Gunton's magazine

GUNTON'S
MAGAZINE

GEORGE GUNTON, EDITOR

VOLUMEX

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H-

>

GUNTON'S MAGAZINE.

JANUARY, 1896.

Philosophy of the Monroe Doctrine.

THE Monroe Doctrine is the application of the principle
of protection to the evolution of Democratic institutions on the
American continents. It is an entire misconception of the
Monroe Doctrine to assume that it involves or remotely implies
a dictatorial attitude on the part of this Republic towards other
countries. It is like the early free-soil demand for the non- •
extension of slavery. It is a declaration of non-extension of
monarchical institutions. It is protecting the opportunity for
the normal and unmolested development of Democratic institu-
tions throughout this hemisphere.

It is a habit of anti-protectionists to represent protection as
a "patronizing favoritism." This really shows a misconception
of the essential features of protection, not merely as applied in
local tariffs, but as a principle in government and societary de-
velopment everywhere. No country ever reached any con-
siderable advance in civilization without protection, which is
an indispensable condition of the survival of the fittest. In order
to prove its fitness to survive, any superior formation in nature
or society must develop the capacity to protect itself against the
devastating or deteriorating contact of inferior types and forms.
Not to do that is to succumb in the struggle for existence and
demonstrate its unfitness to survive.

Protection in industrial legislation is necessary whenever a
superior element in the national production is in danger of being
injured by contact with an inferior productive element in other
countries. Whenever that superiority is in tools and methods,
it does not need protection because its own productive efficiency
furnishes its defense by lowering the cost of production. But
when that superior element is higher-priced labor, which always
means a higher standard of living and a superior state of civil-

2 GUNTON'S MAGAZINE. f January,

ization, it is of prime national importance that it be protected
against injurious competition with the lower-paid labor and con-
sequently inferior civilization of other countries. The reason for
this is obvious, since to impair the social standard of living of
the masses in any country, and particularly in a republic, is to
impair the social quality, industrial efficiency and ultimately the
political character and civilization of the nation. Therefore, as
a means of self-preservation— of fitness to survive, it is neces-
sary for a nation to protect its people from such injurious com-
petition.

To call this favoritism is to misapprehend the subject. It is
simply the action of the nation protecting its own superior ele-
ments from destruction, which is its first duty to itself and to
mankind. Unless that policy had been persistently adhered to
throughout the ages, barbarism would always have prevailed
against the first fruits of civilization.

The organization and modification of political institutions,
industrial systems and economic methods have all been pro-
moted to this end ; and so far as they have succeeded have been
efficient for this purpcse. Scientific protection thus may be
said to involve two distinct lines of action, (i). Protection of
the superior elements developed by any group or nation at all
hazards and at any cost. (2). The efficient guarding of the
freest opportunities for further development of superior char-
acteristics. The Monroe Doctrine is to political development
what scientific tariff legislation is to industry. It does not, in
any sense, imply dictation to any countries on this hemisphere,
as to what form of government they shall have, but it says to
Europe, and for that matter to all mankind (i), that the experi-
ments being made in democratic institutions by American coun-
tries shall be protected from molestation by any foreign, and
particularly monarchical, powers. (2) That the fullest opportuni-
ty shall be guaranteed to all American countries for the evolu-
tion of the most democratic form of government the character
and conditions of the respective peoples make possible. This
policy is fully sustained by the law of evolution. It represents
at once the highest function of national development; the
broadest principles in political science and the scientific promo-
tion of the survival of the fittest, by helping to make the best
fittest.

1896.] PHILOSOPHY OF THE MONROE DOCTRINE. 3

This Republic is the product of eight centuries of con-
tinuous struggling in the evolution of political freedom. From
the tenth to the eighteenth centuries, the evolution of repre-
sentative institutions was chiefly confined to Europe. Amid
famines, desolation, revolutions, parliamentary institutions and
constitutional monarchies were evolved; first in England, and
since, to a much more limited degree on the continent. We are
a transplant to a new continent and have evolved a new type
of political institutions — a Democracy.

As to the condition of our fitness to survive, we owe it to
ourselves and to civilization to see to it that this experiment in
democratic government, this new type of political institution,
shall not be a failure. To fail in protecting the Republic,
either from actual deteriorating influences from without, or in
guarding the freest opportunities for further development and
perfection of the higher type of political institutions we repre-
sent, would be an injury to all mankind, and would put back
progress towards political freedom everywhere. We are making
the experiments in republican institutions for the human race.
We owe it to the human race, and particularly Europe, whose
struggles and sacrifices evolved the preliminary progress, mak-
ing our existence possible, to protect and secure the advance
that has been made. This involves the unhesitating adoption
of a comprehensive protective policy which shall direct the
whole influence and authority of the Republic,

(i). Towards protecting the fullest opportunities for the
natural development of democratic institutions upon these con-
tinents.

(2). By directing our statesmanship towards maximizing
our domestic industrial policy and the further perfection of our
political institutions until the broadest democracy and highest
integrity shall permeate the smallest municipality of the Re-
public.

i. The first is well represented in the policy expressed by
the Monroe Doctrine, that in the evolution of political institu-
tions this continent is devoted to the growth and perfection of
democratic government and all that it implies. Europe is the
field selected by evolution for the development and perfection ®f
middle class institutions.

In the same way that this Republic represents the demo-

4 GUNTON'S MAGAZINE. [January,

erratic type of political government, Europe represents the mid-
dle class type. Europe's contribution is middle class govern-
ment, middle class economics, and middle class civilization. It
is as much our duty to keep Europe in its own field for the per-
fection and extension of middle class institutions in the back-
ward countries of Europe as it is to prevent her from destroying
the new type of institutions in this hemisphere. If England or
Germany want to do missionary work, their field is not here.
It is rather in Turkey, Austria and Russia ; and if Europe is
too small for them, then their field is in Asia and Africa. Any
extension of the best middle class institutions as represented by
England into Turkey, Russia or Asia would be an improve-
ment. It would be superseding despotism by representation.
It would broaden the influence and responsibility of liberty. It
would, in short, be an advance in civilization, but to bring any
part of monarchical, middle class, European institutions to this
continent and engraft it here would be a step backwards. It
would be menacing a superior type in the making. And as the
representative of the new and distinctly superior type of eco-
nomics and government, it is our interest as a means of self-
preservation and our duty alike to the other American govern-
ments and to the still struggling portions of Europe to protest
against such a move, and if needs be interpose an efficient ob-
jection to it.

2. This application of protection through the Monroe Doc
trine is general and will be comparatively inefficient, if not
accompanied by a more specific application of the same principle
to the development of our best industrial and social possibilities
at home. This involves the adoption of a well-defined protec-
tive industrial policy, which must be effectively^applied in three
directions :

(a). Protection of our industries through efficient, economic
tariff legislation.

(£). Protection of the social conditions of our wage classes
by economic regulation of immigration.

(c). Protection of political institutions by demanding a cer-
tain degree of industrial differentiation and political accomplish-
ment as the standard of fitness for annexation.

(a). Protection to our industries does not mean, as is often
supposed, that every industry which finds difficulty in making

1896.] PHILOSOPHY OF THE MONROE DOCTRINE. 5

a profit shall have government aid. Protection as an economic
principle in national development means protection from injuri-
ous foreign competition to those industries whose increase and
diversification are necessary to the development of the social
and political character of the people. In other words, those
industries whose growth necessarily brings the greatest amount
of social diversification among our people, because it is only by
increasing the social diversification of the people that the pro-
gress of general intelligence, political freedom and integrity
can be acquired.

The general class of industries which exert this influence
upon the national character may be grouped as artistic indus-
tries, including all industries which require the specialization
of labor, and depend upon human devices, variety of tools, the
use of steam and gravitation of the people to social centers.
They include the complex manufacturing and commercial in-
dustries as distinguished from the relatively simple, crude,
extractive industries.

It is a fact running through all history that the development
of a higher type of national power and civilization is always asso-
ciated with, and depends upon, the development of manufac-
turing and artistic industries as compared with the crude, iso-
lating, ruralizing, extractive industries. Mining, forestry and
farming generally, except with highly modernized implements,
are essentially non-socializing occupations as compared with
manufacturing, urban-life-creating industries. While they are
important to the nation as furnishing the food and raw materials
of all the higher pursuits, they should never constitute the pre-
ponderating industries of a nation. Any nation whose occupa-
tions are preponderatingly extractive and raw material produc-
ing is sure to occupy a backward position in civilization.

This policy of protecting the complex industries does not in-
jure the agricultural. On the contrary, every extension of man-
ufacturing industries increases the market for agricultural
products, adds to the social facilities of agricultural population
by developing railroads, stimulating invention and giving im-
proved agricultural implements. Through the growth of urban
life, superior architecture, new methods of sanitation, the appli-
cation of steam and electricity to multitudes of new devices,
cheap daily press, and a multitude of economies and conveni-

6 GUNTON'S MAGAZINE. [January,

ences, are created, taking the products of the highest civiliza-
tion into the homes of the rural population, such as could never
have been developed by the relatively simple life evolved by
agriculture and rural occupations. When farmers understand
the principles of protection, they will realize that their salva-
tion from monotony, indefinite drudgery and social isolation de-
pends upon the national policy which shall promote the growth
of urban populations, which means the development of central-
izing and socializing industries.

The degree of protection necessary cannot be governed by
needs of revenue, the state of the treasury, but by the needs of
protection. It must be equal to the difference in the civiliza-
tion as indicated by the difference in the labor cost of the com-
peting countries, whatever that may be. Whether it means a
tariff of 20 per cent, or 100 per cent, is of no moment. To have
less than enough is to have no protection at all. One might as
well try to sustain the ceiling of an eleven-foot room by a ten-
foot wall. Without the eleventh foot the other ten are useless.
The labor cost of production is the only economic basis of pro-
tection in any country.

In all industries whose existence is worth preserving for the
national welfare, the cost of home labor should be the condition
upon which all foreigners should be permitted to enter the home
market. If their own cost of labor is lower than ours, then the
difference must be paid in duties as the price of entering the
market. That furnishes a sound economic rule of action, which
would be equally true and equally efficacious and equally nec-
essary to national welfare in every country. No country
should be permitted to undersell the domestic producers in
socializing commodities in any nation by the use of cheaper
labor than its own. Lower prices without lower wages is
the only civilized criterion for the entrance to a foreign market.

(b) Protection to the social conditions of our wage classes
through economic regulation of immigration is no less signifi-
cant a part of the national protective policy. To permit the
indiscriminate influx of disproportionately cheap labor is as in-
jurious to the social life of our people as is the forcing upon us
of non-socializing industries.

Immigration should be subjected to substantially the same
economic test and standard as applied to the importation of

1896.] PHILOSOPHY OF THE MONROE DOCTRINE. 7

products, namely : the wage status of the immigrants. Educa-
tional and ethical tests are of very little avail. Laborers may
be able to read and write in their own language and be free
from any criminal taint, and have only a twenty-five cents a day
standard of living. The test should be an economic one. Of
course, it could not be insisted that immigrants should have re-
ceived the same wages at home that they expect to receive here
in their relative occupations. Such a requirement would be
prohibitory, as no such countries exist. Nor is this condition
quite so necessary as in the case of products, because laborers
unlike commodities are susceptible of modification and progress
under improved social conditions.

The protection, however, should be adequate to obtain the
most capable and progressive laborers in the countries from
which they come. Nothing would so effectually serve as a
means of securing the superior, by natural selection, as an
economic qualification. Let it be in the form of requiring that
all immigrants from whatever country must have paid their own
expenses hither, and also have in their possession on landing the
equivalent of six months' American wages at their trade and not
less than $250 in any case.

Although this would not insure that every immigrant was
the equal of every American in the same industry, it would in-
sure that only those with a good deal of personal character and
ambition would come. It would probably take the average
European several years' special effort to save sufficient money
to pay his transportation and have the required amount on land-
ing. This of itself would be a guarantee of an exceptional
amount of personal energy and character. The listless would
not surmount the difficulties necessary to accomplish this pur-
pose. By this means, we should be sure to have in the great
majority of immigrants the material out of which good citizens
are made. This would doubtless check the amount of immi-
gration, but it would guarantee a superior quality and therein
consists the protection required.

(c) Protection to our political institutions from the danger of
hasty annexation is scarcely less significant than that required
from immigration or free importation. The eagerness exhibited
in many quarters for annexation shows how little the principles
of protection are really understood. Our democratic institu-

8 GUNTON'S MAGAZINE. [January,

tions could no more stand the strain of the immediate annexa-
tion of Cuba, Hawaii, Mexico and other South American coun-
tries than our manufactures could stand free trade. It would be
adding industrial degradation, social ignorance and political in-
capacity in chunks that would soon swamp the integrity of
democratic institutions. It would be increasing our population
by adding to the very poorest quality we now have and which
now constitutes the danger line to our political institutions. It
would be like multiplying our Tammanys, Mississippis, Louisi-
anas and South Carolinas. While through the Monroe Doctrine
we should protect the freedom of every American country to
develop its own institutions, it is equally important to the pro-
gress of democracy that we be not ourselves swamped by hasty
annexation. The natural trend of development is toward the
ultimate integration of these countries with the United States,
but that must come consistently with the protection of the best
there is in the United States itself. This demands that annexa-
tion, like importation and immigration, take place only on the
bases of economic and political fitness.

No country can be annexed to this Republic with advantage
to itself and without injury to us until its industrial institutions
have outgrown all the evidences of feudal relations, definitely
reached the state of free, competitive wage conditions, and
acquired a considerable proportion of manufacturing indus-
tries, conducted under the modern machine methods, paying
money wages and recognizing the principle of factory legis-
lation.

Unless adequate protection in this direction, securing the
maximum opportunities for our industrial diversification, social
improvement among our laborers and political intelligence
among our citizens is made a permanent part of our national
policy, all talk about enforcement of the Monroe Doctrine is
veritable gush. It has no significance as an element of states-
manship, as it can contribute nothing to our national waif are or
advancement. If we neglect the conditions promoting our in-
ternal development, we render ourselves incapable of helping
others. The United States can only be of real service in pro-
moting the advancement of democratic institutions in other
countries by making the most of its own economic and political
possibilities. To neglect this is to neglect the very source of

1896.] PHILOSOPHY OF THE MONROE DOCTRINE. g

our strength and reduce any pretensions to influence and power
for others to an empty sham.

The President's special message on the Venezuelan case is
a striking illustration of this empty, jingoistic attitude. Mr.
Cleveland is the very embodiment of the anti-protective princi-
ple in this country. His whole aim has been to destroy the
protective principle in ojir national policy. His messages bristle
with epithets against protective statesmanship. He has inspired
and led an onslaught upon our industries and our wage stand-
ard throughout the country. His message a few days earlier at
the opening of Congress was heavily charged with the same
antipathy to the protective policy which he designated as the
policy of " favoritism."

His policy on foreign affairs has been similarly antagonistic
to the protective principle and to the very essence of the Mon-
roe Doctrine. In the case of Hawaii, the President had an ad-
mirable opportunity to apply the principle of the Monroe Doc-
trine by encouraging the efforts of the people of the Sandwich
Islands to establish a republican form of government. But,
instead of giving the Hawaians the benefit of the good offices
of the United States, he threw every obstacle in their way and
actually attempted by force of coercion to reinstate monarchy
after republican institutions had already been established, and
what was worse, his effort was in behalf of a debased, barbarian
monarchy. He thus not only failed to take advantage of a
grand opportunity to apply the Monroe Doctrine to the great
aid of free government, but he used all the power of this gov-
ernment to overthrow a young Republic.

His attitude towards the struggles of Cuba for political
autonomy has been of the same character. Instead of holding
out all the encouragement that the good will of the United
States would carry to the struggle for political freedom in
Cuba, he has distinctly sided with the Spanish monarchy, which
is one of the most backward and semi-barbarian monarchies in
Europe.

In the case of Venezuela, where the claims are far more
doubtful, he springs to the front with a semi- war threatening
proclamation. To help overthrow a young republic and re-es-
tablish a distinctly barbarian monarchy in Hawaii, and encour-
age the cause of monarchy against the struggles for democracy

io GUNTON'S MAGAZINE. [January,

in Cuba, and then, in the name of the Monroe Doctrine, put on
the war paint over the very doubtful claims of Venezuela, is to
play buffoon politics at the expense of statesmanship.

If this nation is to command the respect of the world, it
must have an approximately consistent policy. There can be no
harm in appointing a commission to investigate the facts bear-
ing on the Venezuelan boundary line, but to talk in war terms
before the commission has been appointed which is to report on
the facts, looks more like third-term electioneering than the
serious utterance of the official representative of a great
nation.

A flash-in-the-pan-flurry over Venezuela is well calculated
for the moment to fire the patriotism of the people and attract
their attention away from the disastrous blow the President's
domestic industrial policy has dealt to the national prosperity.
But the character of a public man or a political party cannot
be estimated by a single act. It can be properly judged only
by habitual conduct. Mr. Cleveland's public life is contrary to
the essential principle involved in the Monroe Doctrine, and his
sudden assertion of it at the eleventh hour of his failing reputa-
tion may well justify grave suspicions. While Congress
should insist upon the spirit and letter of the Monroe Doctrine,
regardless of the talk of foreigners about its not being recog-
nized as international law, it is to be hoped that the controlling
majority in Congress will not permit itself to be incited into
taking a ridiculous position on the Venezuelan matter by the
rash and politically desperate utterances of a discredited states-
man.

The President's Financial Plan.

PRESIDENT CLEVELAND proposes in his message to retire
the greenbacks and Sherman silver notes by the issue of long-
term bonds at a low rate of interest. These bonds are to be
sold abroad for gold, and this gold is to be used to take up and
cancel any of the notes that may be in the Treasury, or that may
be received by the Government. He then alludes to this trans-
action first as an " increase of our bonded debt," and then as an
"extinguishment of a troublesome indebtedness," and he says
that, ' ' in the path we now follow there lurks the increase of

1896.] THE PRESIDENT'S FINANCIAL PLAN. n

unending bonds, with our indebtedness still undischarged and
aggravated in every feature."

This language is inadvertently fallacious in attempting to
make a mere postponement of debt by funding it pass for an
extinguishment of debt, or, as the New York Sun aptly says,
" it is a proposal finally to remove a burden of debt by making
us pay interest on it fore_ver. "

The feature which the President's proposition extinguishes
is not the indebtedness nor any part of it. That, as the Sun
says, is strapped to our backs for us to carry forever. He pro-
poses only to extinguish from our currency the $500,000,000 of
Government notes by converting them into bonds. This does
not extinguish a penny of indebtedness, but it does contract the
currency, by about half its effective volume, unless its place is
supplied part passu with this retirement.

When the President says, therefore, that such a contraction
of the currency, with only a very vague and indefinite method
of replacing it, ' ' would be amply compensated by renewed ac-
tivity and enterprise in all business circles," it becomes evident
that we are treated to the paradoxical promise that great busi-
ness prosperity will follow a violent contraction of the means of
payment. The fulfilment of such a promise is contrary to uni-
versal experience. Its possibility hangs wholly on the slender
thread, to which the President devotes only a vague attention,
that the ' ' currency thus retired might be supplied by such gold
as would be used on its retirement or by an increase in the cir-
culation of the National Banks."

' ' Might, " indeed ! and might not !

When contraction in the means of payment produces panic
in the debtor class, gold is the first to hide. And when gold
disappears from circulation a contraction of bank credits and
bank discounts instantly follows, ten or twenty-fold greater in
volume and in its effect to deprive the business community of
the means of payment than the immediate contraction by with-
drawal of notes.

The President is bold when he promises as the result of
such a contraction, that "restored confidence at home, the re-in-
statement of our monetary strength abroad and the stimulation
of every interest and industry would follow the cancellation of
the gold demand obligations now afflicting us." He forgets

12 GUNTON'S MAGAZINE. [January,

that all these demand obligations have almost lost their quality
as debt in their function as means of payment.

Such cancellation per se, irrespective of any inflation by
other means of payment, would be to the business community
like the tightening of the hangman's rope around the convicted
felon's neck. The immediate death which would result would
be the only fact scientifically predicable concerning the event.
The subsequent abundant entrance into a glorious immortality
might be glibly promised to the prisoner by his clerical confes-
sor, but the vagueness and undemonstrability of such a prom-
ise causes the event to be popularly regarded as condign pun-
ishment rather than a case of promotion.

Whether the President's plan would be a success or a failure
depends wholly, therefore, on whether the national banks would
find it profitable to themselves, because of the inducements
which his plan offers, to expand their issues of notes by $486,-
ooo, ooo in time to prevent the calling in of the greenbacks from
working any contraction of the currency whatever.

The motives which are supposed to appeal to the national
banks to effect this increase of note issues would be that the
existing tax on their circulation should be reduced from one
per cent, to a fourth of one per cent., and that they should be
allowed to issue one-ninth more notes than they can now issue
on whatever bonds they deposit with the government as security
for their circulation. But if they won't take the ninety dollars
they are now offered, why should they jump at a hundred
dollars ?

We do not hesitate to say that these inducements are
wholly insufficient to increase the actual circulation of the
national banks by a single penny, nor will they make the cur-
rency any more elastic, or adequate in volume and distribution
to the wants of those sections of the country which are especi-
ally in need of increased banking capital, loans and notes.
They fail to express an intellectual apprehension on the part
of the President, either of the nature of the evils which attend
a sudden and sharp contraction in the volume of the circulating
medium or the quality of the advantages with which a banking
system must be endowed in order to meet the wants of so vast
and diversified a population as that of the United States.

Such a bank note circulation, in order to be elastic, i. e.,

1896.] THE PRESIDENT'S FINANCIAL PLAN. 13

to expand and contract in volume, as the responsible borrowing
needy of the business community require, must be freed alto-
gether from the tether of being obliged to deposit bonds as se-
curity for the redemption of its notes with the government.
This tether to our banking system is like the cable which ties a
ship to its wharf. It ensures the safety of the ship, of course, but
it does so at the cost of preventing it from being a ship at all.
A pretended bank note circulation which is tethered to the gov-
ernment itself, by depositing the security for the ultimate re-
demption of the notes with the government, becomes thereby
an addition to the government note circulation merely, just as a
ship which is eternally tethered to a wharf becomes a mere en-
largement of the wharf and not a ship. It never becomes a
bank circulation at all, for any of the valuable effects upon
business which a bank circulation would possess. It cannot be
daily and hourly redeemable in coin, because only one redemp-
tion is promised on it, by the terms of its existence, and that is
that the government will redeem it in its own legal tender notes
when it is dead. This is not a coin redemption at any time,
but only a substitution of a promise, of which the government is
the sole maker, for one of which the bank is maker and the
government is endorser. One being worth as much as the
other, the exchange is never sought. Solvency of a certain
irredeemable and slow sort being assured, whatever volume of
its own notes is once loaned out by a national bank never returns
to it to be reloaned, but is, like the greenback note itself, a per-
manent addition to a perpetually fixed volume of currency,
capable by the very law of its being of no increase or diminu-
tion. Like the sphynx in the desert, its lungs cannot expand
or contract. It has dimensions and the form in part of things
that live. But it has no life. A true bank note circulation,
one issued by the banks and not by an insolvent government,
undergoes inhalation and exhalation. It is sent out to the ex-
tremities to enrich the tissues of industry, to feed its muscles,
vitalize its nerves and to make its life and energy productive of
action and of power. Then it returns to the centres for its own
revitalization by being brought into exchanging touch with
gold or other actual values, and when thus redeemed it goes
out again upon its circuit.

The national banking system will, of course, have to come

14 GUNTON'S MAGAZINE. [January,

to either coin redemption or general bankruptcy by whatever
mode the greenback notes shall have been retired, since there
will be nothing left for them but bankruptcy, unless they re-
deem their notes in gold. But on the President's plan it is
altogether too evident that what would happen would be bank-
ruptcy and not redemption. The resort to the pontoon bridge
of clearing house certificates, which helped the New York
banks through the crisis of 1893, would by no means span the
abyss which would result from the despotic withdrawal of five
hundred millions of currency.

It is unfortunate for such a proposition that Mr. Cleveland's
term already stands identified with a debt increase, including
principal and interest combined, of about $324,000,000. The
retirement of the greenbacks, by funding them into long bonds,
would be inadequate as a remedy, unless the bonds were made
interminable. For whenever the bonds were paid, the bank-
ing system founded on them would be extinguished, and there
would be the same ruction in finance we have now. There
would either have to be then, as now, a perpetuation of the
debt or a contraction of the currency. Supposing the long
bond plan to be followed, the principal and interest combined,
which would be required to carry out the President's proposi-
tion, would be fully one thousand millions of dollars. Thus the
President, who entered upon his term at the close of a period
of thirty years of continued debt payment, combined with un-
excelled prosperity, would have saddled upon the country, in
four years of peace, a debt one-half as massive as our great
rebellion created during four years of war. There is no mis-
taking the fact that the people are not in a mood, whatever may
become of the currency, to do this thing in this way. All that
the President now proposes forms a part of what the SOCIAL
ECONOMIST proposed in its issue of January, 1894. We accom-
panied the proposal, however, by concomitants which guarded
against the contraction of the old currency at any more rapid
rate than the new currency was issued. The lack of these
adjuncts is fatal to Mr. Cleveland's proposal. We outlined a
somewhat drastic and efficiently coercive plan for bringing
about an adoption of a branch system of banking in the United
States, whereby the country banks, having few deposits and
needing notes, should be allied to the large city banks which

1896.] THE BANKS AND THE GREENBACKS. 15

need no such notes. Mr. Cleveland confines himself to the
expression of a hope that the banks will, of their own interest
and volition, be led to form such a branch system. We pro-
posed also such a reconstruction of the national banking system
as would put an end to bond security for the redemption of
bank notes in greenbacks, and go immediately over to coin re-
demption ; this, so long as silver is in its present hobble, means,
of course, gold redemption. Mr. Cleveland adheres to bond
security, and in so doing necessarily adheres, for the time
being, to the fiat money, in which alone bond security makes
the national bank note redeemable. We proposed a repeal of
the legal tender act, and a forced retirement of the notes in
exchange for the new notes of the several banks, to be as-
sociated under the new system. Mr. Cleveland leaves the legal
tender law in force, and the government to get hold of its
notes for burning, only as it receives them in the ordinary
course of business or buys them with bonds.

In particular, we do not regard the bond feature of Mr.
Cleveland's plan as essential, provided the banks will show the
kind of co-operation which will dispense with it. If they will
not, it may be necessary. It was contained without essential
difference in the proposed bill published in the SOCIAL ECONO-
MIST for January, 1895, and presented by its editor in February
to the Banking and Currency Committee of Congress. We are
satisfied, however, that the issue of $500,000,000 in bonds can
be dispensed with. Banks would sooner assume the redemp-
tion of the notes without being compelled to take the bonds
than be subject to this burden. With proper manipulation,
the aggregate banking capital of the country, amounting to
thirty-eight hundred millions of dollars, forms all the security
needed.

The Banks and the Greenbacks.

THE crucial point in retiring the greenbacks is to determine :
First, whether the right to issue $500,000,000 of bank notes is
of sufficient value to the banks to justify them in assuming their
payment at maturity, which, in the event such notes shall be
issued in lieu of greenbacks, will mean the redemption of the
bank notes on demand in coin.

1 6 GUNTON'S MAGAZINE. [January,

Secondly ', whether it is practicable to so adjust this favor to
the needs of the banks and to their facilities, that to obtain it
they will collect and hand in to the government for cancellation
the whole sum of greenbacks and treasury notes now owed by
the government, at a like rate as they receive from the Con-
troller of the Currency, and issue their own notes to take the
place of the government issue. If the transaction shall include
the Sherman silver notes, the government would of necessity
include in it a transfer of the silver on which the notes were
issued, to the banks, whose substituted issue would take the
place of the Sherman notes. Otherwise the dimensions of the
retirement and substituted bank issue would be confined to the
greenbacks themselves, $346,000,000, or more strictly, to the
portion of the greenbacks not already in the treasury, say, about
$255,000,000.

In short, can the aggregated or associated banks of the
country afford to assume the redemption in coin themselves of,
say, $255,000,000 of notes which the government now attempts
to redeem, in consideration that the free power of issuing a
costless note currency shall be vested in the banks exclusively
relieved of the necessity of depositing bond security, but upon
the security of their capitals and assets alone and upon the test
of daily coin redemption.

The banks would thereby make to the government a per-
petual non-interest-bearing loan of $255,000,000 as the basis on
which they would obtain subrogation in lieu of the government
to the power to issue to the people, upon interest and upon com-
mercial security, a non-interest-bearing volume of notes as large
as they could get the people to borrow at interest on commercial
security, the banks redeeming the notes.

The proposal is analogous to the issue of the first ^17,-
500,000 of notes which the Bank of England is permitted to
issue to the people to circulate as money. For this issue no
bonds of the government exist, nor is any interest paid by the
government to the bank on this sum. It is, however, based on
a perpetual non-interest-bearing loan, once made by the direc-
tors of the bank to the government and consumed in war. As
a perpetual compensation the bank gets the right to draw from
the people of England a costless loan of like amount, through
issuing to them an equivalent sum in loans of its own notes, on

1896.] THE BANKS AND THE GREENBACKS. 17

which loans it obtains interest from its borrowers, instead of
getting its interest from the government.

The assumption is that, if in England a single bank can
afford to make a perpetual non-interest-bearing loan of $85,-
000,000 to the government in exchange for the privilege of
issuing a like volume of costless and non-interest-bearing notes
to the people, so that the interest they receive from their bor-
rowers cancels the interest the government would otherwise
owe them, then, provided the transaction is properly manipu-
lated in its details, the aggregated banks of America, having a
capital and assets in all of about $4,000,000,000, can afford to
make the same kind of a perpetual non-interest-bearing loan to
the government to the amount required to retire the green-
backs, in exchange for the same privilege of securing with their
assets the daily coin redemption of $255,000,000 of currency
issued to their borrowers, who are in effect the people.

The people will be greatly benefited by it in the fact that
if the currency were thus redeemable in coin, it would be issu-
able in volume equal at all times to the volume of good com-
mercial paper seeking discount, and it would be called for
wherever such securities existed. This would cure the dearth
of money in the sections of original production, and so would
make money abundant and rates of interest low wherever the
security was good and banks popular, because useful, which is
all that the people as business borrowers want. The people
as taxpayers would be benefited by it, since the government
would really extinguish $255,000,000 of national debt, in a form
in which it is periodically compelling sales of bonds to get gold,
and put it into a form in which the daily trade of the country
would be supplying the banks with the means of its daily re-
demption. The government would never resume its obligation
to pay it until it withdrew from the banks the right to issue it,
which under the penalty of again coming under the obligation
to pay it the government would never do.

Assuming that such a consummation would be to the gov-
ernment economical and to the people a topic for universal
rejoicing, let us now consider how it is that the banks, which
are to be the chief agents in it, can afford it, since it is only in
so far as it is profitable to the banks that it can be possible to
the government.

i8 GUNTON'S MAGAZINE. [January,

The banks will only issue their bank notes to their cus-
tomers in their ordinary course of business on commercial paper,
or valid securities, which on its maturity will furnish the means
or values which will redeem the notes. Hence, it will be the
assets on which the banks make their loans which will redeem
the notes in coin; and in this point of view the banks in re-
deeming the notes in gold on demand will only do what sound
banking has always* demanded of sound banks.

The circumstance that the notes are issued at a time when
they take the place as currency or "fiduciary money" of govern-
ment notes imposes no burden on the banks, and in no way
makes them payers or bearers of the government debt. On
the contrary, it transfers to the banks the privilege of loaning
out for interest to their customers a volume of non-interest-
bearing notes of their own, which at present it is more expedi-
ent that the banks shall owe to the people, than' it is that the
government shall owe to the people. The gross pecuniary value
to the banks of the privilege of issuing these notes and loaning
them will be the interest they will draw on them which, if they
could keep all the notes loaned out exactly all the time at six
per cent, would be thirty millions of dollars per annum. But
as the exigencies of banking would hardly admit of their being
loaned more than three-fourths of the time, the value of the
privilege to the bankers of the country would be about twenty-
two millions of dollars. But these will only form the central
core of the volume of notes the banks will issue. For by assum-
ing the redemption of these, they are set free to issue all the
notes on which they can maintain coin redemption and for
which they can make good loans. They secure also the aboli-
tion of the sub-treasury system, and make themselves deposi-
tories of the public moneys and agents in the transmission of gov-
ernment funds and the manipulation |,of government loans. The
privilege of issuing bank notes equal to the demand notes now
issued by the government would be worth to the aggregate
banks of the country $22,000,000 annually, and would of itself
impose upon them no other burdens than banks everywhere
assume on their circulating notes. Freedom to issue all the
notes they pleased might well be worth as much more. Gold
redemption would go far to elevate the United States banking
system into the chief magnet for the attraction of foreign gold.

1896.] THE BANKS AND THE GEEENBACKS. 19

The sole confusion on the bankers' side of the transaction
consists in the fact that they are, including National, State and
private bankers, some seven or eight thousand in number, and
seem at first sight to be as imperfectly united as an equal num-
ber of stores for the sale of goods. There is, however, already
a slight connection between the larger and smaller banks in
the system of deposits of reserves now practiced under the
National Bank Act. They are induced by the National Bank-
ing law to keep their reserve on deposit in the banks of the
larger cities, and finally in those of the city of New York.
There is, however, no return-flow from the city to the country
banks of the currency which thus tends toward congestion, ex-
cept as country borrowers may come from all parts of the
Union and make their own terms directly with the New York
banks. Hence, in the panic of '93, it was the presence of these
country borrowers in New York City that put up the price of
currency and small bills, including silver dollars, to a premium
of four or five per cent, above par, whereupon the wealthiest of
the New York banks deemed themselves compelled to cease to
honor the checks drawn on them by the Western and Southern
banks which had deposited in them their reserves. Nothing
could more forcibly demonstrate the unsoundness of a system of
banking than the fact that during times of calm the currency
congests in surplus at the centres of commerce, and is loaned
out on existing values, i. e. , on stock margins and grain certifi-
cates. It fails to return to its points of issue in the rural dis-
tricts, near the farm, the mine, the forest, the mill, the furnace,
the factory or the fishery, where, if loaned, it would aid in the
production of new commodities. It remains to stimulate spec-
ulation in values already created, instead of returning to create
new products. Meanwhile, the starved rural districts become
indignant against banks and banking, because they can only bor-
row at high rates of interest on farm notes, and for large sums
they must come to New York, where for purposes of pro-
duction they can not borrow at all, because the properties
and capitals with which they are seeking to produce are un-
known to the New York banks and trust companies. But for
purposes of speculation they can borrow from the metropol-
itan banks without limit at low rates of interest the very funds
which their home bankers refused to lend them, but which,

20 GUNTON'S MAGAZINI . [January,

when deposited by their home banks in the New York banks as
reserves, is freely loaned at low rates on grain certificates and
stock margins, until speculation or other cause has brought on
a crisis, and then currency passes to a premium, and the coun-
try banks can not draw their own reserves.

It ought to be plain to every banker that this is neither
sound money nor honest banking, but that the elements of
brigandage and piracy are in it at its most vital centre. When
it is so modified that the currency issued by country banks will
go back to them promptly and stay in them until loaned' again
in their own locality, then the national banking system will be
recognized in the rural districts as a boon and a blessing to the
producers, miners and industrial classes, and national banking
itself will be popular.

The banks need unity among themselves, and they there-
fore need the branch system, as much to improve the utility and
elevate the tone of their own business as bankers as they do to
provide for assuming the issue and redemption of the additional
$486,000,000 of notes which now needs to be shifted from the
government to them.

Another reason why the banks need to come together under
the branch system is that it is the only one capable of serving
the whole country equally with good banking facilities. This
is shown by the rapidity with which the branch system, wher-
ever it has been introduced, in England, France, Scotland,
Australia, Canada, has run out the previous system of inde-
pendent banks. A New York banker, Mr. J. Selwin Tait,
writes on this point in the New York Evening Post with conclu-
sive force. He says :

"A little more than sixty years ago, the British joint-stock
banks with branches took the field in England, against the pri-
vate banks which covered England from end to end and were
believed in like a creed by the most conservative people in the
world. It seemed a hopeless thing to fight against the wealth
and local influence of these private banks, and yet to-day they
may be said to have absolutely ceased to exist, swallowed up by
the banks with branches. I know of one bank with deposits
considerably in excess of $200,000,000 which has absorbed more
than 300 private banks.

"London's monetary position has been enormously strength-

1896.] THE BANKS AND THE GREENBACKS. 21

ened by the change to branch banks, and every town in
England has benefited by her gain. That city has ten joint-
stock banks, with branches to the number of 1,343 throughout
the country, and deposits amounting to $934, 716,245. She has
in addition four joint-stock banks which are purely metropolitan,
in that, while they have sixty-eight branches in London, they
have none outside. These four banks have deposits amounting
to $325,000,000. In the case of the class of banks first named,
the cash in hand is about 13 per cent, of the deposits, and in
the case of the purely metropolitan banks about 15^ per cent.
It is interesting to compare these percentages of cash in hand
with that which the United States Government compels our
national banks to keep, with a wise recognition of the perils
to which isolated banks are exposed.

"But these figures do not show all that London gains by the
branch system. It is to-day the center of a system of banks —
domestic, colonial and foreign — representing upwards of 5,000
branch establishments, and with assets exceeding $5,000,000,000.
It would be useless to contend that such a gathering together of
chief officers does not mean a gigantic assembling of capital
also, or to say that the concentration does not give London
enormous monetary and commercial prestige.

"It may seem strange that prudent English bankers should
be content to retain only 1 3 per cent, of cash on hand, and yet
there can be no doubt that a bank with a hundred branches is
more adequately protected with such a percentage of its
deposits on hand in cash than an independent bank is with 25
per cent.

"In wealth the United States is not exceeded by any Euro-
pean country, but its money lacks the power of concentration
as well as the mobility which, with its gold standard, gives Lon-
don the monetary control of the globe. If one could imagine
Niagara's flood scattered all over the country in innumerable
lakes and ponds and left to find its way to the ocean through
ten thousand little rivulets, instead of uniting its waters to form
a force sufficient to turn every wheel on this continent, that
would form a scarcely exaggerated example of the difference
between capital divided among thousands of independent banks
and capital united and mobilized under the branch system."

In the interest of that mobilization of capital, which it is the

22 GUNTON'S MAGAZINE. [January,

chief function of banking to effect, the banks of the United States
must to-day regard the period of independent banks as past.
The branch system is past due, and no occasion for its introduc-
tion can be so appropriate as when the banks are offered the
opportunity to succeed the Government of the United States as
the issuers and redeeming agencies for $486,000,000 of currency
heretofore issued by the United States Treasury.

Before it would be profitable to the large city banks, or
safe to the smaller country banks, to take the burden and oppor-
tunity of this note issue off the hands of the Treasury, there
must be a greater solidarity of interest between the city and
country banks than now exists. At present, in fact, and during
the whole period of the national banking system the city banks
have stood aloof from the country banks, in the matter of the
bank notes. They have said, ' ' We have more gratuitous de-
posits than we can lend ! Why should we issue any notes ?"

To this the country banks could not even reply as could
the country banks in Canada or Great Britain, ' ' Our notes are
the true source of your deposits."

This would have been true had the bank note been the only
note in circulation, as it was in the periods of United States bank
and State bank note circulation. But under the mixed green-
back, gold certificate, silver certificate and national bank note
circulation, this was not true. The note of the country bank
was an insignificant and fortuitous feature in the deposits of
the city banks, and formed no tie of reciprocal interest between
the two.

The metropolitan banks can, and do say, now: " We do
not want to issue any bank notes ourselves, nor to help any
other banks to issue notes, and above all we don't want to be
charged with the redemption of any notes of the country banks.
The greenbacks, gold and silver certificates, are good enough
notes for us, and we don't want any bank notes. "

From this selfish, short-sighted way of surveying the cur-
rency question, through the pinhole of their own self-interest,
the New York bankers will be driven, by the discovery that the
continual free issue of gold bonds, to keep up a government
redemption on the greenbacks, cannot be made perpetual. It
must be stopped, either by the government being forced to pay
silver, or by the banks of the country assuming to furnish gold.

1896.] THE BANKS AND THE GREENBACKS. 23

When the greenbacks and treasury notes shall be retired, if
they ever are, the notes of the country banks will then become
the exclusive unit or basis (with gold coin) of the deposits of the
city banks; coin redemption will inevitably have to come in
when the greenbacks go out. If the banks are left wholly to
work out their own salvation, without legislation as to their
methods of ,coin redemption, as they did under the Suffolk
Bank system of New England, and also under the two banks
of the United States, it will result that half a dozen of the
principal banks of every city will redeem the notes issued by
those banks .which are its customers and correspondents, and
will require deposits to be kept with them sufficient to protect
them in such redemption. For, after all the real work of re-
demption upon bank notes, which are issued on commercial
paper, which results mainly from sales of products, is effected
by the payment of the commercial paper, and this payment in
turn is effected by mutual cancellation in the clearing-house,
and this cancellation is the symbol of the final barter of the
commodities on which the commercial paper was based. Hence
the real medium of redemption of bank notes is commodities,
coin performing only the function of adjusting final balances.

Hence in any system of coin redemption the great metro-
politan banks, and especially those of New York City, cannot
escape being the custodians of the ultimate gold reserve of all
the banks in the country, or the duty of coin redemption which
goes with the gold reserve. To perform this duty with pleasure
and profit they must adopt the smaller banks under their care
and tutelege, as Mr. Tait points out that the joint-stock banks
of London have done.

With the withdrawal of the greenback, individual or inde-
pendent banks come to an end, and the branch system of bank-
ing takes its place. This is only extending to our banking sys-
tem a principle, the analogue of which under the name ' 'con-
solidation" has long since converted our railway system from
one of bankruptcy, weakness, dearness and popular aversion
into one of economy, power, profit, popularity and utility.

The banks do not want the government's bonds, either at
three per cent, or at any other rate. They would be vastly
benefited by being invested with the privilege of issuing the
>, ooo, ooo of currency which now proves to be at once an

24 GUNTON'S MAGAZINE. [January,

incubus to the government, a peril to the national finances, a
perversion of the banking business into injurious ways, and an
influence that deprives the people of an abundant source of loans
and creates chronic stringency in the district of original produc-
tion. All the banks need to ensure the safe and prompt assump-
tion by them of the issue and redemption of the entire $486,-
000,000 of demand notes now supplied by the government is to
establish through a universal and comprehensive adoption of
the branch system of banking such a solidarity of interest as
shall prepare the large city banks to redeem daily on demand in
gold the notes which the smaller country banks will be chiefly
concerned in issuing and lending. This desideratum is a natur-
al and proper element in banking, and needs only good legisla-
tion to secure.

Retire the Greenbacks Without Issuing Bonds.

THE impulse and authority to the banks to assume the
privilege and burden of the issue and redemption of $486,000,-
ooo of bank notes, in lieu of those now issued by the govern-
ment, must come from Congress. It cc ild only be enacted
under the duty which rests upon Congress of paying the public
debt, providing the people with a safe and uniform currency,
lessening the burdens of taxation and promoting commerce be-
tween the States.

Its provisions would be essentially :

1. A repeal of the Legal Tender Act, of the Sub-Treasury
Act, and of such parts of the National Banking Act as require
bond security for currency, and allow redemption of notes to be
made in greenbacks.

2. A requirement that all demand notes issued by banking
institutions of any kind be redeemale in gold coin. If notes
under five dollars are made redeemable in silver, that might
help silver, but would not be material to coin redemption.

3. All State and private banks which comply with this act
to be free from the ten per cent, tax on their circulation.

4. All national, State and private banks of discount and
deposit or circulation, which do not bring themselves within
this act, to be taxed on both circulation and deposits sufficiently
to induce a compliance with this act under penalty of discon-

1896.] RETIRE THE GREENBACKS WITHOUT ISSUING BONDS. 25

tinuance of their circulation, and relative disadvantage in some
small, but not oppressive or compulsory degree as to their de-
posits. ,

5. All banks having from $25,000 to $100,000 capital, and
desiring to issue notes, to establish such branch relations by ex-
change of capital stock of equivalent value, and by reciprocal
participation in voting management proportionate to relative
capitals of the two banks,- with some metropolitan bank exceed-
ing $1,000,000 capital, so that the reserves of the smaller bank
shall be kept in the larger, the notes of the smaller or branch
bank shall be redeemed by its metropolitan bank, and the capi-
tal, loans and assets of the smaller bank shall be security for
loans to be made through it by the metropolitan bank, with such
controlling influence, supervision and auditing of the affairs of
the smaller bank by the larger, as shall make the system a
means of equalizing rates of interest and furnishing abundant
lending facilities and bank credit in the rural, planting, forest,
fisheries, farming and mining sections, as well as secure the
metropolitan banks and their branches in both the redemption
of notes and making of loans.

6. The issue of .lotes by the branch banks, after redemp-
tion by the metropolitan banks ceases, should be punished as a
crime in like manner as the putting out of notes by banks or
persons not authorized by this act to issue them.

7. Banks having capitals above $100,000 and below $1,000,-
ooo shall be permitted to enter into branch arrangements for
deposit of reserves, redemption of notes, exchange of stock and
reciprocity or participation in management, with banks having
paid-up capitals, or capitals and rests, or surplus exceeding
$10,000,000. Banks not adopting the branch system will be
.taxed ten per cent, on circulation and one-half of one per cent,
on deposits.

8. All customs duties and internal revenue taxes shall be
paid in gold, or in notes of banks which promptly redeem in gold.

9. Banks which have organized under this act to the satis-
faction of the comptroller of the currency, shall be entitled :

1. To withdraw from his custody all bond securities depos-
ited with him to secure final redemption of their notes.

2. To a certificate that they are released from payment of
10 per cent, tax on their circulation, and from all control as to

26 GUNTON'S MAGAZINK. [January,

the amount of their reserves, except that of their metropolitan
banks, and from all taxes except such as are imposed by this act.

3. To issue their own circulating notes, to an amount equal
to all greenbacks and Treasury notes they hand in to the Treas-
ury for cancellation, and to any amount on which they and the
banks of which they are branches shall maintain daily redemp-
tion in gold over their own counter as presented.

4. To be the depositories of the government moneys and
agents of the government in managing the public debt. Com-
pliance with this act will consist in each bank organized under
it entering into branch relations with the larger and smaller
banks as herein indicated, in handing in to the Secretary of the
Treasury to be cancelled its aliquot share proportionate to its
capital, of the $255,000,000 of greenbacks to be cancelled, each
share bearing the same proportion to $255,000,000 as its capital
bears to the aggregate banking capital, which shall be permitted
under this act to carry on banks of circulation, discount and deposit,
free from federal taxation, and shall take from the Controller of
the Currency for circulation its own bank notes in the form pre-
pared by the Controller of the Currency in a sum at least
equal to the greenbacks it has delivered into the Treasury.

10. The visitatorial and inspection power of the Control-
ler of the Currency heretofore exercised under the National
Banking Law is continued as to notes designed to circulate as
currency under this act. In States which authorize' a State bank-
ing department, such department shall have concurrent juris-
diction with the Controller of the Currency in all inspection
and visitatorial powers relating to the investments and securities
which constitute the capital stock of the banks located in such
State, and the deposits, loans, discounts, rates of interest and
liabilities to depositors in the same, subject to such laws as the
respective legislatures of the several States may pass for the
regulation of capital invested in banking, for the protection of
stockholders, creditors, depositors, note holders and all other
persons interested in the same. It being the intent of this act
that the State legislatures shall have exclusive jurisdiction to
legislate for the security of deposits and discounts, and that the
State Banking Superintendent shall have concurrent visitatorial
and inspection power with the Controller of the Currency in
all that relates to note circulation.

1896.] 27

Non-Par tisan Politics.

BY EDWARD LAUTERBACH.

THE question of non-partisanship as a principle in politics
is not merely a question as to whether, under certain conditions,
citizens should vote against their party; it is the question
whether non-partisanship is superior to partisanship as a per-
manent method of public opinion on questions of public policy.

If by non-partisanship is meant that when a party for any
reason becomes too debased and corrupt for decent people to
longer stay in and work with, it should be deserted, then it is a
mere truism, which has long since passed in to the category of self-
evident ethics, and is not debatable. It is only when presented
as a permanent principle in political action, that the doctrine of
non-partisanship has any claim to serious consideration. In this
sense, non -partisanship is a delusive sentiment, which has no
foundation in logic or experience. As a principle of action, it
is essentially and fundamentally chaotic, anarchic, disintegrat-
ing and non-representative. It is contrary to the principle and
experience of all societary advance. It might sometimes result
in securing a superior public officer, and so might the tossing up
of a penny, or the drawing of the longest straw. Like gam-
bling, the result will necessarily depend upon accident and
chance, rather than upon well digested principle, which always
involves permanent, cohesive organization.

Permanent, not transient organization, is the instrument
of all societary progress, and is indispensable to representative
institutions. No principle of morals, industry, social life or
political government was ever embodied into public policy . and
institutions, except by means of permanent organization. The
very test of the survival and social acceptance of an idea in any
sphere of life, is that it creates a consensus of social opinion
around and upon which people will organize for definite action.

Every type of civilization and national institutions, or other
social and religious formations, owe their existence to this
method of social action. The despotism of Asia, the constitu-
tional monarchies of Europe and the democracy of America,
are all the outcome of the same method and principle. In pro-
portion as the government is despotic, political organizations
are unnecessary, because the concensus of public opinion is

«8 GUNTON'S MAGAZINE. [January,

there indicated by silent acquiescence and not by conscious ex-
pression.

In proportion as governments become democratic, they in-
volve the principle of volitional representation. Representative
government involves the concentration of the opinions of the
many into the action of the few. This concentration of opinion
can only be correctly secured and converted into a safe rule of
action by being reduced to a principle of public policy; and
this conversion of public opinion into political principle can be
accomplished only by the constant action of permanent organ-
ization; transient and fleeting associations are wholly inade-
quate to the performance of this all-important function of
democratic representation.

Political parties, therefore, are absolutely essential to repre-
sentative government and democratic institutions. They are
the indispensable instruments of reducing popular desire to
political principle, rendering rational, safe and consistent col-
lective action possible. No stronger evidence for this could be
given than the universal fact that with all their defects, political
parties have become stronger and more permanent as represen-
tative government advances.

The advocates of non-partisanship, it may be urged, do not
demand non-partisanship in national affairs, nor in state affairs,
but only in municipal politics. Precisely; and here is where
their case breaks down. If non-partisanship, or to put it in
true mugwump fashion, if temporary organization regardless
of political principle is superior to permanent organization,
based upon well digested principle of public policy for muni-
cipal government, why is it not equally superior for national
and state affairs ? By what rule of logic or experience does
party organization and well digested political principles which
are admittedly superior for state and national affairs, become
inferior to temporary association, devoid of political cohesion
or accepted principle in municipal affairs ? Manifestly, if well
digested principle of public policy is important in the affairs of
the state and federal government, it is more important in the
affairs of local municipalities. For the cities and towns, the
local groups are the nurseries for the character, intelligence
and opinion out of which state and national policies are made.
State and national government are but the larger integrations

1896.] NON-PARTISAN POLITICS. 29

of the local or municipal group. They are the very source of
the national life and character; hence, if it is important that
social principles of public policy should obtain anywhere, it is
most important of all that they should obtain in municipal
politics.

But the cities have become corrupt, we are told, and must
be dealt with upon a different principle. In the organization
of public opinion, cities -must be segregated from state and na-
tional movements. In order to get wiser administrations, we
must discard the machinery which works so efficiently in other
fields ; turn our backs upon the fundamental principles which
represent the cumulative wisdom of the ages and call together
a semi-mob, with no general affinity on questions of public
policy, touching only at the sharpest angles, united only for a
temporary object, jealous and distrustful of each other, because
of the lack of fundamental agreement, and expect from this
discordant, suspicious, non-integrated conglomeration, higher
collective wisdom than could be obtained by permanent, co-
hesive relatively harmonious organization. One might as well
expect philosophy from the dunce and efficiency from the
novice.

The whole doctrine of non-partisanship as a remedy for
political shortcomings is an inversion of the true principles of
societary improvements. It proceeds upon the assumption that
the way to improve a limb is to cut it off. It is much like ex-
pecting to prepare people for freedom by putting them in bond-
age. The true way to improve any part of the body politic is
not to segregate it from the best and vitalizing portion of the
social aggregate, but more closely to integrate it with the larger
whole, so that the life and security of the best shall depend upon
improving the character and elevating the standard of the
worst. Nothing so effectually destroys vigilant activity as the
removal of interest and responsibility.

It is true that cities as the great centres of wealth, com-
merce and industry, contain the lowest as well as the highest
elements of our population. Through the growing political
indifference among the rich at the top and the usable indiffer-
ence of the neglected poor at the bottom, political corruption,
fraud and degeneracy become possible. The remedy for this
is not to eliminate from municipal politics party principles and

30 OUNTON'S MAGAZINE. [January,

responsibility ; on the contrary, it is to insert more of the prin-
ciple of public policy, backed by party organization and respon-
sibility in municipal politics.

If the national party organization were held responsible for
the application of its highest principles in state and municipal
affairs, wherever its party is in control, the incompetence, cor-
ruption, fraud and social degradation in municipal administra-
tion would be chargeable, not merely to the local managers,
but to the national party.

Dishonor and disgrace in New York City, Troy and Chicago,
would be charged to the party as a national organization and
the right to be intrusted with the national government would
be made to depend just as much upon the honesty, integrity
and policy pursued in city and state affairs as upon the general
doctrines of federal policy.

A party whose general principles is popular education,
social improvement for the masses, purity of the ballot, should
be held responsible for the carrying out of those principles in
the state, cities, towns and wards, just as much as in the federal
policy. With public opinion educated and organized on the
basis of central party responsibility running through the whole
body politic, it would be in vain for a party to issue high-sound-
ing sentiments from the White House, and practice fraud, cor-
ruption, ballot stuffing, thugism and general political de-
bauchery in its local administration. A democratic administra-
tion at Washington, with Tammanyism in New York, Me Kane
and McLaughlinism in Brooklyn, rowdyism in Troy and
Chicago, and lynching, assassination, political intimidation and
coercion in the South, would be an impossibility. Public opinion
would demand, as an evidence of good faith, that the high pre-
tensions of political purity and personal freedom should be
verified in the local and state administration where the party is
in the ascendency. This would make it necessary for the
national party to bring to bear its whole power and influence
to secure reform in local and state politics as the only means of
its success in the nation.

It is claimed by the advocates of non-partisanship that
Tammany rule in New York City is the result of too much
partisanship. The truth is, it is due to a low quality of partisan-
ship. It is of the same quality that steals legislatures, shoots

1896.] NON-PARTISAN POLITICS. 31

election inspectors and intimidates whole counties out of their
political rights.

The effort to segregate municipal politics from national
organizations and policy is simply to relieve the respectable ele-
ments of the national organization from the responsibility of in-
sisting upon reform within the party that shall carry honesty
and integrity into municipal administrations. Little wonder
that the respectable people in the Democratic party want non-
partisanship in municipal affairs, especially in New York. By
that means, they are enabled to escape the responsibility of the
political degradation and immorality their party is inflicting
upon the community. The truth is that in national politics the
Democratic party has depended for its success upon the corrupt
and dishonest methods that destroy the freedom of voting in
the South; and the fraudulent majorities manufactured by
Tammany in New York City to overcome the honest vote of the
State. So that in reality the political immorality and social
vice, organized arid encouraged in the local administrations has
been the chief instrument by which the Democratic party has
succeeded to power in the Nation.

To relieve the national party of the responsibility in local
politics is to encourage these debauching political methods. A
thorough system of party responsibility and integrity would
compel the Democratic party to purge itself of the methods
of the Tammanys and the Hills and the Southern coercion-
ists before it could have any respectable standing in Wash-
ington.

What, it may be asked, should decent people do who belong
to degenerate political parties ? They should be compelled by
the public demand for party responsibility to reform their party
or leave it ; but it should be impossible for them to obtain pub-
lic confidence by merely ignoring or repudiating the corrupt
and degrading conduct of their party in local matters.

This political degeneracy cannot be effectually reformed by
fusion. Fusion politics neither emphasize better principles of
public policy, nor purify party organization. On the contrary,
they furnish an easy means for the reform element to shirk the
responsibility of the worst consequences of its party in local
politics while helping to maintain the ascendency in the state
and national affairs. Instead of punishing the party for per-

32 GUNTON'S MAGAZINE. [January,

mitting its political degeneracy, it helps to shield it from legiti-
mate consequences of its vicious conduct.

Fusion is not a reform of methods or a development of
principles, but a mere mixing of men for official positions.
Moreover, it injures the influence and power of the superior
party, because it deprives it of whatever honor and prestige at-
taches to the sporadic fusion movement by destroying party re-
sponsibility. In New York City, for instance, the credit of the
improvements introduced by the present administration has no
definite resting place. The honor, responsibility and credit be-
long to nobody, inspire nobody and this fact chills the en-
thusiasm of organized effort, and has essentially disintegrated
the reform movement.

The Republican party was the organized party of honest
government and municipal reform in this community. It stood
definitely for honest elections, respect for law, better schools,
cleaner streets and general municipal decency. If it had been
true to its principle and party responsibility, refused fusion and
insisted upon its platform and party organization, respectable
Democrats would have been forced to go with it or share the
disgrace of sustaining Tammany. Whether it had succeeded or
failed, it would have welded together the public sentiment in
favor of the movement, strengthened its own power for good,
and weakened the possibility of the compromise with evil. But
by fusion — trying to mix elements having little or nothing in
common — it helped to strengthen the general party to which the
local corruption belonged, disintegrated its own organization,
weakened its own local influence and set back the movement of
reform.

As a method of political reform, fusion is a failure. Pro-
gressive societary movements, to be permanent and useful,
must be protected by the honest organization of public senti-
ment upon a sound principle of public policy, and not by fusion
of personal ambitions. Any effort to make temporary advance
by fusion with those who do not accept the principles, are not
true to the organization and fuse only for a division of the
offices, in order ultimately to strengthen their own organization,
is bad statesmanship, poor politics and mockery of real reform.
Fusion without conversion always results in failure, whether it
is with populists, greenbackers, free silverites, single taxers,

1896.] THE OPENING OF BILTMORE. 33

socialists or mugwumps. Disappointment, jealousy, wrangling
and finally disintegration of the reform party organization is
sure to result from taking on discordant and unassimilable
elements for a temporary purpose. Honesty and efficiency in
political reform and public administration can best and most
easily be accomplished through honest and loyal party organi-
zation whose principles shall permeate its ranks from top to
bottom and whose responsibility shall extend from center to
circumference.

The Opening of Biltmore.

THE press announced with a variety of descriptions the
fact that Mr. George W. Vanderbilt formally opened his country
residence at Biltmore, N. C., on Christmas day. The affair
was a house warming by the immediate members of the Vander-
bilt family.

For several years, considerable has been written about Mr.
George Vanderbilt's Biltmore estate. It has been elaborately
described as the most extensive private property in the United
States. The immediate grounds embrace about nine thousand
acres, through which some seventy-five miles of driveway have
already been laid out. In addition to this the estate embraces
some one hundred thousand acres of woodland, containing great
hunting and fishing facilities, which include Mount Pisgah,
said to be the highest peak east of the Rockies. From the
mansion can be seen some fifty mountain peaks, with an alti-
tude of five thousand feet. The estate, when completed, will
unquestionably be the finest in America, and in many respects
the finest in the world.

All this is highly gratifying to Mr. Vanderbilt and to the
Vanderbilt family, but from an economic and sociological, as
well as national point of view, it has a more significant side.
It is the demonstration of what has frequently been called
attention to in these pages of the social functions of great for-
tunes. Great fortunes, when they are the result of productive
enterprise, as is the case with all the fortunes in this country,
of which the Vanderbilt is conspicuous, have two stages, and
fill two separate kinds of functions, one distinctly economic and
the other social.

34 GUNTON'S MAGAZINK. [ January,

Great fortunes in the making are almost exclusively eco-
nomic. They come of increased enterprises born of far-reach-
ing economies, as the application of new methods or new modes
of organizing productive industry, of which modern railroad-
ing is a conspicuous example. In the period of acquisition, the
owners of large capital are not infrequently harsh, severe
and sometimes even mean. They are in the hustle and bustle
of economic devices, all of which tends to concentrate the at-
tention and interest on a specific thing, and consequently nar-
rows the view of the social horizon. It makes the fortune gath-
erer seem avaricious and grasping, and often brings down the
censure of the very public that is reaping the economic benefits
of his energies. In other words, the function of this seeming-
ly cold and hard-headed life is the cheapening of wealth for
the community by the devices which produce its own fortune.
So that the function of the fortune-maker is not so much that of
a social refiner and reformer as of an economic revolutionist and
wealth cheapener.

That is why an aristocracy, who have passed the period of
industrial struggling and live upon incomes already estab-
lished, look down upon and criticise the mercantile classes
as crude, avaricious and grasping — a criticism so often di-
rected to this country by the so-called upper classes of
Europe.

The function of the second generation of the fortune-maker
is distinctly social. They have been removed from the arena
of bustle and strife involved in wealth production to a position
of leisure, travel and culture associated with large expenditure.
Now, it is always the expenditures of mankind that promote the
higher phases of civilization. It is exactly in this respect that
the aristocracy of Europe have exercised their best influence
upon society. This country is just entering upon the
threshold of the leisure phase of its societary development.

The first expression of it is shown in the eagerness with
which the second generation of our wealthy classes flee to Eu-
rope for their social environment ; some buying estates there,
others adding their fortunes to those of rank and position there ;
all for the purposes of the societary opportunities which the
generations and centuries of treasure and culture have given.
Now, the development of this cultured environment is most

1896.] THE OPENING OK BILTMORE. 35

needed in this country. Every detachment of wealthy Ameri-
cans from this country to Europe is so much check to the
higher evolution of the Republic. We need an aristocracy of
culture in this country, but not such an one as shall be separated
from the people by an impossible social chasm as in Europe,
but one that shall have the conditions of refinement for de-
veloping the highest types of culture and taste in every phase
of social life, without the class chasm of the old world; so that
the social culture, with all it implies, shall percolate down
through all the social strata with no greater obstacle than is in-
volved in the development of the capacity to take on and as-
similate the newer social quality.

In his Biltmore undertaking, Mr. George W. Vanderbilt
has set the first great example to American millionaires in this
direction. He is developing an estate superior in its appoint-
ments and opportunities to anything Europe can offer, with
abundant wealth to add to it all that the latest in science, art and
architecture can develop. Young Mr. Vanderbilt was born free
from the pressure of business bustle, with sense enough to know
that productive investment is necessary to permanent income.
He has, therefore, none of the snobbery which looks down upon
productive enterprise, but he has devoted himself personally to
promoting opportunities for education and art and other so-
cializing and broadening influences. Biltmore is but one of his
efforts in this direction. It is perhaps more significant because
it is leading the way to a new direction of devoting American
wealth to the uplifting of American standard of taste and social
cultivation.

If other young millionaires would follow Mr. Vanderbilt's
example, we could soon have a series of immense estates in
this country which would be veritable centers of diversifica-
tion and refinement, and which would rapidly spread their in-
fluence throughout the whole nation. It would also tend to
turn the trend of travel towards this country instead of taking
it all to Europe. The taste, architecture and general bearing,
developed and engendered under such conditions, would do
much to set the standard among the different social classes in
all parts of the country. It would tend to spread a precision,
order and refinement across the entire continent, and very soon
would make the sneering remark that "we are a nation of dol-

36 GUNTON'S MAGAZINE. [January,

lar chasers " impossible. In supporting the newest and best in
education, leading the way in developing and beautifying
American estates, adding the highest art in landscape, archi-
tecture and social appointments to the exceptional natural scen-
ery, Mr. George W. Vanderbilt is rendering a service to the
development of the national taste and civilization of the Re-
public for the Twentieth Century, no less important than the
service his father and grandfather rendered to the industrial
development of the Nineteenth Century.

The Reed-Dingley Revenue Bill.

As THE result of his uneconomic policy, which disrupted
our industries and destroyed the national revenues, President
Cleveland made a frantic, panic-creating appeal to Congress for
help. He asked the national legislature to forego its usual
Christmas holiday to rescue the treasury from the deplorable
condition into which his leadership had brought it. With a
promptness seldom equalled, Congress, under the leadership of
Speaker Reed and ex-Governor Dingley, responded to the call
for aid. Mr. Cleveland's panicky message was sent to Congress
on December 2ist, and on the 26th the House reported two
bills, one for temporary borrowing to save the Treasury from
bankruptcy, and the other to provide revenue. The following
is the full text of both bills as reported by the Ways and Means

Committee :

BILL NO. i.

A bill to maintain and protect the coin redemption fund and to author-
ize the issue of certificates of indebtedness to meet temporary deficiencies
of revenue. Be it enacted, etc. :

SECTION i. — That in addition to the authority given to the Secretary
of the Treasury by the act approved January 14, 1875, entitled ''An act to
provide for the resumption of specie payments," he is authorized from time to
time athis discretion, to issue, sell and dispose of, atnotless than par in coin,
coupon or registered bonds of the United States, to an amount sufficient
for the object stated in this section, bearing not to exceed 3 per centum
interest per annum, payable semi-annually and redeemable at the pleas-
ure of the United States, in coin, after five years from their date, with like
qualities, privileges and exemptions provided in said act for the bonds
therein authorized. And the Secretary of the Treasury shall use the pro-
ceeds thereof for the redemption of United States legal tender notes, and
for no other purpose. Whenever the Secretary of the Treasury shall offer
any of the bonds authorized for sale by this act or by the Resumption Act

1896.] THE REED-DINGLEY REVENUE BILL. 37

of 1875 he shall advertise the same and authorize subscriptions therefor to
be made at the Treasury Department and at the Sub-Treasuries and desig-
nated depositories of the United States.

SECTION 2. — That to provide for any temporary deficiency now existing
or which may hereafter occur, the Secretary of the Treasury is hereby author-
ized, at his discretion, to issue certificates of indebtedness of the United
States to an amount not exceeding fifty millions of dollars, payable in
three years after their date to the bearer in lawful money of the United
States of the denomination of ..twenty dollars or multiples thereof, with annual
coupons for interest at the rate of three per centum per annum, and to sell
and dispose of the same for not less than an equal amount of lawful money
of the United States at the Treasury Department and at the Sub-Treasuries
and designated depositories of the United States and at such post-offices as
he may select, and such certificates shall have like qualities, privileges and
exemptions provided in said resumption act for the bonds therein author-
ized. And the proceeds thereof shall be used for the purpose prescribed in
the Section i and for no other.

BILL No. 2.

A bill to temporarily increase revenue to meet the expenses of the
Government and provide against a deficiency. Be it enacted, etc. :

SECTION i. — That from and after the passage of this act, and until
August i, 1898, there shall be levied, collected and paid on all imported
wools of Classes i and 2, as defined in the act hereinafter cited, approved
October i, 1890, and subject to all the conditions and limitations thereof,
and on all hair of the camel, goat, alpaca and other animals, except as
hereinafter provided, and on all noils, shoddy, garnetted waste, top waste,
slubbing waste, roving waste, ring waste, yarn waste and all other wastes
composed wholly or in part of wool, and on all woolen rags, mungo and
flocks, a duty equivalent to 60 per centum of the duty imposed on each of
such articles by an act entitled <{An act to reduce the revenue and equalize
duties on imports, and for other purposes," approved October i, 1890, and
subject to all the conditions and limitations of said act ; and on all wools
and Russian camel's hair of Class 3, as defined in said act approved October
i, 1890, and subject to all conditions and limitations thereof, there shall
be levied, collected and paid the several duties provided by the said act,
approved October i, 1890. And Paragraph 279 of Schedule K, and also
Paragraph 685 in the free list in an act entitled "An act to reduce taxation,
to provide revenue for the Government, and for other purposes," which
became a law August 27, 1894, are hereby suspended until August i, 1898.

SECTION 2. — That from and after the passage of this act and until
August i, 1898, there shall be levied, collected and paid on all imported
articles made in whole or in part of wool, worsted or other material de-
scribed in Section i of this act, except as hereinafter provided, 60 per
centum of the specific pound or square yard duty imposed on each of said
articles by an act entitled "An act to reduce the revenue and equalize
duties on imports, and for other purposes," approved October i, 1890, and
subject to all the conditions of and limitations thereof. In addition to the

'TUNTON'S MAGAZIM . [January

ad valorem duty now imposed on each of said articles by an act entitled
"An act to reduce taxation, to provide revenue for the Government and for
other purposes," which became a law August 27, 1894; and on carpets,
druggets, bockings, mats, rugs, screens, covers, hassocks, bedsides, art
squares and other portions of carpetings made in whole or in part of wool,
the specific square yard duty imposed on each of said articles by said act,
approved October i, 1890, and subject to all the conditions and limitations
thereof, in addition to the ad valorem " duty imposed on such articles by
said act which became a law August 27, 1894.

SECTION 3. — That from and after the passage of this act and until Au-
gust i, 1898, there shall be levied, collected and paid on all imported lum-
ber and other articles designated in Paragraphs 674 to 683 inclusive, of an
act entitled "An act to reduce taxation, to provide revenue for the Govern-
ment and for other purposes,'' which became a law August 27, 1894, a duty
equivalent to 60 per cent, of the duties imposed on each of such articles by
an act entitled "An act to reduce the revenue and equalize duties on im-
ports and for other purposes," approved October i, 1890, and subject to all
conditions and limitations of said last named act; but pulp wood shall be
classified as round unmanufactured timber exempt from duty, provided
that in case any foreign country shall impose an export duty upon pine,
spruce, elm or other logs, or upon stave bolts, shingle wood, pulp wood or
heading blocks exported to the United States from such country, then the
duty upon the lumber and other articles mentioned in said Paragraphs 674
to 683 inclusive, when imported from such country, shall be the same as
fixed by the law enforced prior to 1890.

SECTION 4. — That on and after the passage of this act and until August
i, 1898, there shall be levied, collected and paid on all imported articles
mentioned in Schedules A, B, C, D, F, G,H, I, J, L, M and N of an act
entitled "An act to reduce taxation, to provide revenue for the Govern-
ment and for other purposes," which became a law August 27, 1894, a duty
equivalent to 15 per cent, of the duty imposed on each of said articles by
existing law in addition to the duty of August 27, 1894, provided that the
additional duties imposed by this section shall not in any case increase the
rate of duty on any article beyond the rate imposed thereon by the said act
of October i, 1890; but in such case the duties shall be the same as were
imposed by said act; and provided, further that where the present rate of
duty on any article is higher than was fixed by said last named act, the
rate of duty thereon shall not be further increased by this section, but
shall remain as provided by existing laws.

It could not be expected that under such fire-alarm condi-
tions a fully digested revenue measure could be prepared.
Under the circumstances, the revenue bill shows a gratifying
degree of good sense. In view of the brevity, directness and
efficiency of the measure, to criticise its minor defects would be
supercilious. It is a prompt, wise, efficient and well-directed
effort to restore the solvency of the government by much need-

1896.] THE REED-DINGLEY REVENUE BTT.L. 39

ed protective duties. It will be as helpful to indiistry as to the
Treasury.

It is only to continue in operation until August i, 1898, by
which time the nation will have decided definitely whether it
wants to continue its protective policy or enter upon the new
century with a free trade experiment. If the election of 1896
should give a Congress and President in favor of an anti-pro-
tection policy, the provisions of this bill will clear the way for
it, as these duties will cease to operate in less than a year after
the new Congress meets.

On the other hand, if, as is much more probable, the
nation decides in 1896 that it wants to begin the new cen-
tury with a protective policy, the expiration of this law will
make an entire revision of the subject necessary; in which case,
it is to be hoped that the tariff will be put upon a more strictly
economic and less political basis than ever before.

It will be observed that the new bill perpetuates the heresy
that the full amount of the duty is added to the price, by provid-
ing a compensatory duty on manufactured woolens equal to
the duty on raw wool. Every manufacturer knows that the
price is not increased by the full amount of the duty ; it was not
under the McKinley Bill nor under any other bill, and protec-
tionists have denied right along that such is the case. This is
a delusion, the acquiescense in which has done much to injure
the cause of protection, and ought not to be recognized in
any protective legislation. In the present instance, however, it
probably could not have been avoided, as the present bill is an
emergency measure which should not be impeded by protracted
discussion. And as it is only to last until 1898, it might have
have been inadvisable to raise the issue.

The woolen manufacturers needed the protection quite as
much as the wool growers. To give them protection under the
pretense of compensation for the duty on raw wool will have
the same effect as if it had been frankly given for protection,
though it is a delusion which should be avoided in all future
discussions and legislation upon the subject. If manufacturers
really need protection, give it to them, but do not give them
protection under the hocus-pocus process of pretending to com-
pensate them for a duty they do not pay. The disaster of such
legislation is revealed when for any reason a change in the duty

40 GUMON'S MAGAZINE. [January,

on raw wool is brought about, as in the case of the Wilson
Bill.

Every woolen manufacturer knows that the removal of
what was called compensatory duties from woolen manufactur-
ers cut right into their protection. If the duty on wool had
been levied for protection purposes, it would not have been
withdrawn under the pretense of giving free wool. The manu-
facturers would then have had permanent fighting ground
against the severe knifing they received by the Wilson Bill.
Like all other forms of error, bad economic reasoning is sure to
bring its penalty, and its reaction is apt to come when it is least
expected. Correct reasons are always the best in the long run,
though sometimes delusion will make more headway for the mo-
ment. When the time comes in 1898 for a more scientific and
comprehensive revision of the whole subject, strictly economic
reasons alone should govern the legislation. In the meantime,
the Reed-Dingley measure will answer all the emergency pur-
poses both of revenue and protection. If the President obstructs
the passage of this measure by his veto, he will but add one
more to his list of crimes against the Republic.

Toynbee and His Work.

Bv DR. M. McG. DANA.

As A fitting background on which to set the career we are
about to portray, let us recall the sensational and troublous
history of the year in which it began. The trend of European
affairs can be at least partially traced in the mood and policy of
England. You can surely infer from the record of English ex-
citement and governmental action what may have transpired
across the Channel. The year of Toynbee's birth — 1852 — was
one of great unrest. An outburst of military spirit was the re-
sultant of a fresh alarm about a French invasion. Then came
as a consequent, the volunteer movement, which aroused an
immense amount of national enthusiasm, and received even the
sanction of the Crown. The poet laureate, Mr. Tennyson, at-
tempted to voice the popular sentiment, and though his lines
are manifestly unworthy of his high powers, they nevertheless
are significant, because expressive of the public alarm prevalent

1896.] TOYNBEE AND HlS WORK. 41

at that time. The previous year had been signalized by the
opening of the great exhibition in Crystal Palace, and by the
coup d'etat of Louis Napoleon. On the anniversary of the latter
event in 1852, came his inauguration as hereditary Emperor,
with imposing religious ceremonial in the historic church of
Paris — Notre Dame. Lord Palmerston, as foreign secretary
under Lord Russell, had been dismissed. This was due, in
part, to his arbitrary conduct of foreign affairs, and also to a
growing distrust of him by both the Queen and the Prime Min-
ister. Palmerston was a difficult man to understand, for while
reckoned as a conservative at home, he was looked upon by
Continental cabinets as a patron of revolution, and by English
radicals as the steady enemy of political reform. Cobden so
thoroughly disliked him that he did not hesitate to declare him
to be the worst minister that ever governed England. Yet this
good-natured statesman at a later period invited his outspoken
critic to take office under him. Palmerston was also a pro-
nounced friend, officially and personally, of Kossuth, and dis-
played an open contempt for the anger and alarm of Austria
over his escape. He astounded his colleagues by continuing
diplomatic relations with Louis Napoleon, and by giving a semi-
official endorsement to the coup d'etat of the latter. In Feb-
ruary, 1852, came the overthrow of the Russell Ministry, with
its attendant excitement. Little of a positive character had
been initiated or accomplished by it. Following Peel's policy
of throwing open the markets to foreign as well as colonial
sugar, and by the repeal of the Navigation Laws, it had com-
manded a mild approval. It made an ineffectual effort at a re-
form bill, and feebly favored attempts to gain admission into
Parliament for Jews, and then it fell, without exciting any na-
tional regret. The Derby Ministry, familiarly spoken of as the
"Who! Who!" Government, succeeded, and at the outset made
an almost fatal blunder by hinting, as did its Premier, that the
question of protection would be reviewed. At once the Free
Trade League was reorganized, and between the agitation there-
by awakened, the disturbances in Ireland over the Tenant
Right question, the popular discontent became wide-spread.
Turning to the industrial condition, we find the great lock-out
of the iron trade had just occiirred, while the co-operative
movement in London was met by a bitter antagonism on the

42 I'lfx-roN's MAGAZIM . [January,

part of those opposed to all labor associations, even for muuuil
help. The Christian Socialists, among whom figured Charles
Kingsley, were still encountering the denunciation of conserva-
tive reviews and the Manchester School of economists. Such
were the scenes which had been transpiring, and such the pan-
icky year in the August of which Arnold Toynbee was born, at
Savile Row, London.

There is something exceedingly attractive about our sub-
ject, while his name has come to stand for a significant social
movement. New men put new questions, and that makes their
advent always of interest. New eyes wherewith to see this old
world; and then a strong intellect wherewith to untangle its
problems and teach the new truth for which humanity waits,
that makes a mission possible. Toynbee came naturally by his
deep interest in the hardships and occupations of the working-
classes. His father before him had been a student of the con-
dition of the poor, and had assisted in erecting for them model
cottages, and the establishment of a lecture hall, at Wimbledon,
where the Toynbees resided.

It was a lively village, situated in the midst of charming
rural scenery, and ministering to the delight in natural beauty
which was early developed in young Toynbee through the care-
ful and sympathetic tuition of his father. His rambles over
Wimbledon Common were recalled as among the happiest hours
of his childhood. He early acquired a fondness for history,
especially military history, delighting as a boy in constructing
mimic fortifications, and equipping them with such armament
as he could procure. Though always delicate, and acutely
sensitive to pain, he yet was fearless and impetuous, uniting
with high-strung vehemence a resolute will. He was in every
respect a loveable and manly youth. He had a boy's instinct
for games, and excelled in all those sports which in school and
university do so much to develop the physical vigor and self-
reliant qualities for which English young men, as a class, are
noted. Arnold's first preference was for a military life, but
changing tastes, and a sense of physical unfitness, soon turned
him from this; and next he thought of the civil service. To
prepare for this he began upon a course of careful reading,
covering two years, supplemented by lectures at King's College,
London. Again he changed his purpose and determined to

1896.] TOYNBEE AND HlS WORK. 43

prepare for the bar. But even this was abandoned, and few
suspected the struggle, the inward unrest, which made this un-
avoidable. It is always sad to see a young life, girt with un-
usual promise, hampered at its very start with ill health, and
its entail of suffering and struggle ; yet 'tis true that its way of
suffering is the witness which a soul bears to itself. What
martyrdom is more noble than the renunciation of happiness
and the fearless pursuit, of duty, or the placing conscience
where mere feeling had hitherto held sway.

Young Toynbee finally decided to devote himself to the
study of history and its philosophy. To this pursuit he said
he wished to give up his life, and therefore relinquished all idea
of entering upon any profession. Apologetically writing of
this new aim he said : " I do not care to spend my life in ac •
quiring material benefits, which might have an evil, and at any-
rate could not have a good, effect upon me. * * * My sole,
and so far as it can be, unalloyed motive is the pursuit of truth ;
and for truth I feel I would willingly sacrifice prospects of the
most dazzling renown." This has the the ring of true chivalry
about it, and is noteworthy as the utterance of a young man
just completing his nineteenth year. He is having his first
real glimpse into his promised land, his day of ecstasy. Every
one begins the world afresh, as if none had lived before him
whose bequest of failures and experiences might make him
more cautious and less presumptuous. The young man has
now found his calling, and in spirit, at least, he ever after ad-
hered to the programme it involved. Before he was sixteen
his father died, and he was left at a critical period without the
latter's counsel and companionship.

Inclined too much to solitude, and living mostly in books,
it proved a most- timely step when Toynbee entered Pembroke
College, Oxford, at the age of twenty-one. University life
supplied him with correctives for mental faults he had fallen
into, while contact with bright minds intensified and enlarged
the scope of his own powers, taught him his defects and stimu-
lated his ambition. Sickness occasioned by competing for a
scholarship in modern history in Baljiol College obliged him
to leave Oxford. In January, 1875, ne returned as a com-
moner of Balliol College, and here he spent nearly three years
Handicapped by continued ill health, he was compelled to fore-

44 GUNTON'S MAGAZINE. [January,

go reading for honors or competing for any of the University
prizes. In fact, he could only apply himself for a few brief
hours daily, and had to be content with taking a pass degree in
the summer of 1878. While at Balliol he read widely and wise-
ly, and yielded to the spell of some of the scholarly men, inter-
course with whom constituted one of the chief advantages of
University life. The social side of his nature, too, was
brought out during his residence at Oxford, and his genial,
inquisitive spirit attached to him those who appreciated his
gifts and prized his friendship. We have this picture of him
when on the threshold of his unique career: "An oval face, a
high forehead crowned with masses of soft brown hair, features
very clearly cut, a straight nose, and a rather large, full-lipped
mouth, which only needed more color to produce the impres-
sion of beauty. * * * Together with this winning counte-
nance, he had a manner singularly frank, open and animated."
He is a student in looks, and though already an invalid without
the peculiarities, sometimes painful, sometimes pitiful, which
invalidism is apt to produce, the charm his university residence
had for him crops out in letters, as well as in the deepening life
of which he became ever more and more conscious. This frag-
ment of a letter to a friend acquaints us with the thoughtful
and prophetic glow which marked the man : ' ' The Garden
Quadrangle at Balliol is where one walks at night and listens
to the wind in the trees and weaves the stars into the web
of one's thoughts; where one gazes from the pale, inhuman
moon to the ruddy light of the windows, and hears broken
notes of music and laughter, and the complaining murmur
of the railroad in the distance." At Oxford, Toynbee came
under the influence of Mr. Ruskin, then Professor of Fine
Arts in the University. To illustrate the dignity and bene-
fits of manual toil, the professor had persuaded not a few of
the undergraduates to work under him repairing the road in
the village of Hinksey near Oxford. Among these Toynbee
eagerly enrolled himself, and by dint of zeal and pluck rose to
be a foreman among these student workmen, While at Balliol
political economy attracted him, because shedding the light
needed on social conditions, and enabling him to deal intelli-
gently with the problems which soon were to engross his time
and study.

1896.] TOYNBEE AND HlS WORK. 45

It had long been Toynbee's desire to understand and help
the poor. So he made the somewhat original, and, as it proved,
useful venture of spending part of the vacations of 1875 in
in the Whitechapel, East London. He clearly saw that money
is impotent to deal with the problem of poverty. Friendship
and sympathy he recognized as the great factors in bringing
about any permanent betterment. Accordingly, he took rooms
in a common lodging honse in the Commercial Road, White-
chapel, and furnished them in the plainest possible manner.
Thus was initiated a movement whose real promise he, perhaps,
at the time did not suspect. 'Tis always so with humanity's
best workers. They build better than they know. Now the
bon-hommie of Toynbee came out, and the charm of his man-
ners attracted others to him. He did not keep aloof from those
amid whom he came to live, but at once interested himself in
their hopes and neighborly reciprocities in the existing organi-
zations, in the amusements and entertainments of the school
children. Then he offered himself as a co-worker to that ever-
honored veteran in the social movements of East London, Rev.
Mr. Barnett, Vicar, of St. Jude's. Next he put himself in touch
with the Charity Organization Society, valuing the opportunity
he thus gained for securing an insight into the real condition of
those who hitherto had been so little known and less under-
stood. He joined the Tower Hamlets Radical Club, and
through his evenings spent there came to know the East End
politicians and the ideas which governed them. Remember, we
are describing a real life venture, and that Toynbee had no
forerunners, but was feeling his own way in a bold, manly
fashion towards a work which soon engaged all his time and
talents. How like his straightforward, self-reliant method it
was to encounter men where he found them engirt with pre-
judices he deemed irrational and unmanly. For, among the
first themes on which he spoke were those of political economy
and religion, and he chose them because he found so many in
the club who were strongly opposed to both. And it was while
speaking to his associates in the club that he became aware of a
new power. He had been hitherto without any incentive to this
kind of speech, and it was a joy to him to discover that he could
think on his feet and express himself clearly and forcibly and
command attentive listening. The address was, first, such a

46 GUNTON'S MAGAZINE. [January,

setting forth of the nature and aims of religion as might have
been expected from this unconventional, but earnest church man.
The debate which followed was spirited, if not altogether rev-
erent or orthodox in tone. It was a revelation to him as to the
way these men looked at religion; for one speaker held that
the common idea of heaven (one which he was intent upon ridi-
culing), was "a place where the angels had nothing to do but
let their hair go on growing and growing forever. " It was a
pity Toynbee was not able to repeat his Whitechapel residential
visits, but his health was too delicate to endure the strain of his
novel but wearying environment, and sadly he gave it up ; little
dreaming that his example and brief experiment was to be mem-
orialized in Toynbee Hall, and all that it stood for in White-
chapel as well as prompted to elsewhere.

Soon after taking his degree at Balliol some thirty or more
Indian students were put under his charge. His interest in
the study of Political Enonomy had grown, and to this he now
added the careful study of Indian subjects. He rightly felt that
much depended on these representatives of India being rightly
grounded in the principles of economics; at the same time he
recognized the necessity of modifying the teachings of English
economists to the condition of things his pupils would meet in
their own country. He appreciated, also, the opportunity
afforded him of training these young men for responsible service
under the English Government.

Toynbee, young as he was, had already broken with the
older economists, believing them too largely theoretical and too
little ethical. There was need, in his judgment, of a new poli-
tical economy, nearer to the real facts of society and also more
humane. He had no patience with the mere formulation of
economic laws; he wanted duties emphasized, the ethical rela-
tions of men made more of, and some amelioration of the social
condition proposed. If the older school of political writers had
dwelt on the danger of government interference and leaned un-
duly to the doctrine of laissez faire, that only made it the more
incumbent on the new school of economists to show the real
sphere of government what it might do and where its interven-
tion was wise and necessary. Yet he is not an extremist in ad-
vocating state action, or the socializing of some functions hith-
erto deemed beyond the province of the general government or

1896.] TOYNBEE AND HlS WORK. 47

municipality. He was pronounced in his views in favor of
free trade, but also in favor of the freedom of labor
and in the radical change of the Poor Law. His sym-
pathy with the wage-earning class made him feel that the
theories of leading political economists promoted a grasping
spirit in the individual and nation. He felt that the poor man
was handicapped in his lot, for without education, or the free
opportunity of emigration, he had little chance of gaming his
portion of the augmenting wealth of the country. Toynbee's
position was not altogether easy to understand, for he was
neither socialist nor democrat. While he was no partisan in poli-
tics, he was in sympathy with the laboring classes, and he had
made their condition his study. So he realized, as few of the
doctrinaires did, the altered condition of things resulting from
the growth of the factory system, the remuneration of laborers
and their organization for self -protection. The historical method
in which Toynbee believed, had revolutionized political economy
by showing that its laws were for the most part relative, chang-
ing with the varying stages of civilization. Adam Smith was
concerned about production, but already in Toynbee's time the
more equable distribution of wealth was the great question.
Hence, he claimed ''that a gospel of life was needed, and the old
political economy had none. Morality must be united with
economics as a practical science. The better distribution which
is sought will then be found in the direction of (i) a modifica-
tion of the idea of private property by (a) public opinion and (b)
legislation, but not so as to destroy individualism, which will
itself be modified by duty and the love of man; (2) of state
action in the interest of the whole people ; (3) of association not
only of producers but consumers. " Toynbee was a close observer
of economic phenomena, and had the rare gift of impressing his
views on others. In the club of university men he organized
for the purpose of discussing social and industrial questions
and of educating public opinion, he was the leading spirit. In
1880, his belief that the time was ripe for a move-
ment to interest and instruct the masses led him to
deliver a series of popular addresses. The first were given
at Bradford, upon Free Trade, the Law of Wages, and England's
Industrial Supremacy. The second of the above named lectures
he repeated at Firth College, Sheffield. In this is seen the

48 GUNTON'S MAGAZINE. [January,

constant aim of Toynbee to enforce the distinction between the
laws of production, which are the laws of nature, and the laws
of distribution, which are in part the result of human contriv-
ance and may be modified and improved through the growth of
intelligence and a deepened sense of justice. Another lecture,
on Industry and Democracy, was noteworthy for its historical
survey and the close attention it won from audiences in New-
castle and Bradford. In a later address, on the question, "Are
Radicals Socialists, " he proposed these three tests to determine
the wisdom of state interference in any instance: (i) The
matter must be one of primary social importance; (2) it must
be proved to be practicable; (3) the state interference must not
diminish self-reliance. In the winter of 1880 he began to lec-
ture on political economy to a class of workingmen which met
at the Oxford Co-operative Stores. An article he wrote for
the Oxford Co-operative Record on. " Cheap Clothes and Nasty,"
reminded workingmen what hard and ill-paid labor of their
kin was required to produce this sort of clothing. " The great
maxim we have all to follow is that the welfare of the producer
is as much a matter of interest to the consumer as the price of the
product," and in urging regard for this he was wise above his
times, and his dictum finds application to to-day's methods in
trade. At the annual Congress of Co-operative Societies, held
at Oxford in 1882, his paper on " The Education of Co-operators"
was suggestively brilliant and withal characteristic. He urged
on the Co-operative Societies a course of instruction for their
members in civics and political economy. " Languor can only
be conquered by enthusiasm, and enthusiasm can only be
kindled by two things — an ideal which takes the imagination by
storm, and a definite intelligible plan for carrying out that
ideal into practice. " The embodiment of enthusiasm himself,
he sought to kindle a like flame in the breasts of those whom
exacting toil wearied and made apathetic.

In all these efforts, Toynbee is showing the qualities of a
leader and teacher for the times, and had he lived long enough
to advocate his noble programme, he would have profoundly
affected the laboring classes of England. As it was, the latter
hardly realized what a brave friend and wise advocate he was,
so far as their interests were concerned. Henry George's book
on "Progress and Poverty" became the theme of two 'lectures

1896.] TOYNBEE AND HlS WORK. 49

given at Oxford in 1882, and because his last, had about them
a pathetic interest, and the earnest appeal with which they
concluded, addressed to his younger hearers, touched and
deeply moved them. The shadows were visibly gathering
about him, and his friends noted sadly his growing feebleness,
and the loss of his quondam exuberance and hopefulness of
spirit. He would not, however, cease from his labors, but with
characteristic resoluteness tinged with an unconquerable en-
thusiasm, he kept at his work, and in January, 1883, went from
St. Andrews Hall, Newman St. , London, where he was repeat-
ing his second lecture on "Progress and Poverty," a dying
man. He lingered till March 9, 1883, and then amid the home
circle at Wimbledon, in his thirty-first year, he passed away.
To the last, his mind dwelt on his great occupation, to which he
had consecrated himself with a signal devotion. It was to help
men that he had striven, and through his brief but arduous
career he was sustained by his quenchless hope of betterment
for the laboring classes, and an unfaltering zeal in bringing to
them the uplift of his own ideals. There has always been an
undefinable charm about the man, which accounts for a repu-
tation which seemingly at least was greater than any achieve-
ments bear out. After all, the striking and valuable thing was
not what he actually produced, but rather himself. His noble
disinterestedness, his chivalric nature, his wide personal sym-
pathy, his patient courage and lofty optimism — these gave fra-
grance and force to a life which in two countries at least is
to-day a powerful inspiration. Toynbee's name is one to con-
jure with, and his example has called forth the saints of the
the industrial world, who are everywhere warring with city
misery and wrong, and bringing in the brighter day of brother-
hood and social reformation.

We may use Toynbee's own words in speaking of him and
the bequest he has left us: " Oh! time, hast thou no memory?
The bright pictures of glancing life are they gone with those
dead ones who clasped hands and shouted? Or not without a
smile dost thou remember them dreaming ?" It is difficult to
say exactly what Arnold Toynbee's place is to be among the
teachers and leaders of this generation. We know that he was
fast becoming a power in Oxford through his labors as tutor
and lecturer at Balliol. He left only a few monographs and

50 OUNTON'S MAGAZINE. [January

manuscripts full of facts and social studies, laboriously gathered
and carefully arranged. As a political economist he combined
thorough study of the theory of his subject with gifts of imagi-
nation and sympathy, which enabled him to invest its doctrines
with a vivid interest too generally lacking in their exposition.
He was quick to seize upon salient facts, to observe the tragedies
and comedies that make up so largely the staple of daily hu-
man life. Sharing in the modern philosophic spirit, he hesi-
tated to break with the past, and with a scholar's instinct he
gave himself to careful and extended research. He was, in
fact, an authority on economic questions, because of his wide
reading and familiarity with the great writers, from Adam
Smith down. His role, however, was more that of a social re-
former, and he made all his economic studies tributary to that.
His lectures left an indelible impress on his auditors, while the
unrestrained intercourse he held with chosan friends had about
it a genuine tracery of lofty eloquence. Not all could rise to
his indomitable idealism, yet all felt the spell of his passionate
earnestness. To young England and the large circle of university
men whom he met, he was a great inspiration. His life, his aims
were a speaking rebuke to selfishness and the cynicism of those
who depise the common crowd. He strengthened faith in in-
dividual goodness and in the possibilities of general progress;
while at the same time he held high the standard of social duty
amid the growing perplexities of our modern life. Toynbee
Hall, which is his memorial, embodies his views and establishes
the fact that they admitted of practical realization. The college
settlement movement which has developed so rapidly and is so
full of promise, may be reckoned as the outcome of Toynbee's
life and teaching. This is really the highest tribute to the
man ; it shows that he has become a social force, and that is the
best possible transformation of a life. Toynbee Hall has now
become a great institution, with wide reaching educational
and social influences. It maintains a great variety of evening
classes; is the head center of a number of workmen's clubs, has
created a spirit of real brotherhood amid those who hitherto
have stood aloof from one another, and has brought the crowded
population of East London into touch with the legendary life
and culture of the old universities. It did not create much
new machinery, but revitalized and made effective institutions

1896.] TOYNBEE AND HlS WORK. 51

and agencies already existing in that section of London. It
largely reconstituted the vestries, the Boards of Guardians, the
committees on schools, and put new life into the system of
local self-government, where careful instruction is given in po-
litical economy, while grave questions of social and industrial life
are discussed in its lecture hall. In a word, Toynbee Hall stands
for a new ideal of citizenship. The art of self-government
it is seeking to develop. " The Sanitary Aid Committee, with its
headquarters at Toynbee Hall, has not only abated nuisances,
but enforced greater vigilance both on the part of landlords and
of the local authorities. The principle of personal service, per-
sonal knowledge and personal sympathy underlies the whole
movement and is the inspiration of every endeavor. The West
End has been, through Toynbee Hall, brought into friendly re-
lations with the dwellers in the East End. Students and work-
ingmen have met in cordial fellowship, and the result has been
a deeper conviction of human brotherhood, and the acknowledg-
ment of a common responsibility for the common good. Lec-
turers from Oxford and Cambridge have in Toynbee lecture
hall met, face to face, men of every craft, and been plied with
the keen questions that the hardships and hindrances in their
lot suggested. The annual exhibition of pictures, held under
the auspices of Toynbee Hall, has now become a unique affair
in East London, and is attended by great crowds. The inter-
est displayed by those who loan the paintings is itself an augury
of kindlier feeling between classes hitherto widely separated,
while the appreciative enjoyment of this exhibit has awakened
surprise and a new respect for those who have seen so little of
the works of great artists. Here, then, has been a great object
lesson, an illustration of how to reach and lift to a higher level
the life of the poorest and most neglected sections of our great
cities. Toynbee Hall is the evolution of a mighty civic and
social movement which is now seen to be practicable in every
municipality. Its aim is to develop individual character through
the education of civic spirit and through the wise direction of
local energies. It stands as a protest against those social
neglects which have resulted in our slums, in that despair and
decadence which overtake the population unwholesomely
crowded and inhumanly housed. It also is the pioneer of a per-
manent effort to enlist the educated and leisured classes in do-

52 GUNTON'S MAGAZINE. [January,

ing for the less favored, and opportunity is by it afforded for
the personal study of social problems, and for the expression of
every social sympathy.

It was Toynbee's cherished hope that mere doctrinaires
and those living too exclusively in a scholastic environment
might come into sympathetic contact with the masses of toilers
Crowded in the "East Ends" of our cities, study on the spot
the actual conditions of tenement life, seek by personal service
to enoble it, and thus create a spirit of brotherhood which
might efface the sense of class distinctions, class prejudices
and class antagonisms. For all this Toynbee Hall stands to-
day, and the renaissance of interest in and sympathy with the
wage earning millions, and those who are at present below the
life line, we owe in the main to Arnold Toynbee.

Negroes Under Northern Conditions.

BY GUY CARLETON LEE, A.M., LL.M.

IN THE study of the negro we have, as a rule, sought knowl-
edge of the Southern type ; the negro in the North has received
little critical attention. Yet to judge most accurately of the
capabilities of the colored man, as shown by his use of the one-
third of a century of freedom, which has followed the three
centuries of his slavery, we must consider his race in its North-
ern environment. To obtain the best results from such a con-
sideration it is necessary to select a point of research offering
both urban and rural conditions, where the prejudice against
the negro was slight, if existent, at the time of his settlement,
and where the present negro population is composed almost en-
tirely of ex-slaves or their children.

It is believed that Carlisle, Pennsylvania, presents such a
base of investigation.

The peculiar trough-like formation of the country in which
Carlisle, a busy town surrounded by fertile farms, is placed,
afforded for over a century an easy and unmistakable route for
the Underground Railway. This organization furnished reason-
ably safe service, including meals and lodgings, to more than
one-quarter of the total number of escaped slaves fortunate
enough to reach a free State. This number, however, was but

1896.] NEGROES UNDER NORTHERN CONDITIONS. 53

a handful of the multitude of negroes pictured by romancers as
fleeing from bondage. Prior to 1860, 175 to 200 slaves passed
through Carlisle each year, in their Northward flight ; few dared
remain long, as the town was a favorite point of interception,
although its citizens, as a rule, stood neutral in the struggle be-
tween the claims of the master and the resistance of the chattel.
The early negro population was recruited from the "free
negroes" of Pennsylvania. In 1864, however, the town added
over 500 fugitive slaves to its permanent inhabitants, and this
settlement of Virginia and North Carolina refugees furnished
the base of the present colored population. Since 1865, the
colored people have added steadily to their numbers, but their
rate of increase is less than that of the whites. In 1895 the
" free negro" has almost disappeared, and his successors are of
the following stocks : 86.25 + per cent., Virginian; 5.55 + per
cent. , North Carolinian ; 5.25 + per cent. , from unknown sources ;
3.95 + percent, "free negro." During the last century the
number of colored people has from a total of 117 in 1795 reach-
ed the maximum of 1,456 in 1895. Of this number 854 are
females, 602 are males. We may sub-divide them into 31.25 +
per cent, pure negro, 44. 64 + per cent, mixed blood of inde-
terminate quantity, 19.75 + per cent, mulatto, 2.18 + per cent,
quadroon, and 2.18 + per cent, octoroon.

The negro prefers to keep house rather than " to board."
This is due to economic rather than sentimental reasons. His
housekeeper, be she wife or leman, in seventy per cent, of the
homes, provides roof and food for him. The negro of 1866-
1876 had an ambition to own a home; he bought generally in
the alleys and dwelt, as in the Southern States, at the back of
the white man's property. As the alley locations filled up he
was attracted by the cheapness of land in a certain section of
the skirts of the town, and there bought lots. To-day these
purchases have, through the growth of the city, trebled in
value, and that, too, despite the active resistance to progress
offered by the negro, and the depreciation that his bare posses-
sion brings to property. The appreciation of values has been
much less in the negro quarter than in the white residential
quarter. The home of the renter, as well as that of the
owner, varies from the three-room cottage to the ten-room
house ; but not a negro in the town occupies a house fitted with

54 GUNTON'S MAGAZINE. [January,

water closets, sewer connections or working gas fixtures; but
one house is heated by a furnace; none by hot water or steam.
The cost of these dwellings varies from $300 to $2,500; the
majority cost less than $500 each. The ordinary negro renter
pays $3 to $5 per month for his house. The proportion of
individuals to each dwelling is twenty-two per cent, greater
than with the whites, and the number of rooms to each house
is fifty-two per cent. less.

The furniture of the negro is neat and often of good style,
and, in a number of cases, better than that owned by the ma-
jority of whites with equal incomes. The house, at least in the
living rooms, is kept neatly and in order. In 100 homes visited,
87 + per cent, showed no shiftlessness or untidiness outside of the
bedrooms, though in 72 cases the woman of the house was in
constant daily service away from home, from 7.30 A. M. to 6.30
p. M. In thirteen per cent, the whole house was disorderly
and dirty. In 37 houses musical instruments, usually organs,
were found; in 41 the walls had pictures upon them, not one
or two, but a goodly number, tastefully displayed; 92 homes
had curtains ; 90 were carpeted in the living room ; in 1 4 books
were to be seen in quantity ; and in 23 the Bible had visible
place.

The dress of the young colored woman is neat and often
follows closely to the prevailing mode. On parade the young
colored man dresses well, but in a rather loud fashion. The
older people of both sexes, upon Sundays and holidays, wear
substantial garments. The males, however, when not dressed
in their best clothes, present, in the majority of cases, an un-
tidy and dilapidated appearance. The women secure many
second-hand garments, at little or nothing, from their employ-
ers, and owing to the large number of students in the town,
the men are able to dress well and cheaply. The average an-
nual cash expenditure for clothing and shoes in 37 widely differ-
ing cases was $18. 15.

The housekeeping is done upon a surprisingly limited scale ;
the average income or proportion of receipts to each member
of the household rarely exceeds ninety cents per week. This
forced economy is a most interesting siibject of analysis. In
the majority of homes but one heating stove is used ; if this
is not the cooking stove, then the latter seldom contains a fire

1896.] NEGROES UNDER NORTHERN CONDITIONS. 55

for more than two days of each week, for upon the other days
the housekeeper avails herself, by pre-arrangement, of a neigh-
bor's'fire. The supply of fuel ordinarily needed may be esti-
mated at two tons for winter, and half a ton for summer.
This is eked out by such wood as may be gathered at no cost.
One lamp is considered sufficient for the household, but in
winter another is used during part of the evening. At the
first symptoms of sickness the negro seeks medical advice; if
poor, he calls upon the charity physician ; if the owner of real
estate, he is obliged to call a doctor whom he must pay at the
time of the visit. He pays the dentist when a tooth is drawn,
but he spends no money for filling teeth. The staple food of
the negro is bread and molasses. A comparison of the food
lists of thirty-seven families, earning an average of $21.05 Per
month, shows 495 of the 1,009 meals consumed during one
week, to consist of bread and molasses, without coffee, tea,
milk or other addition; 215 consisted of bread and molasses
and coffee, with milk and sugar in 171 cases. Fresh pork is
almost the sole meat used, few vegetables are eaten, and eggs
and butter still more seldom than vegetables. If the woman
of the family is at service, the quality and quantity of the food
is changed. The negro servant regards the need of her family
as paramount to all other considerations. No provisions arriv-
ing at the place of her employment fail to pay her toll, and
baskets, bundles and dress fronts alike furnish her with means
of conveying food home.

I have traced the occupations of 577 of the 602 male negroes;
93 are at school, 99 are under school age. Of the balance, 410,
one is a lime burner, with an income of about $1,500; two arc'
contractors with incomes of $5oo-$6oo; one conducts a laundry
business that has net him about $500 per year. These men
employ both white and colored hands. Five small stores are
run by colored men and return a profit varying from $75 to $250
per year ; eight barbers earn a like amount ; five cobblers and
repairers have incomes not exceeding $100 annually; 15 team-
sters, owning or hiring teams, earn from $1.50 to $2.25 per day
during six months of the year. Thus 37 men may be said to
be in business for their qwn account. Four clergymen earn
from $200 to $825 ; four men are connected with church work
besides the pastors, but do not receive an annual return exceed-

56 GUNTON'S MAGAZINI. [January,

ing $37.50 each; three men earn iroai $48 to $56 per year in
manual labor connected with churches; 40 men earn from $20
to $30 per month as janitors, hostlers, drivers, waiters and men
of all work; 48 are employed during five months of the year on
neighboring farms as farm hands and fence makers, at 75 cents
to $1.50 per day, and in quarries at $i to $2.50 per day. The
average wage of these rural laborers is less than $1.05 per day.
By counting 1 2 months' labor for these 48 men, every working
colored man, not otherwise classed, will be included in estimate.
The skilled laborers include four carpenters earning $1.50 per
day; 10 masons and bricklayers earning $2 to $2.25; six hod
carriers at $1.25. The amount of yearly earnings of skilled
laborers depends upon the general activity in their respective
lines.

One hundred and fifty-six males are then to be classed as
workers. Deducting this number from 410, the total male
population at school age and over, and not at school, and we
find that we have 254 dependent males; of these 172, or a total
of 67 + per cent, of the idle negroes are known to belong to the
class of habitual criminals. The dependent male, when out of
correctional institutions, receives five per cent, of his support
from the direct charity of the whites; 95 per cent, is furnished
by the colored female; 70 + per cent, of the colored females, ex-
clusive of school children and children under school age, are in
service; 20 + per cent, do washing at their homes; 7.5 + per
cent, have no other employment than their own housework.
2.50 + per cent, do not work. A negro woman will only serve
in a negro family when hard pressed for money, and then for a
few days only. The women earn from $1.50 to $2.50, with an
average of $2, per week; some cooks (5) earn from $3 to $4.50.
Of the 113 colored freeholders, 65 are worth less than $300, 27
are rated between $500 and $700, seven between $750 and
$1,000, five between $1,000 and $1,500, six between $2,000
and $2,500, one at $5,000, one at $10,000 and one be-
tween $30,000 and $40,000. During the last 15 years, with the
exception of five men, few negroes have bought real property,
and in many cases the property owned to-day may be traced to
the money brought from the South, and its increase from inter-
est or from the rise in value of the lot in which it was invested.

The apologists of the negro race have done it much harm

1896.] NEGROES UNDER NORTHERN CONDITIONS. 57

by shrinking from reviewing the moral nature of the individuals
composing it, or if prevailed upon, so that they touch on the
subject, they have glossed it over with a varnish of assorted
examples of piety. The intelligent colored man does not desire
this method of treatment; he is willing that the whole truth
should be told. The social evil of the negro should be clearly
seen and fully understood, that the cure may be radical. The
negro's proneness to social sin has been excused, his moral de-
pravity and lust have been sanctioned, where he did not seek
white victims, and to-day his illicit cohabitation is regarded as
a race incident. Of the 1,456 negroes in Carlisle, but 31.25 +
per cent, are of unmixed negro blood. This statement at once
raises the question of the legitimacy of the 68. 75 + per cent., but
though the bar sinister runs across the large proportion of them,
we cannot assume that 68 75 per cent, are born out of wedlock,
any more than we could postulate the legitimacy of the 31.25 +
per cent. We learn from the official registers that during the
past year 362 marriages (white and colored), were celebrated in
the county, and 144 in Carlisle. As the colored people constitute
15 + per cent, of the population we should, from their nature,
expect them to furnish more than 15 + per cent, of the mar-
riages. We find that they actually furnish less than 5.25 + per
cent. , and of this percentage, 24 + per cent, are stated to have
been forced upon the bridegroom. Upon the Register of Births,
we note that of 30 colored births 20 + per cent, may, from the
the record, be regarded as illegitimate; and investigation in-
dicates 20+ per cent, additional should be added; or a total of
40 + per cent, of registered colored births. The registered
births do not indicate the result of the social evil ; the negro
woman in 1895 is an expert in fceticide and infanticide.

Solicitation by colored street walkers is confined to men of
their own color, but the negro " office worker " preys upon the
white man. The negroes maintain six assignation houses, to
which negroes resort, and one that only admits white men; but
while in the six only colored women are sent for, here both
white and colored make calls, upon notice. Three houses exist
where meetings may be arranged before entering the house.
The total number of bawdy houses is sufficient to provide one
for every 145 + of the colored population, counting babies,
children and old people. The home from which the parents

58 'IUNTON'S MAGAZINE. [January,

are all day gone offers opportunities for clandestine meetings,
and such homes furnish a clue to 90 per cent, of the vice exist-
ing among the young people, and gives ground for this state-
ment of a colored clergyman: " Our women work, they must
work; behind in the home the daughter must remain; she is
tempted by her playmates; children are in most cases ruined by
children of an age similar to their own. If our girls have not
the constant care of their mother, or are not put to service at
ten or eleven years of age in a respectable white family, who
will strictly watch them, nine out of ten are ruined." Another
colored minister says: "God help us; three-quarters of our
women are not virtuous, and the evil increases. " The young
colored people of the town, for obvious reasons, do not marry.

There are seven cases of legal miscegenation here. Four
colored men have married white wives, three negro women
have white husbands ; the reason given by the negro in these
marriages is distrust of the virtue of his race. These mixed
families occupy a peculiar position ; both white and black look
upon them with disfavor. They are, however, reasonably
happy and prosperous. Several cases of illegal connections
between the races exist. The social evil is not confined to the
young ; it extends to every age and condition, and its blackness
brings out all the more prominently the pure lives of the
colored Christian workers who labor diligently for the welfare of
their race.

We have placed the number of idle negros at 254, and stated
that 67 per cent, of them are criminals; let us examine the
criminal records for proof. In the following table we will em-
body the result of this search, but will not include tmarrested
persons, known to be guilty of fornication or lewd and lascivious
cohabitation. If such were included, we would claim 98 per
cent as criminal:

1,896.] NEGROES UNDER NORTHERN CONDITIONS.

ONE YEAR'S RECORD.
Arrests Disposed of in Police or Borough Courts.

59

O

0)

^13

bC

Pi

3 ti
o 2

o

O

oj ^

p ^j

h/l

O 4->

Cause of Conviction.

-H S

0>

f4

•S«g

4

6

1

13 °

g a3
o M<

11

CJ ^

M !-, °
S « ^

8^8.

fc

P

^

H

Fighting

8

«'

11 +

72 72 +

17 72 +

Disturbance, including drunk
and disorderly

j

21

11 +

/*• /*

67. 10 +

D / • / * '
12 TO4-

Gambling

c

•*O

* j •

J*> . Aw 1~

68. 33 +

Other offenses

y
15

1

11 +

68.18 +

53.18 +

Justice Court cases, including

J

city loafers and tramps, dis-

posed of by police

Q2

176

11 j.

OQ 1Q J.

11 1Oo-

In higher courts

7
24.

J. /W

78

j +
il +

j". oy +

1 j • 3y +
8 12 +

m*f

/ u

*3 •

v . 3^ -t-

Totals

IQC

2QO

11 +

17 17 +

J.2 17 +

*yj

A D ^

3 / • D / ^

4-^ * v/

Deducting 23 arrests on account of persons arrested more
than once, and we find 172 convicted criminals, or 67 + per
cent, of total number of idle colored men.

