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ELEMENTS 
 
 OF 
 
 POLITICAL ECONOMY. 
 
 WITH ESPECIAL REFERENCE TO THE 
 
 INDUSTRIAL HISTORY OF NATIONS. 
 
 ROBERT ELLIS THOMPSON, M.A., 
 
 PROFESSOR OP SOCIAL SCIENCE IN THE UNIVERSITY OP PENNSYLVANIA, 
 AND MEMBER OF THE AMERICAN PHILOSOPHICAL SOCIETY. 
 
 ''XA 
 
 \) 
 
 "The true greatness of kingdoms and estates, and the means thereof, is an argu- 
 ment fit for great and mighty princes to have in their hand ; to the end that 
 neither by overmeasuring their forces, they lose themselves in vain enterprises, 
 nor on the other side, by undervaluing them, they descend to fearful and pusillan- 
 imous counsels." — Lord Bacon, 
 
 PHILADELPHIA 
 
 PORTER & COATES. 
 
 1882. 
 
1 
 
 p 
 
 ^^Xf^ 
 
 w 
 
 f1 
 
 % 
 
 Copyright by Poeter & Coates, 1875. 
 
 Copyright by Porter & Coates, 1882. 
 
PREFACE. 
 
 This work forms a third and revised edition of the author's 
 " Social Science and National Economy," published in 1875, 
 and in a revised edition in the following year. The author 
 retains his preference for the earlier title, but the general use 
 of the term Political Economy to designate this science ren- 
 ders it desirable to make this change. 
 
 The author of this book has had a twofold purpose in its 
 preparation, — -first, to furnish a readable discussion of the 
 subject for the use of those who wish to get some knowledge 
 of it, but have neither the time nor the inclination to study 
 elaborate or voluminous works ; secondly, and more especially, 
 to provide a text-book for those teachers — in colleges and else- 
 where — ^who approve of our national policy as in the main the 
 right one, and who wish to teach the principles on which it 
 rests and the facts by which it is justified. Of course the 
 book is not exactly what it would have been had either of 
 these purposes been kept singly in view. Some explanations 
 are given, which are here only because this is meant to be a text- 
 book ; there are discussions of a political kind, for instance, 
 in the second chapter, whose presence is necessitated by the 
 fact that no specific instruction in political philosophy is 
 ordinarily given in our college courses, and the teacher of 
 
 5 
 
6 PREFACE. 
 
 National Economy cannot always assume that his classes are 
 already familiar with the conception of the state in its full 
 significance. On the other hand, in the closing chapters, what 
 the theological controversialists used to call "the present 
 truth " has been stated and defended with a fulness which 
 would ordinarily be needless in a text-book, and it is sug- 
 gested that in the use of those chapters a selection be made, 
 and the rest omitted. But it is believed that nothing has been 
 inserted, and it is hoped that nothing has been omitted, whose 
 insertion or omission will interfere with either purpose of the 
 book. 
 
 The form of the book is entirely different from the ordinary 
 arrangement under the three rubrics, " Production, Distribu- 
 tion and Consumption." The method pursued of itself ex- 
 cludes that artificial and symmetrical distribution of its parts , 
 which — the author believes — sacrifices life and reality to 
 system. AVhatever interest or other merits the book possesses 
 it owes to the method which underlies its construction. In so 
 far as the author has succeeded in being faithful to that 
 method, he must have succeeded also in showing that this 
 science is not one that is " up in the clouds," but one that 
 touches on human life and the world's history at all points. 
 
 The author has had access to the library of the late Stephen 
 Col well, Esq., now in possession of the University, and only 
 regrets that he has not been able to use its treasures more 
 freely. It contains some eight thousand books and pamphlets, 
 whose collection occupied Mr. Colwell's leisure till his death in 
 1869, and it embraces nearly every important book, periodical 
 or pamphlet on the subject, that had appeared in the English, 
 French or Italian languages, besides a large number in German 
 and Spanish. 
 
 Of the books that the author has drawn upon, the writings 
 of Mr. Henry C. Carey hold the first place. Then come those 
 
PREFACE. 7 
 
 of his school — Dr. Wm. Elder, Hon. E. Peshine Smith (es- 
 pecially in chapter III.), Dr. E. Diihring (chapter I.) and 
 Stephen Colwell (chapter VIII.). Free use has also been made 
 of the writings of Sir Henry S. Maine and Rev. E. Mulford 
 (chapter II.), W. R. Greg (chapter IV.), Cliffe Leslie, Maine, 
 and E. Laveleye (chapter V.), W. T. Thornton (chapter VII.), 
 R. H. Patterson (chapter VIII,), J. Noble (chapter IX.), and 
 Edward Young (chapter XII.). Other authorities are specified 
 in the notes appended to various paragraphs. 
 
 For the correction of many small and some large errors, 
 and for suggestions which have contributed to whatever com- 
 pleteness of discussion or other merits the book possesses, the 
 author is greatly indebted to the kindness of Cyrus Elder, 
 Esq., of Johnstown, to Joseph Wharton, Esq., and especially 
 to his friend Wharton Barker, Esq., to whose encouragement 
 this book owes its existence. 
 
 University of Pennsylvania, 
 
CONTENTS. 
 
 CHAPTER I. 
 
 PAGE 
 
 Definition and History of the Science 11 
 
 CHAPTER n. 
 The Development of Society. — The Nation 32 
 
 CHAPTER III. 
 Wealth and Nature 41 
 
 CHAPTER IV. 
 The Science and Economy of Population 49 
 
 CHAPTER V. 
 The National Economy of Land 70 
 
 CHAPTER VI. 
 
 The National Economy of Land {continued). — How 
 the Earth was Occupied 101 
 
 CHAPTER VIL 
 The National Economy of Labor 115 
 
 CHAPTER VIII. 
 The Science and Economy of Money 142 
 
 9 
 
IP CONTENTS. 
 
 CHAPTER IX. 
 
 PAOB 
 
 National Economy of Finance and Taxation 179 
 
 CHAPTER X. 
 The Science and Economy of Commerce 197 
 
 CHAPTER XI. 
 
 The Science and Economy of Manufactures. — The 
 Theory 219 
 
 CHAPTER XII. 
 
 The Science and Economy of Manufactures. — The 
 Practice 267 
 
 CHAPTER XIII. 
 
 The Science and Economy of Intelligence and 
 Education 365 
 
ELEMEi:^TS 
 
 OF 
 
 POLITICAL ECONOMY. 
 
 CHAPTER FIRST. 
 Definition and History of the Science. 
 
 § 1, Political or National Economy is that branch of the 
 science of man which treats of man as existing in society, and 
 in relation to his material wants and welfare. It is therefore a 
 subdivision of the science of Sociology, or the science of social 
 relations, which itself is a subdivision of the greater science of 
 Anthropology, or the science of man. 
 
 § 2. It has been objected by some that there can be no such 
 thing as a science of man. " Science," they say, " deals only 
 with things whose actions and reactions can be foretold, after we 
 have mastered the general laws by which they are governed. 
 The test of science, as Comte says, is the power of prediction. 
 There is a science of Chemistry, because there is a "possibility 
 of foretelling what compound will be produced by the union of 
 any two elements or known compounds. But man is not 
 governed by laws of that sort ; he is a being possessed of affec> 
 tions and a will, which often act in the most arbitrary way, — in 
 a way that no one can foresee or predict." 
 
 This objection expresses a truth which can never be left out 
 of sight. If we ignore it we shall miss the conditions under 
 which man's material welfare is to be achieved. Men can never 
 be put to a good use of any sort, while they are regarded or 
 
 11 
 
12 ELEMENTS OF POLITICAL ECONOMY. 
 
 treated as tilings. To do so will be to keep them poor, as well 
 as to degrade them morally; for the best work and the wisest 
 economy cau be got out of them, only by bringing their free 
 will into play in the desirable direction. 
 
 But the possibility of constructing a science of man does not 
 rest upon the power to foresee the line of action that each indi- 
 vidual man will pursue. Man lives in a world which his will 
 did not create, and whose " constitution and course of nature " 
 he cannot change. If he act in violation of its laws, he must 
 take the penalty. Thus if he indulge in habits that contravene 
 the constitution of his moral nature, then moral degradation, 
 unhappiness and remorse will be the necessary results. Because 
 there is such a moral " constitution and course of nature," 
 there is a science of ethics, which enables us to predict, not the 
 conduct of each individual man, but the consequences of such 
 conduct, whatever it may be. And there exists equally for 
 society an economic " constitution and course of nature ;" the 
 nation that complies with its laws attains to material well-being 
 or wealth, and the nation that disobeys them inflicts poverty 
 upon itself as a whole, or upon the mass of its people. To learn 
 what those laws are, is the business of the student of social 
 science ; to govern a nation according to them is the business 
 of the statesman, and is the art of national economy. 
 
 While men are beings possessed of a will, they ordinarily act 
 from motives. This is especially true of their conduct in re- 
 gard to their material welfare; in this connection the same 
 motives act with great uniformity upon almost all men. The 
 same wants exist for all ; the same welfare is desired by 
 all ; so that in this department of the science of man there 
 is so little caprice, that there is nearly as much power to foresee 
 and foretell what men will do, as in some of the sciences to fore- 
 see the actions of things. Nearly, but not quite so much ; for 
 while men are agreed as to the end here, there is room for dif- 
 ference of opinion as to the means, and consequently for variety 
 of action — for wise and unwise ways of procedure. 
 
 § 3. What the science of man and of society lacks in certainty, 
 
SOCIETY A PRIMARY FACT. 13 
 
 as compared with the sciences of nature, it more than makes up in 
 the higher interest that it excites. Whatever science deals with 
 our own species and its fortunes, comes very close to each one of 
 us. Whatever it can tell us of the probable future of our nation, 
 or our race, concerns us more than predicted eclipses or cfeemical 
 discoveries. The most brilliant chemical or astronomical cer- 
 tainty could not move an Englishman so deeply as that bare 
 conjecture of Macaulay, that the time may come " when some 
 traveller from New Zealand shall take his seat on a broken arch 
 of Westminster bridge to sketch the ruins of St. Paul's." The 
 other sciences have an independent value ; but they interest us 
 most when we see that they have a bearing upon this, when 
 they open still larger utilities of nature to human possession, 
 and add to the welfare of mankind. We ask the chemist : 
 *' Shall the time ever come when we shall no longer be dependent 
 upon our coal deposits for light and warmth, but shall be able to 
 produce both from the decomposition of water ?" We ask the 
 physicist : " Shall we soon be able to use this subtle, omnipresent 
 electric force as a motive power ? Shall we ever be able to 
 move through the air in manageable balloons, with speed and 
 safety ?'^ These are not the greatest problems that science has 
 to solve, but they have an interest for us all that more abstract 
 questions can never possess. 
 
 § 4, Our Science considers man as existing in society ; we 
 find him, indeed, nowhere else. The old lawyers and political 
 philosophers talked of a state of nature, a condition of savage 
 isolation, out of which men emerged by the social contract, 
 through which society was first constituted. But no one else 
 has any news from that country; everywhere men exist in more 
 or less perfectly organized society ; — they are born into the 
 society of the family without any choice of their own ; and they 
 grow up as members of tribes or nations, that grew out of 
 families. All their material welfare rests upon this fact, and 
 must be considered in connection with it. The cooperation by 
 which they emerge from the most utter poverty to wealth, is 
 possible only within society and under its protection. Upon 
 
14 ELEMENTS OF POLITICAL ECONOMY. 
 
 the wise management of its general policy, and the eflSciency 
 of its government, the welfare and the security of the indi- 
 vidual depend. The natural right to property, by which that 
 welfare is perpetuated from day to day, is realized only in 
 society. The transmission of the things that contribute to ma- 
 terial welfare from one generation to another — of real and per- 
 sonal property, of knowledge, skill and methods of industry — 
 would be impossible but for the existence of bodies that outlive 
 the single life, and aim at their own perpetuation. Vita brevis, 
 ars longa, or else each new generation would have to begin at 
 the foundation. Hence it is that this science begins with the 
 conception of social state ; not with the study of wealth in the 
 abstract, nor of the individual man and his desires. 
 
 At the fall of the civilized societies that made up the ancient world, 
 the useful arts and sciences would have perished in Western Europe 
 with the polities under which they were developed, had not the great 
 Benedictine order gathered both into their monasteries. These were 
 at once schools of learning and industrial establishments, and the only 
 places safe from the barbarous intrusions of half-Christianized bar- 
 barians. 
 
 § 5. Political economy is an art as well as a science. The 
 term economy, or house-thrift, does not mean here wise saving, 
 any more than it means wise spending. It is borrowed from the 
 management of the first and simplest of all human societies, the 
 unit out of which all other societies have grown — the family. 
 The adjective,poZzYica? prefixed indicates the transfer of the con- 
 ception of thrift to the society which exists that justice may be 
 done and natural rights be realized, and which for that purpose 
 is put in trust with the lives and the material possessions of the 
 whole people. 
 
 § 6. The art of political economy is much older than the 
 science. The former came into existence with the first nation, 
 the latter began to be studied about the time of the discovery 
 of America, and first gained a place as a recognised science a 
 century ago. There is nothing unusual in this, for nearly every 
 science lags for a time behind its related art. Themistocles knew 
 "how to make a small city great" long before Plato and Aristotle 
 
ART BEFORE SCIENCE. 15 
 
 founded the science of politics. Dyeing, cooking, and a thousand 
 other applications of chemistry were in use from the earliest 
 historic periods; but the first centennial of Dr. Priestley's dis- 
 covery of oxygen, that laid the foundation of that science, has 
 been celebrated in our own time. Sometimes the two — the 
 science and the art — exist together, with little or no influence 
 upon each other, for a long period. Thus there was for centu- 
 ries a science of music, taught and studied by men who were 
 not practical musicians; while those that were, pursued their art 
 without giving the slightest heed to the science. 
 
 All human experience shows that science can be of the 
 greatest service to its related art. As chemistry has improved 
 and simplified the industrial methods that existed before Priest- 
 ley and Lavoisier, so the discovery of the economic laws that 
 govern the advance of society in wealth, has greatly changed 
 for the better the economic methods of the nations. Some of 
 the older empirical rules it has vindicated as right ; others it 
 has condemned and set aside as wrong ; it has suggested new 
 and extended the applications of others that were old. It runs 
 the risk, indeed, of rejecting some methods that were clearly 
 right; and it must guard against this, by making the most 
 careful and thorough survey of all the facts of the case. 
 
 In the first stages of a science, which we may call the mechan- 
 ical, empirical rules predominate among the doctrines ; but 
 gradually the simpler and far less numerous scientific ^nwc?}>?es 
 that underlie these rules are perceived. When these are once 
 grasped, the process of submitting rules to the test of principles 
 is an easy and safe one. The science has then passed into its 
 dynamical stage. 
 
 The ancients knew no science of political or national economy. 
 Commonplace remarks and moralizing reflections on the subject 
 are found scattered here and there through their literatures. 
 Single facts that could hardly escape their notice, such as the 
 advantage of the division of labor, and of the transition from 
 barter to the use of money, and the difi"erence between value 
 and utility, were remarked upon, especially by iVristotle. In 
 
16 ELEMENTS OF POLITICAL ECONOMY. 
 
 these hints lay the possible germs of social science, but they 
 were not followed up, nor the underlying laws investigated. 
 
 § 7. The rivalry excited in other parts of Europe, by the 
 prosperity of Venice and Genoa, first led men to study the sub- 
 ject, and we find it occupying a place in the literatures of Italy 
 and Spain, France and England, from the sixteenth century. 
 The circumstances of the times gave shape to these studies. 
 This was the nationalist period of history. Europe had revolted 
 against all the schemes of a universal monarchy ; and independ- 
 ent sovereign kingdoms, with national languages and literatures, 
 and even churches, divided its area among them. That a thing 
 was Spanish or was English, was praise enough in the ears of 
 Spaniard or Englishman. How to aggrandize to the utmost their 
 own country, at whatever expense to others, was the great 
 problem of statesmanship, especially after the religious heats, 
 that had divided Europe into two hostile camps, cooled off 
 somewhat. And of all means to that end, the possession of an 
 abundance of money seemed the best and readiest. After a 
 money-famine that had begun with the Christian era, and had 
 grown in intensity for fifteen centuries, the discovery of America 
 and the East Indies had brought in a vast and sudden supply, 
 which had given Spain for a time an undue preponderance in 
 European politics, and had everywhere bettered the condition of 
 the people. How to acquire it by a foreign trade that would give 
 a balance in favor of our own country, — how to keep it here at 
 home for general circulation and national uses in case of need, 
 was the question. The Mercantile school of writers, as they are 
 DOW called, set themselves to find methods. As a rule their 
 books were corrective of common errors ; they showed that the 
 best way was the indirect way, — to stimulate home industry 
 and have plenty of commodities to sell, not to put a premium on 
 foreign coins and prohibit the export of gold. Theirs was a 
 real science, but in the mechanical stage. 
 
 Among the notable writers of this school are Antonio Serra (1613, a 
 Neapolitan) ; Thomas Munn {England's Treasure by Foreign Trade, 1664); 
 Andrew Y&TT&nton {Engla7id' 8 Improvement by Land and Sea, 1677-81); 
 John Locke {On the Interest and Value of Money, 1691 and 1698); Sir 
 
THE MERCANTILE SCHOOL. 17 
 
 Win. Petty {Easaya in Political Arithmetic 1691), The systematic writers 
 are the Abbe Genovesi {Lezzioni di Coinmercio e di Economieo Civile, 
 1765) and Sir James Steuart {Priucijilen of Political Ecortomy, 1767). 
 Contemporary oppouents are Sir Josiah Child (Brief Observations con- 
 cerning Trade, 1668); le Sieur de Boisguillebert (Factum de France, 
 1712, (fee); Marshal Vauban (Projet d'une Dhne Roynle, 1707),* and J. 
 F. Melon (Evsai Politique sur le Commerce, 1734.) The opinions of the 
 Mercantile school are wretchedly caricatured by many modern writers. 
 
 The new science was as yet a very subordinate branch of the 
 larger subject of politics, and political aims predominated in its 
 treatment of the subject. As we have seen, the questions that 
 it proposed to solve were not of its own suggestion, but were 
 propounded by political leaders. It was not yet strong enough 
 to take the initiative, or to insist on the benefit of an economic 
 policy to the well-being of the people. The final end held in 
 view, both in theory and in practice, was the abundant supply 
 of money for royal cofi"ers, and the practice was far behind the 
 theory. The most absurd financial methods were kept intact 
 if they seemed to subserve this end. Monopolies were created 
 ad libitmn, and sold to foreigners ] the trade between provinces 
 of the same kingdom was burdened with customs-duties, as if 
 between separate kingdoms ; the export of grain, as well as of 
 gold, was prohibited, that its price might be kept down j the 
 industry created and fostered with one hand, was crushed under 
 excessive taxation and arbitrary regulations with the other. 
 Even the great Colbert, whose policy was the grandest and most 
 successful illustration of all of the best and some of the worst 
 teachings of the school, died broken-hearted with the ruin of his 
 plans through the royal ambition that wasted the nation's 
 resources in war, and the royal superstition that was robbing 
 France of millions of her best and most industrious citizens. 
 
 § 8. The second school is that of the EconomUtes or Phi/sio- 
 crateSj founded by Quesnay, the physician and "thinker" of 
 Louis XV. If the mercantile school unduly subordinated the 
 science to the art, the Economistes went to the other extreme 
 and made a complete divorce between them. Starting from a 
 few simple ideas as the postulates of the science, they built up a 
 2 
 
18 ELEMENTS OF POLITICAL ECONOMY. 
 
 fantastic structure of deductions and theories, that stood in nc 
 vital relation to the actual life of society. Their professed aim 
 was to attain a natural line of thought, and in that age the 
 " natural" was conceived as the antithesis of civilization, as 
 then existing. 
 
 In Quesnay's view nature, — by which he meant the productive 
 powers of the soil, — is the sole source of a nation^s wealth ; 
 agricultural labor is therefore the only productive industry, all 
 others being sterile. That this labor produces more than the 
 farmer and his household consume, is the origin of all wealth, — 
 which is merely the net-product of his tillage. The values 
 produced by all other labor are measured by the cost of the raw 
 materials and of the workman's food. The web of cotton cloth 
 is but so much raw cotton and so much corn turned into another 
 form, but retaining the same value. The utility of the new form is 
 greater; the amount of wealth the same. From this he inferred 
 that national policy should do nothing to develop such sterile 
 industries as commerce and manufactures, but merely remove all 
 restrictions from agriculture, from the trade in grain, &c. As 
 agriculture alone produces wealth, it alone must, in the last 
 resort, bear all the national burdens, however these may be im- 
 posed. Turgot, his chief disciple, divests the theory of much 
 that is fantastic, and in his policy as minister of finance applied 
 for the most part merely its just rejection of the system of mo- 
 nopolies, close corporations, duties on exports, &c. 
 
 Quesnay's first book {Tableau Eeohomiqne, 1758) was preceded by arti- 
 cles (on Fermiera and Grains) in the famous Encyclopedic (1756-7). The 
 elder Mirabeau, " the oldest son of the doctrine/' wrote much, of which 
 L'Ami des Hoiumea (6 vols., 1755-60) is the best known. His greater son 
 furnished the theoretic part of Mauvillon's voluminous statistical work 
 on La Monarchic Prusaienne (See §285). Turgot's chief book is Rejlexiona 
 8nr la Formation et la Dintribiition dea Richesaea (1766 and 1778). Of the 
 many other writers, none add either to the substance or the clearness 
 of the doctrine. Dr. Franklin, whose visit to France occurred at a time 
 when these opinions were in fashion, became a disciple of Quesnay. 
 
 § 9. The third or Industrial school of economists was founded 
 by Adam Smith, a Scotch professor, and a friend of Quesnay's. 
 
ADAM smith's*" WEALTH OF NATIONS." 19 
 
 His great work (^An Inquiry into the Nature and Causes of the 
 Wealth of Nations, 1776, 1778, 1784 and 1788) occupied him 
 for five years. It shows that he was influenced by the Physio- 
 crates, yet it is a decided advance upon their teachings. He 
 finds the source of wealth in all the three forms of industry, but 
 gives the first place in point of productiveness to agriculture, 
 the last to foreign commerce ; while he classes as unproductive 
 all those forms of human activity that are not directed to the 
 production or exchange of commodities. Tracing the natural 
 growth of the three great industries, through whose association 
 men advance from the poverty of the savage life to material 
 welfare, he pronounces against all efforts of the state to direct 
 and foster any one of the three, as most likely to turn capital 
 out of more into less productive channels. He, like the Econo- 
 mistes, would have the State adopt ordinarily a purely passive 
 policy as regards the industrial life of the people. By leaving 
 every man to do what he will with his own, and to use it in 
 whatever way will secure the largest possible returns to himself, 
 society will receive the largest possible benefit. In the principle 
 of free competition he discerns the tap-root of all national indus- 
 trial life and growth ; the enlightened .and active selfishness of 
 the individuals who make up society, is the source of general 
 well-being. That which is good for the individual, is good for 
 society also. If there are inequalities of profits or of wages, 
 capital or labor will shift from one channel to another, till 
 things find their natural level. 
 
 The chief fault in the book is its failure to fulfil the promise 
 of the title. Promising to discuss " the wealth of nations,'' it 
 practically ignores their existence, and treats the whole question 
 lis if there were no such bodies. Smith writes as if the world were 
 all under one government, with no boundary lines to restrain 
 the movement of labor and capital, — no inequalities of national 
 civilization and industrial status, to affect the competition of 
 producer with producer. He ignores, therefore, many of the 
 most important elements of the problem that he undertook to 
 solve. Sharing in the reaction of the Physiocratists against the 
 
20 ELEMENTS OF POLITICAL ECONOMY. 
 
 excessively political drift of the Mercantile school, he also goes 
 to the other extreme, and gives us, not a science of national or 
 political economy, but of cosmopolitical economy, which is not 
 adapted to the actual historical state of the world, but only to a 
 state of things which has not, nor ever will have, any existence. 
 
 This way of thinking was the popular one at that period ; Eu- 
 rope was in a state of reaction against the nationalist drifl of 
 the previous centuries, and did not recover from it until the 
 French Revolution had carried many very pretty theories to 
 their logical consequences, and had shown what they were 
 worth. To be " a citizen of the world'' was the ambition of 
 educated men, and many of the foremost minds of Europe — 
 Lessing and Goethe, for instance — formally repudiated the 
 sentiment of patriotism as unworthy of an enlightened civili- 
 zation. 
 
 § 10. In spite of the great nationalist reaction that began 
 with Burke and Fichte, the cosmopolitan way of thinking has 
 not yet lost its attractions for men. The existence of the cos- 
 mopolitical school of economists for nearly a century, and the 
 adhesion given to it by a majority of English, and a great num- 
 ber of Continental and American writers, are a proof of this. 
 
 In France Jean Baptiste Say reduced the teachings of Smith 
 to a more systematic shape, giving them that clearness of expres- 
 sion and perfection of form for which French literature is 
 famous. In his hands, the cosmopolitanism of the system is 
 complete ; his very first title-page dropped the awkward words 
 " of nations/' and from this time the abstract conception of 
 wealth, its production, distribution and consumption, became 
 the themes of what was still called '■^political economy." He 
 enlarged the conception of wealth, however, to embrace imma- 
 terial as well as material products. Since the passive policy was 
 especially assailed as leading to a foreign trade in which the 
 balance may be unfavorable, he devoted especial attention to 
 the theory of commerce. He was the first to announce that 
 commodities are always paid for in commodities, and that there- 
 fore to check the amount of imports is to limit in equal measure 
 
MALTHUS " ON POPULATION." 21 
 
 the power of export. Later writers of the same nation have, 
 like Say, generally spent their pains in the elaboration of the 
 English theories, without adding much to their substance. Not a 
 single recognised doctrine of the cosmopolitical economists can 
 be traced to a French author since Say, while the French litera- 
 ture, in which those doctrines are defended and enforced, is 
 even larger than the English. 
 
 Chevalier, Rossi, Blanqui and Molinari are the chief French repre- 
 sentatives of this school. Bastiat belongs to it in his general tendencies, 
 but his system is a mixture of its doctrines with those of Carey. 
 
 In England Rev. T. K. Malthus furnished a discussion of the 
 other side of the picture — the poverty of nations {Essay on 
 Popidation, 1798, 1803, 1807; 1817 and 1826). At a time of 
 great political disturbances, when the impoverished classes of 
 Europe were calling the governments to account for the bad 
 policy or no policy thi^t had led to so much misery, this gentle- 
 man, a member of the Conservative party, was led to a study of 
 the economic conditions in which that misery originated, that ho 
 might close the mouths of agitators by showing that govern- 
 ments had nothing to do with it, — that it was the effect of a 
 cause beyond the control of the ruling classes. He found that 
 cause in the excessive growth of population, which led to the 
 pressure of numbers upon subsistence, and could only be per- 
 manently controlled by the self-restraint of the lower classes 
 themselves. This discovery was a godsend to the cosmopolitical 
 school, as it enabled it to tide over a dangerous period of 
 popular agitation, when a thousand circumstances seemed to 
 conspire to enforce upon economists as well as rulers the lesson 
 that governments are put in trust with the national welfare, as 
 well as the national honor and safety, and that no mere 
 passivity of industrial policy could be a suflBcient discharge of 
 the trust. 
 
 In the view of Mr. Malthus, the condition of the mass of 
 the people oscillates between ease and misery ; as soon as any 
 sudden advance in their welfare takes place, there is a rapid 
 increase of numbers through the increase of recklessness as to 
 
22 ELEMENTS OF POLITICAL ECONOxMY. 
 
 the future, and then years of scarcity follow hard upon the 
 years of plenty. It was an easy inference that there is a 
 natural rate of wages, a medium between these two oscillations 
 above which and below which the rate was unstable and could 
 not be permanent. Also that, calling the amount of capital in 
 the country that was available for the wages of labor the wage- 
 fund, the only way to increase the rate of wages was to increase 
 that fund or diminish the number between whom it was to be 
 divided. 
 
 Somewhat later, David Ricardo carried the investigation of 
 the subject a step farther, desiring to show the first cause of 
 the inequality of condition that distinguishes different classes of 
 society. Looking through Whig spectacles, as Malthus had 
 looked through Tory ones, he found that inequality to result not 
 from the operation of a natural and unavoidable cause, but from 
 the effects of an artificial monopoly, the te«ure of land. The few 
 who have been lucky enough to possess themselves of the best 
 soils at the first settlement of a country, form a privileged class 
 that can live in idleness upon the labor of others, through exact- 
 ing payment for the use of the natural powers of those soils. 
 This theory — though so different in its motive — was accepted by 
 the school as supplementary to that of Malthus. Both — as they" 
 came to be taught — had the merit of showing how the apparent 
 anomalies of society grew out of circumstances either natural 
 or generally accepted as natural; in the last analysis the 
 principle of competition was shown to be the tap-root of in- 
 dustrial phenomena in both cases ; both vindicated the passive 
 policy as the only wise one, and argued all national interference 
 to be a fighting against invincible facts. 
 
 Mr. Ricardo (following Say and Torrens) also elaborated the 
 theory of international exchanges, in connection with the notion 
 that money is a purely passive instrument of exchanges, changing 
 its purchasing power according to the amount of it that a 
 country possesses. From this it was an easy inference that a drain 
 of money from a country would either have no effect, or would 
 correct itself by so increasing the purchasing power of money ic 
 
RICARDO AND HIS CRITICS. 23 
 
 comparison with commodities, as to make the country a bad 
 place to sell in, but a good place to buy in. 
 
 With him the constructive period of the English school ends, 
 and, after a time in which the writers are chiefly commentators 
 on the traditional body of doctrines, a critical period begins. 
 
 Ricardo's theory of rent has a great many aspects, according to the side 
 from which it is studied. Did he, like the earliest writers who followed his 
 lead, accept the landlord's monopoly as natural and Inevitable, or look 
 upon it as a mischief that society would be well rid of? His dry method 
 of discussion makes it hard to say. Later writers draw from the theory 
 the inference that landed property, as dififering from all other property 
 in that its utility is not the product of labor, is especially subject to 
 national control. This is probably more in accord with Ricardo's own 
 motive, as may be inferred from his hostility to the legislation by which 
 the landowner was secured against foreign competition in the grain 
 market. His Principles of Political Economy and Taxation (1817) is the 
 last piece of positive work of the school, — the crowning of the edifice. 
 McCulloch, James Mill, Chalmers, De Quincey, and many others are his 
 commentators ; the later writers, from Senior to Thornton, his critics. 
 
 § 11. About the year 1833 English thinking, and its ex- 
 pression English literature, took a new departure, becoming less 
 dry and mechanical, more fresh, vigorous and genial. Economic 
 literature shared in the impulse. N. W. Senior led off (1835) 
 with a vigorous criticism of both Malthus and Ricardo. He 
 especially emphasized the fact that as political economy con- 
 sidered wealth in the abstract, and excluded all political con- 
 siderations, it had no right to intrude into the political sphere 
 with its conclusions, and insist on statesmen acting in accordance 
 with them. At the utmost, they could be but one of many 
 considerations that should influence them. The divorce of the 
 science from the art in the English school — a divorce like that 
 which once existed between the science and the art of music — 
 was thus candidly confessed. But this nice distinction, as is 
 commonly the case, was not kept in view by most writers or by 
 the statesmen who took lessons from them. 
 
 Thomas Tooke (^History of Prices^ 6 vols., 1838-58) gave a 
 refutation of the theory that money plays a mere passive part 
 in industry, prices rising in proportion to its increase, aild falling 
 
24 ELEMENTS OF POLITICAL ECONOMY. 
 
 ia proportion to its decrease. He thus indirectly brought into 
 question the theory that an unfavorable balance of trade can be 
 of no injury to the nation. 
 
 W. T. Thornton showed that the theory of a natural and ne- 
 cessary rate of wages was not borne out by the facts, — that there 
 is no uniformity but rather the most arbitrary difference in their 
 rate, — that capital can unnaturally depress it below what is right 
 and natural when the workmen stand alone, — and that work- 
 men in combination can raise and have raised it. Consequently 
 the theory of a wage-fund, changing in amount with the growth 
 of capital, and divided pro rata among the workmen of a coun- 
 try, is a fiction. He especially exhibited the disastrous effects 
 of English theories upon English agriculture, in separating 
 the mass of the people from the soil and breaking up the small 
 farms to make large ones. 
 
 Herbert Spencer (partly anticipated by N. W. Senior and 
 Poulett Scrope, and followed by W. R. Grreg) refuted the Mal- 
 thusian theory by the evidence of facts. He showed that there 
 has been a pressure of population on subsistence in the earliest 
 stages of society and those only, and that with every advance in 
 numbers and the closeness of association, the pressure naturally 
 diminishes. 
 
 German and English students of the history of land tenure 
 (i. e. Von Maurer, Nasse, Maine and Laveleye) showed that 
 Ricardo's theory of the origin and nature of rent was not sustained 
 by history. In the earliest times contracts for land were un- 
 known, and all payments were determined by custom, not by 
 competition. They showed that the transition from customary 
 status to free contract is the great industrial drift of progressive 
 society ; but that the transition is by no means perfect, and that 
 the assumption that it is, whether as made by jurists or by 
 economists, has been a fertile source of wrong to the poorer 
 classes of society. 
 
 John Stuart Mill, besides emphasizing Senior's separation of 
 the science from the art, called in question the whole system 
 of the distribution of the products of labor and capital, as an 
 
THE CRITICAL STAGE. — CAIRNES. — AMERICANS. 25 
 
 « 
 artificial and perhaps dispensable one. Accepting the theories 
 
 of Malthus and Ricardo, and seeing no augurj of a better future 
 
 for the working classes from the present workings of the wages 
 
 system, he declared it doomed, unless it proved capable of better 
 
 things, to pass away. In this he partly followed those socialists, 
 
 who demand a reconstruction of society and the extension of the 
 
 sphere of government so as to embrace the direction of industry. 
 
 More moderate men, equally convinced of the fiiilure of the sys- 
 tem of competition, contract and wages under the existing con- 
 ditions, hope for a change through the voluntary association of 
 masses of the people, so that they may become their own em- 
 ployers and their own providers. 
 
 All these writers have departed from the spirit and the 
 method, as well as the teachings, of the recognised masters of 
 the school. They have reached the conclusions embodied in 
 these criticisms by an inductive study of the actual facts of 
 industrial life, instead of coming at them by a series of deductive 
 inferences from premises assumed at the outset. Prof. J. E. 
 Cairnes undertakes to vindicate both the method and the con- 
 clusions (with some unavoidable modifications and extensions) 
 of the older authorities, and to refute the unhappy concessions 
 of these later writers. 
 
 § 12. In America the cosmopolitical school has had many adhe- 
 rents, who have written largely in defence of its doctrines, but 
 none of them are of any importance in a scientific point of view. 
 They have rendered less service, even, than its adherents in 
 France, for while they have added nothing to the substance of* 
 the teaching, they have, at the least, not surpassed their English 
 masters in vigor of presentation and artistic form. 
 
 Deserving of mention are Condy Raguet, Prof. Thomas Cooper of 
 South Carolina, W. B. Lawrence, Dr. Wayland, the poet Bryant, Prof. A. 
 Walker, Prof. A. L. Perry, and David A. "Wells. 
 
 § 13. Within the present generation there has arisen in Europe 
 and America a school whose controlling motive seems to be a re- 
 action against the excesses of the English or cosmopolitical school. 
 They are called sometimes the school of the Kathedersocialkten, 
 
26 ELEMENTS OF POLITICAL ECONOMY. 
 
 and sometimes the Historical School. To this last title they have 
 no proper right, as, while they reproduce in their hooks a great 
 number of historical facts, they do not start from the consider- 
 ation of national life, which is the unit of history. They are 
 cosmopolitan, like the economists they criticise, and, in the ab- 
 sence of any stable principle of economic science, they often 
 carry their destructive criticisms of the older doctrines to an 
 unwarrantable length, assigning to law, custom, and individual 
 idiosyncrasy a reach of influence which leaves no room for any 
 genuine economic science. Yet this new school has been of great 
 service in its criticisms of the unscientific methods of the older 
 economists, and in disputing their claims to have placed their 
 teachings upon a truly scientific footing. It has helped to recall 
 men from the world of theories to that of reality. 
 
 The best known representatives of this school are Prof. Roscher in 
 Germany, Prof. Laveleye in Belgium, Profs. Cliffe Leslie and Ingram 
 in the United Kingdom, and Profs. F. A. Walker, Dunbar, and Bolles 
 in the United States. It has representatives among the economists of 
 every European country. 
 
 § 14. The nationalist school of economists may be traced to 
 later writers and statesmen of America and Germany. Yet we 
 might even claim Adam Smith himself as its founder, for in his 
 happy inconsistencies he gives his sanction to nearly all its prin- 
 ciples. A still earlier writer, the great Bishop Berkeley of Cloyne 
 (in his Querist, 1735 and 1752), gives suggestions of a line of na- 
 tional policy, and of the economic reasons for it, that give him, 
 a clearer as well as a prior claim to the honor. The form of 
 his work, a series of nearly 600 leading questions, has caused 
 it to be neglected ; but many of the bishop's notions, especially 
 as to the nature and functions of money, are ahead of current 
 ideas in our age as well as his own. The wretched condition of 
 his native Ireland, its lack of money and of manufactures, 
 furnished the motive to these investigations, while his travels on 
 the Continent and his knowledge of England furnished him with 
 materials for comparison. 
 
 Passing by statesmen and state-papers (though Alexander 
 
FICHTE. — COLERIDGE. 27 
 
 Hamilton and his famous TreMsuri/ Report of 1791 deserve 
 mention), we find an early literary champion of the Nationalist 
 school in the great philosopher Fichte. His book (Z>er geschlos- 
 sene Ifandelssfaat, 1801), however, is not in strictness an 
 economic treatise, but as its title page tells us, an appendix to 
 his treatise on jurisprudence, and a specimen of a larger treatise 
 on politics. He finds the wealth of the nation in the equilibrium 
 of the three great industries, and regards it as the function of 
 the government to produce and perpetuate it by sufl&cient legis- 
 lation. Regarding the interchange of national productions, 
 save of those that cannot be produced in all latitudes, as a rem- 
 nant of the barbarism and free trade that reigned in Europe 
 before the existing nations had taken shape, he would at once 
 put a stop to it by substituting paper money, current only within 
 national bounds, for the gold and silver that pass current between 
 the nations. As to cosmopolitanism and the possibility of a 
 world-state, it will be time enough to talk of that, when we have 
 really become nations and peoples. In striving to be everything 
 and at home everywhere, we become nothing and are at home 
 nowhere. 
 
 Other German philosophers, — Franz Baader (as early as 1790), J. J. 
 Wagner, K. C. F. Krause, K. A. Eschenmayer ; — political writers, — Adam 
 MUUer, Robert von Mohl ; — and economists, — C. A. Struensee, C. F. Ne- 
 benius, F. B. G. Herrmann, J. G. BUsch, — with many others, opposed 
 the passivity theory in their writings. 
 
 Samuel Taylor Coleridge, the illustrious English poet, critic 
 and philosopher (in his La^ sermon on the existing Distresses 
 and Discontents^ 1817), without entering into details or proposing 
 any definite economic remedies, deplored the over-balance of 
 the trade spirit in English politics — theoretical and practical ; 
 and declared his belief that that spirit is '' capable of being at 
 once counteracted and enlightened by the spirit of the state, to 
 the advantage of both." He called in question the maxims re- 
 ceived as fundamental by the school, seeing " in them much 
 that needs winnowing. Thus instead of the position that all 
 things find, it would be less equivocal and far more descriptive 
 of the fact, to say that things are always finding, their level ; 
 
28 ELEMENTS OF POLITICAL ECONOMY. 
 
 which might be taken as the paraphrase or ironical definition of 
 a storm. But persons are not things — but man does not find his 
 level.'' Quite in his spirit, his chief disciple F. D. Maurice 
 speaks (National Education, 1839) of " the mass of doctrinea 
 going under that name" of political economy, " ^art of them state- 
 ments of undoubted facts; part of them useful or curious ob- 
 servations about facts; part of them more or less successful 
 attempts to eliminate laws from facts ; part of them crude and 
 heartless apophthegms of morality. " 
 
 § 15. It was the sufferings inflicted on Germany by persist- 
 ence in the policy of passivity after the peace of 1815, that 
 led to a general study of the question, and in Frederick List 
 the German people found one who could state and explain their 
 needs as a nation, and defend a more national policy on scientific 
 grounds. After a course of successful agitation, that laid the 
 foundation of the Zollverein, he came to the United States in 
 1825, leaving all his books behind him, to study the laws of 
 social growth in the practical examples ofi"ered by the new world. 
 As the country was then making rapid advances in wealth, under 
 the protection of a nationalist policy, he had a large field for 
 study, and repaid what he learnt with his Outlines of American 
 Political Economy (1827), a brief pamphlet that contains the 
 germ of his larger work. The National System of Political 
 Economy, (Das Nationale System der politischen (Economies 
 1841 J English transl. 1856), which he prepared after his final 
 return to Germany in 1832. The title well describes the book, 
 and List's line of thought. In his view nations are industrial 
 as well as political wholes, characterized by an internal equality 
 of industrial capacity, and destined to advance in wealth and 
 prosperity, when they remove all obstacles to the mutual inter- 
 change of services between their own people. If all nations 
 stood on the same ground of equality in numbers, capital and 
 industrial development, no such obstacle would be presented by 
 the freest trade with all other nations ; but in the actual his- 
 torical state, a few possess in their enormous wealth both the 
 power and the will to bring the rest into a state of industrial subor- 
 
LIST AND CAREY. 29 
 
 dination by the tyrannous power of capital. If, therefore, a 
 poorer nation wishes to have free trade at home, she cannot 
 remain passive as to the direction of the national industry. 
 
 § 16. Of native American writers, a very considerable number 
 defended the nationalist theory of economy, from the beginning 
 of our union into one people, and some even earlier. Of these 
 Alexander Hamilton, Tench Coxe, Matthew Carey and Charles 
 J. Ingersoll deserve mention. But their aim was not to furnish 
 a scientific basis for a national economy, but rather to urge a cer- 
 tain economic policy from reasons of direct and evident utility. 
 
 The former work was accomplished by Mr. Henry C. Carey, 
 in whose writings, as we believe, the science of national economy 
 passes out of the mechanical into the dynamical stage, i. e. be- 
 comes a true science. Instead of giving us a mass of empirical 
 rules and maxims such as we find in the writings of the mercan- 
 tile school, — or a mass of fine-spun speculations that stand in no 
 vital relation to the practice and life of nations, as is done by the 
 school of the Economistes, and (in a less degree) by that of 
 Adam Smith, — he presents a body of economic teaching, that 
 rests on a few great and simple principles or conceptions, drawn 
 by actual observation from life itself, yet nowhere incapable of 
 direct application to any practical question. These principles 
 are the laws that govern the constitution and course of nature 
 in things economical. They are at once the laws of human 
 nature, and of that external nature, in harmony with which 
 man was created. 
 
 Their discovery involves a searching criticism of the very pre- 
 mises of the so-called Industrial School, and of those conclusions 
 that fairly earned the name of " the dismal science." For it 
 shows that these natural laws are laws of progress towards wealth 
 and the equality of wealth. Where they are allowed to act freely 
 and fully, men rise from proverty, isolation and lawlessness, to 
 wealth, association and national order. The history of human 
 economy is the story of man's transition from the savage's sub- 
 jection to nature, to the citizen's mastery of her forces ; and 
 with every advance the greater advantage is reaped by the most 
 
30 ELEMENTS OF POLITICAL ECONOMY. 
 
 numerous class, that is, the poorest. It thus " vindicates the 
 ways of God to men," and vindicates also the existing frame- 
 work of our civilization against the destructive criticisms of 
 socialists and communists. 
 
 And wherever the wretchedness of the savage perpetuates 
 itself or reappears within the sphere of civilization, there is to be 
 seen, not the effects of natural law, but of its violation. There 
 some class — at home or abroad, — through some vicious legisla- 
 tion or defect of legislation, has interfered for selfish ends to 
 hinder the natural progress toward wealth, equality and the 
 harmony of interests in the national equilibrium of industries. 
 To remove such obstacles is the sole function of the state, as 
 regards the active direction of industry. 
 
 Of Mr. Carey's books the chief are Essay on the Rate of Wages (1835) ; 
 The Past, the Present, and the Future (1848) ; The Harmony of Interest* 
 (1851); The Slave Trade, Domestic and Foreign (1853); Principles of 
 Social Science (3 vols. 1858); and The Unity of Law (1872). Of these 
 and others of his woi-ks, translations of one or more have appeared in 
 eight of the principal languages of Europe. 
 
 Other members of this school : in America, the late Stephen Colwell 
 {The WayH and Means of Payment, 1859), the late Hon. Horace Greeley 
 [Easnys designed to elucidate the Science [Art?] of Political Economy, 
 1870) ; Hon. E. Peshine Smith [Principles of Political Economy, 1853 and 
 1872); and Dr. William Elder {Questions of the Day, Economical and 
 Social, 1870). In France, M. Fontenay, Benjamin Rampal and A. Clapier 
 {Del'Ecole Anglaise et de V Ecole Americaine en Economic Politique', 1871). 
 Fred. Bastiat borrowed some of Mr. Carey's ideas {Harmonies Economiquesy 
 1850 and 1851) to fight the socialists, and made a curious mixture of 
 these with those of the cosmopolitical school. In Italy the statesman 
 and economist Ferrara gives his adherence to Mr. Carey's first princi- 
 ples, and censures Bastiat for his half discipleship. He has translated 
 the Princijjlei into Italian. In Germany Dr. DUhring of the University 
 of Berlin [Carey's Umw'dlzung der Volksioirihschtiftslehrc uud Social- 
 wissenschnft, 1865 ; Capital nnd Arheit, neue Antworten avf alte Fragen, 
 1865 ; Die Verkleinerer Carey's, und die Krisis der Nationalokonomie, 
 1867; Kritische Geachichte der Nationalokonomie und Socialismus, 1871; 
 Cursus der National- und Socialokonomie, 1873); and Schultze-Delitzsch, 
 the great antagonist of socialism, and promoter of co-operation {Capitel 
 zu einem Deutschen Arbeiter-Katechiamus, 1863; Die Ahschaffung det 
 geschdftlichen Risico durch Herrn Lassalle; einneuea Kapitel znm Deutschen 
 Arheiter-Katcchismus, 1866 ; besides many smaller works. French trans* 
 
THE CONTRAST OF THE SCHOOLS. 31 
 
 lation of these two by Rampal, 1873.) In England, Judge Bylei 
 (Sophisms of Free Trade, 1st edition 1849; 9th edition 1870; American 
 edition 1872.) 
 
 § 17. The differences that exist between the two schools is 
 not merely in regard to the details ; it is a difference about 
 foundations and ^rst principles. Neither can concede to the 
 teaching of the other the name and rank of a science, without 
 giving up its own claim to that name and rank. 
 
 The difference is one of method also. The English school 
 adopt the deductive method of the mathematical sciences, and 
 reason down from assumed first principles to the specific facts. 
 They claim that the necessary data for this are already at hand, 
 in the known characteristics and tendencies of human nature, 
 the avarice and the desire of progress, which control and direct 
 the economic conduct of great masses of men. They leave all 
 other elements out of account as inconstant, while they regard 
 these as constant. Theirs is therefore " a science based upon 
 assumptions" (^Saturday Revieio) ; it " necessarily reasons 
 from assumptions, and not from facts " (J. S. Mill). 
 
 The American and German school apply the inductive method 
 of observation and generalization, which has produced such bril- 
 liant results in the natural sciences. They begin with a wide 
 study of the actual working of economical forces, and endeavor 
 to reason upward from the mass of complicated facts to the 
 general laws that underlie and govern all. They begin by 
 recognising the existence of an actual constitution and course of 
 nature, instead of seeking to devise an artificial one on assumed 
 principles. 
 
 These differences will be exemplified in the following chapters. 
 
CHAPTER SECOND. 
 The Development of Society. — The Nation. 
 
 § 18. " Man is a political animal," Aristotle tells us. His 
 nature has not attained its perfection until he is associated with 
 his fellows in an organized body politic. Whatever may be the 
 historical occasion of the origin of the state, this fact of man's 
 nature is the suflScient cause. 
 
 The first type of society is the family. This, like the state, 
 is a natural form. It is a relationship not constituted by a 
 reflective act of its constituent parts. No man has a choice 
 as to whether he will or will not be born into a family, though 
 he may by his own act cease to belong to it. Like the state, 
 the family has a moral personality and a distinct life. It is a 
 whole which contains more than is contained in the parts as 
 Buch; that is, it is an organism, not an accretion. 
 
 § 19. The family expanded into the tinhe. Related or neigh- 
 boring families held or drawn together by natural affection or 
 neighborly good feeling, or a sense of the need of union for the 
 common defence, but chiefly by the political needs and instincts 
 of their nature, formed an organic whole. By the legal fiction 
 of adoption, all were regarded as members of one family and 
 children of the common patriarch, living or dead. The rever- 
 ence for the common father whose name they bore became a 
 hero-worship, and bound them together by religious ties. Their 
 living head or chief was regarded as inspired with judgment 
 to pronounce upon disputed cases, which gradually gave rise to 
 a body of judicial rules or laws revered as of divine authority 
 
 § 20. The tribe became — though not always — a city. A 
 
 hill-fort thrown up for defence against some sudden attack 
 
 became the rallying-point and then the residence of its people. 
 
 The conquest or adoption of other tribes added to their numbers 
 
 and strength, and their home was enclosed b}"" a wall capable of 
 
 defence. The tribal gods of the first citizens obtained general 
 32 
 
THE CITY AND THE NATION. 33 
 
 recognition as the defenders of the city, but those of the new- 
 comers were still worshipped by the clans. The first and the 
 adopted tribes took the place of power, claiming to be " the 
 people," and forming an aristocracy who possessed exclusive 
 knowledge of the laws and religion of the city. Only after pro- 
 longed struggle were these published in a code, and places of 
 responsibility opened to the new citizens or plehs. 
 
 § 21. By the conquest of other cities, the city in some cases 
 attained ao imperial raok. In other cases a number of cities 
 freely united in a league of offence and defence, and ceded their 
 power to make war to a central congress, and established a 
 common treasury. Both movements are in the direction of the 
 nation, the complete form of the state, as the tribe and the city 
 are incomplete forms. The nation is scarcely found in ancient 
 history, save perhaps among the Jews and the Egyptians, and 
 even among them the tribal divisions perpetuated themselves 
 within the national unity. 
 
 § 22. The nation in its true form first appears in the king- 
 doms founded in Western Europe by the Teutonic tribes, after 
 the destruction of the Roman Empire. The Teuton hated 
 cities and loved the open country. When he spared a city he 
 generally left it to its old occupants and made them his tributa- 
 ries. He divided the open country into marks or communes, 
 whose occupants were actually or by adoption members of one 
 family-clan and bore the same name. Several of these were 
 gathered by force of the political instinct into " hundreds," 
 hundreds into " shires." and shires into kins-doms. Over each 
 of these subdivisions an elder, alderman or chief presided. In 
 this way the race passed from the tribal to the national consti- 
 tution, without developing the vigorous municipal life that had 
 previously thwarted all attempts at establishing any larger body 
 politic than the city, except a military, imperial despotism. 
 
 Within the Teutonic mark towns grew up by the same pro- 
 cess as in the ancient world, and the antipathy of the race to 
 the town life wore oflf. But before these new municipalities 
 were powerful enough to hinder the national growth, the nation 
 3 
 
34 ELEMENTS OF POLITICAL ECONOMY. 
 
 had become an established fact. A second enemy of the 
 national 'inity was the feudal system, which conferred large 
 powers upon the local barons, in countries that had been con- 
 quered rather than occupied. Everywhere save in Germany 
 itself the joint eflforts of the king and the people overthrew this 
 local power, and made the central government supreme. Thus 
 the national consciousness superseded all other political attach- 
 ments. 
 
 § 23. The nation is the normal type of the modern state, as 
 the city was that of ancient society, and the tribe that of the 
 prehistoric times. Besides many inaccurate definitions of its 
 nature, several that deserve our notice have been given from 
 different stand-points. 
 
 (1) Geographically the nation is a people speaking one lan- 
 guage, living under one government, and occupying a continuous 
 area. This area is a district whose natural boundaries designate 
 it as intended for the site of an independent people. 
 
 No one point of this definition is essential, save the second. 
 
 (2) Politically the nation is an organization of the whole 
 people for the purposes of mutual defence from outside inter- 
 ference and of doing justice among themselves. It is a people 
 who ''will to be one" in a body politic, for the purpose of re- 
 alizing and making positive those natural rights which inhere in 
 man's nature. 
 
 (3) Ethically the nation is a moral personality vested with 
 responsibility and authority, and endowed with a life peculiar to 
 itself, i. e., not possessed by the parts as individuals. 
 
 § 24. All these notions, and others besides, are elements of 
 the historical conception of the nation. The historical nation is 
 an organism, a political body animated by a life of its own. It 
 embraces not one generation but many, the dead and the unborn 
 as well as the living. It contemplates its own perpetuity, making 
 self-preservation the first law, and being incapable of providing 
 for its own death or dissolution. There is in its own nature no 
 reason why it should ever cease to exist, and the analogies often 
 drawn from the life and death of the individual man are falla- 
 Qious. The end of the nation is its own perfection ; towards 
 
THE DIVINE ORIGIN OF THE STATE. 35 
 
 that it tends by a continual progress to a larger and freer life. 
 Thus. in its laws it continually aims to make political rights 
 more and more the realization of natural right. In its gradual 
 or sudden modifications of the form of government, it tends to 
 make it more and more the exponent of the wants and the 
 powers of the governed. Industrially it continually aims to 
 develop the resources of its soil and the activities of its people, 
 until they become in all necessary things independent and self- 
 sufficient. 
 
 § 25. The nation as a moral persr/nality must have had the same 
 ultimate origin as other moral personalities, whether we conceive 
 of it as the direct creation of God or as the work of His crea- 
 tures. The traditions of all ancient cities with which we are 
 acquainted, point to the first of these alternatives, that is, to a 
 divine origin of their unity and their laws; and no one who be- 
 lieves in the continual government of the world by the Divine 
 Will can doubt that nations exist in consequence of that will. 
 *' He setteth the solitary in families. . . . He fixeth the bounds 
 of the nations." Then national laws are authoritative because 
 they set forth that Will, though its agency be concealed by reason 
 of its working through and by the will of man. Hence the 
 right of the nation over the lives and persons, as well as the pos- 
 sessions, of its members. It has a delegated authority from the 
 Giver of life. 
 
 § 26. The state is either the creature of God, with authority 
 limited because delegated, or is an uncreated entity with au- 
 thority unlimited because original. In the latter case it can 
 confess none of its acts to be wrongful, since it owns no law or 
 morality above or beyond its own will. It must punish all appeals 
 to " the higher law " as treasonable. The atheistic theory of the 
 state thus necessarily leads to the despot's construction of its 
 powers. Those who hold it have generally been in modern times, 
 by a happy inconsistency, on the liberal side in politics, but 
 when they attain to power, the logic of their position must lead 
 them on to despotic measures. The only lasting and inviolable 
 guarantee of personal freedom is in the doctrine of the state's 
 divine origin and authority, though even this doctrine may be 
 
36 ELEMENTS OF POLITICAL ECONOMY. 
 
 abused to serve the purpose of 3espots, when the state is con- 
 ceived as constructed ah extra by the imposition of a govern- 
 ment by a divine authority from without. But the doctrine 
 of the Old Testament is that the state is constituted through 
 the people themselves being drawn into national unity, and that 
 the government is the result and exponent of this fact. The 
 governor, as the word originally signified, is the steersman of 
 the vessel, giving direction to its course. But it is not his 
 function to furnish the moving force of the ship of state. That 
 is furnished by the vital force of the whole body politic. 
 
 § 27. As God made the state, he had a purpose in making 
 it, a purpose which includes some elements common to all states 
 and others that are peculiar to the particular state. Each state, 
 like each man, has a calling, a vocation. Every nation is an 
 elect or chosen people. It has a peculiar part to play in the 
 moral order of the world. When it recognises this purpose, it 
 is, in Hebrew phrase, a people in covenant with God. The 
 leading purpose of the Old Testament is to set forth the manner 
 of such a national life, and the moral laws that govern it. It 
 gives the essential features of such a life, in connection with 
 some that are peculiar to the Jewish nation. 
 
 § 28. The universal element in the vocation of a state is ex- 
 pressed in the statement that it is the institution of rights. 
 This differentiates it from the family, which is the institution of 
 the affections; also from mankind at large, as rights are realized 
 and made positive through the existence of the state. Justice 
 or Righteousness, Plato discovered, is of the essence of the 
 Btate. It can therefore attain to the purpose of its vocation 
 only by complying with the ideal of justice as apprehended by 
 the national conscience, — an ideal ever advancing in clearness 
 and completeness as the nation tries to realize it. At the first 
 this ideal requires only the righteous treatment of its own 
 citizens as alone invested with the rights it recognises. After- 
 wards men are brought by analogy to feel that as the state 
 judges between man and man, God is judging between nation 
 and nation. Hence originates a body of law between the nations. 
 
THE END AND THE PROGRESS OF THE STATE. 37 
 
 If justice be of the essence of the state, any wilful and con- 
 scious violation of it, i. e., any national unrighteousness that 
 does not spring from and find its palliation in a low ideal of 
 righteousness, must be a blow at the national life and existence. 
 It must weaken the bonds which bind men to one another. 
 Hence to plead the necessity of the national life as the excuse 
 for such acts, is to plead that the state can only be saved by 
 being destroyed. A state that has ceased to aim at righteous- 
 ness has given up its raison d'etre^ and is a practical contra- 
 diction. It has ceased to be a body politic, and has become a 
 band of pirates. 
 
 § 29. Justice has two aspects. (1) It is the state's function 
 to do justice upon evil-doers within (and sometimes without) its 
 own boundaries, by punishing them for past and deterring 
 them from future invasions of the rights of others. (2) It is 
 also called upon to do itself justice ; that is, to secure the 
 fullest and freest development of the national life in all worthy 
 directions. As self-preservation is its first duty, there is in- 
 volved in that duty this obligation — to progress in national life. 
 '* The end of the state is not only to live, but to live nobly." 
 
 § 30. In the order of nature, progress is attained through 
 the differentiation of the parts of a living organism from each 
 other and from the whole. " The higher a living being stands 
 in the order of nature, the greater the difference between its 
 parts, an^ between each part and the whole organism. The 
 lower the organism, the less the difference between the parts, 
 and between each part and the whole" (Goethe). 
 
 "The investigations of Wolff, Goethe, aud^Von Baer, have 
 established the truth that the series of changes gone through 
 during the development of a seed into a tree, or an ovum into 
 an animal, constitute an advance from homogeneity of structure 
 to heterogeneity of structure. . . . The first step is the ap- 
 pearance of a difference between two parts of its substance. . . . 
 This law of organic progress is the law of all progress. 
 Whether it be in the development of the earth, in the develop- 
 ment of life upon its surface, in the development of Society, of 
 
38 ELEMENTS OF POLITICAL ECONOMY. 
 
 Government, of Manufactures, of Commerce, of Language, 
 Literature, Science, Art — this same evolution of the single into 
 the complex, through successive differentiations, holds through- 
 out. From the earliest traceable cosmical changes down to the 
 latest results of civilization [it] is that in which progress 
 essentially consists. . . . As we see in existing barbarous tribes, 
 society in its first and lowest forms is a homogeneous aggrega- 
 tion of individuals having like powers and like functions, the 
 only marked difference of functions being that which ac- 
 companies difference of sex. Every man is warrior, hunter, 
 fisherman, tool-maker, builder ; every woman performs the same 
 drudgeries ; every family is self-sufficing, and, save for purposes 
 of aggression and defence, might as well live apart from the 
 rest" (Herbert Spencer). 
 
 See also Coleridge's Idea of Life. (Works, Vol. I., esp. p. 388.) 
 
 This is true less of the spiritual than of the material side of 
 the national life. It applies especially to those relations to 
 nature, which are the theme of social science in the sense that 
 we take it, — relations which come very directly under the action 
 and control of natural laws (See § 2), As regards the higher 
 or spiritual side of that life, each member of the perfect state is 
 in some sense a reproduction of the whole body politic, — like it 
 a free moral personality. 
 
 Yet the Apostle Paul applies this analogy of difference and interde- 
 pendence to the most purely spiritual form of society. " Th#body is not 
 one member but many, and all members have not the same oflBce. . . . 
 The eye cannot say to the hand, I have no need of thee." 
 
 § 31. Every fully developed state is a complex form of life, 
 whose elements may be distingmshed as three. There is the 
 industrial state, the jural state, and the culture-state. The 
 second embraces the state's political life, the people's advance in 
 freedom and social morality, and its development in legislation ; 
 the third is the sphere of intellectual movement, progress in the 
 fine arts, in literature and the sciences. The first is the sphere 
 of the material well-being of the people. The full development 
 
THE RIGHT AND THE LIMITS OF PATRIOTISM. 39 
 
 of each of the three is essential to the highest well-being of the 
 whole body politic. 
 
 § 32. In seeking the full and free development of the national 
 life on all its sides as its chief end, the state cannot be charged 
 with selfishness. The affections and the attachmeiits of finite 
 beings are of necessity circumscribed, that they may be intense, 
 vigorous and healthy. In the family life we should count the 
 man immoral who loved other men's wives as he loved his own; 
 unnatural if he had no more affection for his own children than 
 for those of other men. To " provide for his own, especially 
 for them that are of his own house," is one of the first duties 
 of the head or the member of a nation as well as of a house- 
 hold. 
 
 While acting first of all for the interest of his own nation, he 
 is not bound to seek to injure or cramp the natural develop- 
 ment of other nations. He can quite consistently cherish the 
 warmest desires for the welfare of every other national house- 
 hold, aud scrupulously avoid any act that would interfere 
 with it. The more strong and hearty and pure the attachment 
 he feels towards his own nation, the more likely he is to sympa- 
 thize with the patriotic citizens of other nations. The late F. D. 
 Maurice well says : " If I being an Englishman desire to be 
 thoroughly an Englishman, I must respect every Frenchman 
 who desires to be thoroughly a Frenchman, every German who 
 strives to be thoroughly a German. I must learn more of the 
 grandeur and worth of his position, the more I estimate the 
 worth and grandeur of my own. . . Parting with our dis- 
 tinctive characteristics, we become useless to each other, — we 
 run in each other's way; neither brings in his quota to the 
 common treasure of humanity." 
 
 Those who cherish the enthusiasm that men feel for their own nation, 
 as ethically right, do not necessarily repudiate " the enthusiasm of 
 humanity." They may very well recognise its value and dignity, while 
 feeling that it belongs to another sphere than either the jural or indus- 
 trial state. There is another kingdom, "not of this world" or order, in 
 which " there is neither Jew nor Greek," founded by him who awakened 
 the sense of human brotherhood in the hearts of men. 
 
40 ELEMENTS OF POLITICAL ECONOMY. 
 
 § 33. The industrial state contains three great fundamental 
 classes, — the agricultural, the commercial and the manufactur- 
 ing. A nation takes high rank industrially in proportion as 
 all the three are fully developed and exist in equilibrium. If 
 any one of the three is depressed or hindered in its develop- 
 ment, the whole body politic suffers accordingly. The others 
 may seem to prosper at its expense, but because the state is a 
 living organism and not a dead aggregate of individuals, one 
 member cannot suffer, but all the members must suffer with it. 
 
 § 34. The individuality of the parts of an organism has its 
 end in their interdependence and mutual helpfulness. A flock 
 of animals, though " a collection of individuals,'' is not a whole 
 made up of differentiated parts. It is only " a numerical ex- 
 tension of a single specimen." A mob of men is equally 
 deficient in true organic unity. It is united only by the exist- 
 ence of the same overmastering rage or lawlessness in each 
 single individual, as animates the entire mob. A state is a body 
 in which men have different functions as well as different per- 
 sonalities ; in which each has his place of service to the whole 
 body. The greater and more marked the variety of the parts, 
 the more closely the whole body is bound in an effective unity. 
 The nation takes a low rank industrially whose members are not 
 employed chiefly in serving one another, but in serving the 
 members of other nationalities. 
 
 § 35. All history illustrates the principle that the chief 
 growth of the state is from within. Nations have often imparted 
 to each other wholesome and stimulating impulses, but beyond 
 a certain limit foreign influence has always been a hindrance, 
 and has been jealously resented by the wise instincts of the peo- 
 ple. We see this in the history of art, literature, language, law 
 and political institutions, and every other side of the national life. 
 
 Any plan of human life, any project for human improvement, 
 which, either in the interest of imperial ambition or of cosmo- 
 politan philanthropy, ignores the existence of the nations as parts 
 of the world's providential order, can work only mischief and 
 confusion. 
 
CHAPTER THIRD. 
 Wealth and Nature. 
 
 § 36. We are engaged in "an inquiry into the nature and 
 causes of the wealth of nations." The word wealth is used in 
 two senses ; as meaning either the aggregate of possessions that 
 minister to man's necessities and tastes, or the possession of an 
 abundance of such objects. In the former or popular sense 
 wealth is the measure of man's power over nature ; in the latter 
 or scientific sense it is the power itself developed to more than 
 the average degree. 
 
 Closely connected with the term wealtli is the term value. 
 The one is the antithesis of the other. If wealth is the mea- 
 sure of man's power over nature, value is the measure of 
 nature's power over man, — of the resistance tliat she oflPers to 
 his efforts to master her. Some of the natural substances are to 
 be had everywhere, always and in the form needed for man's 
 consumption. These have no value, though the very highest 
 utility. Others, such as the water for the supply of a great 
 city, need to be changed in place, and have a value proportional 
 to the cost of their transfer. Others need to be changed in form 
 by manufacture as well as changed in place before their use, and 
 have a still higher value. In other instances the resistance 
 takes the form of scarcity, and is therefore in some degree in- 
 superable, and the degree of the value is still higher. 
 
 § 37. Man stands in close relation to nature, as the possessor 
 of a body which forms part of the physical world. He there- 
 fore needs the services of nature continually. His body is un- 
 dergoing incessant decays and renewals. Motion, respiration, 
 sensation, digestion, circulation of the blood, even thought itself 
 wear away its tissues, and unless this waste be replaced the man 
 must die literally of exhaustion. 
 
 Furthermore, these vital processes can be carried on only in 
 
 the presence of a certain amount of animal heat, which must be 
 
 41 
 
42 ELEMENTS OF POLITICAL ECONOMY. 
 
 supplied from within, and (in most climates) shielded from 
 without to prevent its excessive radiation. 
 
 The chemical substances that form the bodily frame are chiefly Oxygen, 
 Hydrogen, Carbon and Nitrogen. The two first in the form of water 
 make 75 per cent, of the whole body, and 83 per cent, of the most com- 
 mon foods. Berzelius says that the living organism is to be regarded as 
 a mass diffused in water, and another chemist has humorously defined man 
 as fifty pounds of nitrogen and carbon suspended in six buckets-full of 
 water. 
 
 The starch which forms so large an element in the ordinary foods 
 enters into the composition of none of the tissues. It is consumed in the 
 lungs to furnish the vital heat, and breathed oflf as carbonic acid. 
 
 § 38. Hence man's two great material necessities are food 
 and clothing. The desires for these furnish the motive to the 
 vastest activities of the race. As his brain expands, indeed, 
 and as society develops, other desires grow into life and become 
 motives to action; but these two are universal. Others are 
 voluntary ; these are enforced by the sensations of hunger ind 
 cold. Others are directed to comforts or luxuries; these to 
 things necessary and indispensable. 
 
 The productions of the three kingdoms of nature do not 
 equally satisfy these desires. Though there are apparent ex- 
 ceptions, it may be laid down as a rule that he obtains food and 
 clothing from the animal and vegetable kingdoms only. The 
 animal kingdom as a whole is supported by the vegetable, which 
 in its turn depends upon the abundance and fitness of the great 
 mixtures of vegetable and mineral substances which we call 
 soil. Only the lowest type of vegetation can support its life 
 upon mineral food alone. 
 
 § 39. We can trace the story of the earth's development back 
 to a period when vegetation, and therefore soil, did not yet exist 
 upon its surface. Some of the natural agents already at work 
 were indeed preparing for the formation of soil. Glacial corro- 
 sion and other violent forms of action were grinding masses of 
 rock into fine sand, and the frosts were chipping away the edges 
 and faces of the rocks by sudden expansion of the water that 
 they had absorbed. 
 
 Vegetation began with the lichens and the mosses, which 
 
THE HISTORY OF THE SOIL. 43 
 
 secured a foothold on the surface of the rocks, and slowly crum- 
 bled down a few grains of sand from the hard mass (by the 
 action of the oxalic acid which they secrete), and dying, mingled 
 therewith the ashes of their o'wn decay. This furnished the 
 first soil for the next hig;hest order of vegetable life, and thus 
 through successive orders of vegetable life the soil was deepened 
 and enriched. 
 
 As illustrating Goethe's law of progress by differentiation of the parts 
 from the whole and from each other (see § 30), it is worth while to notice 
 the stages of this development as given in the great classification of 
 Oken. First come the acofyledons (lichens, mosses, Ac), which have 
 neither root nor stem, neither bark nor wood, neither leaves nor seeds. 
 Then the itionocotyledona (grasses, lilies and palms), which have no 
 branches nor true leaves, but may have either woody stems, or venous 
 liber, or bark — never the three united. The third are the dicotyledons 
 (fruit and forest trees, <tc.), which unite all these parts in one organism. 
 
 This process of the formation of soil on a rocky surface by 
 successive vegetable growths, still takes place with some modifi- 
 cations in the coral islands of the Pacific. When the coral 
 polyp has raised its rocky fortress above the sea level, the 
 surface is soon strewed with fragments that the waves break off 
 and grind into sand, which is mixed with the remains of the 
 coral polyp. A cocoanut carried safely in its rough husk on a 
 long voyage is washed ashore and takes root. The decay of its 
 leaves forms a new soil, and the birds that rest on its branches 
 bring the seeds of other vegetation in their crops, so that a 
 multifarious growth rapidly covers the barren rock. 
 
 § 40. The sustenance which the growing plant derives from 
 the mineral kingdom is not taken solely nor even mainly from 
 the soil through its roots, but from the air through its leaves. 
 Were it otherwise, the growth of the soil must stop as soon as its 
 depth became as great as that to which the plants thrust down 
 their roots. But six feet of soil is not uncommonly found on the 
 prairies of the West, and even that depth still increasing. The 
 chief food of plants is carbonic acid, one of the elements of the 
 air, which in the early geological ages was so abundant that only 
 vegetable life could have existed on the earth's surface. The 
 
44 ELEMENTS OF POLITICAL ECONOMY. 
 
 first luxuriant vegetable growths, the mosses and the ferns 
 absorbed it in vast quantities, growing with marvellous rapidity, 
 and forming the deposits of decayed vegetation, now known to 
 us as coal, after having been 'subjected to vast pressure for 
 unnumbered ages. By burning this as fuel we give back to the 
 atmosphere a small part of the carbonic acid that once saturated 
 it, and thus furnish food for new vegetation from the substance 
 of those which flourished ages ago. Nothing that is consumed 
 or that decays upon the earth's surface is wasted ; — nothing is 
 wasted but what goes into the sea. " Atmospheric air is the 
 grand receptacle from which all things spring and to which they 
 will return. It is the cradle of vegetable and the coflBn of 
 animal life" (Dr. Jno. W. Draper). 
 
 Carbonic acid forms but a thousandth part of the chemical mixture 
 that we call air., 
 
 § 41. The foliage of the plant is a vegetable substitute for 
 mouth and lungs. It presents a vast absorptive surface to the 
 air throu2;h which it drinks in carbonic acid and transmutes it 
 into woody fibre. To pluck all the leaves of a tree in the early 
 summer would be to kill it by suffocation and starvation. From 
 the vast storehouse of the air the plant draws its food, and the 
 atmospheric supply is kept up by the decay of other plants, by 
 the rcwspiration of animals, and by the consumption of wood and 
 coal as fuel. When the plant dies, a small percentage escapes 
 back to the air again, but the great mass is added to the wealth 
 of the soil, from which so little was taken. 
 
 The proportion of sustenance that a plant takes from the air 
 has been ascertained by experiment to be about nine parts in 
 ten. In one case a willow tree weighing five pounds was planted 
 in a box, in two hundred pounds of soil that had been carefully 
 dried and weighed. To prevent the settlement of dust in any 
 appreciable quantity, the soil was covered with a metal plate 
 pierced with very fine holes to allow the free passage of the air; 
 and it was moistened with rain-water only. After a few years 
 the tree was removed, and the soil was carefully collected and 
 
FERTILITY A PROCESS. — THE SOIL A MIXTURE. 45 
 
 dried. On weighing them it was found that the tree had 
 
 gained sixty-seven pounds and the soil had lost eight ounces. 
 
 The late Prof. J. F. Frazer told me that while engaged in the geological 
 survey of Pennsylvania he found af willow tree growing in the cleft of a 
 rock where there was absolutely no soil whatever, but a continual ooze 
 of water was keeping the cleft moist. 
 
 § 42. The fertility of the earth is therefore not an accom- 
 plished fact, but a vast process that is still going on. Nature is 
 preparing for the time when man will make still larger demands 
 upon her resources than at present. Even when the fertility 
 of a piece of ground has been exhausted by continual abuse, 
 she brings her restorative energies into play. Thus the aban- 
 doned tobacco plantations of Eastern Virginia have been covered 
 by a growth of pines, whose long taproots reach down below 
 the exhausted surface, and bring up mineral substances, which 
 after the fall of the leaves and the decay of the stems enrich 
 the soil. A similar instrument of recuperation nature furnishes 
 to the farmer in the clover plant, whose peculiarity it is to thrust 
 down its roots to the mineral subsoil and feed only upon that. 
 
 § 43. The soil, it has been already said, is a mixture of 
 mineral and vegetable matter. The former, even when less in 
 amount, is by no means inferior in importance. It predominates 
 in the subsoil, and in the best soils appears mainly as silicious 
 sand and clay. The first use of the former is to keep the soil porous 
 and make it ready to receive, — of the latter to keep it compact 
 and able to retain. An excess of either substance imparts to 
 the soil a corresponding defect. 
 
 In the plant the silex or flint of the sand reappears as the 
 skeleton. The slight and fragile stalks of our grains and grasses 
 are kept upright under their load of seed by a thin coating or 
 varnish of silica. Every acre of wheat requires from 93 to 150 
 pounds. This mineral element is but slightly present in the 
 fruits and seeds which man carries from the soil ; somewhat 
 more largely in the stems and trunks of trees, but most of all 
 in the leaves which return to the soil at once, or after having 
 served as food for cattle. The leaves of trees contain fifteen 
 times as much as the trunks. 
 
46 ELEMENTS OF POLITICAL ECONOMY. 
 
 § 44. Persistent human stupidity can bring to nought the 
 most beneficent arrangements of nature. The fertility of the 
 soil may be destroyed in spite of tendencies to perpetuate and 
 extend itself, and that in more ways than one. 
 
 (1) By the absence of any system of rotation of crops. Year 
 after year men will take the same elements from the soil by 
 growing the same crop upon it, wheat or tobacco, or some other. 
 There is land around Albany where forty-five bushels to the acre 
 was once no excessive yield in wheat, but where at present not 
 more than fifteen can be grown. Much of the country in which 
 the last battles of the late civil war were fought is made up of 
 exhausted tobacco plantations. The whole system of Southern 
 agriculture under the slaveholding regime tended to the same 
 result. 
 
 § 45. (2) By continually taking away from the soil and never 
 making any return. The absence of a single element that enters 
 into the composition of a plant will as much prevent its growth 
 as would the absence of all. " For every fourteen tons of 
 fodder carried off from the soil there are carried away two casks 
 of potash, two of lime, one of soda, a carboy of vitriol, a large 
 demijohn of phosphoric acid, and other essential ingredients " 
 (Prof. Johnston). 
 
 Substances that have served as food for birds and animals are 
 wprth most to keep up the fertility of the soil. In passing 
 through the digestive organs they are reduced in size to their 
 finest particles, and enriched with organic elements, which the 
 animal derives from the atmosphere. They, are especially much 
 richer in nitrogen than the food itself. In some districts of 
 England cattle are stall-fed with oil-cake and other expensive 
 foods, simply for the sake of the manure, and by this system on( 
 district of moorland in Lancashire has been reclaimed anc 
 brought up to a high degree of fertility. 
 
 Whenever, therefore, the products of the soil are consumed 
 in the vicinity of the farm, the farmer will have at hand th( 
 means of making such a return to the soil as will keep up anc 
 even increase its fertility. But whenever they are transported 
 
RETURN TO THE SOIL. — DENUDATION OF TREES. 47 
 
 to a considerable distance for consumption the power to make an 
 adequate return to the soil is seriously diminished, if not abso- 
 lutely destroyed. The richest soil cannot long sustain such a 
 process of exhaustion, if its proprietors are engaged in sending 
 its natural wealth over land and sea to a distant market. 
 
 § 46. The existence of the means and the power to make 
 adequate returns to the soil is no guarantee that these will be 
 fully employed. Through the sewers of our great cities, and 
 the rivers into which they empty, immense quantities of fertili- 
 zing matter are poured into the sea, and are thus utterly lost. 
 The soil around the city of Chicago, for instarvce, is naturally 
 sterile ; in the refuse of her slaughtering-houses the city has 
 the means of raising it to a very high degree of fertility. At a 
 great expense provision has been made to carry off the whole 
 mass and pour it through the Illinois and the Mississippi rivers 
 into the Gulf of Mexico ; on all hands the measure is applauded 
 as a bold and wise piece of engineering. Belgium is the only 
 civilized nation that is fully awake to the importance of this 
 subject, but England bids fair to emulate her. 
 
 § 47. (3) The fertility of a country may be destroyed by 
 stripping it of its trees, which seem to affect very greatly the 
 amount of rain that falls on its surface. In some parts of 
 upper India the trees have been cut away, the wells have sunk, 
 the rain-fall has ceased, and the country threatens to become a 
 wilderness. The Punjaub seemed likely to meet the same fate ; 
 when the British conquered it not a single tree was observed in 
 its vast area, and the country was rapidly becoming a desert, 
 when its plantation was begun and the waste was arrested. 
 Numidia, the Plain of Babylon, and Judea are instances of 
 countries once proverbially fertile, and now barren (it is 
 believed) through denudation. When Europeans occupied 
 the Cape Yerde and Canary Islands, and St. Helena, they 
 found them well wooded and fertile. As the trees have been 
 recklessly cut down, droughts have become common, and the 
 capacity of the islands to support a large population has disap- 
 peared. The increasing sterility of parts of France, of Lorn- 
 
48 ELEMENTS OF POLITICAL ECONOMY. 
 
 bardy, and of large districts of Spain, is ascribed to tbe same 
 cause. In Lombardy it has been found that the denudation of 
 the country contributes to the rapidity and the volume in which 
 its light and friable soil is washed into the Adriatic by the Po 
 and its tributaries. Great injury has thus been done to the 
 agricultural capacity of the country, and still greater is feared. 
 And as a rule, the absence of trees seems to lead to the concen- 
 tration of the rain-fall in great storms, and the disappearance of 
 better distributed and more moderate showers. The streams 
 alternate between the destructive violen-ce of torrents and the 
 desolation of dr5ught. The tribes of Arabia perceived the con- 
 nection between drought and the absence of trees ; the oldest 
 law recognised as binding on the whole peninsula is one for 
 their protection, and it was repeated in the injunctions given 
 by the Prophet and the Caliphs to the captains whom they sent 
 forth to subdae the world. 
 
 § 48. All these ruinous results are matters for control and 
 correction by the action of the state. Individual selfishness is 
 always shortsighted; the nation as the supreme owner of the 
 national domain has the fullest right to guard against its reckless 
 exhaustion. The state is owner of the national domain in a 
 sense that is not true of individual proprietors. Much or all 
 of it that is incapable of individual appropriation, is national 
 property, — such as rivers and other inland waters, harbors and 
 fisheries. 
 
 Especially is it a question of national policy, because insoluble 
 to individual effort, to bring the farmer and artisan into neigh- 
 borhood, and secure the consumption of the crops within rea- 
 sonable distance of the farm. 
 
CHAPTER FOURTH. 
 The Science and Economy of Populationt. 
 
 § 49. The evolution^ of life upon our planet, after passing 
 through the vegetable and the merely animal stages, was crowned 
 in the advent of man, the especial theme of social science. All 
 the great processes of nature's development that preceded his 
 coming, were but preparations to fit the earth to be his home, 
 and to gratify the capacities and bring into action the powers 
 with which he was endowed. The earth was given into his 
 hands, and he was commanded to "multiply and replenish the 
 earth and subdue it." 
 
