Popular Science Monthly/Volume 84/April 1914/The Struggle for Equality in the United States V

by Charles Franklin Emerick

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THE STRUGGLE FOR EQUALITY IN THE UNITED STATES.

V

By Professor CHARLES F. EMERICK

SMITH COLLEGE, NORTHAMPTON, MASS.

The Courts and Property

THE constitutional safeguards which surround private property in the United States are exceptionally strong. Between confiscation and the multitude stand the state and the federal courts. In Cutting v. Goddard, decided in 1901, the Supreme Court held that a return of 10.9 per cent, on the investment is not unreasonably high and that a return of 5.3 per cent, is unreasonably low.^[1] In decreeing the dissolution of the Standard Oil and the American Tobacco Companies, the same tribunal left the defendant companies in possession of everything which they had succeeded in amassing by unlawful methods. Nowhere in either of these decisions is there any hint that restitution ought to be made. On the contrary, every precaution necessary to conserve the property which monopoly control had garnered together was scrupulously observed. In the course of the Standard Oil decision, the ChiefJustice remarked "that one of the fundamental purposes of the statute (the Anti-trust Act) is to protect, not to destroy, rights of property."^[2] No penalty was inflicted other than dissolution and the prohibition of acts violative of the statute. So far as constitutional guaranties are concerned, the most strenuous advocate of property rights could scarcely ask for anything more.

 

I

Nevertheless, the extent to which the Supreme Court conserves the rights of property is easily exaggerated. The Dred Scott decision did not prevent the overthrow of slavery, and moreover without compensation. On the contrary, it hastened its downfall and proved to be the one thing from which the slave power might well have prayed to be delivered. Much comfort was extracted by an influential portion of the property-owning class from the income tax decision in 1895, but the cost of what was gained from that decision has seldom figured properly in the account. Probably no decision of the Supreme Court since the Civil War has excited so much dissatisfaction or fallen so flat. In the opinion of many the court as now constituted would find a way of upholding a similar measure even though the constitution had not been amended. To save the face of the court was the strongest argument for proposing the income-tax amendment. But the decision of 1895 fanned the fires of social discontent. It unmasked the motives of those opposed to an income tax. On the one hand, are those well able to bear the burden of taxation upon whom a properly administered income tax would to a considerable extent rest. On the other hand, are the beneficiaries of protection who fear that an income tax will deprive them of one pretext for the maintenance of the tariff. The glaring injustice of any income tax apportioned among the several states according to population, in conformity with the court's decision, made such a tax impracticable. One effect was to discredit the court itself. Another fact had a similar effect. In its first decision, the court divided evenly on certain of the points at issue. After reargument it stood five to four against the act on these points. Far from conserving the social order, the in come-tax decision did quite the reverse.

Professor Daniels says:

The decision or, more strictly, the decisions of the Supreme Court which killed the Income Tax of 1894 made a great deal of history, and unmade, or, at all events remade, a good deal of law. It certainly traversed legal expectation, it jostled the doctrine of stare decisis, it contravened previous decisions, and it discredited a good many dicta which had already become "blessed words" among authoritative text writers and accredited authorities on constitutional law. . . . The deliverance of the court can be explained only by reference to what has been happily termed "psychological climate.". . . The Supreme Court had reversed its own decision before, but except in the legal tender cases no modern decision had been reversed which bore very directly upon the stirring political issues of the day. But the court evidently had not been appealed to in vain upon the issue that the tax was a stride towards socialism, and the "weightier matters of the law" seemed to have been forgotten under the shadowy sense of dread which the dim specter of socialism invoked. The most venerable member of the court gave emphatic utterance to the feeling which moved him. "The present assault upon capital," said Mr. Justice Field, "is but the beginning. It will be but a stepping-stone to other, larger and more sweeping, till our political contests will become a war of the poor against the rich, a war constantly growing in intensity and bitterness.^[3]

