Chapter 25
Indirect Effect Of The War: Death Of The Warehouse-commerce
City
2Bearing in mind the evolution of physical decentralization in industry, as articulated by Ford, it is evident that necessity to keep up with such pioneering pace setting must have inevitably resulted in an exodus from the city of a multitude of manufacturers. Furthermore, the ‘‘tin’’ (sheet steel) pan manufacturer, et al, whose products formed part of the general rust heaps of inefficient profiteering belittering the countryside, began, also, to avail themselves of brought-into-use-by-the-War alloyed and alternate metals. The force that motivated Ford to decentralize operations toward sources of raw materials motivated these smaller competitors. This decentralization of physical activity (work or play) and the city-ward concentration of mental activity (work or play) was facilitated by the contiguous war-born improvements of transportation and communication.
3 Thus the general warehouse necessity within the ‘‘gates’’ of great cities ceased, except for the accommodation of certain seaboard imports and highly transient consumer products such as food, clothing, stationery, et cetera, and faddish appurtenances for city distribution.
4 So, too, abated the vast clerkage attendant upon warehousing commerce. Concurrently and moreover, new and able accounting machinery began to infiltrate the ranks of such as remained of the clerks, despite the fact that the capitalist, fearfully detesting machinery, was less inclined to install it in the personal environment of his centrals than in his distant manufactories.
5 The current ‘‘capitalist’’—at least 99.9% of the aggregate—is in no way comparable predatorily to his prehistoric savage forebear. He has become, in fact, a relatively delightful, hearty and emotional being, with the exception of certain minority capitalists who still continue, with shrewd and powerful super-brains, to scheme for means of grandiose exploitation, manipulation and monopoly. The retention of the profit-way of thinking by the majority of Fincaps is attributable far more to habit and petty vanity and lack of courageous imagination of other ways of survival for dear ones, than to fundamentally malevolent instinct. We might better nominate the cause as the habit of non-thinking. Years of great prosperity are productive of the converse of the phenomenon, thought, in those discouraged in such activity by early environment. So it was quite natural that inevitable friendly relationship between clerks, in close proximity to the easy-going, play-loving, sub-super capitalists, should provoke a friendly consideration that retarded the replacement of city workers by the machine in the high degree that the far-off (and, therefore, relatively impersonal) workers have been replaced by machinery.
6 The cityward concentration of mental activity also caused an influx of industrial managements segregating from physically decentralizing production, whose offices had formerly been located in the urban factories. These new industrial headquarters were equipped with much accounting machinery and occupied brand new buildings. This creation of new industrial headquarters, replacing dwindling business clerkage, did not offset the latter’s per capita shrinkage due to the new machinery employed by industrial management. The incursion, however, did deceive the capitalist about the great business change. Seeing new offices renting, he was blinded to the general death of the warehouse city and commerce as he had known it.
7 Years ago real estate minded capitalists, with an eye to doubling their revenue, managed through political control to have enacted certain profitable legislation providing for a doubled city land requirement. These laws, known as Tenement and Housing Acts, made it illegal for people, with few exceptions, to live and work in the same shelter. They were passed with facility because of their seemingly benevolent aspect. It seemed reasonable, for instance, that the butcher should not sleep in contaminating proximity to his meats, and immoral that a business man or his stenographer should sleep at the ‘‘office.’’ The sanitary ‘‘benefits’’ were, however, actually less important than the fact that from a profit viewpoint separate houses, or two shelters for every worker, one by day and one by night, would stimulate land crowding, thus increasing the intrinsic value of the land and also calling for doubled output of profitful building materials.
8 The sudden post-War exodus of physical industry from cities did not seriously affect the inland non-warehouse city, due to the fact that populations of the latter were relatively evenly apportioned to local industrial activities. Moreover, this proportioned and motorized populace was able to move in adjustment to the decentralizing process, resultantly integrating over the open spaces between centers, in many instances not far from the former inland center. Great coastal cities like New York, however, were seriously affected by the inland flight of industry. It left behind in these cities vast pools of undigested-by-industry immigrants—potentiahy helpless masses of people. There are still several million unemployed employables in New York City whose !4 million children (one out of every three children in N. Y. C.) are growing up under ‘‘relief.’’