 § 50. To " subdue the earth," to become master over nature, 
 is, as we have seen, only another way of stating the transition 
 from poverty to wealth. And, as the command implies, that 
 transition has gone hand in hand with the increase of numbers. 
 In the earlier stages of society man lives in comparative isola- 
 tion from his fellows, weak in the presence of nature's vast 
 powers and therefore poor in the command of her resources 
 The scattered families, the isolated tribes, are unequal to helpful 
 cooperation ; for the most part they are confined to the use of 
 such of nature's provisions as are easily accessible to their inef- 
 fectual and wasteful labor. First the wild beasts and birds and 
 fruits of the forest are brought into usej then the peaceful 
 flocks whose skins furnish ready-woven clothing, and whose 
 milk and flesh supply food. The wealth of the mine, of the 
 grain-field, of the cotton plantation, are utterly beyond their 
 reach. 
 
 § 51. But with the growth of numbers too great to be fed by 
 the mere pasturage of the land, comes the transition to agricul- 
 tural industry. New powers of nature, forces that lay unused 
 BO long as the scantiness of men forbade efficient cooperation for 
 their mastery, are made to serve man ; cattle that ran wild and 
 I were slain for food, are tamed to the labors of plough and cart; 
 4 49 
 
60 ELEMENTS OF POLITICAL ECONOMY. 
 
 plants that grew wild on the hillside are brought under culture, 
 and by improvement and the selection of seed, produce an ever- 
 increasing quantity of food and clothing. The waterfall that 
 fell idly over the rocks, or the wind that blew unburdened as it 
 listed, turns the mill ; the peat and coal that lay neglected are 
 made into fuel. A division of labor separates the functions of 
 the human members of society, and each species of work is 
 done more effectively and productively for employing the whole 
 time and attention of the men employed in it. Better tools and 
 implements are invented; and last of all, machinery, and the 
 giant forces that actuate it, come into play in man's service, 
 taking the place of muscular strength, and at every advance 
 lowering the value of articles of utility, and making them 
 obtainable in larger quantities and by a larger number of 
 persons. 
 
 § 52. At every step in this great past of man's industrial 
 development, the growth of numbers and of wealth has gone on 
 with equal strides. In the earlier stages the pressure of popu- 
 lation upon the means of subsistence is marked and painful; 
 yet beneficent, as thrusting men into closer and more helpful 
 association, and forcing them to adopt wiser and better methods. 
 But every advance has been richly rewarded, for with each 
 acceleration in the rapidity of social movement, the resistance to 
 be overcome has diminished. Each generation has worked not 
 for itself only, but for all that were to come ; and the result of 
 all wisely directed work has been to make easier and more 
 effective the task of those who came later. " Other men 
 labored ; ye have entered into their labors." 
 
 § 53. It is, therefore, apart from all merely ethical considera- 
 tions, a wise economic policy for a nation to guard the lives and 
 the health of its people, and to remove all artificial obstructions 
 to the natural growth of population. It is indeed the duty cor- 
 relative to its right to command their lives and persons in its 
 own defence ; but it is also the best policy, in view of both the 
 military strength and the industrial welfare and contentment of 
 its people. For the more people there are productively employed 
 
THE STATE THE STEWARD OF LIFE AND HEALTH. 51 
 
 in any well-managed country, the greater the share of food and 
 clothing, of necessaries and comforts, that will fall to each one 
 of them. Whatever tends to diminish their numbers, — or, what 
 comes to much the same thing, to lower their bodily health and 
 strength — has also the tendency to impoverish them by diminish- 
 ing their power of cooperation and association. Every retro- 
 gression to the sparse numbers of earlier times, is also a retro- 
 gression to their poverty. 
 
 § 54. " But," it will be said, " what need is there of state 
 interference in the matter ? In every man's breast is implanted 
 the instinct of self-preservation, to lead him to take care of him- 
 self Surely we can leave this matter to individual action, and 
 to the voluntary cooperation of individuals." The instinct in 
 question is exceedingly effective as a motive in the presence of 
 visible and well-understood danger. But where the peril is 
 more recondite, though not less real, the instinct is good for 
 nothing. Only reflection and forethought, accompanied with a 
 large and exact knowledge of the scientific conditions of life and 
 health, and a readiness, by no means universal, to act upon 
 these, is sufficient in this case. The state can command the 
 services and opinions of the best judges ; it can carry out whole- 
 sale measures, and override the mulish opposition of wrong- 
 headed people, in cases where only general action is of any avail. 
 In so doing, it is not overriding '* the judgments of individuals 
 respecting their own interests, but giving eflfect to that judgment; 
 they being unable to give effect to it except by concert, which 
 concert again cannot be effectual unless it receives validity and 
 sanction from the law" (J. S. Mill). Thus in England the law 
 recently passed to limit the hours of work in mills and factories 
 for married women, received the support of nearly all that class 
 of mill-hands. They were free to make such private contract 
 with the mill-owner as they pleased, but in fact their freedom 
 amounted to nothing whatever until the law required them to 
 refuse excessive work. 
 
 In other cases the right of state interference rests on the same 
 ground as the laws that forbid and furnish attempts at self- 
 
52 ELEMENTS OF POLITICAL ECONOMY. 
 
 murder. The man who persists in maintaining a dunghill or a 
 cesspool under his windows, or in living in a house sordid with 
 filth or imperfectly ventilated, may have the excuse of igno- 
 rance, but society has not. The officers of the state have as 
 much right to force him to reform these things, as they would 
 have to dash a dose of poison out of his hand. In some cases 
 there is not even this excuse. Certain trades, such as cutlery- 
 grinding in Sheffield, are paid at a high rate because they prove 
 fatal in ten or fifteen years to those who engage in them ; but 
 the workmen have been known to resist stoutly any provision 
 that was meant to diminish the risk (or rather to postpone the 
 certainty) of death, as tending to lower wages. "A short life 
 and a merry one !" is the reckless saying with which such 
 people take their lives in their hands. 
 
 § 55. The state, then, is the steward of the life and the health 
 of its individual members. There are many measures by which 
 it naturally and fitly discharges this trust; such as (1) requir- 
 ing local governments and municipalities to enforce public clean- 
 liness and to provide thorough drainage, and good roads for safe 
 travel ; (2) by quarantining vessels and persons who come from 
 places where infectious diseases are raging ; (3) by enjoining the 
 adoption of preventive measures (disinfectants, vaccination, 
 &c.), in times of epidemics; (4) by chartering and endowing 
 colleges competent to give medical instruction and to grant 
 medical degrees, and by requiring that a doctor so qualified 
 shall sign a certificate of death and of its cause, before legal in- 
 terment shall take place ; (5) by forbidding the sale of unripe, 
 overripe, diseased or adulterated articles of food ; (6) by forbid- 
 ding women and minors from engaging in excessive work or in 
 night-work in factories; (7) by requiring that dangerous employ- 
 ments shall only be carried on, and explosive machines used, 
 with all possible precautions for the safety of the workmen and 
 the public, and by enforcing this by general state inspection. 
 
 Besides these negative checks on the waste of human life and 
 health, there are many positive measures that contribute to the 
 game end. Such are the public instruction of the young in the 
 
MALTHUS'S "LAW OF POPULATION." 53 
 
 first principles of practical hygiene; the establishment of public 
 baths, parks and gymnasia; the requiring of cities to furnish 
 an abundance of pure water, and to see that it is introduced into 
 every house. 
 
 It is questionable whether the sale of what are Called patent medicines 
 should be allowed by the state. Most of these substances, I believe, are 
 compounds that would be useful in some cases of disease, but are exceed- 
 ingly dangerous when used indiscriminatingly, as they must be in the 
 absence of competent advice. Others are simply fraudulent, and con- 
 tain nothing that could have any effect, either good or bad. 
 
 § 56. But all this is open to a general objection, that has 
 occupied a very large space in the discussion of this subject. 
 It will be said that measures to hinder the action of those 
 destructive agencies, and more especially such as tend to promote 
 and foster the increase of a nation's population, will do a very 
 great deal of mischief instead of good. For unless something 
 check it, the number of people in a country will double every 
 twenty-five years, and go on increasing in a geometrical ratio, 
 while subsistence increases only by an arithmetical increment. 
 Thus in two centuries, " taking the whole earth and supposing 
 the present population equal to a thousand millions, the human 
 species would," if the growth were thus unchecked, '^ increase 
 as the numbers 1, 2, 4, 8, 16, 32, 64, 128, 256.; and subsist- 
 ence as 1, 2, 3, 4, 5, 6, 7, 8. In two centuries the population 
 would be to the means of subsistence as 256 is to 9 ; in three 
 centuries as 4096 is to 13; and in two thousand years the dif- 
 ference would be incalculable" (Rev. T, R. Malthus). 
 
 Mr. Malthus's Essay on Population appeared in 1798. Its main posi- 
 tion was anticipated by Herrenschwand {Diacoura fondamental snr la 
 Population, 1786), but the theory obtained its wide currency through the 
 English writer. It was eloquently opposed by Godwin, the author of 
 Political Justice ; then in detail by Sadler, Allison, Doubleday, N. W. 
 Senior and Quetelet, Its latest English opponents are Herbert Spencer 
 and W. R. Greg. The latter says : " The doctrine has been accepted by 
 every writer of repute on economical subjects. . . None of the many 
 authors who have questioned or assailed it, . . . have been able to shake 
 in any degree its hold upon the public mind. . . It has remained 
 the fixed, axiomatic belief of the educated world." {The Enigmas of Life.) 
 
54 ELEMENTS OF POLITICAL ECONOMY. 
 
 § 57. If this view be correct, it is not the growth of popula- 
 tion, but the eflSciency of the "checks" upon it, that best con- 
 tributes to the well-being of the nation. These checks are of 
 two kinds: (1) positive, such as war, famine, pestilence, &c. ; 
 (2) preventive, such as sexual immorality and voluntary celi- 
 bacy. The practicalinferences drawn by Mr. Malthus and his 
 school from this theory were that wherever the state can dis- 
 courage the increase of the population without interfering with 
 personal liberty, it should do so. Regarding pauperism as the 
 result of over-population, they were in general opposed to any 
 provision for the poor, either public or private ; regarding that 
 as a premium upon recklessness and self-indulgence, and as a 
 useless interference between the violators of a divine law and 
 their divinely-appointed punishment. Or if provision must be 
 made for the poor, they would have it managed in such a way 
 as to discourage and prevent " the propagation of a race of 
 paupers.*' They especially labored to create a strong public 
 opinion on the subject, and to diffuse this through all classes. 
 J. S. Mill would have 'Hhe producing large families" " regarded 
 with the same feeling as drunkenness or any other physical 
 excess." 
 
 One inference drawn from the theory was that a high rate of 
 wages is exceedingly undesirable. For when working people 
 are paid abundantly they naturally become reckless as regards 
 the future ; the rate of increase is accelerated, the labor-market 
 overstocked, and the workmen must suffer a fall of wages to or 
 even below "the natural rate" again. Any high rate must 
 therefore be merely temporary, and add to the misery and dis- 
 content of the working classes, by accustoming them to enjoy- 
 ments, which they afterwards lose the power to command. 
 
 § 58. The theory obtained general currency in England and 
 some other countries as an easy and not unsatisfactory explana- 
 tion of the misery that existed in the closely settled countries 
 of Europe. It was an explanation that involved no censure of 
 the leaders in social policy, and that gave full sanction to their 
 disposition to give themselves as little trouble as need be about 
 
VARIOUS INTERPRETATIONS OF MALTHUS. 55 
 
 the suffering classes. But it had such a plausibility in it, that 
 men of quite another stamp adopted it heartily, — men like 
 Chalmers and the younger Mill, who really longed and labored 
 for the social elevation and welfare of their countrymen. 
 
 § 59. The earlier disciples of Malthus, and their master, 
 treated this alleged tendency of population to outrun subsistence 
 as an insurmountable obstacle to the permanent welfare of the 
 mass of mankind. In the several editions of the Essay on 
 Population^ his statements of this opinion are somewhat toned 
 down in concession to hostile criticism j but even the last re- 
 mains open to the same interpretation. Or if he has any hope, 
 it is from the progress of society in education and knowledge, 
 until all men shall be able to "read, mark, learn and inwardly 
 digest" his pleas for voluntary restraint in this matter. (He 
 himself had only eleven children, as M. de Sismondi tells us.) 
 Mr. McCulloch also lays it down as a " principle that the power 
 of increase in the human species must always, in the long run, 
 prove an overmatch for the increase of the means of subsist- 
 ence.'' James Mill says ; " The general misery of mankind is 
 a fact which can be accounted for upon one only of two posi- 
 tions, either that there is a tendency in population to increase 
 faster than capital, or that capital has by some means been pre- 
 vented from increasing so fast as it has a tendency to increase." 
 Rejecting the latter of the two suppositions, he accepts the 
 former as the fact. And he declares that " however slow the in- 
 crease of population, provided that of capital is still slower, 
 wages will be reduced so low that a portion of the population 
 will regularly die of want." 
 
 § 60. The later writers of this school seem inclined to lay 
 more stress upon the counteracting forces, viz. : the growth of 
 subsistence and the checks to population. Archbishop Whately 
 even assigns to these the rank of a counter-tendency, comparing 
 the two to the centrifugal and the centripetal forces that keep 
 the earth for ever moving in the same orbit, and emphasizing 
 the fact that " much as our population has increased within the 
 last five centuries, it yet bears a far less ratio to subsistence than 
 
56 ISLEMENTS OF POLITICAL ECONOMY. 
 
 it did five hundred years ago." N. W. Senior offering a mass 
 of evidence to the same purpose, says : '* I believe in the actual 
 power of population to increase so as to press upon the means of 
 subsistence. I deny the habitual tendency. I believe the 
 tendency to be just tho reverse." Yet he also says that '^ there 
 are few portions of Europe the inhabitants of which would not 
 be richer if their numbers were fewer, and would not be richer 
 hereafter if they were now to retard the rate at which their 
 population is increasing.*' 
 
 § 61. Mr. John Stuart Mill better represents the great mass 
 of English writers on this topic. He holds that the tendency 
 pointed out by Malthus is the constant element in the problem, 
 and all others are inconstant and variable. Not that there is 
 any need to despair in view of this fact. If the uiass of society 
 were really and generally enlightened, the preventive cheek of 
 abstinence would be quite sufficient to overmaster this unhappy 
 and dangerous tendency. All the progress of human civiliza- 
 tion has been through the growing ascendancy of man's higher 
 over his lower nature. The race of men have their future in 
 their own hands in this matter, and as they awake to the realiza- 
 tion of the fact, they will govern themselves more wisely. The 
 social moralist might fairly object here that this constant victory 
 of the higher nature of man has been won through men enter- 
 ing into those relationships from which Mr. Mill would have 
 them abstain, and from their being drawn out of their sordidness 
 and selfishness thereby. Some of the social regulations and in- 
 stitutions on the Continent, which Mr. Mill unhappily chose for 
 eulogy, show us by their effects that whatever discipline the 
 self-contained philosopher may find in this solitary life, it is to 
 the mass of men the road to degradation and debasement. 
 
 But we need not go out of the strictly economic sphere, nor 
 even outside of Mr. Mill's concessions, to find arguments. Since 
 the law was enunciated, whatever its acceptance by the intellectual 
 classes, the mass of men have neither believed nor acted on it. 
 Yet, as Mr. Mill admits, the actual state of society, as compared 
 with what it was, does not bear out the theory. " This does not 
 
MISERY EXCEPTIONAL. — ITS DECREASE. 57 
 
 prove that the law does not exist, but only that some antagonistic 
 principle is at work which is capable for a time of making head- 
 way against the law.'' This exceptional and antagonistical 
 principle he finds in the progress of material civilization ; that 
 is, in the growth of man's power over nature and her utilities. 
 He specifies the improvements in agriculture and in machinery, 
 better roads and means of communication, and the spread of 
 education. Very right, save in regarding civilization and its 
 progress as exceptional, whereas it is the law ; and in accepting 
 misery as the law, whereas it is the needless exception. In this 
 point lies the deepest ground of distinction between the English 
 view of the subject and that here advocated. The latter looks 
 to the future hopefully, tracing there with prophetic foresight 
 all the great ascending lines of human progress as carried for- 
 ward without stop or limit. The other regards that future with 
 despondency, or at least a gloomy uncertainty, being most im- 
 pressed with the existence of forces and tendencies that have 
 wrought misery and promise ruin. 
 
 § 62. The theory is discredited by the experience of the past 
 in this matter. The pressure of population upon subsistence is 
 characteristic of the periods and the places where population is 
 most sparse, — not of those where it is densest. " Let any one," 
 says Mr. McCulloch, whom we quoted above, " compare the 
 state of this or of any 'other European country five hundred or a 
 thousand years ago, and he will be satisfied that prodigious 
 advances have been made, that the means of subsistence has in- 
 creased much more rapidly than population, and that the labor- 
 ing classes are now generally in possession of conveniences and 
 luxuries that once were not enjoyed by the richest lord." 
 
 Take the extreme case of Belgium, whose Flemish provinces, 
 though naturally poor in soil, are the most densely peopled 
 district in the world. In spite of the absence of large manu- 
 factures and a too general dependence on agriculture, the stand- 
 ard of comfort is high, and continues to rise. Switzerland rivals 
 these provinces in density of population and in the general difi'u- 
 sion of comfort among her people. Were the population of 
 
58 ELEMENTS OF POLITICAL ECONOMY. 
 
 Europe to be doubled, there is no reason to suppose the soil 
 would furnish them insufficient support. Deducting one-third 
 of her soil as not arable, and assigning two acres per head to her 
 possible population, she would easily support 800 millions, or 
 three times her present population. Yet Zurich has one person 
 to every one and a quarter acres. 
 
 Belgium has 440 people to the square mile ; one of her Flemish pre 
 vinces has 1800. Four cantons of Switzerland approach her average; 
 Basle 420 J Argovie 398; Thurgovie 368; Zurich 365. Lombardy has 
 370; England and Wales 360; Holland 300; Italy 225; France, Ger- 
 many and Ireland 180; Austria 164; Switzerland 157; Spain 90; Turkey 
 in Europe 76; Russia 30 ; Sweden 22. 
 
 Asia is generally regarded as the cradle of the human race. 
 Here then we must fiad — if anywhere — the sad effects of a 
 prolonged multiplication of the race. Yet Asia is only one-third 
 as densely peopled as Europe, and the part of Asia in which 
 population is densest, Hindoostan, is capable of supporting a 
 much greater number. 
 
 The stories told of the density of the population in China, like many 
 other details about that empire that have come down from last century, 
 are apocryphal. China, according to the census of 1864, has about 260 
 to the square mile; but Chinese statistics are not very trustworthy. The 
 census of 1812 put the density at 283 to the square mile. 
 
 America, Africa and Australasia are but very thinly settled, 
 and it is hardly possible to estimate the greatness of the popula- 
 tion which they are capable of supporting. 
 
 § 63. Of the soil actually under cultivation, not more than a 
 very small part is cultivated as it might be, even in the existing 
 stage of agricultural science. The average yield of wheat in 
 England, for instance, is 26 bushels to the acre. But the fact that 
 57 and even 60 bushels have been grown is enough to show that 
 England is under no necessity to import one-fourth of her bread- 
 stuffs. Only a very small part of her soil is farmed scientific- 
 ally, and official returns made in 1873 show that she has seven 
 and a half million acres, more than half of them in the most 
 fertile part of the island, not under cultivation. In the opinion 
 of N. W. Senior the yield of food would be quadrupled during 
 
BETTER FARMING NEEDED. — EARLY FAMINES. 59 
 
 the century then beginning (1835), and might possibly be multi- 
 plied tenfold. Even soil that is held too poor to repay cultiva- 
 tion, may be made fertile by the skill of the agricultural 
 chemist. Thus Mr. Huxtable on an acre of chalk down — gene- 
 rally given up to the sheep — raised twenty-five tons of turnips, 
 two years running, at a less expense than is usually required for 
 a scantier crop on good soil. 
 
 But these better methods are the product of an age when 
 population is dense, cooperation easy, and the human mind is in 
 high activity. ^ 
 
 Great Britain contains 56,815,353 acres, of which only 31,102,600 acres 
 are cultivated, and 2,187,078 acres are returned as woods and plantations 
 for the growth of timber or the protection of game ; leaving 23,525,675 
 acres in a state of nature. Of this Wales has nearly 2,000,000; England 
 about 7,500,000, and the rest is in Scotland. Most of this is in the moun- 
 tainous counties, northern and south-western ; but over 18 per cent, of the 
 most fertile parts of the kingdom are still uncultivated. Outside of the 
 Scandinavian kingdoms, which may be compared to Scotland, no Euro- 
 pean country of which we have trustworthy statistics, allows so much of 
 its domain to lie idle. Austria proper has eight per cent, uncultivated; 
 Bavaria less than six and a half; Wurtemburg not five. 
 
 § 64. The earlier records of all civilized countries, and the 
 existing state of savage nations, disclose to us habitual poverty, 
 frequent famines and consequent pestilences. In the JSaxon 
 Chronicle and the earlier mediaeval historians, there is a sad and 
 monotonous record of famines, year after year; and England is 
 no exception among European nations. Since the populations 
 have trebled and quadrupled, they are rarely heard of, save in 
 thinly-settled countries like Sweden and Persia. If they occur 
 elsewhere, they are owing to drought or some other unforeseen 
 calamity, and owe much of their desolating force to the bad 
 economic management that has kept the whole people to a single 
 occupation, or made them dependent upon a single crop; for a 
 failure or a series of failures of that crop must produce dreadful 
 misery. But that is the condition of an undeveloped and im- 
 perfect society, not of one whose industrial growth has been 
 allowed to keep pace with its growth of numbers. " But even 
 Ireland, poor and populous as she is, suffers less from want with 
 
60 ELEMENTS OF POLITICAL ECONOMY. 
 
 her eight millions of people [1829] than when her onlj^ inhabit- 
 ants were a few septs of hunters and fishers." So again in our 
 own country, a large proportion of the early colonists from 
 Europe died of hunger and privation, and colonies were broken 
 up, because their lack of numbers and of the power of mutual 
 help made them unable to cope with the resistances of nature. 
 Their successors struggled long with the hardships of their life. 
 As numbers grew, famines disappeared; a century ago two or 
 three millions were abundantly fed on the soil that had hardly 
 supported forty thousand Indians before the coming of the white 
 man. A much vaster number is now still more abundantly pro- 
 vided for, from the food grown in the same area. 
 
 " Whatever tends to develop the natural resources of a 
 country, to call forth a spirit of enterprise among its inhabitants, 
 to render each part less dependent upon itself, and to bind up 
 the commonwealth by the ties of mutual assistance and common 
 interest, tends to mitigate the actual pressure of a famine. The 
 whole list may be expressed in four words — enlightened govern- 
 ment and modern civilization. These are the specifics for famine. 
 Where they exist, scarcity will never result in depopulation. 
 Where they do not, the utmost endeavors of government may 
 mitigate, but they cannot avert." — Hunter's Annals of Rural 
 Bengal, p. 55. 
 
 § 65. History shows us also that a vast decrease in the popu- 
 lation of a country, through the sweeping operation of Mr. 
 Malthus's positive and preventive checks, is a dangerous possi- 
 bility. The investigations of Dureau de la Malle and Zumpt 
 have established the fact — now accepted by scholars generally — 
 that the vast decline in its population was a chief cause, if not 
 the cause, of the overthrow of the Roman Empire by the bar- 
 barians. Greece declined steadily, in this respect, from the 
 time of the Persian wars ; Italy from that of the struggle with 
 Carthage. The free population of Italy — not including Cis- 
 alpine Gaul — at that period was about three millions ; the de- 
 crease was so marked and rapid that thejTws trium liberoTum wab 
 created to make marriage a profitable investment, and discour- 
 
" ROME FELL FOR WANT OF MEN." 61 
 
 age celibacy. The speech of the Censor Metellus, in praise of 
 marriage as a duty though an unpleasant one, was revived and 
 read in the senate by Augustus Caesar, and a multitude of laws 
 passed, but to no lasting purpose. The great famines and 
 pestilences of the times of the Antonines made the ruin of the 
 Empire only a question of time, lie benefits that might have 
 been expected from the diffusion of Christianity and the restora- 
 tion of public morality and the sanctities of the family life, 
 were frustrated by the extravagant estimate put upon celibacy 
 as a religious virtue. At last '• Rome fell for want of men.'' 
 
 See Seeley's Roman Imperialism, First Essay. The name proletariat, 
 given to the lower classes of the Roman population, means that the state 
 supported them in idleness simply that by the growth of their offspring 
 (prolea) the state might be strengthened. 
 
 " The process of depopulation in many provinces of the 
 Roman dominions, since the times of the Antonines, has been 
 excessive, and unaccountable on any of Malthus's hypotheses. 
 We may instance especially the north of Africa, so populous in 
 the palmy days of Rome, and Asia Minor and Syria. Accord- 
 ing to Merivale, Asia Minor once supported 27,000,000 of 
 people. According to McCulloch, they do not now contain 
 more than one-fourth of those numbers. Yet we do not find 
 that they have become either unhealthy or unfertile" (Greg). 
 
 It may be said that all this but illustrates the potent eflBcacy 
 of the preventive checks. It does more ; it shows that it is 
 from those checks to the growth of population, rather than from 
 the growth itself, that we are to fear the most deadly injuries to 
 society. 
 
 § 66. In modern nations the growth of numbers — as officially 
 ascertained — varies so greatly as to set at nought all attempts to 
 fix a o;eneral rate of increase. Nor can the difference be traced 
 to the operation of preventive checks. In England the popula- 
 tion doubles about once in 47 years, while the annual death-rate 
 is one in 44. In France, with the same death-rate, there is 
 hardly any increase, if not an actual decline. In Prussia the 
 increase is as great as in England, though the death-rate is one 
 
62 ELEMENTS OF POLITICAL ECONOMY. 
 
 in 32. In the United States and Lower Canada — immigration 
 being deducted — the population doubles in about 40 years. lu 
 some parts of Mexico much more rapidly. 
 
 The population of G-aul in Roman times was about ten and a 
 third millions ; in the fourteenth century after Christ the king- 
 dom of France, about a third of the present area, contained two 
 and a half millions of hearths, or between ten and eleven 
 millions of people, being 32 to the kilometre (something over 
 three-eighths of a square mile). In 1515 the population was 
 actually less dense — 30 to the kilometre; in 1599, 34; in 
 1698, 39; in 1772, 45; in 1850, 67; in 1867, 71.4; in 1872, 
 67.3. The greatest rapidity was in the decade 1816-25, just 
 after the Napoleonic wars, when the annual increment was 7^ to 
 the thousand. By 1848 it fell to about a third of that number, 
 and by 1870 it had as good as ceased. 
 
 In England the population is said to have been almost 
 stationary under the Tudors. In six censuses taken during 
 the present century beginning with 1811, the rate of increase 
 was found to be 14, 18, 16, 14, 13 and 12 per cent, for 
 each decade. This shows a diminution during and a great in- 
 crease following the Napoleonic wars, as in France. After that 
 the rate fell steadily, and should it not cease to do so, the 
 time will come when England, like France, will cease to add to 
 her population, 
 
 Ireland "Is x)ften quoted by the Malthusians. It is alleged 
 that under the great impulse given to Irish prosperity during 
 the last quarter of the eighteenth century, her population 
 rose from 2,690,556 in 1777 to 5,395,456 in 1805. These 
 figures do not rest upon any ofiicial census, and may therefore be 
 questioned. The first is an estimate based on the returns of the 
 house-tax ; the second is the computation of an individual 
 statist. If it be true, then the population increased but fifty- 
 one per cent, in the next thirty-six years, rising to 8,175,141 in 
 1841. The failure of the potato crop under the blight of a 
 single night, August 5, 1846, broke the one stafi" of life upon 
 which the Irish people leaned, and the famine of 1847 followed. 
 
REASON, AS WELL AS FACTS, AGAINST MALTHUS. 63 
 
 But even at that period Ireland was not as closely populated as 
 England. There was no necessary pressure of population on 
 subsistence, for large amounts of grain were raised for exporta- 
 tion to England, and there had been no great want of food at 
 home. By the year 1874, population had fallen — chiefly through 
 emigration to America — to 5,301,336, a decrease of 37 J per 
 cent. ; such a removal of " the pressure on subsistence '' ought 
 to have produced the happiest eflfects, if Malthus be right. But 
 Professor Cairnes, of Gal way, wrote in 1865 : " We fail to per- 
 ceive any solid improvement, scarcely any sensible improvement, 
 in the present race of daily laborers in Ireland, as compared 
 with their predecessors twenty years ago." Wages have risen, 
 but food has risen equally; as clothing is cheaper their " condi- 
 tion is probably somewhat better physically. '^ 
 
 § 67. There are reasons why the Malthusian theory cannot 
 be true, as well as facts to show that it is not. 
 
 It is an ascertained law of nature that the lower any form of 
 life stands in the scale of existence, the greater the rate of its 
 propagation and multiplication ; the higher it stands the less its 
 rate of increase. Vegetables, as a whole, therefore surpass the 
 animal kingdom as a whole. A potato sprout multiplies twenty 
 fold in a single year ; a grain of wheat even two hundred fold 
 under favoring circumstances. The gardener who would make 
 a plant propagate freely, starves it; but he knows that when by 
 care and attention he has doubled its petals and brought it to an 
 artificial perfection, it becomes sterile. The wild rose of the 
 open fields brings its seeds to perfection ; the rose of the garden 
 cannot be raised from the seeds of its like. 
 
 So in the animal kingdom. The Clio borealis, of which vast 
 shoals furnish a mouthful to the whale, multiplies by millions ; 
 the whales themselves almost as slowly as man. The progeny 
 of a pair of rabbits in a few years will be reckoned by thou- 
 sands ; that, of a pair of wild elephants not by dozens, while 
 tame elephants, though well fed and cared for, and living under 
 their native skies, and allowed a large degree of freedom, cease 
 to breed. 
 
64 ELEMENTS OF POLITICAL ECONOMY. 
 
 § 68. Does not this natural law continue in force when we 
 compare the highest of animals with the rest ? Why should the 
 whole order of nature be reversed in man's case ? The things 
 that serve him as food, stand below him in the order of nature ; 
 their multiplication must therefore be more rapid than his. 
 
 Not only does the law hold good as to man in comparison 
 with the animals ; it is equally true of man as compared with 
 man. The higher the form of life, the slower the rate of its 
 increase. Whenever any nation, or class within a nation, have 
 attained to a high degree of development and culture, there is a 
 reduction of its rate of propagation, and in many cases its 
 extinction begins. It is proverbial that men of genius leave no 
 posterity. In ancient Greece and Italy the extinction of rich 
 and privileged families went on constantly. Augustus had to 
 reconstruct the Roman Senate from among the plebeians, as 
 only fifty families of senatorial rank were left. In France De 
 Tocqueville could specify two hundred old families in one dis- 
 trict alone that had become extinct from various causes within 
 a century. Mr. Greg ascribes the markedly Gallic character of 
 the French nation to the extinction of the superior Frankish 
 race who gave their name to the country and constituted its 
 feudal aristocracy. In England few of the Barons who took 
 part in the Wars of the Roses are still represented in the Eng- 
 lish aristocracy, and genuine pedigrees rarely extend farther 
 back than the times of the Tudors. Of the Norman aristocracy 
 who came in with the Conqueror, and who were one in forty-two 
 of the whole population, only a single descendant was known in 
 David Hume's time. In spite of new creations, the ratio had 
 fallen to one in eighty-eight at the beginning of the fifteenth 
 century, and to one in 12,500 at the beginning of the present 
 century. A multitude of peerages are extinct for want of heirs, 
 and of 1400 baronets created between 1611 and 1819, the 
 families of 783 are now extinct. In the United States, 
 although the rate of increase is very high, yet it is by no 
 means universally so. In the New England States, the native 
 population, which in two centuries grew from 45,000 to 
 
INCREASE IN CLASSES AND IN NATIONS. 65 
 
 4,000,000 souls, is now increasing very slowly indeed. This 
 
 might be ascribed to the great emigration to other parts of the 
 
 country, but the observations founded upon the number of 
 
 births to marriages shows this reason to be not sufficient. The 
 
 most cautious estimate makes the number in the earlier periods 
 
 to have been six children to a marriage ; in the later, about 
 
 four. [Franklin (1751) says : " Marriages in America are more 
 
 general, and more generally early, than in Europe. And if it 
 
 is reckoned there that there is but one marriage per annum 
 
 among one hundred persons, perhaps we may here reckon twoj 
 
 and if in Europe they have but four births to a marriage (many 
 
 of their marriages being late), we may here reckon eight."] On 
 
 the other hand, the foreign population is growing rapidly, and 
 
 doubtless will continue to do so, until it rises to the level of the 
 
 native in education and general culture. In New York the 
 
 census of 1865 showed that in nearly one-fourth of the families 
 
 of that stat« no children had been born, and that in more than 
 
 three-fourths the average was little over one child to each 
 
 family. 
 
 It is of course extremely probable that prudential considerations have 
 much to do in these cases with the avoidance and the postponement 
 of marriage, and consequently with diminishing the increase of the 
 population. As society grows in wealth and in an exaggerated respect 
 for wealth as an element of social standing, young people are less and 
 less disposed to "begin life where their parents began ; they must begin 
 where their elders left off." The only point of objection that we would 
 raise to Mr. Malthus's view of this " moral check on population" is that 
 such artificial and exaggerated prudence ia not a beneficent check to a 
 wrong tendency, but itself a wrong and lamentable habit, — which 
 detracts from the health, the happiness and the morality of the com- 
 munity. 
 
 § 69. As of classes, so of nations. A high degree of civili- 
 zation and mental culture imposes an immediate and natural 
 check upon the growth of numbers. The growth of mind and 
 the growth of numbers are two balancing forces, two tendencies 
 that counteract each other. 
 
 But the growth of mind is a natural result of the growth of 
 numbers, unless the constitution and course of nature have been 
 5 
 
66 ELEMENTS OF POLITICAL ECONOMY. 
 
 wilfully or thoughtlessly interfered with by a bad social 
 economy. There is implanted in the nature of the race a ten- 
 dency to rise from poverty and barbarism to wealth and civili- 
 zation. But this tendency has scope for its exercise only 
 when man can rely upon the help and cooperation of a suffi- 
 ciently large body of his fellow-men, in the work of subduing 
 nature, and when association and cooperation are not artificially 
 hindered or checked. The more people there are in a well- 
 managed country — up to any number that ever has been 
 reached or is likely to be — the better each man will be fed and 
 clothed, if their industry be wisely directed. The more the 
 numbers, in that case, the greater that people's mastery over 
 nature, and the larger the share of the good things that will 
 fall to each individual. 
 
 Thus we find that population is self-regulative. Its multipli- 
 cation brings the civilization, that is the one effectual and all- 
 efficient check to all undue multiplication. '' The excess of 
 fertility has rendered the process of civilization necessary ; and 
 the process of civilization must inevitably diminish fertility, 
 and at last destroy its excess" (Herbert Spencer). 
 
 § 70. Mr. Doubleday was the first who argued that a physio- 
 logical reason or several of them lay at the root of these facts. 
 He suggested that ample and sufficient food had directly the 
 effect of lowering the fecundity of the race. There may be 
 truth in the suggestion, but it is more probable that cerebral 
 development has that tendency. This seems to be true even 
 of the higher animals, as is seen in the case of the tame 
 elephants of India. As man's brain expands, the objects of 
 his desire multiply, and the natural desires common to the 
 whole race lose their prominence and despotic strength. For a 
 time they continue to exist in an excessive and unnatural force, 
 the fruit of long ages of unrestrained indulgence, — the sur;^ 
 vivals of the period of barbarism. The passion for alcoholic 
 liquors, for instance, may be fairly traced back to ages whei 
 I drunkenness formed the only escape from a sordid, unculture( 
 I life, which admitted of no less material exhilaration. 
 
LENGTHENING OF LIFE. 67 
 
 m this particular instance, the distribution of the chemical 
 elements of the human frame — phosphorus especially — seems to 
 be closely connected with the question. But we may well hold 
 with Mr. Grreg " that other physiological causes of antifecund 
 tendency are yet to be discovered ; and that races, nations and 
 families would not so often die out were it not so." 
 
 § 71. By another compensatory law of nature, the less the 
 rate of the reproduction of any form of life, the greater the 
 prolongation of the life of the individual specimen. What 
 nature produces with difficulty, she guards with care. 
 
 This law also holds good between different classes of men. 
 Steadily for centuries past there have been added days, months, 
 years to the average length of human life, — partly from occult 
 natural causes, partly from the growth of medical science and 
 the adoption of wiser sanitary and hygienic methods. Thus, as 
 Macaulay notes, the death-rate in London in any ordinary year 
 of the seventeenth century was greater than in a bad chol'^Ta 
 year of the nineteenth ; and the poorest woman in our times 
 can command better medical attendance than the queens of that 
 era could have obtained. The death-rate fell between 1655 and 
 1845 from one in twenty-three to one in forty. French and 
 German statistics show that the wealthy and educated classes 
 live at least a third longer than the poor and uncultured classes. 
 
 So again it is a mark of the great advance of Christendom, as 
 compared with other groups of nations, that the great epidemics 
 no longer originate within its borders. And since Christian 
 governments have taken measures to put under sanitary regu- 
 lations, the vast Mohammedan and Pagan pilgrimages and fes- 
 tivals, which still breed pestilences, it is to be hoped they soon 
 will cease. 
 
 § 72, Supposing that a bad social economy should check a 
 people or a large mass of it in its natural growth in civilization 
 and intelligence, what would be the effect on their numbers? 
 That would depend upon the vitality and elasticity of the stock 
 to which the people belonged. 
 
 (1) Tn some cases, as in the provinces under Mohammedan 
 rule, oppression seems to produce a depression of spirits or of 
 
68 ELEMENTS OP POLITICAL ECONOMY. 
 
 nervous energy, and thereby to exercise a singularly sterilizing 
 influence. The population of a besieged city is notably sterile. 
 
 (2) More ordinarily, however, the removal of the true pre- 
 ventive checks, the growth of intellect and the access of com- 
 fort, tends to cause a rapid and abnormal increase of numbers. 
 The starved man, like the starved plant, propagates freely. 
 Reduce the people to the level of the beasts and they will 
 multiply like the beasts. And so their numbers may become 
 really excessive, and the mass of a community sink ever deeper 
 in poverty and misery. Such a result may be expected when 
 the wealth of a nation tends to concentrate in the hands of a 
 few, instead of being disseminated throughout the whole people 
 in something like equality. Overpopulation in such a case is 
 not the consequence of natural laws, but of man's wilful inter- 
 ference with them, 
 
 § 73. Man's history as a producer of food may be described 
 as ordinarily passing through three stages. In the first he is a 
 hunter depending upon the voluntary, and therefore the scantiest, 
 productions of the earth that were fitted for his use. In the 
 second he is a shepherd, who has mastered the services of that 
 division of nature which meets his wants with most directness 
 and least labor ; but he is compelled to migrate with his tribe 
 when they seek new pastures, and he has no rights and no safety 
 save as a member of it. In the third he is a tiller of the soil, 
 a member of a body politic, possessed of a fixed home. He 
 makes an acre produce as much food as hundreds did in the 
 first stage, or tens in the second. He is able to act in greater 
 independence of other men; able also to associate more closely 
 with them. The societary circulation moves more rapidly and 
 consequently more forcefully. The resistance of nature dimin- 
 ishing, the pressure of population upon the means of subsistence, 
 which was very great in the first stage, and great still in the 
 second, in large measure disappears. It was that very 
 pressure that overcame the natural inertia of man and forced 
 him to press forward. "■ For his sake " the earth was accursed 
 to be the home of briers, thorns and thistles, that difficulties 
 might develop his power as the earth's appointed master. 
 
 J 
 
•*THE MORE THE MERRIER." 69 
 
 § 74. Man's " power over nature" continues to grow with 
 every advance in the compactness of society. Men obtain the 
 use of more iron and coal, houses and ships, wool and cotton, in 
 return for less labor, as society advances. When the density of 
 population made it worth while to carry the water in pipes 
 through the streets of our city, it was obtained with far less 
 outlay of labor than when every man carried his bucket to the 
 river's bank, or even to the pump, whose erection also marked a 
 stage in social development. So when through the growth of 
 population it becomes " worth while " to sink a shaft to the coal- 
 bed, it is no longer necessary to waste wood as fuel and spend 
 labor in chopping it, and the time saved can be spent in turning 
 the trees into lumber or some other profitable work. Till the 
 grist-mill is erected the labor of a thousand amis is expended in 
 grinding grain ; the work then becomes the business of a few 
 persons, and the rest have the more time for better work than 
 turning hand-mills or pounding the wheat in querns. And these 
 are but specimen facts that represent the whole movement of 
 society. 
 
 " From the beginning," says Herbert Spencer, " the pressure 
 of population has been the proximate cause of progress. It 
 produced the original diffusion of the race. It compelled men 
 to abandon predatory habits and take to agriculture. It led to. 
 the clearing of the earth's surface. It forced men into the 
 social state; made social organization inevitable; and has 
 developed the social sentiments. It has stimulated to progressive 
 improvements in production, and to increased skill and intelli- 
 gence. It is daily thrusting us into closer contact and more 
 mutually dependent relationships. After having caused, as it 
 ultimately must, the due peopling of the globe, and the raising 
 of all its habitable parts into the highest state of culture ; after 
 having brought all processes for the satisfaction of human wants 
 to perfection ; after having at the same time developed the 
 intellect into complete competency for its work and the feelings 
 into complete fitness for social life, — the pressure of population 
 must gradually bring itself to an end." 
 
CHAPTER FIFTH. 
 The National Economy of Land. 
 
 § 75. We have defined a nation as a people occupying a con- 
 tinuous area, and owning this in a more eminent sense than any 
 part of it is owned by any of its citizens. Its stewardship of 
 the economic interests of its people extends to the general over- 
 sight of their rural economy, and calls for the careful removal 
 of all obstacles — especially those of a legal kind — to its improve- 
 ment and that of the people engaged in it; and also for the 
 adoption of such measures of improvement as are not easily 
 attainable by individual action. It may justly be said that this is 
 true of the duty of the state towards any form of industry ; but 
 from the peculiar relation of agriculture to the very existence of, 
 the nation, the state stands in a relation of far greater responsi- 
 bility here. Many of those who most incline to exclude the 
 state from all activity in the sphere of industrial interests, are 
 quite ready to admit that where motives of public policy call 
 for interference, the landowner may fairly be treated as the 
 trustee or steward of the national property, not in any absolute 
 sense the owner. 
 
 § 76. What was said in the preceding chapter of the general 
 advance of industrial methods through the growth of numbers 
 and of the resulting power of cooperation, is eminently true of 
 agriculture. As time advances, larger crops are reaped at a less 
 cost upon lands that were early occupied, and those that were 
 previously inaccessible to tillage, are cleared or drained. A larger 
 amount of labor and capital becomes available, and can be ex- 
 pended with perfect safety upon the same field, as the crops arej 
 increased in still greater ratio. Especially the division of labor? 
 contributes to this. The early agriculturist was "Jack of all 
 trades and master of none." His house, his clothing, his rude 
 tools, everything that he had, was his own workmanship. But 
 
 when thes*^. are produced for him by skilled artisans, who set 
 70 
 
EXTENSIVE TILLAGE. — MEDIEVAL ENGLAND. 71 
 
 him at leisure to do his farm- work better, he obtains all these 
 things at a less outlay of labor, and of much improved quality. 
 
 § 77. Early agriculture was extensive in its method ; that is, 
 it expended a small capital upon a large surface. Just as the 
 hunter required a larger area than the shepherd, and the shep- 
 herd more than the farmer, so the bad and imperfect agriculture 
 of a poor half-savage age, required a larger area than when 
 methods of tillage are highly improved and the capital at the 
 command of the farmer has increased. Thus we find half-bar- 
 barous peoples in earlier times driven by famine from lands that 
 DOW sustain a dense population. 
 
 English agriculture in the middle ages is a case in point. As 
 much of the land as is now under wheat was taken up in raising 
 as much food as would now suffice for a million and a half of 
 persons. The population was something between that number 
 and two and a half millions; yet nearly the whole people were 
 employed in producing food ; even the townsmen poured out 
 into the country to help to gather in the harvest, and the Long 
 Vacation at the Universities was established that their thirty 
 thousand students might go home to assist. As much seed was 
 sown to the acre as at present, but the average yield was 
 only above one-fourth what it is now. Yet the climate of 
 England, as of all Northern Europe, was warmer than it now is. 
 Grapes grew plentifully in the open air, and wine was made that 
 compared with those of France. " The land was imperfectly 
 drained ; the working of the soil was shallow ; the manures 
 employed were limited " to such as were ready at hand, at a time 
 when the Flemish farmers imported English marl. " Scanty as 
 the crop was, it seems to have been very exhausting, for half 
 the land, in ordinary cases, lay fallow. . . Such crops as were 
 obtained, were not procured without large relative expenditure." 
 The agricultural implements were of the poorest ; the plough was 
 a ponderous structure of wood and iron, which it took four horses 
 to drag over, rather than through, the soil. Metal was so scarce, 
 being mostly imported from Normandy, that the wear and tear 
 of plough-iron in a dry season was a large item in the farm budget. 
 
72 ELEMENTS OF POLITICAL ECONOMY. 
 
 As little hay and no green crops were raised, the sheep were 
 mostly killed at Martinmas; and such as were left, with the 
 oxen, starved through the winter, so that improvement of stock 
 was impossible. As late as 1547, bullocks bought for the navy 
 weighed less than 400 pounds. Few garden-vegetables were 
 cultivated, and down to the reign of Elizabeth, they were 
 imported for the tables of the rich from the Continent. This 
 want and the general use of salt food spread scurvy and even 
 leprosy among the people. 
 
 See Prof. Thorold Rogers's History of Agriculture and Prices in Eng- 
 land, vol. i. 
 
 § 78. Later agriculture is intensive ; that is, it expends a 
 large capital upon a small surface. It finds at its hand sources 
 of wealth that tax all its resources for their mastery, but more 
 than repay the larger outlay. It goes down to the sub-soil, 
 instead of spreading over the top-soil of new fields ; it finds a 
 new farm under the old one. It gives up methods of rotation 
 in which the land lay fallow, and adopts a new one, in which, 
 through generous returns to the soil, it yields two crops a year. 
 It multiplies the number of live-stock on a farm, and feeds them 
 generously and under shelter, that it may obtain the means to 
 overcome the natural barrenness of the soil or multiply its fer- 
 tility. It masters the coldness and heaviness of clayey or low- 
 lying soils by artificial drainage, so that the crop in harvest is 
 advanced by weeks and the peril of the autumnal rains avoided. 
 It offers the highest premium for improvements in live-stock, 
 seeds and implements. " Many of these agricultural practices 
 are only possible where there is a large agricultural population ; 
 for which, on the other hand, work is found by these very 
 practices" (Laveleye). 
 
 § 79. While the finest results in agriculture are achieved (as 
 in parts of Saxony) by the outlay of a large capital, directed by 
 large intelligence, upon a considerable area of land, — yet, with 
 the actual human material engaged in farming, and in the exist- 
 ing state of its intelligence, the best results, on the whole, are 
 had where the farms are small and especially where they are 
 owned by the actual cultivators. Progress towards the sub- 
 
LARGE AND SMALL FARMS IN ANTIQUITY. 73 
 
 division of the land — up to .a certain limit — is a gain to agri- 
 culture. The opposite is a retrogression. 
 
 This fact was known even to the ancients. Solomon seems to 
 refer to it when he says : " Much food is in the tillage of the 
 poor;" and the Mosaic law forbade the permanent alienation of 
 lands after their distribution among the people. But the law 
 was evaded or ignored in the eagerness to form great estates ; 
 and Isaiah denounces a woe upon '' them that join house to 
 house and field to field, till there be no place, that thej may be 
 placed alone in the midst of the land/' and the woe is the deso- 
 lation of the land and the reduction of its average yield of food 
 for man (V. 8-10). 
 
 Under Roman rule in Italy the small holdings were swallowed 
 up in the great estates of the aristocracy, in spite of the eff'orts 
 of the Gracchi to preserve the patrimony of the poor. The first 
 step seems to have been the enclosure (possessio) of the common 
 lands {a^er publicus) upon which the common people depended 
 for grazing, and which were absolutely necessary to their methods 
 of agriculture. (The same process was arrested in Attica by 
 the laws of Solon, but was carried out in Lacedasmon.) Pliny 
 tells us the result : " Large estates have been the ruin of Italy 
 {Lntifundia perdUhre Italiam)." The peninsula declined stea- 
 dily in all the elements of wealth and production. The emperors 
 had to obtain from Africa and Egypt the wheat that fed the 
 Roman populace. The incursions of the barbarians led to the 
 breaking up and redistribution of these monstrous estates, and 
 Italy was able to feed her own children again. 
 
 § 80. In the kingdoms of Western Europe only England and 
 Spain have repeated the experience of ancient Italy, and only 
 the former persists in the policy that led to it. 
 
 In these kingdoms (as in most, perhaps in all, countries in the 
 earliest stage of society), the land was at first held, not by indi- 
 vidual owners "in severall,'* but by bodies of freemen associated 
 in a village community. Their land or mark lay, as it were, in 
 two concentric circles around the village or tJiorp. The outer 
 and broader was the folk-land or common on which their cattle 
 
74 ELEMENTS OF POLITICAL ECONOMY. 
 
 mostly grazed. The inner circle of lands that lay next the thorp 
 was divided into three fields, in each of which every marksman 
 had a share, but the whole was cultivated in common by custom- 
 ary methods and under a rotation of crops that left one field 
 fallow and under pasture each year. In the thorp itself every 
 man's house and courtyard were his personal possessions; here 
 community gives way to immunity. 
 
 Gi-radually the equality of the marksmen in possession and 
 dignity gave way to a more aristocratic constitution of society. 
 A manor-house, often a castle, rose above its humbler neighbors, 
 and a lion's share of the mark fell to the lord of the manor, while 
 upon the inferior marksmen devolved the duty of cultivating 
 these demesne lands as well as their own. A social revolution, 
 like the Norman Conquest of England, brought in a new lord 
 of the manor, but added to, instead of removing the burdens of 
 the people. The bulk of them latterly became villeins, as tenants 
 who paid for their lands in the form of customary services in till- 
 ing the lands of their lord a certain part of their time. The value 
 of this labor was so trifling that the lord was quite willing to 
 commute the service for a money-payment, so that villeins be- 
 came copyhold tenants at a fixed rent. With the progress of 
 society, labor rose in value and produce fell, through the former 
 becoming more productive. The people grew richer; the lords 
 of the manors poorer. From tenants the farmers became free- 
 holders, for if the lord wanted money, the price of broad acres 
 would be readily forthcoming from some old stocking hid away 
 in the thatch-roof. " There can be no doubt that the lands of the 
 feudal lords were largely alienated in small parcels. Many causes 
 contributed to this result" (Thorold Rogers). The masters 
 now sought — especially after the enormous reduction in the 
 labor-supply by the black death, — to cancel these contracts and 
 reduce their tenants to villeinage, requiring at their hands the . 
 old services. Fortunately for the latter, the principle of custom 
 or usage was all-powerful in that early age. In the absence of 
 large intelligence and intellectual freedom, every established 
 usage was treated as having the strongest prescriptive right. 
 
THE ENGLISH ENCLOSURE LAWS. 76 
 
 The custom that fixed the form and amount of the tenant's rent 
 was as valid as that by which the lord held his estates. The 
 people rose in Wat Tyler's insurrection against the innovation, 
 and the aristocracy, although successful in putting them down, 
 relinquished their claim rather than provoke another such rebel- 
 lion on conservative principles. 
 
 § 81. An indirect way of stopping this reconquest of the 
 land by the people was found in the enclosure acts, of which 
 the first was the famous Statute of Merton (temp. Henry III). 
 By the provisions of these the aristocracy were authorized to en- 
 close such parts of the outlying folk-land as were not necessary 
 for the use of the tenants and freeholders of the manor. By 
 others passed at a later date the enclosure of demesne lands 
 lying in the fields of the mark itself, and consequently the 
 breaking up of the old system of tillage, was allowed. This last 
 measure, which involved a complete revolution in the rural 
 economy of the country, was consummated by the sixteenth 
 century. It was one that must have been adopted sooner or 
 later. The old system of communistic land tenure imposed 
 burdensome checks upon industry and enterprise; it held back 
 the farmer from adopting any but customary or traditional 
 methods of tillage; it took away some of the strongest in- 
 centives to industry. After its abolition, although the large 
 landowners turned a large part of their enclosed lands into 
 pasturage, to avoid paying what seemed to them the extravagant 
 wages then asked, yet such was the improvement in methods of 
 tillage that there was an increase in the entire production of 
 wheat. 
 
 But this " dissolution of the ancient copartnership in the use 
 of the soil, and the establishment of separate and independent 
 farms in its stead," called for the most scrupulous and careful 
 adjustment of rival claims both in the laws and in their interpre 
 tations. Instead of this we have loosely worded statutes, passed 
 by Parliaments in which the landed interest was supreme, and 
 internreted by subservient and corrupt judges. Sir Thomas 
 More, an exception that did honor to the bench, .tells us of 
 
76 ELEMENTS OF POLITICAL ECONOMY. 
 
 *^ husbandmen thrust out of their own ; or else by covin and 
 fraud, or violent oppression, put beside it ; or by wrongs and 
 injuries so wearied that they be compelled to sell all." Vastly 
 disproportionate shares of the common grazing lands were en- 
 closed ; parts of the three fields to which the lord had no claim 
 were taken in with his demesne lands. Even when the farmer 
 was not dispossessed of his plough-land by force or fraud, he ' 
 was often broken in spirit and in fortune by the enclosure of 
 the commons, and sank into the rank of a day-laborer. " The 
 peasantry lost not only the benefits derived from the right of 
 common over the greater part of England, but that loss involved 
 in numerous cases the loss of their separate fields. They had 
 lived upon the produce of the two, and their husbandry was 
 based on it," 
 
 § 82. The dissolution of the monasteries, and the distribution 
 of the church lands among the new aristocracy created by the 
 Tudors, added to the misery of the people. The new owners 
 treated tenants and freeholders as possessed of no rights in the 
 land. The outcry of the people could not be stifled ', it forced 
 the Protector Somerset to appoint a commission of inquiry, which 
 reported that the charge of wholesale and general injustice was 
 fully substantiated by the evidence ; but they could suggest no 
 remedy. From this period we begin to hear of a " dangerous 
 class " in the alleys and back streets of English cities, where 
 disbanded monks and broken agriculturists congregated. The 
 yeoman class, which had been and still was the strength of the 
 nation, in peace and war, at home and abroad, in church and 
 state, was greatly reduced in numbers and weight, and oppressed 
 by rack-rents. " My father," says Bishop Hugh Latimer, " was 
 a yeoman and had no lands of his own ; only he had a farm of 
 three or four pounds by the year at the uttermost, and here- 
 upon he tilled so much as kept half a dozen men. He had . 
 walk for a hundred sheep, and ray mother milked thirty kine. I 
 He was able and did find the King a harness with himself and 
 his horse while he came to the place where he should receive 
 the King's wages. I can remember that I buckled his liarnesa 
 
 I 
 
THE STRUGGLE OF THE YEOMANRY. 77 
 
 wheu he went unto Blackheath field [in 1497]. He kept me tc 
 school, or else I had not been able to have preached before the 
 King's majesty now [in 1549]. He married my [six] sisters 
 with five pounds (or twenty nobles) apiece, so [besides] that he 
 brought them up in the fear of God. . . . He kept hospitality 
 for his poor neighbors. And some alms he gave to the poor. 
 And all this did he off the said farm, where he that now hath it 
 payeth sixteen pound by the year or more, and is not able to do 
 anything for his Prince, nor for his children, or give up a cup 
 of drink to the poor." 
 
 § 83. Under the kings of the house of Stuart and under the 
 Commonwealth, the yeoman class rallied as to numbers and 
 weight in the nation. We find patriotic writers boasting of 
 them as the glory of England and the terror of France. Lord 
 Chancellor Coke speaks of one-third of England as held in 
 copyhold, i. e., at rents incapable of being raised above the rates 
 specified in the copy or roll of the manor. " Now copyholders," 
 he says, " stand upon sure ground ; now they weigh not their 
 lord's displeas-ure ; they shake not at every blast of wind; only 
 having an especial care of the main chance, namely, to perform 
 exactly what services their tenure doth exact, — then let the lord 
 frown, the copyholder cares not, knowing himself safe." Lord 
 Macaulay estimates the landowners in 1660 at 160,000, and as 
 forming with their families one-seventh of the population. At 
 that time all copyhold and similar tenures were converted into 
 soccage tenures by being placed under the jurisdiction of the 
 king's courts. Down to the middle of the eighteenth century 
 the distribution of the land among small holders and owners 
 was going on without interruption, but at that date it ceased, 
 the tendency to concentration took its place. The subsequent 
 history of English land tenure is a record of the enclosure of 
 the commons without regard to the rights of the poor, — of the 
 absorption of small holdings in great farms without regard to 
 customary tenure, and of the extinction of the yeoman class 
 without regard to the nation's higher interests. Between 1701 
 and 1867 one-third of the farmed and pasture lands of England 
 
78 ELEMENTS OF POLITICAL ECONOMY. 
 
 were enclosed by the rich, often by means of money loaned 
 them by the state for the purpose. 
 
 Leases are become exceptional, being rarer for nine years than 
 in the Middle Ages for ninety. Much of the land is held at 
 rack-rent; that is, the highest price that can be got in the op*^" 
 market. The great mass of it is gathered into large estate^, 
 which grow in bulk, while the number of landowners is small 
 and diminishing.* . ery little of it comes into the market, and 
 that is sold "at fancy prices" to rich men who can afford a 
 counti^ ^at. The working classes have become more and more 
 wretched and dependent; all sense of any relationship, other 
 than that formed by the payment and receipt of wages, is now 
 lost by both the landowner and the people on his estate. " In 
 fact, there is no longer a true rural population remaining, for the 
 ends, political, social and economical, that such a population 
 ought to fulfil. The landed yeomanry, insignificant in number, 
 and a nullity in political power, are steadily disappearing alto- 
 gether. The tenant farmers have lost the security of tenure, 
 the political independence, the prospect of one day farming 
 their own lands, which they formerly enjoyed. And lastly, the 
 inferior peasantry not only have lost ground in the literal sense, 
 and have rarely any other connection with the ground than a 
 pauper's claim, but have sunk deplorably in other economical 
 respects below their condition in former centuries. Thus a soil 
 eminently adapted by natural gifts to sustain a numerous and 
 flourishing population of every grade, has almost the thinnest 
 and absolutely the most joyless peasantry in the civilized 
 world." ..." Once, from the meanest peasant to the greatest 
 noble, all had land, and he who had least might hope for more ; 
 now there is being taken away from him who has little, even 
 that which he has — his cottage, nay, his separate room. Once 
 there was an ascending movement from the lowest grade to the 
 highest; now there is a descending movement in every grade 
 below the highest." 
 
 See Cliffe Leslie's Land Syatema of Ireland, Enyland and the Con- 
 tinent. 
 
"a bad reason is better than none." 79 
 
 § 84. Attempts are made to explain this state of affairs by 
 ascribing it to the operation of causes that were equally and 
 even more vigorously in action when the tendency was to the 
 division and distribution of the land. Thus some ascribe it 
 "-•iguely to the perpetuation of the feudal system and its land 
 irjnure in England. We have seen how the customary tenures 
 of that system operated most powerfully to the advancement of 
 the people at the expense of their lords. - a have also seen 
 how those forms of tenure, with their half-defined and therefore 
 objectionable rights, were finally expunged from Engli' law at 
 the Restoration. And in fact the bes^. landlords in England are 
 those that retain under the new forms something of the old 
 spirit that made feudalism endurable, — to wit, the sense of a 
 personal relationship between higher and lower, and the sense 
 of a duty to the land. Their tenants have security without 
 leases, for they know that no unfair advantage will be taken of 
 them. As they sometimes express it, their confidence in the 
 family is as good as a lease. 
 
 Others ascribe the mischiefs of the system to the right of 
 primogeniture, by which the whole estate passes to the eldest 
 son, to the exclusion of his brothers and sisters. This no doubt 
 is a mischievous rule, but it is one that tends to keep large 
 estates undivided rather than to lead to the absorption of the 
 small ones. No doubt it has the latter effect in an indirect way, 
 by leaving large sums in the hands of the landowners to buy up 
 these latter. But this right is not an invention of this century 
 or of the last ; it was in full operation long before the decline 
 of the English yeomanry began. 
 
 Others urge the want of a proper system for the registration 
 and transfer of land titles. This also is a grave mischief, but it 
 is one of much longer standing than the mischief for which it 
 is to account. It has not kept the rich from buying up the 
 estates of poorer men. 
 
 § 85. The true cause, as Coleridge pointed out, is the im- 
 portation of purely commercial maxims into the rural economy 
 of England. The trading spirit attained in England the as- 
 cendancy it has ever since possessed, about the time when the 
 
80 ELEMENTS OF POLITICAL ECONOMY. 
 
 separation of the mass of the Euglish people from the soil 
 fairly began, viz. : the middle of last century. English political 
 economy from Adam Smith down, with some notable exceptions, 
 has been the exponent and the justification of that spirit. It 
 has shaped public opinion, controlled the tenor of legislation, 
 and controlled the direction of the industry of all classes. It 
 has stripped the landlord of all notions of stewardship for the 
 nation and duty owed to the land and the people who till it. It 
 has led men to regard tha production and cheapening of com- 
 modities as the one great end of all activity. It has sacrificed 
 men and their personal interests to things. 
 
 Now in trade the law of parsimony is the supreme law. For 
 trade aims at getting as large and as quick returns as possible, 
 with the least possible expense in managing and collecting these. 
 Trade can make no distinction between persons and things ; it is 
 (in a low sense) no respecter of persons. It sets aside the dearest 
 friend or the worthiest object of pity, and takes the offer of the 
 man who bids highest and offers the best security. Other 
 things being equal, it prefers the largest purchaser to any other, 
 and even abates the price in his favor ; for the ultimate object 
 being to get wealth enough to be rid of the trouble of getting 
 it, the offer that involves least trouble is the best. 
 
 Apply these maxims to the management of an estate, and the 
 problem becomes one of getting the largest returns with the 
 least outlay in wages and food. All question of the well-being 
 of the small farmer and the laborer is lost sight of. The hold- 
 ing of the former was taken in with other lands to make large 
 farms, that the landlord might have fewer tenants to deal with 
 and less trouble about his rents. The latter were systematically 
 and designedly brought into a position of dependence, because 
 they were thus the more easily managed. Their cottages and 
 gardens, for instance, were let to the tenant-farmer with the 
 understanding that he would see to repairs, and then the cot- 
 tages were re-let by him without the gardens, that their sole 
 dependence might be their wages. The wages-roll was cut down 
 to the utmost, because the less labor the less expense ; the 
 majority of those who had lived by the land were driven to the 
 
THE "SCIENCE FOR WEALTH." 81 
 
 cities, and only a fraction of the people of England now live 
 by agriculture. 
 
 See Coleridge's Works; VI, 215-25 (Araer. Edition). 
 
 Did the English economists raise their voices in protest, 
 when the highest interests of the nation were thus imperilled ? 
 They said : " We have nothing to do with those moral and 
 political questions ; we have no advice to offer. Only be it 
 known to you that additional labor employed in manufactures is 
 more, when employed in agriculture is less efficient in propor- 
 tion." They left men to draw the inference that it was a 
 national advantage when labor was withdrawn from work where 
 it could not be effectively concentrated, and transferred to the 
 cities and factories where it could. Furthermore they furnished 
 them with the factory system for application to tillage, — the 
 capitalist furnishing the means, and the actual worker on the 
 land being reduced to the rank of a day-laborer. They applied 
 to farming " the machinery doctrine of most produce from least 
 labor," which is " the doctrine of starvation to the laborer, and 
 dispossession to the small proprietor, and instead of belonging to 
 the advance of knowledge is a retrogression" (Wren Hoskyns, 
 M. P.). 
 
 " Political writers and speakers of this school have long enjoyed the 
 double satisfaction of beholding in themselves the masters of a difficult 
 study, and of pleasing ' the powers that be ' by lending the sanction of 
 'science ' to all established institutions and customs, unless, indeed, the 
 customs of the poor. Instead of a science of wealth, they give us a 
 science /or wealth." (Cliffe Leslie.) 
 
 § 86. The system may be a failure socially and politically ; 
 but the chief question for us here is — Is it an economic success 
 or a failure ? A study of its general features and a comparison 
 with what we find in other countries leaves no doubt that, in 
 spite of brilliant successes in many matters of detail, English 
 rural economy is, on the whole, a failure, when regarded. from an 
 economic point of view. 
 
 (a) It has failed by displaying a lack of aggressive power. It 
 has gathered up into large farms the areas previously cleared 
 and brought under cultivation by the small farmers of the past; 
 6 
 
82 ELEMENTS OF POLITICAL ECONOMY. 
 
 it has in some degree improved upon their methods. But it 
 has not evinced any ability to cope with and bring under tillage 
 the vast area of English soil that still lies in a state of nature. 
 A committee of the House of Lords of the session of 1873, 
 after a searching investigation, reported that " the improvement 
 of land, in its eflFect upon the price of food and upon the 
 dwellings of the poor, is a matter of public interest; but that 
 as an investment it is not sufficiently lucrative to offer much 
 attraction to capital, and that therefore even slight difficulties 
 have a powerful influence in arresting it." As we have seen, 
 seven and a half millions of acres in England alone still yield no 
 food for man or beast, — contribute simply nothing to the support 
 of the nation. The only proposal made to attack these masses of 
 unsubdued nature is, so far as we know, a proposal to divide them 
 up into small farms. In some cases, especially in the Highlands 
 of Scotland, the peasantry have been encouraged to enclose and 
 fertilize small patches of waste ground that nobody else would 
 touch. At the expiration of their nine years' leases they are 
 commonly ejected, and their little Jiolms or farms are taken into 
 the larger farms. " I could name many," says a Scotch land- 
 agent, " who use this crofting for their waste lands, and then 
 turn out crowds of them and throw their land into large 
 farms." 
 
 (b) It has failed to develop the natural powers of the soil. 
 Were even the area that is now under tillage to be cultivated 
 as experience, both in England and elsewhere, shows to be per- 
 fectly feasible, the country would be under no necessity of 
 depending upon foreign harvests for her supply of food. Eng- 
 lish soil has been made to yield 57 to 60 bushels of wheat to the 
 acre without exhaustion. The average yield is much less than 
 half so much. It is so, because only the merest fraction of that 
 soil has been treated as the scientific knowledge of our days 
 suggests, and because the amount of capital laid out upon the 
 land under the system of large farms is about half as great as 
 would be expended by small farmers of thrift and intelligence. 
 
 (c) But the fundamental mistake and failure has been in the 
 treatment of the human material of her agriculture. She has 
 
FAILURE IN ENGLAND AND IRELAND. 83 
 
 failed to briog into exercise one of the most powerful and effi- 
 cient motives to thrift «.and industry that exists in the human 
 breast, viz: the attachment of the small holder to the spot of 
 earth that is his own, his home. That passion for the posses- 
 sion of land, which is elsewhere a source of publia security and 
 social permanence, she has made a source of public instability. 
 By all the tenor of her legislation and the drift of her public 
 opinion, she has helped in the work of sundering the workman 
 from the soil, and of either driving him away from it to the city 
 or retaining him in the pitiable position of a day-laborer at the 
 lowest rate of wages consistent with bare life and shelter. She 
 has taken no pains to diffuse the intelligence and scientific 
 knowledge that would fit the rural classes to till the land as the 
 needs of the country and the time demand. She has left them 
 at the mercy of the squires and the farmers, growing every day 
 more brutal and hopeless. " They are unable," says Canon 
 Girdlestone, " to lay by anything. They are long-lived, but 
 even in their prime are feeble ; and at the age of fifty often crip- 
 pled with rheumatism, the result of poor living, sour cider, a 
 damp climate, hard work and anxiety combined. There remains 
 nothing for them then but the parish-pay and the workhouse." 
 87. In Ireland the English conquest, begun in 1169, found 
 the people still in the tribal state. The land generally was owned 
 by the tribe, and the chiefs rights extended little farther than to 
 temporary maintenance during his constant peregrinations. The 
 conquerors displaced the chiefs by Norman barons, who held the 
 land under conditions similar to those which prevailed in Eng- 
 land at that time. Not until the completion of the conquest, in 
 the reign of Elizabeth, was there any disposition to disturb the 
 common people. In that and the succeeding reign great areas 
 of Irish soil were " planted " with English and Scotch settlers 
 after the extrusion of the previous tenants, and the jurisdiction 
 of the English common law was extended to the island, setting 
 aside all the native customs of tenure and inheritance. The 
 plantation of Ulster, chiefly by Scottish settlers, was the largest 
 of these operations until the era of the Commonwealth. Crom- 
 
84 ELEMENTS OF POLITICAL ECONOMY. 
 
 well, after the conquest of Ireland in 1652, formed a plan to 
 drive the native population into Connaught and settle the three 
 other provinces from the sister-island. This barbarous policy 
 was carried out as far as was possible, and the people — rich and 
 poor — stripped of their lands. At the Eestoration a very im- 
 perfect restitution was effected, and the attempt to make the 
 restitution complete under the reign of James II. was defeated 
 by the renewed conquest of the island under William III. The 
 destruction of Irish manufactures by hostile legislation in this 
 reign produced a state of wretchedness worse than any caused 
 by mere conquest and confiscation. It forced the people to secure 
 land on any terms. They became tenants-at-will at rack-rents, 
 with the certainty that the improvement of their lands would 
 lead to a rise in their rents. For six generations past the labor 
 of Irish tenants in reclaiming lands, erecting houses and fences, 
 and adding to the value of their holdings has been confiscated 
 by their landlords, who hardly ever lay out any money upon such 
 improvements. There are exceptions, but this is the very general 
 rule. As a consequence, the Irish people have had no motive to 
 improvement. They became disheartened and wasteful farmers. 
 As the English demand for meat and butter seemed to furnish 
 a better return to the landlord, great bodies of the people have 
 been at various times evicted from their holdings to make room 
 for grazing-farms. If they could not manage to make their 
 way to America, these tenants had to settle on any bare moun- 
 tain-side or barren peat-bog, where they find shelter and obtain 
 for a good price the privilege of growing, on land quite unsuited 
 for the purpose, enough potatoes to keep them alive. The 
 worst of these evicting landlords were those who obtained 
 their lands on the sales ordered by the Encumbered Estates 
 Court (1849-1859). 
 
 The inducement originally held out to Scotch and English seU 
 tiers was the offer of " tenant-right" — i. e., compensation for uu 
 exhausted improvements, and free sale of the good-will. Thii 
 bargain was very generally broken by the landlords. Scotch settler 
 of Ulster found that they could not depend upon these promises 
 
IRISH LAND LAWS. ' 85 
 
 and to save themselves from ruin they emigrated in great num- 
 bers to America (1720-1770). 
 
 The recent land acts of 1870 and 1881 have for their purpose 
 to terminate this confiscation of improvements and of tenant-right. 
 They allow the land-courts to fix what would be a fair rent for 
 the land, independently of the improvements the tenant has 
 made. They punish with a Keavy fine the eviction of tenants 
 who are paying a fair rent, and they allow the tenant to dispose 
 of his tenant-right when he decides to throw up his farm. The 
 landlord himself can buy this at a valuation if he so wishes. 
 
 See Prendergast's Cromwellian Settlement of Ireland; Sir Gavan 
 Duffy's Young Ireland; Mr. Sullivan's JVeio Ireland; and Mrs. Mar- 
 garet T. Sullivan's The Case of Ireland (Philadelphia^ 1881). 
 
 In the Scottish lowlands the history of land tenure has run 
 much the same course as in England. In the Highlands the 
 tribal tenure lasted until 1748, the lands being the property 
 of the whole clan, and the chieftains being chosen by the people 
 and liable to be deposed if unpopular. In that year the British 
 Parliament abolished the hereditary jurisdictions of the chiefs, 
 and authorized the crown to give to each of them a baronial 
 title to the lands of their clan, if they would surrender their 
 chieftainship. Under this law the whole of the Highlands have 
 been confiscated from the people and converted into private 
 estates. The clansmen, from landowners, have become tenants, 
 holding at the proprietor's pleasure. Great multitudes of them 
 have been evicted to make room for deer forests and sheep pas- 
 tures ; others have seen their little holdings absorbed into large 
 farms held by capitalist farmers. The towns, the sea-coast, and 
 America have received the people of the Highlands, which now 
 could not furnish one-tenth of the great military contingent 
 which was raised eighty years ago for the war with France. 
 The most cruel evictions were those of Sutherlandshire, in the 
 second decade of the century. The whole interior of this great 
 shire was depopulated, sixteen thousand tenants being driven 
 to a barren sea-shore or to America. The heather was fired in 
 early spring to destroy the pasture and force the immediate sale 
 
86 ELEMENTS OF POLITICAL ECONOMY. 
 
 of their cattle. Their homes were burnt above the people's 
 heads to effect their expulsion. Delicate women died of the 
 shock, old people lost their reason ; but not a hand was lifted 
 in resistance or revenge. When removed to the seashore they 
 were required, after hard and unaccustomed labor in fishing, to 
 aid in the erection- of new homes under the direction of the 
 agent. For farming they had nothing except a few patches of 
 soil on the ledges of the rocks. 
 
 See Mr. John Murdoch's "Letters on the Sutherland Evictions," in 
 the Mark Lane Express. The history of those evictions has been mis- 
 represented very elaborately in various works of reference, and in Mrs. 
 H. B. Stowe's Sunny Memories of Foreign Lands, although their charac- 
 ter was exposed very fully by the report of the Parliamentary Commis- 
 sion on the Scottish Poor Laws. One of the actual victims, a High- 
 lander in Canada, prepared a reply to Mrs. Stowe's chapter on the 
 subject, which he called Gloomy Memories of the Sutherland Clearances, 
 but his sudden death just after his book was printed prevented its get- 
 ting into circulation, and it is now exceedingly scarce. 
 
 In very few instances have the tenants of the large farms prospered in 
 their new holdings. Many of them have thrown up their farms and left 
 the country, and the landlords would be glad to relet to small farmers, but, 
 having allowed the farm-buildings of the ejected tenants to fall into decay, 
 they cannot secure such tenants without making large outlays in repairs. 
 
 § 88. Passing from England to the Continent, we find the 
 rival nations growing in the sort of strength that was once but 
 is no longer the boast of England, the yeomanry. In France 
 small proprietorship was the rule even before the Revolution. 
 The old records abound in accounts of their purchases. It was 
 their wretchedness under the excessive burdens of the Old 
 Regime, when they paid nearly all the taxes, that led Arthur 
 Young to prefer large farming; yet he admits that the peasants 
 of many parts of France were prosperous, industrious and thrifty. 
 They had risen to that state out of the deepest degradation. In 
 the middle ages they could not stand against the English 
 yeoman, because they were little better than slaves. The free 
 play of economic laws steadily bettered their condition, an 
 vested in them more and more of the soil. The Revolution 
 abolished all customary tenures, but it threw the royal demesMies 
 
PRUSSIAN LAND LAWS. 87 
 
 and the estates of the nobility upon the market, and abolished 
 the right of primogeniture, besides releasing the peasantry from 
 the burden of excessive taxation. The number of large estates 
 rapidly declined ; that of the actual landowners has immensely 
 increased. The soil of France is now owned by more than four 
 millions of her people. M. de Lavergne, often quoted by Eng- 
 lish economists as approving of the English system, says : " x\.ll 
 the world accepts petty proprietorship not only as a necessity, 
 but as a benefit. It is recognised as favorable to agricultural 
 productiveness and to public security." To it France owes her 
 vast wealth and her wonderful financial elasticity, exhibited in 
 her management of the immense debt incurred by the last war. 
 In many respects" French agriculture has much to learn from 
 that of England ; but if the history of each for the last two 
 hundred years be taken for comparison, the result will be a 
 iudgment greatly in favor of the former. 
 
 § 89. Belgium is the strongest case in favor of small farms 
 and intensive culture. The farmer in the Flemish provinces 
 lays out twice as much on an acre as is done in England. Farms 
 are continually divided, and with every division their yield of pro- 
 duce has increased. Vast quantities of horned cattle and of 
 green crops are raised; wheat, indeed, is imported, but paid for 
 by exports of meat and vegetables. East Flanders has and feeds 
 1800 people to every square mile of her barren soil. The small 
 owner generally saves half his income, and is continually on the 
 outlook for more land. The farms are mostly between five and 
 seven acres in extent. Most of the land, indeed, is farmed at 
 rack-rents on nine years' leases, with " customary" compensation 
 for unexhausted improvements ; but a large proportion is stead- 
 ily passing into the hands of small holders, who, as in France, 
 outbid all other competitors. So strong is the hunger for land 
 that it is bought up with full knowledge that it will not give as 
 high rate of interest upon capital as is offered by the money- 
 market. The people are poor through the lack of all large in- 
 dustries and the market they give for labor and for food, and 
 the consequent tax of the cost of transportation upon most of 
 
88 ELEMENTS OF POLITICAL ECONOMY. 
 
 what they need besides food. But their poverty is disappear- 
 ing; want and destitution are becoming more rare ; agricultural 
 methods are rapidly improving; the country is tilled like a 
 garden, yielding several heavy crops every year, and presenting 
 the most beautiful and civilized appearance of any in the world. 
 § 90. In Prussia the mediaeval system held its ground down 
 to the beginning of the present century. The government 
 " saw with terror, in 1808, how insecure was a state which had 
 so great a claim on the bodies^ and none at all on the hearts of 
 its people" (Gustav Freytag). Some opposed change. The 
 bauer was stupid, lazy and thriftless, it was said ; nothing could 
 be made of him. A government commission met at Memel in 
 1807 to draft a land-law that should effect the transition from 
 the mediaeval to the modern agriculture. They found them- 
 selves divided into two parties : on the one side the great states- 
 man Stein, the great historian Niebuhr and his friend Stage- 
 mann ; on the other a group of now-forgotten doctrinaires, who 
 had studied English political economy under Kraus at Koenigs- 
 berg. The latter wished for a policy that would secure the 
 maximum of production from the soil, independently of the 
 welfare of the producers. " They held it indifferent whether the 
 present feebler proprietors remained or not, if their place was 
 supplied by wealthier ones, and thus the greatest possible 
 amount lof profit secured." They preferred, indeed, th'at the 
 change should take that shape, following the English commer- 
 cial maxim : " most produce by least labor." " Why," they 
 asked, " waste the productive force of four proprietors and six- 
 teen horses to do that which one proprietor and six horses can 
 do better ?" The other party " considered the promotion of the 
 welfare of the actually-existing occupants of the soil as the true 
 problem of the statesman ;" else they " saw the likelihood of 
 obtaining a class of proprietors who would have no moral interest 
 in the welfare of the country, and they felt the importance of 
 a numerous class of small landholders." Happily their counsels 
 prevailed; the transition was effected by impartial legislation, 
 and not on English principles nor by English methods. The 
 
 ! 
 
LAND TENURE ON THE CONTINENT. 89 
 
 peasant secured the complete control of his own labor, and rose 
 from a state of villeinage to the freedom of a landowner ; in re- 
 turn he ceded to his former master a portion of the land he had 
 held, retaining the rest in fee simple. AH restrictions on the 
 sale of land were removed, and provision was made for cutting 
 off entails. This measure was enlarged and extended to all parts 
 of the kingdom in 1811. It aimed at the highest end of 
 national economy, the welfare of the people ; it secured the 
 lower also — the maximum of production from the soil. 
 
 Since its adoption, the yeoman class has grown in numbers, 
 wealth and independence. In Westphalia especially, land con- 
 stantly passes into their hands by purchase. Its price has 
 risen rapidly; it rose seventy-five per cent, between 1829 and 
 1813. The bulk of it is now in the hands of the actual tillers 
 of the soil ; the agricultural methods are very greatly improved, 
 and the hauer is now proverbial for thrift and industry. 
 
 § 91. Switzerland takes rank next to Belgium in the per- 
 fection of its intensive culture, and the density of its popula- 
 tion. Every foothold of ground is occupied; if the clefts of the 
 rocks contain no soil, it is carried thither. 
 
 Norway with its rocky surface, and Denmark with its alterna- 
 tions of peat and gravel, would be — like Flemish Belgium — in- 
 accessible to any sort of agriculture that did not bring into play 
 the entire devotion and earnestness of their people. In both 
 the greatest difl&culties have been overcome and the largest out- 
 lays of labor rewarded. 
 