Probably the Dartmouth College case has been more often quoted than any other as indicative of the jealous care with which the Supreme Court safeguards property rights. But few decisions illustrate better the relativity of judicial decisions to the circumstances existing at the time and place. When the decision was handed down, business was still conducted on a very modest scale, and the era of the corporate form of business organization was yet to come. In view of the important respects in which the doctrine of charter rights has been modified in subsequent cases, it is probable that the decision handed down in 1819 would have been different if the industrial changes of the next fifty years had been foreseen. Some one has aptly said that the Supreme Court follows the election returns. As it was, it appears that Chief Justice Marshall succeeded in bringing a majority of the court to his point of view only by means of methods which in the light of to-day are so high handed and questionable that they would hardly be tolerated for a moment.^[4]

The potency of the courts to protect property rights depends upon public opinion. Respect for the law is not always at a maximum in the country having the most laws. "It is not the existence of statutes," writes President Hadley, "which makes murder a crime; it is the growth of a public opinion which makes the individual condemn himself and his friends, as well as his enemies, for indulgence in that propensity." The chance of convicting prominent business men under the criminal section of the anti-trust act until recently has been so slim that it was not worth while to bring suit. During the disorders attending the strike of employees on railways centering at Chicago in 1894, public feeling ran so high that the injunctions issued by the federal courts were not vindicated until much of the irreparable injury forbidden by the courts had been inflicted upon the railways and those dependent upon their services. The damages which the railways have since recovered by suits at law for the destruction of property are but a tithe of the losses which they sustained, to say nothing about the losses inflicted upon the public at large. When toll pikes in Kentucky were in public favor, the right of property in them was secure. When they come to be regarded as a "relic of barbarism," the courts were powerless to protect them.

Prior to the Civil War, many counties in Missouri issued bonds to subsidize the building of railways. The bond issues were loosely safeguarded, and some counties in which no railroad was built were saddled with a heavy debt. The people in these counties naturally opposed paying the interest and the principal of the debt, and went so far in some instances as to elect judges of the county court pledged not to make the necessary tax levy. The bond-holders accordingly sought a remedy at the hands of the federal court in Kansas City, Missouri. But in a number of counties public opinion was so set that the orders of the federal court directing the county judges to levy the necessary tax have repeatedly failed to command obedience. One of the accepted and wellunderstood duty of the judges in some counties has been a jail sentence for contempt of court. In some cases the judges have taken to the woods as soon as elected. The Supreme Court has held that a federal judge can not himself or through any official appointed by him make a tax levy. The utmost that can be done is to order a county official to levy the tax needed to pay a judgment, and to punish failure to comply as contempt of court.^[5] The upshot is that the decrees of the federal court have for years been in abeyance and the legal rights of the bondholders have not been enforced. This incident renders it more than doubtful whether the federal courts could have prevented a number of states from repudiating their debts even if the eleventh amendment had never been added to the constitution. In the words of Lincoln:

In this and like communities, public sentiment is everything. With public sentiment, nothing can fail; without it nothing can succeed. Consequently he who moulds public sentiment goes deeper than he who enacts statutes or pronounces decisions. He makes statutes and decisions possible or impossible to be executed.^[6]

If the status of public opinion sometimes paralyzes the activity of prosecuting attorneys and nullifies the decrees of courts, it also occasionally enforces a higher standard of business conduct than the law requires. Numberless oral agreements are every day faithfully observed which can not be enforced at law. Many a man's word is as good as his bond. Every social group has a code of honor which in some respects exceeds the letter of the law. Probably "Wall Street" suggests a low order of cunning to most minds, and yet there is not place where certain kinds of contracts are more scrupulously observed. The whole fabric of credit so essential to modern business rests upon men keeping faith, and is in the main quite independent of the compulsory processes of the courts. Justice secured by means of litigation is frequently so expensive that it comes too high. Throughout the silver controversy the members of the New York Clearing House steadfastly refrained from paying their daily balances in silver, though Congress required the Clearing House rule forbidding such payments to be rescinded.^[7] During the Civil War, Massachusetts paid the interest on her bonds in gold, "though it cost her sometimes nearly three for one to keep her faith."^[8] More noteworthy was the maintenance of the gold standard on the Pacific Slope. Legally debtors in California had as much right to tender greenbacks in full discharge of their debts as in any other part of the country, but the fact that a man could not tender greenbacks without injuring his credit and losing standing among business men effectually prevented such conduct. Self-interest resulted in a higher standard of business honor than the law demanded. In like manner competition at the present time frequently compels a higher standard of efficiency and honor among men than the law requires.