9 The great modern business buildings were drained of their workerpopulation. Warehouses were deserted. The paradoxical picture developed of a horde of workless people crammed in hovels while business buildings remained empty. To the scientific minded, the exodus heralded the beginning of a new emergence. But Fincap, who was fast losing in the divorce action he was defending against his runaway bride, industry, (whose new complexities he was unable to fathom) continued dumbly at his desk, hoping to reap boom profits accruing from the post-War efficiency of decentralizing physical and concentrating mental industry by building ever more gigantic commercial skyscrapers. He persisted—despite the fact that even the newest were rented with difficulty. As usual he way-over-milked a ‘‘good thing.’’ Fincap, calculating potential profits, refused stubbornly and blindly to recognize the trend. Instead, he held empty space at ‘‘consistent,’’ never-to-be-paid figures.
10 The mounting new speculative skyscraper-colossi increased the paradoxical picture between crowded sub-decency dwellings and empty, gleaming work shelters. The most ultra-modern buildings, efficiently heated from central steam plants (located at the river’s edge, so that a through-the-streets haulage of coal would be ovi- ated) and equipped with luxurious plumbing stood idly empty while beneath their giant shadows squalor increased in the congested hovels of a populace disenfranchised from work.
11 With an even keener eye-to-profit than that involved in the Tenement Laws, Fincap had, also, many years before inspired the enactment of other pseudo-benign legislation. Seemingly with the public’s interest uppermost in mind, but with an underlying motif of assuring for himself a regular outlet for his not-too-frequent-for- detection overturn of debt (his prime revenue source), he manipulated the passage of laws specifying strictly the nature of investments that might be made by the enormous credit depositories of the populace, to-wit: insurance carriers, savings banks, and enormous trust companies and trusteed institutions in general: universities, hospitals, churches, et cetera.
12 The issues specified as legal-for-trust-fund included railroad bonds, shelter mortgages, so-called underlying equipment, city, state, government and utility bonds, in stipulated proportions of the total trusts. Although the lists of securities left by the will of a large finance capitalist rarely contained a single one of these bonds, nonetheless they were the stuff into which the people’s, especially the widows’ credit, was diverted.
13 Even if some of the money-custodians more recently have been otherwise inclined toward investment of funds in their custody, observing that widows of personal friends could make but a poor meal of foreclosed railway and rotted ties, the legal-for-trust-fund laws have continued to force the tremendous depositories of credit into the purchase of mortgages upon railroads or realty, et cetera, despite the evident fact that mortgages have been progressively dropping in intrinsic value with the acceleration of the industrial decentralization and obsolescence rate of mechanical-adequacy stages.
14 The Boards of Directors of great insurance companies, savings banks, and others—all representative of the capital-finance profit world—developed with passing years a hoary glamor in their pursuit of the lofty, smug GENTLEMEN’S business of producing ‘‘gilt edge’’ securities and directing ‘‘gilt edge’’ debt matters. They were careful not to spread the bond maturities over too short or too long a period, lest their vast turnover profit be either discovered or insufficiently exploited.
15 The most dignified of the elderly gentlemen serving as directors of the insurance companies, trust and savings banks, were engaged, also, in dividing the commission spoils amongst the various securityselling houses, and were assigned ‘‘duty’’ on the ‘‘boards’’ of great universities (the family-name-advertising gifts of funds to which have been enormous) and churches. The whole scheme of investment directors of large trust funds has been, of window-dressing necessity, an Old Mans Game. Elderly gentlemen can handle such matters with the utmost solemnity, being too worn out mentally to rationalize conscience-pricking problems. An exception, among the churches, has been the Roman Catholic Church. Its priesthood has served, and continues to serve, as its own board of investment directors without subservience to any state investment law, thereby constituting a marvelous source of indirect, imperceptible profit for politicians.