 Russia, in the emancipation of her serfs (1861), had to solve 
 the problem that was before Prussia half a century earlier. The 
 large proprietors and the students of English political and rural 
 economy wished to see the land vested in the nobility, and the 
 bulk of the peasantry reduced to the level of day-laborers. But 
 the aristocratic party had lost its prestige through its failure to 
 carry the Crimean war to a successful issue. The government 
 secured to the serfs the right to purchase at a moderate rate 
 enough arable and pasture land for the needs of each village, 
 and undertook to collect the payment in small annual instal- 
 
90 ELEMENTS OF POLITICAL ECONOMY. 
 
 ments and pay it over to the landowners. That the economic 
 results of the measure are as yet anything but satisfactory must 
 be admitted. This is due (1) to the virus of slavery still poison- 
 ing the minds of the people and leading them to regard work as 
 a curse and a disgrace ; (2) to the system of taxation, by which 
 the public burdens are thrown chiefly upon the peasantry ; and 
 (3) to the fact that the system of communistic land tenure is 
 still kept up in Russia, and in such a way as to deprive the 
 peasant of many of the most powerful impulses to industry, im- 
 provement and thrift. 
 
 In Italy, the plains of the north are under petty culture, and 
 the excellence of the agriculture is proverbial. In Tuscany the 
 lands are farmed in larger portions on the Tnetayer system, the 
 landlord and tenant dividing the crop equally. To pass from 
 Lombardy to Tuscany, is to go from better to worse ; but to cross 
 the Tiber to what was the Papal States and Naples, is to come 
 into a country of large farms, in which beggary and bad tillage 
 deface the earth. The yield is much smaller, and the rural 
 methods are those of the days of Hildebrand, if not of Cato the 
 Censor. 
 
 § 92. Another chief point in the economy of land is to secure 
 and preserve an equilibrium of the three great elements of the 
 industrial state — the agricultural, the commercial and the manu- 
 facturing. To cherish and foster agriculture alone is not to 
 cherish it at all. The farmer's work, unless misdirected and 
 wasteful, produces more than furnishes food for himself and 
 his household. Were it otherwise the whole population would 
 have to be employed in agriculture, as was the case in the earliest 
 period of the art. The existence of such a surplus sets free a 
 part of the population to engage in work of producing other 
 things that society counts among the necessities and comforts of 
 life. When this class, and the number of persons needed for 
 the exchange of the products of both classes, are large enough 
 to consume the ordinary surplus product of the farming class, 
 the three classes stand in equilibrium ; the farmer is assured of 
 a Diarket for his crop, and of a fair exchange of other objects 
 
THE EQUILIBRIUM OF THE INDUSTRIES. 91 
 
 of desire for what he can spare. But if these two classes are 
 not large enough to consume his surplus, the equilibrium does 
 not exist, and the farmer must suffer accordingly. His 
 labor goes for nought ; his crop rots in the fields, or if gathered 
 and taken to market, brings a trifling price because farmers are 
 underbidding each other for the small sales that are possible. 
 In our Mississippi valley, for instance, the equilibrium of the 
 two classes has not yet been attained. " The burning of corn 
 for fuel in the West, of which we hear dismal stories once in 
 seven years, is an indication that too many people there are en- 
 gaged in farming and too few in manufacturing " ( The Nation^ 
 New York, 1869). 
 
 In the absence of a sufficient home market, the foreign demand 
 for breadstuffs and other farm produce is the only dependence 
 of the farmer. For reasons hereafter given, the exchange of 
 raw produce for manufactured goods between distant points can 
 never be a remunerative one for the producer of the former. 
 Were the rural economy of every nation wisely managed, no such 
 exchange could take place 3 save in years of extraordinary scarcity 
 the transportation of large quantities of breadstuffs and the like 
 across the seas would not be thought of. The foreign market 
 can therefore last no longer than the bad management of a few 
 densely peopled countries lasts ; with every advance in agricul- 
 tural methods and rural economy it must threaten to disappear. 
 
 And even while it lasts it is the most uncertain of all markets. 
 The farmer who depends on it takes the risk of two harvests in- 
 stead of one. If the foreign country have a bad harvest, and 
 so need much grain, while his own country's harvest is not too 
 good, he may get as fair a profit as the nature of the case per- 
 mits; in any other combination of circumstances he will not. 
 Still more complicated are his chances when other nations nearer 
 the foreign market are competitors to supply its needs. In 
 that case his success depends upon their comparative failure also. 
 Worse still, the price he can get for what he sells at home is 
 fixed and regulated by that of what he sends abroad ; if a large 
 surplus, raised for the foreign market, be left on his hands, 
 
92 ELEMENTS OF POLITICAL ECONOMY. 
 
 prices will rule low in the home market also, because he and hie 
 fellow-farmers will be uaderselling each other in competing to 
 supply its demand. 
 
 § 93. The farmer who depends upon a distant market can 
 never carry on his farming by the best methods. He cannot 
 raise that variety of crops by which the pressure of tillage upon 
 the resources of the soil is lightened ; for such crops cannot be 
 transported to a distance. He must grow the great staples that 
 meet the foreign demand, year after year, to the exhaustion of 
 the most important elements of his land. He cannot make such 
 returns to the soil as will keep up its fertility ; the refuse of 
 the factory and the town are not to be had. The highly nitro- 
 genized forms of animal manure he can procure in trifling 
 quantities only, as his own cattle and those of his brother 
 farmers are the only beasts of the sort in his neighborhood, and 
 are far fewer in number than if he had a town close at hand 
 making large demands for meat and dairy produce. He can 
 only farm thriftlessly and wastefully ; in our Eastern sense of 
 the word his place is not a farm, but a wheat factory or a corn 
 factory. The farmer who lives near his market is continually 
 improving an instrument of great power and value; he who 
 lives at a distance from his market is continually injuring it and 
 breaking it. The one is adding every year to the wealth of the 
 soil beneath his feet; the other is exporting that wealth to a 
 distance, without the opportunity of making any return to the 
 soil he is robbing of its fertility. 
 
 The census of 1870 exhibits the undue prepcmderance of agriculture in 
 the states we have referred to. In six Western States fifty-four per cent, 
 of those who report any occupation were engaged in farming, while of 
 the whole population of the United States so reported only forty-seven 
 per cent, are farmers. In nine Southern States, from North Carolina to 
 Texas, the proportion is as high as seventy-five per cent. 
 
 The six "Western States have nineteen per cent, of the national popu- 
 lation ; but they raise forty per cent, of the whole corn crop, and forty- 
 two per cent, of the wheat crop, while of all other crops they raise less 
 than their share. Their industry lacks variety, being chiefly agriculture ; 
 their agriculture lacks variety, being chiefly the growth of cereals. In 
 1872, when the English demand for American broadstuffs was much above 
 
RICARDO'S " LAW OF RENT." 9S 
 
 the average, Illinois produced enough to feed all her own population, and 
 to supply the whole English demand, at that rate, for ten years. Soe a 
 very able article on- " The Farmers' Difficulty," by Edward Stanwood, in 
 Old and Xew for September 1872. 
 
 § 94. The theories of the national economy of land which 
 pass current with the English economists seem to be suggested 
 by their practice. Like the theory of population discussed iu 
 the last chapter, they seem designed to excuse the anomalies 
 and miseries of English society, by throwing the blame on the 
 natural laws which govern and condition the growth of society. 
 
 Indeed, the chief of the English theories about land grew 
 directly out of the Malthusian theory of population. In the 
 last statement of that theory, that Mr. Malthus made (1826) he 
 concedes to his numerous opponents that so long as good land 
 was to be had, "the rate at which food could be made to in- 
 crease would far exceed what was necessary to keep pace with 
 the most rapid increase of the population " possible. This 
 shows that the whole question turns upon the relation of man to 
 the soil. 
 
 The " theory of population " is therefore the parent of the 
 " theory of rent" announced by David Ricardo in 1815, and 
 designed to explain the way in which the growth of society 
 makes the few rich and the many poor, by inuring chiefly to 
 the benefit of a class of monopolist* called landlords. In his 
 view, rent arises from the insufficiency of good land to supply 
 the entire people. The first settlers of a country take possession 
 of the best lands; the second set of cultivators are obliged to 
 take those that are worse, or pay nearly if not quite the differ- 
 ence in rent. When the second grade of land has been settled 
 up, the next set must take up a third grade, or pay nearly if 
 not quite the difference in yearly value for a share of the first or 
 second. Thus as the growth of numbers requires the tillage of 
 an ever larger area of the soil, each higher grade of land pays 
 an increasing rent. With every advance in population men are 
 driven to poorer and more wretched soils, and the monopolists 
 of the higher grade of lands are able to live in idleness and 
 
94 ELEMENTS OF POLITICAL ECONOMY. 
 
 plenty upon their continually increasing share of the growths t/f 
 the soil. The only limit to the process will be reached when 
 the only land that is unoccupied is too poor to repay cultivation. 
 The rent that can be secured for any given piece of ground will 
 be nearly if not quite the diflference between its annual yield 
 and that of the poorest lands under cultivation. 
 
 § 95. To show what Mr. Ricardo asserts to be the tendency 
 at work as a country grows in density of population, let us sup- 
 pose the case of an island divided into a number of areas equal in 
 extent but of various degrees of fertility, and each large enough 
 to employ a hundred laborers. The best land in the series can 
 produce (let us say) 900 bushels of wheat, giving nine bushels 
 to each laborer if there be an equal division. The next best 
 will produce (let us say) one-tenth less or 810 bushels, giving 
 1710 (or 900 plus 810) bushels to be divided between two 
 hundred workmen ; and so on. If the population double every 
 twenty-five years, as Mr. Malthus says it may, the following 
 table shows what the growth of population and of sustenance 
 will be in two centuries : — 
 
 Years. 
 
 Persons. 
 
 Bushels. 
 
 Share. 
 
 1 
 
 100 
 
 900 
 
 9. 
 
 26 
 
 200 
 
 1,710 
 
 8.151 
 
 51 
 
 400 
 
 3,150 
 
 7.875 
 
 76 
 
 800 
 
 5,670 
 
 7.0875 
 
 101 
 
 1,600 
 
 9,990 
 
 6.243 
 
 126 
 
 3,200 
 
 17,190 
 
 5.37 
 
 151 
 
 6,400 
 
 31,710 
 
 4.92 
 
 176 
 
 12,800 
 
 48,990 
 
 3.8 
 
 201 
 
 25,600 
 
 72,030 
 
 2.8 
 
 But on the theory of unequal division propounded by Mr. 
 Ricardo, the owners of the lands last occupied would not get 
 2.8 but only 1.8 bushels each, and the amount which fjills to 
 them is just or almost the share that falls to the tenants oF any 
 of higher grade. The difi'erence between that share and 
 the actual annual yield is absorbed in rent. If the entire seven 
 grades of superior land is leased to tenants, its owners absorb 
 nearly if not quite 25,950 bushels as their royalty on the use of 
 
POPULARITY OF RICARDO'S "LAW." 95 
 
 the land, leavinoj 46,080 bushels to the actual workmen. The 
 denser the population, therefore, the greater the misery of the 
 people, and every growth in their numbers increases their own 
 poverty and adds to the wealth of these monopolists. 
 
 § 96. This doctrine found eve"n more acceptance with the 
 English school, and elicited far less criticism and opposition, 
 than that of Mr. Malthus on population. It was a more direct 
 and explicit apology for the anomalous state of things in Eng- 
 land; it explained how a nation might grow in wealth while a 
 very large share of its people sank ever deeper in poverty and 
 misery. It was a still more explicit and satisfactory verdict of 
 " Nobody to blame," — a still clearer excuse for the absence of 
 effort to amend things. Mr. J. S. Mill goes so far as to pro- 
 nounce this law of rent and of the increasing sterility of the 
 land brought under cultivation, to be the very corner-stone of 
 the science. " After a certain not very advanced stage in the 
 progress of agriculture ... in any given state of agricultural 
 skill and knowledge . . . every increase of produce is obtained 
 by more than a proportional increase in the application of labor 
 to the land. This general law of agricultural industry is the 
 most important proposition in Political Economy. Were the 
 law different, nearly all the phenomena of the production and 
 distribution of wealth would be other than they are." An 
 American writer of the same school says : " It is natural — and 
 if natural, proper — though we may not see the reason — that 
 poverty and want, and disease and misery, should be the next- 
 door neighbors of wealth and unbounded prosperity." 
 
 § 97. On Mr. Ricardo's theory that land derives its value 
 from the natural properties of the soil, and not from the labor 
 expended on it, and that landlords are a class of monopolists 
 who have possessed themselves of it, and thus managed to make 
 the growth of society inure chiefly to their own benefit, the 
 right of ownership in land is one that rests on no suflBcient 
 foundation, and one that many of the interests of society call 
 upon the state to set aside and destroy. Mr. Ricardo himself 
 was no friend of these " monopolists," and his school are as little 
 
96 ELEMENTS OF POLITICAL ECONOMY. 
 
 SO. Especially in late years they have been given to using 
 phrases that strongly resemble the utterances of those com- 
 munists, who would have the right to landed property, if not to 
 all property, repudiated by society. They have held up the 
 land-tenure of their country as the source of nearly all its social 
 evils ; they have insisted that the nature of landed property is 
 such that it is both the right and the duty of the state to inter- 
 fere with it in ways that would be public robbery if applied to 
 other sorts of property; they have declared that the ownership 
 of land — in contrast to the ownership of other things — is a 
 public trust, a stewardship of which the nation may exact an 
 account. The offspring of these teachings is the Irish Laud 
 Law of 1870, by which the landowner is forbidden to rent his 
 land for the price that it will bring in the open market. All 
 contracts are to be on terms that an Irish judge shall decide to 
 be reasonable, and when the lease expires the tenant cannot be 
 ejected unless paid for his good-will and improvements. 
 
 § 98. Do the facts of history bear out this theory ? If they 
 do we shall find (1) that in any given area the amount of the 
 produce of the land obtained in earlier times is greater in pro- 
 portion to the number of laborers ; (2) that of two countries, 
 or two districts in the same country, if other things be equal, 
 the one that is poorest in people is the one in which the average 
 degree of personal wealth and comfort is the highest; (3) that 
 the share that falls to the landlord increases, and that which 
 falls to the laborer diminishes, as more land is brought under cul- 
 tivation. 
 
 Not one of these results is sustained by observation. The 
 fleets alleged in the previous chapter in regard to the con- 
 dition of savage nations, and of civilized peoples in the earlier 
 stage, show us that the thinly-settled countries are those in 
 which continual poverty prevails, and frequent famines occur. 
 In the first and the second points, therefore, the theory diverges 
 widely from the facts. 
 
 On the third point — the increasing share of the landlord, as 
 distinguished from an increasing amount — the theory is equally 
 
ENGLISH AND FRENCH HISTORY. 97 
 
 at fault. With the growth of society in numbers, in intelligence, 
 in the efficiency of its workers, the landlord obtains a continually 
 increasing amount, but a continually decreasing share. His 
 third falls to a fourth of the produce, but the fourth is more 
 than the third was ; the fourth becomes a fifth, but the 
 actual amount is still increased. Adam Smith pointed this out 
 as the difference between the times when feudal bondage existed 
 in Europe and the whole crop fell to the landlord, and his own 
 day when the landlord took a third or a fourth part of the pro- 
 duce, but got three or four times as much as the whole had once 
 amounted to. 
 
 Mr. Malthus showed from official returns that in England the 
 landlord in his day took but a fifth of the crop in rent, and yet 
 got a larger quantity than in previous ages when his share had 
 been one-fourth, one-third, or even two-fifths. We have it on 
 equally high authority that between 1790 and 1833 the amount 
 got by the landlord had doubled, while the improved condition 
 of the laborer showed that the increase had not been at his ex- 
 pense. Mr. Senior says that the improvements in England 
 between 1776 and 1836 had " more than doubled the wages of 
 labor and nearly trebled the value of land.'^ 
 
 These results are not open to question ; they have been reached by 
 competent statists, all of them of the school of Ricardo. 
 
 The official figures in regard to France show that of the gross 
 produce of the culture of the soil, 35, 37, 43, 60 and 60 per 
 cent., had been paid as the cost of cultivation at the dates 1700, 
 1760, 1788, 1813 and 1840, and that the yearly sum that fell to 
 each family engaged in agriculture at each date was 135, 126, 
 161, 400 and 500 francs respectively. Comparing these figures 
 with the price of bread at each date, we find that the people of 
 France had not much over half enough to eat under Louis XIY. j 
 about two-thirds of enough under Louis XV. ; three-fourths 
 under Louis XVI., and more than enough under the Empire. 
 The minister D'Argenson in 1753, a year of no special scarcity, 
 says : " Men die around us like flies and are reduced to eat 
 grass." The Duke of Orleans brought a loaf of fern bread to 
 7 
 
^8 ELEMENTS OF POLITICAL ECONOMY. 
 
 the Royal Council, and placing it before the King, his brother, 
 said : " Sire, see what your subjects live upon V The returns to 
 labor in France are by no means what they ought to be even 
 now. France is more fertile than England, yet two-thirds of 
 the French people are engaged in producing food for the nation, 
 against one-third of the English ; and with all, the latter are 
 better fed and more prosperous generally. Furthermore, one- 
 sixth of the soil of France is covered with forests ; one-twenty- 
 fourth of England. If Mr. Ricardo be right, this should mean 
 that the pressure of population has not yet brought the French 
 nation to the cultivation of the poorer soils, and that the acre- 
 age under tillage yields a larger average of bushels than in 
 England. But notoriously the reverse of this is true. And if 
 we compare department with department, it is found that the 
 most populous parts of France are also those in which the yield 
 per acre and the consumption of food per head are both greater, 
 and the quality of the food better, than in the others. 
 
 § 99. The study of the early history of land-tenures, begun 
 since Mr. Ricardo's time, it is now admitted by English scholars, 
 discredits his assumption that all the facts known to us can be 
 traced back to the competition for the use of the soil. Such 
 competition is quite modern in its origin. In former times land 
 was not held by individuals, but by associated groups, bound 
 together by kinship and by immemorial custom. The whole 
 group held the soil in common as an inalienable possession, and 
 assigned parts of it to single families for their use. While cus- 
 tom defined the rights of these families and prevented all intru- 
 sion upon them, custom also debarred the family from disposing 
 of those rights. Where some chief or lord of the manor pos- 
 sessed a claim upon the services of the rest of its inhabitants, the ; 
 kind and amount of this also were fixed by custom ; and where 
 a violent change of lordship overthrew existing customs, others' 
 of equal rigidity quickly grew up in their stead, and were 
 quietly assumed to have held from time immemorial. Noi 
 market for land, and consequently no competition for its pos- 
 session existed among the actual cultivators. Only the ex- 
 
RICARDO'S ANACHRONISM. 99 
 
 tiuction of these tenures in common, and the enclosure of the 
 lands, created individual ownership in the modern sense, and 
 with it competitive rents. Down to quite recent times the rent 
 of land even in England was fixed by custom, not by competi- 
 tion, and much of it is still so held. But English economists, 
 following Adam Smith and Ricardo, have always assumed that 
 competitive are the only true rents, just as English lawyers 
 have assumed that all customary rights are usurpations on the 
 rights of the lord of the manor. Both opinions had their 
 excuse in the almost if not quite universal ignorance of the 
 historical fact; both have done great mischief to the common 
 people, by fostering the notion that the traditional customary 
 rights of the people to the land could be set aside without 
 injustice. 
 
 "These tenures aflFord confirmation of the doubts suggested in Sir 
 Henry Maine's Village Communitiea respecting the historical truth of the 
 economic theory of the origin of rent. Early land-rents were not com- 
 petitive rents ; they were not at all in conformity with Mr. Ricardo's 
 doctrine ; they bore, for the most part, no relation to the fertility of the 
 soil, or its vicinity to market, if there was any market at all. . . . Each 
 manor was, as it were, a separate territory, inhabits by a distinct com- 
 • munity. There was no competition for the tenure of farms from without ; 
 and within the manor the sole regulators of rent were the arbitrary will 
 of the lord, and custom. The rent of the villein was at first, in theory at 
 least, an arbitrary rent; in its next stage it was a customary rent, in 
 labor or produce ; in a third stage it became commuted into a money- 
 rent, based on a valuation of the customary service or payments in kind. 
 In the book before us [Blount's Tenures of Land] we have many exam- 
 ples of the customary rent in labor and in kind, and of the commuted 
 money-rent ; but there is not a single example of a competitive rent. 
 Competitive rents only began with enclosures and the disruption of the 
 old manorial community ; and customary rents survive to this day in 
 many a manor, in defiance of economic theory" ( T/ie Athenseum, 1874). 
 
 The only early instance of a rent not fixed by custom is that provided 
 for in one of the old Irish laws, in which a member of one group, be- 
 coming an outcast, becomes the tenant of another. Of such a tenant as 
 large a rent as could be exacted, might be justly demanded ; but of a 
 member of the sept itself only a fair (i. e., a customary) rent could be 
 exacted. 
 
 § 100. Mr. Ricardo is wrong in his very first premise. " The 
 
100 ELEMENTS OF POLITICAL ECONOMY. 
 
 elements of value to" the first settlers of a new country ' are 
 not the resources that are capable of development through in- 
 dustry and enterprise, but those which offer the readiest supply 
 of the necessaries of life'' (J. H. Burton). They do not begin 
 with the best soil, and afterwards proceed to that which is worse, 
 however natural and reasonable it may seem to assume that they 
 do so. The best soil is usually not known to them as such ; 
 even if it were, it is nearly always inaccessible to them. Through 
 its very wealth, it is not unusually covered with timber, whose 
 clearance is impossible to them. More commonly it is marshy, 
 and requires what would be to them a vast expenditure of labor 
 to drain it. It lies in the lower parts of the country, to which 
 the aqueous circulation has been for ages carrying down the 
 richest elements of the soil. It is infested with malarias, bred 
 of vegetable decay. It is utterly devoid of those natural facili- 
 ties for defence, which in most situations are imperiously neces- 
 sary to the settler. 
 
 The progress of civilization in all ages, therefore, has been 
 from the thin and poor soils high up the rivers to the richer 
 soils that lie neai^r their mouths. . The retrogression of civiliza- 
 tion has been the abandonment of the richer soils and the re- 
 treat up the hillsides to those that are lighter and less fertile. 
 
 The next chapter gives the historical proofs of these facts, and of the 
 true law of settlement. 
 
 The great means that has enabled men to pass from the poorer 
 soils to the richer is the power of co'dperation that increases with 
 the growth of numbers, unless some artificial obstacle has been 
 interposed to prevent it. The sudden decline of numbers, or the 
 diminution of the power of association, has had the effect of 
 driving men back from the land that richly repays the labor 
 expended upon it, to the soil that furnishes natural drainage, 
 that can be ploughed with a crooked sapling. and harrowed with a 
 thorny bush. The labor expended upon such soil is slightly 
 repaid; the crop reaped is therefore dear; but necessity has no 
 choice. 
 
CHAPTER SIXTH. 
 
 The National Economy or Land {^continued) : How the 
 Earth was Occupied. 
 
 § 101. The historical refutation of Mr. Ricardo's theory, 
 which is presented by the history of the settlement of the various 
 countries of the earth, was first given to the world by Mr. H. C. 
 Carey in his book The Past, the Present and the Future (1848). 
 It is worthy of study, not only as a refutation of a dismal theory 
 of the destiny of mankind, but for the light it casts upon the 
 economic side of the world's history, and indirectly upon other 
 ijides also. It might be easily and fairly elaborated into an 
 economical history of the earth, for that history is nothing but 
 the story of man's victory over nature's resistance and the pro- 
 gressive mastery of her manifold utilities. 
 
 § 102. The theory that we are discussing was devised to ex- 
 plain the condition of Great Britain, but no English antiqua- 
 rian would have given such an account of the settlement of the 
 country. When the Romans invaded England, it was at most 
 about half as populous as at the date of the Norman conquest. 
 "The woods must have been larger, the fens had not been par- 
 tially reclaimed and made accessible by causeways ; some of the 
 tribes were unacquainted with tillage; the beech tree, which 
 doubled our food for swine, had not been introduced ; half the 
 roots, vegetables and fruits, which now supplement our corn- 
 crops, had not passed the Channel, and the great roads were not 
 yet made on which the plenty of a fortunate district could be 
 transported to parts where the crops had failed. The stunted 
 British cattle, whose remains we constantly disinter, are proof 
 that even if tillage was known, a large portion of the population 
 lived upon milk. The best peopled parts of England were pro- 
 bably those which were most open and easy to cultivate ; the 
 home counties, Norfolk and Suffolk, and the south-western coun- 
 ties." A " mighty sum of toil has transformed the countrjif 
 
 101 
 
102 ELEMENTS OF POLITICAL ECONOMY. 
 
 throughout England. The fens and forests are a mere memory 
 and a name; foreign trees grow in our hedge-rows; it is difficult 
 to find a point within half a mile of which a road does not run ; 
 the climate has been modified as woods have been felled and 
 marshes drained ; our rivers are smaller than in the old da3's. 
 Thanks to these labors, and to those marvellous changes in agri- 
 cultural science, which may bear comparison with any triumphs 
 of mechanics, England, left to her own resources, can now 
 support four times the population that the country contained 
 under Edward III., eight times our -cumber at the period of the 
 Norman conquest, and perhaps sixteen men for one whom Caesar 
 found in the island." 
 
 In this and the following paragraphs quotations not otherwise credited, 
 and much besides, are from Mr. C. H. Pearson's Historical Maps of 
 England, with Explanatory Essays (2d edition, London. 1870). Mr. 
 Pearson tries to account for many of the facts by military and politica* 
 reasons, having no knowledge of the true law of the occupation of the 
 land. 
 
 §103. The Celtic tribes whom the Romans found in the 
 island do not seem to have been either numerous or powerful, as 
 the invading army that added the island to the Roman Empire 
 numbered but 30,000 men. The home of the several tribes is 
 in every case but one uncertain, but they seem to have been con- 
 fined to the hills of the north and to the hill system of the south 
 and west coasts, which opposes its clifi*s to the currents from the 
 Atlantic, and is divided from the rest of the island by the old 
 Roman military road from London through Chester, which the 
 Saxons called Watling Street. 
 
 The monumental remains of the ante-Roman epoch indicate] 
 this. " The earliest grave mounds are mostly found in the' 
 mountainous districts of the land, — among the hills and fast- 
 nesses ; the later [Roman and Saxon] overspreading hill, valley 
 and plain alike. Thus in Cornwall, in Yorkshire, in Derbyshire 
 and in Dorsetshire, in Wiltshire and many other districts, the 
 earliest interments are or have been abundant ; while the later 
 ones, besides being mixed up with them in the districts named, 
 
CELTIC OCCUPATION OF ENGLAND. 103 
 
 are spread over every other county. In the counties just 
 named Celtic remains more abound than those of any other 
 period. In Dorsetshire, for instance, Hhat county/ as the 
 venerable Stukeley declares, 'for sight of barrows not to be 
 equalled in the whole world,' the early mounds abound on the 
 downs and the lofty Ridgeway, an immense range of hills of 
 some forty miles in extent, — while those of a later period lie in 
 other parts of the county. In Yorkshire again they abound 
 chiefly in the wolds ; and in Cornwall on the highlands. The 
 same again of Derbyshire, where they lie for the most part 
 scattered over the wild mountainous region of the Peak, — a 
 district occupying nearly one-half of the county, and containing 
 within its limits many towns, villages and other places of 
 extreme interest. In this it resembles Dorsetshire, for in the 
 district occupied by the Ridgeway and the downs are very many 
 highly interesting and important places. It is true that here 
 and there in Derbyshire, as in other counties, an early grave 
 mound exists in the southern or lowland portion of the county. 
 . . . There are districts where there is scarcely a hill even in 
 that land [of hills] where a barrow does not exist or is not 
 known to have existed." 
 
 See Grave Mounds and their Contents, by Llellwyn Jewett. London, 
 1870. 
 
 § 104. West of Watling Street lay (1) the ancient kingdom 
 of Cornwall^ which must have been densely peopled, as we learn 
 from the Roman lists of towns, the traces of ancient agriculture 
 and the abundance of ancient remains. Here is the seat of 
 the events now clothed in poetry in the Arthur-Sagas. The land 
 is now mostly abandoned by the farmer to the fisherman and the 
 miner. (2) Wales, whose mountains were fought for as a prize 
 by the two great branches of the Celtic race. (3) The Welsh 
 kingdom of Strathclyde, which includes the Galwegian district 
 of Scotland and the lake district of England. When the 
 Roman occupation ceased, we find the Celts confined to this dis- 
 trict and the south coast. Their literature " shows no acquaint- 
 ance with the country east — let us say — of the second degree of 
 
104 ELEMENTS OF POLITICAL ECONOMY. 
 
 longitude, beyond what a half-educated yeoman now might have 
 of America. . . . Except perhaps in one case there is no 
 authentic tradition of war with the Saxons or Angles in that 
 region, or of British sovereignty there. The single exception is 
 that of Kent." And yet the race is remarkably tenacious of 
 traditions. It carried the Cornish Arthur-Sagas into Brittany; 
 the Irish Fingal-Sagas into Scotland. It knew little or nothing 
 of the east, of the rich lands containing nearly all the wheat- 
 fields of England, while the west is devoted to grazing. What 
 tribes were found there by the Bomans were few and scattered. 
 It was therefore open to Boman colonization, and a mixed multi- 
 tude of Boman citizens and continental peoples was transplanted 
 thither. Seventy thousand Boman citizens are said to have 
 been killed in the massacres by which Boadicea began her revolt. 
 This was the region that fell so easily into the hands of the 
 Grerman tribes, and after a few struggles became the site of 
 Saxon kingdoms. As the Saxons pressed westward they en- 
 countered a fiercer resistance, and repaid it by enslaving the 
 conquered people. At Domesday the percentage of slaves in 
 the north and east was but 3 J per cent. ; in the five south- 
 western counties 16 to 17 per cent. ; and the intermediate 
 degrees of serfage hold the same proportion. The west was the 
 land desired by Saxon as well as Celt ; its ranges of hills, that 
 rise to mountains as they approach the sea, were the subject of 
 protracted conflict, and it was the kingdom of Wessex that rose 
 to such eminence that its king became Bretwalda or sovereign 
 of England. " All the energy and enterprise of the Saxon 
 name flowed naturally towards the west, and from the district of 
 the West Saxons, at first only embracing Hampshire and a part 
 of Wiltshire, went out all the conquering expeditions that 
 wrested not only the south-west and the valley of the Severn, 
 but the more southern of the Midland counties from the 
 Britons.*^ 
 
 § 105, The early isolation of the Saxon kingdoms as of the 
 Celtic tribes was largely due to the great lines of forest that ran 
 across the country, and to the fens that covered much of its 
 
THE SAXONS IN ENGLAND. 105 
 
 surface. To the former (as greatly increasing the annual rain- 
 fall) the existence of the latter was largely due. " The clouds 
 which at present pass over our heads and break in another 
 country or over the sea, were arrested by the simplest natural 
 agencies; and the water that now flows down in a thousand 
 drains to the river, was preserved in marshes and lakes, which 
 in turn sent back what they had received in dank exhalations." 
 The deflections of the Roman roads show that these were among 
 their chief diflScultics of engineering, while they show readiness 
 to run over a hill instead of round it. In Saxon times these 
 obstacles isolated closely related tribes, and forced them to 
 advance from east to west, and to occupy the poorer soils on the 
 high moorlands and the mountain-sides, where traces of the 
 most ancient occupants are visible. We find the Saxon Saint 
 Outhbert praised because in his missionary tours " he was wont 
 chiefly to go through those places and to preach in those ham- 
 lets which were high up on rugged mountains, frightful to others 
 to visit, and whose people by their poverty and ignorance hin- 
 dered the approach of teachers. He went out from the monas- 
 tery often a whole week, sometimes two or three, and often also 
 for a whole month would not return home, but abode in the wild 
 places " and gave them lessons in husbandry and in finding and 
 saving water (Hughes's Alfred the Greats pp. 28-9). 
 
 §106. Throughout early English history the lands beyond 
 the Humber are slightly or not at all connected with the southern 
 shires. Of the midland shires, now the most fertile grain-lands in 
 the island, we hear next to nothing. " The map of Saxon-Eng- 
 land is singularly bare for that midland district, and the few 
 names that mark it are mostly of towns which Edward the Elder 
 founded as a military frontier. Few, indeed, are* the charters 
 that record gifts of land in its rich pastures ; scanty and late 
 the names of monastic foundations that sprang up in it." 
 " A great district popularly called the desert stretched from 
 Durham through the West Riding [of Yorkshire] to the Peak 
 [in Derbyshire ;] and to a period as late as the twelfth century, 
 contained no town of importance. . . The site of Durham was 
 
106 ELEMENTS OF POLITICAL ECONOMY. 
 
 occupied by a thick wood in the twelfth century. Down to a 
 much later time, a lamp used to be hung from the old steeple of 
 All Saints, York, to guide travellers across the forest of Galtres. 
 The Domesday Survey tells us that in Derbyshire five ' hundreds ' 
 out of six were heavily wooded ; and that in Lancashire a quar- 
 ter of a million of acres was covered with a network of aense 
 woods." With the Normans begins a new era for these mid- 
 land shires. " Generally the north of England, Kent and Glou- 
 cestershire, were the parts most thickly peopled under the 
 Romans, while under the Saxons Wessex and the eastern coun- 
 ties were on the whole the best governed and developed. . . 
 From Derby, with its one borough, to Wiltshire, with at least 
 eight and perhaps sixteen, or Suffolk with six, is a great ascent. 
 But it points to different conditions of country " " With the 
 Norman dynasty came new conditions of national life. Wiltshire 
 and Somersetshire declined in relative importance. . . Under 
 King John Lincolnshire alone contributed a fourth of the 
 exports between Newcastle and the Land's End. The mid- 
 land districts of England were now neither desolate nor mar- 
 tial." Yet we still find districts now fertile named in mediaeval 
 history as morasses which threatened the destruction of armies ; 
 and the rich grain-fields of South Lancashire were in the reign 
 of Elizabeth a quagmire that daunted the antiquary Camden. 
 Oliver Cromwell was one of a " company of adventurers" who 
 undertook to drain the fen of Huntingdon and Cambridge shires 
 by diking the channel of the Ouse. 
 
 Northumberland during the Eoman period was densely set- 
 tled ; Roman remains are numerous ; Roman cities were fre- 
 quent and of great size on its " naturally sterile " soil. It 
 afterwards sank into comparative unimportance. The eastern 
 lowlands of Scotland were at first an outlying part of this king- 
 dom ; the castle of Edinburgh is built on the site of a North- 
 umbrian fortress designed to defend the northern frontier. 
 
 § 107. The earliest history of the kingdom of Scotland goes 
 back to the occupation of the Western Highlands by Scotch 
 tribes from the north of Ireland and their subjugation of the 
 
SCOTLAND AND ITS ISLANDS. 107 
 
 Picts. But the prehistoric remains, such as the subterranean 
 dwellings and villages on the upper reaches of the river Don in 
 the slopes of the Highlands, go still farther back. " The coun- 
 try is crowded with hill-forts, small and great; they may be 
 counted by hundreds. They consist of mounds of earth or 
 stones, or both, running round the crests of hills.'' Every spur 
 of the Cheviots is crowned with remnants of old ftistnesses whose 
 builders are unknown to us. 
 
 As to the Irish occupation of the Highlands it has well been 
 gaid that " one acquainted with the agricultural resources of the 
 north of Ireland at the present day, might question the induce- 
 ment of a people to leave that region for the sake of settling in 
 Western Scotland. But it is observable of the Celts as of other 
 indolent races, that the elements of value to them arc not the 
 resources capable of development through industry and enter- 
 prise, but those which offer the readiest supply of some of the 
 necessaries of life. . . The geological character of the country 
 would supply them with a limited quantity of alluvial soil for 
 immediate cultivation. It was found on the deltas of the moun- 
 tain streams, on the narrow straths around their margin, and 
 occasionally in hollows containing alluvial deposits, whith might 
 have been the beds of ancient lakes. These patches of fruitful 
 ground the first immigrants would find ready for use. Modern 
 agriculture has indeed been able to add very little to their area, 
 and has wisely determined that sheep-farming is the proper use 
 of those tracts of mountains among which the alluvial patches 
 are thinly scattered. It is a curious coincidence worth remem- 
 bering, that those very lands in Northern Ireland which the. an- 
 cestors of the Scots Highlanders abandoned,, were in later times 
 sought and occupied by Scots Lowlanders as a promising field 
 of industrial enterprise." 
 
 See Burton's History of Scotland, Chapter V. (Edinburgh, 1873). 
 
 As in English history, we find a Celtic kingdom (Strathclyde) 
 occupying the western hills and Cumberland, while the more 
 fertile Lothians lie open to the invader and yield to the Teutons 
 
108 ELEMENTS OF POLITICAL ECONOMY. 
 
 ■with hardly a struggle. But even in the Lothians the richer soils 
 — as along the Tweed — are of more recent occupation and were 
 forests and swamps two centuries ago. 
 
 § 108. The comparatively bare and now insignificant islands 
 that lie around the coast were once prizes. The Romans seized 
 the Orkneys and perhaps established a garrison there, and the 
 remains of cyclopean works attest a still earlier occupation of 
 the Islands. In the Ossianic traditions they formed a powerful 
 kingdom. In the middle ages they were pledged to the King 
 of Norway as security for a sum of money that would now 
 more than purchase their fee simple. To the west lie the far 
 moie barren Hebrides, which, with the Isle of Man, Dublin and 
 the south-east of Ireland, once formed a powerful Danish king- 
 dom. These islands, once " rich and powerful," we find after- 
 wards " sinking into -poverty," while the others have merely 
 *' preserved a respected position in the British Empire, as main- 
 taining a valuable and industrious population." 
 
 The Duke of Argyle, President of the Cobden Club, in his 
 book about lona tells us the story of the settlement of that 
 island and the adjacent highlands. " At a time," he says, 
 ''when artificial drainage' was unknown, and in a rainy climate, 
 the flats and hollows, which are now generally the most valuable 
 portions of the land, were occupied by swamps and moss. On 
 the steep slopes alone, which offered natural drainage, was it 
 possible to raise cereal crops. And this is one source of the 
 error which strangers so often make in writing on the High- 
 lands. They see the marks of the plough high up upon the 
 mountains, where the land is now very wisely abandoned to the 
 pasturage of sheep or cattle j and seeing this, they conclude 
 that tillage has decreased, and they wail over the diminished 
 industry of man. But when those high banks and braes were 
 cultivated, the richer levels below were the haunts of the otter 
 and the fishing-places of the heron. Those ancient plough- 
 marks are the sure indications of a rude and ignorant hus- 
 bandry. 
 
 " In the eastern slopes of lona, Columba and his companions 
 
IRELAND AND NEW ENGLAND. 109 
 
 found one tract of land which was as admirably fitted for the 
 growth of corn, as the remainder of it was suited to the support 
 of flocks and herds. On the north-eastern side of the island, 
 between the rockj pasturage and the shore, there is a long 
 natural declivity of arable soil, steep enough to be naturally 
 dry, and protected by the hill from the western blast. 
 
 " And so here Columba's tent was pitched and his Bible 
 opened, and his banner raised for the conversion of the 
 heathen." 
 
 §109. Ireland (as that best of judges Arthur Young says), 
 taken acre for acre, is more fertile than England. Yet in her 
 earlier history, when the whole population consisted of a few 
 hundred thousands gathered into clans, its " pressure upon land 
 and food" caused frequent famines, and led to large emigrations 
 into what we regard as the poorest parts of the sister island. 
 Such was the exodus of Scots that established the Celtic king- 
 dom of Dalaradia, and laid the foundation of Scottish nation- 
 ality. Such also was the invasion and occupation of North 
 Wales by the Gadhelic or Irish kingdom of Gwynned, just 
 about the time of the Saxon incursions on the east. 
 
 The Scotch and English colonies in the north had a long 
 struggle with the natural obstacles to settlement, among which 
 want of drainage and consequently malaria and agues were the 
 chief. Within the memory of people now living, large districts 
 have been brought under culture, and the yield of the land im- 
 mensely increased wherever the density of population was such 
 as to make it both possible and profitable. The malarious 
 type of disease — including that offspring of the union of hunger 
 and malaria, typhus fever — have comparatively disappeared. 
 
 § 110. In America, the Pilgrim Fathers and the Puritan 
 colonists fixed their homes on the barren shores of Massachu- 
 setts Bay ; and even when they penetrated the country to found 
 . new commonwealths, they chose high and dry spots like New- 
 port and New Haven. The richest soils under cultivation in New 
 England were reclaimed within fifty years. Other lands, quite 
 as rich, if not richer, lie untilled, while old mountain settlements 
 
110 ELEMENTS OF POLITICAL ECONOMY. 
 
 in Berkshire county and other districts are being emptied of 
 their inhabitants and ancient farmhouses left untenanted. But 
 much of the long-occupied lands have grown in fertility, as agri- 
 cultural methods and appliances have been improved. "Our 
 soil/' says Emerson, "is capable of as great and increased pro- 
 ductiveness as that which England has attained. Concord is 
 now one of the oldest towns in the country, — far on now [1858] 
 in its third century. The selectmen have once in five years per- 
 ambulated its bounds, and yet in this year a very large quantity 
 of land has been discovered and added to the agricultural land, 
 and without a murmur of complaint from any neighbor. By 
 drainage we have gone to the subsoil, and we have a Concord 
 under Concord, a Middlesex under Middlesex, and a basement- 
 story of Massachusetts more valuable than the superstructure. 
 Tiles are political economists. They are so many young Ameri- 
 cans announcing a better era and a day of fat things." 
 
 Mr. Emerson sees the bearing of all this, for he adds: "There has 
 been a nightmare brought up in England, under the indigestion of the late 
 suppers of overgrown landlords and loomlords, that men bred too fast for 
 the powers of the soil, — that men multiplied in a geometrical ratio, whilst 
 corn only in an arithmetical. The theory is that the best land is taken 
 up first. This is not so, as Henry Carey of Philadelphia has shown, for 
 the poorest land is the first cultivated, and the last lands are the best 
 lands. It needs science to cultivate the best lands in the best manner. 
 _ Every day a new plant, a new food is found. Thus political economy is 
 not mean, but liberal, and on the pattern of the sun and sky ; it is coin- 
 cident with love and hope. It is true that population increases in the 
 ratio of morality, and the crops will increase in like ratio." 
 
 § 111. lu New York the first lines of settlement ran along 
 the dry and sandy hills from Manhattan Island and the High- 
 lands to the Mohawk valley. The settlements on the edge of 
 that beautiful and fertile region are much older than those within 
 it. Rich and fertile districts like Greneva have not a history of 
 more than seventy years, while the more remote and less fertile 
 lands along the Pennsylvania line were settled very early, their 
 elevation and their consequent exemption from malaria being an 
 especial recommendation. The New York farmer of our days 
 finds that " knocking the bottom out of a swamp " is one of the 
 
f 
 
 MIDDLE AND WESTERN STATES. Ill 
 
 most profitable things he can put his hand to, and his less-know- 
 ing neighbors stare at the crops that follow. 
 
 New Jersey was preferred by the first Quaker settlers to the 
 west bank of the Delaware, because of the abundance of her 
 light, sandy soils, which were the more easily got at. Hundreds 
 of their clearings, which have long been abandoned, may be 
 found in these districts. The Swedes across the river followed 
 suit. They built Christina, Lewistown, and other towns of 
 Delaware that have become decayed and insignificant places. 
 
 § 112. Penn had the same preference for high land. His 
 first choice for the site of Philadelphia was twelve miles farther 
 north. The early maps of the province show us miles of small 
 farms running from the city along the tops of the ridges, while 
 the richer and lower lands on each side are marked as uncleared 
 and uncultivated. Hence the origin of the Ridge Road. A large 
 part of the banks of our rivers above the city, are still unsafe as 
 building-sites, while below us lie undrained swamps that will yet 
 be the farm-gardens of our city. Much of the best land in the 
 interior of the state is still unoccupied, especially in the valley 
 of the Susquehanna, while comparatively barren places on the 
 slopes of the Alleghenies and its related ranges were settled at 
 a very early date. The old roads of the state go twisting about 
 as if in search of hills to clamber along — even in the limestone 
 valleys, where there is no malaria — while the new ones run 
 along the streams and through the valleys. 
 
 The vast immigration from the north of Ireland that went on 
 during last century found homes in the Alleghenies and their 
 spurs, which they entered through Pennsylvania and North Caro- 
 lina, and then spread over the whole Apalachian system from 
 what are now the Oil Regions to Huntsville in Northern Ala- 
 bama. Their choice was not prompted by want of better lands, — 
 for such lay unreclaimed on both sides of the mountains; — nor 
 by indolence (as Mr. Burton charges upon the Irish settlers of 
 the Scotch Highlands), for no race is more industrious ; — nor by 
 any special safety of their position, as they had to bear for half 
 a century the brunt of our Indian wars. They took the lands 
 
112 ELEMENTS OF POLITICAL ECONOMY. 
 
 that lay most open to them, as did their brethren, who passed 
 by Maine to settle the Granite State. 
 
 § 113. The same course of settlement may be traced in every 
 Western state. Everywhere the rich valley-lands are avoided 
 as the seat of malaria. In Wisconsin the first settlement was 
 made in the patch of highlands called the Blue Mound, and the 
 lines of settlement ran out along the sandy hills as in the east. 
 The richest and the most fertile spots .on the prairies were in 
 earlier times the sloughs or " wet prairies " — the terror of travel- 
 lers, but now under combined and patient exertion " fair as the 
 garden of the Lord.'' One such in Southern Illinois, occupied 
 by Paisley weavers turned American farmers, recalls the most 
 carefully tilled bits of the British Islands. This whole district, 
 commonly known as Egypt, and spreading from the Mississippi 
 far east of the Wabash, is perhaps the richest in the whole 
 North. Yet the Southern planters on their way to occupy Mis- 
 souri, passed it by in disdain, and left it to " poor whites " of the 
 South, who occupy such dry and sandy ridges as they find 
 accessible, where the rudest agriculture suffices to supply their 
 very primitive wants. The rich creek bottoms are inaccessible 
 to its rude and scanty population, who^ have hardly any notion 
 of their value and no capital sufficient to master them. A man, 
 whoso lands if rightly tilled would feed a New England town, 
 will live in a log-hut of two rooms, with a loom and spinning- 
 wheel on the " stoop," and ride to a Hard Shell church, with a 
 saddle of raw hide and stirrups of straw. Every family has its 
 package of quinine, and " the Egyptian shakes " are a proverb. 
 
 If we ascend the various branches of the Mississippi, we find 
 tillage approaching the river if the population is dense, receding 
 from the river to the barer lands that furnish natural drainage 
 if it be sparse. 
 
 Descending the river we reach the vast levees that protect the 
 richest plantations of the continent and testify to the growth of 
 man's power to command the services of nature with the in- 
 crease of numbers. East of this southern valley lie the South 
 Atlantic States. In North Carolina the richest lands are still 
 
SUMMARY VIEW. 113 
 
 undrained, while labor is expended upon others that yield from 
 three to five bushels of wheat to the acre. The Cotton States 
 contain millions of acres still inaccessible to aoriculture throusrh 
 lack of population, because a large outlay of intelligently di- 
 rected labor would be required to occupy them. 
 
 In Texas the first Spanish colony at Bexar and the first 
 American colony at Austin, high up on the Colorado, were both 
 settled by men, who passed by millions of acres of better land as 
 inaccessible, to reach an exceptional elevation. 
 
 § 114. Looking at the entire area of the earth's surface, we 
 fij)d (1) that no nation occupies a territory incapable of support- 
 ing its actual or even its probable population. Norway comes 
 nearest to forming an exception, but the Scandinavian peninsula 
 is manifestly designed for the home of one nationality. Sweden 
 raises more cereals than her people eat, and a very considerable 
 area of her arable lands is still covered with dense forests. 
 England is clearly no exception ; she is capable of producing 
 on her soil four times as much food as her people use; but her 
 agriculture lags far behind the general average of her skill in 
 the invention of better methods and in the application of scien- 
 tific principles. 
 
 (2) The pressure of population upon subsistence and upon 
 the land exists in sparsely-settled regions, and there only. It is 
 a providential agency to stir men to greater exertions and wiser 
 methods, and these exertions are always abundantly rewarded. 
 
 (3) The richest areas of the earth's surface lie still unoccu- 
 pied, and in many cases the richest districts, within national 
 boundaries whose population is dense enough to take possession 
 of them, are untilled and undrained. 
 
 (4) The area of culture may be indefinitely extended in both 
 directions. It is now — we may say — the belt of land that lies 
 between districts that are too poor and districts that are too rich 
 to repay culture. The former as well as the latter may be mas- 
 tered, as the sciences advance in their mastery of the secrets of 
 nature; chalk downs and sandy deserts may be transformed info 
 fair garden fields and orchards at the touch of man, as great 
 
 8 
 
114 ELEMENTS OF POLITICAL ECONOMY. 
 
 natural forces and resources are brought into his service. The 
 wilderness and the solitary place shall be glad, and the desert 
 shall rejoice and blossom as the rose. 
 
 (5) The value of the land of a country is chiefly — or in 
 truth entirely — due to the labor that has been wisely expended 
 upon it, and is proportional to that. The price of a Belgian farm, 
 for instance, is twelve times as great as that of the same amount 
 of waste land in the same country, and the latter brings even 
 that nominal price only because (1) it furnishes a field for labor 
 to produce utilities possible but as yet non-existent; (2) because 
 the labor already expended on other adjacent pieces of land, 
 and the growth of numbers and of the power of association, 
 have made it possible to bring this one under tillage. Were the 
 same piece of land to be transferred to the Andes, its market 
 value would be nil. 
 
 In fine, if in any case a people, with the strength of numbers 
 and the strength of skill, should come to such a state that great 
 wealth should be found side by side with deep poverty and its 
 accompaniments, misery and sordid vice, the cause of such a 
 state of things is not to be sought in " the pressure of popula- 
 tion upon land and food," but in bad national thrift. Somebody 
 is to blame ! 
 
CHAPTER SEVENTH. 
 The National Economy of Labor. 
 
 § 115. The industrial age, in which national economy has 
 become a science, is also the democratic age, in which the govern- 
 ing class are no longer regarded as composing the state or possess- 
 ing an exclusive right to direct its policy to the promotion of 
 their own interests. It is no longer possible, therefore, to call a 
 nation wealthy and prosperous because large masses of capital 
 are in the hands of a few men, if the great body of the 
 people are ill-fed, ill-housed and ill-clothed, or struggling on the 
 brink of pauperism. The prosperity of ''the most numerous 
 class, that is, the poorest," is coming ever more to the front as 
 the great problem of modern statesmanship. 
 
 In an industrial age this problem resolves itself into the 
 question of the rewards of labor. Modern governments can no 
 longer undertake to support great numbers of people in idleness 
 on the produce of the industry of other classes, as was done in 
 the Greek republics and the Roman Empire. Those others, 
 with the advance of political equality, claim equal rights and 
 care. The aim of national economy is therefore to secure " a 
 fair day's wages for a fair day's work," to all who are willing 
 and able to work. 
 
 In modern industry, the operations are so complex in method 
 and so extensive in scale that unassisted labor would be unable 
 to undertake them. Those who by their savings, or by the 
 inheritance of other men's savings, have come into the pos- 
 session of a large amount of the results of past labor, natur- 
 ally and necessarily take the work of organizing industry and 
 directing its forces. These men are capitalists, and their ac- 
 cumulations are called capital. 
 
 § 116. Of the net product of the joint application of labor 
 and capital, what proportion should fall to labor and what to 
 
 115 
 
116 ELEMENTS OF POLITICAL ECONOMY. 
 
 capital ? Is there a natural and necessary rate of distribution 
 or does it vary arbitrarily according to the contract made ? 
 
 The English economists generally accept the former alterna- 
 tive ; they believe that there is a natural and necessary rate of 
 "wages ; that no efforts of the workman can permanently raise 
 Wiiges above that rate, and no efforts of the capitalist can per- 
 manently depress them below it. For, say they, if wages be 
 raised above the natural rate, the rate of increase in the population 
 will be accelerated, and after a time the number of workmen will 
 be so great that they will underbid each other for work, and the 
 rate will be depressed again. If it be depressed below the natural 
 rate by this or any other cause, then the rate of increase of the 
 population will be diminished, and the labor market will be 
 scantily supplied, so that wages must rise. Between the two 
 extremes of this oscillation, there is a middle point of stability, 
 — the natural rate of wages, that which will neither accelerate the 
 growth of population till it surpasses the growth of capital, nor, 
 the reverse. This natural rate is the amount necessary to sup- 
 ply to the unmarried workman the real necessaries of life, and 
 whatever other things his class regard as such. 
 
 The theory is commonly stated in another form, which also 
 accepts a natural rate of wages, and one which is reached far 
 more swiftly. All the money in a country that is available 
 for the payment of labor is taken in the mass and called the 
 wage fund. This fund is divided pretty equally among all the 
 laborers in the country. The apparent inequalities in the dis- 
 tribution are not real ; higher wages can always be traced to 
 payment for undergoing danger or doing work that is disagree- 
 able or discreditable, or work that involves special capacity or 
 preparation. The amount of the fund to be divided depends 
 upon the amount of capital in circulation. The rate of division 
 depends upon the number of claimants. The workingmen have 
 no power to increase the amount of the fund, but they can limit 
 the number of those among whom it is divided, and on their 
 doing so dep-ends their welfare as a class. 
 
 This theory in both its shapes grows out of the supposed 
 
 J 
 
THE HADES OF LABOR. 117 
 
 *' law of population," and must stand or fall with that. Like 
 that, its motive is to show that the misery of the working classes 
 is not to be attributed to any mismanagement on the part of the 
 ruling class, but to the operation of natural and unavoidable 
 laws. Its verdict is, " Nobody to blame," when the growth of a 
 nation in wealth and numbers, and the distribution of wealth 
 among those numbers, do not go on together. 
 
 The first form of the theory is fully refuted by the ascer- 
 tained fact that the poorest classes are the most thriftless, 
 and^the least likely to take thought for the future. The second, 
 by the proofs that workingmen actually have, by combination, 
 raised the rate of wages, without any such increase of circula- 
 ting capital, or the resulting " wage fund," as is here demanded 
 as a preliminary to that increase. 
 
 The facts are abundantly given by Mr. "W. T. Thornton {On Labor, 
 1870), and by Mr. Cliffe Leslie {Systems of Land Tenure, 1868). 
 
 § 117. If the English theory as to the relations of labor and 
 capital be true, then there is no hope for the essential improve- 
 ment of the workingman's condition so long as the existing order 
 of society holds its ground. What labor gains on one side it 
 for ever loses on the other, and as often as it rolls the Sisyphean 
 rock — the rate of wages — up the hill, it rolls down again to 
 crush and destroy the workman. All the old pictures of foiled 
 effort, with which the Greeks peopled their Hades, become but 
 pictures of the efforts of the working classes to raise their con- 
 dition above the wretched standard called " natural wages." 
 
 Those who are striving to rouse the working classes to over- 
 throw the frame-work of modern society and its economic basis, 
 the right of property, are not slow to discern this. Thus the 
 leader of the German socialists, Lasalle, based his fierce denun- 
 ciations of modern civilization and its proprietary rights upon 
 the recognised doctrines of the English school, claiming to be 
 "equipped with all the knowledge of the age" on this subject. 
 His chief opponent, his successful rival in the love and allegiance 
 of the working classes of Germany, is Schultze-Delitzsch, who 
 has devoted his life to showing the working classes that they 
 
118 ELEMENTS OF POLITICAL ECONOMY. 
 
 can improve their condition simply by removing unnatural 
 obstacles to improvement, by availing themselves of the great 
 drift of society towards an equality of condition, and without 
 for an instant liftios: their hands against the accumulations and 
 the vested rights of the rich. In doing so, he ranged himself 
 on the side of the German-American school of economists 
 founded by List and represented by H. C. Carey, telling Herr 
 Lasalle that if he had taken the pains to go over the whole field 
 he would have found better teachers and better principles than 
 those of Malthus and Ricardo. • 
 
 " If any one object," he says, "that the economical principles of the 
 writer are devoid of authority, it will sufi&ce to answer that these princi- 
 ples have been established by the work of one of the most philosophic 
 minds of our epoch, the celebrated American economist, Carey. That 
 work is entitled Principlea of Social Science. It was finished in 1860 ; 
 some years later gave us a German translation of it (Miinchen, 1863-4, 
 published by E. A. Fleischmann). We commend it to the public as one 
 of the most eminent publications that have appeared in this branch of 
 human knowledge. 
 
 " All that is false and damnable in the economic theories of the modern 
 English school, especially those of Ricardo and Malthus, — theories 
 which furnish the starting-point for the thesis defended by Lasalle, — there 
 meets with a triumphant refutation ; and it is truly astonishing that our 
 opponent, * armed with all the knowledge of the age,* had not even known 
 of the aforementioned labors of the eminent man, who, during the last 
 twenty years, has discovered a great number of truths that are now ac- 
 cepted as axioms in political economy." 
 
 John Stuart Mill, in his Autobiographji, shows us that the gloomy out- 
 look for the future of the majority of mankind, presented to his mind 
 when he studied the world through the spectacles made for his eyes by 
 Malthus and Ricardo, led him to at least approximate to the theory of 
 the St. Simonian socialists. They proposed to abolish all rights of in- 
 heritance ; to reconstruct the government out of the ablest men in each 
 of the professions ; to make the state everybody's heir, and to redis- 
 tribute all property as fast as its present possessors died. In Mr. 
 Mill's Principles fii, xiii, ^ 2) he speaks of "the industrial system pre- 
 vailing in this country and regarded by many writers as the ve plus ultra 
 of civilization," as "irrevocably condemned," unless it prove itself com- 
 petent to solve the population question by bringing suflScient motives to 
 self-restraint to bear upon the classes " dependent on the wages of hired 
 labor." 
 
 § 118. The English theory that the power of competition 
 
THE LAW OF PARSIMONY. 119 
 
 fixed all the status of industries, and that all things found their 
 level, led to the inference — adduced above — that the wages of 
 labor are essentially the same in all departments, and that any 
 difference in payment could be traced to an implied payment for 
 facing some danger, or something disagreeable or disgraceful in 
 the work. Closer investigation shows us that custom is as large 
 an element as competition in determining the rate of wages, 
 although the latter is gaining upon the former steadily in modern 
 society. The great change going on all around us is from cus- 
 tomary status, that fixes the rate and price of all things by 
 tradition, to one in which they are fixed by free contract. But 
 the change is anything but complete in any department of life, 
 and as to wages it is simply impossible to say why some classes 
 of work are paid so high and others so low. To give a reason 
 for the difference would be to trace to reason what had not its 
 origin in reason ; or if it ever had, it was in a past so distant 
 that we cannot reconstruct it. 
 
 § 119. Capitalists are, of course, more ready than working- 
 men to listen to the English arguments in favor of the necessity 
 and naturalness of a low rate of wages. But the effort to keep 
 the workingman down to such a rate ignores the very nature of 
 the instrument that is to be used. It is to adopt as a maxioi of 
 economy the fundamental falsehood of slavery, — that a man may 
 be treated as a thing. The law of parsimony is a wise one in 
 dealing with the material, but not with the workman. Every 
 needless pound of iron on the locomotive, every needless pound 
 of coal in the fire-place, is so much waste of the moving force. 
 Every unnecessary ton of iron on the girders of the bridge 
 merely adds to the weight to be sustained, without proportionally 
 increasing the strength that sustains it. So in regard to cost of 
 material ] what is needless is waste. 
 
 But when we come to apply the law of parsimony to the com- 
 plex being called man, we discover by experience that there are 
 very decided limits to its application. Here at least '^ there is 
 that scattereth and yet increaseth, and there is that withholdeth 
 more than is meet, and it tendeth to poverty." The lowest 
 
120 ELEMENTS OF POLITICAL ECONOMY, 
 
 wages that you can get a man to live on, will not get the best 
 work out of him. Put a whole people on such wages, and keep 
 them there — if you can — ^for two or three generations, and you 
 will have crushed the energy, the spirit, the heart out of that 
 people, and made them a very inferior and unprofitable class of 
 workmen. You will have taken away from the great mass of 
 them the means of advancing in intelligence ', their physical 
 character will have deteriorated greatly ', their social morality — 
 their good-will, and public spirit, and ready helpfulness, and 
 brotherly feeling — will have been pretty thoroughly eliminated. 
 Factories will be full of the inflammable human stuff, to which 
 demagogues furnish the spark. The stability of the social edifice, 
 and consequently the security of property, will be endangered. 
 Instead of cheerful, pains-taking, thrifty work, eye-service alone 
 will be rendered, and profits will suffer from waste more than 
 they would from high wages. 
 
 On the other hand, wages that put heart and hope into a man, 
 that make him feel that his personal efforts and his best work 
 are needed to keep them at present rates, that offer him the 
 prospect of becoming his own master by frugality, that enable 
 him to educate his children to fill a place like his own intelli- 
 gently, or perhaps to rise to a higher place, — such wages are in 
 the long run the best of investments. It cannot be said that caj)- 
 italists any more than workmen, have always been alive to this 
 substantial harmony of their interests. When the higher rate 
 of wages has been adopted, it has too commonly been after a 
 conflict between the two classes, through which much of its 
 good effect upon the workmen has been destroyed. 
 
 § 120. Men are morally responsible for the terms on which 
 they purchase labor. When the workman makes his contract 
 singly, the capitalist has a power to dictate its terms, which 
 does not exist in ordinary transactions. In case of disagreement 
 as to terms, it remains to be seen which of the two can hold 
 out longest. Labor cannot : the laborer would starve. Capital 
 can live on its accumulations. If I refuse to buy the baker's 
 loaf, because I think it too dear, he loses but little in waiting 
 
THE WASTE OF SLAVERY. 121 
 
 till noon for another customer. I have therefore no means of 
 dictating to him. But " labor is the most perishable of com- 
 modities/' He who cannot sell his morning's labor before noon, 
 can never sell it; it is gone. The producer of other commo- 
 dities can at least stop producing, and lose only the interest on 
 his capital, when the prices are unsatisfactory. But he who has 
 labor to sell cannot stop producing, cannot cease to offer his 
 single commodity for such price as he can get. 
 
 § 12L The history of labor shows the wisdom of generous 
 dealing with the laborer. In the earliest ages, he was generally 
 a slave ; but it was found that slave labor was dear at any price. 
 Homer says : — 
 
 " The day 
 That makes a man a slave, takes half his worth away." 
 
 Pliny tells us Coli rura ah ergastulis pessimum est, et quicquid 
 agitur a desperantibus (It is the worst possible tillage that is 
 carried on by slaves, nor are they more fit for any other sort of 
 work, because they are devoid of hope). A southern slave- 
 holder told Frederick Law Olmstead : " In working niggers we 
 must always calculate that they will not labor at all except to 
 avoid punishment, and they will never do more than just enough 
 to save themselves from being punished, and no amount of pun- 
 ishment will prevent their working carelessly and indifferently." 
 Why should it ? " Fear," says Bentham, " leads the laborer to 
 hide his powers, rather than to show them ; to remain below, 
 rather than to surpass himself. ... By displaying superior ca- 
 pacity, the slave would only raise the measure of his ordinary 
 duties ; by a work of supererogation he would only prepare 
 punishment for himself. His ambition is the reverse of that 
 of the freeman ; he seeks to descend in the scale of industry, 
 rather than to ascend." And just the same must be the effects 
 of a system ir which the workman's wages are fixed by his 
 necessities and not by his work. 
 
 See Prof. Cairnes's The Slave Power (1862) ; Chapter II. " The Eco- 
 nomic Basis of Slavery." 
 
122 ELEMENTS OF POLITICAL ECONOMY. 
 
 § 122. The history of European serfdom in the middle ages 
 tells the same story. The great mass of the population of 
 Europe was in a state of villeinage, which varied in its forms, 
 but was commonly little short of slavery. They were worth so 
 little as workmen that it took all but a small percentage of the 
 population to raise food for the whole, and vast numbers were 
 employed in herding swine and cattle. In the worst cases, which 
 were very numerous, the villein had no right to the produce of 
 his labor ; the landlord took the whole, and gave the serf what 
 be pleased, — generally the refuse. Hence, as Grurth the swine- 
 herd (in Ivanhoe) says, the cattle bore Saxon names (ox, pig, 
 calf, sheep), while they lived and needed care, but Norman 
 names (beef, pork, veal, mutton), when killed and turned to 
 food. 
 
 Afterwards these villeins began in great numbers to buy their 
 time, and then their freedom, — a fact which shows at once the 
 greater worth of free labor. Those feudal masters were too 
 poor to give anything for nothing ) they sold their slaves to the 
 slaves themselves, because the latter could afford to pay more 
 than any other purchasers j and because the purchase-money 
 earned in half freedom was the full price of the slave's work. 
 What we see in our own century in Prussia went on in England : 
 the emancipated serfs bought land of their lords, creating a new 
 market for it. The Prussian masters complained of the Stein 
 legislation (§ 90) as an invasion of vested rights, but that great 
 statesman told them that a generous policy would benefit all 
 parties. They now admit the fact; what their serfs gained they 
 did not lose. Between 1829 and 1843 land rose 75 per cent, in 
 Westphalia, while there has been an incalculable improvement 
 in the condition of the peasantry — some of whom still remember 
 the time when they were called sclaven. 
 
 § 123, We begin to hear of free laborers in England in the 
 fourteenth century, and from this time laws are passed on the 
 one hand to protect them and increase their number, on the 
 other to keep their wages down to a minimum rate. These 
 laws tell us themselves that such short-sighted policy could not 
 
THE HISTORY OF LABOR. 123 
 
 reach its end. *' The price of labor continually rose ; the price 
 of food constantly fell " (Thorold Rogers). This must have 
 been the consequence of a great increase in productive power of 
 labor acting in harmony with capital. The logic of facts drove 
 wages up, and every successive change was to the advantage of 
 all classes. The workman rose in freedom, self-respect and effi- 
 ciency. 
 
 Between the Restoration and the Revolution the week's wages 
 of a farm hand was four shillings. In 1680 an M. P. com- 
 plained that the English mechanic was demanding a shilling a 
 day, though he would still work for less. In the century end- 
 ing 1830, the wages of a carpenter at Greenwich Hospital rose 
 from 2s. Qd. to 5s. Sd. a day. Bread, indeed, had risen equally, 
 but all other necessaries had fallen. The weekly wages of a farm 
 hand for various periods, if translated into wheat values at 
 current rates, gives this result: 1680-1700,54 pints; 1701- 
 1726, 64 pints; 1727-51, 78 pints; 1752-64, 80 pints; 1770, 
 79 pints ; 1780, 82 pints ; 1824, 89 pints ; 1832, 90 pints. 
 
 § 124. In France this matter has been very carefully investi- 
 gated, and it appears that the rural population of France had 
 half as much food as they needed in the time of Louis XIV. ; 
 two-thirds under Louis XV. ; three-fourths under Louis XVI. ; 
 while from the time of the Empire the laborer's budget begins 
 to show a surplus instead of a deficit. D'Argenson writes in 
 1739 : '* At the moment when I write, in the month of Febru- 
 ary, in the midst of peace, — with appearances promising a 
 harvest, if not abundant, at least passable, — men die around us 
 like flies and are reduced by poverty to eat grass." A fern loaf 
 was brought to the council table by the King's brother that his 
 majesty might " see what his subjects lived upon.'' With the 
 increase of wages, labor has risen to such efficiency that one 
 fourth of the soil formerly devoted to grain is now set free for 
 " industrial crops," and the food of a much larger population is 
 raised upon the other three-fourths. At the same time a much 
 larger proportion of the people is set free to engage in manu- 
 factures of all kinds. 
 
124 ELEMENTS OF POLITICAL ECONOMY. 
 
 § 125. In the colony of New York in 1773, when cheap and 
 fertile lands were plenty, and every mechanic could turn farmer 
 if he pleased, day laborers were paid 45 cents a day; ship 
 carpenters, three times as much; house carpenters, $1.10; 
 journeymen tailors, 56 cents. Adam Smith, who gives us 
 these data, says that the London rate was lower than this, but 
 that of the other colonies was not. Has the rate diminished 
 since the country became more densely settled ? In 1850 our 
 factories employed 731,137 men and 225,922 women, whose 
 daily wages was respectively $.88 6-10 and $.49 2-10, for each 
 person. In 1860 they employed 1,040,349 men and 270,900 
 women, at wages of $1.02 and $.59 respectively. In 1870 the 
 number was 1,615,598 men and 323,770 women, and 114,628 
 young persons, a total of 2,053,996 workers, at an average of 
 $1.18 per diem; a gain of 37 per cent, in ten years. 
 
 § 126. What is true of different periods in the same country 
 is equally true of different countries at the same date : — 111 
 paid labor is dearer as a rule than well paid. Two Englishmen 
 will mow as much hay as six Russians, and although their wages 
 are much higher, the hay costs the farmer only half as much. 
 Arthur Young saw that the Essex laborer was cheaper at half 
 a crown a day than the Tipperary laborer at 5 pence. This is 
 still true of Irish labor outside Ulster and the Dublin Pale ; capi- 
 talists pay less for it and yet find it at least no cheaper. The Ediri' 
 hurgli Review denies that labor is cheaper on the Continent than 
 in England in spite of the difference in wages, and Mr. J. S. Mill 
 says " the cost of labor is frequently at its highest when wages 
 are lowest.^' He says that labor is probably no dearer in the 
 United States than in England. When the Revolution of 1848 
 banished the English navvies who were working on the French 
 railroads, it was found that twice as many Frenchmen could not 
 do the work. But when these had been put for a while on the 
 beef diet of the English navvies, they came up to the English 
 standard, and two could do almost as much as five had done. 
 
 § 127. It is not only through the growth of the laborer in 
 thrift and skill that his condition is bettered. All the accumula- 
 
THE LAW OF DISTRIBUTION. 125 
 
 tions of capital in other men's hands coiiperate to make his 
 work more eflScient and to secure him a larger share of its re- 
 wards. All the work that has been done already adds to the 
 value of the work that he is now doing. Hence, in the course 
 of natural development, the power of labor over the accumula- 
 tions of the results of past labor, grows with the growth of those 
 accumulations. Past work never brings market price, because 
 its very existence makes present work more effective than it 
 was. "The share assigned to the laborer almost always bears a 
 much larger proportion to his labor than his employer's share 
 bears to the labor which his capital represents " (W. T. Thorn- 
 ton). 
 
 The price of a thing being fixed by the cost of its repro- 
 duction, every improvement in the methods of production lowers 
 the price of what has been already produced. Suppose that any 
 European kingdom or American state were brought into the 
 market as a whole, it would sell for the sum needed to bring it 
 up to its present state of improvement in the present condition of 
 labor. Such a sum would represent a mere fraction of the labor 
 that actually was required in its past history to do the same 
 work. Thus the worth of the fee simple of the real estate of 
 England (including roads and mines) is reckoned — or was a few 
 years ago — at £2,000,000,000. This represents much less than 
 the labor of five million men for ten years at present English 
 rates; yet it would purchase the results of the labor of millions 
 spread over the thousand years through which the English 
 nation has lasted (§ 102), because it would now achieve as much 
 as those millions did. Value is not determined, therefore, by 
 the cost of production, but by the cost of reproduction, and 
 with every improvement in method, and even with every ac- 
 cumulation of results, the latter falls below the former. 
 
 With the growth in the productive power of labor, an in- 
 creased proportion of the increased product falls to the laborer. 
 The improved instruments with which he works are themselves 
 the products of more efl5cient labor ; their value has fallen while 
 »is has risen. The capitalist cannot demand as much for the 
 
126 ELEMENTS OF POLITICAL ECONOMY. 
 
 use of them as before ; the workman's ability to become himselt 
 a capitalist has increased, and that ability is one of the points 
 to be considered in their contract. The capitalist's share in- 
 creases greatly in quantity, but is a less proportion of the whole 
 amount. For with the diminution of nature's resistance, the 
 whole dead stock employed in production declines in value while 
 man^s value rises, as he is by all these changes the master of 
 larger utilities. The power of his labor to command the service 
 of capital rises ; that of capital to command his labor declines ; 
 the inequality of laborer and capitalist tends to disappear. 
 
 The Italian economist Ferrara in the introduction to the twelfth volume 
 of the Bihlioteca degV Economisti (Turin, 1852), says of this definition: 
 " Carey [in 1837], and after him Bastiat [in 1850], have introduced a 
 formula a posteriori, that I believe destined to be universally adopted j 
 and it is greatly to be regretted that the latter should have limited him- 
 self to occasional indications of it, instead of giving to it the import- 
 ance so justly given by the former. In estimating the equilibrium between 
 cost to one's self and the utility to others, a thousand circumstances may 
 intervene ; and it is desirable to know if there be not among men a law, a 
 principle of universal application. Supply and demand, rarity and 
 abundance, etc., are all insufficient and liable to perpetual exceptions. 
 Carey has remarked, and with great sagacity, that this law is the labor 
 saved, the cost of reproduction — an idea that is, as I think, most felicitous. 
 It appears to me that there cannot arise a case in which a man shall 
 determine to make an exchange, in which this law will not be found to 
 apply. I will not give a quantity of labor or pains, unless offered in ex- 
 change«for a utility equivalent, and I will not regard it as an equivalent, 
 unless I see that it will come to me at less cost than would be necessary 
 for its reproduction. I regard this formula as most felicitous, because, 
 while on the one hand, it retains the idea of cost, which is constantly 
 referred to by the mind, on the other it avoids the absurdity to wb'cli we 
 are led by the theory, which pretends to see everywhere a value equivalent 
 to the cost of production ; and finally it shows more perfectly the essential 
 justice that governs all our exchanges." 
 
 § 128. In regard to the quality and the rewards of labor, 
 therefore, the same law of progress holds as in regard to food 
 and land. As society advances in numbers and wealth, there is, 
 unless bad economy prevent, a constant progress from worse to 
 better. With the growth of wealth and of numbers, the power 
 of combination increases, with great increase in the productive- 
 ness of labor and the power of accumulation. 
 
GREAT AND PETTY INDUSTRY. 127 
 
 What are the chief forms of bad economy that prevent the 
 laborer from profiting fully by the growth of society ? 
 
 (1) When the steps in the progress of improvement are very 
 sudden and great, a considerable amount of suffering is often 
 inflicted ; but this is temporary and, to much greater extent 
 than is commonly supposed, can be avoided. The introduction 
 of labor-saving machinery is an instance of what we mean ; a 
 much more striking one was the transition during the last 
 quarter of the eighteenth century from hand to steam power, 
 and from the workshop to the factory system. 
 
 The old school-books used to tell us that " it takes ten men to 
 make a pin." But since that day an inventive mechanic has 
 put together a machine that only needs to be fed with wire, 
 well oiled and supplied with steam-power, to turn out complete 
 pins, sort them, and even thrust them into the papers in the 
 right numbers and in straight rows. What is to become of the 
 ten pin-makers ? In any community in which industrial progress 
 is constant, there will be openings for their work. Even Mr. 
 Mill, who believes that such inventions have not "lightened the 
 toil of any human being," admits that "they have enabled a greater 
 number to live the same life of drudgery and imprisonment." 
 Why is this the result? Because pins made by the new process 
 are so much cheaper than before, that the demand for them is 
 greatly enhanced, and when this demand has reached its natural 
 height the whole number of persons employed in the manu- 
 facture (including miners, machine-makers, engineers, &c.) is 
 greater than it was before. As the money then needed to buy pins 
 for a family is much less than it was, there is something left 
 to buy other things, and to pay the men who produce them. 
 
 Furthermore, machinery supersedes muscle but not brains, 
 force but not intelligence. It drives men from low-priced, 
 mechanical work, to employments that demand a higher capacity 
 and command higher pay. Increasing the productiveness of 
 labor, it increases also the workman's share of its results. And 
 this share is not to be conceived as lying idle in the hands of those 
 that earn it. It is again expended in employing other workmen 
 by purchasing necessaries and comforts. 
 
128 ELEMENTS OF POLITICAL ECONOMY. 
 
 The change in methods of work (by its demand for adaptive- 
 ness), and the quality of the new kind of work, both demand a 
 large measure of intelligence in the workman. The amount of 
 suiFering and privation involved in such a change, is exactly 
 proportional to the ignorance and general backwardness of the 
 working classes. For this society is directly responsible. 
 
 § 129. The transition from industry organized on a small scale 
 to the larger industry of the factory system was begun in Lan- 
 cashire in 1790 by Richard Arkwright, and has been one of the 
 greatest of industrial revolutions. It grew naturally out of the 
 invention of the steam-engine, and the application of a power that 
 moves a hundred looms or spinning jennies as easily as a score. 
 It has introduced the precision and effectiveness of military dis- 
 cipline into industry, divided labor more thoroughly, assigned to 
 every workman his position, and reduced the loss of time and 
 of material to a minimum. It thus rendered the labor of the 
 workman far more productive than when he wrought in isolation, 
 flinging the shuttle and tramping down the treadles by the force 
 of his own muscles. It consequently increased the wages of 
 his industry, while it diminished the value of all manufactured 
 goods. The transition to the industry of the factory did not 
 begin in the United States till the second decade of the present 
 century, but since that date the wages of workmen have been 
 doubled, and that of workwomen trebled, while the purchasing 
 power of both has advanced at a still swifter rate. 
 
 It may be questioned, however, whether the change was not 
 more sweeping than it need have been if the working classes 
 had been fully alive to their own interests, — and therefore more 
 injurious, temporarily, to their interests. Large intelligence 
 and large capital went together in effecting the change. It 
 was assumed on all hands that the steam-engine can only be 
 employed with economy as the motive power of a large estab- 
 lishment, which experience shows to be untrue. Small em- 
 ployers shared in the prejudice of their workmen and the 
 uneducated generally against the new invention. Instead of 
 accommodating themselves to the logic of facts, they resisted 
 
VARIED INDUSTRY RAISES WAGES. 129 
 
 the change, and were swept into the large factories by the force 
 of circumstances, before they knew. The restoration of petty 
 Industry in a new form, with all the advantages of discipline, 
 intelligence and machinery, is one of the most desirable of 
 changes in the future. 
 
 § 130. (2) A French workman has well said that " when 
 two workmen run after one master, wages fall ; they rise when 
 two masters run after one workman." Had he said "two sorts 
 of masters," it would have been even truer. " There is rarely 
 competition for labor within a trade in a particular place, unless 
 there be competition for it from without'^ (Leslie). The more 
 openings there are for the laborer to invest his capital (which is 
 his labor), and for the capitalist to invest his (which is the accu- 
 mulation of past labor), the better each will be remunerated. 
 Hence the connection between varied industry and fair wages, as 
 well as fair profits. In any country (or even district) in which 
 that is wanting, labor will be but poorly paid, and especially so, if 
 agriculture is the only pursuit open to the great body of the 
 people. Furthermore, that form of industry, as a rule, furnishes 
 employments that are suited only to able-bodied men, and con- 
 sequently, if there be not a fair admixture of manufactures, 
 those who are not equal to hard, out-door work, are left 
 dependent upon those who are. With the rise of a varied in- 
 dustry, the number of workers rises to a maximum, that of idlers 
 sinks to ajninimum. A field sown with various sorts of grass 
 seed yields a larger crop than if one kind only be used, because 
 each finds special nourishment in some single element of the soil; 
 and so is it with the employment of all the elements of in- 
 dustrial power. 
 
 In later English history^ the manufactures have become con- 
 centrated in London and in the midland and northern shires. 
 Between 1770 and 1850, wages rose 66 per cent, in the twelve 
 northern shires and 100 per cent, in Lancashire and the West 
 Riding of Yorkshire : in eighteen southern agricultural shires, 
 only 14 per cent., although food and cottage-hire were far 
 dearer. In the former two sorts of masters run after one work- 
 9 
 
130 ELEMENTS OF POLITICAL ECONOMY. 
 
 man ; in the latter the growth of population has no outlet save 
 in farming; local capital, of which labor is the most perishable 
 form, has no other investment, and two workmen run after one 
 master. In Ireland the principle is seen still more clearly. The 
 south is now not over populated, but under populated ; whole 
 districts are desolate and idle ; yet nowhere are wages above 
 eight shillings a week, though food is nearly as dear as in 
 England, to which everything is now carried. In the north, 
 the eastern three counties have a very different rate of wages. 
 *' T' ^hat vast system of manufactures, which now stretches over' 
 several counties, it is around towns in which population has 
 doubled in half a generation, that agricultural wages are high- 
 est" (Leslie). The north, from the first days of the Ulster 
 plantation, has had two sorts of employers running after every 
 workman. 
 
 § 131. (3) Laws made in the interest of the upper classes 
 very greatly interfere with the well-being of the working classes, 
 especially the farm-hands. Till very recently the right of the 
 workingmen peaceably to combine to secure higher wages was 
 denied and its exercise punished on both sides of the Atlantic^ 
 although no law forbade the employers to combine in depressing 
 wages. Till very recently the treasurer of a Trade's Union in 
 England might rob it with impunity; the law would not punish 
 him. The Unions were outlawed, though their members since 
 1824 were not. 
 