It is difficult to see why any one with any practical experience of business should take the law of the matter as a guide. The law is a very cumbrous, slow and inefficient machine for preventing robbery and other crimes on the part of rogues and burglars in the various forms in which they infest society. It makes no attempt to show how things should be done well. That is not its business. Any one who relies on the merely legal interpretation of his duties is only doing enough to keep him out of Wormwood Scrubs.^[9]

Once more, when boast is made of the protection afforded private property by the courts, an important exception should be noted, namely, promissory notes. Congress has the right at any time to emit bills of credit and to declare them a legal tender in payment of pre-existing debts. The man who lends another one thousand dollars to-day is without any remedy at law if his debtor at the maturity of the loan tenders him depreciated paper money which Congress has clothed with legal tender power. In other words, a large class of property is in an important respect well outside the protection of the courts. The only remedy open to those opposed to debasing our monetary standard is political action. It was this remedy and this remedy alone that brought about the resumption of specie payments and subsequently prevented the free coinage of silver. Even if the final decision of the Supreme Court in the legal-tender cases had been adverse to the power of Congress to issue the greenback, a large portion of the community, including the great army of wage earners, would have suffered an irreparable loss before the decision was reached.

The property-owning interests dependent upon a protective tariff for their prosperity are in a position similar to the holders of promissory notes. The tariff schedules fixed by any Congress may be changed at any time without the slightest obligation to compensate those whose business interests are thereby disturbed. The courts can not be successfully invoked to stay the hands of Congress. Here as in the case of promissory notes the parties interested are limited to political action, and if the history of tariff legislation indicates anything it is that the remedy is more than adequate.

The case of the liquor traffic, a business in respect to which the police power of the state is subject to a minimum of restraint by the courts, illustrates the same point. The state may, if it deems wise, prohibit the manufacture and sale of intoxicating beverages without indemnifying any one for losses sustained. The liquor business is commonly regarded as disreputable. When run for profit, it is inconsistent with the public good and it is accordingly subjected to all sorts of restrictions. It is notorious that the business in many communities is conducted in flagrant disregard of law. Comparatively few states, however, go so far as to try to prohibit the traffic. In most communities the business flourishes and there is no lack of capital willing to assume the risks incidental to embarking in it. As in the case of protection, the political remedy is usually more than ample to safeguard the liquor interests.

 

II

The theory of judicial control in the American constitutional system entitles the courts to a certain eminence, but it does not justify magnifying the judiciary to the exclusion of everything else. The courts are but one of several restraining influences to which the members of our legislative bodies are subject. "Things in possession," says James Eussell Lowell, "have a very firm grip. One of the strongest cements of society is the conviction of mankind that the state of things into which they are born is a part of the order of the universe, as natural, let us say, as that the sun should go round the earth."^[10] The members of our legislatures are no more exempt from the play of this influence than is the mass of the people who elect them. The man who is obliged to listen to arguments on both sides of a question is apt to reflect a moderate point of view. Eesponsibility also exerts a sobering influence. Besides, in most states political parties are so evenly balanced that other men ambitious for office, within as well as without the party, can easily take advantage of any serious mistake of judgment. Once more, the mass of bills introduced at the recurring sessions of our legislatures is such that none save those that are vigorously pressed stand much show of enactment. The average member likes to be considered a practical man, and therefore looks askance upon the proposals of crank reformers. Finally, in a political contest, the property-owning class is very resourceful in taking care of itself. It can see to it that its claims are ably presented. It can pay for printers' ink. It can command the support of men of influence in the community. It can hire effective advocates and attorneys skilled in the labyrinthine processes of the law. It has great power of endurance as an antagonist. Property has a certain glamor which enables it to make friends in unexpected quarters.