16 The legal set-up seemed so certainly-operative that those who plotted Fincap’s advance attacks were glad to be relieved of the further tactical need of watching its operation—beyond seeing to it that as much of the property as was still unmortgaged became mortgaged, and that the sale of these mortgages to trust fund custodians would net them, in one way or another, at least 10% of the turnover. They were just sufficiendy interested to be sure that none of the mortgages reached their own personal investment portfolios, and to see that their sons and relatives, club-mates and friends, were properly set up at a desk in one of the ‘‘bond departments’’ to snipe for their share of the boodle.
17 Meanwhile, no pause occurred in the erection of ever more enormous business structures for which there was a continually decreasing tenancy, for two reasons: firstly, as already cited, the vain hope persisted that the industrial process would reverse itself, allowing high city tenancy to re-occur; and, secondly, because the legal-fortrust-funds legally designated quota in the mortgage field was having a hard time to find replacement mortgages amongst municipalities, railroads, farms, et cetera, that could legally be set up as certifiedly REFUNDING mortgages, a legal perquisite for any new ‘‘issue.’’
18 Railroads, mortgaged to the hilt, were no longer paying interest even on their extant mortgages; the decentralization from the cities of industry and warehousing was depleting the tax revenue of the cities to such an extent that they were rapidly becoming bankrupt; little-home mortgages, so long a stable investment, were going distinctly sour because home-owners (bound-to-locality occupants) were finding themselves less able than renting tenants (who were doubling-up) to move about in adjustment to the industrial decentralization, and, without wage earnings, they could not pay interest and amortization. Therefore, their mortgages bounced back merrily to trust funds.
19 Meantime the stream of popular exploitable credit mounted by deposit behind the great legal catch-basins of the trust-funders to flood and even spillway proportions. Tsk-tsk. Although ‘‘things’’ looked ever more sour to big business, the unquestioning ‘‘little’’ man continued to heed advertisements appealing to the thoughtful, good citizens who save and insure, and thus tide over depressions for selves and society. Guilelessly, little people went on popping their savings under the wickets of the life insurance depositories and of savings banks grotesquely named to appeal to the common man: ‘‘Immigrant,’’ ‘‘Dry Dock,’’ ‘‘Dime Savings,’’ and ‘‘Bowery’’!
20 ‘‘WHAT to do with the funds?’’ became a vexing problem for the silver tops. Ponderously, they decided that nothing could look more respectably secure than a conservative first mortgage on an Empire State or a Lincoln building—pretentious, mammoth structures in the Queen City, charmingly ‘‘rendered’’ on paper by ‘‘sterling’’ architects. So they signified their willingness to underwrite preposterous skyscraper buildings that had not the slightest possibility not only of total but even of paying occupancy, whereupon the proffered ultra-respectable gargantuan first mortgages became the nuclei of harum-scarum second and third mortgages, racketed off by mouth-watering builders, dealers in materials, politicians and lawyers. Any and all who could get ‘‘theirs’’ out of the building activity, promoted the sale of the second and third building money mortgages to stupid friends. The ‘‘guaranteed’’ mortgages ‘‘never a dollar lost to investor’’ type of business boomed anew.
21 The crowded dwelling vs. the empty, towering work-shelter paradox was ever amplified as more and more people became reduced to living in ever worse hovels, while monuments to racketeering shot up as thrilling but empty. The paradox was even more exquisitely exemplified in subscription drives concurrently running to raise funds from ‘‘all’’ ‘‘denominations’’ for the building of great cathedrals—non-dwelling monstrosities that cost multi-millions of dollars. The Cathedral of St. John the Divine in New York City, an ‘‘armory’’ large enough to sleep all the thousands who then slept on the open streets or in the subways, closed its doors to any such prosaic function as human shelter. New York’s Trinity Church, owner of many empty multi-family dwellings, lifted not a finger to house the down-and-outs, although its congregation, be it admitted untutored in the man-arbitrated causes, dutifully shook their heads at the awful conditions.