The Church system comprises two Methodist, two Baptist
and one Church of God congregations. The first church estab-
lished by the negroes in Carlisle, about the last of the eigh-
teenth century, still exists in vigorous life; this African Meth-
odist Episcopal Church, as it is now called, has 168 church
members and 175 in its Sunday-school. It occupies a substan-
tial church, which, together with the parsonage, is valued at
$7,000, clear of debt. The building is lighted by electricity,
heated by hot air, has a good organ, salaried organist, and is
taken care of by a paid sexton. The pastor received $815 last
year. The leading colored Church is the African Methodist
Episcopal Zion Church, established 1849. Its membership is
180; it has a Sunday-school enrollment of 150; it owns a com-
modious stone church, lighted by gas, heated by furnace ; em-
ploys salaried organist and paid janitor; its property, including
parsonage, is valued at $6,500, clear of debt. Its pastor, a man
of executive ability, received $825 last year. The Baptist
Churches, with 52 and 25 members respectively, occupy neat
chapels, valued at about $1,100, each. One pays its pastor, an

60 GUNTON'S MAGAZINE. [January,

intelligent man, $250 per year, the other pays no salary. The
Church of God claims but seven members ; it has no church, but
owns a lot valued at $175 ; its pastor receives no salary.

A peculiarity of the colored congregations is the equality
of the contributions. Each member strives to do his share, or
I should say her share, as the women are the support of the
church. In one church the contributions for six years have
averaged 12 + per cent, of the income of its members. The
contributions of either of the two Methodist churches surpass
the contributions of any of two-thirds of the white congrega-
tions in the town. In addition to the church organizations,
and yet within them, are many clubs and societies, for the
advancement of religious and social interests; besides these
bodies, lodges of Masons, Odd Fellows, Daughters of Temper-
ance, and kindred orders, flourish. Many negroes are insured
in an industrial insurance concern that pays a small death
benefit and a weekly sick benefit. It has dealt very fairly with
its patrons.

The colored school system is a part of the general educa-
tional plan, distinct from the white schools in the matter of
color, and in that only. The first colored school was established
in 1836. In 1864 another school was added. In 1878 the
Colored High School was organized. In 1882 and 1892 ad-
ditional schools were put in operation. These five colored
schools occupy two commodious and conveniently located build-
ings; these buildings are as desirable and as well fitted as those
assigned to white pupils. The teachers are white — males in the
higher, females in the lower grades ; these teachers are as well
qualified pass the same examinations and receive the same
salary, grade for grade, as teachers of white scholars. The
colored system was complete in 1879, but not till 1882 did any
candidates offer themselves for graduation. In the examina-
tion of that year one female received 95.22 per cent, and second
place, one male 88.84 per cent, and tenth place in a mixed
class of 13, whose leader averaged 95.82 per cent. In 1883, no
colored graduates. In 1884, three females stood eight, nine
and ten in a class of eleven girls, and one male stood at the
foot with 80$ per cent. , in a class of white boys, whose lowest
average was 91 11-20 per cent, and the highest 97^ per cent In
1885, no colored graduates. In 1886, 5 candidates presented

1896.] NEGROES UNDER NORTHERN CONDITIONS.

61

themselves, 3 just managed to pass, 2 were rejected. In 1887,
no colored graduates. In 1888, 10 graduates, of whom 6 were
within i per cent, of failure. In 1889, 1890, 1892, 1893, no
colored graduates. It is necessary to note that prior to 1891 no
colored pupil was able to graduate without an extra year of
high school work.

CLASS OF 1891.

Twenty-seven members, white and colored; white all took
regular course, including 3 years in High School. Colored
took 5 years in high School, or 2 years of extra work. High-
est average of white graduate, 99.82 per cent; lowest, 80.59 per
cent.; 21 white pupils had higher averages than 84.50 per
cent.

Colored Record.

a.
3
£

Arithmetic.

Algebra.

Geometry.

Grammar.

3
1

Physiology.

•

<D

3

o
H

9

a.
«|

O y

A.
B.
C.

5o
60
5o

60
70
70

40
10

10

80
75

75

IOO

93

78

81

70
80

98.40
96.30
98.60

83.45
79-65
79-55

As 80 per cent, was required for a pass, B and C were rejected; A
stood 22.

CLASS OF 1894.

Twenty-two members, 18 white and 4 colored; X and Y,
females had taken two extra years of work ; W, female, usual
course; Z, male, two extra years; W stood 9, X 14, Y 18, and
Z 19, in the class of 22.

Record.

fd

t ;

bi

fc

H

$

at

*

u

cj

3

0

«-M

«-H

8

«

8

ft

*o

>>*J

.1

H

<u

s

o

8

53

*tn

"i s

^l

rt

"C

*— «

o

B

c8

r^

o

0 °

ft .

<

51

O

0

K

ft

>H

X.

92

94

85

86

98

80

98.82

93-99

Y.

95

IOO

86

85

99

90

98.53

95-51

Z.

94

IOO

84

81

99

88

97.65

94-32

W.

95

IOO

90

88

99

96

99.12

96.82

62 GUNTON'S MAGAZINE. [January,

This is the record of the High School since its inception.
It and the lower schools have diffused much useful knowledge,
but the efforts of the system have not resulted in more than a
partial success. Many causes have worked against it. We
must leave the question of reasons and results for another
paper. We will say, however, that there is lack of parental
co-operation; the pupil finds at home encouragement to resist
the authority of the teacher. The inability of the parent to assist
the scholar in the preparation of assigned lessons militates
against the negro. The records of the School Board and the
teachers of the colored schools tell of assaults upon teachers,
vile and profane language of the children in streets and halls,
indecent gestures and lewd handling of each others persons by
opposite sexes, of female pupils detected in compromising situ-
ations with men from the street.

The total white enrollment is 1 149, colored 236, the col-
ored scholars thus furnishing 16 + per cent, of the total regis-
tration. The total tax levy for one year was $12,602.20. Esti-
mated by enrollment, |the amount to be paid by the negro should
be $2,016, but his actual assessment was $507.21, and this was
apportioned among 323 taxpayers. Of these, 162, one more than
half, evade all payment, and the actual amount paid by col-
ored men toward the support of the school was $342.22, less
than 20-100 of one per cent., and less than the lowest salary
paid, to a single teacher in their schools. Expenditures are
based on attendance, if receipts are not. Of $60,000 in vested in
school buildings the colored pupils have the use of T 5 + per
cent, of school books and supplies, 17 + per cent., fund for
teachers' salaries; 19 + percent., sundries and incidentals; 18
+ percent., or a total average of 1.25 + per cent, more than
by attendance the colored schools are entitled to, and more than
70 times what their contribution to the school tax levy would
seem to warrant.

In nine cases out of ten advanced education is a positive
detriment to the negro, and it will be, not only as long as the
educated colored man feels too proud to work at manual labor,
but as long as the present race discrimination exists and the
negro fails to accept his isolation ; as long as practically all pro-
fessional employment, save the ministry, and some few positions
as teachers, are closed to him. He can not find employment

1896.] NEGROES UNDER NORTHERN CONDITIONS. 63

as a clerk, or shop hand — to him only manual occupations are
open. The discrimination, in this town, becomes more and
more rigid. Not only are the avenues to the higher forms of
labor closed, but he is not wanted by white churches as a mem-
ber; if he goes to them as a worshipper he finds himself as-
signed to the back seats of the meeting-house. In the court-
room he is restricted to ceriain seats, and this by the ruling of
a Republican judge ; he cannot obtain entertainment at leading
hotels, nor be shaved in barber shops patronized by whites, and
these instances are but a few of the many.

The white population of Carlisle respects the older negroes,
for they, as a rule, are polite, hardworking citizens, but it is
weary of the younger generation. Eighty per cent, of negroes
born since 1865 are worthless, insolent loafers, immoral, crim-
inal, a sorrow to their parents and a curse to the community.

These, then, are the main facts which a study of the negro
in one Northern town furnishes. The mass of statistics which
I have gathered in other cities but accentuates the present pre-
sentation. I have not attempted to draw conclusions; that will
be a future paper.

In considering the facts presented by Mr. Lee, it should be
remembered that the negroes were segregated from the white
population in a strange environment, where the social ostracism
was even more repressing than in their native state. As
he tells us, they were excluded from every skilled occu-
pation, and almost every profession, as well as from
the hotels and practically from the churches. This freez-
ing social process naturally tended to force the negroes to
derive all their inspiration and habits of living from their own
people, which could hardly be other than depressing. Hence,
it is not surprising that a considerable portion of the negroes,
born under those conditions, should be on the ragged edge of
manners, morality and thrift. If Mr. Lee's investigations prove
anything, it is that the negroes cannot be helped by colonizing
them in Northern cities, but, on the contrary, that their pro-
gress and improvement must be sought by the interjection of
Northern enterprise and Northern economic methods of indus-
try into the Southern States. By this means take to the negro,
and for that matter, the^poor whites, the influences and incen-

64 GUNTON'S MAGAZINE. [January,

tives of order, discipline, thrift and energy in his own environ-
ment.

It is true of the negro as it is of all large bodies of poor and
ignorant people, that they can be improved far easier and with
less misfits by taking civilization to them through their methods
of industry and life than by any attempt to take them to a new
civilization, where they will be sure to be ostracised and segre-
gated into a local colony, with the effect of stereotyping their
inferiority, making the chasm wider between them and the
white population, instead of in any way assimilating them.

The most objectionable feature of Mr. Lee's article, how-
ever, is its unfair interpretation of his own facts. He speaks of
the negroes' social immoralities as if they were peculiar to
race and charges the illigitimacy, shown by the large per cent,
of mulattoes, exclusively to colored women. It is a well-known
fact that this class of negro immoralities are largely traceable
to the greater immoralities of the whites who have had the
right to coerce them ; and if we are to suppose the white peo-
ple to be superior, their immorality is much the viler of the two.
To thus attribute all the sins jointly committed with the whites,
solely to the blacks, whose social opportunities have been the
smallest and against whom race prejudice is the greatest, seems
to be the essence of unfairness, and tends to deprive Mr. Lee's
article of the spirit of the true investigator, and will prevent his
work from having the influence it might otherwise possess. —
[EDITOR].

1896.] 6$

Editorial Crucible.

THE PROMPTNESS with which Congress passed the new
tariff bill is highly creditable,, and shows what efficient leader-
ship can do in legislation. While it is a hastily drawn emer-
gency measure, it accomplishes its purpose of furnishing rev-
enue consistently with the policy of protection; and clearly
shows that the hand of statesmanship is at the helm in the
House.

THE ADAGE that there is no ill without some good, appears
to be true even in Mr. Cleveland's last blunder. He has been
the idol of the American tories and their " consecrated " leader
in the war upon American industries and prosperity. In serv-
ing them, he has lost the confidence of the people, and in his
last great plunge to regain public confidence by playing patriot-
ism, he has set his ' ' sacred " heel upon the necks of the tories
and made the mugwumps his enemies. For this, the nation
should ever be thankful. The alienation of the tories may
atone for many shortcomings, and may still enable the people
to remember him, if only for the enemies he has made.

THE AMENDMENT of the Dingley bond bill, insuring that
the greenbacks shall not be retired, clearly shows that the
country has little to expect from this Congress in the direction
of efficient financial legislation. This clinging to the green-
back in the face of recent experience shows that the Repub-
lican party is still in need of an educational campaign.
Government fiduciary money is the implement of war and rev-
olution. Bank currency with prompt coin redemption is the
instrument of commerce, peace and prosperity. The green-
back served an excellent purpose during the Civil War, but it
has long since outlived its usefulness, and has become an instru-
ment of injury to the nation. Failures to recognize the differ-
ence between instruments of war and instruments of commerce,,
to say the least, show defective statesmanship.

The Journal of Commerce of December 26, had an extended!
editorial tending to show that there is a big real estate deal be-
hind the Venezuelan curtain. A certain company, mainly com-
posed of citizens of the United States, known as the "Manoa

66 GUNTON'S MACAZIM.. [January,

Company," in 1883 received from the Government of Venezuela
a land grant of about 15,000,000 acres which lies in the dis-
puted territory. The Journal of Commerce also plainly intimates
that the head of this company is in somewhat confidential com-
munication with the State department. It further intimates
that the president of this land company has indirectly been
asked by President Cleveland to accompany the boundary com-
missioners in their excursion to Venezuela and British Guiana.
It is to be hoped none of this is true. Everybody would rather
know that the Venezuelan message was inspired by a third
term ambition than to be convinced that it even had a remote
relation to a South American land speculation.

AT ITS RECENT congress in New York City, the American
Federation of Labor did itself great credit in re-electing Mr.
Samuel Gompers as president. Mr. Gompershas served in that
capacity from the organization of the Federation until last year.
The opposition which had been created against him was mainly
of a socialistic character. Mr. Gompers had always stood for
the idea that trade unions are economic organizations, whose
specific object was to struggle for the improvement of wage-
earning conditions, and not for the abolition of the wages sys-
tem and a visionary millenium.

In resisting the inroads of socialism upon the Federation,
Mr. Gompers incurred the enmity of the socialists, who accom-
plished his defeat in 1894. However, this did not change Mr.
Gompers' attitude on the question ; and when the same subject
presented itself at the recent congress, to his courage and credit
be it said, Mr. Gompers spoke definitely and vigorously against
permitting socialism to get possession of the organization.
What is more significant, his speech upon this point was made
immediately before the vote was taken which resulted in his
election.

In the election of Mr. Gompers as president for 1896, there-
fore, the Federation of Labor showed that it is not a social-
istic organization. It shows that the trade union movement in
this country as distinguished from the socialist movement and
the Knights of Labor is a strictly industrial movement, prop-
erly in line with the economic and commercial development of
modern industrial institutions. In short, that it is the only

1896.] EDITORIAL CRUCIBLE. 67

labor organization whose objects and character are really con-
sistent with the spirit and growth of democratic institutions.

IT HAS LONG been a complaint among workingmen that
they get no advantage from protection. The secret of this
somewhat growing impression is to be found in the indifferent
or antagonistic attitude of protectionists towards labor interests.

We have a recent illustration of this in a monograph just
published by S. N. D. North, secretary of the National Asso-
ciation of Wool Manufacturers. The object of this monograph
is to show that factory legislation is a mistake ; that it is uncon-
stitutional, essentially paternal and contrary to public policy.
Mr. North says (page 69) :

' ' Reduced hours of labor in isolated states do not appre-
ciably affect the volume of production in the country at large.
They simply operate to reduce the wages of workmen in the
states thus handicapped. But the uniform application of a na-
tional labor law, be it a ten, nine or eight-hour law, would
reduce by one-tenth, one-ninth or one-eighth the productive
power of labor and machinery, and thus would materially affect
the volume of production."

This is almost an exact repetition of the arguments presented
before the English Parliament fifty years ago by the English
free traders, and repeated twenty years ago in Massachusetts
by Edward Atkinson and others, and is wholly erroneous.

The statement that "reduced hours of labor in isolated
states simply operate to reduce the wages in the states thus
handicapped," is contrary to the experience of Massachusetts,
as demonstrated by a special investigation of her own labor
bureau (see report 1881, pages 323 to 475). And the further
assumption that "the uniform application of a national labor
law, be it ten, nine or eight hours, would reduce by one-eighth
the productive power of labor and machinery," is also
contradicted by experience. England made the ten-hour law
uniform, and the result was just the opposite of that indicated
by Mr. North ; it did not diminish the product but increased it.
Workingmen know these facts through experience, and when
they find intellectual protectionists ignoring them and resort-
ing to laissez fairs reasoning for the purpose of opposing what
experience had demonstrated to be the most economic and

68 GUNTON'S MAGAZIN [January,

wholesome] kind of legislation, it is little wonder that they be-
come skeptical of the industrial friendship of protectionists.

AT A RECENT conference held in Washington to consider
the Lubhi proposition for an export duty on agricultural
staples, the advocates of the proposition substantially rested
their case on the assumption (i) that agricultural prices in this
country are determined by competition with the cheap labor of
the world in the free trade market, and (2) that the price of
manufactured articles at home is increased by the full amount
of the duty on imports, all of which has to be paid by the
farmers.

Could anything more conclusively demonstrate the necessity
for an educational campaign on the economics of protection and
industrial legislation ? The daily market reports show that
there is no such thing as a general world price for agricultural
products, except at the point or in the particular market where
the world products meet. It is true that there is a general
price for the same products in the same market, from whereso-
ever they may come, but it is not true that the prices of products
are the same in a foreign market as in the country where they
are produced. Nor is it true that this so-called free-trade price
is lower or as low as the home price. The price^is always
higher in the foreign market than in the home ; in the case of
wheat it is from 15 to 20 cents a bushel higher. It is solely
because the foreign price is as high or higher than the home
price that the producers of any wares export. Thus, domestic
producers get for things exported the home price plus the
cost of transportation.

The second proposition that the duty on imported wares is
added to the price of both imported and domestic products, is
so obviously contrary to the facts, that it is not entitled to
serious consideration. One thing is manifestly true, however,
regarding these bounty advocates; they are intensely in earnest;
they mean all they say, and they honestly advocate it in the
name of protection. This movement is one of the penalties
for having treated protection too much as a political instrument
and too little an an economic principle.

1896.] 69

Economics in the Magazines.

COIN AND PAPER MONEY. Napoleon Bonaparte. By John

Davis, in The Arena for December.

Mr. Davis cites Napoleon's correspondence, orders and those
of his generals to show that he fought all his wars on the specie
basis, stealing his coin from the countries he conquered, until
his final campaign against- Russia, which he attempted to carry
on on forged paper rubles of the Russian pattern. When he
could no longer collectcoin out of the nations he plundered, his
armies collapsed for want of an elastic system of paper money
like the English. England, on the other hand, carried on twenty
years of war on the suspended (but nearly par) paper notes of
the Bank of England and guaranteed the paper money of Russia
and Prussia. It was therefore, Mr. Davis holds, a contest be-
tween the coin of Europe, seized by force by Napoleon, and the
paper money of England, managed with ability by Pitt and all
ultimately redeemed.

FOREIGN INTERVENTION. M. W. Hazeltine's article on Vene-
zuela, under Work of the Next Congress, in North American
Review for December.

Mr. Hazeltine holds that in order that the occupation by
Dutch settlers of territory between the Orinoco and the Esse-
quibo should give rise to title by prescription first in Holland,
and later in England, it is necessary that Spain, or her success-
or, Venezuela, should have waived her claim. Not at all. Mr.
Hazeltine's error is clear, sharp and well defined. The advan-
tage obtained by discovery is a mere right to occupy. If the
discovering country never occupies, and suffers another country
to continuously occupy, as the Dutch, more or less, con-
tinuously occupied from Barima point on the Orinoco to the
Essequibo rivers, no other waiver from Spain or Venezuela is
necessary than the actual sufferance of this actual occupation
from 1598 to 1895 without any successful or permanent dislodg-
ing of them from occupancy and without any concurrent or
counter-occupancy of their own. This is what occurred in Brit-
ish Guiana. The Dutch occupied the disputed territory and the
Spanish rested on their assumption that the right to occupy, ob-
tained by discovery, is itself a title which renders occupancy by

70 GUNTON'S MAOAZINK. [January,

others wrongful. In this respect the Venezuelan case bears no
resemblance to our Northwestern boundary claim to the line of
54° 40" north. In the latter case there was a joint occupancy
by citizens of both nations on both sides of the line, under a
pre-arranged stipulation, that occupant rights should be re-
spected, but should be subject to the ultimate decision on the
question of national jurisdiction. If the Venezuelan boundary
question should be submitted to the votes of the people actually
residing within the disputed territory, every Venezuelan well
knows that there would be about 40, ooo votes cast for British juris-
diction and probably a vote not to exceed a dozen for Venezuelan
supremacy. Within the Schomburgk line, to which Lord Salis-
bury declines to arbitrate, it is not to be expected that any
votes whatever would be cast for Venezuela. Mr. Hazeltine
seems also to err in declaring that no American imagines the
Monroe Doctrine to be any part of international law. On the
contrary, it is of no value except as it is an application of well
defined and universally admitted principles of international law
to the state of facts existing in 1823 on the American continent.

Vattel and every other writer had laid down as a clear doc-
trine of international law that only lands occupied by savage
tribes are open to disco very and settlement, and that vacant
lands within a country having well defined boundaries, which
are asserted and defended by a recognized state or government,
are not open to discovery or settlement in a manner to give the
settlers the power to carry their nationality and flag with them.
They simply become subjects of the government upon whose
unoccupied lands they settle.

It had also been a settled principle of international law
that insurrectionary States which succeeded in maintaining
their independence of the mother State, until all armed at-
tempts of the mother State to subdue them had ceased, and un-
til many or most other countries had recognized their independ-
ence and opened diplomatic relations with them as independent
nations, and made treaties with them, are no longer the right-
ful subjects of foreign plots or alliances for the overthrow of
their forms of government, and where the form of government
is republican, any other republic may take upon itself to see
that they are not overthrown by foreign force. Of course it
would go without saying that where the form of government

1896.] ECONOMICS IN THE MAGAZINES. 71

was monarchical every other monarchy could defend it, as Rus-
sia defended Austria in 1848. So much of the Monroe Doctrine
had been international law for centuries, and European govern-
ments have applied it in behalf of monarchical systems of gov-
ernment as often as republics have ever sought to apply it in
favor of democracies. All that Monroe did was to declare that
as the republics to the south were situated in 1823, both these
doctrines of law applied t& all the South American republics,
and that the United States would regard any attempt to deprive
any of these Republics of the full benefit of these principles of
law as an act of hostility to itself — i.e. , Monroe affirmed that
their lands, though unoccupied, were no longer open to discov-
ery and colonization so as to transfer the sovereignty in them,
and that their political institutions were no longer open to rec-
tification by European powers. It is like saying that a young
man is of age ; the statement is indeed the assertion that he
has lived twenty-one years, and so far it states a fact, but this
fact depends for its significance upon a whole mass of law de-
fining the distinction between the legal rights of infants and of
adults. Only as it implies all this body of legal doctrine has
it any importance whatever. Americans give away too much
of the merit of the Monroe Doctrine, therefore when they
falsely concede that it is not anchored deep in the principles of
international law, as deeply, to say the least, as the doctrines of
the integrity of sovereign states, of the balance of power, or
the rights of neutrality.

GREENBACKS AND SILVER. Conditions for American Commer-
cial and Financial Supremacy. By P. Ler"oy Beaulieu, in
The Forum for December.

THE professor holds that a government fiat currency cannot,
like a bank currency, be made redeemable by the exchanges of
which it is the medium, and that it is, therefore, radically un-
sound in theory, a doctrine wherein he agrees fully with THE
SOCIAL ECONOMIST. To issue such a currency divorces the
banks permanently from the duty of redeeming in coin, and,
hence, devolves on the government the necessity of furnishing
the gold for discharging an adverse balance of trade at the same
time that it so dilutes the government revenues with paper
that it can get no gold except by borrowing. In order to retire

72 GUNTON'S MAGAZINE. [January,

the greenbacks Professor Beaulieu holds that we must either
"create a public bank, on the model of the Bank of England
and the Bank of France, or resort to a syndicate of banks com-
plying with certain conditions."

Professor Beaulieu holds that European capital will only
be forthcoming on American securities for the exploitation of
our abundant resources when we discard bimetallism and adopt
the single gold standard. The truth of this proposition depends
upon the relative abundance and cheapness at which the two
metals shall be produced during the coming decade. He quotes
an "able English banker" as of the opinion that the Transvaal
alone would produce in 20 years $5,000,000,000 of gold, or say
one- sixth as much as the whole estimated stock extant. A pro-
duction of this quantity would greatly lower the cost of produc-
tion per ounce, and if we suppose it so lowered that only five
ounces of silver should be produced to one of gold, instead of
twenty-eight to one, as now, the conditions of production would
reverse the relative dearness of the two metals as compared
with their normal ratio.

MONROE DOCTRINE. By A. C. Cassatt, in The Forum for De-
cember.

The writer argues that the Monroe Doctrine was simply a
declaration that all the lands comprising the two American Con-
tinents must now be regarded as the property of the respective
American nations within whose boundaries they lie, whether
actually occupied by resident populations or not. This means
that the acquisition of new titles to unoccupied portions of them
are precluded by international law as completely as would be any
acquisition of territorial sovereignty by settling on the waste
dunes of Scotland or on the unoccupied marshes of the Roman
Campagna. Also that efforts of the Holy alliance of European
powers to displace republican by monarchical institutions on
this continent would be deemed hostile to the United States.
He does not think it relates to a boundary question between a
foreign power which then had territorial possessions here and
the adjoining American republic, as in the case of British
Guiana and Venezuela.

1896.] ECONOMICS IN THE MAGAZINES. 73

NICARAGUA CANAL. An Interoceanic Canal in the Light of
Precedent. By Theodore S. Woolsey, in The Yale Review
for November.

Professor Woolsey argues that an interoceanic canal must of
necessity give no exceptional commercial advantage to the
ships or cargoes of either the nation whose citizens build it or
the nation through whose territory it is built, and that during
war it must give no privileges to either belligerent which are
not accorded to every other, and that its neutrality, to be effi-
cient, must be guaranteed by a treaty compact between all the
leading powers, and cannot be efficiently guaranteed by one
power. The precedents by which these doctrines are illus-
trated are drawn chiefly from the cases of Suez and Panama,
and the Clayton Bulwer treaty; and the inference to which they
point seems to be the supposed need of ampler treaty provisions
in the case of the Nicarauga Canal, if it is to be either impartial
in its commercial influence, neutral during war, or the proper
subject of international guaranty of protection. At present it
is supposed to be proceeding under a concession to American
citizens from the Government of Nicaragua without certain or
all the adjuncts which Professor Woolsey deems essential.

POWER TO LEGISLATE. Thomas Brackett Reed and the Fifty-
first Congress. By Theodore Roosevelt, in The Forum for
December.

Incidentally complimenting Mr. Reed's personal powers,
Mr. Roosevelt shows that prior to the adoption of Reed's rules
representative government stood paralyzed by the perfection to
which the power of minorities to obstruct had been developed.
Dilatory motions and constructive absence were the two minor-
ity fictions which had been nursed as defenses of legislative lib-
erty, until the liberty of the majority to legislate was itself at the
mercy of a minority willing to occupy time by dilatory motions
and to demand to be considered as constructively absent for the
purposes of a quorum, when they were, in fact, present for the
purposes of debate and obstruction.

Mr. Reed effected a restoration of parliamentary govern-
ment to first principles, which Mr. Roosevelt regards a higher
service to mankind than the passage of any particular law, since
in effect it amounts to an important rectification of the very

74 GUNTON'S MAGAZINE. [January,.

machinery by which laws are passed, thus supplying popular
government with an efficient mechanism in place of one that
had broken down.

SOCIALISTIC CONTROL OF CORPORATE WEALTH. Should the

Government Oivn the Telegraph ? By Prof. Richard T.

Ely, in The Arena for December.

Professor Ely holds that the duty of the government to own
the telegraphs is axiomatic — too plain for proof. He deigns,
however, to say that because the post-office was put in charge
of the government by the founders of the republic, the best
thought of men like them would do the same to-day with the
telegraph if it could now be brought to bear. There is a dif-
ference in the fact that the post-office does not perform the
work of transmitting its messages itself, but only sorts the
letters and makes contracts with private parties and corpora-
tions to have them carried in assorted packages. The post-
office therefore is not the capitalistic owner of any of the trans-
portation appliances which its various contracts call into action,
but only of the make-up and the massing into favorable packages
of the materials to be transported — a service which involves no
investment of capital whatever, except in a score or so of the
larger cities, and there only in a building for accommodating
the clerical force which is to sort the letters.

The government therefore owns none of the capital and
employs none of the labor involved in the service for which it
charges postage, but it contracts with railways, steamers and
owners of stage lines and horses, and also with city express
companies and foot carriers, to have the whole service per-
formed at stipulated rates per mile, per ton, per letter or per
year, as the case may require. The actual performance of the
service requires a capital in railways alone of $10,000,000,000,
and in steamers, ships, express companies, horses and stock, of
probably another billion.

In the case of telegraph companies, however, what Mr. Ely
means by the government controlling the telegraph is not that
it should take charge merely of the clerical work connected with
sorting the messages for transmission over the privately owned
lines of the telegraph companies, but that it should itself become
the sole capitalistic owner of an enterprise whose capital value

1896 ] ECONOMICS IN THE MAGAZINES. 75

is now about one hundred millions of dollars. It is first to raise
this sum by taxation and pay for the telegraph lines, and then
it is to raise by further taxation whatever deficit of revenue to
meet expenses will subsequently arise. To assume without ar-
gument that a capitalistic speculation of this kind is on all fours
with what it has done in the case of the post-office when,'
in fact, the two transactions sustain no more resemblance to
each other than finance and duck-hunting, is one of those lively
vaults of the fancy which passes in the order of minds of which
Professor Ely is a type for axiomatic truth. Such discrimina-
tors never find out the difference between sober sense and the
wildest nonsense.

SOCIALIST LIGHTING OF CITIES. The People's Lamps. By Prof.

Frank Parsons, in The Arena for December.

Municipal control of electric lighting may succeed well or
ill, in its economy in the way of safety to human life, reduction
of cost to the consumers of light, or purity or the reverse, in
municipal politics. The conflict of statement on these lines is a
little puzzling to those who cannot afford to make a specialty of
universal knowledge ; and we confess we are among that num-
ber. One feature, however, is clear. The class of complaining
rhetoricians, who always see a forward social movement in every
change which seems to contain a promise of transferring power
from capital over to votes, are greatly interested in it. What will
become of rents, profits, interest, trade, commerce or agriculture
when the power to adjust them is taken out of the hands of men
who have paid for land or other capital by years of effort in pro-
duction, and transferred to the class of men who only know
how to manage primaries and stack votes in blocks, as a banker
stacks his paper money for lending, might seem to slow minds
to be problematical. So what will become of all industries
when the capital that runs them is owned by society at large,
and the only wealth or means of managing them consists in voting
power, might "give us pause." But the demagogue socialist
whose only capital is the willingness to do the steering for society
with out paying any penalty for steering unwisely, knows that
in so far as the power of capital is sent to the rear and the art of
demagogy is brought to the front, he can lose nothing and may
possibly gain, if not positively, at least relatively.

76 [ January,

Book Reviews.

SLAV AND MOSLEM. By J. Milliken Napier Brodhead.

Aiken Publishing Co. , Aiken, S. C.

This is a thoroughly interesting though sketchy outline of
the case between Russia and Turkey. It regards the Crimean
war and the Berlin Conference as vast blunders on the part of
England, of which the Bulgarian massacres of a few years ago
and the present massacres in Armenia are the natural fruit.
Had England let Russia alone, the Turks would have been
driven back to the east of the Caspian and the Caucasus, Ar-
menia would have been a Christian power of some strength and
promise, and a revived Greek, Armenian and Slavic Christian
empire would have had its capital at Constantinople, which
would have had enough to do in enjoying its own heritage
with'out undertaking the further conquest of India or China.
The author holds very positively that Russian influence in the
East is as progressive as Asiatic populations will bear, while
English influence is retrogressive and reactionary in sustaining
in power a Turkish government which is the worst on earth.

The book is interesting, also, as emanating from a Southern
author, and being printed by a Southern house. Southern
works on general topics are still rare enough to excite a curious
attention, not unlike that which would be felt for a watch fac-
tory in Wyoming or a gold mine in New Jersey. It is to be
hoped that the rarity of Southern literary efforts will wane.
Nothing would conduce so rapidly to this end as the frequent
appearance from Southern presses of works on Southern indus-
trial and economic conditions.

A HISTORY OF THE UNITED STATES FOR SCHOOLS. By John

Fiske. Houghten, Mifflin & Co.

This is probably as concise, pleasing, picturesque and at-
tractive a school history as could be desired. We have not had
time to examine as to its accuracy, but we note certain slips in
matters of fact as follows: On page 456 it speaks of the McKin-
ley tariff as "abolishing the duties on tea, coffee, sugar, mo-
lasses and hides. " This is three-fourths error. The duties on
tea had been abolished before 1882 (see Senate's tariff compila-
tion for 1884, page 285); the same is true of those on coffee (id.,

1896.] BOOK REVIEWS. 77

page 239); the duty on hides was abolished in 1872, in the gen-
eral scaling of the whole tariff by 10 per cent. Only the duties
on crude sugar were removed by the McKinley act. Also on
page 460, Mr. Fiske recites the depreciation of silver, and then
says : ' 'A financial depression attributed chiefly to the above
causes began early in 1893." This is an error as to date. The
financial depression set in on November 9, 1892, instantly upon
the result of the election b&ing known. On that day a Baltimore
buyer cancelled a $50,000 order for Ohio wool, and on the same
day King, Gilbert & Co., of Middleport, O. , received among
others, a cancelment of an order for 1,000,000 pounds of steel,
and ordered a general reduction of wages. During the election
week, Herman Aukam & Co., of South River, N. J., manufac-
turers of handkerchiefs, announced a shut-down on December
i st. The Phoenix Iron Works, Reading, Pa., reduced their
force in several mills, and on the i2th November, E. D. Jones,
Sons & Co. , of Pittsfield, Mass. , received a cancelment of an
order for a $400,000 paper mill in western New York. C. W.
Howard stopped erecting a paper mill of $80,000 at Neenah,Wis.
The Illinois Iron & Bolt Mill, near Elgin, desisted from the
further erection of additions designed to double their output.
On November 22d, only two weeks after the election, the
Illinois Steel Company's 3,500 hands found itself without orders
and announced a shut-down from December isth, and on No-
vember 3oth, the Enterprise Company of Joilet and the Stone
City Bank failed.

Governor Oates, of Alabama, though a Democrat, a free-
trader and a friend of Grover Cleveland, in fas North American
Review "for November, states frankly when the panic began.
He says: "The financial panic, which began in the latter part
of 1892 and continued through the greater part of the two suc-
ceeding years, suspended three-fourths of the great industries
of the State, especially in the mineral section, etc."

We think, also, that in ascribing 'the [name " America '* to
Vespucius some attention is due to the recent proofs advanced
by Spanish and South American scholars of fair pretensions,
showing that " Amaraca " was the original native name of the
whole region from Nicaragua to Brazil, and still adheres in a
dozen of the local names like Maricaibo (the gulf), Moruco (the
river), Amarica (a town), and the like. This was the region

78 GUNTON'S MAGAZINE. [January,

which Vespucius visited, and by which he might have been
named afterward, as all explorers are dubbed with a new name
for the countries they explore. " Chinese " Gordon, " Buffalo"
Bill, and a score or so of "Australian" Jims, "Turkey"
Toms and " Italian " Joes, illustrate this tendency. Whether
Vespucius brought his name of *' Emerigon " to America or
not, the proof is conclusive that he found a continent which
already bore the name "Ameraca," for all that portion lying
between the Amazon and Nicaragua. Hence the transfer of
the name to the man is probable, while the transfer of the
Christian (not the sir) name of Vespucius to the country was
simply impossible in the nature of language. If any intent
existed to name the continent after Vespucius, it would have
been called Vespucia after his sirname. On the other hand, if
he found a continent already bearing the name " Amaraca " or
*' Emerigon," nothing would be more natural than that he should
take on a cognomen borrowed from the country he had dis-
covered. This was even more formally done in the case of
Columbus, by creating him Duke of Veragua, after another of
the local names pertaining to the central American coast. Mr.
Fiske does not deign to allude to the Spanish pooofs on this
question.

ANARCHY OR GOVERNMENT. By William Mackintire Salter.

Thomas Y. Crowell & Co., New York and Boston. 176 pp.

This is a meaty little volume, both timely and compact. The
book is the outcome of a series of lectures at the School of Ap-
plied Ethics in Plymouth, Mass., in 1894.

The author starts out with a definition of the word anarchy,
as he proposes to use it, viz. : A name for a state of society
without government. As the antithesis of the latter, it does
not necessarily designate a company of dissociated or disorderly
individuals; for anarchy, he claims, is not inconsistent with as-
sociation, but only with enforced association. It is synonym-
ous with liberty, or a system of things where the individuals
would be left free to do as they chose, all compulsion being
eliminated, and the only bonds acknowledged and complied
with being moral. With this exposition of the terms em-
ployed, he then passes on to discuss which is better, anarchy or
government. All reasoning as to the former must be purely

3896.] BOOK REVIEWS. 79

hypothetical, for there never has been and never will be, while
human nature is what it is, a state of society wherein there
would be a complete absence of government. We have no
sympathy with those who conceive of an ideal society, in which
strict anarchy would be the highest and most perfect grade of
social existence.

THE WAY OUT. By Moses Samelson. New York, the Irving

Company, 1895. 428 pages.

This is a rather pretentious little volume, for it assumes to
settle a good deal and seems to make light of the immemorial
difficulties of the problem. The book has no table of contents
nor index, and is obviously faulty in this regard. "The Way
Out, " the author tells us, "is to open up to the reasoning of
thinking men a proposition which, without subverting existing
conditions or possessions, will ameliorate the general conditions
of all the people; grow the moral of the people up to the
level that the general education and the growth of the sciences
imperatively demand," etc.

Part I. is devoted to individual ethics, in which he attempts
to prove that the ethics which educate society, so-called, are
not in accord with the requirements of progressive humanity.
In Part II., these agitations and difficulties which disturb civil-
ization are shown to be the result of human selfishness and not
of natural causes.

In Part III., he solves the problem by disclosing how man
and nature can be brought into harmony. Ethics he defines as
the science of human duty, and as the rules that have governed
it have been more often false than true, he proceeds to declare
what are the right rules and to apply them ; calmly he discusses
the ethics of economy, of charity, of suffrage, of capital pun-
ishment, of labor strikes, taxes, etc.

"The Way Out, "seems clear enough to the author, but
alas, whose nostrum seems sufficient for the complex ills of
society — and this volume like many another essays what no one,
not infallible, can undertake to the satisfaction of inquiring
and burdened tmmanity.

However, our author comes on to firm ground when stating
the nature and scope of government, for social action and gov-
ernment are, he says, practically convertible terms. Indi-

8o GUNTON'S MAGAZINK. [January,

vidual liberty is not just now the great thing, though much is
said about it by those who are seeking practically to nullify
wholesome laws and to repel all restraint. The safety and pro-
gress of society are paramount. No one has a valid title to any
personal freedom which endangers the existence of society.
Public needs must, according to our author, limit all individual
rights; and he properly questions Mr. Spencer's positions, which
represent in our judgment a radically false and dangerous
theory of individualism. "Taking the popular idea," says this
author, "that each man should be the architect of his own for-
tunes, and that success or failure should depend on the intrinsic
worth of each individual, we are conducted straightway to
anarchy." Here is the key to the philosophy of the book and
its contention, " if we take the social standpoint, if there is any
meaning in the concept of a society and any sense in looking
at things from that point of view, then may a society interfere
to protect the lives and property of its members; may, not be-
cause a majority determines that it shall interfere, not on the
basis of any hocus-pocus elections, or of an imaginary ' social
contract, ' but because in the nature of the case it must inter-
fere, or have the right to interfere, else it ceases to be a society,
a real whole, a true social body." Hence, it follows that gov-
ernment may be used for promoting the higher ends of life.
The question of thus acting is always a practical, not a theoret-
ical, one. The only thing to be determined is, can government
act to advantage ? "The sound general tendencies," says the
author, ' ' for modern societies is to assert themselves more and
more in the industrial realm. Here, as elsewhere, I believe
anarchy or liberty should more and more give way to govern-
ment. " True and pertinent are the closing words of this little
book, " to work for the enlarging and deepening and spreading
of the social consciousness in the minds of our American people,
to increase the sense of our belonging to one another, to make
us feel more and more that an injury to one is an injury to all, is
one of the great ethical tasks of the day."

GUNTON'S MAGAZINE.

FEBRUARY, 1896.

The American Doctrine.

The Senate Committee on Foreign Relations has reported
to the United States Senate the following resolution as a defi-
nition and interpretation of the American Doctrine:

Resolved, By the Senate, the House of Representatives concurring,
that as President Monroe in his message to Congress of December 2, Anno
Domini 1823, deemed it proper to assert as a principle in which the rights
and interests of the United States are involved, that the American conti-
nents, by the free and independent condition which they have assumed and
maintained, were thenceforth not to be considered as subjects for future
colonization by any European power.

WHEREAS, President Monroe further declared in that message that the
United States would consider any attempt by the allied powers of Europe
to extend their system to any portion of this hemisphere as dangerous to our
peace and safety ; that with the existing colonies and dependencies of any
European power we have not interfered and should not interfere, but that
with the governments who have declared their independence and main-
tained it, whose independence we have on great consideration and on just
principles acknowledged, we could not view any interposition for the pur-
pose of oppressing them or controlling in any other manner their destiny
by any European power, in any other light than as the manifestation of an
unfriendly disposition toward the United States, and further reiterated in
that message that it is impossible that allied powers should extend their
political system to any portion of either continent without endangering our
peace and happiness ; and,

WHEREAS, the doctrine and policy so proclaimed by President Monroe
have since been repeatedly asserted by the United States by executive
declaration and action upon occasions and exigencies similar to the partic-
ular occasion and exigency which caused them to be first announced, and
have been ever since their promulgation, and now are the rightful policy
of the United States ;

" Therefore be it resolved, that the United States of America reaffirms
and confirms the doctrine and principles promulgated by President Monroe
in his message of December 12, 1823, and declares that it will assert and
maintain that doctrine and those principles, and will regard any infringe-
ment thereof, and particularly any attempt by any European power to take
or acquire any new territory on the American continents or any islands
adjacent thereto for any right of sovereignty or dominion in the same, in

82 GUNTON'S MAGAZINE. [February,

any case or instance as to which the United States shall deem such attempt
to be dangerous to its peace or safety by or through force, purchase, cession,
occupation, pledge, colonization, protectorate or by control of the easement
in canal, or any other means of transit across the American isthmus,
whether on unfounded pretension of right in cases of alleged boundary dis-
putes, or under other unfounded pretensions, as the manifestation of
an unfriendly disposition toward the United States, and as an interposition
which it would be impossible in any form for the United States to regard
with indifference.

At first sight this seems like a somewhat remarkable deliv-
erance, and will probably be so interpreted by some, especially
those who desire to minimize the American Doctrine as an ex-
travagant extension of the "Monroe Doctrine." Upon closer
examination, however, we think this criticism will be found to
be unwarranted. This declaration asserts the full intent of the
Monroe Doctrine, but it can hardly be regarded as really extend-
ing it.

The object of the American Doctrine is to exclude Eu-
ropean monarchies from this hemisphere. This the Senate
declaration does. It does not declare that South American
countries shall not have a monarchy of their own making, but
it does say that they shall not transfer the territory or political
sovereignty to a European monarchy. The essence of the
American Doctrine is to secure the free evolution of political
institutions on this hemisphere. This requires that all American
countries be beyond the power of coercion or bribery by Eu-
ropean monarchies. This seems to be necessary to guarantee
the free choice of institutions by the people of those countries.

If they want a monarchy, there is nothing in the American
Doctrine to prevent it, but it must be a monarchy of their own.
If they wish to integrate with other nations, to strengthen their
political entity, the integration must take place with peoples in
this hemisphere and not with European monarchies. It is quite
within the range of possibility that for the purpose of securing
certain valuable territory for industrial or political reasons, a
monarchy might give a high bribe to a few individuals in some
small American country, and by so doing secure the consent of
that government to a cession of territory, or even a protectorate
to, or for that matter to becoming a colony of, a European mon-
archy. This would not be a development of monarchical insti-
tutions, but a corrupt and treasonable transfer of political

1896.] THE AMERICAN DOCTRINE. 83

authority. To prevent this is the object of the Senate resolu-
tion. In other words, the resolution says that they cannot pro-
cure by any surreptitious means territorial or political authority
on this continent that they would not be permitted to assume
by force.

Of course, England and other European countries will try
to interpret this resolution as a coercion of South American
countries. It is not so intended, and on careful reflection we
do not think it can properly be so interpreted. It protects them
from being confiscated by European monarchies, and also from
being betrayed into the hands of foreign monarchies through
bribery or treachery. But it in no wise limits their freedom to
establish any form of government they choose, and have any
kind of intercourse with European powers they choose. It
leaves them entirely free to have a democracy, an absolute
monarchy, a constitutional government, or any other form of
political organization that they desire to inaugurate, but it must
be their own. In other words, that the political and industrial
institutions on the American continent must be American.

It is for the good of international relations generally that
the American Doctrine should be specifically understood, so
that foreign nations may know exactly how any intrusive action
of theirs in relation to American countries would be regarded.
The Senate resolution, however, introduces no new element
into the Venezuelan controversy. If the boundary indicated by
the Schomburgk line proves to have adequate evidence to sus-
tain it, which the present evidence seems to indicate that it
may, then the English claim will be conceded without more
ado. If, on the other hand, the commission appointed by the
President finds evidence throwing doubt on the English claim,
then the question should properly be submitted to arbitration.
We believe that both the English and the American people are
in favor of arbitration ; but if the English are not, they take the
responsibility of forcing the conflict. But upon all this, we
repeat, the Senate resohition has no particular effect; it is
simply a declaration of the American doctrine for the future.

84 [ February,

English View of the Monroe Doctrine.

THE President's Venezuelan Message has led to a very gen-
eral discussion of the Monroe Doctrine in England as well as in
this country. Whatever the outcome of this international flurry
may be, the world, and particularly the English, will be better
informed regarding the political position the United States oc-
cupy on this hemisphere. The indifference and even contempt
with which Englishmen have habitually regarded America
and Americans had almost become stereotyped into a mental
habit.

For years Mr. Cleveland has had almost a monopoly of
English compliments for Americans. For obvious reasons, he
has been constantly treated as the single and conspicuous ex-
ample of integrity among American statesmen. So long as he
was forcing legislation detrimental to American industries at
home, and hauling down the American flag abroad, he was the
embodiment of greatness. But the instant he asserted the
American doctrine in a way that interfered with the plans of
England, he fell, in the English mind, from a statesman to a
demagogue. They soon concluded that in the light of his pre-
vious attitude, both in the domestic and foreign policy, his rash
and undiplomatic message was the stroke of a politician rather
than the act of a statesman.

The Saturday Review bluntly asserts that "He has written
himself down an ass," and says, " As soon as President Cleve-
land found out that his advances towards free trade were pre-
mature, and that his reductions of the protective tariffs were
unpopular, he went in for ' sound money,' and attacked the
bimetallists ; but this seems to have brought him no great
advantages. In the last forty days, Kentucky, a Southern and
Democratic State, if ever there was one, has shown itself Re-
publican. Nothing, therefore, remained for President Cleve-
land to do , if he wanted to rally his party and secure a victory
at the polls, except to announce a 'spirited foreign policy.'
* * * Our readers must remember that he has played the
same game before. On the eve of a former Presidential elec-
tion, he posed as a Jingo ; he sent Lord Sackville West his pass-
ports, seemed ready to fight with Germany about Samoa, and
issued a proclamation threatening retaliation upon Canada.

1896.] ENGLISH VIEW OF THE MONROE DOCTRINE. 85

For these and other reasons, we feel sure that President Cleve-
land's Message is but a desperate electioneering attempt to win
the Irish and Jingo vote in the approaching Presidential elec-
tion. "

In the same strain the Spectator remarks, " It will, it is
believed, make Mr. Cleveland the inevitable candidate of the
Democratic party for the" November election. It is suggested
in many quarters that this is the real object ; that the commis-
sion will not report until after the election, and that Mr. Cleve-
land will obtain the whole of the anti-English vote."

It must be admitted that there is too much truth in this
diagnosis ; but these English journals are mistaken in assuming
that this sudden assertion of the Monroe Doctrine is simply a
Cleveland affair. The bluntness, bad diplomacy and third-term
politics were his, but the doctrine is the deep-rooted conviction
of the American people. It was because he knew this that he
used it for this questionable purpose. Whatever of personal
ambition, partisan tactics or lack of integrity may be ascribed to
Mr. Cleveland, nothing but downright conviction and zealous
enthusiasm for the American policy can be attributed to the
people.

When the news crossed the Atlantic that both branches of
the National Legislature unanimously endorsed the President's
Message, it began to dawn upon the English mind that even if
Mr. Cleveland was merely a designing politician, he had struck
the popular chord, and had acted the Mark Antony quite suc-
cessfully. This fact seems to have disturbed their self-con-
tained attitude of assuming that the message need not be
taken seriously. And they proceeded to charge the anti- Eng-
lish sentiment here to the Bunker Hill prejudice of New Eng-
landers.

The Saturday Review says :

' ' There can be no doubt that the ordinary American feels
a certain indifference, even contempt, for Englishmen in gen-
eral, and that the masses of Americans are conscious of an
antipathy to Englishmen more pronounced than they feel in
regard to any other people. * * * The bitterest an-
tagonist of Great Britain in America is the New Englander,
who is, so to speak, brought up on the record of the War of
Independence, and who as a Puritan justifies his animosity to

86 GUNTON'S MAGAZINE. [February,

England by dwelling on the fact that the English first insti-
tuted slavery in America, and when the Americans engaged
in a civil war to put an end to it, England sided with the
slave-owners. * * * That the average American, and
particularly the New Englander, cherishes hostility against
England is, we contend, the ground fact of the present situa-
tion. The fact that the Secretary of State, Olney, is a Bos-
tonian is the means through which the New England influence
has coerced the President into his anti-English position."

These extracts show the delusive working of the British
mind on American affairs. The English appear to see nothing
in the American doctrine but Bunker Hill spite, nourished in
the minds of Americans from generation to generation. They
seem not to know that they have continued, with but slight
modification, the same contemptuous and sneering attitude
toward Americans that they entertained at the beginning of the
century. From sheer force of habit, they forget that they have
assumed an unfriendly air to our every step of advance.
Besides giving aid and countenance to the Rebellion for the
purpose of disrupting the Union, they have used every device
of literature, social and political influence, to keep us an agri-
cultural country, by preventing the development of our manu-
facturing and commercial industries. And, with a disinterest-
edness exhibited by no other country, they have laboriously
argued that this was all for our own good.

Their free-trade policy was inaugurated solely for the
promotion of British manufacture. But, curiously enough,
that which they so much desired would be very bad for us,
and what they discarded was exactly what we ought to have. The
fact that we were largely of the same race, having the same
language and literature, made it easy for this sophistry to
become a part of American education. For a considerable
time, nearly all the economic literature in our educational insti-
tutions was English. Indeed, " Bunker Hill " bitterness had
so nearly disappeared that English authors furnished the text-
books for the American youth. True, the anti-English feeling
was again revived by England's pronounced effort to aid the
Rebellion. Yet, through the growing prosperity of the first
twenty years after the war, it again practically disappeared,
and English doctrine and English policy once more began

1896.] ENGLISH VIEW OF THE MONROE DOCTRINE. 87

to dominate American thought and teaching. It took rapid
root in our educational institutions, and soon found ex-
pression in the daily press and periodical literature, finally
accomplishing the election of Mr. Cleveland and a Congress
pledged to incorporate the English doctrine into American
policy — not the policy that England advocates for England, but
that which England recommends for America. Mr. Cleveland
and his Congress went at the reformation business in earnest,
applying it to both our domestic and foreign policy.

The President's un-American foreign policy in Samoa and
Hawaii might have been overlooked, or at least have been
passed by with a little scolding, had it not been accompanied by
his disastrous onslaught upon domestic industries. It was this
national disaster, directly traceable to English influence in
American affairs, and not New England prejudice, that caused
the sudden revolt of public opinion throughout the whole
country against Mr. Cleveland, his party, and the whole doc-
trine and interest by which he had been influenced, and created
a more intense American national feeling, and again demanded
a pronounced American policy.

The so-called an ti- English spirit in this country is not bit-
terness to England, but merely a wholesome distrust of English
advice and influence in American policy. If England hopes to
have the confidence or more than passing respect of America,
Englishmen must abandon their cynical habit of sneering at
Americans, and show an honest interest in the welfare of the
Republic, which, with a few isolated exceptions, they have
never done.

So long as they insist upon treating us as something less
than their equals, and through a patronizing, pretended friend-
ship, seek to make us the prey for their interests, they may
expect us to view their advice with suspicion and distrust.

In discussing the merits of the Monroe Doctrine, the
English appear equally to misunderstand the true American
position.

After pointing out that Great Britain and Germany and
Russia are rapidly filling up, and need some country where
their redundant and of course disagreeable population, can be
sent to relieve the social pressure upon the home administra-
tion, the Special or says:

88 GUNTON'S MAGAZINE. [February,

"We have not a doubt in our own minds that, were Ger-
many free to invade Brazil, or coerce Brazil, Southern Brazil
would become a German dependency, as would also Peru, now
in her nadir of resources, thus constituting a mighty German
State, stretching from ocean to ocean. * * * The trop-
ical provinces of the same vast territory, now almost dere-
lict, could be filled in a generation with the overspill of India,
to the immense relief of the Peninsula, now beginning to be
overcrowded, and the indefinite improvement of all the wild forest
tribes. * * * Under the shadow of the Monroe Doctrine
they (the Americans) are able to keep out the more vigorous
people whose first condition for settlement is that they will
dwell permanently only under their own flag and the protection
of their own laws. * * * The surplus millions (from Ger-
many) are ready to emigrate ; they make capital emigrants, and
they are keenly desirous of founding a new Germany ; but they
can find no place where they can found even a colony, and are
compelled to let themselves be lost amid the endless multi-
tudes of the United States, whose weight in a generation or two
extinguishes all distinctions. * * * A good deal of the
world's future is in their (Americans) hands, and will be mate-
rially affected by a doctrine which they regard as a mere defense
against the necessity of watching their frontiers or keeping up
armaments on the European scale."

As if to add to its misapprehension of the subject, the
Spectator talks of Great Britain as an American power, because
it happens to exercise authority over some American territory.
The Monroe Doctrine is not merely a defense of the United
States, but it is the assertion of an American principle of pro-
tecting the opportunity for the growth and perfection of repub-
lican institutions in this hemisphere.

This principle is asserted not merely on the local interest of
the United States, but on the broad grounds of political science
and the development of types of political institutions. It is for the
interest of all mankind that political freedom and democratic
institutions should have unmolested opportunity for develop-
ment and perfection in some part of the world. There is no op-
portunity for such evolution and experimentation in Europe,
Asia or in Africa. The struggle in Europe is for the perfection
of constitutional monarchy and parliamentary government.

1896.] ENGLISH VIEW OF THE MONROE DOCTRINE. 89

America is the only place on the planet where the opportuni-
ties for democracy can be unmolested by despotic or aristocratic
influences. The United States is the great leader in this ex-
periment, and it is its function to protect that opportunity; not
more for its own sake than for the sake of civilization itself.
The United States is experimenting in democratic institutions
for the whole human racer

The idea that Brazil and Peru would soon become German
dependencies, constituting a "mighty German State, "is exactly
what is not desirable. The Monroe Doctrine does prevent this,
and in doing so is rendering an invaluable service to civiliza-
tion. German types of political institutions are not wanted
on these continents. Germany has not yet perfected the repre-
sentative features of even middle -class institutions in Germany.
Until she has solved that problem for Germany, she is not
sufficiently advanced to transplant her institutions on this con-
tinent where democracy would otherwise grow.

According to the Spectator, ' ' these emigrants will dwell
permanently only under their own flag and the perfection of
their own laws." That is conclusive evidence that they are
not fit to come here. All who want the " German flag " and
"German laws" are not sufficiently advanced to come to
America. It laments that " emigrants are compelled to let
themselves be lost amid the endless multitudes of the United
States, whose weight in a generation or two extinguishes all
distinctions." That is exactly as it should be. They come to
America, and by thus becoming lost amid the endless multi-
tudes of the United States become Americans, and by so doing
prove their fitness for a higher form of government and a more
advanced type of national civilization. That is the true line of
demarcation to be drawn, and to the extent that the Monroe
Doctrine helps to draw that line, it acts as a means of natural
selection by which the best elements of European civilization
may be advantageously assimilated into the democratic civiliza-
tion of the New World.

The fact that England owns territory on this continent does
not make England an American power. The distinctive fea-
ture of America is not the geography but the type of political
institutions. The essence of Americanism is democracy. Eng-
land is distinctively the representative of middle-class institu-

90 GUNTON'S MAGAZINE. [February,

tions; and hence is as un-American as Russia, though not so
backward in its political development. It is true that "a good
deal of the world's future is in their (American) hands;" and it
is for that reason that America should protect the opportunities
and conditions, that the world's future may have the benefit of
what America stands for in human freedom and political gov-
ernment. The Monroe Doctrine is the American doctrine. It
is broader than the United States. It is deeper and more sig-
nificant than any mere territorial interests. It is an essential
principle in political science and rests upon the ground of aiding
human progress by protecting the opportunity of the new to
survive.

Horace White's Money and Banking.*

MR. HORACE WHITE, editor of the Evening Post, and Mr.
Alexander Delmar, who in 1865 was appointed by Secretary
Chase Director of the Bureau of Statistics, have just issued
works on money. The two writers display mtich research in
their several lines of investigation, and while giving evidence
of nearly equal industry and, perhaps, equal acumen, have
come to nearly opposite conclusions, from the top clear through
to the bottom of the so-called " science of money."

The difference of conclusion is, we think, wholly tempera-
mental— an affair of the spectacles, nerves and "gray matter"
through which the facts are seen — and not a consequence of any
difference in the facts perceived or the method pursued in
investigating them.

Mr. White's field of study has been local American finance
from the earliest settlement of the United States to the present
day, going abroad hardly more than is necessary to accompany
the American commissioners to the various monetary exposi-
tions held since 1865 in Europe. He follows the Colonies in their
attempt to substitute some more acceptable medium than coin;
the revolutionists through their continental issues; traces the
course of the First and Second Banks of the United States ; then
the State bank money, the greenbacks and the national bank
notes.

Mr. Delmar's field of research may be said almost to end

* Published by Ginn & Co., New York.

1896.] MR. WHITE'S MONEY AND BANKING. 91

where White's begins, for it consists of a study of the monetary
systems (chiefly as relates to coin) which have prevailed in
Asia, Africa and Europe from the dawn of civilization to a
period not very modern; and the only part of modern and
American history which he dwells upon is the recent monetary
reaction in the Argentine Republic. Yet from these two inde-
pendent and hardly overlapping fields of investigation and
study, Mr. Delmar returns laden with the conviction that
money is primarily a creature of law and that it has rendered
its greatest services to society when it has been clothed with
most of fiat and least of commodity value ; while Mr. White re-
gards every such acme of inverted monetary wisdom as a mani-
festation of human folly and knavery only one remove from the
clear instigation of the devil. He regards the recent gradual
concentration of the world's esteem and appreciation upon gold
as the product of the most refined human intelligence; Mr.
Delmar pronounces it a subjugation of the monetary interests
of the toilers and producers of the world to a few cornerers and
forestallers of the' gold product. It is a catastrophe well calcu-
lated to enslave the masses in the interests of a few financial
despots.

Thus it may be said that Mr. Delmar, writing up the history,
through thirty centuries, of ' 'gold" itself, comes to the conclusion
that what is blindly taken to be its commodity value has at all
times sprung mainly through its coinage use ; this in turn has
been dominated by a subtle connection anciently with imperial
and sacerdotal "fiatism," and at present with commercial
monopoly and financial centralization of power. Mr. Delmar
sees in the Rothschilds and the Bank of England, the lineal suc-
cessors to the Caesars, Tamerlanes and Ghengis Khans. Mr.
White, on the other hand, writing the history of a country and
period in which "fiatism " has been the almost exclusive rule,
and gold the exception, has embraced the conviction that Gold
is the Ark of the Covenant, the sacred dwelling of "The Host,"
and that "fiatism " is a heresy to be smitten hip and thigh, like
the Hivites, Hittites, Perizzites and Jebusites, who hinder the
progress of the Lord's anointed into the promised land.

Mr. Delmar expresses his faith thus (p. 307): "And let
it be remarked that I am not here advocating a policy, but
chronicling a historical fact; all the great enfranchisements

9« GUNTON'S MAGAZINE. [February,

of societies have been accomplished with the aid of
fiduciary money. The Spartans won their liberty with iron
discs of Lycurgus; the Athenians, before the Alexandrian
period, rehabilitated the Republic with 'nomisma,' a highly
over- valued copper issue; the Romans overthrew their kings
with the aid of overvalued ' nummi, ' whose emissions were
controlled and regulated by the State, ex senatus consulto. The
earliest republic in Europe which had the courage to defy the
moribund hierachy of Caesar was that of Novgorod, whose
money was impressed upon leather and, doubtless, issued by the
State; the money of the Scandinavian revolution was the ' klip-
pings ' of Gustavus Vasa, which were issued by the State ; the
money by the aid of which Gustavus Adolphus saved the Protest-
ant religion from being stamped out by Ferdinand, the Catholic,
was overvalued copper 'rundstyks,' issued by the State; the
money of the Dutch revolution was the pasteboard 'dollars,'
issued by the City of Leyden ; of the American Revolution, the
paper notes issued by the Colonial governments ; of the French
Revolution, the ' assignats ' and ' mandats ' issued by the Na-
tional Assembly ; and of the Anti-slavery War in the United
States, 'greenbacks.'

"All these moneys were issued and the emissions were con-
trolled by the State. They were not individual notes, nor pri-
vate bank-notes, but essentially State notes. Indeed, the issue
of fiduciary moneys by the State has so commonly attended all
social enfranchisements, that the occurrence of one of these
events is almost a certain indication of the other. There is a
reason for this — a reason that lies upon the surface. When the
people take the government of a country into their own hands,
wealth naturally hides itself, and the first form of wealth to dis-
appear is the precious metals. The moment a revolution or a
civil war is declared gold and silver disappear. Thereupon the
emission of fiduciary money by the State becomes imperative,
or else the revolution runs the risk of immediate failure, for
money is needed to purchase subsistence and arms, to pay
troops, and generally to carry on the new government."

The exigency which brings forth fiat money, therefore, ac-
cording to Delmar's research, must be some great forward
movement of the people (which means the poor) toward a larger
enfranchisement, or a more rapid wealth-production. This can-

1896.] MR. WHITE'S MONEY AND BANKING. 93

not be had without a swifter and larger diffusion of wealth- con-
sumption among those who do not possess the wealth itself, than
is possible through ' ' sound " money , which is the sceptre of
Pharaoh and not the wand of Moses. It is the common people
who possess that impulse toward liberty and progress which
impels the exodus or revolution which needs the fiat money for
its success. Whoever desires the beneficence of the forward
social movement must be prepared to pay some penalty in the
defalcation in values which will accompany its attainment.

It must be conceded that Delmar's conception admits the
truth of White's complaint against fiat money, viz. : that it in-
volves a temporary social defalcation on the part of those who
owe to those who own. Mr. Delmar, however, boldly belittles
and repudiates this suggestion, on the plea that this is only a
part of that perpetual process of ' ' spoiling the Egyptians, " by
which emancipation is accomplished.

Had it been possible for Mr. White to meet and consider
this view in a spirit of more generous ethical indulgence, it
would have led him to show, if he can, how the early colonists,
having no gold, almost no silver, and absolutely no banks what-
ever for a century and a half — from 1607 to about 1760 — could
have made their exchanges at all, without adopting the cowrie
mo,ney, tobacco and beaver-skin money, and Colonial fiat money
to which they resorted. If he cannot show this, then his im-
patient ascription of such money to folly and knavery is not
well-conceived and is hardly good economics ; for in economic
science no series of events can be pilloried as ethically wrong
unless the finger can be laid on the substituted policies which
would have accomplished the same economic results, and unless
it can be shown that the adoption of these substitutes was feasi-
ble at the time, in the condition in which the colonies were
placed.

Mr. White does not discuss these primary questions; he
does not say whether the colonies did not by means of fiat
money initiate public enterprises and private production, and
perhaps carry them through, on a scale and with dimensions
which without this resort would have had no inception, or if be-
gun would have met with early collapse. If a strict adherence
to ' ' pay as you go, " or adventure only so far as you can pro-
ceed with sound money, belong in the same category of ideal

94 GUNTON'S MAGAZINE. [February,

ethical precepts, as the directions to love one another, and to
shed no blood, then the short and simple answer to them all is
that they are too good for this world and that, consistently with
such precepts, no new rights can be won, no liberties established,
no free popular governments founded and no social reconstruc-
tion realized.

Hence the acidity with which Mr. White denounces the
colonial paper money in the sentences that follow, leaves the
mind with the feeling that something is lacking to justify it.
This something should be the proof that with their sparsenessof
population and poverty of resource, which precluded banks and
bank notes, and with their absence of gold and silver, some other
and better device was within their reach than that which they
used. If no such superior alternative was practicable one might as
well blame the early Britons for eating meat with their fingers
instead of with knives and forks, or the first Astor for not riding
from Waldorf to the sea on a bicycle instead of walking, as to
attach an ethical stigma of wrong-doing to our Colonial ances-
tors for being impelled by their poverty to "make money " when
they had nothing very good to make it of. Mr. White says
(p. 121):

"No kings, however tyrannical, ever debased the money in
circulation so recklessly, persistently, outrageously as the Colo-
nial assemblies. " [Answer : There was essentially none in circu-
lation to debase. — Ed. Econ.] " It would seem that no lessons
of experience were of any value to prevent repetitions of the
same off ense. " [Answer: If gold and silver could have been
got in the quantities needed they would not have issued fiat
money. — Ed. Econ.] "In so far as they were saved from the
worst consequences of their folly, they were saved by the mother
country, with which they were at bitter strife on the subject of
legal tender acts and depreciated paper for three quarters of a
century. Loyal and obedient on most matters, and ready to
take up arms in England's quarrels, they were rebellious and in-
tolerant of restraint on this subject."

The assumption here is that more evil resulted from the
collapse of Colonial money than advantage from its use. But
the common experience of mankind is that the exchanges which
a given sum of money, or even merely supposed money, will
perform in a month or a day, may be of far more value to so-

1896.] MR. WHITE'S MONEY AND BANKING. 95

ciety than the sum of money itself, which is the instrument of
the exchange. A spade worth a dollar may turn over land
worth thousands of dollars. In so doing it facilitates the pro-
duction of a crop whose value is out of all proportion to its own
value. Thereafter it matters little how soon the spade goes to
pieces, though, if it will continue its service for an indefinite
period, it is all the more valuable. Yet eternity is not a neces-
sary sine qua non to its utility. It cannot be proved a fraud or
a " steal " because, after facilitating a production equal to thou-
sands of times its own value, it suddenly breaks down into old
iron and firewood. In how short a space of time may a repre-
sentative dollar pay for itself by its services?

The average life of a note of the Bank of England, from
the date of its issue, newly engraved and signed, to that of its
return to be burned, is said to be only four days, though a defi-
nite portion of all the notes remains out many months. During
that brief average life it far more than pays for its cost of pro-
duction. Indeed, its cost of production bears no proportion
whatever to its utility.

But it is said the Bank of England note is finally redeemed,
while the collapsed Colonial note is not. Fortunately for the
British Empire, this is exactly what does not occur.

The Bank of England note (to the extent of the first
^17,000,000 or so of the issue of notes) is only redeemed by
being circulated and taken at par from all the holders thereof
except the last, viz., the Bank itself. In the Bank's hands it
represents the perpetual unredeemed and irredeemable debt
owed by the Kingdom of England to the Bank, on which the
principal will probably never be paid until the Bank itself is
wound up and retired from business. Indeed, for the govern-
ment to pay off this debt would destroy the very basis on which
the Bank issues the note. But the note is the typical currency
of the kingdom, the initial source of the deposits, including the
deposits of gold, and the pivot of all the Bank's utilities and
powers. Without it the Bank could not be the fiscal agent of
the government, the Imperial Treasury of the kingdom, the
source and regulator of the currency, the central magnet which
draws to itself the world's gold, the governor of rates of interest
and of production and the mediator and averter of panics, the
source of coin redemption for all the banks in the kingdom, the

96 GUNTON'S MAGAZINE. [February,

clearing-house of the world's exchanges, or the throne-room of
the world's finances.

The Bank of England note, therefore, stands as truly for a
perpetually unpaid debt as the notes of the American Colonies,
but it represents a debt made perpetually useful by adapting it
through the alchemy of a government bank to the daily recurring
wants of a new set of lenders, each of whom finds it to his in-
terest to rush forward at an average of every four days and re-
lieve the government of the debt it owes the bank by buying
the bank notes with which to effect exchanges. Thus the gov-
ernment's debt to the bank is, through this utilization of the
note as currency, at once never paid and always paid.

The real sin against the social welfare committed by our
Colonial forefathers did not consist in issuing the Colonial notes,
but in failing to utilize them as at once a permanent bank debt
and popular loan. England has been so fortunate as to do this
with that portion of the government debt to the bank which
circulates as notes of the Bank of England.

In like manner the sin committed by the Continental Con-
gress in conducting the War of the Revolution, in the matter of
the "continental money, " consisted neither in the fact that they
issued that money, for only by issuing it could they have held
their feeble armies together until military, naval and financial
aid came from France ; nor in failing to pay it off and retire it,
for its payment and retirement was not possible, since at no
time had they the silver to pay it with, nor could they have got
it ; nor, if possible, would it have been useful, since if paid off
and retired while it was at par it would have been a violent.
and disastrous contraction of the currency, which would have
wrecked the interests of the people. If paid off and retired
after it had descended to zero, it would only have conferred
vast fortunes on the few bill-brokers who had bought it
up. If paid off on its way down to zero, it would only have in-
jured the taxpayers to enrich the note-brokers. In any form,
and at any time after its issue, its payment and consequent de-
struction would have been a disaster, for to burn up the means
of exchange and measure of value to which a people have ac-
customed themselves is a far greater sin against their prosperity
than to burn up their agricultural implements. The only real
sin the fathers of the Revolution committed consisted in not

1896.] MR. WHITE'S MONEY AND BANKING. 97

putting behind the continental notes, as Alexander Hamilton
actually proposed to Robert Morris to do, a solvent government
bank capable of converting the exchanges of commodities, which
these notes would facilitate, into valid assets for their perpetual
daily redemption and reissue upon sound banking principles.
Hamilton saw that if England could thus convert ^17,000,000 of
national debt into a popular redeemable national currency,
America could, with the same mechanism, utilize the whole is-
sue of continental money. Hamilton therefore during the
war proposed to Morris a government bank of $100,000,000
capital, at a time when there was no bank in the country in ex-
istence. He was only able to partially realize his idea in a bank
of one tenth the capital he had desired, and that at a period
two decades later, when the continental money had already
passed into repudiation ; and only a small part of the great util-
ity he had hoped to achieve could be attained.

Conceding that this failure to make the debt which the Con-
tinental Congress incurred to the people, the basis of the note
issues of a solvent government bank, was a great mistake, it does
not differ from the incapacity which existing politicians and
statesmen of America are exhibiting under exactly similar con-
ditions in the matter of our existing greenback debt. Cleveland
and Carlisle, in proposing a retirement by funding into bonds of
$500,000,000 of currency, do not propose a currency measure,
but only a financial crisis tenfold worse than the crisis of 1893
to 1895.

A sane currency measure would be one which proposed
to convert the greenback debt from a menace to the solvency of
the treasury into an instrument of the commerce of the people
daily redeemed in coin by the banks themselves, as England has
done with the bank loan of £ 1 7 , ooo, ooo. Few of the Senators or
Congressmen in either party are yet alive to the value of this
issue, or rise to the height of this great argument.

Mr. Horace White purports to be pushing his craft along
the icy borderland of financial exploration. He imagines that
the ultima thule of navigable waters is reached when he puts up
gravestones at the points where fiat money has gone down, and
imposes a hicjacet over the bones of those who gave it birth.
In the world of finance, as in that of physics and of morals, ship-
wrecks result not from rottenness in the cargo but bad steering;

98 GUNTON'S MAGAZINE. [ February,

curses are mismanaged blessings; sins and failures are mis-
directed energies and ignorantly handled virtues.

If we, with a century more of light to disregard, decline to
bank on the greenback debt so as to make it useful instead of
pernicious, why denounce our fathers for failing to bank on the
Colonial debt or the continental debt? A financial writer like
Mr. White should teach the people something more than they
already know. He says, "retire your greenbacks." Congress
answers by the acts of 1868 and 1878: "That cannot be done
without a financial crisis a hundredfold more costly than even
the greenbacks are." It would not be very far from the point
Mr. White has reached to the next step in the logic of the situ-
ation, namely, ' ' then bank on them. " The banks, collectively
or separately, could better afford to assume the issue and re-
demption of the $346,000,000 of notes necessary to fill the gap
left by the withdrawal of the greenbacks, if not compelled to in-
vest their capital in government bonds at 3 per cent. , than if
compelled to do so. Hence the issue of government bonds in
exchange for the greenbacks would be to the banks an incubus
and not a privilege. But the issue of the notes by them would
be a privilege and not an incubus, provided there were either
an aliquot distribution of the privilege among the banks in pro-
portion to their capital and solvency, or a concentration and
pooling of the banks into a branch system, such as exists in
Canada, Scotland and England, and an assumption of the sub-
stituted note issue by the whole banking system ; or provided a
government bank of $100,000,000 of capital should be so
formed as to associate with itself from twenty to fifty of the
leading banks of the country in an American syndicate to take
charge of the issue.

To concede that such an operation requires wealthy cap-
italistic co-operation and good fiscal management should not
deter us from advocating it, unless we believe that Democratic
institutions are a failure in all that pertains to the higher
finance essential to national prosperity. If they are, we had
better be looking around for sound government itself, since
sound money is, by the terms of the proposition, conceded to be
unattainable.

Mr. White emerges from his book swearing "like our
army in Flanders " against all the modes in which our ances-

1896.] MR. WHITE'S MONK* AND BANKING. 99

tors undertook to make a people's currency out of a public debt
without banking on it, and unctuous with words of sweetness
and light over the success which has attended the governments
of England, Scotland, Canada, and perhaps France and Ger-
many, all of which have banked on it, and yet with no plain
path marked out whereby we ourselves can shun the worse and
seek the better way.

Mr. White's chapters on the First and Second Banks of the
United States are excellent and comprehensive in detail and
vacuous only in lack of constructive inference from the history
evolved. He finds that both banks were sound, useful, success-
ful, and should not have been destroyed. Jackson's war upon the
Second Bank was based on false premises and inspired by ignor-
ant, unstatesmanlike motives. But he was really desirous of
founding a revised bank more subject to official dictation and
control than that of which Biddle was president, which would
have been a very unwise thing if done, but less unwise than to
destroy the bank altogether. Clay, therefore, was foolish to
make the issue on the bank, since had he not done so, Jackson
would have relented or modified, and a bank of some kind would
have been saved. Biddle also, though he conducted the bank
successfully, was an idiot to fight Jackson, as the result proved.
Mr. White, therefore, cheerfully consigns all the parties to per-
dition, on the assumption that the financial will of Andrew Jack-
son was an unchangeable verity and an irresistible factor which
nobody ought to have undertaken to control, while the mere
economic usefulness and political wisdom of a Bank of the United
States, though unquestionable as facts while they lasted, were
yet not facts of that kind which are entitled to persist and sur-
vive when brought into collision, with the temper of a first-class
Indian fighter with all his fighting dander up, and transferred to
finance.

Mr. White declares that the " Scotch bank system is the
best in the world, and that we might borrow from it, as the
Canadians have done, to our advantage. " But the Scotch sys-
tem has as its keystone a government bank very much like the
bank that Jackson slew; it has the branch system which the
Bank of the United States had inaugurated, to the extent of
thirty or more branches. It has a system of central coin re-
demption, which also the bank of the United States embodied,

ioo GUNTON'S MAGAZINE. [February,

and through which it compelled coin redemption in all the
other banks. The differences between the Scotch system and
what the American system would now be, had the Bank of the
United States continued to this day at its head, cannot be fun-
damental. And yet Mr. White says of the latter, ' ' it does not
follow that the bank would be a desirable institution to-day, or
that it would have lived to this day if Jackson had kept hands
off." Perhaps Mr. White desires the Scotch system without
the Bank of Scotland.

Mr. White antagonizes what might perhaps be called the
dynamic school of monetary economists. He describes money
always as an implement of exchange merely, like hoes and yard-
sticks, and banks always as a business merely, like butchers and
bakers. Neither of them ever rises in Mr. White's contempla-
tion into a social energizing force, and still less into a form of
psychic inspiration, like the Press or the Church or the scien-
tific class, as the brain and nervous system of social evolution.
It would not occur to him to define money as Carey does, in
terms which would apply equally well to language, religion,
government, art, marriage and contracts, viz. , as "an instru-
ment of association among men. " In confining it to the func-
tion of swapping one piece of goods for another, by measuring
the value of the effort expended on each, he avoids much
subtlety and appears to have attained to special simplicity of
treatment. This is necessarily at the cost of overlooking and un-
derestimating the dynamic power of monetary facts and events
upon the intellectual progress and social development. Hence
Mr. White never presents to us money in its tides and currents
as a comprehensive whole. He generally contradicts or denies
the existence of all that class of phenomena which Hume,
Adam Smith, Hamilton, Carey, Alison, and others have dwelt
upon as arising out of its volume or scarcity, its abundance or
lack. He takes no note of the effect of a credit currency of a
higher or more satisfactory kind, like the greenback note in
1862, to retire a credit currency previously in vogue of book ac-
counts and commercial time-paper thus stimulating produc-
tion by substituting cash payments for slow trusts of private
solvency.

A sentence in his preface brings out his antagonism to any
mental habit of regarding money as a dynamic force. But Hume

1896.] MR. WHITE'S MONEY AND BANKING. 101

so regards it when he compared it to water in its fertilizing
influences. Carey also does so when he figures coin and bank
notes as bearing the same relation of relative slowness of circu-
lation and of influence over trade and production, compared
with checks, discounts and deposits, as the blood in the human
circulation bears to the so-called "nervous fluid, "or as canal
boats and ships in commodity transportation bear to railroads
and telegraphs.

Mr. White says : ' ' The people had to a large extent lost
sight of the fundamental principles of money. The miscon-
ceptions and delusions remained, the most dangerous and
widely prevalent being the notion that mere quantity is a desir-
able thing, and that the government can produce quantity, and
ought to. "

Such sentences as these appearing throughout the work in-
dicate that the writer is disposed to treat certain forms of ad-
verse opinion with that petulance which sometimes accompanies
penetration. Mr. White can hardly be insensible to the fact
that ' ' mere quantity ' ' is not a thinkable idea. It is not the subject
of being desirable or otherwise. Quantity must be a quantity
of something, and cannot be thought of apart from the sub-
stance of which it is affirmed. If the things themselves are
desirable, the element of desirableness attaches to whatever
quantity of them is necessary to accomplish their purpose.
A single five-dollar greenback differs from the $420,000,000
of greenbacks issued only in the single element of "quan-
tity." If, therefore, greenbacks in this quantity were neces-
sary for the government's purpose, or are now necessary for
the people's purpose, the notion that quantity has something
to do with efficiency, or that the government could produce the
quantity needed, and ought to, could hardly be classed among
popular delusions. Indeed, Mr. White's own notion to retire
them is one founded on the alleged effects of too much ' ' quan-
tity." Hence the fine scorn for " quantity " on the part of one
who thinks the only reform we need is to lessen the "quantity"
of one kind of currency and increase the " quantity " of another,
is misplaced.

In the points mentioned, Mr. White's book hardly strikes
the high key of oracular deliverance on the financial needs of
the hour, though this is the theme to which it is addressed. It

xoa GUNTON'S MAGAZINE. [February,

is, however, the meatiest and pithiest, and one of the most in-
structive works, yet written on the details of American finance.
Notwithstanding we hold it to be a mistake to attach ethical
blame to those who use paper money of a poor kind because
they cannot get hold of gold, silver or good bank notes in the
quantity they actually need, yet we are no less sensible of the
large value of truth and wisdom involved in Mr. White's tone.
He writes to-day. His tone is the natural reactionary tone
of to-day. Were he in the midst of the events which forced on
others the issues of fiat money which he condemns, he would
not " knuckle in the fight " rather than send out the rag paper.
It had its constructive aspect when it was done which those
who rail against it forget.

Destructive criticism, the puncturing of popular but delu-
sive nostrums, is useful, but not of the highest use. There comes
a time when the twenty-story house that once was thought vision-
ary must be built. It will rise in all the security, light, and beauty
of architectural affluence which is synonymous with the highest
economy of space, time and force. The creation of a perfect
banking system for America is not a more visionary project to-
day than the abolition of slavery seemed in 1856, the subjuga-
tion of the seceding States in 1861, the restoration of protect-
ive tariff for thirty years in 1857, or the enfranchisement of the
black race in 1867. Faith that what man has done man can
outdo, is the divine fire by whose inspiration the frozen music
of the solid edifice rises into the permanent grandeur which is
always due to the enduring and well conceived. The finances
of the country have reached this building period. To take part
in the public exigency we must be builders ourselves, even
under penalty of being thought blunderers. High above all
other structures, whiter in its marble beauty because grander
and more far-reaching in its influence for good than any other,
should rise our temple of finance.

1896.] 103

Is the Duty Added to the Price?

In commenting upon the Dingley Revenue Bill in our last
issue, we called attention to the fact that it continues the idea
of a compensatory duty on wool to manufacturers. We sug-
gested that this was based upon the unsound assumption that
the entire duty is added to- the price which the manufacturers
have to pay for the domestic product. Not that the protection
to manufacturers was too high, but that it is an economic error
to place part of the duty as compensation for the tariff on raw
wool when it is really needed as protection for manufacturers
per se. Nor that this really makes any particular difference in
the actual working of the tariff so long as it is in operation, but
when a change of the tariff is made and it takes the form of free
wool, it necessarily carries with it the compensatory duty added
on manufactured products. If the duty is not all added to the
price, then the removal of the compensatory duty, with the
abolition of the tariff on wool, works a great injury to wool
manufacturers, because it takes from them a portion of the pro-
tection which the industry needs, independently of any influence
of the tariff upon raw material.

Much of the injury inflicted on wool manufacturers by the
Wilson bill came this way. The 1 1 cents a pound duty on wool
amounted to 22 cents on washed wool, 33 cents on scoured wool
and about 44 cents on manufactured woolens. This was all
taken away when wool was put on the free list, on the assump-
tion that no part of it was protection to the manufacturers, but
that it was mere compensation for the duty put on wool, hence
to the extent that the duty was not added to the price, the re-
peal of the wool duty was a real reduction of the protection to
manufacturers. In our comments on the Dingley bill, we ven-
tured to criticise this idea, and suggested that when a compre-
hensive revision of the tariff is undertaken in 1898, the
whole subject be treated on a strictly economic basis and that
protection be given as protection, and then it cannot be taken
away under cover of free raw materials.

To this view Mr. S. N. D. North, secretary of the National
Association of Wool Manufacturers, takes exception, and writes
us the following letter, in which he stoutly maintains, with
Grover Cleveland and free traders generally, that the whole

104 GUNTON'S MAGAZINE. [February,

amount of the duty on imported wool is added to the price of
the domestic product :

BOSTON, January 14, 1896.
Editor Gunton's Magazine:

I am amazed to read the following- statement in your Janu-
ary issue, in the article commenting upon Mr. Dingley's defici-
ency revenue bill :

" It will be observed that the new bill perpetuates the heresy that the
full amount of the duty is added to the price, by providing a compensatory
duty on manufactured woolens equal to the duty on raw wool. Every
manufacturer knows that the price is not increased by the full amount of
the duty; it was not under the McKinley Bill nor under any other bill, and
protectionists have denied right along that such is the case. This is a
delusion, the acquiescense in which has done much to injure the cause
of protection, and ought not to be recognized in any protection legislation."

The facts are exactly the reverse of your representation.
"Every manufacturer knows" that the price of wool in this
country is enhanced nearly or quite by the amount of the tariff
duty upon it, and that it must continue to be so enhanced as
long as the domestic supply of wool is inadequate, either in
quality or quantity, to meet the requirements of domestic
manufacturers. Moreover, the fact has been demonstrated by
the most careful scientific investigation. I refer you to the
report of the Senate Finance Committee on prices and wages
for fifty years", published in 1892. You will find a full analysis
of the findings of that report ; so far as relates to the effect of
the tariff duty upon the price of domestic wool, in the speech
of Hon. Nelson W. Aldrich of Rhode Island, delivered in the
Senate, June 15, 1894, a copy of which I send you herewith.
Careful comparison of the London and American prices of
corresponding grades of scoured wool, extending over the period
from 1881 to 1892, has proved that during this entire period
the American manufacturer paid an average price of thirty-
two cents a scoured pound more than his English competitor
for wool identically the same in quality and use. The wool
duty was thirty cents per scoured pound by the act of 1883, and
thirty-three cents per scoured pound by the act of 1890. The
fact established by that investigation is within the knowl-
edge of hundreds of domestic manufacturers accustomed to the
use of both foreign and domestic wool ; nor can you find one
such manufacturer who will venture to dispute it. It is neither

1896.] Is THE DUTY ADDED TO THE PRICE? 105

a heresy nor a delusion ; neither have protectionists ' ' denied
it right along. " The speech of Senator Aldrich — the highest
protection authority now in Congress — shows that they have
been at pains to prove just the contrary of your assertion.

You say the price of wool was not increased by the Mc-
Kinley law — having reference, no doubt, to the fact that the
price of domestic wool fell steadily during the continuance of
that law. If you will examine the table of comparative prices
in the Finance Committee's report, you will find that domestic
wool prices were higher after its passage, in comparison with
foreign prices, than before, although the McKinley law only
added one cent per greasy pound to the tariff. It is true that
wool prices fell at home under that law ; but they fell only in
sympathy with the world's wool markets ; and they were always,
as they fell, higher than the prices in the world's wool markets,
by nearly or quite the amount of the duty — always, that is, un-
til the election of 1892 made free wool a certainty, and by de-
stroying the manufacturers' demand, forced domestic wool
prices down to the free-trade level some months prior to the
actual passage of the tariff of 1894, in anticipation of the new
values established by that act. I do not understand what you
mean by the remark that acquiescence in this demonstrated fact
— which you call a " delusion " — "has done much to injure the
cause of protection. " Protection cannot shirk facts, or distort
them, or misrepresent them. The fact is, that a duty on wool
increases the cost of wool, by substantially the amount of that
duty, and must always so increase it until such time as it shall
result in developing a domestic supply equal to domestic require-
ments. If that time ever comes, then it will be proven that
wool is an article to which the protection logic applies — as ex-
perience has shown it to apply in so many other instances. In
the meantime, any tariff which levies a duty on wool, without
accompanying it by compensatory duties on woolens, will de-
stroy the domestic wool manufacture. The facts above stated
show why this must be so. Indeed, it has been already proven,
for we have had tariffs that levied the same ad valorem duty on
wool and on woolens, and so long as they existed, the wool
manufacture went surely and steadily down. The truth is, that
the compensatory duties on woolens fixed by all protective
tariffs since 1861, while they have been scientifically calculated,

106 GUNTON'S MAGAZINE. [February,

and are nominally fully compensatory, have not been found, in
practical experience, a full offset, as they were intended to be,
for the denial of free wool. I will not burden you with the rea-
sons why this is so ; some of them must be apparent to every one
familiar with the phenomenal development of the wool industry,
in the last quarter century, in the countries of the southern
hemisphere, and the enormous variety of cheap and useful
wools of heavy shrinkage, which have in consequence been
placed at the command of our foreign competitors. Seven years
of my life have been largely devoted to the study of this prob-
lem ; and, speaking with a knowledge which, without immod-
esty, I may claim exceeds that of more casual students, I am
convinced that the American wool manufacturers, when they
consent to the restoration of a wool duty — as most of them do,
cheerfully — make a sacrifice of personal advantage in the inter-
ests of the uniform and all-around application of the protective
policy, for which the off-setting duties on woolens are but a
partial and inadequate compensation. Your magazine has done
such brave service for " the integrity of economic literature,"
that I feel confident you will not deny me this brief hearing in
its pages.

Very respectfully yours,

S. N. D. NORTH, Secretary.

In the hope of still further promoting "the integrity of
economic literature," we gladly give space to Mr. North's com-
munication. In view of his high official connection with the
wool industry, however, it is with no little diffidence that we
venture to take exception to his conclusions. Yet, he makes
some bold assertions which, if correct, had better be accepted
once for all by tariff advocates, namely: (i) that the price of
domestic products is increased by the full amount of the duty
on competing imported products; and (2), that this "is neither
heresy nor delusion ; neither have protectionists denied it right
along."

Of course, we cannot insist that Mr. North knows that pro-
tectionists deny this, but we are quite sure that the mass of the
readers of the daily papers know that during the last few years
protectionist journals have persistently denied that the whole
amount of the tariff is added to the price. Indeed, that has
been the burden of the Tariff League literature and the Home

1896.] Is THE DUTY ADDED TO THE PRICE ? 107

Market Club literature and Protectionist literature generally
throughout the country since 1890.

But perhaps Mr. North did not intend to include anything
in his statement but wool ; that is to say that the doctrine that
the price of domestic articles is increased by the full amount of
the duty does not apply to manufactured articles, but only to
raw material. If such is- Mr. North's contention, then it is
necessary for him to explain upon what principle a duty affects
the price differently when put on raw materials than when put
on manufactured articles. If Mr. North is correct, then Mr.
Cleveland was right in his 6th of December message, and Lu-
binites are right in insisting that the farmers have to pay higher
prices for their manufactured articles by the full amount of the
protective duty eastern manufacturers receive; that the basis
of the free-trade movement is correct, and that the denial of
this fact by manufacturers and protectionists generally is so
much political bluff. On the other hand, if the position of the
protectionists during these years, that the domestic products are
not higher than the foreign by the full amount of the duty, there
is something the matter with Mr. North's economics, unless,
as we said, that wool is subject to an economic law all its own.

The question raised by Mr. North is largely a question of
fact. If home products are enhanced by the full amount of the
duty on imported competing equivalents, any theory to the con-
trary is fallacious. If the full amount of the duty is not added
to the price, it is the function of economic science to explain
how that comes about, but there is no field for the science until
the facts are settled.

For the facts verifying his position, Mr. North refers us
"to the Senate Finance Committee's report on prices and
wages for fifty years, published in 1892," and to the figures
used by Senator Aldrich in his speech in the Senate, June 15,
1894. We have gone carefully through the Senate report,
Senator Aldrich's speech and several other documents, includ-
ing the Wool Book, published by the ' ' National Association of
Wool Manufacturers," and several copies of the Manufacturers'
Bulletin, edited by Mr. North, and were prepared to testify to
Mr. North's accuracy, and make the proper apology for having
been mistaken; but we regret to say that thus far the facts
appear to be against Mr. North.

io8

GUNTON'S MAGAZINE.

[ February,

In the first place, we are unable to find, in any of the docu-
ments referred to, facts agreeing with the table of London
prices given in Senator Aldrich's speech, and in only one place
are we able to find the figures agreeing with the price given for
Ohio fleece in the Senator's table ; but we find several tables in
the Finance Committee reports and other documents that
materially differ from these.

The domestic and foreign wools usually taken for compari-
son as being most nearly equivalents in quality, and most
largely substituted for each other in manufacture are for
American Ohio XX, and for foreign Port Phillip fine. From
the Wool Book, which, as we have said, is the official publica-
tion of the National Association of Wool Manufacturers, we get
the following table of prices for Ohio and Port Phillip fleece,
washed.* The prices of the Port Phillip fleece are taken from
the London prices, given on page sixty-eight in the Wool Book,
which gives the price each year in English money, from 1872 to
1891, inclusive; and is confirmed by the Senate's Report, Vol.
I., page 237, which contained the London prices in Eng-
lish and American money for every year from 1846 to 1891,
The table is as follows:

AMERICAN.

ENGLISH.

DIFFERENCE.

1881

47 cei

44
40
40
34
35
33
3i
34
33
33

its.

39-5 cei
40.0

38.5
37.0

33-5
31-4
3i-9
3i-9
35-5
32-4
29.9

its.

7-5CCI
4.0
1-5
3-0
0.5

3-6
I.I
t°-9
fi-5
0.6

3-1

its.

1882

1881...

1884. .

1885 ..

1886

1887

1888

1880...

1880

1801...

2.04 cents.

fThe dagger indicates that the domestic prices were lower than the foreign.

* By washed wool is meant wool that is washed on the sheep's back
before shearing, and by scoured is meant wool that is cleaned by a chemical
process after shearing. The shrinkage in Ohio wool by scouring is from
fifty to fifty-five per cent. ; in Port Phillip and Sydney wool it is usually a
little more, being from fifty to sixty per cent.

1896.] Is THE DUTY ADDED TO THE PRICE? 109

From 1 88 1 to 1889 the duty on unwashed wool was TO cents
a pound; under the law of 1890, it was n cents a pound; on
washed wool it is double, and on scoured it is treble ; so that on
the wool represented in the table, down to 1889, inclusive, the
duty was 20 cents a pound; and in the last two years, 1890 and
1891, the duty was 22 cents a pound. If Mr. North's conten-
tion is correct, then the American wool should be from 20 to 22
cents a pound higher than the English wool ; whereas the fig-
ures show that for the whole period it only ranged 2.04 cents a
pound higher.

In other words, instead of the price of the domestic wool
being increased by the full amount of the duty, it was only
increased about one-tenth the amount of the duty. Before
passing from this point, we may add that the table from which
the American prices were taken gives the price of Ohio fine for
the first day of January, April, July and October for each year,
respectively. We took the January, which is the highest of the
four. If we had taken the average of the whole four, which is
the average for the year, as is represented by the English fig-
ures, the difference would have been less than two-thirds of a
cent a pound, instead of from 20 to 22 cents a pound.

In order to test the matter in another way, we have also
compared the price of medium Ohio fleece, scoured, with the
price of the entire amount of the wool imported for consumption
of first and second class, the result of which is given in the table
below. In this table the facts for the domestic wool are taken
from the Senate Report, Vol. II., page 171. (This table is
credited to Mr. North.) The facts for the foreign wool are
taken from a table given by Mr. North in his Bulletin of the
National Association of Wool Manufacturers, Vol. XIX. , num-
ber 2, 1889, page 134.

This table contains the amount and value of wool imported,
with the invoiced price and the amount of duty collected. The
wool in this table is reported unwashed. We have therefore
reduced it to scoured, by the schedule of shrinkage given and
the rule applied as officially laid down in the Manufacturers'
Wool Book, with the following result ;

I 10

GUNTON'S MAGAZINE.

[ February,

MKOIUM OHIO
SCOURED.

FORK1CN
SCOURED.

IUFFF.RF.N

1881

72.75cei
72.00

67-75
59-00
53-00
57-00
61.00
54-75

its.

62.00 cei

58.00
56.0O
55-03
56.00

47.00
49.00
52.03

It!

10.15 ce
14.00
"-75
3-07
* 3.00
10.00

12.00

2.45

nts

1882

1883

1884 •

1885

1886

1887

1888

Average difference

7. 6 cents

* The star indicates that the domestic price was lower than the foreign.

It will be observed that this table is from 1881 to 1888, and
that the facts for the foreign wool are taken from a table includ-
ing all wool of first and second class, which would tend to give
a much lower foreign price than by taking Port Phillip or any
high grade exclusively, and still the difference between the
foreign and the American price only averages 7.6 cents a
pound, whereas the duty was 30 cents a pound, showing that
the price is not increased by the full amount of the duty, but
only by less than one-fourth the amount of the duty. These
facts confirm our previous investigations upon the subject, and
are in accord with the generally accepted doctrine of protection,
that duties on imports do not increase the price of home prod-
ucts by the full amount of the duty.

Sherman and Cleveland on Finance.

SENATOR SHERMAN is the recognized financial leader of the
Republican party. He has had half a century's experience in
public life, which includes several terms in both Houses of Con-
gress, a position in the Cabinet and four years Secretary of the
Treasury. He is regarded as one of the best informed men in
the country on the facts and workings of our revenue and cur-
rency systems. Therefore his recent speech in the Senate,
criticising the President's message relating to the condition of
our revenues and the character of our currency, may very nat-
urally be looked to as an important document, in the present
condition of the nation's affairs.

1896.] SHERMAN AND CLEVELAND ON FINANCE. in

It will be remembered that Mr. Cleveland took especial pains
to show that our industrial and financial disturbance was not
due to the lack of currency, but is wholly attributable to the
defective character of our currency. From reading the message,
it would be difficult to get any other impression than that the
McKinley Tariff Law failed to furnish sufficient revenue, while
the Wilson Bill was adequate to the revenue demands of the
country. He says: "By command of the people a customs
revenue system designed for the protection and benefit of
favored classes at the expense of the great mass of our country-
men, and which, while inefficient for the purpose of revenue,
curtailed our trade relations and impeded our entrance to the
markets of the world, has been superseded by the traffic policy,
which in principle is based upon a denial of the right of the
government to obstruct the avenues to our people's cheap liv-
ing, or lessen their comfort and contentment for the sake of
according special advantages to favorites, and which, while
encouraging our intercourse and trade with other nations,
recognizes the fact that American self-reliance, thrift and in-
genuity can build up our country's industries and develop its
resources more surely than enervating paternalism."

He then presents at great length the working of the
greenbacks upon the government holdings of gold, claiming
that so long as they are out they constitute an endless chain by
which gold can be drawn from the treasury and the government
compelled to borrow gold, on which it pays interest to redeem
the greenbacks, and still they remain unredeemed. He says:
' ' The government was put in the anomalous situation of being
forced to redeem without redemption and to pay without ac-
quittance. * * * In other words, the government has paid
in gold more that nine-tenths of its United States notes and
still owes them all. It has paid in gold about one-half of its
notes given for silver purchases without extinguishing by such
payments one dollar of these notes."

Senator Sherman presents the case from the opposite point
of view. He endeavored to show that the exact reverse of
Mr. Cleveland's presentation is true, namely: that our indus-
trial and financial disturbance is all attributable to a deficiency
in the revenue, and not to the character of our currency.

ii2 GUNTON'S MAGAZINE. [February,

In presenting the revenue side of the question he says :
' ' The President is supported in these views by Mr. Carlisle,
his able Secretary of the Treasury, in his report to Congress.
It is with diffidence I undertake to controvert their opinions ;
but my convictions are so strong that they are in error that I
hope the strength of the facts I will submit to the Senate will
convince it that the true line of public policy is to supply the
government with ample means to meet current expenditures,
and to pay each year a portion of the public debt. The gold
reserve provided for the redemption of United States notes can
then be easily maintained without cost except the loss of in-
terest on the gold in the Treasury, but with a saving of interest
on United States notes and Treasury notes of five times the
interest lost by the gold held in reserve. A vastly greater
benefit than saving interest is secured to our people by a
national paper currency at par with coin supported by the
credit of the United States and redeemed on demand in coin at
the Treasury in the principal city of the United States.

' ' The only difficulty in the way of an easy maintenance of
our notes at par with coin is the fact that during this Adminis-
tration the revenues of the government have not been sufficient
to meet the expenditures authorized by Congress. If Congress
had provided necessary revenue, or if the President and Mr.
Carlisle had refused to expend appropriations not mandatory in
form, but permissive, so as to confine expenditures within re-
ceipts, they would have had no difficulty with the reserve.
This would have been a stalwart act in harmony with the
President's character, and plainly within his power. All ap-
propriations which are not provided to carry into effect existing
law are permissive, but not mandatory, and his refusal to ex-
pend money in excess of the revenues of the government would
not only be justified by public policy, but would have been
heartily approved by the people of the United States. He
knew as well as anyone that since the close of the Civil War
to the date of his inauguration, the expenditures of the Gov-
ernment had been less than its receipts. I have here a table
which shows the receipts and expenditures each year from 1866
to 1893:

1896.]

SHERMAN AND CLEVELAND ON FINANCE.

Receipts and Expenditures of the Government from July i, 1865, to

June 30, 1893.

Fiscal year.

Total revenue.

Total expendi-
tures, including
premium*

Excess of
revenue over
expenditures.

1866

$558,032,620.06

$520,809,416.00

$37 223 203.07

1867..

490,634,010.27

357,542,675.16

133 OQl 335.1 1

1868

405,638,082.32

377,340,284.86

28 207,708.46

1860. .

370 943,747.21

322,865,277 80

48 078,460.41

1870. .

41 1,255,477.63

309,653,560.75

101,601 916 88

1871 ..

383 323,044.80

292, 177, 188.25

91,146 756 64

1872. .

374, 106,867.56

277,517,062.67

06 588 004 80

1871. .

333 738 204 67

200,345,245.33

43 302 050 34

1874 .

280 478 7*,*, 47

287 133 873. 17

2 344.882.3O

1875. .

288,000 051. 10

274 623 3Q2 84

13.376 658 26

1876

287,482,039. 16

258,450,707.33

29,022,241.83

1877

269,000,586.62

238,660,008.93

30,340,577.69

1878

257,763,878.70

236 964 326.80

2O,7QQ,55 I.QO

1870 .

273,827, 184.46

266,947 882.53

6,879,300.93

1880

333,^26 610.98

267 642 Q57 7§

65,883,653.20

1881

360 782 292.57

260 712 887 5Q

100,069,404.98

!882

403,525,250.28

257,981,439.57

145,543,810.71

1883..

398,287,581.95

265,408,137.54

132,879,444.41

1884

348,519,869.92

244,126,244.33

104,393,625.59

1885

323,690 706 38

260 226,935. 1 I

63,463,771.27

1886

336,439,727.06

242.483 138 5O

93,956,588.56

1887. .

371,403 277 66

267 Q32, I 7Q 07

103,471 ,OQ7.6o

1888

370,266 074.76

267 924 8O1. 13

I 1 1,341,273.93

1889 . .

387,050 058 84

200 288 Q78 25

87,761,080.59

1800. .

403,080,982.63

318,040,710.66

85,040,271.97

1801 ..

392,612,447.31

365,773,905.35

26,838,541.96

1802. .

354,937,784.24

345,023,330.58

9,914,453.66

1801. .

385,819 628.78

383,477,954.49

2,341,674.29

1 804 . .

297 722,019 25

367,525,279.83

*69,8o3,26o.58

1805. .

313 3QO 075 I I

356. IQ5 208.20

*42,8o5,223.i8

* Excess of expenditures over receipts.

' ' From this official statement it appears that each and every
year during that long period there was a surplus, which was
applied to the reduction of the public debt bearing interest.
This debt amounted August 31, 1865, to $2,381,530,294. On
the ist of March, 1893, it was $585,034,260, thus showing a re-
duction of the interest-bearing debt of $1,796,496,034. The
public faith was pledged to this reduction in our loan laws, and
by the act creating a sinking fund, and, though in some years
we did not comply with the terms of the sinking fund, yet in
other years we exceeded its requirements, and prior to this
Administration the aggregate reduction of debt was greater
than the law required. Now, for the first time since 1866, we

114

GUNTON'S MAGAZINE.

[ February,

have deficiencies of revenue. Since the first of March, 1893, to
the ist of December, 1895, the national debt has been increased
$162,602,245. I insert an official table showing in detail the
reduction of the public debt in periods of four years from
August, 1865, to March i, 1893, and its increase from that date
to December i, 1895 :

Decrease of the National Debt from its highest point, August j/, fS6j, to
December /, 1895.

Periods.

Total.

Decrease.

Increase.

August 3 1 1 865 .

$2,844 649,626.56

March 1 869.

2 564 2IQ 134. 14

$280,430 4Q2 4.2

March 1873.

2, 160,270,649.23

403,948,484.91

March 1 877.

2 OQ5 066 6l2. I 1

65,204 OI7 12

March 1881. .

2,021,419,850. 18

73,646,781 .93

March 1885. .

1,541,257,867.93

480,161,982.25

March 1 889

1 . 100.800. 418. 71

341,448,449 2O

March 1893. .

963 28l 752.63

236,527,666. 10

March 1895.

1,068,610 527. 18

$IO5 328,774. "iS

Dec. i 1895..

1 125 88? QQ7.QO

57 273.47O 72

Total

',881,367,873.93

l62,6O2,245.27

Net decrease. .

',718,765,628.66

' ' The President, in his recent annual message, complains
that the law of October 6, 1890, known as the McKinley Act,
was " inefficient for the purposes of revenue." That law,
though it largely reduced taxation by placing many articles on
the free list and granted a bounty for the production of sugar,
yet did not reduce revenues below expenditures, but provided a
surplus of $37,239,762.57, June 30, 1891, and $9,914,453.66,
June 30, 1892 and $2,341,674.29 on the 3oth of June, 1893,
when Mr. Cleveland was President, and a Democratic majority
in both Houses of Congress had been elected, all pledged to
repeal the McKinley Act and to reduce duties. The President
makes no mention in his message of these deficiencies; no
mention of the issue of interest-bearing bonds to meet them.
The Secretary of the Treasury is more frank in his statement.
He reports a deficiency of $69,803,260.58 during the fiscal
year ending June 30, 1894, and for the year ending June 30,
1895, $42,805,223.18, and for the six months prior to December
i, 1895, $17, 613, 539.24; in all $130,221, 023.

1896.] SHERMAN AND CLEVELAND ON FINANCE. 115

"No complaint was made that the McKinley law was 'in-
efficient for the purposes of revenue ' when the Wilson Bill
was pending. The objection to the McKinley law was that it
was a ' protective tariff ' and the Wilson bill was a ' revenue
tariff. ' I have a statement showing the receipts and expendi-
tures under each law, each month — the McKinley law, from
its passage, to the election of Cleveland, and the Wilson law,
from its passage, to December i, 1895. During the twenty-five
months of the McKinley law, the average monthly surplus was
$1,129,821. During the existence of the Wilson law, the aver-
age monthly deficiency of $4,699,603. If the McKinley law
was, in the opinion of the President, inefficient for revenue, he
should have said of the Wilson bill that it was bounteous in
deficiencies. "

It would be difficult to imagine a more conclusive state-
ment of the case than is here presented by Senator Sherman,
so far as the revenue effects of the two tariff laws are con-
cerned, and also of the effect of the new tariff law as the real
initial cause of the business and financial disturbance from
which the country has suffered in the last three years. In the
light of the facts presented by Mr. Sherman, it is difficult to
resist the conviction that partisan politics, rather than frank-
ness, accuracy and national welfare prompted the President's
utterances.

When we pass from the subject of deficiency to that of
reform in the currency, Mr. Sherman seems to be laboring
under much the same difficulty that affected Mr. Cleveland on
the revenue question. His defense of the greenbacks appears
to have the same quality of special pleading that characterized
Mr. Clevelaad's attitude on the deficiency-creating tariff bill.

Mr. Sherman's criticism of Mr. Cleveland's "endless chain
statement" that the government "was forced to redeem with-
out redemption and to pay without acquittance," is well taken.
Of course, it is true, that when the government gives gold for
greenbacks, the demand of the holder of the note is completely
satisfied and the government is acquitted of obligation, and it
never re-issues the greenback, except to obtain an equivalent ;
in other words, to obtain for it what it would obtain for gold.
That is to say, when it pays the note, it cancels the debt and
when it re-issues the note, it creates a new debt, and for Mr.

n6 GUNTON'S MAGAZINE. [February,

Cleveland to say that it "redeems without redemption" and
"pays without acquittance," is simply substituting rhetoric for
fact.

Despite his reverence for the greenbacks, Mr. Sherman is
forced to admit that reform is necessary to prevent them from
perpetrating the havoc on the gold reserve that they have been
working for a year past. He proposes that the gold redemp-
tion fund of a hundred millions should be segregated by law
from all other revenues, and be usable for no other purpose than
redemption of the greenbacks, and that "notes (greenbacks),
once redeemed should only be re-issued for gold coin, and such
re-issues should be mandatory when coin is deposited in the
treasury. "

To forbid the re-issue of greenbacks except in exchange
for gold coin, concedes the whole complaint against the green-
backs. If this proposition were carried out, it would practically
convert the greenbacks into gold certificates. They would
cease to represent the credit of the government and become
representatives or certificates of gold deposits. To the extent
that this were done, it would create a contraction of the cur-
rency, or else involve the issue of bonds, to borrow the gold
to replace them. So far as it goes, this is exactly what Mr.
Cleveland proposed, except that he proposed the borrowing of
enough to retire the whole greenbacks, whereas, Mr. Sherman
only proposes to borrow the necessary amount to redeem what
conies in. For cancellation is what it is, since they could not be
reissued, except as certificates of coin deposits.

How much stronger Mr. Sherman's criticism of Mr. Cleve-
land's partisan argument on the revenue effect of the tariff law
would have been, if he had risen above that method himself in
treating the currency. Had he permitted the spirit of the states-
man and financier to rise above that of the party champion and
frankly recognized the force of Mr. Cleveland's criticism upon
the currency, his speech would have been a masterly presenta-
tion of the subject, and greatly added to Mr. Sherman's reputa-
tion as a national statesman.

If Mr. Sherman had frankly admitted that much of Mr.
Cleveland's charge against the greenbacks was well founded, he
would have been free to propose a comprehensive and efficient
remedy, commensurate with his reputation as a financier. This

1896.] CHARTISM: ITS CHARACTER AND INFLUENCE. 117

would have made unnecessary his tinkering, makeshift amend-
ments to render the greenbacks harmless by practically convert-
ing them into gold certificates. The truth is that on the revenue
effect of the new tariff bill and the industrial effect of the Wilson
bill, Mr. Cleveland is a prejudiced, partisan witness, and his
reasoning is narrow and undignified, and Mr. Sherman's reply
on that point is masterly and conclusive.

On the currency Mr. Cleveland is substantially right. His
demand for the retirement of the greenbacks, and his sugges-
tion to encourage a branch banking system, and a flexible
banknote currency with coin redemption, is in the direction
that banking and currency reform must be sought if we are
ever to have a sound, flexible, cheap banking system. It is
bad politics as well as bad statesmanship to refuse to recognize
a correct idea because it comes from the opposite party.

When the greenbacks were created, they were among the
chief means of saving the nation, and the Republican party is
entitled to all the credit of creating them. They have now out-
lived their usefulness, and like all antiquated instruments have
become a hindrance instead of a help to our fiscal system. The
same wise statesmanship that created them when they were
needed should be ready to retire them now that they are not
needed. If the popular prejudice in favor of the greenbacks is
too strong for a comprehensive reorganization of our banking
system which shall retire them all at once, the attempts at
money reform should at least be in that direction. Then, with
each step in fiscal reform, we shall move towards a monetary
system in which the Government shall be out of the banking
business and responsible only for its own obligations, the paper
currency shall be issued only by the banks subject to constant
coin redemption, and the volume of the currency be free to ex-
pand and contract according to the business necessities of the
nation.

Chartism: Its Character and Influence.

THE Chartist movement, now an almost forgotten chapter
in English history, was, after all, one of great political signifi-
cance, and by no means fruitless. For ten years it absorbed
public attention and menaced the public peace. At times it
seemed likely to result in an uprising of the proldtaire against

n8 GUNTON'S MAGAZINE. [February,

the then existing political and social institutions of the king-
dom. It attests the truth, that popular discontent and disorder
are symptoms which can never be safely disregarded. In fact,
it may now be accepted as a truism, that political agitation is
formidable only to the extent that what it demands is feasible.
Whenever any honest attempt is made to deal with popular
grievances, that moment they are deprived of any real public
danger. The saying found in Sully's memoirs, the history of
human progress confirms — "that revolutions come to pass in
great states, not as the result of chance, nor of popular caprice.
As for the populace, it is never from a passion for attack that it
rebels, but from impatience of suffering."

