[The following quoted paragraph signed E. E. is an extract from a private letter to one of the Mutualist's editorial writers, and his (the writer's) answer to the same.]

I came across a statement of the actual status of Proudhon's Bank of the People (1848) Paris. The peak of capital was about 36,000 francs and the number of stockholders also about that number—36,000. So that on the average each stockholder represented a capital of 20 cents, and the bank ceased to exist when Proudhon went to prison to serve a term for his political convictions. Even, if granted, that quantity and quality do not exclude the value of an economical experiment, it stands to prove that the proletariat cannot have the means to finance industrial enterprises which could compete with the huge establishments of the modern combines.—E E.

For many years the needle trades were the poorest of all the workers. The sweat shops were the awful example of capitalism. When the labor bank was opened in New York by the Clothing Workers, half a million dollars were deposited on the first day. There are now 26 labor banks in the United States with the deposits of over 90 millions of dollars, and the oldest of these is not five years of age.

I am citing this as an offset to the small subscriptions to Proudhon's bank, and the statement that labor is too poor to go into the banking business.

But subscriptions are not essential to a mutual bank, and Proudhon need not have called for them. The advocates of Mutual Banking do not believe that machinery or tools or buildings, or even the present day money used in production need be acquired by the workers in order to emancipate themselves.

Credit is what is needed, but it must be furnished at cost; that is, at zero a year. The security for this credit need not be provided by the proletarians, nor even by the workers who have jobs, but by the employers themselves.

The employers of labor (the entrepreneurs) borrowed in Proudhon's time, and those of the present day are still borrowing, but it is the marginal borrower, the one who is in debt for all the capital he is using, who fixes the price of the product.

It is the failure to understand this that has kept labor enslaved.

In Proudhon's day the Socialists said, Competition results in concentration of industry. The larger capitalists are eating up the smaller ones, and the largest ones will finally combine and form great monopolies, with the result that these monopolies will concentrate capital into fewer and fewer hands; and prices will no longer be subject to competition, but will be arbitrarily raised and fixed by the monopoly; profits will be enormously increased by the monopoly. By the economies made possible by large production and concentration, many workers will become superfluous, and will be forced into idleness, thus increasing the proletariat, and the capitalist system will fall of its own weight.

Let us see how far these gloomy predictions have been borne out by the facts.

In the case of one of the largest corporations in the United States producing one of the most important products we find the following:

The United States Steel Company was formed in 1901 by combining several hundred companies. It was capitalized for the enormous sum of one thousand million dollars, and our Socialist friends assured us that it would centralize the capital into a few hands, and raise the price of steel, and increasep rofits, and dispense with many of the steel workers.

Now what really happened was this: There are 125,000 stockholders in the United States Steel Company, and the number is increasing.

After the world war, of all the products in the market, the price of steel was the first to go down to the pre-war level and stay down, and there are 200,000 employés working for the company, more than ever before. The rate of dividends paid to stockholders by that corporation last year was less than that of any of the other large industries.

And the capitalistic system is still going strong. Not one of the gloomy guesses have come true.

Nor are the number of employers in the country diminishing generally. There are more now than ever before—almost ten million of them. They borrow and pay interest on 35 billions of dollars from banks that we know of, and much more of which we have no figures.

The industrial capitalist is mortgaged to the financial capitalist, who is the real master. He it is who makes exploitation possible, and the failure to understand this is what causes Socialist predictions to fall down and Socialist experiments to blow up. H. C.

Now comes Secretary of Labor Davis on the front pages of dailies, under black-type headings, taking the ground that big industrial combinations would benefit labor, the same view the editor of this paper published 30 years ago—only Davis does not say that the money monopoly should FIRST be eliminated.

No man is wise enough to forsee the secondary results of any proposed restriction, and no history is copious enough to record the evils that have ensued upon the denials of liberty. Dr. Greville Maconald.