 Laws not made for any such purpose have often been perverted 
 in their application to the great injury of the working classes. 
 Thus under the old English poor law, the farmers in many dis- 
 tricts by combined action beat down their workmen's wages to 
 such a point, that the latter were forced to " come upon the 
 parish," by asking relief as out-door paupers. The guardians 
 were required by the law to find them work, which they did by 
 supplementing their wages up to the point required for their 
 subsistence. Thus able-bodied men, who fairly earned a living, 
 were degraded to the rank of paupers in order that the whole 
 jjomnauQity might be forced to contribute to the farmer's profits.l 
 
LAWS AGAINST LABOR. 131 
 
 " He was virtually able to put his hand into the pockets of the 
 neighboring rate-payers to make up the deficiency to those whom 
 he employed" (Fawcett). The consequences were most disas- 
 trous; the spirit of the people was broken, and pauperism 
 increased so vastly that it absorbed in some parishes more than 
 half the rent of the land. In some cases the land was actually 
 ofi'cred to the paupers to till for themselves and refused; they 
 preferred to live on alms. Could there be a worse economy of 
 the wealth-producing forces of a nation than the destruction of 
 the thrift, the self-respect and the hopefulness of the con^ 'on 
 people ? 
 
 § 132. The method of prison discipline commonly adopted in 
 this country tends to do injustice to the working classes. In order 
 to make the prison self supporting, the labor of the prisoners is 
 hired out to a contractor, or some industry is practised by the 
 prisoners, and its products sold for the benefit of the State. In 
 either case the tendency of the system is to force down the wages 
 of the free workman. The State cannot brins: its bondsmen 
 into the labor-market either directly or indirectly in such a way 
 as to secure the full market price of their work. No man will * 
 hire convict-labor except on terms specially favorable to himself. 
 No State can dispose of the articles made by convict-labor except 
 at lower rates than are usual for such goods. There is no objec- 
 tion to making convicts work ; on the contrary, every one recog- 
 nizes the usefulness of work as a moral discipline. But the work 
 should be in the production of articles needed for the prison's 
 use. In this way the prison should be directly self-supporting 
 by supplying all its own wants of food, clothing, furniture and 
 the like. • 
 
 § 133. (4) The disproportionate outlay of the workingman's 
 savings upon objects of luxury, instead of a wise saving, is 
 justly alleged as a cause of misery to the class. Thus the ex- 
 penditure upon spirituous liquors is a heavier tax upon the 
 earnings of the laborer than all others put together. But the 
 remedy and therefore the responsibility of this state of things 
 is partly with society at large. It is in the improvement of the 
 
132 ELEMENTS OF POLITICAL ECONOMY. 
 
 homes of the poor, and in furnishing them with mental resources 
 and proper places of resort. So long as the gin-shop and the bar- 
 room are to the modern workman what the church was to the 
 peasant of the Middle Ages, viz. : the only clean, warm and 
 well-lighted room that he is welcome to visit in his hours of 
 leisure, — so long will he go to them. " The main exciting 
 cause of drunkenness is, I believe, bad air and bad lodging" 
 (Chas. Kingsley). Alcohol is sought as the only accessible 
 relief from the physical prostration and mental depression that 
 bad habits of living produce. Drunkenness was once universal 
 in the highest classes of society; "drunk as a lord'* was an 
 English proverb. It has decreased, no doubt with the growth 
 of habits of personal cleanliness, and with a larger intelligence 
 as to the conditions on which good health may be enjoyed. 
 
 In some parts of Sweden they have eflFected a thorough reform of the 
 tavern, without attempting to abolish it. The right to sell liquor in a 
 district is put up at auction by the government, and bought in by an 1 
 association of the friends of temperance. They open the number of ' 
 houses that the law prescribes and at the legal hours only. They sell 
 other drinks and food as well as pure liquors, and allow of no solicita- 
 tion to purchase the latter. No person who has had " enough " can get _ 
 any more. The association furnish pleasant rooms to which the work- ll 
 ingman can invite his family, and provide books and periodicals. The 
 proceeds, after paying all expenses, go to local charities. 
 
 The diflFusion of education will both directly and indirectly 
 work to the same end. When this has multiplied the number 
 and elevated the character of his enjoyments, the workman will 
 no longer seek happiness in sordid physical gratifications. Per- 
 haps he will then come to learn — as no class has yet learned 
 — ^the vast importance of the way in which a people dis- 
 poses of the small surplus left it, after the necessaries of life 
 have been provided. Everything that impoverishes mind and 
 heart tends to increase the outlay upon articles of false luxury 
 which are rather hurtful than helpful. 
 
 § 134. (5) Grrave injuries have been inflicted on the laboring 
 classes by the conflict between labor and capital. In the absence 
 of any knowledge of the essential harmony of their interests. 
 
 I! 
 
 
trades' unions and their strikes. 133 
 
 or at best from the notion that the interests of the "workmen 
 were consulted by keeping down wages to the n.;itural level, 
 English employers, with the approval and support of English 
 economists, have striven to get their work done at a minimum 
 rate of wages. The workmen, finding individual resistance use- 
 less, organized for combined effort, and fixed rates of wages for 
 their respective trades. Their right to associate and to refuse 
 to work for less than this seems plain enough, but the governing 
 classes denied the right, and treated these Unions as unlawful 
 conspiracies. Being thus put out of the pale of the law, the 
 Unions unhappily, but not unnaturally, fell into lawless methods 
 of securing their ends. They had the right to use all persuasive 
 methods to induce those who did not belong to the Union and 
 comply with its rules, to become members, and failing in that 
 to refuse to work in the same shop with them. But they went 
 beyond all lawful limits to force outsiders into membership, and 
 to force them from work during " strikes," as thnj called the 
 temporary suspension of work intended to force masters to raise 
 wages. " Rats," as these outsiders were called, had their tools 
 destroyed, their persons assaulted, their houses attacked, some- 
 times by explosive substances ; and in a number of cases their 
 lives were taken. 
 
 It is a question whether the Trades' Unions have accomplished 
 the ends of their organization. The figures presented by Mr. 
 Thornton in his work on Labor seem to show conclusively that 
 they have ; that the hours of labor have been reduced, and that 
 rates of wages that would never have been attained without com- 
 bined action, have been thus secured, and that the end of the 
 process is not reached. This indeed is contrary to the teachings 
 of English economists that there is a limited wage fund subject 
 to the demands of labor, and that the average share of each 
 workman can only be increased by reducing the number of 
 claimants or increasing the fund. " Workmen are solemnly ad- 
 jured, in the name of political economy, not to try to get their 
 wages raised, because success in the attempt must be followed 
 by a fall of profits, and bring wages down again. They are en- 
 
134 ELEMENTS OF POLITICAL ECONOMY. 
 
 treated not to better themselves, because any temporary better- 
 ing must be followed by a reaction that will leave them as ill off 
 as before." " To go on reasserting that unionism does not raise 
 wages, and that to all appearances permanently, would now-a- 
 days be running too completely counter to every-day experience. 
 To assert that it cannot raise them, is the utmost extent to which 
 any but the hardiest theorists still venture to go" (Thornton). 
 True it is that strikes have frequently, perhaps in a majority 
 of cases, ended with a victory for the masters; but the very 
 rise in rate thus successfully refused has been almost always 
 conceded afterwards to prevent a renewal of the strike; and 
 the gain thus made, when the aggregate of increase is com- 
 puted, has been such as to cast into the shade all the sacrifices 
 and losses incurred during the strike. 
 
 § 135. Trades' Unions* strikes need not succeed if the masters 
 would unite as closely and cooperate as heartily as the men. 
 As a rule the employers are taken in detail. The strike for an 
 advance is made in a few establishments, and those that it throws 
 out of work are supported by the members of the Union at work 
 elsewhere. Succeeding in these establishments, they then make 
 the same demands in other quarters, and with the same result. 
 
 -Strikes have utterly failed in a few cases, where the masters 
 throughout a whole trade have at once discharged all members 
 of the Union, thus retaliating by what is called a " lock-out." 
 But as a rule the employers of labor have not the means of 
 effecting close association, that their workmen possess. Busi- 
 ness makes them rivals ; they are often blindly exulting in the 
 embarrassment of a brother capitalist, when they might well 
 read in it a prophecy of what is coming on themselves. Nor 
 have they any of the vigorous class feeling and opinion, which 
 enables the workingmen to compel unwilling associates to fall 
 into line. 
 
 § 136. These Unions, originating in England about half a 
 century ago (at first merely as Benefit Societies, which most of 
 them still are), have spread into France and Germany, and the 
 United States. They were brought across the ocean by English 
 
THE RESTORATION OP HARMONY. 135 
 
 and Welsh operatives, attracted to our shores by the superior 
 advantages possessed by our working classes. They are still an 
 exotic on our soil ; their strikes are generally in the hands of 
 persons of foreign birth ; they have never attained the complete- 
 ness of organization and the effective management that character- 
 ize those of England. This is due to the fact that there is 
 really no such need of them in a country vphere every man can 
 leave the workshop and become a farmer if he will; where the 
 supply of skilled woj;kmen generally falls far below the demand ; 
 where the utmost freedom of association co-exists with the habit 
 of spontaneous action ; where wages are steadily and materially 
 advancing; where public sentiment gives no support to the doc- 
 trine that low wages are best; and where social and political 
 prestige is rather on the side of numbers, than on that of wealth 
 and the capitalists. They have unquestionably checked the 
 growth of some of our industries by limiting too much the 
 number of persons who may be admitted as apprentices, a rule 
 that does far more mischief in a rapidly expanding country than 
 in one that is nearer the limit of its industrial capacities. But 
 after all, it must be borne in mind that united action is in many 
 cases the best and most effective means for labor to secure fair 
 terms in dealing with capital ; and that there is in the Trades 
 Union itself, apart from the outrages sometimes perpetrated in 
 its name, nothing to call for reprobation. 
 
 § 137. Labor and capital in conflict are in an unnatural state ; 
 harmony is their true relation. For reasons already given, 
 capital finds its account in the cheerful service of labor, not in 
 its discontent. To labor, capital is a benefactor in the highest 
 sense ; were the whole class of capitalists with all their accu- 
 mulations to be annihilated, labor would be reduced to indigence 
 and a struggle for existence more severe than can easily be con- 
 ceived. The capitalist is the captain of industry, who takes 
 the unorganized mob of men, drills it into a disciplined army, 
 supplies them with weapons, ammunition and a commissariat, 
 and leads them to industrial conquests. He is able to do so be- 
 cause he has accumulated instead of merely consuming; his 
 
136 ELEMENTS OF POLITICAL ECONOMY. 
 
 right to his million rests on exactly the same ground as the 
 workman's right to his week's earnings. 
 
 By what method to restore a lasting harmony between the 
 two, is a great question of the day. The first and simplest 
 method is by arbitration. Where it is possible to obtain referees, 
 in whose impartiality and intelligence both parties have confi- 
 dence, and where both are ready to submit their case, disputes 
 are easily settled and harmony restored: The ordinary courts 
 of justice are not available for the purpose, i)ecause they cannot 
 adjudicate the terms of contracts not yet made^ and because the 
 judges have no special acquaintance with the matters at issue. 
 The establishment of tribunals of arbitration chosen from both 
 masters and men, with the sanction of government, has been 
 ^ccessfully tried in England, and these have put an end to 
 several recent strikes and lock-outs. Something like these, 
 though more official in their character, were the Conseils de 
 Prudhommes of mediaeval France, which were revived by Na- 
 poleon I. in 1806 ; but the latter are rather government courts 
 of selected experts to decide legal issues. 
 
 § 138. A second solution is ofi'ered by the system of coopera- 
 tion^ whose advocates would abolish the conflict between capitalist 
 and laborer, by uniting the two functions in the same persons. 
 They would have workingmen unite their savings to establish a 
 workshop of their own, to be managed by foremen of their own 
 selection under rules adopted by the whole body. 
 
 Instances of this industrial method are to be found very early 
 in our own country. The Greek merchant marine is based on 
 the same principle, and it has secured, through the zeal and 
 energy of its sailors, nearly the monopoly of the carrying trade 
 in the Mediterranean. But the first proclamation of the method 
 as a means to revolutionize industry and commerce was made by 
 the socialist Robert Owen, His design was to set up coopera- 
 tive stores rather than workshops ; to abolish the profits of 
 middlemen rather than to get rid of the wages system. About 
 1824-30 many societies were formed on this basis to make 
 " every man his own shopkeeper.^' The most successful was the 
 
CO-OPERATIVE INDUSTRY. 137 
 
 " Rochdale Equitable Pioneers," organized in 1844. The politi- 
 cal troubles of 1848-50 called attention to this method and to 
 successful applications of it to industry in France. The Christian 
 socialist party (F. D. Maurice, Chas. Kingsley, Thos. Hughes, 
 J. M. Ludlow, &c.) urged its general adoption as a remedy for 
 the deadly competition of the wages system. Every man was to 
 be his own employer as well as his own shopkeeper. In spite 
 of many failures, cooperation has an honorable record of suc- 
 cesses to show in France, England, Germany, Spain and the 
 United States. 
 
 If considered as intended to supersede the wages system en- 
 tirely, co(5peration is open to serious theoretical and practical 
 objections. In the light of the true law of social progress 
 (§ 30^, it will be seen to be a decline in industrial organization, 
 when duties and functions that have been distributed among 
 several persons are united in the same person. It would be a 
 loss on all sides, were the captain of industry to cease to exist, 
 and were his functions to be vested in the whole body of work- 
 men. The singleness of purpose, the clearness of outlook, and 
 the energy that large industrial operations demand, could never 
 be brought into play by an association of workmen, or by dele- 
 gates chosen from their ranks and subject to their control. As 
 a rule, the possession of capital is itself the gauge of business 
 capacity, and of the power to organize and administer an estab- 
 lishment. To exclude those who possess these from their 
 present position, would be to deprive industry of its natural 
 and trusted leaders. Now if cooperation were to become uni- 
 versal they would become mere money-lenders, or else their 
 capital would be entirely withdrawn from the sphere of produc- 
 tion, — a loss of the results of past labor that would be eminently 
 deporable. 
 
 In practice it has been found difficult to secure the right sort 
 of men to take the place at the head of cooperative establishments. 
 Men of the necessary qualificatidns are generally able to com- 
 mand their own price elsewhere, and are too well satisfied with 
 their positions to give them up to begin a mere experiment here. 
 
138 ELEMENTS OF POLITICAL ECONOMY. 
 
 And if they did, the estimate put upon their services by their 
 new associates is commonly much below their deserts, so that 
 they would soon be glad to go back to their old places. In 
 the absence of first-class men, it is commonly not the second 
 class that are chosen, but rather men of an inferior grade but 
 more showy qualities. 
 
 § 139. Less open to objection as a solution of the question is 
 the plan of industrial 'partnerships. In this, the proprietor of 
 an establishment agrees to pay his workmen the current rate of 
 wages, and also to distribute among them at the end of the year 
 all or part of the net profit above a certain percentage, say 15 
 or 20 per cent. This method identifies the interests of labor 
 and capital without confounding their functions. The men are 
 stimulated to do their utmost, — to avoid all waste as tending to 
 diminish profits, and all careless work as injuring their market, 
 — and to keep each other up to the mark by the force of public 
 opinion. 
 
 This plan also is no novelty in our own country. Thus in 
 Albert Gallatin's Grlass Factory (established in 1791 at New 
 Geneva, Pa., being the first west of the Alleghenies), every 
 workman had a direct interest in the profits, besides regular 
 wages. The whale fishery and the China trade were managed 
 on the same principle. It was first urged upon the attention of 
 Europe by Charles Babbage in his Economy of Manufactures 
 (1829). A Parisian house-painter, after making trial of the 
 wages system in 1842, took his workmen into this limited sort 
 of partnership, with moral and financial results that attracted very 
 great attention, and led to its imitation by a considerable-number 
 of establishments in France and not a few in England. It has 
 been found that the plan restores thorough good feeling between 
 masters and men, where the worst irritation has existed for 
 years ; that it makes the workmen eager to adopt improved 
 methods, which they would previously have resisted to the utmost; 
 that it diminishes the amount of drunkenness and thriftlessness, 
 and reduces to a minimum the number of holidays spent in 
 dissipation ; that it creates a vigorous public opinion against eye- 
 
INDUSTRIAL PARTNERSHIPS. — CREDIT BANKS. 139 
 
 service and waste, and leads men to pride themselves upon giving 
 good work for their wages. In some cases the amount of profits 
 reserved to themselves by the firm, was fixed at a higher percen- 
 tage than they had ever earned ; and yet at the end of the year 
 they had a surplus to divide with their workmen. 
 
 The plan has been adopted in a good number of American 
 establishments, but it may fairly be hoped that it will be ex- 
 tended to many more, as it seems to be the least objectionable 
 and the most effective of all the new solutions of the labor ques- 
 tion. Of course circumstances will demand manifold modifica- 
 tions of the principle. The number of laborers employed in 
 proportion to the capital invested, must determine what is the 
 proportion of the surplus that will fall to capital and labor 
 respectively. In case the business has suffered losses, it might 
 perhaps be both wise and just to recoup those losses out of the 
 profits of following years. All these details are open to 
 equitable adjustment at the start, or to arbitration as cases of 
 disagreement arise ; but the great thing is to get the workman 
 to feel that he is working for himself and has something to hope 
 for as the result of his skill and diligence. 
 
 § 140. Another modification of the principle of cooperation 
 is that introduced in Germany by Schultze-Delitzch. In that 
 country industry is not so generally organized on the grand 
 scale as is common in England, France and America ; a great 
 part of their workshops are very small establishments, often 
 managed by a single family. If these were to have their 
 materials at the lowest price they must buy them at wholesale to 
 save commissions ; to this end there were organized raw material 
 associations, that they might combine their capital for such pur- 
 chases. Then came the establishment of public bazaars by these 
 or similar associations, for the sale of their wares. But it was 
 found that these workmen had but little capital and no credit; 
 they could offer no sufficient security to induce the banks to 
 lend them even the small sums that they needed; for a working- 
 man's capital is his health and strength, and his death or serious 
 illness destroys it. But if the single workingman has no credit, 
 
140 ELEMENTS OF POLITICAL ECONOMY. 
 
 a large body of them organized on the principle of mutual 
 security would have credit enough ; if one or a few died or were 
 ill the rest would be the bank's security. Associations were 
 therefore formed to establish loan banks or people's banks, as 
 they are variously called ; and these banks make advances to 
 their shareholders on such terms as put them on an equality with 
 the rich. 
 
 The movement began in 1850. In 1872, after twenty-two years of slow 
 and steady growth, there were 442 assoeiations for purchase of raw 
 materials and sale of wares; 2220 banks to make advances to workmen. 
 Of these banks, 807 reported 372,742 members; loans, 359,519,200 thalers; 
 capital, 21,373,529 thalers; deposits and borrowed capital, 77,188,731 
 thalers. (A thaler is seventy-two and a half cents.) This group of 
 banks is connected with a central bank, which negotiates loans for them 
 in the money market. 
 
 § 141. The question of the rate at which woman's labor 
 should be paid, and of the employments that should be open to 
 her, is one of the living issues of our time, and must not be 
 passed over. 
 
 The rate at which she is paid is often alleged as an instance of 
 the power of custom, and unjust custom besides. For doing 
 exactly the same sort of work, it is said, and doing it quite as 
 well, she receives far less pay than a man does. Custom, no 
 doubt, has its influence here ; the more rapid advance of woman's 
 rate of pay seems to indicate as much. But there is reason as 
 well as custom for the difference. 
 
 (1) Men are more steady workmen than women are. The 
 latter, rightly or wrongly, all but a small minority, look forward 
 to marriage and the care of a household as their true career. 
 For this reason they do not concentrate their attention upon 
 their calling with the same singleness of eye as men show. 
 Nor have they, as a rule, the same power of continuous applica- 
 tion, although they have far more natural quickness. The 
 superintendent of the Elgin Watch Factory told me that the 
 women employed there learnt far more during their first fort- 
 night than men did ; but there they stopped, while the men 
 went on learning all their lives. 
 
wOxMan's work and wages. 141 
 
 (2) Through the limitation of the number of employments 
 open to women, they are driven to underbid each other for work. 
 By " employments open to women " are meant those that their 
 prejudices will allow them to enter, not merely those that are 
 fit for their sex to undertake. The position of household ser- 
 vant, for instance, is one that very few American-born white 
 women will now accept. Nor is it of any use to argue the ques- 
 tion, or to hold up the example of a few ladies of high culture 
 and slender purse; the position of direct control by an indi- 
 vidual will, that is bound by no rules save such as it extemporizes 
 from time to time, is become intolerable to them. They fly from 
 it to the store, the factory, the school-room, and finding all these 
 insufficient, they will sew for slop-shops and die of slow starva- 
 tion rather than go to the kitchen. German and Irish women, 
 and Chinese men, are the only material to be had to fill these 
 vacancies, to the varied discomfort of the mistresses of the 
 households. 
 
 The plan of cooperative housekeeping in cities and towns 
 offers a solution of the difficulty. By this, cooking would be 
 conducted in a large central establishment, under the manage- 
 ment of superior chefs^ and the purchases made by experienced 
 caterers under the direction of a committee of housekeepers. 
 This change would be in the same line as that which removed 
 the work of spinning and weaving from the list of household 
 duties ; it would cheapen living to both rich and poor, by 
 enabling wholesale purchases ; it would give an opportunity for 
 the application of scientific principles to the art of cooking; and 
 it would furnish congenial and well-paid work to a large per- 
 centage of the women now out of employment. Nor would it 
 be impossible to apply the same cooperative principle to other 
 parts of household work, and relieve the mistress of the family 
 from the necessity of depending on the services of a class, who 
 — with some exceptions — are certainly not improved and human- 
 ized by their position. * 
 
CHAPTER EIGHTH. 
 The Science and Economy of Money. 
 
 § 142. The progress of society from slavery and poverty and 
 isolation to freedom, wealth and association, involves not only a 
 progressive differentiation of its members and of their functions, 
 but also a constantly increasing interchange of services between 
 these. The more developed the society, the greater the inter- 
 dependence of its members, and the more numerous and rapid 
 these exchanges. With the solitary backwoodsman they have 
 no existence, and he must overcome nature's resistance and 
 master her utilities unaided. But when the country begins to 
 be settled, these exchanges begin ; if a town spring up, they 
 become more numerous and rapid ; if the town grow into a city, 
 the system of mutual service becomes complete. 
 
 These exchanges are at first effected by barter, or the direct 
 exchange of commodity for commodity. But a little experience 
 shows this process to be both awkward and wasteful. The 
 artisan might waste more time than he spent to produce his 
 commodity, in searching for a customer whose wants and pos- 
 sessions were the exact complement of his own. AVhere a single 
 article that varied in the value of its parts, such as the carcass 
 of a cow, had to be divided among a great number of customers, 
 the adjustment of values was nearly impossible. This led to 
 the setting apart some one commodity which should be the 
 representative of all estimable values, and should be the instru- 
 ment of these exchanges and therefore of human association for 
 mutual help. Cattle (peciis), being the first form of personal 
 property (pecuh'um or chattels), was first used as money (pecuma). 
 Afterwards silver, and probably somewhat later gold came into 
 use. The scarcity of these precious metals, and their eminent 
 fitness for making ornaments, had, doubtless, brought them into 
 general demand and caused them to be held at a very high price. 
 The transition to their use as money was gradual and natural. It 
 142 
 
COINED AND UNCOINED MONEY. 143 
 
 is impossible to trace the early history of their adoption. The 
 oldest historical records tell us that they were already in use, 
 though not yet coined, in the patriarchal age, — that is, at a time 
 when the family was still the largest social unit among peoples that 
 afterwards played a part in ancient history. The first coins were 
 in the form of animals, as indicating that they were substitutes 
 for cattle. Afterwards they were coined in small, flat masses of 
 equal weight and a recognised degree of purity, with an image 
 and superscription, which now give these pieces a great historical 
 interest. 
 
 Money is therefore the instrument of exchange and of asso- 
 ciation. It is more usually defined as " the instrument of 
 exchange and the standard of value." In a popular, not a 
 scientific sense, it serves as an instrument for the comparison 
 of values. But as value is the measure of nature's power 
 over man, and as money, like every other commodity, falls in 
 value with the growth of that power, it. is more scientific to 
 regard labor as the standard of value, that being the means by 
 which nature's resistance is overcome. It is true that in setting 
 aside any commodity for use as money regard is had to its com- 
 parative fixity of value. This is the consideration which deter- 
 mined the selection first of cattle, and then of the precious metals. 
 But neither these commodities nor any other possess that fixity 
 which entitles them to rank as scientific standards alongside the 
 standards of weight and measure. 
 
 This usual definition errs also by defect. Money is the instrument 
 of association as well as of exchange. The absence of it tends 
 to isolate menj to prevent the formation of industrial relations 
 among them, and to keep labor down to an unproductive level. 
 Its abundance enables the organization and drill of the industrial 
 ►forces, and the direction of their energies to the best purpose. 
 
 Association is the largest fact in economic experience. It is 
 the exchange of services not only within the range of contract, 
 but among millions who never see each other. The payment of 
 two cents for a morning newspaper brings its purchaser into as- 
 sociation, to that extent, not only with the people actually engaged 
 
144 ELEMENTS OF POLITICAL ECONOMY. 
 
 in its editing, composition and press- work, but with paper-makers, 
 ink-makers, miners, lumberers, telegraph-agents and so forth. 
 
 § 143, The adoption of any form of money as the instrument 
 of association and exchange was a clear advance upon barter. 
 In barter every commodity discharges two functions at the same 
 time ; it is both goods and money. In the new method of ex- 
 change the two functions are separated ; money and goods 
 become separate things. Nor is a vast amount of material 
 thereby withdrawn from other uses : a very small amount of 
 money suffices to effect a very large number of exchanges, and 
 no country needs anything like as much money as it has pro- 
 perty ; it might as well have wagons and railroad carriages ' 
 enough to convey all its movables at once. Very much of its 
 property never changes hands, except by inheritance; a still 
 larger amount not once in a long series of years. At most a very 
 small amount changes hands in the course of a single day, and 
 there is no use for as much money as will represent this amount. 
 The same sum (be it coin, or notes, or credit represented by a 
 check) may be used repeatedly in the same day, and thus dis- 
 charge many times its own amount of indebtedness. The most 
 perfect money is that which changes hands with greatest 
 rapidity j the more rapid its circulation the greater its useful- 
 ness. " The proportion borne by money to commerce decreases 
 in advancing societies" (Carey), and by consequence its rate of 
 interest, or the price paid for the use of money, falls with every 
 advance in its usefulness. Brutus got fifty per cent, a year; 
 Rothschild will lend at four. 
 
 The precious metals have many qualities that fit them for use 
 as coined money. They are not liable to rust; they are easily 
 alloyed with baser metals and as easily separated ; they receive 
 a stamped impression easily and retain it firmly; they are not* 
 easily worn or abraded ; they are readily distinguished from 
 other metals. Their defects are their weight, their intrinsic value 
 as commodities, and hence the real loss of value by such abra- 
 sions as they suffer. So long as we use as money what possesses 
 a very considerable value for other purposes, and is liable, to be 
 
VALUE OF THE PRECIOUS METALS. 145 
 
 diverted to other uses, we cannot be said to have attained the 
 complete separation of the function of money from that of com- 
 modities. 
 
 That these metals should be used at all as monev is a matter 
 of convection or general agreement merely. But that conven- 
 tion once established, their value in circulation, like all other 
 values, is not conventional, but is determined by the cost of 
 reproduction. If, however, the general agreement to use them 
 as money were to cease, and they were to be demonetized, the 
 excessive supply for other uses would cause their purchasing 
 power to decline very greatly. Their intrinsic utility would, in- 
 deed, be more generally made use of, since they would be fai 
 more generally employed in the arts than at present, and in this 
 respect there would be a net gain to mankind in the change. 
 Their use — especially that of gold — as ornaments would cease 
 on this decline in price, and this would make them still cheaper. 
 However well fitted their color and brilliancy to attract the eye 
 and please the fancy of childish savages, the refined taste of 
 civilized man would cast them aside as barbarous. They still 
 hold their place in the toilet because they are " condensed 
 wealth, the trophies of industrial warfare," analogous to the 
 savage's string of scalps. Very few of the articles made of 
 them have any artistic merit. 
 
 § 144. They are difficult of reproduction, and therefore valu- 
 able, because they are scanty in supply and hard of access in 
 their natural deposits. Grold especially is found in very small 
 quantities, and to dig for it is — considering the number of per- 
 sons employed in it — the most unprofitable of human employ- 
 ments. It has the fascination of a lottery, in which a few suc- 
 ceed, but thousands fail. The Mexicans have a saying that he 
 who mines for copper will grow rich ; he who digs for silver may 
 or may not; he who seeks gold never will. Were it otherwise, 
 success would defeat itself, through the decline in the value of 
 its products. 
 
 These metals are, therefore, a very expensive instrument for 
 effecting exchanges. They require a vast outlay of capital, labor 
 10 
 
146 ELEMENTS OF POLITICAL ECONOMY. 
 
 and intelligence, that might otherwise be expended in producing 
 what would directly meet and satisfy the primal needs of hu- 
 manity. " It is a heavy price, and each ounce of gold repre- 
 sents so much labor withdrawn from agriculture and other indus- 
 trial pursuits, which minister directly to the comforts and 
 necessities of mankind." 
 
 See R. H. Patterson's Econoviy of Capital (1864). 
 
 These two metals do not circulate equally in all parts of the 
 world, nor is their purchasing power the same everywhere. 
 Since 1771 gold alone is " legal tender" for large payments in 
 England; i. e., is such an offer of payment as the creditor must 
 accept or forfeit his claim to interest. 
 
 At the beginning of our own government both gold and silver 
 were made legal tender, but owing to circumstances silver was the 
 metal chiefly employed. In 1834 the standard of our coinage 
 was changed from 1 : 15 to 1 : 16, thus favoring the use of 
 gold. Silver-using countries of Europe sent us gold in exchange 
 for our silver, thus effecting a profit to themselves at a loss to 
 us. In 1873 a law was passed, without much consideration, de- 
 monetizing silver; but in 1878 this law was repealed. Silver 
 was again made legal tender, and its coinage in limited quanti- 
 ties for government account was ordered. The law of 1873 was 
 prompted by the change which had taken place in Europe. In 
 1871, Germany, taking advantage of the large accumulation of 
 gold in her treasury through the payment of the French war-in- 
 demnity, determined to substitute that metal for the silver of 
 which her coinage had been made chiefly. A few of the lesser 
 states followed this example of demonetizing silver, and the 
 states of the Latin Union which still retain it in use have been 
 forced to suspend its coinage. Germany was moved to take this 
 step partly by the example of England, and partly by exagger- 
 ated reports of the productivity of our Nevada mines. She has 
 sustained serious losses in consequence of it, since she has not 
 been able to dispose of the silver which she called in, except at 
 a much lower price; and the knowledge that she holds large 
 
EFFECTS OF DEMONETIZING SILVER. 147 
 
 amounts for a rise in the market has tended to keep the market 
 depressed. Besides the discredit thus brought upon silver by 
 laws for its demonetization, its price has been affected through a 
 serious interruption of its outflow from the silver-producing to 
 the silver-using nations. Formerly the East India trade carried 
 to the East a large amount of surplus silver every year. But 
 since India became heavily indebted to England through loans 
 raised in England to pay for railroads and other public works in 
 India, the East Indian government has to meet the interest on 
 these bonds in London by large sales of exchange on Calcutta. 
 As a consequence the export of silver to pay balances of trade 
 due to India has been stopped, and this surplus accumulates in 
 Europe to the disadvantage of the holders of this metal. 
 
 It is generally recognized that this process of discrediting silver 
 by demonetization must come to an end, and several international 
 conferences have been held to secure its general restoration to the 
 coinage of the world. But thus far there has been no result from 
 these, as the nations which employ gold exclusively show no dis- 
 position to retrace their steps, and the others will not resume the 
 coinage of silver until they do so. 
 
 It is argued by the opponents of the restoration of silver that 
 the supply of that metal has been excessive and irregular for 
 years past, and that there is no reason to expect anything but a 
 continuance of this. The figures, however, show that the annual 
 product of gold and silver taken together is much more constant 
 and regular than is the product of either of them. It is also 
 said that silver having fallen below its former value, remonetiza- 
 tion would only result in flooding the world with a debased coin- 
 age. But the fall of silver is due, not so much to any increase 
 in the product, as to the cessation of the demand for it in the 
 mints of the world. A general agreement on the part of Europe 
 and America to restore the free coinage at the old ratio would 
 retrieve and maintain its price. 
 
 On the other hand, the continued demonetization of silver must 
 cause such a diminution of the supply of coin as cannot but re- 
 sult in the most serious disturbances to domestic and international 
 
148 ELEMENTS OF POLITICAL ECONOMY. 
 
 commerce. The mischief already done by demonetization cannot 
 terminate until other countries have been forced to abandon silver. 
 They cannot afford to go on using a metal which their neighbors 
 have discredited, and which they refuse to take in payment of 
 balances of trade. Their business, in so far as coin is necessary 
 to it, will have to be transacted by means of the very inadequate 
 gold coinage they possess or can procure. In Europe this will be 
 felt much more quickly and severely than in America, for the 
 present conditions of international trade and those we fairly may 
 expect for the future, tend to transfer to America a large part of 
 the gold supply of Europe. 
 
 In the East gold has never been a circulating medium ; China 
 will not accept it in payment for her teas and silks ; in India 
 irold mohurs are coined, but have never been leo-al tender. Dur- 
 ing the panic of 1866, Calcutta merchants offered 20,000/. in gold 
 at the banks, but could not obtain even bank notes in exchange. 
 To demonetize silver in the West would be to interpose a serious 
 obstacle to commerce with the East. This commerce is of im- 
 portance, as covering many articles to be found only in the East. 
 
 Cowries, a species of shell, are used in the native kingdoms of Central 
 Africa and some parts of India. Part of the land revenue of Orissa is 
 paid in them, at the rate of 6000 or 7000 to the rupee. Similar were the 
 wampum belts of our Indians. Carthage had a coinage of metal 
 enclosed in stamped leather; Sparta had an intentionally cumbrous one 
 of iron. Russia during the present century tried to get coins of plati- 
 num into circulation, but they were bought up and withdrawn because 
 of the too great variation in the commercial value of platinum. Copper 
 and bronze have been commonly used for coins of small value, "but lat- 
 terly an alloy of nickel and copper has been adopted by several of the 
 most enlightened nations as the best material for small coins. 
 
 § 145. The " precious metals" are often sp^en of as " the 
 standard of value," which is true only in a restricted sense. A 
 standard must remain the same, however other things change ; 
 and this is certainly not true of gold and silver. Their pur- 
 chasing power has been continually varying, generally declining, 
 as the natural deposits of their ores have been laid bare, and 
 the resistance of nature to those who searched for them haa 
 
THE VALUE OF GOLD VARIABLE. 149 
 
 diminished. Vast quantities of them were furnislied to Europe 
 by Spanish America from<ihe conquest of Mexico and Peru, 
 till the revolt of those colonies in 1810. During the thirty 
 years that followed, the supply was largely interrupted, and the 
 supply of money in other forms was hindered by restrictive legis- 
 lation. It was a time of great popular distress, and of em- 
 barrassment to the money markets of the world. Commerce 
 and manufactures were growing, but the instrument of ex- 
 change was nearly a fixed quantity. In 18-10 Russia began to 
 work the Ural mines: the gold discoveries in California (1848) 
 and in Australia (1854) came next. Since then the annual 
 increase of coined money has been nearly quadrupled, and a vast 
 extension of commerce and manufactures has followed through- 
 out the world. 
 
 While both the periods of increase have seen a decline in the 
 purchasing power of gold and silver, in neither of them has it 
 fallen in anything like the ratio of increase. Humboldt esti- 
 mates that in the eighteenth century there were thirty times as 
 much coin in circulation as in the fifteenth ; yet money had, on 
 the very highest estimate, only twelve times as much purchasing 
 power at the era of the Reformation as at present. When the 
 new flow of gold into Europe began, economists of the English 
 school (Chevalier, Cobden, etc.), predicted a rapid fall in its 
 value ; others of the same school (Cairnes, Jevons, etc.), claim 
 that this has been the case to some extent, say ten or fifteen per 
 cent. But even this much is not universally admitted. " We 
 haveueen," says R. H. Patterson, " three hundred million pounds 
 added to the general currency within fifteen years, with so little 
 effect that it is still doubted by many authorities whether there 
 has been any depreciation at all.'' A small depreciation seems, 
 however, to have taken place. 
 
 § 146. On the principles generally accepted by the English 
 school, and first enunciated by David Hume in 1752, the rate 
 of decrease in value should have been exactly proportional to 
 the increase in amount. He says that " the only influence which 
 a greater abundance of coin has in the kingdom" is " by 
 
150 ELEMENTS OF POLITICAL ECONOMY. 
 
 heightening the price of couimodities and obliging every one to 
 pay a greater number of these little -yellow or white pieces for 
 everything he purchases." He admits indeed a temporary effect 
 of quite another kind : " In every kingdom into which money 
 begins to flow in greater abundance than formerly, everything 
 takes a new face; labor and industry gain life; the merchant 
 becomes more enterprising, the manufacturer more diligent and 
 skilful, and even the farmer follows his plough with greater 
 alacrity and attention." 
 
 Mr. J. S. Mill applies the well-worn formula of demand and 
 supply to the subject in this way : " The demand for money 
 consists of all the goods offered for sale. . . . The money and 
 the goods are seeking each other for the purpose of being ex- 
 changed." Again : " If the whole money in circulation was dou- 
 bled, prices would be doubled; if it was only increased one-fourth, 
 prices would rise one-fourth." Mr. Mill does not appear to be 
 aware of the fact that all but a small percentage of purchases 
 are paid for by offset (checks, bills of exchange, etc.), without 
 the use of coin. 
 
 § 147. The element of truth in this mechanical theory is 
 separated from the falsehood in Mr. Patterson's statement : " An 
 addition to the currency of a country is not necessarily a benefit. 
 ... If the currency be doubled, while the productions of that 
 country and the demand for money remain as they were, the 
 double amount will do no more than the lesser one, — only all 
 prices, wages," rents, etc., will be doubled in amount. The 
 prices which a farmer or manufacturer gets for his goods will be 
 increased; but so also in similar proportion will be the amount 
 of his outlay in rent and taxes. It is like adding to both sides 
 of an equation. It would be a sheer waste of money. ... A 
 case like this, however, never occurs in the actual world." And 
 why ? Because in the actual world money is always drifting to 
 the nations whose industry and enterprise give it the highest 
 utility, — to the nations whose mcreased productiveness and in- 
 creased demand for money furnish a sphere of usefulness to the 
 increase, — to the nations whose worth, honor and intelligence 
 
MORE MONEY, MORE PRODUCTION. 151 
 
 make them the safest depositaries of the world's loose cash, 
 and thus the centres of credit. England has raised her coin 
 circulation to 150,000,000^., but her annual savings are between 
 a hundred and a hundred and thirty millions. The vast quan- 
 tities of the precious metals that flowed into Europe after the 
 discovery of America, may well, in the absence of new enter- 
 prises and industries to employ it, have had a different effect, 
 and produced '* a dearness of all things without a dearth of 
 anything." Europe — especially Spain — was industrially inert, 
 incapable of safely absorbing so large a quantity of the precious 
 metals, incapable of receiving the industrial impulse they would 
 most naturally have imparted. The lack of stimulating in- 
 fluence on a stagnant and stationary society is seen in India and 
 China, which absorb every year $50,000,000 in silver, only to 
 hoard it away. 
 
 § 148, The influx of money into a progressive country is one 
 of the most powerful promoters and increasers of production. 
 To money (as to labor) '^ time is money ;" whoever possesses 
 it must seek an investment for it, or lose the profits ; when it is 
 plenty, all sorts of productive work are stimulated ; labor is the 
 master of capital, and industrial enterprise gains a more than 
 proportionally larger return for its outlay, with every increase 
 of the outlay. Labor becomes more productive as the instru- 
 ment of association is more universally accessible. Its price rises 
 while that of commodities falls. 
 
 The drain of money away from a country does not make it — 
 as some have said — " a good place to buy in but a bad place to 
 sell in," — ^just the reverse. It makes it a bad place in which 
 to buy anything but special products of its soil or climate, 
 because although labor is cheap, the commodities produced by 
 labor are dear through its inefficiency. It makes it, therefore, a 
 good place for the sale of the merchandise of countries more 
 happily situated. " To him that hath shall be given." Money 
 tends to where money is ; start a shilling in circulation in Thibet 
 ot Central Africa, and the chances are that it will turn up in 
 London. It will do so, because the presence of great accumu- 
 
152 ELEMENTS OF POLITICAL ECONOMY. 
 
 lations of capital in England, have made English labor produc- 
 tive to a degree that outweighs all other considerations. 
 
 § 149. For the same reason, the money market in poor countries 
 always tends towards stringency. However great may have been 
 the recent supply, it is speedily drawn off into a thousand side 
 channels, and the main stream is diminished. The effect of this 
 is far more than proportional to the amount involved, for this 
 market is extremely sensitive. On the first intimation of a 
 scarcity, the rate rises, and they who must have money to pa^ the 
 current expenses of large establishments, or to meet their out- 
 standing obligations, are at the mercy of the lender. The cap- 
 tains of industry, and, through them, their laborers, are no 
 longer the masters but the servants of capital. 
 
 § 150. A second form of money, and one that is in many re- 
 pects superior to coin, is paper-money. It is open to none of 
 the objections that we have presented to the use of gold and 
 silver. It wears out sooner, indeed, but can be replaced at a 
 trifling cost ; its production withdraws no large portion of the 
 race from productive industry; its use abstracts from the arts no 
 substance of intrinsic value ; it circulates more rapidly than 
 gold because it represents great values by a smaller bulk, and is 
 easier of transfer. And when, as can be accomplished by wise 
 legislation, the public have security that the note is really issued 
 by the firm that it professes to come from, and that that firm is 
 able to meet all just demands upon it, the last objection to its 
 use is removed. If barter may be compared to the rude mode 
 of transportation on human backs, and coin to transportation in 
 carriages drawn by horses, paper-money is the steam-carriage, 
 whose use calls for larger precautions against danger, but whose 
 superior utility far outweighs that consideration. 
 
 The earliest form of pliper-money was the bill of exchange. 
 From a letter of Cicero to his brother Atticus, directing him to 
 obtain a sum of money at Athens, we learn that this or some- 
 thing equivalent to it existed in antiquity. It was reinvented 
 in the Middle Ages, not by the Jews, but by the Caursins, « 
 class of money-changers employed by the Papal See in the col- 
 
THE BILL OF EXCHANGE. 153 
 
 lection and transmission of its revenue from all parts of Europe 
 to Rome or Avignon. The Hanse towns adopted it, and it 
 passed into currency as one of the ordinary methods of com- 
 merce between distant traders. 
 
 By this plan a debtor in Hamburg, who wishes to pay his 
 London creditor, goes "on 'change" and buys of a discount 
 house a draft on London for the amount. This draft has pre- 
 viously been drawn by some Hamburg merchant upon his London 
 debtor, and sold by him to the discount house for a trifle less 
 than the market rate of exchange. This exchange is " in favor 
 of Hamburg " when drafts on London are plenty and sell for a 
 small percentage less than the " face value." It is " against 
 Hamburg " when the reverse is the case ; and unless the course 
 of exchange changes, some specie will in that case have to be 
 exported from Hamburg to London to restore the balance. 
 The amount of the discount or the premium on bills of exchange 
 can never be greater than the cost of transmitting specie, in- 
 cluding interest and insurance. By this method, it will be seen, 
 the debts of London merchants to Hamburg merchants are paid 
 by set-ofi" against the debts of Hamburg merchants to London 
 merchants, and the amount of money exchanged between the 
 two cities is reduced to a minimum. 
 
 § 15L The advantages of this plan are so great that the 
 advantage of something like it for the transaction of business 
 within each city was readily seen, and banks of deposit and 
 issue were established as early as the fifteenth century. The 
 first Italian banks, however, were mere associations of the public 
 creditors in each city for the joint care of their interests, and 
 when they became banks in the modern sense, they did not begin 
 the issue of paper-money, but dealt only in money of account, 
 which is yet to be described. The same is true of the banks of 
 Amsterdam, Hamburg, and Stockholm. By 1673 we find the 
 Bank of Genoa issuing bills of pretty large amount, which 
 passed into circulation for wholesale transactions. About the 
 same time the English goldsmiths began the practice of issuing 
 bills which circulated in the same way, and when in 1694 the 
 
154 ELEMENTS OF POLITICAL ECONOMY. 
 
 Bank of England, and in 1605 the Bank of Scotland, were 
 established, the issue of these bank-notes to those who bor- 
 rowed money was a feature of each institution. These were at 
 first "time-notes" bearing a low rate of interest^ and conse- 
 quently certain to be presented for redemption. Growing a little 
 bolder, the Bank of England issued demand notes that bore no 
 interest, and these passed rapidly into circulation, imparting a 
 vigorous impulse to all sorts of business. As the country really 
 needed these, it was almost impossible that any large quantity 
 of them could be presented for redemption at once, except in 
 cases of extraordinary panic. Of course the bank was enabled 
 to extend its discounts far beyond the amount of coin at its 
 command. For the bank did not — no bank could — keep on 
 hand specie enough to redeem its entire circulation. It was 
 sufficient if it kept as much as experience showed would meet 
 the largest ordinary demand for it. 
 
 Such was the genesis of the modern bank-note, which has 
 been one of the most powerful agents to promote and fertilize 
 industry. To establish a bank of issue in a community where 
 none has existed before, is to coin the mutual credit and confi- 
 dence of the people into available money. It is to bring men into 
 closer and more helpful association, by furnishing a new supply 
 of the instrument of association and of the exchange of ser- 
 vices. It is to put the means of industrial activity into the 
 hands of those captains of industry who will open avenues of 
 useful employment to the idle and the dependent. It is to 
 recall from distant banks, and to draw out of old stockings and 
 cash-boxes, the accumulated sayings of the community, and 
 make them doubly efficient in the promotion of local interests. 
 By adding to the rapidity of societary circulation it adds new 
 profits to every bargain, and gives a new efficiency to every blow 
 on the anvil, a new value to the crops in every field. 
 
 Sir Walter Scott says of the Scotch system of banks of issue : 
 " The facilities which it has afi"orded to the industrious and 
 enterprising agriculturist or manufacturer, as well as to the 
 trustees of the public in executing national works, have con- 
 
HOW TO MAKE BANK-NOTES SAFE. 155 
 
 verted Scotland from a poor, miserable and barren country into 
 one where, if nature has done less, art and industry have done 
 more than in perhaps any country in Europe, England not 
 excepted. Through the means of credit which this system 
 afforded, roads have been made, bridges built, and canals dug, 
 opening up to reciprocal communication the most sequestered 
 districts of the country; manufactures have been established, 
 unequalled in extent or success, — wastes have been converted 
 into productive farms, — the productions of the earth for human 
 use have been multiplied twenty fold, while the wealth of 
 the rich and the comforts of the poor have been extended in 
 the same proportion. And all this in a country where the 
 rigor of the climate and the sterility of the soil seemed united 
 to set improvement at defiance. Let those who remember 
 Scotland forty years since bear witness if I speak truth or false- 
 hood." 
 
 See "Malachi Malagrowther's" Letters on the Proposed Change in the 
 Currency (Edinburgh, 1826). 
 
 § 152, The community, in using the notes of the bank as 
 money, pass a vote of confidence in the general solvency. They 
 are authorizing the directors to monetize a small portion of the 
 capital of the neighborhood, that the utility of the rest and the 
 facility of its transfer may be increased. They are passing, at 
 the same time, a vote of confidence in the honesty and prudence 
 of those directors. 
 
 '' What security have we that the confidence thus extended 
 will not be abused ?" Two : (1) government inspection should 
 be continually exercised over every such institution, and should 
 extend to all the details of its management. Of course this 
 implies no publication of the bank's affairs, save when the re- 
 sults are such as to justify its dissolution. 
 
 (2) Under restrictions imposed by general laws, any number 
 of citizens should be as much at liberty to establish a bank as 
 to open a store to sell dry-goods. The profits of legitimate bank- 
 ing are always large enough to attract thither capital suflficient to 
 supply safely all the demand for paper-money and discounts. It 
 
156 ELEMENTS OF POLITICAL ECONOMY. 
 
 is only when the business is made a monopoly, and confined to a 
 small number of firms, that their limited capital is unequal to 
 the demand for money made upon them by the community. 
 The best guarantee for safety is freedom. 
 
 The supposed danger that over-issues are practicable, and 
 that they may not only bring the holder of bank-notes into a 
 position of risk, but also derange the whole market for money, 
 and with it all other markets, is in the main a mere bugbear. 
 Banks do not break down because their note circulation is too 
 large, but because the other departments of their business are 
 so badly managed that their notes, be they few or many, have 
 no guarantee behind them. A bank can ordinarily put into 
 circulation no more notes than the community needs. The 
 avenues of return are always more open to the public than those 
 of issue to the directors. But one class of English economists 
 have said "over-issue" so often that they are ready to stake 
 their reputation as financiers upon this theory, which is sustained 
 by no facts, and is disputed by the ablest men (Tooke, Ash- 
 burton, Fullarton, etc.) of their own school. " It was a pair of 
 spectacles which the Bullion Committee [of 1811] left as a 
 legacy to .the subsequent generation, and which became the 
 medium through which all our monetary difficulties were viewed. 
 The increase of the bank's issues to the extent of a million or 
 two above the ordinary amount, was held capable of producing 
 the most momentous consequences. It ' depressed the currency,' 
 and was the parent of our recurrent monetary crises. The up- 
 holders of this theory, it is true, never demonstrated by a refer- 
 ence to prices that the currency was depressed. They took 
 that for granted, and a good deal more besides " (R. H. Patter- 
 son). 
 
 § 153. The third and the most perfect form of money is 
 money of account. It possesses in a still higher degree all the 
 advantages that make paper-money better than coin. It passes 
 in circulation most rapidly ; it performs the vastest amount of 
 service in proportion to its amount; its use involves no loss by 
 wear ; its production is so nearly costless that its cost hardly 
 
THE BANKS OF VENICE AND GENOA. 157 
 
 enters into men's thoughts. As much as paper-money is less 
 material than coin, by so much is money of account less material 
 than paper-money. As we have compared coined money in its 
 efficiency and utility to a carriage drawn by horses, and paper- 
 money to the car moved by steam-power, so might we conceive 
 of money of account as a vehicle of transportation through the 
 air, moving with electric swiftness, and impelled by some of 
 those subtler physical forces whose mastery is yet to be achieved. 
 It is the money of civilization ; its use involves a degree of 
 intelligent insight into the true nature of wealth and of ex- 
 changes, and a strong confidence in the general honesty and 
 trustworthiness of mankind, that are impossible to the savage or 
 the half-civilized man. 
 
 Money of account originated in the commercial cities of Italy, 
 and its use was thence transferred to the great emporiums of 
 Northern Europe — Amsterdam, Hamburg and Stockholm. The 
 republics of Venice and of Genoa authorized their creditors to 
 establish banks on the basis of the certificates of the city's debt. 
 The Bank of Venice dates from 1171, when a forced loan was 
 raised to fit out a fleet • that the burden might be felt as little 
 as possible, the persons assessed were formed into a company for 
 protection of their common concern and the receipt of interest; 
 at the same time the debt was made easily transferable by order 
 on the company, and thus its use for the discharge of obligations 
 grew up naturally. At first it was a forced loan under special 
 guarantees ; then a desirable investment ; then a means of pay- 
 ment. The first eharactev of the deposits so entirely disappeared 
 that government ceased to pay interest on the capital. Then to 
 secure a uniform currency, it decreed that all wholesale transac- 
 tions should be paid in the form of a transfer of bank stock, 
 unless otherwise stipulated ; so that whoever had a box full of 
 coins, gathered from the four quarters of the earth through the 
 manifold channels of Venetian trade, took them to the bank to 
 get credit upon its books according to their weight and fineness. 
 The standard by which their value was estimated was called 
 " money of account," to distinguish it from the various moneys 
 
158 ELEMENTS OF POLITICAL ECONOMY. 
 
 that were translated into it. The government treated these 
 masses of coin as payment for the privilege of a credit on the 
 bank's book, and all idea of their repayment was lost sight of. 
 Yet for four hundred years, or until the conquest of the city by 
 Napoleon I., this money of account circulated freely, and was 
 at a premium (or agio) in coin ; trade proceeded with a rapidity 
 previously unknown j no Venetian ever raised his voice in com- 
 plaint of an institution which was the pride of the city and the 
 envy of Europe. When the French destroyed it, they found no 
 funds to reward them. 
 
 The Bank of Genoa originated in the same way, but differed 
 in some details of management, such as the issue of bank-notes. 
 The Bank of Stockholm owed its origin to the fact that copper 
 was the only coin in circulation in Sweden, and it was therefore 
 necessary to translate this into a more convenient form of money. 
 Hamburg and Amsterdam, the Genoa and Veniqe of the North 
 in the sixteenth century, were equally embarrassed by the various 
 weights and standards of the coin that flowed into their cities, 
 and established banks of deposit and transfer to translate these 
 into " money of account;" here also wholesale transactions were 
 required to be settled in the shape of transfer of bank credits. 
 As neither were based on government debts, and neither loaned 
 money, the expenses were defrayed by a slight charge to the 
 customers of the bank. Both cities reaped immense advantages 
 from the system, in the rapidity and ease with which money of 
 account passed from one person to another in effecting ex- 
 changes. The Bank of Amsterdam .failed in 1790, as it was 
 found that the funds on which its credit rested had been in part 
 abstracted by the Dutch government. That of Hamburg still 
 exists. 
 
 § 154. A bank in the modern sense is more than any of 
 these institutions was. It is a discount house, a firm for the 
 issue of paper-money, a place for dejyosit of money, a clearing- 
 house, and a branch of a larger clearing-house. It is the union 
 of all the earlier features of such institutions, with the addition 
 of others that grew out of the peculiar methods of modern 
 business. 
 
FOUR FUNCTIONS OP A BANK. 159 
 
 First, its discount business. A bank is an institution that 
 deals in credits by buying up debts, — that may be said to turn 
 debts into credits for a consideration called discount. Except in 
 the retail trade, the larger part of modern business is transacted 
 by means of ''mercantile paper." The buyer does not transfer 
 the amount due to the seller in coin or bank-notes. He gives him 
 a bill for the amount payable in (say) sixty or ninety days. 
 The seller cannot afford to do without the money for so long a 
 time. He wants to " turn over his capital " as fast as possible ; 
 he would rather give up a percentage of his profits and get the 
 money at ance. He takes it to bank to be discounted, after 
 making himself responsible for its payment by endorsing it. 
 If the directors are satisfied with the name of the endorser or 
 of the drawer, or of both, they let him have the money, minus 
 the interest for the time specified. When the time is up the 
 drawer of the bill must pay it, or if he fail its endorser must. 
 
 Second, its issue business. A whole or a part of the money 
 advanced to the bank's customer may be needed in such shape 
 as will circulate among all classes. If he be a contractor or a 
 manufacturer he is dealing with people who keep no bank ac- 
 count. He must, therefore, have moneywhich they can use, and 
 this the bank gives him, either in its own notes, or in those of 
 some other bank. In this way the banks put into circulation a 
 much larger sum in notes than their whole paid-up capital would 
 suflfice to redeem, and this with perfect safety to themselves 
 and great benefit to the community. 
 
 Third, its business as a clearing-house, which is the most 
 important of its functions. In most cases a customer of the 
 bank who has had a note discounted would find it very incon- 
 venient to be paid in any form of money ; he prefers a credit 
 to that amount on the books of the bank. That is, the bank 
 advances him a sum of money, and he at once "deposits" it 
 with the bank, and uses the credit thus obtained to pay his 
 debts by check, i. «., by the transfer of a portion of this credit 
 to the account of his creditors. A small percentage of checks 
 are drawn in money by their holders, but in most cases they 
 
160 ELEMENTS OF POLITICAL ECONOMY. 
 
 are paid simply by a transfer of credits. In this case the 
 " deposits '' on the bank's books become virtually part of the 
 currency, and constitute a vast fund of "money of account" 
 for the discharge of indebtedness. These deposits far exceed in 
 amount all other forms of money in circulation, and move with 
 greater raj^dity and exhibit vaster utility in effecting exchanges. 
 The deposit fund continually tends, indeed, to diminish in volume 
 through the discounted notes maturing and being paid, as well 
 as through the payment of depositors' checks; and it is only 
 kept up through fresh deposits of cash or fresh discounts. When 
 the demand for these discounts is not great, or the directors are 
 hopeful and confident, the rate of discount falls. When the con- 
 trary is the case, it rises and the best security is required. 
 
 This is particularly noticeable in countries where there is no legal limit 
 to the rate of interest, such as England. In the United States a bank 
 usually charges uniformly the rate fixed by law. 
 
 Fourth, to make the system more efficient and to give this 
 money of account yet wider currency, each bank in our great 
 cities is a branch of a larger clearing-house. When all the 
 business of a city was done at a single bank, the transfer of its 
 credits sufficed for all wholesale transactions. When several 
 took the place of one, very large sums of money passed between 
 them, as a check would not transfer credit unless both parties 
 kept accounts at the same bank. But now each bank makes its 
 statement in the clearing-house, of its claims against every other, 
 and on balancing the account of each, the net indebtedness to 
 (or from) it is ascertained, and paid from (or to) the clearing- 
 house. These balances are the merest fraction of the gross 
 amounts, and the system brings every bank, to a certain extent, 
 under the supervision of the rest. 
 
 This method of settlement was adopted by the dealers in the old 
 French fairs, and enabled the merchants to transact a great deal of 
 business with the exchange of very little money. 
 
 The Scotch banks first adopted it for the mutjj^al supervision and con- 
 trol of their circulation. They met once a fortnight in Edinburgh to ex- 
 change notes, and paid the net balances in coin. 
 
CAUSE AND CHARACTER OF PANICS. 161 
 
 § 155. Note here that we must distinguish between the true 
 character of money of account and the way in which it is mostly 
 created in modern times. The method of buying and selling 
 " on time " with which it is now associated is open to many ob- 
 jections; but if that method were utterly abolished, if the dis- 
 count system were to cease, and all purchases were to be paid in 
 cash, such a currency as this would be as necessary as ever for 
 the transaction of business. The credit-fund would then have 
 to be created entirely, as it now is in part, by the actual deposit 
 of money in some institution like the Bank of Hamburg. Its 
 volume would then be no longer liable to contraction or ex- 
 pansion with the hopefulness or distrust of bank directors. 
 Were a money of account based not on deposits of cash, but 
 on deposits of securities to a fixed amount, as in Venice, it would 
 retain its power of circulation, with no reduction of its volume, 
 in the worst seasons of panic, and would be continually available 
 for the transaction of legitimate business. The possession of 
 such a ^' money of account" was the secret of the mercantile 
 stability of Venice and Genoa, Hamburg and Amsterdam ; as 
 the complication of our " money of account'' with the discount 
 system is a chief cause of our commercial fluctuations. 
 
 ^ 156. No market is so sensitive as the money market. A 
 very slight reduction in the supply raises the price out of all 
 proportion, and leads to a rigid scrutiny of all securities offered 
 as the ground of a loan. The banks at such a period are sensi- 
 tive to the approaching stringency ; they refuse discounts that 
 they would else have granted ; they refuse new paper, and put 
 an artificial dam across the great stream of credit-payments, to 
 the ruin of those who must go on and who must have money. 
 In the fright that follows, as in all frights, men lose their wits ; 
 the business community is demoralized. Credit, faith in any- 
 body, in anything but visible and tangible money, disappears. 
 There is a general falling back upon the more primitive and 
 material methods of payment. The great credit-fund of money 
 of account loses its currency, or hold upon public confidence, 
 because created by discounts and bound up with the uncertain 
 11 
 
162 ELEMENTS OF POLITICAL EOOXOMY. 
 
 fortunes of the discounting banks. Then begins a *' run upon 
 the deposits." Those deposits were in great part created by 
 credits granted, and were never intended to be paid in money 
 of any sort. The banks sho'.ld have the option of paying 
 them in legal tender, or in certificates of deposit, good at the 
 clearing-house; but they have none. They are demanded 
 in visible and current money. In spite of the reduction of dis- 
 counts, their amount is still too great to be thus disposed of, 
 and a suspension of the banks necessarily follows, upon which 
 the panic reaches its height. All exchange of services, except 
 the most necessary, ceases at once ; the community relapses into 
 the barbarism of mutual distrust. The history of bankings 
 since the establishment of the discount system, shows us the 
 necessity of such a reform as will sunder that system from bank- 
 ing proper, and secure the permanent currency and the free crea- 
 tion (under proper safeguards) of money of account. 
 
 No bank existed in England till 1694. During Common- 
 wealth times the London goldsmiths, whose fire- proof and thief-: 
 proof vaults rendered them the natural custodians of large sums 
 of money, began to exercise some of the functions of modern 
 banking. They granted loans at high rates of interest, and is- 
 sued these in demand-notes. A little experience showed them 
 how much specie they must keep on hand to meet the possible 
 demand for it on any one day. They paid depositors six per 
 cent, interest for it. This continued till after the Revolution. 
 
 § 157. It occurred to William Paterson, member of the Scotch 
 Parliament from Dumfries, that government could raise money 
 for the war against France without paying the high rate of in- 
 terest exacted by the goldsmiths. He saw that a far larger sum 
 than they could command would be obtained, if the government 
 could give confidence to the multitudes who were hoarding small 
 sums, and make it worth their while to lend them. He pro- 
 posed a Bank of England,. after the model of those of Italy and 
 Holland, — i. e., for the issue of circulatiog paper-money, secured 
 by the deposit of what we call government securities. After 
 much opposition, the plan was adopted with some modifications, 
 
THE BANK OF ENGLAND. 163 
 
 and the Bank of England began its career January 1st 1694 
 by lending its whole paid-up capital of £1,200,000 to the gov- 
 ernment at 8 per cent, interest. At jBrst its notes were gladly 
 taken in exchange for the light and defective silver currency of 
 that day ; but when the new coinage that was carried through 
 under Sir Isaac Newton came upon the market, the notes de- 
 clined in favor, although they bore interest and were much 
 needed for the business of the country. In 1096 their redemp- 
 tion in specie was suspended. The Tory party, mostly country 
 gentlemen, attempted to establish a land-bank as a rival. It 
 also was to loan money to the government and to discount bills 
 only on the credit of real estate. The plan failed utterly and 
 caused great loss to the nation. 
 
 The Bank of England grew slowly into favor, and lost its bit- 
 terest enemies as the old race of usurers died out and none filled 
 their places. It gradually perfected its methods; it established 
 the system of book credits, with payments by check. It substitu- 
 ted demand-notes bearing no interest for time-notes that bore 
 interest; these new notes passed quickly into the circulation, and 
 were rarely returned for redemption. It issued smaller and 
 therefore more useful notes, the first being never less than £20. 
 It secured in 1706 a virtual monopoly, not more than six per- 
 sons being allowed to unite their capital to establish any other 
 bank in England. (This lasted 120 years, and was then confined 
 to London and towns within 65 miles of it.) On the other 
 hand it upheld the public credit, and greatly simplified ques- 
 tions of finance, by furnishing a channel through which the 
 people could easily come to the support of the government in 
 time of need, and could always obtain either a profitable invest- 
 ment for capital or a loan of money on easy terms. The rate of 
 discount down to 1844 varied between 4 and 5 per cent,, 
 save a rise to 5J and 6 in the last half of 1839. Other bank^ 
 ing houses grew up in London and throughout the country, but 
 all subordinate to the great national concern in London. 
 
 § 158. As a state bank it shared in the vicissitudes of the 
 government. It had to stand a run on its specie in 1745, wheu 
 
164 ELEMENTS OF POLITICAL ECONOMY. 
 
 the Pretender was on his way to London, but the city merchants 
 stopped this by publicly pledging themselves to stand by the 
 bank. In 1772 and 1783 panics were caused by " over-trad- 
 ins" in foreign goods ; in the latter the bank for the first time 
 adopted the policy of cutting down its discounts, till the drain of 
 specie from the country should cease, — an effectual but rather 
 *' heroic" remedy, as every reduction of the circulation intensi- 
 fies the panic. 
 
 la. iFf93 and 1797 panics recurred ; that of 1793 caused partly 
 by ovtY-trading, partly by the political disturbances of the time; 
 that of 1797 entirely by the latter. In both cases the bank made 
 bad worse, by refusing discounts and thus allowing wealthy and 
 solvent firms to go down unaided. Happily the government re- 
 stored confidence by an issue of exchequer notes. In 1810 the 
 revolt of the Spanish-American colonies led to immense over- 
 trading and a consequent panic. Cargoes of skates had beeu 
 sent to cities where ice and snow were never seen, and others 
 had received Epsom salts enough to physic their entire popula- 
 tion once a week for fifty years. The bank having suspended 
 specie payments since 1797, came to the aid of solvent firms 
 with large amounts of notes, and the government ordered an 
 issue of £6,000,000 besides. 
 
 § 159. In 1815 the bank began to get ready for a resumption 
 of specie payments by cutting down discounts and reducing cir- 
 culation. It thus reduced the currency by £12,000,000, a mere 
 trifle as compared with the money value of the nation's pro- 
 perty ; but the whole circulation for a time stopped and an arti- 
 ficial panic was produced. In 1821 it resumed specie payments, 
 after a suspension of twenty-four years, thus altering at once and 
 greatly the terms of all contracts made in the interval and not 
 yet executed. All who had land, labor or produce to sell, or 
 contracts to fill, were placed at great disadvantage. Creditors — 
 i. e., the wealthy, capital-holding class — gained greatly, except 
 where their debtors were absolutely ruined? Mills stopped, land 
 fell in price, labor was thrown idle, and in peace men suffered 
 niore than the calamities of war. 
 
peel's bank bill. 165 
 
 In 1825, 1837 and 1839 panics similar to that of 1793 
 occurred — i. e., they were caused by over-trading and intensified 
 by the selfish policy of the bank. In 1840 a parliamentary 
 commission began to investigate the reasons of these crises, and 
 in 1844 Sir Robert Peel's famous " Bank Act " V7as passed, with 
 a view to prevent their recurrence. Rejecting the opinion of 
 Adam Smith — that if bank-notes be issued only on the discount 
 of merchantable bills of undoubted character, and founded on a 
 real transaction-, they cannot be excessive, — English fir ciers 
 had adopted the theory of over-issues as explaining the A^nole 
 matter. That theory grew very naturally out of their mechanical 
 theory of the efi'ect of an increased supply of money (§ 146). 
 
 § 160. The Act of 1844 was directed to the regulation of the 
 English currency through the Bank of England, to prevent a 
 fancied " depreciation." It severed the banking department 
 proper from the department of issues, and transferred to the 
 latter £14,000,000 in government obligations as security for bank- 
 notes of that amount. It required that, if the note circulation 
 exceeded that sum, the bank should have gold in its vaults equal 
 to the excess. At the same time it provided that the bank-note 
 circulation of the country banks should be limited and diminished, 
 never increased. In other words, it made the amount of paper- 
 money in circulation in England dependent upon the amount of 
 bullion in the vaults of the banks. 
 
 The measure betrayed a total want of apprehension of the true 
 nature of the discount and deposit system. It did not put the 
 vast currency created by the bank's advances and those of its 
 rivals, under any specific limitations. It allowed the bankers to 
 create currency ad libitum on the pages of their ledgers, pro- 
 vided they did not print it on bits of silk paper that passed from 
 hand to hand. In ordinary business times it could therefore put 
 no restraint upon the real circulation of the country. Rather it 
 set before the bank the strongest inducement to multiply that 
 currency and stimulate speculation when money was easy, that 
 it might "make hay while the sun shone" and get its super- 
 fluous issues into circulation. Heretofore the rate of discount 
 
166 ELEMENTS OF POLITICAL ECONOMY. 
 
 had ranged between 4 and 5 ; from this date the extremes are 
 2 and 10. The office of a regulator is to moderate extremes ; 
 but the bank has really intensified and exaggerated them. 
 And when we speak of the Bank of England, it must be re- 
 membered that it controls all the lesser banks. By its im- 
 mense size, its vast prestige, its special privileges, it is able to 
 fix the rate to be paid for money throughout the kingdom. 
 
 But in other than ordinary times, when this great credit-fund 
 losef it:s currency, when the business community is demoralized 
 by panic, and the demand for other and more tangible forms of 
 money recurs, the act becomes at once powerful for mischief. In 
 such a case the actual supply of notes and specie is manifestly 
 unequal to the vast demand made upon it by the business of a 
 great nation ; and not only the Bank of England, but all the 
 banks of the country are hand-tied so far as regards any help 
 they can give. Their notes may be as good as gold. Since 
 1823 they have always been so. But they can issue none until 
 the government step in and put an end to the panic by sus- 
 pending the act which was meant to prevent panics. 
 
 All these objections were very ably presented before the act was passed, 
 by Lord Ashburton (head of the house of Baring Bros.), T. Tooke, 
 (author of the History of Prices), John Fullarton {On the Regulation of 
 the Currency), Charles Scott (a Montreal banker), and others; but to no 
 purpose. The " sound views on currency " represented by Peel, Lord 
 Overstone (Mr. Jones Lloyd), Torrens, McCulloch, &c., carried the day. 
 
 Worse still, the act conduces to purely artificial panics. The 
 causes that lead to the diminution of bullion in the bank vaults 
 are various, and most, or indeed all of them, are without any signi- 
 ficance as to the general soundness of the English money market. 
 If a large amount of foreign stocks or government bonds have 
 been subscribed for, gold must go out to pay for them. If 
 schemes of improvement in India are on foot, English gold must 
 buy on the Continent the silver that is to pay the Hindoo work- 
 men. If any country has sold as much as usual to England, but 
 has bought less than usual, specie must be exported to pay the 
 balance, since bills of exchange are not to be had. If a failure 
 
a PUTTING ON THE BANK SCREW." 167 
 
 of the English graia crop necessitates a larger import than usual 
 of Russian or American wheat, Mark Lane must pay for it partly 
 in gold, unless the exports to Russia or America be unusually 
 great. Any one of these causes or a concurrence of several will 
 diminish the bullion in bank. Were there no Act of 18-i4, and 
 were the directors wise by past experience, the decrease would 
 not matter. It might be treated as a petty backset, that the 
 course of trade would speedily compensate for. 
 
 But as ii is, the bank raises the rate and diminishes the 
 amount of discounts as the bullion diminishes, in order to keep 
 the circulation down to the level of the bullion, instead of 
 taking any steps directly to replace the loss. It does not go to 
 the Continent to buy or borrow bullion ; it throws the whole 
 pressure of the distress upon the business men of the nation. 
 Holders of stocks of domestic and even of foreign goods, who 
 are in want of money, must throw them on the market at any sacri- 
 fice, and sell them at a bargain to some rich capitalist at home or on 
 the Continent who is on the outlook for such chances. English 
 stocks and foreign stocks held in England are sometimes sacrificed 
 to an extent that exceeds the maximum of bullion in the batik 
 vaults. la this way a purely artificial drain of specie home- 
 ward is produced, and the bank is satisfied. In the meantime 
 great establishments have broken down under the pressure, a 
 few because they ought to break, others in spite of their com- 
 plete solvency. In many cases, after the affairs of such houses 
 have been wound up by the costly processes of an English 
 bankruptcy, — which absorbs 45 per cent, of the estate, — every 
 creditor has been paid in full, and a handsome fortune left to 
 the partners. 
 
 § 16L Three years after Peel's Bank Act was passed came 
 the crisis of 1847, occasioned partly by the drain of gold to 
 buy food abroad because of the failure of the potato crop, partly 
 by the great railway speculations of that period. The Bank Act 
 failed in its purpose, as even its author confessed ; the govern- 
 ment suspended its operations to allow the bank to come to the 
 assistance of business men. The same took place in the great 
 
168 ELEMENTS OF POLITICAL ECONOMY. 
 
 crises of 1857 and 1866, and in a less degree in 1874. In 
 1857 mercantile extravagance was not rife in England j business 
 was quiet and moderate as compared with 1852, when the bank 
 stimulated speculation to the utmost by lowering the rate to 
 two per cent. But Peel's Act necessitates a crisis in England 
 whenever any of England's customers are in trouble. The 
 American crisis caused a drain of specie from Europe to the 
 United States, and all England was put " under the bank'" 
 screw '' to turn the tide of gold back to England ; prices were 
 forced down twenty-jSve per cent., and large amounts of the pro- 
 ducts of industry passed out of the hands of their rightful owners 
 into those of capitalists who could take advantage of their ne- 
 cessities. Every crisis takes from the poorer and more active to 
 give to the richer and idler classes, and adds to the inequality 
 of wealth that is so ominous a sign for the future of England. 
 It destroys also a part of the moral capital of the nation, — the 
 confidence and hopefulness of its captains of industry. 
 
 England possesses, therefore, a highly artificial banking system, 
 one which is nominally armed with great powers to protect the 
 industrial interests of the nation, but certain, if rigidly ad- 
 hered to, to use them to oppress and injure those interests. 
 
 § 162. In Scotland, on the other hand, we find an eminently 
 natural banking system, created not /or the people, but i^them, 
 acting down to 1845 with the most perfect freedom in the exten- 
 sion of its operations, the increase of its credits and the amount 
 of its circulation. And the safety has been exactly proportional 
 to the freedom. Scottish bank-notes have been at par; the 
 people will take guineas instead, if they must, but they pass 
 them off as soon as possible as a pretentious, unthrifty, eminently 
 un-Scottish kind of money, much inferior to a native bank-note 
 issued in any corner of Scotland. 
 
 The business men of Edinburgh, having heard that their coun- 
 tryman (Paterson) was planning a bank for the English, and 
 that he had been successful in obtaining a hearing, asked an 
 Englishman named Holland to devise a Bank of Scotland. He 
 did sOj and put his proposals before them. They knew nothing 
 
THE SCOTCH METHOD OF BANKING. 169 
 
 of banking, but were willing to learn. They abounded in objec- 
 tions, but saw the point of his answers. And so, in 1695, the 
 new institution was launched, under a charter granted by the 
 Scottish Parliament, being the first private joint-stock bank that 
 the world had ever seen. It had a monopoly for twenty-one 
 years ; its profits were very large, and the benefits that it 
 conferred on an impoverished country were immense. Other 
 companies came into existence, and the jealousies were extreme ; 
 every bank was eager to break the rest, or at least injure their 
 credit. In 1752 better counsels prevailed. Legislation was had 
 to put an end to some abuses, including the practice of refusing 
 payment of notes till six months after demand, and the issue of 
 very small currency. The banks associated closely in a sort of 
 national clearing-house, for mutual protection and mutual sur- 
 veillance. The bi-weekly exchange of claims in Edinburgh was 
 adopted, serving as a powerful check upon unsafe business. No- 
 where in the world has an extensive banking system been carried 
 on with so little loss to the public, and no country has derived 
 so much benefit from banking. 
 
 The distinguishing feature of the Scottish banks is their 
 system of cash credits. Whoever can get two satisfactory 
 bailsmen to endorse his bond, can open an account for its amount 
 in the bank. He is charged four per cent, on the amount that 
 he actually draws, and is allowed two per cent, on sums deposited 
 when the bank is in his debt; that is, after every day's transac- 
 tions his account is balanced and he is paid interest at the lower 
 rate or pays it at the higher rate, — according as he is the bank's 
 creditor or its debtor — till the next transaction alters the balance. 
 But the payments are mostly in notes, and not by check ; paper 
 money, therefore, plays a large part in Scotch banking, as notes 
 constitute almost the entire currency of the kingdom. They are 
 not aristocratic notes like those of England, of £5 and upward, 
 but very largely £1 notes for the use of the people. It is to 
 exchange these notes and pay their balances in coin that the 
 banks meet twice a week, and thus they are enabled to form an 
 estimate of the extent and safety of the business of each. In 
 
170 ELEMENTS OF POLITICAL ECONOMY. 
 
 1826 the English ministry proposed, "for the sake of uniformity,' 
 to abolish this useful and popular currency; but the proposal was 
 received with such an outburst of opposition from all classes and 
 parties (Sir Walter Scott took a very prominent part), that it was 
 abandoned. In 1845 all further increase in the amount of this 
 paper-money was forbidden — i. e., it was enacted that, however 
 great Scotland's need for more money in the course of her growth, 
 she should have no more. She has now actually less, as the failure 
 of a Glasgow bank has caused the lapse of several hundred thou- 
 sand pounds. In times of panic these cautious Scotchmen 
 exercise the higher caution of mutual help. In the run on the 
 Union Bank of Edinburgh in 1857, there was in Bank street a 
 double flow of gold — frightened depositors carrying away their 
 money to other banks, and bank clerks carrying it back again. 
 The results fully justify this confidence; for over a century the 
 public have lost nothing by the banks and the banks have lost 
 nothing by the public. Stockholders have lost in a very few 
 instances through dishonest or silly management. 
 
 § 163. The first Bank of France was established in 1716, 
 when the country was bankrupt, business suspended, and the 
 misery of the people at its height. In two years it had revived 
 trade of every kind and restored the public credit. Unfortu- 
 nately its projector and manager, a Scotchman named John Law, 
 held the theory that a country could not have too much money, 
 and that it could safely have and usefully employ as much as 
 the entire value of its property. Sustained in his schemes by 
 the Regent, he extended the circulation to four thousand millions 
 of dollars, bought up the royal revenues, the colonies and the 
 entire foreign trade of France, and went into immense specula- 
 tions in trade. To keep up the value of his notes, false divi- 
 dends were declared, and specie was forbidden to pass as money 
 except in small amounts. Of course th'^ attempt utterly failed, 
 and the bubble bursfc, leaving France in a worse plight than 
 before. 
 
 In 1776 another bank was started, but not under that name, 
 as France was afraid of banks. This one shared in the great 
 
BANK OF FRA"^"CE. — LAND BANKS. 171 
 
 struggle carried on by Turgot and Necker, to redeem the public 
 credit — and in the failure of the struggle. It came to an end 
 with the Revolution, and was succeeded by a joint-stock bank, 
 established by the Parisian bankers. 
 
 The present Bank of France was founded by Napoleon in 
 1800; it was given a complete monopoly of banking — a state of 
 things that has been again restored through the provincial banks 
 being united to it. Throughout its history it has been charac- 
 terized by public spirit and a generous policy. Thus it did its 
 utmost to carry French commerce through the exciting times 
 of 1848 without reducing its discounts ; and when the govern- 
 ment authorized it to suspend specie payments, it really never 
 did so. It has repeatedly raised bullion by loan or purchase to 
 meet a drain, instead of making the business community meet 
 the emergency for it. Since 1857 it has adopted the principle 
 of raising the rate of discount in stormy times, but apparently 
 it does not materially decrease the amount. For this reason all 
 sorts of disasters are predicted for it by English authorities on 
 jBnance. France suffers less from commercial crises than Eng- 
 land or America, because less engaged in foreign trade or indeed 
 in wholesale operations of any sort. Her currency is mainly 
 specie, and the extent of the credit system in proportion to her 
 population and wealth is very small. 
 
 § 164. In France, Belgium, Germany and Russia, the pro- 
 blem of establishing banks on the credit of real estate has been 
 successfully solved, and these banks are now very widely estab- 
 lished to grant discounts to landowners and thus promote agri- 
 cultural improvement. The great difficulty and expense of 
 proving land-titles, and of legally recovering money loaned on 
 land, seemed to condemn this class to pay high rates of interest. 
 In Scotland, however, there is a very simple system of land- 
 registry, and recovery of debts is a cheap and easy process. 
 The Scotch banks, by their cash credits secured by bond, have 
 solved the problem for their agricultural customers. The land- 
 owners of Silesia, finding themselves utterly impoverished by 
 the wars of Frederick the Great, adopted a scheme proposed 
 
172 ELEMENTS OF POLITICAL ECONOMY. 
 
 to them by a Berlin merchant, named Biiring. They unitedly 
 pledged the whole land of the province to the government, 
 which raised money on its own credit as if for a public loan, 
 and lent it to the association at the rate it paid for it. This 
 loan is put on the market in the form of land-stock, guaranteed 
 by the government and transferable at pleasure. Besides this 
 public association, private ones have been formed in great 
 numbers, and have done much to improve the agriculture of the 
 Continent. These private land-credit banks take mortgages 
 bearing a fixed rate of interest upon landed property, paying for 
 those mortgages not in money, but in their own obligations bear- 
 ing a lower rate of interest, which obligations the mortgagor 
 sells, mainly to small local capitalists. 
 