22 It was not long before the non-tenancy and, therefore, the non-revenue of skyscrapers automatically ‘‘shook out’’ the third and second mortgage holders, representative of money investments at least equal if not double the value of the first mortgages that had been underwritten by the trust fund managers. Here was real-property ‘‘deflation’’ or Ford’s amplification of dollarability dramatically active. A dollar could buy three times as much Empire State Building as before on a basis of the dollars still holding title to property.
23 At this juncture when it became evident that even the first mortgage interest and amortization could not be paid, Fincap and his revenue sinecures of the warehouse era, the cities, were in full financial rout. Banking failures multiplied. The little banks throughout the country, whose financial structures were replicas of the network thrown over New York and other Atlantic cities by Fincap, could not pry loose liquid capital by loan from their big brothers because the latter’s liquid capital was itself rapidly ‘‘freezing.’’ Hundreds of small banks failed daily.
24 The unemployment situation grew apace, due to the industrial flight and the increasing utilization of the inanimate machine. For awhile Fincap, automatically aligned against municipal, state or federal aid to the ‘‘stranded’’ (not for any moral reason), successfully bulldozed individuals, particularly the salaried saps of the low income group—under $2,000 per annum—to support the unemployed by ‘‘donations’’ from their meager wages. (Many corporations deducted ‘‘contributions’’ under duress of ‘‘firing,’’ setting an able precedent for an ensuing underworld racket era.)
25 One reason for this Fincap ‘‘stand’’ is simple of detection. Others will be discussed later. Should there be set up the precedent of the state taking up the slack in employment, Fincap could not hold down labor’s wage demands through the invocation of his unchallenged ‘‘demand-and-supply’’ formula and his ‘‘surplus-of-labor’’ doctrine. Moreover, if the precedent were set up, the industrial progression with its implication of an EVER-increasing human time disemployment, made it evident that state support would call for ever-increasing funds.
26 Fincap in no way pretended to himself that the federal, state and municipal governments would not have the support of popular credit were they to undertake efficient support of the industrially disenfranchised workers; or that popular support of the government’s course would not be indicated by the people’s high evaluation of its (the government’s) legal tender for the re-purchase of its own promissory notes, issued for that purpose.
27 This popular accrediting of the government in taking over ‘‘relief’’ has been precisely demonstrated. Any recent appreciation in dollar purchasing value (‘‘deflation’’ to the money broker) is in direct relationship to popular credit of the governments paper dollar. The constant over-purchase of any offering of government notes with diminishing interest rates in a financial market where little else has been saleable testifies to the truth of this statement. The immediate post-war 20% discount on government bonds changed to leading premiums. If it is pointed out by those eager to disparage this truth that recently there have been a number of well sold ‘‘old fashioned’’ private enterprise bond issues, examination will disclose that these represent simply wholesale legal-trump-ups to apply to the great trust-fund’s legally enforced appetites which have had no recent amortizable fodder. Since government underwriting of mortgages has, at last, made amorization budgeting possible in certain categories, the credit of these bond issues is fundamentally ‘‘federal’’ hence basically ‘‘popular.’’ These bond issues are not, however, being purchased by individuals.
28 Why did Fincap, through his political job-machine racket-hold on government, resist the government’s taking a hand in relief? Why did Fincap refuse, in face of the fact that private ‘‘charity’’ (a cheery little moral word inherited from the ancient days of complete and abject slavery) could not keep even minor pace with the vast requirement?
29 The reason is fundamental. Fincap was intuitively aware of the situation’s being NOT AN EMERGENCY but an EMERGENCE OF A NEW ERA.
30 Fincap, in order to survive, strove not to allow people directly to accredit themselves through their government (themselves). Were they to succeed, Fincap could no longer keep his entrepreneuring position valid, this ‘‘position’’ being the ‘‘enforcement’’ of government’s borrowing from him as the only ‘‘legal’’ means of establishing ‘‘liquid’’ government operating funds. By this ‘‘position’’ the process of ‘‘loaning’’ the ‘‘funds’’ to the people as unified in government and then selling the notes and bonds of the government back to the people, directiy or indirectly through bank and insurance investments, entailed diversion of a constant cyclic 10% ‘‘take out’’ for his own ‘‘ingenuity’’ and ‘‘foresight.’’