Nor does the referendum promise to lead to such radical departures as many fear. There is a vast amount of inertia in the multitude which makes strongly for things as they are. The masses of the people may be more conservative than the average member of a legislature. For this reason certain organs of the Conservative party in England favor the referendum. It may prevent extremists from getting what they want by playing off one party against another. Many people are unwilling to take the trouble to inform themselves upon measures proposed for reform. Others talk like progressives, but lose heart when it comes to vote. Many working people are as much averse to shortening the working day as are the owners of factories. Parents bent upon exploiting their children are opposed to the interference of the law. The boys upon the anthracite coal breakers like their jobs. It is noteworthy that the extension of the ballot to women recently in Illinois was done by the legislature and not by a referendum. The gaining of "votes for women" may render the electorate still more cautious going. The historic function of women has been to conserve the old rather than to initiate the new. In any event, some opponents of woman suffrage favor submitting the question to the women of the several states as the most effective way to defeat it.

It is possible that the advocates rather than the opponents of the referendum will find more cause for disappointment at the result. The people of Oregon in 1910 and 1912 as compared with 1906 and 1908 showed a disposition to go somewhat slower in assenting to measures submitted for their approval. Out of thirty-two measures submitted in 1910, twenty-three failed to secure popular approval.^[11] In 1912, twenty-six out of the thirty-seven measures submitted failed of adoption. Of the thirty-seven measures submitted, fourteen were proposed amendments to the constitution, only four of which were adopted. As the number of measures submitted has increased, the percentage adopted has fallen.^[12] Of one hundred and sixteen constitutional amendments submitted to the voters of the several states during 1886-1891, sixty-two were rejected.^[13] Of ninety-nine amendments submitted during 1894-'96, fifty-three were rejected.^[14] Of eighty-eight constitutional questions submitted to the voters of Michigan during 1835-1908, thirty-nine failed of adoption.^[15] In Massachusetts affirmative action has been more common. Of sixty amendments submitted since 1780, only nineteen have been rejected.^[16] The experience in Switzerland has been that many progressive measures when submitted to the people have been defeated.^[17] Its effects have not been radical or socialistic, neither has its tendency been progressive.^[18]

Few writers eminent in the world of letters during the closing years of the nineteenth century were so impressed with the evils of democracy as Lecky. To his mind a wide suffrage meant government by the more ignorant portion of the community, political instability, successful appeals to class jealousies and antipathies by the demagogue, the spoliation of the rich by the poor. And yet Lecky was inclined to view the referendum with favor. By disentangling issues from one another, by freeing them from the dominion of party and from coalitions of logrolling politicians, he thought the referendum might "prove the most powerful bulwark against violent and dishonest change." He even went so far as to say "that its tendencies might be towards extreme Conservatism."^[19] One of the leaders of the Labor Party in England, Mr. J. Ramsay Macdonald, thinks the referendum will enable reactionaries to single out certain measures for defeat and to interfere with a consistent policy of reform.^[20]

Judging from the amount and the character of the opposition which the referendum at present excites in the United States, one might suppose that it is nothing less than revolutionary in principle. Yet it involves nothing with which the country has not long been familiar. It squares with the traditional American theory that sovereignty resides in the people. In calling constitutional conventions and in adopting new constitutions it has long been employed in most of the states. It is the usual method of amending our organic law. In the decade ending with 1908, 472 constitutional questions, nearly all amendments, were submitted to the people of the several states.^[21] The movement now well under way merely extends the use of the referendum to legislative acts. I can see no objection to such an extension that does not apply with as much force to the right of the people to determine their organic law. The latter is the more fundamental and logically includes the former. If the right of the people to pass upon legislative questions is dangerous to liberty and property, the right to pass upon constitutional questions is still more dangerous, unless surrounded by more careful safeguards. It is evident that the electorate en masse of a large population can not formulate the details of either their statutes or their constitutions. But if they are incapable of passing upon the public policy embodied in the former, neither are they capable of passing upon the general principles embodied in the latter. "The fact is," says Professor Burgess, "that the political science of the modern world is still engaged in the task of working out the distinctions between sovereignty and government, and that political practise is in the transition period between the sovereignty of the government and the sovereignty of the people behind the government."^[22] Much of the opposition to the referendum can only be understood in the light of this remark.

The argument that the referendum will lower the character of our legislative bodies is of doubtful validity. This has not been the effect upon our constitutional conventions. The personnel of these conventions is far superior to that of our state legislatures. While many of the latter have gained a reputation as fountains of political debauchery and have declined in influence, the former have remained in high repute. A seat in a constitutional convention is still an honor.