 § 165. Although proposals were very early made for the 
 establishment of joint-stock banks of issue in the American 
 colonies (especially in Boston and in Philadelphia), land bank- 
 ing was the first that was adopted. The colonial governments' 
 land offices made loans in paper-money " on bond and mortgage " 
 at low rates of interest, thus furnishing a circulation for local 
 trade and helping the settler to reclaim his land. The deprecia- 
 tion of public credit by the vast issues of paper-money during 
 the Revolutionary War put an end to the practice. But these 
 colonial issues did not stand at par; they ranked differently in 
 difi"erent colonies, and so gave rise to that curious complication 
 by which a pound meant one thing on the right bank of the 
 Delaware, another on the left, but a pound sterling in neither case. 
 
 § 166. Robert Morris, a merchant of Philadelphia, was much 
 struck with the need of a public bank to facilitate the business 
 of the colony, and was about to ask a charter for one when the 
 Revolution put a stop to his plans. Being the Superintendent 
 of Finances during the closing years of the war, he had great 
 difficulty in raising loans, and proposed to the Continental 
 Congress his plan for a bank. It was formally approved, a 
 charter secured from the State legislature, and the Bank of 
 North America went into operation January 1782. The national 
 For some account of a system by which the advantages of the credit 
 system have been extended even to the working classes, see § 140. 
 
BANK OF THE UNITED STATES. 173 
 
 government took a quarter of a million in stock, and borrowed 
 $400,000 from the bank. It did much to restore public credit and 
 stimulate industry; it gradually became independent of govern- 
 ment, while still rendering needed aid. In 1785 its charter was 
 withdrawn by the state legislature by the votes of the country 
 members, who wished to see the state's credit restored and the 
 land offices reopened, — and who thought the bank was in the 
 way. It continued operations without a charter, and was re- 
 chartered in 1787, the farmers having found out their mistake. 
 
 Banks were soon after established in Boston, New York and 
 Baltimore. 
 
 § 167. The old Bank of the United States was chartered by 
 the U. S. Congress in 1791, on the recommendation of Alexander 
 Hamilton, whose report on the subject is a masterly state paper. 
 When the charter had expired in 1811, the party of strict cone 
 struction — i. e., those who believed in giving the general govern- 
 ment as little power as possible — were in possession of power 
 and refused to renew the charter. The local banks chartered by 
 the states alone remained, with capital by no means equal to the 
 demands upon them. Great expansions were followed by sudden 
 contractions of the currency, the banks always "protecting 
 themselves " at the expense of their customers by sudden re- 
 trenchment of circulation, rather than sacrifice any part of the 
 large amount of government stocks that they held. Well might 
 Matthew Carey protest, " that abstracted from all attention to 
 the interests of the community, it is supereminently absurd, 
 impolitic, and injurious, as it regards the interests merely of the 
 banks, to press citizens into the vortex of bankruptcy ;" and 
 " that those sudden vibrations of bank accommodation whereby 
 money is rendered superabundant at one time and immoderately 
 scarce at another, are favorable to speculation and the wealthy 
 alone, — and are pernicious to morals, industry, trade and com- 
 merce, — that they tend to enrich the wealthy and impoverish 
 those who stand in the middle and lower walks of life, — in a 
 word, to make the rich richer and the poor poorer.'* 
 
 Letters to the Directors of the Banks of Philadelphia (1816). 
 
174 ELEMENTS OF POLITICAL ECONOMY. 
 
 § 168. The second U. S. Bank was chartered in 1816, a 
 charter granted two years previously having been defeated by 
 the veto of President Madison. Its earlier years covered a period 
 of great financial prostration (1816-24); its later period was 
 one of great inflation and general speculation (1833-6) ; the 
 nine years between were marked by a sober and steady growth 
 in all the elements of national prosperity. The history of the 
 bank and its national influence has been the subject of bitter 
 and protracted controversy. We incline to the view that it 
 rendered the nation great services in helping it out of the time 
 of distress, and was in no wise responsible for the inflation and 
 reckless trading that culminated in the crisis of 1837-8. It 
 furnished a national currency that passed current in every part 
 of the Union, at a time when the complexity of a score of 
 difi'ereut banking systems, and the existence of numbers of 
 fraudulent banks, prevented the notes of any other bank from 
 possessing more than a local circulation. It raised the public 
 credit by accepting public bonds as subscriptions for bank stock. 
 It evinced the solidity of its monetary basis by sustaining for 
 years the attacks of a powerful political faction, headed by 
 President Jackson. When at last it failed to obtain a renewal of 
 its charter, and thus ceased to be a national and became a state 
 bank, it was at the same time greatly weakened both in actual 
 resources and in public confidence by the withdrawal of the 
 government deposits. It engaged in speculations, and the failure 
 of these, joined to the hostility of the then dominant political 
 party, involved its ruin, but it cannot be held to have verified 
 the prophecies of its enemies. 
 
 § 169. From 1836 till the opening years of the recent Civil 
 War, we had no National Banking system. Every state legis- 
 lated according to its light, and hardly one of these state laws 
 evinces any intimate knowledge of the workings of the credit 
 system. Some had the wisdom to leave their people free to en- 
 ^SLge in banking to any extent they pleased, under general re- 
 strictions for the defence of the public who held bank-notes, — 
 as in Scotland. Others .by artificial restrictions kept capital out 
 
STATE BANKING LAWS. 175 
 
 of banking, and thus prevented the business community from 
 getting the amount of accommodation they needed. Thus 
 Rhode Island, under a free system, had seventy-one banks, or 
 one for every 2000 of its popuhition, with an aggregate capital 
 of nearly ^15,000,000, and investments and loans of $19,500,000. 
 Pennsylvania in 1850, under a restrictive system, had but fifty- 
 three banks, or one to every 40,000 of its people, with a capital 
 of $20,500,000, and loans and investments of over $50,000,000. 
 Rhode Island had $100 a head invested in banking; Pennsyl- 
 vania $8. The legislators who established this state of things, 
 and conferred the monopoly of banking on a few favored estab- 
 lishments, thought they had provided for all risks by limiting 
 the number of bank-notes, and requiring the banks to keep a 
 fair proportion of specie on hand for their redemption. They 
 did not see that they had left it in the power of the directors to 
 create another species of currency without any limit except 
 ordinary prudence, and yielding large returns for the loan of 
 the bank's credit. If they saw a huge mass of " deposits " set 
 over against a somewhat larger mass of '' loans and investments " 
 in the published reports, they probably counted it a sign of the 
 high confidence that the bank enjoyed ; they never thought of 
 those deposits as a far more volatile and explosive form of cur- 
 rency, not issued in engraved notes, but created by a few strokes 
 of the pen on the credit side of a bank-account. By limiting 
 the capital invested, they had only furnished the chance and 
 increased the temptation to excessive discounts, such as the 
 actual figures show. Nay, they rather forced the banks to go 
 beyond the bounds of prudence by subjecting them to an intense 
 pressure on the part of the business community, which would 
 otherwise have been distributed over a large number of estab- 
 lishments with a great aggregate capital. For the profits of safe 
 banking are always large enough to attract thither as much 
 capital as the business community needs, when the right to 
 establish a bank is restricted only by such general laws as are 
 necessary to protect the public. 
 
 § 170, The banks of our three great seaports rendered very 
 
176 ELEMENTS OF POLITICAL ECONOMY. 
 
 effective service to the government during the opening years of 
 the war, j&lling the empty treasury by a large loan of specie, and 
 upholding the national credit. 
 
 The National Banking system which has grown out of Secretary 
 Chase's financial operations, and now includes all the banks of 
 issue in the country, recalls many of the features of early banking. 
 Like the Italian banks, and the Bank of England in its first 
 stage, the notes are secured by the deposit of government securi- 
 ties, but with the additional guarantee that the national credit is 
 fully pledged for their redemption. The banks have a double 
 source of profit; they receive the interest on the government 
 bonds, and have besides the profits of their discounts. They are 
 of course subjected to the closest examination as to the state and 
 manag-ement of their affairs. Those who remember the state of 
 the currency before the war, or have ever looked into an old 
 Counterfeit Detector, will be forced to confess that this national 
 currency has great advantages. 
 
 The valid objections to the system are two : (1) The laws to 
 establish and regulate it are based upon a very imperfect notio'n 
 of the credit system, and of the nature and extent of the credit 
 employed by the bank in business. Like the old state laws, 
 they take great pains to " hedge in the cuckoo " by limiting the 
 issues of notes. They do not provide for the grouping of the 
 banks in local clearing-houses for mutual supervision. They do 
 nothing to keep the banks from " protecting themselves " in 
 stringent times at the cost of the business community at large. 
 
 (2) The distribution of these banks was an artificial one, and 
 was becoming more and more so with every year. In the original 
 assignment the amount of their aggregate issues was fixed at 
 a given amount and distributed among the states accord- 
 ing to population. Several of the poorer states were unable to 
 make use at once of all the amount thus assigned to them, and 
 after a given date it was distributed among the older and richer 
 states. Connecticut, Rhode Island and Massachusetts, for in- 
 stance, got very much more than their share, the Western States 
 very much less. With every year these poorer states were 
 
DEFECTS OF OUR BANKING SYSTEM. 177 
 
 growing in wealth and in the need for money, at a rate that sur- 
 passed the progress of the older states. With every year the 
 preponderance of numbers and wealth shifted farther westward. 
 But the new states were tied to just the amount of circulation that 
 they could put upon the market at that date ; and this, although 
 they needed far more bank-notes in proportion to the extent of 
 their business than the older states did, as with them the credit 
 system is far less perfectly organized. Hence their outcry for 
 more money, and their opposition to the measures taken to re- 
 duce the amount of national currency in circulation, unless it 
 were replaced by some other form of paper-money. So far as this 
 defect can be obviated without changing the basis of our bank- 
 ing system, it has been, by recent legislation. 
 
 (3) In spite of their bearing the name " national," our banks 
 are confined to very limited localities in the transaction of busi- 
 ness. A vast amount of money is paid in transactions between 
 distant parts of the nation by the cumbrous and expensive 
 method of drawing and negotiating bills of exchange. The 
 sales of the Western crops and the purchase of Eastern goods 
 in exchange are actually carried on as if they were transactions 
 between the merchants of two different nations, and sometimes at 
 an expense of several per cent, premium or discount to business 
 men. While our present system offers the advantage that the 
 national currency passes freely through the whole nation, and 
 keeps the rate of discount down, its incompleteness leaves 
 great openings for illegitimate business in drawing speculative 
 bills of exchange based on no real transaction, but negotiated by 
 collusion between distant banks or firms. 
 
 A national clearing-house established by government, with 
 branches in every important city, and an understanding with all 
 the national banks, would cheapen, simplify and add security to 
 all our domestic trade. As local clearing-houses enable the 
 banks to keep watch upon one another, so would this system 
 bring the collective banks of each locality under the supervision 
 of the banks of other places. The amount of money needed for 
 the whole business of the nation would be greatly reduced. The 
 12 
 
178 ELEMENTS OF POLITICAL ECONOMY. 
 
 balance due to (or from) any city from (or to) all the rest, could 
 be ascertained at a central office and then paid from (or to) that 
 office. There might also be lodged in this national clearing-house, 
 as in the Bank of England, '^ the power to meet panics by tempo- 
 rary expansion," which " must be a power capable of being used 
 promptly and with decision" (7%e Nation). Of course this in- 
 stitution would be debarred from all trading in money or com- 
 modities, and would be allowed to charge a small j9er centum or 
 rather per mille to pay expenses. 
 
 (4) The laws which regulate these banks unhappily tend to 
 accelerate rather than to retard the centralizing tendencies of 
 the national money-market, — the tendency to gather the great 
 mass of the nation's capital into one great monetary centre. 
 Money flows naturally to the places where it is most abundant, 
 just as water tends to run down hill; but as it is often the 
 chief problem in hydraulics to overcome that natural law, so 
 also is it a chief problem of national economy to bring the 
 power of capital to bear upon the less developed and less 
 wealthy districts of the country. 
 
CHAPTER NINTH. 
 National Economy of Finance and Taxation. 
 
 § 17L The differentiation of function that accompanies the 
 progress of society renders necessary the existence of a body of 
 paid oflScials to carry on the government (including police and 
 military forces), and numerous other expenditures. In the earli- 
 est time the head of the family — the chief of the tribe — the 
 lord of the manor — bore rule within limited areas without re- 
 ceiving fee or salary. He was the lawgiver, the law-ward (lord), 
 the executor of the law, by reason of his position as chief pro- 
 prietor or as head of the kindred. But in the growth of nation- 
 alities a great step was effected when the king's judges rode 
 circuit through the whole realm, with cognisance of all or nearly 
 all causes, and when the king's shire-reeve (sheriff) took the 
 place of the feudal and hereditary count at the head of the 
 county. It was felt that there was a great gain in the increased 
 responsibility and in the fairness of professional judges, though 
 the new system was far more expensive. The remnants of the 
 old system that exist to this day in England in the unpaid jus- 
 tices of the peace, chosen. from the gentry and clergy, is felt by 
 the common people to be a great burden. It gives the power 
 and the interpretation of the laws into the hands of men who 
 are swayed by the prejudices of a class. "Justices' justice" is 
 a proverbially poor sort, and one of the chief demands of the 
 working classes in the agricultural shires is: " Grive us stipen- 
 diary magistrates !" So in Ireland, the " assistant barristers " — 
 professional judges supreme on the local bench, though bearing 
 a very modest name — are found to be the mainstay of the poorei 
 classes in all matters of the interpretation of the law. 
 
 § 172. As in the enactment, interpretation and administra- 
 tion of the laws, so in the enforcement of civil order and the 
 national defence, — every class of transactions is a source of ex- 
 pense. The soldier and the policeman discharge duties that 
 
 179 
 
180 ELEMENTS OF POLITICAL ECONOMY. 
 
 were once incumbent upon every male citizen ; they set the citi- 
 zen free to employ himself as he will, and he must pay for the 
 Release. And if the state interprets its vocation as extending to 
 the sanitary and intellectual welfare of the people, the expense 
 involved becomes still greater. It must take measures itself, or 
 require municipalities to take measures, to keep its cities in such 
 a state of cleanliness as shall bring up the average health of the 
 people to a high standard. It must establish public schools and 
 colleges, and training schools for teachers, that the rising gene- 
 ration may not grow up in ignorance. It must set up post- 
 offices, to promote easy intercourse between the different parts 
 of the nation. If it regard religious knowledge as essential to 
 good citizenship, it may endow a clergy devoted to diffusing it. 
 In these and a thousand other ways it comes to pass that a civi- 
 lized nation is obliged to pay for the advantages of a free gov- 
 ernment, and the state must assess upon itself in some form taxes 
 to secure a sufficient national revenue. Through fees, fines, 
 costs of suits, &c., it can throw a part of the burden upon those 
 who are most immediately concerned, but a large part of it muet 
 be discharged by the community as such. 
 
 § 173. The problem of so imposing taxes that they may be 
 as little burdensome as possible is one that has perplexed states- 
 men in all ages. Some of the methods taken to raise money 
 for current expenses without taxation are sufficiently curious. 
 Down to quite recent times lotteries have been thus made use of 
 on both sides of the Atlantic, — the people greedily buying a 
 *' ticket," each acting in the hope that one of the great prizes 
 will fall to him. This plan is now justly discredited as lowering 
 the tone of social morality by giving a legal sanction to gambling, 
 and fostering thriftless and reckless habits. 
 
 Monopolies have been another device of state-craft. The 
 notion that the state possessed exclusive control of certain trades, 
 and of various branches of commerce, was general in the middle 
 ages. Even where no fee was exacted, it was usual to require a 
 charter from the king for every trade-guild, and this was after- 
 ward made a source of revenue to the government. James I. 
 
DIRECT AND INDIRECT TAXES. 181 
 
 of England made himself especially odious to the mercantile 
 classes by granting monopolies of trade in great numbers to his 
 court favorites, and to those who would pay roundly for them. 
 This system was in some cases not without its merits as a 
 promoter of enterprise, apart from its relation to national 
 revenue. In some cases great undertakings would not have been 
 begun without the grant of a temporary monopoly like that 
 given to the East India company, and to the companies that 
 effected the first English settlements in America. ]\Ioncpolies 
 of the tobacco trade exist in France; of salt in British India. 
 The licenses given in England to auctioneers, pawnbrokers, ped- 
 lars, and to those who sell tea and tobacco, and the licenses 
 required in most countries to sell spirituous liquors, are some- 
 thins; of the same nature. 
 
 The income from the royal demesnes was in early times a 
 chief source of revenue. But these have been so largely re- 
 duced by alienation, and are so small in proportion to the revenue 
 now required, that they play little or no part in national finance. 
 The sale of public lands once brought a very considerable 
 revenue to the United States, but through the preemption and 
 homestead laws this source of revenue is now almost closed. 
 
 § 174. Taxation, direct or indirect, is now the chief source 
 of revenue. The former is levied either (1) upon the people 
 according to numbers, or (2) on their property, real and personal, 
 according to its value, or (3) on articles of luxury in use and 
 possession, or (4) on the annual income of the people. The 
 latter is levied on articles produced, usually those that are not 
 of prime necessity, or on imported goods, usually such as are 
 luxuries, or can be made at home. 
 
 The comparative merits of direct and indirect taxation have 
 been much disputed. Both forms exist in this country, the 
 former being that chiefly employed by the state and municipal 
 governments, while since the repeal of the income tax the 
 revenues of the United States are mostly derived from indirect 
 taxes. 
 
 § 175. Indirect taxes are so called because they are not paid 
 
182 ELEMENTS OF POLITICAL ECONOMY. 
 
 into the treasury by the person who really bears the burden. The 
 payer adds the amount of the tax to the price of the commodity 
 taxed, and thus the taxation is concealed under the increased 
 price of some article of luxury or convenience. The distribution 
 of such taxation by the payer among his customers is not so 
 easy a matter as is supposed. English economists, applying 
 their formula, ''all things find their level," have treated this 
 distribution as a thing of course. But experience shows that the 
 incidence of taxation is not determined by laws as rigid as those 
 of hydraulics. A tax is often paid directly and finally by the 
 person on whom the law imposes it, and makes no change in 
 prices. Were it otherwise direct taxation would be impossible, 
 and the rich man, when assessed upon land, luxuries or income, 
 would pass the burden on to his dependent neighbors. 
 
 It is claimed as a merit of indirect taxation that vast sums 
 may be thus raised without exciting dissatisfaction, or even 
 attracting attention ; that duties which bring the government 
 forty or fifty millions cost each consumer but a few cents a week, 
 and are paid in almost daily instalments. As Theodore Parker — 
 arguing against this method — puts it: "The people must pay and 
 not know it ', must be deceived a little, or they would not pay 
 after this fashion." The expediency of the method is all the more 
 questionable in view of this fact. In a free country, where 
 public opinion is the force that directs and controls national 
 policy, it is eminently desirable that the people should feel that 
 they are taxed, and that every appropriation of the legislature 
 comes out of their pockets. " A free people ought to know 
 what they pay for their freedom, and pay it joyfully; and they 
 should as truly scorn to be cheated into the support of their 
 government as into the support of their children. In the next 
 place, a large revenue is no blessing. ... A revenue rigorously 
 proportioned to the wants of a people is as much as can safely be 
 trusted to men in power " (Dr. Channing). 
 
 Another objection is that nearly all indirect taxes are burden- 
 some checks upon societary circulation and the interchange of 
 services, — not the less really such because their action is not so 
 
DIRECT AND INDIRECT TAXES. 183 
 
 easily perceived. The amount of water in the channels of busi- 
 ness may be lowered but a few inches, but that few inches turns 
 shallow places into shoals, and impedes the whole current. The 
 poor especially suffer under this system ; these little assessments 
 come upon them pretty much in proportion to their numbers, 
 not at all in proportion to their means. It is said that they can 
 exempt themselves by ceasing to use the commodities taxed, 
 none of which are articles of prime necessity. So they would, 
 perhaps, if they realized how much they were paying in the 
 course of the year, but the " few cents a week " is taken so 
 quietly that it is not felt to be the burden that it really is. 
 
 It may safely be laid down that indirect taxes should be 
 assessed only on those articles whose consumption it is desirable to 
 discourage, and if it be possible with a view to discourage them, 
 rather than to revenue. For this reason all internal revenue 
 duties, — except on spirits, tobacco and the like, — all taxes upon 
 the capital or dividends of corporations who have not received 
 a monopoly of their business, should, unless urgently required 
 for revenue, be wiped from the Statute Book. 
 
 Stamp duties are sometimes indirect and sometimes direct. 
 The stamps put upon mercantile paper, receipts, and the like, 
 come under the former head, and are objectionable. They re- 
 semble the alcavala^ or tax upon every transfer of property that 
 did so much to blight the industry of Spain. Taxes imposed in 
 the same way upon inheritances and wills are not so objectionable, 
 being direct taxes, but they are assessed upon property that is 
 likewise subject to income or property taxes. They are not im- 
 posed in this country, although there are taxes upon " collateral 
 inheritances" in some states; but the stamp taxes on beer-kegs 
 and on cigar-boxes are instances of direct taxation by means of 
 stamps. 
 
 § 176. Experience shows that as a rule, lighter taxes of the 
 indirect sort yield a larger amount of revenue than those that 
 are heavier. In political arithmetic two and two do not always 
 make four. Thus Sir Robert Peel and Mr. Gladstone achieved 
 their great reputation as financiers partly through their raising a 
 
184 ELEMENTS OF POLITICAL ECONOMY. 
 
 larger revenue through well-adjusted but lighter taxes. Similar 
 to this was the immense increase in the post-office revenue 
 through the lowering the rates of postage to two cents for half- 
 ounce letters, and the use of postal cards. In each case the 
 lowering of the price caused a great increase in the consumption 
 which more than balanced the loss of revenue on each single 
 amount. This fact of itself shows how much this method of 
 taxation interferes with the business of a country and checks 
 the exchange of services. 
 
 In other cases the imposition of a very high excise or im- 
 portation duty leads to smuggling or illicit manufacture. The 
 duty covers the risk of discovery and punishment, and those 
 who have been engaged in the manufacture or the importation 
 excuse themselves for defrauding the revenue by the plea that 
 the government is oppressing their business and waging war 
 upon it. In general the tone of social morality i$ not so high 
 as to prevent this plea from having some weight in the public 
 opinion of the country, and the detection and punishment of 
 the offender become difficult and expensive. Thus, under the 
 regime of high excise duties imposed 1864-7, whiskey sold in 
 open market for a less price per gallon than the amount of 
 the tax per gallon upon its manufacture. In this way the 
 business passed for a time into the hands of illicit distillers, and 
 all others were obliged to stop. 
 
 § 177. Direct taxation is paid by the person who really and 
 finally bears the burden. In most cases it is to a certain extent 
 indirect also. Thus a heavy tax on real estate will raise rents, 
 and a heavy tax on incomes will affect salaries. But neither the 
 house-owner nor those who receive salaries are able to add to 
 their receipts in anything like the same measure. 
 . Of the three fbrms of direct taxation — capitation tax, property 
 tax and income tax, — the first is the most objectionable, if em- 
 ployed to raise a large part of the revenue. A small capitation 
 tax upon every citizen is not an unfair way of reminding the 
 voter that the government is carried on at the expense of the 
 people. But a heavy tax of this sort — much resorted to in 
 
PROPERTY AND INCOME TAXES. 185 
 
 earlier times — has all the disadvantages of indirect taxation ex- 
 cept its popularity. 
 
 Property taxes are assessed either upon all forms of property, 
 real and personal, in proportion to its value, or upon articles of 
 luxury included among personal property; or upon real estate 
 alone. The first is the method practised in the state of New 
 York ; the last is that in use in Pennsylvania, and is now gener- 
 ally thought the wiser one. So much of personal property is 
 now held in the form of bonds, mortgages, &c., that can be sent 
 out of the state as the day for making returns comes round, that 
 the evasion of a law taxing this sort of property is very easy. 
 But real estate cannot be hidden, and a tax upon it reaches all 
 classes, though not equally. It 'raises house-rent, &c. As 
 assessments upon real estate must be made by public officers, the 
 collection of the tax is expensive and it is liable to great abuses 
 through favoritism. 
 
 § 178. The most modern and theoretically the fairest form of 
 taxation is the income tax. It seems to make every one con- 
 tribute to the wants of the state in proportion to the revenue 
 which he enjoys under its protection ; while, " by falling equally 
 on all, it occasions no change in the distribution of capital or in 
 the material direction of industry, and has no influence on 
 prices" (McCulloch). No other is so cheaply assessed and col- 
 lected ; no other brings home to the people so forcibly the fact 
 that it is their interest to insist on a wise economy of the national 
 revenue. 
 
 The first English income tax was imposed by Pitt 1798-1802, 
 and renewed 1803-1815. In the middle ages the feudal 
 tenure upon military service saved large expenses for the national 
 defence, and most of the domestic aflfairs of the kingdom were 
 administered by local authorities. The income of the royal 
 demesnes was supplemented by customary feudal fines and pay- 
 ments, and by a capitation or poll tax. At the outbreak of the 
 Civil war the first excise taxes were imposed, but with the pledge 
 that they would be abolished at the return of peace. The first 
 Parliament after the Restoration was controlled by the landed 
 
186 ELEMENTS OF POLITICAL ECONOMY. 
 
 interest ; it abolished all duties on the land, whether of service 
 or payment, and confirmed to the landowner all rights without 
 duties The feudal syatem came to an end at once. From this 
 time excises and customs were multiplied by parliaments made 
 up of landlords. At the Revolution the Whigs came to power, 
 and the country gentlemen found themselves in a minority, but 
 still stronp — -'gh to prevent the imposition of any but the 
 most tritling'^ taxes on land. The rate of these taxes was after- 
 wards through their influence made permanent and the prin- 
 cipal comrautable at the pleasure of the landowner, and Mr. 
 Pitt was defeated in his attempts again to make the land con- 
 tribute its fair share. His income tax was a compromise that 
 assessed the landlord's permanent revenue and the trader's pre- 
 carious profits equally. At present the whole land-tax of Eng- 
 land is about one-fiftieth of the revenue, while landed property 
 constitutes a very large part of the whole wealth of the nation. 
 
 ]By 1840 the indirect system had attained the perfection 
 humorously described by Sidney Smith: "Taxes upon every 
 article which enters into the mouth, or covers the back, or is 
 placed under the foot, — taxes upon everything which is pleasant 
 to see, hear, feel, smell or taste, — taxes upon warmth, light and 
 locomotion, — taxes on everything on the earth and the waters 
 under the earth, — taxes on everything that comes from abroad 
 or is grown at home, — taxes on the raw material, — taxes on 
 every fresh value that is added to it by the industry of man, — 
 taxes on the sauce that pampers the rich man's appetite, and 
 the drug that restores him to health, — on the ermine which 
 decorates the judge, and the rope which hangs the criminal, — 
 on the poor man's salt and the rich man's spice, — ''on the brass 
 nails of the coffin, and the ribands of the bride, — at bed or 
 board, couchant and levant, we must pay. The schoolboy whips 
 his taxed top, — the beardless youth manages his taxed horse 
 with a taxed bridle, on a taxed road ; and the dying English- 
 man, pouring his medicine which has paid 7 per cent, into a 
 spoon that has paid 15 per cent., flings himself back upon his 
 qhintz bed which has paid 22 per cent., and expires in the arms 
 
peel's income tax LAIVS. 187 
 
 of an apothecary who has paid a license of a hundred pounds 
 for the privilege of putting him to death. His whole property 
 is then immediately taxed from two to ten per cent. Besides 
 the probate, large fees are demanded for burying him in the 
 chancel ; his virtues are handed down to posterity on taxed 
 marble ; and he is then gathered to his fathers to be taxed no 
 more." 
 
 § 179. Sir Robert Peel imposed the new income tax in 1842, 
 in a time of general distress, after a series of great deficits in 
 the annual budget. It brought in so much revenue that he and 
 his successors in the treasury were able to relieve the mass of 
 the people from the burden of some indirect taxes and to lower 
 others. This last step, it was found, still farther increased the 
 revenue, and these reductions became a settled policy in British 
 Finance. But the whole British system, the income tax ex- 
 cepted, must still be classed among the measures of bad policy by 
 which the inequalities of condition are preserved and fostered. 
 Seven-eighths of the revenue is still raised by indirect taxation, 
 and the proposal to raise it all by the same means was made by 
 Mr. Gladstone at the general election of 1874, but shared in 
 his general defeat. The revenue is raised by duties upon a few 
 articles in general use, such as sugar, tea, coffee, spirits and 
 wine; while articles of expensive luxury, laces, satins and 
 velvets, have been exempted. Cobden, Bright and some others 
 advocate the removal of most, if not all, the existing duties and 
 excises, and ask that the workingman's breakfast table be free 
 from all taxation. 
 
 § 180. The objections to the income tax, however, are very 
 strong. (1) That it is inqiiisitorial. It demands of the citizen 
 a statement of his affairs for each current year, and this he must 
 make to commissioners who are his neighbors, and perhaps his 
 rivals in trade. This objection is hardly a sufficient one in case 
 the tax returns are not published. If they are, there can be no 
 doubt that it is a hardship for a tradesman to be obliged to in- 
 form the public that he has had rather a bad year of it, and 
 has hardly been able to make both ends meet. In many cases 
 
188 ELEMENTS OF POLITICAL ECONOMY. 
 
 it is well known that persons reported and paid taxes upon a 
 much larger income than they actually received, purchasing 
 thus a reputation for wealth and prosperity. 
 
 (2) Reports are more commonly dishonest in the other direction. 
 To escape taxation, incomes are returned as much less than the 
 fact. This has been frequently the case in England, where no 
 publication of returns is made. Income from land and houses 
 is indeed very easily ascertained, but that from trade and pro- 
 fessions must be taken on the faith of the citizen. Certain 
 London shopkeepers, whose stores were removed to make way 
 for a city railroad, made claim for compensation on the basis of 
 annual profits, aggregating five times as much as they had put 
 on their tax-papers, and a jury cut down the estimate only to 
 three times as much. 
 
 (3) The equal assessment upon all sorts of income is claimed to 
 be unfair. The lump value of two incomes of $5000 — one per- 
 manent as derived from real estate, and the other precarious as 
 depending upon the profits of a trade — is very different; but the 
 law taxes both equally. This may be obviated by careful legis- 
 lation. 
 
 The great problem to devise an income-tax law that shall en- 
 force honest returns without resorting to wholesale publicity, and 
 shall duly discriminate between different forms of income, has 
 not yet been solved. Till such a law is obtained, the least 
 objectionable form of taxation must be that assessed on per- 
 sonal and real estate. To make direct taxation on personal 
 estate efi'ective, it should be levied on stocks through the 
 company in which they are held, and deducted by the com- 
 pany from the amount of the dividends. To assess it on divi- 
 dends merely would be a mistake. Many companies are so situ- 
 ated that they do not care to declare dividends, though they 
 earn them. They go on year after year turning their net profits 
 into principal invested, and the proprietors live on income from 
 other sources. 
 
 No income tax will probably be again imposed in the United 
 States for many years. But if the industry of the country 
 
THE COLLECTION OF TAXES. 189 
 
 should ever reach such a height of development as to enable her 
 to furnish herself with the most of what she now imports from 
 Europe, the revenue from customs will then be inadequate to the 
 needs of the government. New revenue from some other source 
 will take its place. If an income tax should be again adopted, 
 one of the most important questions in regard to it will be 
 whether all incomes, whatever their amount, should pay the 
 same percentage. The law that Pitt devised, and all others in 
 England down to 1861, made a discrimination between large and 
 small incomes, and taxed the former more heavily. Since that 
 year all incomes not exempted have been taxed equally, and the 
 United States law was severely censured by some British writers 
 for exacting a "progressive rate" of 5, 7^ and 10 per cent, for 
 different incomes. Now taxation should be proportioned either to 
 income or to ability to bear it. If the former, then the English 
 law is unjust in exempting incomes below £100 ; if the latter, 
 the American law and the earlier English laws were not unjust 
 in making a discrimination among taxed incomes. It would be 
 unjust to make the discrimination excessive, and tax all incomes 
 above a certain sum — 50, 75 or 100 per cent. — as some wild 
 theorists in France proposed. But the want of some discrimi- 
 nation must be reckoned among those defects of English legis- 
 lation that have tended to perpetuate and increase the vast dis- 
 crepancies in English wealth. 
 
 The practical objections to this form of taxation make a tax 
 on land far less objectionable, especially in a country whose 
 resources are imperfectly developed and its wealth unevenly 
 distributed. 
 
 § 181. Among the important points in the economy of taxa- 
 tion are (1) cheap collection ; (2) popular certainty as to amount 
 and time. Both these and every other wise principle were set 
 at nought by the system of farming the revenue adopted under 
 the Roman empire and in France before the Revolution, and 
 still perpetuated in some Mohammedan countries. The taxes 
 were sold at public auction to a class of persons who remuner- 
 ated themselves by wringing the utmost farthing out of the poor. 
 
190 ELEMENTS OF POLITICAL ECONOMY. 
 
 The popular hatred and detestation of the publican class, dis. 
 closed to us in the Gospels, related to this custom, and was well 
 deserved and universal throughout the empire. Jewish tradi 
 tion records but one honest publican. 
 
 The second principle is also violated by unforeseen changes in 
 the revenue system of a country that employs indirect taxation. 
 Business men lose very much by every new piece of tinkering 
 expended upon the tariff. They must, therefore, on the prin- 
 ciple of insuring themselves, put a larger profit upon all com- 
 modities, so that the lack of a wise and steadfast national 
 policy inflicts a tax upon the people that brings no return to the 
 treasury. 
 
 § 182. Ordinarily the taxation of a year should at least pay 
 the national expenditure of the year. A nation that does not 
 '* make both ends meet '' in times of peace and of no extraordi- 
 nary calamity, cannot be regarded as wisely governed. But 
 times that call for a vast extraordinary outlay of national wealth 
 are incident to the history of every nation. In periods of great 
 wars, for instance, the government must raise sums of money 
 which far exceed those that it ordinarily raises by taxation, and 
 national debts are incurred, to be gradually paid off on the return 
 of peace. These debts are of no modern invention, but the 
 fashion of paying them came in about the close of the seven- 
 teenth century. The power of one generation of a nation thus 
 to bind not only itself but subsequent generations is now an 
 accepted principle. 
 
 Are war debts really necessary ? Perhaps not ; any prosperous 
 and free people that unanimously undertake a just war, and are 
 not already encumbered by previous debts, could, by vigorous 
 exertion, pay their way as they go. Prussia avoids war-debts j 
 the wars of Frederick the Great left the country greatly de- 
 pressed and exhausted^ but without a dollar of indebtedness. 
 The Hohenzollerns, it has been said, brought good business 
 abilities with them from Nuremberg. England's great war with 
 the first French Empire left the country the burden of 
 £600,000,000 of debt. Had she begun the war with a clear 
 
WAR DEBTS NOT NECESSARY. 191 
 
 financial record, and assessed every year the same amount of the 
 total taxation raised during its continuance, she would have 
 come out of it with a surplus in the treasury. Could the taxa- 
 tion have been raised one-third higher than it actually wa3 
 during our recent civil war, and kept at that from first to last for 
 five years, the country would have come out of the struggle with 
 no indebtedness. This is the policy that all great writers on 
 finance, — Hume, Adam Smith, Ricardo, McCulloch, &c., — ■ 
 recommend. For political reasons, good or bad, it is never 
 adopted. It is feared that a great increase of the immediate 
 public burdens will strengthen the peace-party and weaken the 
 government. It is thought that the people are not at first aware 
 of the magnitude of the sacrifices required of them, and heavy 
 taxes are not imposed till the war is coming near a close. For 
 these and the like reasons the nation comes into the money 
 market as a borrower. Thus, it is thought, the burden will be 
 80 distributed as to be imperceptible and lightly borne. But all 
 such attempts at distribution add to its real weight and to the 
 injury it inflicts. 
 
 § 183. Governments generally borrow at a great disadvantage 
 when great capitalists control the money market. The public 
 credit is at the lowest point in war times, and no patriotism 
 holds men back from taking advantage of this. In former times 
 this was remedied in a vigorous wayj Colbert cut down the 
 capital of the public debt to the amount actually furnished by 
 each lender, and treated the surplus as an illegal because usurious 
 exaction. By this partial repudiation he brought up the public 
 credit at once and was able to borrow at very reasonable rates. 
 The British ministry in the reign of Queen Anne replaced all 
 the old loans by others that paid interest at market instead of 
 war rates ; giving the lenders the choice between that and re- 
 demption. During the war that England waged with Napoleon 
 her capitalists were on the outlook to prevent any renewal of 
 that proceeding. The government was forced or induced to 
 fund the debt as fast as it was contracted. That is, money was 
 raised by selling perpetual annuities, redeemable at par, for such 
 
192 ELEMENTS OF POLITICAL ECONOMY. 
 
 price as they would bring in the market. These annuities, 
 considered as the interest upon the nominal principal, were at 
 very low rates, but the principal itself was not paid in full to 
 the government. The buyer offered to take the loan at thirty, 
 forty or fifty per cent, discount, according to the state of the 
 money market. Thus of the 600 millions sterling added to 
 the national debt, only 484 millions was actually paid to the 
 government. The perpetual annuities amounted to 3 per cent, 
 interest upon the nominal, and 5J per cent, upon the actual 
 loans. With every rise in the national credit, the nominal value 
 has become more nearly the actual one, so that even by pur- 
 chases in open market the nation could now redeem its debt 
 only at the par value, i. e., by paying a sum to its creditors that 
 it never received from them. As capital is worth much more 
 than 3 per cent., taking year with year, it is thought by many a 
 saving not to pay the debt. Others oppose payment on the 
 ground that its wide distribution imparts a certain stability to 
 the whole political edifice by identifying the interests of the 
 people with those of the government. Cobden, Bright and the 
 Manchester school generally oppose its payment on the ground 
 that it holds England back from engaging in new wars, by putting 
 her under bonds to keep the peace. The population of England 
 is twice as great, and her wealth four times as great, as when the 
 debt was contracted two generations ago, yet its amount has been 
 but slightly diminished. Few people seem to expect that it ever 
 will be paid, and one Tory organ, denouncing Gladstone for his 
 policy of harassing interests, expressed the fear that he would 
 be for attacking the national debt next. Two measures, how- 
 ever, look toward its redemption. There is a Sinking Fund 
 managed by commissioners, which uses such money as is placed 
 at its disposal to buy up " consols," and hold them at interest, 
 expending that interest in fresh purchases. Another measure 
 of Mr. Grladstone's has been to sell terminable annuities charge- 
 able to the budget, and buy up with the proceeds the perpetual 
 annuities formerly granted. But at the present rate of re- 
 
ENGLISH AND AMERICAN POLICY. 193 
 
 demption four centuries must elapse before the whole would be 
 discharged. 
 
 § 184. The United States have always acted on the policy 
 of speedy redemption * The debt of the Revolution and that 
 of the second war with England were discharged by .1835, less 
 than sixty years after the former began. At the rate of redemp- 
 tion pursued since the close of the civil war, the nation would 
 be out of debt by 1890, and much sooner if the national revenue 
 be not reduced and the large sums that are now expended in 
 paying interest are applied to paying the principal. 
 
 § 185. The existing debt of the United States was not funded 
 as fast as contracted ; high rates of interest were offered rather 
 than large discounts on the principal. Secretary Chase, what- 
 ever his mistakes, strove to keep the debt under national control, 
 and even borrowed for periods that were far too short, so that 
 some of his earlier loans fell due during the war. Afterwards 
 three forms of bonds were adopted, — 7-30s, 8-40s and 5-20s, 
 the two latter being payable at option at any time between 
 eight and forty years, &c., after issue. Yet, as in England, 
 the real rate of interest upon the debt is much higher than the 
 nominal one, — in some cases nearly eleven per cent, instead of 
 six. The government had made large issues of paper money, 
 which after a time depreciated in value very greatly, fluctuating 
 with the course of our military history, as the public confidence 
 in its redemption rose or fell. But vast quantities of this money 
 were subscribed for United States bonds and accepted at par ; 
 so that the nation received on an average about fifty-seven cents 
 in gold on the dollar for its obligations, on which it pays full 
 interest and is bound in all honesty to pay the full principal. 
 
 This is the calculation of Prof. Bowen of Harvard College. 
 
 § 186. So long as the government continued to borrow money 
 
 and to accept this paper-money at par in subscriptions for loans, it 
 
 was not strictly an inconvertible currency, and the country had 
 
 to some extent the control of its volume. When the government 
 
 ceased to borrow, it lost this redeeming feature, and became a 
 18 
 
194 ELEMENTS OF POLITICAL ECONOMY. 
 
 currency of the most objectionable type. The question was then 
 raised whether it should be allowed to continue thus, or steps be 
 taken to bring it to par with gold. Here two parties were devel- 
 oped. One proposed to accumulate gold in the treasury, and fix 
 a day for j-esumption. The other proposed to make these notes 
 convertible into bonds bearing interest at B.65 per cent, or some 
 similar rate, and reconvertible into treasury notes at any time at 
 the holder's option. The former plan prevailed, and was carried 
 into efi"ect January 1, 1879. 
 
 The steady appr^iation of our paper-money under the steps 
 preliminary to resumption caused great suffering to the debtor 
 classes of the country. Farmers, for instance, who had borrowed 
 money on mortgage when the dollar was worth sixty cents in gold, 
 found themselves obliged to repay these mortgages in dollars worth 
 one hundred cents. They very naturally resisted the policy which 
 made this necessary, not only as regards their own debts, but also 
 those of the government. Hence the rise of the Greenback 
 Party, with its theory that money is the creation of a govern- 
 mental jiat^ its demand that the debt be paid in paper-money, 
 and its proposal to substitute treasury notes for national bank 
 notes. The party reached its maximum strength during the years 
 of business distress which began in 1873, and declined with the 
 actual resumption of specie payments and the revival of our in- 
 dustries. There is a possibility that its proposal to replace bank 
 by treasury notes may come to the front again when the repay- 
 ment of the outstanding bonds has gone so far as to deprive the 
 banks of the basis on which their paper-money rests. (See § 170.) 
 Instead of devising some other basis of issue equally or sufficiently 
 secure, it will be proposed to issue an equal amount of treasury 
 notes. As a note is a debt bearing no interest, owed by the issuer 
 to the holder, there would seem to be some fairness in asking that 
 the privilege of such issues should be confined to the government. 
 But any advantage which would be derived from making such 
 issues a government monopoly would be more than counterbal- 
 j^nced by the loss to the country through the destruction of its 
 Jgcal centres of isgue, aod the substitution of the Treasury at 
 
INTERNAL REVENUE TAXATION. 195 
 
 Washington and its branches in the great cities as the only 
 places of issue. Our monetary system tends too much to cen- 
 tralization already. This plan would increase that tendency 
 tenfold. It would destroy many of the country banks, which 
 depend on the privilege of issue for their profits, and in this 
 way would deprive us of the most important agencies for the 
 facilitation of association and the fertilization of industry. 
 
 § 187. During the war the government found it necessary to 
 establish a system of internal revenue taxation, by which a great 
 number of articles were made to contribute to its support. When 
 the necessity for such a revenue ceased, these taxes were removed, 
 with the exception of duties on whiskey, tobacco, playing-cards, 
 matches, patent medicines and bank-checks, and a tax on the 
 capital and deposits of banks. The removal of all these except 
 the two first is now accepted generally as advisable. But there 
 is good reason for objecting to these two being made exceptions. 
 Of course the appetite for whiskey and that for tobacco are as 
 legitimate objects of taxation, with a view to discouragement, as 
 anything can be. But these taxes fall upon the States with no 
 fair reference to their ability to bear the burden they impqge. 
 In particular, the Southern States pay under the whiskey and 
 tobacco taxes large sums into the national treasury which would 
 be better expended on the education of their people and the 
 payment of their debts. These taxes should be removed, not to 
 give the country "free whiskey" or "free tobacco," but to en- 
 able the States to relieve their necessities from this very source 
 of revenue. 
 
 § 188. The United States government is one of a series of 
 governments — national, State, and county or township or muni- 
 cipal — whose aggregate costliness is greater than that of any 
 other system in the world. All our officials are paid, and we 
 have more of them in proportion to the population than has any 
 other country. Under the peculiar provisions of the national 
 Constitution, the general government discharges fewer functions 
 than in any other country, except perhaps Germany. It leaves 
 to the States the local police and the most part of the manage- 
 
196 ELEMENTS OF POLITICAL ECONOMY. 
 
 menfc of civil and criminal justice, but it retains to itself sev- 
 eral of the easiest and most popular sources of revenue, and 
 compels the States to raise their revenue by direct taxation 
 mainly. It alone can impose duties on imports. It alone can 
 levy internal revenue taxes in such a way as not to discourage 
 the production of any article in any particular locality. Ordi- 
 narily, the revenue of the general government must be much in 
 excess of its legitimate expenses. This leads to very gross abuses 
 in congressional legislation, by which large sums of this surplus 
 are appropriated for public works which have no real claim upon 
 the national treasury. It would be much better to arrange for 
 its distribution among the States in proportion to population, as 
 was done with the surplus of 1835. Such a distribution could 
 be accompanied by conditions as to its expenditure in the educa- 
 tion of the illiterate and the extinction of local and State debts. 
 It would bind the States more closely to the national Union, 
 while relieving their people of burdens which at present press 
 with severity upon many of them. 
 
CHAPTER TENTH. 
 The Science and Economy of Commerce. 
 
 § 189. Commerce is the interchange of services or pro- 
 ductions between persons of different industrial functions, effected 
 either directly or through the intervention of third parties. 
 The motive to such an interchange is found in the fact that the 
 labor which each expends upon the production of the article 
 which he gives is less than that which he would have to expend 
 to reproduce the article which he receives. Thus each receives, 
 therefore, what is of greater value to him, than what he gives. 
 
 § 190. Commerce is therefore the outgrowth of the division 
 of labor, and has kept pace with that in its growth. In the 
 first stage, commerce existed only between persons of the same 
 family or tribe, and involved no formal exchange of commodities. 
 The savage husband undertook the dangerous duties of hunting, 
 fishing and war; the wife the laborious work of the household 
 and their petty agriculture. Both shared in the products. 
 Afterwards members of the same tribe rendered each other 
 certain customary services, such as mutual help in the pastur- 
 age of the cattle and the tillage of the Jields of the mark (§ 80). 
 Then through the rise of a difference of employments or pos- 
 sessions between the tribes, a piece of neutral ground became 
 the meeting place of a group of these tribes for mutual ex- 
 changes, in which exchange cattle were used, less as money 
 than as a standard to estimate comparative values. Then arose 
 a class of traders, whose business it was to facilitate exchanges 
 by ascertaining the reciprocal wants of different persons, and to 
 negotiate for terms advantageous to each. Either from the first 
 or in course of time, these traders became possessed of capital 
 enough to purchase what was offered for sale, which they then 
 again offered to those who needed it, on terms advantageous to 
 themselves. 
 
 The rise of this class was clearly an advance in social develop- 
 
 197 
 
198 ELEMENTS OF POLITICAL ECONOMY. 
 
 ment. A function hitherto discharged by persons, who might 
 be better employed, was transferred to more competent men. 
 The trader knew the demand and supply of every article more 
 thoroughly and readily than its producers or its consumers : to 
 obtain that knowledge was his special work. Instead of spending 
 much of their time in searching for a customer, producers found 
 it to their advantage to employ his knowledge and skill, and to 
 d<^vote the time thus saved to larger production. While he 
 aaded nothing directly to the amount or the utility of the pro- 
 ducts of industry, he helped to increase the amount of pro- 
 duction indirectly by economizing the time of the producers. 
 
 One of the most important of these traders is the banker or dealer in 
 money, whose function has already been discussed. All that is said in 
 Chapter VIII. is, in some sense, a subordinate part of this chapter. 
 
 § 191. Still the trader, the middleman or go-between of these 
 exchanges, is but a means or instrument, whose end is com- 
 merce. And as in the case of other instruments, how to dispense 
 as much as possible with his services is one of the problems of 
 economic organization. His power over the producer and the 
 consumer, which is measured by the proportion that his profits 
 bear to the value of the article exchanged, declines steadily 
 with the advance of society in intelligence and the power of 
 association. In the early time he took a very large share, be- 
 cause the producer and consumer being at a distance from each 
 other, knew little of each other, and because the risks and the 
 expenses of his business were great. Afterwards his profits de- 
 clined, mainly because with the growth of population and the 
 advance of mutual knowledge, the chances of producer and con- 
 sumer dispensing with his services and dealing directly with 
 each other, increased. But even now his profit is a tax upon 
 both, which should be reduced to a minimum. For he adds 
 nothing to the real wealth of society. He neither directs and 
 manages a vital change in the form of matter as does the 
 farmer, nor a chemical and mechanical change in form as does 
 the manufacturer. He merely transfers things from the place 
 of their production to the place of demand : The products of 
 
DISTANT AND NEAR COMMERCE. 19S 
 
 other men's labor pass unchanged through his hands, — with' 
 their value increased by the cost of transportation and the 
 amount of his profits. 
 
 When Charles Fourier was young, he was on a visit to Paris, and 
 priced at a street stall some apples of a sort that grew abundantly in his 
 native province. He was amazed to find that they sold for many times 
 the sum that they would bring at home, having passed through the hands 
 of a host of middlemen on their way from the owner of the orchard to 
 the eater of the fruit. The impression received at that instant nevp 
 left him ; it gave the first impulse to his thinking out his socialistic 
 scheme for the reconstruction of society, in which, among other sweeping 
 changes, the whole class of traders and their profits are to be abolished. 
 
 § 192. It is evident that the amount of this tax upon indus- 
 try is greatest when the consumer and producer are at the 
 greatest distance from each other, and are consequently most 
 dependent upon the trader. Where the producer has the 
 market close at hand he is under no necessity of sacrificing any 
 large part of his profits. Sooner than do so, he will be his own 
 trader, and deal directly with his customers. 
 
 Commerce between persons in neighborhood is also a com- 
 merce of swift returns. The capital employed circulates much 
 more rapidly, and accomplishes a much larger amount of service 
 in proportion to its amount. Instead of considerable amounts 
 of it being thrown out of possible use, because in transit between 
 distant points, the whole is directly and immediately available : 
 as soon as the manufactured goods have left the factory, they are 
 ready for purchasers. As soon as the flour has left the mill, it 
 is available for human food. The waste of time involved in 
 more distant commerce is totally avoided or reduced to a 
 minimum. 
 
 § 193. Commerce between persons in neighborhood leaves 
 little opening for those traders' speculations by which artificial 
 scarcity is produced. Commerce between distant points involves 
 the passage of large quantities of goods through single ports of 
 entry and exit, on their way from the field of their production 
 to that of their consumption. As they change hands at this 
 point from one trader to another, their price to their final pur- 
 
200 ELEMENTS OF POLITICAL ECONOMY. 
 
 chaser is mainly fixed. If a number of traders foresee a slight 
 scarcity of supply, it is not unusual for them to club resources, buy 
 up all that they can lay their hands on, and hold it for an advance. 
 Unless some unforeseen circumstance defeat their plans, they are 
 thus enabled to put into their pocket large sums, which repre- 
 sent simply no service rendered to society, — no benefit to either 
 producer or consumer. Thus in the grain-trade, v^hich centres 
 so largely in Chicago, traders have repeatedly brought about a 
 scarcity of this sort, and raised the price of flour to the Eastern 
 and European consumer. Were the wheat-crop of the wholB 
 country, like that of Pennsylvania, consumed in the vicinity of 
 the farms, " such corners in wheat," as they are called, would 
 be impossible. Very different is the desert of those, who, fore- 
 seeing an enormous scarcity, buy up the present supply and 
 hold it over till the scarcity occurs, or buy up in one district to 
 sell in another. They diminish the present consumption and 
 enforce economy of resources ; they spread the dearness over a 
 larger space and time, and thus prevent scarcity from becoming 
 real famine by making the supply go as far as possible. What- 
 ever the motive, a real service is rendered in this case. 
 
 This production of artificial scarcity is not an exceptional or 
 difficult thing when the producer and consumer are at a distance 
 from each other. When California was quite a young state, and 
 depended almost entirely upon the Atlantic States and Europe 
 for all supplies, the prices of all importations were kept enor- 
 mously high by forestalling the San Francisco market. " It is 
 a frequent occurrence that a few wealthy men combine together 
 to buy up all of a certain kind of merchandise and then control 
 the price." In Australia (§ 274), especially during the time 
 when the country was dependent upon England for nearly all 
 sorts of goods, the same system was " carried on in the most 
 systematic manner " and has not ceased yet. 
 
 See Reairietiona on Trade, from a Colonial Point of View, by David 
 Syme (republished from the Fortnig^htli/ Eeview), Boston, 1872. 
 
 § 194. These facts are only extreme instances of the power 
 of the trader to dictate his own terms, when the producer has to 
 
ARTIFICIAL DEARNESS AND CHEAPNESS. 201 
 
 send his wares to a distant market. These conspiracies are but 
 the extreme form of the general understanding that grows up 
 between the body of capitalists, when the chief supply of an 
 article is concentrated within a limited area and in a small num- 
 ber of hands. Such an understanding, easily reached in such 
 circumstances, will, unless checked by some other competition, 
 enhance the price of goods quietly and by degrees that escape 
 notice, but are none the less burdens upon the producers and 
 the consumers. The traders can " fix their own prices " in such 
 cases. 
 
 The same power of the trader over the prices that rule in a 
 distant market is sometimes displayed in producing an artificial 
 but temporary cheapness, to be followed by such a rise of prices 
 as will recoup him for the loss. Where the consumers of an 
 article make an efi"ort to dispense with his services and those of 
 its distant producer, by developing resources for its supply that 
 are nearer at hand, he not seldom finds it worth while to ofier 
 large quantities at less than cost price. He shares this sacrifice 
 with the producer of what he sells, and both have the intention 
 to hold fast the market, and retrieve their present losses by 
 larger future gains. The effect is to force the new producer of 
 the same article to cease operations, " unless he have a very strong 
 back indeed,'' and can afford to go as far in making sacrifices as 
 his longer-established rivals. As this is very rarely the case in the 
 first stages of an enterprise, there is no choice but to cease pro- 
 ducing, and the market is left dependent upon the trader and 
 his partner, the distant producer, although every facility existed 
 for producing the article more cheaply and abundantly at home. 
 
 See II 252 and 284. Coleridge says: (VI. 511) '' It has already been 
 sbown, in evidence which is before all the -world, that some of our manu- 
 facturers have acted upon the accursed principle of deliberately injuring 
 foreign manufacturers if they can, even to the ultimate disgrace of the 
 country and loss to themselves." 
 
 § 195. Even as regards domestic commerce, there is -large 
 
 space for reform in the diminution of the number and the profits 
 
 of the middlemen, who stand between producer and consumer. 
 
 *' Any one who inquires,'' says Mr. Mill, " into the amount that 
 
202 ELEMENTS OF POLITICAL ECONOMY. 
 
 reaches the hands of those who made the things he buys will 
 often be astonished at its smallness." This bears especially 
 hard on the working classes ; it deprives them as producers of 
 the benefit of market rates for their workmanship. It taxes them 
 more heavily as consumers than it does the rich who can afford 
 to buy at wholesale. He needs most to economize, yet he pays 
 the highest prices, a fact that does much to counteract the 
 natural tendency towards an equality of condition ; as Solomon 
 said, " The destruction of the poor is their poverty." The 
 earlier English economists regarded free competition as a suffi- 
 cient corrective of this ; if profits were excessive, more capital 
 would flow into the trade, and the competition for custom would 
 bring prices down. But while this has had its effects, it is by 
 no means sufficient, especially in small communities ; trades 
 tend to become informal associations to keep prices up to a cus- 
 tomary standard of profits, which in England averages about 
 fifty per cent, of the wholesale price. 
 
 Cooperative stores are a means of obviating this difficulty, from 
 which great things are expected, and perhaps justly. In these 
 the consumers associate to establish a retail store by their joint 
 contributions, and employ competent persons or some central 
 agency to purchase the goods in large quantities and at the 
 lowest wholesale price, as well as of the best quality. These are 
 retailed for cash at a margin of profit that more than covers the 
 cost of the operations, and the net profits are distributed at the 
 end of the year in proportion either to purchases made or to 
 stock held. Some of these stores sell only to their stockholders ; 
 others sell to accepted customers, and give these a small share 
 in the joint profits proportional to their purchases ; others sell 
 to the public at large, and distribute the profits among stock- 
 holders only. In the third method (and in the second, in a less 
 degree) the cooperative basis of their operations is given up ; 
 the establishment becomes merely a joint stock company to deal 
 in a certain class of goods, and the ordinary dealers' motive to 
 overcharge or adulterate goods comes into play. These stores 
 originated with the Owenist party in England about 1830 ; they 
 
COMMERCIAL CREDITS. 202 
 
 exist in great numbers in that country, in France and in 
 Germany, where Schultze-Delitzsch has greatly promoted their 
 establishment. Some look to them for a complete revolution of 
 the retail trade and the abolition of the retail trader. But the 
 destruction of any function in the organization of society would 
 be a retrograde step. The chief service that these stores can 
 render is in restraining the trader from adulteration, and in 
 forcing down prices to a just rate ; in substituting cash payments 
 for book-credits, and perhaps in finally leading him to take his 
 customers into partnership by dividing among them a share of 
 his annual profits. 
 
 § 196. Another questionable feature of modern commerce is 
 its transaction of business on credit, or " on time," as it is called. 
 The buyer ^f a quantity of goods does not pay for them in 
 ready money of any kind, but gives his note payable in thirty, 
 sixty or ninety days, which the seller can only convert into 
 available money by having it discounted at the bank. If the 
 buyer does not pay the note at the date specified, the seller has 
 to pay it himself, and put the amount into his list of bad debts, 
 unless the law gives him redress by a levy on the property of 
 the buyer. 
 
 (As we have already said, this method of creating the credit- 
 fund of money of account on the books of the bank might be 
 abolished without abolishing the credit-fund itself, and the 
 separation of the two — of our money of account from our dis- 
 count system — is one of the problems that greatly concern the 
 future of modern business.) 
 
 Now, of course, the seller cannot afford to put the goods at as 
 low a figure as if he were paid in cash. He even in some cases 
 designates different prices according to the length of the credit; 
 in other cases, each house or each trade sells on time for a fixed 
 number of days. And the difference is not merely the amount 
 that he will lose by the discount of the note. He has to insure 
 himself against bad debts by an increase of his profits on all 
 transactions. He must charge more to good customers in order 
 to insure himself against bad ones. This has a tendency to 
 
204 ELEMENTS OF POLITICAL ECONOMY. 
 
 ibrce up all prices, and to increase the value of the goods in 
 their passage from producer to consumer without adding to their 
 utility. 
 
 A transition to buying and selling for cash would greatly 
 simplify business. It would separate transactions that ought to 
 be treated distinctly and each on its own merits. It would rid 
 good houses of the burden of this mutual insurance system, 
 through which they suffer for the instability of others. It 
 would separate the business of borrowing money at the bank 
 from the business of buying and selling, and make ''every tub 
 stand on its own bottom." It would send every man to bank to 
 borrow money on his own security, or that of his neighbors who 
 know something of his affairs, instead of enabling him to borrow 
 there on the credit of those from whom he buys. 
 
 § 197. Whether and how far the change would be effectual 
 in restraining the spirit of reckless adventure and speculation, 
 without impeding legitimate enterprise, is a more difficult ques- 
 tion. It would at least bring distinctly into view the question 
 of the sufficiency of every person to whom an advance is made, 
 without complicating it with the desire to make a sale to him. 
 And this question would come before experts, whose business it 
 would be to make themselves acquainted with the facts, instead 
 of business men who have hands and heads full of other matters. 
 As a rule it would come before a man's own neighbors and 
 acquaintances, the directors of some local bank, instead of being 
 settled in a city where the statements of a " Commercial Direc- 
 tory" or some similar institution, are the only data for proceed- 
 ing. If joint guarantee were required it would have to be 
 furnished as in Scotland by two or more responsible neighbors, 
 who would need to know something of his standing before they 
 risked what would be a large loss to them, while it might be in 
 comparison a small loss to the wholesale firm in the city. 
 
 A great change for the better in this regard has been effected 
 since the war. Six months' credit has been generally shortened 
 to thirty or sixty days. The possession of a trustworthy me- 
 dium of exchange, of bank-notes that circulate throughout the 
 
THEORY OF INTERNATIONAL EXCHANGES. 205 
 
 whole country, and that with a new rapidity, has done much 
 good in this respect. The loss of a multitude of bad debts, and 
 the consequent decline of confidence in distant customers, have 
 done more. But there is still great need of improvement and 
 perhaps of the abolition of sales on time. For instance, one of 
 our largest dry goods houses made a thorough overhauling of its 
 list of debtors during the panic of 1873, and found that it knew 
 simply nothing of its prospect of ever getting any money from 
 nearly a third of them. 
 
 § 198. When we know the function of the trader, and the part 
 he has played in industrial history, we are better able to decide 
 between the comparative benefits of home and foreign commerce. 
 The question is not of merely theoretical interest; upon the 
 answer generally accepted as correct must depend the public 
 policy of each nation, for the revenue system of every country 
 has its effect to encourage or discourage one or both. 
 
 Adam Smith and Jean Baptiste Say, the founders of the mod- 
 ern school of economists in England and France, pronounce in 
 favor of domestic commerce as the more profitable of the two. 
 Smith says that if a given amount of capital be employed in 
 purchasing and interchanging goods within the same country, 
 that country will reap twice as much advantage from the activ- 
 ity of that capital, as if it had been employed in purchasing and 
 interchanging an equal value of goods with another country. 
 For in the one case encouragement is given to only one native 
 industry ; in the other to two. Nay more, — the operations of 
 domestic commerce being far swifter than those of foreign trade, 
 the advantage to the country is proportionally great. In his 
 day it was possible to effect twelve such exchanges at home for 
 one abroad, making capital employed in the former twenty-four 
 times as useful to the country as if it were engaged in foreign 
 trade. (With modern facilities for transport, this ratio would 
 of course be very much decreased.) In his view the amount of 
 employment that a country can furnish to her people, depends 
 upon the amount of capital in circulation ; so that a pound em- 
 ployed in the purchase of British carpets for sale in the home 
 
206 ELEMENTS OF POLITICAL ECONOMY. 
 
 market might furnish twenty-four times as much work to 
 EngUsh workmen as a pound employed in trading with Portugal 
 for wines. A trade, therefore, by which the merchant grows rich 
 may be one from which his country derives no corresponding 
 advantage. In asserting so much, Adam Smith certainly yielded 
 the fundamental principle of his whole system, which was that 
 if society will simply remove all restrictions from individual 
 enterprise, and allow every one to do with his own what he will 
 — what he finds pays him best — society will reap the largest 
 possible benefit. 
 
 § 199. The English school of course enter protest against 
 this concession, and try to refute the reasoning on which it is 
 based. Ricardo and McCuUoch give substantially the same 
 answer. They assume in their answer that goods must be paid 
 for in goods ; that if England and Scotland give up a certain 
 commerce with each other, because the one can better supply 
 itself from one foreign country, and the other from another, 
 those countries will begin to purchase the products of English 
 and Scottish labor to the same amounts, and nobody will be 
 thrown out of employment in either country by the cessation of 
 the domestic exchange. Now this assumption, which they do 
 not put in so many words, but leave to be implied, is not to be 
 conceded without evidence. Rather there is much evidence to 
 the contrary. England and China have a large mutual foreign 
 commerce, but, in spite of the Christian forcing the pagan to 
 allow the importation of opium, millions upon millions of Eng- 
 lish silver are absorbed every year by the Chinese, in payment 
 for teas and silks, which are not paid for in English goods. So 
 also India absorbs yearly millions of silver coin in payment for 
 her native goods, all that she takes from England being insufl&- 
 cient to pay for what England buys of her. The trade between 
 our own country and Europe is after the same fashion. England 
 and the Continent do not " call it square" at the end of every 
 year, balancing our raw cotton and breadstuff's against dry goods 
 and hardware. We pay over millions upon millions of gold and 
 silver to balance our accounts. Europe takes no more of what 
 
GOLD AS A COMMODITY. 207 
 
 we have to sell than she must ; she sells us all she can. For 
 us, therefore, these attempted refutations of Smith have no 
 force, and unless some better be given, we must concede his 
 position that American capital, if spent in encouraging the pro- 
 duction of some of those articles that we pay Europe gold and 
 silver for, would confer greater benefits on the country than if 
 spent in importing them. The second part of his argument — 
 that from the comparative rapidity of the two forms of com- 
 merce — Ricardo and McCulloch do not touch. 
 
 §200. " But after all, even when the balance is paid in gold 
 and silver, still the fact is that the exchange is of commodities 
 for commodities. For in that case gold and silver are them- 
 selves given in exchange as commodities, not as money. And 
 it is in this new capacity alone that they are productive ; in all 
 other cases they merely facilitate interchanges of parts of the 
 national wealth ; but when exported as commodities, they pro- 
 cure in return other commodities that add to the aggregate of 
 that wealth." So J. B. Say argues. 
 
 Under this reasoning lies the notion of the passivity of 
 money, — that it plays no part in production, but only in 
 exchange ; that any increase of the amount of it in circulation, 
 only increases in that proportion the money price of other com- 
 modities; that any decrease in that amount only diminishes the 
 price. This notion runs counter to the observed facts in the 
 history of money, as recorded by Humboldt and Arthur Young, 
 for the last four centuries, and by Thomas Tooke {History of 
 Prices), for the present century. A tendency to decline in the 
 purchasing power of money with the increase of its amount, is 
 indeed a very natural supposition ; no doubt, in an unprogressive 
 society, such would be and has been the effect, as has been shown 
 by the vast decline in the purchasing puwer of silver in India, 
 since the English began to trade with her people. But a pro- 
 gressive society is one that resists such natural tendencies ; an 
 influx of the instrument of association into such a country, tends 
 to stimulate all sorts of productive industry. It finds — except 
 in periods of financial depression — a host of persons waiting for 
 
208 ELEMENTS OF POLITICAL ECONOMY. 
 
 tliis very instrument, to begin new lines of production, and it 
 sets many new wheels moving. " Hence new uses will be found 
 for it when it is abundant, new avenues of commerce will be 
 opened, new branches of industry will be essayed, until in- 
 creased production finds employment for the increase of money. 
 If money has increased, industry and trade are increased; and 
 thus the tendency to depreciation is met and strongly counter- 
 acted.'' 
 
 See Stephen Colwell's Ways and Means of Payment (Phila. 1859), 
 p. 556. 
 
 § 201. The drain of the precious metals from a country, 
 though its effects are alleviated by the creation of the credit 
 fund for domestic payments, is therefore decidedly injurious to 
 its general interests. "It is not exactly true to say, as has too 
 often been said over and over again, since Turgot first said it, 
 that money is a commodity like any other. That proposition is 
 untrue, except as it regards the metal of which money is made ; 
 but in so far as it is the means of exchange, it has peculiarities 
 of its own, which clearly distinguish it from other commodities. 
 If iron and cotton are scarce, those who need them suffer by 
 the scarcity, but it has no effect upon the prices of other ma- 
 terials. • If, on the other hand, money is scarce, the price of 
 everything else is affected. Every one must make exchanges, 
 must buy and sell ; if, therefore, there is a tendency to a defi- 
 ciency or a scarcity of the means of exchange, every one is 
 straitened, and all transactions become difiicult. Just as 
 when the water falls in its rivers, traffic is interrupted because 
 the vessels are aground ; so, when money is diminished or dis- 
 appears from the channels of circulation, articles pass from one 
 owner to another with great difficulty. We have got to the 
 point of dispensing, in the commercial transactions of advanced 
 countries, with a great quantity of money by replacing it by 
 credit in all its forms ; but, given the quantity of money that is 
 still necessary, its rarity produces an embarrassment, and some- 
 times even a general crisis." 
 
 See Le Marche Monitaire et aes Crises depuis Cinquante Ansj by Emile 
 de Laveleye (1865). 
 
MONEY STIMULATES PRODUCTION. 209 
 
 The possession of a large quantity of money is, within limits 
 that no progressive country has reached, a great advantage. It 
 enables any country to organize its industry upon such a scale, 
 and to carry its division of labor to such perfection, as will bring 
 down the price of all the products of industry, while affording a 
 large return to both the capitalist and the laborer. It therefore 
 makes such a country a cheap place to buy in, mainly because 
 of that accumulation of money, which was to make everything 
 dear. And if any country have got the lead in this respect, an 
 unrestricted trade with those that are not so well off for money 
 will not correct but only increase Jhe inequality. It will con- 
 tinually drain the precious metals out of those countries to 
 increase its own store, because it will steadily keep the balance 
 of trade in its own favor. It will sell others what it pleases, 
 and buy of them what it must. If there are exceptions to this 
 rule, they are to be found in those unprogressive countries, in 
 which the wants of the people are so few that it is impossible, 
 after selling them everything that they will buy, to balance the 
 purchases of raw materials from them. Such countries are 
 India and China. 
 
 This truth is the germ of the theories of the Mercantile 
 school ; it. is a doctrine " combated by the great majority of 
 economists," who travesty the principles of that school as if men 
 like Colbert, Locke and Steuart held that one could eat or wear 
 money. But these same economists, proclaiming the passivity 
 or barrenness of money, save when given in exchange for 
 foreign goods, would have us believe that those countries which 
 receive it in that exchange are so grandly generous, or so blind 
 to their own interests, as to give commodities of the highest 
 utility for one that has no utility, or that only possesses it when 
 it can again be sent abroad. 
 
 202. The theory of foreign exchangee now maintaiaed by the 
 English school, and first enunciated by Torrens (1808) and 
 Ricardo (1817), is given in a very forcible form by Mr. J. S. 
 Mill. It bases the advantage of the foreign trade exclusively 
 upon the comparative productiveness of labor, or of different 
 14 
 
210 ELEMENTS OF POLITICAL ECONOMY. 
 
 kinds of labor, in different countries. Each country exchanges 
 with others goods that cost it less labor than those that it re- 
 ceives would have cost it if produced at home. Each saves 
 labor by the bargain, and therefore each derives benefit from the 
 exchange, even though it might have produced the same articles 
 at home for less labor than they cost the other. For even if it 
 be as easy to make iron in Pennsylvania as in England, yet if it 
 pay better to raise wheat for exportation because England's need 
 of wheat compels her to give more iron for our wheat than the 
 labor spent in raising wheat would have produced, we are gainers 
 by the exchange. Each country, therefore, should manage its 
 economy not on the lines indicated by its natural resources, but 
 on those that are indicated by the exchangeable value of its 
 products in the markets of the world. Every nation, therefore, 
 Mill says, instead of adopting a national policy that looks to the 
 development of any species of industry, should allow things to 
 take their natural course, being assured that to do the things 
 that are easiest, and to buy in the cheapest market and sell in 
 the dearest, are the most remunerative ways of procedure. 
 
 § 203. We have already given some reasons why commerce 
 between distant points is an undesirable thing, as open to the 
 exercise of tyrannizing power by traders and their combinations. 
 The next chapter will be chiefly devoted to showing that while 
 individuals may find it to their account to buy in the cheapest 
 market and sell in the dearest of those that already exist, com- 
 munities will frequently find it more to their account to create 
 new markets by cherishing a varied industry at home. At this 
 point, therefore, we shall only remark : 
 
 (1) That exchanges are not, as this theory assumes, effected 
 on the basis of labor expended, but of money price, which is 
 quite another matter. We might be able to produce iron at a 
 far less expenditure of labor in Pennsylvania than in England, 
 and yet not be able to sell it so cheap in the world's markets 
 as England does. Some of the manufactures of iron, such as 
 cutlery, axes and saws, are actually so produced through the 
 possession of better machinery, but they have not yet driven 
 
THE ECONOMY OF LABOR. 211 
 
 English wares of the same sort out of the market. A recent 
 report to the British government asserts the same of many forms 
 of American dry goods, yet they do not sell in Europe. " What 
 makes the diflFerence in money cost ?" Many things, — the ex- 
 tent and the method of taxation, the cost of capital, the rate 
 of wages, the diflference in the purchasing power of money, and 
 the like. 
 
 Now, in view of domestic commerce, these elements of diflFer- 
 ence have no existence. It makes no diflference to a country 
 what is paid for an article of home production, provided there is 
 no waste of labor in producing it, and provided there is a fair 
 exchange of labor for labor. If tailor and hatter make an 
 exchange of goods, whether they call the price a thousand 
 dollars or one, is of no importance if only the values exchanged 
 are equal. The standard of money payment, be it high or low, 
 is the same for both. 
 
 § 204. (2) The theory assumes that the chief end of national 
 as of individual economy is to save labor, whereas the great 
 problem is how to employ it productively. If buying in the 
 cheapest market reduce the amount of employment, it will be 
 for the nation that does it the dearest of all buying. A farmer 
 who spends his idle hours in making a sled might have got one 
 at the factory for the price of wheat that cost him less labor; 
 but he may have been wiser in making than in buying, because 
 those idle hours would otherwise have been wasted. The nation 
 that spends its surplus labor, — and every nation has a surplus 
 of it, — in working up its raw material into goods is gaining by 
 the business, even though it may employ that labor less eflfect- 
 ively than another that has more experience and capital. The 
 people of Denmark spend their long and bleak winters in spin- 
 ning and weaving home-made goods that England would furnish 
 them cheaper than they make them. The nation says, with one 
 consent, through its national government, " we will not buy of 
 you what we can make ourselves, for if we did our time would 
 be lost." England herself is an illustration of what we mean. 
 " If every man and woman and child returned as a worker in 
 
212 ELEMENTS OF POLITICAL ECONOMY. 
 
 the census had full employment, at full wages, for forty-eight 
 weeks out of the fifty-two, England would be a perfect Paradise 
 for workingmen. We should be in the Millennium! Far other 
 is the real state of afi'airs. Taking all the facts into account, I 
 come to the conclusion that for loss of work from every cause, 
 and for the non-efi"ectives up to sixty-five years of age, who are 
 included in the census, we ought to deduct fully twenty per 
 cent, from the nominal full-time wages" of the lower classes as 
 a whole. 
 
 See R, Dudley Baxter's National Income of the United Kingdom. (Lon- 
 don 1868.) 
 
 The problem thus presented is not an insoluble one for any 
 country. It is the problem of the due balance of the three great 
 elements of the industrial state. England has missed its solution 
 chiefly through the rending the people away from the land, the 
 establishment of a system of agriculture which lacks aggressive- 
 ness and full productive power, and her consequent dependence 
 upon foreign harvests. Millions of the English people who 
 should be living by the land and owning it, sit prisoners in Eng- 
 lish workhouses, or crowd the lanes and back streets of her 
 manufacturing towns. Our danger is in the other direction — 
 an undue development of agriculture and foreign trade to the 
 neglect of varied industry. 
 
 § 205. (3) In adopting, therefore, a purely passive policy, we 
 should not be accepting the natural order of things, but accom- 
 modating ourselves to a thoroughly artificial order. The false 
 position in which England finds herself compels her to wage war 
 upon the industries of other countries; for us to sit idle and 
 passive while she does so by means of the vast masses of capital 
 concentrated in the hands of a few capitalists, would be as weak 
 as to sit idle and passive while her fleet bombarded Boston or 
 New York. The English ideal — forced upon them by their posi- 
 tion — is that their country should be "the workshop of the 
 world" and all other countries her dependencies. She is, in their 
 view, "like a vast city to which the less peopled parts of the 
 civilized world are an agricultural country, which is glad to send 
 
ENGLAND'S IDEAL OF COMMERCE. 213 
 
 its overplus of provisions [of raw materials] in exchange for the 
 luxuries and conveniences of a manufacturing region" (Thorold 
 Rogers). "England's position is not that of a great landed pro- 
 prietor, with an assured revenue, and only subject to occasional 
 loss of crops or hostile depredations. It is that of a great mer- 
 chant, who by immense skill and capital has gained the front 
 rank and developed an enormous commerce, but has to support 
 an ever-increasing host of dependants. He has to encounter 
 the risks of trade and to face jealous rivals. . . . England is 
 more favorably situated than any country, except the United 
 States, for manufactures and commerce. . . . The future rise 
 of the United States into a great manufacturing and naval 
 power, appears the most probable and certain cause which will 
 place a limit to our national increased prosperity" (Dudley 
 Baxter). The United States and British colonies "are young 
 and rising countries; industrres, as yet nascent, are thoroughly 
 suited to the natural capacity of the region and of the people, 
 the latter being of the same stock as the mother country, whose 
 manufactures they prohibit or discourage. There is no reason, 
 apparently, except priority in the market, why the industry of 
 the old country should not be transplanted to the new" (Tho- 
 rold Rogers). 
 
 In other words, England having by a bad national economy 
 destroyed the equilibrium of agriculture and manufactures at 
 home, and thereby made herself dependent upon other peoples fcfr 
 the supply of food and a market for her wares, must now do her best 
 to prevent these new countries from attaining that equilibrium. 
 If they attain it, that will " place a limit to her increase and 
 prosperity," and unless emigration surpass everything that the 
 world has seen, will produce first wide-spread misery and then 
 domestic chaos. She must, therefore, use all her powers of 
 capital and persuasion to keep off the evil day. Although she 
 professes to believe, and persuades herself that she believes, in 
 the solidarity of interests, and exhorts men 
 
 From growing commerce loose the latest chain, 
 
 . . . Till each man finds his own in all men's good, 
 
 And all men work in noble brotherhood ; 
 
214 ELEMENTS OF POLITICAL ECONOMY. 
 
 yet she cannot but see in this national growth of the industry 
 of these new peoples an injury to her own well-being All 
 English arguments and exhortations to passivity, however sin- 
 cere, lie, therefore, under a just suspicion, as special pleadings. 
 Facile homines credunt, id quod volunt. 
 
 § 206. (4) The commerce proposed by this theory is the 
 exchange of the raw materials of some countries for the manu- 
 factured productions of others. It is therefore an unfair ex- 
 change, [1] one side pays for the transportation of bulky and 
 costly articles over great distances ; the other pays for the 
 transfer of goods of the same value but condensed in form. 
 The burden of transportation, the chief tax upon production, 
 falls therefore heavily upon the producer of raw material, 
 lightly upon the manufacturer who exchanges with him. But 
 as long as comparative cheapness is the one test by which an in- 
 dustry must stand or fall, the prodilcer has no redress. He can- 
 not say that he will sell to the nearer consumer and save the cost 
 of transportation. His farming or planting may be a ruinous ex- 
 haustion of the land that does little or nothing to fill his purse, 
 but there is nothing else for him, so long as the foreigner can 
 undersell home-made goods, prevent the establishment of fac- 
 tories, and close those that have been established. 
 
 [2] The exchange is unfair through the unequal distribution 
 of risks. The producer of raw materials depends upon a 
 thousand contingencies for his success, of which other producers 
 know nothing. A bad crop or harvest may leave planter or 
 farmer with nothing to sell ; a good one may overstock the 
 market and pull wheat and cotton <so low that the cost of trans- 
 portation absorbs nearly the whole price. But the manufacturer 
 can foresee demand and adjust the supply to it, running his mill 
 over-time at one period, under-time at another. The English 
 distribution of functions thus assigns all the certainties to one 
 nation, all the risks to another. 
 
 § 207. This contingency is the chief element in fixing the price 
 of raw materials. Their supply vibrates between distant extremes 
 of scarcity and plenty. Their producer' finds a great loss in 
 
"BUYING BACK THE TAIL." 215 
 
 either. The manufacturer, through his larger power of adjust- 
 ment to demand, can ordinarily avoid these ruinous extremes. 
 The country that exports raw material is continually losing the 
 fair returns of its labor through these variations, while it takes 
 in pay goods at a price that is permanent and profitable to the 
 manufacturer. Such a country is consequently a large exporter 
 of the precious metals to pay for its importations. 
 
 [3] It was an old and atrue jestof the manufacturing countries 
 at the expense of those who supplied them with raw material and 
 took manufactures in exchange, that these latter " sold the hide 
 for sixpence and bought back the tail for a shilling." Take the 
 case of a planter, who raises both cotton and breadstuffs for ex- 
 portation, as the best illustration of the position of the whole 
 country. His cotton is worth from ten to twenty per cent, more 
 at the Manchester mill than when it left his plantation; so much 
 has been absorbed by the cost of transportation, and of the whole 
 bulk some ten per cent, is thrown out by the spinner as waste. 
 His corn is worth four times as much in Manchester, being far 
 bulkier in proportion to its value, and he has no means to raise 
 its price above one-fourth of what it ordinarily sells for in Eng- 
 land, as it then comes into competition with the harvests of 
 England and the world. But it goes to feed Manchester work- 
 people, and is therefore part of the raw material of the cotton 
 goods that come back to clothe his family and his work-people. 
 He buys it back in buying those goods, paying a dollar for what 
 brought him twenty-five cents, and another dollar for what 
 brought him eighty. And then, besides, he must pay the cost 
 of bringing it back from Manchester to his plantation. He had 
 better have employed people to spin and weave his cotton and 
 consume his corn at home, even though their money cost were 
 much greater than that of Manchester goods. For as he is both" 
 a producer and a consumer, his interest is in the comparative 
 price of the two classes of goods, not only in the cheapness of 
 that which he buys. And if — as must be the case — a factory 
 near at hand gives him, and the people dependent on him, a 
 
216 ELEMENTS OF POLITICAL ECONOMY. 
 
 larger share of manufactured goods, it matters very little whether 
 the money-price that he pays is great or small. 
 
