of friction between them. More knowledge on the part of capital of the good qualities of those that serve it, and some knowledge upon the part of the men of the economic laws which hold the capitalist in their relentless grasp, would obviate most of the difficulties which arise between these two forces, which are indispensably necessary to each other. I hope that those of our men who possess that inestimable prize, the taste for reading, will make it a point to study carefully a few of the fundamental laws from which there is no escape, either on the part of capital or labor. If this library be instrumental in the slightest degree in spreading knowledge in this department, it will have justified its existence.

I trust that you will not forget the importance of amusements. Life must not be taken too seriously. It is a great mistake to think that the man who works all the time wins in the race. Have your amusements. Learn to play a good game of whist or a good game of drafts, or a good game of billiards. Become interested in baseball or cricket, or horses, anything that will give you innocent enjoyment and relieve you from the usual strain. There is not anything better than a good laugh. I attribute most of my success in life to the fact that, as my partners often say, trouble runs off my back like water from a duck. There is a poetical quotation from Shakespeare, that is applicable. It is to "wear your troubles as your outsides-like your garments, carelessly."

Many men are to be met with in this life who would have been great and successful had the world rated them at the value which they placed upon themselves. This class are the victims of an hallucination. Nobody in the world desires to keep down ability. Everybody in the world has an outstretched hand for it. Every employer of labor is studying the young men around him, most anxious to find one of exceptional ability. Nothing in the world is so desirable for him and so profitable for him as such a man. Every manager in the works stands ready to grasp, to utilize the man that can do something that is valuable. Every foreman wants to have under him in his department able men upon whom he can rely and whose merits he obtains credit for, because the greatest test of ability in a manager is not the man himself, but the men with whom

he is able to surround himself. These books on the shelves will tell you the story of the rise of many men from our own ranks. It is not the educated, or so-called, classically educated man, it is not the aristocracy, it is not the monarchs, that have ruled the destinies of the world, either in camp, council, laboratory or workshop. The great inventions, the improvements, the discoveries in science, the great works in literature have sprung from the ranks of the poor. You can scarcely name a great invention or a great discovery, you can scarcely name a great picture, or a great statue, a great song or a great story, nor anything great that has not been the product of men who started like yourselves to earn an honest living by honest work.

And, believe me, the man whom the foreman does not appreciate, and the foreman whom the manager does not appreciate, and the manager whom the firm does not appreciate, has to find the fault not in the firm, or the manager, or the foreman, but in himself. He cannot give the service which is so invaluable and so anxiously looked for. There is no man who may not rise to the highest position, nor is there any man who, from lack of the right qualities or failure to exercise them, may not sink to the lowest. Employees have chances to rise to higher work, to rise to foreman, to be superintendents, and even to rise to be partners, and even to be chairmen in our service, if they prove themselves possessed of the qualities required. They need never fear being dispensed with. It is we who fear that the abilities of such men may be lost to us.

It is highly gratifying to know that the hours of labor are being gradually reduced throughout the country-eight hours to work, eight hours to play, eight hours to sleep, seems the ideal division. If we could only establish by law that all manufacturing concerns which run day and night should use three turns, it would be most desirable. You know we tried to do so for several years at a cost of some hundreds of thousands of dollars, but were finally compelled by our competitors to give up the struggle; the best plan, perhaps, is to reach it by slow degrees through state laws. No one firm can do much. All its competitors in the various states must be compelled to do likewise, for in our days profits are upon so narrow a margin that no firm can run its works except under similar condi

tions with its competitors. It is necessary, therefore, that laws should be secured binding upon all. We should be glad to support such a law; but, even as at present, if workmen use well the time they have at their disposal they will soon rise to higher positions. You need not work twelve hours very long; most of us have worked more hours than twelve in our youth. The workman has many advantages to-day over his predecessors. A sliding scale for his labor ranks him higher than before as a man and a citizen. The proportion of the joint earnings of capital and labor given to labor never was so great and is constantly rising, the earnings of capital never were so low. The cost of living never was so low in recent times.

I hope the future is to add many more advantages and that the toilsome march which labor has had to make on its way from serfdom, when our fore-fathers were bought and sold with the mines and factories they worked, up to its present condition, is not yet ended, but that it is destined to continue and lead to other important results for the benefit and dignity of labor.

[The sliding scale proposed was afterwards introduced by Mr. Carnegie and has been in successful operation for many years.]

THOMAS NIXON CARVER

EMPLOYEE AND CUSTOMER OWNERSHIP

Thomas N. Carver was born in Kirkville, Iowa, in 1865, and has been professor of political economy at Harvard since 1902. He is one of the eminent economists of this country and in the following address discusses a recent and important change in our economic conditions. This address was delivered at the forty-third annual convention of the American Electric Railway Association held at the Million Dollar Pier, Atlantic City, New Jersey, October, 1924.

THE World War produced a number of political revolutions in Europe. It has not yet produced an economic revolution. A number of old governments have been overthrown and new ones set up in their places. In some cases this resulted in a temporary economic débacle, but wherever industry has begun to function again it looks so much like that which existed before the revolution as to be difficult to distinguish from it. No significant improvement over the old forms of industry has yet been produced in any European country by any of these political revolutions. Their ultimate effects go no deeper than those that follow the ousting of one gang of politicians from the government of an American city and the substitution of another.

An economic revolution may follow as a result of a political revolution, but usually it does not. According to De Tocqueville, the one significant result of the French Revolution, which was primarily political, was that the peasants got possession of the land that had formerly been held in large estates. Up to the present (1924) that is the only economic improvement noticeable in Russia; yet the specific purpose of the Russian revolutionists was to use the power of government to force a new economic order upon the people. In spite of the most ruthless exercise of governmental power which the modern world has

ever seen, they have found the economic forces too much for them. As to the peasants and the land, the most that the revolution did was to facilitate a process that was already going on. More than that, the whole process was toward the private ownership of land, which is the direct antithesis of communism. In short, the economic forces brought about the ownership of land by the peasants in spite of rather than with the help of the new political power.

Economic revolutions usually proceed from causes that lie deeper than politics or government. The most that a government can do is to hasten or retard them, and even this is not always possible.

The only economic revolution now under way is going on in the United States. It is a revolution that is to wipe out the distinction between laborers and capitalists by making laborers their own capitalists and by compelling capitalists to become laborers of one kind of another, because not many of them will be able to live on the returns from capital alone. This is something new in the history of the world.

The labor movement in this country is so far in advance of that in any other country as to make comparison impossible. In European countries, including Great Britain, labor organizations and labor leaders are still pursuing antiquated methods that are comparable to the attempt of a man to lift himself by his boot straps. Here they are using the fulcrum of capital ownership and are actually lifting themselves into positions of well-being that amount to affluence in comparison with the conditions of European laborers. In European countries they are dominated by a psychology that was built up in a primitive and fighting stage of social development; here they are emerging from that stage and are beginning to think in constructive terms such as belong to a progressive and industrial stage. In European countries they are grasping at the shadow of political control, but have never and never will by that method put an ounce of the substance of economic prosperity into the hands of any laborer. In this country they have refused to be deceived by shadows and are rapidly gaining the real substance of prosperity.

Those belated minds that are still thinking in terms of the