The Chartist movement was, as a matter of fact, in its
origin and aim economic. Its leaders had before them a plan
of social and industrial amelioration. Then it had behind it
much genuine enthusiasm, as well as intelligence. Its appeal
was naturally addressed largely to the feeling of discontent and
distress at the time of its birth so widely prevalent, and therein
lay its chief strength. Furthermore, it should be clearly recog-
nized by students of this singular movement, that Chartism was
a consequence rather than a cause; it was the expression of deep
resentment and revolt against a most oppressive industrial con-
dition. The toiling masses were poor, they were overworked,
they received less than a living wage and their life was unut-
terably wretched. They therefore joined in the Chartist agita-
tion, believing that thereby would come betterment to their
present promiseless and intolerable condition. Of course, selfish
politicians, as they always have done, availed of the movement
to foist themselves into prominence, yet it cannot be denied
that for the most part those identified with the movement were
sincere in their advocacy of it, and many sacrificed everything,
even life itself, in its behalf. The personnel of some of its
leaders was remarkable, and this lends to its history a pathetic
interest. It is a sad but now admitted fact that the progress of
industrial reform has been slow and painful, and on its banner
are the names of brave and brilliant advocates, and even of
noble martyrs.

Three circumstances may be said to have aided in develop-
ing the movement in question: First, was the general com-
mercial and industrial distress. The Victorian period, it should

1896.] CHARTISM: ITS CHARACTER AND INFLUENCE. 119

be remembered, began amid threatening social conditions.
Popular education had been little regarded, and, so far as the
state was concerned, it was practically ignored. The laws of
political economy were known and appreciated by compara-
tively few, while the general attitude was one of suspicion.
Second, was the introduction of machinery, which brought with
it the modern factory system. This, under the doctrine of
laissez faire, wrought at first disastrously. The greed of capi-
talists, the ghastly sufferings of those employed in the mills, is
one of the shamefullest and saddest chapters in the domestic
annals of England. The first of the Factory Acts had been
passed by Parliament, despite a most bitter opposition, and
they were the first successful efforts to secure legislation for
the benefit of the laboring classes. This was also the first
effective blow dealt that school of political economists who
opposed all State intervention to protect working men and
improve their condition. Third, was the popular antagonism to
the Poor Law of 1834.

One of the immediate antecedents of the Chartist uprising
was the Henry Hunt movement, which began in 1819, and
became memorable through the Peterloo massacre in Man-
chester, August 1 6th. The aim of this was to secure annual
Parliaments, universal suffrage and the repeal of the Corn
Laws. There was a wide and determined agitation kept up until
the death of its leader, in 1835.

Another antecedent of the Chartist movement, and that
which directly led up to its organization, was the Reform Bill
of 1832. While this was largely a class measure, and by its
concessions probably averted an else inevitable revolution, it
did not go far enough. Moreover, it was a cruelly deceptive
measure ; for while it was carried by the agitation of the work-
ingmen, it was found finally not only to have left them in the
lurch, but practically to have improved in no particular their
political condition. It conferred on them no political emanci-
pation, and when this was discovered, the exasperation was gen-
eral and deep. The bill benefited the middle classes, and to
that extent abridged the monopoly which the aristocracy and
landed classes had hitherto enjoyed. The working classes, how-
ever, were left wholly without the franchise. When Lord John
Russell, to the appeal of some Radicals in Parliament for fur-

izo GUNTON'S MAGAZINE. [February,

ther extension of the right of suffrage, made his celebrated
finality declaration, "that Parliamentary reform closed with
the Reform Law of 1832," immediately the Chartist movement
succeeded to the Reform agitation. For the first time in the
history of the working class, laboring men separated from other
social classes and formed their own political party. This was
really the genesis of the social democracy. It was the birth-
time, too, of telling phrases which thrilled the popular hearts
and stood for great realities. One of these was, " The Revolu-
tion," which to John Stuart Mill seemed meaningless, because
he was unable to see what the people found in it, viz. , the over-
throw of Absolutism. So with such watchwords as ' ' The
Rights of the People," "The Rights of Labor, " etc., they served
a good purpose, and now point the progress made in the evolu-
tion of democracy. No better or more taking title could have
been given this new movement than "The People's Charter,"
from which comes the abbreviated name chartism, by which it
is known in history. It was the unconsciously felicitous chris-
tening given by O'Connell, who drew up the programme, and,
handing it to the secretary of the Workingmen's Association,
said, " Here is your charter; agitate for it, and never be content
with anything less." The immediate constituency behind this
at first really formidable movement was strikingly diverse.
First, was the Workingmen's Association of London, whose aim
was educational and moderate. Next, came the Birmingham
Political Union, unstable in its make-up, and in sympathy with
the currency scheme of Mr. Attwood, and eager for some sort
of industrial amelioration. Then there were the three unions of
the North, under the leadership of Fergus O'Connor, the mem-
bership of which was active and even violent in their opposi-
tion to the new factory system, and also to the application of the
Poor Law. These various bodies now were consolidated into a
National Convention, which by concerted action hoped to force
Parliament to heed their proposals. The method pursued, and,
indeed, the only one open to them, was public agitation. This
was pursued on a most extensive scale, and with a vehemence
sometimes passing into violence, which soon compelled the pub-
lic and the Government to regard it. Leaders came to the
front from the ranks of the workingmen of commanding per-
sonnel, and the whole of England was speedily in a blaze of ex-

1896.] CHARTISM: ITS CHARACTER AND INFLUENCE. 121

citement. Monster meetings were convened at influential
centers, while lesser gatherings were made the means of rousing
the masses and combining them in earnest agitation for the ends
in view. Of course, a colossal movement like this would soon
develop diverse tendencies. There was the political wing,
clamoring for the suffrage and immediate representation in Par-
liament that would secure political power, and with this was
allied the Social Chartists, who hated " the bread tax."

Besides these were the Chartists of discontent who came
into the movement because, anything would be better than
their present wretched state. These represented the lowest
strata of the laboring population, to whom the promise of the
benefits inherent, as was claimed in " the charter," seemed like
a new gospel.

" Chartism, my friends," cried a leading orator at Kersall
Moor, the Mons Sacer at Manchester, " is no political affair in
which the question is whether you obtain the right of suffrage ;
chartism is a knif e-and-fork question ; it means good dwelling-
houses, good eating and drinking, competency and a short day's
work." This was the doctrinaire view, but it took hold of the
masses.

Looking carefully for a moment at this so-called " Peoples'
Charter," it has little in it that is formidable; almost nothing
that to us seems even strange. We have lived up to all that
it demanded and more, too. Scan its six points and they
astonish us by their reasonableness; aside from the question,
whether if then realized they would have at once improved the
status of the laboring classes.

Manhood suffrage stood first, next followed annual Parlia-
ments, third was vote by ballot, then came the abolition of the
property qualification, fifth was the payment of members of
Parliament, and last the division of the country into equal
electoral districts. This was Chartism's programme, about the
discussion of which, now, you could hardly arouse enough
diversity of opinion to make it lively, much less precipitate a
great nation into the throes of domestic revolution. But such
great movements, with all the passions they awakened and
bloody encounters they produced, indicate the onward march
of the people, the widening area of liberty, and the improve-
ment in the industrial condition of laborers.

laa GUNTON'S MAGAZINE. [February,

We will not dwell on the agitation maintained at red heat
for nearly a decade, of the unparalleled numbers that came to-
gether to be inflamed by the frantic language of those who
addressed them, nor speak of the conservative friends of the
movement, like Kingsley and others of his ilk, who surrounded
it with a halo of romance. Nor is there room to mention the many
eccentric and brilliant leaders, who, devoted to the movement
their scholarship and their eloquence, and in its behalf sacrificed
comfort and social preferment, and braved death itself. There
was the unique Fergus O'Connor, who edited the Northern Sfar,
the chief organ of the Chartists, and which was read aloud on
the moors and to groups in the cabins of the poor, and in this
way reached an immense multitude. He was a man of com
manding presence, came of a good family, and possessed a kind
of eloquence which captivated the masses. It was O'Connor
who started the land scheme, by means of which he hoped to
make his followers landowners, and so voters. It was a vision-
ary scheme, and though it prospered for a while, like other pro-
jects of his and his associates, failed through popular distrust
and the attacks made upon it by those opposed to the Chartist
movement. O'Connor was a conspicuous opponent of the
Anti-Corn Law League, as were his followers. This grew out
of the belief that the repeal of the Corn Laws meant not only
cheaper bread, but cheap labor. Besides, the Chartists felt that
the middle classes, who favored the Reform Bill and were now
agitating for the repeal in question, had been false to them,
and so they took the opposite in order to punish them.
O'Connor managed to get into Parliament, where he proved an
unreliable leader, and ended his career by becoming insane.

Henry Vincent brought to the movement an unimpeachable
character and marked ability as a popular speaker The attempt
to rescue him from the prison in Newport, Wales, was one of
those episodes which enabled the government to charge the
Chartists with the scheme of organized rebellion.

Ernest Jones deserves mention for his devotion to the
cause. He was a scholar and a gentleman, and paid the penalty
of his service to Chartism by being sentenced to death for high
treason, which was subsequently commuted. Jones continued
identified with reform agitation along the lines of the Charter
until 1870.

1896.] CHARTISM: ITS CHARACTER AND INFLUENCE. 123

In a test election to experiment with the secret ballot in
Manchester, he was the Radical candidate for Parliament, and
was elected, but died in less than an hour after receiving the
news of his success. So passed away the last of the Chartists,
his sudden death being occasioned by a cold contracted by his
labors in the campaign.

Thomas Cooper, the venerable poet of Chartism, has,
through his autobiography, preserved, more than any one else,
its inward history, describing the passionate enthusiasm which
animated its followers, and the bitter sufferings and cruel perse-
cutions encountered by the stout-hearted workingmen who with
such lofty hopefulness espoused the movement.

O'Brien was amongst the most advanced in his view of any
of the Chartist leaders, and though socialistic in aim, did not
confuse that with industrial retrogression, as did some of his
associates. He seemed to be feeling about for a new social or-
ganism, for he saw the trials to which the working classes were
being subjected, and felt that they were too sore for human
endurance.

These are but a few of the apostles of Chartism who went
among the people and began to speak to them of the new Gos-
pel and acquaint them with the promises of the Charter and all
the benefits that would accrue from it. In addition there was a
vast literature of Chartist newspapers, which touched the popu-
lar heart and kindled great expectations.

Only after the movement had spent itself was it possible to
do justice to the high character, the lofty aims and varied gifts
of the better class of Chartist leaders. These deplored the violence
counseled by the ranting mob orators, and they mourned over
the miseries of those led astray by mercenary delegates. But
they did more ; they established schools, institutes, lecture and
reading rooms, and sought in every way to inculcate knowledge,
for they were the heartiest and truest advocates in Britain of
popular education. Of course, there was a two-fold side to
Chartism. With the noble purpose and unselfish heroism of
some was blended the fanaticism and ignorance of others essay-
ing to be leaders of the people, for there were two clearly de-
fined parties — the Chartists of physical force, and the Chartists
of moral force. Revolutionary demagogues and wise-headed
and large-hearted leaders were to be seen side by side, each in

124 GUNTON'S MAGAZINE. [February,

their own diverse way urging on the same movement, while the
severe measures adopted by the government only intensified the
hatred of the latter by the burdened masses, who fondly be-
lieved that the Charter would, when granted, usher in their
millenium. England was divided into practically two nations
by this unprecedented agitation, the rich and the poor, each
hating and at the same time fearing the other.

The final collapse of the movement came April 10, 1848,
when, after a great meeting on Kensington Common, it was
proposed to march to Parliament carrying the monster petition
in behalf of the Charter. Great apprehension was felt by the
Government, and the defense of London was committed to the
Duke of Wellington. The procession was abandoned, and the
dreaded day passed without any outbreak. The great national
petition, bound with iron hoops, and supposed to contain the
signatures of 5,700,000 persons, was carried like a coffin into
the House of Commons, and presented formally by Fergus
O'Connor.

By expert examination, officially made, the signatures, it
was reported, were far less in number than had been represented
and some of these, it was stated, appeared to be forgeries.
This must be taken with considerable allowance, and comes
from an unfriendly source. It should be borne in mind that
very few of the working men could write, and their illiterate
condition was due to the neglect of popular education by the
government. Those who circulated the petition had to sign
for the vast majority who heartily favored the Charter, and
were ardent supporters of the movement. The petition, at all
events, represented the feeling and views of the toiling masses
of Great Britain.

With this seemingly unfortunate exhibit, which the Tory
leaders did their best to belittle, the Chartist movement con-
cluded. The rank and file of those who had supported it, and
from it hoped so much, feeling that they were betrayed or
abandoned by their leaders, could not be rallied for further
organized effort. Chartism ceased from this date to be a dis-
turbing influence. The result produced a profound sensation
on the Continent, as well as throughout the United Kingdom.
It settled the question that the latter was safe from Revolution,
and the object-lesson was one that made a salutary impression

1896.] CHARTISM: ITS CHARACTER AND INFLUENCE. 125

everywhere. It will not, however, be fair to infer that this
unique movement, with all its weird pageantry and final fiasco,
was fruitless.

Chartism was one phase in the transition from the old to
the modern industrial system. It was in itself a popular and
persistent protest against the laissez faire doctrine. It was
a passionate repudiation "of the creed that labor is only a
commodity, and the laborer nothing but its seller, and that the
state must stand aloof from all meddling. The Chartist upris-
ing aimed to secure for labor legislative protection, and was in
the best sense socialistic. The opposition of manufacturers
and of the Manchester School of Economists, which in the main
provoked this movement, was met and vanquished. Among
the results of Chartism was the famous ten-hour bill, passed in
1847, and similar protective measures, relating to different
branches of industry. As an instance of the unreasonable and
unintelligent opposition to the former on the part of one from
whom a different spirit and attitude might have been expected,
was John Bright's vehement denunciation of that bill, "as one
of the worst measures ever passed in the shape of an act of
legislature. " In fact, it was the Chartist agitation which led
to the rescue of the industrial classes from a cruel oppression,
and an almost indescribable degradation. The Ricardian School
of Economists have made an unseemly record, siding as they
did with the manufacturers, and opposing the factory acts to
the utmost of their power. The working classes learned through
the educational influence of this agitation that their safety lay
in such organizations as enabled them to secure political power
and the relief that was imperative through state intervention.
Then, in addition, it may be said that practically three out of
the six points of the Charter are already part of the constitu-
tional system of England, and it is not at all unlikely that a
fourth point — that of dividing the country into equal electoral
districts, will sooner or later be approximately adopted. With
the improvement of the times and adjustment to the new indus-
trial regime, Chartism disappeared. For it had done its work.
It was more than a passing episode ; it is rather an important
chapter in the history of industrial evolution, the lesson and the
results of which cannot safely be forgotten.

The improvement in English labor conditions was hastened,.

126 GUNTON'S MAGAZINE. [February,

if not secured, by the Chartist movement, and in consequence,
the hatred excited against the existing order of society has
largely disappeared.

This, too, is significant, that British working men again
constitute the backbone of the great Liberal party. Then, in
addition, the steady growth of trades unions, not legitimated
till 1871, and of co-operative societies, is to be reckoned as the
outgrowth of the Chartist agitation, while by it the laboring
classes have been taught reliance and thrift, and to study more
generally the economic conditions of industry.

Tariff Reductions and Fiat Money.

BY RAYMOND E. DODGE.

FOR THE Protection of American industries and the estab-
lishment of American Financial Independence of foreign bank-
ing institutions,

" Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That
a Bank of the United States of America shall be estab-
lished, with a capital of one hundred millions of dollars,
divided into one million shares of one hundred dollars each
share. Four hundred thousand shares, amounting to the
sum of forty millions of dollars, part of the capital of the
said bank, shall be subscribed and be paid for by the
United States, in the manner hereinafter specified; and
six hundred thousand shares, amounting to the sum of
sixty millions of dollars, shall be subscribed and paid for
by individuals, companies, or corporations, in the manner
hereinafter specified."

The incorporation of a great central organization under
government control has become a national necessity for the de-
fense of American financial and commercial interests, and to
provide the means for armament when national honor demands
extraordinary preparations to maintain its dignity. Legislative
action in such a direction, too, means a notice to the world that
the United States will have no more fiat money in its currency,
and that the wealth of the nation would be a unit in the sup-
port of national credit.

1896.] TARIFF REDUCTIONS AND FIAT MONEY. 127

That there is a necessity for the reorganization of the
financial system of the Government in the direction indicated,
is apparent to every man who has made a study of the business
conditions of the country for sixty years past, as affected by
legislation.

The financial condition of the Government is nearly as bad
as it was before the Civil War. The political conditions of the
country are as uncertainly indicated by party votes as previous
to the election of 1869. Business is practically at a stand.
Successive tariff reductions have decreased the revenues from
customs duties or indirect taxes to the point that the ordinary
operations of Government have become seriously embarrassed.
To complicate and to increase national burdens, an enormous
issue of Government paper money must be kept at par with
gold under the present policy by the issue of bonds to the
amount of nearly one hundred millions of dollars annually, with
a consequent ; increase of interest charges as well as of the
public debt in a time of peace.

So far as sound money is concerned, national banknotes
have become a rarity in the ordinary operations of trade, silver
money is locked up in Treasury vaults, and gold is either
hoarded or exported. Under the weak and inefficient Sub-
Treasury system, from one-fourth to one-third of the currency
remains idle, without interest, and kept out of circulation in
violation of all financial experience. The worst feature of the
system is that, while the Treasury of the United States is com-
pelled to furnish gold free of charge for the operations of trade
with other countries, the only source from which it can replen-
ish supplies without begging or borrowing is closed, through
the fact that its receipts from customs duties are almost wholly
in its own notes. Thus, Buchanan's administration finds a
parallel in that of a Democratic successor, and nearly from the
same causes.

Tariff and currency conditions have affected every Ameri-
can industry, and prevent a return of the prosperity which
this country, by reason of its situation and natural resources, is
entitled to expect from the policy of its executive and legislative
officials. In view of the facts, it becomes necessary to ascer-
tain the causes, and to indicate why it is believed that a reorgan-
ization of methods would be of value to the interests of the nation.

ia8 GUNTON'S MAGAZINE. [February,

TARIFF REDUCTIONS.

It is an undisputed fact that every panic recorded in Ameri-
can history has come through tariff reductions, complicated by
unsound conditions of currency, including that of 1873. Thus
the compromise tariff of 1833, aided by the destruction of the
Bank of the United States, produced the panic of 1837. The
tariff of 1846 and irredeemable state bank currency produced
the depression of 1853-54. The wildcat currency led to a panic
in 1857, which was precipitated by the tariff of that year. After
the Civil War, tariff reductions and greenback inflation culmi-
nated in the panic of 1873. Precedents were so well established,
that the result of the campaign of 1892, after the inflation of
paper money in 1890, precipitated another cyclone of commercial
destruction.

Since the close of the Civil War the tariff reductions have
exceeded those of every decade save one in the history of the
country. Under the mask of tariff reform the principles of
Democratic free trade have succeeded in deluding the voters
to an extent never accomplished in the days of Calhoun and
Van Buren.

A study of tariff returns from 1821 to 1860 will show that,
with the exception of the measures of 1833 and 1857, no sched-
ules framed admitted over 20 per cent, of merchandise free of
duty. Even the Walker tariff never exceeded 20 per cent.
The Compromise tariff returns show 50 per cent, free, and
that of 1857 30 per cent. During the war the free list ranged
from 4 to 1 1 per cent.

The distress and depression under Democratic tariffs were
due to the low rates upon merchandise which competed with
American productions. Whenever Democrats controlled the
Government, this destructive policy has borne the fruit of
national disaster. Under Walker's schedules the average ad valo-
rem rate never rose above 25 cent., and the duties under the
Act of 1857 ranged below 20 per cent. Whig tariffs ranged from
30 to 50 per cent, ad valorem.

The war tariffs imposed an average rate of from 33 to 48
per cent, ad valorem, and in that period American industries
revived. As soon as the Democratic party regained strength
and importance it resumed the attack upon domestic interests,
and sought to depreciate national currency to the level of fiat

1896.] TARIFF REDUCTIONS AND FIAT MONEY. 129

money, by attacking the national bank system. ' ' Tariff Re-
form " and the " Money of the People " have succeeded as party
cries to " Free Trade" and " Free Banking."

By 1873 nearly thirty per cent, of all imports were received
free of duty to meet the demands of the tariff reformers. Under
the tariff the list was increased to one-third of the total. With
each reduction their demands were renewed, and the message
of the President in 1887 but emphasized the clamor for relief
from the alleged war taxes, even though the free list was as
great as that of 1857. The verdict of 1888 was that the friends
of protective tariff should revise schedules. The tariff of 1890
in its title declared that the act was to reduce revenues, and it
increased the free list to over 55 per cent, of all received. It
gave the leading industries protection, and increased the aver-
age rate only about 4 per cent.

Not placated by the increase in the free list, the reformers
started in to strike down the few remaining remnants of pro-
tected schedules. The result of 1892 gave them the power,
and ad valorem rates came down to 3 1 per cent, under the tariff
of 1894. Thus, at one blow, the principal industries of the
country, those which gave support to the great masses of the
people in the Eastern States, were deprived of 38 per cent, of
the protection afforded by the operations of the tariff of 1890.
The free list was not materially changed, except as to sugar.

TARIFF REFORM'S BLIGHT.

Aver. Aver. Aver. Aver.

Tariff. Ad v. Free Tariff. Ad v. Free

Duty. List. Duty. List.

1824 43 20 1861 48 n

1833 30 50 1870 41 30

1842 35 20 1883 43 33

1846 25 20 1890 50 56

1857 19 30 1894 31 48

The table shows the necessity of thorough tariff revision.

THE CURRENCY QUESTION.

The currency system of the United States in part seems to
be based upon the assumption that the Sub -Treasury must per-
form the function of a great national bank without receiving
any of the profits which accrue to an institution of that class.
It is the function of government to coin money from metal, to

130 GUNTON'S MAGAZINE. [February,

provide for a proper regulation of the currency and banks, but
beyond such action, except in emergencies, no constitutional
provision exists. As a war measure paper money was a neces-
sity, from the fact that no great national bank was ready to sup-
port the government by advances of funds or to provide circu-
lating notes. The suspension of specie payments was a natural
result through unsound money conditions.

The Democratic party is primarily responsible for every
inflation of paper money since 1836, in the destruction of the
Bank of the United States as the national depository and re-
demption agency. If Andrew Jackson had been bribed to
remove the deposits, he could not have more effectively served
the purposes of English banking interests. In 1830 the capital
of the Bank of England was $65,000,000; United States Bank,
$35,000,000; Bank of France, $18,000,000. Thus Jackson
destroyed the competitor most feared by the Bank of England.
His mad act left the country to financial vassalage and depend-
ence upon foreign money lenders. It closed the only domestic
source for the arrangement of national loans, and paralyzed
American investments. For nearly a generation the country
was practically a colonial appendage of England, though retain-
ing an apparently independent form of government.

In the inflation which followed, all of the profits of the
country, much of the wealth, and countless happy homes were
swallowed up in the whirlpool of paper money. All of the
treasure mined in California was lost in the export pf metals.
Revenues were paid in depreciated Treasury notes. The
bonded debt of only $328,000 in 1835 increased to $90,000,000
by 1 86 1. Treasury notes amounting to $181,000,000 were also
issued during the period.

Fiat money, wild-cat currency and tariff reductions broke
down American industries, destroyed the Whig party, and
created chaotic conditions of trade, which later disintegrated
the Democratic party and made it possible to blot out slavery
by a reorganization of political forces. History records that the
Republican party succeeded by the adoption of measures which
were denounced as impracticable by the older parties. Tariff
duties were made payable in gold. National banks were estab-
lished, and, to take the place of coin for the emergency, treas-
ury notes, without interest or promises to pay, were issued for

1896.] TARIFF REDUCTIONS AND FIAT MONEY. 131

the ordinary operations of trade. It was the only expedient
possible in the absence of a great national bank.

That the greenbacks were not retired in 1878 was due to
the influence of such Democratic leaders as John G. Carlisle,
Richard P. Bland and Daniel W. Voorhees. Republicans were
carefully wiping out the ebligations when the fiat money men
forced the reissue of legal tender notes.

With the exception of the Act of 1873, every measure tend-
ing to appreciate the power of gold has been enacted by Demo-
cratic Houses in Congress. Democratic policy has ever been
to increase the use of credit money and to reduce the amount of
redemption specie in circulation. This policy has made gold a
commodity, depreciated silver, and thus forced both metals out
of circulation. It is the use of paper money that has demone-
tized silver. If legal tenders were retired, the nation would be
forced to re-establish a bimetallic standard. The advocates of
silver prevent the appreciation of the white metal by insisting
that paper representatives shall be issued to pay for deposits of
silver bullion. These paper issues the national credit demands
shall be kept at par with gold.

The policy of retaining in circulation the enormous issues
of government promises to pay, held at par with gold by
daily redemptions, has driven out of trade nearly all forms of
sound currency. In 1878, government note issues did not
exceed one-third of the currency. In 1895 they form nearly
all circulation for trading purposes, and about 98 per cent, of
all revenues.

The funds in Treasury vaults are not in circulation. The
Sub-Treasury system holds out of circulation 30 per cent, of the
whole currency, from the fact that it is not a banking institution.
The same money deposited in banks would remove the system
of contraction established by the Democratic party as the basis
of a sound national currency.

For years the Sub -Treasury has drained annually from
the people vast amounts of gold to furnish it free of expense
to shippers. When that source was exhausted, it took gold
from banks. When banks refused longer to furnish gold,
the Treasury turned to foreign bankers and borrowed gold at
interest to maintain the Democratic policy of fiat currency upon
an alleged gold basis.

GUNTON'S MAGAZINE.

{ February',

It is declared that the national currency is the best in the
world, yet the Treasury is unable to maintain redemptions in
gold without enormous annual loans, and the reissue of
redeemed notes to meet other obligations. Greenbacks and
Treasury notes payable on demand on January ist amounted to
$484,452,296. The available reserve was only $60,000,000.

The currency of the country on January i, 1866, was
shown to be :

ISSUES.

TOTAL.

TREASURY.

IN CIRCULATION.

Gold Coin

$568. 106 010

*8l 178 1Q2

$484 728. S47

Silver Dollars

421 280 62Q

l64,o8l.7O2

SO 2OS.Q27

Subsidiary

77,182,006

12,764,321

64,417,685

Gold Certificates

50.000,880

l6l.45O

4Q,Ol6.41Q

Silver Certificates

14S.7O2.SO4

o, 62s 8s6

336,076,648

Treasury Notes

117.771 280

22.044 six

11^,726,760

United States Notes
Currency Certificates
Bank Notes

346,681,016
34,450,000
211. 7l6.Q71

115,825,143
2.845,000

7,o6l 117

230,855,873
31,605,000

2o6,6si,8i6

Totals

$2,I97,OOO,236

$6l7,7Q1. 51 2

$1.570,206,724

Of the gold coin in circulation, the national banks held
on October i only $110,378,360. State bank holdings in 1894
did not show over $9,000,000. National bank holdings in 1894
were $125,020,290, and in 1893 $129,740,438. National bank
holdings of certificates for gold were : 1893, $47,522,510; 1894,
$37,810,940; 1895, $21,525,930. Thus in 1895, 40 per cent, of
gold certificates and only about 22 per cent, of gold coin claimed
to be in circulation were in possession of national banks.

The returns show that only $15,537,100 in national bank
notes were held by national banks. The returns show that the
total amount of gold and gold certificates held by national banks
has decreased 25 per cent, since 1893. This was contraction of
redemption money, not fiat money. The bank notes have been
hoarded.

That legal tenders are interest-bearing obligations can be
seen in the fact that the Treasury in 1894 was forced to borrow
on bonds to keep them at par with gold. The interest
and principal of the debt thus incurred was 26 per cent, of the
whole issue of legal tenders, and this was the interest for one
year. In 1895 the bonds issued, principal and interest, were 27

1896.] TARIFF REDUCTIONS AND FIAT MONEY. 133

per cent, of the legal tenders. The country still owes the whole
obligation and the bonds.as well. For 1896 more bonds must
be issued to pay interest upon legal tenders.

If the percentages of gold receipts for customs duties at
New York be applied to those from all ports of entry they will
show the following conditions :

Total customs duties for 1895 $151,907,588

Gold receipts 3 19,005

Legal Tender Redemptions, gold 1 1 7,354,954

Gold exports 60,985,415

Thus with gold receipts from customs duties of $319,005,
the only source of the Treasury to obtain gold for redemptions of
legal tenders must be from money lenders. The table shows
that gold is exported and hoarded in equal amounts.

The conditions indicate that tariff revision and increased
duties are necessary, and also that a reform of currency is in-
evitable. The conditions show that paper money must be re-
tired and that a great central organization of banking capital
must be formed to protect the industries and financial enter-
prises of the nation, and to avoid repudiation and a depreciated
paper circulation. Silver must be remonetized, not by free
coinage, but upon sound lines of common sense.

The day has passed when compromises can be tolerated.
Divided party responsibility since 1874 has created the present
conditions. Every beneficent feature of protective tariffs has
been imperilled in the useless struggle to maintain an alleged
gold basis by the issues of fiat and other forms of paper money,
and to keep them at par with gold by increasing the public
debt. The scattered and unorganized national banks maintain
their existence upon the credit of government. However will-
ing, they cannot take up the burden of redemption and of reor
ganization of national credit and wealth.

Bimetallism has been the desire of the Republican party,
but its leaders have accurately considered that it must be pre-
ceded by the provision for retirement of all forms of legal
tender paper money. The agitation for free coinage has
directed attention to the dangers of fiat money. This danger
and not the fear of silver has made necessary a reorganization
of the currency and the establishment of a national bank.

Let the national bank assume the redemption of all issues

134 GUNTON'S MAGAZINE. [February,

of paper money until retired by government and then follow by
the substitution of its own notes. Customs duties should be pay-
able in gold and silver equally, or in the notes of a bank which
redeems in gold and silver equally.

Such a bank would be backed by the deposits and the credit
of the nation, and would protect the scattered national banks
by redeeming their circulation. It would provide loans for
national emergencies and thus enable the nation to be indepen-
dent of other nations. Such a plan would enable the country
to establish practical bimetallism without waiting for other
countries to initiate the movement. Under a popular form of
government gold monomentallism can never succeed. Fiat
money must be retired and American financial independence
must be restored as well as protection to American industries.

The American Federation of Labor.

THE fifteenth annual convention of this body met in
Madison Square Garden, New York, December 9 to 17, 1895.
It was in many respects a noteworthy gathering, and its doings
attracted no little attention. To begin with, its claims are large,
and its aims, so far as they can be inferred from the declarations
of the body, are deserving of careful attention. Numerically it is
the " leading radical society on this hemisphere," and at the
same time "the strongest conservative society in New York,"
numbering 100,000 strong in the city and vicinity. Again its
scope is protective and helpful. Through the trades unions
wages are maintained very much above the level they otherwise
would be ; and by their employment bureaus, benefit societies
and out-of-work funds, a wide and effective mutual service is
rendered. The insistance on the principle which underlies
these unions, arises from this belief, ' ' that non-union men are
social cyphers. In the labor market they possess no freedom
of contract; in politics they have no organization to protest
against social wrongs. But for the trades unions there would
be no arbitration boards, labor bureaus or factory inspectors ;
no instruction of the multitude in their rights, and no laws on
the statute book recognizing labor's interests as interpreted by
labor." One can well imagine the sense of growing strength
which pervades the representatives of those organizations when

1896.] THE AMERICAN FEDERATION OF LABOR. 135

assembled to consult as to how to promote their interests and
extend their principles throughout the industrial world. This,
too, may be said for this convention, that its deliberations were
marked by good sense, a conservative and kindly spirit, and by
broad views as to the relations of labor to the well-being of
society. In fact, it cannot be denied that to trade unions is due
the improved conditions of the laboring men; and they have
prospered just in the proportion that they have had wise leader-
ship and held to an equitable and conservative programme.
The history of trades unions is one of great interest, and reveals
the slow but sure emancipation of labor from a thraldom that
was once most oppressive.

These unions have taken away the hopelessness that for
a long period invested the hired laborer's lot. They have un-
doubtedly put the wage-earner in a position to hold out for his
price, and have converted the question of how little can he
afford to work for, to how much the employer can afford to
give. Still trades unionists should remember that their chief
hope of further improvement in the future must rest on the
possibility of increasing the general productivity of labor. It
is not generally recognized by them that the chief betterment
of the working class is to come from the development of their
own personal efficiency. Increase of intelligence may be ex-
pected to augment their productivity. From President Mc-
Bride's annual report, we learn that the year past was noted for
the large number of small and local, rather than large pro-
longed strikes, and for their uniform success in the wage-issue
raised. He makes a deliverance that will command general
approval, when declaring that the resolution passed in 1894
should become their law, viz. : ' ' That contracts made by unions
with their employers should be faithfully lived up to by the
unions, so long as they are not violated by employers; and the
occurrence of any trade dispute with such employers by other
unions than those having contracts, shall not be cause for the
violation of agreements by such unions as have regular strikes. "
This bears on the vexed matter of sympathetic strikes, and
hints at one serious friction between local unions and the cen-
tral organization. It was a significant utterance for this body,
and one which further attests the conservative spirit that
seemed to control it, " that we declare that the American Fed-

136 GUNTON'S MAGAZINE. [February,

eration of Labor has no political programme, "and the emphatic
vote of 1,531 in favor, to 359 opposed, was the answer to the
attempt to commit the convention to the Socialist party.
14 There is no more intolerant man in the world than the State
Socialist," said Mr. Gompers. "If socialism is right let it
grow, but don't continue to decry the trades unions ; think of
its martyrs, its achievements, its results." No more momen-
tous action was taken than this, and all true friends of the labor-
ing class will feel like congratulating the convention for this
wise and timely action. Just now it is not an independent
labor party in the political world that is needed, so much as in-
dependent voting by the laboring men.

The whole force of the federation was also invoked in be-
half of a shorter work day, and the report urging it ; claiming
that less hours of toil gave better health of body and brain;
better wages and increased production ; better homes and lives
and a fairer distribution of wealth, was adopted. The conven-
tion showed its far-sightedness when adopting a resolution ' ' to
encourage a broader education of mechanics by the municipal
establishment of institutes, where the young man who is learn-
ing a trade can in his leisure hours have the privilege of attend-
ing lectures pertaining to his future life work." An intelligent
and moral citizenship is the great desideratum of the hour.
Honest and skillful work is entitled to rank with art. The con-
vention's action to secure better sanitation for bake-shops, more
humane treatment for journeymen bakers, indicates the careful
survey it maintains over the whole field of labor. It was cer-
tainly both courteous and wise to listen to Miss Willard appeal-
ing for the convention's endorsement of temperance instruction
in the schools, for aid in redeeming the slums and opposing the
saloon power, and in maintaining fair play and pay for women
wage earners, and the answer was to the point and withal nota-
ble, when it referred to its full deliverances and unequivocal
attitude in the past in reference to those grave questions.

The Federation of Labor is working steadily towards the
affiliation of all labor organizations of every sort with itself; and
there is the disposition to concede the utmost latitude of opin-
ion and action consistent with progress and unity.

To this end overtures were made to other labor organiza-
tions, and time only can settle whether this Federation will

1896.] THE AMERICAN FEDERATION OF LABOR. 137

finally include everything and be the one all-comprehensive or-
ganization of labor in this country. It has now come to be a
body of immense power, its legislative functions are large, its
principles and methods are openly known, and it has been
hitherto cautious and yet pronounced in its positions and policy.
To the extent that it is tolerant and broad-minded, intent on
lifting up the laboring class, and uses its influence to improve
the environment and opportunities of the latter, will it be re-
spected, and its achievements be hailed with gladness by every
friend of social progress. In the election of Mr. Gompers to
the presidency of the Federation, this hope for its future is as-
sured. The trend of labor sentiment is towards the extension of
municipal power and the socializing of functions now exercised
by private corporations, and, if with this is united adherence to
a gradual evolution along this line, no harm can accrue. It is
a hopeful sign, that a representative body like this could hold an
eight days' session in the City of New York, where it was closely
watched and exposed to the severest criticism, and command,
as it did, the confidence and sympathy of the general public.

In conclusion, it may be said that the federation of labor
organizations has come to stay, but its scope and usefulness is
going to depend on the personnel of workingmen themselves.
The success of every labor union, local or general, will in the
end be determined by the intelligence, integrity, in a word, by
the character of its members. This century of boasted indus-
trial progress is the one in which pessimism has had its birth.
Poverty and injustice are still with us, despite our growth in
wealth and in the recognition of brotherhood. Social re-adjust-
ments come slowly. Laboring men are now on their mettle,
and their cause is one with intelligence and moral betterment.

The American Federation of Labor has a great future be-
fore it, and every friend of human progress wishes it well,
but that future of enlarged influence and helpfulness must be
realized by patience, through the elimination of class hatreds and
the broadest application of economic truths and moral forces.
This convention practically adhered to the great purpose which
makes the Federation both a hope and a power, viz. : ' ' The
betterment of its members and their families, their social and
industrial interests, as well as the advancement of society and
righteousness generally. "

138 [February,

Compulsory Arbitration.

BY JEROME DOW1).

IT is to be hoped that the great labor strikes of the past
few years have brought to the American people some realiza-
tion of the necessity for finding a solution to the strike problem.
Strikes are tending to become more frequent, to involve the
interests of a larger and larger number of people, and to greater
violence and lawlessness. Unless some remedy is found for
these interruptions to business and social order, the time is not
remote when civil war must ensue. Capital and labor are both
developing in the direction of consolidation, and as the oppos-
ing organizations become more powerful, the strike will assume
wider and more serious proportions. Industrial evolution is
rapidly eliminating the small capitalists, and leaving production
to a few immense syndicates. The number of employers is
yearly becoming fewer, and the army of the employed larger.

Considering the gravity of the situation, it is surprising
that the magazines of the country, especially those of a political
nature, should not have given more consideration to the sub-
ject. It is especially surprising that this problem should not
have called out the inventive genius of the political economists.
The fact that the last Congress passed, without division, a bill
providing for compulsory arbitration between inter-State com-
merce carriers and their employes, indicates the imminence of
such legislation.

In the past, it has been too often alleged, and with truth,
that economists have either opposed or ignored many of our
best reforms. Of what value is political economy or any other
science if it cannot be applied so as to aid in solving the pro-
blems of the human race ? And to whom should people more
naturally look for political guidance than to the economists ?
But, as a matter of fact, do people or legislators look to
economists as beacon-lights when groping in fog and darkness ?
As a matter of fact are not political economists for the most
part walking abroad with their heads in the clouds ? While
the country is threatened with civil war, growing ont of an
unsolved political problem, are not our economists devoting
most of their energies to the Austrian theory of value ?

What has political economy to say in reference to compul-

1896.] COMPULSORY ARBITRATION. 139

sory arbitration ? What has it to propose respecting the grow-
ing frequency and violence of strikes ?

In the opinion of the writer, political economy does not sanc-
tion the strike, but it does sanction the principle of interfering
to put an end to a false notion entertained by economists, and
people generally, that a laborer has a right to quit work at any
time and under any circumstances. The idea that he has such
a right is the survival of the individualists' conception of politi-
cal economy, now out of fashion among progressive thinkers.
As long as production is 'carried on by isolated citizens, as in
the agricultural state of society, it is a matter of no consequence
whether a farmer, coal digger, house servant or mill operator
quits work or continues it. Hence, in the primitive society,
the belief very naturally obtained that everybody had a right
to do as he pleased. It was then no concern to the public
whether a man built a wooden house or a stone one. He could
shoot his gun in any direction, or at any time, without molesta-
tion. He could keep unsanitary stables and pig-pens, and
poison the air and water for miles around, and nobody was hurt
but himself. But in a thickly populated community these
liberties become injurious to others, and are no longer per-
mitted. One's conduct becomes of more and more concern to
others as population becomes more and more dense. Under
modern conditions of production the value of each man's labor
depends entirely upon the degree of faithfulness with which
others perform their tasks. The labor of the nail maker yields
nothing unless the farmer has worked the soil and gathered
the harvest. The farmer's surplus wheat, corn and pork are
valueless unless the miners dig up the coal with which to run
the mills and factories. Neither the labor of the manufacturer,
the mill operative nor the farmer is of any value if those who
transport products fail to keep open the arteries of exchange.
Every laborer under modern conditions is under obligation to
every other laborer. Each occupies a position of trust. A tacit
agreement exists among every class of producers that reciprocal
services shall be faithfully performed. Is it not just as im-
portant for coal miners, cotton spinners or railway operatives
to stand faithfully at their post of duty, as it is for a soldier in
time of war to stand to his post ? The wages of a deserting
soldier is death. Shall soldiers of the great industrial army de-

140 GUNTON'S MAGAZINE. [February,

sert their posts whenever it suits their interest to do so, re-
gardless of the consequences to everybody else ? When coal
mines are closed up, or when travel is suspended, thousands of
innocent people are made to suffer. Much wealth is, in effect,
confiscated, as, for instance, the perishing of fruit and live
stock held out of market. Wage earners fail to reach their
places of business, merchants fail to get proper supplies, en-
tailing loss of custom, inability to meet obligations and some-
times bankruptcy.

The practical outcome of this unsolved labor and capital
problem is a periodic wholesale confiscation of property, and
terrorizing of the country, together with more or less destruc-
tion of life.

Many readers will at once say that this problem is simply
one of police regulation. The proper remedy consists in arrest-
ing the offenders, convicting them and sending them to prison.
But there are not police enough to cope with an army of strik-
ers, nor jails enough to hold them. And if it were possible to
cope with them it would be far from wise to do so. It is the
policy of modern political economy to prevent crime, instead of
merely sanctioning the contrivance of policemen to crack people
over the head who commit it. Enlightened policy dictates that
such legislation be enacted as shall prevent strikes from occur-
ring.

But any attempt by the government to eradicate this evil
would involve the question of interference with private con-
tracts. The tompulsory Arbitration Bill was opposed in the
House because it was deemed ' ' a restriction of the right so dear
to every American, the right to make personal contracts. " By
the way, a multitude of sins have, in the past, been cloaked by
a few rhetorical flourishes on the "liberty of contract." It
seems difficult for some people to distinguish between liberty
and license. They do not realize the truth that unlimited lib-
erty is anarchy, and that rational liberty only insures to the
citizen such freedom as he may exercise without injury to others.
No civilized society has ever permitted unrestricted liberty of con-
tract. It is necessary for the law to interfere with contracts made
with minors, married women, imbeciles, drunkards, lunatics,
hackmen, railroads, street car companies, etc. When the first leg-
slation was proposed to prohibit children under nine years from

1896.] COMPULSORY ARBITRATION. 141

working in mills and factories, the manufacturers showed them-
selves to be great champions of "personal liberty," as if liberty
meant the right to coin gold out of the blood and bones of
infants.

But the practical effect of compulsory arbitration would be
to give the State authority to fix prices. If the State is to de-
.cide whether the employes of a railroad are just or unjust in
their demands, it must decide first what wages are proper.

There is reason to believe that the State may determine
the value of services rendered to a railroad by employes with
as much satisfaction as it fixes the rates of transportation (which
is the same as fixing the compensation of the men who own and
operate the roads). The government of cities already under-
takes to determine the value of services rendered by hackmen,
draymen, by those who light the streets and supply the people
with water, etc. In civil suits it is often the case that a jury
ascertains the value of services rendered by a carpenter, farm
hand, house servant, bookkeeper or doctor. For the State to
judge between capital and labor as to what wages are just,
would not be very difficult nor would it be altogether a shock-
ing innovation.

The writer is not sure but that the State has a pretty clear
right to interfere with the contract between a capitalist and his
employe from another point of view.

Under the old system of competition among small traders
and capitalists, any laborer who was dissatisfied with the terms
of his employer enjoyed the privilege of seeking work from
some other employer in the same line of business. But now he
cannot do that if the industry in which he is skilled is organized
into a huge monopoly. Liberty of contract does not exist under
monopoly. The only liberty that a monopoly leaves a man is
the kind that a highwayman leaves when he demands your
money or your life. The liberty of the laborer about which
some economists gloat is only a fiction. Pressed by want, the
poor laborer is often impelled to imitate Esau, who sold his
birthright for pottage.

However, the question may be asked, If the State pre-
scribes the pay for services rendered to a monopoly, may it not
also fix the prices of the coal it consumes and also its office fur-
niture, such, for instance, as a broom or water bucket. There

142 GUNTON'S MAGAZINE. [February,

is this difference: the broom maker or coal dealer is not depen-
dent on the monopoly for his life, and neither of them is an em-
ploye of the company, and neither works with the company's
capital.

Again the objection may be urged that if the government
interferes in disputes between railroads and employes, why not
interfere in all industries? The answer is that expediency is as
safe a guide in this case as it is in limiting the extent of inter-
ference with marriage contracts and contracts with minors,
drunkards, etc. If the State knows when to stop in the matter
of fixing transportation charges, it may by the same instinct
judge when to stop in the matter of supervising wage contracts.
The railroad affects so many people that it becomes a public
institution, and subject to public control. Government inter-
meddling is never thought of in connection with perpendicular
transportation in elevators, or circular transportation in "jolly
go-rounds" and "Ferris wheels."

But how shall the government enforce a decree against a
labor organization? In the Arbitration Bill which passed the
last Congress, there is a provision that the laborer shall not quit
work until 90 days after the award, and not then without 30
days' notice. The bill does not provide an adequate penalty for
violation of these terms. Perhaps this defect would be reme-
died by a clause rendering the offender ineligible to re-employ-
ment in any railroad subject to government control.

When the award is against the capitalist it may be easily
enforced as an ordinary decree of court. But in case the award
is against the employes the capitalists would not have an
equally strong ally in exacting obedience to the decision.

This seems an injustice, but it is not so much so as it at
first appears. The laborer and capitalist, it must be remem-
bered, do not bargain on equal terms. The possession of prop-
erty gives the latter an immense advantage. The mere act of
quitting work without notice is a civil rather than criminal
offense. And the law never permits a civil process to issue
against a man to the extent of taking away all of his property,
and certainly it would be still more merciless to demand that he
give another his services. That would be slavery. However,
one's moral objection to remain at work, according to the de-
cision, is none the less binding because of poverty.

1896.] COMPULSORY ARBITRATION. 143

In conclusion, it is not the purpose of this article to discuss
the details of the Arbitration Bill. Political economy is only
concerned with the fundamental principles, and in answer to
the question, Does political economy sanction government in-
terference to prevent strikes by enforcing arbitration ? the
writer records his vote in-the affimative. Yea, the first princi-
ple of government, that of protecting the lives and property of
the people, sternly commands the legislator to interfere and put
an end to these violent outbursts and great embarrassments to
commerce which blemish, more than anything else, the civiliza-
tion of the nineteenth century.

In advocating compulsory arbitration, Mr. Dowd finds him-
self under the logical necessity of endorsing the doctrine of
State regulation of prices, transportation rates and wages. This
is the danger of reasoning from precedent rather than from
principle. The fact that the government has done something
that it ought not to have done is made the reason for its contin-
uing in that line.

Having interfered to the extent of regulating railroad rates,
it should go forward and regulate railroad wages ; and with the
same logic, of course, proceed later to regulate wholesale and,
perhaps, retail prices, house rent and other values. Precedent
can only establish a wise rule of action when it rests upon sound
principle ; bad precedent leads to more and more mistakes, nor
is compulsory arbitration the same in principle as a court of law.

Civil and criminal courts pass upon disputes for which there
is a specific rule of adjustment. Custom and statute law have
decided the conditions and the right of property, and persons
and courts are called upon to give judgment after the fact. In
cases of industrial arbitration, as where it is a dispute over future
wages, there is no such established rule of action. There is no
precedent. If it is for an increase of wages, the case is a new
one. Its justice or injustice lies entirely in the new condition ;
the social demands of the laborer, the pressure upon his oppor-
tunities to maintain his social status, are matters which the State
is least of all competent to pass upon. The parties to the new
conditions, those demanding and those from whom the demand
is made, are the only parties competent to act with any approx-
imate justice in the case. To call in a court composed of those

144 GUNTON'S MAGAZINE. [February,

who knew little of the merits of the case to give a decision
which must be binding would be the surest way to have an un-
economic and inequitable decision. Such decisions could not
settle the question, but would lead to new controversy, and if
such decision could be enforced by arbitrary power and so pre-
vent the educating force of agitation, it would stop progress.
By the logic of his reasoning, and in spite of himself, Mr. Dowd
lands clearly within the socialistic campus. — [EDITOR.]

Principles of Party Organization.

BY FRANK L. MC VEY.

THE public mind, composed as it is of the minds of indi-
viduals, is incapable of entertaining more than one great prob-
lem at a time. It is not the highly endowed who are the meas-
ure of the public's power of apprehension, for these only serve
to overcome the lesser powers of the submerged tenth and con-
tribute to a general averages ; so that the average mind is the
true measure of the public mind. The principle of one thing
is fundamental. The individual may be well trained in mind
and power of concentration ; nevertheless, he is not able to take
up more than one question at a time. The greatest statesmen
with keen intellects, the most skillful engineers with accurate
minds, and the celebrated philosophers versed in abstract
theories, have never been able to solve more than one question
at a time. The statesmen in attacking a problem, the engi-
neers in constructing Brooklyn Bridges, the philosophers in
their reasonings, have all been compelled to limit their investi-
gations to single objects. Much less, then, can the public deal
with more subjects than one. The public, consisting of indi-
viduals who exercise their right to think, is often divided in its
views and opinions. When, therefore, a question of great in-
terest comes up which the public must decide, a division takes
place in the ranks of that public. This is not a division of
many parts, but of two — those for and those against the ques-
tion. Every problem whose decision is of vital importance to a
government admits of but one of two answers — either it is or it
is not expedient. This division of opposition and support is
the natural basis of parties. Thus, every nation is divided
into two great parties. It is true that many party organ-

1896.] PRINCIPLES OF PARTY ORGANIZATION. 145

izations exist in every nation which would on its face go to
show the reverse of the proposition ; but when a decision of yes
or no is demanded, then those parties — no matter how many or
what their creeds or beliefs may be — will be found on one side
or the other of the specific matter, either supporting the gov-
ernment or opposing it. Sometimes a party increasing in num-
bers appears in the political arena with the hope of avoiding the
question at issue. But it cannot long hold such a position. It
will be forced to take one side or the other, or lose what it has
already gained. Thus against its will the party is merged into
one of the great divisions, although it may retain its name and
organization. Such incidents have occurred more than once in
the history of the United States. In the Presidential campaign
of 1856 four parties entered the contest — the Democrats, Re-
publicans, Whigs and Know Nothings. The question at issue
was that of slavery, which the Know Nothings wished to
ignore and the Whigs to compromise. The Whigs and Know
Nothing organizations were broken to pieces in the election
which followed, while their members were assimilated by one or
the other of the two great parties. The political affairs of Ger-
many were greatly disturbed in 1893. In the political cam-
paign of that year twenty parties put candidates in the field ;
twelve of these elected members to the parliament. The Con-
servatives, Imperialists, National- Liberals, Radicals, Ultra-
montanes and the Socialists were the strongest.* Despite this
motley array of political opponents, all the parties took sides
upon the Army bill — the real question before the public.
The Conservatives, National Liberals and Imperialists were ar-
rayed in support of the bill. For the time being party lines
were blotted out and one leader guided the opposition and one
the ministerials. In France the government was compelled to
meet the advances of Socialism. At the time (1893) six parties
strove for ascendancy — the Radical Republicans, Socialist Re-
publicans, Monarchicals, Radicals, Conservatives and the Pro-
tectionists.! These parties were not arrayed one against the
other, but they formed alliances. The Radical and Socialist
Republicans opposed the government in its attempts to check
the Socialistic tendency in the State, while the Conservatives,

* Annual Register, 1893, pp. 349.
f Ibid, pp. 310-334-

146 GUNTON'S MAGAZINE. [February,

Radicals and Protectionists supported it. In England the
Home Rule Bill demanded the attention of the public. At the
time no less than six parties had representatives in parliament
— the Liberals, Nationalists, Conservatives, Unionists, Tory
Democrats and Labor Unionists. The Conservatives tried to
raise an issue concerning the Agricultural Holdings act, which
was injurious to the tenant-farmers. The Conservatives op-
posed the bill. The Ministerials were equally anxious to dis-
play their interest in artisans and unskilled workmen,* and thus
postpone the Home Rule bill as long as possible. But the bill
did come up, and on that great issue there was an immediate
development of the different organizations into opposition and
ministerial parties. These historical facts bear out the state-
ment that there can only be two great parties in any nation.
Not only is the statement true of the nations mentioned, but of
all nations where political life exists.

But what is a party, and what is a great party ? "A party,"
as defined by Burke, " is a body of men united in promoting by
their joint endeavors the national interests upon some particular
principle in which they are all agreed."! Accepting Burke's
definition as true and as good a one as can be found, the ques-
tion of a great party still confronts us. Any organization which
nominates candidates for President and Vice- President is a
national party, but not always a great party. A party to be
great must have the confidence of a large portion of the people,
must present the issues which are most important for the wel-
fare of the State, and it must be a party of principle. In fact,
principle is determinative of party character. By it parties are
divided into two classes — the party with principle vaguely appre-
hended and the party with principle clearly understood. The first
may be characterized as the party of feeling, the second as the
party of principle. The Federal party may be said to have be-
longed to the first. The object of the leaders was to make a
nation — this was not understood by the followers of the party. In
fact, the principles of the party were never formed into a creed. J
The party lived on a kind of instinct rather than upon any defined

* Ibid, pp. 1-27.

f " Thoughts on the Cause of the Present Discontent." Burke's Works,
Bonn's ed., Vol. I., p. 375.

\ Lalor's Encyclopaedia, Vol. II., p. 171:

1896.] PRINCIPLES OF PARTY ORGANIZATION. 147

principles. It was, in reality, a party of feeling, the principles
being vaguely comprehended by its followers. This was one
of the causes of the party's downfall. History has shown that
parties of principle are more effective, more durable, and more
consistent than those of feeling; while parties of feeling, though
often doing good work, are transient, changeable and rest on
expediency. New parties are apt to be parties of this kind.
They are a kind of a necessity, volunteers, as it were, ready to
fill the vacancy caused by the demise of a great party. Parties
are not immortal. There is a time when they come to an end
of their usefulness and a substitute is needed. The economic
and political changes in the United States are so many that a
party of one idea or principle is apt, in the course of a few years,
to become narrow, unless it takes up the more important of the
ever-increasing questions. With such varying interests, it is
wonderful that more local parties have not sprung into exist-
ence. Generally, the cries of sectionalism and class legislation
have kept them down. The discontented have been content to
put their grievances in the form of demands and cast their vote
with the party that recognized their grievances. Where griev-
ances take precedence over principles, then the party is one of
feeling ; or where the organization is held together by a common
feeling of discontent it cannot be a party of principle.

The utterances of parties from the platform, and in the
newspapers, are evidences of the class to which they belong.
These utterances are based upon the resolutions passed by the
delegates of the party in convention assembled, and must be
examined as determinative of the character of a party. We
know these resolutions as platforms. A platform* is the out-

* Vide Notes and Queries, S. 7, Vol. I., pp. 7.

" Patrick's Parable of the Pilgrim, pp. 206, ed. 1687.

" New York-Herald, May 6, 1848.

" Lynchburg Virginian, August, 1858.

The word platform has a history of its own. It was formerly used to
refer to some religious creed, although as early as 1547 the word was
used in references to principles other than religious, but not political. It was
a religious word, and was so considered even to the middle of this century.
Webster's Dictionary of 1854 does not give the political side of the defini-
tion. The word was probably not used in the United States in its present
sense earlier than 1837. The New York Herald uses it in the issue of
May 6, 1848, in its present political sense. The Lynchburg Virginian of
August, 1858, prints the word showing that its use was quite general by
that time.

148 GUNTON'S MAGAZINE. [February,

lined programme of intended party action, and hence is the
phenomenon by which we determine whether a party is one of
feeling or one of principle. As a manifestation of the principle
of the party the platform must show that principle in its rela-
tions to the economic constitutional and political questions which
the party is compelled to meet. These three phases of govern-
mental activity are fundamental, and no party can make a true
and full declaration of its purposes without reference to them
all. If an effort is made to avoid any one of these, the down-
fall of the party is only a question of time. Constitutional
questions are to a great extent settled, but economic and
political ones are continually arising which seem to grow more
difficult as the years go by. But it is necessary to have a con-
stitutional basis for the economic and political views to rest
upon; and if this constitutional basis is not formulated the
party's views on other subjects cannot be stable ones.

If the principles which have been developed are true, then
the short existence of the various parties, which have sprung
into existence during the history of the United States, can be
easily explained. As long as the tariff remains the great
question in this country, the party divisions will remain about
as they are. The position of each party is closely defined, and
it is not likely that a new party can easily usurp the position of
either one.

Lately we have had a new party of considerable importance
in this country, i. e. , the People's Party. It, however, has reached
the period of decline. The party has failed to formulate lasting
principles upon the three great fundamentals of government.
This fact explains its position. Until some party does formu-
late principles upon questions of greater importance than those
in existence to-day we shall retain our present party divisions,
despite the attempt of parties like the Populist to occupy a
place as one of the great parties.

1896.] 149

Economics in the Magazines.

BANKING. The State Bank of Indiana. By Wm. F.
Harding in The Journal of Political Economy (Chicago) for
December, 1895. An excellent account of the best experiment
in American banking, under the authority of State legislation,
ever made. The writer shows that the State Bank of Indiana
was called into existence in 1834, on account of the special need
for banking facilities created in that State by the forcible
crushing out of the Second Bank of the United States, by
Jackson, Taney & Polk; that it copied as closely as was practi-
cable the chief features of the Bank of the United States, except
that its branches were allied banks, having each its capital and
business, instead of being, as under the Bank of the United
States, merely distributed offices of the main bank. It also
relegated the State Bank per se into a State Board of control
over the branch banks, and not a bank of itself distinct from its
branches. This system worked well for Indiana, owing to the
agricultural and isolated character of the various towns it served.

' ' The result was a system that furnished a sound currency
until the Civil War. Even during the period of the "free"
banks, the State Bank, and afterward the Bank of the State,
was there, a standing judgment upon the notes of shaky banks.
Indiana's one material failure, so far as banks are concerned,
was in the case of these ' ' free " banks. They were based upon
the bond security system of the New York law ; but because of
defects in details, and insufficient regard to the condition of the
States whose bonds were accepted, the entire system was a failure.
But this period lasted only from 1852 to the passage of the
national bank law, and very few of the shaky banks were left
after the panic of 1857. Thus, Indiana had a sound institution
to carry it over from the worst period of the State banks to the
organization of the present national system."

CANALS. The Nicaragua Canal and the Monroe Doctrine.
By L. M. Keasbey. Advantages of the Nicaragua Route. By
J. W. Miller. The Nicaragua Canal and the Economic Devel-
opment of the United States. By Emory R. Johnson. All in
Annals of American Academy for January. Of these three
valuable pleas for the Nicaragua Canal, the first argues that the
better way to have the canal built is to build it ourselves, rely-

150 GUNTON'S MAGAZINE. [February,

ing on the superior control which simple ownership would give
us, for future preference in its management ; the second affords
a pleasing picture of the topographical and engineering advan-
tages of the Nicaragua route; and the third argues that the
work, if accomplished, would draw closer together the Eastern
and Western States of our Union, as well as the states and
powers of Central and South America, and would even increase
the traffic of the great transcontinental railways of the United
States. If a vessel drawing ten feet of water can now sail from
New York by Nicaragua River and Lake to within eleven miles
of the Pacific, and will there be only no feet above that ocean,
and if one of its sailors from a mast forty-two feet high could
look directly1 over and see the topmast of a similar vessel in
the Pacific port, as Mr. Miller alleges, it is difficult to see why it
should cost the $70,000,000 estimated by Mr. Miller, and still
more the vastly larger sum estimated by the Congressional com-
mittee which lately reported, to build it.

The sum required to build it seems to be about what it
requires to keep a gold balance in the Federal Treasury for six
months.

The Suez Canal shares are now at a premium of 550 per
cent, over their issuing price, which shows them to be among
the best stocks in the world. The Nicaragua Canal may safely
be expected to pay as well. England lacked the enterprise to
project or push to completion the Suez Canal. It depended for
its construction on bankrupt Egypt and little-to-gain France.
But when once completed, England was quick to grab not only
its stock, but entire control of the satrapy by whose urgency
and concessions it had been built. Mr. Keasbey shows in a
most ingenuous and instructive narrative of our negotiations
with England throughout the Clayton-Bulwer fizzle relative to
the Nicaragua Canal, that the only terms on which we can
secure her joint action are those of paying the whole cost our-
selves and taking all her snubbing as to the management. It
is better to go it alone. Then if England cares to thwart, or
desires to control it, we can at least have the consolation of
knowing that we did not pay a cent to prevent her trying it on,
and hence that we haven't tempted her into one of those
breaches of faith whereby nine-tenths of all her conquests have
been won.

1896.] ECONOMICS IN THE MAGAZINES. 151

GOLD. The Agio on Gold and International Trade. By
Prof. W. Lexis in The Economic Journal (British Economic
Association). Prof. Lexis writes in a skeptical spirit as to the
magnitude of the effect of the depreciation of silver relatively
to gold to favor the export trade of silver-using countries, and
to act as a protective duty against the import of goods from the
gold-using countries. IJe was reluctant to believe that such a
doctrine could be true in any degree, and only entered upon its
critical investigation because he found the manufacturers and
merchants of the countries affected to be largely of this belief.
A like belief prevailed extensively among the same classes in
this country while it was on the greenback basis, with a
premium on gold. Henry C. Carey and Gen. B. F. Butler both
regarded the fall in the premium on gold, which in a strict cur-
rency sense meant only an advance in the value of the coun-
try's promises to par with gold, as a withdrawal of a part of the
tariff protection.

He quotes Prof. N. Pierson, late Minister of Finance in
Holland; Professor Marshall and Professor Levasseur of Paris
as expert economists who declare it impossible that this dis-
parity between the two metals shall have any such effect.

He then reviews the case of India minutely, and reluctantly
concludes, ' ' the falling value of the rupee therefore favors the
competition of India in Europe. " He also reviews the case of
China, and comes to the same conclusion; "For China, as in-
deed for all silver standard countries, it is in my opinion true
that the fall in the value of silver has, in the way shown, made
export easier and import more difficult. " Finally, he comes to
the same verdict as to Russia; but he thinks the degree in which
this factor has controlled prices is much less than the degree in
which they have depended upon production, and that they have
been greatly overestimated by the bi-metallists.

If Professor Lexis' doctrine is true, then the thrusting of
the country upon a silver basis would operate as a lively stimu-
lus to our exports and check to our imports, which, by revers-
ing the heavy adverse balance of trade now existing, would send
gold into our country instead of drawing it away. This view
was proclaimed for a time by the London Statist about a year
ago, but later it returned to its advocacy of the ' ' gold basis " as
the only thing that could bring salvation to any body, ' ' unto
the Jew first and afterward to the Gentile."

152 GUNTON'S MAGAZINE. [February,

MISSIONS. Foreign Missions in the Light of Fact. By Rev.
Judson Smith, D. D., Foreign Secretary A. B. C. F. M. in North
American Review for January. The Philosophy of the Mexican
Revolutions^ by M. Romero, Mexican Minister to the United
States in the same. Dr. Judson perceives in Christian
missions in heathen countries an intellectual, social and moral
force, the benignity of which is open to no question, the only
theme for consideration being whether the harvest repays the
expenditure of effort.

Minister Romero, on the contrary, writing of Mexico, at-
tributes the chief adverse influences which have retarded the
peace, order and prosperity of the country, and kept it plunged
in bloody revolutions, to the church. Dr. Judson, in recounting
the triumphs of missions, includes the progress of Catholic as
well as of Protestant propaganda, and would therefore number
the ascendancy of " The Church " in Mexico amongthe triumphs
of missions. Minister Romero, on the other hand, in recount-
ing what is regarded as " progress " in Mexico, says: "The
church party is completely broken down as a political organiza-
tion, and cannot cause again any serious disturbance, and the
elements of civil war are now lacking. " The means by which
this result was accomplished he describes as follows: " The
church property was declared national property, and was sold
by the government to the occupants at a nominal price, payable
partially in national bonds, then selling at a very low price ;
about five per cent, of their face value. The clergy were then
deprived of all political rights. Their convents, both of monks
and nuns, were suppressed. The number of churches existing
in the country was considerably reduced. Complete independ-
ence, " (meaning severance) ' ' between the church and the state
was proclaimed." Religious processions outside the church,
and even the ringing of bells were forbidden. Feast days were
diminished to two or three. No priest was allowed to wear his
robes outside the church, and the state took exclusive charge of
the registration of births, deaths and marriages.

Mr. Romero's article is not intended as a reply to Doctor
Smith ; but it suggests that there is a neglected aspect to the
missions question. Christian missions have invariably been the
stool-pigeons, wooden ducks and stalking-horses, behind which
have come the armed expeditions and conquering forces of shop-

1896.] ECONOMICS IN THE MAGAZINES: 153

keeping and manufacturing conquest. Lobengula has hardly
time to find out what new trick the missionary is trying to
teach him, when along comes the white colonel with his Gatling
guns, and he discovers that what the grand army of white
conquerors is after is not "souls " nor " peace, "but cattle, land
and gold. It does not yet appear whether the founder of
Christianity would be wilfing to be responsible for the average
effects of missions, when regarded as the forerunner of com-
mercial conquests or of mercenary political hierarchies.

PREMIUM ON GOLD. Agricultural Progress in the Argentine
Republic. By Wm. E. Bear in The Economic Journal (British
Economic Association) for December. The Argentine has ad-
vanced since 1870, when it planted only 24,000 acres in wheat to
a planting of 7,141,000 acres in 1894-5. In 1880, after a poor
harvest, Argentine actually imported 813,000 quarters of wheat,
and only in 1884 had her exports risen to 500,000 quarters.
From this she rose rapidly to a crop of 9,835,000 quarters in
1893-4, of which 7,648,000 quarters were exported.

A nearly equal rate of increase has occurred in the produc-
tion of maize, lucerne hay, linseed, sugar, grapes and tobacco.
Sheep had increased from about 14,000,000 in 1860 to an esti-
mate of from 80,000,000 to 100,000,000 in 1887, and owing to low
prices for wool and changes in stock from wool sheep to mut-
ton, sheep have not advanced in numbers since, but have ad-
vanced greatly in quality. Of cattle much the same may be
said. The population has grown from 1,350,000 to 4,700,000,
of whom 1,248,469 represent the excess of immigrants over
emigrants. Sixty per cent, of the immigrants were Italians,
1 8 per cent. Spaniards, 10 1-2 per cent. French, and only 21-2
percent. Britons. In 1885 the paper currency became incon-
vertible, gold having been at par in 1884. In 1887 the premi-
um on gold, over the inconvertible paper, rose to 35, in 1890 to
161, in 1891 to 277, in 1892 it stood at 225, in 1893 at 224, and
in 1894 at 257. During these years (from 1887 to 1894) of high
gold premium, notwithstanding a decline of the English or gold
price from 32^. 6d. per quarter in 1887, to 225. loal. per quar-
ter in 1894, the Argentine money price seemed to rise about
threefold. Mr. Bear says: "The only explanation of the
rapid expansion referred to, after a period of comparatively

154 GUNTON'S MAGAZINE. [February,

small increase in wheat production, is one which no prejudice
against bi-metallism should discredit. It is the rise in the pre-
mium on gold which counteracted the fall in the gold price of
wheat. This is the explanation given by the Argentine Finance
Minister, as well as by Mr. Gastrell and other British represen-
tatives in the Republic."

It will be observed that the period in which Mr. Bear pict-
ures Argentine agriculture as making such gigantic strides up-
ward, while the value of its paper money was going downward,
is nearly identical with the collapse of the great banking house
of the Barings, owing to its too extended investments in Ar-
gentine securities. Mr. Bear's article is profoundly instructive
as it stands, but it creates a yearning after a clearer insight into
the philosophy of the process whereby [a depreciated currency
brings at once prosperity to the farmers of an agricultural coun-
try, and yet ruin to the bankers who invest in its railways and
public securities. The conjunction of the two opposing condi-
tions to the two classes at one time seems to call for some com-
prehensive explanation.

TAXATION. Income Taxation in France. By H. Parker
Willis, in The Journal of Political Economy (Chicago), for De-
cember. Mr. Willis is in deep sympathy with the income tax,
and writes apologetically to explain why France has never
adopted it, nor taken kindly to it. Reading through the lines
of Mr. Willis's partiality to this form of taxation, it is clear
that it has generally been opposed by French statesmen as
being an implement of socialism and a cover for social revolu-
tion. At times, the theory of taxation as held by Mr. Willis
seems to be obscure, as where, page 39, he seems to argue that
a land tax, a house tax, a tax on licenses and a personal
property tax, are all different forms of income tax. Of course,
all taxes must be paid out of the income of the person on whom
the incidence of the tax finally rests, but such taxes are in no
necessary way rated in proportion to income as their basis, and
therefore are not income tax. Again, on page 5 2, the writer speaks
of these four forms of taxation as ' ' the present specialized taxes
upon incomes, " and yet declares that France needs the income
tax as ' ' the only one which will keep pace with the growth of
public wealth and permit the retirement of worn out and galling

I&96. ] ECONOMICS IN THE MAGAZINES. 155

impositions. " If a country has four forms of income tax, but
needs to abolish them all in order to enjoy the benefits which it
would derive from the income tax principle, it looks as if these
four forms of taxation must be something else than a tax on
incomes. Mr. Willis concedes that France detests the income
tax because of its inquisitorial quality, just as the people of the
United States do.

VALUE. Hedonistic Interpretation of Subjective Value. By
Henry W. Stuart in The. Journal of Political Economy (Chi-
cago) for December. "Subjective value" is very much like
" subjective " courage (i. e. , what a man thinks he would dare do
with no enemy before him) ; or ' 'subjective wisdom" (what a man
thinks he knows, as compared with what others credit him with
knowing); or " subjective " wealth; or the "subjective" reve-
lations by the Archangel Michael, from which Mohamet got the
Koran. " Subjective value," therefore, has nothing to do with
the cost of producing things, or with the earning power of in-
vestments, or with social exchanges, or money, or price, or
markets, or daily quotations, or stock exchanges, or what it will
pay to buy, or sell, or plant, or reap, or sow, or do, or leave un-
done. " Subjective value " is the value of poor Miss Flite's
judgment in chancery, which arose from the fact that she had
lost her judgment for every other purpose except to ' ' wait for
a judgment. " It is the attempt to apply a thermometer to
ecstacy, so as to measure bliss in terms of money, and gauge
prices according to the number and fineness of the vibrations of
delight with which a commodity will thrill the soul of its pos-
sessor. Any pretence that there are no such blankety blank
school men of the order of Duns Scotus extant will be dispelled
by perusing this article. Such a discussion is as useful as were
the dissertations of the middle-age scholastics on the qualities of
the bodies of angels, or their capacity to endure in fire without
combustion.

156 [February,

Book Reviews.

THE SOCIAL CONTRACT. By Jean Jacques Rousseau. G. P.

Putnam's Sons, New York and London. Pp. 227.

It is somewhat remarkable that a republication of this
famous treatise should now appear. We might well ask, is there
a popular demand for it, are men to any extent reading it, and
if so, for what purpose ?

Of course, for us the interest in it is purely historical. It
had, confessedly, a profound influence in shaping the most
violent revolution of modern times. It still has its place in
the history of ideas, and is itself the most striking state-
ment of a theory now abandoned by the ablest and safest
thinkers in the realm of social economics. We have outgrown
it, and more than that, as a thesis it has been thrown out of
count. Still it is none the less true that it deeply affected the
history of nations, and what is more significant, it is at present
the arsenal wherein the foes of our present social order get their
weapons for attack. This volume gives this political chef d'oeuvre
of the famous Frenchman in a very compact and attractive
form, and it is not uninteresting reading, even for one totally
dissenting from his views. ' ' The speculative importance of
the Social Contract," it has been truthfully said, " results from
its historical importance."

The doctrine of the sovereignty of the people is now ac-
cepted, and this was largely due to Rousseau's advocacy of it.
But the claim that our earlier statesmen were influenced by this
treatise to any marked extent, we doubt. Both Hobbes and
Locke had affected Rousseau, and the former gave utterance
substantially to the same theory and more largely shaped Eng-
lish politics. "Le Contrat Social" is its author's protest against
the monarchical system, which he saw about him, and which he
believed brought the greatest misery to the greatest number.
It is to the political student a curious production, logically full
of flaws, while practically the theory is an insufficient defense
against anarchy. It is eloquent, and its seeming plausibleness
and cogency gave it favor with the multitude and for a time
carried them with it.

The men of the revolution idolized him, while his style
captivated such as Saint Pierre and Chateaubriand. Byron was

1896.] BOOK REVIEWS. 157

his panegyrist, and at the present, persons as different as Rus-
kin and the late Renan are said to be, in a qualified sense, his
followers.

In religion, Rousseau may be termed a " sentimental deist;"
he took refuge in the nebulous kind of religion in his day so
fashionable and convenient. His unorthodoxy had one merit —
it never led him to scoff, while his political heresies, after a
time, lost their power to harm, for they were illogical and
unpractical.

The Social Contract theory, as accounting for the origin of
society, is without historical foundation, and equally untenable
is the doctrine that government, historically considered, derives
its existence and its powers from the consent of the governed.
We did not make the state or the body politic ; we were born
into it, the roots of it are in human nature.

Rousseau is now no longer accepted as a teacher in the
realm of political science. The book, however, was a favorite
with the revolutionary leaders in France, and was the delight
of Desmoulins, Danton and Robespierre. At the same time,
the Social Contract produced less of a sensation in Europe than
the author's essay, which appeared a few years before or his
" Noville Heliose. " It is a fad with some extremists now to read
this treatise, and in the language of anarchistic agitators
Rousseau's teachings are plainly disclosed.

INDUSTRIAL EVOLUTION OF THE UNITED STATES. By Carroll
D. Wright, LL.D., United States Commissioner of Labor.
New York, Flood & Vincent, 1895, 362 pages, $1.00.
This book is one for which the public generally as well as
those who are more especially interested in economic questions
may be profoundly thankful. It will please the scholar, because
it gives him facts. It should please the public, because it treats
a subject of great importance and interest in a popular and
readable style. It appears under most favorable auspices. No
author could probably be found better equipped to write upon
the subject. Mr. Wright's long career as a statistician gives him
well-deserved prestige. Massachusetts was the first State to
establish a labor bureau, and he was the first commissioner ap-
pointed since 1869, either as commissioner for Massachusetts
or the Uuited States. He has been gathering and compiling

158 GUNTON'S MAGAZINE. [February,

statistics upon a large variety of subjects, and has earned a
reputation for thoroughness, accuracy and impartiality.

The Chautauqua Literary and Scientific Circle has insured
an extensive reading of the book by placing it in its course of
required reading for 1895. This will give a wide dissemination
to the facts of our economic history which will make it more
difficult to impose upon the public with some of the glaring
absurdities of those economic theories which have little regard
for facts.

The author's point of view is well stated in the opening
sentence of the preface: " The plan of this work comprehends
a plain, simple statement of the leading facts attending the
planting and development of the mechanical industries of our
country. No attempt has been made to discuss some of the
influences which have affected their developments, such as the
varied effects of tariff legislation, financial experiments, foreign
policies or economic conditions and principles." The only
point where the author even seems to deviate from the plan is
in Part IV. : " The Influence of Machinery on ' Labor.' " But
even this deviation is apparent and not real. The more com-
plicated matters, treated in Part IV., make even the plain state-
ment of facts seem almost like the advocacy of a theory.

The author has divided his work into four parts. In Part I.
are given the main facts regarding the first ventures in ship-
building, textile manufacture, printing and publishing, building
and manufacturing building materials, and the iron industry.
One chapter is devoted to the condition of labor and wages in
the colonies.

In Part II. the author first shows how the factory system
developed and how it affected industries. In the chapter on
" The Civil War — An Industrial Revolution," the author pre-
sents facts to prove that slave labor was uneconomic and more
expensive than free labor. The chapters on " The Develop-
ment of Industries, 1860-1890," show such a marvelous in-
crease in the number of industries, the amount of capital em-
ployed and the amount of products, that they seem more like
a romantic tale than ' ' a plain, simple statement of the leading
facts." The last three chapters of Part II. are entitled, " Num-
ber of Employe's and Total Wages, " ' ' Women and Children in
Industry." and " Labor and Rates of Wages, 1780-1790."

1896.] BOOK REVIEWS. 159

These chapters are of great value, as they show that the condi-
tion of employe's has steadily improved throughout the
century.

Part III. is devoted to " The Labor Movement." Among
the subjects treated are " Labor Organizations," " Labor Legis-
lation," " Labor Controversies, " "Historic Strikes," "The
Chicago Strike, 1894," and "Boycotts." These chapters are
of special interest and importance, as their subjects indicate.
The judicial impartiality of the author is here very manifest.

Part IV. is devoted to "The Influence of Machinery on
Labor." It is shown how machinery first displaces labor and
afterwards expands the industry in which it is used, and creates
new industries. Labor agitators who claim that machinery is
the enemy of the laboring man, will find the facts presented in
these chapters hard to explain. In the last chapter on ' ' The
Ethical Influence of Machinery on Labor," the author shows
that the use of machinery tends to elevate the laborer socially,
intellectually and morally, and would seem to refute the view
often presented in the pulpit that this "commercial age" is
tending toward ' ' worldliness. ' '

The book is amply supplied with maps, diagrams and illus-
trations. It is a book that should be read by every one who is
interested in his country, or the progress of civilization in the
world, especially by those who are in a position to mold public
opinion.

THE MAKING OF THE NATION. By Francis A. Walker, Ph.D.,

LL. D. Charles Scribner's Sons, New York. 1895.

pp. 314.

This is the third in the American History Series, and one
of the most important. It covers the period reaching from
1783 to 1817, and carries the reader through that critical period
in our national development, when the peril of disintegration
was so extreme. The weakness, of the Confederation is well
brought out as well as the financial and political embarrass-
ments which resulted. The story of the Genesis and the adop-
tion of the Constitution, drawn up by the Convention of 1787,
loses none of its romance as retold in this little volume.

It is a chapter in American history that one reads now
with keenest interest, for it is the narrative of our beginning as

160 GUNTON'S MAGAZINE. [February,

a real nation. Mr. Walker's view of the evolution of the
latter is given clearly and with fairness, and his admirable
presentment of the statistical data bearing on the national
growth, is one of the valuable features of the book. He attrib-
utes to the changed attitude of the Republican party the
growth of the Principle of Nationality. That party had set out
by striving to limit the exercise of power on the part of the
United States; it had denounced a national debt as a sure
means of political corruption; it had complained of the multi-
plication of offices as bribing and overawing the people ; it had
opposed excises, stamp duties and direct taxes, as forms of
tyranny; it had declared the National Bank to be grossly un-
constitutional ; from all these positions it receded, and when it
obtained control of the Government it proceeded to do what
once it had denounced. This change of policy was a mighty
contribution to the course of nationality.

The part played by the great men who were the formers of
the Constitution, and the real makers of the nation, is well out-
lined. Rightly, our author affirms that it was through the
" compromises of the Constitution " that the nation came
to be.

He claims that the instrument of 1787 was of revolutionary
origin, and not a lineal descendent of the Articles of Confedera-
tion or the Acts of the Revolutionary Congress. The new
government was the resultant of evolution under the impulse
or constraint of forces, some of which had not appeared in 1787.
The ordinance of that year our author holds to be one of the
monumental charters of American constitutional history.

This book makes a good manual for students of American
history, and its appearance is most timely. Indeed, the series
itself is a sign of that renaissance of patriotism which needs
wise instruction and careful leadership to contribute to those
national virtues which are our safeguard.

The appendix of the book is not the least valuable part,
and the volume is well worthy to become a text-book for his-
torical classes and clubs, and will give in abbreviated form
what the general student would have to search for in many
volumes of ordinary histories, covering this crucial period.

GUNTON'S MAGAZINE.

MARCH, 1896.

The Silver Senators and Protection.

UNDER the leadership of Mr. Wharton Barker, of Phila-
delphia, sixteen United States Senators have signed a document
which they call a declaration of principles. This declaration
calls for ' ' the free and unlimited coinage of siver at a ratio of
1 6 to i by the independent action of the United States."

Mr. Wharton Barker has addressed a letter to the manufac-
turers of the United States, demanding that this declaration of
the sixteen Senators (written by himself) be adopted by the
Republican party, with the threat of free trade as the penalty
of refusal. This stand-and-deliver policy is very much like that
of the advocates of the Lubin Export Bounty Scheme in their
demands that the Republican party shall endorse export boun-
ties. They say, give us export bounties or we will vote against
your tariff protection. The basis of their claim is that export
bounties is a form of applying protection to agriculture. The
prohibitionists have long taken the same position; and they
helped to elect the present Administration to punish the Re-
publicans for not adopting prohibition. The socialists may be
expected to do the same thing.

The silver people Mr. Barker represents claim to stand for
bimetallism and protection. They insist that the Protection
party has always claimed to be for bimetallism and this ultima-
tum to the manufacturers and protectionists throughout the
country is presented on the basis of bimetallism.

The sixteen United States Senators who signed Mr.
Barker's declaration and those who sympathize with it, are
bound in honesty either to show that ' ' the free and unlimited
coinage of silver at a ratio of 1 6 to i by the independent action
of the United States, " would tend to promote and perpetuate
bimetallism or to abandon bimetallism altogether and frankly
declare in favor of a single silver standard.

162 GUNTON'S MAGAZINE. [March,

If bimetallism means anything, it means the constant use
of the two metals. Honest bimetallism demands the use of
gold in monetary circulation just as much as it demands the use
of silver, and vice versa. Mr. Wharton Baker and the sixteen
United States Senators ought to know, that under free and un-
limited coinage two metals cannot be kept in circulation as
monetary equivalents when commodity value at the coinage
ratio of one is double that of the other. The immense profit in
the coinage of the cheaper metal, when its value is only slightly
over half of that of the dearer, would so stimulate the coinage
of that metal as to soon make its supply adequate to the entire
coin demand of the country.

The value of coins, like the value of any other commodity
supplied for public use, without legal restriction, tends to equal
the cost of producing the dearest portion of the needed supply
continuously furnished. There is nearly as much difference in
the cost of producing silver in the different mines as there is
between copper, nickel, and silver. But the value of all the sil-
ver tends to a uniformity equivalent to the cost of producing it
in the dearest mines that are continuously needed.

So, in circulation, the value of different kinds of coin as
full legal tender money equals the value of the dearest coins
constituting a permanent part of that circulation. If, there-
fore, we have unlimited coinage of gold, silver and other
metals at a fixed ratio, they will all circulate as the equivalents
of the gold, so long as the gold remains in circulation. But if,
through the profit of supplying any one of the other metals,
the quantity of coin so increases as to make gold unnecessary,
it will retire from circulation in exactly the same way that the
products of hand-looms retired when an adequate supply of
cotton cloth could be furnished by factory methods. With the
retirement of gold as the dearer coin, the value or purchasing
power of all the remaining coins will fall to the commodity
value of the dearest remaining one, which would then be silver.
And if free coinage were given to coppers or nickels, silver
would soon be retired by the same process.

Those who hold the doctrine that the legal tender quality,
or government fiat, is the sole factor in determining the value
of money, constantly point to the fact that the present silver
dollar, which contains only about 5 1 cents worth of silver, is

1896.] THE SILVER SENATORS AND PROTECTION. 163

unhesitatingly accepted throughout the community as an equiv-
alent of the gold dollar. This is true ; and it is due entirely to
the fact that silver circulates in conjunction with a dearer coin,
gold. So long as the gold remains, the silver coin will have
the same money value, but if the gold were retired the value of
the silver dollar would at once drop to its own bullion value.
The only reason that it does not drive out the gold now is, that
there is not unlimited coinage, hence it cannot be increased in
sufficient quantity to render gold unnecessary to the monetary
circulation.

This is demonstrated in the experience of countries where
gold does not circulate, as, for instance, in Mexico. The Mexi-
can dollar will not circulate in this country, nor in Mexico, at
more than about half what the American dollar will circulate
at, although it contains fully as much silver as our dollar. The
obvious reason is that the American silver dollar is a part of a
monetary circulation in which gold constitutes the dearest coin,
and, consequently, its own bullion value does not determine its
monetary value. Whereas, in South America, the silver dollar
is a part of a monetary circulation in which it is itself the
dearest coin. The Mexican dollar, being the most expensive
coin in the monetary circulation of which it is a part, its mone-
tary value rests upon and is only equal to its own bullion value,
while the value of the American silver dollar is determined by
the value of a coin whose bullion value is nearly double its
own. In other words, in Mexico the silver dollar is the dearest
coin; in America gold is the dearest. Therefore, in Mexico
the value of a silver dollar is equal to the value of the silver bull-
ion. In the United States the value of the silver dollar is equal
to the value of gold bullion. Withdraw the gold from the Ameri-
can circulation, and the American silver dollar would rest on
the same basis as the Mexican silver dollar, and its value
would be exactly the same if it contained exactly the same
amount of silver.

Of course, the free coinage of silver would increase the
demand for silver, because it would say to every silver pro-
ducer, here is 129 cents an ounce for all the silver you can
bring, which would be about 92 per cent, advance over the
present market price. And for all who can furnish silver at
the present price, without loss, it would be a profit of 92 per

164 GUNTON'S MAGAZINE. [March,

cent. It needs no philosopher to see that such a profit would
not only induce an increased output of the present mines, but
it would furnish a handsome profit for the working of inferior
mines. Indeed, mines not more than half as productive as the
poorest mines that are now being worked without loss, could
be worked at a profit equal to what is obtained in most indus-
tries, with the value of silver definitely fixed at a minimum of
$1.29 an ounce, every increase in the coinage of silver would,
of course, be so much towards supplanting the use of gold, and
to that extent it would tend to throw out of use the most ex-
pensive gold mines, just as the fall in the price of silver closed
up the less productive silver mines. This would tend to lower
the value of gold, as the dearest mines in use would then be less
costly. So, there would of course be a movement in both
directions, that is to say, the bullion value of silver would tend
to rise by virtue of the use of poorer mines, and the value of
gold would tend to fall by virtue of throwing the poorer gold
mines out of use. And under the free coinage of both metals,
this would undoubtedly continue until the value of the two
metals at a given ratio would be the equivalents of each other.
But the question is whether such equivalence would be reached
before the gold was driven out of monetary use in the United
States. On that point there is little room for discussion. With
the present disparity in the value of the two metals, it is safe
to say that under free coinage, silver would more than furnish
our entire coin demand before the cost of producing silver in
the dearest mines would abolish half the difference now existing
between the value of the two metals at sixteen to one. In
other words, gold would be entirely driven from our circulation
long before the bullion value of silver had reached $1.29 an
ounce. Indeed, gold would probably go to a premium immedi-
ately in anticipation of this result.

Under these circumstances, Mr. Wharton Barker and his
sixteen United States Senators know, because they are not
fools, that the free coinage of silver in this country alone,
would not mean bimetallism at all, but silver monometallism. All
intelligent European bimetallists recognize this fact, and do not
pretend that bimetallism demands the free coinage of silver with
the present disparity in the value of the two metals.

To demand the free and unlimited coinage of silver at a ratio

1896.] THE SILVER SENATORS AND PROTECTION. 165

of 1 6 to i, by the independent action of the United States, is not
to demand bimetallism but silver monometallism.

Honest bimetallism has a real standing in court. The Re-
publican party and protectionists generally have always claimed
to be bimetallists, and if the sixteen United States Senators and
their followers honestly stand for bimetallism, they are justified
in making this demand upon the protectionist party. But the
demand should be for a bimetallism that guarantees the perma-
nent use of both metals, not a scheme falsely named bimetal-
lism, which leads straight and immediately to the use of one
metal only. If the fight is to be between silver monometallism
and gold monometallism, the gold will surely win. If it is to
be an honest fight for bimetallism against monometallism of
either metal, its success is assured. But to use the name of bi-
metallism to obtain the unconditional coinage of silver at 1 6 -to
i by the United States alone, is a fraud, and puts the whole
movement beyond the pale of serious consideration by honest
statesmen or careful publicists.

Honest bimetallism is a feasible proposition which the Re-
publican party and protectionists generally may be expected
seriously to entertain. But any political party which will per-
mit itself to be imposed upon by economic sophistry or political
threats into adopting silver monometallism under the pretense
of protecting bimetallism, is not entitled to the public confi-
dence of any class, much less to be entrusted with the affairs of
a great nation. Let the silver party define its issues. If it wants
protection to silver as an industry, let it say so, and then the
question can be discussed on the merits of that proposition. If
it wants bimetallism as a fiscal policy, let it say so, and the
issue can then be discussed upon that proposition. If it wants
silver monometallism, let it squarely say so, and the merits of
that claim can be discussed. If the sixteen silver Senators and
their followers are dishonest, they are not worth recognizing by
any party. If they are honest and really want bimetallism,
they will be willing to accept the policy that will give bimetal-
lism. Bimetallism can be accomplished in one of two ways.
( i ) By the limited use of the cheaper metal at a definite ratio,
say, 1 6 to i; the restriction being sufficient to prevent silver
from entirely displacing gold in the monetary circulation. (2)
By the unlimited use of silver at its bullion value — that is to

1 66 GUNTON'S MAGAZINE. [March,

say, the unlimited coinage of silver at a flexible ratio, so that
the silver dollar shall always contain a dollar's worth of silver
regardless of the number of grains. Either of these two plans
would afford bimetallism without a depreciation in the mone-
tary value of either metal. The fixed ratio involves limited
coinage, and unlimited coinage involves flexible ratio. If the
silver people insist upon 16 to i, they must expect limited coin-
age. If they insist upon free coinage, they mnst expect flex-
ible ratio. If they reject both and insist upon unlimited coin-
age with the fixed ratio at 16 to i, the country will be war-
ranted in concluding that their aim is not to establish bi-
metallism, but to afford market for silver at a fabulous profit,
regardless of its deranging effects upon prices, wages and in-
dustrial solvency.

Politics of Greater New York.

THE question of the consolidation of Brooklyn and her
suburbs with New York is drifting into a condition which taxes
the utmost alertness of those who have it in charge to success-
fully steer it. The policy of the commission headed by Andrew
H. Green has been Fabian and tentative. Doubtless the work
has grown under this cautious management more rapidly than
would have been possible had the commission pursued the
bolder course of affixing a particular plan of union, or, in other
words, a charter for the grea'ter city, to their proposal. They
were wise in having the people vote upon the simple question of
union of the two cities. They have thereby secured, in the
entire district of the Greater City, a vote of 176,170 for, to
131,706 against, the naked proposition to consolidate. The
tactics of thus passing upon one question at a time is indisputa-
ble for the purpose of securing, or, as the skeptical would say,
precipitating action of some kind in the direction of union. This
advantage is necessarily purchased at the cost of some vague-
ness as to the terms of the union, with the probability that
henceforth there will be a growing demand that the terms of the
union be made known before further action.

This demand for an understanding now as to the terms of
the future union, appears in part in a letter from Corporation
Counsel Scott urging that Staten Island be left wholly out of
the greater city, owing to its distance and sparse populatio n

1896.] POLITICS OF GREATER NEW YORK. 167

and that something be made known as to whether New York
City is to have her tax rate raised by more than 100 per cent.
This would be involved in the establishment of any uniform tax
rate. It would virtually saddle more than half of the heavy
debt and high tax rate heretofore incurred by Brooklyn, upon
New York taxpayers.

Brooklyn, he says, has reached her utmost margin of bor-
rowing capacity under the Constitution, while New York falls
short of it by sixty millions of dollars. Is New York to assume
two-thirds of Brooklyn's excess of debt, or is Brooklyn to re-
main under her own load ? The real estate in New York is as-
sessed at an average rate of 60 per cent, of its market value.
Our observation would lead us to say that New York realty is
assessed more nearly at from 33 to 40 per cent, of its market
value. Brooklyn real estate, on the contrary, is assessed at
nearly its full market value, and on this its tax rate is one per
cent, higher than New York's rate on its lower valuation. New
York has about twelve millions of dollars of revenue from
docks, markets and other sources outside of direct taxation,
while Brooklyn has next to none. All these inequalities must
be adjusted and their actual working known, before any voter,
either in the Legislature or at the polls, can know what he is
really voting for, in voting for consolidation.

Mayor Strong, with whom Corporation Counsel Scott may
be supposed to concur, also declares that "the questions in-
volved in the consolidation are of so grave and intricate a
character that there should be no haste in the matter. The
work of drafting a comprehensive charter for the new city," he
says, ' ' should be intrusted to a commission of competent citizens
who can have ample time to perfect their work. " His notion of
the method of consolidation, which has been decided on by the
Republican majority in Albany, is that, on the plea that the
final act of union by the separate municipal corporations will
be greatly facilitated, it is proposed to appeint Commissions
solely to grab a lot of patronage. The Mayor said that if any
bills providing for the appointment of such commissions are
introduced in the Legislature, and they shall provide that the
State Commissions shall supersede any New York City Com-
mission, he will probably go to Albany to personally protest
against such legislative action.

i68 GUNTON'S MAGAZINE. [March,

The city government of New York seems, therefore, to
desire a continuation of the work of the Andrew H. Green
Commission. At present the support of this policy leaves its
supporters open to a division hereafter between a government
by a single charter and a government by many detached statutes,
each organizing some particular board. Those who desire the
appointment of a new commission, to frame a charter, can tem-
porarily pull with those who are working for the consolidation
of the two cities, piecemeal, by independent acts of the Legis-
lature, one for the police, another for the fire, and a third for
the health, a fourth for the councils or legislative department,
a fifth for the public works, law, streets, etc.

Meanwhile, the consolidation scheme is made part of a gen-
eral scheme for reconstructing all the city governments within
the State by dividing the cities into three classes according to
population, so that the first class shall include only cities having
upwards of 250,000 population, meaning New York, Brooklyn
and Buffalo; the second will include cities having 50,000 or
over, but less than 250,000. Into this class would fall Albany,
Rochester, Syracuse and Troy. The cities of the third class are
as follows :

POPU-

ClTY. LATION.

Amsterdam 18,542

Auburn 24,737

Binghamton 34, 514

Cohoes. 25,021

Corning 10,025

Dunkirk 10,040

Elmira 29,911

Gloversville 14,694

Hornellsville 11,898

Hudson 9,633

Ithaca 13,460

Jamestown 18,427

POPU-

ClTY. LATION.

Lockport 16,088

Long Island City 35,745

Middletown 11,612

Newburg 24,536

Ogdensburg n,956

Oswego 21,969

Poughkeepsie 23, 196

Rome 13,638

Schenectady 22,858

Utica 46,608

Watertown 16,982

Yonkers 3I,4I9

Kingston 21,495

A State Municipal Board of Commissioners, to be appoint-
ed by the Governor, is proposed for the exercise of ' ' critical
and advisory powers over all the local municipal governments
of the cities of the first and second class."

It is made the duty of this board to criticise and report
upon all proposed laws affecting cities before their passage by
the Legislature; to require such explicit reports upon the
different branches of city government as they shall prescribe,
and to preserve, tabulate and publish the same for the public

1896.] POLITICS OF GREATER NEW YORK. 169

use ; strictly to investigate the conduct of the government of
the cities, their departments and officers, and to certify all
municipal bond issues as to their form, regularity and legality.
It is proposed that the charters of cities of the third class shall
be uniform, that the Mayor have exclusive power to remove
and appoint the heads of all executive departments (members of
boards of administration); that he have direct supervisory
power over the police ; that he have a veto on all legislative acts
of the Common Council, and that he be not a member of the
Common Council, nor preside therein.

The chief intent of this portion of the proposed law seems
to be to belittle and emasculate the Common Council, and to
make of each Mayor a petty autocrat responsible to no one,
a policy it may be remarked exactly opposite to that of all
English city governments, and which seems to imply that in
America a city council must, of necessity, be a nuisance.

Meanwhile, although Chairman Lexow of the Legislative
Committee on Cities formally reports the Andrew H. Green
Commission Bill, he does not look to the charter to be reported
by that commission as being the chart to which he or the Re-
publican majority in the Legislature will adhere in their own
future course. On the contrary, he has a series of legislative
measures in keeping or in prospect, which, if adopted, would
render that commission obsolete.

From both these policies the eleven Brooklyn Republican
Assemblymen have declared their dissent, and insist that if the
Green Commission bill is made a party measure they will not
be bound by the party caucus, and they desire that an agree-
ment for a uniform tax rate in both cities shall precede the cre-
ation of any joint boards of government.

Senators Wray and Brush — both of Brooklyn — have bills
for resubmitting the question of consolidation to a popular vote ;
Senator Brush desires the resubmission to be made before pre-
paring a charter. He holds that the vote heretofore taken is a
mistake, and that the people were misled. Senator Wray's bill,
on the contrary, provides for the prior appointment of a com-
mission to prepare a charter, after which there shall be a re-
submission of the question of union on such charter. It in-
structs the proposed commission in advance to ' ' draft a
charter for the Greater New York which shall contain the

1 70 GUNTON'S MAGAZINE. [March,

feature of an equal tax rate." It also provides for a commis-
sion, to consist of the Mayors of New York and Brooklyn, three
men to be appointed by the Mayor of New York, three to be
appointed by the Mayor of Brooklyn, and three to be appointed
by the Governor from the territory to be consolidated outside of
the two cities.

Thus, wherever Brooklyn comes upon the scene it is with
a proposal to "even down" her tax rate at the cost of New
York. Her representatives seem to suspect that a charter,
prepared by the Green Commission and sustained by Strong,
Scott and Lexow, might not effect this purpose.

The scheme of consolidating the departments of the two
city governments, one at a time, involves the present appoint-
ment of the Commissioners of each department by the Governor.
It is assumed that the ruling spirit in making the appointments
would be Mr. Platt, who is also in charge of the Governor's
interests as an avowed candidate before the next National Con-
vention. There is an opportunity to attack a programme of
this kind as tending to deprive the two cities of " home rule,"
which would give Tammany Hall, in New York, and the
Democratic machine in Brooklyn a strong hand at the next city
elections.

The strong blending of party manoeuvring and personal
interest which is thus interwoven with the question of consoli-
dation is by no means favorable to the development of an ideal
or model charter for the greater city. Tammany Hall will
have its charter whose quality is not yet known. Possibly it
may adopt Green's work as its own. The bills to be formulated
by the legislative committees on cities seem likely to carry out
the programme of still further eviscerating the City Councils
and Caesarizing the Mayor in all cities.

Since Mr. Lexow reported favorably the bill for continuing
the Andrew H. Green Commission, he has further complicated
the situation by proposing to create the Cities Committee of the
two Houses of the Legislature into a commission for inquiring
into plans of consolidation, with instructions to report not later
than March ist. This seems to indicate a Republican move-
ment for more expeditious action than the Green Commission
would furnish. The Green Commission endeavors to hold the
consolidation plan suspended and to keep its terms and methods

1896.] POLITICS OF GREATER NEW YORK. 171

vague as long as possible. Even the bill which it now proposes
legislates nobody out of office or into office. It therefore con-
solidates absolutely nothing, and leaves matters in a shape where
the Legislature can at any time remit the control of New York
and Brooklyn into the hands of the Governor and his astute ad-
visers or keep it suspended, like Mahomet's coffin, for a further
indefinite period.

It would be desirable that before a new charter shall be
framed for the largest population which has ever been brought
under one city government, there should be some discussion of
certain fundamental principles which have been supposed at
times to underlie good city government.

There are some who would like to know, in advance of
actual consolidation, whether the new city when created is to
rule itself or is to continue to be ruled from Albany ; whether
it is to share its water supply and the revenue from its markets
with Brooklyn, or whether Brooklyn is to run its own water
supply and public works; whether the Greater City is to have
any greater power of expropriation of lands and of requiring a
higher standard of house building in the central portion of its
area, or whether the most central portions are to be left to the
slower tendencies of laissez faire and private enterprise;
whether there is any virtue in the system so prevalent in Eng-
land of creating the heads of departments by selection out of
the members of the City Council, somewhat as committees of
Congress are chosen. Can Manchester, Birmingham, Glasgow,
Bradford, all have their city legislatures, while Greater New
York must choose between being governed in some matters by
an elective Czar and in all others by appointed satraps ? Are
we incapable of having a city legislature in which all the execu-
tive chiefs of the city government shall sit as members, so that
each can explain, in advance of its adoption, how any legislation
proposed by the others will affect his department?

Is the modern American system of converting the city
council into a dummy, without power, or utility, or honor, and
governing the city by a bureaucratic system like that of Ger-
many or Russia, divorced from any responsibility to a delibera-
tive body, a supremely perfect thing? Does it work well, as
illustrated in the costliness and corruption of American city
governments since it has come into vogue?

172 GUNTON'S MAGAZINE. [March,

Is it a true rescue from the evils of city government to
erect the Mayor into a Czar, while allowing the council to col-
lapse into a putrid reminiscence?

Is it absolutely essential to the true principles of democracy
that the control of both branches of the city government, and of
all its departments, shall be relegated to the non-taxpayers ; or
would it comport seriously with both republican and democratic
principles to have one branch of the city council elected by the
taxpayers and heavier class of rentpayers and householders
upon a general city ticket, so as to draw into its membership men
known to the people of the entire city and no others? Would
such a known citadel of the taxpayers and of the capitalists,
land holders and business men of the city, be really more aris-
tocratic than the dictatorship of the two or three party bosses,
who now emerge out of our discredited system?

But to ask these questions, or any others, while the city is
whirling onward in its "shooting Niagara" programme may be
more nearly an academic exercise than a political suggestion.

Undoubtedly individual enterprise and corporate wealth
will continue to dignify the Greater New York, whether it
shall have any very high order of city government or not.
Doubtless some sort of conglomeration which will answer for a
modus vivendi will be devised. We do not say it will not be
an improvement, but the deliberations which lead up to it, thus
far, have a haste and an informal rush and crush about them
which are more suggestive of a crowd trying to get across Brook-
lyn Bridge, than of two vast populations merging into one
municipality.

What the English Think of Us.

IT is very interesting to study the fluctuations of English
opinion regarding the United States, as expressed in the most
dignified journals. When they think there is no danger of a
real conflict that will affect their power or profits they speak
of America and Americans with a contempt bordering on
brutality; not always even refined brutality. But when there
is any real danger they adopt the role of patronizing flatterers,
and seem not to know that this is as transparent as their arro-
gance.

When the President's Venezuelan message was issued, the

1896.] WHAT THE ENGLISH THINK OF Us. 173

Saturday Review, the Spectator and other English journals, as
we pointed out in our last number, treated it as the act of a big
boy who simply needed a spanking. The Saturday Review
flippantly remarked that a war with the United States would
destroy three-fourths of our industries, " without taking into
account the fact that all their " (our) "important cities along
six thousand miles of Coast wojild be bombarded and utterly
destroyed. "

As a part of this ill-informed opinion on American affairs,
the same journal assumed that there was nothing behind the
Venezuelan message but a bid for the Irish and Jingo vote. In
short, that this country is run by a few corrupt politicians, who
are supported by no intelligent public opinion ; a thing seldom
to be found in the United States anyway ; and that the pulpit
may be relied upon to prevent the American people from doing
anything to the injury of Great Britain. Soon they found that
the spirit and convictions of the people of the United States
were not in the keeping of the pulpits; and even though the
President might be influenced by narrow partisan reasons, Con-
gress and the people from one end of the country to the other
were a unit in supporting him, for very broad and public-spirit-
ed reasons. Whatever his motive, he expressed the real spirit
and point of the American doctrine. This discovery surprised
and even shocked them. They seemed not quite to know
whether to get mad, play the bully, or adopt the tactics of the
fox in the fable. But when the Boer incident arose, and Ger-
many intimated that she was about ready to recognize the inde-
pendence of the Transvaal Government, new light entered
the British mind regarding America and Americans. Mr.
Chamberlain and Mr. Balfour talked about the "Union Jack
and the Stars and Stripes floating together in the cause of civil-
ization," on the basis of a close brotherhood between the United
States and Great Britain. And now the Spectator is surprised
that there should be any other feeling in the United States re-
garding England than that of the warmest brotherly love. It
says:

' ' We fear that the traditional dislike of England is very
strong in the West, where there is a belief, akin to our own
belief about Russia, that England is a most arrogant Power,
always taking something, and always ' looking down ' with a

174 GUNTON'S MAGAZINE. [March,

certain scorn upon Americans and their doings. * * *
There is much other evidence of the growth of what we here
call Jingoism in the Western mind, which has never had to
encounter the smallest opposition, and can hardly conceive that
there is any limit to the power of the Union, or that it is not
' naturally ' supreme within the two Americas. * * * We
do not believe that if we stirred jn Europe the Americans would
'jump on our backs,' for they would probably deem such a course
ungenerous; but they certainly would expect us to acknowledge
that they could do it if they pleased, and to gratify their amour-
propre by some large diplomatic concession* We have offered to
arbitrate about the only territory which we believe to be outside
our actual and historical possession ; and to go further would
be to admit the possibility of arbitration about the whole
Empire. No doubt, we could, without arbitration, cede all the
disputed lands to Venezuela, and so end the discussion ; but that
would be really, though not formally, an act of submission sure
to provoke further and larger demands in the near future ; for
we must not forget that our very presence on the American
continent, though it is because of that presence that the United
States are in existence, is treated by Mr. Olney as ' unnatural
and inexpedient.' * * * It is melancholy, however, for
Great Britain to go on its business with the fuse of such a shell
in the House still unextinguished, and more melancholy to feel
that the rosy views of unity among English speaking peoples
rested on so slight a basis of fact. And it is most melancholy
of all, perhaps, to recognize that we know ourselves so little
that we cannot even guess what it is in us that offends some
Americans so much. Grant all that is ever said of us by races
who do not understand us, to be true, and in whatway have we
exhibited our evil qualities towards Americans ? When we
fought them we were beaten ; they, and not we, have always
had the best of any bargain, and as for ' arrogance ' surely no
man who understands English and retains his senses can deny
its presence in the President's message."

If the Spectator is unable to understand why the feeling
among Americans towards England is not unmixed affection,
we suggest that it read its contemporary, the Saturday Review,

*A11 the italics are ours.

1896.] WHAT THE ENGLISH THINK OF Us. 175

of January 4th. It will there get a sample of manners that
Americans have not learned to call lovely. Apropos of the pro-
posed address to American authors by English authors on the
question of International Peace, that eminently respectable
journal published with evident approval a protest from Mr.
Morley Roberts who, after incidentally remarking that there are
no authors to appeal to &n the other side of the Western ocean,
says : ' ' In the first place, no Englishman with imperial instincts
can look with anything but contempt on the Monroe Doctrine.
The English, not the inhabitants of the United States, are the
greatest power in the two Americas, and no dog of a republic
can open its mouth to bark but by our good leave. Personally, I
look forward to a time when a social and political revolt shall
tear the heterogeneous plutocratic fabric of the States to frag-
ments, and then the more truly democratic England may come
by her heritage."

" Those who sign this precious paper go on to say that we
are proud of the United States. ^ Sir, we might be proud of
them ; but to say that we are proud of them is to speak most
disingenuously. Who can be proud of our connection with a
politically corrupt and financially rotten country, with no more
than a poor minority vainly striving for health? It will be time
enough to speak decently of the United States when we know
why and for what this scare was created ; when we learn who
pulled the strings, and can count the few who have benefited by
it."

" If our literature is the only bond between us and this
most ill-mannered country, it may be time for us to repudiate
American copyright before the Americans repudiate it. But lit-
erature is no real bond, because not one American in a thousand,
no, not one in ten thousand, has had his manners made less
brutal by the most casual acquaintance with it."

In the same issue the Saturday Review expresses itself
editorially on the subject as follows :

' ' The question for Englishmen to decide is how they are
going to meet these growing pretensions of the United States.
To make concession, it may be argued, is absurd. We should
only have to make further concessions four years hence, and so
on in a preposterous series of humiliations. We must either re-
solve to give up our connection with Canada and to withdraw

176 GUNTON'S MAGAZINE. [March,

from all our possession in both the Americas, or we must resist
at once what Dr. Westlake calls a ' most flagitious policy ' on
the part of the United States, and use every means to strengthen
ourselves in Canada in the immediate future. At first blush,
Englishmen will be inclined to echo Lincoln, and declare that
4 everything must go in ' before England consents to lose her
place among the nations. And such a policy might easily be
justified. Those who cry for peace should remember that it is
America that is making this war, and not England. Their
journalists and authors, forsooth, are not respected on this side;
their unappeasable vanity, therefore, demands the supreme judg-
ment; the responsibility for this crime of crimes must rest with
them. It is obvious that one might strengthen this argument
of despair. The strength of America, one might say, is in-
creasing year by year, and if they have the wisdom to wait,
their wishes must in time have the force of law. In another
thirty or forty years, there will be one hundred millions of
people in the United States ai\d the riches of the country7 will
have more than doubled. It would therefore be to England's
advantage to fight at once. But no such arguments should
dissuade us from playing the game for empire as well as it can
be played. We can submit the dispute in Venezuela to arbitra-
tion, and to American arbitration, without loss of self-respect.
Let Lord Salisbury tell President Cleveland that, if he appoints
on his commission Americans of the best class, such as Mr.
Bayard or Mr. Phelps, Great Britain will afford the commission
all possible assistance, and the difficulty is solved. We want
nothing but what is right from Venezuela, and such Americans
would see that all our rights were maintained."

"And as soon as America is conciliated, we must proceed
to set our house in order. The greater part of the emigration
into the United States comes from these islands. It would need
but little to deflect the major part of it from the American
northwest to the Canadian northwest. A ten per cent, differ-
ential duty in favor of our colonies would settle up Manitoba in
ten years, instead of settling up Minnesota and Dakota. This
differential duty would restore prosperity to New Zealand and
enrich Australia and Canada, while reducing to hardship and
to straits the population between the Alleghany Mountains and
the Rockies, which is now clamouring for war. There is a

1896.] WHAT THE ENGLISH THINK OF Us. 177

kernel of good even in things evil. Pressure from the outside,
science tells us, increases the cohesion between the units that
compose the body corporate. The threat of war by America
will cause Englishmen to hold more closely together, and will
diminish that selfishness on the part of the mother country to-
wards the colonies, which has hitherto been regarded as the true
commercial policy of the .nation, and which has never deserved
the name of policy, because it makes for disunion and not for
union, for weakness and not for strength."

Englishmen, from the Prime Minister down, might as well
learn first as last that while there are all the ties of common
blood, language and literature between the United States and
England, these will not serve to create a frank, confidential
feeling between the two countries until England recognizes
America on equal terms; until, at least, they become as re-
spectful in the general treatment of America and American
affairs as they are of those of Continental countries. They will
receive about the kind of respect from Americans that they give
to Americans, and there is no good reason why they should
have any more.

There are many reasons why England and America should
be the closest friends ; and they might have been so, long ere
this, but for the offensive snobbishness of England towards this
country. Americans are not bitter towards England in the
same inborn hereditary sense that the English are contemptuous
towards Americans. On the part of Americans, it is a reacting
irritation from English hostility and bad manners. A very lit-
tle well-bred behavior on the part of the leaders of public opin-
ion and official opinion in England would do much to create a
warm, not to say enthusiastic, feeling in this country towards
England. From looking over the general disposition and tem-
per of other European, and, for that matter, Asiatic, countries
also, it would almost seem as if England could hardly afford
longer to rest her interests on her offensive attitude towards the
United States. America is about the only country where she
has any reasonable ground to hope for a lasting and deep-rooted
friendship ; but this can never be secured by any system of bul-
lying, or feigned contempt.