The best men in the community are still willing to serve in it, no matter at what cost to health or private affairs. I can not recall one convention which has incurred either odium or contempt. . . . In looking over the list of those who have figured in the conventions of the State of New York since the Eevolution, one finds the name of nearly every man of weight and prominence; and few lay it down without thinking how happy we should be if we could secure such service for our ordinary legislative bodies.^[23]

The demand for the referendum is the result of the deterioration which our state legislatures have already undergone.

Most of the objections to a larger measure of popular rule are merely notes of caution. The proper metes and bounds can only be determined in the light of further experience. In the mean time, it is the place of every intelligent man to keep an open mind. No plan of government is a finality. Our direct primary laws are still in the experimental stage. Some of them have been enacted by machine politicians with a view to discrediting them and are capable of great improvement. Even the fundamental guaranties of our federal and state constitutions need to be adapted to changing conditions either by interpretation or by formal amendment. The constitutional prohibition in Pennsylvania which prevents a law requiring wages to be paid in money may have once conserved the liberty of the individual, but such a prohibition to-day secures the form without the substance of liberty.^[24] Whether a given guaranty is fundamental or not is a matter upon which there may easily be differences of opinion. To hold that constitutional guaranties are immutable and that the majority after due deliberation has not the moral right to change them is to take them outside the realm of reason and discussion.

On constitutional matters practically no one questions the referendum. On local matters, such as the liquor question, increasing the bonded debt of a city and granting franchises, where the issues are "simple and familiar to the voters," it has an acknowledged field of usefulness. The extension of the referendum to state-wide legislative acts is at the present time the bone of controversy. A century ago, however, the ratification of state constitutions by popular vote was viewed with similar misgivings. It was not till 1840 that this practise was generally recognized. At the outset, the state legislatures called constitutional conventions without any higher sanction.^[25] The federal constitution was ratified by representatives of the people and not by popular vote. To-day, however, the ratification of amendments to the constitution by the legislatures of the several states is an anachronism. As applied to legislative acts, the referendum can have only a negative effect. As already noted, it frequently makes for things as they are rather than for needless change. A serious objection is that it may embarrass the conduct of public affairs by withholding necessary appropriations. The voters are sometimes penurious in voting the public money. On two occasions, appropriations for the state university in Oregon have been held up until approved by a referendum, the teaching staff in the meantime performing its duties without pay. Such experiences tend to repel efficient teachers. The educational advantage to the voters hardly compensates for the interference with efficiency. Such occurrences are, however, not a necessary feature of the referendum. In Ohio, "laws providing for tax levies, appropriations for the current expenses of the state government and state institutions," are not subject to the referendum. The legislature is also empowered to exempt "emergency laws necessary for the immediate preservation of the public peace, health or safety" from a referendum by a two-thirds vote. Similar provisions exist in many other states.

The small vote polled on constitutional and legislative referenda as compared with the vote for candidates often excites remark. Probably it indicates that many voters are more interested in men than measures. It also points to the fact that our political canvasses are largely contests between individuals seeking the emoluments of public office. Electioneering is so conducted as to arouse partisan zeal. The appetite of hungry spoilsmen aided by automobiles gets out a vote that is not particularly well informed. Moreover, referenda seldom get much newspaper notice. Except in Oregon, the voter is usually left entirely to his own devices to inform himself. Finally, referenda are overlooked by many voters because they occupy an inconspicuous place on the ballot. The vote cast upon such questions in Illinois has been greatly increased by placing them upon a separate ballot. A similar plan in Idaho has almost doubled the percentage of the total vote cast on constitutional amendments.^[26]

