Outraged labor continued to wreak vengeance on the traitors.  Caste lines formed automatically.  The children of the traitors were persecuted by the children of the workers who had been betrayed, until it was impossible for the former to play on the streets or to attend the public schools.  Also, the wives and families of the traitors were ostracized, while the corner groceryman who sold provisions to them was boycotted.

As a result, driven back upon themselves from every side, the traitors and their families became clannish.  Finding it impossible to dwell in safety in the midst of the betrayed proletariat, they moved into new localities inhabited by themselves alone.  In this they were favored by the oligarchs.  Good dwellings, modern and sanitary, were built for them, surrounded by spacious yards, and separated here and there by parks and playgrounds.  Their children attended schools especially built for them, and in these schools manual training and applied science were specialized upon.  Thus, and unavoidably, at the very beginning, out of this segregation arose caste.  The members of the favored unions became the aristocracy of labor.  They were set apart from the rest of labor.  They were better housed, better clothed, better fed, better treated.  They were grab-sharing with a vengeance.

In the meantime, the rest of the working class was more harshly treated.  Many little privileges were taken away from it, while its wages and its standard of living steadily sank down.  Incidentally, its public schools deteriorated, and education slowly ceased to be compulsory.  The increase in the younger generation of children who could not read nor write was perilous.

The capture of the world-market by the United States had disrupted the rest of the world.  Institutions and governments were everywhere crashing or transforming.  Germany, Italy, France, Australia, and New Zealand were busy forming cooperative commonwealths.  The British Empire was falling apart.  England’s hands were full.  In India revolt was in full swing.  The cry in all Asia was, “Asia for the Asiatics!” And behind this cry was Japan, ever urging and aiding the yellow and brown races against the white.  And while Japan dreamed of continental empire and strove to realize the dream, she suppressed her own proletarian revolution.  It was a simple war of the castes, Coolie versus Samurai, and the coolie socialists were executed by tens of thousands.  Forty thousand were killed in the street-fighting of Tokio and in the futile assault on the Mikado’s palace.  Kobe was a shambles; the slaughter of the cotton operatives by machine-guns became classic as the most terrific execution ever achieved by modern war machines.  Most savage of all was the Japanese Oligarchy that arose.  Japan dominated the East, and took to herself the whole Asiatic portion of the world-market, with the exception of India.