The suggestion of the Saturday Review that "England
should proceed to set her house in order and use means to deflect

178 GUNTON'S MAGAZINE. [March,

immigration into Canada away from the United States," shows
a glimpse of good sense. Our surprise is that England has not
done that long ago. Our English contemporary thinks " a ten
per cent, differential duty in favor of our colonies would settle
up Manitoba in ten years, instead of settling up Minnesota and
Dakota." Of course, this would be something of a violation of
the Free Trade doctrine, but it would be good statesmanship.
There is no doubt that England will be compelled, sooner or
later, to give up the system of laissez faire.

We are just now seriously considering the adoption of more
restrictive legislation against immigration from Europe. If
England would put a twenty per cent, differential export duty
on all emigrants leaving her shores in English ships, in favor of
Canada, she would be conferring a great benefit on the United
States. If the scheme should effect its purpose, she would save
us the disagreeable duty of doing the same thing to prevent
their coming here.

The Saturday Review is unquestionably right in saying,
' ' the threat of war by America will cause Englishmen to hold
more closely together, and will diminish that selfishness on the
part of the mother country towards the colonies." And we may
also add that "the threat of war (by England) will cause
(Americans) to hold more closely together," and will diminish
the influence of English opinions on American policy, and tend
greatly to concentrate and intensify the patriotic feeling for the
national development of the United States. The more that feel-
ing is cemented and the more the international resources of the
nation are developed, the greater will be the respect of England
and all other nations for the United States. It seems to be a
rule among nations as well as individuals that the respect and
friendship of others increases directly as we are able to get along
without them.

Manifestly the highest interest of civilization would be im-
measurably promoted by a cordial friendship between the two
great English-speaking nations ; and it remains for England to
say whether such friendship shall exist. If from any hereditary
notions regarding her own superiority, England persists in re-
fusing to submit to arbitration a claim to a disputed territory m
America, she will make such friendship impossible. In the
present instance her claim may be much better than that of

1896.] EXPORT BOUNTIES NOT A REMEDY. 179

Venezuela, and indeed we suspect it is ; but to refuse arbitra-
tion and insist that her own opinion shall be final in an Ameri-
can boundary question simply destroys all the validity to any
pretense to friendship and race affinity, and compels the United
States to treat her as an enemy.

If we are forced to take up arms in this instance, it will
be not only in defense of the Monroe Doctrine, but in defense
of the principle of peaceful arbitration in the settlement of
boundary questions on these continents. If England's pride
and contempt for the United States prevent her from recogniz-
ing this position, we can only express our regrets at her ill-
mannered short-sightedness, and move on, leaving her to enjoy
an increasing isolation among the nations of the earth.

Export Bounties Not a Remedy.

BY D. HUTTON WEBSTER.

THE depression in agriculture, in the United States and
abroad, has charged the air heavily with schemes of relief. The
German farmers beg the central government to check the
downward tendency of the prices of cereals by taking upon
itself the sale of imported wheat and other staples. In this
country chimerical schemes have sprung up like the Russian
thistles which the farmers urge the government to eradicate.
Free silver, bonded warehouses, government loans on land, a
mammoth wheat and cotton trust of all the producers of these
staples, to raise the world's price, are only a part. The pro-
position for export bounties on agricultural staples is now the
fad. The prices of American manufactures are increased by
our protective tariff ; so it is argued must be those of agricul-
tural staples. It would seem that the fact that the price of all he
sells at home or abroad is made in Liverpool, in competition
with agricultural staples produced by the cheapest labor in the
world, would lead to a doubt whether his prices could be raised
by a bounty, in a way to involve a rise in all the world's prices,
but it does not. They say: " Just so long as prices of manu-
factures are enhanced in value by protection, equity, justice
and expediency demand an equal increase of prices for staple
agriculture." True, prices cannot be raised by import duties

i8o GUNTON'S MAGAZINE. [March,

where the products are exports not imports. But a limited
portion of the revenue collected from imports can be used to
pay a premium on exported agricultural staples.

A moderate bounty, for a limited period, on the production
of beet and cane sugar, or a protective duty upon its importa-
tion, would be a legitimate extension of the protective system.
Not only would the agricultural interests, West and South, be
greatly benefited, but ultimately the diffused benefit to the
country at large in the ability to produce all the sugar we con-
sumed would more than compensate for the temporary burdens
such a bounty or duty would at first entail.

The time is approaching when the duties laid on agricul-
tural products, of which we export a surplus, may become pro-
tective. In the case of wheat, for instance, it may become
profitable to import cheap foreign wheat into this country, and
nothing but a protective duty would then keep it out. Other-
wise the American wheat grower will suffer the fate of his Eng-
lish cousin, who has been well-nigh ruined by the competition
of the foreign wheat grower.

The export bounty proposition proposes to tax the whole
people to pay farmers the freights on their products to their
foreign market. Presumptively it should apply to all exports if
to any. What would be the justice in refusing to grant bounties
upon any agricultural exports ? Why not grant bounties on hay
and barley, oats and rye, tobacco, livestock, meat and dairy pro-
ducts, lumber and small fruits; in fact, upon every product of
agriculture exported in payment for imports ? Of all our ex-
ports, it is those of which we produce least that should be
encouraged, rather than those of which we already produce too
great an amount.

The most tangible effect of the imposition of export boun-
ties would be to lay a heavy burden upon the public treasury.
Just how large the bounties should be and what particular agri-
cultural products besides wheat, corn and cotton, should be
subsidized, has never been definitely stated. Of agricultural
staples, a bounty of 10 cents per bushel on wheat, 5 cents per
bushel on corn and i cent per pound on cotton has been pro-
posed. Taking these three schedules only, let us see what
would be the burden laid directly upon the Treasury, to supply
the necessary funds to pay the bounties, and let us see also what

1896.] EXPORT BOUNTIES NOT A REMEDY. 181

the consumer would pay indirectly in the shape of increased
taxes and higher prices. *

In 1894, we exported 164,283,129 bushels of wheat, and re-
tained for home consumption 231,848,516 bushels, f A bounty
of 10 cents per bushel on the amount exported would have
cost the Treasury over $16,000,000, and the people, in the
higher prices of all the wheat sold at home,, would have paid
over $23,000,000. Of corn, we exported in 1894, 66,489,529
bushels, and retained at home 1,533,006,602 bushels. J A
bounty of 5 cents per biishel on the 4. 1 1 per cent, exported, of
the total amount produced would have entailed a burden upon
the Treasury of only about $3,000,000, but the domestic would
have paid in enhanced prices over $77,000,000. We sent
abroad in 1894, 2,683,282,325 pounds gross weight of raw cotton,
keeping at home 1,086,099,153 pounds. A bounty of one cent
per pound would have taken $27,000,000 out of the Treasury,
and $10,000,000 from the pockets of the American consumer.
Thus, for these three staples only, the payment of the moderate
bounties above mentioned would have cost the government over
$50,000,000 and the consumer would have been burdened to
the amount of $110,000,000, a total of over $160,000,000, a sum
one-third of the total expenses of the nation for 1894, and
considerably above the amount of the customs revenue
receipts.

Unlike the tariff duties, which provide a revenue for the

* NOTE BY THE EDITOR. — This calculation assumes that a bounty would
raise the price obtained by the American exporter in the Liverpool market
for his wheat, cotton, etc., by the amount of the bounty. As there would
be but one price for all in the Liverpool market, this rise would imply a
like rise in the prices of commodities coming from countries which paid no
bounties. This could not occur except on crops like cotton, of which the
American supply would be so nearly the sole supply as to control the
market. But on wheat our supply is not the controlling factor. The
bounty could not raise the foreign and hence could not raise the domestic
prices. It would cause the farmer to collect 10 cents a bushel of the price
out of the government, and the remainder only out of the foreign con-
sumer. Hence, it would cheapen our wheat to Liverpool buyers, not raise
its price to American buyers. Hence, it would act as a bounty to the for-
eign manufacturers whose operatives consume our wheat and whose wage
rate would be lowered to meet this lower cost of bread.

f Statistical abstract of the U. S. for 1894, p. 266.

| Ibid. , p. 266.

i8« GUNTON'S MAGAZIKE. [March,

support of the government, these bounties would be an ex-
hausting drain upon the revenues. Every increase in the
amount of our exports would mean greater demands upon the
Treasury and the pockets of the people. The existence of a
large surplus to be marketed abroad, would invariably reduce
the price paid by the foreign buyer who would get his wants
supplied at a constantly lower cost. This would mean a reduc-
tion in the cost of living and a corresponding decrease in the
wages of labor. Foreign manufactures would be cheaper than
ever before, while the protection afforded to our own indus-
tries would not prove sufficient to keep out the lower-priced
foreign goods. This could only be done by a further extension
of protection by higher duties. And thus it comes about that
export bounties would necessitate higher duties, which in turn
would require higher export bounties, and so on indefinitely
until we find ourselves traveling hopelessly in a circle.

" Pay the shipper," it is said, " a bounty of ice. per bushel
or 150. per cental upon its export, that would raise the price of
wheat consumed in the United States the exact measure of the
bounty paid. The shipper would also pay the farmer the addi-
tional i5C. per cental for the reason that he would receive it
back from the United States Treasury upon presentation of his
bill of lading." The competition of exporters to handle as
much as possible would, it is claimed, effect this result.

But in event of an enticing government bounty, combina-
tion among exporters to retain a share of the premium paid to
them directly would be much more likely than competition.
The farmer is not an exporter. His products are gathered to-
gether at the few great centres of commerce and pass through
the hands of the comparatively small number of persons who
are exporters. It is no idle fear to suppose that prices would
be so manipulated as to leave at least a good share of the boun-
ties in other hands than those of the producer. In the case of
wheat and cotton, eventually the whole amount of the bounty
might accrue to the grower, but this would not be true in the
early years of its operation. With other products of agricul-
ture, which do not represent such large interests as wheat and
cotton, and the production of which is more scattered, it might
be possible for the exporters permanently to retain a large part
of any bounties granted. The American people would be

1896.] EXPORT BOUNTIES NOT A REMEDY. 183

making a costly experiment without, however, materially im-
proving the condition of the farmer.

To enlist the shipping interest in this proposition, it is to
be enacted that the exports on which a bounty is paid shall be
shipped only in vessels built by and owned in the United
States. Only 14 per cent.-of the carrying trade of this country
is in American bottoms. Without the competition of the for-
eign vessels, it would be easy for American shippers to make
high rates for freight, and by charging all the traffic would
bear, appropriate a good share of the bounties.

The export bounty proposition is intended as a special
measure of relief to the producers of the great staples, wheat
and cotton, which form the largest items in our exports. It
will be profitable to turn our attention to the peculiar conditions
that confront us in these two branches of agriculture.

The fact stares us in the face that for the ordinary fanner
of the United States, wheat raising is no longer profitable. Be-
tween 1868 and 1892 wheat suffered an average decline for the
whole period of 35 per cent. The farm price has declined year
after year, falling, for instance, from .538 cent in 1893, to
.491 cent in 1894.* We have not far to seek for an explanation
of the steady decline in recent years. Practically all continental
Europe raises sufficient wheat for domestic consumption.
Great Britain is the chief buyer of the world's surplus wheat.
In her limited market more than a dozen nations are competi-
tors. By the recent introduction of labor saving machinery in
cheap labor countries such as India, Egypt, Russia and Argen-
tine, together with the enormous reductions in ocean trans-
portation charges, the American farmer has been brought into
direct competition with peon and coolie, ryot and monjik.
Great Britain has been reaping the benefits of cheap breadstuff's
and the American farmer has paid the bill. The farmers are
deluding themselves with vain hopes if they imagine that the
price of wheat can ever permanently rise. Wheat may be raised
wherever civilized man can live, and the world has not yet
reached by any means its limit of production. In Argentine,
the wheat lands have only begun to be exploited; in the four
years, 1891-94, her wheat exports increased from 32 million

* See Report of the Statistician of the Department of Agriculture for
March, 1895.

184 GUNTON'S MAGAZINE. [March,

bushels to 80 million bushels, or one-sixth of the total crop of
the United States. In the Canadian Northwest, in the immense
steppes of Siberia and Southern Russia, in the vast plains of
Australia, and in the fertile valleys of India, are untold acres of
wheat land yet undeveloped. With the advantageous conditions
that prevail abroad the future of cheap wheat raising seems to
be immense.*

As long as the American farmer continues to export wheat
in competition with other countries, which can produce it at a
much less cost, so long will wheat production become more
and more unprofitable. Our land is wearing itself out to supply
cheap food to Europe, and although we may float our bread
across the waters, the profits will not return after many years
of weary waiting.

And yet it is just this unprofitable, wasteful and disastrous
wheat growing that it is desired to perpetuate by a system of
bounties. The effect of a bounty sufficiently large to benefit
the grower to any appreciable extent, would be to greatly in-
crease the amount of our wheat production. Those who were
about ready to drop out of the fight and turn to other crops
would be induced to continue their production, while many,
under promise of the bounty, would be induced to take up
wheat raising on a large scale, on great bonanza farms. Now,
it is evident that any large increase in our exports, as by the
stimulation of an export bounty, beyond the amount actually
required by the foreign market, would operate like the Argen-
tine and Russian competition in recent years, simply to reduce
the world's price. In 1894, Russia, Argentine, India, Australia
and British North America exported to Great Britain about 42,-
000,000 cwts. of wheat, f The United States sent her nearly
25,000,000 cwts., considerably less than her exportation the
year previous ; but, notwithstanding this fact of the imports of
foreign wheat into Great Braitain, about one-third was from
the United States. We are still a very momentous factor in
fixing the world's price. The production of an extraordinary
surplus could throw an immense amount of wheat upon the
already over -crowded English market. The only way the

* See a suggestive article on '' Future Wheat Raising" in the SOCIAL
ECONOMIST for April, 1894.

f American Economist, Vol. XV., No. 22.

1896.] EXPORT BOUNTIES NOT A REMEDY. 185

surplus would be disposed of would be by lowering the price to
the foreign buyer by just the amount of the bounty. Wheat
that cost 65 cents per bushel to raise would be sold for say 50
cents per bushel, and difference got back in the bounty. We
should be taxing ourselves to sell cheap wheat to the foreigner.
The low price abroad would inevitably react upon the domestic
market, lower prices would be the result, and the last state of
the farmer would be worse than the first.

If bounties were granted on other products of our farms,
such as live stock, meat and dairy products, tobacco, hops, etc.,
the cheapening in price to the foreign consumer would come
out of the profits of the middlemen, rather than from the pro-
ducer. The exporter would be always able to appropriate a
greater share of the export bounties on these products than on
agricultural staples. Hence, it would be to his interest to ex-
port as great an amount of these non-staple products as possible.
But there are strong competitors in the foreign markets, and in
order to induce the foreigner to take the American products in
preference to those of other countries, it would be necessary for
the exporter to give up part of the export premium in the shape
of lower prices. The final effect would be, as with wheat, a
lowering of the market price abroad at the expense of the
American people.

The English export bounties on corn and other cereals,
have been appealed to, as showing the beneficent results of this
policy upon agriculture. By a statute passed in 1689, a bounty
of 5 shillings a quarter on the exportation of wheat was
granted, when the 'price did not exceed 48 shillings a quarter. *

* The comparative merits of the English export bounty system have
been a much mooted question among economists. The act is given in full
in Macpherson, Annals of Commerce, Vol. II, p. 634. For various views
of the act, see, in particular, Rogers, Work and Wages, p. 270; Cunning-
ham, Growth of English Industry and Commerce, Vol. II, p. 371; Faw-
cett, Protection or Free Trade, p. 19 and pf. ; Cox, Free Land and Free
Trade, p. 27 and pf. ; Encyclopaedia Britannica, Vol. 6, art. Corn Laws.

Adam Smith, Wealth of Nations, Chap. V, argues strongly against
the bounties; Malthus, Theory of Population, Bk. Ill, Chap. II, regards
them more favorably; Ricardo, Political Economy, Chap. 23, holds that
the effect of an export bounty upon corn is to lower the price to foreign
consumers. The principle of export bounties is carefully criticised by a
writer in the Edinburgh Review for 1804.

i86 GUNTON'S MAGAZINE. [March,

The object of the bounty was not only to foster agriculture,
but it was intended to stimulate production so as to render it
possible for England to raise at home all the corn (wheat) she
consumed. The growth of enclosures for sheep raising had
left the country dependent upon foreign lands for a large share
of her corn, and it was thought highly desirable that England
should produce enough for her own needs. This was finally
achieved as the result of the bounty system, and the country, as
a whole, profited; but agriculture received little permanent
benefit. Capital was attracted to the land to take advantage of
the high price of corn which at first prevailed. Agriculture
was given a fictitious stimulus. More corn was produced than
the market needed, the surplus sold abroad more cheaply than
at home, while the domestic price was so reduced that corn sold
at a lower price seventy years after the bounty was first laid
than seventy years previous to 1689. The corn laws of the
eighteenth century, says Cunningham, were a security for an
abundance of a cheap food supply.

But the advantages or disadvantages of the English bounty
system have no intimate connection with the merits of the
present proposition. The chief object of the legislators of
Queen Anne's day was to provide that England should raise a
corn crop sufficient for her own needs as a safeguard against
famine and a resource in time of war. But this proposition
has no such aim. It simply proposes to pay American farmers
to continue in an industry, unprofitable not only to themselves
but to the whole country. As long as we export so long will
the low price of wheat continue. What is needed is not the
encouragement of a surplus for export, but a diminution in
our annual yield, looking forward to the time when we shall
raise wheat for our own needs only. To this result natural
causes will also contribute. Wheat is a very exhaustive crop.
Our grain lands are subject to a rapid depreciation in the
amount of their annual yield. Thirty years of tillage generally
reduce the return of grain at least two-fifths. The growth of
our population is enormous. ' ' In another generation, except
for the resources which may be won from our swamps and arid
lands, it appears doubtful whether our grain crop will greatly
exceed the local demand."*

*Shales, United States of America, Vol II, p. 410.

1896.] EXPORT BOUNTIES NOT A REMEDY. 187

The great fact stands forth, and it is well illustrated in the
case of cotton and wheat, that limitation of the production of
the great staples and a judicious diversification of crops, rather
than any appeal for legislative aid, are the only remedies for our
agricultural depression. It is claimed that diversification is im-
practicable because we must pay for our imports with our ex-
ports, and these being largely wheat and cotton, any diminution
in their production will at once react disastrously upon the coun-
try. Hence wheat and cotton producers must continue to raise
the same amount of those staples as of old, and for their other-
wise unprofitable agriculture, receive compensation in the shape
of an export bounty. But proper diversification means the sub-
stitution of a paying export for an export which does not pay.
For 1894, the exports of merchandise from the United States
amounted to $807, 3 12,113, the imports to $676, 3 1 2, 1 1 6. Of agri-
cultural products exported the heaviest items were, in round
numbers, of corn a value of $28,000,000, of wheat $72,000,000,
of wheat flour $52,000,000, of cotton $202,000,000, a total of
over $350,000,000. That is, considerably over one-half of the
values of our agricultural exports consisted of these four articles.
Great as they are, we could drop from the list all of the wheat
and flour exported and a large portion of the cotton, and easily
substitute an equal value of other productions more profitable
to export. In 1894, we sent to foreign countries, cattle, meat
and dairy products, tobacco, seeds, hops, fruits, etc., amounting
in value to nearly $225,000,000. But the limits of European
demand have been by no means reached. It would pay the
American farmer, says Secretary Morton, to produce those
things that people abroad wish to buy. What is needed is a
vigorous campaign in foreign markets for our agricultural prod-
ucts, not staples. The wider the range of exports the better.
American producers must carefully study the character of the
foreign markets they seek to supply. We can export ever-in-
creasing quantities of meats and fruits, butter and other dairy
products, barley, corn, tobacco and many other products of our
farms.

Judicious varying of crops means also that we shall raise
here, agricultural products now imported at a great cost. The
total value of our agricultural imports, exclusive of tea, coffee,
etc., amounted in 1894 to over $200,000,000. Practically all the

i88 GUNTON'S MAGAZINE. [March,

articles which go to make up this vast sum could be raised in
this country. Let us take sugar for a striking example. In
1894, we imported 4,345,193,881 pounds of sugar. Of cane and
beet sugar we produced about 655,000,000 pounds, or not one-
rifth of the amount imported. All the beet sugar produced in
the United States would not suffice for four days' consumption.
We paid in 1894, $126,871,889 for the single item of sugar im-
ported. All of this enormous sum, equal to the total value of
wheat and wheat flour exported, could be retained at home, giv-
ing employment to the great number of men required in the
cultivation of the sugar' beet and cane, for the work in the
sugar factories and in the manufacture of machinery for those
factories, and in the case with beet sugar, substituting for
the exhaustive crop of wheat, the intensive culture of the
beet.

And so we might extend the list. California alone might
supply the United States with all its olive oil, of which in 1894
we imported to the value of nearly $1,000,000, and with all the
citrus fruits, nuts, raisins and prunes, of which our importa-
tions amount to nearly $10,000,000. There are 10,000,000
acres in California alone which can be used to supply the coun-
try with the products of the fruit tree and the vine. There is
said to be a great field in California for tobacco growing, for
the growing of cork and other articles which we import so
heavily.

In conclusion, we may sum up briefly the results of our ex-
amination of the merits of the export bounty proposition.

An export bounty is an attempt to bring about an equality
in protection, where, by the nature of the case, none can exist.
The two policies are antagonistic in every feature, and did
both exist side by side the effect of one would be to neutralize
the effect of the other.

The operation of the bounties would be inequitable, heavily
taxing the American people in order to increase the cost of
what they buy, at the same time that its general effect upon the
class it is intended to benefit would be disastrous. It would
prove finally an incentive to continue and extend a form of
production now unprofitable, and would thus greatly retard
that scientific, intensive farming which, with a proper diversifi-
cation of crops is the only remedy for agricultural depression.

1896.] 189

Charles Booth and His Work.*

BY DR. M. McG. DANA.

•

THAT the area of secrecy is narrowing, no one can now
longer doubt. The public wears its heart upon its sleeve.
Misery fascinates, and everywhere compels attention. Here
and there a prophet speaks through the daily press, or through
books, and thereby makes suffering vocal, or forces the busy,
heedless world to halt, and consider what may, what must be
done. Such a one is Charles Booth, who, in a monumental
work on " The Life and Labor of the People in London," has
elaborately described and analyzed their character, condition
and prospects. It was undertaken with the purpose of making
the fullest and most reliable investigation possible, so as to lay
open to public view, and for critical study, the social status of
the poor in Britain's metropolis.

This is now admitted to be the age of great cities, and the
renaissance of interest in them is one of the signs of hope.
The problems of the city are world problems, and because of
their complexity, has wide research, comparison and careful
induction from the vast amount of statistical data now in
hand, been made necessary. The moral and economic rela-
tions of the city to the body politic and to civilization have only
of late been recognized, and, as the result, students and re-
formers of every name and type are focusing their attention
upon them. Our author has given to the world six volumes,
in which we have a broad penetrating and thorough scientific
study of London. They are packed full of most varied
statistics, and illuminated with maps and diagrams. Mr.
Booth was president of the Statistical Society of London in
1893-4, and has for years devoted both his time and money to
the investigations which his books now put within the reach of
all interested in social phenomena and questions. While rank-
ing as one of the foremost statisticians of the world, he is at the
same time a man of recognized candor and public spirit. There
is no concealment about his methods, for he is careful to tell
what processes he has followed, and to what results they have
conducted. On two occasions the British Government has

*" Life and Labor of the People." Charles Booth. London and New
York, Macmillan & Co. Six volumes; at $1.50. 1895.

190 GUNTON'S MAGAZINE [March,

testified its appreciation of his work, and to some extent en-
abled him to carry it on. In 1893, he was a member of the
Royal Commission charged with the investigation of the Poor
Law. Few, perhaps, would have had the courage to tackle the
problems he has, and in the way he has, involving such pains-
taking research and so much difficulty in finding a clue
through the labyrinth. But Mr. Booth is a master in this kind
of work, though it remains to be seen whether the minute
details into which he has descended were really necessary for
any political or sociological purposes. It is, however, probable
that the civic and national policy of England in reference to
the poor will be largely affected by this exhibit of their condi-
tion, and by his pronounced views as to pauperism and old age
insurance. We doubt, however, if Mr. Booth realizes the true
significance and value of his work. At all events his service
seems to be that of an investigator, a collector and collator of
minute and exact data bearing on the condition of the various
classes included under the term poor, rather than that of a
philosopher or specific generalizer. This is the disappointing
part of his books ; for they are practicably usable only by ex-
perts; they place a mass of information at the disposal of the
social student, leaving him to deduce the theories they sub-
stantiate, and the policies they suggest. It is not unlikely that
this is Mr. Booth's way of doing this kind of work, and we
must therefore accept it as his contribution to the sociology of
London. Ordinary men have not time to wade through these
volumes, and they are not designed for such readers. Special-
ists dealing with various phases of the municipal problem will
find these books a mine of information, and so Mr. Booth's
material will be worked over and made available in this way.

Dealing specifically with the people of London, Mr. Booth
divides them into eight distinct classes, designating each by a
letter, and so describing each that the class can be known the
world over.
A — The lowest class, comprising occasional laborers, loafers and

semi-criminals.

B — Casual earnings — " very poor •" which includes those whose
means are insufficient for independent life, and whose in-
come falls much below i8s. to 2 is. per week for a moder-
ate size family.

1896.] CHARLES BOOTH AND His WORK. 191

C-Intermittent earnings ) h "the poor."

D — Small regular earnings j *

By the poor is meant those who have a sufficiently regular,

though bare, income, such as i8s. to 2 is. per week.
E — Regular standard earnings, above the line of poverty.
F — Higher class labor.
G — Lower middle class.
H — Upper middle class.

In a table by itself, he gives next the population by classes,
according to means, position, and by sections based on employ-
ment. Districts of the city are then compared, e. g. — St.
George's in the East is the poorest district, though Bethnal Green
is very little above it. The area dealt with is peculiar to Lon-
don, comprising unions of parishes or registration districts, and
containing about 900,000 inhabitants, and known comprehen-
sively as East London.

Mr. Booth's first claim about the classes already designated
is that class A renders no service, creates no wealth, and de-
grades whatever it touches. Furthermore, it seems to be his
belief that the individuals in this class are incapable of improve-
ment, while their numbers are conditioned by the economic con-
dition of the classes above, and also by the discretion of the
charitably disposed. This class, moreover, is to a considerable
extent hereditary, which justifies his opinion that therein is its
menacing feature, and he puts the number belonging to it at
11-4 per cent, of the above population.

Class B numbers n 1-4 per cent., and the laborers belong-
ing to it do not average three days work a week, though Mr.
Booth doubts if they could or would work more had they the
opportunity. They constitute the leisure class among the poor,
a leisure bounded very closely by the pressure of want, but
habitual to the extent of second nature. To these the dullness
and regularity of civilized existence is well-nigh unendurable.

Class D, which is nearly 14 1-2 per cent, of the population,
and Class E, which includes 42 per cent., form together the
actual middle class of the district in question, the numbers above
and below being fairly balanced.

Then, by grouping A, B, C and D, we get those who may
be said to be living in poverty, and they constitute 35 per
cent, of the population. The classes E, F, G and H represent

192 GUNTON'S MAGAZINE. [March,

those living in comfort, and are put at 65 per cent, of the
population.

Mr. Booth is regarded, of course, as an authority on the
matter of poverty, and we look for some generalizations or sug-
gestions based on this elaborate classification which we have
now presented. About all our author ventures in this direction
is first to declare, what may not have been generally realized by
those concerned — that is, that the so-called very poor are a
crushing load to the poor; and further, that the poverty of the
poor is mainly the result of the competition of the very poor.
He therefore believes that the latter class must be eliminated
out of the competitive struggle for existence, for only thus can
any relief be obtained for those above.

Now, we question whether this can be done in any way
suggested by Mr. Booth. Class A is " to be harried out of ex-
istence," but just how he does not tell us. Class B will
have to be taken in charge by the community for its own sake,
because incapable of independent existence up to the required
standard. Undoubtedly it is a constant burden to the State,
and those of this class are dear workers at any price, while they
are the chief absorbents of the charities of all others.

They are shiftless, incapable, and, economically considered,
a dead weight on the body politic. We are inclined to believe
that these are peculiar to London. They represent a traditional
poor class, largely the resultant of English life and the product
of an aristocratic society. It is a sodden, immobile class, such
as is not paralelled anywhere else. If the crux of the social
problem is found in this class, then we doubt if Mr. Booth has
found the solution. For inasmuch as it is formed by drift from
all other classes, is, in fact, the social wreckage which for one
reason or another is constantly developing, how are you going
to eliminate it. For the State to take charge of the class and
colonize it on cheap lands, and treat them, in fact, as depend-
ents, and, if unable to meet the imposed standard, to break up
the family life and draft them to the poorhouses, this is no cure
of the state of things which produces the class. As economists,
as aiming for the betterment of society, we want to know what
makes the class called very poor, which Mr. Booth says has no
future. This is London's unique problem, and while character
and condition are accurately delineated, we are still left without

1896.] CHARLES BOOTH AND His WORK. 193

a really sufficient remedy for this quagmire tinder the whole
social structure.

No city can safely have such classes as A and B, for by be-
coming a constituent part of its population, it not only is a social
menace, but it tends to perpetuate itself. The industrial sys-
tem in England ; the wardship feeling accompanying inherited
wealth and rank ; the old traditions and customs of a feudal age
—when the rich had numerous dependents for whom food and
lodging were provided ; a poverty hereditary and contented —
this, in fact, accounts for the classes in question. Now that
Mr. Booth has fully made known their numbers and habitat,
how to deal with them is still unsettled. That there is a
"submerged tenth" in what he terms a confessedly poverty-
stricken district, is not the whole of a bad state. Since you
have causes yet unremoved that keep this class replenished,
the cure of abject poverty can only be found in drying up its
sources.

Passing to the common lodging-houses, which in London
have some distinctive features found nowhere else, Mr. Booth
again gives a careful exhibit of their number and accommoda-
tions. There were in 1889 one thousand of these houses, cap-
able of lodging 31,651 persons, and ranging all the way from a.
hotel to the crudest and cheapest lodging abode. Two signifi-
cant facts we note in connection with these, first, they are;
increasing, and that betokens an irresponsible and unwholesome-
method of living ; and second, they are largely the resort of ai
low type of the city's population, who have no desire for the
privacy or permanency of a home. The bad economic feature
about them is that it is so generally becoming profitable to house
this increasing class of lodgers. It is an ominous sign when,
in preference to homes of their own, men and women are
willing to resort to this gregarious style of living. This is part
of the house problem, and we are again disappointed that in a
work so voluminous as this, we have no generalizations as to
the influence and reason of this kind of existence. In London,
inasmuch as the lodging-houses are under police surveillance,
those resorting to them are under more or less restraint.

When we turn to Mr. Booth's description of the metropolis,
with the street as the unit, we can see the practical benefit of
these investigations. The locale of the extremest poverty is

194 GUNTON'S MAGAZINE. [March,

thus indicated, and where the representatives of the various
classes are to be found is pointed out. This exhibit has already
led to wise action on the part of the authorities and private cor-
porations in selecting sites for model tenements; and it has also
proved a guide to those engaged in the dispensation of charity.
In fact, that is what every community needs, for, by locating
poverty, by knowing the character and condition of certain
blocks of houses and single tenements in blocks, it has the key
to the situation, and sanitary and social missionaries know
where the plague spots in the city are, and can deal intelligently
with them.

For this reason, Volume III. will prove the most popular in
the series, for in it model tenements are discussed, and what
their influence has been on tenants and neighborhoods is well
brought out. In this part of his work Mr. Booth has availed of
the help of expert assistants, and the monographs of such as
Miss Octavia Hill make it both more readable, and, to the civic
reformer, more suggestive.

For London this must be said, that it has led the way in
the effort to provide comfortable and wholesome homes for the
poor. Bad housing is now confessedly seen to be a terribly ex-
pensive thing to any community, and in this sphere of philan-
thropic and civic action the laissez faire doctrine has yielded
most slowly. Mr. Booth has afforded great help to the London
council, and we can commend this volume to the careful study
of those who are interested in the matter of providing model
tenements. As this is a subject which concerns every populous
center, our author's investigations, and the views of his contrib-
uting monographists, will make this volume of world-wide in-
terest and value.

It is, however, absolutely startling when running over some
of Mr. Booth's unromantic but appalling figures, to find that in
the lower classes there is an aggregate of 2,259,000 who cook,
eat, sleep, wash, etc., in a single room; that there are 1,000
persons living with more than eight in a room ; that 6,000 dwell
with seven in a room, and 5,700 with five in a room. These
data carry their own lesson ; they set every friend of humanity
reflecting on such a social state in the chief city of Christen-
dom ; and they already have awakened renewed interest in the
subject of this volume, and will make imperative on moral and

1896.] CHARLES BOOTH AND His WORK. 195

sanitary grounds the breaking up of this sort of promiscuous
herding.

To the student of civic immigration, Mr. Booth brings not
only statistical information, but some generalizations which are
of moment. He shows conclusively that London, despite its
enormous population, is exceptionally homogeneous in its make-
up. Whence immigrants" come, and what industries they take
up, is exhaustively shown the reader. The two forces conduc-
ing to immigration obtain in every country, and London's ex-
perience in this regard is true for all large cities. These two
forces are drift and current; the former brings unsettled, rest-
less spirits, with vague ambitions towards every large muni-
cipality, and also the social wreckage of the country and
provinces; the latter brings more often the cream of the
counties to London, with the purpose of seeking distinct
economic advantages. This is the reason why cities are likely
to continue to grow in size and population; for these are per-
manently operative forces. The bearing of this fact we
should have thought Mr. Booth would have shown on muni-
cipal poverty. For, in the action of the first force, we find
really the source of classes A and B. The tramps, the unem-
ployed, the vicious and incompetent drift into London from all
parts of the United Kingdom, and keep these lowest classes
full ; while with us they are replenished by foreign immigration.
As yet we have no native proletariat, and therefore our condi-
tion is not the hopeless one of the city of London.

In the classification of the school population, Mr. Booth
has placed at the service of the friends of progressive and
popular education in London, most important and timely in-
formation. In England the study of classes is necessary, be-
cause there you find distinctive social divisions, and therefore
this work is applicable in the main to the English metropolis.
Still as the question of education is a burning one just now all
over England, and especially in London, it was well that Mr.
Booth took up the matter of ascertaining to what extent the
children of the poor are reached. In this particular field of
investigation one cannot but feel that his volume resembles
our census reports.

The statistics gathered by Mr. Booth relate to penny banks,
school libraries, bands of hope, cricket and football clubs, to the

196 GUNTON'S MAGAZINE. [March,

number of pupils attending the board schools, to their physical
condition, to the character and occupation of the parents, etc.
The schools, too, are classified, as well as enumerated, and the
number of both boys and girls provided for in secondary and
proprietary schools. All this detailed information when gath-
ered up for a single city amazes an American reader, and starts
the inquiry, cui bono ? To this, all that needs be said is that it
is Mr. Booth's belief that the data are worth collecting; and that
to the Londoner the work itself is like a parliamentary blue
book. It would be of little consequence for us to know how
many school children had bad mothers, or w'hat trade their
fathers followed, or whether they had a square meal before
coming to school or not. We have no time to read such details;
even if we had them, and if any one with Mr. Booth's genius
should collect such statistics, they would probably be condensed
and used for the purpose of establishing certain sociological
principles, or would be related to the evolution of certain social
phenomena interesting to all thoughtful persons. That only
witnesses to the difference between English and American meth-
ods, as well as to the difference in their respective social condi-
tions. One might go through these six volumes and glean out
a good many practical things important to know, and with a
direct bearing upon the life about him. Such service will be
rendered by some future editor, who will condense this mass of
detailed information, and give us the results which they have
led up to. An Englishman, however, feels towards these books
very differently from any one on this side of the water. He can
say, and truthfully, it is a full portrayal of London's population
in its poorest districts. Herein are its wage earners classified,
their relation to the life line shown, their homes and character
disclosed, whether their children are at school, and in what con-
dition. The sociologist says it is invaluable ; the civic reformer
gets from these books pointers for his work; the philanthropist
is guided by them in his efforts, and the charitable in the dis-
pensation of their gifts. The churches learn through them
where the districts of religious destitution are situated, and the
London Council discovers by means of them the unsanitary
spots and the congested neighborhoods, and thus to all who are
working for the social betterment of London, Charles Booth has
been a well-nigh indispensable help.

1896.] ILLINOIS LABOR REPORT ON TAXATION. 197

This voluminous work, we therefore believe, interests a
great variety of readers, and will be the storehouse from which
friends of civic reform will get their impulse and information,
Perhaps the author was wise in refraining from positive gener-
alizations ; he has left that for various specialists, and has rather
sought to supply all possible data relating to the social and in-
dustrial condition of the teeming toilers in the greatest mart
and metropolis of the world.

Illinois Labor Report on Taxation.

THE Illinois Labor Bureau is advertised as consisting by
statute of three " manual laborers," Mr. Charles G. Stivers, of
Chicago; Lewis F. Lumaghr, of Collinsville, and William E. R.
Kell, of Decatur. These three " manual laborers " have re-
cently published the Eighth Biennial Report of the Bureau of
Labor Statistics of Illinois, in 491 pp., octavo. We do not
perceive that, though warranted to come from " manual
laborers " only, it is one whit less imposing in the ponderosity
of its statistics, and it certainly is very much more revolution-
ary and radical in its conclusions, than the celebrated report
of the Rt. Hon. George J. Goschen, on Local Taxation in Eng-
land. When manual laborers can turn out reports like this,
without any interruption in their manual labor, they excel the
South American woman who was traveling through the Andes
in the cortege of Humboldt, and whose endurance attracted
the admiration of the explorer and naturalist. She not only
rode her mule through the steep mountain passes with ease in
spite of being large with child, but when the supreme moment
of her maternal crisis came, alighted under the friendly shade
of a bush, remained behind the caravan for a couple of hours,
assisted only by her husband, and a little later in the same
half day overtook the caravan, riding into camp serenely smil-
ing with her new born babe in her arms. There was little
need thereto inquire if "mother and child were doing well."
So we gladly assume that these Illinois manual laborers —
Charles, Lewis and William — have kept on weeding their
onions, digging their wells and mining for coal, during their
full nine |hours a day, while the production of this book has
served them'for^an amusement during"^4 nooning."

198 GUNTON'S MAGAZINE. [March,

Though the miracle of three manual laborers turning out
such a stupendous composition without pay is hardly less than
the reputed composition of Homer's two immortal poems prior
to the discovery of an alphabet, yet they are put forward with-
out a word of boasting on their behalf, a fact which pro-
claims in trumpet tones the modesty of the Illinois manual
laborer.

The purpose of the Three Illinois Manual Laborers in this
report is to prove that some of the property-holders of Illinois
are paying taxes which ought to be paid by others of them, and
particularly that property-holders in Chicago are paying taxes
that in honor and justice ought to be borne by property-holders
in Winnebago. As the composition of this work, without a
single boast, by the three Illinois manual laborers, shows their
modesty, so its aim shows their complete unselfishness. The
evil which they seek to reform in no way affects their class.
Neither in Chicago nor in Winnebago do manual laborers pay
State, city or local taxes. Such taxes rest only upon real estate
and personal estates of considerable value, and those who pos-
sess either cease to be manual laborers.

Like Prince Boodha of India, the three Illinois manual
laborers go out of their own caste to champion the rights and
redress the wrongs of suffering humanity. Better, however,
than Boodha, they desire to shield the rich. They would save
from excessive taxation the sun-kissed farmers and the wind-
browned stockraisers of rural Illinois, who generally have to
get on horseback to ride to the farther end of their farms, and
always climb a very tall tree if they want to look over their
broad acres.

Is it possible that the three manual laborers who dig, hew
and heckel the labor statistics of Illinois have accepted as
their motto the pretended view of Hamilton, "Let the law take
care of the rich and the rich will take care of the poor ?"

The astuteness of the "three Illinois manual laborers,"
when applied to taxation, first discloses itself in the vigor with
which they discover perjury and expensive looting in the
mode in which the Chicago banks state their " net credits " for
taxation, under a tax law which they say requires that ' ' gross
credits shall be offset by bona-fide debts " (p. 32) "so that only
the difference can be returned for taxation."

1896.] ILLINOIS LABOR REPORT ON TAXATION. 199

Under this law the Chicago banks state that their resources
amount to $87,621,762.58, and their liabilities amount also to
$87,621,762.58. To borrow an expression of the late Abraham
Lincoln, their resources and their liabilities are as like as two
peas, and there are no net credits whatever left for taxation ex-
cept the black walnut railings, the inkstands and the paper-
weights, which are said~to amount to $10,000.

The banks claim that their capital stock belongs to their
stockholders; that the surplus fund and undivided profits go
with the stock as the bridle goes with the mare; that the de-
posits are what the bank owes, and, in short, that all that it has
it owes to somebody. All that it holds in the way of loans and
discounts, bonds and cash, it holds as security for what it owes.
Hence accounts balance, and the parable of the unjust steward
is repeated with applause.

It is so palpably clear to the three Illinois manual laborers,
that every corporation is the owner of its own stock, and
ought to be taxed for it, that the pretence that to tax it once
against its stockholders and once against the bank would be
double taxation is a pure sophism.

But it is when the three Illinois manual laborers come
athwart the fact that Chicago real estate is assessed at only a
tenth of its fair value that the iron of monopolistic oppression
enters their laboring souls. They point with pride to the
small number of Chicago residents who own their own homes
(scores of times greater than in any other city or village in the
world), and say, " For this are we Laborers." Now the serious
fact is that there is no fact of even the smallest dimensions in
the alleged grievance. "In 1890, Chicago contained 31 per cent,
of the population of the State of Illinois, and 30 per cent, of
the true value of all property. She paid, -in 1894, 31 per cent,
of the State taxes."* There is, therefore, absolutely no
squirrel in the tree at which the three Illinois manual laborers
are barking.

Yet on this very interesting but inadequate basis they ask
to have Illinois adopt the single tax on land values, irrespective
of their improvements. This is like levying a tax on the
shadows cast by fence posts, irrespective of the posts. There

*Taxation in Chicago and Philadelphia, by John R. Commons, in
Journal of Political Economy for September, 1895. P. 435.

200 GUNTON'S MAGAZINE. [March,

are no such shadows. So, irrespective of the estimated earnings
which future improvements would enable land to yield, and the
actual earnings which past improvements enable it to yield, land
has no value. The assumed value of vacant land is merely the
prospective and reflex effect of the value it will have when im-
proved to adapt it to its location. All values of land relate,
therefore, to its actual or prospective improvement. Irrespec-
tive of either it would be a myth like the net credits of the Chi-
cago banks. In what we have said we have assumed that the
Report is the work of the Three Illinois Manual Laborers and
of them alone. Far be it from us to impute that there is a
Bacon behind this Shakespeare.

Its secretary, George A. Schilling, is too intelligent, and,
probably, owns too much land, to believe that taxes upon land,
whether equal or unequal, can in any way be made burdens
upon the landless manual laborer. He knows that Lake Mich-
igan could as soon be made to rest on a duck's back. Perhaps
he knows, also, that a man who works for wages is tethered by
a homestead, and can be held to a lower wage rate than one who
can move.

Governor Altgeld also reads history. He would be likely
to know that under the Roman system of taxation by centuries,
wherein the taxpayer's voting power was made exactly com-
mensurate with the taxes he paid and the number of soldiers he
was required to furnish, equip and maintain, men never con-
cealed their wealth, or tried to evade their taxes or undervalue
their estates, because the power was made proportionate to the
burden.

Knowing this, if he were disposed to propose a remedy of
any kind, and being straightforward, honest and free from
demagogism, he would propose that the same thing be done in
Illinois.

But he has not proposed it.

Hence we may conclude that this argument, that the in-
equality of taxation among the land holders of Illinois causes
the whole land tax to rest upon those who own no land, and
that the remedy for it lies in taxing a pure phantasy of the
deceived brain, a value that can nowhere exist, did not originate
in the brain either of Governor Altgeld or of Secretary Schil-
ling. All this must be credited to the three Illinois manual

1896.] THEORY OF SOCIAL FORCES. 201

laborers, and to them alone. At least, like the Six Jolly
Fellowship Porters in Dicken's "Bleak House," if they are
not much around, the establishment enjoys a larger trade for
being run in their name.

• Theory: of Social Forces.*

The above is the title of a monograph by Prof. Simon N.
Pattpn, in which he attempts to state the theory of the forces
which have evolved society. In the phraseology of Darwin,
Spencer, Huxley and Haeckel, he marshalls the economic pro-
positions of Smith, Mill, Ricardo and Carey. His literary
method, however, is the ultra abstract style of Emerson, wedded
to the remorseless dogmatism of Ricardo. Over all is thrown a
soft and tender light of theological Christianism, mingled with
vague German transcendentalism. Such a work will bother peo-
ple and haunt the minds of people until they read it very much
as Mark Twain's rhyme of

A pink trip slip for a five cent fare,

A blue trip slip for a three cent fare,
Punch brothers, punch; punch with care,

Punch in the presence of the passengere.

Professor Patton's book will be searched by many who find it
difficult to explain why they like it, or to make a satisfactory in-
ventory of what they get out of it. He starts with the hypoth-
esis that "requisites of survival" are the origin of ideas; in
short, that our first beliefs are the product of the environment
in which we are placed ; that we believe what will best adapt us
to survive in our environment ; changing our beliefs only as we
change to an environment in which the new belief still has most
of the requisites of survival. A familiar illustration of this
facility in adapting one's beliefs to his interest is the case of the
Pennsylvania postmaster, who, when asked how it was that he
held office under successive administrations of different politics,
replied, ' ' If the administration can change its politics quicker
than I can it must be smart. "

" The process of creating beliefs is not logical, nor is it the

* The Theory of Social Forces, by Simon N. Patton. (Wharton School,
etc.) Philadelphia ; published as a supplement to the Annals of the Ameri-
can Academy. 151 pp. January, 1896.

202 GUNTON'S MAGAZINE. [ March,

result of activity at the conscious center. Each new requisite
for survivals starts new centers into activity and creates a new
group of ideas and beliefs. As many independent beliefs are
possible as there are requisites for survival necessary for the
progress of the race. It is not difficult, therefore, to account
for the presence of a great variety of beliefs amo,ng men, or for
the ease with which new beliefs are acquired. They are as
much the result of contact with the environment as the ideas
and pictures of the sensory side of the mind." (Page 65).

Applying this doctrine or assumption to the views of any
teacher, the question, Are they true ? becomes painfully fresh
and unsophisticated. The only wise question is, "Where has
he been and whom has he met, or read ?" That being answered,
we will know what he thinks, just as we know the shape of a
cheese if we see the mould in which it was pressed.

If anybody believes that honor and honesty in individuals
give rise to credit and make exchanges with deferred payments
possible, he must stand corrected. Prof. Patton says :

" The exchange of goods and the growth of credit would
develop in individuals and in communities the feeling of honor,
the love for truth and the desire to live up to their contracts. "
( just as the marsupial pouch develops in the forefront of female
kangaroos by the convenience of extending the skin of their
bellies frequently, in carrying their young).

The mode in which theologies come waltzing into being
under the fiddling of the poets and the fuddling of the priests is
satisfactorily cleared up in a very few sentences. (Page 105.)

" In the idealization of these conditions, so as to build a
concept of the universe, God is placed completely outside of
and behind the universe, just as the heroes on earth are ex-
ternal to and above the society they rule. He is thought of as
the Creator of the Universe and the source of all life and
power. In this way He is placed completely outside of society
and is not subject to any of its laws. Such a concept of deity
is satisfactory to beings whose first thought is to avoid pain and
to secure protection from enemies. By its aid primitive people
create social forces which unite them into groups and inspire
them to action.

" In a social commonwealth, there would be no basis upon
which a development of this kind could take place. There

1896.] THEORY OF SOCIAL FORCES. 203

would be no fear and no need of protection. The higher ideals
of the people would be associated with progress and with
freedom from protection. Social progress would be thought of
as due to the united action of all the members of society."

The teaching that God is a subjective idea, a creation of
poets and of the imagination, is naturally followed by the con-
clusion that society will in the long run settle down into the
Comtean idea of worshipping universal humanity, t. e. , of self-
worship, instead of remaining forever in the worship of an ideal
shadow of itself.

Without further following Professor Patton's disquisition,
it may be said that it is a compend of current advanced thought
upon the lines laid down by the class of thinkers who regard
organization as the cause of life, matter as the cause of mind,
environment as the cause of ideas, body as the cause of soul,
and man as the author of God. And yet this system of sup-
posed ratiocination, whose metaphysical postulates are in all
cases assumed without argument, are accompanied by so many
complimentary and patronizing allusions to Christian beliefs,
as being in harmony with the highest and final processes of
thought, that many readers will doubt whether the outcome of
Mr. Patton's work may not be to make the Christian religion
the very keystone of the philosophic arch.

Professor Patton seems to be willing to accept the organizing
and social aspects of Christianity as being part of the crop of
evolution, and due to natural and involuntary selection among
beliefs, according to their tendency to furnish ' ' requisites for
survival, " /. e. , to supply man with the means of coming out
victor in the struggle for subsistence. This is walking the tight
rope over the abyss which yawns between scientific materialism
and metaphysical religion with an audacity that Blondin might
envy. And nothing can be clearer than that, like Blondin over
Niagara, the walker steps out blindfold and with his feet in
a basket, when he seeks to deduce a fundamentally meta-
physical faith from physical resources. The central idea of all
religion is that soul or force or energy is a dominant cause and
inspiration of all material phenomena, not their effect. If this
is not true, then the further genuflexions and compliments to
religion are invested with a painful hypocrisy. If this is true,
then an attempt to account for phenomena by describing en-

204 GUNTON'S MAGAZINE. [March,

vironment and matter as being the creators of God and of
soul are as fallacious as the effort to account for the gas flame
by ascribing it to the tube, the gas and the lighted match.
There is no quality in either the tube, the gas or the match
which is not the product of some previous force, as metaphy-
sical, as subtle and as purely beyond reduction to material or
atomic form, as are gravity, cohesion and the sun's ray. And
if metaphysical causes do thus dominate in phenomena, then
the whole attempt to deduce inspiration from environment, life
from organization and being from non-being is only an ignor-
ing of this dominancy.

In this tendency, Mr. Patton reproduces the view of
religion which Gibbon describes as prevailing during the most
cultivated period and in the most cultured classes of ancient
Rome. Then "all religions were to the vulgar equally true, to
the philosophers equally false and to the statesmen equally use-
ful." Where Professor Patton's ambiguities and dexterities
will be most severely tested will be in his effort to combine in
his own person the sincere devotion of the vulgar, with the
sterile negations of the learned, and the many fruitful utilities
which come to the diplomatic class, so that he will succeed in
showing not only that Christianity is like all other religions, a
product of environment and therefore false, and that it is unlike
any other religion, a revelation of the Godhead and therefore
true, but that wholly unlike itself while it sends its martyrs to
the block and its crusaders to the slaughter, it is still an aggre-
gation of all the means of economic survival, and therefore
supremely and always useful.

Professor Patton keeps on hand a ' ' social commonwealth "
of his own, of course, which he makes to consist in having
"evolved" out of "a pain economy" into a "pleasure
economy. "

There is something entertaining in his dilettanti mode of
stating the vague attitude in which he both pooh-poohs and en-
dorses the leading visionary schemes of the day under the
epithet " democratic ideals." He says (pages 139 to 142):

" In modern nations, and especially in the pleasure economy,
the strong feelings tending to help the dependent classes are due
to democratic ideals. The older ideals of this group are justice,
liberty, equality and fraternity. To them may be added ten-

1896.] THEORY OF SOCIAL FORCES. 205

dencies towards the referendum, the initiative, and proportional
representation in the sphere of government, and in the economic
world, such ideals as a living wage, surplus values, progressive
taxation, the single tax and the right to live, to work and to
enjoy the fruits of the earth. These ideals picture society as it
may be in its finer environment, with the mastery of nature a
completed task, and thus they assume a much higher state of
civilization than we actually possess.

"While the picture of the environment presented by these
ideals belongs to an advanced pleasure economy, there is one
element in them which belongs to a pain economy. The evils
and pains of life are represented as coming, not from the envi-
ronment or from the defects of human nature, but from men.
The strong and successful are pictured as being in a never end-
ing conspiracy to defraud the weaker and less successful. The
oppression of the dominant classes and their grasping nature
are made vivid in a thousand ways by those who represent pop-
ular movements.

"Democratic ideals thus rest upon two prominent thoughts,
the gifts of nature and the oppression of men. In emphasizing
the gifts of nature, the environment of the distant future is
pictured, when the mastery over nature is complete. In
visualizing the oppression of men, the distant past is pictured,
when the conditions of a pain economy were supreme. These
ideals thus combine a prophecy of the future with a history of
the past. The historical man of the distant past is put without
change into the best environment of the distant future. The
obstacles to progress thus seem to come from the dominant
classes to prevent an equal distribution of the gifts of nature.
There is a silence as to pains and the obstacles to progress which
come from the environment and represent the cost of nature's
bounties.

"Swch pictures of nature and of men have been the inspira-
tion of the leaders of democratic movements designed to free
society from the control of its dominant classes. They were
especially vivid at the time of the French Revolution, and are
presented with fresh vigor in recent discussions. The ideals of
Godwin which aroused the opposition of Malthus were similar to
those of Henry George in his discussion of the land problem.

' 'These democratic ideals are the static elements of a pleasure

206 GUNTON'S MAGAZINE. [March,

economy, for they hinder further differentiation and tend to
keep in society all the classes it now contains. They retard
the displacement of the less efficient classes and restrict the
activity of the more efficient. They prevent the integration of
society and the development of the type of men most fitted for
the earth's best environment."

We believe the present work will be more widely read than
his previous ones, which is speaking well of it, as Professor
Patton has succeeded in interesting a not inconsiderable con-
stituency which values his work highly.

Industrial Competition of Japan.

THERE is no country whose economic changes are likely to
create so much industrial surprise, if not dislocation, in the
next quarter of a century as Japan. Until recently Japan has
been classed with China and other Asiatic countries as in the
hand labor era. The more advanced machine-using countries,
like England and the United States, have entertained no fears
from competition with the cheap labor of Asia, because the
economies of their superior machinery have more than offset
the increase in the cost of production through their higher
wages. This has led many economists of the laissez-faire
school to assume that high wages instantaneously bring with
them lower cost of production, attributing the diminished cost
to the increased skill and dexterity of the higher wage laborers.
Such writers as Edward Atkinson and Mr. Shoenhof are con-
stantly adding to the flood of free trade literature on the basis
of this very erroneous assumption. Because we could compete
successfully in most lines of manufacture with Asiatic countries,
it has been insisted that we could do so with England for the
same reason, namely, that our wages were higher.

Having assumed that the superiority of high wage condi-
tions all lies in the increased personal dexterity of the laborers,
these writers seem to have entirely overlooked the great part
machinery plays in low price machine phenomena. The reason
this country is in greater danger from English competition
than from the Chinese is that England has similar machinery
to our own while the Chinese continue to produce by hand
labor. Whenever two countries employ the same tools or

1896.] INDUSTRIAL COMPETITION OF JAPAN. 207

machinery the lower wages become the great element in de-
termining the competition. That is precisely the case between
the United States and England. So that while we have little
to fear from the cheap labor of Asia, without modern machin-
ery, we have everything to fear from the relatively lower wages
of England, because English laborers have as highly perfected
machinery as we have. -

During the last quarter of a century Japan has been rapid-
ly westernizing her civilization, and is now rapidly western-
izing her methods of industry. At the present rate she is pro-
gressing it may not take her more than a decade to get the fac-
tory system, with its most modern equipments. Although this
will be sure to act upon her laborers, raising their standard and
increasing their cost of living, it will probably take half a cen-
tury before her wages approximate the wage standard of the
United States or even of England. To the extent to which she
increases her factory methods faster than she raises her wage
standard will she become a successful competitor with west-
ern producers; and will demonstrate the economic soundness
of protection as a permanent principle in national statesman-
ship. All the world should rejoice at Japan's progress. But it
will be a calamity for mankind if Japan should be permitted to
destroy or even lessen the rate of progress in this country or in
Europe. Her advent into the use of modern methods should
be beneficial to her own people, and make her the missionary to
carry similar methods and civilization into other Asiatic coun-
tries, but not to injure the civilization of western countries.

In the second number of the " Bulletin of the Labor De-
partment," Commissioner Wright publishes an article on "The
Industrial Revolution in Japan," by William Eleroy Curtis.
The facts given show that the industrial condition of Japan may
have a very significant bearing upon international competition
of the immediate future. Mr. Curtis says:

Japan is becoming less and less dependent upon foreign
nations for the necessities and comforts of life, and is making
her own goods with the greatest skill and ingenuity. Since their
release from the exclusive policy of the feudal lords, the people
have studied the methods of all civilized nations, and have
adopted those of each which seem to them the most suitable for
their own purposes and convenience. They have found one

2o8 GUNTON'S MAGAZINE. [March,

thing in Switzerland, another in Sweden, another in England,
others in Germany, France, and the United States, and have re-
jected what is of no value to them as readily as they have
adopted those things which are to their advantage. It is often
said that the Japanese are not an original people; that they are
only imitators; that they got their art from Korea, their indus-
tries from China, and that their civilization is simply a veneer
acquired by imitating the methods of other countries. All of
this is true in a measure, but it is not discreditable. Under the
circumstances that attend the development of modern ideas in
Japan, originality is not wanted, but a power of adaptability
and imitation has been immensely more useful. The Japanese
workman can make anything he has ever seen. His ingenuity
is astonishing. Give him a piece of complicated mechanism — a
watch or an electrical apparatus — and he will reproduce it ex-
actly and set it running without instructions. He can imitate
any process and copy any pattern or design more accurately
and skillfully than any other race in the world. It is that faculty
which has enabled Japan to make such rapid progress, and will
place her soon among the great manufacturing nations of the
world.

It was only forty years ago that the ports of Japan were
forcibly opened to foreign commerce. It was only twenty-eight
years ago that the first labor-saving machine was set up within
the limits of that empire. Now the exports and imports exceed
$115,000,000.

It is a curious fact that 10,273,401 fans, 2,348,810 umbrellas,
134,206 screens, 455,659 paper lanterns, and 13,843,022 gross of
matches were shipped from Japan in 1 894.

The industrial revolution that is now going on in Japan is
quite as remarkable as the political revolution that occurred
there thirty years ago, and equally important to the rest of the
world. Until recently all the manufacturing done in Japan has
been in the households, and 95 per cent, of the skilled labor is
still occupied in the homes of the people, and in a measure
independent of the conditions that govern wage workers in
other lands. The weaver has his loom in his own house, and
his wife, sons and daughters take their turns at it during the
day. It has always been the custom for children to follow the
trade of their parents. The finest brocades, the choicest silks,

1896.] INDUSTRIAL COMPETITION OF JAPAN. 209

the most artistic porcelain, cloisonne and lacquer work are done
under the roofs of humble cottages, and the compensation has
heretofore been governed usually by the quality of the piece
produced.

There have been but two strikes in Japan. One of these
occurred among a railway construction gang, who were hired
for certain wages to work six days in the week, and were re-
quired to work seven without additional compensation. When
their protests were unheeded they laid down their tools and
appealed to the police authorities for the enforcement of the
law which makes six days a week's labor, and provides that no
employe" of the government or any corporation or private indi-
vidual shall be compelled to work more than six days in a week
without extra compensation. Sunday is the usual day of rest
in Japan. Its selection is not due to law nor to religious
scruples, but to public convenience and, perhaps, out of respect
to foreign nations. When what is known as the six-day law
was passed, the Government set the example by closing its
offices on Sunday, and all other institutions followed suit. That
law was originally suggested for sanitary reasons.

The second strike in Japan occurred in Tokyo in the
summer of 1895. A party of bricklayers engaged in building
a factory near Tokyo had their hours of labor extended from
twelve to thirteen because of a desire on the part of the manage-
ment to complete the job and start the machinery as soon as
possible. The men did not object to this increase of time, but
asked a corresponding advance of wages, which, as they were
getting only 1 2 cents a day in our money, would have been only
i cent a day increase for each, or perhaps $i a day for the
whole gang. But the contractor refused, and they quit work.
He got other bricklayers to take their places, but they were
induced to abandon him also, and as he persisted in his refusal
to do what the men considered simple justice, it was decided to
send emissaries to all the other bricklayers in the city and ask
them to join in a sympathetic strike. This attempt to introduce
foreign methods into the conservative labor system of Japan was
only partially successful. The greater part of the bricklayers
employed in the city declined to join, but a thousand or more
men, engaged upon the city water works, on some railway freight
houses and other large structures, quit, and it was several days

2io GUNTON'S MAGAZINE. [March,

before the difficulty was adjusted. Public sentiment was
aroused by the disturbance, and the contractor who caused the
trouble finally compromised with his men and went back to
twelve hours' work for twelve hours' pay.

The ancient system of household labor is being rapidly
overturned by the introduction of modern methods and ma-
chinery. The older artisans are offering a vain resistance and
cannot be drawn from their antique looms and forges by any
inducement that has yet been offered, but the younger genera-
tions are rapidly acquiring a knowledge of the use and value of
labor-saving machinery, and factories are being built in all
parts of the empire. The greatest progress thus far has been
made in cotton spinning and weaving, but several iron mills
have been established and machine shops are are springing up
all over the empire. In four years the new treaties go into
effect, when foreigners will be allowed to engage openly in
manufacturing enterprises. Then their capital and experience
will give a decided stimulus to mechanical industry and the
increase in the productive power of Japan will be even more
rapid than now.

The first manufactory established in Japan was a cotton
mill down in the southwestern corner of the empire, in the
province of Satsuma, which has produced the best pottery and
some of the greatest men. Prince Shimazu was its patron.
Having learned something of modern arts and sciences from
the Dutchmen who were allowed to remain on the island of
Deshima, he started a laboratory on his estates, in which
he learned telegraphy, photography, and how to make glass,
coke, and gas for illuminating purposes. A few years later he
built a factory near his summer villa, which was half arsenal
and half iron foundry. He made guns there and other articles
of iron, and experimented with explosives.

The next factory was set up by Mr. Kajima of Tokyo, in
1867, while the country was still disturbed by the war. It
originally had but 720 spindles, but now operates 82,000, and is
the largest in the empire. These were the only factories in
Japan until 1879, when the government undertook to encourage
such enterprises, and established two well-equipped plants in
different parts of the country to educate operatives and demon-
strate the superiority of modern machinery. It set up four

1896.] INDUSTRIAL COMPETITION OF JAPAN. 211

more in 1880, four in 1881, one in 1882, another in 1883, and
still another in 1884. They served their purpose, made ma-
chine spinning popular, and have since been handed over to
private companies, who are operating them with great profit.

The industry has grown so rapidly that, according to sta-
tistics gathered by the Osaka Board of Trade, there are now 61
factories in operation, with 580,564 spindles, employing 8,899
men and 29,596 women. The factories in course of con-
struction, and which will be in operation during the present
year, will bring the total number of spindles up to 819,115.
Thirty- seven of these factories are at Osaka. The largest in
the empire has 82,000 spindles, and the smallest 1,136. There
are four with more than 5 0,000 spindles, and thirteen with more
than 25,000.

The first genuine foreign factory to be established in Japan
is the Osaka Tokei Seizo Kubushiki Kwaisha, familiarly known
as the American Watch Company. It was started on January
i, 1895, and turned out its first finished watch on April loth.
The organizer and promoter of this company was Mr. A. H.
Butler of San Diego, Cal. , who took an outfit of watch-making
machinery to Japan and induced a number of jewelers and
watch dealers in Osaka to furnish $160,000 capital to pay the
cost of a building and the running expenses of the business.
The company is incorporated under Japanese law, and the stock
is all in the names of Japanese citizens, although 140 of the 300
shares actually belong to Mr. Butler and his associates.

Japanese architecture is not suitable to factory work that
requires a great deal of light and protection from wind and
weather, and therefore it was necessary to erect a new building
of brick upon the American plan, 240 by 40 feet in size, with an
abundance of windows.

In the meantime, the machinery was set up in temporary
quarters and a number of men and boys, who had already been
engaged in repairing and manufacturing hand-made watches and
clocks, were assembled to be educated by P. H. Wheeler, the
superintendent, and his assistants. Mr. Wheeler had worked
in Elgin, Rockford, and Springfield, 111., and in Columbus, O.
He brought with him from America nine experts, who, like
himself, have contracts for three years and an option of renewal
for 'three years longer at the end of the first term. They are as

2i2 GUNTON'S MAGAZINE. [March,

follows: From Elgin, F. M. Clark and William Keene; From
Rockford, T. Schnarke; from Springfield, L. Sylvester, E. V.
Goodman and Charles Gassier; from Columbus, H. Barbier,
S. B. Finch and George Flick.

These gentlemen say that their Japanese students show very
great aptitude and skill, and that they learn much more rapidly
and have a much more delicate touch than persons of similar
intelligence and condition in the United States. Nearly all of
them had some experience in making or repairing watches and
clocks before they came into the factory, and a few had used
hand machines for drilling, polishing and that sort of work ; but
the modern machinery at which they were placed was entirely
new to them. They are mostly young men, aged from eight-
een to thirty. As none of them can understand a word of
English, and none of the American experts could speak
Japanese when they arrived, the work of instruction might
have been very slow but for the keen perception of the pupils.

It is difficult to explain a proposition to the Japanese, but
their power of imitation is so well developed that the easiest
way to teach them is to go through the process yourself and let
them watch you. Almost instantly they are able to repeat it,
and will continue to do so until the end of their days without
the slightest variation. Another difficulty in this school of in-
struction was the absence of words in Japanese to describe the
machinery and the parts of the watch, but the English terms
were adopted and are now exclusively used.

The highest wages paid to the skilled native workmen in the
factory are only 40 sen a day, which is equivalent to 20 cents in
our money. The lowest wages are 10 sen (5 cents) a day, while
in American factories the same labor would be paid from 50
cents to $5 a day. The capacity of the factory when fully in
operation will be 150 watches a day, and owing to the low price
of labor they can be sold with a profit for 50 per cent, less than
the market price in the United States and Europe.

The following tables shows the rates of wages per day
paid to Japanese artisans and laborers : (Values stated in Amer-
ican gold on the basis of 2 silver yen to the dollar. )

1896.] INDUSTRIAL COMPETITION OF JAPAN.

DAILY RATES OF WAGES, JAPAN.

2I3

OCCUPATION.

HIGHEST.

LOWEST.

AVERAGE.

Blacksmiths $o . 60

Bricklayers .88

Cabinetmakers (furniture) .53

Carpenters -. .50

Carpenters and joiners (screen making) . .55

Compositors .83

Coolies or general laborers .33

Cotton beaters .45

Dyers .60

Farm hands (men) .30

Farm hands (women) .28

Lacquer makers .58

Matting makers .50

Oil pressers ' .34

Paper hangers .60

Paper screen, lantern, etc., makers .55

Porcelain makers .50

Pressmen, printing .70

Roofers .60

Sauce and preserve makers .40

Silkworm breeders (men) .50

Silkworm breeders (women) .25

Stonecutters .69

Tailors, foreign clothing i .00

Tailors, Japanese clothing .56

Tea makers (men) .80

Tobacco makers .50

Weavers .40

Wine and sake makers . . .50

Wood sawyers .50

.18
.20

•17
.10

-14
•13
•05
.16
.06
•15

.20

.16

.20
.20

•13
.II

.20
.10
.10
•05
.22
•25
•15
•15
.II
.07
.15
•13

•30

• 33

• 30

• 30

• 30
.29

.22
•23
•25
.19
.19
.29
•30
•25
•31
•31
.29
.26
.29
.24
.22
.17
.36

•49
.28

• 31
.26

.15
.29

• 30

DAILY RATES OF WAGES PAID IN YOKOHAMA.

OCCUPATION.

RATE PER
DAY.

OCCUPATION.

RATE PER
DAY.

Blacksmiths

Carpenters

Carpenters, ship

Compositors

Confectionery makers and

bakers

Cotton beaters

Dyers

Joiners. . .

Laborers, ordinary

Lacquer makers

Matting makers

Oil pressers

Paper hangers

Plasterers

Porcelain artists, ordinary.
Porcelain artists, superior..

.36
.26
.29
.29

• 17
.i?
.24
.29

• 19

.24
.24
.24
.24
.26

• 38
.72

Porcelain makers

Pressmen, printing offices.

Roofers

Sake brewers

Sauce and preserve makers

Screen makers

Silk spinners (female)

Stonecutters

Tailors, foreign clothing..
Tailors, Japanese clothing.

Tea-firing men

Tea-firing women

Tea pickers

Tilers

Tobacco and cigars mak-
ers

Wood sawyers ..

• 24
.19
.26

.22

.24
.26
.17
•'31
.48
.24

.14
,IO
.29
•31

.24
.29

2i4 GUNTON'S MAGAZINE. [March,

There has been little inducement for the development of
inventive genius in Japan until recently, and the greater part
of the applications already filed in the patent office have been
for trifles, like children's toys, or improvements or changes in
foreign methods and machinery to make them more useful in
that country.

I asked Mr. Matsudiara, the chief examiner of the patent
office, at Tokyo, whether the introduction of common schools
and compulsory education had improved labor.

" That is difficult to say, "he replied, " but so far as I have
observed, education is not improving labor. The little education
that the common people receive in the public schools makes
them abhor labor. It has always been the custom in Japan for
families to follow the same trade or occupation for centuries
after centuries, but when a boy receives an education superior
to that of his father he seems to feel that the old mode of life
and avocation are not good enough for him. If he is a farmer's
son he wants to live in the city, and if he is the son of a
mechanic he wants employment under the government or some
less laborious occupation than his family have followed. But I
believe the Japanese are not peculiar in this respect. I think it
is the rule all over the world that when a man acquires learning
he wants to advance in other respects also and better his con-
dition."

While the Japanese will soon be able to furnish themselves
with all they use and wear and eat without assistance from
foreign nations, they will be compelled to buy machinery and
raw material, particularly cotton and iron. Therefore our sales
will be practically limited to those articles. And the market
for machinery will be limited as to time. The Japanese will
buy a great deal within the next few years, almost everything
in the way of labor-saving apparatus, but they are already be-
ginning to make their own machinery, and in a few years will
be independent of foreign nations in that respect also. Another
important fact — a very important fact — is that they will buy
only one outfit of certain machinery. We will sell them one
set, which they will copy and supply all future demands them-
selves. This will go on until the new treaties take effect, when
American patents will be protected.

They have very little wood- working machinery; and very

1896.] FOREIGN COMMERCE FOR 1894-1895. 215

little shoemaking machinery, for the people do not wear shoes.
The same is true of knitting machinery, for they do not wear
hosiery. I do not think that more than 20,000 out of the
41,388,313 people who compose the population of Japan wear
shoes and stockings. Ninety per cent, go barefooted and bare-
legged, women, children and men protecting their feet from the
stones by wooden and straw sandals. The higher classes have
the same sort of foot gear, but it is made in a more finished
manner, and they wear little cloth affairs that they call " tabis"
upon their feet. These are made of white or blue cotton, and
do not go above the ankle bone. But the use of shoes and
hosiery is increasing, and the people will grow into it as they
have grown into other foreign notions.

Foreign Commerce for 1894-1895.

THE official summary comparing the commerce, tonnage
and immigration of 1894 and 1895, as prepared by the Bureau
of Statistics of the Treasury Department, has just appeared
and contains some points that deserve notice. Our imports
that are free of duty are almost exactly the same in totals for
the two years, viz., for 1894, $383,37 i, 933, and for 1895, $384,-
810,163, notwithstanding a falling off of articles of food and
live animals to the amount of $73,406,212, and an increase of
$63,167,881 in "articles in a crude condition for domestic in-
dustry." It seems remarkable that sugar which passed from
the dutiable to the free list during the period, should have
diminished in importation from 4,034,105,924 pounds in 1894 to
3,488,450,685 pounds in 1895, and from a value of $105,178,-
073 in 1894 to a value of $67,413,326 in 1895. We seem to
have used 600,000,000 pounds less of sugar per annum when it
became free than when it was under duty and to have expended
$30,000,000 less in its purchase.

Tea, which was free in both years, shrank slightly in use,
viz., from 102,082,702 pounds in 1894 to 97,883*051 in 1895.
Our imports of hides and skins were doubled both in quantity
and value, viz., from 147,321,997 pounds, worth $18,541,449, to
283,506,793 pounds, worth $36,432,989. To make such an in-
crease interpretable economically, we should know how this in-
creased importation compares with the domestic production of

ai6 GUNTON'S MAGAZINE. [March,

hides in the same period, of which, unfortunately, the govern-
ment takes no statistics whatever. There was an increase in
the export of leather and its manufactures from $14,888,068 in
1894, to $18,492,760 in 1895, but an increase in export of
$4,000,000 worth of leather would have formed but a partial out-
let for an increase in importation of hides to the amount of
$18,000,000 worth. In 1883, the great leather trust was formed,
under whose operations most of the tan bark in the country
was, it was said, bought up. It is known that cattle were
slaughtered so heavily in the period of financial depression, that
the total number in the United States was less by 3,287,023
head on January i, 1895, than they had been on January i,
1893, and this slaughter would naturally increase, for that
period, the domestic supply of hides, which can hardly be less
than ten times greater than the importation. As there has
been no change in duties on hides since 1873, there seems to be
no cause to which to attribute the increase in the import of
hides and export of leather and its manufactures in 1894-5
other than the creation of the leather trust and consequent new
economics in the trade.

Meanwhile, the increase of $124,240,449 in the aggregate
values of goods imported is not paid for by any increase in ex-
ports of merchandise. We exported $807,312,116 worth of
domestic merchandise in 1894, and $807,740,016 worth in 1895.
Though this export exceeds our imports for the year ($801,663,-
490) by about six millions of dollars, this excess is the smallest
that has occurred in eight years, and the total exports are
the smallest of any year since 1888.

What a splendid commentary these figures exhibit upon
the standard free trade argument that unless you buy of
foreigners (competing products, of course,) you cannot sell to
them. Here we expanded our purchases of dutiable goods
from foreigners by $124,240,449 or nearly two dollars per
capita, and we sold them only $300,000 worth more, or say four
cents worth ^er capita. If we turn to the exports of gold and
silver it is not difficult to see how our increased purchases of
competing foreign goods were paid for. In the tariff debates
of 1828-34 Mr. Webster could argue that the difference was
paid for in the freights earned by our vessels in the ocean trade ;
but now we are making no earnings of that kind. In prosper-

1896.] FOREIGN COMMERCE FOR 1894-1895. 217

ous years, or rather in years of easy credit, free trade orators
can argue that the adverse balance is paid for by an export of
American securities and shares, but in these two years of de-
pression more securities were sent home to us than were pur-
chased anew. Hence, the difference could not be balanced in
that way. But our net exports over imports of gold were
$72,066,287; our net exports of silver over imports were
$42,547,046. Total export of coin and bullion, $114,613,333,
which comes within $10,000,000 of adjusting the above in-
crease of imports.

Looking at our exports more minutely we find that those of
agricultural implements have risen slightly, viz., from $4,765,-
793 to $5,319,885; those of cattle have shrunk in number nearly
one-half and in value from $38,963,554 to $26, 997, 771. We have
sent abroad more horses, however, the export rising from 8,171,
worth $1,363,588, to 19,853, worth $3,006,502. Our exports of
sheep, one-half of which are to England, have risen from 274,-
133, worth $i,7n,355» to S00*1?!, worth $3,310,936. Free wool,
therefore, favors the export of sheep, as free trade favors the
exodus of population.

Our export of breadstuff s in all forms was $125,604,486 in
1894, and $125,266,871 in 1895; our foreign cousins resolutely
refusing to buy an ounce more of our flour or wheat, though we
increased by $2 per capita our purchases of their goods. Our
export of cotton shrank from $200,413,772 to $189,890,645, and
our export of cotton cloths fell from $11,602,905 to $10,100,881,
but we sold nearly $1,000,000 more of fish and a like amount
more of fruits abroad. Our export of hops rose in quantity from
14,305,065 pounds to 17,959,164 pounds, but fell in price, so
that we got only $1,745,945 for the larger export of 1895 against
$2,124,311 for the smaller export of 1894.

Our export of manufactures of iron and steel rose in value
from $29,943,729 to $35,071,535 ; but our handsomest increase
in exports was in mineral oils, which rose from $36,588,959 to
$50,842,983. This rise in our export of oil seems hardly ade-
quate to account for the report that the Standard Oil Company
of New York will distribute dividends amounting to $33,000,-
ooo for the year, notwithstanding the lively competition of
Russia in the petroleum manufacture, and of the electric light
companies, the municipal gas companies, the wax candles and

2i8 GUNTON'S MAGAZINE. [March,

the. professors of socialism and the Bartholdi statue in furnish-
ing the light supply.

Our export of meat and dairy products sums up thus :

1894. 1895.

Beef— Canned . . $5,233,795 $5,476,040

Fresh 17,404,763 16,522,018

Salted 3,722,914 3,743,667

Tallow 1,748,893 1,207,350

Hog Products — Bacon 37,736,883 37,411,944

Hams 10,239,228 10,996,870

Pork 4,701,872 4,430,156

Lard 39,378,242 37,348,753

Mutton 195,539 37,222

Oleomargerine 11,265,110 7,824,893

Poultry and game 19,717 28,418

All other meat products 1,476,634 1,593,651

Dairy Products — Butter 1,730,210 2,194,103

Cheese 6,682,694 3,401,117

Milk 206,041 240,642

Total provisions, etc $141,742,435 $132,456,843

With a falling off of only $9,000,000 in our exports of pro-
visions of all kinds, and with our exports of breadstuffs abso-
lutely stationary for the two years, and with a net falling off in
export of live animals of only $8,529,362, there is a falling off
in the imports of articles of food and live animals to the amount
of $73,406, 212. This, taken with our increased importation of
competing foreign goods, seems to indicate that in times of
stringency and money pressure, we at least depend more and
more on the home supply for our foods, and produce a larger
proportion of them. Perhaps this is what Mr. Toots meant
when he undertook to solve the inquiry of the Member of Par-
liament, "What shall we do with our raw materials when we
discover that our gold is going abroad in exchange for an inor-
dinate supply of foreign goods ?"

Mr. Toots did not understand very well what the inquiry
meant, but he thought the answer "Cook 'em, sir!" might
prove to be as safe as any other.

1896.] 219

Social and Industrial Statistics.

BY HON. CARROLL D. WRIGHT.*

[Specially reported for GUNTON'S MAGAZINE.]

Complete and accurate statistical information is a prime
necessity in our complex modern civilization. Facts, and all
the facts, must be had before we can reach any satisfactory
solution of present day problems. The statistician writes
crystallized history. The science or scientific method known
as statistics is comparatively young, but already its processes
have become highly efficient. Indeed, had the records of the
past been based upon information collected with anything like
the thoroughness, impartiality and attention to detail required
of the modern investigator, written history would have been
far truer than it is.

Statistics may properly be grouped under three heads :

(1) Records of continuous events, or history in the skele-
ton;

(2) Enumeration of aggregates, such as census and immi-
gration figures; and

(3) Investigations covering representative facts, such as
rates of wages, cost of production, etc.

Among the sources of statistics are the official records of
states, municipalities and courts; commercial reports; newspa-
paper accounts, when verified ; individual statements, and so on.
An immense amount of work is often necessary to get together
a comparatively simple set of facts. For instance, we were re-
quired not long ago to collect representative statistics on the
subject of marriage and divorce. This involved an examination
of every petition for divorce, the trial evidence, if any, and final
decree, in every one of the 2,700 courts of the United States
having jurisdiction in divorce cases, for a period of twenty
years.

The taking of census statistics is even more complex, and
far more liable to error, because of individual misrepresenta-
tion, or ignorance. The faithfulness of a census depends upon
the honesty and patriotism of the people. The same is true of
industrial data. Manufacturers sometimes complain that the

•Synopsis of Lectures I. and II. before the School of Social Economics.
Specially reported for GUNTON'S MAGAZINE.

220 GUNTON'S MAGAZINE. [March,

facts concerning their particular establishments are misrepre-
sented, but it is almost invariably true in such cases that the
error is traceable to the manufacturer himself. The official
record cannot be more truthful than its source.

It is very easy to juggle with figures. So much dishonest
use is made of honest statistics that popular faith in the whole
science is often seriously weakened. As a matter of fact,
figures will never lie but liars will figure. A few plain rules
should always be observed in attempting to get at the meaning
of a mass of facts. You must be sure of your authority, and
carefully observe every footnote and explanation. Make cer-
tain, also, that you have all the essential facts, not merely those
most prominent. Failure to do this may give you conclusions
the direct reverse of the truth.

In no two lines of statistics are errors more common than
averages and percentages. A good example of the former is
the method which most people will adopt in getting the aver-
age wages in a manufacturing concern. Suppose in a certain
factory 20 men are employed at $i a day, 40 at $2 and 60 at $3.
The ordinary man will add $i, $2 and $3, divide by 3 and get
$2 as the average daily pay. Whereas, the true method is to
multiply out each class by itself, thus getting the aggregate
pay roll, and divide that by the total number of employes,
giving an average rate of $2.33.

Mistakes in percentages arise from a disregard of the very
obvious law that for purposes of quantitative comparison per cent-
ages must be cast upon equal bases. For instance, the forma-
tion of three new savings banks fifty years ago, when, perhaps,
but one previously existed, would be a gain of 300 per cent. ;
whereas, when we came to have over a thousand such institu-
tions, an addition of 25 annually would only show a percentage
increase of 2 1-2. And yet that sort of reasoning is constantly
employed in numerous lines, to show how fast we are going
down hill.

An amusing illustration of this class of error came under
my notice not long ago. It was reported from a certain co-edu-
cational institution for one year that 50 per cent, of the women
students and only i per cent, of the men had married. This
was proclaimed as indicating the folly of sending girls to that
school for an education. The actual facts were that the insti-

1896.] SOCIAL AND INDUSTRIAL STATISTICS. 221

tution contained but 2 women and 100 men. One of the men
had married one of the girls; i per cent, in one case, 50 per
cent, in the other.

The United States government was the first to establish a
regular census. The 1790 enumeration was a simple matter
compared with the immense mass of information collected a
century later. The mere count of the people is now but a
small part of the process. The census of 1890 was taken by an
army of nearly 50,000 enumerators, each supplied with blanks
containing 27 distinct questions for every individual. The
enumerator has to go to each house, and in case the family are
away is perhaps obliged to get the information from a domestic
servant. You will easily see how liable to error the record
would be in such cases, to say nothing of the mistakes con-
stantly made by individuals in giving information about them-
selves. You would think it remarkable that a man should not
remember whether there had been a death or a birth in his
family during the year, but such instances are by no means
rare. Indeed, while for the purposes of political apportion-
ment, etc. , census statistics are fairly reliable, scientific accuracy
is about impossible.

The British census is taken by what is called the photo-
graphic method. On a designated Saturday night small blanks
containing but seven or eight questions are left with the head
of each family in the kingdom, and between that time and Mon-
day morning he fills in the blank with the facts relating to all
members of the family who were in the house at 12 o'clock on
that Saturday night. The distribution and collection are done
by an immense number of enumerators, one for every street
perhaps, so that none may be overlooked. The adoption of this
system has been urged in the United States, but you will
readily see how faulty it may be. I believe the American sys-
tem is better. Our enumerators gain experience during their
work, and many are counted whom the photographic system
could not possibly reach. In taking the census of Massachu-
setts in 1875 I tried the British method, and although that State
has had the public school system almost since its organization,
only 37 per cent, of the blanks were properly filled out.

A census office has its occasional streaks of humor. We
sometimes get cases of transposition such as this: A man,

222 GUNTON'S MAGAZINE. [March,

seventy years of age, reported as dying from teething, and a
two-year-old infant carried off by old age. Again, a watch-
maker will be reported as a matchmaker from a town where,
according to our records, no matches at all are made. In such
instances, it is a part of the staticistian's duty to go behind the
returns and correct manifest errors.

The population of the world at large, of course, increases
only by excess of births over deaths. But the rate of growth
in different localities is subject to the widest variations, owing to
movements of population and the effects of climate, soil and in-
dustrial conditions.

Immigrants have formed a large element in the increase of
this country's population. Thus, in the decade from 1830 to
1840, the increase by natural causes was 29 per cent., by immi-
gration, 4.65 per cent. ; from 1870 to 1880, the natural increase
was 23 percent., immigration, 7.29 percent; but from 1880 to
1890, the natural increase fell to 14.40 per cent., while that by
immigration rose to 10.46 per cent. I have never been able to
arrive at any satisfactory explanation of this remarkable drop
in the rate of natural increase. It is, of course, figured upon a
larger basis of population than for the previous decade, and
there may have been faulty enumeration, or a decrease of
births accompanying our increasing wealth ; but these consider-
ations are equally applicable to the previous periods, and the
real cause still remains a mystery.

Taken the world over, there are about 510 males and 490
females in every 1,000 of population. This proportion varies
in favor of the females somewhat, according to the age of the dif-
ferent countries. Thus, in Great Britain and Ireland there are
about 1,047 females to each 1,000 males; in France 1,014; in
Germany 1,039, ano^ so on> while in the United States there are
but 952. The State of Massachusetts, where large numbers of
women are employed in the textile industries, has 1,058 females
to 1,000 males, while Montana, as yet a pioneer state, where
the occupations are almost wholly confined to men, shows but
503 females to 1,000 males.

The foreign-born population of the United States numbered,
in 1890, 9,249,547, or 14.77 Per cent, of the whole. Of these,
Germany has contributed the largest share, something over 30
per cent. ; Ireland coming next with over 20 per cent. ; England

1896.] SOCIAL AND INDUSTRIAL STATISTICS. 223

and Wales about n per cent.; the Scandinavian countries to
per cent., and so on. The French and Scotch are not much
given to emigration, and constitute only 1.22 per cent, and 2.62
per cent. , respectively, of our foreign population.

The element of foreign-born residents in the United States
is much larger than in any European country, there being 147
in every 1,000, as compared with 78 in Switzerland, 29 in
France, 10 in Germany, 4 in Great Britain and only 2 in Italy. p

The population engaged in , agriculture, fisheries, etc. , in
this country is about 85 per cent, native and 15 per cent, for-
eign; in trade and transportation, 78 per cent, native to 22 per
cent, foreign ; while in the manufactures the foreign proportion
is larger, being 32 per cent, to 68 per cent, native.

The popular impression as to the effect of immigration
upon religion and politics is quite erroneous. It is generally
supposed that most immigrants are Catholics, while not more
than one- half can possibly be so; Ireland and France contribute
to the Catholic population, but those from Great Britain, Ger-
many and the Scandinavian countries are almost entirely Pro-
testant. The same general proportion exists as to their political
affiliations ; the former being largely Democratic and the latter
Republican. The English are about evenly divided between
the two parties, but this is set off by the French Canadians, who
are Chiefly Republicans. The Democratic South is almost
entirely native, while the North the States with the largest
foreign element are largely Republican. Some of the great
cities, however, show exceptions to this tendency. North Caro-
lina has the smallest foreign-born population, only 23-100 of i
per cent ; North Dakota is at the other end «f the list with
44.58 per cent. The bulk of the German population is west of
Pittsburg, and of the Irish east.

It is a very remarkable fact that of all the immigrants com-
ing to this country between 1821 and 1890 some 60 per cent,
were still living at the latter date. The total number coming in
those 69 years was 15,427,657.

There is a very general apprehension felt in regard to the
growing preponderance of city over country population. This
feeling I do not share. Certain facts about urban growth are
usually overlooked. For instance, increasing population does
not necessarily imply increasing density within the same limits.

224 GUNTON'S MAGAZINE. [ March,

Indeed, the congested districts of great cities do not increase,
but are more and more being given up to business purposes.
Large suburban areas are constantly being taken in, and filled
up with former city residents. These annexations, of course,
show increases in aggregate population, but they also mean,
as is not made so apparent, a relative decrease in density.
The suburban movement is growing rapidly along with im-
proved methods of transportation, and it is an altogether health-
ful tendency.

Moreover, while our urban population has been growing
rapidly during the last twenty years, it is still much below the
European average. Only about 29 per cent, of our population
can be considered urban, as against 42 per cent, in Prussia, 53
per cent, in Great Britain and 80 per cent, in Holland.

It should also be remembered that the reason people leave
the country for the cities is because they can there enjoy more
of the comforts and conveniences of life, secure better educa-
tional advantages, and come within the refining influences of
increased social contact. It is not, therefore, a dangerous
tendency. Rural life is essentially isolating and non-pro-
gressive, and the building up of cities and towns all through
the country must be considered a hopeful rather than a dis-
couraging sign, because it brings the agricultural population
into closer and more frequent contact with the forces of higher
civilization.

A far greater difficulty is to be found, however, in the
problem of city government. In that respect I am of the
opinion that the United States has much to learn from the
countries of the-Old World.

1896.] 225

Editorial Crucible.

WE FULLY appreciate the compliment implied by those
editors who use our articles for leading editorials. As their
object is, doubtless, to give their readers the best there is, they
might be extending their usefulness, if they would indicate
where they get it. Their readers might then go to the same
source and get much more than their limited space permits
them to give. But, if they really insist upon making us fur-
nish their editorials without either pay or credit, we suggest
that they ask for advance sheets. This would give their edi-
torials more freshness, and also save them from having to mu-
tilate the magazine for copy. While we cannot condone edi-
torial stealing, we cannot resist the feeling that the sin is
greatly modified by the good judgment shown in the selection.

IN HIS SPEECH in the House of Commons on Monday, in
behalf of clemency towards Irish political prisoners, Mr. Red-
mond, leader of the Parnellite faction, threw all the blame for
the use of dynamite in English politics on the Irish in America.
He said they are "regarded by Irishmen, generally, as being
mad and reckless." This seems a little severe on the Irish in
this country, even if true, after having sent hundreds of thous-
ands of dollars to pay the election expenses of Home Rulers
like Mr. Redmond. But there is a hopeful element in it, after
all. Mr. Redmond has probably learned that the use of dyna-
mite as a method of political warfare, is a mistake, and, in order
to give the impression that the Irish in Ireland have entirely
abandoned physical force methods, Mr. Redmond threw the
blame of using dynamite on the Irish in America. Well, they
are at a considerable distance from Westminster, and, perhaps,
can bear the burden without much pain. But it is not at all
certain that it will be forgotten the next time Mr. Redmond
comes around with the hat.

IN GIVING to Liliuokalani practically a free pardon, Presi-
dent Dole has done himself and the Hawaiian Republic great
credit. Not that the dusky Queen has any particular claims to
freedom, but it shows a disposition to treat political offenders
as leniently as possible. It is the more striking when com-
pared with the conduct of Liliuokalani herself. It will be

226 GUNTON'S MAGAZINE. [March,

remembered that when Mr. Cleveland was conspiring to over-
throw the young Republic, and place the dissolute Queen back
upon the throne, she declared it to be her right and her inten-
tion, if restored, to send President Dole and his associates to
the block. It was nothing but this programme of savagery
that deterred Mr. Cleveland in his monarch-restoring policy.
He did not dare to face the American public with such a crime
on his hands. Yet this same woman, who aided the conspiracy to
overthrow the Republic, has been granted her freedom by the
very man whom she would have sent to the block, if she had
succeeded in getting where he is. The two acts measure the
difference in the civilization, character and comparative fitness
for power of the two persons. She is a barbarian, with the
instincts of a savage ; he is a gentleman with the instincts and
long-sightedness of a statesman. May he long remain the
President of the Hawaiian Republic.

THOMAS A. EDISON has sent the new Roentgen " X " Rays
through half an inch of steel, a vulcanized rubber plate and a
sheet of celluloid, and thus far finds no substance through which
the ray will not penetrate freely, consequently no substance
capable of either refracting or reflecting them. Imperfect pene-
tration or non-penetration is as necessary to refraction and re-
flection as they are to opacity. Mr. Edison regards the action
of the new rays as fatal to the undulatory theory of light, if the
X rays are the movements of an ether. A singular fact is that
the rays should select the bones from the flesh in their photo-
graphing, and should give such clear outlines of needles, bul-
lets and other foreign substances imbedded in the flesh, while
giving no outlines at all of the distinctions between fibre,
nerves, viens, arteries and other component parts of the flesh.
Flesh and all its parts seem to be transparent to these rays, as
atmospheric air is to sunlight, while bones, bullets, needles and
other unorganized or less organized matter are more nearly
opaque, and hence are capable of arresting and returning the
cathode rays, and so affecting the photograph-plate. And yet
when these substances are in the air, instead of in the human
body, Edison sends the rays directly through these very sub-
stances, steel and the like. The magnet also easily refracts
the rays.

1896.] EDITORIAL CRUCIBLE. 227

IT LOOKS as if the present session of Congress was going to
touch the high-water mark of do-nothingism. Before the holi-
days, Mr. Cleveland issued a special message asking ^Congress
to pass some measures of financial relief before it adjourned for
Christmas. The House promptly passed two measures, one for
providing revenue and .the other for raising a temporary loan
until the revenue should begin to come in. Neither measure
has yet passed the Senate, nor in all probability will do so. The
United States Senate is showing a lack of patriotism and states-
manship that is discreditable to the nation. It is just such petty
conduct as has been exhibited there during the last two months
that brings popular government into discredit. Little wonder
that in view of such performances foreigners have little respect
for American statesmen. But the opinion of foreigners is of
small account compared with the opinion of the American peo-
ple themselves. Such petty politics as are being enacted by
the United States Senate in the present session in the name of
statesmanship, is rapidly destroying respect for our National
Legislature among our own citizens. United States Senators
are pointed to with scorn by anarchists, socialists, mugwumps
and chronic fault-finders as venal politicians who are willing to
sacrifice the nation's welfare for their own ends. That this can
be done with any grain of truth is discreditable to the nation
and dangerous to Democratic institutions.

THE EVER GENIAL editor of our contemporary Seaboard,
keeps firing good-natured broadsides at us because we are
able to see that an export bounty on agricultural products is not
a legitimate part of our protective policy. We object to call-
ing things by wrong names. The free silver people are asking
unlimited coinage of silver at 16 to i, and they call it bimetal-
lism, when it is the simplest and most effective means of getting
monometallism. Our contemporary calls an export bounty
protection, when it is a direct means of getting paternalism.
An export bounty may be, as Mr. Lubin says, an effective
means of "artificially increasing the price of agricultural
products," but that is not protection; it is simply converting
public taxes into private profits. This might greatly increase
farming, and so make more exports necessary and increase the
amount to be paid out of the public treasury.

228 GUNTON'S MAGAZINE. [March,

But this is not desirable for the country. What we need is
not more farmers, but more and greater variety of manufactures,
increasing urban populations, which will furnish both a larger
market for our agricultural products and a much greater mar-
ket for the products of intensive farm culture.

Our national development is not to be in the direction of
more agriculture, and if an export bounty would do all that its
friends say it would, that would be one of the best reasons for
not granting it. We commend to the consideration of our con-
temporary an article on " Export Bounties Not a Remedy," by
Prof. D. Hutton Webster, of Stanford University, in this issue.

THE American Agriculturist has completed its annual live
stock investigation, and places the aggregate value of all farm
animals at $1,860,420,000 on the first of January, 1896, as
against a value of $2,463,083,000 for the like date in 1893, a
shrinkage in three years of $662,633,000, or 25 per cent., and a
shrinkage for 1895 of $62,130,000. This continual shrinkage in
values of the principal farm products is doubtless due to in part
to the rapid opening up of semi-barbarian countries to oppor-
tunities for competing in furnishing the meat supply, and to
the increasing extent to which the American, Australian, Argen-
tine and African, and United States territorial meat supply is
drawn from the great ranch farms, where a low cost of pro-
duction prevails, instead of from the comparatively small farms
of the central States. This cheaper semi-barbarian supply is
made possible largely through the new railway lines everywhere
being opened up through English loans. This reduces the
question of good prices for farm products ultimately to a ques-
tion of abundant banking facilities and low rates of interest to
farmers. Unfortunately the American farmers generally do
not see this point, and are so far from voting in a manner to
give them as good banking facilities as those which favor
Argentine, Australian, African and Indian competition that
their Granger and Farmers' Alliance spokesmen can always be
counted on for every vote hostile to the evolution of a sound
banking system and abundant banking facilities. They are
ready to vote for free silver, new greenback issues, a revenue
payable in fiat money only ; and if they could get a chance to
vote all banks out of existence it is not at all certain they would

1896.] EDITORIAL CRUCIBLE. 229

not do so. And yet the loss of value in their farm animals is
largely due to these causes, and is the direct penalty for the
dearth of banking facilities which they are doing their utmost
to convert into a famine of rural bank credit.

THE SO-CALLED popular loan has not been very popular,
though it has been attended by some newspaper effervencence
which seemed like tclat. Out of the whole $100,000,000, indi-
vidual subscribers have applied for and received only $2,000,-
ooo. The Treasury has incurred a simultaneous loss of gold by
withdrawals made by those who were obtaining from the Treas-
ury the very gold with which they purchased their bonds, to the
amount of $25,000,000. To this extent, therefore, the Treas-
ury is not replenished, and the bond issue does not effect its
purpose. It is an issue of bonds to the amount of $100,000,000
to effect an increase in the gold reserve, which is limited by this
fact alone to $75,000,000.

The members of the syndicate, including Messrs. J. P.
Morgan & Co. , the Deutsche Bank, the National City Bank of
New York and Messrs. Fisk & Son, receive $33,000,000 of the
loan, and the other successful bidders are chiefly foreign and
domestic operators in whose hands the bonds may be said to be
still unmarketed. The transaction has made clear that if the
whole gold furnished is not first drawn out of the Treasury to
fill subscriptions with, it is because of the hesitation of brokers
and bankers to demand the bonds in a manner which they know
will defeat the object of their issue. This in turn makes it im-
probable that the attempt will be made to supply future deficits
of gold in any such manner, and it is generally felt that the
syndicate method is not much better. The endless chain busi-
ness will continue to apply until politicians have the wit either
to provide the government with a gold revenue, or to devolve
the obligation of furnishing a currency redeemable in gold on
the banks collectively by repealing the legal tender act, or to
establish a government bank with sufficient capital to run the
currency according to law and upon sound banking principles,
without any fiatism or fiat money in sight.

IT is CLEAR by the tone of the debate on the Queen's
speech that Parliament, regardless of party, is ashamed of the

230 GUNTON'S MAGAZINE. [March,

position Lord Salisbury has taken on the Venezuelan question.
The amendment moved by Mr. L. Atherly- Jones, Radical
Member for North West Durham, to the effect that the boundary
dispute with Venezuela be referred to arbitration, met with
almost unanimous approval. The Liberals bubbled over in
their endorsement of it, and nothing but the fact that an amend-
ment to the Queen's speech would require the Administration
to oppose it, and consequently, by party discipline force the
Tories to sustain the Ministry, prevented the Tories from join-
ing the Liberals in the support of the amendment.

This was also indicated by Mr. Balfour's appeal to the
House not to discuss the question at present, with the evident in-
ference that the Ministry was willing to do just what they are
asking. The whole affair shows that the English people are
utterly opposed to the idea of England going to war with the
United States, because she refused to submit a question of
boundary dispute in America to arbitration. It may turn out
that the evidence is more in favor of the Schomburgk line than
of Venezuela's claim, but investigation and arbitration and not
war, are the true means of settling that question. Such a ter-
mination of the difficulty will be an important step towards
establishing arbitration as the means of settling international
disputes. The fact, however, that the United States was ready
to fight, if necessary, in the interest of peaceful arbitration, may
carry the news to such hot-headed Jingoes as belch forth their
anti-American venom in the Saturday Review, that after1 all
the United States, though characteristically a peaceful, indus-
trial nation, will have to be reckoned with when questions of
American territory are involved. We are a peace-loving people,
but we have a national duty to perform and may be relied upon
to perform it.

COMMENDABLE EFFORTS are being made to abolish the
sweating system. A bill has been introduced into Congress to
deal with the subject, by imposing a tax of $300 a year upon
contractors entering into the sweat-shop methods of manufac-
ture. A bill has also been introduced into the New York
Legislature, making it a misdemeanor for any person, except
the members of families residing there, to manufacture in
buildings used for human habitation.

1896.] EDITORIAL CRUCIBLE. 231

The difficulty with both of these measures is that their
means of enforcement are inefficient. The federal tax would
be most difficult to collect and very generally evaded. The
same is true, but perhaps less so, of the bill before the Legis-
lature. The sweat-shop system is sufficiently vile, uneconomic
and socially debasing to warrant drastic measures for its exter-
mination. It should be dealt with in the same direct uncere-
monious way that we deal with epidemics. It is not a system
to be regulated but one to be exterminated. There is nothing
good in it. It pollutes all it touches. It is foreign to modern
industrial methods and conditions. It is injurious alike to the
physical health, moral growth, social purity and economic
welfare of the community. Instead of having long and elaborate
bills that tax the highest skill of an expert lawyer to interpret,
we should apply to it simple direct legislation. A bill with
about three clauses, as follows :

(i). That the manufacture in any buildings used for
human habitation of any of the products named in Andrews'
bill should be unconditionally prohibited.

(2). That the owner of any building so used should be pun-
ished by a fine equal to the full rent of the entire property.

(3). That any person having goods manufactured contrary
to this bill should be punished by a fine equal to the entire value
of the goods.

This would practically confiscate the entire rent of the
property used for sweat-shop purposes and the goods produced by
sweat-shop methods. If this bill were enforced the sweat-shop
system would not last a month ; property owners and contrac-
tors would avoid any contact with a business in which the value
of their property was confiscated. Moreover, this would put
the responsibility upon the owners of the material and the
owner of the building, just where it belongs. It is useless co
punish the poor wretches who are the victims of this system.
The sweating system is a social disease, no less malignant
than small pox, and should be dealt with in an equally sum-
mary fashion.

232 [March,

Economics in the Magazines.

ARBITRATION. The Venezuelan Difficulty. By Andrew
Carnegie in North A merican Review for February. The Presi-
dent's Monroe Doctrine. By Theodore S. Woolsey in The Forum
for February. Mr. Carnegie is more American in his assump-
tion that the United States is the proper constable-general of
the American continent, and can judge for itself how far it will
protect the just boundaries of South American republics, than
he was when he sailed away from the tariff conflict, recommend-
ing to Congress to pass the Wilson bill. He sees in the Mon-
roe Doctrine chiefly two branches of the Anglo-Saxon race — one
impelled by the earth-hunger, grabbing all the land it can; the
other, impelled by a sense of its dominancy in the American
continent, resolved to protect the latter from the further opera-
tion of the land-grabbing propensity. The highest warrant for
the exercise of the American prerogative appears to Mr. Car-
negie to consist in the unity of their will and purpose to exer-
cise it. If the American people were less agreed about it, the
event would not be justified. But seeing they are a unit on the
point, its justice is indisputable.

Professor Woolsey discusses the question in the light of
international law, but sees only therein a violation of the prin-
ciple of national autonomy. There is more in international law
than State independence. Vattel writing a century and a half
ago declared that a special duty to arbitrate boundary ques-
tions lay upon adjoining states between which no understood
divisional line had ever been agreed upon, and where settle-
ment and occupation were for a long time open to both in a new
continent — (like America) — having no common master. Vattel
bases the duty to arbitrate on the clearly understood principle
that the line to be run must be one based on expediency and
not on title.

Americans would not arbitrate the question whether the
Monroe Doctrine is a proper doctrine to apply in a given case
or not, which is the real question which would be at issue be-
tween England and America, after the commission shall have
decided that England is not entitled to the part of Guiana she
is occupying. While we are pressing forward upon an issue on
which we would not arbitrate our own half of the question, no

1896.] ECONOMICS IN THE MAGAZINES. 233

doubt seems to occur to many minds that our right to compel
an adversary to arbitrate his end of it is beyond suspicion.

Perhaps the true source of the obligation to arbitrate the
Venezuelan question is that stated by Vattel, viz., that no
actual line of division between the two populations ever ex-
isted. To fight over the exact location of a line which has no
existence is a clumsy mode of drawing the line for the first
time.

ELECTRIC TRANSMISSION. The Distribution of Electric
Power at Niagara. By (the late) Franklin Leonard Pope.
Electric engineers predict that transmission of electric en-
ergy for 200 miles from Niagara is feasible so as to deliver it
cheaper than power can be had from steam with coal at $3 per
ton, but the apparatus for transmitting it to Buffalo has not
been put up because Buffalo manufacturers are trying to get it
at a cost too nearly gratuitous.

GOLD, SILVER AND BIMETALLISM. The Story of Cripple
Creek. By Cy Warman in The Review of Reviews. That
Flood of Gold. By Carl Snyder in The Review of Reviews.
Some Leading Errors of the Gold Standard Party. By Otto
Arendt (Germany) in The Review of Reviews. Bimetallism;
Some Damaging Facts in Its History. By Frank J. Herriott in
The Review of Reviews. The Increased Production of Gold. By
Edward Atkinson in The North American Review. Our Mone-
tary Programme. By J. Lawrence Laughlin in The Forum.
The most instructive of these articles is that of Carl Snyder.
It shows that the costs of mining gold in Colorado have fallen
almost at an average to a sixth of what they were in 1870,
while simultaneously Colorado has rushed up since 1892 from
$600,000 output of gold to $17,000,000, taking the lead of Cali-
fornia, and restoring to the United States the lead by so nar-
row a margin, that it means temporary equality with South
Africa and Australia in gold production. Meanwhile, says Mr.
Snyder, "in 1887, all the world turned out but $106,000,000 of
gold; last year it rose to $203,000,000." Production has now
reached a total one-fourth larger than it was in 1853 under the
flood of California's and Australia's most prolific yield.

Meanwhile, Mr. Arendt asserts that the yield of silver in
the United States "is falling off from 30 to 40 per cent, a year. "

234 GUNTON'S MAGAZINE. [March

Nevada is completely exhausted. In Australia, the silver mine
of Broken Hill, once yielding half a million kilograms a year,
is given up, and only in Mexico and South America does silver
continue to be produced. " The relative production is to-day
much more favorable for silver than when the value relation
was i to 15.50, and that if the figures of production were alone
to determine, not silver but gold must have fallen in value "

Mr. Snyder concludes with the prediction that the increase
in gold out-put will be 10 per cent, per year for the next five
years at least, and will amount to 1,300 millions in the five years
of the century that remain, and asks, ' ' will it be possible for
our monetary systems to survive the addition of such an over-
whelming flood ?" It would seem more pertinent to ask whether
the disparity between gold and silver which has made tem-
porary shipwreck of our monetary systems, could survive the
addition of so much gold when accompanied by so small a pro-
portion, relatively, of silver.

Mr. Herriott falls into many lapses of economic theory,
which render his historic criticism on the past of bimetallism
somewhat chaotic. He assumes that a bimetallic system fails
if silver and gold keep continually varying slightly from their
legal ratio, by so small a discount as a fraction of one- fifteenth,
and so, "cross the line of parity" by this small fraction at
times when the disparity in their relative quantities produced,
and consequently in their relative cost of production, is ten or
twenty times greater. On the contrary, if at a time when
quantity and cost of production of gold and silver are changing
from a ratio of 16 to i to a ratio of only about 4 to i,
the ratio of value drops only so slightly as to put a premium of
2 or 3 per cent, on the metal which is under- produced by 50
per cent., this proximate preservation of the ratio should be
recognized to the credit of the double standard effort.

Mr. Atkinson does not notice the declining production of
silver, assumes that " the world's commercial unit of value is
now fully and finally established," thinks that "the present
quantitative increase in the product of gold will have no direct
influence upon the prices either of property or of products, "
and holds that prices of metals and fabrics are about what they
were in 1845-50, before the gold supply was increased so enor-
mously from California and Australia.

1896.] ECONOMICS IN THE MAGAZINES. 235

Professor Laughlin believes solely and simply in the
quantitative theory of money, and thinks prices depend wholly
on three factors, viz., the supply of money, the supply of the
money material, and the cost of production of commodities.
On this assumption, if the supply of gold should so expand
that instead of there being only one ounce of gold to nearly
thirty ounces of silver produced there should be only one ounce
of gold to ten or twelve of silver (labor being at all times the
common factor whose cost, as applied to both, ensures that like
quantities of labor must produce like values in both) then ten or
twelve ounces of silver must soon become worth one ounce of
gold.

INTEREST. The Positive Theory of Capital and its Critics,
By Professor Bbhm-Bawerk, in The Quarterly Journal of
Economics for January. Professor Bohm-Bawerk believes that
he has a theory which derives interest on loans from some other
source than the abstinence of the lender, or the earnings made
by the borrower by means of the capital borrowed, or than the
productivity of capital in itself when used as a fund for produc-
ing wealth. He seems to regard this value as being one that is
extracted from pure time, and is born out of the relation of the
present tense of the verb to be to the future tense of that verb.
In that respect he is like Mr. Keely, of the celebrated Keely
motor, who is understood to derive his motive power directly
from gravity, without any intervening product of gravity or
other force, petroleum or falling water, or steam or electricity
having any share in its production. In this article Mr. Bohm-
Bawerk replies to the coarse and materialistic critics who
suspect that money is borrowed because it has productive
powers. The discussion is thin, the air is rarified, the product
is nil. But as in an ascent of Mont Blanc, it is something to
have reached a point so worthless, and to have got down.

URBAN BRAINS AND RURAL BRAINS. Dissociation by Dis-
placement; a Phase of Social Selection. By Carlos C. Clossan in
The Quarterly Journal of Economics for January. This article
is marred by a too recondite verbiage, but its underlying argu-
ment is valuable. It is that the movement of human beings to-
ward social groups, and finally toward cities, is accompanied
or caused by a brain development, the very opposite in its direc-

236 GUNTON'S MAGAZINE. [March,

tion from the kind of brain development which promotes isola-
tion, nomadism, or country life. In short, there is a gregarious
or grouping type of brain, and a nomadic or isolating type.
The isolating type is that in which the head is wide in propor-
tion to its length. The gregarious type is that in which the
head is long relatively to its width. The narrow heads are styled
Dolicoide. In these the width of the head is not over 80 per
cent of its length, and the people having this form tend toward
cities. Those in which the width exceeds 85 per cent, of its
length are Hyperbrachycephalic, and they tend to become
nomadic or rural.

Extensive statistics are given to sustain this generalization,
which, so far as it goes, is, of course, a revival under new
terms, of the postulates of phrenology. Gall, Spurzheim and
Combe made breadth of head the physical expression of de-
structiveness, and pointed out its prevalence in carnivorous
beasts, lions, tigers, serpents, eagles, hawks, etc., which, of
course, are largely nomadic and live in isolation. The narrow
heads are deer, antelope, hounds (which hunt in packs and
affiliate with man), horses, sheep and the like. This article
extends the same generalization to the tendencies of certain
races and classes to group in cities. The North American In-
dian illustrates the broad head, and he is sufficiently nomadic.
The narrow head is expressive of timidity and of interdepend-
ence, because of fear, as well as of refinement, nerve develop-
ment and fitness to receive culture. The first is a prime mo-
tive in all tendencies toward populous, social groups; the
greater security of human life in cities, and of herd and bird
life in flocks, and of insect life in swarms, and of fishes in
schools, is probably the chief motive or instinct which draws
numbers together. The basis of the article has a grain of truth,
and its statistics in immediate connection with economic science
present the doctrine with rare force, but as a thesis in the study
of the conformation of the brain, it simply confirms the teach-
ings of the craniologists of half a century ago.

