As a natural reaction from the unprecedented co-operation and co-ordination demanded by the war and of the subordination of all selfish interest for the achievement of victory, there has developed the world over, pronounced class consciousness and activity. We witness labor functioning as a class; we see the farmers functioning as a class, the shippers, manufacturers, and, in fact, practically every major element of our body politic functioning as a class. Each is seeking to protect its class interest in some manner, through some kind of organization, political or economic in character, by propaganda, threat, and influence.

In view of this far-reaching and rapidly growing movement, the thought naturally suggests itself that the trust companies of the United States also organize and co-ordinate their common interests-not, however, from merely selfish motives, but from the broad viewpoint of the economic welfare of the country, and, directly or indirectly, of all classes. In serving that larger interest will the trust companies best serve their own selfish interest. And, perhaps, thus they may help to awake the other factions and classes of our people to a realization of the fundamental truth that unselfish service is the most profitable self-service.

We have heard and read the multiplying platforms of labor, of internationalists, and of other organized classes, and I am tempted to propose a platform for the trust companies of America-a platform which will be built upon the basic principle that we believe the world war was fought to destroy autocracy for all time, and carried with it a larger significance than the mere dethroning of kings and the ending of reigns of royalty. It was a war to preserve democracy against autocracy in all its phases and places in our civilization. So today we should no more endure autocracy in Washington, for instance, than in Berlin; no more in labor councils than in capitalistic circles; no more among farmers than bankers.

Such a platform should advocate just return, fair treatment, and proper voice in determining working and living conditions for labor. But it should also demand as much from labor and drive home to labor the fact that labor cannot expect these results unless it stimulates production and gives a fair day's work for a fair day's wage; that labor cannot prosper at the expense of the majority of our people; that it cannot prosper unless it puts its shoulder to the wheel and helps every other class to prosper; that labor will defeat its own purpose and bring hardship upon itself and all other classes so long as it permits the country to suffer from under-production.

Our Alarming Under-Production

And the extent of our under-production may be indicated by a few facts relative to the output in basic materials during 1919. There were 130,000,000 tons less of bituminous coal mined last year than in 1918; there were 12,000,000 tons less of anthracite coal produced than in 1918; 9,000,000 tons less of steel ingots; more than 5,000,000 bales less of cotton than in 1914; 76,000,000 bushels less of wheat than in 1915; 140,000,000 bushels less of corn than in 1917; more than 900,000,000 pounds less of copper than in 1918; more than $10,000,000 less of gold than in 1918, and more than $4,750,000 less of silver than in 1918.

Labor Must Increase Production

It is patent from the statistics as to our own under-production which I just cited, that American workers must drive harder than they are today. Increased wages, granted to meet the high cost of living, have, generally speaking, lessened instead of increased production, and consequently have defeated their purpose by increasing the cost of living. No man should be underpaid, but production should be maintained, and not decreased with increased wages.

Strikes have been epidemic. From June, 1919, to the first of this year there were brought before the United States Department

of Labor for settlement 260 strikes and 239 labor disputes. During the week of February 7 of this year there were 77 such cases pending before the Department. Yet, the average union wage scales per hour in the general trades in 1919 were 17 per cent. higher than in 1918; 55 per cent. higher than in 1913, and 72 per cent. higher than in 1907. Regular full-time weekly earnings in 1919 were 48 per cent. more than those of 1913, and 61 per cent. in excess of those of 1907. But regular hours of labor per week in 1919 were 5 per cent. less than in 1918, and 8 per cent. less than in 1907.

It is significant to note, in this connection, and labor should ponder the fact, that a few days ago four large farmers' organizations prepared a memorial to Congress in which it was stated:

"Those who believe that labor has an inherent right to organize a strike believe that such organizations have a right to starve the people of the cities to death, on the one hand, and to destroy the property of the farmers, on the other. No such right has ever existed, and no such right exists now. It is economically unsound, and the American people I can and will work some other method for the settlement of such controversies. No set of men has ever had the moral or legal right to destroy property or cause suffering by combining together, and the welfare of all the people must ever remain superior to that of any class or group of people."

Labor Seeks Control of Legislative

Machinery

That declaration embodies the fundamental principle upon which this nation was established, and by implication, but none the less effectively, strips from a certain element of labor its cloak of so-called "democratization of industry" and reveals its autocratic ambitions. This is all the more timely in view of the plans recently formulated by a committee of the American Federation of Labor for a nation-wide, aggressive political campaign by organized labor to control Congress and elect National and State officials friendly to such labor.