 [4] If there were no other reason for the policy that seeks to 
 reduce foreign commerce to a minimum, a suflBcient one would be 
 found in its effect upon the human material it employs. Bentham 
 thought the worst possible use that could be made of a man was 
 to hang him; a worse still is to make a common sailor of him. 
 The life and the manly character of the sailor has been so 
 adorned in song and prose, and the real excellences of indivi- 
 duals of the profession have been made so prominent, that we 
 forget what the mass of this class of men are, and what repre^- 
 sentatives of our civilization and Christianity we send out to all 
 lands in the tenants of the forecastle. How could they be other- 
 wise, unless gifted with superhuman powers of resistance to 
 temptation, since they are ordinarily shut out from all the 
 humanizing and elevating influences of human society and its 
 natural relationships ? 
 
 And then, be it remembered, their work, while the most 
 difficult, dangerous and severe of human employments, is also 
 the most unproductive, the most useless. John Fitch's applica- 
 tion of steam-power to navigation has rendered no greater service 
 to mankind than this, of reducing the number of those who are 
 required to conduct the interchanges of commodities between 
 nations. 
 
 § 208. Domestic commerce, or the interchange of services ana 
 commodities between persons of the same nation, is one of the 
 bonds that Providence employs to bring every people into closer 
 and firmer unity. It grows out of that differentiation of function 
 that characterizes organisms of a higher order of life. It weaves 
 across the country a web of intercommunication, binding part to 
 .part in the bonds of mutual service and helpfulness. The national 
 unity rests on deeper foundations (§ 23-25), but this is one of the 
 natural expressions of that unity, which reacts upon and 
 strengthens the unity itself It tends to produce that individu- 
 ality of type in the part, which again produces the strong cohe- 
 rence of the whole body politic. In every progressive nation 
 
TRUE AND FALSE COMMERCE. 217 
 
 this domestic commerce is continually gaining in its amount and 
 in proportion upon commerce with other peoples. Its people are 
 continually more and more employed in serving and helping each 
 other — less and less in servino' foreigners. 
 
 . A nation that is declining in industrial coherence and inde- 
 pendence grows faster in foreign than domestic commerce. Its 
 people lose their diversity of pursuits, and conform more and 
 more to a single type of character as of occupation, to the loss 
 of true individuality. Their lines of transit run across the 
 country in one direction, — to the seashore ; they are the warp 
 without the woof of the web. That people are sinking to a lower 
 grade of social organization ; the parts grow in likeness to 
 each other, and their numbers, however great, are but the 
 numerical repetition of a single specimen. 
 
 The amount of a nation's foreign commerce is therefore the 
 worst possible test of its general prosperity. A disproportion 
 of this to domestic commerce shows that the nation is not self- 
 contained and self-sufficient, but dependent upon other nations 
 either for the supply of its necessities or a market for its labor. 
 Yet the increased returns of exports and imports are often 
 gravely offered in evidence of the beneficent effects of a cer- 
 tain course of national policy. A fair test is to be found in 
 the average consumption of articles of prime necessity per head 
 of the population, which continually tells quite another story. 
 
 § 209, Every nation contains within its own providential 
 boundaries the means of making itself independent of all others 
 as regards the supply of articles of prime necessity. There is, 
 therefore, no need of employing a large number of its people 
 and a large amount of its capital in transporting those articles 
 across the ocean. They are always of a bulky nature, and 
 therefore manifestly unsuited for long transport. 
 
 Legitimate and natural commerce moves rather along the me- 
 ridians than along the parallels of latitude. It is the inter- 
 change of the products of one climate with those of another. Its 
 mission is to " mix the seasons and the golden hours" (Tenny- 
 son), not to " carry coals to Newcastle" by bringing to each 
 
218 ELEMENTS OF POLITICAL ECONOMY. 
 
 people the things that it could abundantly produce at home. 
 From such natural commerce to "loose her latest chain" is the 
 clear duty of every nation. 
 
 Or, if we take commerce in the largest sense, as meaning the 
 whole intercourse of nation with nation, it will include the inter- 
 change of ideas, the naturalization of better political and indus- 
 trial methods. And with this intellectual interchange there 
 would naturally be associated a commerce in those articles 
 whose artistic excellence and elaboration of workmanship cause 
 them to present in a concentrated shape the very flower of the 
 producing nation's intellectual life and spirit. 
 
CHAPTER ELEVENTH. 
 
 The Science and Economy of Manufactures — The 
 
 Theory. 
 
 § 210. The progress of the industrial state, as of every other 
 organized society, and indeed of organic life as a whole, is in the 
 transition from the simple to the complex, from the state in 
 which the parts resemble each other and the whole organism, to 
 that in which the diflference between the parts, and between the 
 whole and the parts, is as great as possible. " As we see in ex- 
 isting barbarous tribes, society in its first and lowest forms is a 
 homogeneous aggregation of individuals, having like powers and 
 like functions ; the only marked difference of function being 
 that which accompanies the difference of sex. Every man is 
 warrior, hunter, fisherman, toolmaker, builder; every woman 
 performs the same drudgeries ; every family is self-sufficing, and 
 save for purposes of aggression and defence, might as well live 
 apart from the rest" (Herbert Spencer). 
 
 With the advance of society, this uniformity disappears. 
 From being '' Jack of all trades and master of none," each 
 member of the community confines his attention to a single pur- 
 suit, and does that one thing better and more effectively. Me- 
 thods of work improve ; a smaller number of workers and a less 
 amount of labor is required to raise food for the whole commu- 
 nity. The rest are gradually set free for other employments, 
 some to tan skins into leather and make shoes; others to turn 
 wool into cloth and make clothes; others to dig up iron and 
 smelt it for tools, agricultural implements and articles of house- 
 hold use ; others to mould clay into pottery or bricks, or quarry 
 stone for houses ; others to cut down trees and fashion them into 
 furniture and other wood-work. Each of these trades, as the 
 numbers of society and the consequent demand for their pro- 
 ductions increase, is capable of continued subdivision of labor. 
 The tanner ceases to make shoes, the carpenter to cut down 
 
 219 
 
220 ELEMENTS OF POLITICAL ECONOMY. 
 
 timber, the weaver to spin his yarn or to fashion his cloth into 
 garments. And at every subdivision of function, the efficiency 
 of the workman and the skill demanded of him are increased. 
 Arkwright, the Lancashire barber, may or may not have in- 
 vented the spinning-jenny, but he stamped his name on the his- 
 tory of industry when he devised the first factory, and taught 
 the North of England weavers and capitalists to substitute coope- 
 ration as regular as clock-work for desultory and wasteful work. 
 
 § 211. Every change of this sort is a real gain to society at 
 large and to each member of it. The members of the nation 
 who had before no need or less need of each other, become more 
 helpful and useful to each other. The farmer findfe, with the 
 artisan within reach, a ready market for his produce. He can 
 buy with its price plenty of clothing, utensils and furniture, — 
 plenty of the things that add to life's comfort and take away its 
 sordidness. He can purchase improved implements that make 
 his work easier and more fruitful. He is more closely associated 
 with his fellow-citizens than before ; every wise purchase or sale 
 that he makes is an interchange of services, by which both par- 
 ties are benefited. There is a real and growing harmony of in- 
 terests between all classes; the advance of either in wealth 
 enables the others to find a better market for what they would 
 sell; and as wealth leads to the expenditure of larger capital 
 and thus to more productive work, the prosperity of each enables 
 the other to buy of it to better advantage. 
 
 § 212. The growth of the power of association is, at the 
 same time, growth in individual freedom. The more closely 
 men are thus united, the more free each one is to give full play 
 to the bent of his own character. He is not forced to make his 
 living by an employment for which he may have no taste, and in 
 which he can therefore never use his natural gifts to the best 
 advantage. He can consult his liking. And men's employ- 
 ments and daily industries react powerfully upon general char- 
 acter; variety of work produces and cherishes individuality. 
 The parts of the body politic grow in diversity from each other 
 and from the whole body ; the societary type rises with that 
 
THE NATURAL GROWTH OF INDUSTRIES. 221 
 
 growth. The unity of the parts in the whole becomes all the 
 stronger for the difference. The body is " fitly joined together 
 by that which every part supplieth," when no part can say to 
 another : " I have no need of thee." 
 
 All history illustrates this growth in social unity, through 
 growth in individuality. Spain proscribed individuality and 
 freedom; her only philosophers were, like St. Theresa and 
 Ignatius Loyola, those who taught the absorption and annihila- 
 tion of the man in the corporation ; the consequence has been 
 a growing lack of vital cohesion and unity in a monarchy that 
 once aspired to universal empire. Germany was riven into 
 fragments by feudalism, but her individualistic philosophy, whose 
 first word is " I am I," has gone hand in hand with her indus- 
 trial progress, in binding her into a compact and vigorous em- 
 pire. 
 
 See Prof. F. D. Maurice's Lectures on Social Morality. 
 
 § 213. This industrial growth is the natural course of all pro- 
 gressive societies. They grow more diversified in their work, 
 if the constitution and course of their nature be not interfered 
 with. Were there no possibility of interference, the whole pro- 
 cess might be left to nature, except so far as legislation is needed 
 to restrain those who are unwilling to give justice to the rest. 
 
 Interferences, however, do arise ; some from within, some 
 from without. Unjust laws, artificial panics, badly imposed or 
 excessive taxes, unwise economy of labor, restrictions on home 
 trade, the currency of doubtful money and false theories, the 
 absence of general education and intelligence, and many other 
 things already adverted to, prevent the industrial community 
 from going forward as it might. To remove all such restrictions 
 must be among the first duties of the statesman as an economist. 
 
 § 214. But interferences come from without also. Sometimes 
 these grow out of wars and conquests, as when the Philistines 
 would not allow the Israelites to carry on the trade of the smith, 
 lest they " should make them swords or spears," and he who 
 needed a smith's help had to go down to Philistia. At others 
 they grow out of the state of dependence in which one country 
 
222 ELEMENTS OF POLITICAL ECONOMY. 
 
 stands to another. Colonies have been continually cramped and 
 held back, that they might contribute to the profits of industry 
 in the mother country, rather than develop a native industry of 
 their own. In 1827 Mr. Huskisson of the British ministry 
 told our Minister " that it was the intention of the British gov- 
 ernment to consider the intercourse of the British colonies as 
 being exclusively under its control, and any relaxation from the 
 colonial system as an indulgence, to be granted on such terms as 
 might suit the policy of Great Britain at the time it was granted." 
 
 § 215. But without the employment of either military force 
 or political domination, it is possible and not unusual for one 
 country to keep another in a state of industrial dependence and 
 check its growth. Were all countries equal at the start and 
 sure to remain so, this could not happen. If they had all the 
 same command of capital, had they all equal skill and intelli- 
 gence, were they all subject to the same taxation, then any 
 aggression could be but temporary and would be punished by 
 equal loss in some other direction. But this is by no means the 
 actual state even of the nations called civilized. No two of 
 them have reached the same point in industrial development, 
 some are far ahead, because of an earlier use of natural advan- 
 tages; others lag far behind, though they are striving with all 
 energy to come up. 
 
 Suppose, now, that two nations that differ thus should estab- 
 lish full and free commercial intercourse between each other, 
 what will be the necessary effect ? At first sight it might seem 
 that the rich nation would be conferring benefits upon the poorer 
 one, which the other could but feebly return 3 that the difference 
 between them would be gradually and steadily diminished 
 through the poorer nation coming forward in industrial develop- 
 ment, and taking an ever higher place, and that more rapidly 
 than before. 
 
 But experience shows that just the reverse of this is the case. 
 The rich nation becomes, for a time at least, richer by the ex- 
 ctiange ; the poor nation permanently poorer. The former, 
 through its command of cheap capital, and, by consequence, its 
 
DOCTRINAIRE OBJECTIONS. 223 
 
 greater division and efficiency of labor, can continually undersell 
 the latter in whatever it chooses to export to it, for it can send 
 it manufactured goods at prices with which the manufacturers 
 of the other cannot compete. The process of accumulating 
 capital in the poorer country is decisively checked ; its people 
 are reduced from what variety of industry and mutual exchange 
 of services they had possessed, to a uniformity of employment in 
 which no man needs or helps his neighbor. Their power of asso- 
 ciation is destroyed ; money, the instrument of association, is 
 drained out of the country. Nothing is left them but the pro- 
 duction of such raw materials as the richer nation chooses to 
 buy, and how unprofitable a commerce of that sort is, we have 
 already seen (§ 206). The country steadily declines in all the 
 elements of productive power, even in the character of the 
 single home industry that is left it (§ 92). " From him that 
 hath not" is " taken away that which he seemeth to have." 
 
 § 216. Here a sweeping objection meets us. A number of 
 theorists tell us that " even if this be the result of unrestricted 
 trade between two such countries, the weaker has no lawful 
 power to put a stop to it. The sphere and duties of government 
 do not extend to the direction and regulation of industry. It 
 might as well undertake to tell its people what they are to 
 believe, as to tell them what they must make, and where they 
 must buy. The right to exchange one's property wherever one 
 pleases, is a part of the right of property itself. It is robbery 
 of the individual citizen, therefore, to say that he shall so man- 
 age his buying and selling as to foster a native rather than a 
 foreign industry." " I assume," says Prof. Thorold Rogers, 
 " that there are such rights as are called natural, and that these 
 are the inalienable conditions under which individuals take part 
 in social life. No one questions the natural right of free ex- 
 change." ' 
 
 This notion rests on the old exploded fiction that men passed 
 out of a state of nature into the social state by a social contract, 
 in which so much of their natural rights as were necessary to 
 the being of society were given up, and all others were 
 
224 ELEMENTS OF POLITICAL ECONOMY. 
 
 retaioed. But, as already stated (§ 23), natural rights of indi- 
 viduals have no existence in any real sense except in society 
 itself, and wherever the well-hein^ of society demands it, they 
 must give way. It rests with the recognised authorities of the 
 nation, those through whom the national will expresses itself, to 
 say how far this is necessary, and when that decision is made, 
 no one has a right to complain of spoliation. Else it would be 
 the moral right of every citizen to refuse to pay school-tax, or a 
 fax for any other purpose that the bare existence of the state 
 did not involve. 
 
 This theory would introduce the most utter slavery, the des- 
 potism of the individual will, under the plea of liberty. It 
 would give to every individual in the state the liberum veto, by 
 which Poland was ruined. It would leave no choice with any 
 nation but to follow a policy of inaction that would expose its 
 people to the utmost suffering, and ultimately lead to the 
 destruction of the bonds of society. And even if there were not 
 one dissenting voice within the nation itself, still the unanimity 
 could take no effect for lack of a proper organ for its expression. 
 The uncertain agency of voluntary leagues and associations 
 would be the only means, — a means altogether insufficient, — to 
 carry out their purpose. When the sense of national necessity 
 was clear and strong, the people would abide by such voluntary 
 decisions, but in more ordinary moods they would begin to say : 
 " What matter will it make if I buy this of one man, and not 
 from another ? It is but a drop in the bucket after all." Now 
 the very function of the government is to express and embody 
 the higher and purer will of the people, and not their lower, 
 self-indulgent moods. The great and true ruler is the one who 
 can distinguish between the two, and direct his policy ac- 
 cordingly. 
 
 The fragment of truth which gives this error all the validity 
 that it has, is that the government, as a rule, is concerned with the 
 industrial (as with the intellectual) life of its people indirectly ; 
 with some other provinces directly. It is, as the preamble of 
 the U. S. Constitution very well expresses it, to ^^ provide for 
 
•'promote" and "provide." 225 
 
 the common defence" but to ^^ promote the general welfare." 
 Theorists who run to the other extreme would have government 
 take as much charge of the one sphere as the other. They 
 would substitute national workshops, for those of individual 
 employers. They would put the rights of property under great 
 restraints or abolish it utterly. But as the government is not 
 the power that propels the ship of state, but the helmsman 
 (^giibernator) that steers it, this extreme is as false as the other, 
 while it grew out of the other by a necessary reaction. Well 
 did Edmund Burke say that to draw the line between what the 
 state should do as such, and what it should leave to the activity 
 of individuals, is one of the nicest questions in legislation. 
 These sweeping and wholesale solutions of it, just because of 
 their simplicity and directness, are under suspicion as false. 
 
 Another form that the objection takes is this : " The state should exact 
 a tax from no man unless it be made payable into its own treasury and 
 used for its own ends. But the difference between the price of the home- 
 made article and that at which the foreigner would have provided it is 
 such a tax ; therefore it is unfair." In other words the state has no 
 right to jo?-o;Ho/e but only to provide for things and actions needful to 
 the nation's life. 
 
 § 217. In the state, therefore, inheres the right to promote 
 the industrial development of the people, as necessary to their 
 " general welfare." And the right is no less than a duty. If 
 it be the first duty of the nation to provide for its own existence, 
 there is involved in that the duty to promote the largest and full- 
 est existence possible, the free development of all sides of the 
 national life. If the state exist that justice may be done, that 
 justice is not to be conceived merely in the jural sense ; as the 
 popular phrase extends its application, the people must be 
 allowed " to do themselves justice," and all obstacles to that 
 end must be removed. If the state exist that freedom may be 
 attained and realized for its people, then it must make such 
 provision that its people shall possess real industrial freedom, — 
 the freedom of neif^hborhood commerce and mutual service with 
 each other. It puts restraint upon the international trade, that 
 the far more important domestic trade may exist and be free. 
 15 
 
226 ELEMENTS OF POLITICAL ECONOMY. 
 
 ^' But are not its citizens at all times free to trade wherever 
 they please, without its interference? If they think it best to 
 buy of the home producer they can do so." 
 
 They are not free, if no one can undertake to produce what 
 they need at home, for want of assurance and security. In such a 
 case the right and natural thing is for the people to say, through 
 their organ, the government, " Go ahead ; build your factory ; 
 put in your machinery ; we will buy of you/' In so saying 
 they are acting out their own freedom of choice to the fullest 
 degree. They are saying, " We choose to have a free choice 
 between the home and the foreign maker, and so we pledge 
 ourselves that the former shall have a chance to establish him- 
 self." All freedom is won by sacrifice ; the wise and far-sighted 
 people is the one that will make the sacrifice — that will sufi'er 
 the pains of a bloody revolution, as more endurable than the 
 long, wasting misery that centuries of tyranny inflict. Such a 
 principle will not be left out of sight when such a people enters 
 the work-shop and the factory. 
 
 A writer in the Fortnightly Review (London) says : " An observant 
 journalist has remarked that it is a singular fact that in Austria 'those 
 who have vigorously struck down every ecclesiastical and political 
 monopoly throughout the empire are the most vehement advocates of a 
 restrictive commercial policy, while on the other hand those who are in 
 favor of free trade are the most ardent supporters of ecclesiastical 
 privilege.' Austria is not singular in this respect. In France the ad- 
 vocates of free speech and a free press are restrictionists ; while im- 
 perialists, as a rule, are free traders. In the United States the abolitionists 
 or Republicans are avowed restrictionists, while the Democrats are de- 
 cidedly in favor of free trade. Precisely the same phenomenon may be 
 observed in the British colonies. In Canada, Australia and New Zealand 
 the party of progress has always been identified with a restrictive com- 
 mercial policy, while the Conservatives are the most uncompromising of 
 free traders. Indeed, it may be said that one-half the entire English- 
 speaking race are, in one shape or another, in favor of a restrictionist 
 policy, and of this half the great majority are advanced liberals. It is 
 the national creed in the United States, Canada, and the leading Australian 
 and New Zealand colonies. . . Strange as it may appear, it is neverthe- 
 less true that it is just because the party of progress in the colonies are 
 opposed to monopoly in every shape that they are the advocates of re- 
 striction in regard to commerce. Instead of that policy savoring of 
 monopoly, they maintain that it has exactly the opposite tendency ; and 
 
IN PEACE PREPARE FOR WAR. 227 
 
 their chief object in imposiDg import duties is to put down monopolies, 
 by extending the sphere of competition." 
 
 § 218. No violent transition from the sphere of the state's 
 direct duties is needed to carry it into this of its indirect in- 
 fluence. Indeed, it cannot discharge the former without exer- 
 cising the latter. It must make large purchases or manufacture 
 in its own workshops large supplies for the army, navy and other 
 executive branches (§§ 297, 302). In either case the choice 
 between home and foreign industry is forced upon it. If it 
 raise large sums by indirect taxation, it must select the method 
 of imposing these, — whether by excises upon home productions 
 or duties upon those of other countries. 
 
 Its provision for its own safety in case of war involves the 
 cherishing of such industries as furnish the great necessaries of 
 national use, and indeed requires their creation. " In time of 
 peace be prepared for war" is a commonplace of statecraft. Now 
 in war the government is of necessity a large purchaser of many 
 sorts of manufactured goods. Foreign commerce is interrupted, 
 either entirely or so much so as to render the importation of 
 these goods — which are contraband of war — difl&cult and hazard- 
 ous, and on a large scale impossible. The home manufacturers 
 that might have supplied them cannot spring up in a night. 
 The narrowness of vision, the lack of foresight, which prevented 
 their being called earlier into existence, has its reward in na- 
 tional perplexity, often in actual defeat. 
 
 " How then is it," says Dr. Horace Bushnell, " that free trade 
 science is going peremptorily to settle all the great questions of 
 public economy ? For if we set ourselves down to it as the test 
 of economy, and say it is final, we are by and by obliged to ask : 
 Is there nothing to be done or thought of in the world that is 
 out of 'economy,' and rightly spurns it? May not the worst 
 * economy ' sometimes be the best ? To be fostering modes of 
 production when the trade-balance shows a disadvantage wears a 
 bad look certainly as respects the matter of economy. But how 
 many and vast supplies are .wanted that must not be left to the 
 uncertainties of trade, — where to higgle over expense would be 
 
228 ELEMENTS OF POLITICAL ECONOMY. 
 
 even a contemptible weakness ? This is true in particular of all 
 the supplies that are needed for the equipment of the state of 
 war. Without these no people is a proper nation, or at least by 
 any possibility a strong one. These, therefore, we must not 
 only have, but must have the way of making at any cost." 
 
 See Seribner's Magazine for July 1871, article on ^'Free Trade and 
 Protection," 
 
 219. It is sometimes urged as an argument in favor of unre- 
 stricted trade, that " the mutual dependence of the nations thus 
 produced is eminently promotive of the cause of international 
 peace. It will put the nations under bonds to keep the peace, 
 by placing each of them in such a relation to the rest that a 
 war with any other will inflict ruinous losses upon its industries, 
 and therefore it will create within each a sentiment in favor of 
 peace^ and a class whose interests are bound up with its preser- 
 vation." 
 
 An unhappy comment upon this rose-colored theory is found 
 in the fact that the majority of modern wars have been under- 
 taken, not for national honor or pride, but for the sake of trade, 
 — " the fair, white- winged peace-maker." The communities most 
 at war with the rest of the world have generally been those in 
 which the spirit of trade predominated — Tyre, Carthage, Venice, 
 England, &c. A great English military historian and general, 
 Sir W. Napier, lays it down as a rule that the traders have 
 begun the wars and the soldiers have ended them (See §§ 257, 
 278, note). 
 
 Furthermore, this argument assumes that war in and of itself, 
 is the chief thing to be avoided in international affairs. It 
 leaves out of sight the truth that a just and righteous war may 
 be the clear vocation of a nation, and the preparation for it the 
 very highest duty. If unrestricted trade unfits a people for the 
 infliction of just punishment upon unrighteous nationalities, it 
 unfits it for one of the very highest ends for which nations exist; 
 — unfits it for rendering to other nations the very highest 
 service possible, — the defending them against the unjust 
 invasion of their rights, or the chastising them into a better 
 
OUR FINANCIAL METHODS. 223 
 
 state of mind. Such cases, do, undoubtedly, exist ; but they are 
 exceptional, and not happy exceptions either. Europe has no 
 more pitiable spectacle than the sight of a nation foremost in 
 wealth, culture and capacity for just and impartial indignation, 
 yet bound hand and foot by trade motives, forswearing its better 
 instincts, deserting its natural allies, and held back from ex- 
 erting its just influence upon the world's politics. 
 
 Furthermore, the eflfect of such unrestricted commerce is to 
 place the weaker and less developed of the two countries at the 
 mercy of the other. The dependence is never fully mutual and 
 equal, and in the nature of things cannot be. The one is fully 
 provided with all the munitions and appliances of war ; the other 
 has all these to seek. Hence the rule of international law now 
 coming into recognition, that neutral nations are bound to strict 
 (not merely to impartial) neutrality, as the weaker of the two 
 nations at war will derive more benefit than the other from the 
 power of making unreserved purchases on neutral soil. This 
 fact of the unprepared state of the more backward country can- 
 not be hid from the other; in case of a disagreement, it furnishes 
 a strong motive to overbearing insolence and aggression. It has 
 been repeatedly alleged as a motive for rushing into hostilities, 
 never for holding back. 
 
 § 220. A comparative study of the financial methods of dif- 
 ferent nations discloses circumstances that render discrimination 
 in favor of the home manufacturer the only fair mode of pro- 
 ceeding. One country makes efforts to be rid of the burden of 
 debt, and to that end imposes a heavy direct or indirect taxation 
 upon its people; another funds its debts in perpetual annuities, 
 and has no intention of paying more than the interest. One 
 country has adopted a very eflficient but expensive system of gov- 
 ernment by paid and responsible oflBcials ; another possesses and 
 employs a large class of men of wealth and leisure, upon whom the 
 work of legislation and the local administration of justice can be 
 devolved. One country has a very high ideal of the duties and 
 responsibilities of government, and considers the health and in- 
 telligence of the people its charge, and taxes all property-owners 
 
230 ELEMENTS OF POLITICAL ECONOMY. 
 
 accordingly ; another leaves these matters to the care and in- 
 terest of individuals. One country expects in all its people a 
 certain degree of civilization implying a corresponding expendi- 
 ture for fitting habitations, clothing, food, education, &c., and 
 thence an adequate scale of wages to support this expendi- 
 ture; another country is satisfied to see large masses of its 
 population but slightly raised above the brutes, and toiling 
 for a pittance. One country extends over a vast and sparsely- 
 settled territory, and this fact adds to all the national ex- 
 penses ; the other has a small territory with a compact popula- 
 tion. One country, through force of circumstances, has been 
 compelled to ask very great sacrifices of its people for the 
 national safety and defence ; the other has long dwelt at peace. 
 Any one or more of these circumstances make it just and fair 
 to compensate for the weight of home burdens by duties high 
 enough to give the home manufacturer a fair chance. Nothing 
 could be more unequal than equality of duties in such cases. 
 
 These things are not superficial matters that may be adapted 
 to the economic teachings of every new set of economists. The 
 national methods of finance are the expression of the nation's 
 life ; their peculiarities are the expression of that in the nation's 
 life which gives it individuality and historic distinctness. They 
 need continual and steady reform, that they may be kept up to 
 the national standard of right, and the national average of intelli- 
 gence. But reform is not revolution; it is evolution rather. 
 In these things there is for every nation a "constitution and 
 course of nature," whose laws must be learned and followed in 
 wise change and in wise resistance to needless change. 
 
 For these considerations the cosmopolitical school have no 
 place ; they think their consideration in connection with the 
 question of wealth and economy an impertinence. They write 
 as if there were no nations, or as if they were merely local and 
 conventional arrangements for police purposes. With Cobden, 
 they would gladly see all boundary lines wiped from the map ; 
 and like him, they regard nations as necessary evils. Their 
 arguments are never based on the necessities of national life, 
 
TARIFFS AND THEIR METHODS. 231 
 
 and the means to attain the largest and fullest degree of that 
 life; but on " the maximum of production throughout the 
 world." They know of no interest save pocket-interest, whereas, 
 as Mr. Mill well says, a man's interest is whatever he takes an 
 interest in. And every good citizen will take an interest in the 
 industrial development and independence of his own country. 
 We might, as Dr. Bushnell does, concede the force of all their 
 economic arguments, and then reject their conclusions on higher 
 grounds. 
 
 So much for arguments drawn from political theories and the 
 replies to them. From these we pass to the purely economic argu- 
 ments in favor of restrictions upon foreign trade ^ and first to 
 those that would justify the imposition of those restrictions per- 
 manently., if need were. But first of all as to the methods of 
 restriction. 
 
 § 221. The state, then, possessing the right to discriminate 
 between home and foreign industry, and being prompted to do 
 so by reasons of public policy as well as by a desire to promote the 
 welfare of its citizens, has to make a choice of the best means 
 to that end. It might directly encourage the worker at home 
 by a system of bounties and subsidies; but this plan is now 
 generally rejected as too artificial, and as open to great abuses. 
 Or it may prohibit the importation of foreign wares, or discour- 
 age their importation by duties that will raise their price high 
 enough to enable the native manufacturer to compete with them 
 in the home market. Prohibitions are now properly regarded as 
 unwise ; discriminating duties are adopted as preferable by nearly 
 all civilized nations. 
 
 Another question of method is the choice between specific and 
 ad valorem duties. The former exact so much for each pound, 
 yard's length or square foot of all goods of a given kind, with 
 no reference to their comparative fineness or value. The latter 
 taxes each class of goods a certain percentage on their sworn 
 value. The specific form of duty is preferable, (1) because its 
 proper amount is most easily and surely ascertained. It enables 
 
232 ELEMENTS OF POLITICAL ECONOMY. 
 
 government to dispense largely or altogether with *' Custom- 
 house oaths ;" renders false invoices as good as useless. (2) 
 Because it gives the largest protection to the manufacture of 
 those cheaper and bulkier articles which are of prime necessity 
 to the nation. It thus furnishes a primary school of industrial 
 education, in which the working classes and their captains of 
 industry learn to make cheap things before they attempt those 
 that require finer elaboration. (3) It diminishes smuggling. 
 To bring in goods without paying duty requires a degree of con- 
 cealment that is impossible in the case of the coarser wares; 
 while the smallness of the duty upon the others, in comparison 
 with their cost, makes it not worth while to run the risk of 
 detection. (4) It does not, as ad valorem duties do, intensify 
 the fluctuations in the price of an imported article, by admitting 
 it at a low duty when it is cheap, and imposing a higher duty 
 when it is dear. Especially in times of crisis and distress, when 
 an industry is ready to perish, it does not, as ad valoreTvi duties 
 do, invite foreign rivals to complete the ruin, by allowing their 
 goods to enter almost duty free ; but by its unvarying defence 
 against such assaults revives the fainting industry. 
 
 § 222. Protective duties yield for a considerable period a 
 large revenue to the state, but that is not the object of their 
 imposition. Duties for revenue, i. e., too low to be protective, 
 in spite of their appearance of moderation, are highly unjust. 
 They inflict all the hardships of indirect and unequal taxation, 
 without even the purpose of benefiting the consumer. Duties 
 for protection, while they bring large revenue, have another 
 purpose, and, as we shall see, benefit the consumer to a far 
 greater extent than they tax him, while their amount is equally 
 available for public uses. Their object is their own abolition, 
 for they aim at such a development of the national industry as 
 shall render impossible the importation of the dutiable articles. 
 To impose revenue duties is to accept indirect taxation as a 
 permanent method of finance ; to impose protective duties 
 is not. 
 
 § 223. It would, of course, be absurd for a young or a poor 
 
THE INCIDENCE OP DUTIES. 233 
 
 country to begin at once the production of everything that her 
 people need. The limited amount of her capital and of her 
 labor would not allow of this. Those coarser articles whose cost 
 of transportation is great, and which a specific system of duties 
 will do most to exclude, should be the first object; afterward 
 those that are finer. 
 
 But even classes of goods that are under very heavy duties 
 will continue to be imported for a good while. It will ordinarily 
 take the lifetime of two generations to acclimatize thoroughly a 
 new manufacture, and to bring the native production up to the 
 native demand. It is from such imported goods as these that 
 the customs' revenue is derived ; and they will sell at a higher 
 rate than before the duty was imposed. The very object of the 
 duty was to raise the price of the foreign article ; if it failed to 
 do so, it would offer no protection. But it is a great mistake to 
 suppose that such articles will sell for their old price plus the 
 duty. A part of the burden will fall on the foreign producer 
 and the importer. The amount of it that they will have to pay 
 will generally be proportional to the amount of home production. 
 When such duties are first imposed and the amount of native 
 competition is very slight, nearly if not quite the whole of the 
 duty is paid by the consumer; but the amount thus paid dimin- 
 ishes steadily as home production increases, and when the latter 
 is nearly up to the home demand nearly if not quite all the duty 
 will be paid by the importer and the foreign manufacturer. 
 Hence the outcry raised by these two classes against protective 
 duties ; it is not from love of the consumer, nor yet from jealousy 
 of the profits made by the native manufacturer, but from an un- 
 pleasant consciousness that through his efforts the amount of 
 revenue that they are furnishing to the government is steadily 
 increasing in proportion to their whole business, and to the re- 
 duction of their profits. 
 
 Here are two bits of information and confirmation from British trade 
 circulars. A Sheffield steel firm says : " We have a very large steel trade 
 in America, amounting to a large proportion of our whole business, and 
 in that market there is, from various causes, much competition ; and 
 these two causes, large trade and competition combined, have induced ub 
 
234 ELEMENTS OF POLITICAL ECONOMY. 
 
 to be satisfied with a smaller average of profit there than we have real- 
 ized on the average in our other markets." A London iron firm explains 
 to its producing customers : " With the present out-turn, a material re- 
 duction of the American duty, or something equally significant, is 
 necessary to advance the price of iron above £7 a ton." The very threat 
 of a protective duty, i. e., the threat to foster native production and com- 
 petition, has often had the effect to lower the price of the foreign article. 
 
 There are some very evident inferences from this fact. (1) 
 The amount of a duty is not always nor often the same as the 
 amount of the protection it offers. If the duty be seventy-five 
 per cent., and the foreign manufacturer pay fifty per cent, of it, — 
 i. 6., if he sell his goods only twenty-five per cent, higher than 
 before it was imposed, then the protection afforded is twenty-five 
 per cent, and no more. Allowance, therefore, must be made for 
 this fact in imposing protective duties. A duty is protective in 
 intention when its object is to promote. home production; it is 
 protective in effect, whether it be low or high, when it does 
 raise the price of the foreign article sufficiently to give the 
 native producer a chance in the home market. It must there- 
 fore be so high that the foreign producer and his agents cannot 
 pay it, and still have a sufficient profit on sales. 
 
 (2) Nothing, therefore, can be more misleading than some of 
 
 the wooden calculations made by the opponents of protective 
 
 duties. They reckon up the entire consumption of the home 
 
 made article, and calculating — in the case supposed — that it sold 
 
 for seventy-five per cent, more than . the foreign article would 
 
 have cost had there been no duty, they assume that the vast 
 
 sum thus reached went into the pockets of native manufacturers, 
 
 and was " taken out of the pockets of the consumer." 
 
 For another false assumption in such calculations — the assumption that 
 the home producer does or can charge up to the amount of the protection 
 he receives — see ^ 241. Henry Clay used to tell a story of a Free Trade 
 orator haranguing from the stump a crowd of Kentuckians. " Do you 
 know, sir," said he to an attentive hearer, " that that coat on your back 
 cost you a half a dollar a yard more than it need, because of this accursed 
 tariff?" " Wal, stranger," was the reply, drawled out slowly, " I reckon 
 it must be so since you say it. But this coat cost me by the yard just 
 three bits" (three-eighths of a dollar). 
 
 (3) The notion that unrestricted commerce gives each nation 
 
THE ECONOMY OF LABOR. 235 
 
 simply all the possible advantage that it can reap from the more 
 advanced industries of others, and that nothing but a fair profit 
 can be added to the cost of production and transportation, is 
 utterly untenable. Were this the case, the entire duty would 
 fall on the consumer from first to last. But in fact, the money 
 received into the treasury is very largely drawn from the trader's 
 excessive profits, and not from the consumer in any sense. 
 
 The benefits reaped hy a nation from a restrictive policy may 
 he considered under four heads. 
 
 § 224. Firstly, it is a wise economy of the labor of the people. 
 Now the national economy of labor consists, not in getting on 
 with as little as possible of it, but in finding remunerative em- 
 ployment for as much of it as possible. If labor be the source 
 of wealth, — and this is one of the few points on which all are 
 agreed — then that country must advance to wealth which has work 
 for all who are willing and able to do it. To find work for all is 
 one of the greatest problems that a nation has to solve ; none has 
 yet attained to a complete solution of it; but none is so far from 
 its solution as the country in which agriculture is the only em- 
 ployment open to the great mass of the people. For farming, as 
 a rule, furnishes employment only to robust men and in the 
 open air; all others — women, the young, the sickly — are left in 
 idleness and dependence upon the farming class. 
 
 In districts of our own country, especially in the South, 
 where agriculture is the only industry, a considerable portion of 
 the people live on the verge of starvation for want of work. 
 Maine was a by-word for poverty sixty years ago, when her 
 people were either farmers or lumberers. Since she began to 
 use her immense water-power, she has left many other states 
 behind her, and has now work for all her people. Australia is 
 a young country, with plenty of land, large natural resources, 
 and no excess of population, and but a small percentage that are 
 incapable of hard work. Yet she has been greatly perplexed to 
 find employment for that percentage, especially for the young. 
 A highly-respectable farmer from Ulster, who went thither about 
 1840, could get nothing for his boys to do, and actually made 
 
236 ELEMENTS OF POLITICAL ECONOMY. 
 
 sailors of them to save them from idleness and worse. For this, 
 among many good reasons, most of the Australian colonies foster 
 home industries by restrictions on foreign trade. 
 
 The greater the variety of the industry the more the demand 
 for labor and the better the laborer is paid ; for instead of two 
 workmen competing for every job, we shall have two masters, two 
 sorts of masters running after every workman. " There is rarely 
 competition for labor on the part of employers within a trade, in 
 a particular place, unless there be competition for it from with- 
 out. And in the absence of competition from without, what 
 competition there is on the part of employers within a trade 
 often tends to lower wages " (Cliffe Leslie). Thus in the north- 
 ern and eastern shires of England, and the three north-eastern 
 counties of Ireland, work is far better paid than in the other 
 parts of those kingdoms, because in those agriculture and manu- 
 factures are competing for labor, while elsewhere there is little 
 or nothing else than agriculture. So also in the Walloon pro- 
 vinces of Belgium, as compared with the Flanders provinces. 
 In the latter farming has been brought to perfection, but indus- 
 tries exist only on a petty scale, for want of coal and water- 
 power, and there is a considerable amount of misery. In the 
 Walloon provinces farming is backward in comparison, but great 
 industries abound, wages are nearly twice as high, and pauperism 
 exists to hardly any extent. The notion that labor will in such 
 cases transfer itself from the worse to the better market, is not 
 borne out by the facts. The wrench of separation from familiar 
 surroundings is terrible to the uneducated workman, and not 
 very agreeable to any one. If it be made at all, generally a 
 more distant field offers a still better prospect, and the man emi- 
 grates. The transfer around the world is easier than from shire 
 to shire. Besides, the laws of many countries discourage the 
 latter transfer, and tend to reduce the laborer to the condition 
 of a serf, adscriptus glehse. 
 
 § 225. We sometimes hear it said in reply : " Skilled artisans 
 are as Well off in England under Free Trade as in America 
 under Protection. Their week's wages will buy them more 
 
PROTECTION MODIFIES LABOR. 237 
 
 broadcloth,' Sevres china, fine cutlery, &c., than it would in 
 America." They ought to be much better off; a country that 
 possesses the vast capital that England has, and can carry the 
 organization of labor to the perfection it has there reached, 
 should pay her workmen at rates with which the rest of the 
 world could not compete. We ought to see a growing scarcity 
 of skilled labor in America, through the emigration of our 
 artisans thither. But, in fact, vre find our workshops and 
 factories full of her workmen, and an immigration of them to 
 America since the restrictive policy was adopted, such as there 
 never was before. 
 
 But all this is besid^ the question. The question is not be- 
 tween free trade and protection, but between the varied industry 
 which England acquired by long persistence in protection, and 
 which she will retain under any system, and the want of it, from 
 which we can only be saved by following England's example 
 rather than her precepts. 
 
 § 226. Furthermore, the creation of a diversified industry 
 introduces such a change into farming itself as enables the farmer 
 to employ a greater variety of labor. A home market takes the 
 place of the distant one, and crops are grown which require more 
 care and attention, but repay it with larger profits. Farming 
 passes out of its wasteful extensioe phase into the intensive stage, 
 in which its operations are more productive and profitable. And 
 this " mixed farming" which pays best all the world over, is as 
 varied in the sorts of labor it employs as in the products of the 
 labor. Women and children can now be employed, as physical 
 strength and endurance are no longer the sole requisites. 
 
 § 227. Labor is benefited by the restrictive policy in that 
 the increase of its productiveness, and consequently of its re- 
 muneration, is thus made possible. We have already seen the 
 natural progress of the workman from wasteful, thriftless, me- 
 chanical, ill-paid work, to that which brings the whole man into 
 service, mind as well as muscle, and uses all his powers to the 
 best advantage We have seen that while both capitalist and 
 laborer are benefited by the transition, the laborer receives the 
 
238 ELEMENTS OF POLITICAL ECONOMY. 
 
 larger share of the benefit, and the power of labor to command 
 the services of capital (of the accumulations of past labor, that 
 is) grows steadily with the growth of society, A country that 
 remains chiefly agricultural calls only for the lower, and lower- 
 priced, sorts of labor ; that which diversifies its industry creates a 
 demand for those sorts that rank higher in their demands upon 
 human capacity and in their rewards to industrial ability. It is 
 therefore the interest of the laboring classes, even more than 
 of their employers, to see to the naturalization of all the indus- 
 tries for which the country has any natural aptitude. 
 
 This argument has especial force as regards the people of the 
 United States. The natural drift and bent of the American 
 character towards the mechanic arts and the inventions that 
 facilitate them, which a morning in the U. S. Patent Office 
 would make clear to any one, would find little or no vent in the 
 absence, or the undue subordination of the manufacturing in- 
 dustries. The strongest side of the national intellect and the 
 brightest gifts of the people would be thrown into the shade. 
 
 A comparison of our manufacturing cities and districts with 
 the city of New York and its working classes, discloses the fact 
 that wealth is far more evenly distributed where industry is varied. 
 In Philadelphia and Pittsburg, or Cincinnati, for instance, there 
 are very few very rich men, and the process of accumulating 
 large fortunes is a slow one. But more of the people own 
 their own houses in Philadelphia than in any other city of the 
 world. The working men of those cities, many of whom are 
 foreigners, are generally well ofi" and contented with their lot. 
 They, too, have a stake in the stability and security of society, 
 and taking the whole record, Philadelphia has had fewer strikes 
 and lock-outs than almost any other city. 
 
 Prof. Fawcett, indeed, has amused us by informing the English people 
 that " the Manchester of America " has 119,000 paupers, or three times as 
 many in proportion to her population as England has. The professor, 
 unhappily for his country and his race, has lost his sight, and is therefore 
 dependent upon those who read to him. By an inadvertence of some of 
 these, the number of dollars expended in the relief of the poor of Phila- 
 delphia was transmuted into the number of poor who receive relief. Even 
 
THE FARMER PROTECTED. 239 
 
 that sum is deceptive; as good salaries are paid to officials and the pau- 
 pers are kept in such style that gout is a common disease at the alms- 
 house. Philadelphia has something over three thousand in-door and 
 at out a thousand out-door paupers, nearly all unable to work. 
 
 As to being " the Manchester of America," Philadelphia may accept 
 the compliment with qualification. She ranks above Manchester and 
 next to London as a manufacturing city. 
 
 And these cities can claim no monopoly of prosperity. In 
 Massachusetts, for instance, the number who receive relief from 
 the state is reduced ten per cent, since 1855. Tlie Boston 
 Traveller says : " Fifteen years ago a visit to those districts in 
 any of the cities of the Commonwealth that are occupied as 
 homes by the working classes, revealed poverty and want in 
 marked contrast with their present position. Then, the child- 
 ren, with bare feet and half covered with ragged garments, 
 looked half-starved, as they really were. But to-day the visitor 
 to the same district will find them comfortably clothed and shod, 
 and having a cheerful look that gives the most unmistakable 
 evidence that hunger is a stranger to them. The decrease in 
 pauperism is therefore largely due to the better remuneration 
 received by the working classes.'^ 
 
 § 228. Secondly, protection to industry is as much needed 
 by the farmer as by the manufacturer. The farmer, and in 
 general all the producers of the raw material of our industries 
 and of food, need direct protection. The excessive grain- crop 
 of the West, as we have seen, finds no outlet for more than a 
 fraction of its amount in the European markets. What becomes 
 of the bulk of it ? It is mostly consumed by the people of the 
 Eastern States, which might, but do not, produce enough food 
 to feed themselves. Perhaps a great multitude of Western 
 farmers could have found better work on the unoccupied land in 
 the East; but as things are, they are secured the Eastern market 
 for Western products by direct protection. If we had free trade 
 with Canada, the farmers of that region, who pay little for labor 
 and little for government, would be glad to sell their produce to 
 New York and New England at prices with which the West 
 could hardly compete. But a tariff on farm produce shuts them 
 
240 ELEMENTS OF POLITICAL ECONOMY. 
 
 out, or keeps up prices so far that the Western producer has a 
 chance. 
 
 So with other producers of raw materials. Our coal-mines 
 have to compete along the seaboard with the mines of Nova 
 Scotia ; our salt-makers with the Liverpool exporters ; our wool 
 growers with those of Canada and Europe ; our cotton planters 
 once sought protection against the West Indies and may yet seek 
 it again against those of Hindoostan ', our sugar planters are and 
 deserve to be protected. All these industries are carried on 
 under a weight of national taxation that would make interna- 
 tional free trade a bounty upon foreign importations. In every 
 case the great body of protectionists and all their leading thinkers 
 have urged generous consideration of the claims of this class of 
 producers. 
 
 A number of New England manufacturers have indeed taken another 
 course. For the sake of getting the raw materials of their manufacture 
 cheaply, they urge that we should admit free of duty whatever is " repro- 
 ductively consumed," and impose duties on what is not. See A Manual 
 of the Currency, by George A. Potter, New York, 1868. 
 
 § 229. The benefits extended by national legislation to agri- 
 culture under the Nationalist policy does not stop at its pro- 
 tection. It is heavily subsidized by the nation. The Pro- 
 tectionists voted the Homestead Law, to enable the farmer to 
 begin his occupation of new lands under the most favorable con- 
 ditions. They also have always carried out the policy of subsidiz- 
 ing new roads and railroads, so as to give the farmer free access to 
 his market. " A tariff and internal improvements " have always 
 gone together in our political war-cries. The agricultural de- 
 partment of the government has been kept up for the benefit of 
 the farmer, that a knowledge of the best methods of work might 
 be disseminated, and new plants imported, acclimatized and 
 scattered over the land. All these proceedings are capable of 
 vindication only on the principle that it is wise and right for a 
 nation to make sacrifices to promote industry; on free trade 
 principles they are wrong. 
 
 § 230. Just as the laborer's prosperity is measured by the 
 relation of his wages to current prices, and not by the latter 
 
THE farmer's market. 241 
 
 alone, so the farmer's is measured by the relation of the prices 
 of raw and of manufactured goods — including food under the 
 former, — and not by the prices of either one. Wherever the 
 manufacturer is found at work, the prices of the two converge ; 
 wherever he is wanting, and the farmer stands alone, their prices 
 diverge. On the Schuylkill, for instance, the price of a pound 
 of rags and that of a pound of paper come very near to each 
 other. Suppose there were no paper-mills elsewhere in the 
 Union ; then as one went west the prices of the two would 
 diverge with every mile. At the foot of the Rocky Mountains 
 rags would be as good as worthless, while paper would bring a 
 far higher price than in the east. Just such is the relation of 
 the price of raw materials of all sorts as compared with the 
 price of manufactured goods of all sorts. The points where the 
 lines of price almost converge are those at which the one is 
 transformed into the other by manufacture. Free trade would, 
 not completely, but in great measure, transfer those points to 
 the other side of the ocean. Would the producer of food and 
 of raw materials be benefited by the transfer ? He would have 
 to pay the heaviest tax upon industry, the cost of transportation 
 in each direction. He would spend two bushels of corn in get- 
 ting one to market, and then pay in equal measure for everything 
 that he needed to bring back for his own use. 
 
 § 23L Protection to industry gives the farmer an abundant 
 and steady market for his breadstuffs, and creates a market for 
 crops more remunerative than grain. The European market for 
 our wheat and corn is furnished by England, and is the most 
 unsteady that can be thought of. The amount that is needed 
 depends, first of all, upon the character of the English harvest, 
 which commonly furnishes from two-thirds to three-fourths of 
 what is needed. Then Mark Lane turns to the wheat crops of 
 the Baltic and the Ukraine (and the corn crop of Turkey) to 
 supply the deficiency, as the English consumer prefers their round 
 hard grain to the American. If they cannot get enough there, 
 they send orders to the United States. The farmer ordinarily 
 runs the risk of a bad harvest; our farmers take the risk of 
 16 
 
242 ELEMENTS OF POLITICAL ECONOMY. 
 
 three. If two harvests abroad have been pretty bad, and that 
 at home has been not too good, he will make money. Otherwise 
 he may perhaps burn corn for fuel, as was frequently done in 
 free trade times. One year England will purchase of us seven- 
 twentieths of all the wheat that she needs ; the very next year 
 (1865) only one-twentieth. Her demand of us fell in 1872 to 
 8 J million bushels from 13^ millions in the previous year. The 
 price varies, though not as much as the amount, and by no 
 means depends upon the quantity taken, but upon how far that 
 comes up to the supply. Thus in 1856 the quantity was nearly 
 six times as great as in 1869, and the price was twice as high. 
 Worse still, the price that England must pay for the petty 
 quantity she takes, exercises a great influence upon that of the 
 entire crop, destroying the stability of our home market. 
 
 § 232. The policy which increases the number of those who 
 
 are not engaged in farming, but must live on its products and 
 
 pay for them, is that which secures to the farmer the best and 
 
 steadiest remuneration. The average consumption of wheat in 
 
 America is more than five bushels per head ; on an average of 
 
 years a native of the British islands consumes about a peck of 
 
 wheat grown on our soil. It will, surely, be the wisest way to 
 
 refuse to buy British goods, and thus draw her workmen across 
 
 the ocean to manufacture the same articles here. It will pay 
 
 better to feed them here than at home, and thus save the cost 
 
 of transporting both their food and their manufactures, besides 
 
 selling to each of them twenty times as much of the former. 
 
 And besides, it will be wiser to attract a multitude of our 
 
 own home population to manufactures, and thus create a steady 
 
 home market for food. Free traders urge the farmer to secure 
 
 the choice of two markets to make his purchases in, the home 
 
 and the foreign. The American artisan has no such choice of 
 
 two markets ; he must buy his food at home. Even if he lives 
 
 along the Canadian border he finds himself shut out from that 
 
 market by protective duties on American produce. 
 
 § 233. This fact, that the interest of the farmer and the 
 manufacturer are identical, attracted the attention of Franklin. 
 
THE farmer's home MARKET. 243 
 
 He wrote home from London in 1771: " Every manufacturer 
 encouraged in a country makes part of a market for provisions 
 within ourselves, and saves so much money to the country, as 
 must otherwise be exported to pay for the manufactures he 
 supplies. Here in England it is well known and understood 
 that wherever a manufacture is established which employs a 
 number of hands, it raises the value of land in the neio:hborin2 
 country all arouod it. It seems, therefore, the interest of our 
 farmers and owners of land to encourage our young manu- 
 factures in preference to foreign ones." 
 
 General Jackson, in a famous letter to Dr. Coleman, puts the 
 case very forcibly : " The American farmer has neither a foreign 
 nor a home market, except for cotton. Does not this clearly 
 prove that there is too much labor employed in agriculture ? and 
 that the channels of labor should be multiplied. Common sense 
 points out at once the remedy. Draw from agriculture the 
 superabundant labor, and employ it in mechanism and manu- 
 factures, thereby creating a home market for your breadstuffs, 
 and distributing labor to a most profitable account, and benefits 
 to the country will result. Take from agriculture in the United 
 States 600,000 men, women and children, and you at once give 
 a home market for more breadstufis than all England now fur- 
 nishes." 
 
 § 234. The creation of a varied industry enables the farmer 
 to enrich himself without impoverishing the soil. It does so by 
 bringing the farmer and the artisan into neighborhood, and giv- 
 ing the former facilities for making returns to the soil that he 
 would not otherwise possess. It does so by creating a demand 
 for less exhaustive crops than the great staples that are needed 
 in the foreign market. It does so by promoting the cattle- 
 farming that has turned large areas of Belgian peat and sand 
 into the richest farms in the world. It does so by making it 
 worth while to farm more carefully, through the certainty of a 
 permanent local market, rather than to get out of the soil as 
 fast as possible all the easily accessible elements, and then move 
 on westward to take up new land. What has been the history 
 
244 ELEMENTS OF POLITICAL ECONOMY. 
 
 of American agriculture thus far? It has mostly been the rob- 
 bing the soil of its most valuable qualities to export its wealth 
 across the ocean. " In my opinion it would be improper to 
 estimate the total annual waste of the country at less than equal 
 to the mineral constituents of fifteen hundred million bushels of 
 corn. To suppose this can continue is simply ridiculous. As 
 yet we have much virgin soil, and it will be long ere we reap 
 the full fruits of our improvidence ; but it is merely a question of 
 time. With our earth-butchery and prodigality we are each year 
 losing the intrinsic essence of our vitality" (Geo. E. Waring). In 
 some parts of the country it is no longer a question of time. 
 Districts like the region around Albany will now yield but a 
 third the amount of wheat that the first settlers got from thern. 
 The New Englanders have been the most wasteful of our farmers. 
 W^herever they have settled, as in western New York, the soil 
 has been blighted under their feet. On the other hand, the 
 grain farmers of eastern Pennsylvania, by their steady care to 
 keep up the fertility of the soil, have made their lands more 
 valuable with every year. Not that their methods are first-rate; 
 any one who has seen a European farm knows how much they 
 have to learn, especially on the utilization of manures. But by 
 sowing clover, a plant whose roots thrust themselves down to the 
 subsoil and take mineral sustenance from that, and by ploughing 
 down the clover with lime, the land has been kept up to a fair 
 degree of fertility. The possession of a home market, however, 
 and the command of the refuse of our towns and factories, and 
 the opportunity to keep large numbers of cattle and to alternate 
 other crops with grain, have been the chief cause of their pros- 
 perity. The farmer who has his market at hand, unless he be 
 unusually thriftless and wasteful, can go on year after year im- 
 proving the instrument by which he makes his living ; he who 
 depends on a distant market has no choice, as he must go on, 
 year after year, destroying it. 
 
 § 235. Protection diminishes the risk of farming by giving 
 variety to its products. The farmer who depends upon exporta- 
 tion puts all his eggs into one basket. Excessive rains or ex- 
 
PROTECTION AND COMMERCE. 24£ 
 
 cessive droughts, insects and blights, wage war upon the few 
 staple articles that he can find a market for. If he had the 
 consumers at hand, he could sell them a great variety of crops; 
 if one failed, the others would ordinarily — not always — escape. 
 Green crops flourish under the rainfall that ruins wheat ; the 
 blight that spreads ruin among the grain is powerless over the 
 bay. The soil that yields a poor and a risky return for one 
 article is just the thing for another. 
 
 § 236. Thirdly, the people of a nation reap a benefit from 
 the restrictive policy, in that it applies the law of parsimony to 
 the number of the commercial class, and to their profits. 
 
 A country is wealthy in proportion to the amount of its labor 
 for which it can find productive employment, in directing either 
 the organic or the formal changes of matter that fit it for man's 
 use. But the trader and those whom he directly employs produce 
 nothing; he only contributes to the productiveness of labor by 
 saving the time that the producer might otherwise waste in 
 seeking a purchaser. The more the service of the trader is 
 needed, the less is the net benefit derived from him, because the 
 greater in that case is the amount of the tax he imposes upon 
 the article on its way from the producer to the consumer. This 
 tax is ordinarily greatest when the distance between the pro- 
 ducer and the consume is greatest, and, as we have seen, is in 
 that case not limited to the cost of transportation and a fair 
 profit for his services. By practices and methods, of which arti- 
 ficial scarcities are but extreme instances, the price of the goods 
 that he transmits is lowered or raised at pleasure, either to 
 destroy competition in the market where he sells, or to reap the 
 large profits that far more than repay him for that and other 
 sacrifices. That these profits are ordinarily excessive in the 
 absence of home competition is evident from the fact that he 
 can aff"ord to pay a considerable share of the protective duties 
 designed to create home competition. 
 
 The restrictive policy brings the producer and the consumer 
 into neighborhood, and thus diminishes their need of the trader, 
 and weakens his power over them. The heavy tax of trans- 
 
246 ELEMENTS OF POLITICAL ECONOMY. 
 
 portation is saved ; men are set free from that most laborious 
 and unproductive of occupations to engage in otliers which are 
 productive, and which this very policy has called into existence. 
 The buyers of an article are no longer dependent upon the 
 trader as to the price they will pay ; if it be exorbitant, they 
 can go direct to the producer. The market can no longer be 
 forestalled, because the great and necessary commodities are no 
 longer concentrated in a few hands, but pass in much smaller 
 parcels, and through much fewer hands, from those who produce 
 them to those who need them. 
 
 § 237. Not that this policy destroys international commerce j 
 it only transforms it and makes it more equitable. From an 
 exchange of raw materials for manufactured goods, it raises it 
 to an exchange of manufactured goods on each side. Even if 
 the value of international exchanges is not reduced — and pro- 
 tection oft'^en increases them — their bulk and the cost of their 
 transportation are reduced, and that very decidedly. Men have, 
 thereby, more power to command the use of ships, and less need 
 to use them. It gives men at once more power over ships, and 
 ships less power over men — which is the law of progress 
 in regard to the instruments of wealth. It restores the equili- 
 brium of foreign exchange, and puts an end to the export 
 of specie from the poorer to the wealthier countries, retaining it 
 where it is most needed by increasing its utility and purchasing 
 power. 
 
 A country that continually develops native wealth and in- 
 dustry by a consistent Nationalist policy grows in power to pur- 
 chase those articles that its own manufactures do not yet supply, 
 or that can only be produced in another climate than its own. 
 The country that has the most diversified industry is best able 
 to patronize the finer industries of other countries. The servant 
 girls of the Northern States before the war bought more English 
 silks than did the slaveholding aristocracy of the South. Every 
 country that carries on an unrestricted trade with another much 
 richer than itself, purchases a less and less valuable class and 
 amount of goods with every generation, till at last its demand 
 
COMPLAINTS OF THE TRADING CLASS. 247 
 
 counts for nothing in the markets of the other. In so far as a 
 richer country persuades the poorer ones to follow this policy, she 
 herself becomes less of a workshop and more of a mart ; their 
 raw products pass through her ports and factories with ever less 
 of elaboration and an ever greater diminution in their amount. 
 From carrying on commerce with the world she sinks to the 
 position of a nation of shopkeepers and traders which carries on 
 commerce for the world. 
 
 The relations of Ireland, Portugal and Turkey to England illustrate 
 
 what we mean. See next chapter. England's very best customers are 
 
 the Protectionist nations. 
 
 § 238. The numbers and the prosperity of our own trading 
 class that are engaged in foreign commerce show that the pro- 
 tective policy has not extinguished that occupation. They show 
 likewise that the profits of manufacture under protection are not 
 so great as to cause an excessive diversion of capital in that 
 direction. 
 
 If we were to listen, indeed, to the complaints of some of this 
 class, we should infer in them either a great want of common sense, 
 or a sublime disregard of their own interests. They complain, 
 without courting any comparison of their ledgers, that the 
 profits of the manufacturing class are inordinately great, — that 
 two or three hundred per cent, per annum are reached in this or 
 that line of production. Then, why not leave importing and go 
 to manuficturing ? Oh, they are too moral! "Those who 
 believe that a legal monopoly is a system of robbery protest 
 against it on principle, and do not want to share its ill-got gains " 
 {Evening Post). Or if this be incredible there is another reason. 
 *' The profits are so precarious that before the year is up we may 
 lose everything by a reduction of the tariff" {Ibidem). There 
 would be very little danger of a reduction were it not for the 
 zealous warfare that these gentlemen wage upon the tariff. If 
 our manufactures are an unsafe investment, it is they who make 
 them so. In doing so they not only keep those profits up, if 
 they are high, by checking the flow of capital in that direction, 
 but make those (supposed) high profits right and reasonable, as 
 
248 ELEMENTS OF POLITICAL ECONOMY. 
 
 covering not only a fair return for the invested capital but a fair 
 insurance for the risk thus created. 
 
 § 239. Fourthly, and especially, the restrictive policy fosters 
 and encourages the growth of manufactures, and is often the 
 only way to create a varied industry in a new or a poor country 
 that does not possess it. 
 
 In imposing a protective duty upon the products of foreign 
 manufacture, the aim is not dearness or scarcity, but the reverse. 
 Prohibitory duties or the legal monopoly of a manufacture by a 
 few persons might produce a scarcity; but protective duties 
 operate in exactly the contrary direction. 
 
 If dearness — and we measure that by the labor-cost always — 
 were to be the result, and even the permanent result of such a 
 policy, it might yet be vindicated as a wise measure, for all the 
 reasons we have already specified, — reasons that relate to the 
 economy of labor, of agriculture, and of commerce. 
 
 But a rise in price can be but a temporary result of the pro- 
 tective duty, while only prohibitory duties can create scarcity. 
 And even if we leave out of view those compensatory advantages 
 that accrue to the community from the first, the temporary sacri- 
 fice involved in the temporary increase of price is a measure of 
 wise policy quite in the line of the best statesmanship in other 
 fields of national life. 
 
 The establishment of a post office, which in a country like the 
 United States will not pay for itself for centuries to come, is a 
 measure whose wisdom none disputes. It binds the people in 
 one, promotes intelligence, helps the popular education, renders 
 services that far outweigh its cost. Yet a consistent free trader 
 must oppose the measure, as taxing the mass of the people for 
 the benefit of the classes who use the post office; if he defended 
 it, it would be on grounds of indirect benefit that would justify 
 a like sacrifice in the protection of home industry. 
 
 Our public school and college system is another instance of 
 this. Consistent free traders, like Herbert Spencer and Gerritt 
 Smith, must oppose the measure. It is taxing all classes for the 
 benefit of one class of "producers," the fathers and mothers; 
 
WISE NATIONAL SACRIFICES. 249 
 
 it is the expenditure of public money for other ends than those 
 of police at home and defence abroad. It can only be justified 
 on the ground that it pays in the long run, and indirectly to all 
 classes, as protection does. And protection itself, as Mr. Mill 
 very forcibly puts it, is a method by which producers are " edu- 
 cated up to the level of those with whom the processes have 
 become habitual. '^ 
 
 Not only the education, but the rearing of children, which 
 the Christian state imposes upon the parents by its laws to give 
 perpetuity to the relationship of marriage, and to punish in- 
 fanticide, is a business involving large sacrifices for an ultimate 
 benefit. Were not the natural afi'ections too strong for logic, we 
 might have zealous advocates of free trade urging men to give 
 up this wasteful business, and import full-grown men and 
 women from Europe, where they are to be had so cheap. 
 
 In short, wherever we turn we find the farsightedness that 
 makes the sacrifice, and the nearsightedness that refuses to make 
 it, set over against one another, and the one approved as wisdom 
 by the consent of mankind, which rejects the other as folly. 
 
 § 240. Protection, adopted for these ends, has the sanction of 
 nearly all the great free trade authorities. Adam Smith con- 
 ceded that, " by means of such regulations, indeed, a manufacture 
 may sometimes be acquired sooner than it could have been other- 
 wise, and after a certain time may be made as cheap or cheaper 
 than in the foreign country/' His chief French disciples are 
 Say, Blanqui, Rossi, and Chevalier. Say taught that " pro- 
 tection granted with a view to promote the profitable ap- 
 plication of labor and capital might be productive of universal 
 benefit. New modes of employment, though destined to result 
 in great advantage when the workmen have been trained and 
 the preliminary obstacles surmounted, were liable, without the 
 aid of government, to cause heavy loss to the undertaker — a 
 result carefully to be avoided. '' Blanqui writes that " experience 
 has already taught us that a people ought never to deliver over 
 to the chances of foreign trade the fate of its manufactures." 
 Rossi declared that " in the conduct of a nation/' as in that of 
 
250 ELEMENTS OF POLITICAL ECONOMY. 
 
 a family, sacrifices needed to be made in the hope of thereby 
 opening " new roads to affluence." Chevalier declares that 
 ^' every nation owes to itself to seek the establishment of diversi- 
 fication in the pursuits of its people, as Germany and England 
 have already done in regard to cottons and woollens, and as 
 France herself has done in reference to so many and so widely 
 different departments of industry ;" that this " is not an abuse 
 of power on the part of the government; on the contrary, it is 
 the accomplishment of a positive duty which required it so to 
 act at each epoch in the progress of a nation as to favor the 
 taking possession of all the branches of industry whose acquisi- 
 tion is authorized by the nature of things. Governments are, 
 in effect, the personification of nations, and it is required that 
 they should exercise their influence in the direction indicated by 
 the general interest, properly studied and fully appreciated/' 
 And in his opinion, " combination of varied effort is not only 
 promotive of general prosperity, but is the one and only condi- 
 tion of national progress." 
 
 All these gentlemen belong to the free trade school, especially 
 Chevalier. So does John Stuart Mill, who is of the opinion 
 that " the superiority of one country over another in a branch 
 of industry often arises only from it having begun it sooner. A 
 country which has this skill and experience to acquire may in 
 other respects be better adapted to the production than those 
 earlier in the field; and, besides, it is a just remark that no- 
 thing has a greater tendency to produce improvement in any 
 branch of production tnan its trial under a new set of conditions. 
 But it cannot be expected that individuals should at their own 
 risk, or rather to their certain loss, introduce a new manufacture 
 and bear the burthen of carrying it on until the producers have 
 been educated up to the level of those with whom the processes 
 have become traditional. A protecting duty continued for a 
 reasonable time will sometimes be the least inconvenient mode 
 in which a country can tax itself for the support of such an 
 experiment." 
 
 Mr. Geo. W. Smalley (of The N. Y. Tribune) asked Mr. Mill during 
 his later years, " whether he still adhered to this statement ?" " Ce.r- 
 
MR. J. S. MILL ON PROTECTION.- 251 
 
 tainly," was his answer j "I have never affirmed anything to the con- 
 trary. I do not presume to say that the United States may not find 
 protection expedient in their present state of development. I do not 
 even say that if I were an American I should not be a protectionist." 
 
 If there be any doubt as to the practical bearing of these 
 concessions, especially the last, it is dispelled by Prof. Thorold 
 Rogers : " Few statements made by any writer have, I am per- 
 suaded, been more extensively, though unintentionally, mis- 
 chievous than this admission of Mr. Mill. The passage has 
 been quoted over and over again in the United States, and in 
 the British colonies, as a justification of the financial system 
 which these communities have adopted. The circumstances in 
 which they are situated exactly square with the hypothesis of 
 Mr. Mill. The countries are young and rising, — industries, as 
 yet nascent, are thoroughly suited to the natural capacity of the 
 region and of the people ; the latter being of the same stock 
 with the mother country whose manufactures they prohibit and 
 discourage. There is no reason, apparently, except that of 
 priority in the market, why the industry of the old country 
 should not be transplanted to the new. Hence, I repeat, Mr. 
 Mill's concession is perpetually quoted, and is perpetually mis- 
 chievous." Protectionists may now cease quoting Mr. Mill, and 
 begin to quote Prof. Thorold Rogers. 
 
 § 24L The object and the effect of protective duties, then, is 
 to enable the home producer to furnish the manufactured goods 
 more plentifully and cheaper than before the duty was imposed. 
 *' Though it were true," says Alexander Hamilton, " that the 
 immediate and certain effect of regulations controlling the com- 
 petition of foreign with domestic fabrics was an increase of 
 price, it is universally true that the contrary is the ultimate 
 effect of every successful manufacture. When a domestic manu- 
 facture has attained to perfection, and has engaged in the prose- 
 cution of it a competent number of persons, it invariably 
 becomes cheaper. Being free from the heavy charges which 
 attend the importation of foreign commodities, it can be afforded 
 cheaper, and accordingly seldom or never fails to be afforded 
 cheaper in process of time than was the foreign article for which 
 
252 ELEMENTS OF POLITICAL ECONOMY. 
 
 it is the substitute. The internal competition which takes place 
 Boon does away everything like monopoly, and by degrees re- 
 duces the price of the article to the minimum of a reasonable 
 profit on the capital employed." 
 
 So well ascertained and so necessary is this result as regards 
 the profits of manufacture that Prof. Thorold Rogers alleges it 
 as a reason against protection : " Unless the state were to go so 
 far as to grant a monopoly of production to one or a few indi- 
 viduals whom it protects, it could not prevent the operation of 
 that economic law which reduces profits, other things being 
 equal, to an equality. Manufacturers crowd into the protected 
 occupation, and the benefit intended to be secured by the policy 
 of the government is distributed and annihilated by competi- 
 tion.'' Mr. Rogers does not seem to be aware that this is the 
 very " benefit intended to be secured." But we have his word 
 as to how that policy does and must work, — above all that it 
 involves no monopoly. 
 
 " Competition being always free," says McCulloch, " among 
 home producers, the exclusion of any particular species of foreign 
 manufactured goods cannot elevate the profits of those who pro- 
 duce similar articles at home above the common level, and 
 merely attracts as much additional capital to that particular 
 business as may be required to furnish an adequate supply of 
 goods." 
 
 Neither of these two authors, it will be perceived, concedes that prices 
 are brought down by protection to the foreign rate ; but they both show 
 that the foolish clamor as to the excessive profits of the protected manu- 
 facturer has nothing to go upon. Mr. D. A. Wells flatly contradicts his 
 English teachers when he says : " It not unfrequently happens that the 
 imposition of a tax in the form of a tariff on an imported article is made 
 the occasion for very greatly and unnecessarily advancing the price of a 
 corresponding domestic product." 
 
 § 242. What are the reasons for this final reduction in price ? 
 It is because the obstacles to cheap production have been over- 
 come, and the home producers are competing for the home 
 market. These obstacles are manifold. (1) The lack of se- 
 curity deters the manufacturer from putting his capital into a 
 large undertaking. He has to make great outlays, great sacri- 
 
England's industrial warfare. 253 
 
 fices even, but he has no security that he will ever reap the 
 fruits, unless the home market is secured to him. He fears the 
 foreign competition more than that of his competitors at home, 
 because the latter stand on an equality of power and capacity 
 with him, while the former are able and ready to make large 
 sacrifices simply to drive him out of the market and secure it to 
 themselves. It is not a matter as to which we are left in any 
 doubt that artificial fluctuations are produced for this purpose. 
 "It has already been shown," says Coleridge in 1834, "in evi- 
 dence which is before all the world, that some of our manu- 
 facturers have acted upon the accursed principle of deliberately 
 injuring foreign manufacturers, if they can." " Experience,'* 
 says Blanqui, one of the free trade economists of France, " has 
 already taught us that a people ought never to deliver over to 
 the chances of foreign trade the fate of its manufactures." 
 
 A report presented to the British Parliament in 1864: by a commission 
 appointed to investigate the state of industry in the mining districts 
 says : — 
 
 *' The laboring classes generally in the manufacturing districts of this 
 country, and especially in the iron and coal districts, are very little aware 
 of the extent to which they are often indebted for being employed at all 
 to the immense losses which their employers voluntarily incur in bad 
 times in order to destroy foreign competition, and to gain and keep 
 possession of foreign markets. Authentic instances are well known of 
 employers having, in such times, carried on their works at a loss amount- 
 ing in the aggregate to £300,000 or £400,000 in the course of three or 
 four years. 
 
 " If the efforts of those who encourage the combinations to restrict the 
 amount of labor and to produce strikes were to be successful for any 
 length of time, the great accumulations of capital could no longer be 
 Oiade which enable a few of the most wealthy capitalists to overwhelm 
 all foreign competition in times of great depression, and thus to clear the 
 way for the whole trade to step in when prices revive, and to carry on a 
 great business before foreign capital can again accumulate to such an ex- 
 tent as to be able to establish a competition in prices with any chance of 
 success. 
 
 " The great capitals of this country are the great instruments of war- 
 fare against the competing capital of foreign countries, and are the most 
 essential instruments now remaining by which our manufacturing su- 
 premacy can be maintained ; the other elements — cheap labor, abundance 
 of raw materials, means of communication, and skilled labor — being 
 rapidly in process of being equalized." 
 
254 ELEMENTS OF POLITICAL ECONOMY. 
 
 So much for Tennyson's 
 
 "... fair, whito-winged peace-maker." 
 A greater poet had some excuse for making his Eaust say :— 
 
 '^ Krieg, Handel und Piraterie 
 Dreieinig sind aie, nicht zu trennen." 
 
 § 243. (2) The inexperience of the laboring class is not to be 
 overcome in a day. Their lack of skill involves diflBculties and 
 losses ; their industrial education, like all education, is an invest- 
 ment that pays only in the long run. The unprotected manu- 
 facturer is a captain of industry who must drill his men under 
 fire, must expect to fight with them from the first day that he 
 enlisted them. Foreign operatives, indeed, can be secured in 
 some branches and for positions that require special skill. The 
 non-commissioned officers of the industrial army may therefore 
 be men of some experience, but the rank and file employed in a 
 new industry are raw recruits. But when once the army has 
 learnt its drill, work becomes as effective as anywhere else, and 
 the labor-cost, and with it the labor-price of production, is as 
 low as elsewhere, and lower at home, as the cost of transportation 
 and the profits of a long string of middlemen are no longer 
 added to the price while the article is on its way from the pro- 
 ducer to the consumer. 
 
 And the captains of industry themselves need drill and ex- 
 perience as well as their workmen. The processes of a great 
 manufacture are not to be learnt in a day, even if no changes in 
 method are contemplated. But among the great advantages 
 gained in the acclimatization of new industries, not the least is 
 the gain in improved methods when an old industry is tried 
 under a new set of conditions. Many of the most notable labor- 
 saving inventions, beginning with Whitney's cotton-gin, owe 
 their existence to the efi"orts of those who were engajjed in 
 prosecuting new and protected industries. Such has been the 
 history of the sugar manufacture in Europe, which now actually 
 pays duties that discriminate in favor of cane sugar from the 
 West Indies, and yet partly supplies even the English demand 
 The great advances made in the application of chemistry to 
 
PROTECTION CHEAPENS. 255 
 
 manufactures, date from the efforts of Napoleon to make the Con- 
 tinent independent of England. Thirty yeara ago Dr. Wayland 
 entered his protest against the duties that discriminated in favor 
 of home-made cutlery, since " not a thousandth part of the 
 cutlery used is made here." Since then, by the invention of 
 new machines, England is actually surpassed in the production 
 of all but the finest varieties. 
 
 The Spectator (London) declares that the new manufactures 
 in Bengal will in a few years be strong enough to hold their own 
 against English competition, but that at present, or so long as 
 " coal is dear, and the hahit of manufacture upon the large scale 
 not yet formed,'^ the removal of high duties would cause them 
 first to languish and then to die out, as the native manufactures 
 of India did half a century ago. 
 
 An English Trade Circular of 1871 says: "Every Canadian season 
 affords unmistakable evidence that some additional article in English 
 hardware is being supplanted by the produce of the Northern States, and 
 it is notorious how largely American wares are rivalling those of the 
 mother country in other of our colonial possessions, as well as upon the 
 Continent. The ascendancy of the Protectionist party in the States con- 
 tinues to operate most favorably for the manufacturing interest there, and 
 it is no wonder that, under such benignant auspices, the enterprise in 
 this direction is swelling to colossal proportions." 
 
 § 244. (3) The' complete organization of industry, and the 
 accumulation of the capital that make it possible, are not effected 
 in a day. It is a commonplace of the economists that the pro- 
 ducts of industry are cheapened by extending the scale of pro- 
 duction. Very often a manufacture already existing in the face 
 of unrestricted foreign competition is carried on in a small, 
 feeble and costly way for lack of assurance as to a large demand 
 for it. But as soon as protection gives it that assurance the 
 production is doubled, trebled, quadrupled, — and the price is 
 pulled down to less than the previous selling rates instead of 
 increasing by the amount of the duty imposed. Thus the selling 
 price of American cottons fell after the tariff of 1842 imposed a 
 heavy duty on English cottons, instead of rising. Something 
 of the same sort in the hardware trade was evidenced by an 
 
256 ELEMENTS OF POLITICAL ECONOMY. 
 
 English circular of that year offering hardware at rates that 
 after paying the new duties would still be a little lower than 
 they had been before. The same was the case with the price of 
 starch, and doubtless with many other articles, which at once 
 began to be made in large quantities instead of small. Mr. 
 Greeley illustrates this by the case of a newspaper ; double its 
 circulation, and the publisher can afford a better paper at a less 
 price. 
 
 § 245. Much is often made by the opponents of protection of 
 a case in which the adjustment of duties is exceedingly difficult. 
 It may be desirable to protect both the production of the raw 
 material and of the finished product of an industry. This occurs 
 more frequently elsewhere than in our own country, but the case 
 of the woollen and iron industries brings this within the number 
 of our tariff problems. Our present tariff on wools and woollens 
 was adjusted on a basis agreed to by a joint convention of wool- 
 growers and wool-manufacturers, but it is complained, by a small 
 minority of the latter, that it forces them to pay an exorbitant 
 price for certain grades of foreign wool which they must have 
 to mix with native wool for the production of some classes of 
 goods ; and that the protection accorded them by duties on the 
 goods is nullified by the duties on wool. The same complaint is 
 made by some manufacturers who need a large supply of steel and 
 iron, and who say that the steel that they can buy in the Ameri- 
 can market is inferior, or the iron too dear. These complaints 
 may or may not have foundation in fact, but the true remedy 
 seems to be the higher protection of the manufactured goods, 
 rather than the proposed " removal of duties from articles re- 
 productively consumed." The difficulty will disappear as the 
 production of these raw materials of the manufacture is brought 
 nearer perfection ; and no one that believes in protection could 
 consistently seek its solution in the removal of duties. 
 
 In conclusion^ a formfial answer to a few of the more common 
 ohjections may not he out of place. 
 
 I 246. (1) " Protection discriminates against the consumer, 
 in favor of the producer." Who this consumer is, that is neither 
 
WHAT IS HIS INTEREST? 257 
 
 a producer as well, nor directly dependent upon the prosperity of 
 other people who are producers, is hard to say. His name and 
 the mysteriousness of his character would seera to indicate that 
 he is the Devil. But most likely he is an innocent ens lo^iciim, 
 manufactured by the same process of abstraction by which the 
 economists devised their economical man — " a covetous machine, 
 inspired to action only by avarice and the desire of pro- 
 gress." That is, they cut away or stole away (abstracted) the 
 better half of the real being, and persisted in treating the 
 remaining human fragment (if we can call it human) as a living 
 reality. "The consumer" always buys and never sells — has no 
 soul and no patriotism — has no interest but the cheapness of 
 commodities — belongs to none of the classes that make up the 
 industrial state. His sole function in life is to devour the result 
 of other men's labors, but he adds nothing himself to the sum 
 of the utilities that make wealth. There may be a few excep- 
 tional persons in the nation that deserve to be called mere con- 
 sumers — /ruffes consumere nati — but that the national policy is to 
 be for ever directed in accordance with the interests of an insig- 
 nificant and useless class, is a large assumption. And that their 
 interest lies in the direction of dependence upon the farther 
 producer, instead of the nearer, we have seen reason enough 
 to doubt. " The consumer " must be as short-sighted as he is 
 hard to find, if he thinks it does. 
 
 It is said that " the interest of the consumer is the interest of 
 society, while that of the producer is the interest of a class." The 
 interest of the mere consumer is in mere cheapness. His interest 
 must be best secured in a condition of business and industry in 
 which prices are the lowest and the producers are underbidding 
 each other for customers. But that condition is found in what 
 are called hard times. Either such times are a golden age, for 
 whose coming we should pray, or the interest of the mere " con- 
 sumer " and that of society are nut identical. 
 