In the opinion of some writers, the initiative is nothing less than revolutionary. "Of all the proposals that have been brought forward in the name of direct democracy, the initiative is the most preposterous and the most vicious," remarks President Butler.^[27] In view of the diverse forms which the initiative takes in the several states, this condemnation is altogether too sweeping. One's judgment should be governed by the concrete form which the initiative takes. In Oregon, a measure goes directly to the voters in the form in which it is initiated. In Ohio, it is first considered by the legislature. If not enacted into law within four months, or if passed in an amended form, it is submitted to the people in either its original or its amended form, provided a supplementary petition "signed by not less than three per centum of the electors in addition to those signing the original petition" is filed with the secretary of state. In Oregon, eight per cent, of the legal voters are required to initiate a measure; in Wyoming, the plan submitted to the voters in 1912 required twenty-five per cent. In Missouri, an initiative petition must be signed "by not more than eight per cent, of the voters in each of at least two thirds of the congressional districts in the State." The larger the population of a state the more difficult it is to secure the required number of petitioners. In Michigan, more than twenty per cent, of the voters "voting for secretary of state at the preceding election of such officer" are required to initiate a constitutional amendment. The petition must be signed at a regular registration or election place and the signatures must be verified by the registration or election officers. No amendment can be submitted to the people if the legislature disapproves. Finally, an affirmative vote of not less than one third of the highest vote cast at the election for any office is required to adopt such an amendment.^[28] A movement that is marked by so many signs of caution offers little occasion for alarm to the owners of property. A common objection to the referendum and the initiative is that they will destroy representative government. By a similar course of reasoning, namely, by excluding everything but one fact from the mental horizon, one might prove that the earth is destined soon to fall into the sun. I am not aware that the most radical advocates of direct democracy propose to do away with representative government. The yearly grist of legislation is so large as to render such a thing impossible. The chief object of direct democracy is to render our representatives more truly representative. If our legislative bodies were the deliberative bodies they are supposed to be, the demand for the referendum and the initiative would hardly have arisen. Many bills are originated by interests outside of the legislature and are rushed through in the closing days of the session without opportunity for amendment or debate. Instances of minority rule through laws enacted by a majority of our legislative assemblies have not been uncommon. As a result, there has long been a tendency to shackle our legislatures with more stringent constitutional restrictions. Numerous statutory enactments have been written into the organic law of many of the states which the legislature can not change. Provisions in the statutes of some states are often found in the constitutions of other states. The referendum and the initiative are another device to prevent an abuse of legislative power.

President Woodrow Wilson says:

Among the remedies proposed in recent years have been the initiative and referendum in the field of legislation and the recall in the field of administration. These measures are supposed to be characteristic of the most radical programs, and they are supposed to be meant to change the very character of our government. They have no such purpose. Their intention is to restore, not to destroy, representative government. . . . If we felt that we had genuine representative government in our state legislatures no one would propose the initiative or referendum in America. They are being proposed now as a means of bringing our representatives back to the consciousness that what they are bound in duty and in mere policy to do is to represent the sovereign people whom they profess to serve and not the private interests which creep into their counsels by way of machine orders and committee conferences. The most ardent and successful advocates of the initiative and referendum regard them as a sobering means of obtaining genuine representative action on the part of legislative bodies. They do not mean to set anything aside. They mean to restore and re-invigorate, rather.^[29]

Our legislative bodies sometimes yield to the passions of the hour, but the cowardice and irresponsibility which lead to this result are to some extent induced by the fact that the courts may set aside what the legislature enacts. The contention that the referendum will lower the standing of our legislatures is open to question, but there can be no doubt that judicial control has promoted trifling on the part of our legislative bodies and undermined their authority. So long as the Interstate Commerce Commission was not clothed with the substance of power, the railways occasionally treated it with contempt by waiting to present their side of a controversy until it was taken up by the courts. In like manner, judicial control lessens the reliance of property owners upon political action and causes undue reliance upon the judiciary. It seems probable that many members of our legislatures would treat the railway interests with more consideration if they knew that legislative indiscretion would not have to run the gauntlet of the courts.

Notwithstanding the undermining influence of judicial control upon legislative authority, the railways have found political action by no means unavailing. It is notorious that the legislatures of many states have done the bidding of the railways in practically everything that has concerned the railway interest. Likewise, our municipal governments have frequently been dominated by the public service corporations. The story related of a member of the Pennsylvania legislature, who, on a certain occasion, moved that if the Pennsylvania railroad has no more business to transact, the legislature do now adjourn, is typical of a situation that has been more or less general. If the railway and other corporations have not always been treated fairly by the public, it has sometimes been because the corporations by pressing their advantage too far have brought about a revolt from corporate rule. A high financial authority, The Commercial and Financial Chronicle, seldom co m mends the tendency of government to interfere with business. It maintains that the railways have not been getting fair treatment at the hands of the Interstate Commerce Commission. But concerning state regulation of rates, it remarks:

