Causes of Depressions

Charles G. Merrell

[Reprinted from Land and Freedom, July-August, 1931]

A FEW weeks ago, at a druggists' meeting, one of the members finished his talk for the day with a rather sad picture of the unemployed during the last year. Here we are, in a land of plenty, of natural resources and of accumulated wealth beyond the dreams of our forefathers, and yet we have on all sides distress that, it if were laid bare for all to see in its fullness, would shock the hearts of the strongest men. And yet, when he came to a consideration of what was to be done about it, he threw up his hands in utter despair and knew not even what to suggest.

The noted economist Roger Babson, at about the same time, evidently felt a depression of mind and spirit and tried to express it by copying in one of his reports a few verses by Marion L. Ulmer, originally published in The Congregationalist:

THE UNEMPLOYED

His thin face haunted me my mind said "Why?"
Yet something in my heart made me ashamed.

That I was warmed and fed and safely housed,

While he, disheartened, cheerless, sought a "job."

The unemployed but we are not to blame.

Or are we not? Aye, well we know our guilt
Is strong upon our soul, that any man,

Wanting and willing, hungers still and needs.

Lay on our hearts, O Father Life of All,

The burden of these men, until we feel
Their helpless wings abeat "gainst prison walls

The greatness of our social structure raised.

For not in any canting words of creed

But in the fibre of our life we feel
The pain of every sick, disheartened soul

The price and glory of our brotherhood!

And yet in all of his reports I have yet to see from Babson, or any other economist of note, an explanation of the situation, or a remedy for it. He does warn against increasing the load of taxation, but how to bring this about with decreasing returns from the usual sources and increasing needs for relief work is something he does not attempt to answer.

"OVERPRODUCTION" vs. "OVERPREDICTION"

We hear on the one hand that overproduction is the cause of our present difficulties, and on the other hand that the demonetization of silver in India and other countries, together with the scarcity of gold or its proper distribution, is somehow the explanation of all the trouble. In between these major causes (as explained by our publicists) are numerous other explanations for the greatest depression in the history of our country and the unemployment situation that is a disgrace to those who attempt to guide the destinies of this great nation.

Will Rogers once made the pertinent remark that what this country was suffering from was not overproduction but "overprediction, " and so I am not going to add to the suffering of my fellow men by making more than one prediction, which is that unless there is a marked change in the course upon which the ship of state is sailing, the next depression will be worse than the last, as has been the case in each instance over the past twenty years; and while it is about as dangerous to one's reputation for sanity, in these days of organized mass psychology, to point out errors in the existing order as it is to make predictions for the future, I am going to give myself the satisfaction of doing this very thing.

Now let us consider this great problem of unemployment. In a normal state of affairs how can there be any such thing as unemployment? In the final analysis what is employment but the application of labor to land? From such application all wealth is produced. It my be true, in a spiritual sense, that "the harvest is ready but the laborers are few," but when we talk of unemployment, does anyone even suggest that the starving millions are unwilling to work? No, the great cry is, "There is no work," and at the same time there is no bread for those who have not the money to pay for it. And yet there are millions of bushels of grain for which there is no market. How can such a paradox be?

Let us examine this problem carefully. Man is born on earth, and as he cannot live in the air or in the sea, he must live on the earth as long as he lives in this world. Our forefathers used terms more in their original sense: A freeman was not only one who was not a slave or a serf but a freeholder of the land he lived on and worked for his living, and only such a man possessed the right to vote.

We in this great country of ours delight to expatiate on the fact that all men are free and all can vote, even the women. What an anomaly! All men can vote, but all cannot work for a living!

FREE TO VOTE, BUT NOT TO WORK!

Let us put certain facts in juxtaposition and see if it throws any light on the problem: starving men on one side, unused grain on the other idle men and idle acres. Let a child tell the answer. Bring the starving men to the unused grain, put the idle men on the idle acres. Is not that the obvious answer? But this cannot be done just because of one thing : the land on which the grain was grown and the idle acres are no more free than are the idle men who have produced the grain and are starving today.

All wealth in its final analysis is produced by the application of labor to land. That which we call "capital" is no more nor less than the stored and unused products of "labor." Millions of people who are now out of employment are willing to work. If you had gone with me into the Western country years ago you would not have found a single individual not earning his own living.

Now, just what was the difference in the West forty years ago and the conditions we find here in Cincinnati today? I read in the Cincinnati Post not long ago of a panic that occurred here, back in 1840, in which Jacob Burnet, after whom an earlier popular hotel was named, lost his entire fortune of $80,000. He went out in the woods with an ax to cut cord wood at $1.50 a cord, kept his family alive and afterward re-established his fortune. Now, who could do that today? Just imagine anyone of us going out fifteen or even a hundred miles from Cincinnati and cutting cord wood off any piece of property! You know as well as I do that anyone who tried it would simply add one more to the population of the county jail. Or suppose one of these unemployed today might have read about the Irish people having lived on potatoes for years, and thought last spring that that would be a good thing for him to do to tide his family over a hard winter. I live only ten miles from the city, and on my way home I pass acres and acres of unused land. Suppose such a man had come out to some of these unused acres last year with the idea of planting potatoes to keep his family from starving. How far do you imagine he would get with his plowing?

The ownership of the earth today is concentrated in the hands of a very few men to whom the unemployed must go for permission to use the land, or even for their very existence. The Creator made the whole earth; man never made an acre nor did he individually create a dollar of the enormous value at which the land of this country is held today. The value of land is made by the community, and in fact the value attaches not to the land itself but the site which it occupies.