VENEZUELA. The Progress of the World, in The Review of
Reviews for February. A very charming comparison of the
arguments in favor of Venezuela with the arguments against
England's title to the disputed territory, by a writer who evi-

1896.] ECONOMICS IN THE MAGAZINES. 237

dently does not share in the opinion of Judge Charles P. Daly,
the very learned President of our New York Geographical
Society, that the Spanish have never occupied any part of the
disputed territory, but that it has always been occupied by the
Dutch. On this point the writer says : " If we mistake not
the English school geographies, atlases and other sources of
ordinary information, previous to 1840, regarded the Essequibo
as the boundary line, and held that British Guiana contained
about 12,000 square miles."

Not only the British but the American "school geogra-
phies " did not. Before us lies a volume entitled, "An Ac-
companiment to Mitchell's Map of the World," etc., by S.
Augustus Mitchell, dated 1843, and whose text embraced 578
octavo pages of description, the most elaborate and standard
geographical work, we think, which had at that time been pro-
duced by an American. It says: "The region at present
styled Guiana, extends along the coast from Cape Barima, at
the mouth of the Orinoco, to the Oyapock River, a distance of
about 750 miles, and extending in the interior to the moun-
tains at the source of the Essequibo, Surinam and Morowyne or
Maroni Rivers, about 350 miles, comprising an area of about
115,000 square miles. This region is at present divided be-
tween the British, Dutch and French. British Guiana extends
from the Orinoco to the Corantino River, and embraces the
three colonies of Essequibo, Demerara and Berbice. " This
American work of 1843 runs the line essentially where Salis-
bury runs it, and asserts in its preface that it is based in general
on Murray's Encyclopaedia of Geography, Malte, Bruns &
Goodrich's Universal Geography, Flint's Geography, Encyclo-
paedia Americana, etc.

Rand & McNally's maps of most recent date also run the
western boundary of British Guiana from the very same Point
Barima, at the mouth of the Orinoco, and we doubt if a single
American map can be found which has any other starting point.
We feel morally sure from the numerous maps we have con-
sulted that no American, English, Dutch or French map ever
bounded Venezuela on the. Essequibo.

238 [March,

Book Reviews.

THE CHAUTAUQUA BOOKS.

THE GROWTH OF THE AMERICAN NATION. By Harry Pratt

Judson, LL.D., Head Professor of Political Science in the

University of Chicago. New York: Flood & Vincent.

1895. Pp- 359-
INITIAL STUDIES IN AMERICAN LETTERS. By Henry A. Beers,

Professor of English Literature in Yale University. New

York: Flood & Vincent. 1895. Pp. 291.
SOME FIRST STEPS IN HUMAN PROGRESS. By Frederick Starr,

of the University of Chicago. New York : Flood & Vincent.

1895. Pp. 305.

This is the American year in the calendar of the Chautauqua
Literary and Scientific Circle. Of the five books which, to-
gether with the monthly magazine, The Chautauquan, consti-
tute their required course of reading, three relate to the
industrial, political and literary development of the people of
the United States, while a fourth draws largely from the
evidences of earlier civilizations on this continent for its raw
material and its illustration.

Next year will be French, the following year German, and
the third year, 1898-9, will be English. The present year is
consequently one which will particularly interest readers of
GUNTON'S MAGAZINE. Each of the writers has endeavored to set
forth in brief space the salient points of our national develop-
ment, and the causes which operated most forcibly. They have
thus striven to provide the best possible guide for the study of
present day problems in America — questions of industry and
politics, like the tariff and currency questions; of morals and
social life, like temperance reform and immigration ; of religion
and education ; of the relation of the races in the South, and of
laborers to capitalist employers in the North, and of organiza-
tions both of laborers and capitalists to the general public every-
where.

Professor Beers begins by setting forth the conditions
which made literature impossible in colonial days. On the one
hand the isolation of plantation life was unfavorable to its
development in the south, while on the other the intolerance of
the New England theocracies made possible only sermons and

1896.] BOOK REVIEWS. 239

theological treatises. True, they tried to make up in quantity
what was lacking in the quality of this literary food of the
period, the pulpit hour-glass being silently inverted twice, or
sometimes thrice, while the orator pursued his theme even unto
" f ourteenthly " (p. 27). But it was not literature.

There followed the period when politics took the place, in
part, at least, which had been so actively occupied by theology
— a period whose beginning is marked by the writings of
Franklin, and whose continuance gave free play to political
instead of pulpit oratory. It is an age of eloquence and
rhetoric, but hardly of real literature. It is not until we reach
the era of national expansion, which followed the second war
with England, and the times of Irving and Cooper, that
American literature can be said to have any real existence.

"In the seventeen years from 1821 to 1839, there were
graduated from Harvard College Emerson, Holmes, Sumner,
Phillips, Motley, Thoreau, Lowell, and Edward Everett Hale.
In 1836, when Longfellow became Professor of Modern Lan-
- guages at Harvard, Sumner was lecturing in the Law School.
The following year (in which Thoreau took his bachelor's de-
gree) witnessed the delivery of Emerson's Phi Beta Kappa lec-
ture on 'The American Scholar' in the college chapel, and
Wendell Phillips's speech on 'The Murder of Lovejoy' in
Faneuil Hall" (pp. 126, 127).

' ' It was out of the conditions of life and industry, of poli-
tics and religion, which made such men possible, that there was
born an independent American literature. As the century
draws to its close, we realize that we are no longer colonies ; we
are no longer commercially dependent on the whims of Euro-
pean belligerents, as in the time of the Napoleonic wars; we
are no longer provincially dependent on European opinion as
before our own Civil War.

' 'As a nation the republic has ripened into mature life. "
(Judson, p. 354.)

This quotation from Mr. Judson's closing paragraph shows
at once his purpose, tenor and point of view. Our history has
been an orderly development through successive stages of
growth, which had their seeds sown in previous clearly denned
social, political and industrial conditions. Moreover, American
history is no mere episode in the world's progress, but the be-

240 GUNTON'S MAGAZINE. [March,

ginning of a social evolution in which European civilization is
making a conquest of the world, and of which the twentieth
century bids fair to see the completion in Asia and Africa (p.
24). Mr. Judson's most interesting and powerful chapters are
those relating to the social life and the distinguishing features
of our political development. He has made one serious mis-
take, however.

Democracy was entirely unknown in the colonies. The idea
belongs practically to this century, the aristocratic constitution
of New York State, for instance, remaining in force until 1821.
It is unfortunate that the writer of still another text-book on
American history should follow the established precedent and
devote one-third of his text to history as ancient as that of
Greece and Rome, and as valueless as nursery rhymes for
the purposes of modern statesmanship. If our national life
begins with the revolution of 1789 (p. 97), why not begin the
story of the growth on page i and not on page 101, when mak-
ing a "brief sketch ?"

Mr. Judson's other fault is in saying so little about some
things, in the 250 pages remaining, as to make the statements
either absolutely unintelligible or at least quite worthless. To
give so brief an account of any matter as to necessarily pro-
duce the wrong impression, is but little better than to state an
actual untruth. The statement (page 103), for instance, that the
electors met in February [1789] and unanimously chose George
Washington president, with John Adams as vice-president,
implies not only that they voted for individual candidates for
these offices, but that Adams was the only choice for the vice-
presidency. As the author himself explains elsewhere, however
(pp. 126 and 132), neither of these inferences is correct.*

Such terms, as mildly protective and moderately protective,
used as descriptive of the law of 1789, also indicate that the
author is quite innocent of the real principle of tariff protection
and the nature of its operation.

These may be minor defects in a work which is quite ex-
cellent as a whole, but they are defects which do inestimable
harm, and which could be readily removed -dth a little more
care to be accurate, as well as entertaining.

*See the footnote on page 193 for another example.

GUNTON'S MAGAZINE.

APRIL, 1896.

Building Associations and Savings Banks.

Building and loan associations, the world over, are rapidly
rising into effective competition with savings banks as aids to
economy. They outstrip other co-operative and mutual aid
associations in enabling the working classes to so use their
wealth as to help each other and themselves. In 1893* there
were 5,838 associations in the United States. They had 919,614
male members and 307,828 female members, making an army
in all of 1,218,442 persons. They conducted "a unique private
banking business " into which they had paid a capital, including
dues and profits, amounting to $450,667,594, all of which had
been loaned out in the act of receiving it, and out of this aggre-
gate of business done only 35 associations reported any losses
whatever, and those had only lost a total of $25,332.20, being
only one cent in twelve hundred dollars.

The total deposits in savings banks are upwards of four times
as great, viz: $1,777,933,242 for 1894, but savings banks had some
advantage in the start. The first one was established in Bruns-
wick, Germany, in 1765, while the first " building club " is heard
of in Manchester, England, in 1795. The building and loan
association became prevalent, however, in England only in 1834,
and in the United States in 1850. In the latter year the first
general Act authorizing them in Pennsylvania was passed.
Savings banks, on the other hand, came in with the century.
The first suggestion of them was made by Daniel Defoe in 1697,
which was revived by Jeremy Bentham a century later, in 1797.
In 1799, the first English savings bank was started at Wen -
dover, and by 1817 they existed in so many towns that they be-
came the subjects of an act of Parliament.

Savings banks spread more actively than building associa-

* Ninth Annual Report of Commissioner'of Labor.

242 GUNTON'S MAGAZINE. [April,

tions because they furnish an occupation and income to those
who start them. Building associations merely supply a valua-
ble temporary accommodation, not a permanent career to their
founders. Altruistic associations only succeed in the degree
that they supply a business and a career to the officers who con-
duct them. It was the rather wasteful injunction of the
apostle Paul that the oxen who ' 'trod out the corn, "or as we would
now say, ' ' threshed out the wheat " by walking over it, were not
to be muzzled. Society is still specially favored by unmuzzled
oxen who are willing to tread out our wheat if allowed to eat
as much as they desire, and to spoil more than they eat.

The Pauline type of threshing machine has been banished
from the farm, but still lingers among the charitable institu-
tions which only endure when those who conduct them do their
" treading out " unmuzzled. Hence it is the law of such insti-
tutions that their managers will introduce as many helpers into
them as can possibly be paid salaries out of the funds that can
be drawn from the charitably disposed. It necessarily follows
that organized charities tend to so absorb their funds in paying
officers that the surplus available for actual relief is as precari-
ous as would follow from the impulsive sympathies of the
unorganized witnesses of the distress. By a subtle economic
law every such charity resolves itself into a business concern in
which the willingness of the public to give becomes the soil or
quarry or mine, the means and arts of begging become the
plow or pick, the contributions slowly fall to the level of the
natural returns of industry and are absorbed in expenses of
producing, and the net result available for relief sinks again to
the spontaneous gifts of unendowed sympathy.

Neither savings banks nor building and loan associations
are charities, but a savings bank has the merit of being a busi-
ness, while a building association of the original (terminable)
form is only a series of business accommodations. Each per-
son who takes part in it, except possibly the secretary, has
another business on which he relies for income. A savings
bank gathers up the savings of the very poor and lends usually
to Governments, to cities or to the rich owners of land who
can give a first mortgage for a large sum on productive real
estate worth twice the sum loaned as security. It is the oppo-
site therefore of a charity ; it is a machine for enabling the

1896.] BUILDING ASSOCIATIONS AND SAVINGS BANKS. 243

weak members of society to help the strong. It pays a low rate
of interest, generally 2, 3, or 4 per cent., to the depositor be-
cause the depositor is poor and therefore powerless to get more
without becoming insecure as to the principal. He is sup-
posed to choose between the savings bank and immediate con-
sumption of the fund in living. Whatever premiums the
money loaned is actually worth, over the lawful rate of interest,
are pretty sure to be paid by the borrower, either as broker's
commissions, costs of searching and guaranteeing title, or the
like, but no part of these premiums reaches the depositors.

Building and loan associations, on the other hand, pay the
shareholders a profit of from 10 to 12 per cent, on the shares
they hold. Their system involves economies of management
to which no savings bank can aspire, and reaps an income on
all its loans of money, so far above legal rates of interest, that
in any other mode of doing business it would be blocked by
the plea of usury. To those who are familiar with the drastic
quality of the Usury laws, the building and loan associations
are chiefly admirable for the adroit mode in which they drive
their coach and four through these laws, without so much as
saying "by your leave" to legislator, judge, or jury. None
such could pronounce their loans usurious, notwithstanding
they bear from 4 to 20 per cent, in excess of the current
rates. All their loans at legal rates and no more are put up at
auction to the highest bidding member of the association, and
the premium he pays to get the loan is not a price which he
pays for the loan, but for being preferred over every other
bidder. This premium is in good faith a legally distinct thing
from interest. It is therefore not an evasion nor a substitute,
but another contract, of preference among rivals, which the leg-
islature could not forbid without forbidding sales at auction.
If savings banks should undertake to adopt the same device by
putting up their loans at auction between rival bidders, in their
hands it would not work, because it would be a loan of money
to one who does not own it. But the award of the money,
called for convenience a loan, by a building association to one
of its members is not in fact a loan, but is a partition of a joint
fund among those who own it. This partition must sooner or
later allot the same share to every other member. Priority is
not interest. Neither is an allotment to one member of an

244 GUNTON'S MAGAZINE. [April,

association in advance of another, of a fund jointly contributed
in equal sums by all, a loan. It is partition. It is like the
equalization that is made in an estate between owners in com-
mon, some of whom draw out their shares earlier and others
later. It involves the principle of interest, because compensa-
tion must be made according to the length of time by those who
withdraw earlier to those who withdraw later. But this com-
pensation for priority in partition is not a payment made for
the forbearance to collect a debt, and therefore is not interest,
and its rate cannot make it usury.

A second economy peculiar to these * associations is three-
fold. It consists (i) in the inherent simplicity of their accounts,
which saves salaries, books and rent, (2) their necessary avoid-
ance of accumulated funds liable to be stolen or defaulted, and
(3) their avoidance of all uninvested funds involving continual
losses of interest.

The simplicity of accounts grows out of the rule that all
the moneys received by the association in dues are paid in at
the same meetings and in like sums per share for each member.
On any share the sum paid is the same as that paid on every
other, taking into view a compensatory system of fining dere-
lict members for non-payment or deferred payment. Hence all
shares have, at a given date, the same financial value. They
are not like deposits in banks, where very assiduous labor is
necessary to state any one account, and vast records must be gone
over to state the aggregate. In a building association it is only
necessary to multiply one share, as to its status, by the whole
number of shares to state the whole financial condition of the
association as to its -receipts. As all the funds received are
loaned at the same meeting (in all companies classed as ' ' ter-
minating" or single series), and as the loans run in like series
and are proportionate to the shares, and investments are always
identical with receipts, the grand balance sheet can be figured
instantly with like simplicity.

So long as the system is honestly pursued there can be no
defalcations, hardly any losses of principal and almost no loss of
interest. Where the "loans " are auctioned off and distributed

* Our description here applies to the pure or serial type of associa-
tions. So far as the associations become permanent, its funds are entrusted
to a treasurer who deposits them in bank and gives bonds. His balance in
bank thus affords the basis for loans.

1896.] BUILDING ASSOCIATIONS AND SAVINGS BANKS. 245

at the same meetings where the dues of which they consist
are paid in by the members, no fund remains over after any meet-
ing which can be the subject of theft or defalcation by any
officer. Hence no bank account, no surety bonds from officers,
no iron vaults or big safes and no costly rentals are essential.
Contrast this with banks which require vast bulky records, ledg-
ers, day-books, journals, cashbooks, dockets, registers and huge
volumes of customers' accounts with one bookkeeper for letters
A to E, another for E to G, etc. The accounts become so vast
that the thefts, as in the recent case of the cashier of the Shoe
and Leather Bank, can be concealed either by drawing the money
from old unclaimed accounts which have not been drawn upon for
ten years, or by carrying fictitious checks in the drawer as cash,
or by any one of a scor.e of tricks which grow out of the vol-
uminousness of the accounts.

A direct stimulus to the substitution of the co-operative sav-
ings plan in lieu of the savings bank plan at Rochdale, Eng-
land, was the theft by the actuary of a savings bank in that
town of ,£71,715, of which loss ,£37,433 had to be borne by the
depositors. In consequence the savings bank closed in 1849,
and the subsequent adoption and perfection by the people of
Rochdale of the mutual savings and co-operative systems gave
the town a commanding fame throughout the world as a pioneer
in the domain of practical social economics. A single theft
from the savings bank at Dublin cost its depositors ,£56,000,
and another loss at Tralee was made of ,£36,000. Other frauds
of actuaries at Cardiff and elsewhere have since occurred. Sav-
ings banks as well as all others are under a heavy tax in loss of
interest upon the funds they are compelled to keep lying idle
as reserves with which to stem the tide of any sudden call that
may be made upon them through fear or panic, by the mass of
their depositors.

And yet these reserves are confessedly always a naked bluff
and never a sure defence1 either in the case of a national or a
savings bank. Any bank which first converts all its assets into
loans recoverable only at the expiration of long periods of time,
and yet holds all its deposits payable to the depositor on demand,
must be theoretically capable of being thrown into suspension
of payments at any moment by a general run of all its deposit-
ors; hence the theory on which savings banks, and indeed all
banks of deposit, run is that its depositors can at any moment

246 GUNTON'S MAGAZINE. [April,

break the bank by presenting all their demands for payments
at once. It is no small excellence in the Building and Loan
Associations that they are free from this peril. Insolvency is
as impossible as theft in an honestly conducted terminable or
single series association of the plan we have thus far described.
But in a savings bank all its proprietors, trustees and officers
may be honest and it may still be robbed by its clerks, and vice
versa. Where the association is made continuous or perpetual
by providing for the issue of a new series of stock every
year, half year or quarter, each series becomes in effect a single
terminable association having the same qualities of economy
and solvency, taking nothing from any previous series except
the continuous watch-care of several of the same officers.

It is also a feature in savings bank management that there
is an interest on the part of 'the proprietors in getting as much
of their deposits without interest, and keeping as many of them
unclaimed as they can. Hence they divide the year into what
they call dividend periods, which are generally on the first days
of January and July, and adopt a rule that interest shall only
begin to run on deposits at these two periods. If, therefore, a
depositor deposits say $200 in any savings bank on the third
day of January and does not draw it out until the twenty -fifth
day of December, though his deposit lacks only a week of hav-
ing been in the bank a full year, and the bank may have so
loaned it as to have made it earn $12 for itself, yet it has
earned nothing for its depositor. It earned nothing during
its first half-year because it was deposited one day after ' ' divi-
dend day. " It earned nothing for him in the second half-year
because it was drawn out six days before the proper dividend
day. This trick for cutting off depositors' interest without any
just reason shows that the management of savings banks is not
mutual. That it is still prevalent, if not universal, is assumed
by a leading savings bank president, Mr. John P. Townsend
of the Bowery Savings Bank, in his article in the North Ameri-
can Review for March.*

* Free Stiver and the Savings Banks : " It is a well-known fact,"
says Mr. Townsend, "that a run on a savings bank is profitable to the bank
per sf, by reason of the abandonment by the frightened depositors of the in-
terest on money withdrawn between the two dividend periods of the year, so
that the scare punishes only the timid ones who yield to the excitement."
[And yet if all were "timid'' the bank must break. — ED.GUNTON'S MAGAZINE.]

1896.] BUILDING ASSOCIATIONS AND SAVINGS BANKS. 247

As to the unclaimed deposits,* nearly thirty years of agita-
tion were required in New York State to secure the passage of
an act requiring savings banks to report the deposits unclaimed
and to notify the next of kin of the owners of unclaimed depos-
its of the existence of such deposits. In one 'case the owners
of a deposit of $500 made in 1851 were lost at sea in 1867.
Shortly after, the next of kin inquired at the counter for the
deposit, but not having the bank book could get no information
or satisfaction. Later the act was passed and the next of kin
was notified. When the unclaimed deposit was drawn in 1892
it amounted to about $2,700, and the bank had probably made
by loaning it for a whole generation a net profit over interest
three times greater than the original deposit. But the entire
account was only rescued from absorption by the bank by an
act of the Legislature which proposal for a long time was
denounced as "blackmail" and whose passage was steadily
resisted by the representatives of the savings banks. President
Townsend of the Bowery Savings Bank is therefore claiming too
much when he says that the banks or their trustees " do a
purely benevolent work in the interest of the plain people,
mechanics, artisans, clerks, women and children, and those de-
pendent on salaries and wages for their maintenance." It may
be set down as a universal rule that the attendance of trustees at
the meetings of financial corporations of any kind cannot be had

* The Superintendent of the New York Banking Department recently
addressed to the editor of this magazine the following response to our in-
quiries as to the amount of these deposits :

The department has no reports or tabulated statements which show the
extent and amount of unclaimed deposits or dormant accounts in savings,
national, state and private banks.

Savings banks are required by law to report here the names and num-
bers belonging to dormant accounts, but not the amount.

At request of the late Constitutional Convention this department
obtained the amount of unclaimed deposits or dormant accounts in savings
banks of this state, January ist, 1894, which aggregated $1,443,808.97.

The banks of discount and deposit in this state are required by law to
publish annually, on or before September ist, " for six successive weeks in
one newspaper of the county in which such bank is located," and in the
state paper, '' a true and accurate statement verified by the oath of the
cashier, treasurer or president of the deposits made with such banks, " etc. ,
etc., over $50 unclaimed for five years.

(See Section 28, Chapter 689, Laws of 1892.)

248 GUNTON'S MAGAZINE. [April,

for altruistic motives. If the trustees are not paid from $5 to
$25 per meeting they do not attend, and the loans must be left
to the officers of the bank, viz., the president and cashier, ex-
cept when the trustees come to get loans for their friends. The
altruistic element has been wholly eliminated from savings
banks by the pressure of business engagements, which compels
business men to limit their strength to tasks that arc paid for.

Although the word "building" appears so conspicuously in
the name of these associations, the purpose for which the bor-
rowing member obtains his share need not be connected with
either the erection of a building or the purchase of land or a
home. It may be obtained as a capital for trading, manufact-
uring, farming, transporting, mining or speculating, provided
he amply secures to the association the payment of his future
dues. The name "building" is not everywhere prevalent; mu-
tual loan associations, homestead aid, savings fund and loan co-
operative banks, etc., answer the meaning more exactly. In the
winding up of every such association, the aggregate of all the
dues balance against the aggregate of all the loans, and every
shareholder remaining in the association at the time the stock
matures must be a borrower or a distributee to the amount of
the value of the matured shares held by him. Hence there is
a compulsory withdrawal of members as the series approaches
maturity, and since the so-called loans are only the distribution
to each of that to which he is entitled, when the series is com-
plete by the payment of all the dues, the distribution will be
complete in the fact that each member owns the paid-up shares
for which he has subscribed, and his debt to the association has
been canceled by his dues, premiums, interest and fines.

Col. Wright's report for 1893 describes sixty-eight plans of
paying premiums, twenty -five plans of distribution of profits
and twelve plans of withdrawal. The discussion of these
would lead us into a domain of technique which would be aside
from the scope of this article. Neither can we discuss in this
article how far the safety which we have attributed to the
original, or " serial " or terminable associations, can still be pre-
served in the "perpetual" or non-terminable associations ; nor
can we discuss the relative security of the "local" and the
" national " form of associations, further than to say that they
approximate more nearly to the banking type in methods,

1896.] BUILDING ASSOCIATIONS AND SAVINGS BANKS. 249

profits, risks and advantages, as they depart from the original
simple serial form.

It seems likely from the economic principles involved in
these associations that they have not yet reached to more than
the threshold of the many applications of which they are
capable. They can as well be used in aid of one principle or
achievement as another in which numbers of persons may feel
a competitive or a common interest. They could be used to-
day to send American prospectors to the " Rand " mines of
South Africa, or to open up new mines in Rhodesia ; to estab-
lish young men from the country in business in the cities, or to
expand upon the plan of Mayor Pingree of Detroit for employ-
ing the idle labor of the unemployed poor in cities by placing
them in possession of am pie farms and comfortable homes in the
country. They can be employed largely in aid of the mobility
of labor as well as of the energizing and vitalizing of small
capitals. It may be doubted if banking in any other of its
forms, all of which are useful, or co-operative effort in any
other direction, has in it so much of the promise of social regen-
eration or of the potency of true progress.

Let us suppose for a moment that the vast deposits now
made in the savings banks, amounting to $1,777,933,242 in
1894, of which the enormous proportion of $1,578,352,728.40
are made in the Eastern and Middle States alone, were all made
in mutual savings and loan associations instead, how widespread,
electric and comprehensive would be its effect to diminish the
relative power of banking and capitalist or speculative classes
and to increase the relative power, enterprise and productivity
of the working and laboring classes.

At present the whole fund is loaned to the rich. Few
business men put their means into rented real estate where it
will earn, say, seven per cent. , until they have reached the ut-
most limits of their capacity to use it in active business, where
it will average twenty to twenty -five per cent. No merchant or
manufacturer, therefore, who has less than from $100,000 to
$1,000,000 in his business can really afford to have $20,000 in
improved productive real estate for rental, outside his factory
or store. Few, therefore, can borrow from savings banks un-
less they are worth a good fortune. They tend to aggrandize
the already sufficiently preponderant power of the wealthy, and

250 GUNTON'S MAGAZINE. [April,

they are no resource whatever to the young, the stalwart and
the poor in their early struggles for a foothold.

The whole sum is probably loaned to as few persons and in
as large sums as the land of Great Britain is owned, and forms
nearly as prominent a force in the concentration of wealth as
the great British land monopoly.

Meanwhile, if the same sum were invested in building and
loan associations, each owner of a share of $200 would immedi-
ately upon paying his entrance fee and dues, say $3 for the
former and $2 per share per month for the latter, become en-
titled to his equal chance among the others of obtaining an im-
mediate loan of $500 on every $200 share for which he had sub-
scribed, with the certainty of getting $200, plus a dividend
on the profits earned from those who borrow. This would convert
the whole $1,800,000,000 of funds now deposited in the savings
banks into a potential or hypothetical, but not actual lending,
power of $4,500,000,000, all contingently but immediately oper-
ative in behalf of the 5,000,000 persons, each of whom would
have a borrowing power two and one-half times greater than
the par of the shares he held. The knowledge that one can
obtain a loan on practicable conditions is often worth more than
the loan itself, and this knowledge belongs to the non-borrow-
ing as well as the borrowing member. Such a chance, there-
fore, would vest in the working classes a borrowing power
greater than is now possessed by all the depositors in national,
state and private banks combined, and would virtually relegate
the lending power of those institutions to a secondary relative
position. Such a movement would accomplish a social transfer
of financial power not unlike that which manhood suffrage
effected in the cognate realm of political power.

By the last report there were 1,076 of these associations in
Pennsylvania, 718 in Ohio, 631 in Illinois, 429 in Indiana, 390
in New York, 349 in Missouri, 286 in New Jersey, 237 in Mary-
land, 125 in California, 131 in Kentucky, 115 in Massachusetts,
8 1 in Iowa, 72 in Michigan, 71 in Kansas, 82 in Minnesota, 76
in Virginia, 66 in Nebraska, 61 in Tennessee, 54 in West Vir-
ginia, 48 in South Carolina, 39 each in Texas and Wisconsin, 24
in North Carolina, 16 in New Hampshire and 14 in Wisconsin.
Nowhere have the building and loan associations grown to such
vast proportions as in the United States. One association in

1896.] A FULL-WEIGHT SILVER DOLLAR. £<Ji

Dayton, Ohio, had 8,662 shareholders, 1,435 borrowers, 59,755
shares in force and 1,327 loans on real estate. The principle
involved is that of massing the contributions of those who have
but little in a manner to re-enforce the strength of each with
the power of the common host. It gives to the "cheese-par-
ings " of the helpless the force of accumulated capital. It
brings local neighborhoods in the most sparsely settled dis-
tricts, as well as slightly acquainted persons in large cities, into
a capacity of mutual association and reciprocal aid. It combines
the marvel of security with the minimum of required skill and
organizing capacity. It does not demand an integrity which is
unattainable or not to be had on every cross-road or corner. It
almost dispenses with the need of a cultivated habit of busi-
ness honor, since it keeps the larder about as bare as Mother
Hubbard's cupboard. Its profits are of the very highest, yet
irreproachable for fairness. Its feasibility and applicability to
new purposes are so various that none need be surprised to see it
employed in purposes the most reformatory and humane as
well as in those with which it has heretofore been identified.

A Pull- Weight Silver Dollar.

It is safe to say that no solution of the silver question is
feasible in this country on the basis of silver monometallism. If
the fight is forced on monometallist lines, the single metal will
not be silver. The only solution of the question favorable to
silver is in the direction of bimetallism — the use of silver with
gold. The silver people profess to be favorable to this; and if
they are, any feasible plan for dealing with the subject on a bi-
metallic basis should receive their hearty support.

In our last issue we suggested a plan by which bimetallism
could be secured with the unlimited coinage of silver by adopt-
ing a flexible ratio, thus adapting the quantity of silver in the
dollar to the value, so that the silver dollar in actual circulation
will always be worth as much as the gold dollar, either as bull-
ion or as money. Under such conditions there could be no
tendency of silver to drive out gold, or vice versa, and, conse-
quently, no reason for restricting the coinage of either.

252 GUNTON'S MAGAZINE. [April,

To this position the Rochester Democrat and Chronicle
presents the following criticism :

GUNTON'S MAGAZINE is a periodical devoted to American economics
and political science. Its articles are always interesting, and usually in-
structive, because as a rule they are direct in style, clear in statement, and
free from superfluous and confusing phraseology. The March number
has an article on " The Silver Senators and Protection," which shows con
^rincingly that the free coinage of silver would not be a measure of bimetal-
lism, but would in all probability lead to silver monometallism. The writer
reaches this conclusion: " Bimetallism can be accomplished in one of two
ways: (i) By the limited use of the cheaper metal at a definite ratio, say, 16
to i ; the restriction being sufficient to prevent silver from entirely displac-
ing gold in the monetary circulation. (2) By the unlimited use of sil
ver at its bullion value — that is to say, the unlimited coinage of silver at
a flexible ratio, so that the silver dollar shall always contain a dollar's worth
of silver, regardless of the number of grains."

The first-mentioned plan is clear enough, but the second, it must be
confessed, is either self-contradictory or expressed in terms so obscure as
utterly to conceal the author's meaning. How can a dollar, once coined,
always contain exactly a dollar's worth of silver, if the bullion value of the
metal fluctuates ? Let us lay down a problem, using round numbers for the
sake of simplicity: Suppose, this year, the commercial price of silver bull-
ion is such that 600 grains are worth a dollar. Suppose several millions
of 6oo-grain dollars be coined. Suppose next year silver rises or falls in
value, and several millions of dollars be coined, each containing 500 or 700
grains. How could there be uniformity of value in the different-weighted
coins ? In other words, what magic is there in the ''flexible ratio " scheme
that could make 500 grains of silver worth the same as 700 grains, or that
could impart a zoo-cent bullion value to coins of various sizes, '' regardless
of the number of grains " in them ? This, seemingly, is a problem incapa-
ble of logical solution, although, possibly, the editor of GUNTON'S MAGA-
ZINE has some explanation in reserve that will clear away a mystery which
appears to be impenetrable. But, on its face, the statement of the propo-
sition is an abrupt departure from that lucidity which, as before remarked,
usually characterizes the discussions in this periodical.

It is rather surprising that, in suggesting a way for the more liberal
use of silver in our monetary system, and at the same time for preserving
bimetallism, GUNTON'S MAGAZINE made no reference to the Windom plan.
The late Secretary Windom proposed that the government purchase silver
at its bullion value, and in payment for the same, issue certificates of con-
venient denominations for currency circulation, the certificates to be redeem-
able in silver bullion at its market value on the date of presentation. Such
certificates would always have their full face value, because the holders
could at any time exchange each dollar of them for a gold dollar's worth of
silver. They would be as good as gold ; therefore they would be available
for the settlement of all balances, domestic or foreign. Consequently they
would not drive gold out of circulation, nor bring the country to a mono-
metallic silver basis.

1896.] A FULL-WEIGHT SILVER DOLLAR. 253

This eminently sensible plan would be in the nature of a compromise
by the advocates of free silver-coinage, but not by the friends of sound
money. It would utilize silver in our monetary system, but would carry no
threat of a depreciated currency. It is worthy of the attention of every stu-
dent of finance who is neither a gold nor a silver monometallist.

Our contemporary is entirely correct in saying that we
made no reference to Secretary Windom's plan. We have dis-
cussed that in previous issues. The reason we did not refer to
it is that it does not cover the case. Indeed, it is an entirely
different proposition. Mr. Windom's scheme was to receive
silver bullion and issue ' ' certificates of convenient denomina-
tions for currency circulation," and redeem them in silver
bullion at the market value. Such value would be measured in
gold coin, of course, on the date of presentation.

One objection to this scheme is that it does not use the sil-
ver as standard money in any way. Indeed, it does not coin it
at all. It simply proposes to receive the silver as so much
property in pawn. It would not have used the silver as money
at all, not even through the certificates, as the certificates so
issued must in reality have been paid in gold. It was exactly
the same as a promise to pay as many bushels of wheat as are
worth ten dollars. The courts have everywhere held this to be
a promise to pay ten dollars, and not to pay any quantity what-
ever of wheat. The logic of this decision is unanswerable.
The only way one can pay a debt with a gold dollar's worth of
wheat or silver or any other commodity at any given time is
either to make the purchase in open market with gold at the
very time of payment, or else give the gold itself; and of
course the latter is what would always be done, as the other
would involve much time and labor for nothing. Consequently,
a promise to issue certificates payable in silver, purchased with
gold at market rates, is practically a promise to buy all the
silver offered and pay for it in gold. In such case the silver
would not be money at all. No use of silver can really be called
bimetallism which does not convert the silver into full legal
tender, primary money, having all the redemption coin functions
that the gold has. And if it is represented by certificates, the
certificates must have the same legal tender functions in all
respects that gold certificates have or that the gold or silver
coin itself would have. In other words, it must convert the
silver into dollars, either by coinage or certificates, which have

254 GUNTON'S MAGAZINE. [April,

all the money power that the gold coin or certificates have.
This, it will be remembered, is what Secretary Windom's
scheme did not contemplate.

Our proposition does not contemplate, as did Mr. Windom's,
making the government a mere pawn-shop or store-house for
silver bullion, and issuing for circulation certificates of deposit;
but it contemplates the unrestricted coinage of silver at the
market ratio, that is to say, putting a dollar's worth of silver
into the dollar, less, say, i per cent, for seigniorage.

The Rochester Democrat and Chronicle asks, " How can a
dollar once coined always contain a dollar's worth of silver, if
the bullion value of the metal fluctuates?" We answer, "It
cannot," and our proposition is not based upon any assumption
that it will. On the contrary, it is based on the assumption
that whenever the value of silver rises, under-valued coins will
go to the melting-pot. Jewelers and manufacturers will, as
they always have, stand ready to melt dollars that are worth
more as bullion than as coin. It also recognizes that whenever
the value of silver falls so that the coin is over-valued, it will
be turned into the treasury; and that only coins that are slight-
ly over-valued, i. e. , are worth a fraction less as bullion than as
coin, will circulate ; because no profit can be gained by melting
them and no loss sustained by keeping them in circulation.
This is no more than has always occurred in history under the
fluctuations in relative value, which the changes in rate of pro-
duction by the mines, or in the election of one metal for coin-
age or in the arts, has occasioned.

The Rochester Democrat and Chronicle supposes that the
issues of two years of coinage, one of dollars containing 500
grains and one of dollars containing 700 grains, are simultane-
ously out, and asks, " How could there be uniformity of value
in the different weighted coins?" We answer, the two differ-
ent weighted coins could no more be got out, and kept out, at
the same time, than one quality of wheat could have two dif-
ferent prices at one time, one of 70 cents and one of 90 cents, in
the same market.

During a time when, at the market price of silver, it re-
quires 600 grains of silver bullion to buy a gold dollar, it is
obvious that under our proposition no dollars ccntaining more
than 600 grains will be coined, because no holder of silver bull-

1896.] A FULL-WEIGHT SILVER DOLLAR. 255

ion will have any interest in throwing in any extra grains. No
dollars having any less than 600 grains can be coined, because
to coin dollars having less bullion than is needed to buy a gold
dollar is no part of our proposition. The coinage would start,
therefore, with no premium to the silver owner calculated to
send silver to the mint, and no profit in getting it coined other
than the privilege of having it converted into full-weight legal
tender money. Silver would circulate according to its weight
and value, as all commodities and coins justly and fairly ought
to circulate. The only event which could disturb the equilib-
rium between value and weight, existing at the moment of coin-
age, would be a subsequent change in value of the metal
through causes connected either with the supply of the money
metal, i. e. , cheaper cost and increased quantity produced at
the mines, or vice versa.

Suppose these causes to raise the price so that a gold dol-
lar would only purchase 590 grains of silver. Forthwith the
jewelers would " contract the currency" by paying a premium
for all the 6oo-grain dollars then out and melt them.

Suppose, however, production at the mines so increases and
cheapens that coins containing 600 grains (which when issued
would buy 23 22-100 grains of fine gold) will buy only 22
grains. These are out to the amount of, say, $,6,000,000,
which are as many as our mints could coin in one year, if used
at their utmost capacity. The holders of these silver coins of
short weight would have the right under the statute to pay
debts, duties and taxes with them, just as they now have in case
of the greenbacks and of the "standard silver dollars," so-
called. The utmost harm that could happen to them would be
that they would all go into the treasury and stay there, which
is no worse a fate than accrues to all the silver dollars now
coined.

The Government would incur a slight loss in recoining
them into dollars containing, say, 626 grains; but this would be
infinitesimal as compared with the losses it now sustains in re-
deeming in gold the promises issued to pay for silver. But the
small loss thus incurred could, if necessary, be made good by
a slight increase in the seigniorage until the loss of any such
coinage was covered. Meanwhile, however, the full-weight
silver dollar could be paid by the Government without any

256 GUNTON'S MAGAZINE. [April,

charge or imputation of dishonor; and this itself would utilize
for money purposes, not only the entire fund of silver now
lying idle in the treasury, but potentially the entire silver prod-
uct, if it were required for money purposes. More silver
would not be coined under this proposition than was required
for monetary circulation, because no profit would accrue to
the owner of silver by having it coined. The only advantage
to be gained would be its conversion into money, which, of
course, would be no advantage at all if there was no need for
it as money, since at least i per cent, would have to be paid
for the coinage.

The only objection to the coinage of dollars of different
sizes is the necessity of changing the dies; but investigation
shows that this is a small matter after all, since the variation
might always be made in the thickness and not in the circum-
ference of the dollar, which would involve very little change in
the dies. The change in the dies could be limited to four times
a year, provided the value of silver had changed, say, 2 per
cent. It is probable, however, that the dies would not have to
be changed more than once a year, and, perhaps, not so fre-
quently as that. Such a plan would give us bimetallism, with
coins both of full weight and value at home and abroad. One
coin would be as good as another, and either would be about
as good in the pot as in the bank. Besides giving a great
steadying power to our money, this would furnish a perma-
nent market for silver to the full extent that it was required in
the monetary circulation; but it would only take it at its market
value, which is all that any coinage should do.

Restoring American Ships.

Senator Stephen B. Elkins, of West Virginia, has intro-
duced into the United States Senate a bill which sounds the
keynote to the Protectionist policy which will be promptly
inaugurated on the approaching election of a Republican presi-
ident and a thoroughly Protectionist Congress in 1896. This is
a bill to again protect the American carrying trade on the ocean,
which alone of all the American industries has been left to the
"tender mercies of the wicked " free trade dogma since 1816.

1896.] RESTORING AMERICAN SHIPS. 257

Many Americans are so absorbed in their private affairs, and are
so deafened by the din of the mugwump assertion, that "a Chi-
nese wall surrounds American commerce, " that they actually
do not know that all tariff protection was in 1815 placed in
course of being withdrawn altogether from the business of
sailing American vessels on the ocean. Such withdrawal
was continued and perfected by many acts and treaties
with foreign powers, until by about 1846 the last shreds
of protection to shipping disappeared. Now, for half a
century, the one American industry which has been sub-
jected to the combined competition of every ship-owning na-
tion has had no protection whatever. If there were any
virtue in the free trade principle, pure and simple, the flag of
the United States ought to float over half the carrying trade of
the world. Instead, it only covers 14 per cent, of the cargoes
that pass between our own country and foreign ports. Our
coasting trade only survives because from this all foreign vessels
are absolutely excluded.

Senator Foraker (elect), of Ohio, in his recent speech at
the Lincoln Birthday banquet before the Lincoln Club in New
York on February 12, said that the flag of the United States
would again float over 60 per cent, of American cargoes on the
ocean if the country would return to ' ' discriminating tonnage and
tariff duties, " by putting a premium upon American-built ships ;
making the free list of imports subject to the condition that
they come in American bottoms, allowing a rebate of 10 per
cent, on all dutiable goods of our own carraige ; confining the
benefits of reciprocity to goods carried in ships of the recipro-
cating countries, and protecting American marine insurance
and American shipping from the tyranny and injustice now
practiced by foreign marine insurance. These provisions he
regards as marking the true American policy for attaining com-
mercial independence and our ' ' rightful place on the oceans. "

Of course, either of the candidates for president, now
prominent, will gladly welcome and sign a measure to re-
store the United States to their early ascendancy in the carry-
ing trade. Much of the local prosperity to flow from the
special activity in ship-building, to which this policy would give
rise, would enure to the advantage of our Atlantic, gulf and
Pacific ports. It is more gratifying, therefore, to observe that

258 GUNTON'S MAGAZINE. [April,

the "talk that means business " on this question comes equally
from leaders of opinion and legislation in the interior states,
whose only ports open on the Ohio and the lakes.

In June, 1895, in reviewing an article by Mr. Bates on
"Protection to Navigation," we took occasion to say, "The
remedy which would be most effective would be the revival of
the remedy actually pursued from 1792 to 1816, and which in-
creased our shipping six and one-half fold in nineteen years,
viz: to make our whole system of duties on imports discrimi-
nate so as to pay a lower rate of duty upon goods coming in
American than in those coming in foreign ships. A wise adjust-
ment of duties on this basis would soon cause the ocean to
swarm with American ships, without any serious rise in rates
of transportation, because our capitalists and ship builders are
all ready to build them. Within a few years it will restore to
the American flag the carrying trade in American goods and
(in) a very large share of all goods carried between English
ports." Our allusion to the carriage of goods between English
ports was called forth by the incident that the London Times
had then recently published, viz : that bailed hay was selling in
London at $40 a ton, and on the west coast of Ireland, only a
few hundred miles away, at $10 a ton, thus indicating that since
the coasting trade of the British Islands had been thrown open
to the "competition of the world," the producers and con-
sumers of hay, at least in the British Islands, were getting very
scant and poor service, and, therefore, necessarily very dear
service. The old maxim applies that a business which is thrown
open to everybody will be done by nobody.

The simplicity of Senator Elkins' bill* will commend it to
all. It is drawn by Mr. Alex. R. Smith, the editor of the jour--
nal, Sea Board, which is specially devoted to our commercial
and maritime interests. It is, however, exceedingly modest in
its demand. The better to exhibit in its true light this modesty,

* A discriminating duty of ten per centum ad valorem, in addition to
the duties imposed by law, shall be levied, collected, and paid on all goods,
wares, and merchandise which shall be imported on vessels not belonging
to citizens of the United States ; and any and all clauses in existing treaties
in contravention hereof, and all acts of Congress contrary thereto, are
hereby abrogated and repealed.

This act shall take effect fifteen months after its passage.

1896.] RESTORING AMERICAN SHIPS. 259

we purpose to compare the little here asked for with the greater
work done in the Republic's infant days. It is possible that in
the effort to simplify this legislation it may expect a somewhat
larger effect than would actually be produced unless the bill be
amplified in its scope by the addition of other and broader pro-
visions. To this end we may recur with profit to the degree of
legislation which was found protective in 1789 to 1815.

The protection of our national shipping by ' ' laws similar
in their nature and operation to the British navigation acts "
formed a chief object of that convention of merchants and busi-
ness men at Annapolis, which led to the movement to revise
the Articles of Confederation, and to form the present Federal
Constitution, vesting the National government with the power
to lay duties on imports. A memorial from the like commer-
cial class in Baltimore to the first Congress which assembled
under the Federal Constitution declared that "for want of
national protection and encouragement, our shipping, that
great source of strength and riches, has fallen into decay and
involved thousands in the utmost distress. "

Within two months after the date of this petition, and be-
fore the country had even a secretary of the treasury or any
cabinet officer, and before Congress had defined what officers
should constitute the various " heads of executive departments, "
that body responded in its second act to the demand for protec-
tion to ocean navigation.

This act provided :

(1) For a general rebate of 10 per cent, from the import
duties on all goods imported in American vessels from ports
other than the Chinese and East Indian.

(2) On all East Indian and Chinese goods other than teas, if
brought in foreign vessels, the duties were to be 12.5 per cent.
ad valorem ; whereas, if brought in American vessels they were
about half that rate.

(3) On teas, if brought from China or India wholly in Amer-
ican ships, the import duties were to be 6 cents per pound on
Bohea, 10 cents per pound on Souchong, other black imperial
or gunpowder, 20 cents on Hyson, and 12 cents per pound on all
other green teas. If brought only from Europe in American
vessels, the duties were to be 8 cents a pound on Bohea, 13 cents
on Souchong, other black imperial or gunpowder, 26 cents per

260 GUNTON'S MAGAZINE [April,

pound on Hyson, and 16 cents per pound on other green teas.
If brought in foreign vessels all the way from China, the duties
were to be 15 cents a pound on Bohea, 22 cents on Sou-
chong, etc., etc., 45 cents on Hyson, and 27 cents on other
green teas.

These duties were nearly doubled in 1790-91 — were still
further increased in 1797, when they stood, on Bohea at 12 cents
from China in American vessels, 14 cents from Europe in
American vessels, and 1 7 cents if brought all the way in for-
eign vessels. On Souchong the rates were 18 cents, 21 cents and
27 cents respectively. On other black imperial, gunpowder,
Gomee, and Hyson they were 32 cents, 40 cents or 50 cents,
according to the flag they came under, and so remained until
1812, when all these rates were again doubled. The rates con-
tinued nearly as high and the discriminating principle as to the
vessel they came in continued, so far as the act of Congress
could continue them, and when not vacated by treaties pursuant
to the Reciprocity Law of 1815, until 1832. There was even a
duty of 10 cents per pound on all teas imported otherwise than
in American vessels from beyond the Cape of Good Hope until
September n, 1841. Here are fifty-two years in all of exceed-
ingly influential discriminating duties, which are not embodied
or copied in Senator Elkins' bill. A very important share of
the productive effect actually exerted in behalf of American
shipping was achieved by these duties. It would not be correct,
therefore, to assert that a mere discrimination of 10 per cent, ad
valorem on goods imported did actually effect the degree of
tariff protection which was afforded to our shipping from 1789
to 1832, or to infer from the success then achieved that such a
bill as Mr. Elkins now presents would prove adequate under
existing conditions.

It should also be borne in mind that by a further act of Con-
gress, approved only sixteen days after that above described, ad-
ditional protection to our shipping was given by levying discrim-
inating tonnage dues, as follows :

On all vessels, American built, owned by citizens, or for-
eign built, if owned by citizens on the 29th of May, 1789, and
while owned by citizens per ton on entry at a custom house,
(each arrival), 6 cents.

On all vessels thereafter built in the United States, partly

1896.] RESTORING AMERICAN SHIPS. 261

or wholly owned by foreigners, on each entry at custom house,
per ton, 30 cents.

On other ships or vessels at the rate of, per ton, 50 cents.
While by the act of July 4th, 1789, goods imported in foreign
vessls paid full duties, and goods imported in .United States
vessels paid 10 per cent, less, by the acts of August zoth, 1790,
and March 2d and 3d, 1^91, the mode of this discrimation was
changed by providing that goods imported in ships and vessels,
not of the United States, should pay ten per cent, additional to
the schedule rates. This ten per cent, additional continued
until the act of August 3oth, 1842. There was during all the
period from 1790 to 1842 a ten or twelve per cent, discrimina-
tion in rates on all goods not brought from China or India in
American vessels, in addition to a discrimination in tonnage
duties, which on a vessel of 8,000 tons would amount to a tax
of $4, ooo for each entry of a foreign vessel into an American
port.

Our increase in shipping engaged in the foreign trade,
under these laws, was from 123,893 tons in 1789 to 346,254tons
in 1790, to 529,471 tons in 1795^0667,107 tons in 1800, to 744,-
224 tons in 1805 and to 981,019 tons in 1810. All this progress
increased our shipping eight-fold in twenty-one years, notwith-
standing that in 1806, Great Britain declared France and its allies
under blockade, in 1807 Napoleon declared England and its
allies under blockade, thus subjecting our vessels to capture for
trading with any part of Europe, and in December, 1807, Pres-
ident Jefferson, by an act of unparalleled folly, forbade all
American vessels to go to sea. Owing to this, and the still
greater blunder of the reciprocity act in 1815, our tonnage en-
gaged in the ocean trade in 1810 was not again equaled until
1847. In 1888, 1890 and 1892, it again fell below the level of
1810, though our population was seven-fold greater.

For a time, from 1815 to 1846, our tonnage of shipping in
the ocean trade was nearly stationary. In 1846, it even under-
went an expansion, reaching its highest point in 1861, when it
amounted to 2,494,894 tons.

From this point it has again declined below the figures of
1 8 10. The absolute lack of progress from 1810 to 1846 was
due to the paralyzing effect of the treaty of 1815, and the act
of Congress passed to give it effect. The act of 1815 provided

262 GUNTON'S MAGAZINE. [April,

" that so much of the several acts imposing duties on the ton-
nage of ships and vessels, and on goods, wares, merchandise,
imported into the United States, as imposes a discrimating duty
on tonnage between foreign vessels and vessels of the United
States, and between goods imported into the United States, in
foreign vessels and vessels of the United States, be and the
same are hereby repealed, such repeal to take effect in favor of
foreign nations, whenever the President of the United States
shall be satisfied that the discriminating or countervailing duties
of such foreign nations, so far as they operate to the disadvan-
tage of the United States, have been abolished."

Thus, we threw away our protection to ships, as one of the
conditions of a peace with England, after a war waged nom-
inally to protect our ships from search for foreign seamen.
The real reason, however, was that through the folly of the
Democratic demagogues of that period our national welfare
had become perilously interlocked in a warfare virtually with
all Europe, in which our only ally was the marvelous adven-
turer and genius of Corsica, whose empire had vanished at
Waterloo and left not a vestige of its power on which we could
call for aid.

Our ambassadors, without waiting to consult the home
government, snatched hastily from the burning elements of the
conflagration, a treaty of peace, which was rapidly followed and
consummated by an act giving free competition in the ocean-
carrying trade to the power which had conquered at Waterloo.

Our own little victories over that power, the most import-
ant of which, at New Orleans, was won five weeks after the
treaty of peace had been signed, were of no real value except
as a balm to our national vanity. The issue was decided for us
in the defeat of our precarious ally. Under the stern necessi-
ties involved in that defeat, we accepted with a pretended alac-
rity, which would have been unwise if it had been at all sin-
cere, a curtailment for eighty years of our power as a maritime
nation. The hour has now arrived when this national humilia-
tion and loss should be reversed with a vigorous snap and ring
that shall be felt and heard in every seaport on the globe.

i896.] 263

Economic Aspect of Large Trading.

A single commercial enterprise does not by mere force of
its dimensions necessarily become a topic of general economic
interest. But when it marks the culmination of a series of
changes in trade methods, which in its entirety revolutionizes
the essential nature of commerce, it becomes as important in an
economic sense as any great internal improvement or new pro-
cess in the useful arts. Half a century ago the economics of
commerce seemed to demand a rapidly increasing specialization
of industries, each firm dealing in one line of goods. The
country store, " which dealt in everything," was held to be syn-
onymous with slow trade and sparse populations. The city
merchant who dabbled in anything outside of his line was
distrusted. If he imported dry goods, he should let watches
alone. It was assumed that a wholesale firm which gave its
attention exclusively to velvet ribbons or to straw millinery or
umbrellas, was sure to outstrip one that sold all those.
Whiteley's in London, Wanamaker's in Philadelphia, Lehman's
"Fair" in Chicago, the Beau Marche in Paris, and Macy's in
New York began thirty years ago to reverse the current and
set the tide in an opposite direction. They discovered that cus-
tomers easily tire in the vigilant search for low prices, and
quickly lose their keen sense of values and of qualities in the
eager quest for the best goods, and when their perceptions are
thus benumbed by over-exercise they are ready to buy — they
buy all they want without that strict habit of scrutiny with
which they set out. When this stage is reached, the secret of
trade is found in having everything they can possibly desire.
Thus the great " shops " have returned to the earlier fashion of
selling everything, thereby saving their customers time, and
availing themselves of that prolific stage in the customer's
mind when his patience is exhausted by much scrutinizing,
when his taste has lost its keenest edge, and when his confidence
has fixed upon one establishment as being at least as good as
any that can be found.

The firm or joint -stock company of Siegel, Cooper & Co.
has for several years carried on in Chicago the most colossal
enterprise in the country in the line of purely retail trade, and
is now on the threshold of an even more gigantic undertaking

264 GUNTON'S MAGAZINE. [April,

in New York (City. The edifice erecting for this purpose on
Sixth Avenue, from Eighteenth to Nineteenth Street, now ap-
proaches completion sufficiently to afford the public an oppor-
tunity of appreciating at least its importance as a contribution
to the architecture of the city. It is the largest structure in
the world devoted to trade under a single management, except
the Beau Marche" in Paris. Its architectural style is not yet
fully disclosed, but promises to excite as much interest as its
dimensions. It is to be 200 feet wide in front by 470 feet deep,
and seven stories in height, thus enclosing an area equal to
twenty-two city lots, or i 5-6 acres on each floor, or about fif-
teen acres on its eight floors. This is about three times the
space occupied by the H. B. Claflin Co. (wholesale), whose
sales have run up to $80,000,000 per year, and about twice the
area of flooring in use by Hilton, Hughes & Co.

The site and building involve an expenditure which can
hardly be less than $7,000,000, and it may well be supposed
that the arrival of so formidable a competitor who has not here-
tofore sold a dollar's worth of goods in New York has stimu-
lated the older merchants who have so long occupied Sixth
Avenue to unwonted activity. Altman's, located immediately
opposite the new enterprise, have well under way an enlarge-
ment of their'store to a depth of 306 feet, an addition to the
whole of one storyjin height and in the rear of seventy-five feet
more of delivery stables. As yet, however, they have not been
able to effect a purchase of the corner on Eighteenth Street
which would be essential to bring them into imposing rivalry
as respects their frontage on Sixth Avenue.

An interesting question will be whether this invasion of
Western capital and enterprise means that every great retail
store in New York and throughout the country must be driven
by competition into the universal department system, which has
been carried to a greater extent by Siegel, Cooper & Co. in
Chicago than by any other firm. Must every, great modern
dry goods store not only sell millinery, furs, robes, clothing,
pictures, house furniture, hardware and groceries, and keep a
restaurant as at Wanamaker's and Macy's, but must they all
have a servants' employment or intelligence office, a savings
bank, bank of general deposit, a meat, game and poultry mar-
ket, a live bird market of enormous variety and dimensions like

1896.] ECONOMIC ASPECT OF LARGE TRADING. 265

that of Siegel, Cooper & Co. in Chicago, a coal yard, a dentistry
establishment, baths, barber and hair dressing, liquors, wines
and cigars, jewelry, diamonds and bijouterie, bicycles, musical
instruments and pianos, and others, ad i nfin itum? Where is
the extension of departments to stop? Why not add carriages,
harness and sales stables, real estate, house renting and insur-
ance, building and mechanical trades and publishing, ship-own-
ing, stock brokerage and a daily newspaper?

But it may be asked, What interest has the public, and es-
pecially what interest have economists, as such, in the concen-
tration of so many heterogeneous branches of sales under a
single control, or rather in the greater "fitness to survive"
shown in those that concentrate many lines, than in those that
confine themselves to one? The same as in the advance in
ship-building from the bark canoe to the ocean steamer; the
same as in the advance in railroading from a bankrupt road
from New York to Harlem to a solvent system of railways
beginning at the Atlantic and ending at the Pacific ; the same
as in the transition from the little Irish or French farm of from
three to ten acres, to the bonanza farm of Grandin or Glenn,
which produces a million dollars' worth of wheat in a year and
owns the ships that carry it to Liverpool ; the same as in the
advance from the home weaver to the factory system.

The points involved in the new system of merchandising
are the economy of time to the purchaser, for he can order
everything he wants at one counter and in one store ; equality
of prices and of method as between large and small, and rich
and poor purchasers, for there is no time to be unequal ; hon-
esty, fairness and dispatch in the sale of goods, since it all
reduces itself to a motive process, putting out the goods, taking
in the prices ; these qualities must lead back ere long to the
manufacturers by ensuring a paying preference in trade to those
who manufacture durable and permanent, over those who turn
out transient and defective, goods. All the elements of progress
lie in the direction of giving the greatest dimensions to industry.
This is accomplished in trade, as everywhere else, by just that
continual ' ' dissipation of energy ' ' (/. e. , expenditure of capital
and labor), "integration of matter" (/. e., massing of build-
ings, workmen, goods, exchanges and processes), "differentia-
tion of form" (i. e., extension of the unity of function, which

a66 GUNTON'S MAGAZINE. [April,

comprehends all sales, to that diversity of phenomena which
applies to selling all things), wherein Herbert Spencer detects a
unity between the law which evolves the acorn and the universe,
the army and the opera. In this progress there is- in trade, as
in all other things, a continual progress of every department,
"from the homogeneity and indefiniteness of non-organization
to the heterogeneity and definiteness of organization." Where
a human being touches trade at a point only one remove from
beggary, idleness and theft, by standing on a street corner and
selling matches or pencils or flowers only, unaided by the co-
operation of a single human being, there is what Mr. Spence
would call the " homogeneity and indefiniteness of non-organ-
ization." Every step in the upward progress of trade from this
point, until it has a force of 5,000 clerks, occupying sixteen
acres of flooring and retailing goods worth fifteen millions per
year, lies through a continual increase in the ' ' heterogeneity and
definiteness of organization," /'. e., in the definite direction of
many wills and members of society to the attainment of a single
definite purpose. Such a concern can hardly sell fifteen millions
of dollars' worth of goods annually at retail without disbursing
$2,500,000, annually, for the wages of its clerks, salesmen,
porters, carriers and other employees. It will concentrate into
a single building, probably as large sales as are now made on
either of the avenues, except the Sixth, throughout their entire
length, at an aggregate saving for rent, interest and clerk hire,
which is simply enormous.

It is not a little singular in the psychological aspect that
the continual evolution of industry from its lower and smaller
to its higher and intenser forms is attended by the pangs of
many who do not welcome the new birth, but, on the contrary,
look on it with apprehensions of disaster and calamity. ' ' It will
close so many of the smaller concerns," says one. "It will
make it so much more difficult for persons of small or moderate
capitals to compete," says another. "It will harness all the
small proprietors into mere clerks of the few great capitalists, "
says a third. " People who can contemplate this concentration
of wealth with delight must be prepared to kiss the chains which
the new slavery will bind upon their limbs, " says a fourth.

It is true that the number of persons who can be without a
"boss," or master, is greater in the nomadic life than in the

1896.] ECONOMIC ASPECT OF LARGE TRADING. 267

civilized; greater, therefore, among savages and least in the
more highly organized and complex industries of cities; greater,
therefore, also in civilization among those who stand aloof from
the larger firms, corporations, parties, clubs and associations
than from those who enter into them and so keep with the
" swim." But it is also true that the savage and the solitaire,
the non-partisan, the individualist or the recluse purchases his
freedom from being bossed at the cost of having nothing which
he himself can command, own -or control. His loss of real
power is commensurate with his unwillingness to co-ordinate
himself with the purposes of others. Civilization itself con-
sists, therefore, largely not in escaping from all masters, but in
recognizing and falling in with the masterful, whether it be in
trade, politics, art, religion, business or society. The class who
will obey no one can command no one. The class who will not
recognize worth, cannot be recognized as having any worth.
Hence adaptation to environment includes as its first essential
the ability to co-ordinate and co-operate with others, including
the acceptance of such subordination of the individual to the
mastery of the successful as promotes the success of the work.
These principles apply to trade as implicitly as to the military
career or to Church organization.

If the economics essential to the most perfect sales system
require mammoth stores, the fact will be shown by their ability
to sell more goods at a lower percentage of cost for the rent,
clerk hire and transportation, loss of time and interest than the
same volume of goods could be sold in the small stores, just as
the great factory manufactures at a lower cost per yard, and
the great railway carries more cheaply than the Japanese jin-
ricksha or the Indian guide, the ox-team or the "star route"
stage.

The great stores, like the great factories, or the great rail-
ways, however, could live but for a brief period on the trade
they win from other existing traders. Their permanent profits
must come from the absolutely new trade they bring into being
by their increased facilities and the new consumption to which
their cheaper sales give rise. Siegel, Cooper & Co.'s great
store will probably draw new trade from a circuit of from five
hundred to a thousand miles around, the overflow of which to
their rivals will compensate for and doubtless exceed what it

«68 GUNTON'S MAGAZINE. [April,

may draw from them. It will stimulate a more active ferry,
bridge and railway communication between this portion of New
York and all its suburbs, and will increase the general flow of
traffic which now tends toward the distinct retail trading mart
of which it will assume to be the center and the chief attraction.
It will stimulate such active competition on the part of its im-
mediate rivals as will clearly elevate this section of New York
into as distinct and commanding an eminence in retail trade as
Wall Street enjoys in finance and speculation, or as Chicago
enjoys in grain and provisions. We have referred to the anal-
ogy which exists between the workings of the natural and sci-
entific theory of evolution as it applies in the physical world
and in the economic. It is the same process in both.

In like manner, considering a great business enterprise as a
development in mere art, as well as in industry and in social
science, it may be said that it follows the laws of art, as dis-
tinctly as they are traced by Hegel in his sketch of the Philoso-
phy of Art, from the Pyramids to the Parthenon, and from the
Parthenon to the opera. The first effort of the human spirit
struggling to express and interpret itself expends its creative
force, says Hegel, in mere mass, as the Pyramids on the Nile, the
Babylonian walls and hundred brazen gates, the Chinese wall,
the Colossus of Rhodes, and the great amphitheatres of Rome,
where from 40,000 to 370,000 persons gathered to witness a sin-
gle act of amusement or of sacrifice.

How vast the stride from this to the Greek statue, where
perfect grace and mobility, lightness, joy and life stood en-
shrined in marble, but only in the single form. How far it
seemed from this to those more social forms of art which lay
hidden in groupings, numbers, the conflicts of opposing wills
and hosts, and the orderly sequence of successive events, with
all their dreadful power to teach passion, justice and the penalty
of offended law. Painting brought the group and the conflict,
but was limited to a single moment of time. It was powerless
to express the dramatic action which feeds the moral sense, or
the historic sequence out of which birth is given to the divine
quality of law. These came with history, which when told in
verse and fitted to be sung becomes the epic. In passing from
the epic to the drama, with living actors reviving in exact
movements and gestures every attribute and charm of life and

1896.] ECONOMIC ASPECT OF LARGE TRADING. 269

power, art draws near to its final climax. In the opera the
drama is set to music, and here, if earth were all there is of
earth, art would reach its final climax. But far above the earth
stretch the unexplored illimitable heavens, and far beyond and
above the soul are the fathomless mysteries of being, causation,
duty and destiny. These cause the final form of art to be
worship, the last baffled effort of the divine in man to interpret
the divine in nature.

In this chain of logical sequence, as defined by one of the
master thinkers of the German race, the struggle of the divine
spirit in man, to give itself expression, first takes the form of
mere dimensions; mass, the colossal. But as the subsequent
ascent is made from mere mass, first to the cold beauty of indi-
vidual excellence, as seen in the isolated statue, then to the
ever-increasing warmth and naturalness of the subsequent
stages of art, the painting, the poem, the drama, the opera and
the final transcendant effort of the mind to express itself in
worship, we discover the law of life, of art and of progress.
There is a logical sequence in industry, as there is in science and
in art, whereby magnitude in dimensions comes first in order,
before we can have grace or beauty, association in groups, and
the harmony between antecedents and consequents which con-
stitutes social justice. Anguste Comte found that there is a
natural order in the sciences whereby the human mind must
evolve those sciences that grow out of mere dimensions or mass,
viz., mathematics, astronomy and physics, before it could take
up the more graceful, complex and disputable sciences which
involve the study of life or biology, first in individuals and then
in groups, and among biological studies the incertitude and com-
plexity increases as we pass from the facts relating to the physi-
ological and anatomical structure of a single specimen to those
which investigate social organizations composed of many, and
intellectual and moral relations of every kind.

In all these phases of progress, every forward movement
has to be made against an instinctive impulse of condemnation
— a Papal bull of anathema, which mankind involuntarily issue
against the unexpected and extraordinary. The consolidation
of railways, in our own time had to be carried on against the con-
sciences of courts, the hostility of legislatures, and the denunci-
ations of statesmen and ' ' reformers " at every step. But the

270 GUNTON'S MAGAZINE. [April,

blind guidance of sheer profit was wiser than the honest jeremi-
ads of saddened prophets, because the power of the unconscious
instinct which guides the human race is a power higher than the
dictum of any one member of the race, however enlightened or
wise. Doubtless the orbit in which the race moves will period-
ically swing back from its concentrative to its dispersive tenden-
cies, from its perihelion to its aphelion. It will find new modes
of evolving individually-conducted and liberty-developing in-
dustries to offset the grinding sacrifices of ease and freedom in-
volved in great concentrations of control. Something of this
dispersive force is seen when the greater printing and publish-
ing houses of New York betake themselves to Rahway, N. J.;
to Akron, Ohio; to Northport, Long Island; or to Irvington-on-
the-Hudson. Mankind can be as certainly trusted, in the long
run, to seek individual freedom as to seek wealth, which, in its
last analysis, means the massing of power over many, and, con-
sequently, the loss of relative freedom of some kind. The
vibratory alternation or unstable equilibrium between the suc-
cessive and simultaneous control of these two forces is one of the
facts which renders it possible that society shall be eternal.

American School of Political Philosophy.

BY THOMAS S. BLAIR, A.M.

Among the contributions to the original thought of the
day which we owe to the conductor of this magazine, the sug-
gestion of the creation of an American School of Political
Philosophy seems to be one of the most fruitful. According to
the writer's understanding of that suggestion, the many and
significant points of difference between the conditions of life
now prevailing in this country and those under which were
evolved the earlier and later systems of thought relating to this
class of subjects, make necessary the revisal of the European
conclusions from an American point of view. Taking up this
germinative idea, and passing before us in mental review the
more conspicuous of the facts on which it seems to throw a
fresh light, we discover in it the possibility of its conversion
into a fundamental concept capable of co-ordinating into a sys-
tematized ensemble a large body of recognized phenomena,

1896.] AMERICAN SCHOOL OF POLITICAL PHILOSOPHY. 271

which shall not simply constitute an adequate basis for a mod-
ernized political philosophy, but also afford a confident assur-
ance of discoveries of still wider scope beyond. Let us make a
first crude attempt at methodizing these facts in the manner
thus indicated, as follows :

The Occidental civilization has already developed out of
the conditions peculiar to certain successive periods in its his-
tory, two successive - philosophies of political organization.
These are

1. Out of the state of war natural among tribes or nations
of a low order of civilization, with the War-Lord as the organ-
izing intelligence presiding over the fulfillment of the most
urgent requirements, to-wit, the protection of the tribe or
nation from violence from without, is evolved the great co-
ordinating concept of the Divine Right of Kings.

2. Out of the state of peace consequent on the success of
this form of organized resistance to aggression from without, is
evolved the substitution of rule through success in wealth-
winning for rule through success in war-waging, so as to meet
the new requirement under the altered conditions, namely, the
protection of the individual, whether in person or in property,
from violence within the organization : — with consequent
development of the new concept of Representative Govern-
ment.

This new concept, admirable in the abstract, was, under the
conditions prevailing in that European nation in which it received
its greatest development, in the actual concrete, representative
simply of the interests of the special class just mentioned ; and
necessarily so, for in it alone, outside of the high-lineage class,
was to be found the organizing intelligence indispensably
requisite to orderly government. It was a great step in ad-
vance, because involving so much, ultimately, in the opportuni-
ties inevitably opened up to the masses, but, in itself, it was
essentially sordid.

In both European systems there is found the element of
class-government — a government by a class, and hence (under
the laws of human nature) a government for that class : the
other classes in each case depending for their share of the
advantages of the existence of the government on the fact —
when such was the fact — of a community of interest as between

272 GUNTON'S MAGAZINE. [April,

themselves and the governing class : but in the earlier the ele-
ment of chivalry, the sentiment, " noblesse oblige" was a power-
ful antiseptic against corrupting influences, a saving power not
effective in the same way in the later system. Against this,
however, must be set up the consideration that the protecting
care of the high-born over the low-born was extended upon the
condition, express or implied, of willing subjection on the
part of the latter.

But again, while the relative position of earlier and later are
those of Conservative contrasted with Progressive, the govern-
ing class under the later system developed a philosophy — the
accepted economic philosophy of to-day — which recognizes in
natural law no provision for further progress — for progress
beyond that condition of things which places them in the seat
of power. To the American instinct, the history of the
struggle between the Conservative and the " Liberal " parties in
England over the legislation for the emancipation of the labor-
class (as presented, for example, in Mr. Gunton's description
of English Factory Legislation, in his Wealth and Progress)
seems amazingly illogical, reactionary, and il-Liberal.

To the American mind, therefore, the suggestion is self-
evident that, as erst to the rule of the peace-securing class, suc-
ceeded the rule of the order-preserving class, so now the times
are ripe for the supersession of the latter by the rule of the
progress-securing class. What forecast, then, can we frame of
the distinguishing features of this final and complementary,
this American, Philosophy of Political Organization ?

A discovery is already half made when we have determined
what it is that we would discover. Let us then make the effort
to construct a hypothesis of what the progressive system, in
practice and in theory, in aspiration and in realization, in view
of the facts conditioning its evolution, is destined to be

Instead of a government of the militant class, or a govern-
ment of the employing class, there will be a government of the
labor class. As before, the interests of the non-governing
classes will, to a certain extent, be safeguarded by the fact that
the interests of the governing class will suffer by reason of its
oppression of the rest of the nation ; but this safeguard will
operate with greater celerity, positiveness and effectiveness,
because of a certain peculiarity of the non-governing class

1896.] AMERICAN SCHOOL OF POLITICAL PHILOSOPHY. 273

consisting in the fact that it must always be the most unfavora-
bly affected of all the classes by any influence injurious to the
interests of any other class. This circumstance establishes the
superior fitness of the labor class for the position of control (i)
whenever the true principles of political, social, and industrial
adjustment have been discovered by the leaders of thought;
and (2) whenever these principles have been comprehended and
adopted by the labor class.

Let us further assume that, even as, through a slow and
much-perturbed evolution of conditions, a fullness of time was
finally reached when the accumulated facts of experience sup-
plied the materials out of which the human mind was able to
frame the concept of Divine Right, co-ordinating all those
facts into the generalization which we recognize as the earlier
European Political Philosophy; and even as the future evolu-
tion of the conditions of existence co-ordinated in the concept
of the rule of the Successful Commoner; so now, in the course
of the continued progress of that evolutionary movement, the
hour has at last struck when the additional experience accumu-
lated suffices to suggest the new co-ordinating concept which is
competent to systematize the whole sum of Occidental experi-
ence into the sought-for Philosophy, if only the human mind —
whether through the exercise of a keener insight than has as
yet been brought to bear upon the phenomena, or through the
adoption of a new point of view — can, in this third, as in the
two former instances, show itself capable of grasping their
true significance, with the ultimate result of the development
of a political philosophy under which a government of the
labor class, by the labor class, for the labor class, intelligently
administered, shall prove to be the best of governments for
every class.

It is needless to enlarge in this place upon the consequences
to human progress of the realization of such an ideal. It suf-
fices to name but one of the many aspects which the prospect
presents, to- wit : the relief which it promises from the pressure
of that dark and dismal incubus upon modern hope and en-
deavor, the classic Political Economy, with its Gospel of Help-
lessness, of the impotence of human effort in the presence of
the natural laws of wealth-generation, its Gospel of Help-
lessness as regards the future of the labor class, and its Gospel

874 GUNTON'S MAGAZINE. [April,

of Hate embodied in its doctrine of the relations between
Capital and Labor. Fancy the change from its paralyzing and
degrading pessimism to the inspiring, ennobling influences of
an abiding faith in a sublime purpose, indulging all the perplex-
ing phenomena of human existence: — a purpose in the carry-
ing-out of which each individual alive to his place in the scheme
is a conscious participant.

Finally, and as the crowning feature of our hypothesis, let
us assume that there exists, not simply, as above suggested, a
more commanding point of view for the new philosophy to dis-
cover, but also a new method in the pursuit of knowledge; this
new plan of procedure consisting in adopting the methods of the
successful man of affairs in dealing with the complexities
of the phenomena of concrete existence, as a substitute for the
unsuccessful methods of the baffled philosophers.

Thus, there would seem to be laid out for the American
School of Philosophy a programme of discovery, not only of
the deepest import within the comparative narrow scope of a
Theory of Political Organization, but also in the widest range
accorded to human thought in the boundless realm of abstract
speculation.

The Myth of Stock Watering.

Among the numerous popular errors born of economic
superstition and the fear and distrust of capital, none are more
prevalent than the notion that stock watering is a means of en-
riching capitalists by swindling the public. Nor is this super-
stition limited to workingmen, but it seems to be about as prev-
alent among the professional classes. In the Arena for March,
Professor Frank Parsons, who frequently enlightens the readers
of that journal on economic subjects, seeks to denounce as a
public injury the fact that the Western Union (Telegraph)
Company bases its capital of $95,000,000 and bond debt of
$15,000,000 on apropertynow alleged to consist of 190,000 miles
of line, 800,000 miles of wire and 21,000 offices, all of which
have grown out of several small investments made, say, in 1860;
one of $147,000 for a line from Brownsville, Neb., to Salt Lake
City, another from New York to Louisville costing $150,000, and
various other short lines, all of which were capitalized in 1863

1896.] THE MYTH OF STOCK WATERING. 275

at only $3,000,000. There is a vast expenditure of diseased and
abnormal emotional distress in depicting the expansion of these
small investments of cash made thirty-five years ago, as if they
were the basis on which the present $110,000,000 of capitaliza-
tion rests, thus ignoring the continual investments of millions
of new capital, and the addition of the fruits of many years of
the investment of capital in new lines, and in paying wages for
the co-operative efforts "of many scores of thousands of co-
workers.

The writer does not seem to know that multiplying the
stock or increasing the issue of shares did not increase the value
of the property at any time by a single penny, nor add to the
total of dividends that could or would be paid. All this increase
of shares and certificates of stock was mere waste paper, except
as increased earnings gave rise to increase of value. Suppose
no increase had occurred on the capitalization of $3,000,000
made in 1863, would the public have been any richer or the
stockholders any poorer? If the earnings were what they have
actually been, and the stock had remained at $3,000,000, then
each $100 share of that stock would have sold for $3, 700 and
would have drawn all the revenues it has actually drawn. The
Chemical Bank has pursued this course. It was capitalized
sixty years ago at $300,000 and remains in that state since.
But each share sells at forty-eight times its face, and it loans its
original nominal capital about once every twenty minutes dur-
ing banking hours. Its failure to increase the quantity of its capi-
tal so as to keep its shares down to par has not cheapened its
services to the public nor lessened its profits or income by a
single dime. Its charges on loans depend on the current rates
of interest, not on the amount at which it is capitalized. And
whatever it can save at these rates it must divide. So with
the Western Union. Increasing its capitalization has had no
effect whatever on its rate of charges for telegraphing or on the
total amount of its earnings. Its rates for telegraphing were
governed by the competition between it and the mails or other
modes of sending the news, and by the value which the senders
attached to speed as compared with postage. Its aggregate
earnings depended on the margin it could make between its re-
turns or receipts and its costs for employees, repairs, etc.
Neither of these elements would be affected by the quantity

276 GUNTON'S MAGAZINE. [April,

of its shares of stock. Of course, it must be recognized that a
large portion of the gross earnings were constantly being trans-
ferred into and added to the fixed capital which was to be used
in making new earnings.

The law which governs the distribution of the values which
result from production, between the things produced by labor
and effort, on the one hand, and the means which condition or
expedite or save labor in production, on the other, has never been
so clearly worked out as could be wished.

There is no difficulty in perceiving that a chief source of
the rapid rise in the value of a racehorse from the $300 which
he would be worth so long as he would trot a mile in 2m. 255.,
to the $3,000 which he would be worth if he trotted the mile in
2m. i2S., and the $30,000 he will be worth when he trots the
mile in 2in. 5$., springs from the gate moneys paid by the
sportsmen whom the horse will draw. The desire to win by
skillful horse breeding, a horse which will draw these gate fees
or other like profits, causes an expenditure in the effort to pro-
duce this order of horse,, commensurate in losses and risks with
the average cost of the other efforts which result in the same
values. The proprietors of the racecourse can divide a portion,
perhaps the whole, of the gate money, with the owners of the
horse as profits, but the power to earn such profits is in part
capitalized in the increased value of the horse, which conditions
the gate fees. This rise in value attaches to the horse first at
the rate of $200 for every second of reduction in time, and then
at the rate of $4,000 for every such reduction.

In the same way a valuable corner lot on two great thor-
oughfares like Wall street and Broadway may be said to grow
in price with every added $100,000 of exchanges it conditions
in excess of the exchanges which can be made in any inferior lo-
cation. An actor's drawing power conditions the rate at which
he can sell his services to the manager of a theater. A preach-
er's power to attract $50,000 annually in pew rents when his most
formidable rival could attract only $25,000 in pew rents, en-
titles him as a condition of church success to a salary of $25,000
and his competitor to one of but $12,000.

The principle upon which rests this distribution of values to
the causes which condition value, is not unlike that upon which
an engine, a loom, a yoke of oxen, or a plow, engaged in pro-

1896.] THE MYTH OF STOCK WATERING. 277

ducing power, yarn, potatoes or grain, draws to itself as an im-
plement, by reflex action, & value which, as these objects are
not themselves consumable in the gratification of any human
want, is derived from their function or utility as means of pro-
ducing things that are consumable. They are all implements
of human labor used to save a greater human labor, and a por-
tion of the natural cost of the labor they save attaches to them-
selves, by carving out a margin between the cost of the alter-
native means of accomplishing the same result, and the lower
cost at which they accomplish the same result; a residiuum of
saving, a portion of which goes to him who first uses them as
profits and another portion of which goes into the work of re-
producing this labor-saving apparatus, and thereby becomes at
once its cost of production and its capital value.

As a rule, shares of stock in a company subjected to the
risks of active commercial or manufacturing business will take
on a selling value in the market equal to the sum of money on
which the dividends will pay the current earnings in similar
grades of business. The current earnings in a good manufac-
turing business are from 8 to 20 percent., according to its kind.
For many years the Chicago Tribune Company, as a corpora-
tion, was capitalized on a basis of $200,000. When first so
capitalized, say in 1858 to 1860, it was insolvent, fresh from a
receiver's hands, and its stock might have been worth $25 on
every hundred. By 1864-6 it rose to an annual dividend -pay-
ing power of $225,000, and these dividends sent the principal
value of its shares up from $25 per share (of $100) to $650 per
share. At the latter price its $200,000 of stock were worth
$1,300,000. Had the company been desirous to sell its stock to
the public, it would then have been in accordance with the
tactics of "the street," to have reorganized the company on the
basis of $2,000,000 capital, and to have sold its shares at about
from $60 to $75 per share of $100. Such a reorganization, how-
ever, would not have enabled the concern to earn a dollar more,
or to sell its paper or its advertising space any higher. If
shares were issued for $20,000,000, they would have sold for
$6.50 per share. The amount of stock issued upon any enter-
prise has absolutely no influence in determinining its aggregate
earning power. If the public can be induced to invest in it
more freely if the amount of stock issued is such that the divi-

278 GUNTON'S MAGAZINE. [ April,

dends keep it very nearly at par, that is an affair by which buy-
ers and sellers of its stock make or lose, so far as its range of
actual earnings is unknown, and therefore subject to some mis-
representation. But no fraud in that direction can affect the
prices which the company can exact from the public.

All means of production, /'. <•., machinery, mills, farms, etc.,
and all conditions of production, /'. e., land in cities deriving its
value from its mere working space and centrality of location
with reference to the societary movement, derive their value
by reflex action from their earning power, /. <r., the principal
value is a consequence of the return or earnings which the free
competitions of society will enable its owners to charge for
their use. Stocks of working corporations do not differ in this
respect from corner lots, or merchant ships or farms. When
the California gold fever broke out in 1849, the owners of ships
sailing to Panama, and thence to San Francisco, were said to
earn the value of their ships in one voyage. The temporary
price of any ship that could perform this service, and could not
be immediately duplicated, would tend to rise to a price in
which every dollar of its cost would bring six dollars. But
this change would not differ from the tendency of sheep to rise
to a price threefold their cost to produce, when the American
Civil War sent raw cotton up to fivefold its former price. So,
when a corner lot presents a location, whereon a building cost-
ing $100,000 to erect will rent for $30,000 per annum, the
value of the lot must rise to $200,000. This is simply be-
cause real estate has got to have that principal value on which
its earnings will pay 10 per cent. If the cost of the necessary
building will only absorb about $100,000 of this value, the re-
mainder must attach to the lot, because it conditions the build-
ing, and through the building the $30,000 of annual rents.
The so-called value of both lot and building is really regulated
by the rates of earnings, and means that $300,000, invested at
current rates, nets the same return as $100,000 invested in
erecting a building on that lot for rental at competitive values.
The $300,000 is, therefore, no subtraction or filching from the
earnings of that general public which never owned the land.
It is simply "arithmetical wind, "or, in effect, a "watered
stock," arrived at by capitalizing the annual rent of $30,000 so
as to make it the assumed consequence of an expenditure of

1896.] GERMAN SOCIALISM OF TO-DAY. 279

$300,000, when, in fact, it is the father and author of that
valuation. Stock watering, therefore, is going on in corner
lots, in all lands and in all social opportunities in which in-
creased earnings, whether annual or daily, become the cause of
increased principal values.

The work of issuing specious and deceptive arguments,
which attribute growth in wealth to any other causes than sub-
stantial services rendered to industry, is a form of incendiarism
very much like the efforts of the fire-bugs who set fire to
buildings in order to stimulate owners to insure. Articles like
Mr. Parsons', adapted only to propagate a form of social lunacy
among the gullible, should quicken the intelligent classes to
spread true and sound economics.

German Socialism of To-day.

The Socialistic party, as a political organization, originated
under the • ministry of Bismarck. It really dates from 1863,
when Ferdinand Lassalle founded ' ' the General Union of Ger-
man Workers. " Social Democrats are believers in an ideal
social state, and the principles they inculcate to reach this end
differentiate them sharply from all other political parties, and es-
pecially all political factions known under the common name of
bourgeois parties. At the conference of the party held in 1891,
when serious divergencies of opinion appeared, a programme
was drawn up which commanded the approval of a majority of
delegates present. The dissentients, comprising mostly
younger members, were quite strong, and they denounced the
programme as a compromise with capital and with the anar-
chist, which is still further to the left. They do not desire
representation in the Reichstag, because they are as much op-
posed to parliamentary government as they are to bourgeois
ideas and government in general.

The great mass of Social Democrats are recruited from the
large towns and industrial centers. In rural districts their
strength is small. In Berlin, five of the six representatives in
the Reichstag are leaders of the Social Democratic party.
Here is another index as to the strength of the latter. In
1893, forty-four Social Democrats were returned, an increase
of ten over their previous delegation. Their poll showed an

a8o GUNTON'S MAGAZINE. [April,

increase of 300,000 on that of 1890, which amounted then to a
total of 1,734,000. It would seem that where Social Demo-
crats are elected, they have behind them enormous majorities.
The Social Democrats' forty-four representatives received as
many votes as the 108 Conservative representatives. The pro-
gramme drawn up in 1891 at Erfuit remains substantially the
platform of the party still, and reveals the doctrine for which a
fierce battle is now being waged all over Germany. These are
some of them. It affirms that the economical development of
bourgeois capitalist society involves the decay and ultimate de-
struction of the smaller industries. It also separates the
worker from his means of production, and makes him practi-
cally a member of a possessionless proletariat. Further, the
development of machinery and the application of implements
of labor have enormously increased the productivity of the lat-
ter. It then claims that all advantages from this increase are
monopolized by the capitalists, and this portends increasing in-
security of existence, an augmenting condition of misery, op-
pression and debasement.

There is no error in economics so fatal to sound thinking
as the notion that the advantages of capital can be monopo-
lized or absorbed by the capitalist. Nothing is capital which is
not wealth employed in producing wealth. Wealth can only be
employed in producing wealth when it is used in paying wages
of labor, in buying stocks of raw materials, plants and imple-
ments for labor to work with and upon, in making loans of
money to be used in employing labor in production, in trans-
porting, transforming or transferring either the products of
labor or the conditions under which labor can work, all of which
is done by labor, for labor, and is a form of labor. So far as
wealth is used, not as capital but in ostentatious living, it is
merely an employment of labor itself to disperse wealth among
laborers, which is the very use of wealth, which Socialists re-
gard as most humane and beneficial, since dispersion is 'the
opposite of accumulation. Descending from abstract reasoning
to concrete example, the vast rise in wages, from 18 and 25
cents a day to $3 and $4 a day for skilled journeymen, which has
marked the nineteenth century is part of that " present order
of things " due to capitalist aids, which Socialism denounces.
While the psychic or intellectual force which has fought for each

1896.] GERMAN SOCIALISM OF TO-DAY. 281

specific rise in rates of wages in detail has been the unions of
organized laborers, animated by the social stimulus of larger
personal freedom and broader political rights, a more liberal
education and a better standard of life, yet the economic con-
ditions which have rendered continual concessions of these
higher wages possible by the employing classes, have been the
larger capitals, and especially the larger use of machinery in
manufactures, agriculture and transportation. These it is
which have raised wages sixteen-fold in machine-using
countries, leaving them the same in hand labor countries.

The following is a resume of the legislative proposals which
are brought forward periodically in the Reichstag, only to be
laughed at or rejected by overwhelming majorities.

1. Equal electoral and suffrage rights for all Germans over twenty
years, without distinction of sex. Introduction of the proportional electoral
system. Elections to be held on a Sunday or general holiday. Payment
of elected representatives.

2. Self-government of the people in Empire, State, province and
parish.

3. Decisions as to peace and war to proceed from the elected represen-
tatives of the people. Institution of an international Court of Arbitration.

4. Abolition of all laws which limit the free meeting of the people and
the free expression of their opinion.

5. Abolition of laws which give public means to ecclesiastical or reli-
gious purposes. Ecclesiastical bodies are to be regarded as private
communities.

6. Secularization of the schools. Obligatory attendance at primary
school. Free instruction at all public educational establishments.

7. Abolition of a standing army.

8. Free legal advice. Judges to be elected by the people.

9. Free medical advice.

10. Graduated income taxes. Abolition of indirect taxation.

Such are the principles and programme of the Social Demo-
crats of Germany, and they are finding their way into England
and this country by a propagandism which is more active than
it is able. But as it is to the least intelligent that appeal is
made, and to those who, discontented and unthrifty, put the
blame on the present social order, it is an appeal of no incon-
siderable force. The German Socialists of the type under dis-
cussion have all the pride of their race, and claim that their
views are scientific, and that all economists opposing their
vagaries are intellectually inferior — mere apologists, in fact, of

282 GUNTON'S MAGAZINE. [April,

the social system they desire to overthrow. Yet this may be
said on no less authority than Prof. H. Sidgwick, of Cambridge
University, "that no positive contribution of importance has
been made to economic science by any Socialist writer through-
out the century. The lessons of socialism to economic science
have been mainly in the way of criticism, partly direct and pur-
posed, and partly indirect and unintentional. By drawing ex-
travagant inferences from accepted economic premises, it has
suggested shortcomings in these premises, by an undesigned
reductio ad absurdum."

In fact, there is nothing new in later German Socialism; the
older views have simply gained in precision and coherence.
Owen really had the seed thoughts which more recent writers
have expanded and emphasized. Socialistic experiments have
been for the most part such palpable failures, that now the ten-
dency is to discourage all voluntary essays, and to insist upon
state action as the only hope of realizing their programme. As
yet no Socialistic ventures, like that at Rochdale, or of artisans'
co-operative stores, have demonstrated the great capitalist or
great employer to be superfluous. The German Socialism has
no field in this country, for here no such condition exists as
necessarily rouses the class antagonisms prevalent on the conti-
nent. Those who talk and teach it here, belong to a school of
hortatory declaimers, who make no pretense to scientific stand-
ing, but whose capital in trade is the discontent or distress for
which our industrial order is not responsible. The workingman
is apt to express, not his own ideas, but what he has caught up
from others, and often he is found repeating what there is no
forthcoming evidence to substantiate. In the United States, as
well as in England, real wages rose some 20 per cent, between
1860 and the maximum period of 1871-4. Money wages rose 50
per cent, in this country and between 30 and 40 per cent, in the
United Kingdom in the same period. In both countries real
wages were higher in 1891 than in 1873. Since the present in-
dustrial order came in, there has been an increase of perma-
nancy of income and employment, and this must be the result
of capital in private hands. Moreover, the evolutionary devel-
opment has been towards private ownership of tools and imple-
ments— in a word, capital. It would be far better for our work-
ingmen to study the situation which exists here and to take less

1896.] LEADING EVENTS OF THE MONTH. 283

to the theories of Socialists abroad. Their hope is in organiza-
tion and in such advance in wages which, by wise action and
united effort, they can secure for themselves. Most of the
particulars in the Social Democrats' programme are already fea-
tures of our government system, but when it comes to an indis-
criminate warfare on capital and the abolition of private owner-
ship of the implements of labor, all thoughtful workingmen will
pause. Municipal workshops would not give more employment,
since what is wanted is an augmented consumption, a larger
demand for the products of industry. That will come with an
improved social scale of living on the part of the masses, with
higher wages and with extended markets.

Our readers may gather from this exhibit of the programme
of the Social Democrats the state of feeling in the German em-
pire, and if there is to be any enlarged Socialistic experimenta-
tion by the government, then let Germany lead the way, for
here and in England the evolution is in another direction.

Leading Events of the Month.

REVENUE AND FINANCE.

Senator Morrill, Chairman of the Committee on Finance,
formally abandoned the Dingley Revenue Bill on February
25th, after a second failure to get it before the Senate. By this
final vote the free trade and free silver forces, the latter includ-
ing Republican Senators Teller, Mantle, Carter, Dubois and
Cannon, made it apparent that no relief for the treasury can be
secured during the present session. The net deficit on June
30, 1895, for the three years previous aggregated $120,651,351,
while accounts for the present fiscal year to date are behind
nearly $22,000,000, with no prospect of improvement. Under
these conditions, and with the reissuance of greenbacks in pay-
ment of current balances, it cannot be long before the new gold
reserve, now about $127,000,000, will begin to go the way of its
predecessors. Thus, as between a revenue measure and the pos-
sibility of another gold-bond sale, the silver senators, it appears,
have chosen for the latter.

Meanwhile, it is interesting to note that foreign capital for
investment in this country would be very easily obtainable at
the present time but for the prolonged uncertainty regarding

284 GUNTON'S MAGAZINE. [April,

the ultimate place of silver in our circulation. London financial
reports indicate high prices for all good securities, and a general
interest rate of not over 21-2 per cent.

The failure of the Dingley Bill also results in renewed de-
pression in the woolen trades. In the New England states,
particularly, numerous shut-downs and short-time orders are
reported. From Philadelphia, in one day (March 18), are re-
ported the failure of the Angora Mills, woolen manufacturers,
turning out of employment 400 operators; James Long Brothers
& Co., manufacturers of dress goods, and Rhoades Builders,
all due to distress of trade. Meanwhile, as the Outlook says:
" The woolen trade in Great Britain was prosperous in 1895
* * * chiefly due to the great purchases from this country.
Our orders have been large in every branch of the woolen trade,
both for the raw material and the manufactured article;" and
according to customs reports the largest percentage of gain was
in our orders for shoddy.

STRIKES AND LOCKOUTS.

The fact that the garment-working trades contribute a
larger quota to the annual supply of strikes than any other one
industry in the country, is internal evidence by itself of the rot-
tenness of the whole "sweatshop" and contract labor system.
During the last month strikes against low rates and long hours,
for recognition of unions, and so on, have been in progress
among the clothing cutters of Chicago and Cincinnati, the pants
makers of New York and Brooklyn, and the United Garment-
Workers of Baltimore and elsewhere. In Germany over 30,000
members of the men's clothing trade were on strike" during
February, and are reported to have secured a 12 1-2 per cent,
advance in wages. There have also been strikes going on
among the lithographic artists of New York, Boston, Chicago
and St. Louis, principally for recognition of unions and against
piece-work. Most of them have been settled by mutual con-
cessions.

LABOR ORGANIZATIONS.

In line with the above comes Commissioner Bowling's an-
nual report of the New York Bureau of Labor Statistics. Dur-
ing the year ending June 30 last, sixty-seven new labor organ-
izations were formed, with 7,618 members; the old organizations

1896.] LEADING EVENTS OF THE MONTH. 285

gained 15,416, and with the estimated increase since July ist,
and unions not reported, the total organized force is now put at
about 225,000 in the state. Over 50,000 union men, working
in seventy-six branches of trade, are enjoying the eight-hour
system. Especially noticeable is the fact that in spite of the
discharges and wage reductions of the last three years, the pro-
portion of employed members, in these organizations, has in-
creased. On July i, '1894, seventy-five per cent, of union
members were at work, and one year later eighty per cent.
Women's organizations gained in numbers about one-third dur-
ing the same period. These figures show a gratifying progress
in the trades-union movement, both as to membership and
actual results gained.

SQUIRE FORTIFICATIONS BILL.

A bill appropriating $10,000,000 for coast defenses, on a
plan contemplating similar appropriations by seven successive
sessions of Congress, has been reported by Senator Squire. It
provides for more or less extensive work on the entire seaboard,
including not only the more important points, Boston, New
York, Philadelphia, Washington, New Orleans, San Francisco,
and Portland, Ore., but numerous minor exposed harbors, and
all the lake ports. The whole plan has met with more or less
opposition, particularly in New York, where a so-called "work-
ingmen's " mass meeting in Cooper Union made formal protest
against expending a cent for this purpose. Undoubtedly there
have been, in recent political events in this country, tendencies
which might develop into radical militarism, and it is quite
possible that such an immense expenditure as the Squire bill
proposes would be unwise and unnecessary. But the absolute
defenselessness of all our important seaports, New York par-
ticularly, is a matter that ought not, in sound public policy, to be
perpetually neglected. Not that this country is planning to
assume any aggressive foreign policy, as the European press
seem to think, but recent events have all gone to indicate the
growing anxiety of the Old World countries to colonize their
surplus population under their own flags, wherever they can ob-
tain a foothold; and, from now on, complications involving the
whole attitude of the United States toward the future of demo-
cratic institutions on this continent are liable at any time to

286 GUNTON'S MAGAZINE. [April,

arise. We ought to be in a position to assert the American doc-
trine not only with firmness but with confidence, and that can-
not be while risks so enormous continue unprotected. The plea
of some of the Cooper Union speakers that this is only another
scheme to put power in the hands of capital in its mythical
" war " with labor, was wholly discreditable. The idea that the
proposed new forts in the Narrows, for instance, could be used
for bombarding bodies of New York strikers, is novel, to say the
least.

CUBA.

The Cuban situation within the last few weeks has become
seriously complicated. Both Houses of Congress have, by
practically unanimous votes, passed resolutions favoring a rec-
ognition of the belligerency of the insurgents. The House
resolution, adopted March 2, and which is now being considered
by the Senate, declares that in the opinion of Congress war ex-
ists in Cuba; that the only permanent solution of the difficulty
is an independent government on that island; and that from
our near relations with Cuba, American interests are suffering
and should be protected, by intervention if necessary. This
last clause may be withdrawn before final adoption.

On Sunday, March i, rioting and anti- American demonstra-
tions, principally led by university students, broke out in
Madrid and Barcelona, and continued for several days in the
more prominent cities all over Spain. Our consulates at Bar-
celona and Bilboa have been stoned, and the residence of Min-
ister Taylor threatened. The Spanish Minister of State made
prompt apology for the outrages, and a few days later the gov-
ernment temporarily closed several of the more important uni-
versities. Aside from the merits of the case, such a manifesta-
tion of national fire in a decaying and bankrupt kingdom is
calculated to awaken more admiration than censure, even in
the United States. But the thoroughly mediaeval character of
Spanish ideas is well exhibited by the Imparcial (Madrid) in its
remark: " We conquered Napoleon by guerilla warfare, and we
shall employ a system of privateers to overcome a trading
nation." Guerilla warfare, by the way, when carried on in
Cuba is the particular style of fighting which Spain insists shall
not be recognized as warfare at all.

1896.] LEADING EVENTS OF THE MONTH. 287

The comments of the French and English press on the
crisis have been decidedly pro- Spanish; those of the German
press a little milder. The Paris Jour nat says that "Europe
one day will have to unite against this method of applying the
Monroe Doctrine;" the St. James Gazette speaks of our "un-
limited policy of aggression," and the Westminster Gazette dis-
covers that our "mad action " is "destroying respect abroad."
It is nothing unusual for England, the prince of "land grab-
bers " to regard any copying of her own policy by other powers
as madness aud aggression. At the present moment Her Ma-
jesty's Government is engaged in appropriating a new slice of
Siam ; squeezing the savage king of Ashantee ; interfering in
the internal affairs of the Transvaal republic, and last of all,
ordering a new Egyptian expedition, ostensibly in moral sup-
port of the Italians recently defeated at Adowa in Abyssinia —
all " in the cause of civilization," as usual — while neither in the
Venezuelan nor Cuban imbroglios has there been any intimation
of a desire on the part of this country to acquire new territory.
What the foreign press comments particularly reveal is a com-
plete failure to comprehend our position in the matter. An-
nexation is exactly the proposition which has not entered into
the present discussion. The absorption of non-homogene-
ous races never has and should not become a part of our
national policy. It is not even certain that Cuba is capa-
ble as yet of successfully carrying on an independent gov-
ernment, though if the future supremacy of Spain is to
be maintained on the Weyler plan, almost any experiment
would be a preferable alternative. One of Weyler's or-
ders, for instance, prescribes death or imprisonment for any
Spanish subject who speaks well of the insurgents or discredits
the prestige of Spain ; another prohibits rural storekeepers from
selling provisions to women or children, and another confiscates
the property of all insurgents who fail to surrender within fifteen
days.

Sooner or later, of course, the anomaly of Spanish rule in a
democratic hemisphere must come to an end. But our present
attitude regarding belligerancy is taken solely in the interests
of humanity, and to forestall any new ' ' reign of terror " such
as Spain maintained in Cuba from 1868-78, without interference
from the United States.

a88 GUNTON'S MAGAZINE. [April,

TRANSVAAL.

The British Government has exonerated Mr. Cecil Rhodes,
but takes the precaution of appointing Earl Gray to act with
him hereafter in administering the affairs of the British South
Africa Company. The trial of Dr. Jameson and his men is
proceeding in London, simultaneously with that of the rebellious
Uitlanders in Pretoria, nothing definite having yet been deter-
mined in either case. President Kruger naturally refused to
entertain Mr. Chamberlain's proposition for internal reforms,
and now it is reported that the British Government has offered
to relinquish the suzerainty secured to it by the Convention of
1884, if the Boers will redress the grievances of the Uitlanders
and enfranchise British subjects living in the Transvaal. It
may be that the various South African States will eventually
drift into a sort of confederation under British control, but so
long as the Transvaal remains independent it is difficult to see
how its President can consistently grant the franchise to alien
residents. They have the full privilege of money making in
the Rand gold fields, and are justly subject to taxation in con-
sequence. But as they are largely in the majority, to grant
them the suffrage would be to at once convert the republic into
a British province. It is not creditable that Mr. Chamberlain
should make a proposition to the Boer Government which he
would not think of suggesting to any larger power.

VENEZUELA.

The long expected presentation of the British side of this
controversy made its appearance in the shape of a Blue Book
issued March 6th. It is curious to note that the whole case has
been practically submitted to arbitration in an unofficial sense,
by all the powers concerned, for two months past. The inves-
tigations and researches made independently by each party will
form, when completed, a mass of important evidence on both
sides, which ought to make apparent to Lord Salisbury what at
first he could not see, that this is as plain a case for arbitration
as ever existed.

Sir Frederick Pollock's presentation is undoubtedly very
strong as regards the general probabilities of right, though some
of his English critics assert that important points have been
slurred and quotations from the records garbled and miscon-

1896.] SOCIAL AND INDUSTRIAL STATISTICS. -289

strued. Briefly, the best established points seein to be that
prior to the treaty of Munster (1648), the Dutch had established
themselves at various points between the Essequibo and Orin-
oco, while the Spaniards had but one settlement south of the
latter river, that at San Thome de Guayana; that the Munster
treaty confirmed both Spain and Holland in the territory
already held by them in South America; that under the addi-
tional privileges granted "by this treaty the Dutch went on and
located far up the basin of the Cuyuni River, a northern branch
of the Essequibo; that by the treaty of 1814 the English suc-
ceeded to all the Dutch possessions in Guiana; and that the
claim of Venezuela to the Essequibo boundary, first made in
1844, was- based chiefly on the original Spanish right of discov-
ery, which if valid now, would apply equally to the whole
continent.

Altogether, as the London News says, the stronger the
British case the less reason Lord Salisbury can urge against un-
conditional arbitration ; and there is reason to think from the
latest received reports that some agreement to that effect may
soon be reached.

Social and Industrial Statistics.

BY HON. CARROLL D. WRIGHT.*

Death rates and statistics of crime form an important and
interesting branch of the subject we are considering. This is a
class of facts, however, peculiarly liable to misrepresentation,
and in studying them we must always look beneath the surface
and not draw conclusions from the bare figures alone. For in-
stance, the death rate of a city will be increased by the mortu-
ary records of its hospitals, which include large numbers of
patients brought in for treatment from outside localities. Of
course, that portion of the death rate indicates nothing as to the
health conditions of the city. Statistics of arrests made in the
large centers also will cover not only local offenses but all those
criminals from country districts who have fled to the city in the
hope of concealment and been apprehended there. Such cases

* Synopsis of Lectures III., IV. and V. before the School of Social
Economics.

290 GUNTON'S MAGAZINE. [April,

demonstrate the efficiency of the city's police, nothing else.
Nor should the fact be overlooked that criminal statistics are
growing more and more complete and detailed ; the work of
courts is becoming more efficient, and legislatures are adding
new classes of offenses to the penal code ; all of which will
show apparent increases in crime where an actual decrease
may have taken place. Thus, a few years ago a certain writer
made comparisons between a Northern and a Southern state to
show that the public school system of the former was a nursery
of crime. The facts were that the Northern state recognized and
dealt with, as crimes, some fifty offenses which in the South-
ern state went unpunished, while certain other crimes were
punishable in the Northen state by imprisonment and in the
South by fine only. No comparison is admissible in such a
case without first reducing the terms to a common basis.

We hear a great deal about the growing proportion of the
unemployed in the community. A comparison between 1870
and 1890 shows that in the former year 32 out of every 100 of
population were engaged in some gainful occupation (including
both wage workers and employers), while in 1890 the ratio was
36 to the hundred, a very considerable gain. Moreover, the
largest percentages of increase were in manufacturing, trans-
portation, trade and professional pursuits, while agriculture,
fisheries and mining, compared with total population, show a
relative decrease, thus upsetting the parallel claim that the
substratum of society is increasing at the expense of the higher
and more civilizing occupations.

The decadence of profitable agriculture, the absorption of
the small farms and homesteads by land sharks, and the increas-
ing burden of mortgages, are some other themes that are often
sung. The facts are that the 1,500,000 farms in the United
States in 1850 had increased in 1890 to 4,500,000 ; their
value had risen from $3,270,000,000 to $13,280,000,000 ; value
of implements and machinery from $151,500,000 to nearly
$500,000,000 ; and the average size of farms had steadily fallen
from 203 to 137 acres. Statistics of mortgages, collected for
the first time in 1890, show that fully 95 per cent, may be
classed as the result of prosperous conditions. Thus 59 per
cent, were given for the original purchase money, purely busK
ness investments; 13 per cent, for improvements of real estat e

1896.] SOCIAL AND INDUSTRIAL STATISTICS. 291

new buildings and machinery, etc. ; 18 per cent, for various
extensions of operations, 5 per cent, to raise money to go into
business, and so on. Only a few per cent, can be said to indi-
cate adversity in any actual sense, and out of this number very
many were due to family misfortunes, losses by fire, etc. , not
chargeable to the business conditions of the country.

It is interesting to notice that the per capita circulation in
the United States, $25.50, is probably the largest of any coun-
try in the world with the exception of France, where it is over
$50. Our per capita wealth is $1000 ; per capita public debt
$32.37, and private debt (estimated) $291. In statistics of pri-
vate debt it should always be remembered that more or less
duplication of mutually offsetting accounts is inevitable, and
almost any statement on the subject will show a larger net in-
debtedness than actually exists. This difficulty is illustrated
by an imaginginary case in which, for instance, A owes B $10;
B owes C $10, and C owes A $10. Any statistical record would
show the indebtedness of these three men as $30, while strictly
speaking no net obligation exists between them at all.

The remarkable development of the manufacturing indus-
tries of our country makes that branch of statistical research
one of great interest. From well-known reasons our popula-
tion has, of course, increased much faster than that of Great
Britain, but our manufactures have gone ahead at an even
more rapid rate. Thus, in 1860, the total value of the manu-
factured products of the United Kingdom was about 2,885
billion dollars, as compared with 1,885 billions in the United
States. The product of Great Britain in 1888 was valued at
4, 100 billion dollars, while that of the United States in 1890
had risen to the immense sum of 9,372 billions. The total
number of employe's in the manufactures of this country in-
creased from 731,137 in 1850 to 3,745,123 in 1890, while the
wages paid them rose from 236! million dollars to z\ billions.
During the same period our total invested capital increased
from over 535 million to 6£ billion dollars, but the value of
product per dollar of capital invested fell from $1.91 to $1.64.
Here we have the evidence, in spite of frequent assertions to
the contrary, that the per capita income of the workingmen
has steadily increased, while the per dollar return to capital
has fallen off. Of course the aggregate return to capital has

292 GUNTON'S MAGAZINE. [April,

largely increased, even at this lower rate, because of the vast
growth in quantity produced, but larger investments are now
required to give the same value of product. It should not be
concluded, however, that the efficiency of capital is diminishing.
On the contrary, the community now gets a much greater
quantity of wealth per dollar of capital invested than ever be-
fore, and the apparent decrease is due solely to the fall in
prices. Thus in both these directions the laboring class has
shared in the gains resulting from our modern evolution of in-
dustry.

Neither are we going to the dogs in respect to the child labor
evil, concerning which much alarm has very properly been felt.
The number of children employed in the manufactures reached
about 180,000 in 1880, but since then it has decreased until in
1890 there were but 120,885 so employed. And this has oc-
curred notwithstanding the steady increase in the number of
manufacturing establishments throughout the country.

The principal difficulty in collecting statistics of manufact-
ures lies in the reticence of the producers themselves. Most
of them are only willing to give a part of the facts relating to
their establishments, and the result is an injustice both to the
government and to themselves. For instance, it is very com-
mon for manufacturers to report as small a capital as possible
and as large a product. The consequence is that these produ-
cers can very readily be charged with making immense profits,
whether such is actually the case or not.

The chief trouble in this respect has arisen from the unwill-
ingness of manufacturers to return the amount of their bor-
rowed capital. Manifestly every dollar of credit capital is just
as essential to secure a given product as that of capital owned ;
and so far as its relation to production is concerned it makes no
difference where the capital actually in use has come from.
Much of the bitterness in the labor problem is chargeable to the
misunderstanding to which this vicious fallacy in the statistics
has given rise. In the Massachusetts census of 1885 the man-
ufacturers were more generally made to understand the impor-
tance to themselves of rendering complete returns, and the re-
sult was that out of the $500,000,000 invested in manufactures
in that state, $93,000,000, or i8£ percent., proved to be credit
capital. In the United States census of 1890 an attempt wa

1896.] SOCIAL AND INDUSTRIAL STATISTICS. 293

made to secure the credit capital of the whole country, but the
method employed , that of ascertaining the sums paid in interest
and computing the capital from that, at average rates, proved
very faulty. The returns showed but 12-63-100 per cent, of
borrowed capital, but in reality the proportion is probably much
larger than the i8-£ per cent, of Massachusetts; since the latter
is one of the oldest and wealthiest States, with a much greater
element of owned capital" than would be found in any of the
newly-developed sections of the country.

On the other hand, the manufacturer adds to the confusion
regarding the profits of his business by including interest on
both his borrowed and owned capital as a part of his cost of
production. This, I insist, he should not do, as interest is a
part of surplus, not of cost. The only cost properly chargea-
ble to invested capital is that of maintenance and repairs. It
is only because its use will create a surplus (out of which inter-
est may be paid) that capital is employed in production at all.

The Inadequacy of Great Parties.

BY WILLIAM B. CHISHOLM.

According to Mr. Frank L. McVey, in the columns of
of this magazine : ' ' Every problem whose decision is of vital
importance to a government admits of but one of two answers —
either it is or it is not expedient. This division of opposition
and support is the natural basis of parties." This is practical
politics, and I do not understand Mr. McVey as sustaining this
state of things so much as merely emphasizing its actuality.
His theory of the unification of parties and the solidarity of
their opposition to each other is eminently practical and suits
the average politician. But the question is whether we have
not arrived at a stage when our politics must become more the-
oretical— when we must trust politics less to the men who say
that they can run it and more to the men who are not at all
sure that they can ; when we must pay more attention to the
thoughtful minorities and to the possible combinations in poli-
tics and less to the ipse dixit of this or that political machine
which hires brass bands in October and enriches itself from
year to year with all the official pap which it can command.

294 GUNTON'S MAGAZINK. [April,

The American nation are in no danger of growing un-
practical or visionary. They go, as does Mr. McVey in this
special thesis which I have noticed, for the most obvious, for
the quickest, answer to a question — for that which gives them
something definite to lay hold of. The American is not half as
sinuous as the modern English or ancient Greek; it is rather
Roman in its objective and practical outlook. If you tell the
average hurried man of business that there can be but two par-
ties in a country after all, he is very apt to coincide with you,
because more than two parties would seem to complicate things
and make too much political litter.