Immediately preceding the panic of 1907 the states were very active for a time in reducing rates, but as soon as railroad revenues commenced to fall off, the States began to see the logic of the situation and in most cases changed their policy. They desisted from further attacks on the railroads. The local newspapers came to the rescue and pointed out how seriously the railroads were suffering and how detrimental to the best interests of the State this was. Popular sentiment changed and attacks upon the railroads in large measure ceased. Thus it was demonstrated that, after all, the railroads had little to fear from State action.^[30]

One of the important functions of corporations, according to Professor Burgess, is to save the people from paternalism by acting as a makeweight against the state.^[31] There can be no doubt that corporations serve this purpose. By enabling individuals to combine their several resources and talents, they preempt a large field for individual enterprise which only the state would otherwise be equal to undertake. But it is an open question whether this will prove true in the long run, so strong is the political influence which corporations can bring to bear against the public interest. The problem of keeping corporate action within proper bounds is so difficult that the upshot may be that the state will be driven to take over certain industries and run them on its own account.

(To be continued)

1. William Z. Ripley, "Railway Problems," p. 578.
2. United States Supreme Court Reports, Vol. 55, Law. Ed., October, 1910, p. 652.
3. Winthrop More Daniels, op. cit., pp. 199, 200 and 206.
4. Jesse F. Orton, "Confusion of Property with Privilege; Dartmouth College Case," The Independent, Vol. 67, 1909, pp. 392-97.
5. I am indebted to the Dean of the University of Missouri for this information.
6. "Debates of Lincoln and Douglas," op. cit., p. 82.
7. Horace White, "Money and Banking," fourth edition, p. 171.
8. James Russell Lowell, "Prose Works, Essay on Democracy," Vol. 6, p. 11.
9. Hartley Withers, "Stocks and Shares," p. 145.
10. Op. cit., p. 36.
11. Ellis Paxson Oberholtzer, "The Referendum, Initiative and Recall in America," pp. 397-412.
12. George H. Haynes, Political Science Quarterly, March, 1913, pp. 19 and 32.
13. A. Lawrence Lowell, op. cit., p. 170.
14. Ellis Paxson Oberholtzer, op. cit., p. 163.
15. John A. Fairlie, "The Referendum and Initiative in Michigan," The Annals of the American Academy of Political and Social Science, Vol. 43, 1912, pp. 155-158.
16. A. Lawrence Lowell, op. cit., p. 171.
17. Jeremiah W. Jenks, "Governmental Action for Social Welfare," p. 58.
18. A. Lawrence Lowell, op. cit., p. 168.
19. Op. cit., pp. 22-34 and 276-294.
20. A. Lawrence Lowell, op. cit., p. 158.
21. Ellis Paxson Oberholtzer, op. cit., p. 477, quotes W. F. Dodd's work on "Revision and Amendment of State Constitutions" to this effect.
22. Political Science Quarterly, Vol. 13, 1898, p. 203.
23. Edwin L. Godkin, "Unforeseen Tendencies of Democracy," p. 142.
24. William Draper Lewis, "A New Method of Constitutional Amendment by Popular Vote," Annals of the American Academy of Political and Social Science, Vol. 43, 1912, pp. 315-316.
25. Charles A. Beard and Birl E. Shultz, "Documents on the State-wide Initiative, Referendum and Recall," pp. 15-19.
26. W. F. Dodd, "Some Considerations upon the State-wide Initiative and Referendum," Annals of the American Academy of Political and Social Science, Vol. 43, 1912, p. 213.
27. "Why Should We Change Our Form of Government," p. 25.
28. Charles A. Beard and Birl E. Shultz, op. cit., pp. 80, 203, 169, 178-179; Ellis Paxson Oberholtzer, op. cit., p. 397; "The Constitution of the State of Ohio," published by Chas. H. Graves, Secretary of State, 1913.
29. William Bennett Munro, "The Initiative, Referendum and Recall," pp. 87-88.
30. June 14, 1913, p. 1657.
31. Op. cit., pp. 203-204.