 § 247. (2) " But it is every one's interest — his money inte- 
 rest, at least — to buy in the cheapest market, and sell in the 
 dearest he has access to." Suppose that his buying in the 
 17 
 
258 ELEMENTS OF POLITICAL ECONOMY. 
 
 cheapest market makes the difference of his having no dearest 
 market to sell in, but only a cheapest market for that purpose also. 
 Then manifestly his interest is found, if he have anything to 
 sell, be it sweat of brow or of brain, be it wares or provisions, 
 in the comparative rates of the two markets. Free trade simply 
 forces him — forces all the producers in the country — to buy in 
 the markets that now exist, be they good or bad, without giving 
 them either right or power to create a new and a better market 
 than any that exists. 
 
 The sole interest of a man is not in the spending the money 
 he has now in his pocket, be it great or small. A larger interest 
 for him is the getting more to replace it. And then the interest 
 of those who have empty pockets, of the unemployed laborers 
 of a country, runs still more strongly in the same direction. 
 Terence could buy " as much for a shilling in Ireland as he can 
 here for a dollar." Why then didn't he stay there ? Because 
 he " couldn't get the shilling," and he can compass the dollar. 
 
 It is not, then, anybody's interest to buy in the cheapest and 
 sell in the dearest of existing markets, if by that operation he 
 leaves hirqself, in the long run, without much or anything to 
 buy with. Least of all is it the interest of a nation, which has 
 the power to create for itself markets in which the relative 
 cheapness and dearness is really in favor of all classes qf buyers 
 and sellers. 
 
 § 248. (3) " Every country has its own natural advantages, 
 from which Providence meant the rest to derive benefit. 
 Each country should do the things that are easiest. Free trade 
 proposes that they shall do so — Protection that they shall not. 
 It is, therefore, a setting aside the course of nature; it is intro-^ 
 ducing an unnatural system of exclusion." 
 
 Every country has its own natural advantages, from which 
 Providence evidently meant its own people to derive benefit. 
 To that end Providence itself gives a certain measure of natu- 
 ral protection in the cost of transportation, &c. Were all the 
 international relations of thfe people in a natural state, that natu- 
 ral protection would possibly be quite sufficient. But the purely 
 
NATURAL ADV;\NTAGES. 259 
 
 artificial status of those relations, produced by an unnatural 
 national economy of some of them, deprives others, the newer 
 and weaker countries, of the opportunities of natural growth 
 and development. It is the aim of protection merely to remove 
 the obstacles to natural growth. 
 
 This natural growth is achieved in the equilibrium of the 
 industries. If one wealthy nation has destroyed that at home, 
 has impoverished her agriculture by driving out of that channel 
 the mass of the population, and is thereby forced to find work 
 for them in manufacturing goods for foreign countries, and food 
 for them in the unequal exchange of those goods for wheat and 
 corn, all her financial power is at once exerted in the direction 
 of destroying or hindering the growth of the equilibrium of the 
 industries elsewhere. That she may manufacture for the rest 
 of the world, the rest of the world must confine itself to raising 
 food and raw materials for her. 
 
 Is it " natural " that any nation should keep its farms on one 
 continent and its workshops on another? Is it ''natural" that 
 cotton, on its way from the grower to the wearer, should go 
 half-way round the globe and back again? Is it "natural" 
 that a large part of the race should be employed in carrying 
 bulky articles — raw materials and coarse goods — from some 
 countries to others in the same climate and of the same 
 general capacity? Is it "natural" that a country with 
 millions of tons of iron on the surface of her soil, and 
 square miles of good coal not far below it, and most of her labor 
 running to waste for lack of employment, should send for rail- 
 road iron thousands upon thousands of miles ? (See § 282.) Is 
 it not a most unnatural and artificial system ? Or is there no 
 test of what is " natural " in this connection, except present 
 cheapness in money price? 
 
 Protection is natural resistance to an unnatural state of 
 things. If to the superficial eye it wear the appearance of 
 artificiality, it shares in the reproach of many a just war, which, 
 although defensive in reality, wore the appearance of being 
 offensive. 
 
260 ELEMENTS OF POLITICAL ECONOMY. 
 
 § 249. (4) " Protection can change the direction of capital, 
 but does not add to its amount or efficiency. It can only divert 
 it from more to less remunerative channels, without in the least 
 adding to its power to employ and fertilize labor, or increase 
 the national wealth/' 
 
 This argument has been partly refuted in the exhibition of 
 the effects of a varied industry upon labor. Its chief author, 
 Adam Smith, gives us its refutation in another direction, when 
 he calls attention to the greater rapidity of movement of a capi- 
 tal employed in a home manufacture than a foreign trade, a con- 
 sideration that has great weight when a country of limited capi- 
 tal is under discussion. We have also seen that the capital that 
 is wastefully and feebly employed in a native manufacture under 
 free trade, becomes far more efficient when a protective duty 
 gives it a larger market. Far less than double capital will do 
 quadruple the work, when the demand is quadrupled. 
 
 But the chief answer is that capital grows steadily under a 
 nationalist policy, and declines as steadily in its absence. For 
 capital grows as the power of association is increased, and the 
 social circulation is accelerated; declines with the decline of 
 either. Men can save only when they have plenty of work, and 
 that work is remunerative. A nation that leaves its labor largely 
 unemployed is unable to make those accumulations of the results 
 of past labor that we call capital. A nation that secures its peo- 
 ple as much and as varied industry of a productive and re- 
 munerative kind as the case permits, is on the road to wealth. 
 In the latter case the results of labor are more evenly distributed 
 than in the former; they are represented by the houses owned 
 by well-paid workmen ; the accounts kept at the saving's 
 banks; the possession of better furniture; the better education 
 of the children. In the former the gains effected gather into 
 the possession of a few men of great fortune; they make a 
 greater display, but the mass of the population are in penury. 
 
 Even if this objection were true in the sense in which it is 
 meant, the advantage of protection would be great. To direct 
 a part of the capital out of the channels in which alone it would 
 
"protection does not protect." 261 
 
 earn a return under free trade, — the channels of money-lend- 
 ing, land speculation, transportation and agriculture — would 
 prove a great gain to all classes, by increasing the rapidity of 
 commerce at home, by diversifying industry, and adding to the 
 mutual helpfulness and interdependence of the people. For a 
 new country, in the present state of the world's industry, the 
 question is not between this raanufticture and that; not between 
 " manufactures suited to the character of the country, and there- 
 fore remunerative," and others that " must be carried on at a 
 loss." It is substantially between agriculture associated only 
 with a few of the rudest industries that supply its direct wants, 
 and the equilibrium of the industries, in which manufactures 
 hold their due place. Under all these smooth sayings lies this 
 harsh alternative, which is carefully hid away from the popular 
 sight by round words. 
 
 § 250. (5) " Protection does not protect." This paradox 
 bears two senses : 1. " Production does not increase prices, and, 
 therefore, does not stimulate home production. Look," we 
 are told, " at its effect on copper. A heavy duty was imposed, 
 and the effect was that the article reached figures so low that 
 several mi^s had to stop, and its price at home is more governed 
 by the prices that it brings in the foreign market than ever 
 before." This is quite true, and yet the aim of the protective 
 duty was accomplished. The American producer was secured 
 control of the home market; if he went into over-production he 
 made a mistake from which no national policy or legislation could 
 save him. That he began to export pig copper, and thus to 
 make himself dependent upon the foreign market, is not the 
 fault of the tariff. He merely repeated what has been pointed 
 out as the great mistake made by the farming interest. Mean- 
 time, what becomes of the theory that protective duties add 
 just their amount to the price at home ? 
 
 2. It is also said to mean : " Protection makes production so 
 expensive that the home manufacturer is shut out from com- 
 peting in the foreign market. The amount of our exports 
 declines, and the national wealth is diminished.'' 
 
262 ELEMENTS OF POLITICAL ECONOMY. 
 
 In 1860 the value of our export of manufactures was 
 $42,100,000. In 1881 it was $77,300,000, or including all 
 manufactured foods, $165,874,000. But even if it were much 
 less than this proportion, we should have every reason to be 
 satisfied. The chief problem for the country is to secure such 
 an equilibrium of our industries as shall employ as many of 
 our people as possible in serving each other, and thus dimin- 
 ish our dependence upon foreign products. The growth of 
 domestic commerce under the protective policy far more than 
 compensates for any loss it might have inflicted as regards 
 commerce with foreign countries. And a manufacturing sys- 
 tem which has the patronage of fifty millions of people can 
 afibrd to dispense with a good deal of foreign custom. 
 
 It is quite true that America will obtain a very large share of 
 the world's commerce in the not distant future. Her share in it 
 now would have been much greater than it is if she had adopted 
 the policy of subsidizing steamship lines, by which the English 
 producer has been brought near to every foreign market, and has 
 been enabled to send his goods abroad at less than the real cost 
 of transportation. The quality of our exports of manufactures 
 is what has made for them the foreign demand whicl;^does exist. 
 We make more honest cottons, more ingenious and serviceable 
 tools, and better adjusted machinery than our rivals. Had we 
 followed the free-trade principle, which exalts mere cheapness 
 above everything else, we should not have efi'ected these gains. 
 
 But it must be borne in mind that the amount of its exports 
 is no safe criterion of the general prosperity of a country. That 
 notion originated in countries that have made themselves de- 
 pendent upon the vicissitudes of foreign trade. If we export 
 less because we have the power to consume more at home so 
 much the better. This must certainly be true of the United 
 States under the present tariff. The manufactures of the 
 country have vastly increased, and if we send less of their pro- 
 ducts abroad, it must be because we have grown wealthier as a 
 nation and individually — able to command the use of more 
 commodities. 
 
THE POWER OF IMAGINATION. 263 
 
 § 251. (6) " Protection discriminates against the poorer and 
 more thinly settled districts of the nation in favor of the older 
 and the richer states." We have partly answered this in show- 
 ing that it did not discriminate against the farmer. 
 
 The tariflf is no more designed for the East than for the West 
 Even if it had only the eflfect of bringing the Western farmer's 
 market to buy and sell from across the Atlantic to our own sea- 
 board, the West would have saved that much — the tax of trans- 
 portation across the sea, the uncertainty of foreign demand, &c. 
 The only industry that the West could cultivate without the 
 tariff is the raising large quantities of wheat, to be sold in Lon- 
 don or Liverpool at $1.40 per bushel put down, after paying 
 railroads, grain-dealers, shipowners, and the like. 
 
 But the official figures show that the West is benefiting by the 
 tariff even more than the East. While the increase in the entire 
 value of our manufactures between 1860 and 1870 was 128 per 
 cent., in the seven principal Western States it was over 400 per 
 cent., and the increase in all the Southern States also outran the 
 national average, in spite of the vast destruction of property and 
 the prolonged suspension of industry there during the war. 
 
 These facts are sufficient for our purpose here, but to the ad- 
 vocates of the Nationalist policy they are not satisfactory. The 
 South and West might have done far better than this; would 
 have done so were it not for the wide dissemination of the notion 
 that the tariff is a law for the benefit of Eastern and Northern 
 manufacturers. Even in regard to material interests imagina- 
 tion governs men greatly. The West and South are both awaken- 
 ing to this fact. Georgia is ambitious of becoming the centre 
 of the cotton manufacture, and Chicago and Minneapolis are 
 destined to become two of the greatest manufacturing centres 
 of the world. 
 
 My old classmate, the postmaster of Charlotte, N. C, tells me that he 
 found the people of his neighborhood so completely possessed with this 
 prejudice, that he could hardly induce them to begin manufacturing their 
 own cotton instead of exporting it. By taking advantage of every occa- 
 sion, public or private, he at last persuaded them to organize companies 
 
264 ELEMENTS OF POLITICAL ECONOMY. 
 
 to start spinning-mills and weaving-factories, so as to find a local invest- 
 ment for their little savings. The result has been that employment has 
 been found for large numbers who would otherwise have remained idle ; 
 the water-power that was running to waste has been utilized ; profits 
 larger than those of the Northern manufacturer have been realized; the 
 price of cottons in the neighborhood has been reduced, and the general 
 well-being of society generally promoted. 
 
 § 252. (7) " The doctrine of protection leads on logically to 
 the platform of the Communists. It teaches the people that it 
 is the business of the state to provide for the prosperity and em- 
 ployment of the people. The next step is to assert that the 
 people have a right to employment, and that if the competition 
 of individual capitalists fail to furnish them with that, the state 
 must step in to establish national workshops for the benefit of 
 those who are out of work. From this, to the monopoly of all 
 industry, and consequently of all property by the state, is an 
 easy descent." 
 
 The Nation (April 9th, 1874) speaks of "European socialism, the seeds 
 of which were naturally found in Continental centralization, and were 
 brought to this country in the protective system." 
 
 Protection cordially accepts the existing order of society, the 
 present distribution of wealth and the lawful freedom of indi- 
 vidual action, as right and proper. Its chief advocates (Thiers, 
 &c.) have been zealous opponents of Communistic socialism, and 
 the ablest defenders of the rights of property. While it asserts 
 that the industrial growth and welfare of the people must be 
 among the first cares of the statesman, it does not teach — what 
 all experience refutes, that this can be attained through the 
 direct action of the state as the employer and organizer of labor 
 in general, while it with consistency accords the state a monopoly 
 of a few departments, such as the post-oflBce. 
 
 That the protectionist principle bears some resemblance to the 
 false positions of the Communists, or can be made to do so in 
 clever but hostile statements, we do not care to deny. It con- 
 tains the truth of which communism is the counterfeit false- 
 hood, — the truth that it is the duty of the state to " promote 
 the general welfare. '* It thus furnishes the best refutation of 
 
PKOTECTION AND COMMUNISM. 265 
 
 communism, for error is never defeated and put to rest by bare con- 
 tradictions, but by the statement of the truth that lies nearest to 
 them, or even involved in them, and that gives them what vitality 
 they have. If the assertion of that duty leads on to com- 
 munism there is unhappily no escape for the American nation ; 
 the country stands already committed to it by the preamble to 
 the United States Constitution. That that preamble pointed to 
 a protectionist policy is clear from the expressions of popular 
 feeling while the Constitution was under discussion, and from 
 the legislation adopted by the first Congress under the new 
 government. 
 
 Throughout the earlier chapters we have seen two great con- 
 trasted theories of the nature and efi'ects of social progress under 
 the existing constitution of society. The one declares that the 
 world under the freedom of individual action is drifting steadily 
 toward distress and misery ; that whatever progress is achieved 
 enures only to the benefit of the few, and rather detracts from 
 than adds to the well-being of the many; that it is in the 
 interests of the rich to keep the wages of the poor as low as pos- 
 sible so long as free competition is the law and rule of industry. 
 "Whoever holds with this teaching must vibrate between 
 the theory of state passivity or free trade, and that of the reno- 
 vation of society by the destruction of the existing rights of 
 property and methods of distribution. He will incline to the 
 former whenever he is least hopeful of the future of society, or 
 least alive to its miseries. He will favor the other whenever he 
 is awake to those miseries, but confident that they are not the 
 necessary lot of mankind. 
 
 The other' body of teaching declares that power and freedom 
 go hand in hand in the world's progress ; that except by arti- 
 ficial interference every gain for man in power over nature is a 
 gain for all ; that wealth naturally tends to an equable distribu- 
 tion among all classes ; that the interest of the capitalist is to 
 pay well those whom he employs so as to develop their power to 
 the uttermost ; that labor continually and naturally grows in 
 power over all the accumulations of past labor that we call 
 
266 ELEMENTS OF POLITICAL ECONOMY. 
 
 capital. If the latter teaching be likely to lead some of the 
 thoughtless into communism or socialism, is it not far more likely 
 that the former will lead thither those of the thoughtful who are 
 not able to think their way out of these doctrines ? 
 
 And we are not left to conjecture here. Mr. Mill is certainly, 
 after Adam Smith, the most distinguished writer of the Free 
 Trade School ; in his Autohiography he discloses the fact that 
 his hearty acceptance of the doctrines of Malthus, Ricardo and 
 his own father, had led him to such gloomy conclusions as to the 
 results of the existing organization of society and its distribution 
 of property, that he had come to the conclusion that it would 
 be a change for the better were some modification of socialism 
 to be substituted so as to put a limit to the great and growing 
 inequality of wealth and extension of poverty that he saw around 
 him. He also tells us, what is the fact, that Bastiat adopted in 
 part the views of the Nationalist school in order the better to 
 fight the Communists who attack landed property. What 
 Schultze-Delitzsch and his Opponent Lassalle have to say on 
 this question has already been told (§ 114). 
 
CHAPTER TWELFTH. 
 
 The Science and Economy of Manufactures. — The 
 
 Practice. 
 
 § 253. The theory and the practice of national economy, as 
 already remarked, (§ 6), do not always go hand in hand. The 
 theory in some cases is much better than the practice ; men see 
 and approve the better course and follow the worse. In other 
 cases it is worse than the practice, or lags behind it. In all the 
 more necessary and practical affairs of life, men are not left de- 
 pendent upon the possession of correct theories. They do in- 
 stinctively the right thing, having no conscious reason, or only 
 a bad one; and after their practice has been repeatedly sub- 
 jected to the censures or the mockery of shallow theorists, it is 
 at last vindicated by the riper judgment and clearer insight of 
 wiser men. 
 
 It is, therefore, a mistake to suppose that the practice of na- 
 tional economy at a time when correct or current theories of the 
 subject had not yet begun to be formed, is unworthy of our study. 
 Men " builded wiser than they knew" in many things; the great 
 and wholesome instincts that grew out of the national life into 
 which they were born, and from which their own life derived 
 half its value, led them aright where they had no theory; and 
 only shallow doctrinaires would depreciate the results as having 
 no right to exist, because not attained logically. 
 
 § 254. The ancient writers on political philosophy confined 
 their attention chiefly to the jural state. But the actual rulers 
 had a clear notion of economic policy. Boeckh has shown (as 
 against Heeren) that Athens took measures to protect home in- 
 dustry, to develop its various forms, and to make the state inde- 
 pendent of its rivals for the necessaries of life. The low concep- 
 tions of political morality that prevailed, allowed of the use of 
 means to this end which are not capable of vindication. If an ally 
 of Athens had corn to sell, it must be brought to the port of 
 
 267 
 
268 ELEMENTS OF POLITICAL ECONOMY. 
 
 Athens (the Pirgeos), and a certain proportion must be sold for 
 use in the citj itself^ and at a fixed price, before any could be 
 disposed of at competition prices to the merchants of other 
 cities. The effect of these measures was limited by the nature 
 of the political constitution of Greece. In this as in other mat- 
 ters every city legislated for itself; nothing was done to benefit 
 Grreece as a whole, and to bring her different divisions into the 
 close and friendly relations of mutual helpfulness. Even the 
 structure of the country forbade this; it was easier and cheaper 
 to feed Athens with corn from the Chersonesus than to carry 
 food over the mountain passes from Boeotia. That the country 
 never became an industrial whole, is connected with the fact that 
 it was never a political unit. It fell into subjection through the 
 weakness of its social constitution. 
 
 Rome also adopted a Protectionist or Nationalist policy in 
 earlier times, when she was still a people among the peoples. 
 Already she was a great industrial city, competing with Carthage 
 for the commercial preeminence of the Mediterranean. When 
 she became an empire, the enemy and the destroyer of nationali- 
 ties, she of course abandoned that policy. 
 
 § 255. In the middle ages industry was in the hands of 
 chartered guilds, and was a matter of privilege and prescrip- 
 tion. The states that awoke to the importance of the industrial 
 life of the community all took measures to protect and cherish 
 local industries. In Italy the great prosperity of Venice was 
 largely owing to the care with which she protected all the inte- 
 rests of her merchant princes, and the rival cities of the main- 
 land followed hard in her footsteps. 
 
 Charles V., of Spain and Germany, studied the maxims and 
 methods of Venetian policy, and adopted them in Spain. But 
 when the industries of his kingdom sprang into life, he loaded 
 them down with oppressive and vexatious burdens, in order to 
 raise money for his wars. The alcavala imposed a tax upon 
 every transaction, the intercourse between the provinces was 
 put under a heavy tariff of duties, and the right to collect these 
 was farmed to individuals who were often foreigners. Every 
 
HENRY IV. AND COLBERT. 269 
 
 wise maxim was set at nought, and the country languished in 
 ever-deepening poverty. 
 
 § 256. In France, the leading statesmen had learnt the 
 same lesson from the Italian cities, but to better purpose. Sully, 
 indeed (anticipating the Economistes of the last century), wished to 
 promote agriculture alone, and regarded manufactures as promo- 
 ting luxury and waste. But France owes to the care and 
 patronage of his wiser master, Henry IV., the transfer of the 
 growth and manufacture of silk from Italy to her own soil. 
 
 Colbert, the greatest statesman of the reign of Louis XIV., 
 was recommended to the confidence of that monarch by the 
 Cardinal Mazarin as his last act. The King " might with truth 
 and justice say that, in giving him Colbert, Grod had done much 
 for the prosperity and glory of his reign. France might add 
 that she owes to his wise counsels the wonderful develop- 
 ment of her industry" (Thierry), His "spirit has appa- 
 rently never ceased to influence the councils of his country'* 
 (Dr Travers Twiss, in 1847). He found the finances in a ruin- 
 ous state, and that the industrial interests of the country had 
 been sadly neglected during the period of confusion that had 
 elapsed since the death of Henry IV. As Adam Smith says, 
 he combined great integrity and great clearness of intellect, 
 with the habits of a laborious man of business. His weakness 
 was undoubtedly his too great faith in the virtues of legislative 
 interference. He did not know when to stop. He found the 
 frontiers of the provinces lined with custom-houses for the col- 
 lection of unnatural duties upon domestic commerce, and these he 
 wisely transferred to the frontiers of the nation. He developed 
 the French marine by a system of bounties. He removed 
 excessive burdens from the shoulders of the agricultural class, 
 and then did them more than equal harm by prohibiting the 
 export of wheat. In 1661: he had enacted his great tariff" law, 
 by which duties were taken off" exports, and imposed upon man 
 ufactured goods imported from other countries. That the effect 
 was " the prodigious development of France under the encour- 
 agement which it aff"orded them" (Blanqui) is admitted even by 
 
270 ELEMENTS OF POLITICAL ECONOMY. 
 
 the Free Traders, who deplore the means he adopted. Those 
 light and graceful fabrics, in whose production the skill and 
 nice taste of this Celtic people find exercise, were naturalized in 
 France by Colbert ; without him, as Irish history shows, these 
 national gifts might have lain idle. " France," says J. B. Say, 
 " at present contains the most beautiful manufactures of silk 
 and wool in the world, and is probably indebted for them to the 
 wise encouragement of Colbert's administration." Some En- 
 glish writers urge, indeed, "that France showed signs of 
 revived prosperity and augmented wealth under the administra- 
 tion of Colbert, was to be attributed to the re-establishment of 
 order in the finances of the country, and the removal of various 
 obstacles which impeded the operation of certain branches of 
 industry" (Twiss). It is certain that France was a richer 
 and more prosperous country than at any previous period, 
 partly in spite of the meddlesome trifling of the regulations 
 which Colbert imposed upon the industries he had called 
 into existence. The man could put no restraint upon his won- 
 derful gift for arranging details ; he irritated the French mer- 
 chants till they told him that what they chiefly asked of him 
 was to "let them alone" (^Laissez faire) ; and one of them de- 
 clared that Colbert, after getting the coach out of the slough on 
 one side, had tumbled it back again on the other. 
 
 France did not "long reap the benefits that Colbert's system 
 conferred. Louis XIV. had no sense of the importance of in- 
 dustry. He wrote to Charles II.': "If the English are satisfied 
 to be the merchants of the world, and leave me to conquer it, 
 the matter can easily be arranged. Of the commerce of the 
 globe, three parts to England and one part to France." He. 
 therefore, wasted the national wealth in unsuccessful wars, and 
 generally bought peace by granting treaties which pledged 
 him to remove duties from foreign manufactures. That of 
 Nimeguen. in 1713, completed the work of destroying the pro- 
 tective system. Colbert died of a broken heart in 1683, amidst 
 general distress ; two years later a still more deadly blow was 
 struck at French industry at home ; the edict of Nantes (1598), 
 
THE EXPULSION OF THE HUGUENOTS. 271 
 
 by which the Huguenots received full toleration, was revoked 
 (1685), and half a million of the most industrious and intelli- 
 gent class of French manufacturers and tradesmen were driven 
 into England, Holland and Germany. "They carried with them 
 the skill and intelligence, and the secrets of trade that made 
 France great, and many of the most important industries of 
 England, especially, are traced back to those expatriated 
 Frenchmen." " They are at this time improving the manufac- 
 tures of your majesty's enemies," pleaded Colbert against the 
 measures of intolerance undertaken even during his lifetime; 
 he himself afforded them all the protection in his power. No 
 greater service could be rendered to the Protestant cause outside 
 France than was rendered by the intolerance of Louis XIV. ; 
 it laid the foundation of the industrial, and, consequently, of 
 the political predominance of the Reformed nations, by supply- 
 ing just the element that their manufacturing methods most 
 lacked. The reign that opened with such bright promise iu 
 1661, closes in 1715 with a universal depression of every matC' 
 rial interest of France. 
 
 The history of the financial policy of France between this 
 period and the accession of Turgot, in 1783, is a story of make^ 
 shift and extravagance, in which the Law episode is merely 
 the most fantastic passage. Turgot was theoretically a free 
 trader of the school of, the Economistes ) but he seems to 
 have shrunk instinctively from any steps to realize these views, 
 while he took the boldest measures to destroy monopolies and to 
 release labor from traditional shackles of all sorts. His success- 
 ors in 1786 negotiated a treaty with England, by which France 
 was flooded with English goods, and in two years the manu- 
 facturing industries of France were almost annihilated. Distress 
 became so universal that the government was forced to call the 
 States-General, and the Revolution — whose first and loudest cry 
 was " Give us bread !" — began. 
 
 § 257. Napoleon restored the policy of Colbert. He united 
 all Central Europe into one vast empire, with perfect freedom 
 of trade between all its divisions, and in so far allowed the devel- 
 
272 ELEMENTS OF POLITICAL ECONOMY. 
 
 oped industry of one part to cramp the development of that of an- 
 other, knowing that France chiefly profited by this. But he 
 shut out from the Continent the manufactures of the power that 
 had long kept all the rest in industrial subordination, and every- 
 w4iere throughout Europe manufactures began to spring up 
 again. He had as little liking for English doctrines as for Eng- 
 lish goods. In 1803 he forbade J. B. Say to publish in France 
 the work in which he had systematized the views and theories of 
 Adam Smith. He said : " If an empire were made of adamant, 
 political economy would grind it to powder." But he had 
 thoughts of his own on the subject. " Formerly there was only 
 one kind of property, land ; another has now arisen, industry." 
 He would defend the one as well as the other from invasion by 
 " the nation of shopkeepers." 
 
 England had control of the seas, and Europe drew her supply 
 of sugar mainly from the British colonies. Prussian chemists 
 had been making experiments on the extraction of sugar from 
 the beet, under the patronage of Frederick the Great, who was 
 like Napoleon a very decided protectionist. At the Prussian 
 king's death, the experiments ceased for lack of means to carry 
 them on. They were again resumed under Napoleon, and the 
 French Institute appointed a commission to look into the matter. 
 The first attempts were failures, and France went on for years 
 paying fifty cents a pound for foreign sugar. In 1810, the 
 matter was taken up again under imperial patronage ; special 
 schools of chemistry were founded, and a large area of land was 
 devoted to the culture, and in 1812 nearly 5,000,000 pounds of 
 beet sugar was in the market. The industry survived the 
 Restoration, for the Bourbons did not bring back permanent 
 free trade. " For thirty years nearly every law passed on custom- 
 house matters has been intended either to establish or to con- 
 solidate the system of protection and prohibition" (J. B. Say, 
 1826). Beet sugar now holds its own against the foreign com- 
 petitor, and pays a tax to the government. It occupies an ever- 
 increasing area of Flemish, German, Swedish, Polish, Russian 
 and French soil, — millions of acres of the last. Its production 
 
FRENCH PERSISTENCY IN PROTECTION. 273 
 
 has invigorated other industries, especially agriculture ; the refuse 
 pulp furnishes an excellent food for vast numbers of cattle, and 
 their manure, with the other refuse of the factories, has added 
 greatly to the fertility of the soil. No district produces less 
 wheat, for having begun beet culture; generally more. It fur- 
 nishes winter work, and work for women and children, eivinc' 
 employment to a great number of persons, who would else be 
 idle. The Journal des Fahricants de Sucre for January 4th 1866, 
 says : " One of the most remarkable and interesting facts of the 
 past year is the export of considerable quantities of sugar from 
 France to England, a country that, not many years ago, tried to 
 stifle the beet sugar industry in its cradle." 
 
 § 258. Under all changes of government, France clung to 
 the commercial policy of Colbert and Napoleon, down to our own 
 times. That she advanced most rapidly in the development of 
 every material interest, is as clearly proved by the official returns 
 to the government as anything well can be. Between 1820 and 
 1857 the growth of wheat rose from 5.4 to 6-.8 bushels per head 
 of the people, so that she feeds all her people, and has food to 
 spare, though her population is nearly three times as dense as 
 that of Pennsylvania. Between 1836 and 1856 the value of her 
 exports increased 131 per cent., though the population had not 
 increased five per cent. The increase in the value of British 
 exports for the same period was 120 per cent.; and the amount 
 of these that were paid for in imports was fully one-half, while 
 that of France was not more than a fifth. 
 
 In 1860 the superior person who had made himself Emperor 
 of the French, and afterwards unmade himself, set aside all 
 the traditions of French finance and negotiated a commercial 
 treaty with England, providing for a reduction of import duties 
 on both sides. The English free traders, Cobden, Gladstone, . 
 &c., who were engaged in the negotiation, set at nought the tra- 
 ditional maxims of the school. " We want trade," said Mr. 
 Kicardo, "not treaties of commerce; for they are opposed to 
 our principles." The great body of the French people, espe- 
 cially the opponents of Napoleonic personal government, opposed 
 18 
 
274 ELEMENTS OF POLITICAL ECONOMY. 
 
 the treaty and its principles most strenuously; but English 
 liberals elaborated it in secret conferences with the agents of 
 the French empire, and rejoiced when the imperial will forced 
 it upon " the most Protectionist of European lands," as one of 
 Cobden's eulogists says. On the one hand England removed all 
 duties on French manufactures and lowered the excise duties 
 upon French wines and spirits; on the other hand French du- 
 ties on English manufactures, if more than thirty per cent, ad 
 valorem, were to be reduced to that amount at October 1st, 1861, 
 and to twenty-five per cent, three years later. The effect was 
 no doubt to increase very greatly the trade between the two 
 countries ; they bought of each other many things that they 
 had been accustomed to make at home, and employed a larger 
 number of people in carrying these articles back and forward, 
 instead of setting them at productive work. Some industries in 
 each country gained at the expense of corresponding interests 
 in the other ; they had been doing well, and they did better. 
 Other industries in each were very greatly injured by the change, 
 and numbers of people thrown out of employment. This gain 
 was thought a sufiicient off-set among the friends of the treaty. 
 France employed a far larger number of her people in serving 
 foreigners, and made them dependent upon the vicissitudes of 
 the foreign market. Hitherto she had suffered little or nothing 
 from commercial revulsions and panics ; from this time they be- 
 gan to affect her money-market and her industries. She lost in 
 the stability of employments, wages and profits. But she lost 
 much less than if she had made the experiment thirty or fifty 
 years earlier; the gains of her long era of consistent and per- 
 sistent Protection, made her able to sustain the hazard of the 
 new era. She had become a rich country, with abundance of 
 cheap capital, industrial skill, popular intelligence and enter- 
 prise. She could afford some competition, and even the imperial 
 charlatan did not design to try unrestricted competition. The 
 duties preserved, — if we consider the stage of skill, industry and 
 capital that France had reached — were really as fully protective 
 as many that have been enacted in our own country with a view 
 
England's industrial beginnings. 275 
 
 to protection. One of the emperor's organs, the Journal des 
 Debats, boasted that he had outwitted the English statesmen, 
 and that the thirty per cent, duties would be really protective. 
 
 Our staunch friend, Count Agenor de Gasparin, in his Un Grand Petiple 
 qui se Eeleve, asserts that the French Treaty is actually more prohibitory 
 than the Morrill Tariff of 1S61. Yet French manufacturers complained 
 of its terms. Although the duty on iron was $12 a ton, it was said that 
 the production of iron in France was impossible. In 1868 the Chamber 
 of Arts of Roubaix, the leading centre of the wool-combing industry, and 
 the neighboring city of Tourcoing, protested against the renewal of the 
 treaty, and the workingmen petitioned to the same effect. The manu- 
 facturers of Lille and Amiens united in the protest, and the Moniteur In- 
 dustriel complained that the treaty "has carried 20,000,000,000 francs to 
 the debtor side of our national credit sheet." 
 
 Since the French people obtained the control of their own af- 
 fairs by the overthrow of the Second Empire, they have revised 
 their general tariflf in a protectionist sense. For the treaty of 
 commerce of 1860 they have refused, after negotiations prolonged 
 over years, to substitute any other, unless it were one much less 
 favorable to free intercourse with England. The duties on cot>- 
 tons and woolens were the matters of most difficulty. 
 
 § 259. England owes her industrial greatness to the persist- 
 ency with which she adhered to the Nationalist policy. Five 
 centuries ago she was little more than an agricultural country. 
 She produced an abundance of excellent wool, but her workshops 
 were on the Continent, among the Flemings, whither English 
 wool was carried to be converted into cloth. " The ribs of all 
 people throughout the world are kept warm by the fleeces of 
 English wool," (Matthew Paris). " Most articles of clothing, 
 excepting such as were produced by ordinary domestic industry, 
 were imported from Flanders, France and Germany. The names 
 of the articles to this day indicate the places where they were 
 manufactured. Thus there was the mechlin lace of Mechlin, 
 the duffle of Duffel, the diaper of Ypres (d'Ypre), the cambric 
 of Cambrai, the arras of Arras, the tulle of Tulle, the damask 
 of Damascus, and the dimity of Damietta. Besides these we 
 imported delf ware from Delph, Venetian glass from Venice, cord- 
 ovan leather from Cordova, and millinery from Milan " (Smiles). 
 
276 ELEMENTS OF POLITICAL ECONOMY. 
 
 The last term formerly included all sorts of fancy and ladies* 
 wares. Edward III., " the greatest of the Plantageuets,'' a sov- 
 ereign of the same class with Frederick and Napoleon, took the 
 first step to bring the nation out of this industrial dependence. 
 Some Flemish workmen had fled into England, and this seems 
 to have suggested to him the idea of importing Flemish skill 
 lather than its products, of bringing the farmer and artisan into 
 neighborhood. An act of Parliament was passed in 1337, for- 
 bidding under heavy penalties the exportation of wool and the 
 importation of woollen goods. This heroic remedy probably 
 caused some embarrassment, for the English did not possess 
 the skill to produce the equal of Flemish fabrics; but the Flemings 
 were in worse straits. " Then might have been seen throughout 
 Flanders weavers, fullers, and others living by the woollen manu- 
 facture, either begging or under stress of debt tilling the soil.'' 
 A large number listened to the invitation held out by the 
 English government, and finding themselves cut off from the 
 English market so long as they remained at home, came over 
 into England and brought their trade with them. Old manorial 
 rolls and charters from this time on, contain great numbers of 
 unmistakably Flemish names, especially those that relate to the 
 Eastern shires. As to the exportation of wool, that became a 
 monopoly of the king's exchequer, and added much to the rev- 
 enue at a time when the kings were much in need of such sup- 
 plies. England then declined to compete with and began to 
 emulate Flanders ; artisan and farmer were brought into prox- 
 imity, and the price of manufactured goods approximated to that 
 of the raw materials. 
 
 The penalty for a first violation of this law was a finej for a second, 
 maiming; for a third, imprisonment; for a fourth, death. In 1746 the 
 last was changed to seven years* transportation. In 1334 all were 
 abolished. 
 
 From this time woollens were the great English staple. Other 
 branches lay under comparative neglect. Even iron was im- 
 ported from the Continent for the use of English blacksmiths, 
 and its cost was an important item in the expense of a farm 
 
CONTINENTAL REFUGEES IN ENGLAND. 277 
 
 r§ 77). The coming in of Protestant refugees from the Low 
 Countries and France,»which began about 1550, was so extensive 
 that an investigation showed the presence of 40,000 that year 
 in London alone. Queen Elizabeth planted a great number at 
 the then decayed town of Sandwich, describing them as " men 
 of knowledge in sundry handicrafts," such as " the making of 
 says, baize and other cloth, which hath not been used to be made 
 in this our realme of England.'' Both Norwich and Sandwich 
 were recovered to prosperity by these foreigners. They intro- 
 duced, besides the spinning and weaving of new fabrics, the art 
 of dyeing, of which the Flemings had preserved the monopoly. 
 " The native population gradually learned to practise the same 
 branches of manufacture; new sources of employment were 
 opened up to them ; and in the- course of a few years Eng- 
 land, instead of depending upon foreigners for its supply of cloth, 
 was not only able to produce suflScientfor its own use, but to ex- 
 port the article in considerable quantities abroad '' (Smiles). 
 They brought over the manufacture of lace and cutlery. They 
 also put an end to the importation of cabbages, onions, and 
 other vegetables from Holland, by establishing kitchen gardens, 
 first at Sandwich and then at London. In 1621 the 10,000 
 strangers in London were plying 121 dififerent trades. The un- 
 wise intolerance of Continental governments led to these trans- 
 fers of skill and experience, and pointed out the wisdom of the 
 policy that brings the workshops of a nation home to its own soil, 
 to the neighborhood of its farms. The industrial life of the Eng- 
 lish people took a great advance; from the uniformity of a single 
 occupation, they rose to that varied industry, which is the mark 
 of a civilized people. 
 
 § 260. Under the Protectorate of Cromwell the foundation of 
 England's merchant marine was laid by the Navigation Acts. 
 The Dutch possessed a monopoly of the carrying trade, which 
 was open to all. Even the produce of the British colonies was 
 brought to England in Dutch bottoms. The new acts prohibited 
 the importation of any but European goods in any but English 
 ships, manned three-fourths by Englishmen. Upon European 
 
278 ELEMENTS OF POLITICAL ECONOMY. 
 
 goods imported in foreign ships, they imposed discriminating du- 
 ties. A cry went up at once that England was ruined; the goods 
 that must be had from abroad were far more in amount than could 
 be brought by the existing merchant marine, or any that could be 
 procured for years to come. But Cromwell persisted, and by the 
 end of his reign the Navigation Acts were so popular, that the 
 first Parliament that met after the Restoration reenacted them in 
 full at the very opening of its session. They took care, how- 
 ever, to exclude Scotland, which Cromwell had treated as part of 
 England, from their scope. England was a self-sufficient and 
 independent country, more necessary to other countries than other 
 countries were to her. At the date of their repeal she had given 
 up that position ; it had become necessary almost to her existence 
 that she should have free access to the markets of the world. 
 The Dutch sought to maintain their supremacy on the seas by 
 force, but the victories of Blake confirmed the legislation of 
 Cromwell. 
 
 § 261. Under the later Stuarts the policy of naturalizing 
 every species of industry was carried out with more or less 
 energy. In 1677 appeared " England^ s Improvement hy Sea and 
 Land. To Outdo the Dutch without Fighting. To Pay Debts 
 without Moneys. To set at Worh all the Poor of England with 
 the Growth of our own Land. . . By Andrew Yarranton, 
 Gent.'' The author had taken pains to see how foreign trades- 
 men turned out the goods that were in such demand ; he would 
 have his countrymen come up to them in all things. Let them 
 import the skill of the Grerman and the Dutchman, set up the 
 linen trade and the iron manufacture at home, and improve their 
 woollen staples by getting foreign machines and workmen. 
 From this time the statute book abounds in acts to accomplish 
 these ends, and unforeseen occurrences cooperated with them. 
 The last great persecution of the French Protestants began, and 
 the best skilled laborers of France were flying across her border 
 to find a home among strangers. England, the old refuge of 
 the persecuted, got her full share of them, at least 100,000 
 skilled artisans. The wares made in England were only plain 
 articles for common use. " The chief manufactures amons us 
 
THE HUGUENOTS IN ENGLAND. 279 
 
 at this day are only woollen cloths, woollen stuffs of various 
 sorts, stockings, ribandings, and perhaps some few silk stuffs, 
 and some other small things scarce worth the naming ; and 
 those already mentioned are so decayed and adulterated that they 
 are almost out of esteem both at home and abroad " (Fortrey, 
 1693), *' France had long been the leader of fashion, and all 
 tlie world bought dress and articles of vertu at Paris. Colbert 
 was accustomed to say that the fashions were worth more to 
 France than the mines of Peru were to Spain, Only articles 
 of French manufacture, with a French name, could find pur- 
 chasers amongst people of fashion in London. . . So soon as the 
 French artisans settled in London they proceeded to establish 
 and carry on the manufactures which they had practised abroad ', 
 and a large portion of the stream of gold which before had 
 flowed into France now flowed into England. They introduced 
 all the manufactures connected with the fashions " (Smiles). 
 The hat trade especially was transferred from France to England, 
 so that the French nobility and even the Roman cardinals had 
 their hats made by the Huguenots at Wandsworth. Every 
 species of woollens, linens, and fine hardware, glass and paper, 
 known to trade was produced on English soil ; the silk manu- 
 facture, which previous attempts had failed to transfer to Eng- 
 land, now took root, and England soon exported large quantities 
 of silk fabrics. To cherish the industry, the duties on imported 
 silks were trebled, and then their importation prohibited. 
 Strange to say, all classes of Englishmen still seem to think there 
 was some gain to the nation in this importation of French skill, 
 and in buying goods at home rather than in sending over the 
 seas for them. The historians of English industry point to this 
 era as one of the turning-points in the development of England's 
 industrial greatness, and justly pride themselves on the fact that 
 it was the readiness with which the nation opened an asylum to 
 the persecuted of all nations that led to the building up her 
 manufactures and the improvement of their processes. On 
 their own principles they should see no difference between 
 making these things at home and buying them in France. 
 
280 ELEMENTS OF POLITICAL ECONOMY. 
 
 § 262. In 1771 the iron trade was taken under the protection 
 of the nation, heavy duties on its importation being imposed. 
 About 1787 very great iraproveTiieDts in the method of its manu- 
 facture were ^effected, and from this time English iron was 
 increasingly protected by successive tariffs, till in 1819 the duty 
 was £G 10s. a ton, although for years previous to this Ejjglish 
 makers had undersold all others in every European market. Ifl 
 1834 it was reduced to £1 a ton. 
 
 But woollens were still the great staple of English manufacture 
 in the 17th and 18th centuries, and every care was taken to 
 protect their makers from foreign competition. In 1678 Indian 
 cotton goods were denounced in petitions to Parliament, as 
 threatening the ruin of the woollen trade. Between 1700 and 
 1736 their importation and me were prohibited ; then the law 
 was relaxed to allow the manufacture of mixed woollen and cot- 
 ton goods ; in 1774 the manufacture of cottt)n goods was legal- 
 ized, as a thing which '' ought to be allowed under proper regu- 
 lations," among which were provisions to make sure that all that 
 was worn was of British manufacture. When England beo-an 
 this manufacture, India could supply her with cottons at a third 
 the cost of home manufacture, and indeed their import was a 
 chief business of the East India Company. But by strenuous 
 protective measures, she developed the skill of her people, secured 
 the invention of better machinery, made great accumulations of 
 capital. The tariff of 1819 still prohibited the importation of 
 cotton goods made east of the Cape of Good Hope, and imposed 
 50 to 67 per cent, ad valorem duties on those that were made in 
 Europe. She can now carry the cotton of Hindostan and 
 Georgia over land and sea, spin and weave it into stuffs, and then 
 carry it back to undersell the American and the Indian manu- 
 facturer, who sees the staple growing under the windows of his 
 factory. Having reached this point she throws off all protective 
 duties and invites the world to imitate her magnanimity. 
 
 The manufacture of cottons (coatings), seems to have begun at Man- 
 Chester about 3640, the material being imported from the Levant. The 
 name occurs much earlier, but really designates woollen fabrics. 
 
England's long persistence. 281 
 
 One measure of protection to English goods was the prohibition upon 
 the export of machinery for spinning, weaving or printing any sort of 
 fabric ; persons who " enticed any artificer to go to foreign parts in order 
 to practise or teach his trade " were liable to severe punishment. As 
 late as 1842, the export of flax machinery was still forbidden. 
 
 § 263. Since the time when the chief American colonies de- 
 clared and secured their independence, that is within the space 
 of a century, great changes in the industry of the world have 
 taken place. It has been, in another sense than the old phrase 
 meant, " a century of inventions.'^ James Watt devised the 
 condensing steam-engine; Hargreaves the spinning-jenny; Ark- 
 wright the spinning-frame and the factory system ; Crompton 
 the mule-jenny ; Cartwright the power-loom ; Whitney the 
 cotton-gin ; Fitch the steamship ; Oliver Evans the high-press- 
 ure engine; Stephenson the locomotive; Morse the telegraph ; 
 Howe the sewing-machine. All these and a thousand less-noted 
 inventions have added new arms and legs to capital and endowed 
 the rich with the power to add to their wealth, to make steam 
 and iron do the work of a vast multitude of human hands. No 
 country has profited so vastly by these inventions as England ; 
 none has guarded with such jealousy the material interests upon 
 which she now bases her claims to greatness among the nations. 
 On her small area she has gathered machines that do the work 
 of four hundred and fifty million people. Improved means of 
 communication have put her at the door of every other people 
 under heaven. Vast accumulations of capital and the command 
 of money at a low rate of interest, have enabled her to watch the 
 shifts and changes of the market, to destroy hostile competition 
 by temporary sacrifices, and to undersell every foreign manu- 
 facturer at will. Yet not until almost our own days has she ever 
 pretended to open her own markets to the competition of other 
 nations, and in very great measure this pretence is only a pretence, 
 
 § 264. We have seen that Napoleon closed the market of 
 Europe against her wares, and shut her out from all parts of the 
 Continent, Even Russia, by the Peace of Tilsit (1807) joined 
 the Continental system. The declaration of war in 1803 by 
 England, when the ink on the peace of Amiens (1802) was 
 
282 ELEMENTS OF POLITICAL ECONOMY. 
 
 " hardly dry" (Talleyrand), was largely due to the commercial 
 jealousy of Eogland. " The emperor/' Talleyrand wrote to 
 Fox in 1806, " does not think that this or that article of the 
 Treaty of Amiens has been the cause of the war ; he is con- 
 vinced that the true cause has been the refusal to make a treaty 
 of commerce against the industrial and manufacturing interests 
 of his subjects." But the overthrow of Napoleon, and the re- 
 lease, of European nationalities from the imperial yoke, did not 
 bring to England the permanent open market that she expected. 
 France did not for an instant relax her protective system; the 
 Bourbons watered what the Corsican had planted. Germany 
 suffered for a time the misery of a sudden paralysis of her new- 
 born industries, but the rise of the Zollverein put an end to 
 this. Russia and the United States, after a period of Free Trade 
 and industrial depression, both went back to Protection in 1824. 
 Much the same was the course of events all over Europe. 
 
 The revolt of the Spanish- American colonies in 1810, and the 
 consequent destruction of the Spanish monopoly of their trade, 
 gave an opening for the export of large quantities of English 
 goods, which was eagerly embraced. The thoughtfulness engen- 
 dered by free competition was finely illustrated ; cities received 
 consignments of Epsom salts sufl&cient to physic every inhabitant 
 once a day for two or three generations to come; to others, in 
 which ice and snow had never been seen, whole cargoes of skates 
 and pattens were sent. This reckless trading to the supposed 
 Eldorados of the West, had its necessary results in a violent 
 commercial panic. 
 
 § 265. Up to 1832 England was governed by the upper 
 classes, " the landed interest," who had influence enough to re- 
 turn the majority of her House of Commons. By the Reform 
 Bill of that year, such a redistribution of seats was effected, as 
 transferred the power to the middle classes, who were chiefly 
 interested in manufactures. "Since 1832 we have had a sys- 
 tematic course of legislation, in which the wants and the wishes 
 of the middle classes have been carefully attended to, and their 
 interests habitually consulted. But we have seen no signs of 
 
THE I-NDUSTRIAL REVOLUTION. 283 
 
 the same solicitude with respect to the necessities and interests^ 
 certainly not less pressing nor less important — of the working 
 classes." — (^London 31orning Post). This gradually gave a new 
 direction to the industrial policy of the country, and led to 
 changes in the legislation. The old restrictive duties upon for- 
 eign manufactures were removed or greatly reduced, in the hope 
 that the example would have the effect of leading other peoples 
 to throw open their markets to British goods. The protection 
 given to British agriculture hy the Corn Laws, was removed, 
 in order to secure cheaper food for the English laborer, and keep 
 *' the natural and necessary rate of wages " at the lowest point, 
 so that the loom-lords might be able to sustain competition in 
 the price of their fabrics. From this era England has steadily 
 and unceasingly preached the beauties and benefits of unre- 
 stricted trade, and professed her repentance for the worse than 
 blunders of her former method, declaring that her own " experi- 
 ence has fully proved the injurious effect of the protective sys- 
 tem and the advantage of low duties upon manufactures." 
 (^Government Minute, 1859). Homines facile credunt id quod 
 volunt (Caesar). 
 
 " Mr. Pitt in 1787 found our customs-law a mass of intricacy and con- 
 fusion. ' The mode in which he proposed to remedy this great abuse was 
 by abolishing all the duties which now subsisted in this confused and 
 complex manner, and to substitute in their stead one single duty on each 
 article, amounting, as nearly as possible, to the aggregate of all the vari- 
 ous subsidies already paid.' Also, ' in some few articles,' for example 
 timber, he meant to introduce ' regulations of greater extent,* but such 
 was the general scope of his arrangement. During the war and during 
 the first years of peace, many augmentations of duty took place, some 
 for purposes of revenue, but with the effect of enhancing the stringency 
 of protection ; some for protective purposes alone. The tariff underwent 
 a general revision in 1819, . . . and again under the government of Lord 
 Grey, a large number of minor duties were reduced in 1832 and 1833, but 
 it was in the interval between these two periods that the most important 
 relaxations of the prohibitory and protective system were introduced into 
 the law, first by Mr, Wallace [1823], and afterwards and principally by 
 Mr. Huskisson [1823-27]. Still it continued to contain some prohibitions 
 and a very great number of prohibitory rates of duty ; and no approxi- 
 mation to unity of principle was discernible in its structure as a whole. 
 In 1842 it was attempted to make an approach to the following rules: 
 
284 ELEMENTS OF POLITICAL ECONOMY. 
 
 (1). The removal of prohibitions. (2). The reduction of duties on mana« 
 factured articles, and of protective duties generally, to an average of 20 
 per cent, ad valorem. (3). On partially manufactured articles to rates 
 not exceeding 10 per cent. (4). On raw materials to rates not exceeding 
 5 per cent. The duties were then reduced on about 660 articles." 
 (Gladstone.) 
 
 The tariffs of 1845-6 still further reduced duties, leaving those on silk 
 N at 15 per cent.; on made-up fabrics of other material, 10 per cent.; not 
 made-up, free. The corn laws were finally repealed in 1849, and the dis- 
 Qrimination in favor of colonial sugar abolished in 1851. The tariff of 
 1853 fixed 10 per cent, as the maximum on all manufactures except silk, 
 and abolished various unproductive duties. It substituted specific for 
 ad valorem rates. The French Treaty of 1860 abolished the duties on 
 French manufactures. The chief changes since 185.H have been the re- 
 moval or reduction of revenue duties on articles in general use, — tea, 
 , sugar, and the like. All these tariffs admit the principle of discrimina- 
 tion in favor of home industry. 
 
 § 266. With the very partial exception of France (§ 258), 
 no continental people has followed English example. " There 
 is no doubt/^ says The (London) Economist, '' that Free Trade 
 is one of the most unpopular things in practice in the world." 
 It has not enabled England to hold the position of industrial 
 superiority that she once did. " We have now/' says a Free 
 Trade authority, *' many rivals, where thirty or forty years ago 
 we had none ; we formerly supplied nations, which now partially 
 or entirely manufacture for themselves ; we formerly had the 
 monopoly of many markets, where we are now met and under- 
 sold by young competitors. To several quarters we now send 
 only that portion of their whole demand, which our rivals are 
 at present unable to supply. A far larger proportion of our 
 production now than formerly is exported to distant and unpro- 
 ducing countries, ... to our own colonies and our remote pos- 
 sessions. More, relatively, is sent to Africa and America, and 
 less to Europe. Countries which we formerly supplied with the 
 finished article, now take from us only the half-finished article 
 or the raw material. Austria meets us in Italy; Switzerland 
 and Germany meet us in America ; the United States meet us 
 in Brazil and China. We formerly sent yarn to Russia ; we now 
 send cotton-wool; we sent plain and printed calicos to Germany, 
 
CONTINENTAL WARES IN ENGLAND. 285 
 
 we now send mainly the yarn for making them. All these 
 countries produce more cheaply than we do, — but as yet they 
 are not producing enough ; we therefore supplement them . . . 
 Henceforth otir manufacturing industry can increase only, not 
 by underselling or successfully competing with our rivals, but by 
 the demand of the world increasing faster than our rivals can 
 supply. This is . . . preeminently the case with our chief 
 manufacture, the cotton." (^The North British Review^ 1852.) 
 Be it noted that these rivals who now compete on equal terms 
 with England in the markets foreign to both, are nations who 
 first refused to compete with her in their own home markets. 
 They developed under the shelter of protective tariffs the skill 
 and the capital, which have enabled them to emulate her as a 
 producing and an exporting nation. 
 
 § 267. Even in the English home market the competition of 
 foreign manufacturers has been keen and effectiv.e. Many minor 
 branches of trade, which cannot secure a voice in Parliament 
 and some sort of indirect protection, have been nearly ruined. 
 For instance, the cheap labor of Norway and Belgium and the 
 access to abundance of timber, have enabled those countries to 
 export doors and window-frames at prices with which English 
 house-carpenters cannot compete, and great numbers of them 
 have been obliged to emigrate. The larger industries have not 
 escaped. The abolition of duties on French manufactures in 
 1860 simply destroyed the extensive manufactures of silk in 
 Coventry and Macclesfield, and sent hosts of their workmen to 
 the poor-house. The importation of French silks was quadrupled. 
 English statesmen looked on, suppressing all national instincts 
 for the sake of a theory, and exhorted the silk-weavers to im- 
 prove their machines and processes, or else take to something 
 else. Formerly Coventry and Macclesfield competed with Lyons 
 for the American market. Now the competition is only between 
 the French and the American silks. So in less degree of the 
 iron trade, the paper trade, and even the cotton trade. Thirty 
 Prussian locomotives are running on one English railway, and the 
 massive girders of the new St. Thomas's Hospital, under the very 
 
286 ELEMENTS OF POLITICAL ECONOMY. 
 
 windows of the Houses of Parliament, were forged, framed and 
 fitted in Belgium, after a free and open competition in which a 
 dozen English manufacturers joined. Englishmen ask why is this, 
 and find the answer : The foreign workman outdoes the English 
 in effectiveness, because he is better trained and educated, and the 
 natural organization of labor has been carried almost to perfection. 
 The Continental states do not leave everything to the scramble of 
 free competition ; they have no faith in the Laissez /aire maxim. 
 They make temporary sacrifices, such as the outlay on popular 
 education, both directly to schools and teachers, and indirectly 
 by protective tariffs, and reap benefits manifold. 
 
 See an article on " Continental Iron Works Supplying English Mar- 
 kets/' copied into Littell's Living Age for May 23d, 1868, from The London 
 Revieto. The writer tells this story : 
 
 "An English manufacturer met a friend the other day in London. 
 *What are you doing here?' he said. The other told him in confidence 
 that he was waiting to know the result of a competition for a large 
 quantity of work. ' I fully expect the order/ he said, * for I have tendered 
 at a price by which we shall lose, merely to keep the works open.' The 
 other asked if he had any objection to exchange figures with him, as all 
 the tenders were in, and he had himself tendered for a Belgian firm. The 
 Eaglishman named his price. 'You may go home then !' said the other. 
 * I am fifteen shillings a ton below you, and it will pay our firm very well 
 at that price.' " 
 
 In 1874, when the iron trade at home was especially depressed by the 
 sudden cessation of the demand in many parts of the world, following 
 the panic of 1873, the English government sent out a commission to 
 inquire upon what terms and of what quality Belgian iron, especially 
 ship-plates, and bars and sheets used in ship-building, oould be imported 
 for the Admiralty. They did so because they found that Belgian iron in 
 general could be had at 10«. to 20s. a ton cheaper in London than Eng- 
 lish could ; and because this particular class of iron was monopolized by 
 a few firms, and cost £10 a ton more than it would in Belgium. On free 
 trade principles, the government was perfectly right. '' Buy where you can 
 buy the cheapest," is the first maxim for governments and for peoples, 
 laid down by their English exponents. But there is a difference between 
 " your ox " and *' my bull." The English correspondent of an American 
 paper tells us how Englishmen took the news of this commission : — 
 
 " So far as I can ascertain little sympathy dwells in the English heart 
 towards the commission. Pecuniary advantages when opposed to national 
 advantages must ever be ousted. And I think, with many others, that 
 the present is a question wherein the former would operate antago« 
 
WILL ENGLAND PERSIST? 287 
 
 nistically towards the latter. If government specifications were distrib- 
 uted exclusively amongst our foreign competitors, they and their workmen 
 would proportionately swell in opulence and manufacturing supremacy 
 in the departments embraced, as ours descended. Further, it is regarded 
 as most significant that a Tory government should have ventured even 
 upon a preliminary investigation of the policy of going out of the country 
 for government iron. "We are now thirty years from 1844. What would 
 have been thought of the prophet who should have committed himself to 
 the prophecy that in 1874 Mr. Disraeli would seriously think of buying 
 foreign iron for our own ships of war ? To buy foreign bread for our own 
 mouths was considered bad enough, but to buy abroad our very bulwarks 
 would have been thought absolute treason." 
 
 § 268. Will England persist? Possibly she will. Her 
 middle classes, at least, retain their faith in the sacredness, the 
 almost divinity of free competition, and their belief that the 
 sphere and duties of government extend no farther than to keep- 
 ing each man's hands off his neighbor's throat and pocket. With 
 Mr. Gladstone, they pity the benighted protectionists abroad, as 
 a zealous Christian pities the heathen. " I venture,'' he says 
 in 1871, "that there is not the prevalence of enlightened views 
 upon the subject that we desire in America; although it has a 
 strong free trade party, yet the prevalence of these opinions is 
 by no means assured. In our own colonies — I say it with deep 
 regret — in our own colonies there are very strong and consider- 
 able tendencies towards the establishment of what we call the 
 exploded system of protection. I also must say, and it is with 
 much pain, that the course of affairs in France is very different 
 from that which we wish it to be." They still exult in the con- 
 sciousness that they, and they alone, have found the key to all 
 industrial problems, and lament the invincible ignorance of 
 political economy that prevails in the United States (^Spectator, 
 187-4) and other protectionist countries. As this class gives us 
 pretty nearly all the English literature of our days, it is the 
 common impression that there is no dissent from its teachings. 
 
 " It would seem as though we free traders had become nearly as bigoted 
 in favor of free trade as our former opponents were in favor of protection. 
 Just as they used to say, * We are right : Why argue the question ?' so 
 now, in the face of the support of protection by all the greatest minds in 
 America, all the first statesmen of the Australians^ we tell the New Eng- 
 
288 ELEMENTS OF POLITICAL ECONOMY. 
 
 land and the Australian politicians that * We will not discuss protection 
 with them, because there can be no two minds about it among men of in- 
 telligence and education. We will hear no defence of national lunacy,' 
 we say. If, putting aside our prejudices, we consent to argue with an 
 Australian or American protectionist, we find ourselves in difficulties. As 
 far as we in our island are concerned it {i. e. free trade) is so manifestly 
 to the pocket interest of almost all of us, and at the same time on account 
 of the minuteness of our territory, that for Britain there can be no danger 
 of a deliberate relapse into protection." — Dilke's Greater Britain. 
 
 § 269. But the Reform Bill carried by Mr. Disraeli in 1868, 
 by establishing household suffrage, has effected a second trans- 
 fer of power in England, to wit: from the middle to the lower 
 classes. The latter gave no hearty support to the great agita- 
 tion for the abolition of the corn laws. Ebenezer Elliott, the 
 poet of that struggle, wrote in 1849, " It is remarkable that 
 free trade has been carried by the middle classes, not only with- 
 out the assistance of the working classes, but in spite of their 
 opposition." Senior expressed his fear that if the extension of 
 representative government should increase the power of public 
 opinion over the policy of nations, " commerce may not long be 
 enabled to retain even that degree of freedom which she now 
 enjoys." Chalmers says : " This is a subject on which the popu- 
 lar and philosophic minds are not at all in harmony," and ex- 
 presses the same fear as Senior does, as to what would result 
 from "the very admission into Parliament of so large an influ- 
 ence from the will of the humbler classes." Kingsley speaks of 
 the artisans of the great cities as '^ sneering and growling at Mr. 
 Cobden's harangue — ' Cheap bread ! curse him, he means cheap 
 
 wages I 
 
 1' '> 
 
 § 270. What direction will this new political element, as it 
 gradually makes itself felt in Parliament, give to legislation, 
 especially as regards economical matters ? English students of 
 its tendencies say that (1) it will be intensely Nationalist. It will 
 insist on the nation having a foreign policy of its own; it will 
 fight when its blood is up, whether Manchester suffers or not. 
 It will look at matters through English spectacles, not cosmopo- 
 litan ones, and trust more to national instincts and impulses 
 than to fine-spun theories. A Parliament, then, that really 
 
THE LOWER CLASSES IN POWER. 289 
 
 represented this class would not sit with folded hands and see 
 Macclesfields and Coventrys go to ruin, because somebody had 
 made a book argument about free trade that was thought unan- 
 swerable. (2) The theory of government held by this class is 
 very different from the Laissez /aire notion of the class just 
 above it. It has not been the vigorous, strong, prosperous part 
 of society that chiefly wanted the state to get out of its way. 
 Rather it has been in great need of a helping hand from the 
 constituted authorities. The state (apart from the policeman, 
 to whose functions the " let alone " school would reduce govern- 
 ment) has mostly been the workingman's best friend and pro- 
 tector. He has no scruples and no grudges about giving it 
 pretty large scope of action. If any one will make it pretty 
 clear to him that the drift of legislation can help him to more 
 work and better pay, he will look for that help. (3) Being 
 themselves very directly a producing class, they are not so 
 likely to see the axiomatic force of the free trade maxims : 
 " Every man's interest as a consumer is the interest of society ; 
 every man's interest as a producer is the interest of a class. 
 Let all legislation be for the good of the consumer, because his 
 interest always represents the interests of society and the good 
 of the whole nation " 
 
 The ao-itation ajrainst free trade which beiran in England amoncj 
 the working classes soon after the American Civil War has spread 
 also to the farming class, under the stress of American competi- 
 tion. It is still confined to a minority, but the minority is grow- 
 ing ; and this issue has sufficed to decide several elections of 
 members to the Imperial Parliament. It does not want for rep- 
 resentatives among the intellectual classes, and it is admitted that 
 Mr. Cobden's work is now subjected to an amount and degree of 
 criticism which would have been thought quite impossible at the 
 time of his death. The main answer to the protectionists is that 
 they can propose nothing which will furnish any practical solu- 
 tion of the diificulties they complain of Mere protection will 
 certainly do nothing for England, unless as accompanying meas- 
 ures to restore the English people to the use and enjoyment of 
 19 
 
290 ELEMENTS OF POLITICAL ECONOMY. 
 
 the land of England (§ 86). Protection is useful only as it tends 
 to a healthy equilibrium of the industries (§ 33). At the time 
 of the Reformation two to one of the English people were en- 
 gaged in agriculture. At present the proportion is less than one 
 to three, a sixfold change in three hundred years. For this dis- 
 aster the " Fair Traders " have no remedy. They propose a sys- 
 tem of retaliation, which England cannot afford and her working 
 people would not endure. The land question is everything, and 
 there is needed, not a break-up of the great estates, but a return 
 to small farms. 
 
 § 271. The colonies who form part of the British empire 
 are as slow to adopt the English theory as are industrial nations 
 nearer home. Canada until 1879 imposed a tariff for revenue 
 upon imported manufactures, which fostered a few of her weaker 
 industries, and thus excited unfriendly comment in England. Her 
 policy was sketched as follows by Mr. (now Sir Alexander) Gait, 
 her Finance Minister, in a speech made in England in 1859: "The 
 fiscal policy of Canada has invariably been governed by the amount 
 of revenue required. It is no doubt true that a large and influ- 
 ential party exists who advocate a protective policy; but this 
 policy has not been adopted by either the government or the 
 legislature, although the necessity of increased taxation* for the 
 purposes of revenue has to a certain extent compelled action in 
 partial unison with their views, and has caused more attention 
 to be given to the proper adjustment of the duties, so as neither 
 unduly to stimulate nor depress the few branches of manufac- 
 ture which exist in Canada. . . . The government have no 
 expectation that the moderate duties imposed by Canada can 
 produce any considerable development of manufacturing indus- 
 try ', the utmost that is likely to arise is the establishment of 
 works requiring comparatively unskilled labor, or of those com- 
 peting with America for the production of goods which can be 
 equally well made in Canada, and which a duty of twenty per 
 cent, will no doubt stimulate." So willing was the Canada of 
 that day to serve as an appendage to the industrial system of 
 England. 
 
Canada's passive policy. 291 
 
 Three years later (1862) Mr. Gait assured the Manchester 
 Chamber of Commerce that Canada had no purpose to close its 
 market on them. " The best evidence that could be offered 
 against the charge of Protection was that the eifect of the 
 tariff had not been to produce manufactures. The manufac- 
 tures of Canada were those that might be expected in a new 
 country — nails, steam-engines, coarse woollens, and other arti- 
 cles necessary in a newly settled country. There was not at this 
 moment a single cotton-mill in Canada, nor a silk manufactory. 
 The imports of earthenware and glass, hardware and iron, had 
 gone on increasing every year from 1859 till the present year." 
 
 Even this meekness was not enough ; he was asked why 
 Canada did not raise her revenue by direct taxation on land and 
 income ; these revenue duties had been thrown in their teeth in 
 Europe. It had been said : " Can you expect us to throw off 
 all duties on British goods, when your own colonies tax them 
 fifteen per cent?" He retorted that such questions would come 
 with better grace if England did not raise £28,000,000 a year 
 by customs, and £17.000,000 by excise duties. Direct taxation 
 might be best; but it was also a luxury that a poor and thinly- 
 settled country could not indulge in. 
 
 Knowing that a mere passive policy was not sufficient to build 
 up a new country, Canada pursued with zeal and energy the tra- 
 ditional policy of directly aiding immigration from the Old 
 World, instead of attaining the same end indirectly by making 
 the Dominion a place eminently well worth settling in. She 
 used the money raised by taxation to pay the expense of these 
 new-comers ; if she had taxed foreign productions at a higher 
 rate, they would have come without her help. But she was " all 
 the time pouring water into a cask with a hole in it. Allowing 
 for great exaggeration in the reported numbers of French-Cana- 
 dian emigrants to the United States, we fear that for two emi- 
 grants whom, with much expense and with great labor, we bring 
 over, we probably lose three. But little account is taken of the 
 emigrants who are lost, because they are mainly withdrawn from 
 
292 ELEMENTS OF POLITICAL ECONOMY. 
 
 manufactures, and agriculture is the government's sole care" 
 (^Canadian Monthly^. 
 
 Canada had bought in the cheapest market and sold in the 
 dearest that she could find, with no thought of creating better, 
 nearer and steadier markets than any she could find ready- 
 made. Her wise marketing did not prevent her from being 
 a poor and backward country. She did the easiest thing, and 
 made no sacrifices from the first j had lived from hand to mouth; 
 was wise with her pennies and foolish with her pounds; saved 
 at the spigot and wasted at the bung. And, therefore, the tide 
 of population moved over her border into the United States — 
 away from the land of low taxation and free choice of markets 
 to the land of high taxes and home markets. She could not 
 keep the Europeans who came into her ports with half a mind 
 to stay. Her own people sold land and houses at a sacrifice, and 
 sought a home in New York and New England. 
 
 " By describing one side of the frontier," says Lord Durham 
 in a celebrated report, " and reversing the picture, the other 
 would be described. On the American side all is activity and 
 bustle. The forest has been widely cleared ; every year numer- 
 ous settlements are formed, and thousands of farms are created 
 out of the waste ; the country is intersected with common 
 roads On the British side of the line, with the excep- 
 tion of a few favored spots, where some approach to American 
 
 prosperity is apparent, all seems waste and desolate The 
 
 ancient city of Montreal, which is naturally the capital of 
 Canada, will not bear the least comparison, in any respect, with 
 Bufi'alo, which is the creation of yesterday. But it is not in the 
 difference between the large towns that we shall find the best 
 evidence of our inferiority. That painful but most undeniable 
 truth is most manifest in the country districts, through which 
 the line of natural separation passes, for a distance of a thou- 
 sand miles. There on the side of both the Canadas, and also 
 of New Brunswick and Nova Scotia, a widely-scattered popula- 
 tion, poor and apparently unenterprising, though hardy and 
 industrious, separated from each other by tracts of intervening 
 
CANADA WANTS RECIPROCITY. 293 
 
 forests, without towns or markets, almost without roads, living 
 in mean houses, drawing little more than a rude subsistence 
 from ill-cultivated land, and seemingly incapable of improving 
 their condition, present the most instructive contrast to their en- 
 terprising and thriving neighbors on the American side 
 
 Throughout the frontier, from Amherstburgh to the ocean, the 
 market value of land is much greater on the American than on 
 the British side. In not a few parts this difference amounts to 
 a thousand per cent I am positively assured that supe- 
 rior natural fertility belongs to the British side. In Upper 
 Canada, the whole of the great peninsula between Lakes Erie 
 and Huron, comprising nearly half the available land of the 
 province, is generally considered the besfgrain country of the 
 American continent." 
 
 In 1856-1866 we had a treaty of reciprocity with Canada. 
 She admitted free a few of our coarser manufactures, on condi- 
 tion that we should throw open our markets to her agricultural 
 products. When the arrangement was made it was not very 
 unfair, but it became so after the adoption of the protective 
 policy by America in 1861. When the time fixed for its ex- 
 piry came, America refused to renew it, and has repeated that 
 refusal as often as it has been asked. 
 
 A much broader proposal than that for reciprocity has been 
 made on both sides of the border. Canada and America are parts 
 of a great area which seems to be designated by nature for unre- 
 stricted intercourse. Each of the three groups of provinces of 
 which the Dominion is composed has closer relations naturally 
 with the adjacent American States than with the other provinces. 
 The customs line which sunders the two countries is excessively 
 costly to both. A customs-union, if eflPected on the basis of a 
 common protective tariff, with distribution of receipts propor- 
 tionally to population, would bring Canada into closer relations 
 to the continent to which she belongs naturally, while it would 
 enable both countries to confine their custom-house line to the 
 seashore. 
 
294 ELEMENTS OF POLITICAL ECONOMY. 
 
 The possibility of such an arrangement has been increased by 
 the adoption of. a Canadian protective tariff in 1879. In that 
 year the Tory party, then in opposition, took up this issue at the 
 general election, and, to their own surprise and that of their ene- 
 mies, secured a working majority in behalf of this national policy. 
 Of course manufactures carried on within so small an area and 
 for the benefit of so small a population as that of Canada cannot 
 be expected to exhibit the rapid and vigorous growth which is 
 seen in those of America. But already the new tariff has done 
 much for the welfare of the Dominion in diversifying her indus- 
 tries, furnishing employment for her surplus labor, and bringing 
 the farmer and the artisan into close and helpful relations. 
 
 See Isaac Buchanan, M. P., On the Industrial Resources of America 
 (Montreal, 1864), a chaotic compilation edited by Henry J. Morgan. 
 Mr. Buchanan is the leading Protectionist of the Dominion, and belongs 
 to the school of Henry C. Carey. The most original and able writer of 
 the party, known to us, is John Maclean {Free Trade and Protection, 
 Montreal, 1868). 
 
 § 272. The Australian colonies have been much more decided 
 and independent than those of British America, a fact largely 
 due to the enterprising, wide-awake character of the popula- 
 tion, whom the gold discoveries took thither. They have made 
 fair trial of free trade, which they now scout as "an antipodean 
 doctrine," while protection is their national creed. It commands 
 an ever-increasing majority in the colonial legislatures ; it is the 
 avowed principle of " all their first statesmen ;" it is especially 
 the doctrine upheld and acted upon by the liberal and progres- 
 sive party, while the old sheep-farming aristocracy are at once the 
 Conservative and the Free Trade party. The policy of cherish- 
 ing a varied industry is drawing the colonies closer together, and 
 has led to the first steps towards a Federative Union. Ail 
 classes but one are full of enthusiasm for the industrial inde- 
 pendence of Australia. '' No British Goods Sold Here" is 
 the sign by which an Australian tradesman wooes popularity 
 and custom. Dishonest dealers tear off the British labels from 
 imported goods, and substitute one which marks them as 
 Colonial make. This people are straining every nerve to 
 
AUSTRALIA HAS REASONS. 295 
 
 develop a varied industry and bring the farmer and the artisan 
 into neighborhood ; they have no idea of keeping up workshops 
 at the antipodes. They " would rather import that which 
 should produce the commodities than the commodities them- 
 selves." They want a free trade that will not mean the " mono- 
 poly for British manufactures," " and their chief object is to 
 put down monopoly by extending the sphere of competition." 
 
 § 273. " But you are taxing your consumers for the benefit of 
 the producers. As well break all the windows in your houses in 
 order to keep glaziers in work." No proof that a percentage of 
 loss is incurred by protection deters them. " A digger at Bal- 
 larat told me that he knew that under a protective tariff he had 
 to pay higher for his jacket and moleskin trousers, but that he 
 preferred to do this, as by so doing he aided in building up in 
 the colonies such trades as the making up of clothes, in which 
 his brother and other men, physically too weak to be diggers, 
 could gain an honest living. . . The Australian diggers and 
 western farmers of America are setting a grand example to the 
 world of self-sacrifice for a national object" (Dilke). 
 
 " Australia is but a young country yet, with plenty of avail- 
 able land for settlement; with exuberance of resources, mineral 
 and agricultural; and hitherto not greatly overburdened with 
 population ; and that, too, of a class consisting probably of a 
 smaller number of the physically incapable than any other coun- 
 try in the world. Yet for years past the great difiiculty has been 
 to find employment for the rising generation. The question of 
 tariffs there has been eminently a social one" (Syme). It is a 
 fact known to the present writer that immigration thither from 
 the North of Ireland was deterred by the reports which came 
 back that fathers of families in very comfortable circumstances had 
 sent their sons to sea in despair of finding work for them. The 
 Australians found that " their youth was growing up in a 
 state of semi-barbarism, without education, without employment, 
 and without hopes for the future," while their country was be- 
 coming '' a huge sheep-walk." 
 
 § 274. Those who are familiar with the facts of the com- 
 
296 ELEMENTS OP POLITICAL ECONOMY. 
 
 mercial history of Australia are not so ready to admit that her 
 people are making their own goods at a loss. (1) The Austra- 
 lians are much less at the mercy of speculators than when they 
 depended entirely upon a distant market, and by consequence 
 they are now in so far free from the vast fluctuation in prices 
 produced by "forestalling the market" or " getting up corners." 
 *' There is scarcely a commodity imported into Australia but has 
 at one time or another been manipulated in this fashion. The 
 practice is carried on in the most systematic manner. There are 
 individuals there who make it their special study to create an 
 artificial scarcity. No sooner is there the slightest prospect of 
 even the most temporary deficiency in the supply of any com- 
 modity, than some one immediately begins to buy up every 
 parcel in the market and every shipment to arrive. Once in pos- 
 session of the bulk of available stock, he is in a position to de- 
 mand his own price from the consumers " (Syme). 
 
 Hittell's Eesourcea of California (p. 333), gives an account of the same 
 system as pursued on the Pacific coast. 
 
 (2) Australia, like other countries that did not manufacture, 
 was not ordinarily furnished with goods at the lowest price that 
 her British friends could sell them for, but whenever she tried 
 to begin their manufacture she got them " at a sacrifice." She 
 had tallow in abundance and all the materials to make soap and 
 candles; her people repeatedly undertook to make them, and it 
 was found that they could do so at prices much below the ordi- 
 nary price of the imported articles. But no sooner was this 
 known in England, than large shipments of soap and candles 
 were thrown upon the market at prices with which the home 
 manufacturer could not compete. One maker after another was 
 crushed by the unequal competition, until the Victoria tariff of 
 1871 took this industry under protection. 
 
 Again, Australia produces maize, while England has to im- 
 port it. Yet maizena, a well-known preparation from that 
 grain, was imported from England and sold for a shilling a 
 pound. A native firm began its manufacture and sold it at five 
 pence, and afterwards at two pence per pound, but has had a 
 
IRELAND'S PASSIVITY. 297 
 
 hard fight with foreign competition, and would have been 
 swamped but for the confidence in success that buoyed them up 
 against losses. 
 
 Again, Victoria produces vast quantities of very superior 
 wool, yet in 1870 the importation of woollens amounted to 
 £817,087. A factory at Geelong earned a fair dividend and a 
 high reputation by the manufacture of a class of tweeds, which 
 wore well. A Yorkshire firm got a sample of the fabric and 
 made a cheap and inferior imitation of it, with which the 
 colony was soon flooded. • The factory would have been closed 
 had not the legislature imposed a protective duty upon all im- 
 ported cloths, and the colony is now spinning and weaving its 
 own wools at a rate that will soon make it independent of 
 Yorkshire. 
 
 These are not the only cases. An old colonist declared at a 
 public meeting in Sydney, that he " had seen a large number of 
 industries perish in this country, not because they had not in- 
 herent strength, but because they had been strangled, as it were, 
 by the competition of other countries, . . . Unless a man had 
 a very strong back, he could not bear up against them till he 
 could establish his industry.'^ 
 
 See Sir Charles Dilke's Greater Britain, bnt especially "Restrictions on 
 Trade: From a Colonial Point of Vieio," by David Syme. Republished 
 Boston, 1873. 
 
 § 275. Two of England's dependencies — Ireland and India — 
 have had no discretion as to the direction of their economic 
 policy, — no power to set up barriers against the beneficencios of 
 free trade. Both of them have been, throughout the period of 
 their relation to her, relatively inferior in capital and skill, and 
 both have illustrated the result of free competition between 
 nations so situated. 
 
 Ireland possesses many natural advantages, but labors under 
 the absence of others. Acre for acre her soil is better than that 
 of England, but her immense rainfall — in some places in the 
 west it rains two hundred days in the year — renders grain-farm- 
 ing gambling. Since the failure of the potato crop, she has been 
 
298 ELEMENTS OF POLITICAL ECONOMY. 
 
 chiefly dependent upon green crops and dairy farming, and she 
 is unsurpassed in both. She has mines of gold, silver, and iron, 
 but very few of coal ; a great geological convulsion seems to have 
 stripped her of her coal measures, paring the top from the 
 island and leaving bare the vast limestone plain, intersected with 
 peat bogs, which forms its centre. But English coal can be 
 put down on her seaboard as cheaply as in the south of Eng- 
 land ; more cheaply than in France. Her vast area of fine pas- 
 ture land and her peculiar climate, render the wool of her sheep 
 exceptionally fine, and therefore for centuries back in great de- 
 mand to mix with the coarse wools on the Continent. But her 
 wool is not woven and spun at home ; she exports it together with 
 large quantities of food. Her Celtic people are of the same blood 
 with the French across the Channel, and possess the same capa- 
 city for the development of fine taste, and the artistic feeling for 
 form and color ; but these lie undeveloped while they remain at 
 home. The Irishman only flourishes after being transplanted 
 from his native soil, although he feels for that soil the most pas- 
 sionate attachment. His qualities as a workman, which have 
 been so abundantly useful in our country, lie dormant at home. 
 §276. The spirit in which the English government and 
 people used to deal with Irish industry finds its most striking 
 illustration in the suppression of the woollen manufacture at the 
 close of the seventeenth century. The manufacture of woollens 
 and linens began very early ; under Henry VIII. the importa- 
 tion of Irish woollen thread was prohibited. Under Charles I. 
 Wentworth used all his tyrannical energies to suppress the 
 woollen manufacture, and promote that of linen. The over- 
 throw of the King and his party left the Irish free to spin and 
 weave what they would, and not till after the Revolution of 
 1688 did the complaints of the English manufacturers induce 
 the government to restrict them from producing woollens for the 
 supply of the home market. The English House of Lords 
 (1698) took the initiative, and begged the King to take measures 
 to confine the Irish to the linen trade, as the rapid growth of 
 their woollen trade was drawing English spinners and weavers 
 
IRISH WOOLLEN INDUSTRY STRANGLED. 299 
 
 to Ireland. The House of Commons followed, and the King 
 promised to do what was desired. The Irish Parliament was in 
 110 sense a body that represented the nation ; they imposed a 
 prohibitory duty on the export of Irish woollens, while the 
 English Parliament prohibited their export save from six 
 Irish to six English ports. Irish industry received a shock 
 from which it never recovered, and even English industry felt 
 the recoil. The wool-workers flocked over into England, and 
 overstocked the labor market, or by competing for the trade, 
 cut down the profits. Others took their skill and industry to 
 the Continent, and contributed to the improvement of the 
 foreign factories. A great part of the people were thrown out 
 of employment, or thrown back upon farming, and the era of 
 rack-rents began. " Upon the determination of all leases made 
 before 1690," says Dean Swift, " a gentleman thinks he has but 
 indifi"erently improved his estate if he has only doubled his 
 rent roll. Farms are screwed up to a rack-rent — leases granted 
 but for a terra of years — tenants tied down to hard conditions, 
 and discouraged from cultivating the land they occupy to the 
 best advantage by the certainty they have of the rent being 
 raised, on the expiration of their lease, proportionably to the 
 improvements they shall make." The value of Ireland as a 
 customer for English goods was very greatly diminished ; where 
 once they had bought large quantities of the better wares, they 
 now took only the coarser, and in small amounts. Well might 
 Swift, with savage wit, refuse to respond to the toast, " Ireland's 
 Prosperity," on the ground that he " never drank to memories." 
 " Ireland," he wrote in 1727, " is the only kingdom I ever heard 
 or read of, either in ancient or modern story, which was denied the 
 liberty of exporting their native commodities and manufactures 
 wherever they pleased, except to countries at war with their 
 own prince or state; yet this privilege, by the superiority of 
 mere power, is denied us in the most momentous parts of com- 
 merce." With every generation her trade declined, except that 
 in linen, conducted chiefly by the Scotch and English colonists 
 in the three north-eastern counties, where the streams are so 
 
300 ELEMENTS OF POLITICAL ECONOMY. 
 
 richly charged with natural salts that they will bleach without 
 the addition of chemicals. Even this was envied; in 1785 
 Manchester sent up a petition with 117,000 signatures, asking 
 the prohibition of Irish linens. The implied pledge made to 
 foster the Irish linen trade was never kept ; bounties were given 
 to English and Scotch producers only. But the Irish maker 
 held his own, and the annual value of Irish linen is now half 
 that of the rental of the kingdom. 
 