If we regard the official time and trouble which nomina-
tions involve — in New York State, for instance — the hiring of
bands and not infrequently of speakers, the printing of all
sorts of campaign literature and the campaign expenses gen-
erally— I will freely admit that two parties are a company and
three would be a crowd. Viewed in this light, I do not partic-
ularly object to Mr. McVey's rather cavalier-like dismissal of
the Populist party, though I have not yet, for one, been able to
discover that they are so moribund. What I do maintain is
that there is more than one great issue always up in the coun-
cils of every party ; Mr. McVey seems to think that there must
be some special one to overshadow the others. But how is it
now? Silver has come to stay as well as the tariff, and although
it has always seemed to me that* protection and a gold standard
on general principles are allied, still there are strong Protec-
tionists in the West who are equally fervid for silver, and there
are many Free Traders who are by no means in favor of free
coinage. And when you complicate the issue with the policy
of jingoism versus diplomacy; with the A. P. A. versus the
parochial school, with even the antipodal stand of Messrs. Bar-
rett of Massachusetts and Talbert of South Carolina, as regards
sentiment and reminiscence — you have a vast deal inside either
the Democratic or Republican party to generate dissension.
The party is not a unit. This is shown easily enough in the
difficulty of selecting available Presidential candidates even
among the most eminent men in the ranks. The centrifugal
tendency of party elements is shown in so many ways, so con-
stantly and sometimes with manifestations of such extreme bit-
terness, that we can but admit that a unification of party policy

1896.] THE INADEQUACY OF GREAT PARTIES. 295

on any one set of lines involves an amount of self-repression
and self-surrender which must keep the tension at all times
critical. Men are naturally divided into partisans and inde-
pendents. A great many men vote for certain nominees with-
out having gone near a caucus or without taking much, if any,
interest in the pre-campaign manoeuvres, simply because such
men or such a policy most nearly meet their approval; and
a good many men vote- from prejudice if not out of spite.
What could induce either Mr. Barrett to vote the Democratic
ticket or Mr. Talbert to vote the Republican? It is very evi-
dent to all that such extremists vote on sectional issues now, or
would vote on them if they had no special prepossession in fa-
vor of protection or free trade. I did not intend to lay any
emphasis upon the sectional question, because we are all one
country; and if we were threatened, Republicans and Demo-
crats would be shoulder to shoulder in defense of the common
flag and the harmonious whole. But if one wants to look into
the human heart and see motives without any palliation or dis-
guise he will be compelled to admit that there are in this year
of grace, 1896, some Democrats who would vote the Democratic
ticket even if it should become the party of high protection and
a gold standard; and there are some Republicans who would
swallow free trade itself and unlimited coinage of silver because
they love the name Republican and would not give it up.
These are your Simon Pure sentimentalists in politics, but, after
all, is not politics more largely a matter of sentiment than most
people like to concede?

The practical inference which I would draw from this
rather mild dissent, from Mr. McVey's very clear and able
presentment of his view, is this, that the powers of cliques and
independent organizations, under competent leadership, is very
great, and that we shall have to watch them more and more in
Congress and elsewhere. Look how much power the Populists
have already wielded in Congress. Look at the importance of
the Irish vote in Parliament. I am very glad for one that the
South does not vote solidly as of yore, simply because Ameri-
cans should be homogeneous, as such; and there should be
plenty of Northern Democrats and Southern Republicans, in
order to give the people of both sections a fuller confidence in
each other as regards the final healing of those old war cica-

296 GUNTON'S MAGAZINE. [April,

trices. I shall, in fact, for the immediate purposes of this dis-
cussion, lay Mr. Barret and Mr. Talbert on one side — on a
dusty shelf, if you please — and let them nurse each his pet
grievance. I am considering the power of minorities and inde-
pendent cliques entirely or largely without reference to section.
I do not believe party unification can be kept up beyond a cer-
tain point, for beyond that point it invariably leads to bossism
and machinism. We want to hear all sorts and conditions, and
to give every shade and hue of political divergence from the
platform standard its just consideration. The centrifugal will
still be balanced by the centripetal. But remembering the ad-
vantage which the recognized leader always has in shaping
party policies, let us not be too timid about abridging his
powers every now and then. We want the voice of the whole
people, and the expression of individual representatives. I
believe that the era of shades and cliques in politics has come
to stay.

1896.] 297

Editorial Crucible.

THE ACTION of Congress recommending the President to
extend the rights of belligerents to the Cuban revolutionists
created consternation in Spain and alarm throughout Europe.
From the comments of the European press, one would think
that all Europe felt in immediate danger of molestation by the
United States. It is a little peculiar that no such alarm was felt
in 1 86 1, when Spain, in less than two months after the first shot
was fired upon Fort Sumter, hastened to recognize the bellig-
erency of the South. Moreover, there is a great difference in
the two cases. The rebellion in this country was to overthrow
the republic for the sake of perpetuating the most degraded
form of labor (chattel slavery). In Cuba, the rebellion is to ob-
tain political freedom for Cubans. Spain was on the side of
slavery and barbarism and against freedom in both cases.
Spain's historic opposition to freedom, and her habitual use of
brutal methods, conclusively demonstrate her unfitness to con-
trol the destinies of any people, outside her own, and particu-
larly any people on the American continent.

This pretense about unfriendliness and the calling on Eu-
rope for co-operation is but the cowardly whining of an effete
and decaying monarchy, whose very existence is a menace to
freedom and advancing civilization. And the prattling of the
European press about American interference only shows how
envious and jealous Old World monarchies are of the advancing
power and prestige of the United States.

BY ITS VOTE on the House Revenue Bill, the Senate has
decided that the United States Government shall continue to
pay its bills by borrowing, unless it will grant the demand
of Silverites and the Populists for the unlimited coinage of
silver at the ratio of 16 to i. Of course, this scandalous result
is not accomplished by the free silver men alone, but by the
Democrats with their aid. They are doing this in the pre-
tended interest of bimetallism.

Because Senator Aldrich (R. I.) admitted that he would
not vote for the Dingley Bill or even for the McKinley Tariff
Law with a free coinage of silver amendment, except by inter-

2<)8 GUNTON'S MAGAZINE. [April,

national agreement, Senator Allen (Neb.) openly charged him
with having ' ' lied on the question * * * ; for three years, you
have stated in this chamber and undertaken to make the people
believe that you were a bimetallist." As if free silver was
bimetallism.

It is surprising that such blustering audacity can pass for
bimetallism, when there is no bimetallism in it. Senators
Allen, Stewart, Peffer and the rest are not bimetallists at all.
They are blocking the fiscal machinery of the United States,
compelling the government to borrow money to pay its current
expenses, in order to bully the Senate into passing a bill for
silver monometallism. And yet they are permitted to thus
parade as bimetallists without exposure or rebuke.

Mr. Teller was very indignant at what he called Senator
Merrill's attempt to read the free silver people out of the Re-
publican party. If the Republican party is a bimetallist party,
they should be read out of it because they are not bimetallists.
They are monometallists and should be so treated. Whatever
their views may be on any other subject, they have not place in
a party that honestly stands for bimetallism.

THE OBLIGATIONS of Great Britain to protect the Armeni-
ans, or to compel the Porte to protect them, arise out of the
fact that England has had the island of Cyprus ceded to her in
advance, expressly as a compensation for any costs she might
incur in extending the required protection. The other powers
of Europe were induced to leave Turkey in England's hands,
upon condition that she guaranteed to them the fulfillment of
Turkey's obligation, and the agreement thus to guarantee the
promised security of the Armenians was made the basis on
which England's effort to "convert the Mediterranean into an
English lake " was strengthened by a cession of the Island of
Cyprus. Article 61 of the treaty of Berlin reads thus:

"The Sublime Porte engages to realize without delay those
ameliorations and reforms which local needs require in the
provinces inhabited by the Armenians, and guarantee their
security against the Circassians and Kurds. It undertakes tp
make known from time to time the measures taken with this
object to the powers, who will watch over their application."

1896.] EDITORIAL CRUCIBLE. 299

The English government also made a separate treaty,
which contains the following clause :

"In return his Imperial Majesty, the Sultan, promises to
England to introduce necessary reforms, to be agreed upon
later between the two powers, into the government, and for the
protection of the Christian and other subjects of the Porte in
these territories (i. e., Turkey in Asia), and in order to enable
England to make necessary provision for executing her engage-
ment his Imperial Majesty, the Sultan, further consents to
assign the Island of Cyprus to be occupied and administered by
England.

" Done at Constantinople, June 4, 1878."

It is impossible to reconcile the conduct of England in the
Armenian business with any standard whatever of honor or
rectitude. She has obtained her fee from the great criminal,
Turkey, upon an express promise to enforce his good conduct,
and on this stipulation has virtually become both the counsel
for the defence and bail for the good behavior of the prisoner.
The prisoner gains his liberty by being delivered into Eng-
land's hands upon England's stipulation for his good behavior.
He then makes use of this boon to slaughter 50,000 of the
men, women and children whom England has been paid a fee
to protect from this same slaughter. When England is asked
to fulfill her promise, she replies that Turkey ' ' must have time
to mature the promised reforms." No wonder Gladstone
yearns to be returned again to Parliament in order that at least
one voice may rebuke such perfidy and national dishonor.

THE PASSAGE OF the Raines Bill introduces a radical change
in the excise policy of the state of New York. It substitutes
for the country, town and city boards of excise a state commis-
sioner, to be appointed by the Governor and the Senate, the
commissioner to appoint deputy commissioners in each county,
subject to his orders. This centralizes the taxing of liquors into
a state function. The division is then drawn between the tax
on sales of liquor in quantities less than five gallons, to be drunk
on the premises where it is sold, and sales of liquor not to be so
drunk. Upon persons conducting the former the annual tax is
$800, in cities of 150,000 population or more; upon those in
cities having fewer, and more than 500,000, $650; upon those in

300 GUNTON'S MAGAZINE. [April,

cities above 50,000, $500; above 10,000, $350; above 5,000,
$300; above 1,200, $200; elsewhere, $100.

The tax on persons selling in quantities less than five
gallons, not to be drunk on the premises where sold, will be
§500 on cities of the highest class (New York), grading down,
in like manner as above, through $400, $300, $200, $100, $75
and $50. The tax on licensed druggists, selling only on re-
corded prescriptions signed by a physician, and once only on
each prescription, is graded in like manner at $100, $75, $50,
$30, $20, $15 and $10. No liquor is to be sold on Sunday, and
no screens are to obstruct the view of the interior of saloons at
hours when liquors are not to be sold. Those who sell liquor
to be drunk on the premises must not sell on credit, and all
credits for liquors so sold are void. An absurd notion has got
abroad in New York City that this vitiates mortgages taken by
brewers on the fixtures of saloons, but this is wholly an error.

A local option clause authorizes each town by vote to
forbid the sale of liquors in either or all of these modes
within that town, in which case no tax certificates shall be
issued within that town.

Harper's Weekly opposes the law furiously on the ground
that it effects a concentration of political power in State officials.
The Evening Post thinks it would work well if Civil Service
were applied to the officials who administer it. Tammany
Hall regards it as adding to the political capital of that institu-
tion. Thomas C. Platt, in a very able and outspoken argu-
ment, over his signature, predicts that it will succeed in a
social and party point of view. The mayors of at least half a
dozen cities oppose it.

THE SIGNS OF the times, as indicated in the nomination of
delegates to the St. Louis convention, are that protection will
again be the dominant issue in the national campaign. It is to
be hoped, whether Speaker Reed or ex-Governor McKinley re-
ceives the nomination, he will use his entire influence to
have the party commit itself to a broader, a more distinctly eco-
nomic interpretation of protection.

It is a great mistake to assume that protection is limited to
import duties, and that the benefits of these are limited to the

1896.] EDITORIAL CRUCIBLE. 301

industries they directly affect. Much of the best effects of pro-
tection upon national welfare comes indirectly. The benefit to
farmers from protective duties on manufactures is indirect, and
comes through the improved prosperity of the country and in-
creased market for agricultural products. Laborers are bene-
fited by protection to manufactures through the increased
social opportunities that the growth of manufacture and com-
merce with urban population creates, and the consequent
higher wage opportunities that this increase in diversified in-
dustries makes possible. On the other hand, the principle of
protection should be extended to the wage class in certain other
forms, as, for instance, in the shortening of the hours of
labor, restriction of immigration, suppression of the sweating
industries and the recognition of trades unions as a means of
industrial negotiation. Employers are benefited indirectly by
labor legislation through the increased consumption and en-
larged markets resulting from the improved conditions of the
laborers ; in the same way farmers are benefited by the general
prosperity created through the development of manufacture
and commerce.

The thing to be taught and learned regarding protection is
that in matters of tariff, the benefit comes directly through the
manufacturer, and is indirectly beneficial to both farmers and
laborers, and that in matters of domestic labor legislation, the
benefits come directly to the laborers and indirectly to the em-
ployers and the public.

The protective platform must be broad enough to include
both phases of protective legislation, or it cannot permanently
receive the support of both classes. Mere narrow-gauge high
tariff protection, which recognizes employers only, will be sure
to inspire the opposition of a large portion of the most intelli-
gent laborers and active farmers, and if it should succeed in
carrying the Republicans back to power in 1896, it could not
long hold them there. This is the year for giving the pro-
tective policy a broad, national economic basis.

302 [April,

Economics in the Magazines.

BANKING. Trade and Industry of South America. By
Emilio M. Amores, in The Engineering Magazine for February.
This article shows that Mexico and Central and South America
have a combined population of 57,365,308, or very nearly as
great as that of the United States ; their total foreign commerce
foots up: Imports, $557,504,462 and exports, $722,364,251;
total, $1,279,868,713. This would be two-thirds as great as the
foreign trade of the United States, if these figures are given on
the gold basis. But as nothing is said about the basis, and
most or all these countries are on the silver basis, we infer that
this would reduce all these values by about one-half, which
would make the total foreign trade of all these countries about a
third that of the United States. Of the total import trade into
all these countries the United States sends only $99,814,558, or
a little more than one-fifth, while of the total exports from these
countries the United States takes $207,384,623, or nearly one-
third. No part of this superiority of Europe grows out of race
affinities or language or tastes, since almost no part of it goes
to Spain or Portugal, but all of it to England, France and Ger-
many, with which these countries have less race affinity and
unity of habits and tastes than with ourselves. The chief
agency required to extend our trade with South America and
Mexico is to expand our banking facilities so as to afford the
traders of those countries as large and long credits as the
greater banking facilities of Europe now afford them. This
can not be done without the creation in the United States of
at least one great banking institution, such as the two banks of
the United States, founded, the first by Hamilton and the
second by Dallas, Gallatin and Madison, once were. The Pan-
American conference came to this conclusion and asked for a
Pan-American international bank, and there is a bill now be-
fore Congress to incorporate such a bank. But a United States
bank for the benefit, exclusively, of foreigners, to extend credits
to merchants in Bolivia and Argentine, but not in Illinois, Mon-
tana and Texas, is a misconception on its face. What we need
is a great national banking institution of at least $100,000,000
capital, into which the Treasury and the whole banking system
of the country shall be interlocked, as those of Great Britain,

1896.] ECONOMICS IN THE MAGAZINES. 303

France and Germany are interlocked in their respective national
banks. But just at present our national genious for finance
seems content to exploit itself through a Treasury which is en-
dowed with all the dangerous and wild-cat functions of bank-
ing, viz: those of issuing irredeemable promises and coining
unretirable debts, but which fears to invest this national ' ' wild-
cat bank " with any powers to put a few thousands of millions
of dollars worth of banker's assets behind its worthless paper,
lest perchance it may be found to be enjoying something of the
security and profits of an actual bank. In the last analysis,
therefore, our trade with South America hangs fire until the
American people attain to a better knowledge of the means of
giving more credits. The most painful feature of our case is
that this lack oppresses our domestic commerce even more than
our foreign.

CANAL. The Nicaragua Canal an Impracticable Scheme,
By Joseph Nimmo, Jr. , in The Forum for March. Mr. Nimmo's
assault on this project is absolutely merciless. He thinks that the
demand for the canal is constantly disappearing through the
rapid extension of the railways crossing the continent in South,
Central and North America, thirteen now in all ; that not more
than 1,625,000 tons of shipping would pass through it annually;
that the tolls which would have to be charged on a i,ooo-ton
vessel in order to pay an interest on its $135,000,000 of cost
would be $6,900 per trip through the canal, and that virtually
all that it would connect would be "the doldrums," or calms,
on the Atlantic side, through which no vessel could sail, with
the uncommercial wastes of distance on the Pacific, which can
produce no trade. To make it defensible would cost $400,000,-
ooo. Mr. Nimmo's brief is as solid and memorable as Daniel
Webster's argument that no railroad train could run in cold
weather, or stop within three miles of any particular town if it
reached a high rate of speed, (twelve miles an hour being the
rate then thought of) or pay expenses if it had to be laid on
"solid mason work." The first projectors of the New York
Elevated were sure that no locomotive could be used to draw
the trains, as the vibrations produced by its weight would crum-
ble the iron structures. Hosea Biglow's maxim, "Don't never
prophesy unless ye know," is one for which Mr. Nimmo feels

304 GUNTON'S MAGAZINK. [April,

profound contempt. And yet such unsparing criticisms are bet-
ter than the wastes and swindles committed at Panama, and
may help to save us from their like.

DISTRIBUTION. Wealth Production and Consumption. By
Geo. B. Waldron, in The Arena for March. The writer esti-
mates that under the census of 1890 it is shown that there are
20,115,106 persons employed in occupations directly productive
of material wealth ; that the total product of the country was
$13,640,931,866, which is $678 per worker or $217 per capita of
population, or $1,075 Per family.

The distribution of this total national income or product he
estimates to be as follows, viz. : For necessaries (food, clothing,
furniture, lighting, fuel and other), 44.72 per cent., or $6, 100-
000,000 ; for luxuries, 26.27 per cent., or $3,584,000,000; for
expenditures in keeping up capital, /'. e. , in maintaining old
wealth, added wealth and for use of foreign capital, 27.25
per cent., or $3,717,000,000; and for government expenditure
1.76 per cent., or $240,000,000, which is by far too low for fed-
eral, state, city, etc. The writer shows that the working families
are 12,063,479 in number and get in wages and profits $9,136-
128,873, or about two-thirds of the annual product of the wealth
and industry of the country, for their own immediate consump-
tion. The wealthy families are 626,673 iQ number and they get
incomes amounting to $4,054,802,933, out of which they pay in
maintaining old wealth (i. e., in repairs, interest, insurance,
etc.) 2,436 millions; in adding to reproductive wealth,
(/'. e., conditions of production and of employing labor,
such as land, buildings, and machinery, etc.), 1,196 mill-
ions; in use of foreign capital, 85 millions — a total of
3,717 millions of dollars. A large share of the costs of keeping
up old wealth have to be paid out of the incomes of the 626-
673 wealthy families. If we deduct the whole of that cost from
the incomes assigned to the wealthy families there would re-
main for each of them an income for expenditure on personal
consumption of less than $500 each family. This would of
course be an error. Mr. Waldron has made, however, a com-
mendable essay toward a correct analysis of wealth distribution.
We think his exclusion of rent from the list of necessary
wealth consumption, on the ground that what the tenant

1896.] ECONOMICS IN THE MAGAZINES. 305

expends in rent is a source of the landlord's income, and there-
fore is not a consumption of wealth, is fallacious . What he
pays for food is in like manner a source of farmers' income, and
what he pays for clothing is a source of manufactures' income.
All expenses of one class are sources of the income of another.

GOLD. Gold Mining in the Southern States. By H. B. C.
Nitze, in The Engine ering~ Magazine for February. The entire
gold mined in the Southern States from 1799 to 1894 amounted
to $45,227,712, of which $25,289,420 was sent to the mint for
coinage. The product in 1894, however, had fallen to the low
figures, $263,827. The period of largest production was in the
forties, when it reached $1,000,000 annually. The author be-
lieves that " workable bodies of ore exist, which may form the
basis of profitable mining operations, and that indications point
to a reasonable revival of gold mining in these states with in-
creased production."

GOLD EXPORTS. Why Gold Goes Abroad. By A. C. Fisk,
in The New Science Review for January. Mr. Fisk is a frisky
man with his figures, and they will seem to the average mind
romantic. In stating the total volume of money in the country
in and out of the Treasury at $2,420,434,781, he duplicates sev-
eral sums, particularly the gold and silver deposited and the
gold certificates and silver certificates issued in place of them.
This is as if, in estimating the grain supply, we should add to-
gether the grain stored in bins, and the certificates that the
grain is so stored, which are handled on the board as represen-
tative of the grain itself. But when Mr. Fisk comes to state
the proportion of money not available for circulation at $2,231,-
228,451, he takes our breath away. He leaves only an "actual
amount of currency in circulation " to be $189,206,330, or a per
capita circulation of $2.70. He includes in this withdrawal
from circulation the national bank reserves, $452,103,214, and
the reserves of banks other than national, as if he assumed that
not only the banks depositing these reserves could not use them,
but that the banks in which they are deposited cannot. Would
the New York and other reserve banks pay one or two per cent,
on these reserves if they were " not available for circulation ?"
Would they have declined to honor, during the panic, the

306 GUNTON'S MAGAZINK. [April,

checks drawn for them by the country banks, if they had not
already loaned them out to their customers? If Mr. Fisk will
read Bagehot he will learn that the whole ultimate reserves of
the banking system of Great Britain, deposited with the bank
of England, are liable to be loaned on call to the bill brokers
of London. Mr. Fisk reduces, by similar figures, the estimated
amount of gold in the country from $627, 000,000 to $102,000,-
ooo, but to do this he deducts the gold in the banks, $133,398,-
786, from the sum which he regards as available for circulation.
He might as well deduct the gold in safes, in pockets and in the
" old stockings." Mr. Fisk then proceeds to roll up an adverse
balance of trade, amounting to $1,110,000,000 a year, which he
arrives at by assuming that $5,000,000,000 of our stocks and
bonds, other than railroad, are held abroad, which is five times
too high and fully half the value of our entire railways, which
is preposterous. On this he thinks we pay in interest and divi-
dends $250,000,000; on our railroad debt abroad, $260,000,000;
as foreign profits in American banks, breweries, etc., $200,000,-
ooo ; as marine freights, $300,000,000, and that .our tourists ex-
pend in Europe $100,000,000. These figures are as purely
romance as if they came in a yellow- covered novel. They rest
wholly on guess work. The government collects no statistics
whatever on the points involved, except some broker's guess
work obtained by Mr. Ford, and that bears no likeness to Mr.
Mr. Fisk's figures.

HERRING. The Herring's Mysterious Migration. By A.
H. Gourand, in The New Science Review (quarterly), Transat-
lantic Publishing Co., Phila. The sea herring here described
come up from the lower depths of the ocean, at the spawning
season. After intervals usually of seventy years, they come
for periods of from ten to eighty-one years. The last periods
of absence were of sixty-nine, sixty-six and sixty-nine years,
which carries this extraordinary migration back to 1550, prior to
which no records are extant.

Their sole known habitat is the Skaggerack and Cattegat
Straits, which separate Denmark from Sweden. Upon their
arrival they cause a rapid building up of towns and gathering of
fishing population in the Swedish province of Bohnstan. They
come in such quantities as to lift up into the air above the ocean

1896.] ECONOMICS IN THE MAGAZINES. 307

solid mounds of struggling herring several feet in height at their
points of concentration. They are followed by herring whales,
cod, porpoises and hovering birds of prey, in such numbers that
the approach of the shoals of herring can be noted, from these
surroundings while they are still far out in the North Sea. Out
of its depths they seem to rise, " when, pervaded with the anxi-
eties of a dawning parentage, they quit the obscurity of the
deep to rise at the mouth of an" open tomb." In the years 1550
to 1590, the city of Marstrand, the chief centre of the industry,
"exported annually 600,000 tons of dried and salted herring,
an amount not greatly inferior to the present surplus product
of all Europe." During these periods of activity, cities are
built up, money is plenty, profligacy and crime prevail, as in a
modern gold-mining camp. When the arrival of herring
ceases, misery, destitution and emigration follow. One small
school of these herring outnumbers the population of the globe,
and each such school follows a leader of much greater than the
usual size. Innumerable "schools" combine to form a
" shoal, " and many shoals comprise the entire migration. In-
dividually the herrings are ' ' what is called an inmeat herring,
large and fat, and of a length varying from eleven to fifteen
inches. " The shoals are believed to be led by a king herring,
which is by some regarded as a fish of a different species, called
a band or ribbon fish. He is about eighteen feet long, narrow
and flat like a ribbon, ' ' his head being ornamented by a tuft
of fragile spines, like a peacock's feathery crest." But it is only
the Scandinavian "king of the herrings" which wears this
crown. The shoals which visit northern Scotland have also
their king, but he wears no crown. Where are this species of
herring during the long interval of seventy years in which they
do not visit the Scandinavian straits, nor have ever been taken
elsewhere ? What law or principle governs the periodicity of
their migrations? And why, since their periods of absence are
uniformly close upon seventy years, do their periods of arrival
annually vary in duration from ten to eighty-one years?

SOCIAL EVIL. The Social Evil in Philadelphia. By Rev.
Frank M. Goodchild, in The Arena for March. The writer es-
timates that there are 20,000 prostitutes in New York City, and
232,000 in our country to-day. He says: " Their average life

308 GUNTON'S MAGAZINE. [April,

is five years. Every five years, then, two hundred thousand
pure girls must be dishonored and spoiled to supply the de-
mand of lust ! Ancient and heathen Athens used to go into
mourning because every nine years, seven youths and seven
maidens had to be furnished for the devouring Minotaur of
Crete. How ought we, then, as a nation to prostrate ourselves
before God in seeking deliverance from, this monstrous evil that
every year devours forty thousand of our pure maidens and
pollutes two hundred thousand of our pure youths!"

"Prostrating yourselves before God" is the emotional
plan. It will merely furnish the presumptuous and hysterical
with an opportunity to listen to their own rhetorical efforts. The
women who are pursuing this life need homes, husbands, fami-
lies, intellectual and social amusement and association, and
light, profitable work. Their intellectual resources are few and
dull, and they shrink from the gloom and isolation of a friendless
life. Even while they are plunging into deeper friendlessness
they are in constant pursuit of the form of association which
will most nearly, of any that is possible to them, resemble the
home. Churches, associations and all organized methods
thus far adopted are hopeless failures. The raiding and fines
by the police and courts of law are a hideous mockery which
offend civilization and make the evil worse. Colonization has
more merits than any other alleviating force. But the social
evil is still the hopeless cancer in our modern civilization.

WAR. Jingoism, or War upon Domestic Industry. By
Edward Atkinson, in The Engineering Magazine for February.
The writer assumes that it is the little band of peace-at-any-
price mugwumps who have denounced President Cleveland's get-
me-a-gun manifesto, to whom the world is now indebted for the
prospects of peace between Great Britain and the United
States. Such an assumption hardly needs comment. The re-
sult simply shows that the sequestration of territory", which has
been going on for a century in all parts of the world under
the influence of British aggression, has been stopped peremp-
torily at the threshold of the America'n continent by the exercise
of one firm will and courageous purpose. Where both Mr.
Cleveland and Edward Atkinson got in their effective " war
upon domestic industry " was in their fanatical and bull-headed

1896.] ECONOMICS IN THE MAGAZINES. 309

assault on the tariff conditions essential to the prosperity of
American industries in 1892, thus bringing about the financial
crisis of 1892 to 1895, from which we have not yet recovered.
For this crowning blunder against the country's welfare Cleve-
land's fortunate and wise action in the Venezuela business par-
tially atones. The chief defect in Cleveland is that he began
the study of economics very late in life, and under the unfortu-
nate bias of being able to" perceive that if he advocated free
trade it would rally around him the Bourbon South and the
mugwumps, and so give him a second term. Now that he has
kicked both these causes of bias to one side, he might prove
capable of many sensible things.

WILL AND CAUSATION. Individual Determinism and Social
Science. By G. Fiamingo (Rome), in Annals of the American
Academy for March. This article reflects the mental state of a
writer who doubts whether the continuity and precision of the
statistics applicable to human conduct, in its economic, ethical
and political relations, may not effectually eliminate the notion
of will from the philosophy of human action, as the theories of
chance have been eliminated from the domain of the physical
sciences, by what are called the laws of physics. This line of
reasoning simply indicates that the writer has a surplus of Dar-
win, Tyndall and Huxley, Haekel and Spencer, and has not yet
laid in a supply of Hegel, Schopenhauer and Hartmann. These
latter writers, by making these very laws of matter and phys-
ics to be absolute Will, in every philosophic sense, simply uni-
versalize the phenomena of will at the very stage of the argu-
ment where it is expected to vanish.

[April,

Book Reviews.

HISTORY OF THE UNITED STATES FROM THE COMPROMISE OF
1850. By James Ford Rhodes. Vols. I. II. and III.
Harper & Brothers, New York.

The three volumes of this imposing work, thus far pub-
lished, carry the narrative from its initial period — the com-
promise of 1850 — to the close of the military campaign of 1862.
Shiloh had then been fought, Beauregard had evacuated Corinth
and fallen back toward Vicksburg, Grant was temporarily over-
shadowed by Hallock in the Mississippi campaign, McClellan
was approaching Richmond via the James River, McDowell
was in command at Washington, Fremont and Banks were con-
tending with Early in the Shenandoah Valley, New Orleans
had just surrendered to Farragut, Porter and Butler; and
President Lincoln had not yet announced his emancipation
policy. These volumes extend over twelve years of the thirty-five
which the work intends to cover, viz., to the inauguration of
Grover Cleveland as President in 1885. As the later twenty-
three years are by far more eventful than the earlier twelve, it
would seem that the author intends a work of from eight to
ten volumes. His appreciation of the dignity of his task is
indicated on the opening page by citing the opinion of
Mommsen, the historian of Rome and of Christianity, to the
fact that " the American Civil War, of 1860-5, *s tne mightiest
struggle and most glorious victory as yet recorded in human
annals."

The work if fully and satisfactorily executed in the regard
of accuracy alone, covers so advantageous a field as respects the
importance and interest which attaches to its period, that it
cannot fail to command the very widest reading. The studious
critic naturally plunges into its pages with the inquiry, have
we a new American classic? How does our new historian rani
in style, in research, in eloquence, in impartiality, fidelity anc
conscientiousness, in minuteness and accuracy of detail, ii
breadth and scope of philosophic generalization, in brevity anc
force of expression, in diversity of scope and compass, and ii
pure historic insight. Is he easily a peer in the good company
of Motley, Prescott, Irving and the two Bancrofts in America

1896.] BOOK REVIEWS. 311

Or is he a peer of the world among the stalwarts — Macaulay,
Alison, Grote, Guizot, Mommsen and Gibbon ?

The reader will not require long to discover that very high
qualities are apparent in every page of these volumes. The di-
versity and scope of view are broader than is usual even in first-
class historical writing. Minute, condensed descriptions of
social facts, illustrating the intellectual grade, home life, indus-
trial condition, morals, religion, economics, amusements, enthu-
siasms, of the entire people, are numerous, panoramic, vivid
and American in tone and color. They follow each other in the
happy sequence, as well as with the abundant prodigality which
Nature exhibits wherever her fertility fills all the landscape and
satisfies the eye. The text seems to cost no effort, and yet a
glance at the foot-notes reveals that the narrative which flows
so clearly and pleasantly, is usually the result of ceaseless and
laborious research among the very best sources of information
that could be consulted.

Mr. Rhodes never minces his words in the description of
social conditions. On the contrary, he delights to ' ' hew to the
line, let the chips fall where they may." His "Chapter IV."
on slavery is written strictly from the Northern point of view.
No exhibition of the qualifying effects of personal attachment
between master and slave, or slow evolution of the African
character under the influence of the domestic life and labor of the
plantation, is permitted to mollify the intense scorn with which
the historian regards slavery. He might, without difficulty,
have found Northern visitors who had spent much time in the
South who would narrate instances in which negresses rose to
such an influence with their masters that they would freely
interpose force, not only to prevent the master from whipping
the colored children of the household, but also to prevent him
from whipping his own white children, doubtless more easily
the latter than the former, and would only be more highly
respected for their warmth and vigor. Mr. Rhodes has tried
to draw his. picture fairly and from valid and abundant evi-
dence. He has striven to make allowance for the motives of
sympathy and humanity in the master as exceptional facts,
leaving cruelty and mercenary heartlessness to constitute the
rule. But it is like seeking to find amenities in war or righteous-
ness in crime. The following sketch of the "poor whites"

312 GUNTON'S MAGAZINE. [April,

may serve as indicating the directness and explicitness with
which Mr. Rhodes " calls a spade a spade."

" I have spoken of the effect of slavery on the slaves and
slave-holders, but there was another large class in the south
that must be considered. The poor whites were free ; they had
the political privileges of the planters, but their physical con-
dition was almost as bad, and their lack of education almost as
marked as that of the negroes. Yet they asserted the aristoc-
racy of color more arrogantly than did the rich ; it was their
one claim to superiority, and they hugged closely the race dis-
tinction. Driven off the fertile lands by the encroachments of
the planter, or prevented from occupying the virgin soil by the
outbidding of the wealthy, they farmed the worn-out lands and
gained a miserable and precarious subsistence. As compared
with laborers on the farms or in the workshops of the North,
their physical situation was abject poverty, their intellectual
state utter ignorance, and their moral condition grovelling base-
ness. * * *

The poor whites of the South looked on the prosperity of
the slave-holding lord with rank envy and sullenness ; his trap-
pings contrasted painfully with their want of comforts, yet he
knew so well how to play upon their contempt for the negro,
and to make it appear that his and their interests were identical,
that when election day came the whites who were without
money and without slaves did the bidding of the lord of the
plantation. When Southern interests were in danger, it was
the poor whites who voted for their preservation. The slave-
holders and the members of that society which clustered
around them took the offices. It was extremely rare that a
man who had ever labored with his hands was sent to Congress
from the South, or chosen to one of the prominent positions in
the State."

Mr. Rhodes' second volume extends from the inauguration
of Pearce in 1852 to the election of Lincoln in 1860. It treats of
the two Soules' duels with de Turgot of Paris, of filibustering
for Cuba and the Ostend manifesto, of the Kansas Nebraska
act, the career of Stephen A. Douglas, Know-nothingism,
Sumner's speech on The Barbarisms of Slavery, and Brooke's
assault therefor; the strife over constitutions in Kansas and
the advent there of John Brown; the campaign of 1856 be-

1896.] BOOK REVIEWS. 313

tween Buchanan and Fremont, the Dred Scott decision, career
of Robert J. Walker as Governor of Kansas, and of William
Walker, fillibuster in Nicaragua; the rise of Seward, Lincoln,
Douglas and Jeff Davis as political leaders, John Brown's raid
and execution, the Lincoln-Douglas debate, the election of John
Sherman for Speaker; the four conventions of 1860 and the
election of Abraham Lincoln.

We detect no inaccuracy in Mr. Rhodes' account of this
period, except what is evidently occasioned by his bias toward
low tariff views, resulting in a most imperfect and untenable
view of the period of hard times or industrial distress which set
in in the summer of 1854, and continued until 1860, and until we
were well into the Civil War. There is, indeed, no mention
whatever in Mr. Rhodes' Volume II. of any panic or distress
until 1857; whereas, the affair of 1857 was chiefly a bank panic,
and the distress and suffering of the working classes, the cessa-
tion in manufacturing, building, transporting and the fall in
wages and need of poor relief, was hardly one-half as great
in 1857 as it had been in the fall of 1854 and winter of

1854-55-

It is the more remarkable that Mr. Rhodes should have
overlooked this, since the columns of the daily press of that
period were filled with accounts of the suspensions, sufferings,
starvations, suicides, souphouses and other substitutes for a
prosperous industry. On December 31, 1854, souphouses were
opened in every part of New York and Brooklyn. But this was
not until after processions of the unemployed and mass meet-
ings of the suffering, and isolated accounts of the starving, had
continued for three months. The Seventeenth Annual Report
of the New York Association for Improving the Condition of
the Poor, having a membership of about three thousand of
the very first people of New York City, describes this period
as follows:

' ' Distressing revulsions sometimes occur in monetary
affairs, which set at naught the calculations of political econo-
mists; and of this nature were the events of the summer and
autumn of 1854. The first sign of the coming calamities ap-
peared in the depression of wages and diminished demand for
labor. But the most noticeable amongst the leading causes of

314 GUNTON'S MAGAZINE. [April,

distress were the draught and blighted harvest. These were
followed by financial derangements, fraudulent bankruptcies,
and reckless speculations, which locked up capital and paralyzed
industry. Add to these a winter of almost unprecedented length
and severity, and we have an outline of the events which made
that year one of the most trying in the history of the association.
The indigent relieved by it suddenly rose from 5,669 families,
which was the average of the preceding ten years, to 15,549
families; and from the previous average outlay of about $27,000
a year to $95,000."

In this period, the Governors of South Carolina and Missis-
sippi issued proclamations begging the charitable of the whole
world to come to the relief of their people, as their suffering was
more intense and severe than in 1837, or at any former period
in their history. Horace Greeley made a tour to Ohio to find out
the extent and study the causes of the general distress, which
every leader in The New York Tribune (most of which were
written by Henry C. Carey) attributed to the direct effects of
the low Walker Tariff of 1846. These disastrous effects had
been merely delayed in their coming, but not averted, by the
vast influx of gold from California in 1849-52, the exceptional
demand for our agricultural products in Europe, due to the de-
cline of British wheat-raising under the repeal of the corn laws
in 1847-9; to the failure of the Irish potato crop in the same
years, and the industrial derangements in Europe, caused by
the revolutions of 1848 and the Crimean War of 1852-4. Never
had so many factitious circumstances happened to force pros-
perity upon the United States as in the years 1851-1853. All
these were in their full career and potency when the famine,
first of currency and then of food, struck us in the summer of
1854. This currency famine was clearly due to the fact that the
low tariff of 1846 had set on foot a rapid increase of importa-
tions of foreign goods into the United States, particularly of
"sixth quality" iron rails for railroad building, and of dry
goods. Our imports of rails under the Walker tariff contrasted
with our entire domestic product as follows: *

* See Neilson's Statistical Chart of 1799 to 1866, published by Am. Iron
and Steel Assoc.

1896.]

BOOK REVIEWS.

AMERICAN

AMERICAN

YEAR.

(TONS) IM-
PORTED.

ROLLED

(TONS) AND

YEAR.

(TONS) IM-
PORTED.

ROLLED

(TONS)AND

RE-ROLLED.

RE-ROLLED.

1847

15,161

not given.

1853

334,874

87,864

1848

33,028

1854

316,811

IO8,Ol6

1849

77,463

24,318

1855

142,818

138,674

1850

159,081

44,083

1856

174,156

180,018

1851

211,264

50,603

1857

200,822

161,918

1852

275,101

62,478

These figures show that only in one year under the Walker
tariff did our domestic production of iron rails, and our re-rolling
of old British rails combined, equal our import of new English
rails. In many of the years our imports were more than four
times the domestic products. The rails we imported, though
made in England, were called "the American rail," because
they were of too low a quality to be sold in any other market,
being the lowest of six qualities made. To ride over them at
all was nearly as dangerous as to make an ascension in a balloon.
On one day in 1856, four trains, at different points on the Erie
Railway, ran off the track through defective rails, the writer
hereof being a passenger on one of these wrecked trains,
whereon three persons were killed and many injured. In
walking two miles to the nearest town, he observed scores and
almost hundreds of rails which were as defective as the rail
Which had thrown the train.

The only manufacture which succeeded in this epoch of
driveling imbecility and economic asininity, which Mr. Rhodes
praises, was railroad building aud wildcat banks. For the
former, pauperized counties voted the land and subscribed to
the stock, while the foreign iron manufacturers furnished the
rails and rolling stock, taking their pay in railway bonds which
they soon sent over to Samuel J. Tilden, their American attor-
ney, and by him the bonds were foreclosed and the roads trans-
ferred to those who had supplied the English rails. The wildcat
banks (of which 580 new ones were created in 1852 and 1853)
were brought into being, and issued their floods of ill-secured
notes, to discount the commercial paper given to the New York
importers in payment for the increased volume of imports in-
duced by the low duties under the Walker tariff, the average
imports for fourteen years after 1847 being exactly two and a

316 GUNTON'S MAGAZINE. [April,

half times greater per annum than they were under the tariff
of 1842-6. When the collapse of 1854 followed upon the
Walker tariff and wildcat bank inflation of 1851-2-3, the city
of New York voted $10,000 to the relief of the suffering and
had not a dollar in the city treasury to pay it with (February,
1855); the city could not pay the salaries of the city officers and
police; Central Park was projected by Democratic politicians in
order to furnish the poor of the city with work, and the due-
bills of the City Treasurer were " shaved " by the brokers in
Wall street. Thousands of buildings in course of erection had
their unfinished walls roofed over because not a dollar of money
could be borrowed on the most gilt-edged real estate security
or at the most exorbitant rates of interest. Only the railroad
wreckers and wildcat bankers grew rich. When bills of the
last had collapsed, the people paid their small debts and con-
ducted their entire retail trade in postage stamps as currency, a
condition of things which set in in the summer of 1854 and con-
tinued seven years.

It is in the face of millions of facts like these, which
appeared in Presidents' Messages and Governors' proclamations,
that Mr. Rhodes says :

"The revenue tariffs of 1846 and 1857, however, demon-
strated a fact of great value — that a high protective tariff is not
necessary for the growth of our manufacturing industries.
Broadhead of Pennsylvania, said in 1857, that in five years the
production of iron had doubled." (Vol. III., p. 58.) Had
Broadhead really possessed a broad head, he would have
known enough to say that while in the five years preced-
ing 1857 our production of domestic iron rails had about
doubled, nevertheless, in the eight years following the enact-
ment of the Walker tariff our importation of iron rails had
increased more than twenty-fold, and in 1853 was nearly five-
fold as great as our domestic production.

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REGARDING

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GUNTON'S MAGAZINE.

MAY, 1896.

England's Return to Protection.*

FOR five hundred years England had a protective policy.
Under that policy she passed from the most backward country
in Europe to the leading commercial country in the world.
Under that policy she gave mankind the factory system, parlia-
mentary institutions, religious freedom, abolished slavery and
established the highest wages in Europe. By the economic
advantages thus acquired, she developed a superior productive
capacity which enabled her to undersell on even terms all other
manufacturers in the world.

Having securely obtained this advantage, she sought to
increase the prosperity of her manufacturing classes by captur-
ing foreign markets. To this end, having no fear of competition
in manufactures, and desiring cheap food in order that her manu-
facturers might have lower-priced labor, on June 27, 1846, she
adopted free trade, removing all import duties upon breadstuffs
and raw materials, as well as manufactures.

This was heralded abroad as the stroke of economic eman-
cipation, and has been the basis of nearly all economic literature
ever since. Free trade has been proclaimed as the true
economic policy for all nations. In this country, the economic
doctrinaires have persistently propagated the notion that our
only hope for permanent prosperity is in imitating the English
and adopting free trade. Thus far, we have refused to be con-
verted, but now and then have wavered to the extent of making
a partial experiment, and paying the penalty in swift disaster.

On the 2 yth of next June, England will have had half a
century's experience under this free trade regime ; and it is sig-
nificant that at the end of a fifty years' experiment, which has
not converted a single country, she is now taking steps to re-
turn as gracefully, but as effectively as possible, to a protective

By George Gunton ; reprinted from the New York Press, April 20, 1896.

318 GUNTON'S MAGAZINE. [May,

policy. This is what intelligent protectionists have predicted
would necessarily be the final outcome. England's competitive
superiority over continental producers has all along been due
to the superiority of her machinery ; and her ability to undersell
American producers has been due to her lower wages. This
seems to be an enigma to free traders. They have never
been able to understand why England's power to undersell in
the American markets was the result of an entirely different
cause from her power to undersell continental producers.
When our higher wages are given as the reason for needing
protection in the United States, they invariably reply by asking
" If we need protection against England because our wages are
higher, why does not England need protection against the con-
tinent, because wages are higher in England than in continen-
tal countries?"

Intelligent protectionists have no difficulty in solving this
seeming conundrum by showing that England may be able to
compete with continental countries, despite her higher wages,
and that the higher wages of the United States make a protec-
tive tariff against England indispensable.

The facts furnished by Mulhall, the English statistician,
make the explanation of this very simple. He shows that 78
per cent, of the productive power in Great Britain was steam,
as compared with 60 per cent, in Germany, 58 in France, 45 in
Holland, 41 in Spain, 34 in Scandinavia, Portugal and Italy, 29
in Austria and 10 in Russia ;~ or 36 for the average of con-
tinental countries. That greater use of steam and machinery
gives England, despite her higher wages, a lower cost of produc-
tion is shown by the further fact that the cost of productive
energy per thousand foot-tons in Great Britain is 16.8 cents, as
compared with 20 in Belgium, 22.4 in Switzerland, 23.2 in Ger-
many, 28.4 in France, 29.4 in Holland, 27.6 in Spain, 42.4 in
Portugal, 35.6 in Italy, 32.2 in Austria and 25.2 in Russia. In
other words, although mechanics' wages in Great Britain were
$7 a week, as against $4. 1 2 on the continent, the cost of energy
per thousand foot-tons was only 16.8 cents in Great Britain, as
against 26.6 on the continent.

Says Mulhall: "This enables us (England), as far as labor,
is concerned, to undersell the continental nations by 12 per
cent., although our workmen's wages are almost double." In

1896.] ENGLAND'S RETURN TO PROTECTION. 319

other words, the increased cost of production due to higher
wages in England is more than offset by the superiority of
English machinery by about 1 2 per cent.

In the case of the United States and England, the facts are
quite different. So far as the machinery is concerned, it is
substantially the same in both countries. Consequently, the
only item of difference is the cost of labor, which, being higher
in this country, makes a net difference in the cost of produc-
tion against the United States. According to Mulhall's tables,
just referred to, the cost of energy per thousand foot-tons in the
United States is 19. 6 cents, as against 16.8 cents in Great Britain,
or one-sixth more in the United States than in England; and
this estimate relates to the entire productive capacity of
the country. If this were applied to manufactures alone,
the difference would be very much greater. It is manifest,
therefore, that by the same comparisons on the same basis of
facts, we need protection against England because of our
higher wages, while the higher wages in England do not make
protection necessary against the continent, since the difference
there is more than offset by the difference in machinery.

This fact makes it manifest that as fast as continental
countries begin to use as good machinery as England, Eng-
land's advantage will disappear, and the wages will become the
only factor of difference in cost, as is now the case between
England and the United States. Unless continental wages rise
to the level of English wages, England will be unable to com-
pete with continental countries, and will be compelled to resort
to protection or lose her foreign and much of her domestic
trade.

The prediction that this would inevitably come has been
sneered at by free trade doctrinaires, who seem to imagine that
some occult superiority resides in the free trade formula. Dur-
ing the last few years, however, facts have been too much for
their theory. Continental countries have begun to adopt the
best English and American machinery, and with their much
lower priced labor are competing with English manufacturers,
not merely in their own markets, but also in the English market.
This tendency has become so manifest to observing English
statesmen that an actual change of policy is now being contem-
plated. Of course, they are very loath to admit that their free

320 GUNTON'S MAGAZINE. [May,

trade policy is a failure. Indeed, the superstition in favor of
free trade is too strong to render such a frank confession polit-
ically expedient. Little by little, however, it has been inciden-
tally admitted by prominent statesmen several times during the
last few years. About eighteen months ago, the London Stafist
offered a reward for the best essay on the subject of "Organ-
izing an Imperial Federation," in which the principle of free
trade should be maintained within the federation and protection
against all without.

It is officially announced that a conference is to be called for
the purpose of devising ways and means to bring it about. In
his speech announcing the scheme at the Canada Club, the sub-
stance of which has since been repeated in Parliament, Mr.
Chamberlain admitted that though still a free trader, he was
willing to depart from the doctrine in order to improve the com-
mercial interests of the country. According to the report of his
speech in the London Times, he said :

' ' I have no such pedantic admiration for it (free trade) that
if sufficient advantage were offered me I would not consider
a deviation from the strict doctrine. [Hear, hear !] Mr. Cobden
himself took this view, and compromised his principles in mak-
ing the French treaty ; and it cannot be expected that we, his
disciples, should be more orthodox than the apostle of free
trade himself. [Hear, hear! and laughter.] My fourth propo-
sition is that a true Zollverein for the Empire, that a free trade
established throughout the Empire, although it would involve
the imposition of duties against foreign countries, and would
be in that respect a derogation from the high principles of free
trade, and from the practice of the United Kingdom up to the
present time, would still be a proper subject for discussion and
might probably lead to a satisfactory arrangement, if the
colonies on their part were willing to consider it. [Hear, hear!
and cheers.]"

This is a complete confession that free trade as a policy for
England has been a failure, and that England is now ready to
adopt an imperial federation modelled on the basis of the
United States, with a protective policy against all foreign coun-
tries. This is in accord with Lord Salisbury's speech some two
years ago, and the call for a conference shows that it is a part
of the official program of the administration.

1896.] ENGLAND'S RETURN TO PROTECTION. 321

The London Times of March 27th endorsed the scheme in
a leading editorial, in which it says: ''The United Kingdom
has for nearly half a century pursued, steadily and avowedly, a
free trade policy, while the colonies, on the whole, though with
some remarkable exceptions and with no approach to uniformity
of action, have drifted jnto protectionism. This divergence
has hitherto frustrated the various projects that have been dis-
cussed for an Imperial Customs Union, which would, at once, es-
tablish free trade within the empire as it exists within the vast
territories of the United States, and would bind together the
members of such a federation by ties of interest as well as those
of sentiment. * * * Yet we believe the vast majority of
people of the1 United Kingdom will heartily endorse Mr. Cham-
berlain's desire."

After reminding its readers that Mr. Cobden would not
have objected to this policy, and admitting that " however
cautiously limited the modification of the tariff might be," it
must involve the reimposition of the ' ' duty on foreign corn and
the levy of a renewed tax on foreign sugar." It says, "The
belief in free trade as the indispensable condition for the growth
of an industrial and commercial community like ours is not in-
consistent with a growing impatience of the pedantry that
would condemn any practical modifications of an abstract doc-
trine, such as the most rigid economists have themselves intro-
duced when they had to descend from theory to business. A
very moderate advantage given to our colonial fellow-subjects
would have scarcely a perceptible influence on the great bulk
of our foreign trade. At the same time, it would be a sub-
stantial guarantee to the colonists of a position in the home
market the importance of which is likely to increase from year
to year."

The Saxonic English of this is that Mr. Chamberlain,
speaking for the administration and backed by the London
Times, proposes an industrial federation between Great
Britain and her colonies, making them industrially into one
nation like the United States, and adopting for them a pro-
tective policy similar to that which we have adopted in this
country, viz. , that they shall have free 'trade within the federa-
tion and protection against all outsiders. In order to soften
the shock to the minds of the English people, it is called an

322 GUNTON'S MAGAZINE. [May,

extension of free trade, and in order to make it palatable to
the colonies, who have never believed in free trade, it is called
protection. But the simply truth is that it is the abandonment
of the free trade doctrine and the adoption of a protective policy.
This is a stroke of long range statesmanship on the part of
England. It will give her free access to the markets of all
her colonies for her manufactured products, while a tariff
barrier will be erected against the products of all other countries.
On the other hand, it will preserve the English market for the
agricultural products of her colonies. This will give Canada,
Australia and India the exclusive right of way to the British
market. But while it will give to the colonies an advantage
for their agricultural products in the British market, it will
seal the fate of the development of manufactures in the
colonies. Australia, Canada and India will be hopelessly
defeated in any attempt to develop manufactures with free
importation from England. This, of course, will tend to keep
the colonies agriculturalists and the producers of raw material,
and will allow England to be the exclusive manufacturer for
the entire empire.

Nothing that has occurred during the last half century so
completely justifies the protective policy of the United States
as this proposed Imperial Federation of England. It is the
testimony of the most successful industrial country and the
only free trade country, that the policy of protecting the de-
velopment of domestic manufacture is the true policy of national
development.

How will this new scheme, if adopted, affect the United
States? Its immediate influence will be to exclude American
farm products from the British market. As England is the only
important purchaser of agricultural products, this would practi-
cally destroy the foreign market of American farmers. If this
scheme goes into operation, the American farmers will awaken
to a realization of the folly they have committed in allowing
themselves to be hoodwinked into believing that the home mar-
ket was a matter of insignificance to them and that the foreign
market was to be their chief reliance. They will realize that
the only market that is worth their while to rely upon is the do-
mestic consumption of the United States. It is the increase of
this consumption or home market that protection and the de-

1896.] CREDIT ASSOCIATIONS IN GERMANY. 323

velopment of manufacture and internal commerce has created.
It is the further extension of this that must be relied upon to
give an assured prosperity to our farming population. This
return of England to the protective policy, I repeat, is a com-
plete demonstration of the far-reaching wisdom of the tradi-
tional policy of the United States, which has ever been to use
the influences of government to promote the diversification of
industry and the multiplication of manufacture as the true
means of promoting national prosperity.

The only hope for the permanent prosperity of the agricul-
tural population in this country is to abandon their dependence
on foreign markets for the sale of their products, and co- oper-
ate in supporting the policy which most effectively stimulates
the growth of home manufacture and commerce. Instead of
chasing the will-o'-the-wisp of foreign markets and clamoring
for the free silver delusion at 16 to i, their interest lies in giv-
ing their hearty support to the demand for the re-inauguration
of a rational but firm and effective protective policy.

Credit Associations in Germany.

APART from the mortgage banks, savings banks, and the
old style of capitalistic banks headed by the Imperial and joint
stock banks and private banking houses which are planted all
over Europe, there is evolving on that continent, and chiefly in
Germany, two systems of co-operative or Poor People's banks.
Their theory and practice are so wholly unknown in the United
States that it is a matter of some care and difficulty to translate
their methods into the language of American interests and
needs, so that we of the great republic can understand how
these queer modes of doing business run so like a prairie fire
in the Old World.

The Schulz-Delitsch system, when translated into Ameri-
can terms, becomes pretty nearly a compulsory savings bank,
based on the building-association system of shares, payable in
small regular installments as its primary capital, with an un-
limited liability-on-loans on the part of all its members as a
means of reinforcing its deposits by an enormous borrowing
power, and therefore lending power, which greatly transcends

324 GUNTON'S MAGAZINE. [May,

that of the American savings banks. In short, it is a savings
bank based on what we call building or loan association shares,
with an unlimited liability attachment for borrowing purposes.
Herr Schmidt, of Vienna, ten years ago computed the entire
number of such associations at 4,500, with 1,500,000 members,
maintaining loans of ^450,000,000 or $2,250,000,000, being a
fifth more than the savings bank deposits of the United States,
and about one-twentieth of the highest national bank ' 'clearings. ' '
The Schulz-Delitsch associations loan only to their own mem-
bers (/'. e. , to subscribers to their shares), and for 1892 their
shareholders were returned as consisting: 30. i per cent, of peas-
ants, market gardeners and small cultivators; 3. 2 per cent, "as-
sistants of cultivators " (farm laborers), gardeners, etc. ; 27.4 per
cent, artisans working for their own account; 5.6 percent,
journeymen, factory hands, miners, etc. ; 8 per cent, shopmen,
2.2 per cent, letter carriers, railway officials, waiters, etc. ; 9 per
cent, commissionaires, servants, etc., making 70. 2 per cent, of the
poorer classes. Skilled workingmen then followed, with 11.9
per cent., leaving less than one-fifth of the shares, in toto, to be
held by the middle, mercantile, bourgeoisie and aristocratic
classes, combined, whose ascendancy in ownership is vetoed at
the start by a universal provision that no one person can hold
more than one share.

And yet the Schulz-Delitsch associations are regarded as
less distinctly favorable to borrowers than the still more novel,
unprecedented and interesting Raiffeisen banks, which contrive
in the most absolute manner to pluck the flower of safety from
the very midst of the nettle danger, for they unite the singu-
lar quality of borrowing from the relatively rich, in order to
lend for long periods to the absolutely poor. Those who can
give good commercial security at present are sent to the other
banks for short loans. The Raiffeisen class loan only to such
as are not expected to be able to repay the loan until they shall,
in the course of many months or a few years, have made the
means of repayment out of the profits derivable from the em-
ployment to which the loan is put. And yet the members of
these Raiffeisen associations become each security for all, on
all the loans the association makes, thus resolving the whole
association into a partnership, firm or commune, in which all
that each member is worth is liable for all that either the asso-

1896.] CREDIT ASSOCIATIONS IN GERMANY. 325

elation as a whole undertakes towards strangers, and also for
all that every member of the association undertakes in borrow-
ing from the association.

The purely loan offices of the Raiffeisen type number up-
ward of 1,000, and the various supply associations for printing,
trading, insurance, dealing in manures and fertilizers, dairy
associations, wine-growing, wine-shops, etc., conducted on the
same "unlimited liability " principle, amount, with the loan
offices, to 3,800 establishments. Yet so far as the Raiffeisen
loan offices are concerned, they make the astounding report
that ' ' after forty- three years' experience neither member nor
creditor has ever lost a penny."* We are told that " govern-
ments now encourage them; provincial diets ask for them,
priests and ministers pronounce their blessings upon them, the
peasantry love them." Where they open there is a prompt ex-
odus of Jews, pawnbrokers and money -sharks. The latter lit-
erally close up their shops and leave the country. In localities
where 40, 60 and even 100 per cent, interest had been taken, it be-
comes practicable for the poorest man who can prove that he
has a productive use to make of money, which will bring him a
sure and sufficient return, to borrow all the money his proposed
use will justify, at from four to seven per cent., for as long a
period as the use in question requires to yield its returns.

The first "loan bank" was started by Raiffeisen in 1849,
the second in 1854, the third in 1862 and the fourth in 1868,
thus requiring twenty years to generate four of these banks.
Twelve years more passed before they began to multiply and
before the public began to discover the working of their distinc-
tive principle. By 1885 there were 245 in Germany; by 1888,
423; by 1889, 610; by 1891, 885, and by 1893 upward of 1000
in Germany alone. In January, 1896, Hans Kriiger reports in
Vierteljahr schrift fiir Staat$ und Volkswirtschaft that there are
of Raiffeisen loan offices 3,800 establishments, and that the gov-
ernment of Germany is now seeking to identify itself officially with
the system by establishing for them a central bank of its own,
with the view apparently of adopting the various establishments as
branches. But the Raiffeisen associations already have their

*" People's Banks," by Henry W. Wolff, p. 72. Longmans, Green & Co.,
publishers.

326 GUNTON'S MAGAZINE. [May,

own central bank, which, unlike the local associations, is a share
bank with limited liability and a capital which has hitherto
proved ample. Herr Kriiger therefore regards the Imperial
overture as uncalled for and invidious, almost a source of dan-
ger to the system.

For many years the government, under Bismarck, tried dili-
gently to intermeddle with the system by imposing upon it
conditions which were alien to its spirit and requirements, but
which were assumed to be designed to strengthen it. One of
these Bismarckian impositions was that the members should
subscribe to shares, to a specified sum, thus forcing upon
the Raiffeisen banks a feature of the Schulz-Delitsch asso-
ciations. Another was a series of suggestions to both classes
of associations, looking to the encouragement of limited instead
of unlimited liability. The share provisions were evaded for a
time by making the shares nominal, and in 1892 out of 4,401
credit associations of both kinds, 4,169 were based on un-
limited liability.

In the Raiffeisen banks, therefore, there are no entrance
fees, dues or other form of compulsory deposits, such as lie at
the basis of the American building and loan associations and
are in part the basis also of the Schulz-Delitsch banks. The
theory of the Raiffeisen system is that ' ' long credit is the rule.
Calling upon a poor man who deliberately joins in order to
borrow, to pay money, is sheer mockery."

When a system of banks founded on such a principle be-
comes an ark of refuge so that, during great war panics and
convulsions, popular deposits withdrawn from other banks which
offer interest will be pressed on these, without interest, it may
be assumed that a palpable discovery in the science of credit
has been made. Yet this is just what happened to the Raiff-
eisen banks, and in a less degree to the Schulz-Delitsch associ-
ations in the great wars of 1866 and 1870.

The cardinal principle of the Raiffeisen banks being to loan
on personal character and on satisfactory evidence of the intrin-
sic productiveness of the use to which the money loaned is to be
put by the borrower, it follows that the association at the outset
can consist only of the residents within a limited district, say
of 400 "neighbors." All of these must know each other well,
and know each other's characters and enterprises. Only such can

1896.] CREDIT ASSOCIATIONS IN GERMANY. 327

be willing to form themselves into a bund, union, brotherhood,
partnership or commune, in which each shall ' ' stand for all
and all for each," as to the purposes of the bund, whether it be
to lend money to certain of its members, to borrow it from
strangers, to sell supplies, etc. Every member must be elected
by the members already joined. Notwithstanding it would seem
that such an association would be a difficult one to get persons
of means to join, both Raiffeisen and Schulz-Delitsch made
much of the feasibility of forming an association at all, turn
upon getting some reasonable proportion of rich, well-to-do or
responsible members, to not merely become members, but man-
agers, preferred in exact proportion to their means.

While in the Schultz-Delitsch associations the committees
elected by the members to make the loans are paid both salaries
and commissions, the Raiffeisen associations are run by an ex-
ecutive committee of five and a council of supervison of from
six to nine members, all of whom work without pay. The only
paid officer in each association is the cashier, and he has no
" say " in determining either a borrowing, a loan, or any other
act involving responsibility. Wolff alleges, on behalf of the
Raiffeisen system, that "purely gratuitous service has proved
at once the most economical and the most safe."

The exact means by which Raiffeisen, or the central bank,
could control the organization of local banks so as to ensure the
choice of a sufficient number of responsible persons into the asso-
ciation is not wholly apparent, and yet it seems to have been
done. It seems, also, to form a part of the ordinary plan of
organization that a majority of the executive and of the super-
visory boards should always consist of the richer members. Mr.
Wolff, in his account of the evolution of these associations, de-
clares, without explanation, that this is the rule, and assumes
that the ordinary self-interest of the members, supplemented
by instructions from headquarters, is sufficient to ensure its
observance.

The Schulz-Delitsch banks cannot say, like the Reiffeisen,
that they have met with no catastrophes. Between 1875 and
1886, thirty-six Schulz-Delitsch associations were declared
bankrupt, and 174 more went into liquidation. The crash
of the association at Diisseldorf in 1878 almost resembled
the South Sea Bubble on a small scale, and was commemorated

328 GUNTON'S MAGAZINE. [ May,

in a painting which depicted the ruined stockholders besieging
the broken bank in hysterical groups. Other failures occurred
in Chemnitz, in Bonn, in Rosswein, in Wrietzen, in Schkendits,
in Allstedt, in Cannestedt, in Dessau. In May, 1880, the deputy,
Herr Ackermann, stated in the Prussian Chamber that in 1879
twenty-four Schulz-Delitsch associations had lost 7,805,608
marks (close upon $2,000,000), and in 1880, up to that date,
another 1,202,877 marks ($300,000) had been lost. In 1892
there were nine bankruptcies and four liquidations. In all, Dr.
Schneider computes, there have been 184 failures out of 1,910
banks, or 9^ per cent, of the whole number — by far too large
a percentage. The Schulz-Delitsch associations are also open to
the charge of sustaining a high rate of expenditure. In 1885
2,907,475 marks were paid out in commissions and salaries on a
turnover of 24,835,265 marks — about twelve per cent.

Dr. Schenck, the head of the Schulz-Delitsch Union, com-
piles the statistics of all the co-operative credit associations of
Germany for 1892. He shows that out of 4,401 credit associa-
tion or co-operative banks registered in Germany 1,076 are
associations of the Schulz-Delitsch plan. In 1892 these 1,076
gave credit to the extent of 1,561,609,530 marks ($390,402,380),
including renewals, which are estimated at $300,000,000, being
1,451,309 marks per association.

Both the Raiffeisen associations and the Schulz-Delitsch
associations differ from all American Banks in the fact that
their loans are not limited by their deposits. They enter the
market as borrowers upon their own credit as associations, and
it is alleged that the effect of the unlimited liability of their
whole membership is that they readily borrow all they can lend
without the need of bills, mortgages or pledges of " collateral."

The Schulz-Delitsch associations invite members from any
quarter; make short loans on strictly commercial security,
though. to members only; and upwards of a thousand of them
are bound together into a Schulz-Delitsch Union, though there
are in addition a large number of banks organized essentially
on Schulz-Delitsch lines which do not seek membership in the
Union.

" Individuals are to derive no benefit except the privilege of
borrowing. All profit goes to the reserve. The first object of
the reserve is to meet deficiencies for which only with hardship

1896.] CREDIT ASSOCIATIONS IN GERMANY. 329

could individual members be made responsible. Its next is to
supply the place of borrowed capital, and so make borrowing
cheaper to members. Lastly, should it outgrow these needs, it
may be applied to some public work of common utility benefit-
ing the district. Not even in event of the association being dis-
solved is any sharing out permitted. In that case the money
has to be handed over to §ome public institution, to be kept on
trust until required for the endowment of a new association
formed in the same district and under the same rules. Or, that
failing within a reasonable time, the reserve may be employed
for some useful local public work. "

Yet there seem to be exceptions to the rule laid down by
the founder, for even the first little loan bank begun by him,
with $1,500 of borrowings, at Flammerstein, in 1849, an(i which
had lived by lending as cheaply as it possibly could, and finding
means by borrowing still more cheaply, until, in 1892, its re-
serve had grown to $10,000, at last forsook its founder's co-oper-
ative principles and divided its reserve among its members.
This fact would indicate that the principle on which Raiffeisen
set out has but partially been made effective in the laws of
Germany, and that the title to funds remains in the mem-
bers of each bank, and can be diverted from the plan of its
founder, at least by a unanimous membership. If this can occur
on dissolution, presumptively it can be also done at any previ-
ous moment, but, on the whole, the spirit of its founder prevails
in these associations, or they could not preserve their distinctive
type.

The marked feature in both these new systems of German
popular banking is the reaction, or retrogression, which they
show from that principle of "limited liability," or "shirking
the debts," which has now for more than a century contributed
the chief inducement to the inauguration of uncertain or finan-
cially dangerous enterprises by corporations in England and
America. The chief basis on which both the Schulz-Delitsch
and the Raiffeisen associations have planned to " create a cap-
ital without a capital of guarantee," as Schulz himself ex-
presses it, has been to recede as far as possible from the scheme
of " individual irresponsibility " for debts and losses, which is
the chief corner-stone of our financial corporations. Upon this
principle, also, the kindred associations known by other names

330 GUNTON'S MAGAZINE. [May,

in Italy, France, Austria, Hungary, Spain and Russia are
founded. They all do a great work in ending destructive criti-
cism by constructive enterprise.

It cannot be denied that much of the unscrupulousness in
business, and of the disposition to make a net profit out of
bankruptcy and by repudiation, which characterizes the business
world wherever these aims can be effected legally, viz. , in Great
Britain and America, is educated into it by the debt-evading
basis on which corporations are formed. Corporations often
come into existence, repudiating all indebtedness for the very
assets by which they do business, they continue in existence
only as long as it is more convenient to pay their debts than to
fight them, and when they go into a receiver's hands they com-
pel creditors to take as low a percentage of their debts as is
necessary to leave the corporations a profit, thus shifting all the
risks and losses of business upon their creditors, and so using,
virtually, their creditors' property as an experimental capital
with which to start without actual personal risk to themselves.

We cannot regard it as altogether an unhealthy sign that
both of the new German efforts to " vulgarize credit " by plac-
ing "enterprises of great pith and moment" within the power
of the deserving poor, have made the very basis of their sur-
prising success to consist in discarding utterly and dogmatically
at the outset the notion that there can be any escape from legal
liability, at any time or in any way, for every part of the indebt-
edness whereby value has been obtained from another person
that remains unpaid for. This seems much like a restoring of
the ancient landmarks, to conform literally to that pithy but
much-slighted precept, " thou shalt not steal," by so extending
it as to add, "even through the legal methods of limited liability. "

It is also extremely important to note that in some way, not
wholly explained, but apparently practical, both these classes
of credit institutions, though moulded upon democratic lines,
have not sunk into the socialistic bog of anti-capitalism or hatred
of rich men. Though both the Schulz and the Raiffeisen banks
limited members to one share and the Raiffeisen to one vote,
to prevent the associations from falling into the coercive or
capitalistic monopoly of rich men, yet both of them insisted
that no association should be formed entirely of poor men,
and that, when rich men were mustered in, they should have

1896.] CREDIT ASSOCIATIONS IN GERMANY. 331

an advisory power proportionate to the greater burden of risk
they were carrying. They must be given an effective veto
in the executive committees, in the committees of supervision,
and in the quarterly meetings of the committees of revision.
Thus these associations, though they are doing far more than
any other agency in Germany to expand the industrial powers
of the poor, are nevertheless the one medium through which
the poor are united in most effective, and without misrepresen-
tation we may say, voluntary co-operation with the rich. The
associations, especially the Raiffeisen, could not have met with
the prosperity and security they have enjoyed if the reckless,
the irresponsible and the desperate had been entrusted with
their management. Schulz is said to have distinguished at first
against "the very poor men," but the large percentage of
journeymen, farm laborers, market gardeners, waiters and
peasants which are returned as members of his banks, shows
that it must have been only the thriftless and wilfully improvi-
dent that he aimed to exclude. Raiffeisen insisted upon " rich
members" enough to make a majority in each of the com-
mittees of management. Hence the progress of these banks
has been peculiarly along lines tending toward the largest social
brotherhood rather than toward social revolution. The so-called
"scientific socialists " as such have found none but negative
comfort in them. The greater their prevalence the less the
need of " social revolution."

The German lending associations seem to have made use,
in these two credit systems, of the same principles of judgment
concerning men and loans, which the merchants and manufac-
turers, and even the farmers of America, apply to the matter
of giving credit in the sale of goods. Dun's and Bradstreet's
commercial agencies collect for their patrons, to guide them in
extending or withholding credits on the sale of goods, very
nearly the same class of facts as determine the judgment of both
the Schulz and the Raiffeison banks in making loans. The dis-
covery on the part of our German cousins consists only in utiliz-
ing this kind of knowledge so as not merely to make it the basis
of sales on credit, but also of loans. All credit tends probably
to democratize capital. The pith of Alexander Hamilton's con-
ception of the gain made to society by banks of any kind lay in
their tendency to gather up the idle capitals of society, and to

332 GUNTON'S MAGAZINE. [May,

utilize them by loaning them to the enterprising. This was
practically equivalent to increasing the quantity of capital by
increasing its rapidity of movement. The two German systems
carry this utility one step further. They so mass the aggre-
gated responsibility of the comparatively poor as to arrive at a
power of borrowing for their own use from the relatively rich.
This seems to be an advance in credit methods along lines which
Americans cannot fail to study with interest. And yet in
some respects the Raiffeisen banks seem like an importation
from Russia of some of the principles of the Russian commune,
called in towns the artel, and in agricultural work the mir. A
common convenience of both the artel and the mir in Russia
is that all the members become jointly liable for any obligation,
like that of a salesman in a store, or cashier in a bank, which
one of its members may assume. So the mir, in its social ca-
pacity as a unit, is liable for the taxes due from the land of one
of its members, and assumes the duty of tilling it in his ab-
sence, and converting the results of the tillage to the payment
of his debts. It also sustains a degree of liability for his defal-
cations, debts and torts.

There is, therefore, in the Raiffeisen associations a degree
of voluntary recurrence to practical communism or partnership,
which seems to indicate that among the poor there is a natural
tendency backward toward communistic or tribal methods. So
far as a voluntary restoration of something like the tribal system
shall prove to contain in it a better means of giving credit to
the poor, it will command the closest attention and respect of
the economic world.

A Proposed "Clearing House Currency."

MR. OILMAN, a banker, of Wall Street, has drawn, and Mr.
Fairchild has presented, a bill for establishing a "clearing
house currency," so-called. It sets out with the assumption that
a Bank of the United States, with branch banks in every state,
such as has heretofore been advocated in our predecessor, The

* " The Incorporation of Clearing Houses and the Issue of a Clearing House
Currency," by Theodore Oilman (banker), in The Banking Law Journal (March),
with the bill (H. R. 3338) to Incorporate Clearing Houses and Provide Clearing
House Currency, etc., introduced by Mr. Fairchild.

1896.] A PROPOSED "CLEARING HOUSE CURRENCY." 333

Social Economist, and by the editor of this magazine before the
Banking Committee of the H. R. , is, in fact, needed to perfect
our American banking system. It cannot, however, be had be-
cause too large a share of the American people still get their
financial opinions through the largely inaccurate filtrations into
the popular thought of the day, of the financial beetle-headed-
ness and economic ignorance of the great American duellist and
Indian fighter, Andrew Jackson. It is popularly supposed that
Andrew Jackson opposed a Bank of the United States per se
as an economic and monetary institution. That this popular
notion is false is shown by the fact that he opened his warfare
by asking Congress to charter a new United States Bank which
should be more completely under the control of the Government
of the United States, instead of rechartering the then existing
bank.

Mr. Oilman repeats the popular error that a Bank of the
United States has been tried and found wanting; whereas the
two successive Banks of the United States enjoyed careers of
uninterrupted success — indeed formed the most successful fea-
ture in the administration of the government anywhere to be
found in its first half century. The two banks each paid eight
per cent, dividends throughout almost their entire existence as
government institutions, and not less than six per cent, during
the remainder. Their stocks were eagerly sought for by Euro-
pean purchasers even at a time (in 1816-17) when the bonds
and notes of the United States were at 20 per cent, discount.

The Bank, which passed into discredit in 1841 and wound up
its affairs, without the loss of a penny either to its depositors or
to its billholders, had ceased five years before to be a govern-
ment bank, by its charter, and seven years before to be a de-
pository of government moneys, pursuant to the purpose and
to the pledge of public faith on which it was created. It had
carried out a resumption of specie payments for an insolvent
government at a time when the government demand notes were
only worth 75 cents on the dollar, and had enabled the Govern-
ment to collect its customs revenue in coin, after its custom
houses had for six years (during the interval of 1811 to 1817,
when there was no government bank in existence) been stuffed
with the depreciated paper money of the wild-cat state banks.
The Government subscription for seven millions toward^ the

334 GUNTON'S MAGAZINE. [May,

capital of the bank had never cost it a penny, yet on this stock
the Government drew its dividends for nearly twenty years like
any other stockholder, and appointed its five directors, of whom
one was always made president of the bank; and when in 1831
a hostile administration advertised that ten millions of its own
debt would be reimbursed at the bank, at a time when the
United States had only a third of that sum on deposit, the
bank promptly paid in coin the unnecessary drain.

It also paid $1,500,000 for its charter, and, from 1816 to
1836, $75,000 a year for the privilege of receiving the govern-
ment deposits and handling the government debt gratuitously.
We believe that for the substantial counterpart of this same ser-
vice the Government of Great Britain now pays its Bank of
England about three per cent, interest on ^17,000,000, and in
addition an annual salary of about ^190,000.

The withdrawal of deposits from a bank created expressly
to receive them, made solely because President Jackson could
not make the appointment of the president of the branch bank
at Portsmouth, N. H., part of the political spoils of the victo-
rious party, was an act so perfidious and reckless, in the
depths of its partisan demagogism, that all Americans should
bow their heads in shame when it is mentioned.

The two Banks of the United States made themselves cen-
ters of redemption, or virtually "clearing houses" for the
paper money of all the state banks, as well as for the commer-
cial bills they discounted. For lack of a similar service, the
state banks, when left to themselves (viz., in 1812 to 1816
and in 1836 to 1860) always plunged into the fathomless morass
of irredeemable or wild-cat notes, thereby bringing on the two
bank convulsions of 1836-40 and 1854-60. The Banks of the
United States, therefore, successfully reconciled issues of the
notes of state banks with perfect and prompt coin redemption.
They compelled at once an elastic and a safe currency. This
combination of blessings has never existed in the United States
since its government bank was extinguished. Since that time
we have had currencies which were sometimes safe in some
ways, but never in all ways. They could expand and after ex-
panding burst, but they could not expand and contract in a
healthy way twice a year, as the paper currency expands and
contracts in England and in Canada.

1896.] A PROPOSED "CLEARING HOUSE CURRENCY." 335

When Mr. Oilman, therefore, disposes of the Bank of the
United States as an experiment that has been tried and found
wanting, he talks buncombe to the ignorance of the galleries,
and not sense to the intelligence of the House.

Mr. Oilman's proposition is to erect the clearing houses of
the various states into legal organizations, into which the banks
clearing in them shall be federated, and into banks of issue, under
the name of ' 'clearing houses of issue, " of which he provides that
there shall be at least one in each state, and one for every dis-
trict in which the clearings exceed $200,000,000 annually. The
notes which he desires the clearing houses to issue are, there-
fore, to be the notes of the entire association or group of banks,
thus consolidated for the function of note issues into one associ-
ation. These clearing houses are to be incorporated ' ' either
under the national currency act, or under the laws of any state
or territory of which a majority [sic, majority of what ? — ED.]
shall be authorized under the national currency act." The
clearing houses of issue are to have power to issue to such banks
as are members, and as are short of currency, a new form
of currency, to be known as clearing house currency, on
the pledge or pawn with such clearing house of such "com-
mercial assets, promissory notes, bills of exchange, conver-
tible bonds and stocks, and other securities and evidences of
debt," as the borrowing bank may deposit with the clearing
house to secure its issue. The clearing house has, as assets to
secure its loan of notes, first, the power to close out by sale the
securities on pledge of which the notes were issued; second, to
foreclose upon all the other assets of the bank to which the loan
is made ; third, to assess the other members of the association
with their quotum of the deficiency, and, fourthly, if all the
banks of one clearing house fail to make up the deficit, it may
be assessed by the Comptroller of the Currency, through the
various clearing houses of the country, upon all the banks of the
country which organize under the clearing house system. But
as assets to secure the redemption of the notes it issues, it re-
ceives from the borrowing bank no asset whatever, and not
even its promise. The note is the debt of the clearing house
and not of the borrowing bank.

The point at which the various banks are organized into the
various clearing houses of issue, and these various clearing

336 GUNTON'S MAGAZINE. [ May,

houses of issue are finally confederated into a common liability
for all clearing house currency issued, is that of legal liability
for the clearing house note. The notes to be issued shall be in
denominations of from $i up to $1,000, as may be applied for,
and shall be prepared by the Comptroller of the Currency,
in styles and numbers adapted to general circulation. The
currency in which the clearing house notes shall be finally
redeemable (sec. 9) shall be either "clearinghouse currency,
United States legal tender notes or coin certificates." The
clearing house of issue may at all times loan to 75 per cent, of
the estimated value of the securities offered.

No obligation of coin redemption is anywhere connected
with these proposed issues. No design to withdraw the green-
backs, paripassu, as fast as the new notes are issued, is any-
where revealed in Mr. Oilman's bill, and the issuing power is
as illimitable as the power of the people, by means of pen, ink
and paper, to manufacture what are called " commercial secu-
rities. " The experience of the country with the greenbacks and
national bank notes abundantly proves, that public distrust can-
not take the form of demanding daily redemption of any notes
which by their terms are always redeemable in other notes of
the same kind and not in gold or standard coin. It becomes,
therefore, a fair question whether Mr. Oilman's bill is not a
project for unlimited inflation without any tendency or capacity
of contraction.

In this regard it differs wholly from the clearing house
certificates issued during the panic. Those were for cir-
culation as between the banks and the clearing house only.
Those banks, being in all cases responsible, would look upon
them as bank debts and not as money. Knowing that they
were all unauthorized by law, and therefore void if brought to
any legal test, they would seek to use them only as pontoon
bridges over the crisis. As the crisis subsided they were re-
tired because they were illegal and inadmissible as a perma-
nent currency.

Mr. Oilman proposes to break away from these moorings
and to endow the aggregated clearing houses of the country
with an illimitable power to issue paper money for popular use,
with the annex, as to redemption, that when any of this paper
money is presented for redemption, all that the holder can get

i8g6.] A PROPOSED "CLEARING HOUSE CURRENCY." 337

is another form of the same scrip. Of course such a provision
as this protects it effectually from any presentation at all. It
is like the provision that national bank notes shall be redeemed
only in greenbacks. It insures their non-presentation to the
bank issuing them for redemption, because every holder knows
that there are no per cent, of government bonds deposited as
security for the redemption of the bank notes, and nothing
whatever is deposited for securing the greenbacks. Hence
every national bank note issued forms just as permanent a con-
tribution to the national currency as the greenback itself; so
would every " clearing house of issue "note under Mr. Oilman's
proposal.

The fact that the securities and loans, on which the clearing
house issues the notes, are paid, will not bring back or retire the
notes loaned upon them. Their course, like that of the brook,
is "on and on forever." Nothing will bring back paper money
to the fountain which issues it but coin redemption, or, as the
bankers call it, "homing." This element, so conspicuous in the
bill which Mr. Gunton advocated before the Banking and Cur-
rency Committee, is entirely absent from Messrs. Oilman and
Fairchild's bill.

The proposed " clearinghouses of issue " under the Oilman
bill are not themselves banks. They have no capital; there
is no fund which is primarily liable for the redemption of the
notes issued; there are plenty of endorsers, but no original
debtor on the note. The clearing house of issue does not owe
it, because it issued it only to relieve a bank which has paid off
its debt and stands discharged, and has had its securities re-
turned, leaving no value to the clearing house to pay it for, or
with. The particular bank to which the note is issued has a
capital, and was liable primarily to redeem the loan and
take up the securities and pay the debt it owed the clearing
house of issue. All this it has done, and hence owes nothing.
But this bank never assumed to redeem the notes themselves
in which the loan was made. Those are the notes of the
clearing house only ; the Oilman bill gives no right to the
clearing house which issues them to get them back for cancel-
lation if it wants to. It provides that when the borrowing bank
pays the debt for which the notes were issued, that clearing
house may immediately advertise that it will redeem such

338 GUNTON'S MAGAZINE. [May,

notes on demand. Redeem them in what? In "United
States legal tender notes or in other clearing house certifi-
cates," /'. f.t in the first link of an endless chain. Who will
present any note for redemption in this manner when he knows
that all the banks of the country are liable for its ultimate
payment ? Nobody ! Hence advertising will not bring them
unless something better than the note itself is offered for them.
Sometime, if he waits for the general collapse of all paper
money which will ensue upon a sufficiently unmanageable infla-
tion, it will be redeemed either in gold or not at all. If in
gold, what he has got is as good as anything; if in nothing at
all, he makes no gain by presenting it for more of the same
article ; and without prompt daily redemption the ultimate
goal of such an issue must be a collapse.

We are all the more forcibly impressed by the weaknesses of
the Oilman bill that the precautions involved in the Gunton bill
were not superfluous.

It is not a superfluous requirement that before the banks of
the country, national, state or private, be set free to issue all
the bank notes they please, they be first deprived, by a repeal of
the legal tender law, of the power to make additional contribu-
tions to the volume of irredeemable money. Bank issues must
remain restricted in amount and secured by government bonds
until coin redemption is restored.

It is not a superfluous requirement that every bank note is-
sued shall have some one bank primarily liable for its payment
or redemption, and that such conditions shall exist that it will
go home to that bank for redemption pretty soon after its
issue. It is not a superfluous requirement that the central bank
which is expected to redeem the note shall be brought into such
relations with the bank which issues the note, that it can over-
see and control its loans and protect itself by deposits of the
' ' reserve " of the bank of issue in maintaining coin redemp-
tion. To this end there needs be something more than mere
correspondent banks. There must be branch banks and a
branch directorate, whereby every bank owns stock in its cen-
tral bank and is directly or indirectly represented in its direc-
tion, and every central bank controls the official staff of its
branch banks, and makes them officers of its own bank for
every purpose of oversight and responsibility.

1896.] FARM PRICES NOT MADE ABROAD. 339

Finally, as we have elsewhere shown in this number, it is
not a needless requirement that the greenbacks shall be retired.
The notion that they are consistent with the existence of a
sound currency, or that their presentation for redemption will
stop when we again have a sufficient paper revenue payable in
greenbacks, is not true. Therefore American financiers, if we
really have any (and it would almost seem from the utterances
of our public men that we have none), must keep on the look-
out for a sound banking system as well as a sound revenue sys-
tem. As they cannot have the latter without a thoroughly pro-
tective tariff, so it has not yet been made apparent that they
can by any ingenuity have the former without establishing a
system with a central bank and constant coin redemption.

Farm Prices Not Made Abroad.

BY HON. J. R. DODGE,
Late United States Commissioner of Agriculture.

MR. D. HUTTON WEBSTER makes effective opposition to the
Bounty Plan. His ideas are sound on the remedy, diversifica-
tion, avoidance of hopeless foreign competition and extension
of available lines of exportation, but he errs in assuming quite
too strongly that ' ' the limits of European demand have by no
means been reached" on "cattle, meats, dairy products,
tobacco, seeds, hops, fruits, "etc., which now yield $2 2 5, 000,000.
Meats cannot be forced on the continental countries, that are
determined by every means of protection, including edicts of
exclusion, to encourage ample home production, and Great
Britain buys all she can use, less and less from us as Argentine
and Australia increase their competition. So with dairy pro-
ducts, only Great Britain will buy, and Denmark and Holland
and France beat us out of sight in the supply. Our cheese
export has dwindled to a fourth of its volume, due largely, it
is true, to dishonest adulteration, which we do not prevent as
Canada does. It is absurd to say our tobacco exports can be
much extended, as Europe produces as much as we do, holds a
government monopoly on its sale, and controls and restricts
both home production and foreign purchase. Hops are no
dependence for exportation. Europe usually has ample home

340 GUNTON'S MAGAZINE. [ May,

production. There is a chance for exports of fruits, wines and
various forms of minor production.

He is in error, too, in the broad assertion as a "fact," that
" the price of all the farmer sells at home or abroad is made in
Liverpool." The price of our hay, potatoes, market garden
products, most of the fruits, bear no connection with Liverpool
prices, as they are never sold there or in any foreign market.
Nor is the price of our corn ever made in Liverpool, as 70 per
cent, of all the maize in the world is consumed in this country,
and only a trifle goes abroad ; scarcely any when the price is
high here; and this is our largest arable crop. Nor is the
price of cotton made in Liverpool, for Europe must have it,
and we produce more than all the rest of the world together;
and Liverpool pays 6 cents when we pile up a surplus in
European markets of three or four million bales, and from 10 to
20 when we reduce the supply. What nonsense, then, to say
that the making of the price is in the hands of the brokers of
Liverpool rather than in those of the planters of the United
States !

He is also wrong in attributing to the English Export
Bounty the sole influence in enlarging English acreage and
creating a home supply of wheat. Its object, "to stimulate
production so as to render it possible to raise at home all the
wheat she consumed," was not attained, though he says " this
was finally achieved as a result of the bounty system." From
1765, forty-nine years before the repeal of the bounty, the
imports were greater than the exports, with the difference con-
stantly increasing after 1775, as follows:

EXCESS OF IMPORTS.

1765-74 880,619 quarters.

1775-84 605, 747

1785-94 7",462

1795-99 2,349, 830

In 1773, the import duties were reduced to admit a greater
supply of foreign wheat. The production did increase, from
increase of demand as the factory system was developed. In
1689, the product of England and Wales was returned at 1,760,000
quarters. Including Scotland, in 17 60, Comber's estimate was
3,800,000 quarters; in 1773, a statement in Parliament made the
product of Great Britain 4,000,000 quarters. I have the en-
dorsement of the British Board of Agriculture for these facts.

1896.] GREATER NEW YORK. 341

Commercial writers and economists, getting their figures
from commercial statements, often assume erroneously an all-
prevading influence of commercial centers on prices. The
truth is easily shown and indisputable, that the values of a large
proportion of the agricultural products of this country are in-
fluenced little or not at all by the commercial movements lead-
ing to Liverpool and other foreign markets, having no connec-
tion with that movement or dependence on it ; and most other
countries are far less affected, because they have fewer exports
seeking markets controlled by international competition. In-
deed, the trading world, the middlemen, assume quite too
much importance generally in making values for the agricul-
tural production of the world.

Greater New York.

TRUTH compels the reluctant confession that the project for
the consolidation of ' ' Greater New York " has been pushed at
Albany and elsewhere solely on the ground that unless consoli-
dation is effected by 1898 the census of 1900 will show Chicago
to be the leading city of the Western world in population. No
claim of desire for better city administration is put forward as
forming any part of the motive of the movement, and perhaps
could not well be urged, without accompanying the project
with some outline of what the plan of the .charter for Greater
New York is to be. Any exhibit of a plan of the future city
government is regarded as not good tactics for those who de-
sire the consolidation cause to win. The policy is ' ' first con-
solidate, and then find out what consolidation means."

Assuming that annexation has for its chief motive to sur-
pass Chicago in population in the next census, that object could
perhaps most cheaply and safely be obtained by simply enact-
ing that ' ' for census purposes New York City should be deemed
to consist of the present city together with all the suburban
populations dwelling within fifteen miles of the City Hall, but
this consolidation shall work no change in the local govenments
now existing within the area thus limited."

Indeed, for purposes of population this mode of annexation
would be more efficient than the plan now pending, since the
present plan would only bring the population up to about

342 GUNTON'S MAGAZINE. [May,

3,195,000, while that above outlined would add to it Jersey City
or Hudson County, N. J., with 275,000 population, Essex
County (Newark), with 256,000 population, and perhaps enough
of Bergen County to raise the entire addition to 800,000, mak-
ing a grand total above four millions. This would carry New
York past Paris and bring her into rivalry with London. It
would be far more dignified to admit a desire to rival London
than to confess to a fear of being outstripped by Chicago.
Nearly as large a portion of the real suburbs of New York City
lies within the State of New Jersey as in that of New York.
As London extends into several counties, why should not New
York extend, in name as well as in fact, into two States ? It
could easily divide itself into two districts, its New York and
New Jersey districts, or eastern and western, or into three dis-
tricts, Eastern, Central and Western, leaving the present city
as the Central District. A provision that the taxes raised for
local improvements in each of these districts should be expended
within the district in which they were paid, and that the dis-
tricts in question should remain as heretofore as to their State
taxes, would probably be all that would be required to induce
the assent of the New Jersey Legislature as well as of that of
New York to such a consolidation of the entire Greater City
with all its suburbs.

The agglomeration of jurisdictions thereby arising would
be far less complex than in the metropolis of London, which
arrives at one government as to Public Works, Police, Health,
and Fire without merging ninety ancient systems of village or
home rule in other respects, and particularly as to taxes, edu-
cation and the poor. The Fire, Health, Police and other munici-
pal functions would be improved rather than otherwise, by being
performed in common and organized under one central authority.
The Greater City would be freer rather than otherwise for hav-
ing a political and legislative interest in both States, and an in-
fluence in both legislatures. Such a condition might pave the
way for ultimately expanding this port and population into that
absolutely Free City, which by the Dongan Charter it was
solemnly covenanted by the British Crown that this city should
be ; a covenant which many good lawyers regarded as broken,
when in 1854, by the Metropolitan Police Act, the city was for
the first time ruled from Albany.

1896.] -GREATER NEW YORK. 343

The constitutional difficulties could at the utmost merely
limit the completeness of the consolidation by preserving the
autonomy of the two portions held asunder by State lines, but
such difficulties ought not to be greater than has attended the
peaceful union of Austria and Hungary under one crown and
imperial ministry, with two legislatures and two local cabinets,
or than has attended the'union of Scotland and England with
one crown and one Parliament. If what we are after is the
greatest city possible, let us have a city that in the near future
will exceed London in population.

The selfishness which inspires Mayor Strong's hostility
to the inclusion of Staten Island into the Greater City rests
doubtless on the belief that much of the dock accommodations
for vessels now pertaining to New York City would be superseded
by massive docks which would be constructed on the sister
island. Perhaps the general tendency of the movement might
prove to be the gradual up-building of a city on Staten Island,
nearer to the ocean, having better facilities for dockage and for
connection with southern and western railways than Manhattan
Island. Staten Island is much the larger of the two islands ;
indeed, is nearly twice as large as Manhattan. It consists gen-
erally of higher ground, and is, therefore, capable of being more
effectively drained. The old connection through the East
River and Long Island Sound with the New England states,
and with the Hudson River towns, which had much to do with
locating the great city on Manhattan in preference to Staten
Island, and with locating the wholesale and banking business of
the city itself on the southeast precinct of the city below Wall
Street and east of Broad, has long since ceased to be relatively
important. The wholesale houses have migrated twice to meet
western traffic — once in 1850-57, when they came over from
South William and Beaver Streets into Warren, Murray and
Chambers Streets, and again in 1870-80, when they moved from
Murray and Chambers Streets up to Worth and Leonard Streets.
They are now moving up Broadway to meet the New York Cen-
tral Railway and New England railways, which movement a
removal of the freight depots of the Central from St. Johns
Square would convert into a stampede.

On the contrary, the building of the two projected bridges
across the Hudson River, one at Twenty-second street and one

344 GUNTON'S MAGAZINE. [May,

at or near Sixty-ninth street, would tend to draw the bulk of
the active merchandising of the city to the central West side,
from Washington Square to Seventieth street. If, however,
these bridges are delayed in building until after the Western
Trunk lines are permitted to effect a junction with adequate
docking arrangements and depots on Staten Island, it is dif-
ficult to foresee how large a diversion or division of population
and business from New York it might effect. Diedrich Knick-
erbocker records the grief and disappointment of the early Dutch
explorers at the fact that the first settlers on Manhattan should
prefer that island, whose shores were on deep water, where
docking out and making new land in the usual Dutch way by
wresting it from the sea was so expensive, when they could
just as well have had Communipaw flats, where they could have
docked out for whole furlongs before reaching deep water. So
it seems that New York set out by sacrificing first rate chances
for docking to Communipaw, and now in its latter-day glory, it
is about to waive an equal advantage in favor of Staten Island.

In any event, the future evolution of the metropolis will
almost certainly be determined by the immense preponderance
in value of its western trade, over every other, and the whole
effect of this preponderance will tend toward shortening its lines
of communication with incoming western railways by meeting
them where they come in, whether this be done through bridges
which bring them into the present city, or through extensions
of the city to include their points of arrival.

There is an element of shrewdness in Mayor Strong's
present objection to the inclusion of Staten Island in the
Greater City. It would employ the funds raised by taxation
in New York in building Liverpool docks on Staten Island,
there to effect that junction between western railways, and the
coasting trade and ocean steamers, which forms the chief
source not merely of an annual revenue of twelve millions of
dollars now derived by the city from its docks and markets, but
of the very bulk of the exchanging which is done by the city
itself as a whole.

Mayor Wurster and the Brooklyn legislators at Albany
evidently fear that consolidation means for them something
like what union with England meant for Ireland, and which
union with Prussia in the German Empire has meant for

1896. ] GREATER NEW YORK. 345

most of the minor German States. They dread the kind of
progress that comes from being perpetually outvoted. They
seem to pass from a majority into a minority, so far as
New York may be capable of voting as a unit. This fear,
however, not only assumes a somewhat improbable class of
questions to be voted upon, and a unity of public spirit and
policy of which New Y6"rk City has always had very little,
but it ignores the natural tendency of the greater area of the
Long Island section of the future city, toward such a relatively
more rapid increase of population as will speedily equalize the
two in numbers. In 1830, Brooklyn may have had 2,000 people
and New York 250,000. While New York has been growing
six-fold, Brooklyn has grown nearly six hundredfold. Despite
the lower percentage rate which attaches to larger populations,
Brooklyn's future area being nearly four times that of the
present New York, readily assures it a rapid tendency to equal
existing New York in the near future. What Brooklyn poli-
ticians in both parties have a more solid reason to fear, will be
the immediate extension of the Tammany Hall organization,
which at most times forms four-fifths of the city government of
New York, over Kings, Queens, and Richmond Counties. The
exoteric or popular part of that organization, when confined to
the existing city, includes a permanent force of three "com-
mitteemen " for each election district, and five -for each
assembly district, amounting to a standing force of somewhere
from 8,000 to 12,000 men, of whom the Tammany General
Committee numbers twelve hundred. The esoteric, initiated
or secret order known as the ' ' Columbian Order, or Order of
St. Tammany, " is a secret club which owns the property known
as Tammany Hall, determines what is regular and democratic,
and stands in the same relation to the outward organization as
Thomas C. Platt, individually, is reputed to occupy toward the
exterior organization of the Republican party in New York
State.

Upon the Tammany Hall organization being extended over
Kings, Queens and Richmond Counties, its local committees
would stand enlarged from about 12,000 members to about
20,000, and its annual political patronage, in all the forms in
which city revenues are expended, would rise from a mere
sixty millions to a full ninety millions of dollars. While by

346 GUNTON'S MAGAZINE. [ May,

spasmodic means or hysterical popular convulsions it might
lose its grip on the power and patronage of the two cities for
one or two years out of twenty, its more intense and efficient
form of organization would limit these exceptional spasms to
short periods. During fully four-fifths of the time Tammany
Hall would control a patronage rapidly rising toward a hun-
dred millions annually. No ordinary Democratic convention
elected at the call of a mere county committee would ever sit
again in Kings, Queens or Richmond Counties. The Tam-
many general committee would be a perpetual convention,
always elected and ready to come together at the call of its
chairman to nominate candidates for office or declare what it
would go for, and how much it required to satisfy its ' ' highest
end of politics — an organized appetite. "

The certainty that the Tammany Hall organization will be
formally extended into these counties as soon as consolidation
occurs, in place of the existing voluntary democratic primary
system, is a consummation toward which Brooklynites in both
parties look with a dread that approaches terror. Brooklyn
Republicans look on and wonder whether there will be enough
of Thomas C. Platt to go around when he is spread over so much
larger a territory, and is called upon to compete with a regular
Tammany organization throughout the whole of it.

The conclusion forced upon us by the many-sided agitation
of the Greater New York movement is that party manuoevring
and local property interests have it in their keeping, almost to
the exclusion of any impulse toward the better and wiser
government of the great metropolitan population which it
affects. We are not favored with any view of the schemes for
better and cleaner city government, which may possibly be held
in solution, and out of sight, under the foaming swirl and
agitation of its rapid current. We do not know whether it con-
templates a restoration to their pristine dignity and ancient
strength of the honored boards of aldermen and councilmen,
and proposes to invest the new metropolis with a city legislature
worthy its importance as a commercial, manufacturing and
banking centre, or whether it purposes to treat it as a sort of
Bulgaria, to be presided over by the subservient satrap of an
ultramontane Czar.

We do not know whether the consolidation is sought as a

1896.] AN INDUSTRIAL CRISIS. 347

preliminary to the consummation of vast schemes of local im-
provement, such as the perfecting of railway access to our city
by bridges, and the restoration of our declining grain and cattle
trades with the West by convenient grain-storage elevators, and
by vast abattoirs like those of Paris, or whether the city, like
the seaports of China, is to be a mere field in which licensed
thieves shall be permitted in the name of taxation to steal all
they can take without inciting the populace to armed rebellion.

We believe there must be in the long run a definite con-
nection between a wisely planned charter for city government
and a well-governed city. We do not believe in the permanent
efficacy of personal impulse, or even of hysterical popular con-
vulsions, as a means of amending a corrupt working of a city
government which is doomed to failure and incompetency by
its organic law.

Therefore, we would be glad to see some attention given to
the constitution under which the expected metropolis is to
work, provided, of course, it is to enjoy its liberties and is to
govern itself at all.

An Industrial Crisis.

THE Lawrence Manufacturing Company, of Lowell, having
decided to go out of the business of making cotton cloth, fur-
nishes a text for the Boston Journal to editorialize in this lugu-
brious strain: " Is this the beginning of the end? Is it possible
that Massachusetts' industries are on the downward path? If
so, what is the cause and what the remedy ? " Neither of the
latter questions is difficult to answer. It must have been evi-
dent to Massachusetts manufacturers for some time that the
making of coarse cotton cloth has got to go, and it is useless to
grumble over the inevitable. This industry is bound to go to
the South, where it belongs, and whither it can go with advan-
tage to that section of our country; for it marks the begin-
ning of a manufacturing development which will be of immense
economic benefit. This industry will create a socializing
environment greatly needed in the South, while at the same
time it will supply the social wants resulting therefrom. The
home market will be enlarged and a higher civilization be
evolved. It is high time New England should be through with

348 GUNTON'S MAGAZINE. [May,

the stage of manufacturing represented by cotton cloth. That
industry is shifting its center; it will now go South, and ulti-
mately may move on to Japan and India. The remedy for this
loss, so far as New England is concerned, is to turn its atten-
tion to the production of finer goods ; therein lies its future.
Already has this been seen by leading manufacturing corpora-
tions, who have something besides the shopkeeper's outlook.
As a consequence, they are changing over their machinery and
preparing to do a higher grade of work. Wages are not going
to fall, nor hours of labor to be increased. The economic and so-
cial benefits accruing from good wages and a shortened work-
ing day will not be sacrificed because of the temporary embar-
rassment resulting from the shifting of certain industries. The
most effective economic force in society is invention, and by
this means new products are being introduced which a diversi-
fied taste and a more complex social life make necessary. New
England's hope for a continued prosperous industrial future
lies in the supply of new commodities, which improved machin-
ery will make possible. Exactly what the tariff did in enabling
the American manufacturer to produce cotton cloth for the
American market, that it will do, as we move up and produce
finer fabrics. More and more will it be seen that the protec-
tion of the home market develops the socializing influences of
the nation, affecting the standard of living and the wages of the
laboring class. The country has had a bitter experience of the
contrary policy, and the protective principle will be re-instated,
whereby the New England manufacturer will be put on an ap-
proximate competitive equality with the foreign producer of
high-grade fabrics. All that is necessary is opportunity for the
development of new and higher manufacturing industries, and
that can be secured through a protective policy. To the promo-
tion of this, the statesmanship of this country is going to devote
itself with increasing intelligence and steadiness.

The home market is ever to be the chief reliance, because
that is the measure of domestic consumption, and more surely
than anything else indicates the prosperity of the people. It is
the tendency of civilization to make the industries of all coun-
tries depend more and more upon home consumption. It is not
the wealth it exports which is any exponent of a nation's pros-
perity, for it may export largely and yet be very poor. The

1896.] SPECIALIZATION OF FUNCTION IN WOMEN. 349

wealth that is consumed, covering all that enters into social life,
that is the real index of national prosperity. New England
must increasingly diversify its manufactures and produce the
finer fabrics for which there is growing demand. Inventive
genius, devising improved methods of production will make this
possible. In certain sections of England this transition has
been witnessed, wherein -more diversified and higher industries
have superseded the simpler manufacture of cotton cloth. It is
for the leaders of New England manufacturing enterprises to
anticipate the trend of things, to discern the higher wants which
will require to be gratified. It would be a sad confession to
make, that New England can only produce cotton cloth. If
that were true, then her doom is sealed, and the beginning of
her end has indeed come. But there is no reason for discour-
agement ; rather is there a call for wise and energetic effort to
meet the changed industrial condition. The remedy for the sit-
uation is in the diversification of industries. New England's
problem is one of readjustment, and when that has been accom-
plished she will be on a broader and more prosperous industrial
basis than she has ever been in the past. Increasing desire is
prophetic of social progress. More wants means a higher stand-
ard of living, and that portends increased consumption, which
in turn will necessitate enlarged and more varied production.
We have by no means reached the limit of our manufacturing
productivity, and hence, sagacious foresight and adherence to
the policy of protection secures for all our great manufacturing
cities a sure future.

Specialization of Function in Women.

BY HARRIOT STANTON BLATCH.

THERE is a theory that women, in consequence of our indus-
trial system, are undertaking for the first time various kinds of
arduous work. With this theory is linked the conviction that
the hard work of the world was once done by men alone. But,
on studying the past, we find those "good old times" never
existed. In support of the ideal of leisure for women, there is
not a single ancient fact nor modern instance. With the devel-
opment of machinery there has come no change in the sex of
toilers, though there has come a change in the place where

350 GUNTON'S MAGAZINE. [May,

some of the world's production is carried on. Spinning and
weaving, brewing and candle-making have now left the home
and gone to the factory; with the growth of kindergartens the
teaching of even little children has left the home, and women
have followed their work. There is a given amount of labor to
be done, and women ought to shoulder their share; and the
majority of them have borne their part of the burden. If
most women need more leisure than they get to fulfill their ma-
ternal functions, they will apparently have to gain it, not by
shifting burdens to the over-weighted shoulders of men, but
through the economy of labor which would result from co-oper-
ation in their special "sphere." The crux of the difficulty is
not that women have changed in some trades and professions
from unorganized, unpaid workers in home industries into
specialized and paid workers, outside the home, but that they
have not carried specialization far enough. In fact, the need
is the professional woman everywhere. Professional work
means paid work, which in turn means the emancipation of the
worker. The woman's " cause " is probably a question of dol-
lars and cents, and is not to be won solely by right to vote and
hold office, or by freedom to enter every profession and trade,
or by securing a fair wage or a shorter working day. The
pivotal question for women is how to organize their work as
home-builders and race-builders, how to get that work paid for,
not in so called protection, but in the currency of the state.
Married women's property laws, marriage settlements and ali-
mony are makeshifts, if not steps in the wrong direction, for
they concern merely women of the well-to-do classes. Finan-
cial independence cannot be secured to the majority unless our
homes are so systematized that each woman becomes a profes-
sional, producing a marketable commodity, instead of being, as
now, an amateur, playing more or less feebly with a variety of
trades. If each woman remains the producer, so to speak, of
her own bow and arrow, the angler for her own food, the fabri-
cator of her own wigwam and blanket, she may lay up in return
for her self-sacrifice treasure in heaven, but will get little cash
down in this world.

Let us consider the effect lack of specialization has upon the
lives of employed women. In a classification of the female
population of any country the handful of rich women who have

1896.] SPECIALIZATION OF FUNCTION IN WOMEN. 351

no employment other than organizing servants, social functions
and charities, can be omitted. Speaking broadly, women fall
into four divisions: those employed in professions, in trades, in
paid domestic service and in unpaid domestic service. Now
the diffusion of effort over paid and unpaid work, or over the
various departments of home service, is not only a severe strain
upon the energies of all four classes, but distinctly lowers
efficiency both in gainful pursuits and in the family itself. The
class which is capable of the greatest concentration is the pro-
fessional. Probably this is the reason why the percentage of
women to men in professional lines is higher than in other
pursuits outside domestic service, and it is certainly the reason
why the work is more satisfactorily performed and as well paid
as that of men. Professional women take up a career for life,
for it is comparatively easy for them to continue their work
after marriage, belonging as they do to the class which can
command the service of other women in the home. But as this
form of co-operation is becoming more difficult and unsatis-
factory, the "help " problem is one of the questions which the
professional woman will have to solve in the near future.

The evil effect diffusion of energy has upon the lives of the
women of the poor who are in gainful pursuits, cannot be ex-
aggerated. In the East End of London, the maximum wage
received by women in different trades of greatly varying skill is
almost identical. The woman bookbinder, for example, and
the match-girl earn the same wage. The reason is that the
bookbinder belongs to a social grade in which the neat-fingered
women folk can do simple millinery and dressmaking, and the
parents are rich enough to allow their daughters to work for
' ' mere pin money " ; while the socially inferior match-girl must
concentrate her force and work for a living. These were the
reasons why thousands of women, before the foundation of the
Woman's Exchange in New York, were doing art and fancy
work for pay as low as that of the hands employed on ready-
made clothing. The worker, especially if unorganized, is sure
to be cut down to just what existence demands, and if one
whole class of workers, when compared with another, as for ex-
ample, women with men, is able to live for less money because
of the many things it will do for itself instead of hiring done
for it, its wage falls in proportion. Workers are not judged

352 GUNTON'S MAGAZINE. [May,

individually, but as a class; therefore the lack of concentra-
tion in the average woman affects the estimate of even the most
capable. Wherever women take industrial life seriously, they
secure a better position. Their exceptional strength in the
textile industries, both in England and America, is due to their
continuing their industrial career after marriage, to their thor-
ough training and to their having been in the trade from its
rise. But even when trained, the female operative often allows
certain parts of her work to be done for her. It is a rule for
women not to do the fitting and pressing in tailoring shops,
not to sharpen their tools in vulcanite factories, not to lift the
"forms" in printing-offices, and not to "tune " their weaving
machines. The employer gives a high estimate of the cost of
this delegated work, and lowers correspondingly the woman's
wage. In every case she might perform the work, which is not
so heavy as many tasks in the domestic circle. The average
baby weighs at birth seven pounds, and does not walk till its
weight is twenty or twenty-five pounds, but I have never heard
that one man is told off, to every three or four mothers, to lift
these babies. So, perhaps, we may hope that women will yet
exhibit in their gainful pursuits a moiety of the muscular vigor
shown in the seclusion of the home.

To emphasize the opposition which men may have to our
progress will not in the least blind the well informed to the fact
that our chief stumbling block is our own conception of our
lives. Now it is generally held that woman's place is home,
that all women prefer domestic life, and that they are all by
nature suited to preside adequately over its various depart-
ments. These opinions are based on impressions, and, like all
such opinions, are held tenaciously. During two years I have
been collecting information about the desires of married women
wage-earners. I began inquiries among the employees of a
large clothing factory. A careful canvass showed that most of
the women worked from a desire for independence, and not, as
is supposed, because their husbands were unemployed. The
majority of the men were earning wages above the average of
the neighborhood. Only half of the women preferred domestic
work, and in every case expressed a decided taste for some one
department of housework or care of children. Most of the
others were about equally divided between a marked prefer-

1896.] SPECIALIZATION OF FUNCTION IN WOMEN. 353

ence for factory work, or the combination of factory and house-
work. The statistics I have been collecting in Yorkshire bear
similar testimony to diversity of gift and taste in women. It
may be perverse in lowly wage-earners to show individuality as
if they were rich, but apparently we shall have to accept as
fact that all women do not prefer domestic work to all other
kinds, and none of those who do show equal skill in all its
departments. The insistance that women on marriage must
become homebuilders deeply affects the economic position of
the whole sex. When a laborer belongs to a class which usually
changes its trade in the middle of its career, he cannot command
the wages or promotion of a person belonging to a class of
permanent workers. Common sense refuses to treat seriously
the economic position of a person who will be found using a
paint brush in decorating china one day, and the next manipu-
lating a scrubbing brush in the isolated home. But with home-
building organized women could concentrate whatever energy
they must give to work, on the trade or profession they at first
adopted.

But I do not wish to be understood as advocating such organ-
ization for the sole purpose of making an industrial career eas-
ier for women. I would emphasize rather that to the house-
wife and mother, more than to any other class of employed
women, does lack of specialization mean a serious handicap.
First, it must strike any one who gives thought to the matter
that motherhood and homebuilding are two different and
even antagonistic employments. Who has not noticed the
breath of liberty it has been to some woman, once poor but
afterward able to command the services of other women, to find
that her motherhood was no longer chained to housewifery?
And there must be some way to end for all women the unfortu-
nate union of cradle and frying-pan! Still further, in home-
building itself specialization is needed. The only isolated home
that can pretend to a passable performance of its functions is
that in which the family income is large enough to command
paid service. Then the cook is one who prefers cooking to
housework, who has chosen that line of work, and has had
training in her trade. The same is true of housemaid, laun-
dress, housekeeper, nurse. But, in at least 7,000,000 American
homes, not even a maid-of-all work assists the housewife.

