'--you're the mob,

gentlemen--'and protect at all hazards life, liberty, and property.' And

in the time to come, when you rise in your strength, remember that you

will be rising against the property of the trusts, and the liberty of

the trusts, according to the law, to squeeze you. Your teeth are pulled,

gentlemen. Your claws are trimmed. In the day you rise in your strength,

toothless and clawless, you will be as harmless as any army of clams."



"I don't believe it!" Kowalt cried. "There is no such law. It is a

canard got up by you socialists."



"This bill was introduced in the House of Representatives on July 30,

1902," was the reply. "It was introduced by Representative Dick of

Ohio. It was rushed through. It was passed unanimously by the Senate

on January 14, 1903. And just seven days afterward was approved by the

President of the United States."*



* Everhard was right in the essential particulars, though

his date of the introduction of the bill is in error. The

bill was introduced on June 30, and not on July 30. The

Congressional Record is here in Ardis, and a reference to it

shows mention of the bill on the following dates: June 30,

December 9, 15, 16, and 17, 1902, and January 7 and 14,

1903. The ignorance evidenced by the business men at the

dinner was nothing unusual. Very few people knew of the

existence of this law. E. Untermann, a revolutionist, in

July, 1903, published a pamphlet at Girard, Kansas, on the

"Militia Bill." This pamphlet had a small circulation among

workingmen; but already had the segregation of classes

proceeded so far, that the members of the middle class never

heard of the pamphlet at all, and so remained in ignorance

of the law.