Were capitalistic interests to undertake such a campaign, there would be a revolution. Yet, organized labor is merely seeking "industrial democracy"-a democracy exemplified in the so-called Plumb plan to nationalize the railroads for the particular benefit of the railroad brotherhoods.

Paramount Issue of Railroad Problem The platform of the trust companies should direct the attention of Congress and the Interstate Commerce Commission-as an agency through which the forthcoming railroad legis

lation enacted by Congress will be administered to the fact that in seeking a satisfactory solution of the transportation problem the paramount issue is not what the brotherhoods, the railway executives, the bankers, or the shippers want, but solely what the public must have, namely, soundly managed, sanely regulated, and efficiently, economically operated railroads.

The railroad plank in the trust companies' platform should make clear to all classes and interests that the continued prosperity of the nation is contingent upon the public obtaining that kind of service and as soon as possible. The railroads must be allowed to earn enough to provide it. And in order to provide that service the railroads will be compelled not only to equip themselves efficiently but also to expand their facilities. Adequate transportation cannot be obtained without credit; credit cannot be secured without fair earning power; earning power cannot be sufficient without fair rates and just regulation.

The railroad plank of our platform should emphasize the fact that Government operation of the carriers has been a failure-a very costly failure. But private ownership and operation from now on must be more successful than ever before. If we are to escape the disaster of having the roads revert to Government control and the triumph of such a scheme as the Plumb plan, which would impose a tremendous tax burden on the nation-already too heavily taxed-for the especial benefit of about two per cent. of our people, there must be far better administration and operation of the railroads than the Government afforded and the roads had in the past. But, above all, the railroads must be given a fairer opportunity to serve the public more satisfactorily than they have ever before enjoyed.

Congress must provide adequate and just legislation; the Interstate Commerce Commission must permit living, and not starvation rates, and the Government must grant a loan sufficiently ge to enable railroads to equip themselves operly to handle the commerce

of the country. If these things are done, the investing public will provide the means for the needed expansion of railroad facilities in the future, because the capital required for such prospective development will be attracted to the railroad business, and not, as today, driven away from it. In brief, our railroad plank should insist upon having the railroads taken out of the field of exploitation into that of sound economics. They present a business problem to a business people, and should be accorded a solution conceived and worked out in the same spirit as our banking system.

Proper Protection Abroad for our Dollars

The trust company platform should advocate Government recognition of the fact that we cannot expect American dollars to seek employment and investment abroad unless they are accorded the protection of the American flag and the United States Government. Our banks cannot afford the American people adequate foreign investment service; they should have the complete support and co-operation of our Government, and our investors in foreign securities should depend on the moral backing of our Government to protect them. American lives and American property should be safe around the world.

A policy of economic and financial imperialism on the part of the United States Government should not be tolerated, for such a policy would inevitably lead sooner or later to political imperialism, and that would be fatal not only to our Government but also to the interest of our foreign investors. But the Government's moral support should be granted freely to our citizens legitimately engaged in developing the resources and industries of other countries by means of American capital and labor.

Europe Must Share Responsibility

The platform I propose would seek to make clear to Europe that America is glad and willing to lend a hand in helping Europe rehabilitate itself but insists that the peoples of Europe bear their proper share of the burden and solve their political, financial, and economic problems in courageous, satisfactory manner, instead of accusing "heartless America" of being "gorged with the fruits of victory and refusing aid to those who helped her win victory."

The peoples of Europe must face the facts and recognize that the reasons for their depreciated currencies are inflation, extravagance, unsound financial methods, failure to raise sufficient revenue by taxation to meet Governmental expenditures, and adverse trade balances. They must appreciate the necessity for remedying these conditions, if they would have us continue our financial assistance on an adequate basis. Europe, in fact, must share the responsibilities, as well as the advantages and fruits, of such aid.

Other Planks in the Platform

The trust companies' platform should endeavor to impress upon the American people the full significance of the exchange situation and the barrier it creates abroad against our products—an invisible tariff that is higher than any tariff before the war. Our platform should insist upon the demobilization of Gov

ernment interest and activity in business. But, as much as I am opposed to further Governmental participation in industry, in foreign financing, and in extension of credits, it may be advisable eventually for our Government to reverse its present policy and make grants, through existing or newly created agencies, for financing our export trade, provided that such credits be expended in the United States for American products.