354 GUNTON'S MAGAZINE. [ May,

With the truism that it is vital to a nation's existence to have
home and children cared for, we must agree ; but it is to make
facts wait on fancies to suppose this can be attained so long as
in over half our homes one woman, single-handed, is attempting
to perform various and conflicting duties. I often wonder that
the consequent waste and bad workmanship do not strike hard-
headed business men. For instance, to mention one leakage,
the retail buying of the world is done almost entirely by
women. For this work we have had no training. And if we
were all put to learn, many of us would turn out failures. I do
not wish to judge all women by myself, but there are a cer-
tain number who are like me in never having laid out a dollar
to the best advantage. Like me they go to the school of expe-
rience, but there being no gift for buying in us, we gain no
wisdom. Now, I know all the pretty masculine witticisms
about woman's love of shopping; still, I much doubt, if we
ought to sacrifice for a subject of wit even, an enormous amount
of wealth. I do not wish to question the adequacy for the
work of the home, of any particular woman; I only wish to
point out the absolute impossibility of efficiency in at least 7,000,-
ooo homes, and the difficulty of efficiency in, say, my own
home. Further, I would remind the happy possessor of a
home, where everything is so organized that the falling ill
of one or even two of the "helps" does not in the least inter-
fere with the smooth running of the domestic machinery, that
the perfection of her home is attained through co-operation
with other women, and not through her own unaided ability,
however great that may be. Again, I do not question the sat-
isfactoriness of the homes of professional women, political, ar-
tistic, literary women, when I declare that whatever merit
they possess is largely due to the fact that the actress when on
the stage, the doctor when by her patient's side, the writer
when at her desk, has a Bridget to do the homebuilding for
her. It is because the professional woman seems never to have
recognized that it is her co-operation with other women which
has given her freedom to specialize; it is because the great
movement for the emancipation of women has remained so
completely a well-dressed movement, that it has been possible
to ignore the disastrous part unspecialized work has played in
the lives of most women. Side by side with the marked im-

1896.] SPECIALIZATION OF FUNCTION IN WOMEN. 355

provement in the condition of the well-to-do or educated wom-
an, our century shows little or no progress in the condition of
the woman of the people. How to be free to do the work for
which she has a gift, how to do her work efficiently and gain
independence, and yet satisfy her maternal instinct and love of
home, is a problem difficult of solution for the professional
woman, and insoluble — under present conditions — for the house-
hold drudge and the women of the poor. On the other hand,
were there organization in woman's sphere, we should see the
woman cook working up to the position of chef, the operative
into positions of highest skill and trust, the little nursery-maid
into the trained woman, knowing scientifically how to feed and
clothe a child. Such results, far from laying an extra burden
of work upon women, far from depriving them of strength and
opportunity to perform their work as mothers, would husband
their powers and save them from the dispiriting effect of dif-
fused and unfruitful effort.

But, it is objected, would not such organization involve
delegating the care of children to others than their mothers?
To which I reply that the first steps in motherhood — physical
motherhood — do concern entirely the relation of a particular
woman to her offspring ; but the wider duties to our children
demand, if those duties are to be adequately fulfilled, that we
should profit by the contrast of talent and character in women.
Some are fitted for one side of child-rearing, others for another,
while some again are fitted for one of the many departments of
home-building ; others for work quite outside the home. Those
who advocate entrusting a child absolutely to its own mother
must have either too exalted an idea of feminine capacity, or a
very low idea of what constitutes rearing a child. We can
trust the squaw to rear her papoose, but as civilization demands
finer citizens than savagism, we should lay aside primitive
customs. Every woman should feel that her work as a mother
cannot be complete unless she co-operates with other women.
It takes the co-operation of many men to produce a steam-
engine, and it will require the co-operation of many women to
"rear" the civilized child. In a recent number of the Fort-
nightly Review, Professor Sully ably advocates the new study
of child-nature. He points out the obstacles the student of
children has to encounter in the " prejudices " of the "average

356 GUNTON'S MAGAZINE. [ May,

mother." To me the chief merit of the article is, that it may
do something to lessen the good opinion which average mothers
have of their abilities. Blessed will be the day for the race
when the average mother becomes broad-minded enough to
o\vn that, though she may bring into the world well-balanced
children, she must, for very love of them, leave their rearing
to those with trained talent for the work, while she makes beds
for the world or plays the violin at our concerts ! When the
mothering of children has become a fine art, the physical side
of maternity will be seen in its simplicity, not as an insatiable
monster ready to devour every energy of any woman who
approaches it. Natural law, it is true, imposes limitation, but
the binding of child-bearing up with race-building, in all its
complexity, and home-building, is not natural law, but only a
survival of the necessities of savagism.

To sum up, then — for the efficiency of the work, no less
than the good of the workers, is the specialization of function
among women imperative. Diffused effort means bad work-
manship and discontented workmen. Were the modern idea
of division of labor applied to women's work everywhere, those
women who choose an industrial career would be able to con-
centrate their powers ; those who follow a profession would
be able to give to their work their full energies ; those who
choose to be home-builders would handle their work as trained
professionals, and, above all, those who rear our children
would follow the career of their choice with as much enthusiasm
as ability.

Our American Proletariat.

To THOSE who are observing carefully the trend of social
evolution there are certain menacing conditions. The only safe
development of social life is that which results from wholesome
desire for betterment. To desire things is the first real step in
social progress. A certain amount of discontent lies at the
basis of all attempts to improve the environment. It is there-
fore a hopeful sign when the poorer classes want more things.
A dull, heartless contentment with a confessedly low condition
is the antecedent of despair. It betokens an unimprovable
situation. If a man does not want enough to be willing to

1896.] OUR AMERICAN PROLETARIAT. 357

struggle to gratify it, he will never make any progress, for no
wants means no advance. That is why it is of such economic
importance to stimulate and broaden our desires. The only
places in the world where there is no social improvement are those
where there is no social movement, where static conditions
rule, where what has been is accepted as what inevitably must
continue to be. The only cheering symptoms in society are
where there are personal and collective yearnings for a larger
life; where better homes and food, better amusements and better
educational advantages — in a word, a better environment, is
the craving ; for this portends the effort that will ultimately
secure it. That is the line along which social evolution should
proceed. The greatest and gravest problem of the hour is how
to raise the standard of living; how, therefore, to augment
wages, and so enlarge the opportunities of life. The gratifica-
tion of human wants, desires and aspirations is the controlling
element in all social progress. The law of interdependence
obtains now to such an extent that the welfare of all is identical
with that of each. It was really the utterance of an economic
truth where the poet says:

What one is —
Why may not millions be.

The real worth of a civilization or a religion lies in the breadth
of its influence ; they must aim to reach and save all. At pres-
ent we are confronted by a movement the very reverse of all
this. Instead of a steady and ever broadening effort to raise
the standard of living, we are encountering efforts to make pos-
sible the very lowest phase of life. Nay, more ; we meet
with charitable and commercial enterprises to make not only
practicable this low standard of existence, but even to make it
respectable. Right here lies the social danger of this move-
ment. Instead of mitigating the hardships of a crude semi-civil-
ized life, we ought to augment them. We do not want to cheapen
life, nor encourage a grub state of existence. The nearer ani-
mal-hood any portion of society is allowed to keep, the worse
for it. It involves arrest of improvement and tends to perpet-
uate what should be tolerated as, at the most, a temporary con-
dition. Every undertaking to make low living reputable is an
economic blunder, a social peril. It is never safe to cater to a

358 GUNTON'S MAGAZINE. [ May,

decadent life; we want rather to make it disreputable. The
facts, however, in our large cities, go to show that we are en-
couraging and perpetuating a proletariat. This is the first and
obvious result of cheap lodging-houses, of nickel-meals, of all
devices to cheapen living. We are attracting to the cities the
vagrants and tramps, the idle and vicious, by making it pos-
sible for them to subsist on a minimum of cost, and to do so
with a sort of quasi-reputableness. Already we have a large
fifteen-cents-per-night population.

Efforts to supply model tenements to the working class is
an attempt to stimulate home-making and rests on family life.
This is a moral and economic movement, and is deserving of
all the helps that can be given by municipal co-operation. But
the lodging-houses are not promotive of family life, and that
they are commercially profitable only shows that we are de-
veloping a class that in poverty and moral degradation we
supposed we should be free from in a country so new and full
of industrial opportunities as is ours. In Great Britain and on
the continent these houses are under police surveillance and
careful sanitary inspection. With us they are multiplying, and
are becoming the abiding places of criminals, professional
paupers and election floaters. In New York we had 112 licensed
lodging-houses, accommodating 15,233. They vary in prices
and in accommodations, ranging as low as 10 cents per night
and as high as 25 and 35 cents. Some have baths with hot and
cold water, while the larger number, especially of the cheaper
ones, have none. Some 35 have saloons in the same building,
and 22 have saloons adjoining on one side. Many are filthy,
the breeding places of disease, and for that reason a menace to
the public health. Undoubtedly they are the enforced homes
of some who once were in better circumstances, but have be-
come socially and financially wrecked, and have no other places
to go. But all transiently stranded, if they have hot lost their
sense of self-respect, will escape from them as speedily as pos-
sible. They are with us as yet largely winter resorts for those
who in milder weather resume tramp life and do just as little
work as possible. The city of Glasgow tried, with great success,
the experiment of establishing its own lodging-houses. This
was done to relieve the congested condition of the tenements,
and to provide for a large floating population that was previously

1896.] OUR AMERICAN PROLETARIAT. 359

accustomed to find lodging in the wretched abodes of one-room
families. Being under strict regulations and furnishing better
accommodation than the smaller lodging-houses, they have,
through the natural competition engendered, largely extirpated
the latter. They have raised the standard of life in the lodging-
house, and in this way excited a wholesome influence. If
lodging-houses in American cities have come to stay, then the
only safe and economic policy is, by strict police oversight and
sanitary rules, to make the lower-priced lodging-houses unprofit-
able. Mammoth model lodging-houses, such as we hear are
projected in New York, could by their better facilities and
higher standard of living make the inferior and uncleanly ones
unremunerative, and thus oblige them to close up. The prin-
ciple we contend for is, that if these lodging-houses are a
necessity, then make the cheap and filthy type impossible to
exist, and let the model lodging-house on a paying basis push
up the standard of living, and thus compel the others to follow
suit. Men are not going to a ten-cent house if, for a trifle
more, they can get better accommodations; and if sanitary
regulations make the cheaper type unremunerative, then we
may look to see the pig-sty style of abode eliminated. The
pauperized peasantry of the Old World, drawn across the ocean
by the force-pump of immigration, is what is steadily swelling
the ranks of the proletariat. Accustomed to subsist on far less
than what in this country is a living wage, they introduce the
habits and standards of their nations amongst us, and constitute
the nucleus of the class known in London as ' ' the submerged
tenth. " Temporary relief for the destitute and unemployed is in
our judgment wiser than to make a type of existence possible
here that is incompatible with self-respect, cleanliness and
virtue. More work and better wages is the way of escape from
this deterioration of life; less charity and more earnings; a
stern war against dirt and its accompaniments, and a crusade in
behalf of every agency likely to improve city tenements, and to
facilitate access to suburban homes for the wage-earning class.
This is a large question, and as economists and patriots we have
to meet the problem involved. The "free soup-house" style
of relief can only be justified in great emergencies, and a
standard of life only a slight remove from this is in the long run
morally deteriorating. Cheap restaurants are bad enough, but

360 GUNTON'S MAGAZINE. [ May,

if their cheapness is made possible by a concealed element of
charity their influence is degrading. Thriftlessness, indolence
and loss of self-respect are thereby fostered; so comes that
feeling which underlies pauperism, "that it is the duty of
society to support those who are idle and culpably inefficient. "
We need more drastic measures in efforts to stay the growth of
this proletariat, and especially do we need a stiff resistance to all
efforts to lower the standard of living and make it at the same
time respectable and remunerative.

Every attempt to establish ten-cent lodging-houses and
five-cent-a-meal restaurants by philanthropic organizations
and quasi-charitable methods is, in the long run, an injury to
the very class it is designed to help. It tends (i) permanently
to establish a lower standard of living and an inferior estimate
of social life; (2) to the extent that this succeeds it creates a
permanently depressing influence upon the wages of American
labor, and (3) to increase the inducement to transfer the
European proletariat to the United States, and thus add to
the influences which lower the social character and standard of
our civilization.

Instead of thus promoting the forces which tend permanently
to degrade the social life and lower the wages of American
laborers, and increase the inducements for the poorest type of
immigration by making social inferiority profitable, true reform
should begin by establishing an effective restriction of immigra-
tion to this country, followed by vigorous use of state and
national legislation to promote all the conditions which tend to
raise the standard of living of American laborers.

Political Revolution of the South.

BY PROFESSOR JEROME DOWD.

THE breaking up of the Solid South is an interesting and
important fact. While the Democratic party has lost control
in only four States, the old order of things is completely broken
up. In North Carolina not less than 40,000 men have left the
Democratic party, and the ' ' slump " in other states bears about
the same ratio to the former Democratic strength.

The disruption was not due to a division of sentiment over

1896]. POLITICAL REVOLUTION OF THE SOUTH. 361

any particular party issue. There was no difference on the
tariff between the Democrats and the Populists, except the
Populists called that a side issue. There was no real differ-
ence between them on the money question. Both parties advo-
cated free coinage at the ratio of i to 16. The Populists charged
the low price of land and products to the alleged contraction of
the money volume. The Democrats occupied the same ground,
and a majority of them to-day believe that the per capita amount
of currency has been continually decreasing since the war. At
first free coinage was the great panacea of the Populists, but
when they found the Democrats in the same boat with them,
they declared that free coinage would add only 25 cents per
capita to the circulation, and was of no account. The Populists
went further and advocated fiat money, more as an excuse to
pick a quarrel with the old party than anything else.

Another evidence that party issues had little to do with the
revolution is to be found in the indifference of the Alliance peo-
ple to the contents of their own platforms. When their demands
included tariff reform all the Alliance men seemed to be well
pleased. When, at a succeeding annual meeting of the order,
the tariff issue was omitted, they endorsed the platform with
equal unanimity. When the plank demanding government
ownership of railroads was changed to government control,
there was apparently no dissenting voice. The farmers did no
thinking for themselves. They sent delegations to their national
gatherings who were without either instructions or convictions.
The annual meetings were under the domination of a few thor-
ough-going demagogues whose chief object was to frame de-
mands that would not meet the approval of the old parties. The
Alliance men adopted whatever demands these men handed
down. They accepted the demands more as an expression of
opposition to the old parties than as an embodiment of their own
views on the issues of the day. The Sub-Treasury scheme was
loudly advocated until the farmers had been safely cut away
from their old moorings, then the absurdity was discarded as of
no further use.

In the last campaign in the South the populists were indif-
ferent to all party issues. They refused to listen to Democratic
speakers and cared not a whit for what they had to say about
tariff, currency, or anything else. It was perfectly evident

362 GUNTON'S MAGAZINE. [ May,

that the revolution of the South did not arise primarily from
any contending over party issues or policies.

It is quite the fashion with many Democrats to account for
the new movement on the ground that the people have simply
been misled by designing men. But that will not do. It is
preposterous to suppose that any combination of schemers are
ingenious enough to conceive and bring about such a change
solely by misrepresentation of facts. Of course falsehood and
misrepresentation entered in as propelling forces. But these
alone could not have accomplished the result. As well might
we say that the French Revolution was achieved upon fictitious
issues and that the economic and political condition of the coun-
try was not the real cause.

The revolution of the South is due mainly to one fact, and
that is lost faith in the old parties and their leaders. The farm-
ers, who have been going from bad to worse under a very op-
pressive system of taxation, both state and national, and obtain-
ing little or no relief from their party even when it had power
to act, have determined to have a new party of their own mak-
ing. They believe, more firmly than any other class, that great
wrong underlies the distribution of wealth. Notwithstanding
that the national wealth has been doubled in the past thirty
years, they are convinced that a comparatively few men have,
to a great extent, monopolized the sources of that wealth, con-
signing many hard-working people to a state of poverty and
helplessness.

They believe that the great inequality of wealth in the
United States is not due to the superior service rendered to
society by those who control the wealth, but that it is due to
bad laws, vicious taxation (national, state and local), stock-
jobbing, and unbridled and unprincipled corporations. The
people of the farm and the workshops view, on the one hand,
great wealth — a few living in luxurious mansions, giving costly
entertainments, wearing fortunes in diamonds, riding behind
fine horses, and by their side are poodle dogs that are better
fed and housed than many of the proletariat, and otherwise
making an ostentatious display of riches. They read of the
easy-going life of those who are born rich — a class wholly ab-
sorbed in pursuits of pleasure ; indifferent to the welfare of those
whose toil makes such luxuries possible ; oblivious to the fact

1896.] POLITICAL REVOLUTION OF THE SOUTH. 363

that much of the wealth of the world, whether gained in trade,
transportation or manufacturing, represents the life-blood of
human beings. Even the richest people are willing enough to
admit that a public office is a public trust, but they are re-
luctant to visit condemnation 011 the owner of an estate who
acknowledges no public obligations, and gives over his life
entirely to pleasure ! The masses read of another class who
have grown rich by copartnership with the government, which
reaches its fingers into the pockets of one citizen to enrich
another. On the other hand, the masses view around them
on the farm and in the shops numberless fellow citizens work-
ing in a state of dependence, enjoying few of the blessings of
civilization; their wives and children doomed to a treadmill
existence, and haunted by the fears of going from bad to worse.
They look at first with envy at those who sit at life's banquet
table, but that envy soon curdles into hatred. When they think
of legislation as a means of relief, they find little to encourage
them. They see the lobbies of Congress swarming with manu-
facturers who are asking and receiving favors under either
Democratic or Republican rule, while the poor men on the farm
far away continue their tedious round, already tax -ridden to the
limit of endurance. As a result of these facts, the farmers and
wage-earners of the South have concluded that the government
is under the domination of the rich, the manufacturers, the
trusts and the bankers, and that the tillers of the soil and the
day-laborers are only the burden-bearers and underlinings of a
plutocracy.

Another potent factor of the revolution is the growing
consciousness of lost independence. Formerly the farmers of
the South were the most independent people in the world.
They raised all the home supplies, and with the proceeds of
their surplus crops obtained ample money for living comforta-
bly and educating their children. Now the division of labor
and cheap transportation have restricted the number of com-
modities which can be produced at a profit. The farmers no
longer find a remunerative market for their beef and pork.
The Western meat is much cheaper. Flour and corn, oats and
hay, also come in from other States and cramp the local mar-
ket. The old homesteads are going to rack, lands are
washing away, and the young girls and boys of the farms are

364 GUNTON'S MAGAZINE. [ May,

ning to the towns and cities. Whole families are abandon-
ing the farms and seeking employment in the mills and facto-
ries. Those who remain behind feel deeply humiliated at their
growing dependence. The farmers find the railroads that trans-
port their products in combination, and able to levy as much
tax upon any article as it may bear without being driven out of
the markets. They find nearly everything they buy at the
stores burdened by a tariff tax and controlled by a trust whose
object is to give as little to and get as much from the con-
sumers as possible. Many of them are reduced to the necessity
of mortgaging their stock and farm effects in order to obtain
food supplies to carry them through the winter season.

The third great factor of the revolution is the change of
temper and ideas of the farmers brought about by the changed
economic conditions. The farmers at one time were the most
conservative class in the South. While they were independent
themselves, they opposed the idea of any government interfer-
ence with the affairs of trade and transportation. They held
out for the idea that each man should do as he pleased with his
own. But as their independence began to disappear, and as
they began to find trade and transportation assuming the char-
acter of huge monopolies, their conception of the duty of the
government also began to undergo a change. The establish-
ment of railroad commissions throughout the South is due en-
tirely to the pressure brought to bear by the rural population.

The Anti-Trust laws are also due chiefly to the sentiments
of the farmers. Formerly the farmers were the most pro-
nounced advocates of the principle of non-interference by the
government. Now the dominant idea among them is for
government legislation on a large scale. They have experienced
a complete revolution in their political conceptions. While this
change has been taking place in the country, and among the
factory people and small traders, the cities with their growing
wealth and independence have become more and more conserva-
tive. A conflict between the opposing ideas was inevitable.
The conflict has reached the highest culminating point in South
Carolina over the State Dispensary System, where all the cities
are violently opposed to it, and all the country population
stoutly uphold it.

The Democratic party held sway so long in the South that

1896.] POLITICAL REVOLUTION OF THE SOUTH. 365

it had become bigoted and intolerant. While the suffering pro-
letariat class was debating the changed economic condition of
the country and proposing remedies, the old leaders of the
party and the little witlings set to work to denounce every
idea and proposition which was not mossed with age, and to
characterize the author as a revolutionist. To dub every new
idea as anarchistic, and "to impeach the motives of one who
ventures to think along a new line, is the stock-in-trade of old
partisan hacks and their young toadies, who oppose every
change and believe that all good exists in the past, and that all
present evolutions presage only calamity. A marked spirit of
inquiry has prevailed in the South among the farmers, and the
liberally educated people of the cities for the past twelve years.
The people representing this spirit naturally rebelled, and fell
out of sympathy with prescriptive methods and the effort to
throttle freedom of thought, and to intimidate political action.
A prescriptive policy is always a foe to progress. It stifles free
inquiry and shackles the mind. In South Carolina the attitude
of the conservative element toward every new proposition has
been blind opposition. In a country where new ideas are not
encouraged and welcomed, the people are but herds and flocks
in servitude. The new movement in the South received a
powerful impetus from the intolerance and bigotry of the moss-
back element.

The South is deficient in that class of people which is found
in all highly enlightened communities, to wit, people who neither
believe that all truth is in the past, nor that every change is an
improvement — people who realize that institutions and ideas de-
velop by a process of evolution, who display a spirit of toler-
ation towards every honest effort to find truth and are willing
to investigate things for themselves with a frank and inquiring
turn of mind. This attitude is the dictate of intellectual cul-
ture, and this class is the salvation of any community against
stagnation on the one hand and reckless change on the other.
There are a few men in the South of commanding positions who
belong to this class, and they are conspicuous because they are
exceptions to the rule. It is alleged that the Populist organiza-
tion is only a class party, which has been built upon the preju-
dices of the country people against the town people, and the
poor against the rich. It cannot be denied that the Populist

366 GUNTON'S MAGAZINE. [ May,

party is a class party. Those who justify the existing state of
affairs and who sympathize with the privileges of the rich as
naturally drift into a class party as do those who buffet with
poverty and sympathize with its sufferings. The rich, the edu-
cated, and the cultivated classes, being remote from the com-
monalty, are too apt to have their sympathies alienated from
them.

The Populist party is indeed a class party. Therefore, one
may see why the contents of platforms are of so little concern
to them. Their own platform is only a flag that unites com-
mon sufferers and sympathizers. The class feeling is so strong
that a farmer who is other than a Populist is looked upon as a
traitor, and a clergyman in a country community who is other
than a Populist is regarded as an ally of oppression. But alas !
many of the leaders are now applying the prescriptive methods
who formerly were among the first to snarl at the party whip.
Populism is simply a protest against existing conditions and an
expression of lost faith in the ability and willingness of the old
parties to deal with modern problems. Populism, indeed,
offers no adequate solution to any political evil, has no definite
policy, except such as may be summed up in a desire for whole-
sale legislation; and this fact accounts for the eagerness of its
members to chase rainbows and follow untried leaders. A great
many people still look upon the new party as only a comet —
something soon to pass out of view. But not so. The new
movement is permanent. The farmers will never again ally
themselves with any party which does not advocate a large
amount of government control over production, especially such
as pertains to railroads, telegraph companies, etc. If it is true,
as scientists inform us, that all progress is from the homogene-
ous to the heterogeneous, political parties must necessarily dis-
integrate and multiply with the advance of civilization. This
tendency is well illustrated in the rise of new parties in Great
Britain, France and Germany. The extreme conservatives of
the Democratic party in Southern cities are akin to the Repub-
licanism of the North, while the rural Republicans of the South
are akin to the radicalism of the rural Democrats of the South.
The large manufacturing interests developing in the South will
tend more and more to bring the Republicans and conservative
Democrats nearer together. Upon the whole, there is no prob-

1896.] NON-PARTISANSHIP A MUNICIPAL NECESSITY. 367

ability that the old party lines will ever be drawn again. The
appearance of this new luminary in the political sky is not
necessarily an augury of approaching calamity. It is a safety
valve for violent passions, and it forces the other parties to
move forward. Some real advantages are already apparent.
For instance, a higher order of talent is being drafted into the
avenues of trade, manufacturing and transportation. More tal-
ented men are entering the ministry, journalism and the field of
education, medicine, etc. Formerly every young man of talent
hastened into the profession of law, and hoped to round out his
career with a term or so in Congress. Now the wrecked condi-
tion of the Democratic party discourages all young men with
political aspirations.

The writer has noticed within the past two years a grow-
ing tendency among the graduates of Southern colleges to take
University courses North or abroad. The literary awakening
in the South within the last few years, as seen in the rapid
organization of clubs and libraries, is one of the most remarka-
ble facts connected with her progress. Amidst the confusion
of parties in the South, I think, may be discerned a quickening
intellectuality, and the dawn of a higher civilization.

Non-Partisanship a Municipal Necessity.

BY D. H. BOLLES.

IN THE discussion of this issue it is indispensable that we
ascertain at the outset the true office of a non-partisan policy.
Non-partisanship is not a surrender of the essential principles
of either or any party. Its ambitions do not reach out to the
accomplishment of political results either in the nation or the
state, but only to municipal issues. Parties are, at least in
our own land, absolutely essential to a healthy national life.
Upon every citizen rests the imperative duty to belong to some
party.

The American man in his exoteric relations is an actor in
three phases of associated life — the family, the neighborhood
(or municipality), and the state (meaning as well the nation).
In the last of the three phases the average man is a practical
nullity, incompetent to discharge his duty to the state, except

368 GUNTON'S MAGAZINE. [ May,

in combination with some millions of associates. But in the
first, as a head or inmate of a family, he stands, as regards the
performance of duty, isolated and alone. None can share his
functions or obligations.

But how is it with the second or intermediate sphere ? In
this it is clear that he incurs obligations, some of which are
purely individual, while some find him, in common with his
neighbors, corresponding naturally with his interests, a por-
tion of which are strictly personal, while in others his concern
is identical with theirs. With which of these obligations and
interests, or either, has his party to do, through any legitimate
authority on its part or any debt of loyalty on his ?

We answer unhesitatingly, none whatever. The party
was organized and is maintained to accomplish distinctly
national results. The nation is its proper field of endeavor.
Its platform, in so far as it is distinctive and characteristic, is
simply an elaborate statement of its position on national issues.
Even its jurisdiction of the State, and certainly of the subordi-
nate localities, is incidental, but as national results can be
achieved only through the votes of the citizens in those pre-
cincts, its resort to them is necessary and therefore confessedly
lawful. And the municipality itself, so far as it is tributary to
the party endeavor outside of straitly municipal interests, may
properly be made a subject of party contention. But there we
draw the line. The party can interfere in a city election, or
with the administration of its proper city functions, only by a
usurpatory stretch of power.

What would be the sentiment evoked, in the event that the
delegates of either party, in National Convention Assembled,
should nominate a ticket to fill the elective offices of the City
of New York ? It would (if the act of a Democratic Conven-
tion) stir even Tammany Hall to open rebellion. Yet, if munici-
pal politics fall within the proper purview of party action,
wherein could lie the wrong? And if it is in any sense a party
matter, why not prefer the representative sagacity of the whole
organization to the dubious preferences of a local and (com-
paratively) insignificant section of it? And if it be claimed
that in this case the part is greater than the whole, and that
the New York City wing is vested with exclusive jurisdiction,
whence comes the prerogative ? If conferred, either expressly

1896.] NON-PARTISANSHIP A MUNICIPAL NECESSITY. 369

or by implication, from the party, the party can justly and
authoritatively revoke or resume it. If the party is not the
source, then it is quite clear that any attempt of the self-asser-
tive local segment, or its chiefs, to draw the party lines, to
fulminate a guast-party ticket, or to denounce as deserters those
of their associates or followers who refuse to comply with their
dictation, is a downright usurpation. That citizen, whether
Democratic or Republican, who, in a municipal contest, votes
and acts disregardful of party behests, deviates not from his
loyal duty to the party of his choice. The legitimate lines of
party action stop when they touch the municipal boundaries.
Within those boundaries he is free to speak, act and vote.

Two facts we may assume, i. The body best fitted to
administer the affairs of any municipality is its own citizens,
just as the person best qualified to manage the interests of any
man is the man himself. 2. The poorest possible curator of a
municipality is a great national party, composed of millions of
strangers, ignorant of its needs, unfamiliar with its conditions
and disregardful of the wishes of its citizens. These considera-
tions are unanswerable. In fact, party control of municipal in-
terests is a flagrant outrage on every principle of home rule.

The suggestion that it is not the whole party, but the
small fraction of it, whose locus in quo is the municipality itself,
which seeks to manipulate and control municipal affairs, has
already received its answer. That fraction, though arrogating
the name and endeavoring to wield the prestige of the party,
is utterly devoid of any actual party authority. It is, except in
the particulars presently to be mentioned, no different from
any other voluntary association of citizens.

Then why not use it (will be the prompt response) as such
an association? Why balk at the mere party name? It is or-
ganized and efficient. It has its rules and regulations, its offi-
cers and file leaders and all the machinery needed for thorough
municipal work. It is here on the spot, ready to your hand.
Why take the trouble to construct a clumsy, heterogenous, pie-
bald combination for a purpose, far better to be subserved by
rallying around the old banner and moving on with your old
comrades to its accomplishment?

The suggestion is specious and plausible. On the other
hand, the answer is easy and decisive. First, then, taking this

370 GUNTON'S MAGAZINE. [May,

city as an illustration, in any future struggle on strict party lines,
the conditions that have obtained in the past will continue un-
changed. The party that has dominated the city will regain
and retain its control. It is indeed claimed in some quarters
that the Republican party has so gained in strength that, in a
square contest, under ordinarily favorable auspices, its chances
are at least equal with those of its adversary. But that view is
illusive. The elections in 1894 and 1895, each in its different
way, conclusively prove it. As long as the voting constituency
remains what it has been, is now and is likely to continue, the
city will, despite the best Republican endeavor, lie at the mercy
of Tammany Hall. The only hope of emancipation and relief
lies in a resumption of the non-partisan tactics of 1894.

Second. — But even if the claim just disputed is well founded,
and the Republicans should at the next city election succeed in
wresting the control from their adversaries, what hope, what
trust, what well considered faith could we base upon that
result ? and especially if victory should follow victory in
favor of the new domination? It was not from any inherent
vice in the Democratic party, peculiar to that organization, and
not shared by other men, that the long and shameful history of
its municipal dominion has almost attained the proportions of a
national disgrace. They became freebooters, because the con-
trol of the affairs of the city, not being a legitimate party object,
their campaigns were predatory in quality and character from
the outset, and they regarded the city, its wealth, its resources,
and its long train of remunerative offices in the light of spoils,
and treated them accordingly. The leaders were engorged with
sudden wealth ; their henchmen were rewarded with posts of
trust and importance ; the whole gang of followers fed at the
public crib, and the power of Tammany Hall strengthened and
consolidated.

Is human nature, dressed up in Republican form, so im-
maculate and impeccable, so variant in quality from its Tam-
many counterpart over the way, that it would be invulnerable to
the prodigious temptation held out by the captured city ? Are
the conditions now, or are they likely to become, so changed
that the curse of party domination in the past is to be trans-
muted into a blessing in the time to come?

The experiment of the Republican supremacy has not been

1896.] NON-PARTISANSHIP A MUNICIPAL NECESSITY. 371

tried, but it is not difficult to presage the probable outcome.
The truth is, and it is one of the most instructive lessons of our
annals that, with the great prize of city control confronting him,
it is not within the power of the average politician to withstand
the terrible temptation. Be his qualms of conscience at the
outset what they may, the stress of his own wants and ambition,
and the tremendous urgency of the party's greed, are sure, in the
end, to overbear and suppress them.

While, then, the devoted party man, when acting with his
comrades in his party's legitimate field of movement, is to be
respected as a valuable, indeed an indispensable, factor in the
cause of the national well-being, as a manipulator of city
interests he is not only out of his proper orbit, but his energy
is ominous of mischief and harm.

Enough has been adduced to warrant, if not compel, assent
to the following propositions.

First. — Partisan control of municipal administration is
hostile to the municipal welfare.

Second. — The only hope of municipal emancipation lies in
the fearless and faithful enforcement of the non-partisan policy.
Hence,

Third. — The non-partisan has vindicated his right to a
foothold, and to the respectful consideration even of his
adversaries.

372 [May.

Editorial Crucible.

THE NEW YORK Sun calls for the abolition of the term
"bimetallism," in connection with our monetary discussion.
It insists that the term only serves to mislead. Those who are
talking loudest for bimetallism don't want bimetallism at all,
and would oppose any plan that would give them bimetallism.
What they want is free silver, which everybody knows would
be monometallism. The Sun's frank way of stating the case
maybe a little unpleasant to the free silver people calling them-
selves bimetallists, but its position is about correct. Free coin-
age of silver to-day does not mean bimetallism, and we have
great difficulty in believing that those who advocate free coin-
age at 1 6 to i think it is bimetallism. The question of free
coinage is the question of a silver standard. If the silverites
want to make that the issue, their fate can be predicted with
great precision.

THE CLEVELAND Plaindealer jubilantly announces that
the Democratic convention at Chicago will announce for the
free coinage of silver. It quotes Palmer, of Illinois ; Voorhees,
of Indiana; Rice, of Ohio, and the Washington Post as
authority for the prediction that the free silverites will have a
majority of seven votes in the Chicago convention, and names
the states from which the free silver voters are to come. If
this be true, the Democratic party is evidently going to try to
be consistent with itself. Wildcat banking, fiat money, free
silver and free trade would make a very natural platform for
that party. It has always been very fertile in financial and eco-
nomic as well as political wrongheadedness. This is just the
year for exterminating that kind of wild-eyed democracy, which
stands only for industrial disintegration.

AN EFFORT is being made by interviewing railroad presi-
dents and college professors to revive the impression that the
industrial depression is due to fiscal rather than industrial

1896.] EDITORIAL CRUCIBLE. 373

causes. By this means it is hoped in the coming campaign to
shelve the tariff question by adding emphasis to the money
question.

It is manifest to even the Evening Post that the administra-
tion party has lost its grip upon public confidence; that all the
booming they gave to the Wilson bill failed to revive public
confidence in the free trade policy. Their only hope now is in
minimizing the force with which the reaction will come. This
they hope to do by filling the air with the sound money cry.
Reform in our monetary system is, indeed, highly necessary,
but so it is in our tariff system, and the havoc this administra-
tion has created with industry should be corrected in short
order by the next Congress. But the tariff revision should be
accompanied or immediately followed by a vigorous reform in
our monetary system. This should not consist in the mere
establishment of gold monometallism, but it should comprise a
genuine reform in our banking system, which is far more im-
portant than monometallism or bimetallism. Sound banking
woiild do more to give uniformity to the rates of interest and
make borrowing for solvent business men and farmers easy
than any legislation about the coinage could possibly do. The
ssue should be protection and sound banking. Both free trade
and free silver should be permanently dropped from the political
calendar.

MR. CHARLES A. TOWNE, of the Sixth Minnesota District,
has delivered one of the most carefully prepared addresses given
in Congress on the silver question. His speech shows accurate
compilation of facts presented in support of free coinage, but
unfortunately his reasoning rests upon a sandy foundation.
The chief point in his speech was to show that the fall in prices
is due to the appreciation of gold, in proof of which he cites the
index numbers, which, for such a purpose, are worthless. To
take a hundred articles and average them may show that a
change in the aggregate value has occurred. It could do
nothing to show whether the change was due to monetary or
economic causes. If the change in price is due to changes in
the value of money, all commodities will be affected in the
same direction and in precisely the same degree. Instead of

374 GUNTON'S MAGAZINE [May,

making this point clear, the index numbers obscure it by re-
ducing all the commodities to a general average.

Besides giving charts showing the movement according to
the index numbers, Mr. Towne gives tables showing the change
in the value of the different articles, which tables prove the
worthlessness of his index-number charts. They show that
during the period covered the value of some articles has risen
25 per cent.; others have fallen 25 per cent., proving that the
change is not due to the money, but to economic causes re-
lating to the production of the articles themselves. Mr. Towne
could not have given anything which more effectively destroys
the chief prop of his whole argument than this table of prices.
One might as well try to measure weight with a yardstick, or
cloth with a pint mug, as to ascertain the effect of gold on the
movement of prices by the use of the index numbers.

THE 27TH OF JUNE will be the fiftieth anniversary of the
repeal of the Corn Laws, and the Cobden Club, London, is
preparing a great celebration in commemoration of that event.
It must be something of a shock to the members of the Cobden
Club to learn that just when they are trying to emphasize the
virtues of England's free trade policy, by celebrating the fiftieth
anniversary of its adoption, the English government, with the
largest popular majority behind it in both the House of Com-
mons and the House of Lords that has been known for a long
time, is preparing to return to a protective policy, and so, in
effect, officially announce to the world that, after all, the Cobden
doctrine was but a temporary local expedient.

To be sure, for a time, it helped English manufacturers,
but it practically ruined English farmers, and now its virtues
for manufacturers are rapidly evaporating, and a return to pro-
tection seems the only way of saving England from a slow but
sure industrial decline. Fortunately for England, her states-
men have a large residuum of hard common sense. They never
were pedantic enough to allow a theory, however sacred, to
stand in their way of attaining any important object. And
now, that under free trade, they see England is losing her hold
on foreign markets, they are taking steps again to get the ben-
efit of a protective policy. By way of softening the blow, how-

1896.] EDITORIAL CRUCIBLE. 375

ever, the new name under which Great Britain is to return to
protection is Imperial Federation.

It is a little cruel in Mr. Chamberlain to project his scheme
for a new protective regime just at the time the Cobden Club
is commemorating the fiftieth anniversary of the repeal of
the Corn Laws. But it only shows that the administration
thinks there is more statesmanship in pushing towards protec-
tion for the future than in glorifying the free trade of the past.

ENGLAND'S TREASURY on April i6th had a surplus of
$21,059,000, which Sir Michael Hicks-Beach declared to be the
largest surplus ever known. The United States Treasury at
the same date presents a deficit for the period in which the
present administration has been in power of $262,000,000, as
represented by increase of funded debt merely, and some mill-
ions more, if all means of deficiency in revenue are added.
This also is the heaviest deficit known in this country in time of
peace, and exceeds the cost of every war save the last.

Sir Michael Hicks-Beach, moreover, without intending to
expound protectionist doctrine, declares that " British and
Irish spirits are entirely displacing foreign spirits " in the home
market, and that India and Ceylonese tea, produced within
British dominions, were displacing Chinese teas in English
markets at the rate of 10,000 ooo Ibs. per annum. But Secre-
tary Carlisle is silent upon the question whether any American
product is displacing the foreign in any market, unless it may be
our workingmen, of whom about 28, 500 left the country last
year in excess of all that arrived, thus attesting that the con-
dition of labor is, for the first time in thirty-five years, better
abroad than at home.

America is, however, the more prosperous of the two coun-
tries for statesmen. Poor Mr. Gladstone, after inheriting a
fortune supposed to be ample for all the needs of a gentleman,
and living prudently, is obliged to signalize his retirement, from
the longest career as a party leader ever known, by selling his
library and works of art to reduce his expenses. On the con-
trary, our American President, after the most sudden and brief
participation in party leadership which has ever crowned per-
sonal mediocrity with national disaster, reviews his short period

376 GUNTON'S MAGAZINE. ' [ May,

of office-holding, only twelve years in all, to find that it has
lifted him from a bachelor's flat in Buffalo into the honor of

«

being the first to retire from the Presidency a millionaire.

THE NEW YORK LEGISLATURE has just passed a law com-
pelling railroads to carry bicycles free of charge. Why not
pass a law that passengers shall ride free and have done with it?
This is a part of the socialism by which farmers ask the govern-
ment to pay the freight of their export products to foreign
ports, which gave the Interstate Commerce Commission the
power to regulate railroad tariffs and which created the bil
now before the New York Legislature restricting the combina-
tion of productive enterprise under the pretense of preventing
"corners." All this only shows what dangerous legislation is
possible under a democracy when the voters are ignorant of '
economics and political science. This bicycle law is simply
a bid for the votes of bicycle riders at the expense of the rail-
roads. It is a reflection upon the good sense and public integ-
rity of the political party responsible for it.

If a bicyclist should have his wheel carried free, why should
not an equestrian have his horse carried free when, he wants to
go by rail? The popular assumption that railroads and large
corporations should constantly be made the victims of attack
by legislation, shows a state of economic viciousness. This
kind of legislation is constantly being introduced into state leg-
islatures as a means of compelling corporations to pay black-
mail to political lobbyists and cheap legislators. The public
sentiment which has made this possible is but the natural fruit
of the educational campaign to which the American people
have been treated during the last decade by free trade doctrin-
aires and socialist propagandists. It was largely a campaign
of industrial blackguardism for the sole purpose of discrediting a
tariff policy; thinking that ignorant antagonism would be in-
flamed more easily by constantly pointing to successful business
men and large corporations as plunderers of the poor. The
consequence is, the nation is saturated with semi-socialist senti-
ment which is bearing fruit in a crop of dangerous socialistic
legislation, which, if continued, will succeed in crippling the
industrial enterprise of the nation.

1896.] EDITORIAL CRUCIBLE. 377

THERE is something strikingly elastic about the English
Tories. While they stand normally as the defenders of tradi-
tional institutions and die-in-the ditch antagonists to political
reform, they are constantly doing the unexpected and passing
measures more radical than the radicals propose. It was in
this sporadic way that the Tories gave England the Ten-Hour
Law in 1846 and extended the suffrage to workingmen in 1867,
after a protracted opposition to both. The present Tory ad
ministration is repeating this characteristic. Always the oppo-
nent of Irish legislation, the Salisbury administration has now
introduced a more radical land bill than the Irish were able to
extract from Gladstone.

The new bill provides that tenants may sublet their hold-
ings without the positive assent of the landlord ; and that if the
rent is too high for a tenant to pay, he can go into court and
have it reduced. That when new leases are made and the
value of land has been increased by improvements, the rent
cannot be adjusted to the new value due to improvements.
There is probably not a country in the world where the tenants
have such favorable legislation as the last two bills give Ire-
land. Yet the Irish tenantry seem to be no better off after this
legislation than before, which shows that the real difficulty is
not the question of rents. Irish farmers would hardly be able
to get a living if there were no rents to pay at all. Their pov-
erty is due to the backwardness of their industrial methods ;
they are too poor to have the implements of modern farming,
and their holdings are too small to permit of truly economic
methods. There is really no hope for making any considerable
improvement in the condition of Ireland by fixing rents. What
Ireland needs is a diversification of industries. She needs
manufactures so that she can have a domestic market for what
she produces and the development of capitalistic methods
throughout her industries. The greatest injury that England
inflicted upon Ireland was when she suppressed her manufac-
tures. She can never atone for that by any socialistic tinkering
with the rents. A return of manufacturing industries and cap-
italistic methods would be worth more to Ireland than any land
legislation or a Parliament in College Green or any other
change in her political institutions. Her disease is economic,
and diversification of industries is the only cure.

378 [ May,

Leading Events of the Month.

IMMIGRATION.

Congress has again taken up the immigration problem, and
within the past few weeks several measures have been intro-
duced embodying new restrictive and regulative features. One
of these, prepared by Senator Lodge, requires that the appli-
cant for admission be able to read and write in the language of
his native country; another, reported in the House, provides
that all immigrants must obtain from the United States Consular
officers, at the port of embarkation, certificates showing that
they do not belong to any of the prohibited classes; and Repre-
sentative Linton has a bill establishing a property test of $500
in money for each immigrant, and requiring a residence of
fifteen years before citizenship can be attained.

The requirement of the second bill has already been in
force in a limited sense for many years, with respect to immi-
grants from certain Oriental countries, but undoubtedly it
would materially lessen the chances of evasion if made general
in its application. When the only examination is at this end of
the voyage, the expense and hardships of deportation naturally
weigh against over-strict enforcements of the law in many
cases.

It certainly should not be considered that ability to read
and write in his native language of itself qualifies a foreigner
for residence in the United States. As a test of admission,
however, this would probably furnish some indication of his
capacity to learn the language and comprehend the customs
and institutions of the American people.

The amount of money and length of residence called for in
the Linton bill are both somewhat excessive, but, on the whole,
a property qualification is by far the most effective test of indus-
trial and intellectual capacity. The real danger to this country
from European immigration is in the cheap-labor element
that enters into it, and out of which have grown up our ' ' foreign
colonies" and the sweating system. It is almost impossible to
prevent this except by requiring some conclusive proof of
ability to earn a living; and for an European laborer to have ac-
cumulated several hundred dollars preparatory to coming here
is, perhaps, as good an evidence of personal stamina as we need

1896.] LEADING EVENTS OF THE MONTH. 379

demand. The necessity for legislation in this direction is
pressing. It is true that owing to industrial depression the
average monthly immigration has now fallen to but little over
one-half what it was in 1892, but of this number an increasingly
large proportion is the undesirable overflow of the Latin
countries of Southern Europe. During April there was an
immense increase in Italian immigration, attributed to various
temporary causes. Many of these new-comers had to be de-
ported, and those landing, it is said, possessed an average of
only about $8 apiece in money.

This is a field which the new and broader policy of national
protection as a scientific principle should no longer neglect.
As it is at present, whatever indirect protection is given Amer-
ican workingmen at the custom house, is in constant danger
of neutralization by direct competition with foreign cheap
laborers in person — the growing surplus which Europe, under
her low-wage and foreign market economics, is incapable of
taking care of at home.

RAINES LIQUOR-TAX LAW.

By the signature of Governor Morton the Raines bill be-
comes a law, and on May ist the entire excise system passes
from local to state control. Undoubtedly this concentration
will result in a more efficient administration of excise affairs,
and as a matter of fact we shall probably have much less politi-
cal corruption than has existed heretofore in the hundreds of
petty boards acting with independent discretionary powers all
over the state. The new commissioner and his assistants will
constitute a definite body of public officials upon whom respon-
sibility may be fixed. New York already has more saloons
than any other state, and the number ought to be reduced.
Uniformity in the regulations respecting location of saloons,
character of dealers, etc., will probably take the "personal
pull " element largely out of the situation, while the abolition of
free lunches is a particularly excellent feature, from a purely
economic standpoint.

But, on the other hand, it is doubtful if the actual con-
sumption of liquor can ever be materially reduced by legisla-
tion of this character. It attacks the problem at the wrong
end. Saloons exist solely because of the demand for what they

380 GUNTON'S MAGAZINE. [ May,

furnish, and they are most numerous and thriving where pov-
erty and ignorance are most dense. Indeed, it will not be sur-
prising if the disreputable gin-mills prove to be the very ones
that can best afford to pay the increased tax. The real reform
needed, therefore, is social rather than penal; it should deal
with the conditions that create intemperance and its accom-
panying evils. Already, in New York City, a strict enforce-
ment of the Sunday prohibition has simply resulted in a largely
increased Saturday night trade in bottled liquors.

The peculiar feature in the discussion of all measures of
this character is the conflict between the interest of revenue
and reform. If revenue is the object, then the more saloons
the better; but if gradual extermination is the purpose, then a
decreasing tax return ought to be a welcome sign. The pres-
ent law may accomplish both results to a certain extent, but
the inconsistency of this crowning argument in its favor still
remains.

JUDGE CLEMENT'S DECISION.

A decision of considerable importance to trades unionism
has been recently handed down by Judge Clement, of Brooklyn,
in a case involving the right of labor organizations to collect
fines for violations of rules. It was held that a labor union, as
a legal institution, may regulate the rates of wages and hours
of employment to be accepted by its members, and enact by-
laws that members shall not work with non-union men. Fines
to enforce these rules may be legally collected.

It is to be hoped that this decision will be sustained. Effec-
tive organization is the strong feature of the whole working-
men's movement for high wages and improved conditions. A
labor union is formed for mutual advantage, and whoever be-
comes a member is supposed to do so with full understanding
of its regulations and his obligations to abide by them. This is
the fundamental principle of all organized bodies, upon which
their self-maintenance depends. Judge Clement's opinion,
therefore, introduces nothing new, but simply recognizes the
right of labor unions to share with other organizations in these
common and necessary privileges.

At the same time, if trades unions would devote themselves
more thoroughly to educational work with their men, so that

11896.] LEADING EVENTS OF THE MONTH. 381

the fact of membership became a definite guaranty of integrity,
and working with a "scab" actually meant working with an
inferior craftsman, there would be less temptation to violation
of rules, and, in the public estimation, more justification for
their enforcement.

GREATER NEW YORK BIEL.

Though the New York-Brooklyn consolidation measure
passed the Assembly only by the aid of Tammany votes, and
has since been officially disapproved by the mayors of both cities,
the present programme seems to be to make it a law any-
how. In all the hearings before Mayors Strong and Wurster,
the bulk of the opposition argument was directed, not against
the consolidation idea, but against the present unstatesmari-
like and unbusinesslike method of bringing it about. The pop-
ulation of the territory to be united nearly equals that of the
whole United States in 1789, and as Mr. Seth Low pointed out
before Mayor Strong, the original federation of the states was
not decreed until a constitution had been prepared, discussed
and accepted. This is certainly the logical method of proced-
ure, whether the two cases are wholly parallel or not. But un-
der the new plan, consolidation is fixed for a certain date,
whether the Charter Commission shall have been able to master
all the immense complexity of details, local and constitutional,
by that time or not. This is perhaps the most important un-
dertaking of the kind ever attempted, and it is difficult to see
the necessity for so mudn haste. The present measure has been
justified on the ground of obedience to the popular will, but un-
questionably the real will of the citizens who voted to con-
solidate these two great municipalities was and is that the
union shall be effected by a plan of action somewhat commen-
surate with the magnitude of the interests involved.

ANTI-" CORNERING " LAW.

A bill just signed by Governor Morton makes it a mis-
demeanor for any corporation to enter into a combination or
conspiracy for the purpose of forcing up the price of the neces-
saries of life. This was directed principally against a reported
' ' combine " to put up the price of coal. Such legislation is,
doubtless, intended to protect the public, but it usually hampers
capital, to the final injury of the public. The real law that will

382 GUN-TON'S MAGAZINE. [May,

more and more correct these speculative tendencies is economic
rather than statutory. Ability to offer the public superior ad-
vantages is about the only power that continuously holds great
corporations and trusts together. Whenever attempts are made
to increase profits by arbitrary methods, successful competition
again becomes possible, and the "combine" usually falls
apart by its own weight. More fortunes by far have been lost
than gained in this way. A growing recognition of the fact
that competition is always in operation, potentially if not
actually, will tend to eliminate "cornering" schemes, and at
the same time preserve to the community the immense ad-
vantages of concentrated enterprise.

THE FRENCH CABINET.

The French Socialists are having an opportunity to observe,
in the troubles of their leaders, M. Bourgeois and his associ-
ates, some of the difficulties of practical statesmanship. For
two months past the cabinet has been proceeding without the
confidence of the Senate, and now the first foreign complication
of importance results in the resignation of the Foreign Minis-
ter, M. Berthelot. This was the dispute over appropriating a
part of the Egyptian Reserve Fund for the expenses of the new
British expedition against the dervishes on the Upper Nile.
The French press vehemently denounced the scheme, and the
French and Russian members of the Egyptian Public Debt
Commission lodged a formal protest against it, but M. Bour-
geois has no further action to report except'that secret negotia-
tions with England on the subject are in progress. It is diffi-
cult to see just what "negotiations " are going to accomplish,
now that the appropriation has been made and expended and
the expedition is well under way.

CUBA.

The Cuban insurgents, now "bandits, " according to General
Weyler's latest decree, appear to have won at least two im-
portant engagements during the past month, and without doubt
several filibustering expeditions have succeeded in landing
military supplies on the island. During the coming rainy
season, moreover, the native fighters will have a distinct ad-
vantage over foreign troops. Mr. Murat Halstead, in the April
Review of Reviews, gives the white population of the island as

1896.] LEADING EVENTS OF THE MONTH. 383

about double that of the colored. This is a considerably better
showing than could be made, for instance, by the " Black
Republic " of Hayti, and it is possible that a democratic ex-
periment in Cuba might prove successful — at least, relatively to
the present regime. Neither the record of the Spanish rule
for centuries, nor the general character of that nation, gives
much promise that administrative reforms in Cuba would be
genuine or lasting.

The President does not seem inclined to follow the sugges-
tion of the Senate resolutions, recently adopted by the House,
that he use his good offices with Spain for the recognition of
Cuban independence. Instead, he has appointed General Fitz-
hugh Lee to succeed Consul- General Williams at Havana, and
it is understood that General Lee is to investigate the actual
military situation, and supply the administration with official
information. This is probably the wisest course to be taken
under the present circumstances.

INTERNATIONAL ARBITRATION.

Lord Salisbury's statement favoring propositions looking
towards a permanent Court of Arbitration for all disputes be-
tween England and the United States, makes the discussion of
that plan at once important. However great the advantages
of such a tribunal, there are manifestly some classes of funda-
mental international privileges which could never be submitted
to it, and should be excepted from any general arbitration
agreement. In other cases also, the whole significance of a dis-
pute might depend upon an immediate decision, or at least an
enforced suspension of operations until the arbitrators could
act. The slaughter of seals almost to the point of extermina-
tion, during the long Bering Sea disputes, is an example in
point. Furthermore, a general agreement of this kind should
include all the American republics or none.

384 [May,

Economics in the Magazines.

CURRENCY BY GOVERNMENT NOTE. Deficiency of Revenue
the Cause of our Financial Ills. By John Sherman, in T/tc
Forum for April. The Ex- Secretary marshals the facts show-
ing that had there been no deficiency of revenue there would
have been no inability on the part of the government to redeem
its notes in gold. But he makes his proof to rest entirely on
the post hoc ergo propter hoc argument that no inability to re-
deem the notes except by borrowing gold occurred until after
the revenue had fallen short of expenditures. This is, how-
ever, inconclusive and unsatisfactory to many minds. There is
the " neglected element " in Mr. Sherman's argument that no
matter how great the excess of revenue over expenditure, it
will not furnish the government with gold with which to re-
deem the notes in gold unless the revenue is itself paid in gold,
and that not a penny of customs duties paid in the Atlantic
states has now been paid in gold in several years. Mr. Sher-
man may say, " if there is a sufficient greenback revenue the
government can easily buy the necessary gold with the green-
backs." It can, so long as those greenbacks are at par and the
maintenance of the greenbacks at par depends upon gold being
in the treasury to redeem the greenbacks with. After all,
therefore, Mr Sherman's specific for keeping the gold in the
treasury depends upon the gold being in the treasury. It ar-
gues in a circle. It is like the negro's reason for sitting in his
roofless cabin under his tipped-up dining table during the rain :
"Why don't you put a roof on your house, Sambo?"
" I can't, massa, because it rains."
" But why don't you put a roof on when it don't rain ?"
" I don't need no roof when it don't rain, massa."
If a gold revenue is necessary to enable the government to
supply the merchants with $305,617,419 in gold for export be-
tween July i, 1892, and December i, 1895, and with $54,649,-
093 in addition for the banks to hoard, and if the effect of there
being $500,000,000 of government notes out is that the whole
of the customs duties are, in fact, paid in notes needing re-
demption, and not one cent of it in gold, and if the ability of
government to buy gold for redemption, with its irredeemable
notes, depends upon redemption actually occurring, then we

. ] ECONOMICS IN THE MAGAZINES. 385

land in the petitio principii, that the government's ability to re-
deem depends on its ability to redeem.

The point is how, with no revenue whatever necessarily
payable in coin, the government can maintain coin redemption
except by buying the coin. It cannot be done.

Mr. Sherman concludes his article by praising our existing
government currency as the best in the world.

It is open to grave question whether a currency of notes
which has absolutely no asset behind it to secure its redemption
except the excess of revenue over expenditure, which is not an
asset at all, but a contingency and an accident, liable to disap-
pear at any moment, can be truly said to be the best currency
extant, particularly when one of the incidents of receiving it for
customs duties is to render it impossible for the government to
collect the kind of revenue it needs to collect, in order to main-
tain the value of this very currency. Should McKinley be nom-
inated and elected to the Presidency, and should John Sherman
have charge of the Treasury, it by bare possibility may happen
as a coincidence that when the greenback revenue shall be
restored, the demand for gold for export will stop and the neces-
sity of obtaining a revenue in gold will disappear. But we can
no more believe this result to be absolutely sure to follow than
that a farm which raises nothing but pumpkins can by no possi-
bility be driven to the necessity of getting its eggs by purchase.
In fact, Mr. Sherman's opinions, though in line with an opinion
in favor of the superiority of a government currency over a bank
currency, once given by the banking economist, Ricardo, do not
seem to us to rest on sound principles. We think Ricardo failed
to appreciate the effects of absence of assets on a government
currency.

IRRIGATION. Pump Irrigation on the Great Plains. By
H. V. Hinckley, in The Engineering Magazine for April. Mr.
Hinckley selects points in Southwestern Kansas, not far re-
moved from the Colorado and Oklahoma lines, where there is
no rainfall sufficient to grow any crop for the food of man or
beast, and shows that by windmill pumping, crops and fruits
worth from$i8 per acre in wheat, to $1,000 per acre in orchard,
can be produced. The cuts enforce this fact with abundant
illustrations which have the force of proof. A curious ques-

386 GUNTON'S MAGAZINE. [May,

tion is whether the water supply thus obtained is really perma-
nent, or whether, as it comes to be drawn upon, it may not,
like the petroleum supplies in Northern Pennsylvania, or the
natural gas at Pittsburg, fail. Mr. Hinckley is frank enough
to declare that what is really needed is a means of getting
water by "sun power," as that is the only form of power
that will work with an intensity proportionate to the drought.

LAND-OWNERSHIP. Limitation as a Remedy. By John
Clark Ridpath, LL.D., in The Arena for April. Land owner-
ship is given as the first title under which "limitation as a
remedy " is to be considered. We infer that limitation, as to
all other natural opportunities, and perhaps faculties, is to fol-
low. We are to have limitations on the wealth one can accu-
mulate, perhaps on the knowledge one can acquire, since that is
only intellectual wealth, on the number of persons one can
employ, the number of sheep and cattle he can own, the num-
ber of copies of a magazine he can circulate, the number of
books he can write or print, the number of shares he can hold
in any corporation, etc. Our English forefathers preceded us
by limiting the number of sheep one man could own several
centuries ago. But the most usual limitations imposed on man-
kind have been in the line of either one wife, one vote, one
Church, one king and country, one name without aliases, one
office, one college course, one homestead, one seat in a railway
car, one flag, one political party, and perhaps one slice of bread
to two fish-balls. Whether we are limited to one life or not is
a much disputed problem. Also whether we have all one
genesis, and are sprung from one ancestor or germ cell. Mr.
Ridpath 's aim is to prove that the class of men who acquire
more land than can be used by them to the best advantage of
the community are to be restricted — whether as to acreage, or as
to value, or as to number of tenants or modes of use, we are
not informed. The North American Indians, and indeed all
savage races, agree with Mr. Ridpath, but are more radical.
They believe there should be no private title to land at all.
Perhaps if Mr. Ridpath could only assemble all who are
opposed to the monopoly of land by private owners on dress
parade, the mere power of this exhibit would settle the ques-
tion without further argument.

1896.] ECONOMICS IN THE MAGAZINES. 387

RELATIVITY. The Relativity of Political Economy. By
Francis W. Howard, in The American Catholic Quarterly Review
for January. A valuable study, based mainly on the Comtean
doctrine, that sociology is, of all the sciences, that which com-
bines greatest complexity in phenomena with least certitude in
general conclusions (i. e., laws). With all due respect for the
clerical writer's distrust toward the conclusions which men are
able to arrive at concerning the laws which govern society in this
life, we must be permitted to doubt whether, in a strictly
scientific point of view, the problem is made clearer by capping
them with all the hypotheses which are possible concerning the
life to come. Mr. Howard says: "In no two ages and in no
two countries does man obtain his subsistence in exactly the
same way, and consequently the political economy of one age
may have but little in common with that of the next." We
answer, Is it any different with ethics, theology or faith? Is
the Christian world to-day willing to sink seven millions of lives
to recover the holy sepulchre from the infidel ? Does it even
imagine that a sepulchre can be holy ? Is there not at least as
great "relativity" in all the other lines of thought, and
especially in theology, as in political economy ? Did not
Christianity in the first century find its highest theological
formula in a belief in the immediate end of the world ? Is
there anything left of this belief to-day ? What has become of
the discussion between the advocates of the Homoousion and
the Homoiousion which once rent the Church ? Obviously as
rapid a transition occurs daily in theological as in economic
controversy. Even the Catholic Church moves its doctrinal
stakes at least once in a half century. Within the last half
century it has added the immaculate conception of Mary and
the Papal infallibility to its doctrinal stock. It is as impossible
for the human mind to stand still in its doctrinal creeds as in
scientific theories.

388 [MAY,

Book Reviews.

SOCIALISM: ITS GROWTH AND OUTCOME. By William Morris

and E. Belfort Bax. London: Swan, Sonnenschein & Co.

New York: Charles Scribner's Sons. 1893. Pp. 335.

This purports to present the history of the development of
Socialist views, mainly through brief biographical notices of the
persons whose names are prominent in connection with the
topic. It is superficial both in its omissions and in its illustra-
tions, omitting the practical examples of Socialism among the
Greeks, such as their "common tables," and the Socialist
theories of Plato, and their refutation by Aristotle, all of which
is doubtless ignored because it tends to refute the favorite
superstition of the "scientific socialists" that they are an un-
refuted and original product of modern times. To recite that
every form of modern Socialism ran out its race in Greece
twenty centuries ago, and that speculation, in that day, dosed
the world with its "looking backwards," as fully as in ours,
and betook itself to its "phalansteries" as successfully as in
the past half century, is a form of thought which is not welcome
to the dreamer who desires it understood that his dream is an
entirely new one.

Nor do Messrs. Bax and Morris attempt to notice the
modern economic argument that the thing that is new in what
they call modern capitalism is that it attains to the greatest
universality and equality in the consumption of enjoyable goods
through the concentration of the ownership of non-enjoyable
goods or reproductive agents (such as land, mines, machinery,
etc.) into the hands of the wealthy few who can afford to accept
the lowest and smallest percentage rate of compensation for its
use, so that society at large is served more cheaply and econo-
mically by large capitalists than by small ones. No allusion is
made to the argument that the intensity of individual selfish-
ness is imperatively required to stimulate the average man to a
sufficient rate of production to sustain the whole mass, that
when this stimulus is applied to the utmost to all men, none too
much for the needs of all is produced, as shown by the fact that
the whole quantity produced is consumed, and all of it within
the year in which it is produced, except the small modicum of

i806.] BOOK REVIEWS. 389

added annual wealth which can only be made profitable to its
owner by being converted into machinery, capital, or other
form of stored-up labor.

A vast amount of good new white paper and excellent
black ink are constantly being consumed in the production of
Socialist books, all of which are themselves a proof that a fair
revenue is at all times derivable by thrifty profit-makers from
telling the poor, for a trifling charge, how poor they really are.
It is greatly to be hoped that in due time the course of individ-
ual profit for these writers will be found in spreading before
their readers some analysis of the economic arguments which
go to show that equal diffusion of the ownership of reproductive
wealth (such as Roscher shows to prevail among the Caribs,
Kamschatkans, Beloochees, Zulus and all savage tribes) is fatal
to social progress and productive only of the most intense indi-
vidual slavery and social degradation. Human life becomes so
cheap where equality and community in the ownership of the
land prevails, as in Ashantee and Dahomey, that when a chief
dies several hundred virgins must be slain in order that the
canoe which holds his corpse may be floated in the ditch which
is filled with their blood. In a capitalistic civilization, on the
contrary, like that in the United States or England, human
welfare becomes of so much interest to all the members of
society that a failure by an employer to pay a dozen men as
high wages as they were heretofore paid, will cause a hundred
thousand men to lay down the tools of their industry and inter-
est themselves emotionally in the wage-rate of men or women
whom they never saw, whose occupations they do not follow,
and even whose names and nationalities they do not know or
care to know. Men like Bax and Morris believe that there is a
market for books which incite to discontent and none for books
that explain economic law. Hence they write histories of society
into which no higher economic law can find entrance than that
the naked pursuit of profit by employers, when left to itself, is
not a sufficiently humane, or just or intelligent economic force
to which to entrust the destiny of employees. Very true ! But
as the destiny of employees finds psychic forces within the
breasts of the employees themselves as potential as the sense of
profit in employers, why not credit both forces with their due
potency in the evolution of society ?

390 GUNTON'S MAGAZINE. [May,

POLITICAL ECONOMY FOR HIGH SCHOOLS AND ACADEMIES. By
Robert Ellis Thompson, S.T. D., etc. Boston and London:
Ginn&Co., 1895. Pp. 108, izmo.

This compact little work is well conceived and admirably
executed, in most respects, as a first book of instruction in eco-
nomics. It will be read with more interest by most adult busi-
ness men and "new" or "science" women, than the longer
and more abstract treatises. It is on the lines of Hamilton, the
first Congress, List, Carey and the present Republican party,
as to protection. On the issue of bimetallism, it regards the
fall in silver as being a consequence instead of the cause of the
demonetization of that metal. On " Domestic Commerce, " and
on "Socialism, Communism and Anarchism," the book is in-
structive and sound. But even Homer sometimes nods. Pro-
fessor Thompson has evidently never dug for clams, until after
they were boiled and deep in the soup. If he had, he could not
have written (on page 24) of the " alertness of eye and hand
needed to keep him (the clam) from escaping. " He must have
borrowed his notion of this alertness from the story of Charles
Lamb, at dinner, delving with his long-handled spoon down into
the depths of the soup tureen for another clam. For a time it
escaped him, but bringing it up at last, he added (this is a strictly
English pun): " De profundis clam 'av I." But on the beach
clams don't usually exhibit speed.

THE LAW OF CIVILIZATION AND DECAY: AN ESSAY ON HIS-
TORY. By Brooks Adams London: Swan, Sonnenschein
& Co., Ltd. New York: Macmillan & Co. 1895. Pp. 302.
Price, $2.50.

This is a remarkable and stirring survey of history for
two thousand years past, from the standpoint of a philosopher
who sees in the conflicts and wars of that period mainly a
struggle between the people whose action is controlled by
economic motives and material interests, on the one side, who
may fairly be called industrialists or money worshippers, and
the people who are dominated by imagination (faith, religion,
priesthood, -the supernatural), on the other, who, in the light in
which Mr. Brooks presents them, are usually ' ' Christ wor-
shippers," though the local ascendancy of any other religious
cult, based on the supernatural, if such there were, would not

1896.] BOOK REVIEWS. 391

conflict with the author's philosophic view. This being the
major key in his strain, or what in dramatic literature would*
be called the "hero" and the "heavy villain, " it in no small
degree sustains the interest and piques the curiosity to find
that throughout the story there runs another purely economic
drama between the money lenders or usurers or coiners of gold
and silver, on the one side, and the debtor classes, laborers and
producers, small farmers, merchants and traders, on the other.
One might expect the latter to form a subdivision of the
money worshippers, but they are not. The cleavage between
the materialist and the religious class is one that cuts society
perpendicularly, leaving an equal portion of upper classes or
leaders, generals, statesmen and capitalists to both. The
cleavage between the money making or lending, and the money
borrowing class, is horizontal, dividing always the enslavers
from the enslaved. Mr. Adams makes no concealment of the
fact that on the former issue he thinks with the money
worshippers against the supernaturalists, or, as he calls them,
the imaginationists. He believes that the gradual victory of
the former over the latter (of the ' ' material ' ' over the
' ' spiritual, " as many would phrase it) has been a steady
triumph of science over superstition, of truth over imposture,
of equality over despotism, of liberty over enslavement, and
of happiness over suffering. He also sympathizes with the
view that a continual depreciation in the purchasing power of
money, arising from the inflation in its volume, has been
synonymous with the emancipation of the lower orders of
society, and that a contraction in the volume of money is the
mark of the increasing exactions of the money lenders and
sufferings of the producing classes. On the question of the
function of religion, therefore, he follows in the wake of Gibbon
and Buckle, and wants but little church and plenty of science.
On the question of money he stands with Sir Archibald Alison,
Carey and Delmar, against Overstone, Mill and the bullionists,
and wants " soft" money, "credit " money, plenty of money,
anything to prevent money from getting dear. The descrip-
tions which are given of life and industry, of land ownership
and slavery, under the Roman Empire, are graphic, striking
and full of touches of light only obtainable by deep and exhaust-
ive reading.

39* GUNTON'S MAGAZINE. [May,

THE MANUAL OF STATISTICS, 1896, AND STOCK EXCHANGE HAND-
BOOK. New York: Chas. H. Nicoll, publisher. Price, $3.
This gives the facts concerning each railway and industrial
company necessary to enable an investor to form an intelligent
opinion concerning the true value of its stock, including cost,
history of the undertaking, earning power, changes of manage-
ment, assets, debts and expenses. It includes also commercial,
banking and mining and traction companies, insurance, but not
manufacturing, and the quotations for stocks of the kind cov-
ered, in all the stock markets of the country from Boston to
San Francisco; also statistics of cotton, wheat, real estate, bank
clearings, interest laws and other matters of interest to dealers
in stocks and securities.

CLASSES AND MASSES. By William H. Mallock. New York:

Macmillan & Co. Pp. 129. 1896. Price, $1.25.

In combating the Socialist claim that the rich are growing
richer and the poor poorer, Mr. Mallock has done some effective
work. In the little book before us, however, he has entered
into the larger field of general economics, and with doubtful
advantage both to himself and his subject.

The first chapter consists of an article entitled, " How is
Wealth Distributing Itself, " previously published in the Pall
Mall Magazine, and is a very efficient rebuttal of the Socialist
claim regarding the distribution of wealth. The remainder of
the book is largely devoted to an obvious effort to show that
the demands of the working classes for more wages and better
conditions is a mistaken movement that should be discouraged.
Mr. Mallock thinks it is a social crime to make laborers dis-
contented, or encourage their discontent. He has introduced
a great many grotesque pictures, half truths and much poor
reasoning, to show that laborers are getting practically all it is
possible for them to have.

He speaks with sneering flippancy of "humane condi-
tions," " humane living," the " living wage," and other phrases
used by the laboring classes to express their feelings regarding
their own condition. He assumes that the discontent among
the laborers is something that " their leaders had taught them,"
which leaders he delights to call "professional agitators."
This quality justifies the English workingmen in regarding the

1896.] BOOK REVIEWS. 393

book as a piece of special pleading against them and the welfare
of their, class.

After a considerable display of being simple and matter of
fact, in statement, he presents what is practically Henry
George's formula, as follows: The "minimum standard of
humane living " is determined, and is necessarily determined,
by the maximum which a man who pays no rent can extract by
his own labor from the worst soil under cultivation. It would be
difficult more completely to miss the mark in any discussion of
the wages question.

This is not true in any community, and the more varied the
occupations and complex the civilization, the farther from the
truth does this formula become. If this statement were true,
no laborers could earn more than those laborers who occupy
land for which they have to pay no rent, which, of course,
everybody knows is not the case.

Instead of saying that the standard of "humane living" is
determined by what a man can extract by his own labor from
the worst soil under cultivation, it would be more nearly true to
say the value of the product of such land is determined by the
standard of living of the laborers who produce it.

A laborer does not lay more brick per hour to-day than he
did four hundred years ago , but he gets ten times as much for
laying a hundred brick to-day as he did then. And why? because
the man is more costly and his service is more expensive, and,
consequently, the value of bricklaying is much higher, not
that he lays more brick, but that the laying of every brick he
handles costs more, solely because he is a more expensive social
factor. The laying of brick costs more per hundred in one
country than in another, and in one locality than in another in
the same country, and in the same country at different periods,
and all for the same reason.

Having concluded that the standard of living and conse-
quently the income of the laborers is ' ' determined, and neces-
sarily determined, by the maximum, which a man who pays no
rent can extract by his own labor from the worst soil under culti-
vation, " Mr. Mallock concludes that the condition of the labor-
ers is not a proper subject for sympathy, but that it is the
inevitable result of a natural law, and ' ' it would be folly and
madness to attempt to make them discontented. "

394 GUNTON'S MAGAZINE. [ May,

Any person who is acquainted with the conditions of labor,
and particularly with the conditions of agricultural labor, in
England, with wages at ten shillings ($2.50) a week, and can
say that it is " folly and madness to attempt to make them dis-
contented," may well be taken as an apologist for barbarism.

Mr. Mallock ought to know that the salvation of the work-
ing classes lies in their becoming discontented. The reason the
agricultural laborers of England have made no progress since
1840 is that they have been too contented, and their content-
ment has made them among the lowest types of laborers in
Europe.

On page 137, he has a peculiar diagram showing that the
proportion of agricultural produce per hand is higher in England
than any country, including the United States. Just where he
gets these facts he does not tell, but they are in direct conflict
with facts on that topic given by Mulhall. Whatever date Mr.
Mallock's diagram is intended to represent is not indicated, but
there has been no radical change in the productive power of the
different countries during the last few years.

In his "History of Prices," page 81, Mulhall gives facts
which, taking all kinds of grain together, show a product
annually of 920 bushels per laborer in the United States as
compared with 540 per agricultural laborer in Great Britain.

There is good ground for defending capitalistic enterprises
against socialistic attacks, but to urge that it is a crime to make
laborers discontented with their lot is a little worse than nothing.
It is asking laborers to believe what every day's experience
teaches them is false, and serves only to make those who
write such stuff appear in the light of defenders of industrial
hardship and enemies of social improvement.

WHAT EDITORS THINK

OF

QUNTON'S flAQAZINE.

Daily Freeman, City of Kingston, N. Y. — " The pages of
GUNTON'S MAGAZINE glisten with pregnant suggestions upon
the great economical and political questions of the day. It is
interesting as well as philosophical and instructive. No one
who is interested in economics should fail to read it regularly."

Tribune, Scranton, Pa. — "Probably one could not buy on
any news-stand in the world a better digested quarter's worth
of economic literature than is to be had in the April issue of
GUNTON'S MAGAZINE. Professor Gunton solves the currency
question, shows the need of restoring the American merchant
marine, and discusses ten or a dozen other grave and weighty
topics — all with the ease of a master thinker. And the good
thing about Gunton is that nine times in ten he is all right."

Light, San Antonio, Tex. — "Its accuracy in statement,
whether of facts or figures, is vouched for, and it will be found
valuable as a reference. It will repay thoughtful perusal by
the politician."

Tribune, Scranton, Pa. — "Professor Gunton goes to the
root of the subjects he discusses, and does not try to befog the
atmosphere."

Evening Tribune, New Albany, Ind. — "The articles are
as sound in logic as they are forceful and clear in thought.
They are written from the standpoint of a pure Americanism.
We should be glad to see this magazine have a large circulation
among us. It tells the truth on the great subjects it discusses."

Daily News, Aurora, 111. — "For those seeking for a broader
knowledge of American economics and political science, GUN-
TON'S MAGAZINE, published monthly at New York, is beyond
comparison the most excellent journal of its kind printed."

Republican, Peru, Ind. — "Every American who gives
thought to the great questions involved in economics should by
all means read GUNTON'S MAGAZINE."

Orleans American, Albion, Orleans County, N. Y. — "The
tone of its articles is dignified, fair and exhaustive. We com-
mend it to all who make a study of political economy and its
deductions are applicable to the condition of things in this
country at the present day."

Morning Patriot, Jackson, Mich. — "We like GUNTON'S
MAGAZINE because it is an honest protection periodical, and

never knowingly misstates a fact. Misrepresentation is so
common in tariff advocacy that this makes reading it quite
satisfactory. "

Daily Herald, Norristown, Pa. — "Whoever desires to
keep up with the developments of the day in the discussion of
politics, finance and economics should become a reader of
GUNTON'S MAGAZINE."

Standard, Watertown, N. Y. — "Professor Gunton is a
well-known and able defender of ' scientific protection ' and
sound money, and the author of several works of repute, one of
which, ' Wealth and Progress, ' is pronounced by the Political
Science Quarterly to be the most notable contribution to the
science since Walker's 'Wages Question.' We should think this
magazine would be of especial interest to intelligent students of
affairs just now."

Daily News, Dansville, N. Y. — "That peerless economic
monthly, GUNTON'S MAGAZINE, for April, is on our table. We
can frankly say of it that for those who wish to quit so much
haphazard reading and turn to the real study of economic sub-
jects, this is the magazine they want. To the public man who
wants to really understand public questions in their economic
bearings, it is a great help."

Morning Herald, Utica, N. Y. — "GUNTON'S MAGAZINE is
filled with an abundance of interesting and instructive read-
ing for the student of economic and political science. This
periodical is one of the most useful aids, if not almost indis-
pensable, to an intelligent understanding of the great public
questions. "

Daily Times, Gloucester, Mass. — "GUNTON'S MAGAZINE,
devoted to American economics and political science, is replete
in matter which enables one to become thoroughly acquainted
with the leading topics of the day."

• Cape Ann Breeze, Gloucester, Mass. — " GUNTON'S MAGA-
ZINE is one of which those who have a liking for solid literature
are fond."

Press, Cambridge, Mass. — "GUNTON'S MAGAZINE discusses
in a forcible tone various phases of the subjects of American
economics and political science. It is safe to say that the mag-
azine holds a conspicuous position among the successful
monthly periodicals, and every number brings forth something
fresh and interesting in relation to those subjects which are ex-
acting such widespread attention at this time.

Herald, Steubenville, O. — "It is the only magazine in
America devoted to political economy, and its arguments are as
sound as its statements are reliable."

GUNTON'S MAGAZINE.

JUNE, 1896.

The Coining Presidential Conventions.

IN no national election since the War have the issues been
of such vital importance to national welfare as are those in-
volved in the Presidential election of 1896. Not that the tariff
and the money questions are new ; on the contrary, they have
been mentioned in almost every Presidential platform since
Lincoln ; but the public mind has been in such a general forma-
tive state on these subjects, that a vague reference to them
sufficed to satisfy public opinion. During the last decade a
steady crystalization of public opinion on both these themes has
been going on, which has been greatly intensified by the ex-
perience of the last three years. The protracted business de-
pression, with its alarming deficiency in the national revenues,
caused by the effort to overthrow our tariff policy, has created
a strong reaction on the subject of protection, and brought
prominently to view the serious defects in our banking and
monetary system. So that the two questions that will take pre-
cedence of all others in the national election this year are pro-
tection and money.

Whether these subjects of national importance shall be
dealt with on the plane of broad economic and monetary prin-
ciples; or their treatment shall be subjected to the interests of
political party-expediency, will largely depend upon the coming
conventions to be held at St Louis and Chicago on the i6th of
June and the yth of July, respectively.

The Democratic party is in such utter discredit with the
nation and so fatally divided against itself that its action cannot
be expected to exercise any very important influence, since it
has no serious expectation of success. It is, therefore, to the
Republican convention that all eyes are turned. It is from St.
Louis and not from Chicago that the nation is nervously wait-
ing for the voice of wise statesmanship on these important sub-,

396 GUNTON'S MAGAZINE. [June,

jects. There never was a time in the history of the Republican
party when its highest wisdom was more imperatively needed.
It is the opportunity of a generation; and the responsibility is
commensurate with the opportunity.

If the Republican party allows itself to descend to factional
squabbles and trifling compromise on these great national ques-
tions, it will commit the error of its life, and prove to the nation
that it is as barren of true statesmanship as is the Democratic
or Populist party.

On the tariff question, under the leadership of Mr. Cleve-
land, the Democratic party has deserted the American policy,
and has entered the folds of free trade, so that on the question
of protection the Republican party stands alone. On the money
question, both parties have habitually announced themselves
as favoring bimetallism, but the steady decline in the value of
silver has produced a wide difference of opinion between the
East and West. The Eastern or manufacturing and commer-
cial sections of the country have grown more afraid of silver,
while the West and South have clamored more vigorously for
it. The East has shown great caution and even timidity about
offending the West on the silver question, and this very timidity
seems only to have emboldened the South and West in their
insistence, not merely upon a liberal use of silver, but upon the
extreme demand of unlimited coinage of silver at 16 to i.
Indeed, every suggestion of modification of the demands of the
silver advocates looking towards a limited use of silver at 16 to
i or free coinage at its bullion value has been scornfully rejected ;
their war cry is free coinage at 1 6 to i , or nothing. By this
irrational attitude they have forced the fight until the issue
is now not between bimetallism and monometallism, but
between a gold and a silver standard. Although the responsi-
bility of this position may be charged to the unreasoning atti-
tude of the silverites, that is no justification for the Republicans
to act on this narrow view of the subject. A comprehensive
treatment of the money question in all its aspects of banking
and currency, and not a mere choice of the standard, is expected
of the Republican party.

It sometimes occurs in the history of a great party that it
cannot do the best it knows, but must be contented to compro-
mise with the opposition in order to prevent something worse

1896.] THE COMING PRESIDENTIAL CONVENTIONS. 397

being adopted. This was the case in the passage of the Sher-
man Silver Purchase Law in 1890. Nothing but the fear of
the passage of a free coinage law induced the Conference Com-
mittee to report the Sherman Bill. No such conditions exist in
1896. The blunders of the present administration and the reck-
less persistence of the -free silver advocates have made the
Republican success an assured fact. Upon the Republican
party therefore will rest the entire responsibility for shaping
the national "policy. Is it equal to the emergency?

If the Republicans are to justify their return to power,
they must rise to the level of the occasion. The defeat of free
silver would no more constitute a solution of the money question
than, would the defeat of socialism constitute a solution of the
labor question. At best, the defeat of the free coinage of silver
is a mere negative victory. The present situation calls for
something more than mere organized negation ; it is positive
constructive statesmanship that is required, on both the protec-
tion and money questions.

Of course, the so-called sound money and tariff reform
doctrinaires will be profuse with their advice in the treatment
of these subjects. Although they will offer "gilt-edged
wisdom" and the "independent vote," it should not be for-
gotten that it is to their leadership we owe the last three years'
experience. With them sound money means mere antagonism
to silver, and tariff reform means destruction of American
industries. It is not from this class, no matter how friendly
their purring may seem to be, that the St. Louis convention
can look for statesmanship and strong political guidance. All
it really needs is to be true to the traditions and principles of
its own party.

On the tariff question, the declared object should be not
merely revenue but protection — protection to whatever is
desirable in the interest of the nation's prosperity and advance-
ment for us to maintain and develop. The wages and the
standard of living of American laborers should be made im-
peratively to constitute the lowest datum line of competition in
the American market. No competitive commodities should be
permitted to enter this country by means of a lower labor cost
of production. Foreign producers who desire to sell to
American consumers must be compelled to pay in duties to this

398 GUNTON'S MAGAZINE [June,

country what they fail to pay in wages in their own country.
It should be erected as an irrevocable standard in foreign trade
that American wages are the basis of American competition.
In other words, that foreigners shall only be permitted to have
the economic advantage of American markets by rising to the
equivalent of American wage conditions. And this principle
should also be as rigidly applied to the immigration of laborers
as to the importation of products.

On the money question, it is specially important that the
St. Louis convention be true to its party traditions. We have,
perhaps, the worst currency system in Christendom. The worst
features of our monetary system we owe directly or indirectly to
Democratic statesmanship. The sub-treasury system, and all that
implies, we owe to the political perversity and fiscal insanity of
Andrew Jackson, in his malicious determination to overthrow
the second bank of the United States. The present greenback
issue was made necessary by the Southern Rebellion, as was
also the present National Banking system with its bond security
circulation.

It is the fiat fixity of the Government notes and the bond
security for the bank currencies that renders our money non-
elastic and incapable of expanding and contracting with the
business needs of the community. It is the non-elasticity which
makes our bank currency the most costly in the world. To this
fact, is due the great inequality in the rates of interest with its
oppression of the farming population of the South and West.
Indeed, this is their real grievance which they are mistakingly
charging to anti-silver legislation. What the South and West
need is not cheap money in the sense of money of small value,
but in the sense of good money at low rates of interest. This
cannot be obtained by free silver or any other change in coin-
age laws. It must come from a reform in the methods and
system of banking, which shall afford the same credit accommo-
dation to the farmers of the South and West that are now en-
joyed by the manufacturers and merchants of the East. For
this, we must look not to the mere anti-silver feeling of Wall
street, but to the policy of Hamilton as exemplified in the first
and second banks of the United States. There we had the best
monetary system in the world. It gave us good money, plenty
of money, uniformly low rates of interest and profitable bank-

1896.] BISHOP POTTER AS AN ARBITRATOR. 399

ing, which we might have had to this day, and avoided the era
of wild cat banking, greenback issues and the handicap of the
present national banking system, but for the unpatriotic blun-
ders of Democratic statesmanship.

If the St. Loiiis convention will rise above the mere sec-
tional contest between gold and silver and look to Hamilton in
stead of to Wall Street for its inspiration, for its tariff and
monetary policy, we may hope for a statesman like platform
which will give us broad, scientific protection and a monetary
programme that shall have all the advantages of a safe, elastic
currency, with an adequate banking system that shall serve
the rural farmers as cheaply and abundantly as it accommo-
dates the wealthy merchants, manufacturers and bankers.

Bishop Potter as an Arbitrator.

THE recent decision of Bishop Potter in the case of the
striking lithographers in New York City has created consider-
able adverse criticism in the press. It is one of those cases
whose discussion involves the conditions and economic prin-
ciples underlying the whole wages question. The Bishop de-
cided in favor of the men and consequently to the great dis-
satisfaction of the employers; and the press, as is usually the
case when any industrial subtlety arises, seems to side entirely
with the employers. Much is made of the fact that, in giving
his decision, the Bishop remarked that "it was in harmony
with the tendencies that make for social progress," as if that
were a matter which should have no influence in such a decision.
One morning paper cynically remarked that " harmony with
tendencies that make for social progress could not be reduced
to a marketable item." Nothing, according to this journal,
should have influence in deciding social conditions and in-
dustrial policies that cannot be reduced to a marketable item.
Little wonder that such journals exercise no serious influence
upon the discussion of weighty, economic and political prob-
lems.

The fact is that the labor question is chiefly a matter of
' ' tendencies that make for social progress. " It often happens
that in the conflicts between labor and capital, that is the only

400 GUNTON'S MAGAZINE. [June,

fact to be decided. Of such is the whole question of shortening
the hours of labor, improving the sanitary conditions of work-
shops; enforcing educational- opportunities for factory children;
establishment of free kindergartens; the suppression of un-
wholesome tenements; the cleaning of streets; increasing the
number of public parks and the general improvement of the
surroundings of the homes of the laboring classes. These are
all measures whose adoption depends on their being ' ' in har-
mony with the tendencies that make for social progress." For
any other reason, they would always be opposed by the tax-
payers; and unfortunately, as it is, they are too frequently
opposed by them. Those who sneer at this sentiment only show
how little they know about the very elementary character of the
modern labor question. Every improvement the factory
laborer now enjoys over the beastly and degrading conditions
of the English factory operative of the first quarter of the cen-
tury has been secured solely on the ground that they were ' ' in
harmony with the tendencies which make for social progress,"
and have always been opposed because they could not be re-
duced to a "marketable item."

Bishop Potter's argument and decision may be criticised,
but not for any such superficial uneconomic and unstatesman-
like reasons. On the contrary, to be "in harmony with the
tendencies that make for social progress " is an indispensible
quality of all wise public policy. In order to criticise Bishop
Potter's decision fairly, it is necessary to consider the contro-
versy which he was called to arbitrate upon. According to the
Bishop's letter, the questions at issue were as to

(1) The abolition of piece work.

(2) A minimum scale of wages of $18 per week.

(3) Certain limitations and regulations as to the employ-
ment of apprentices.

(4) The rate of wages to be paid for overtime.

(5) Whether 44 or 47^ hours should constitute the week's
work.

In the first place, it should be remembered that in calling
in Bishop Potter as an arbitrator, they did not call in an
economic expert but the most prominent representative of
Christian and human sentiment in the community. It was to be
expected, therefore, that in the absence of any specified data

1896.] BISHOP POTTER AS AN ARBITRATOR. 401

upon any given points, the decision would be given in accor-
dance with the most humane aspects of the case ; or in favor of
what was most " in harmony with the tendencies that make for
social progress." It would have been discreditable to the head,
heart and profession of the Bishop had it been otherwise. But
in all such cases, there are elements to determine which,
good human impulses and Christian charity are not the safest
guides.

Generous impulses might and frequently would decide quite
contrary to the real "tendencies that make for social progress. "
It is exactly at this point that Bishop Potter seems to have erred
in his decision.

It appears that the third and fourth propositions, viz : the
limitations as to the employment of apprentices and the rate of
wages to be paid for over-time were decided by the other arbi-
trators, and only the first, second and fifth were left for the
Bishop to pass upon. The last one, viz. : whether 44 or 47-^
hours should constitute a week's work, the Bishop decided
against the men in favor of the 47^- hours for which the em-
ployers think he was a "second Daniel." On the first two,
however, abolition of piece work, and the minimum scale of
wages of $18 per week, he decided with the men, and it is this
that has caused the adverse criticism.

The employers complained ' ' that to abolish piece work is
an infringement on the personal liberty of contract." To this
the employes very properly reply that "present economic
conditions have practically put an end to personal liberty of con-
tract in nearly all trades." This plea for personal liberty of
contract is the held-over argument of the English manufacturers
against the 14 hour system ot 1819. Every business man
acquainted with the methods of modern industry knows that
this so-called personal liberty of contract is a myth. He knows
that neither laborers nor employers can individually make con-
tracts regarding wages, hours of labor and other conditions asso-
ciated with the employment of labor. Factory methods have
made it imperative for all laborers to work under the same con-
ditions as to wages, hours of labor and all other appointments
attending their work. That is indispensible to the efficiency of
integrated labor. All such questions, as the time of starting,
stopping, amount of time allowed for meals, price, etc., are

402 GUNTON'S MAGAZINE. [June,

determined for the laborers en masse ; and if any individual
laborer objects and insists upon making an individual contract
differing from this, he is permitted to go elsewhere, only to find
the same rule in operation. These are matters which neither
employes nor employers can avoid. They are essential to the
very organization of industry in which large groups work inter-
dependently with each other, and modern methods are em-
ployed. Consequently, to talk about abolition of piece work
being an infringement on the personal liberty of contract is the
acme of absurdity. On the contrary, the very conditions of
industry which have brought piece work into existence, ren-
dered personal liberty of contract practically impossible.

But the absurdity of the employers does not increase the
wisdom of the Bishop's reasoning on this point. He says:

"The gist of the matter seems to be this. There is a
tendency at the present day among the working classes toward
increasing solidarity. There is a strong movement among the
employers of labor to resist this tendency. The conditions
implied in the wage-work system are favorable to solidarity.
The conditions implied in the piece-work system allow the
employer to deal with his men separately, and to isolate, more
or less, the interest of each from his fellows. * * * If,
nevertheless, the arbitrator or referee is required to give a
decision, it seems to me that he must consult his highest
conscience as to which of the opposite tendencies makes for
the social good, and side with one or the other of the parties
accordingly. * * * Having called attention to it, I beg
to add that I find myself constrained to decide in favor of
the abolition of piece work."

On this point the reasoning of the Bishop is manifestly
erroneous. It is no doubt true that under piece work, laborers
are more or less pitted against each other, and the leaders
chosen to set the price, and it is also true that the piece-work
price is also based upon the day-work wages ; that is to say,
what the laborer can earn, by day-work, will be the guide for
fixing the piece-work price, so as to make the weekly wages of
the day-work and piece-work laborers substantially the same.
It is on this principle that when new machines are introduced
into an industry, the piece-work price per unit is reduced but
the weekly earnings are usually slightly increased. But there

1896.] BISHOP POTTER AS AN ARBITRATOR. 403

is nothing in this that militates against the solidarity of labor.
On the contrary, in those industries where piece-work most
generally prevails, the greatest solidarity among laborers exists.

Solidarity of laborers does not depend upon piece-work
or day-work methods of employment. It depends on the dis-
position of the laborers to organize, and this in turn largely
depends upon the obviousness of their interests so to do. In
mechanical industries, where large numbers are employed and
machinery is used, piece-work almost uniformly prevails; yet,
these are the very industries where individual contract and
isolated action is most impotent. These are the very industries
where all the conditions of work and wages are decided en masse
for the whole group, and consequently where solidarity is almost
inevitable. In fact, there is no conflict whatever between piece
work and industrial solidarity or labor organizations. Laborers
can organize and act in concert with just as much efficiency for
an advance of 5 cents a dozen, or 2 cents a hundred yards, or
10 cents a ton, or 5 cents a thousand gallons, as they can for 25
cents a day. Consequently, the reasons the Bishop gives
for deciding against piece-work are wholly uneconomic and
erroneous. It may be that in certain branches of lithographing,
piece-work is unfeasible, but, if such be the case, it is due to the
peculiarity of the work and not at all because it is contrary to
the "tendency of solidarity among the laborers."

The next point, viz., minimum scale of wages of $18 per
week, involves no economic sublety. As the Bishop says,
"the two points hang together." If the men are to work
by the day, they must have a definite daily wage. Whether
it should be $18 a week, or more or less, was a very proper
question for arbitration. The decision of the Bishop in favor
of the men on this point appears to be fully justified. In
their interview the morning after the decision, the employers
said they ' ' offered evidence to prove that the wages of the
artists in the different grades averaged $23.50, $27.64, $23.33
and $20.50 a week, or about 178 per cent, more than the
average man in mechanical industries receives, and that the
wages here are $i for every 25 cents paid in Germany for the
same work."

If these figures are correct there can be no objection to
the Bishop's decision that the minimum wages should be $18 a

404 GUNTON'S MAGAZINE. [June,

week, since that would be $2.50 a week less than, according to
the employers' statement, they now receive. The fact is, how-
ever, that only fancy prices were quoted by the employers in
this interview. We have before us an official schedule of the
prices received in twenty-one shops in February, 1896, which
shows that some of the wages are as low as $9 and $10 a week,
and that, taking the lowest and the highest altogether, the
general average of the whole is $21.15 per week. The Bishop's
decision was doubtless made with a full knowledge of these
facts.

The complaint that the wages are higher here than in Ger-
many, and higher in New York than in many other places
in this country, is not entitled to serious consideration. If any
weight were given to this claim which is invariably presented
in wage disputes, no increase of wages would be possible in this
country until the wages in Germany arose to the American
level ; and no increase of wages would be possible in New York
City until they were as low as in the most rural districts. Such
a policy would prevent all progress. Wages are higher here
than in Germany and opportunities for employing lithographers
to make money are many times greater in this country than
in Germany. If they want to pay German wages, let them do
business in Germany and accept German prices and other con-
ditions. If they want to pay the wages of the rural conditions
and small towns, they must go to the small towns for their
business. They can't have American opportunities for Ger-
man wages or New York opportunities for rural wages.

The Banks and Sound Money.*

IN contemplating a reform of any social institution, the
statesman has to consider, not merely what would be the best
thing to do, but what, under the circumstances, is feasible.

It is hardly necessary to say that a sound and efficient
monetary system would have no Government fiduciary money
in its currency. No money would be legal tender except stand-
ard coins, and banking would be a business entrusted entirely

* This article by George Gunton was published in The Bond Record, June,
1896, under the title, "Can Greenbacks be Retired without Issuing Bonds or
Contracting the Currency." Reprinted by permission.

1896.] THE BANKS AND SOUND MONEY. 405

to private enterprise, in which the Government would exercise
only the police function, such as inspection, enforcement of con-
tracts, minting, printing of notes, etc., so as to guarantee
integrity in weight, measure, fineness of coin and genuineness
of notes. All notes should be issued by banks, subject to cur-
rent coin redemption ; and to accomplish this the banks should
be integrated with redemption centres and branch banks, so
that currency notes, like individuals' checks, would be subjected
to the test of solvency by constant return for redemption.
This would furnish at once specie payments and an elastic cur-
rency, expanding and contracting with the needs of solvent
business, which is precisely what our present system fails to
furnish. This would involve a radical reorganization of the
banking system, including the retirement of the greenbacks;
the abolition of the bond securities for note issues of national
banks; the abolition of the 10 per cent, tax on state bank circu-
lation ; the repeal of the legal-tender act, and the establishment
of a branch bank system with a central or federal bank.

There are many reasons why such a sweeping pro-
gramme would be difficult to accomplish at present, because
of the confused opinion, almost amounting to superstition,
among the people on various phases of the monetary ques-
tion. For instance, a central or federal bank with branches,
although the most perfect system ever adopted, suggests the
idea of reviving the banks of the United States, which, for
purely political reasons, have received a bad reputation. So
prevalent is the superstition against the banks of the United
States, that able and otherwise sound writers on finance feel
called upon to speak of them as a failure. Even Mr. Dods-
worth, editor of The Journal of Commerce, in the Sound Cur-
rency Pamphlet, says: "We began our existence with fiat
government paper; after the disastrous failure of that folly,
we tried the expedient of issuing notes by two specially
authorized United States banks which equally ended in dis-
aster alike to the banks and the public."

This is an error, evidently born of the popular political
prejudice created by Jackson's opposition to the bank. Both
banks of the United States were financial successes; neither
noteholders nor depositors of either ever lost a dime. The
second bank of the United States took a herd of wildcat-

406 GUNTON'S MAGAZINE. [June,

banks whose notes were varyingly depreciated from 10 to 40
per cent., brought them to specie payments and saved the
country from a financial collapse. The notion that the banks
of the United States were failures is a part of the monetary
superstition which may be relied upon to retard the progress
of currency reform.

The greenbacks, and the national banks with their bond
security circulation, are also surrounded by a superstition; but
it is a superstition in their favor. They were both born during
the Civil War, and are so interwoven with our thirty-two years
of greatest prosperity as to occupy an almost sacred place in
public opinion. They both came into existence as emergency
measures rather than as efforts to found a system of sound
financiering. The Government issued the greenbacks to fur-
nish money to carry on the war, because the ordinary supplies
of money were tightened, and almost closed against it. It
organized the national banking system with bond securities
mainly as a means of compelling the banks to take the Govern-
ment bonds. Thus, both these institutions are associated with
a national crisis, which they helped us to tide over and save the
Union.

This fact has done much to create a halo around the green-
backs. That which saved the republic in time of war, when it
had no friends, is held to be good enough to use in time of
peace. The greenbacks are called good money; even John
Sherman thinks they are the "best money in the world."
Consequently, there is a strong vein of popular sentiment which
will resist the retirement of the greenbacks. This sentiment
in favor of greenbacks as the saviours of the republic is sup-
ported by another vein of social superstition which is made up
of the various currents of socialistic opinion, including Popu-
lism, Grangerism, Greenbackism and Free Silverism, which
believe that the Government should own or control productive
industry, and particularly that it should have absolute control
over the supply of money. They are especially antagonistic to
the bankers, and hence are very suspicious of any change in
our monetary system in the direction of transferring the func-
tion of issuing money from the Government to the banks. This
they regard as taking the chief instrument of industry and
commerce out of the hands of the people and putting it into the

1896.] THE BANKS AND SOUND MONEY. 407

hands of monopolists, who are in constant conspiracy against
public welfare.

With all this suspicious, ill-informed public sentiment upon
the monetary question, a thorough reorganization of our cur-
rency system, upon the principal of sound banking, is as diffi-
cult as it seemed forty years ago to abolish slavery. Yet, if any-
thing at all is to be done, it should be done upon these lines.
How much real monetary reform them is feasible ? Nothing is
worth doing which does not permanently retire the greenbacks,
and thus take the Government out of the banking business, and
rid the monetary system of legal-tender fiat money.

There are two methods by which the greenbacks may be
retired. One is with the Government issuing bonds and obtain-
ing gold to redeem them. The other is to have them redeemed
and cancelled by the banks. Against the first method two ob-
jections will be urged. One is that for the Government to issue
bonds to pay off the greenbacks would be to convert a non-
interest-bearing debt, into an interest-bearing debt, and thus
increase the public burden by about $16,000,000 a year. The
other objection is that the retirement of the greenbacks in
this way would seriously contract the currency and create a
financial panic of unheard-of dimensions. These objections are
sufficient to make it difficult, if not impossible, for a consider-
able time to come, to get Congress to vote for the retirement of
the greenbacks by means of issuing $500,000,000 worth of
bonds.

The other alternative is for the banks to redeem and retire
the greenbacks, and in order to avoid the evil of contracting
the currency, substitute their own notes for the greenbacks,
dollar for dollar. To this, it would seem, there could be no
opposition on the part of the public. Even the popular preju-
dice against the banks could not create an objection to the banks
relieving the Government of an indebtedness to pay which would
involve a principal of $500,000,000, or an annual interest of
about $16,000,000. The opposition to be encountered here is
from the banks. Will they undertake the task of assuming the
Government indebtedness by retiring the greenbacks and treas-
ury notes and replacing them with their own notes ? Of course,
banks are business institutions and can only be expected to act
on business principles ; but whenever their business interest

408 GUNTON'S MAGAZINE. [June,

will justify it, they may properly be expected to act in the
interest of public welfare.

What interest have the banks in doing this ? Would it pay
them ? There can be no doubt whatever, that the retirement
of the Government legal-tender notes, without issuing interest-
bearing bonds, or contracting the currency, thus putting all the
paper money in the country on a coin-redemption basis, would
be an excellent thing for the country ; and if the banks can
afford to do it, there would seem to be no valid reason why it
should not be done, and done at once.

In the first place, the banks would not have to assume a
debt of $500,000,000. The portion of the debt which circulates
as money consists of the greenbacks issued under the laws of
February 25 and July n, 1862, and March 3, 1863, of which
$346, 681,016 are now outstanding; and $137,324,280 in treasury
notes, issued in the purchase of silver under the Sherman
act, now outstanding, making a total of $484,005,296. It is
estimated that during the thirty-three years of their circu-
lation some $20,000,000 of greenbacks have been lost or
destroyed in various ways, leaving an actual indebtedness of
$464,005,296.

Of course, in assuming this indebtedness, the banks would
receive whatever assets were held by the Government as se-
curity for this debt. This would include the $100,000,000 gold
reserve and the silver bullion now in the treasury, for the pur-
chase of which the Sherman notes were issued, which, on Feb-
ruary i, 1896, was officially stated at $124,575,129. In addition
to this, they would receive the Government deposits which are
now locked up in the sub-treasury, amounting on an average to
about $100,000,000. (February, 1896, it was $162,000,000.)
They would also have returned to them the $220,000,000 worth
of United States bonds, which they are now obliged to keep
permanently on deposit with the comptroller of currency as
security for the redemption of the $217,181,917 of national bank
notes, now in circulation (March i, 1896), on which they draw
only about 3 per cent, interest, when the capital is worth
to them fully 5 per cent. This net loss of 2 per cent, is equal
to $4,400,000 a year, which is equivalent to $88,000,000 of
capital, earning 5 per cent. In short, the case would stand as
follows :

1896.] THE BANKS AND SOUND MONEY. 409

INDEBTEDNESS.

Greenbacks $346,681,016

Treasury notes (1890) 137,324,280

Total $484,005,296

ASSETS.

Gold reserve r .$100,000,000

Silver bullion 124,575,129

Greenbacks lost and destroyed 20,000,000

Government deposits 100,000,000

Capital value of $220,000,000 of returned bonds 88,000,000

Total... $432,575,129

Net indebtedness $51,430.167

It will thus be seen that the actual indebtedness to be as-
sumed by the banks is not $500,000,000, as commonly supposed,
but only a little over $51,000,000, no part of which the banks
would really have to pay. . What would the banks receive in
return for assuming this slight indebtedness? First of all, they
would be relieved from the present burden of bond deposits for
circulation, which to-day practically deprive rural banks through-
out the United States of the only advantages the business of
banking can have outside large cities. Indeed, the high-priced
bonds and the restriction of note issues to 90 per cent, of their
par value, together with the i per cent, tax on circulation, has
essentially destroyed all inducements for national banks to issue
notes. It is very much like compelling a manufacturer to in-
vest one-third more capital in his machinery and plant than is
necessary efficiently to conduct his business.

By this method the national banks of New England are com-
pelled to use three times as much capital to do about the same
amount of business as are the banks of Scotland. Besides being
relieved from this handicap, they would acquire the right to issue
all the notes upon which they could maintain coin redemption.

In doing this, therefore, the banks would be amply repaid
in the increased freedom for sound banking. In thus assuming
the government obligation and freeing it from fiscal entangle-
ment, while enlarging vastly their direct lending power among
the people, the banks would disarm the popular prejudice against
them. They would unmistakably put themselves in the position
of public benefactors, and henceforth, instead of being regarded

410 GUNTON'S MAGAZINE.

as the instruments of monopoly, they would stand conspicuously
as generous aids to both the government and the people.

Of course, this would involve the establishment of some in-
tegrated relation of the banks so as to create redemption cen-
tres, accomplishing the result obtained by the branch bank
system, which is necessary in order to keep the solvency test ac-
tive by constantly forcing all bank notes home for redemption.

With this modification of our banking system, there would
no longer be any need of a ten per cent, tax on state bank cir-
culation. All that would be necessary would be for state banks
to attach themselves to some central bank or redeeming agency
through which their notes could be redeemed. This would
enable the maximum freedom of banking with the minimum
burden of expense. By thus reducing the cost of monetary
machinery, it would tend greatly to lower the rate of interest in
the rural sections of the country and extend the capacity for
note issues and fiscal accommodation into every village in the
country. Such a measure would assist the Government, benefit
the banks, render an invaluable service to the farming and
small business population. In fact, the farmers and small
business men would gain many times more through the lower
rates of interest than they could ever hope to gain by the free
coinage of silver or any of the Populistic programmes from
which they expect so much. I can think of no one measure
that would do so much towards clearing our present monetary
muddle, stimulating business confidence and creating a whole
some public opinion towards our monetary institutions, as the
retirement of the greenbacks by the banks and the putting of
our paper money on a coin redemption basis.

Estimating the entire banking capital and deposits of the
country, national, state and private, at $4,000,000,000, the
advantages to be derived from integrating and federating the
vast volume of capital, so as to place it all, or the greater por-
tion of it, behind the note issues of the country would be incal-
culable. Much less legislation would be necessary to this end
than is frequently assumed, because the banks tend to integrate
into the right sort of an organization among themselves, if
simply set free to do their business in their own way. The
best law of banking is the rut or custom which bankers fall
into of their own accord. There was never any statute requir-

1896.] THE BANKS AND SOUND MONEY. 411

ing the Suffolk bank to redeem the notes of the other New
England banks, or prescribing the deposit each bank should
make in the Suffolk bank, to protect it in redemption, or limit-
ing the notes any bank should issue or the reserve it should
keep. Yet the Suffolk system worked perfectly. All its notes
were redeemed, and it issued no notes which it ought not to
have issued, and there was no wild-cat in it, notwithstanding
there was no statutary restriction.

So there was no line in either of the statutes creating the
First or Second Bank of the United States requiring it to re-
deem the notes of the various state or private banks, yet it
did so as part of its banking business, and the Second Bank
was established chiefly with the motive that it should do so,
founded on the experience that the First Bank had done so.
Usually it no more requires a statute to secure redemption of
the notes of correspondent banks by a central bank, than it re-
quires a law to compel wholesale merchants to give credits in
trade to retail merchants. The most important functions of
banks throughout the world are not enjoined on them by law,
but are assumed as growing out of self-interest.

The integration of our American banks into one banking
system, so as to ensure a combined placement of their entire
capital and deposits behind each and every note issued, hardly
requires any other law than simply a removal of the obstructing
laws that now exist, viz. :

1 . A repeal of the Bond Security law ; for so long as this
exists no note will seek redemption until after the bank has
failed, which is too late for the best results.

2. A repeal of the ten per cent, tax on the state bank notes;
for so long as it exists no state or private banks can issue notes,
and without competition in note issuing there can be no relief
from the high rates of interest which oppress the West and South.

3. A repeal of the Legal-Tender Act ; since while this
exists, banks cannot safely be suffered to issue their own notes,
but must issue a bond-secured note.

4. A repeal of the law requiring national banks to invest a
third of their capital in national bonds ; since the prospective
payment of the national bonds would upset any system founded
on this provision.

5. A repeal of the Sub-Treasury Law.

412 GUNTON'S MAGAZINE. [June,

All these barriers to free and legitimate banking are now
law.

The only constructive law that need be passed would be
either a law providing for the integration or federation of all
the American banks — national, state and private — into a branch
system, or a law providing for the creation of a fiscal bank of
the American Union with upwards of $100,000,000 of capital,
of which the Government of the United States should own, say
one-fifth. Such a bank would immediately proceed to federate
or integrate the whole banking system of the country by the
mere force of its leadership in financial influence. However
this result might be accomplished, the consolidated system
could easily issue a note currency equal to one-fourth of the
assets which would stand behind it, on the basis of daily coin
redemption, and complete liability of all the capital, deposits,
and shareholders of each bank for the notes issued by it.

In addition to the $464,000,000 of bank notes, issued by the
banks in lieu of the greenbacks and Sherman notes which they
retire, let us suppose that the community gradually takes from
the new banks to be started in the South and West, about $500,-
000,000 more upon which the banks issuing them and their cor-
respondent banks in the cities maintain daily gold redemption.
This system of things would keep about one thousand new
country banks constantly supplied with whatever proportion
of $100,000 each of loanable notes daily coin redemption
would send " homing " to it. If we suppose this to be a third,
then the hungry rural sections of the East, South and West
would have constantly out on loan among them about $330,000,-
ooo of new funds, and constantly in the bank drawers awaiting
new loans about $166,000,000.

This would bring to a short termination by prompt pay-
ment the system of farm liens and long credits which is now
impoverishing the South. It would wind up much of the farm
mortgage tendencies, which are bleeding the rural districts, east
and west. It would restore a jubilee of cash payments. It
would end fiat money, and at the same time make really good
money plenty. It would restore gold and silver to their normal
functions as means of redemption. It would make all our credit
money sound by basing it on visible assets. No real obstacle
exists in the way of achieving all this good, except the simple

1896.] HISTORY OF BANKS OF ISSUE. 413

difficulty of restoring sound traditions concerning banking and
credit money, among a people who have been wandering in the
wilderness of sub-treasury, wild-cat and fiat for sixty years.

History of Banks of Issue.*

MR. CONANT has written a compendious history of banks of
issue because he regards the theme as one of the most impor-
tant with which the historic muse can concern itself at this time.
" It bears," he says, " directly upon the best means of devel-
oping the possibilities of individual and national life. " Never-
theless, the work is not strictly a study of the economic effects
upon industry and upon society of the paper currencies issued
by either government or banks, although at occasional points in
the narrative glimpses of such effects break in upon us. It nar-
rates the rise of banks as business undertakings, the political
and personal conflicts about them, and the modes in which
they have done their business. It does not deal with the
changes in volume of paper currencies, their effects upon coin-
age, commerce, prices, costs and production, which make up
the economic results of paper money. His plan " excludes
the systematic treatment of paper money, which would of itself
fill a volume. " The main doctrine of the book is that which has
for years been so strenuously taught in this magazine, viz. , that
the paper currency of a country should be issued by its banks
only, under the very least government supervision essential to
secure constant daily redemption of its notes in coin, and that
only a currency so issued can be "regulated by commercial
conditions, " or can be stable, elastic, useful or sound.