31 Another vastly important reason for Fincap’s opposition to government relief is to be found in the matter of specific accounting requirements enacted into legal-for-trust-fund security laws. These called for a schedule of specific refunding of a municipal, state, federal or other security to be ‘‘attached’’ to the bonds, based on apparently predictable excesses of regular ‘‘revenues’’ of the borrower in excess of ‘‘expenditures.’’ IF budgets are not balanced, no such schedule can be appended; therefore, no bond issue can be sold. This is the key to Fincap’s wail for a ‘‘balanced budget.’’
32 There is no moral idealism provoking the cry, for Fincap has always winked pleasurably at government’s acquisition of new debt which meant that eventually Fincap would have more debt to sell. Fincap, through political control, hitherto succeeded in periodic bolsterings of the tax schedules. Coincidentally, with much ballyhoo about the ‘‘government’s getting out of business,’’ he would draw up a plan of ‘‘retrenchment’’ of government activity mercilessly yet sanctimoniously ‘‘firing’’ thousands of government workers, thus theoretically providing a schedule of government expenditure less than the revenue from the jacked-up taxes. This ‘‘balance’’ legally implemented a fine new bond issue.
33 Of course, the municipal, state or federal government did not stay within these balanced budget figures. Neither did Fincap dream of its doing so. If it had, there would not be the need to borrow more and more. There was only and always the legal necessity of Fincap’s controlling the debt amplification by ‘‘stages,’’ that is, through the attainment of a theoretical monetary point of budget balance in order that debt might be legally saleable. Ironically, as has now developed, the budget’s unbalanced ‘‘condition’’ (which prohibits exploitation of the accounting system’s nominated federal debt and which by random emergencies slips further and further from balance, despite ‘‘administration’’ attempts to heed the propaganda) has as a ‘‘joker’’ been saddled on Fincap by the rules of his own original sanctimoniously conniving specifications of legal-for-trust-fund investments, through legislative enactment.
34 This, then, is the explanation of the hue and cry regarding budgetbalancing. The current intention of such budget-balancing is simply that some 50 odd billions of accumulated federal and state government’s so-called ‘‘debt’’—a debt not ‘‘called’’ by the people who underwrite it and never to be ‘‘called’’ except by revolution—may be turned-over with a neat five billion ‘‘take’’ by Fincap. This would be ‘‘recovery’’ de luxe! It would be the juiciest melon ever sighted by the ‘‘boys.’’
35 Prior to the ‘‘New Deal’’ Fincap disapproved, through his politicians and press, the assumption by government of the maintainance of the industrially disenfranchised from work. Such action would obviously have rendered it impossible to get the government budget ‘‘balanced,’’ at least for too long a time to suit his watering mouth. Fincap’s current reversed attitude toward relief underwriting will be considered at a point in the book coincident with chronological order.
36 The vast majority of people have so long accepted the slave outlook that they gobble up, with hearty cheers, the great press-vomiting of the politicians controlled by Fincap, this discussion of the affairs of Fincap always being in the latter’s own ‘‘lofty’’ vocabulary and outlook. The public has been slavishly receptive to this chatter for many centuries merely because it did not have the experience of the perspective to think in terms of the grand progression of the emancipation of man by man from animate slavery, a progression pointing toward man’s ultimate environment control by virtue of the ‘’service" of his by-hand-and-mind devised inanislaves.
37 However, the day of potential fulfillment has arrived. It is but faintly obscured under a veil—now a very thin veil of old words and habitual ways kept alive by the press, radio and movies, these three abstract monopolies being Fincap’s last stronghold.
38 Unless people can speak clearly one to another they cannot ascertain that they think alike or act in the mutual accord resultant upon their understanding of one another. So long as the press and radio impose on the public a 95% blanket of utterly meaningless chatter, through which the 5% voice of the people is discoverable only by persistent searching, just so long will Fincap be able to delay the moment of the mutual revelation of the people’s understanding. Once apparent, this understanding is going immediately to articulate itself, through democratic perversity, in the emancipation of man from material servitude to his enviroment—the all-time teleologic goal.