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Rh position of the property owner and of the worker. Mines, railroads, factories, and machinery, cannot be laid off. Through good times and bad, they are a fixed charge, unless the business wishes to face bankruptcy proceedings. The most important obligation of a modern business is the interest on its bonded debt. Wages and salaries may stop, but interest on bonds must continue if the business is to remain solvent.

Thus land owners, the owners of bonds and mortgages, and in late years, the owners of stocks as well, have saddled their property ownership claims on society. They are possessed of the vitals of present-day economic life. Armed with title deeds to natural resources and to machinery alike, they are in a position to dictate terms to the remainder of mankind. Before a tree can be cut or a ton of coal mined; before a wheel can turn or a locomotive speed along the steel pathway; before a wage-earner can raise a hand to labor for himself and his family, the proper owners must be assured that they will receive a specified rate of return on their holdings.

Society, for the use of the earth which was here before our forefathers came, and for the use of the machinery of production which the people of America have spent three centuries in building, must pay a royalty, or tax, to the owners of land ofor [sic] machinery. The method by which the owners came into possession of this property is scarcely brought into question. As owners, they are entitled to the first fruits.

The point is well illustrated by an analysis of the way in which periods of prosperity and of adversity affect the shares of income. First, take railroad earnings. During a good year, a regular rate—say 5 per cent.—is paid on bonds. The earnings being high, a dividend of 8 per cent is paid on the stock. The general run of wages and salaries remains the same, although they are increased in a few departments. A bad year ensues. The interest on the bonds is paid at the same rate as in a good year. Earnings are low, therefore