In his first chapter on "The Theory of a Banking Cur-
rency," Mr. Conant defines the differences between the bank-
ing principle and the currency principle. It is that the bank-
ing principle regards bank notes as mere substitutes for the
notes of merchants running on time, whereby something gen-
erally acceptable in exchange is given in place of a note having
only a limited acceptability. The "currency" principle, on

* A History of Modern Banks of Issue ; with an account of the Economic
Crises of the Present Century, by Charles A. Conant. 595 pp. ; 8vo. New York
and London, G. P. Putnam's Sons, 1896.

4M GUNTON'S MAGAZINE. [June»

the other hand, regards the bank note as performing the
functions of money, and its volume or total supply as subject
to regulation by the state, on the theory that it affects prices,
production, values and prosperity in like manner as coin. We
doubt if there are any two "principles " in the case, which can
be designated, one as a "banking" and the other as a "cur-
rency " principle. There are two classes of students of the
workings of paper money of any kind, one of which follows the
note, or the bank which issues it, to its close, mainly to see
whether the promise contained in the note is kept, and holds it
to be good or bad according to this single criterion. This
may be called the Banking School of Investigators. Of this
are all who deny that bank notes or paper money affect real
prices. It is doubtless a healthy and natural coincidence that
in almost no instance has there been any other final outcome
to paper money save repudiation, unless it was issued through
banks, and was based upon the exchanges of actual value that
arise in commerce. At present our greenback currency might
be pleaded as an exception, provided there were anybody
that could tell us when, where or how it is going to be finally
redeemed and retired. At present we are only redeeming it
by an increase of debt, which, in the nature of things, points
toward repudiation in the end. Hence it cannot yet be quoted
as an exception to the rule.

The " currency " school looks steadily to paper money,
whether issued by government or banks, not merely as an ethical
promise, dependent for its justification upon its performance, but
as a fructifying dynamic creative force in industrial progress,
influencing prices through the new totality of volume it imparts
to money as a whole, which they say means the totality of freely
exchangeable credits which can be used in purchasing goods.

This total volume of freely exchangeable credits is in their
view that "state of the atmosphere," whose barometer is "price"
and whose effect is prosperity if " prices" rise, and hard times
if they fall. Of this school are H. D. McLeod, Carey, the
Greenbackers, and generally those who oppose a return to a
bank note currency redeemable in coin.

The Chapter II. on "Ancient and Modern Banking in
Italy," in 17 pages, does all doubtless that can be done for so
large a topic in so small compass. The Bank of Venice is

1896.] HISTORY OF BANKS OF ISSUE. 415

rightly defined as having consisted in making a government
debt so easily transferable, and the interest on it so promptly
payable, that men could utilize what the government owe them,
as a means of paying what they owe each other, and should
seek to be paid in government credit rather than in coin.

In view of the modern systems of ' ' banking upon landed
security," which are illustrated in the Mortgage Banks of Ger-
many and Russia, in a manner which tends greatly to reduce
• the rates of interest to farmers and is as secure as any form of
banking, it seems hardly up-to-date to identify that phrase on
p. 24 with " Law's bubble," in which no lawful pledge of the
title to specific pieces of land was ever given to the note holder.
Certainly, no charge should be made that "banking upon
landed security" is necessarily crude, or that the "belief that
property may be transferred by paper representations with
safety for banking purposes " is any less true of landed securities
than bills of exchange, or that it ' ' led the American colonies
through every form of monetary folly" or " deceived for a
moment even the sane, clear mind of Hamilton" — without
backing up such sweeping anathemas by specifications and
proofs far too weighty and important to be thrust side wise and
incidentally into a 17 -page chapter on "Ancient and Modern
Banking in Italy. " It is this unnecessary habit of contemptu-
ous and unsustained allusion to the most balanced and really
inspired and constructive statesman America has ever known
that marks, and we beg to say, marks unfavorably, the literary
mugwump of New York City — the man who cannot address an
audience or produce a book without advertising it as done after
the designs of foreign tailors, and in perfect independence of
all American influences. When the influence of a profound
and absolutely wise American statesman is sought to be over-
thrown, it should be done with a more adequate recognition of the
dignity of the task. In an American work designed to lead
American finance in the direction in which Hamilton himself, in
his report on Banking, not only blazed the way, but turnpiked the
road, it is not worth while to sneer at the great teacher and
architect in finance, one hour of whose influence to-day would
make all such works as Mr. Conant's, however excellent they
might be, needless.

The history (pages 28 to 37) of the outcome of the conflict

416 GUNTON'S MAGAZINE. LJune>

between the " greenback " system in Italy and the attempted
return to sound banking is full of instruction for us. By 1874
840,000,000 lires (about $175,000,000) of government legal ten-
ders had been issued, and the effort was made to form the
National Bank of Italy and the five other banks of circulation
(viz., Roman, National Bank of Tuscany, Tuscan Bank of Credit,
Bank of Naples and Bank of Sicily) into a syndicate, which
should withdraw the (greenback) notes issued directly on behalf
of the government, and substitute a like sum (840,000,000 lires)
in bank bills of the National Bank of Italy, which were made
legal tender throughout the kingdom.

The bankers of Italy should really have known that in
making these new notes also legal tender they postponed coin
redemption indefinitely, invited further inflation, and only piled
up wrath against the day of wrath. The only purpose for
which bank notes having assets behind them for redemption
could with any point or meaning be substituted for irredeema-
ble governments having no asset behind them, would be to get
a form of circulation on which daily redemption in coin could
be enforced. To this end all legal tender laws should have been
simultaneously repealed. But instead the new bank notes were
themselves made legal tender, thus cutting off the right to make
that very demand for coin on them which would constitute the
only test of their value and limit of their volume.

Most of the banks exceeded their legal circulation ; all made
improvident loans; the government retained an unlimited
power of drawing on their resources, and to satisfy this un-
limited power the National Bank of Italy was empowered to
issue legal tender notes, without limit, for the purpose of
advances to the government. The forced legal tender quality of
their notes was not repealed until 1 884, and out of these facts grow
the financial morass in which Italy has ever since floundered.

Chapter III , on Banking in France, opens with a history
of John Law's " Company of the West," in 1716, which was at
first highly useful ; and only when it had been overloaded with
the management of the public finances, and of the commerce of
two continents, did it collapse (1720) in what is now known as
the " Mississippi bubble." Then followed the Company of the
Indies (1721), the Bank of Commercial Discount (1767-1793),
and the Assignats (1793-96), when all the fallacies of the fiatists

1896.] HISTORY OF BANKS OF ISSUE. 417

had full swing. All that was necessary to make money plenty
again in the very hour when an issue of 45,578,810,040 francs
had sunk to the point where one real silver franc would buy
1,000 of the "legal tender" francs, was to repeal the legal
tender law.

" No sooner, " says Prof . MacLeod, "was this great blow
struck at the paper currency, of making it pass at its current
value, than specie immediately reappeared in circulation. Im-
mense hoards came forth from their hiding places ; goods and
commodities of all sorts being very cheap, from the anxiety of
their owners to posssess money, caused immense sums to be im-
ported from foreign countries. The exchanges immediately
turned in favor of France, and in a short time a metallic cur-
rency was permanently restored. "

Thus, all the painful and unsuccessful efforts to maintain
one dollar as good as another dollar failed, and all the scarcity
of dollars ended when the law making the paper dollars legal
tender was repealed.

The author (pages 66 to 70) differs from the current of
financial writers in making the fall in the value of silver rela-
tively to gold begin in 1867, instead of in 1773-4-5, and so pre-
cede and cause instead of follow and result from the hostile leg-
islative action of Germany, which began in 1871 and culminated
in 1873-4.

Chapters IV. to XII. of Mr. Conant's work are occupied with
First Century of the Bank of England, Second Century of
the Bank of England, The Scotch Banking System, Banking in
Ireland, The Banks of Germany, The Austro-Hungarian Bank,
The Bank of Russia, The Banks of Northern Europe, and
The Banks of Southern Europe including those of Switzerland,
Spain, Portugal, Greece and the Ottoman Empire. Upon these
chapters we may make comment hereafter. Chapters XIII. to
XVIII. treat of Banking on the two Continents of America
under the titles "The Bank of the United States," "The State
Banking System," "The National Banking System," "The
Canadian Banking System," and " The Bank of Latin America."
Exactly 100 pages are devoted to the history of Banking in the
United States in its three distinct forms. There is no chapter
distinctly on The Greenback System whereby the government
assumes the functions of issue without assets for redemption,

418 GUNTON'S MAGAZINE. [June,

and redeems with gold purchased by loans, which might well
have been made the subject of a chapter, since it virtually en-
tails on the Treasury all the burdens of a Bank of Issue without
any of its safeguards.

'Mr. Conant's sketch of the Bank of the United States,
first and second, is political and personal rather than economic,
but being accurate within its limitations, it becomes as it pro-
ceeds an unsympathetic vindication of those institutions, within
the arena of ethical, moral and financial controversy. It does
not bring out with the force and vigor which characterized
McDuffie's and John Quincy Adams' Report, the fact that the
Bank of the United States had rendered greater services to the
government and people than the Army and Navy combined ;
had rendered these services without cost ; had even paid highly
for the privilege of rendering them ; and in the event of future
war, would aid greatly in lessening the cost of war by avoiding
issues of government money, and thus maintaining the currency
of the country flexible, stable and at par with coin. Mr.
Conant does not discuss the kind of currency secured to us by
the Bank of the United States, nor show its advantages as
frankly as was done by the Committees of Congress in 1830-34,
and as has since been done by Mr. Stephen Colwell, in "Ways
and Means of Payment," and by Mr. Henry V. Poor, in "Money
and its Uses." He does show, however, that the Bank of the
United States came out of the fight against Jackson with its
credit still good, that it paid all its debts, and redeemed all its
notes, and that only its stock holders lost by the war which the
government made upon it. He does not, however, emphasize
the fact that the elimination of the bank intensified, if it did
not chiefly cause, the crisis of 1836-7. He does show (p. 308),
that no sooner was the Bank of the United States out of the
way, than the state bank currency was at a discount of ten per
cent, and the government itself, which in forty years of the Bank
of the United States had never lost one cent on its deposits or
dividends, was compelled to accept $25,000,000 of its deposits
from the pet State Banks, in bank notes bearing an average
depreciation of 10 per cent, at the time they were taken, the
actual amount realized on which is not stated.

The history of the State banking systems is interesting,
and embraces many details, which within their field are accu-

1896.] HISTORY OF BANKS OF ISSUE. 419

rate, but they are not brought into comprehensive logical states-
manship by any vigorous current of economic theory. This
current would be supplied by attaching all the losses, wrecks
and crises which attended the State banking systems, to the
lack of efficient national headship in a bank of the United
States, capable of enforcing coin redemption. With this clue
added, .the chapter on State banks becomes coherent. The suc-
cess of the Suffolk system and of the State Bank of Indiana, is
due so far as it went to the fact that they followed the policies
of the Bank of the United States, though in a more limited way.
The "free banking" and "safety fund " systems were without
merit — mere phantasmagorias.

In Mr. Conant's concluding chapters, after one on banking
in Africa and the East, he has four chapters on crises, entitled
respectively " Crises and their Causes," "The Early Crises of
the Century," "The Later Crises of the Century," and "The
Crisis of 1893."

He regards crises as due in all cases to "an expansion and
collapse of credit." This is what crises are. Being itself
the fact which requires explanation it cannot at the same
time be its cause. We regard crises as due more often to a
shifting in the channels of production, and a drying up of old
sources of supply, that have become too costly, and that must
for the better economizing of the world's energies be replaced
by new ones. The collapse of credit is not the cause but only
the barometer that makes the symptoms known. On other
occasions, as in 1893 to 1895, a crisis may be produced in Amer-
ica, simultaneously with a career of unprecedented prosperity
in England, by an artificial shifting of localities of production
brought about by changes in rates of duty on importations by a
Tariff Act. At other times a crisis, even if it results immedi-
ately from a collapse of credit, may be really ascribable to some
large inflation in the volume of a credit currency or in increased
access to coin or the precious metals, which produced the expan-
sion in credits in a manner due strictly to the output of the
mines and the magnifying power of hope in the human mind to
change the course of production and not to mere ' ' human fool-
ishness." To exhibit the different conclusions which may be
come to by those who look at immediate, approximate or surface
causes, and those who take more remote and recondite causes

42O

GUNTON'S MAGAZINE.

[ June,

into consideration, we may compare Mr. Conant's citation of
causes (p. 462) for the leading crises of this century, which are
generally of the former kind, to those to which they have been
ascribed by others equally judicious.

CONANT.

1825. — ''Foolish investments in Latin
American securities."

1837. — " Loans in the United
States."

1847. — "The failure of the cotton
crops."

1857. — " Railway speculation."

1866. — Effects of American war and
useless investments in cotton mills and
ships.

1873. — By railway building in the
American wilderness.

1890. — New fever of investment in
South America.

1893. — Loss of confidence of foreign
investors.

OTHER ECONOMISTS.

1825 (Carey, Patterson).— " The ex-
pansion in volume of English currency,
produced by the return of coin to cir-
culation in 1820, after thirty years of
suspension, and the resulting plethora
of money.'1

1837 (Carey, Alison, Clay). — "De-
struction of United States Bank, con-
traction of currency and low duties on
imports under Compromise Tariff of
1832-3.

1847 (McCulloch, Alison and Carey).
— There was no crisis in America. The
crisis in Great Britain was due to re-
peal of the Corn Laws, drain of coin
for foreign bread stuffs, and failure of
Irish potato crop.

1857 (McCulloch, Carey, etc.). —
Low duties of 1848, excessive impor-
tations t of foreign goods, producing
Wild Cat bank inflation of '50 and '51,
ending in exports of gold and indus-
trial collapse to American industries,
and bankruptcies of American manu-
facturers in 1854-1855, thus causing
non-payment of debts due to English
merchants in 1856, whose withdrawal of
credits produced American crisis of 1857.

1866. — The crisis applied to England
only. It could not affect America be-
cause our currency would not export.

1873. — By the exhaustion of our
supply of government bonds for export,
and the consequent necessity of paying
for our imports with coin or products.

1890. — No crisis in the United
States.

1893. — No crisis in Great Britain.
That in United States produced solely
by election of Cleveland on a basis in-
volving Gorman-Wilson tariff.

1896.] Tne FOUNDING OF HARVARD. 421

Mr. Conant's failure to connect the crisis of 1893 with the
election of Grover Cleveland and a Congress pledged to reduce
the tariff, may commend his book to the approval of a limited
circle of mugwumps, but the American people as a whole are
competent to settle some questions in economics by the sheer
force of numbers and. common knowledge. Mr. Conant has
written a book of some literary merit and involving much care
and research. The destructive force of his antipathies against
the Bank of the United States, and the weakness of his apolo-
gies for the state banking systems prevent his criticisms from
attaining the degree of constructive force essential to sound or
true statesmanship. His book culminates in a doctrine that
good banking currency can exist in Europe and Canada, and
that a bad currency actually does exist in the United States.
This is exactly where all the publications of the Sound Cur-
rency Committee land us. Their iconoclasm is so impartial
that it leaves us no models. Their cynicism is so comprehen-
sive that it admits of no plans. Their pessimism is so complete
that they will advocate only an eternal calm, a financial Nir-
vana. Verily, there is more hope of a return to sound banking
in Mark Hanna and Thomas C. Platt than in those who pene-
trate to the end of the earth in search of wisdom and come back
with no other lesson than that a Bank of the United States
would be exactly what we need were it not for — the ghost of
Andrew Jackson.

The Pounding of Harvard.

BY SARAH B. KENYON.

"THAT intellectual men should early contemplate an institu-
tion for the instruction of youth in the higher branches of
science," says Josiah Quincy, when speaking of the origin of
Harvard, ' ' might be expected, and is in conformity with the
usual practice of mankind. But this has ever happened after
time had given validity to their occupation of the soil, and
external enemies had been conquered or conciliated; after
those roots of discord which naturally spring up among new
combinations of men had been extirpated or overpowered;
after wealth had begun to flow in and a sense of security, com-
bining with a sense of prosperity, had given power and ex-

422 GUNTON'S MAGAZINE. [June,

pansion to the spirit of benevolence. At such a stage of ad-
vancement institutions having for their object high and exact
scientific education might be anticipated. "

In this case, of all the usual conditions, we find but one —
a company of intellectual men. But six years had elapsed from
the settlement of Boston, and only sixteen from the landing at
Plymouth, when these undaunted men took counsel together
how they might best establish a seminary of learning. " The
first necessities of civilized man, "continues Mr. Quincy, " food,
raiment and shelter, had scarcely been provided; civil govern-
ment and the worship of God had alone been instituted when
the great interests of education engaged their attention. Con-
sider the situation. A strip of land of less than thirty miles on
the sea coast, and extending scarcely twenty into the interior.
Less than five thousand families in all. A mighty and dreadful
wilderness reaching to their door stones; a cruel, subtle and
relentless savage people inhabiting this wilderness; wild beasts
and the terrible rattlesnake filling them with alarm; an Indian
war impending, and religious discord filling their souls with bit-
terness. Can anything more sublime be conceived? For alike
spirit under like circumstances history will be searched in vain. "

On the pages of New England " First Fruits" I found the
following: " We dreaded an illiterate ministry when our present
ministers shall lie in the dust. * * * The beginning and
progress of the college doth fill our hearts with comfort."

On the 8th of September, 1636, the general court assembled,
and their records contain the. following: "The court agrees to
give four hundred pounds towards a school or college, whereof
two hundred pounds shall be paid the next year, and two
hundred pounds when the work is finished, and the next court
to appoint where and what building." The next year, 1637, the
general court appointed twelve of the most eminent men of the
colony to take order for a college at Newtown.

Says Johnson's Wonder-Working Providence : " For place
they fix their eyes upon Newtown, which, to tell their posterity
whence they came, is now named Cambridge. The situation
of this college is very pleasant, at the end of a spacious plain,
more like a bowling-green than a wilderness; near a fine
navigable river, environed with many neighboring towns of
note, being so near that their houses join with her suburbs. "

1896.] THE FOUNDING OF HARVARD. 423

Another writer speaks of it as "a plan very pleasant and
accommodate, and then under the orthodox and soul-flourishing
ministry of Mr. Thomas Shepheard. "

Notwithstanding the promises and act of the general court,
and the great amount of zeal among the members of the colony,
it would have been some years before their designs could have
been carried into effect, if it had not been for the bequest of
Mr. John Harvard, who died at Charlestown in 1638.

Comparatively little is known of his life. He was educated
at Emmanuel College, Cambridge, taking his degree of M.A.
was a dissenting minister in England, and emigrated to Massa-
chusetts Bay in 1637. He was made a freeman on November
2d, of that year, and preached in Charlestown until his death, of
consumption, in the following year. To the college, not even
actually begun, John Harvard left one-half his property and his
entire library. As to the amount of the property, nearly all his-
torians say it was ^779 178. 2d. Quincy contends that it did
not exceed ^400. The catalogue of his library shows that
it contained two hundred and sixty volumes, of which many
were among the most recent and valuable publications of
the day.

' ' The half his fortune, and his entire library, from one,
who, though he left no children, left a widow and general heirs
who were dear to him, was the earliest, the noblest, and the
purest tribute to religion and science this western world had
yet witnessed. It was equally timely and unexampled. Was
ever college more justly christened than when this infant of the
new world was called Harvard ? " His example was quickly
followed. The magistrates subscribed among themselves ^200
in books for the library; those who could afford it gave ^£20 and
^"30. "A number of sheep," says Pierce, " were bequeathed
by one man; a quantity of cotton cloth, worth nine shillings,
was presented by another; a pewter flagon, worth ten shillings,
by a third ; a fruit dish, a sugar spoon, a silver-tipt jug, one
great salt and one small trencher salt, by others." Presents or
legacies, amounting severally to five shillings, one pound, two
pounds, were all faithfully recorded with the names of the
donors. If we are at first tempted to smile, a little reflection
will soon change this disposition into a feeling of respect and
even of admiration.

424 GUNTON'S MAGAZINE. [June,

"How full of noble examples," says Quincy, "is this pic-
ture ! " " The poor emigrant struggling for subsistence, almost
homeless, in a manner defenseless, is seen selecting from the
few remnants of his former prosperity, plucked by him out of
the flames of persecution, and rescued from the perils of the
Atlantic, the valued pride of his table, or the precious delight
of his domestic hearth, his heart stirred and his spirit willing, or
gives according to his means, towards establishing for learning a
resting place, and for science a fixed habitation on the borders
of the wilderness. The inhabitants of the country, contribut-
ing from their acres or their flocks ; those of the metropolis,
from their shops and stores; the clergyman from his library,
and the mechanic from his tools of trade. At the date of Har-
vard's death there was a school at Cambridge tinder the charge
of Mr. Nathaniel Eaton, to whom was also entrusted the build-
ing of the college."

Mather in The Magnalia, says of him: " He was a blade,
who marvellously deceived the expectations of good men con-
cerning him, for he was one fitter to be master of a bridewell
than a college. His personal honesty in money transactions
seems not to have been questioned, but his temper was violent
and quarrelsome, and his treatment of those under him ex-
tremely cruel; and he was dismissed in disgrace. And Mr.
Samuel Shepherd was entrusted with the finances of the college,
until in 1640 Henry Dunster became its president."

Dunster proved to be a competent man. He formed the
first code of laws, revised the rules of admission, and the
principles upon which degrees should be granted, retaining the
simple scholastic forms ; advanced the business interests of the
college and himself instructed the students. The first class
received its degrees in 1642. Its course of study had been
that of English universities, modified to fit the churches with
able and learned ministers. For admission, a certain prepara-
tory course in Greek and Latin was required. These were
continued, together with Hebrew, Chaldaic, Syriac, logic, ethics,
arithmetic, geometry, physics, metaphysics, politics and
divinity.

So good was the course that " some gentlemen have sent
their sons hither from England, who are to be commended for
the care of them. This hath been a place certainly more free

1896.] THE FOUNDING OF HARVARD. 425

from temptation or lewdness than, ordinarily, England hath been.
Yet if men shall presume upon this, to send their most ex-
orbitant children hither, intending them more especially for
God's service, the justice of God doth sometimes meet with
them, and the means doth more harden them, in their way, for
of late the godly governors of the college have been forced to
expel some for fear of corrupting the fountain."

Fancy some of these youths coming from England with
the very latest thing in Puritan fashions ; others with more than
a touch of the cavalier about them. They walk through cloisters
of grey tree-trunks and overarching boughs, instead of those
of grey old stone. They come to the building, which one
writer calls too gorgeous for a wilderness, and another speaks
of as l ' fair and comely within and without, with spacious halls
and large library. "

President Dunster was a most earnest worker, and gave
out of his own scanty means abundantly, contributing, at a time
of its utmost need, one hundred acres of land. He besought
the General Court, and under his auspices a memorial was ad-
dressed by Mr. Shepheard, of Cambridge, to the Commissioners,
for a contribution for the maintenance of poor scholars in the
college. It entreats the commissioners to recommend to every
family throughout the plantations, if able, to give one-fourth a
bushel of corn or its equivalent, which would be a blessed
means of comfortable provision to such as stand in need of
support. "

The Commissioners claimed a voice in the concern of the
college, and in 1646 recommended the General Court "to take
some action with the parents of scholars, that when they are
furnished with learning, that they remove not to some other
country, but improve their parts and abilities in the service of
the colonies, for of twenty scholars who had been graduated
prior to 1646, twelve had actually gone to Europe and eleven of
them never returned. "

President Dunster's efforts for the college were in the end
ill-requited. The Puritans were Paedobaptists — believed in the
necessity of infant baptism — and when President Dunster,
whose views were known to be opposed to this doctrine, felt
called upon to bear public testimony of his belief, he was in-
dicted by the Grand Jury for disturbing the ordinance of infant

426 GUNTON'S MAGAZINE. [June,

baptism in the Cambridge Church, convicted by the Court,
sentenced to a public admonition on lecture day, and laid under
bonds for good behavior. Finally he was compelled, in October,
1654, to resign his office and throw himself upon the mercy of
the General Court.

In a pathetic appeal he submitted the reasons why he
should not at once be obliged to give up his house to his suc-
cessor, and he was permitted, with his family, to remain until
the following March. Upon his death, in 1659, he ordered that
his body should be brought to Cambridge and be interred near
the scene of his labors to which he had consecrated his affec-
tions. The General Court paid his widow the sum of twenty
pounds, but a portion of what was owing. Quincy character-
izes Dunster as, "as true a friend and as faithful a servant as
this college ever possessed."

It was during President Dunster's time that the first print-
ing press north of Mexico, and the first one in British America,
was established at Harvard. It was the gift of a Reverend Mr.
Glover, of England, who died on the passage over, in 1639; but
Stephen Jaye, whom he had engaged for the work, set up the
press in Cambridge, and began printing. The Freeman's Oath
and Pier ce's Almanack were issued in 1639, and " The Psalms
Newly Turned Into Metre," in 1640. Among the most unique
works printed were those of John Eliot, in the Indian tongue.
The Bay Psalm Book was published and revised by President
Dunster, assisted by Mr. R. Lyon, and for years was the book
used in the Congregational churches.

In 1640 the general court granted the revenues of the ferry
between Cambridge and Boston to the college, and it proved a
great, although not sufficient, help. In 1642 the first board of
governors or overseers was established, and consisted of the
governor, deputy-governor, magistrates of jurisdiction, and the
teaching elders of the six adjoining towns — Cambridge, Water-
town, Charlestown, Boston, Roxbury and Dorchester. In 1650
the college was made a corporation, consisting of the president,
five fellows, and treasurer or bursar, whose acts were subject to
the approval of the overseers. This rendered it very difficult
to transact business, and in 1657 an appendix to the college
charter made the acts of the corporation of immediate effect,
and only alterable by the overseers. The college struggled

1896.] THE FOUNDING OF HARVARD. 427

along with many promises of help, and often failures in per-
formance, until in 1655 Governor Endicott presented a plea for
help to the general court, which was received with little
encouragement.

Two months before the forced resignation of President
Dunster, the overseers had made overtures to the Rev. Mr.
Chauncy.

Chas. Chauncy was born at Yardly Bury in 1589, was ed-
ucated in the Westminster School and Trinity College, Cam-
bridge. He was the friend of Archbishop Usher. He preached
at Marston, Laurence and later at Ware, in Hertfordshire. He
was silenced and suspended by Laud, but afterwards recanted,
and to the end of his life regretted the fact, and in his will en-
joined upon his posterity never to conform. He came to Ply-
outh in 1638 and preached there three years, and then, not be-
ing able to agree with the church on baptism, went to Scituate,
where he remained twelve years, when he was invited to re-
turn to Ware and preach to his former congregation; was
finally prevailed upon to become President of Harvard, with
the salary of ^100 per annum and the understanding that he
would not disseminate his views upon baptism by immersion
and the celebration of the Lord's Supper at evening. For Mr.
Chauncy not only believed that infants should be baptized,
but that they should be washed all over. " A custom," says an
old writer, "which is not tolerable in this climate." For sev-
enteen years this learned and able man administered the affairs
of the college, and died at the age of eighty-two. It was dur-
ing President Chauncy's reign that, in 1669, there was contrib-
uted by the various towns in the colony the sum of ^2,695 5s-
for the erection of a new college. Of this sum, Scarborough
gave the least, £2. gs. 6d. and Boston, ^800, while Portsmouth
gave ^420.

Historian Pierce says this dependence of the college on the
whole colony made it beloved as a child.

Under the administration of President Hoar, who succeeded
President Chauncy, the college was in a very bad way. The
dissatisfaction was great, the fellows resigning so that they
even endangered the charter. The Rev. Mr. Oakes desired
the office, and had a strong following. President Hoar, with
all his scholarship and personal worth, seems not to have been

428 GUNTON'S MAGAZINE. [June,

able to overcome this, and in 1675 resigned his office, and Rev.
Mr. Oakes was appointed. Dr. Hoar was the first graduate of
the college to become its president. President Oakes died in
1 68 1 of malignant fever.

After the death of Oakes, Rev. Increase Mather was
chosen, but declined. Rev. Samuel Torrey also declined. In
1683 the Rev. John Rogers, a descendant of the martyr, was
chosen, and lived but one year. The Rev. Joshua Moody was
offered the chair, but declined, and Rev. Increase Mather
finally took the chair in 1685. At this date we resign the torch
to some other historian.

Mr. Quincy sums up the relation of the General Court to
the college as follows : "Their vote in 1636 planted the first
germ of its being. Their acts in 1642, 1650 and 1657 gave it
an efficient corporate form and powers. They are entitled to
be its earliest friends and constant patrons. In respect to
grants of money, the patronage of the General Court, during
the first period of seventy years, certainly never exceeded, and
it is not known to have equalled, ^100 per year, until 1673,
and after that ^150 per year for the remaining years of this
period. These payments, with the income of the ferry, were
all their certain income. Many of the grants of land by the
General Court proved of no avail, as the title was defective,
and the college was dispossessed of these benefactions.

A word in closing, from The Magnalia, wherein Mather
styles the college ' ' a river without the streams whereof
these regions would have been mere unwatered places for the
devil." He also says, "Nor have the country sent over agents
to appear at Whitehall for any of its interests for more than
these thirty years, but what had their education in this nursery.
And again, the death of those brave men that first planted New
England would have rendered a fit emblem for the country a
beech tree, with its top lopt off, and the motto, ' I am left a
ruin,' if Harvard College had not prevented it."

1896.] 429

The University Settlement Movement.

THE recent annual meeting of this most excellent organiza-
tion calls attention again to its unique work and great promise.
The Settlement in New York was the child of Toynbee Hall in
East London, and its- aim was to become ultimately the
Toynbee Hall of this city.

It began in 1887 under the more modest name of the
Neighborhood Guild, and owes its genesis to Mr. Stanton Coit,
who, after a residence of some weeks among the tenement
house people of the East Side, began his work of reform. A
boys' club was the initiative, which proved a success from the
start. A girls' club, a kindergarten and a Penny Provident Bank
soon followed. With varying fortunes the work was prosecuted
until 1891, when the above name was assumed, and a new start
was made on a broader and stronger financial basis. The house No.
26 Delancey Street was taken, and that has been the headquarters
of a movement which has broadened out until now it needs,
more than anything else, a new and more commodious building.
While not modeled exactly after Toynbee Hall, it does sub-
stantially the same work and along substantially the same lines.
Its leading spirits at the first had visited Toynbee Hall and
studied its method and shared the inspiration which has made
the London movement so noteworthy. The East Side of New
York has many features in common with the Whitechapel sec-
tion in the great English metropolis. Poverty, almost as
appalling, may be found in it, as well as overcrowding, and that
lack of school and recreation privileges which are found in more
prosperous portions of the city; while the Tenth Ward in
which this Settlement is planted is said to be the most densely
populated of any like area in the world. The original motto of
the Guild, viz.: "Order is our basis, improvement our aim,
and friendship our principle," gives the clue to its success. It
was the first attempt in any American city to bring men and
women of culture and sympathy into touch with the toiling
masses. It was the first effort to establish friendly intercourse
between uptown people and the occupants of the crowded tene-
ments downtown. It was the beginning of that bridge of
human service and interest which was to connect two alien dis-
tricts, and to bring into kindly relations two widely separated

430 GUNTON'S MAGAZINE. [ June,

classes. In this lies the significance of the movement, and as
the few years have gone by since it was undertaken, its timeli-
ness and imperativeness have become more and more apparent.
The laissez faire principle in society is full of unsuspected
peril. Hostile social classes are the resultant of non-intercourse
and the neglect of that service which conditions the moral well-
being of both. Society is not a chaos, but an order, a unity, a
progress. It is social aloofness which has begotten our worst
class antagonisms.

We are now awaking to the obligations of brotherhood, and
discovering new facts and forces in such talismanic words as
altruism, solidarity, stewardship. "The struggle for life,"
which has for so long been the accepted principle of evolution,
is not the sole governing factor; a second one plays an equally
important part, viz. : the struggle for the life of others. This
is the ethical factor in the drama of human development, with-
out which sympathy, tenderness, unselfishness would have had
no place or part; and life would have been for us "humans "
only a continuous fight, and the Hobbesian war state the nor-
mal modus vivendi. The University movement stood first of
of all for the dues of brotherhood and the reciprocities of
friendship. And what is more, it stood for these in popu-
lous districts which had been practically abandoned by the
churches. Not that the sympathy of their members ceased,
for this is to be said to their honor, that they have been the
personal workers and givers in behalf of the University Set-
tlement. But when churches formally, or through their pas-
tors, doubt the utility claimed for the Settlement, and further-
more question whether it is, as a regenerative influence in
society, equal in reach and permanency of influence to the
Christian Church, then may the disclaimer be in order, that the
Settlement sought as best it could to occupy the wide and needy
fields the Church had forsaken.

Time only can tell how useful and morally regenerative the
Settlement is to be. Certain it is, it was born of the social con-
dition confronting all who cared for the city and who knew what
a large portion of its life has become through social neglect.
As a matter of fact, the Settlement House is a centre of grow-
ing interest and influence, amidst a section where the poorest
of the people are forced to live. It is an educational institute,

1896.] THE UNIVERSITY SETTLEMENT MOVEMENT. 431

teaching the principle of self-help and bringing culture and re-
creation, practical instruction and higher ambitions to the doors
of those who have largely lived without them.

It is the head center of a series of organizations by which
every age and condition in the complex surrounding population
are reached. From it stream the influences which make better
citizenship, better homes, in a word, better ideals possible. It
re-enforces the principle of local responsibility for what is awry
in its own locality, and seeks to make the denizens of the latter
interested in their own social betterment.

Through the workers in the Settlement House, a class ot
educated young men are brought into touch with those needing
the uplift of their personal service and example, and while the
latter find opportunities to study the social and civic problems
now so important, those among whom they sojourn feel the con-
tagion of their broader, braver life, and yield to their leadership
in all that makes for the common weal.

The education is mutual, for one of the sins of the man of
culture is to despise or neglect his less favored brother, and go
his way as if it was no concern of his, that there were thousands
whom he could serve, and whose personal lives he could brighten.
There is no place where an earnest man feels less like posing in
self-conceit than when in the presence of those who hunger for
something better, and wait for the manly word of hope and
help.

It was a deserved rebuke to a University teacher who, be-
fore a social science club of workingmen, alluded to the diffi-
culty of making himself understood, when he was met by the
interjected response of one of his hearers, " I once heard Hux-
ley lecture and had no difficulty in understanding him." It
seems to be forgotten that the masses, in time of a political can-
vass, are never suspected of any inability to understand the
addresses of our leading lawyers and statesmen. It might be a
good eye-opener to some of our most attractive and able preach-
ers if they would occasionally exercise their gifts with the
denizens of such a typical district as the Tenth Ward in New
York.

Hitherto, the ward politician has been the power; as boss,
as friend to old and young, as the advocate of the rights of the
people, he has held undisputed sway. Now, the Settlement in-

432 GUNTON'S MAGAZINE. [ June,

troduces some new factors into the ward or district. It acts as
an educational center through its classes for study of economics,
its free circulating library, its recreation classes, its committees
on civic reform, its youths' clubs, its kindergarten, its confer-
ences on social questions, its lectures, its penny provident bank,
etc. To the people amidst which planted, the Settlement is a
constant source of light and strength. Aiming to influence the
wants, habits and social character of the dwellers in a given dis-
trict, it is really a mighty agency, with whose possibilities of
service we are just becoming acquainted. It is enlargement of
social opportunity that the Settlement is aiming everywhere to
bring to the masses of the people, and that is the condition of
all industrial improvement.

Abroad, "the Settlement" movement is gaining popular
favor and support. Since the establishment of Toynbee Hall,
similar settlements have been organized in different parts of
London. Oxford House, the Passmore-Edwards Hall, started
by Mrs. Humphrey Ward; Browning Hall, Mansfield House
and others, show the activity developed in this line of social
effort, and their economic value is what is now giving to them
their real significance.

The whole movement, here and in Great Britain, demon-
strates one thing, that if anything of value is to be done to assist
the working people, a good share of the help must come from
those actually living as neighbors to them. The Lord Chief
Justice of England, it is said, comes to a workingmen's club in
a little upper room in Whitechapel and tells its members that
the West End of London has quite as much need of the East
End as the latter has of the West End. So social bonds are be-
ing formed between the rich and the poor, and a true brother-
hood is supplanting the darkness and indifference which for-
merly prevailed.

In this country the Settlement movement is rapidly grow-
ing. There are to-day seventy-six Houses, doing an increas-
ingly extensive and influential work. They have their several
characteristics, some being chiefly intellectual, others ethical,
yet others medical and sanitary. While a few are intensely and
aggressively religious, yet all are working effectively, and though
the experimental stage is not passed, still all give promise of
permanency. However, time and experience may lead to mod-

1896.] REMEDY FOR MONETARY SECTIONALISM. 433

ification in methods of work. There is wide difference between
" Hull House " in Chicago, which is operating along a variety
of lines, and is an instance of what can be done in a great city,
and the picturesque Log Cabin Settlement in the mountains
of North Carolina, with its unique environment, but really
needy field.

Everywhere the "Movement" stands for service to hu-
manity, for friendly intercourse and brotherly fellowship.

We help develop the best life possible for all when labor-
ing to efface class prejudices and antagonisms, and in acknowl-
edgment of a common responsibility for the common good, be-
come helpers of one another. Our world is treated to its most
delightful surprises, where golden deeds and red letter sayings
are intermingled in the gray warp of its life. "The Settle-
ment " is the hand of the helper to the man — whose want is a
larger "opportunity," and to the neighborhood — whose need
is higher social ideals.

Remedy For Monetary Sectionalism.

VERY few politicians are looking forward to a disintegra-
tion and re-organization of parties as being among the natural
sequences of the existing attitude of popular convictions. Here
and there in grave Quarterlies having a limited audience, like
Harvard's Journal of Economics under the sensational title,
"The New Sectionalism," it is carefully pointed out that on the
important question, "With what kind of money shall the coun-
try's exchanges be made? "the South and West have for from
five to ten years been voting nearly solid in one way, and the
States north of the Potomac and the Ohio rivers, and east of the
Mississippi have been voting the other.

The South and West have been declaring that through the
demonetization of silver, the money coined of that metal has
ceased to be "money of ultimate redemption," that prices have
come to be measured by the volume of gold only, and this,
being smaller than the former volume of both gold and silver,
amounts to a contraction in the volume of the price-measuring
money, hence in an epoch of continued falling prices, hence in
lessened production, hard times, catastrophe throughout the
world, and universal suffering of the human race, or at least of

434 GUNTON'S MAGAZINE. [June,

the people of the gold using nations. The remedy they propose
for this is the immediate free coinage of silver, without regard
to the question whether the value of the silver itself in a dollar
thus to be freely coined shall be 100 cents, or 67 cents, or 7 cents,
or i -7th of a cent.

To this platform the eastern and central States have by
their votes on many questions made a reply consisting of multi-
farious denials of fact and of theory, which might be summar-
ized thus :

First, it is not true that any countiy has demonetized
silver; all silver coins are still money, full legal tender standard
coins as ever. All that any government has done has been to
cease to permit private holders of silver to add to their number
at their own discretion. If this had had the effect to limit their
production it would be impossible that such a limitation of pro-
duction would lessen the value of those already produced; on
the contrary, the one and only economic means to enhance the
value of standard silver coins would be to cease to produce
them. While it would be possible to prove that silver coins had
been made worth more because individual holders of silver were
restrained from producing them, it cannot be asserted that they
are worth less.

Second, it is not true that the production of silver coins
for use as money has been stopped or lessened ; on the contrary,
since the privilege of free coinage was taken from private
persons, governments have on their own account coined silver
in a degree that amounted to inflation. The United States
alone have coined, in fact and in effect, $486,000,000 of new
standard silver dollars since 1873, which is sixty times more
than it had coined in a century of previous history. Hence, if
abundant silver coinage could raise prices we ought to have had
a rise and not a fall in prices.

Third, in the world at large, according to the report of
our director of the mint, the silver coinage has been increased
since 1880 by $1,500,000,000. Hence no contraction in silver
coinage has anywhere occurred.

Fourth, it is not true that the money which inflates prices
must be redemption money. No practical business man or
economist ever thought that such a " roor back " could be
true. Every business man in America saw that the greenback

1896.] REMEDY FOR MONETARY SECTIONALISM. 435

issues affected prices, but no man ever claimed that greenbacks
were " money of ultimate redemption," at least in any greater
degree than coined silver now is. All money that buys affects
prices.

Fifth, it was not true, until after 1892, that prices gener-
ally have fallen. Between 1870 and 1892, land, labor and the
values of industrial investments, stocks, shares and means of
production, into all of which nine-tenths at least of all values
constantly go, rose steadily; wages of labor, in particular,
rising according to official labor reports by seventy-six per
cent. The only products that fell were those in which improved
processes were lessening the quantity of foot-tons of human
force essential to the production of a yard, ton, or other unit
of the product.

Sixth, so far from it being true that all gold- using coun-
tries are suffering from contraction of values, Great Britain,
herself the chief gold-using country, has, according to its Chan-
cellor of the Exchequer, for two years been enjoying such un-
exampled prosperity as she has never before known.

In the mind of the whole East and center of the country,
therefore, the free silver advocates are declaiming over events
that have not happened ; their supposed facts are visionary and
illusive; their theories are myths stuffed with moonshine, and
their remedy, ' ' free coinage, " has no more to do with their
grievance, "dear money and hard times," than a Voudoo
woman's incantations have to do with sending rain.

To this the people of the West and South reply: "The de-
nials you make do not touch the citadel of our position. Poli-
tics, like metaphysics, nearly always consist in giving a bad
reason for a faith which we would believe by instinct if we had
no reason. Can you- deny that you have in some way got a
corner on the money market, when it is apparent in the money
column of every daily newspaper that the gold bugs of the great
cities can borrow all the money and bank credit they need, with
which to speculate in commodities already produced, at the low
rates of from two to four per cent, per annum, while the farm-
ers and small merchants of the West and South are paying
either in the form of added prices on what they buy on credit,
or in interest on loans, from twelve to twenty per cent, on all
the borrowed capital they need for production? You bankers

436 GUNTON'S MAGAZINE. [June,

are the creditors, we farmers are the debtors. It is to your in-
terest that money should be scarce and dear, and when it is so,
you call it " honest " money, meaning thereby a higher rate of
interest than honest men can earn, and, therefore, a rate which
constantly squeezes the substance of our wealth into your
pockets."

To this Wall Street might truly reply that depreciating the
coinage would tend to increase rather than reduce the rates of
interest on loans ; that low rates of interest could only be arrived
at by heightening the competition and increasing the numbers
of the agencies for the sale of credit, which are the banks, and
furnishing the banks with a costless currency, which could only
be done by revesting in them the power to issue their own bank
notes.

It is so long (sixty years) since the West and South have
had the advantages of an efficient banking system, that the very
word " bank " is odious throughout those sections. The people
of those sections are not able to associate banks with popular
relief or industrial aid to the common producing classes, nor
with low rates of interest, since 1836. Prior to that time bank-
ing was universally popular, its blessings were generally ac-
knowledged, and, in 1840, the South and West were carried for
the restoration of the United States Bank and a Protective
Tariff by a popular majority that gave to William Henry Har-
rison the heaviest electoral majority ever given to any candi-
date from Washington to Grant. This was because the work-
ings of our monetary system, from Hamilton to Adams (ending
in i829)? were favorable to enterprise, and insured as low rates
of interest in Arkansas and Tennessee, Michigan or Illinois, as
in Wall street.

Now, for nearly thirty years, the South and West have
been without a banking system, or a single bank, in any true or
useful sense. So far as the issue of notes is concerned, the pre-
tended national bank note has been, in effect, a mere govern-
ment note, with a national bank's endorsement, the security for
the redemption of which was lodged with the government. No
financial hallucination could be more complete or mischievous
than the notion that such a note currency is of any value to the
people as a means of making rates of interest low, which should
be the chief function of a bank note, and its only real justifica-

1896.] REMEDY FOR MONETARY SECTIONALISM. 437

tion. The existing so-called national bank notes cost the banks
which issue them nearly as much as gold itself would cost them.
For every $90,000 of notes they issue they must buy and store
with the government $100,000 worth of bonds, bearing only 3
per cent, interest. The banks could buy not only $90,000, but
about $108,000 in gold coin with the same bonds.

In parts of the country where money is worth from 12 to
20 per cent., the 3 per cent, interest which the bonds draw is no
compensation whatever for one's capital. As the so-called bank
notes are only redeemable in greenbacks, or when the bank
dies, there is no " homing " to the notes. They never return
to the bank issuing them. Hence, the one first loan by which
they are issued is the only one which the issuing bank can ever
make of these notes. They are not like the freely issued notes
of the various banks of Canada or of Great Britain and Ireland,
or of the various banks of the United States prior to 1836.
These- are, or were, sent "homing" by a central redemption
agency, very early after their issue, and when redeemed by the
issuing bank became ' ' loanable funds " in the vaults of that bank,
competing with other funds of like kind, to get out again on
loan, and at all times, whether actively effecting exchanges or
lying awaiting loans, absolutely costless to the issuer.

But when a pile of fully-paid-for national bank notes lies in
the drawer of a so-called national banker, he is losing interest
on a capital expended, within 3 per cent, per annum as great as
he would lose on pure gold coin of the same amount. And
what is 3 per cent, per annum in the South and West ?

Hence what the South and West connote by the term
bank is not the real and genuine article of banking, but the
bastard, decrepit and idiotic substitute for banking which has,
under the name of " National Banking," denied practically to
the West and South all the advantages of true and real bank-
ing. They are denied that competition between money lenders
in the issue of absolutely costless notes, which is the only
influence capable of making rates of interest low, and of ad-
vancing prices, which is what the South and West really mean
when they say they want money to be plenty and times not
hard but prosperous.

This is the grievance which caused the Populist party to
poll upwards of one million votes in 1890, to increase the vote

438 GUNTON'S MAGAZINE. [June,

nearly everywhere in 1892, and which is likely, unless some
effective reconstruction of the banking and currency system
shall be entered upon by the Republican party, to swell the
vote of the Populist party in 1896 to nearly three millions of
votes.

Of course, few if any Populists, Grangers or Socialists,
Fanners' Alliancemen, Single Taxers or Silverites will foresee
or admit that the true road to "cheap money and advancing
prices, " lies through increasing the competition between banks
and reducing the cost of the form of notes the banks can lend .
Like most mobs they are shouting "Release unto us Barabbas,"
or, " He had better speak no ill of Brutus. "

It is not so unfortunate that the Populists do not yet know
what they are building, as it is that the Republicans do not yet
know what needs to be built. Not one Republican, however
sage he is reputed to be in finance, has yet uttered a word which
indicates that he even apprehends what is meant when the South
and West vote solidly against the Center and East — or more
correctly, the farms and plantations oppose the cities for nearly
a whole generation on every question that relates to money.

As analysed carefully in The Quarterly Journal of Eco-
nomics, these votes show the West and South to have been vot-
ing for the free coinage of silver whenever the East and Center
voted to restrict its coinage, and for its continued coinage when-
ever the East and Center voted to suspend its coinage. The
West and South have voted against the issue of interest -bearing
bonds as a means of buying the gold wherewith to redeem our
greenbacks in gold, and against making these bonds payable in
gold, on the theory that it would be no catastrophe, or that it
would be positively beneficial to put the country on a silver
basis. The East and Center have contemplated such a result
as a catastrophe too evident to need analysis or explanation.

The animus of the West, in all these and other like votes,
has been, " We want money to be plenty, even if it is poor, so
that we in the West and South can hold on to it abundantly, in-
stead of seeing it withdrawn by the banks to the deposit centers."
The animus of the East and Center has been, " Money is
already plenty and has always been so; our large deposits and
low rates show this. What we want is that it shall be kept so
good that all parts of it can stay here in our banks If this fails.

1896.] REMEDY FOR MONETARY SECTIONALISM. 439

the good part of it will be drawn away to Europe, and we in the
East will then be as short of money as you are in the West and
South. "

It is easy to see in this statement of the issue, that East and
West are really fighting for the same thing, in the same inter-
est, i. e., to keep money cheap and rates of interest low, each
for its own section.

The West and the producing sections remember that when
the country was doing business on an abundant, depreciated,
non-exportable currency, viz., the greenback, the money was
not good, but the prices and the times were. If, the free coin-
age of silver would work exactly as the fifty-cent greenback dol-
lar did, to send gold to a premium, but also to release the
producing sections from their paralysis, they are ready to chance
its evils for its supposed advantages.

They feel very certain that continually issuing bonds for
the purchase of gold to pour through a seive, in redeeming
fiat money, for redeeming which there are no assets but what
are borrowed, is not " sound money." Something better than
this must be devised or this will itself be stopped. The Repub-
lican party is trusting at present to the exceedingly precarious
testimony of John Sherman that a sufficiently high revenue,
though paid only in fiat money, will supply the government
with all the gold coin it needs with which to redeem the fiat
money. This is a good enough platform to get in upon, be-
cause it reduces the election to the tariff issue on which the
Republican party can carry nearly every State. But it will not
remain good beyond the day of electio^i. After that day our
statesmen must set themselves to consider by what changes, in
our monetary mechanism, the duty of furnishing gold with which
to adjust the international balances against us can be shifted
from the treasury to the banks. It is no part of the govern-
ment's business to pay international balances in gold, made by
merchants and banks, which, when called upon for gold even
in payment of the revenue, give only a greenback.

The Shermans who say that this fathomless abyss of fiat
folly is " the most perfect currency the world ever knew," the
Clevelands who say that to keep on buying gold to dump into
this abyss is " sound money," and the Peffers who declare that
what we need is more of the same sort, and the Sound Currency

440 GUNTON'S MAGAZINE. [June,

Committee who can get no deeper into the question than to say
that any money is good money which is worth as much when
melted as in the coin, all are blind leaders of the blind. No
money is good, or sound, or cheap, which does not bring bank
credit to the producer's door ; which does not flow out as freely
to the farmers and planters as the rain falls and as the sun
shines upon them ; which is not redeemed daily and hourly in
commodities and commerce by the authority that issues it at as
full values as they got for its issue, and that is not free,
elastic, inspiring, life-giving, to every part of the body politic
and commercial through which it circulates.

The Groningen Land Lease System.

BY PROF. JAMES HOWARD GORE.

Land is never well cultivated by anyone who has not the strongest inter-
est in making it produce the largest amount possible ; and no system of tenantry
is favorable to progress in which there are not well understood arrangements by
which there is developed in the cultivation of the soil a constant interest never to
neglect anything that will make the land more and more fruitful, both at the
present time and in the future. — Passy.

IT is not intended by the title given to this article to convey
the idea that the province of Groningen has a land lease system
peculiarly its own. But the system here to be discussed is
found more frequently in this province than in any of the others
in the United Netherlands, and here it may be said to have
attained its most highly organized form. It is popularly known
as " Bekle mregt, " or " Regt -van Beklemming" of which, un-
fortunately, there is no exact English equivalent, but it might
be characterized in general as half-ownership.

In the records of the Abbey of Fulda for the latter half of
the twelfth century, entries of receipts include sums of money
paid in by certain persons, designated as "half-freemen," for
the rent of stipulated pieces of land. Year after year it appears
that the same person paid an unvarying amount for an iden-
tical parcel of land. Similar entries occur in the papers left by
the heads of other religious houses, and in one case the honest
confession is made that a certain gratuity was accepted for the
transfer of the lease to another tenant.

1896.] THE GRONINGEN LAND LEASE SYSTEM. 441

The advantages resulting from a permanent tenancy to a
corporate body, such as a religious organization, in which it
was necessary to know in advance the income for the ensuing
year, were so great that a life-lease was given whenever possible.
Upon the death of a tenant it was quite natural that some
member or members of the family should desire to continue in
possession, and if the tenant was satisfactory it was equally
natural that the owners should want to renew the lease. Upon
the occasion of such a renewal, as was the case in early days
when an important transaction was consummated, a bottle of
wine was drunk or the one seeking the favor made to the
grantor a present.

The benefits of this life-lease system, and its natural fol-
lower, the arrangement of passing the lease from father to son,
soon suggested that the annoyance of making the renewal, or
transfer, might be avoided by giving in the first instance a
lease which would be perpetual and hereditary. This was
done, with the saving clause that at each transfer a present
should be made. To such a system was given the name
BekUmming. What was found advantageous to church prop-
erty was deemed applicable to state lands. Thus, when
Ommelanden and Groningen united in 1595, all unclaimed prop-
erty was taken up by the State and placed in the hands of a
rentmaster. These public lands received large additions in
1607 when the church property was confiscated, and more than
twenty cloisters and several abbeys passed into the hands of the
State and were turned over into the immediate charge of the
rentmaster.

The records of Groningen show that of the leases for lands
belonging to the state prior to the sixteenth century, only one
was for so short a period as ' eleven years, another for twenty
years, while all the others were for fifty years or more. Dur-
ing the sixteenth century eighty leases were recorded, of which
fifty-seven were for life and five were perpetual. And from
this beginning perpetual leases became the rule.

Private owners had been pursuing the six year lease sys-
tem, which, for small tracts and near villages was satisfactory,
but for larger farms so remote from village communities where
it was necessary that the tenant should have a house upon the
land, the tenant who first erected the house demanded some se-

442 GUNTON'S MAGAZINE. [June,

curity for reimbursement in case exorbitant charges for rent
should be asked when the time for renewal came around. At-
tempts were made to incorporate in such contracts conditions
which would reimburse a tenant thus excluded. But when the
laws of Groningen prescribed the character of the houses that
could be built within its domains, and as the tenant's own ideas
of what he needed enlarged, the only condition of lease that
could furnish adequate security was an extension of time. Thus
the land became held (bcklcmmd) by the house. In the case of
renewal of term leases there was usually an increase of rent,
but to avoid the appearance of increase, it was common to pay
this additional rent for the period in one installment. When,
therefore, private owners afterwards leased land in perpetuity,
this fiction of increase was preserved in the demands for a pres-
ent at each transfer. It may be that the presents, which enter
so frequently and so largely into the system as now observed,
take the place of this increase of rent, and that they are so
adjusted both as to times and amounts as to be equal to the
added rent.

The existence of Beklemregt was legally recognized in
1577, in 1 60 1 it was clearly defined in the land laws, and in the
eighteenth century, when the church lands were disposed of to
individuals, they were sold under the recognition of the per-
petual lease, and a test case established the tenant's inalienable
right to the land leased to one of his forefathers. In 1711, by
a State ordinance, the form of perpetual lease was promulgated,
which under eight heads specifies distinctly the rights and
duties of both parties together with those of their heirs or
assignees.

The Napoleonic code of 1809 was inaccurate when it stated
in article 1575: " Beklemming takes place whenever land is
given over to another in hereditary lease with the condition
that an annual rental is paid, the taxes and assessments met
by the renter, with a renewal every six years by giving a fixed
present, the land remaining the property of the owner."

The hereditary feature is correct, but the framer of this
section sought, either purposely or unintentionally, to graft on
the idea of periodic renewals. Most likely intentionally, so as
tojadapt the unique Groningen system to the six year lease
scheme then in vogue in France.

1896.] THE GRONINGEN LAND LEASE SYSTEM. 443

The next article of the code merely prescribes that the
further rules regarding Beklemtning should rest in custom.

Since the perpetual lease system was very rare outside
of Groningen, only in Friesland and Drenthe as isolated cases,
it is easily understood how the early laws, especially those drawn
up by persons not in sympathy with Dutch institutions, should
make no mention of Bekleimning. This was true of the French
code of 1811, while that of 1820 recognized its existence in some
of the provinces, but did not attempt to define its powers or
limit its functions. Three years later an effort was made to
stop the spread of this system by specifically enacting that no
new perpetual leases should be made, and the enjoyment of
those already in force was somewhat embarrassed by a refusal
to outline the law of Beklemming^ merely stating that custom
should rule in all existing cases.

Fortunately, in 1830, the political parties saw that their in-
terests lay in promoting the interests of the farmer class, and
realized that in improving the condition of this class they would
add to those forces which tend to conserve institutions. There-
fore, each party, when in power, was ready to contribute to
the welfare of agriculturists, and since those of Groningen were
already the best in the land, the law-makers turned to them for
land-laws.

Just here there arises an inability to clearly distinguish be-
tween cause and effect. The lease that is perpetual and hered-
itary is so much like reality, is tangible at least in that it can be
made a matter of record, that it could be held for debts. It is
not possible to state which came first : the conception that such
a lease is liable for debt and hence is a reality, or that being a
reality it was liable for debts. At all events, in 1833, it was es-
tablished by precedent that a perpetual lease could be attached
for debt. Of course, this was soon followed by the recognized
right to mortgage such a lease, and if mortgaged then sell it or
transfer it in any way desired.

At no time have the statutes provided for such tnmbles as
might arise in the complicated transactions of these leases, nor
has any authoritative attempt been made to clearly define the
rights and duties of owner and tenant, but precedents seem to
fix as certain the following points:

444 GUNTON'S MAGAZINE. [June,

RIGHTS OF TENANT.

He has the hereditary use of a fixed parcel of land, and can
occupy and cultivate it as if it were his own.

In case of dismissal he shall receive the value of all build-
ings which he erected, and of all forests which he planted. In
the latter case, the value is estimated at the price which the
trees would bring if converted into timber.

He can place a mortgage on the lease or on the buildings
which he erected.

If the owner lives within the province rent is paid at his
home, otherwise it is transmitted at the owner's cost and risk.

He can sell, exchange, or dispose of his lease without con-
sulting the owner.

He can have his wife recorded as his natural heir to the
lease; or any child who has attained majority; or all minor
children collectively. The tenant was regarded as the house-
hold, consequently in case of his death the family of minors
should be regarded as his successors until the youngest should
attain majority.

DUTIES OF TENANT.

He must take the land into possession and cultivate it dur-
ing the period of the lease, transferring it to another upon his
death.

He pays annually a fixed and unchangeable sum, from
which he can claim no deduction for any cause whatsoever.

He pays, under the name of presents, when there is a sale
or transfer, the equivalent to two years' rent ; when he marries
or remarries, one year's rent ; when the lease passes to him by
inheritance, one year's rent ; when he registers the name of his
wife or children as his natural heirs, one year's rent; but if he
records the name of any other party, the gratuity is double the
preceding; when the youngest child of a family of minor heirs
becomes of age, one year's rent.

He pays all taxes.

He cannot change the form of the fields without permis-
sion. (By way of a note it might be said that usually the
boundaries of fields are ditches, therefore any change in the
boundaries might modify the drainage of the entire neighbor-
hood to such an extent as to seriously affect adjacent property).

1896.] THE GRONINGEN LAND LEASE SYSTEM. 445

He cannot cut any trees, even those he planted himself.
He cannot cut peat, except for his own household use.

RIGHTS OF OWNER.

He reserves the right of hunting and fishing.
He can have only one tenant.

He recovers the use of the land in case the tenant forfeits
his lease.

THE LEASE IS FORFEITED.

In case of the death of the tenant, unless his heirs' names
has been admitted to record.

If he leaves the land.

If he misuses it in any way so as to permanently injure its
value.

If the tenant fails, in which case the lease is sold and the
rent paid first; then the residue becomes available assets.

If the property passes into the ownership of the tenant.

If the rent for two years should be unpaid.

It will be seen that Beklemming differs from ordinary lease
in the following particulars : The lease is a reality ; the tenant
has the unrestricted use of the land for an unlimited period ; he
owns all he raises ; he can transmit or mortgage his lease ; he
pays all the taxes, and on certain occasions he pays a gratuity.

Unquestionably an ideal form of lease is that which gives
the maximum amount of liberty and freedom to both owner
and tenant. To the owner is due the rent of the ground, an
amount equivalent to what it can produce over and above the
cost of production plus any extrinsic value which external
surroundings or agencies may give to the products. To the
tenant belongs the price of his labor, the hire of such utensils
and machinery as he may employ, and some remuneration for
his superintendence and acquired knowledge of agricultural
affairs. In Groningen the best proof that the owner receives
his just dues under this system can be seen in the fact that
land rents there amount to about three and one-fourth per cent,
of the value of the land, while the average rate of interest is
only three per cent. , and that in no province in the Netherlands
are farm lands so difficult to purchase. Also the tenant fares
well. Even a short stay in this province will impress one with
the thrift of the farmer class. He will see then, fine buildings,

i 16 GUNTON'S MAGAZINE. [June,

the best methods of farming, because the permanency of tenure
emboldens a man to make experiments whose results he will
be permitted to enjoy, and a feeling of security that marks the
difference between a freeman and a serf.

Arthur Young has said: " Give a man the secure posses-
sion of a black rock, and he will turn it into a garden ; give him
a nine year lease of a garden, and he will turn it into a desert."
In the perpetual lease he has the secure possession. Of course,
the very element of security which he has possesses a money
value, and the annual rent would be more than under the ordi-
nary system. But under the ordinary system the tenant cannot
put forth his best efforts, since their results in greater fertility
of soil or larger crops give, in the eyes of the owner, a greater
value to the land, and he would seem to profit by this advanced
value in an increased rent. The tenant, knowing that a renewal
will be possible only at a higher rate, seeks to obtain returns
for the extra labor which brought about this higher state of
cultivation, or perhaps he may, in the last year or two, try to
depreciate the land, so he overworks and abuses it, and by so
doing the wealth of the community is diminished.

The three essentials for success in agricultural matters are:
ground, labor and capital, but it does not always happen that
they can be found united in one person. If the owner of the
land has already invested his capital in its purchase, it would
be best for him to place its cultivation in the hands of some one
who could command the labor and capital ; and if a man has
limited capital, it would be to his interest to use this money in
helping him to farm profitably land for which he has a per-
petual lease, rather than use all of his money in the pur-
chase of land for whose cultivation he has not the requisite
capital.

From a political standpoint the perpetual lease possesses
advantages. The owner is interested in stregthening the gov-
ernment, for in its stability rests his guarantee of continued
ownership ; and the tenant can prosper only so long as stable
conditions give good prices to his produce.

Every traveler through Groningen is impressed by the
prosperous appearance of the farms, the free use there made of
agricultural machinery, the manly independence of the farmer
class, and the interest shown in all institutions and agencies for

1896.] INDUSTRIAL CUBA. 447

promoting the welfare of the community. Some might wish to
attribute these conditions to the fertility of the soil. But this
fertility is the outgrowth of the lease system, for originally the
soil of Friesland was equally good and its situation just as fav-
orable, but it held fast to the time-lease system and has re-
mained behind its neighbor in the development of agriculture
within its domains.

The government has repeatedly shown its recognition of
the prosperity enjoyed by the tenants of Groningen by appoint-
ing commissions to investigate the general land-holding and
land-leasing system. Their reports have always endorsed the
perpetual lease, but no means have been devised for intro-
ducing it in other provinces without serious inconvenience to
the small holders. But in a new country such a system might
be adopted.

It is in the belief that a discussion of this topic has not
found a place in the literature of our country that this article
has been written.

Industrial Cuba.*

BY EUSEBIO VASQUEZ.

IN reading the French newspapers, one is struck with the
slight interest they seem to take in the causes of the Cuban
insurrection. Twenty lines suffice to state the unimportant
events — an insignificant encounter, the burning of a plantation,
the plundering of a sugar mill. That is the way, in France,
you are writing the history of this revolution, whose causes, it
would seem, ought alone to occupy you. The philosphy of his-
tory seems to have no place in the distribution of news and the
commenting on events in the daily press.

At bottom, what is the question under discussion? Why
have the insurgents taken up arms ? Why does this merciless
war threaten still to continue for a long time? A political
cause has been assigned for the insurrection. In truth, the
cause is above all an economic one. Unquestionably, the col-
ony is exploited in a very severe manner by the home country.
The Spaniards seem to have adopted the principle that the col-
ony and the colonists are two elements specially created for

*Translated from Journal des Economistes, by A. B. Woodford, Ph. D.

448 GUNTON'S MAGAZINE. [June,

their benefit, made to enrich public functionaries and to pay
tribute to Spain. The rule is applied with extraordinary stead-
fastness. Every position is reserved exclusively for Spaniards,
so that Cubans cannot hope that civil offices will ever be open
to them. They only have left the task of paying fantastic
taxes and entertaining the public officials whom the home Gov-
ernment sends them.

To this political cause of uprising are added others of an
economic character. The Spaniards have established in Cuba
a prohibitive system. Enormous duties are imposed on foreign
merchandise, and this aggravating system is rendered absolutely
illogical by the extraordinary taxes imposed on Cuban products
when they reach Spain. One can understand that no attention
is paid to the interests of the island in such a regime. Foreign
nations in their turn also impose high taxes on exports from
Cuba. From this it results that the unhappy colonist has diffi-
culty in selling his goods and is obliged to pay excessive prices
for the necessaries of life.

Singularly, the larger part of the insurgents, who are colored
people, all pretend to be descended from the French. The
province of Santiago de Cuba is largely inhabited by the French
and their descendants. The negroes speak the French language
and, being descended from the slaves of Frenchmen, they
haughtily claim their so-called quality of being Frenchmen.
And to these pretended Frenchmen, Cubans descended from the
Spaniards join themselves quite readily and struggle for the in-
dependance of their island. One of the best recruits of the two
leading insurgents, Maximo Gomez and Maceo, has been a
French sergeant, Meyer, who joined the revolutionists at the
expiration of his engagement of the foreign legion, at a salary
of $400 a month. Having become a leader of the insurgents,
Meyer conducted one of the most audacious campaigns, torment-
ing the regular troops, stealing convoys, and cutting telegraph
lines and connecting them with other lines, which led to offices
which were in his power. He was thus able to receive and send
out dispatches and create interminable confusion in the services
of the administration. He countermanded military orders and
was able to bring two Spanish brigades face to face in line of
battle, each having been mistaken for a band of insurgents.
Behind them two thousand rebels devastated the province.

1896.] INDUSTRIAL CUBA. 449

When the revolutionists encounter regular troops, they are
quite frequently repulsed. The Spanish soldiers have been
greatly praised, and one cannot say too much concerning their
energy, their courage, and the heroism with which they support
endless fatigue and extreme danger. But it is proper to recog-
nize that the insurgents show much skill and courage on their
side. In this singular war, the most unexpected means, the
most barbarous devices are employed. Thus, in order to break
the square of regular troops a dozen insurgents were sent by a
rebel commander into the midst of the Spanish ranks each car-
rying a dynamite bomb, which they exploded, and were them-
selves blown up with the Spanish soldiers about them. But
the lines were broken and the column decimated. One can
understand that with partisans thus determined to meet death,
the struggle will be long, painful and bloody.

One of the first economic effects of the insurrection has
been to greatly reduce the trade in sugar, which was one of the
most important in the island. One may properly ask next,
What will become of the tobacco industry, if the insurrection
continues ? Everybody knows that Cuban tobacco, and espe-
cially Havana tobacco, is the best in the world. Its production
is not great enough to meet the demand of exporters and,
nevertheless, in spite of the great demand, the tobacco trade is
undergoing a severe crisis. This may seem strange at first.
How is it, the reader will ask, that the industry is suffering
when production cannot equal consumption ? The answer is
ready ; Havana cigars, for some years, have been undergoing
the severe burden of counterfeits, and not of simple competi-
tion. It is thus that prices have been lowered. Heaven knows
the counterfeiters have not stopped work. Hamburg alone
floods Germany, and America has innumerable false Havana
cigars. How can we expect the smokers who are accustomed
to pay 5 and 10 cents for so-called Havana cigars to pay 15 or
20 ? It would be ridiculous to tell them that they are not
smoking Havana cigars, for they would show you the boxes,
the marks, imprints, and stamps of the best houses in Havana.
We are dumfounded at such audacity. The whole is apocry-
phal— stamp, imprint and cigars.

False Havana cigars have thus killed the trade of the real.
The consumer who formerly paid 15 or 20 cents for Havana

45° GUNTON'S MAGAZINE. riline»

cigars to-day asks for the same kind of cigar for 5 or 10 cents;
and the maker can not possibly sell at this price, both labor
and general expenses being too high.

Some details concerning tobacco plantation and the cigar
industry in Havana may be of use here. In Europe peo-
ple are almost completely ignorant of how this, one of the
most interesting of industries, is carried on here in Cuba.
People who write about Cuba have almost entirely neglected
to give even a summary glance at it. How many French
smokers, for instance, would be able to explain the mark
Vuelta Abajo on their cigar boxes ? It is, nevertheless, a piv-
cious mark when not counterfeited. Vuelta Abajo is to tobacco
what M6doc is to wines, that is to say, the very best territory,
a privileged enclosure, capable of yielding products of the very
highest excellence. It forms about one-tenth of the territory
producing tobacco. It begins at Guanajay, a town bordering
on the province of Havana and belonging to Pinar del Rio, and
forms the northwest point of the island of Cuba. It is on the
hills that tobacco is cultivated. The tobacco grown there is
the finest, has the most delicate leaves and the most exquisite
aroma; it has the reputation of being the finest in the world.
The principal kinds are those' of Rio Seco, in the south of the
province of Pinar del Rio; Paso Viejo, and San Luis.

Vuelta Arriba, which extends throughout the whole centre
and south of the island, produces rather heavy tobacco, with
little aroma, which in spite of its very low price, can scarcely
compete with the Brazilian and Mexican tobaccos which it
meets in foreign markets. Vuelta Arriba possesses, however,
a finer tobacco than that raised in most of the island called
Reniedios; for there is classed under the name of Vuelta Arriba
a quantity of tobacco coming from all parts of Cuba.

Purchases from the planters are made in a rather curious
fashion, and one which astonishes foreign merchants. The
Almacenistes or wholesale merchants in Havana, send their
agents to visit the plantations in Vuelta Abaja and Vuelta Arriba.
Contrary to business custom, they do not buy the tobacco by
means of samples, but conclude the transactions without even
opening the bundles, depending entirely on the word of the
planter. What is even more strange, no one has ever heard
that a purchaser was deceived in the quality of the merchandise

1896.] INDUSTRIAL CUBA. 451

sold. This fiduciary system, surviving without abuse in a
country where competition and fraud are quite general has oc-
casioned the inspectors of tobacco, which the French govern-
ment sends here, much speculation. To form an estimate of
the tobacco, buyers look at it still standing and thus judge of
its value. The tobacce is all taken to Havana, put into ware-
houses and paid for by tale.

The warehouse is a great aid to the foreign purchaser,
because he finds gathered there the tobacco from the whole
island. He thus avoids much expense and fatigue. Business
is carried on from November to March. The wholesale mer-
chant determines the price and a reunion of these merchants
regulates the prices current, imposing them both on the foreign
buyer and on the planter whose work is so poorly paid for.

The exportation of leaf tobacco is mainly confined to the
United States, where the factories buy a large quantity. The
free towns of Germany, Hamburg and Bremen, are also quite
large buyers from Cuba.

Tobacco is taxed 8 shillings per hundred kilos when ex-
ported, but a great part of the tobacco is worked up on the
island, cigar manufacturers being very numerous. These fac-
tories are mainly in the hands of Spaniards. There are, how-
ever, two very rich companies, the Bok and the Upmann,
which stand at the head of the industry, and are composed, the
first of English and Germans and the second exclusively of
Germans ; many English and Americans are associated with
the Spaniards in the cultivation of tobacco.

45« [June,

Editorial Crucible.

THE ECONOMIC VIEWS of the New Hampshire Democrats
appear to have been radically changed by the recent object
lesson. In 1892, the New Hampshire Democratic convention
confirmed the national platform of the party which " denounced
protection as a fraud and robbery, unconstitutional and contrary
to the fundamental principles of the Democratic party." In
its platform, adopted a few days ago, it has completely turned
its back on the anti-protection doctrine and declared for a tariff
that will "afford such incidental protection as will meet the
requirements of American capital and labor." If this sort of
conversion continues until the fourth of March next, Mr. Cleve-
land will hardly have any friends left.

IT is SAID that the Chinese Government is following the
example of Japan in sending students to Europe and this
country to be educated. In the recent contest with the Japan-
ese, the statesmen of the Flowery Kingdom acquired a realiz-
ing sense of the superiority of Western methods over Eastern.
If this leads China to sufficiently modify her conception of
civilization as to encourage the introduction of modern indus-
trial methods into that country, the war between the two
branches of the Chinese race will have been worth many times
what it cost. The admission into China of steam, factory
methods, railroads and other modern industrial appliances will
do more to bring China and the eastern nations into progressive
harmony with the rest of the world than all other powers
combined.

THE NEW YORK Sun is still doing noble work in exposing
fraud in American journalism. Whether we agree with the
politics of the Sun or not, we are forced to admit it to be the
leader of clean, straight, patriotic journalism in the United
States. Its treatment of political and economic subjects is
always bold and straight, if not sound. In its attitude towards
public men, it recognizes character and ability, regardless of
party lines; it is the enemy of humbug under any guise. It is
difficult sometimes to understand its selection of political leaders,
especially when it champions Tammany Hall and David B. Hill,

1896.] EDITORIAL CRUCIBLE. 453

but even when doing this, it is frank, open-handed and free
from cant. Under all circumstances, it is American. Regard-
less of every other consideration, the Sun is for the Flag. It
frequently gets on the wrong side of industrial questions, par-
ticularly in labor disputes, but it is the gem of American
journalism all the same.

THE HUBBUB THAT is being made about McKinley's silence
looks a good deal more like politics than sound finance. The
only judgment of McKinley that is worth while must be formed
upon his utterances and actions before he was a candidate
for the presidency. Any opinions he might express at this
late hour, if not in accord with his public records, would be
worthless.

On the other hand, the McKinley boomers are trying to
create the impression that he is the candidate of the people and
not of the bosses. It is doubtful if there ever was a more com-
pletely boss-conducted boom than the one which is expected to
float the nomination to Mr. McKinley. The only difference is
that his boom is in the hands of new " bosses," but they have
all the qualities of the old with a little less modesty. This
anti-boss clap-trap has a very Pharisaical flavor, which the best
friends of McKinley may well regret.

IT SEEMS to be taken for granted that the future policy of
this country is to be determined entirely by the doings of the
Republican convention, to meet at St. Louis on June i6th.
What the Chicago convention will do, and whom it will nominate,
appear to be matters in which the public is no longer inter-
ested. Mr. Cleveland's much announced position in favor of
" sound money," his high reputation for " integrity," evidently
avail nothing with the people. Nobody, except, perhaps, the
New York Sun, seems longer to care what Mr. Cleveland's
future plans are. The administration must begin to realize
how ungrateful Republicans are. Yet, there are others who
think this reveals a sane perception on the part of the public.
There is doubtless some truth in the common belief that the
masses may for a time be deluded into following false gods,
but they can not be either coaxed or coerced into continuously
worshipping at the shrine of impotence and obvious failure.

454 GUNTON'S MAGAZINE. [June,

THE MOVEMENT IN the Board of Education to elect Presi-
dent Oilman, of Johns Hopkins University, to the post of
Superintendent of the New York public schools is something
of a surprise to the public. Nevertheless, it is an evident
movement in the direction of reform in popular education.
Not that we have anything special to urge against the present
incumbent, Mr. Jasper; but the selection of Mr. Oilman
shows a clear disposition on the part of the Board of Education
to secure the best talent there is for the school system of the
Greater New York. By most people it would be regarded as a
step down to exchange the Presidency of Johns Hopkins
University for that of Superintendent of the public schools in
New York, but in reality the latter is much the more important
position. If Mr. Gilman is as successful as Superintendent
of public schools in New York as he' has been as president of
Johns Hopkins University his election will mark a great step in
the progress of popular education.

THE REPUBLICANS OF Pennsylvania, New Jersey and Massa-
chussetts in their State platforms have endorsed the policy of
discriminating duties on imports with the view of restoring to
the American Ocean Carrying Trade the protection which was
given to it from 1791 to 1816. The resolution of the Massa-
chussetts Republican Convention is as follows :

" We believe the time has come to return to the policy of
Washington and Hamilton, which, by discriminating duties in
favor of American bottoms, secured 90 per cent, of our carrying
trade to American ships, and which, if now restored, would
again revive our shipping and cause American freights to be
paid to Americans. "

This resolution ought to form part of the Republican
National Platform to be adopted at St. Louis on June i6th.
The country now pays $150,000,000 each year to owners of
foreign vessels for the transportation of American products,
and foreign products coming to the American markets. All
the property consumed by fires in the United States and
Canada annually does not equal in value, within 25 per cent.,
the wages diverted from American labor by allowing nearly
our entire imports and exports to be carried in foreign ships.

1896.] EDITORIAL CRUCIBLE. 455

THE WAR of words which is going on as to whether we shall
maintain the gold standard, or go over to the silver standard,
has no meaning for a clear brain. The redemption of green-
backs with borrowed gold at the rate of $180,000,000 a year,
shows in fact that our legal business standard is fiat paper. How
can gold be our standard of payments when it cannot be de-
manded in payment except from the Government ? The very
banks which are crying importunately for the maintenance of
the gold standard, mean by it only that the Government shall
pay gold to the banks for their greenbacks. The banks them-
selves selfishly cling to the ' ' fiat money " basis, on all that they
are liable for to depositors. If the Banks want sound money
and a Gold Standard, they can get it at once by recognizing
gold on all their obligations, paying gold at once themselves for
all greenbacks and thereby ending the run on the Treasury.
If they are afraid to pay gold, and mean by a "gold standard "
only that the Government shall pay gold to them while they pay
only fiat money to others, i. e., to the merchants who need gold
for export, as they have been doing for four years past, then
they are no true advocates of ' ' sound money. " They want the
Government to tread the wine-press of the gold standard alone,
while they pay in that species of "rag money," whose redun-
dancy in volume, they say, excites the distrust of the world's
financiers.

We have now been out of the War of the Rebellion for
thirty years, and sixteen years of that thirty the Government
has been the only party in the country from whom gold could
be drawn. The Banks and Exchanges talk "gold" but pay
"fiat."

The Treasury must be relieved of its burden of supplying
gold for commerce from the Revenues drawn from the Taxpay-
ers. Such a process is confiscation and not " honest money;" it
is " fiat wind " and not sound currency.

THE COUNTRY is approaching another sale of bonds. In
only seven days of the May just past the greenbacks sent in for
" redemption " in gold (if a process which has no redeeming
feature can be called redemption) amounted to $7,000,000, or at
the rate of $28,000,000 for the month.

In the year 1892 (Harrison's fourth) only $5,000,000 of

456 GUNTON'S MAGAZINE. [June,

Treasury notes and greenbacks were offered for redemption.
In the first ten months of the fiscal year 1896 (Cleveland's third)
the redemptions have aggregated $135,000,000, and by June
3oth, the end of the fiscal year, they are expected to amount to
$184,000,000.

The gold contents of the Treasury sieve, sometimes sarcas-
tically called the gold reserve, because it can reserve nothing,
after being temporarily tilted up to about $132,000,000 by the
recent bond sales, has settled down below $114,000,000 (2oth
May) and its further decline will bring it below $75,000,000,
probably in June.

The rapid rate of increase in greenback redemptions is sig-
nificant. Even in March, April and May of last year the
redemptions amounted to only about $1,000,000 a month. This
year the redemptions in March were nearly $8,000,000 ; in April
$7,600,000, and in the first seven days of May they were
$7,000,000.

This cannot be stopped by any mere opposition to silver or
declaration for gold standard. We can only be relieved from
these disastrous conditions by some re-organization of our bank-
ing system which shall give a federation of all note issuing
banks, strong enough in capital and influence to take the work
of meeting the demand for gold off the hands of the govern-
ment ; and to compel redemption and payment in gold by the
banks. This, of course, involves the retirement of government
note currency and the substitution of equal or greater volume
of bank note currency, and the total repeal of the legal tender
law. Are the Republican statesmen who will direct the de-
liberations of the St. Louis convention equal to this task?

AT THE REQUEST of the National Association of Post Office
Clerks a bill has been introduced into Congress by Representa-
tive Sperry, of Connecticut, providing for the classification of
clerks in first and second-class post offices. The object of this
bill is to group various workers in the post office so that they
shall have the advantages of promotion in salary from the min-
imum to the maximum, which now applies to letter carriers.

Since there is nothing unreasonable in this bill and since
the post office is a department of the Government service,
whose regulations have to be determined by acts of Congress,

1896.] EDITORIAL CRUCIBLE. 457

there would seem to be no good reason the bill should not pass.
If letter carriers begin at a certain minimum salary, which is
increased in yearly amounts until it reaches a certain maximum
amount, why should not this apply to all other workers in the
post office, as there is manifestly no good economic objection
to it ?

The New York Sun opposes this measure on the very pecu-
liar ground that it is a dangerous precedent to have an associa-
tion or trades union among Federal office holders. According
to this, the employes of the Government are not to have the
same opportunities of exercising associated influence to improve
their pay that is conceded to all other laborers. This is very
much like the decision of the Court in the case of the Ann
Arbor strike some years ago. The piece of railroad on which
the strike occurred was in the hands of a receiver, which was
virtually the Government. The Court ordered the laborers to
take the boycotted freight, and because one of them resigned
his position rather than do so, he was taken into court and fined
$50 and costs, with the promise of both fine and imprisonment
for any future act of the kind. This indicates what laborers
may expect with the socialistic or public ownership of industry.
When the Government becomes the employer, organization
against the employer will be conspiracy against the Govern-
ment. Freedom of labor is really consistent only with private
enterprise and the equal rights of both employers and laborers
to organize their competitive forces. We repeat that the present
Bill ought to pass, but the Post Office employe's must not com-
plain if they have not as good a chance to make their demands
felt as have other laborers. They are under State socialism
and must be willing to put up with the disadvantages of
Pharaoh-nic methods of coercion.

458 [ June,

Leading Events of the Month.
TRANSVAAL.

There has been no more interesting exhibition of diplomatic
fencing in recent years than the present bout between Mr.
Chamberlain and President Kruger. So far the Boer statesman
has won at every point, and in view of the revelations contained
in the recently published cipher despatches, the only proper
course for England is to call Mr. Rhodes and the whole man-
agement of the South Africa Company to a strict account.
Her familiar policy of compulsion through inaction will not
work here, for President Kruger holds hostages. He may, if
he chooses, carry out the full sentence imposed upon the con-
victed Uitlanders, one of them a brother of Cecil Rhodes, unless
the latter gentleman is banished from Africa. There is a re-
port that he has actually submitted this ultimatum, since learn-
ing of Mr. Chamberlain's attempt to shield the instigators of
Jameson's raid.

However desirable or inevitable England's supremacy in
South Africa may be, her present embarrassment is at least a
lesson to the effect that the supplanting of inferior races by the
higher civilization is best accomplished through industrial evo-
lution rather than political intrigue and chicanery.

INDUSTRIAL PROGRESS IN CHINA.

A good illustration of the true mode of development in the
case of backward nations is found in the sporadic forces at work
in China. It is reported that the emperor has ordered the con-
struction of a new railroad of considerable extent; that there
are good prospects of inaugurating a regular steamboat service
on the Yang-tse-kiang river; and that a commercial mission
from France, following the example of England and Germany,
is about to travel extensively in the heart of China with a view
to building up an import and export trade and thereby awaken-
ing some industrial activity among the inhabitants. Strangest
of all, for China, is the report of a strike occurring among the
tailors of Shanghai, which is said to have resulted in an increase
of wages from 15 to 25 cents a day (American money), and in
the food allowance from $1.56 to $2.60 per month. These
instances, it is true, are isolated and comparatively insignificant,

1896.] LEADING EVENTS OF THE MONTH. 459

but the transformation of the Chinese Empire is not to be
looked for in one generation. They indicate the important
fact of the gradual infusion of Western industrial ideas. The
evolution of political institutions can and will come later.

CUBA. ^

Apparently the moral support which the insurgents receive
from this country is serving their purpose nearly as well as an
official recognition of belligerency. General Weyler says that
our perpetual ' ' interference " must cease or he will have to re-
sign his command. In his exasperation he has expelled several
newspaper correspondents, whose offense had been the furnish-
ing of facts to prove that numerous battles, so-called, have
been nothing less than massacres of non-combatants, reported
as " victories " by otherwise inefficient Spanish columns. And
now, but for the prompt action of our State Department, the
entire crew of the captured filibuster " Competitor," including
two American citizens not found bearing arms, would have
been executed upon court martial judgment.

There is small likelihood that our interference will cease so
long as this sort of thing continues, and it is remarkable to find
the European press still vigorously upholding the Spanish
policy in every particular. Especially inapt is the London
Globe's comment, that our ' ' pretentious arrogance " in the mat-
ter is due to a determination to make our commerce supreme in
the Western hemisphere. If there were any truth whatever in
the imputation, it would at least be simply an imitation of
England's policy the world over : — first guns, then traders.

The Queen Regent, in her speech to the Cortes, however,
seems well enough satisfied with the " correct and friendly con-
duct of the American Republic." But when she refers to
Spain's "mission of civilization " in Cuba, and says further that
the island's commerce could not continue except under Spanish
control, she indulges in the absurd. The only thing that would
not continue would be the revenue previously going to Spain.
Cuba's trade and industry could get along well enough without
that particular form of encouragement.

LABOR LEGISLATION.

Several important measures affecting the interests of labor
have recently become laws : notably the bills carrying out the

460 GUNTON'S MAGAZINE. [June,

constitutional prohibition of contract labor in prisons. This
marks the satisfactory ending, at least in New York State, of
another crusade against the doctrine of "cheap goods" regard-
less of the cost in human beings. Another measure aimed ai
the same evil is now before Congress, providing that goods made
by convicts shall not be sold outside the State in which they are
produced.

Representative Barrett has introduced into the House a
joint resolution proposing an amendment to the Constitution
to the effect that Congress may have power to limit uniformly
the hours of labor in manufactories of textile fabrics and other
industries. This is aimed at the supposed advantage which the
South, with its long hour system, has over New England man-
ufacturers; but it would not, however, prevent the eventual
transference of the cotton industry to the former section. It is
a fair question whether under the " implied powers " doctrine
developed by Hamilton, Congress has not already the power to
legislate on this question without any amendment. The main
point is to get the legislation. The short hour movement is
steadily progressing, and as the South develops it will make
itself manifest there. But there is not much hope that Con-
gress can be brought to act upon the subject until it takes the
form of a national agitation.

In the same line is the bill for the classification of clerks in
post-offices, which the New York Sun describes as an ' ' assault
upon Washington " for higher wages, a portent of trades-union
methods in the civil service. If there is any good reason why
government employe's should be the only class of wage- workers
in the country who are prohibited from endeavoring to better
their condition, it has yet to be advanced. The Sun's warning
that future legislation may be dictated by powerful trades-
unions (of postal clerks) is hardly creditable. We should say
that the employe" has at least an interest in such a matter, as
well as the government. The absence of any pressure what-
ever upon the postal department is one great reason why it still
continues to employ antiquated methods and a hand-laTx>r
system.

The Sun's criticism furnishes, by the way, a good example
of what would happen regarding wages if the government
should take possession of the railroad and telegraph systems.

1896.] LEADING EVENTS OF THE MONTH. 461

Not a penny of increase could ever be gained without overcom-
ing, among other things, the whole force of the "public econ-
omy " cry, the effectiveness of which is sufficiently familiar.

THE POLITICAL SITUATION.

Four weeks before" the St. Louis Convention, Mr. McKin-
ley's friends are claiming for him enough uncontested delegates
already elected to give him a majority on first ballot. But
the continued silence of the Ohio candidate on the money ques-
tion has undoubtedly produced an unfavorable effect, and the
contest can hardly be considered settled as yet. In the Demo-
cratic camp, by the way, more anxiety by far is manifested
over the character of the Republican nomination than of their
own. Mr. Morrison confesses his inability to remedy or even
understand the financial situation, while Mr. Carlisle, for his
part, wants to subordinate the tariff issue, and refers to it in
passipg as the " character and amount of taxation to be im-
posed upon our citizens. " Very little is being said this year
about the "robber barons " and " unconstitutional taxation."
Neither is the Democracy in good position to force the money
issue to the front, when a majority of its state conventions so
far have declared for free silver, and it is an even question
which faction will control the Chicago Convention.

Mr. Thomas C. Platt, has expressed perhaps better than
anyone else, the two essential principles which ought to be em-
bodied in the Republican platform : first, a protective tariff suf-
ficient to " make up for the difference in the price of labor here
and abroad " ; and second, a measure which will "render our
currency system intelligible, safe and elastic." Thereby it will
put protection upon a sound economic basis, and at the same
time take a step in the direction of a rational and efficient na-
tional banking system. The all but certainty of Republican
success anyway, makes it doubly important that the party's
declaration of principles be economic, not traditional only.

THE BOND INVESTIGATION.

Senator Peffer's resolution having been adopted, the bond
sale investigation which is expected to unearth divers ' ' gold-
bug " deals, and official corruption, is now on. There is the
usual flavor of political buncombe about this investigation, and

462 GUNTON'S MAGAZINE. L June>

the usual result may be expected. The real points that need
attention have to do with the causes that made necessary any
bond sale at all. The first of these is the deficit-making tariff
of 1894. The second is a bungling banking system under which
the government can be compelled to borrow its own gold over
and over again. The investigating Senators might better have
passed the Dingley tariff bill for one thing, and then taken up
a plan for so organizing the banks as to make them responsible
for their own business needs.
NEW CIVIL SERVICE ORDER.

The far-reaching importance of President Cleveland's last
order regarding the civil service, has hardly as yet been appre-
ciated. Outside of the higher officers, requiring Senatorial
confirmation on the one hand, and common laborers on the
other, there are now less than 800 government positions avail-
able for political purposes. The new order transfers about
30,000 employe's to the classified list. It is difficult to see why
this step would not have been fully as desirable and correct at
the beginning of Mr. Cleveland's term as at its close. All his
present Democratic appointees are now secured in office, who-
ever the next President may be.

But in itself the measure is a good one. The spoils system
is one of the numerous wrongheaded political ideas given us by
Andrew Jackson, and it has been one of the danger spots in
American politics ever since. Its removal may lessen the total
product of campaign enthusiasm, but it will leave more free-
dom for the intelligent discussion of public questions. The
burden of office-promising is lifted from candidates and cam-
paign managers; and several prominent politicians have already
welcomed the change on that account. A prohibition applying
equally to both can prove no real hardship to either.

1896.] 463

Economics in the Magazines.

ART. Restraints Upon the Practice of Architecture. By
John Beverley Robinson, in The Engineering Magazine for May.
Mr. Robinson is opposed to the establishment of any censor-
ship over art, not so much because the people do not need the
censors as because the State and municipal governments would
be incompetent to appoint competent censors. He says: "It
is just as well to admit at the start that, in comparison with
the older nations, America is crude. Compared with Lon-
don and Paris, as far as the elegancies of life are concerned,
New York and Boston are of but a wild western type of civil-
ization. We lack the records of the centuries about us; we
lack the traditions of race and home; we lack the esthetic
sense and critical discernment that come with high cultivation. "

One would think from the frequency with which American
immaturity in art is asserted that our early American colonists
did not bring with them the grade of civilization current in
Europe when they came, and proceed to improve upon it in
the directions which were made most pressing by their environ-
ment, so as to evolve here a new and divergent evolution in art
at least as rapid and marked as that which was subsequently
made in Europe. The assumption seems to be that we re-
lapsed into a sort of "stone implement" or prehistoric age, and
became like the cave dwellers of Switzerland, or the shepherds
of Judea, that had everything to learn and nothing to teach.
Will Mr. Robinson kindly compare the solitary grist mills now
floating on the historic Rhine, which "tie up " at one little slow
Dutch farm after another, grind its grist by the lethargic power
of the stream playing on the boat's wheels when they anchor,
with the magnificent equipment of a Minneapolis flour mill
grinding as many tons in an hour as would be ground on the
whole Rhine in a year? Let him compare the little handsickle
in use on the small seven to thirteen acre farm of France,
unchanged since the advent of Boodha in India, or of Cyrus on
the Tigris, with the Western reaper, which reaps and binds
eighty acres in a day. Is there no art in Morse's telegraph, or
Fulton's steamboat, or Colt's revolver, or in an American culti-
vator, but only in a morbid projection upon canvas of Dante's
insane portraitures of a supposed but impossible torture of lost

464 GUNTON'S MAGAZINE. [June,

souls in hell, or of the ever recurring monks of the wine cellar
lewdly jibing the waiter girls that bring them their inebriating
cups? Two-thirds of all the so-called art of Europe consists
of pictures that are both unideal and untrue, designed to com-
memorate events that never occurred, or to preserve our rever-
ence for ideas which the human mind no longer seriously enter-
tains. American art must be the embodiment of American
ideals, and not the reflex of mediaeval ideals which no longer
command the sincere respect even of the European mind. The
art of Europe is as crude in its way as that of America, because
it does not relate to ideas that are now or ever again can be
potential over the human mind.

The most powerful and artistic fiction of modern times, per-
haps of any period, whether judged by the extent to which it
has been read, dramatized, acted, imitated and translated, or by
the depth of its revolutionary effects on society, is Uncle Tom's
Cabin. It drew much of its power from the hunger the world
felt for a new art that should be American. Irving wrote vol-
umes on England, Spain, Mohammedan histories, etc., all of
which are passing into waste paper because they have not the
originality of true art, while his name lives only in that small
portion of his work whose theme was American, viz., The Leg-
end of Sleepy Hollow, Rip Van Winkle and Diedrich Knicker-
bocker. Humboldt showed that travel and scientific observa-
tion were fine arts, and that the best field for their practice lay
in America. Audubon lifted the study of birds into a fine art,
and found no field necessary to its practice but America. Low-
ell, Mark Twain and Bret Harte have lifted American humor
into an art so fine that the European world itself is enquiring
whether all real humor is not exclusively an American art.

GOLD. The Present Value and Purchasing Power of Gold.
By H. M. Chance, in The Engineering Magazine for May. Mr.
Chance straddles over two inconsistent theories of the causes
that regulate the value of gold, by saying first that it is deter-
mined by the cost of production, and secondly that ' ' gold and
silver are less sensitive (to changes in the cost of production)
because the stocks on hand are so large, the inertia of the mass
so great, and the influence of tradition and past experience so
strong, that years may elapse before a change in the cost of

1896.] ECONOMICS IN THE MAGAZINES. 465

production creates a corresponding effect upon their market
values or purchasing powers." Of course, the latter proposition
falsifies the former and makes the quantity of gold standing
over a more important factor than any one year's production in
regulating value. The only way in which " tradition and past
experience " can regulate the value of gold is by increasing the
demand for it either in the arts, in commerce or in coinage.
Mr. Chance makes the following interesting exhibit, showing
that all the other chief metals have cheapened relatively to gold,
but attributes the cheapening to the fact that improved pro-
cesses apply to all except gold.

Pounds of metal required to purchase one ounce of gold.

1876 i8q6. Decline in Purchasing Power.

Iron .2067 3858 46 per cent.

Lead 344 636 46

Zinc 275 516 47

Tin 103 148 30

Copper 90 188 .52

Silver (ounces) 1 7. 3 30. 8 44

Mr. Chance attributes decline in the cost of producing sil-
ver entirely to improved processes, ignoring any diminution in
demand due to legislation. He thinks also ' ' we are entering
upon a career of unexampled prosperity which shall have as its
most potent factor, an enormous addition to the world's store
of gold."

SECTIONALISM. The New Sectionalism. By Frederick
Emery Haynes, in Quarterly Journal of Economics for April.
Western Feeling Toward the East. By Senator Allen of
Nebraska, in The North American Review for May. Why the
West Needs Free Coinage. By C. G. Thomas, in The Arena for
May. Mr. Haynes outlines the statistical facts showing that
for a decade the South and West have been pulling away from
the Center and East, drawing the line at the old Mason and
Dixon line for the South and at the Mississippi River for the
West. The States lying between the Mississippi and Pennsyl-
vania he classes as doubtful or variable. On the questions of
Free Coinage of Silver, Repeal of the Sherman Law, the Pas-
sage of the Income Tax, and the Issue of Bonds to Maintain the
Gold Reserve, the West and South have been voting against the

466 GUNTON'S MAGAZINE. [June,

North and East as thus defined. The West and South also
are supposed to be "opposed to banks" and to the system of
having the banks issue paper money, are in favor of a green-
back currency without any particular means of redemption for
it, are in favor of using the taxing power as a supposed means
of "levelling down " the rich and "levelling up" the poor, of
which policy the single tax, graduated income tax, graduated
property taxes, etc., are illustrations, and are becoming per-
meated by State socialism as to railroads, telegraphs, public
agencies and natural opportunities. They are, moreover, sup-
posed to prefer free trade to protection, farming to manufac-
tures, a simple civilization to a complex one, and cheap labor
to high wages.

Senator Allen expresses in sarcastic and bitter terms the
feeling of that class of Western people who hold that the demon-
etization of silver has been an act of designed oppression in-
tended to enrich the East and impoverish the West. This
brings down the merits of the case to a simple question of an
Eastern Pharaoh and his Western bondmen, tending toward an
exodus of the bondmen out of the Egypt of their monetary
despair.

Mr. C. S. Thomas spreads out the singular network of un-
truths, fallacies and blunders which are supposed to occupy the
place in the minds of the people of the South and West which
should be held by facts and sober judgment.

There is first the assumption that since 1873 there has been
a " shrinking money volume, " whereas these people certainly
must know that since 1873 there has been an increase of the
money volume of the world to the extent of more than
$1,500,000,000 in standard silver coinage alone, of which about
$500,000,000 has been put forth in the United States, an expan-
sion greater than ever before occurred in so short a time. There
is, secondly, the monstrous falsehood that free silver coinage,
at a time when the silver bullion in a dollar is worth only 55
cents, would restore to us "the monetary system of our
Fathers! " When, pray, did " our Fathers," or anybody else's
fathers, ever have "a monetary system " in which a coined dol-
lar contained only 55 cents worth of silver! And since free
coinage of silver would instantly lower the value of the Ameri-
can silver dollar to 55 cents, we beg to know at what period our

1896.] ECONOMICS IN THE MAGAZINES. 467

fathers had a monetary system in which it required nearly two
standard silver dollars to buy one gold dollar. To speak of free
coinage of silver to-day as a measure that will restore any
monetary system which the American people ever before pos-
sessed is to assume that we have no capacity to discriminate.
Again we are treated to^the familiar chestnut among economic
vagaries that "the demonetization of silver was intended to
enhance the value of primary money by lessening its quantity
and limiting it to a metal small in bulk and easy to control."

Let a few facts show the falsehood of this assumption.

The proposal to demonetize silver was first made in 1861-2
by the first Comptroller of the Currency under Lincoln, on the
ground that silver was too dear a metal to make a currency of,
it having then been at from 3 to 5 per cent, premium over gold
for about ten years. It was this uselessness of silver because of
its dearness which caused gold to be gradually adopted by
Wall street as the money of America, from necessity, and be-
cause of its cheapness throughout the twenty years prior to

1873-

In the Paris Monetary Conference of 1867, Mr. Ruggles,
as the representative of Wall street and of the United States,
and on behalf of this country's interests as a known debtor
country, advocated gold in that conference because of its cheap-
ness, silver being then at a premium of 5 per cent. , and virtually
being the more oppressive currency of the two for the debtor
class.

Before the French Monetary Commission in 1869, Baron
Alphonse de Rothschild spoke freely, forcibly and wisely against
the proposed demonetizing of silver by France, on the theory
that it would contract the money medium and produce wide-
spread disaster throughout the world. The free silver coinage
advocates could to-day charge no evil consequence on the de-
monetization of silver, which the head of the house of Roths-
childs did not predict as the result of it two full years before it
was begun by Germany in 1876. This sufficiently proves that
the world's greatest bankers opposed what is now regarded as a
monetary squeeze enacted to enrich themselves.

Rothschild based his opposition on the ground that silver
might within ten years become the cheaper of the two metals,
and hence a means of .relief instead of oppression to those who

468 GUNTON'S MAGAZLNK. [June,

desired money to be abundant. This prediction was fulfilled.
What Rothschild did not predict or forsee was that after silver
became thus abundant, and after its bullion price had fallen to
nearly half the price necessary to sustain parity at sixteen to
one, and after the world's coinage had been inflated by one half
by new silver coins, silver would continue to be produced in as
large a proportion to gold at its lower price, as it had ever
before been produced at its higher price. This is the all-
staggering fact in the present situation, which daunts the
hearts of those who have desired to see silver restored to par
at sixteen to one. So long as silver can be turned out profit-
ably by the mines at a cost of sixty-seven cents for an ounce of
480 grains, free coinage cannot impart the value of a dollar to
37 ingrains, EVEN by the concurrent action of all the govern-
ments in the world.

This being so, if the West and South think they are
oppressed because they cannot freely coin a fifty-two cent dollar,
no harmony with their views on the part of the East and North
would help their case. Their own Western and Southern
debtors would not attempt to pay their debts in fifty -two cent
dollars if free coinage were enacted and the new coins issued.
Why? Because few debtors ever pay debts at all except from a
desire to be trusted again by the same creditor. Payment in
fifty-two cent dollars would not answer that motive. Debtors
who do not want to be trusted again have already a cheaper
route open than the free silver route, viz., by bankruptcy.
That pays their debts generally with ten cents on the dollar.

1896.] 469

Book Reviews.

PROTECTION AND PROSPERITY; an Account of Tariff Legislation
and its Effect in Europe and America. By George B.
Curtiss, Esq. , Counsellor at Law. 864 pages, royal octavo.
Published by Pan-American Publishing Co. , 1 1 1 Fifth ave. ,
N. Y. 1896. For s"ale by subscription, price $3.50.
Although the author prefixes to his work likenesses of
three candidates for the Republican nomination to the Presi-
dency in the approaching campaign, and prefaces it with intro-
ductions by Governor Morton, Governor McKinley and Speaker
Reed, the work itself has elements of breadth, permanence and
endurance reaching not only far beyond any presidential cam-
paign and beyond the limits of any single country, but beyond
also the popularity or permanence of any particular form of
governmental institutions or type of national civilization.

Mr. Curtiss's work is entitled to, and we see no reason why
it should not secure, even more of the attention of old Europe
and of the British colonies everywhere, of Latin America, and
of the New Asia and New Africa that are so rapidly coming
into national being, than it needs to secure at the hands of the
American people. Fully two-thirds of the work (563 pages)
are devoted to the Tariff histories of European States. This,
however, we can say to all American readers upon economic
questions; whether it be the Congressman who thinks he has
utterly surrounded the tariff question as he would a bottle of
Mumm's Dry, and has corked it down in the best speech extant,
or the pert Eastern College Professor who assumes that "of
course the Tariff Question has no place in economic science,
and therefore no interest for us; we could teach a class in
economics two years without being found to have a conviction
on either side of the Tariff Question ;" or the daily newspaper
editor who asks "What have I to do with the Tariff ? That
belongs to the politicians;" or the quiet reader who thinks he
has read it all up — to all of these we say, ' ' Let him that
thinketh he stands take heed, lest he fall." For neither in
Europe nor America has there ever been furnished in a single
purely historical work the materials for so exhaustive a study
or for so successful a mastering of the Tariff Question in all its
details.

470 GUNTON'S MAGAZINE. [June,

The work is in six parts, of from four to seven massive
chapters in each part.

Part I. presents an outline of the commercial history of the
world to 1650. Its four chapters are entitled (i) General Divis-
ion of Trade, Commerce and Industries; (2) Commerce of the
Nations of Antiquity; (3) Industrial Development of Italian and
German Cities in the Middle Ages ; (4) Development of Trade
and Industries in Western Europe.

This whole period he finds to have been (p. 30) a period of
" universal free trade and no progress. People were left to
take their own course, and go their own way. That barbarous
struggle for existence, which is the fundamental basis of free
trade, was carried on through all the centuries before the Chris-
tian era, through the dark ages and down to the middle of the
Seventeenth Century, without industrial advancement or mate-
rial progress among the masses."

This is altogether too sweeping a statement. The fact that
there was no national legislation affording protection to domes-
tic industries does not warrant the conclusion that this was an
era of free trade. Nor is it correct to say that this period was
without industrial advancement or material progress among the
masses. It was during this very period that England evolved
the wages system, parliamentary institutions, religious freedom,
created a middle class which transformed her from the most back-
ward into the most advanced industrial and political country in
Europe. It was during this period that the free towns with
their industrial development, which were the nurseries of modern
civilization, arose and exercised their greatest influence. It was
during this period that the Hanseatic League and the League
of the Rhine became the organized industrial forces protecting
manufacture, trade and commerce from the marauding havoc
of robber barons and avaricious kings, without which industrial
England of the lyth, i8th and ipth centuries would probably
have been impossible.

So far from this being an era of free trade, it was an era of
intense protection. Every walled or chartered town presented
a protected industrial center. To be sure the protection did not
follow national lines, but it everywhere followed industrial lines.
Every charter that was granted from the time of William Rtifus
contains some additional concessions and privilages and ex-

1896.] BOOK REVIEWS. 471

elusive rights to the industrial enterprise of the town. It was
this protection of the towns which secured their industrial
growth and made national development ultimately possible.
What is more, every nation in Europe rose in political power,
wealth and importance directly as the protected towns were
maintained and with the fall of the towns came the industrial
decline of the nation.

It was because the towns in England were never overpow-
ered by either barons or kings, or both combined, as in Spain
and France, nor entered upon a self-destructive warfare against
themselves, as in Italy and Germany, that England came to the
front as the leading industrial nation of Europe, and converted
what had previously been local protection to individual towns
into national protection of general industi ies. We think it an
error, therefore, to call this a period of free trade.

Part II. of Mr. Curtiss's work treats of " Early England
under Free Trade." Its five chapters are entitled (i) Social
and Industrial Conditions prior to the Fourteenth Century. (2)
Trade and Commerce Monopolized by Foreigners. (3) First
Attempt at Protection. (4) Rise and Fall of Trade Guilds.
(5) Disorganization of Labor. That the protective period in
England was preceded by about twelve centuries of free trade,
and no progress, is a point not easily made clear. That the
guilds were movements towards class protection for artisans is
more generally known. The position taken by Mr. Curtiss
that the confiscation of the property of the monasteries and of
the guilds by Henry the Eighth, and the enclosure of the com-
mon lands of manors, had the effect to "disinherit" the peas-
ant population and convert them into a " factory working"
proletariat, is a doctrine from which many will dissent.

Here again, our author appears to misapprehend the true
inwardness of the industrial trend. We fear he has been par-
taking too freely of the pessimism of Thorold Rogers, whose
reasoning frequently runs contrary to his own facts. The en-
closures of commons was really a movement from pastures,
hunting and fishing towards tillage, and was therefore an econ-
omic movement towards rendering a dense population possible,
instead of a movement from tillage towards a more pastoral
life of herding and flocks. In fact, the commons were a most
wasteful and uneconomic use of land. It was purely the com-

472 GUNTON'S MAGAZINE. [June,

munistic use of property, which is but a few degrees less econ-
omic than pure nomadism. Nor is it correct to speak of the
factory-working proletariat. The factory system is the great
progressive force that has entered English civilization. It has
done more for the working class than any and all other move-
ments put together; and what is more, it was the logical outcome
of the protective system, which first, in its local and then in its
national application, had prevailed in England for six centuries.
In fact, England's factory system is the monumental result of
her protective policy and the source of her competitive supe-
riority over all other nations.

In Part III. "Modern England under Protection," on p.
59, Mr. Curtissgets fairly down to business. In Chapter I. on
" Great Britain's Protective Policy, " it is shown to have been first
effectively marked out in the report of Sir Walter Raleigh to
King James I. in 1604, though certain efforts relating to the wool
trade date back to Edward III. Raleigh stung England's pride
by declaring that the Dutch were furnishing England with corn,
catching and salting and selling England's fish, spinning and
weaving England's wool, carrying England's crops and products
and coals. Next followed the Navigation Act by Cromwell's
Rump Parliament in 1651 and the victories of the English navy
over the Dutch in 1652-3. The history of England's policy of
colonial acquisition is traced, side by side, with its navigation
laws for upbuilding its shipping and for excluding vessels of
other nations from trade with its colonies ; and its tariff laws
for developing chiefly its wool and woolen production. Statis-
tics of the growth of exports and imports from 1697 to 1793
accompany this exhibit, together with the loans made by Great
Britain to the other nations of Europe to aid in crushing Napo-
leon. The only marked desideratum in this chapter would be a
statement of England's tariff and treaty relations with Turkey,
India and China, which, however, have been fully stated by
Carey in several works.

Chapter II. deals with the growth of industries from 1800
to 1860, without, however, emphasizing the fact that the
protective policy from 1800 to 1846 was practiced only in favor
of Great Britain and was denied to Ireland and India; thus
resulting in a spoilation of the two latter, who were made the
victims of a simultaneous free trade policy in a manner which

1896.] BOOK REVIEWS. 473

Mr. Curtiss has apparently not deemed it essential to the
novelty or unity of his work to emphasize, and which, doubt-
less, are sufficiently known to the public mind through other
works.

Part IV. is entitled ' ' Return to Free Trade and Its Effect
on Home Industries." This is considered in six chapters,
entitled (i) Origin of the Free Trade Movement; (2) Free
Trade Legislation ; (3) England Under Free Trade from 1850
to 1874; (4) Free Trade and English Industries; (5) Same, con-
tinued ; (6) The Free Trade Policy a Failure. Chapter VI.
alone, consisting of eighty-seven pages, forms about the most
exhaustive indictment against the so called free trade policy
in England which has ever been published. Printed separately
as a tract, it would be of invaluable service to both the Fair
Trade and Imperial Confederation movements now pending in
Great Britain. Indeed, we can not resist the conviction that as
great a use will be made of Mr. Curtiss's entire work in all
parts of the British Empire as in the United States. The
part of the work devoted to the British tariff polic}' far exceeds
in exhaustiveness and value the writings of any Englishman,
and even of Sir Archibald Alison, an achievement to which we
had not thought any American would be equal. If any
improvement were to be suggested in the matter of Part IV.
it would consist of constructing and adding static charts, illus-
trating, in diagramatic form, the truths taught by the sixteen
pages of tables which follow it.

Part V. treats, in 161 pages, "Protection to Native Indus-
tries in Continental and other Countries," devoting Chapter I.
to The German Empire, Chapter II. to Russia, Chapter III. to
France and Chapter IV. to Austria- Hungary, Italy Belgium,
Holland, Switzerland and other countries. The research
required for this part of the work is great in the degree that the
topic is usually slighted or treated with glittering generalties.
Nothing which had been previously prepared equals in detail,
and we think in accuracy, this part of Mr. Curtiss's work.

Part VI. treats of "The Tariff in the United States." This
will be discussed in another article.

Meanwhile, the collection and collation of this vast mass of
related matter, which has hitherto existed only in the most scat-
tered and widely sundered forms, most of which would be inac-

474 GUNTON'S MAGAZINE. [June,

cessible even to most scholars, compels a restudy of the most
important single economic question on which any country can
undertake to legislate. Studious and thoughtful minds will not
so much care how Mr. Curtiss, in a literary sense, has handled
his pen more than how Schliemann handled his spade in the
ruins of Troy, or Humboldt his mule in the heights of the
Andes.

Personalities and compliments, art, deftness and skill, all
become secondary considerations, as with a discoverer who has
returned from an unexpected exploration into a country over
which superstition has extended its taboo. The all-important
question is what has he found and what do all these findings
prove. Of Mr. Curtiss we may say he has found enough to
compel every statesman, publicist, economist and historian who
desires to say anything bearing on the tariff question, to care-
fully study the question over again. It will not do not to know
the new matter here brought to light.

H Gunton's magazine

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