Our platform would lay stress upon the imperative need for the conservation of our credit resources and for the diverting of capital and credit from speculative, unnecessary ventures to legitimate, essential business. It should advocate the strictest economy on the part of the Government and the adoption of a proper budget system.

In this proposed platform, the trust companies should strive to make Congress realize that if we are to speed up industry to the productive capacity demanded in this critical period, the unjust and onerous taxation now imposed on business interests and capital must be lightened.

Based on the estimates of the Administration, approximately 35 per cent. of the cost of the war has been borne by current taxation, This is a greater amount than the original program called for, and is due largely to the ease with which a legislative body may increase the rates of taxation on incomes without realizing the ultimate effect of the high assessment. To continue to raise such enormous sums of revenue by means of an assessment on incomes will place a greater burden on posterity by impeding the industrial growth of the country than would the passing to them of a larger contribution to the war debt than is now contemplated.

Trust Companies Greatest Opportunity

The trust companies of the United States should do all in their power to help make the public understand these great economic problems and stimulate a demand for a sound, satisfactory solution of them. That should be the motive for and guiding spirit of the closer and more unified co-operation of the trust companies of the country. They have a very important economic function to perform in our modern civilization. They also have an equally important educational mission before them, and they have, in common with other financial institutions, the greatest opportunity in their history to perform an invaluable service to the public. Let us seize that opportunity and make the best of it-for the sake of enlightened selfishness, a selfishness that is served best when it serves others most.

Russia, Austria, Germany, Italy, Belgium, France and Great Britain have abandoned the gold standard. No longer tied to this hitching post, the currencies of these countries have been soaring into unknown heights. In several instances the inflation since the war has been greater than inflation during the war. The increase in currency has in most cases gone on steadily, without sign of contraction, or even of coming to a halt. There is no longer any attempt or any pretence that the currency can be redeemed at the will of the holder in gold; consequently the only check on the increased issues has been the needs of the governments and the speed of the printing press.

Mr. O. P. Austin recently compiled figures of the world's increase in paper money since the beginning of the war. The results are amazing.

"The paper currency of thirty principal countries of the world at the beginning of the war aggregated a little over seven billion dollars; at the end of the war, November, 1918, it was about forty billion dollars, and in December, 1919, it totaled fifty-one billion dollars, these figures being of course in very round terms, and exclusive of the currency issues of the Bolsheviki Government, which alone are estimated at thirty-four billion dollars. The gold reserves of the thirty countries in question aggregated in 1914 a little less than five billion dollars; in 1918, a little over seven billions, and in 1919, slightly below the seven billion dollar line. The ratio of gold reserve to outstanding notes in the thirty countries in question was, in 1914, 70 per cent.; by 1918, it had dropped to 18.4 per cent., and in December, 1919, was 13.7 per

cent.

"The world paper currency at the date of the Armistice was more than five times as

great as at the beginning of the war, and one year later, December, 1919, was seven times as much as at the beginning of the war. The actual increase during the year succeeding the Armistice was over ten billion dollars, or a 25 per cent. increase over that existing at the end of hostilities. The paper currency of the thirty countries for which details are available, is seven times as much as at the beginning of the war, while the gold in the countries in question has increased less than 50 per cent. meantime. As a consequence, the ratio of gold to paper has fallen from 70 per cent. to 13.7 per cent.

"The Central Powers, Germany, AustriaHungary, Bulgaria and Turkey, had at the beginning of the war about $600,000,000 of gold and $1,200,000,000 of paper; at its termination they had $686,000,000 of gold and $12,305,000,000 of paper, while at this date, a little over one year after the Armistice, their gold has fallen to $327,000,000 and their paper circulation advanced to $18,771,000,000. Their ratio of gold to notes was at the beginning of the war 49.7 per cent., at the end of the war 5.5 per cent., and at the present time 1.7 per

cent.

"The Allies taken as a group, which began the war with $3,763,000,000 of gold and $4,900,000,000 of paper, had at its termination $5,217,000,000 of gold and $25,000,000,000 of paper, and at the present time $5,071,000,000 of gold and $29,600,000,000 of paper. The ratio of gold to notes was at the beginning of the war 76.6 per cent., at its termination 20.9 per cent. and at the present time 17.1 per cent."

Reaction on American Currency Standard

The abandonment of the gold standard by all the principal European countries is not a thing that we can look upon as a question