 § 277. This act was but the worst of many conceived in the 
 same spirit. The export of cattle to England in 1663 was pro- 
 hibited in order to protect the English breeder. The manufac- 
 ture of glass was put down in the same way as that of woollens. 
 " The easiness of the Irish labor market and the cheapness of 
 provisions still giving us the advantage, even though we had to 
 import our materials, we next made a dash at the silk business, 
 but the silk manufacturer proved as pitiless as the woolstapler. 
 The cotton manufacturer, the sugar refiner, the soap and candle 
 maker (who especially dreaded the abundance of our kelp), and 
 any other trade or interest that thought it worth its while to pe- 
 tition was received by Parliament with the same cordiality, until 
 the most searching scrutiny failed to detect a single vent for the 
 hated industry of Ireland to respire'^ (Lord Dufferin). The 
 country was forbidden to trade with the East, with the Mediter- 
 ranean, with the Colonies. 
 
 Not till the rising of the Irish Volunteers in 1778, and the 
 consequent concession of the independence of the Irish Parlia- 
 ment in 1783, was the weaker island treated as possessed of any 
 industrial rights that the stronger was bound to respect. From 
 that period till the Union of 1801, Ireland had control of her 
 own industrial policy, and one of the first uses that she made of 
 it was to impose a duty upon the importation of certain English 
 goods which it was felt could be made as well at home. Those 
 eighteen years were a time of rapid industrial growth; Irish 
 manufactures began to show themselves. " There is not a 
 nation on the habitable globe,'' wrote Lord Clare in 1798, 
 *• which has advanced in cultivation and commerce, in agricul- 
 
THE INFAMOUS UNION. 301 
 
 ture and manufactures, with the same rapidity in the same 
 period." But one of the provisions of the infamous compact 
 which terminated the country's legislative independence, was 
 the gradual removal of these duties. Those on cotton goods 
 were to be removed between 1808 and 1821 ; those on woollens 
 by the latter date; that on cotton yarn in 1810. As the pro- 
 cess went on, the Irish factories closed with the same beautiful 
 regularity. The protected silk, flannel, stocking, blanket and 
 calico manufactures of Ireland are now extinct. By 1840 the 
 woollen manufacturers of Dublin had fallen off from ninety-one 
 to twelve ; their workmen from nearly 5000 to about 600 ; wool- 
 combing and carpet-weaving was almost gone. Six thousand 
 weavers and combers in Cork were reduced to 478 by 1834. 
 
 Once again the people were thrown back upon the land ; the 
 merciless competition of British capital was as effective as the 
 merciless legislation of the English Parliament; English Free 
 Trade undersold Irish manufactures out of existence, and 
 reduced the Irish people to the uniformity of a single employ- 
 ment. The only field of enterprise left was competition for the 
 possession of a few acres, as the last refuge from starvation. 
 " Some well-meant but vain attempts have been made from time 
 to time to promote manufactures in the country, in the form of 
 what is called an Irish manufacture movement, that is, an agita- 
 tion to induce a general undertaking or resolution to use articles 
 of Irish manufacture rather than English, without reference to 
 their relative quality or cheapness" (J. N. Murphy). But in 
 vain ; because the people had no power to " give effect to their 
 judgment respecting their own interests," all attempts at such 
 concert being ineffectual, " unless it receives the sanction and 
 validity of a law" (Mill). " It is well known that almost all 
 the manufactured articles used in Ireland, save lioen, are 
 British or foreign products. There are British and French 
 millinery and silks ; British, French, Danish and Hungarian 
 gloves; English soap, candles, ironmongery, hardware and 
 glass ; in fact, almost everything in use by rich and poor — all 
 imported and paid for by Irish raw agricultural product" 
 
302 ELEMENTS OF POLITICAL ECONOMY. 
 
 (Murphy). England has 740 occupations relating to trade, com- 
 merce and manufacture; little Scotland 501 ; Ireland only 261. 
 
 § 278. " Some human agency must be accountable," says 
 Lord Dufferin, " for the perennial desolation of a lovely and 
 fertile island, watered by the fairest streams, caressed by a clem- 
 ent atmosphere, held in the embraces of a sea whose affluence 
 fills the noblest harbors of the world, and inhabited by a race — 
 valiant, generous, tender — gifted beyond measure with the 
 power of physical endurance, and graced with the liveliest intel- 
 ligence." 
 
 Many are the solutions ! 1. "The Irish are an idle, thriftless 
 race," says prejudice. Their record in the colonies and in 
 America, as in England itself, disproves the slander. " We 
 are apt to charge the Irish with laziness," says Swift, " because 
 we seldom find them employed ; but then we don't consider 
 that they have nothing to do." " They are priest-ridden, ig- 
 norant Catholics," says bigotry. They bring their religion with 
 them to new fields of labor, but it does not prevent their pros- 
 pering. They are of the same creed as the industrious and 
 prosperous Belgians; of the same race and creed as the French. 
 " They are turbulent; the country is so disturbed by popular out- 
 rages, that capital shrinks from Ireland as a field of investment," 
 say the lovers of peace and quiet. It is admitted that Ireland 
 is disturbed because of the poverty and misery of the people. 
 It is a miserable circle, if the efiects of their misery are such as 
 to prevent the application of the remedy. Is not the effect put 
 for the cause here ? 
 
 2. " The misery of Ireland arises from the excess of her 
 population," say the old-fashioned economists. Between the 
 Union and the Famine (§ 66^ the rate of increase of popula- 
 tion in Ireland was less than in England ; since that date there 
 has been a decrease of one-third through emigration, without 
 any corresponding improvement in the condition of the people. 
 Although England consumes over fifty million bushels of grain 
 in the manuficture of liquor, she manages to feed, in ordinary 
 years, two-thirds of her population or fourteen and a half mil- 
 
WHY IS IRELAND POOR? 803 
 
 lion people — taking the census of 1868 — on the produce of 
 twenty-five and a half million acres of arable land. Belgium 
 on six and a half million acres feeds nearly five million people. 
 Ireland with fifteen and a half million acres of better laud than 
 cither England or Belgium can show, is overpopulnted with a 
 people that number something over five and a half million 
 souls ! " But since the famine and emigration brought down 
 the numbers, things are much better in Ireland. Mr. Disraeli, 
 you know, says that the ' famine did more for Ireland than a 
 long succession of statesmen had been able to do//' The fam- 
 ine and emigration did reduce the population from something 
 like eight millions to the present figures, a decline of 32 per 
 cent. But the best judges pronounce that this reduction has 
 efi*ected no material improvement in the condition of the peo- 
 ple, which is improving only where the farmer and the artisan are 
 in neighborhood, and where the farmer sells his crop to his 
 neighbors, i. e., in the three or four north-eastern counties. Every- 
 where else, the Irishman at home is " selling the hide for six- 
 pence and buying back the tail for a shilling/' " The dispropor- 
 tion of the opportunities of employment to population," as Lord 
 Dufferin expresses it, is the real state of the case ; not the dis- 
 proportion of natural resources and land to the population. 
 But this explanation confesses judgment against those who have 
 control of the industries of Ireland. For the rapid and enor- 
 mous multiplication of any people, if it outrun the development 
 of their industrial resources, is a proof and a cousequence of the 
 wretchedness and poverty that first made them reckless and 
 liopeless. It is the well-to-do workman, the one who has a 
 social standing and prospects, that considers his ways. 
 
 See ^ 68, note. The only evidence we can find for the assertion of a rapid 
 increase in the population is the fact that the Registrar-General reported 
 an enormous birth-rate in Ireland. But the ofiBcial figures of the Irish 
 census show that this must have been balanced by a still more 
 enormous death-rate, as indeed is highly probable (^ 71). Yet Mr. 
 Mill gives from Quetelet a table of annual increase which puts the 
 Irish rate far higher than that of England, and indeed the highest in 
 Europe. 
 
304 ELEMENTS OF POLITICAL ECONOMY. 
 
 § 279. 3. " The misery of Ireland arises out of the wretched 
 system of land tenure," say the new-fashioned economists, 
 Mr. Thornton and his disciples; "her people are reduced to 
 tenants at will, they are rack-rented ; they have no inducement 
 to improve their land, because the better they make it, the 
 higher the rents will go. They hide their savings from the 
 landlords, and get two per cent, interest on them, instead of 
 putting them into the land. They need security of tenure and 
 compensation for unexhausted improvement. Till they get them, 
 as Mr. Caird says, ' what the ground will yield from year to year, 
 at the least cost of time, labor and money, is taken from it.' " 
 The inference is that the Irish landlords, and the middlemen to 
 whom they let their properties, and who again sublet it to the 
 farmers, have been the vampires who have destroyed Irish 
 prosperity, and driven her people beyond the seas. But where 
 the same land tenure has coexisted with manufactures the 
 people have prospered ; and where the two have not been asso- 
 ciated, the landlord has often been broken in fortune as well as 
 the tenant. The commissioners sent out to relieve the sufferers 
 by the famine, found in the Connaught poor-houses men of 
 estate and family, who had served as the High Sheriffs of 
 their counties. One-third the landlords of Ireland were swept 
 away in the common ruin. A very large portion of the land 
 of Ireland has changed hands in late years ; £25,000,000 
 worth in the ten years (1849-1859), during which the Encum- 
 bered Estates' Court sat in Dublin. Of the estates thus sold, 
 the ownership was often only nominal ; the landlord an unpaid 
 pensioner on his own laud. And it is a mistake to suppose 
 that rack-rents are necessarily high, except in relation to the 
 means of the tenant, " The rents of Ireland are comparatively 
 low. This, I believe, is generally admitted, though there are 
 flagrant exceptions ; even a rent that is absolutely low, may be 
 beyond the means of an indigent or unskilful tenant" (Lord 
 Dufferin.) They are in fact much lower than farmers with the 
 command of a home market easily pay in other countries; much 
 higher than the Irish farmer can often afford. 
 
THE IRISH LAND-MARKET. 305 
 
 After all, what is the charge brought against the Irish land- 
 lords and their middlemen ? That they acted on the princi- 
 pies of English Political Economy, and sold their commodity 
 in the dearest market they could find. " The moral respon- 
 sibility of accepting a competition rent is pretty much the same 
 as that of profiting by the market rate of wages. If the first 
 is frequently exorbitant, the latter is as often inadequate, and 
 inadequate wages are as fatal to efficiency as a rack-rent is 
 to production ; though each be the result of voluntary adjustment, 
 it is the same abject misery and absence of an alternative which 
 rule the rate of both. . . . The disproportion of the op- 
 portunities of employment to population has resulted in univer- 
 sal pressure and universal competition — competition in the labor 
 market; . . . .competition in the land market only to be 
 relieved by the application to more profitable occupations of so 
 much of the productive energies of the nation as may be in 
 
 excess of the requirements of a perfect agriculture 
 
 How powerfully the development of manufactures in the North 
 of Ireland has contributed to the relief of the agricultural 
 classes of Ulster, by giving the tenant farmer an opportunity of 
 apprenticing some of his sons to business, .... and by 
 enabling the cottier tenant to supplement his agricultural earn- 
 ings with hand-loom weaving, and by a general alleviation of 
 
 the pressure upon the land, I need not describe 
 
 Had Ireland only been allowed to develop the other innumera- 
 ble resources at her command, as she has developed the single 
 industry in which she was permitted to embark, the equilibrium 
 between the land and the population dependent upon the land 
 would never have been disturbed, nor would the relations be- 
 tween landlord and tenant have become a subject of anxiety " 
 (Lord Duiferin). But the Irish land laws of 1870 and 1881 
 both seek to put a limit to the competition for land b}' legal 
 restriction, rather than to put an end to it by removing its 
 cause — ^by creating and cherishing a varied industry. They 
 did so with eyes fully open to the source of this unhappy com 
 
 petition. In the debate on the former Bill in the Commons 
 20 
 
306 ELEMENTS OF POLITICAL ECONOMY. 
 
 the line of argument adopted by the Government, according to 
 The Spectator, was this : " Free contract implies free contract- 
 ors ; however, partly from historical circumstances but cldejly 
 from the absence of alternative employments, the poorer tenants 
 of Ireland are not free ; at least half the adult population are 
 compelled by the coercion of hunger to agree to any terms 
 which will secure them the use of the soil. It is because they 
 are not free that a penalty is afl&xed to capricious eviction, — 
 that a court is to settle the terms on which leases must be 
 granted, that even on the expiring of the lease, good-will is to 
 revive like a plant out of the ground." On reading this, we 
 are obliged to ask : Are there no resources at the command of 
 statesmanship, by which these " alternative employments " 
 could be called into existence, and the Irish problem 
 solved without tampering with vested rights, and re- 
 calling into existence that " system of limited, imperfect and 
 half-developed rights, natural only to a low civilization," which 
 all Europe has taken such trouble to be rid of. There is a re- 
 source which has always been found fully equal to the occasion, 
 but unfortunately it is called Protection. And from the most 
 trusted leaders that the people of Catholic Ireland ever had, a 
 demand for it has been distinctly made. 
 
 " What sort of legislation would follow the establishment of a separate 
 Irish Parliament, if any legislation at all, might easily be anticipated, 
 if it were not distinctly foreshadowed in a tentative declaration of some 
 Catholic clergymen, drawn with great ability for its purpose, and assur- 
 edly not put forward without the private sanction of higher authority 
 than it claims. It is enough to say it is declared that Political Economy 
 will not do for Ireland, that the Irish manufacturer cannot compete with 
 the English, and that the natural energies of the Irish people must be 
 developed — that is to say, properly speaking, repressed — by Protection 
 and prohibition" — (Cliflfe Leslie {Land Systemn of Ireland, England and 
 the Continent, pp. 35-6.) Mr. Leslie recognises the fact that the absence 
 of manufactures is a chief source of Irish poverty and retrogression. 
 However, he believes that Ireland is not a manufacturing country, be- 
 cause her land tenure laws are so bad that the capitalist cannot secure 
 sites for factories, and he seeks to substantiate this reasoning by adducing 
 some half-dozen cases of hardship. The land tenure is the same in 
 England as in Ireland; the same in "Ulster as in Connaught. It was 
 
IRELAND'S "LACK OF CAPITAL." 307 
 
 the same in 1783-1801 as it is now, when no such diflBculty as to the 
 sites of factories was experienced. 
 
 Did not the Gladstone ministry and their majority in Parliament " declare 
 that Political Economy would not do for Ireland," when they resolved to 
 set aside freedom of contract between landlord and tenant? "If Eng- 
 lish landlords, millionaires anH economists have an economical convic- 
 tion, it is in favor of freedom of contract. Yet a house led by the 
 greatest of living economists has abandoned it. . . . The Bill does inter- 
 fere directly with their claim to do as they like with their own 
 
 Mr. Lowe, when taunted with his old economical arguments, acknow- 
 ledged that the Bill was not intended to increase wealth, which is the ob- 
 ject of Political Economy, but to save society" (Spectator). 
 
 § 280. (4) '' Ireland is miserable, wretched, unprogressive 
 for lack of capital to undertake the industries that would give 
 her people sufficient employment," says the practical man. 
 Solomon anticipated him when he wrote, " The destruction of 
 the poor is their poverty;" but of what use is it to tell the Irish 
 people that the reason why they are so ill off is because they were 
 not in the past able to lay by for the present, and therefore will 
 not now be able to do so for the future ? " We frequently hear 
 Irish aspirations after English capital ; and loud are the popular 
 rejoicings when an Englishman settles in Ireland, with a few 
 thousand pounds, to establish some branch of industry; and 
 these rejoicings are not so much for the example he sets, as for 
 the capital he brings with him. We find, too, the English press 
 occasionally warning the people of Ireland not to frighten away 
 by their turbulence English capital, which, if not so deterred, 
 would be devoted to the development of Ireland, instead of be- 
 ing sent for employment to the antipodes, — a warning which im- 
 plies that Ireland must look outside herself for the capital neces- 
 sary to develop her resources. . . . Capital may be defined as 
 past labor laid by to aid future. . . . The capital of Great Bri- 
 tain and other civilized nations has grown from weak and scanty 
 beginnings. . . . The capital, or saved labor of any country, 
 must in the ajrsregate come from the labor of that country. It 
 cannot come from any other source. Another country will not 
 supply it. Capital is not parted with unless in exchange for an 
 equivalent. The more the labor of a country is productively 
 
308 ELEMENTS OF POLITICAL ECONOMY. 
 
 employed, the larger will be the amount of its saved labor. The 
 greater the activity of industry, the energy of production, the 
 process of perpetual consumption and reproduction, the greater 
 will be the capital created within the country" (J N. Murphy). 
 But even savings are not capital unless they are reproductively 
 employed in the country itself; and the productive classes of 
 Ireland save large sums of money, for whose investment there is 
 absolutely no opening in Ireland. An average of £16,000,000 
 is deposited with the Irish banks at IJ per cent, interest, and 
 is invested in the London money market by the bankers. And 
 the amount of these savings would be very much greater, were it 
 not for the vast number of the unemployed and unproductive 
 class who live off the national income. These are the two ex- 
 tremes of Irish society, — the landlords who draw incomes from 
 Irish estates and spend them in Paris or Naples, instead of de- 
 voting themselves, as captains of industry, to the development 
 and improvement of their estates; the great host of beggars, 
 paupers and dependent persons, who find nothing to do. and 
 live in idleness ofi" the earnings of others, some of them inside, 
 but most of them outside the workhouse. 
 
 Even Lord Dufferin joins in this talk about Ireland's need of capital : — 
 ''Let capital overflow her soil, and though her superficial area remain the 
 same, the stimulus to her powers of production would be equivalent to an 
 accession of territory sufficient to support thousands in affluence, where 
 at present hundreds find a difficulty in extracting a bare subsistence." 
 Ireland has, and under any free trade regime would have, to compete 
 with the industrial skill and the division of labor which has been the 
 slow acquisition of centuries of English history. Irish labor is dear, as 
 all unskilled labor is. As her people say, " their fingers are all thumbs" 
 at manufacturing, and Lord Duflferin himself tells us that "even the tra- 
 ditions of commercial enterprise have perished through desuetude." The 
 nascent industries of Ireland would be "strangled in their cradle," 
 unless the new capitalists had — as the Australian expressed it — "a pretty 
 strong back" to bear up against the sort of competition that Manchester 
 and Bradford, Sheffield and Birmingham would bring to bear upon them. 
 
 § 281. What will England do for Ireland ? Almost anything 
 except protect her industry or repeal the Union and concede the 
 " Home Ilule" that would enable her to protect herself. Every- 
 thing, that is, but the one thing that will be of permanent use. 
 
JUDGE BYLES ON RESTITUTION. 30S 
 
 She will even interfere with the rights of property, and put the 
 competition of the land market under restraint. But she will 
 suffer no restraints upon the market for cottons, woollens, hard- 
 ware, soap, candles and glass; its conjpetitions are something 
 unspeakably sacred, on which none may lay irreverent hands. 
 And then, is not British prosperity bound up with the doctrine 
 that men have the right to buy in the cheapest and sell in the 
 dearest market, and do what they will with their own, — provided 
 it is not land in Ireland ? Only one English voice is raised in 
 protest : " The destruction of Irish industry by the ancient 
 English policy is not only a case for repentance, but for restitu- 
 tion, or at least compensation. Like other sinners, we are very 
 willing to confess that we have done wrong; ready even to 
 promise that we will do so no more. But a proposal that we 
 should give any Irish industry, or even any English industry on 
 Irish ground, a partial and temporary advantage, so as to place 
 Ireland, as nearly as we can, in the same state as if she had al- 
 ways been fairly treated, as an integral part of the empire — a 
 proposal to make up for past delinquencies and really restore in- 
 dustry to its natural channels — I say such a proposal, just and 
 natural as it is, would at present be received in England with 
 derision." ... If this were done " England's gain in the re- 
 sult cannot be calculated. But she will be no loser even in the 
 process. The wealth that native manufactures will at once pour 
 into Ireland's lap will not be abstracted from the United King- 
 dom, but created in Ireland " (Judge Byles). 
 
 See SopMsms of Free Trade ; Chap. XVI. : " Free Trade for Ireland." 
 Also Lord Dufferin's Irish Emigration and the Teutire of Land in Ireland f 
 and Mr. J. N. Murphy's Ireland — Industrial, Political and Social. 
 
 § 282. India was a manufacturing country when English 
 merchants first began to establish their factories or trading sta- 
 tions along the coast of the Bay of Bengal. Down to quite a 
 recent period a great trade in the fine cotton goods of India — 
 "so fine that you can hardly feel them with your hand" — was 
 carried on. " On the coast of Coromandel and in the Province 
 of Bengal, when at some distance from a high-road or principal 
 
310 ELKxMKNTS OF POUTICAl. ECOXOMY. 
 
 town, it is difficult to find a vilhige in which every man, w Lilian 
 and child is not employed in making a piece of cloth. At pres- 
 ent much the greater part of whole provinces are employed in 
 this single manufacture," whose process '' includes no less than 
 a description of the lives of half the inhabitants of Indostan " 
 (Col. Orme, 1805). The manufacture was very ancient : "the 
 weaver of Dacca on his clumsy loom produced in the days of 
 the Roman empire that ' woven wind/ the transparent Indian 
 muslin, — the human gossamer, of which a whole dress will pass 
 through a finger ring. Any other nation than our own, I sup- 
 pose, would have cherished the manufacture of a fabric, the 
 most perfect probably in the whole world, and certainly the 
 most ancient that can be specifically identified : had it fallen 
 naturally into disuse, would have held a little state money well 
 spent to preserve it. Not so we English. We have well-nigh 
 annihilated the cotton manufacture of India. Dacca is in great 
 measure desolate ; the population, from 300,000 has fallen to 
 60 or 70,000 ', its most delicate muslins are almost things of the 
 past. We imposed prohibitory duties on the import of Indian 
 manufactures into this country. We imported our own at nomi- 
 nal duties into India. The slave-grown cotton of America, 
 steam-woven into Manchester cheap-and-nasties, displaced on 
 their native soil the far more durable but more costly products 
 of the Indian loom. ..." 
 
 See J. M. Ludlow's British India, its Races and its nistory. Two vols. 
 Cambridge, 1858. Also, his Thoughts on the Policy of the Croum toward 
 India. London, 1859 j and Chapman's Cotton and Commerce of India. 
 
 England brought India juster and cheaper government, an 
 era of peace, lighter taxes and improved methods of manage- 
 ment. But under the Christian rule of Britain the industry of 
 the country has been blighted, and " the manufactures of India 
 were, it may be said, completely ruined by a general lowering 
 of import duties [in 1813] on articles the produce or manu- 
 facture of Grreat Britain, without any reciprocal advantages 
 being given to Indian produce or manufactures when brought 
 home. Next, inasmuch as the sale of opium, — a government 
 
THE IDLENESS OF INDIA. 311 
 
 monopoly in Bengal and Behar — was greatly impeded by 
 the competition of free-grown opium from the native states 
 of Malwa, prohibitory duties were imposed at all the Presiden- 
 cies on" the latter, " and the native princes of Malwa were ac- 
 tually induced to prohibit the cultivation of the poppy for British 
 behoof, — being suitably bribed for thus ruining their own sub- 
 jects " (Ludlow). By 1833 not a single piece of cloth was ex- 
 ported from India, and for the ruin inflicted on its artisans Lord 
 William Bentinck, the Grovernor-General, could find " no paral- 
 lel in the annals of commerce/' English writers tell of " the 
 enormous and undeniable falling oflF in the commercial activity 
 of India ; the decay of those flourishing marts with which the 
 whole coast was once studded; , . . the contraction, and in 
 great measure the ruin of trade; the neglect of public works; 
 the depreciation of agricultural produce;" which last 'Ms ob- 
 served to be a marked feature of our rule. . . . The numerous 
 local markets created by the existence of the native princes," 
 and by the wide existence of a class that had other means of 
 subsistence than farming, ^'and which, by serving as centres of 
 money circulation, enhanced the value of produce on the spot, 
 disappeared." " The trade of India is so trifling, as compared 
 with its agriculture, that the trading classes, except the village 
 bankers" or usurers, ''form a very small item" (J. M. Lud- 
 low). " A great part of the time of the laboring population in 
 India is spent in idleness. I don't say this to blame them in the 
 smallest degree. Without the means of exporting the crude and 
 heavy agricultural produce, and with scanty means, whether of 
 capital, science or skill, of elaborating it on the spot, they have 
 really no inducement to exertion beyond what is necessary to 
 gratify their present and very limited wishes " (Chapman). 
 
 In fine, there is nothing left in India save an impoverished 
 agriculture and a lifeless trade. The Hindoo cotton-grower pro- 
 duces the raw material to clothe hie countrymen ; but it reaches 
 them by way of Calcutta and Manchester; the skill of his won- 
 derful manufactures is being lost: He pays for the strip of 
 cloth that covers his own nakedness twenty times the amount 
 
312 ELEMENTS OF POLITICAL ECONOMY. 
 
 of cotton that it contains. To carry his cotton crop even to the 
 river on bullocks costs on an average five cents a pound, and em- 
 ploys vast numbers of the people and of cattle in laborious and 
 unproductive work. He has lost the power of association with 
 his fellows; no man needs or helps his neighbors; all need and 
 help the foreigner only. " Half the human time and energy of 
 India runs to mere waste," says Mr. Chapman ; and elsewhere 
 he says that of the cultivable surface of all India one-half is 
 waste. In 1831 the cotton weavers and merchants of Bengal 
 petitioned the English Parliament for reciprocal fyee trade. 
 They found their "business nearly superseded by the introduction 
 of the fabrics of Great Britain into Bengal, the importation of 
 which augments every year, to the great prejudice of the native 
 manufacturers.'^ Knowing " the immense advantages which 
 the British manufacturers derive from their skill in construct- 
 ing and using machinery, which enables them to undersell the 
 unscientific manufacturer of Bengal in his own country," they 
 were " not sanguine in expecting to derive any great advantage 
 in having their prayer granted ;" but with the meekness of the 
 Bengalee they ask it " as a manifestation of your lordships' good 
 will." 
 
 Dr. Bowring, a leading champion of free trade, said on the occasion of 
 this petition: — "It is a melancholy story of misery so far as they are 
 concerned, and as striking an evidence of the wonderful progress of 
 manufacturing industry in this country. Some years ago the East India 
 company annually received of the produce of the looms of India 6,000,000 
 to 8,000,000 pieces of cotton goods. The demand has now nearly ceased. 
 In 1800 the United States took nearly 800,000 pieces; in 1830, not 4000. 
 In 1800 1,000,000 pieces were shipped to Portugal ; in 1830 only 20,000. 
 The poor India weavers are now reduced to absolute starvation ; numbers 
 of them have died of hunger. And what was the sole cause ? The 
 presence of the cheaper English manufacture, — the production by the 
 power-loom of the article which they had been used for ages to make 
 by their unimproved and hand-directed shuttles. It was impossible that 
 they should go on weaving what no one would wear or buy." But at 
 this very period the exportation of this better machinery, and even the 
 inducing skilled artisans to emigrate, was forbidden under heavy penalties 
 by English law. At the same time, as we shall see, every trade exercised 
 in India, and every tool it employed, was heavily taxed. 
 
INDIAN REVENUES. 313 
 
 Some feeble attempts to revive by mild protection the cotton manu- 
 factures of India have latterly been made. One member of the Man- 
 chester Chamber of Commerce, assailing the Canadian Tarifif (see g 271), 
 toM Mr. Gait : " This part of the country has been very restive lately 
 under the India duties of five per cent.," and another that '* Exactly tho 
 same process is going on in Canada that led to the erection of cotton- 
 mills in Bombay." The tariff in force at the era of the Rebellion taxed 
 British cotton, silk and woollen goods, and metal goods, 5 per cent.; 
 those of other countries twice as much; cotton yarn and twist from Eng- 
 land 3J per cent. ; from other countries 10 per cent. This was changed 
 in 1859 by abolishing the discrimination in favor of British goods, fixing 
 the duty on thread and twist at five per cent., and putting a duty of 20 
 per cent, on haberdashery, hosiery, millinery, and some other classes. 
 Mr. Jas. Wilson, the founder of the Economist, becoming Finance Min- 
 ister of India in that year, changed all duties on manufactured goods — 
 including yarns — to 10 per cent. But the pressure of direct taxation has 
 again forced a resort to high duties, and the people, with the co-operation 
 of English capital this time, are again taking to manufacturing. Man- 
 chester protests, but it can't be helped. The Spectator, edited by an 
 Anglo-Indian, says that if the tariff be kept long enough these manu- 
 factures will survive its removal ; but that as long as coal is dear, " and 
 the habit of mavufacturing on a large scale is not yet formed," they 
 would first languish and then die out under free trade. 
 
 § 283. The revenue from duties on imports being destroyed, 
 the necessity of raising money to pay the British troops and 
 officials, and carry on the government, led to a most oppressive 
 system of taxation and the creation of monopolies. Former 
 Indian governments drew the revenue from a land tax, at first 
 payable in kind, but after the Mohammedan conquest exacted — 
 at least in part — in money. The English adopted the same 
 method, but (1) they carried it out with a thoroughness im- 
 possible under any Oriental government, — with the hard rigidity 
 of a Shylock. (2) They insisted on payment in money exclu- 
 sively, forcing the tax-payer to find a market for his goods, and 
 requiring the circulation of sums hitherto never employed in 
 India, yet the value of Indian coin declined. Silver was nearly 
 as valuable in India as gold in Europe ; but the establish- 
 ment of absolutely free intercourse and competition with a 
 European nation brought its value down to the European 
 standard. On the other hand, the people were thrown into tho 
 
314 ELEMENTS OF POLITICAL ECONOMY. 
 
 hands of the native usurers who had control of the great mass 
 of the coin in circulation j these vampires form the only class 
 that has prospered under English rule, and desires its con- 
 tinuance. (3) The destruction of Indian manufactures has 
 brought down the price of raw produce and food by removing 
 the workshops of India to the British islands. It is by the 
 export and sale of these, in a country till recently almost desti- 
 tute of roads and means of transportation, that the land-tax is 
 raised. In many instances, from 60 to 70 per cent, of the crop 
 was thus employed, and outside the Deccan the average was fifty 
 per cent. (4) The land-lax levied by the native princes was ex- 
 pended in the neighborhood ; if in money, it was spent on articles 
 of native manufacture. By the policy of centralizing the gov- 
 ernment, the same fund was now expended mostly in distant 
 parts of the country, and much of it in paying salaries in 
 London, still more in the payment of high salaries to foreign 
 officers " without root in the country, who either save money for 
 the purpose of carrying it away, or spend it for the most part on 
 articles of British growth and manufacture; they being more- 
 over few in number and residing only in the chief towns " 
 (Ludlow). " Formerly," the native would say, ^' the govern- 
 ments kept no faith with their land-holders and cultivators, ex- 
 acting ten rupees where they had bargained for five whenever 
 they found the crops good; but in spite of all this zolm (op- 
 pression) there were then more hurkut (blessings) than now. 
 The lands yielded more returns to the cultivator, and he could 
 maintain his family better upon five acres than he can now upon 
 ten" (Col. Sleeman : Rambles in India). 
 
 But this oppressive land-tax is not sufficient for the needs of 
 the government, and monopolies have been created to supplement 
 it. (1) When the English began the conquest of India, its 
 people were noted for " their total abstinence from spirituous 
 liquors and other intoxicating substances " (Warren Hastings). 
 The government have set up distilleries, and supplied " arrack," 
 a fierce alcoholic drink, to licensed venders. It used its facilities 
 to establish new depots for the sale where none were known 
 
SALT AND OPIUM MONOPOLIES. 315 
 
 before. The price is low -, the sale immense ; the spread of 
 drunkenness is going on over the whole land; and petitions for 
 a prohibitory law come to England from the most public-spirited 
 of the natives. (2) The Hindoo lives very largely on rice and 
 fish, consequently needs a considerable amount of salt, — far 
 more than those who live on wheat and flesh. Instead of a light 
 tax imposed by previous rulers, the E. I. Company established 
 a monopoly of the manufacture by which the price was raised to 
 famine rates, and it needed three months' work of a ryot in the 
 interior to provide salt for a small family, while fish were carried 
 inland half-salted or unsalted, and used in a state of half- 
 putrefaction. Fortunately the English salt-makers could not be 
 excluded from the Indian market, and their importations forced 
 down the price, while it diminished the demand for labor. 
 " Imagine," says Mr. Ludlow, '^ the possibility of Cheshire salt, 
 produced in a damp and comparatively cold climate like ours, 
 under all the disadvantages of rent and royalty, rates and taxes, 
 interest on capital and a high price of labor — after being carried 
 bulky as it is, to the other end of the world — being sold to one 
 of the poorest populations of the world cheaper than that manu- 
 factured on their own coasts, where evaporation takes place with 
 extraordinary rapidity; where labor is at two pence a day; by 
 a government which pays neither rent nor royalty, rates nor 
 taxes l" Yet even since this alleviation, salt sold (1855) for 14 
 times its cost at Madras, and £72 a ton wholesale in the interior; 
 and the average consumption was one-third as much per head 
 of the people as the company supplied to its Sepoys. And in 
 many ways the monopoly checks industry, restricts the fisheries, 
 and hinders the keeping of cattle. (3) The monopoly of opium 
 of Bengal began in 1795, the object being to supply the article 
 to the armed smugglers who introduce it into China in spite 
 of the efforts of the government to exclude the pestiferous drug. 
 
 See The Opium Trade, ns carried on in India and China, by Dr. Nathan 
 Allen. Lowell 1850. 2d Edition, 1853. The attempts of the Chinese 
 government to suppress the traflBc was the chief if not the only cause of 
 the " Opium War" between England and China in 1840-1. In a petition 
 
816 ELEMENTS OF POLITICAL ECONOMY. 
 
 addressed to the English government by the merchants engaged in it, it 
 is said, " That the trade in opium had been encouraged and promoted by 
 the Ind'an government under the express sanction and authority, latterly 
 of the British government and Parliament, and with the full knowledge 
 also, as appears from the detailed evidence before the House of Commons 
 on the renewal of the charter" of the E. I. Company in 1833, "that the 
 trade was contraband and illegal." When it was proposed in Parliament 
 to suppress the monopoly, and thus put an end to the contraband trade, 
 a committee reported : " In the present state of the revenue of India it 
 does not appear advisable to abandon so important a source of revenue, 
 — a duty upon opium being a tax which falls principally upon the foreign 
 consumer, and which appears upon the whole less liable to objection 
 than any other that could be substituted." The Emperor refused to legal- 
 ize what he could not put a stop to, declaring " nothing will induce me to 
 derive a revenue from the vice and misery of my people." 
 
 But wherever opium is grown it is used ; and the company's 
 servants tell us that " One opium cultivator demoralizes a 
 whole village; and that one-half the crimes in the opium dis- 
 tricts, — murders, rapes, and affrays, — have their origin in opium- 
 eating." The ryot was not allowed to profit much by the crop ; 
 before planting the poppies he must make an engagement to sell 
 the juice at a specified price, and to the government alone; 
 when they were ripening, his fields were examined, the amount 
 of the yield estimated, and another engagement to furnish at 
 least that quantity was made. If less was furnished, he was 
 heavily fined for neglect j if the government advanced him 
 money — as was commonly done — to buy seed and get the crop 
 in, he paid twelve per cent, interest. Nor had he his choice as 
 to whether he would plant the poppies ; he was forced to give 
 up a portion of his land to them. (4) Equally oppressive and 
 exacting were the methods pursued in carrying on the monopoly 
 of tobacco on the Malabar coast. But these are only a few out 
 of a multitude of monopolies resorted to in order to avoid taxing 
 the importation of British manufactures. The moturpha, one 
 of the worst abominations of Moslem finance, was levied upon 
 the exercise of every trade and occupation, sometimes in the 
 form of a license, sometimes as a tax upon the tools employed, 
 often at six times their cost. A tax was laid on every cocoanut 
 
Belgium's industrial record. 317 
 
 tree ; on the knife with which the tree was tapped for its 
 sacchariDe juice ; on the pot in which the juice was boiled. 
 The fisherman paid a tux for the very stone on which he beat 
 his clothes. A petition sent to England by the natives of 
 Madras complains of the practice of annually " leasing out to 
 individuals certain privileges, such as the right of measuring 
 grain and other articles ; the right to the sweepings of the gold- 
 smiths' shops; the right of dyeing betelnut; of cutting wood 
 in the jungle ; of grazing cattle ; of gathering fruit and wild 
 honey; of catching wild-fowl ; of cutting grass for thatch, and 
 rushes for baskets ; of gathering cow-dung, and innumerable 
 other such rights of levying taxes on the poorest of the poor." 
 In Malabar the company claimed all the wax made by the bees, 
 leaving only the honey to the keepers; and actually destroyed 
 several branches of industry by exacting a license for their 
 exercise. 
 
 § 284. The progressive peoples are in every case those who 
 have fostered and protected national industry by national legisla- 
 tion. 
 
 (1) Belgium, "that old cockpit of Europe," is inhabited by 
 two peoples, " who speak different tongues, intermingle but 
 little, are jealous of each other, and inhabit different halves of 
 the kingdom. The one occupying the northern half of the 
 kingdom," the Flanders provinces, "where Flemish is spoken, "is 
 now famous for its husbandry alone, though once as famous for 
 its manufactures." Its linens, woollens, and other fabrics held 
 the markets of the world until the seventeenth century, when 
 the protective policy of England and France fully acclimatized 
 these manufactures on their own soils. Its superior skill in linen 
 weaving enabled it to retain a large measure of that industry, 
 until the invention of spinning and weaving machines superse- 
 ded the spinning-wheel and the liand-loom. Its deficiency of 
 coal, and the prohibition upon the export of linen machinery 
 from the British Islands, kept up till 1842, forbade competition 
 with the power-loom, and the country was reduced to a number 
 of small local industries." Fur till 1844 Belgium was a Free 
 
318 ELEMENTS OF POLITICAL ECONOMY. 
 
 Trade country. Under the imperial rule of Napoleon she shared 
 in an unusual degree in the impulse that the continental sys- 
 tem imparted to the manufacturers of the Continent. Her 
 cottons and woollens were noted for their excellency, and com- 
 manded the French markets. But the cheaper price of the in- 
 ferior goods with which England flooded the Continent on the 
 return of peace inflicted great injury upon both manufactures, 
 especially that of cottons. Being transferred from Spain to 
 Holland by the Treaty of Vienna, Belgium had free access to 
 the markete of the latter and its colonies. But the Kevolution 
 which gave her independence in 1830 closed both these against 
 her. The new government, taking its cue from the English 
 Whigs, who had given it moral support, announced the purpose 
 that Belgium should be an agricultural country, contented with 
 " the commerce of commission and transit " as a port of entry 
 for English goods on their way to the Continent. The Liberal 
 party upheld this course, but some of the clerical party, notably 
 the Abbe Defoer, contended for protection to home industry. 
 They pointed to the increasing prostration of manufactures ; to 
 the repeated failures of new enterprise through their exposure 
 to unfair competion, English goods selling at one-fourth less 
 than the London price, as long as any one attempted to make 
 them in Belgium, and French agents acting for years together 
 under general orders to undersell the native manufticturers. 
 They showed that although coal and iron had been found in 
 close proximity in the southern (Walloon, or French speaking) 
 provinces, yet no general success had attended the attempts to 
 develop this and the other vast resources of the country. 
 Associations and companies had been formed ; there had been a 
 sort of mania for industrial associations, but they came to 
 nothing. At last a government inquiry into the state of Bel- 
 gian commerce and industry was ordered, and in 1842 it re- 
 ported ; in 1844 the first Belgian protective tariff was adopted, 
 and Holland followed the example in 1845 ; in 1846 a commer- 
 cial treaty on the basis of reciprocity was effected between 
 the two countries, in order that this new tariff might in no 
 
THE BELGIAN TARIFF AND ITS EFFECTS. 319 
 
 way interfere with their old commercial relations. The 
 results are known to all the world in the rapid and vast de- 
 velopment of manufactures in the Walloon provinces, which 
 now compete with the English in the British markets and those 
 of the world. Even in the north " steam factories are now 
 rising in Flanders — the excellence of its flax, and the industry 
 and manipulative skill of its numerous rural population, may go 
 far, as regards the manufacture of linen, to compensate for the 
 total absence of iron and coal." Two Englishmen, selected by 
 the iron masters to ascertain the reasons of this, made inquiries 
 on the Continent, and report that, " with the advantage of pos- 
 sessing the best and most skilled workmen in the world, Belgium 
 and France have been thrusting us out of foreign markets to an 
 extent which the public will hardly credit, and of which the 
 trade itself is hardly aware. '^ .... For instance, in Spain, 
 " England is thrust aside, defeated by Belgium and France. 
 We cannot compete with their producers either in price or in con- 
 tinuousness and certainty of supply. Nor is this all. Even at 
 home these industrious and pushing people are challenging our 
 supremacy, and that not infrequently with success. In bar 
 iron, in rails, in engines for agricultural purposes, and even 
 in locomotives for railways, they have lately been obtaining 
 orders in our own market.'^ 
 
 It is easy to believe that this is rather an overstatement of 
 the case, but it has truth enough to be unpleasant reading in 
 Birmingham. Upon it they base a plea that English workmen 
 should be contented with lower wages, in order that their em- 
 ployers may compete with the cheaper labor of the Continent. 
 But the development of manufactures in Southern Belgium has 
 caused a n;reat advance in the rate of wages, and by furnishing 
 the farmer with a near and steady market, has made him fully 
 able to pay these. Protection has also naturalized in those pro- 
 vinces new species of tillage, such as the culture of beets for 
 sugar, from which the bulk of the sugar now used in Belgium 
 is derived. " The Walloon farm laborer earns two francs a day, 
 and often more, while the Fleming earns but one." " The line 
 
320 ELEMENTS OF TOLITICAL ECONOMY. 
 
 of division between high and low wages closely corresponds with 
 the line of division between the two races ;'' it is also like the 
 same line in England, the line of division between the purely 
 agricultural and the manufacturing districts. Liege lies on the 
 line; three miles south of it farm wages are twice as high as 
 they are three miles north of it. The northern provinces, in 
 spite of the unequalled agriculture, which has turned Flanders 
 into a garden, are afflicted with pauperism. When hand-loom 
 weaving ceased it was at its height ; in 1848 there were nearly 
 200,000 " indigents," one-fourth of whom were women who 
 had lived by spinning. The blow fell heavily on the farming 
 class also, as the small holders lost the employment by which 
 they eked out a living, and lost the home market for their 
 flax. But even Flanders is rallying under the shelter of the 
 protection that might have saved her workmen from beggary in 
 the process of adopting better methods of manufacture. 
 
 " If any one," says a Belgian Free Trader, " had left the 
 country in 1835, after having visited our principal manufactu- 
 ring centres, and were to come back to it now," in 1861, " he 
 would be struck with the transformation that they have under- 
 gone, the advances they have achieved ; he would find a nume- 
 rous, intelligent and active population of working people, where, 
 a quarter of a century ago, he would have seen nothing but 
 country houses scattered at wide intervals over extensive plains.. 
 As a consequence, production, except of articles of food, has 
 outrun the needs of the population, although it has increased in 
 numbers and in wealth, and we are obliged to seek for foreign 
 outlets." 
 
 See J. F, Constant : Du Regime Proteeteur en Economie Politique, 
 Bruxelles, 1842. H. F. Matthysens : La Hollande, V Angleterre, et la 
 Belgique ; Anvers 1850. De Laveleye ; L' Economie Hurale de Belgiqne 
 (largely reproduced in Cliffe Leslie's Land Systems and Induatrinl Eco- 
 nomy.) Ejusdem : "The Land Systems of Belgium and Holland" in 
 Cohden Club Exsays on Systems of Land Tenure; London 1870. H. H. 
 Creed and W. Williams, Jr. : Handicraftsmen and Capitalists; London. 
 
 § 285. (2). Germany is now taking her place among the 
 great industrial nations, through the removal of all restrictions 
 
FREDERICK IN THE ROLE OF COLBERT. 321 
 
 upon internal commerce and the legislative fostering of home 
 industry. The second king of Prussia, gruff old Frederick Wil- 
 helm, and his son, the great Frederick, began the work of raising 
 the land to the place to which its vast resources, its intellectual vigor 
 and its past history entitle it. " Frederick," says his greatest 
 biographer, " was the reverse of orthodox in ' Political Economy'; 
 he had not faith in free trade, but the reverse ; nor had ever 
 heard of those ultimate evangels, unlimited competition, fair start 
 and perfervid race by all the world (towards ' Cheap-and- 
 Nasty,' as the likeliest winning-post for all the world), which 
 have since been vouchsafed to us. Probably in the world there 
 never was less of a free trader. . . . The desperate notion of 
 giving up government altogether, as a relief from human block- 
 headism in your governors, and their want of even a wish to be 
 just or wise, had not entered into the thoughts of Frederick. 
 . . . Many of Frederick's restrictive notions, as that of watch- 
 ing with such anxiety that ' money ' (gold or silver coin) be not 
 carried out of the country, will be found mistakes, not in orthodox 
 Dismal Science as now taught, but in the nature of things ; and 
 indeed the Dismal Science will generally excommunicate them 
 in a lump, too heedless that fact has conspicuously vindicated the 
 general sum-total of them, and declared it to be much truer than 
 it seems to the Dismal Science. Dismal Science (if that were 
 important to me) takes insufl5cient heed, and does not discrim- 
 inate between times past and times present, times here and 
 times there/' 
 
 " In improving the industries and husbandries among his 
 people, his success, though less noised of in foreign parts, was to 
 the near observer still more remarkable. A perennial business 
 with him this, which even in time of war he never neglected, 
 and which springs out like a stemmed flood whenever peace 
 leaves him free for it. His labors by all methods to awaken new 
 branches of industry, to cherish and further the old, are incessant, 
 manifold, unwearied, and will surprise the uninstructcd reader 
 who comes to study them. . . . Certain it is. King Frederick's 
 success in National Husbandry was very great. The details of 
 21 
 
322 ELEMENTS OF POLITICAL ECONOMY. 
 
 the very many new manufactures, new successful ever-spreading 
 enterprises, fostered into existence by Frederick ; his canal- 
 makings, road-makings, bog-drainings, colonizings and unwearied 
 endeavorings, will require a technical philosopher one day, and 
 will well reward such study and trouble of recording in a human 
 manner, but must lie massed up here in mere outline on the 
 present occasion/' Excepting some small mention of two Prus- 
 sian chemists, that are busied, with aid and comfort from this 
 protectionist king, in getting sugar out of beet-juice — Herr Mar- 
 graff, 1747 till 1773, and after him a French Monsieur Achard. 
 refugee for his religion. This latter finds a second partner in 
 Napoleon, with notable results for France (§ 257). 
 
 See Carlyle's Frederick the Great, Book XVI., Chapter VIII. Also 
 Book XXI., Chapter II., where the younger and greater Mirabeau's 
 MonarcMe Prussienne (Paris 1788), a free trade pamphlet in eight octavo 
 volumes, is noticed with the summing up : " M. le Comte, would there 
 have been in Prussia, for example, any trade at all, any nation at all, 
 had it always been left ' free ' ? There would have been mere sand and 
 quagmire, and a community of wolves and bisons, M. le Comte." 
 
 In Mr. Carlyle's earlier works he accepts the results of the Dismal 
 Science — as he was the first to nickname Political Economy — as a 
 "Divine Message," though "perhaps as small a message as ever there 
 was such noise made about before," (Latter Day Pamphlets, 1850). He 
 seems to have now got beyond that, converted by the evidence of facts. 
 
 § 286. Frederick's unfriend, the Empress Maria Theresa, and 
 her son and successor, Joseph II., labored much the same way 
 for the promotion of industry in Austria. They all made the 
 mistake of leaving domestic industry under manifold restrictions, 
 which went far to balance the protection against foreign inva- 
 sions. The practice of trade was confined to limited corpora- 
 tions ; heavy excise duties and monopolies kept back home pro- 
 duction ; instead of one national Prussian tarifi" there were sixty- 
 seven, for every boundary line that divided province from prov- 
 ince was a line of customs' duties, shutting out the home manu- 
 facturer from his rightful market. Equally unwise, but quite in 
 keeping with this, was the prohibition of the importation of 
 certain manufactured goods, and of the export of raw materials. 
 The numerous privileged classes were exempt from the action of 
 
FROM BAD TO WORSE. 323 
 
 these laws, and could bring in what they pleased. Smuggling 
 was made a science, and supported by public opinion ; of the 
 great mass of officials required by the system, very few were 
 above taking bribes. These mischiefs came to a head under 
 Frederick's worthless successors, who intensified all the faults 
 and neglected all the good points of his system. Adam Smith's 
 doctrines were becoming popular in Germany ; Kraus of Koenigs- 
 berg and others taught them from professional chairs. A new 
 generation of officials grew up under this teaching, who detested 
 their country's meddlesome and vexatious fiscal policy for its 
 faults, without understanding its merits. 
 
 At last free trade became a recognised maxim of Prussian 
 policy. The king proclaimed, during the struggle with Napoleon, 
 that all prohibitions were cancelled, and all duties were reduced to 
 8i per cent, in the provinces not in possession of the enemy, and 
 when the " War of Liberation " broke out in 1813, the proclama- 
 tion was renewed. In the meantime the Continental system had 
 been extended to Germany ; British and Colonial goods were ex- 
 cluded from her markets, while those of France came thither 
 free of duty " by right of conquest," without any grant of reci- 
 procity. " German industry made admirable progress during 
 that time, not only in the different manufacturing branches, but 
 in all branches of agriculture, though laboring under all the dis- 
 advantages of the wars and of French despotic measures. All 
 kinds of produce were in demand, and bore high prices ; and 
 wages, rent, interest of capital, prices of land, of all sorts of 
 property, were enhanced" (List). The lower Rhine, as hav- 
 ing been longest under the French rule, made the greatest 
 advance. Perhaps Saxony, hitherto a free trade country, and 
 the great depot for the dispersion of British goods over Central 
 Europe, came next in point of industrial progress. Germany en- 
 joyed prosperity without example at the very time when her 
 people were drinking the bitter cup of national humiliation. 
 The victories that restored the ir^dependence of European 
 nationalities brought disaster to theii: material interests ; it threw 
 open their markets to the competition of their insular ally, and 
 
324 ELEMENTS OF POLITICAL ECONOMY. 
 
 set up all the old Hoes of deoiarcation that divided Germany 
 into a few large states and a host of micioscopic despotisms. 
 Twenty-seven of these custom-house lines — one-third of the 
 whole number — lay across the Rhine, and at each of them com- 
 merce was impeded with duties and delays. The German mer- 
 chant had no field of activity outside his own little principality ; 
 Germany enjoyed protection in each of its members from all the 
 rest, and at the same time virtual free trade with the foreigner. 
 The cry of ruined merchants and unemployed workmen led 
 Prussia to undertake an elaborate investigation of her own indus- 
 trial needs. The ministry of Hardenberg and Van Biilow had 
 proposed to keep up the present low tariff, but make it specific 
 in the nature of the duties imposed, and to abolish all provincial 
 restrictions on commerce. The matter was referred to the 
 Council of State, who recommended the appointment of a spe- 
 cial commission of inquiry, and the king selected one under the 
 presidency of Wilhelm von Humboldt. After a prolonged in- 
 vestigation, in which all interests had a hearing, the commission 
 decided in favor of a moderately protective system, with the 
 removal of all prohibitions on exportation or importation, and 
 of all local restrictions upon trade. There were only two dis- 
 senting voices — both disciples of Adam Smith — in the commis- 
 sion; only three in the Council of State; the results were em- 
 bodied in the Prussian tarifi" of 1818. 
 
 As if with a view of illustrating both sides of the case at once, Prussia 
 in 1822 demanded reciprocity with England in the matter of the Naviga- 
 tion laws, and in 1824 Mr. Huskisson granted it. " The effect of reci- 
 procity upon the Prussian mercantile navy," says an ardent free trader, 
 " has been to diminish it most materially in amount, while British ship- 
 ping gains an ever-increasing share in her carrying trade. This case is 
 quite sufficient to show what would inevitably be the result of a fair and 
 free competition between British shipping and the shipping of any other 
 country (in this hemisphere at least), with which it comes in contact," 
 (W. P. Adam : The Policy of Retaliation-, London, 1852). The Prussian 
 shipping fell ofif 44per cent, in the number of vessels and 27 per cent, in 
 their tonnage between 1806 and 1839, although the commerce of the 
 country increased vastly. See Porter's Progress of the English Nation, 
 p. 396. 
 
THE ZOLLVEREIN. 325 
 
 § 287. At the same time a movement in favor of protection 
 to German industry and the removal of all custom-houses to the 
 German frontier was going on in the centre and south of Germany. 
 Friedrich List, then a professor in the University of Tuebin- 
 gen, was put forward as its spokesman. It aimed at a national 
 tariff system for all Germany, and in 1820 succeeded in securing 
 a preliminary treaty at a conference of German ministers at 
 Vienna, and then a special conference at Darmstadt. Then fol- 
 lowed the establishment of three Zollvereins, — one for North- 
 western and Central Germany, headed by Saxony, Brunswick 
 and Hanover, with low revenue tariff; one for Southern Ger- 
 many, including Bavaria, Wurtemberg, and some minor states; 
 a third in the North, consisting of Prussia and the minor states 
 in her immediate neighborhood (Ilesse, Nassau, &c.), who adopt- 
 ed the tariff of 1818. At last, in 1833, the last two and those 
 of the first that lay in Central Germany united on the basis of 
 that tariff, including in this great Zollverein about twenty-six 
 millions of the German people. Austria on the south, and 
 Hanover, Brunswick, Oldenburg, Mecklenburg and the Free 
 Cities on the north, alone stood out. Hanover, Brunswick and 
 Oldenburg, under English influence, formed in 1828 a Steuer- 
 verein with a tariff of low duties for revenue ; as they shut out 
 the Zollverein from the North Sea, the latter attempted a union 
 with them in 1841, but found that it could only be secured at 
 the sacrifice of protection to native industry. In 1853 the an- 
 nexation was secured, on condition that Hanover should receive 
 seventy-five per cent, more than the share of the revenue to 
 which her population would otherwise entitle her. From 1849 
 Austria strove to either break up the Zollverein or get admission 
 to it with all her dependencies. Many of the minor states favored 
 this latter proposal, and it seemed likely that Prussia, in resist- 
 ing it, would bring on war. But in 1853 a reciprocity treaty 
 between the two powers put an end to the struggle. 
 
 Zollverein means Customs' Union; »S'fe«errerer?j, Imposts' Union. The 
 latter was an imitation of the former, without its protective purpose. 
 
 In the Zollverein each state has an equal vote, although 
 
326 ELEMENTS OF POLITICAL ECONOMY. 
 
 Prussia had till 1852 more than half the populatioa. Another 
 sacrifice made by Prussia for the general interest was in the 
 distribution of the customs' receipts on the basis of population ; 
 small states with a farming population, got far more than their 
 true share ; Prussia ^ot half a million thalers a year less, 
 and asked no more, although Frankfort-on-Main in joining the 
 Zollverein in 1835 received a larger share than her population 
 would justify. The duties are assessed on the basis of the ta- 
 rijQf of 1818, subject to modification at the conference of repre- 
 sentatives. These modifications are of a sort to show the Pro- 
 tectionist purpose of that tariff, and of the Zollverein itself. 
 Thus in 1843-5, the duty on cotton goods fixed in 1818 at 12^ per 
 cent., was very decidedly increased to meet English competition ; 
 in 1844 the duties on iron were increased for the same reason. 
 The duties on all importations are estimated to average 12 per 
 cent., but as a great part of these are low duties on the raw ma- 
 terials of manufacture, the duties on manufactured goods must 
 be sufficiently high. Dr. Bowring, who was sent out by the 
 British Government to examine and report upon the Zollverein 
 in 1841, clearly showed the Protective character of the tariff. 
 Professor List estimated the duties on manufactured articles in 
 common use at from 20 to 60 per cent. " The most popular ob- 
 ject of this great social movement is, by a prudent and well 
 constructed tariff of duties, to protect and encourage German 
 manufactures, to exclude by duties the foreign producer from 
 the German market [?], and to extend the exportation of the 
 products of their own industry to foreign markets" (S. Laing). 
 One of the best and most protective features of the system is 
 its imposition of specific duties, changed in their amount ac- 
 cording to a periodical observation of the market prices. No 
 room was left for false invoices ; none for the foreign exporter 
 to throw foreign goods on the market at a merely nominal 
 price, after paying merely nominal duties, so as to undersell the 
 German maker at a small sacrifice. At the same time the 
 duties fell more heavily upon the cheaper and more 
 commonly used articles, whose production at home is of the 
 
THE EFFECT OF THE ZOLLVEREIN. 327 
 
 first importance, and though requiring less of skill in the work- 
 ingman, gradually educates him in the skill and taste neces- 
 sary for the production of finer wares. 
 
 § 288. The carefully prepared statistics of the business of the 
 Zoilverein, in home production and consumption as well as im- 
 portation, give us the data for estimating the efi'ects of the sys- 
 tem. We find (1) That protection has vastly increased the 
 power of the German people to command the services of other 
 peoples. The importations have risen steadily in amount and 
 quality, instead of decreasing. " If we look at its practical ef- 
 fects upon British industry, we are warranted in the conclusion 
 that the wealthier and more industrious our neighbors become, 
 the better customers they are in the world's markets, in supply- 
 ing which British industry and capital are embarked" (Laing.") 
 
 (2) The wages of labor have been very largely raised, for both 
 farm hands and factory hands. Not only has more money been 
 paid for a day's work, but so much more as enables the working- 
 men to command a much larger amount of material comfort. 
 
 (3) The farmer has not lost what the manufacturer has gained, 
 but has gained equally with him ; the prices of raw materials 
 and of manufactured goods have steadily approximated, as the 
 market has been brought nearer the farm. (4.) The total con- 
 sumption of articles of prime necessity has increased in a ratio 
 that far exceeds the growth of the population. (5) The enormous 
 diflference between rich and poor has been diminished and the 
 middle class of prosperous and intelligent people has gained 
 greatly in number. (6) The development of home industry 
 has not been effected at the expense of that unhappy victim of 
 tarifi" legislation, '' the consumer." Even the small class of 
 consumers, who are not also — directly or indirectly — producers, 
 find their profit in it. As Dr. Bowring shows, the home mar- 
 ket is supplied with better and cheaper goods than England 
 could furnish, and Prussia is now competing for the possession 
 of even the English markets. 
 
 " The Zoilverein, according to the census of 1867, comprises a territory 
 of more than 90,000 geographical square miles, with a population computed 
 
328 ELEMENTS OF POLITICAL ECONOMY. 
 
 at over thirty-eight millions. Since the realization of commercial freedom" 
 between the parts of the empire, " German industry has increased in an un- 
 precedented degree, and, to a certain extent, competes successfully with 
 that of Great Britain. The character of the foreign commerce of Germany 
 has entirely changed. Instead of exporting raw materials only, she sends 
 out the products of her own manufacturing industry, creating a market 
 abroad which keeps her actively employed at home. The German wool- 
 len manufacture has recovered the ground lost in the middle ages, and 
 its fabrics at present form the chief part of the Zollverein exports. The 
 manufacture of cotton and silk has made equal progress, although the 
 materials have to be imported. The linen trade has not yet began to 
 compete with that of England, but in steel and iron goods, in glass, 
 paper and silk manufactures, in pottery, stoneware and porcelain, in 
 chemicals, in the refining of sugar and beer, Germany abundantly sup- 
 plii ' a wants, and yet reserves a surplus for foreign interchange " 
 (Tei;i.es -. i.i,ecent and Existing Commerce — Free Trader). The linen trade, 
 also, has become of importance, in later years. 
 
 (7) The Grerman people, once dissevered by the frontiers of 
 petty principalities, have been mightily drawn into national and 
 political unity by the industrial policy that recognised the iden- 
 tity of the material interests of these severed parts. It was the 
 Zollverein that made the ideal of German unity popular, though 
 it did not originate it. It was the public sentiment thus created 
 that enabled Prussia in 1866 and 1870 to put herself at the 
 head of a united Germany, and reduce- the petty sovereigns of 
 the country to the rank of a landed aristocracy. It was, as 
 Mr. Laing points out, the same growth of public sentiment in 
 power and control over the government, that compelled Prussia 
 to replace her autocratic institutions by a representative system, 
 in which the popular will finds a free and regular expression. 
 Since that time, Dr. Bowring tells us in 1840 '* the sentiment of 
 German unity has been brought out of the regions of hope and 
 fancy into those of the positive and material interests." " Ger- 
 many in the course of ten years," says List in 1841, " has ad- 
 vanced a century in prosperity and industry, in national self- 
 respect and power." " The German people," says Mr. S. Laing 
 in 1842, " are for the first time united in one great object of ma- 
 terial interest; . . . and for the first time they have made the 
 influence of public opinion an efi'ective state power in their in- 
 
THE ZOLLVEREIN AND THE UNITY OF GERMANY. 329 
 
 ternal affairs. . . . The German commercial league is, in its re- 
 sult, the most important and interesting event of this half cen- 
 tury." " Their exaggerated expectations are that Germany is 
 to run the same career as England; to attain the same national 
 wealth ; to force or persuade Holland, Belgium, Hanover, Ham- 
 burg, Denmark, to become members of the league; to exclude 
 all but their own goods and manufactures from the Continent; 
 to become an acknowledged political power; to have a common 
 flag, common revenues; to have fleets, armies, colonies, and to 
 be a great naval power on the ocean." " xlccording to every 
 true German, the league is to be the grand restorer of nationality 
 to Germany, of national character, of national m'nd, '^ational 
 greatness, national everything to a new, regenei.... i ..erman 
 nation. They are to spin and weave themselves into national 
 spirit, patriotism, and united effort as a great people." 
 
 In 1864 Prussia, following the example of France, reduced her 
 tariff from a protectionist to a revenue basis. The competition 
 thus challenged proved most disastrous to many of the great in- 
 dustries which had been developed by the earlier protective policy 
 of the Zollverein. In 1879, after making full proof of what free 
 trade could do for Germany, the protective policy was restored again. 
 
 § 289. (3) Russia became a European power in the time of 
 Peter the Great. He and some of his successors — notably 
 Catharine II. — labored to foster industry by their patronage, 
 but as the people were too unskilful, it was largely by the im- 
 portation of foreign artisans. The merchants being mostly Old 
 Believers (or Easkolniks) did their utmost to keep foreign manu- 
 factures out of holy Russia, but large quantities were brought 
 in, especially from the Leipsic fairs. The peace of Tilsit in- 
 cluded Russia in the Continental System, until the war broke out 
 again in 1812. At the return of peace and the restoration of 
 ordinary relations with Western Europe, Russia had an extra- 
 ordinary season of prosperity. The failure of the crops in the 
 West made a great demand for her grain, and money flowed into 
 the country. Under the influence of Storch, a Russian disciple 
 of Adam Smith, the Emperor Alexander adopted the free trade 
 
330 ELEMENTS OF POLITICAL ECONOMY. 
 
 policy. The ruin of a great part of the Russian manufactures 
 speedily followed. " It is only the first shock of free competi- 
 tion/' said the theorists ; " wait a little and you will see the tide 
 turn." But the tide did not turn ; England shut out Russian 
 corn to protect her own farmers, and the ruin grew worse. Count 
 Nesselrode came to the conclusion that Russia must keep her- 
 self. In a ministerial circular of 1821, he says: "Russia sees 
 herself compelled by circumstances to adopt an independent in- 
 dustrial system ; the products of the empire find no access to 
 foreign markets ; domestic manufactures are either ruined or 
 on the point of ruin ; all the moneys of the empire flow abroad ; 
 and the most solid business houses are on the brink of fail- 
 ure." The tariffs of 1820 and 1822 put an end to this period 
 of dependence, when, as Mr. Cobden told his countrymen, a ces- 
 sation of English exports would have the effect "■ to doom a por- 
 tion of her " Russia's " people to absolute nakedness." Since 
 that date every year has seen great industrial advances. " In no 
 country in Europe has the march of civilization and progress 
 in modern times been more rapid, decided and systematic ;" all 
 this " having been effected by the energy and wisdom of a few 
 master minds." " The manufacturing industry is not yet fifty 
 years old. It required nursing under a system of protection, 
 but is now so far developed as to admit a great deal of competi- 
 tion " (Barry's Russia in 1870). 
 
 The cotton manufacture doubled in a few years after the 
 tariff; its products are now worth $125,000,000. At first it im- 
 ported four-fifths of the thread used ; but since England re- 
 moved her prohibition on the export of spinning-machinery, the 
 proportion has changed, and only one-sixteenth of the yarn used 
 is imported. The amount is seven times what it was in 1822, 
 and employs 175,000 people. Native cottons have driven the im- 
 ported out of the great Russian fairs, and the export is much 
 greater than the import. They are " capital in quality and neat 
 in design ; far prettier and neater, I think, than our own " 
 (Barry). Since 1830 the silk manufacture has been protected, 
 ind two-thirds of the silks used are now made at home, and 
 
RUSSIAN MANUFACTURES AS THEY ARE. 331 
 
 3ompete in excellence with any foreign goods, while, like all 
 home-made Russian fabrics, they are much better adapted to 
 the popular taste. . . There are also ^00 woollen factories, em- 
 ploying 110,000 workmen and making goods of the value of 
 $50,000,000 annually. The absence of large capital, the lack 
 of popular education, the low grade of intelligence, the large 
 use — as in Germany — of fabrics spun and woven in the house- 
 holds, all tend to keep back Russian manufactures; the Russian 
 workman does as he is bid, or as he sees others do, but cannot 
 be left with any range of responsibility. But the people are 
 making large advances, especially since the emancipation of the 
 serfs, and in the absence of other teachers, the discipline and 
 the work of the factory is of itself sharpening their faculties and 
 quickening their perceptive powers. The somewhat lower tariff 
 of 1869 imposes duties of at least thirty-five per cent, on foreign 
 manufactures. " Everything is now done to stimulate trade ; 
 every inducement held out to encourage manufactures ; factories 
 are springing up fitted with native-made machinery. Branches of 
 industry are started, which before were thought to be impossible 
 for Russian ingenuity to master, and trade flourishes as it never 
 flourished before. Ever since the Crimean war the amount of 
 interchange of commodities has been increasing" (Barry). 
 
 § 290. Sweden began to develop her manufactures by protec- 
 tion in the time of the great Gustavus Adolphus. During the 
 later Middle Ages the country was kept in a state of poverty 
 through the oppressions of the Hanseatic League and the back- 
 wardness of its people. Even after its emancipation from the 
 Danish rule it formed no higher ambition than to export raw 
 materials in exchange for the small quantity of manufactured 
 goods this commerce could afi'ord her people. Gustavus formed 
 and executed the purpose to make his kingdom a manufiicturing 
 country. His protective policy has been maintained from that 
 day to this, with great results to the kingdom. The first and 
 only departure from it was in 1845. Sweden was almost the only 
 country that responded to the proposal — reciprocity as to naviga- 
 tion laws — made by England. English authority describes her 
 
332 ELEMENTS OF POLITICAL ECONOMY. 
 
 ^ 
 
 present tariflF on goods as '' having the unfortunate distinction 
 of disputing with Spain the debatable honor of being the high- 
 est in the world, the Russian only excepted." Till 1824 the 
 prohibition policy was followed, under •' a more liberal but tho- 
 roughly protective {t7'es-protecteur) system," her manufactures 
 were more than trebled in thirty years, and her agriculture so 
 much improved that she now has large quantities of grain for 
 export, instead of depending, as was once the case, upon the 
 granaries of Finland. 
 
 La SuMe et son Commerce, par le Baron Knut Bonde ; Paris, 1852. 
 
 (5) Denmark is and was a protectionist country. " She 
 stands alone in her corner of the world, exchanging her loaf of 
 bread, which she can spare, for articles she cannot provide for 
 herself, but still providing for herself everything she can by her 
 own industry. . . . This home industry of hers is protected by 
 heavy import duties on all foreign articles which could compete 
 with her own manufactures; and these are avowedly imposed, 
 not for revenue, while a lower duty would be more productive, 
 but for protection. . . . The object is simply to secure a living 
 to that portion of the population which is not engaged in hus- 
 bandry, and which, without protective duties on all that inter- 
 feres with their branches of industry, would become a burden 
 on the rest of the community." 
 
 See S. Laing's Denmark and the Duchies ; London, 1852. 
 
 § 291. (6) Spain was one of the first to adopt the prohibitory 
 system, and that by which revenue was raised by duties on the 
 commerce between the dififerent provinces of the kingdom ; she 
 was also one of the last to give these up. The system was often 
 as ruinous to home industry as it was meddlesome ; thus in 1720 
 she adopted a tariff which was ingeniously mischievous. " Its 
 provisions discriminated against the export of Spanish goods to 
 the colonies, and in favor of foreign manufactures and of con- 
 traband trade. The industry of the nation, arrested first of all 
 by the competition of Italy and the Low Countries, afterwards 
 by that of England and France, ceased its development. It re- 
 mained backward it was paralyzed, while the other countries by 
 
SPANISH TARIFFS. 333 
 
 means of Cadiz carried on the commerce of its colonial pos- 
 sessions, and drew from them the raw materials and the precious 
 metals which they produced. The tariff of 1778 which im- 
 posed heavy duties upon goods produced abroad came too late; 
 the miechief was accomplished, and the industry of Spain was 
 all but annihilated " (J. F. Constant). It had no time to rally 
 before the Napoleonic wars completed her misery. She has 
 suffered more this century than any other country from internal 
 discord and civil war. The country is rich in the elements of 
 material wealth, but poor in population, being next to Scandinavia 
 and Russia in the sparseness of population. The first really 
 national and simply protective tariff was adopted in 1845 ; it 
 abolished all provincial tariffs and most of the prohibitions, and 
 reduced the duties on a good many articles without in the least 
 giving up the principle of protection. That Spain has advanced 
 rapidly in industrial development during the thirty years that 
 have elapsed is universally conceded. " Progress," wrote M 
 Block in 1850, " is so rapid that the figures of to-day are left 
 behind to-morrow. On every side we see factories and workshops 
 rising, established either by Spaniards or by foreigners. These 
 latter crowd into this country of great expectations, where so 
 much land still awaits active and intelligent occupants, who 
 bring hither their talents and their capital. '^ 
 
 See L' Espngne en 1850, Tableau de sea Progrea lea plua recenta ; par 
 Maurice Block. Paris, 1851. 
 
 The new tariff of 1869 reduced the duties on a great number 
 of articles without giving up, either in fact or in intention, the 
 principle of protection ; after its adoption the revenue, which 
 had fallen off since 186-4, considerably increased. The destruc- 
 tion of the French vines by the Phylloxera insect having created 
 a great demand for foreign grape-juice to meet the demands on 
 the French wine-market, the Spanish vine-growers in 1882 voted 
 to sacrifice Spanish manufactures to their French rivals in ex- 
 change for concessions which would give them advantages over 
 other vine-growing countries. The new commercial treaty caused 
 great disturbances, and even riots, in Catalonia. 
 
334 ELEMENTS OF POLITICAL ECONOMY. 
 
 § 292. Two European countries enjoy the unhappy distinction 
 of illustrating the miseries inflicted upon nations industrially 
 weaker when they engage in free competition with those that 
 are stronger. 
 
 (1) Portugal m 1681 began the development of her. woollen 
 manufactures, the Count de Ericeira being Prime Minister and 
 author of this policy. " Our woollen cloths, cloth serges and 
 cloth druggetts," says the old British Merchantman, "were 
 prohibited" after 1684; "they set up fabrics for making cloth, 
 and proceeded with very good success, and we might justly 
 apprehend that they would have gone on to erect other fab- 
 rics, until at last they had served themselves with every spe- 
 cies of woollen goods." The prohibition not extending to all 
 woollen fabrics, but only to those most in use, was repeatedly 
 evaded by making goods that differed from these only in some 
 trifling respect, but bore names invented to suit the Portuguese 
 tariff. At last, in 1703, after the death of Ericeira, Portugal 
 negotiated the Methuen Treaty with England, by which Portu- 
 guese wines were admitted into England at lower rates than 
 those of France, and English goods into Portugal at the old 
 rates of duty. The aristocracy, who were large wine-growers, 
 were chiefly interested in the new arrangement. " Their own 
 fabrics," says the British 3Iercha7itman, "were perfectly ruined, 
 and we exported £100,000 value in the single article of cloths 
 the very year after the treaty. The court was pestered with 
 remonstrances from their manufacturers ; . . . . but the thing 
 was passed, the treaty was ratified, and all their looms were 
 ruined." One of the first effects was such a drain of silver 
 from Portugal that " there was left very little for their neces- 
 sary occasions," and this was followed by a drain of gold. Ex- 
 change stood at fifteen per cent, against Portugal, and her 
 export of coin to England rose to £1,500,000 a year. Goods 
 were not paid for in goods, as Free Traders allege. 
 
 Her people were reduced to the monotony of a single occupa- 
 tion ; the amount of their productive labor was vastly dincin- 
 ished; their power of association and mutual helpfulness was 
 
THE RUIN OF PORTUGAL. 335 
 
 destroyed. The diflference between the price of their raw pro- 
 duce and the maDufactured goods for which they exchanged 
 them, increased as the workshop was carried away from the 
 neighborhood of farm and vineyard. The aristocracy of land- 
 owners found that they had been killing the goose that laid the 
 golden eggs, for though, as there was no occupation but farming, 
 the people were competing for the possession of land, the rents 
 that they were able to pay were much less than if a varied in- 
 dustry had furnished a home market by withdrawing a large part 
 of the people from agriculture. One new industry was created — 
 smuggling. " We do not deny," says Mr, Macgregor in his 
 Commercial Statistics, " that there were advantages in having a 
 market for our woollens in Portugal, especially one of which, if 
 not the principal, was the means afforded of sending them after- 
 ward, by contraband trade, into Spain/^ As to her legitimate 
 commerce, Mr. McCullough says that the tonnage of her ship- 
 ping is about one-thirtieth of what it was, and that her produce 
 is mostly carried in foreign ships. Every year saw a decline of 
 the nation in wealth, civilization, power and prestige. Her peo- 
 ple retrograded in intelligence and skill. ^' It is surprising,'* 
 says an English traveller, " how ignorant, or, at least, superfi- 
 cially acquainted, the Portuguese are with every kind of handi- 
 craft; a carpenter is awkward and clumsy, spoiling every work 
 he attempts, and the way in which the doors and woodwork, 
 even of good houses, are finished, would have suited the rudest 
 ages. Their carriages, of all kinds, from the fidalgo's family 
 coach to the peasant's market cart, their agricultural imple- 
 ments, locks and keys, &c., are ludicrously bad. They seem to 
 disdain improvement, and are so infinitely below par, so stri- 
 kingly inferior to the rest of Europe, as to form a sort of dis- 
 graceful wonder in the middle of the nineteenth century" 
 (Bailly). "The finances," says the Annuaire de V Economie 
 Politique for 1849, ''are in the most deplorable condition ; the 
 treasury is dry, and all branches of the public service suffer. A 
 carelessness and a mutual apathy reign throughout the govern- 
 ment and the nation." 
 
336 ELEMENTS OF POLITICAL ECONOMY. 
 
 Nor has England gained as much as Portugal has lost ; the 
 country is too poor to be a good customer. The Portuguese de- 
 mand for English goods is now of no importance, and has no 
 effect on the English market. The country is a sucked orange, 
 a thing to be got rid of — " a burden and a curse to England," 
 Mr. Cobden says. 
 
 After the defeat of the Church party and its leader Don 
 Miguel, a protective tariff was adopted in 1837, and its rate of 
 duties increased in 1841. It has the merit of being " specific" 
 in its method, so that its rates fall most heavily upon the com- 
 moner and cheaper articles. But in a country so demoralized 
 by contraband trade, so stripped of all the elements of industrial 
 wealth, so bereft of skill and enterprise, it can only operate 
 slowly in retrieving the fortunes of Portuguese industry. Still it 
 has made a change. It has turned the balance of trade with 
 England in Portugal's favor, and already " manufactures of 
 woollen and cotton goods, paper and tobacco, employ many per- 
 sons in Lisbon, and the printing of cotton goods imported from 
 England, has nearly put a stop to the trade in English printed 
 goods" (Dr. Yeates). 
 
 § 293. Turkey, Mr. Cobden thinks, is also *' a burden and a 
 curse " to the commercially powerful nation with whom she has 
 long enjoyed free trade. Turkey was once a burden to nobody; 
 was one of the chief commercial nations of the world. "Greece 
 and Asia Minor furnished us with their manufactured products, 
 together with those of India, long after their conquest by the 
 Turks, and up to the period when the industry of Europe reached 
 its development. To-day their manufactures have all but dis- 
 appeared, and those unhappy countries have nothing but farm 
 products" (Constant). When the power-loom superseded the 
 hand-loom in Western Europe, there was an immense importa- 
 tion of British goods. The muslins, the ginghams and the 
 carpets that for centuries had commanded the markets of the' 
 world, that fifty years ago were worn in the backwoods of America, 
 were driven out of their own home markets. " Although," says 
 McCulloch, " our muslins and chintzes be inferior in fineness to 
 
THE RUIN OF TURKEY. 337 
 
 those of the East, and our red-dje be inferior in brilliancy, those 
 defects are more than balanced by the greater cheapness of our 
 goods ; and from Smyrna to Canton, from Madras to Samarcand, 
 we are everywhere supplanting the native fabrics." Turkish 
 carpets are still unequalled by the Western fabrics, but the 
 latter have driven them out of the market. " Of six hundred 
 looms for muslins in Scutari in 1812, only forty remained in 
 1831 ; and of two thousand weaving establishments in Tournovo, 
 there were only two hundred " left. 
 
 Under any financial system, short of enforced prohibition of 
 foreign manufactures, these Eastern industries would have had 
 a severe struggle, but would most probably have survived it. 
 Protection might have been the means of importing foreign 
 skill, and perhaps, in spite of English prohibition, the necessary 
 machinery. But the Turkish merchants had all the odds against 
 them. In the absence of a sufficient revenue from customs' 
 duties, and of direct taxation, the native industry of the country 
 was severely taxed. Taxes on trades, taxes on tools, taxes on 
 every sort of raw material, taxes on every kind of home-made 
 fabric, licenses and monopolies, all were laid upon the workman 
 at home, while his competitor from abroad paid the merest trifle 
 in customs' duties, and, by special treaties with France and Eng- 
 land, even that wa^* reduced from five to three per cent, ad 
 valorem^ in consideration of the exemption of Turkish vessels 
 from certain harbor duties. Native exports pay twelve per cent. 
 
 For a time there was left to Turkey a lifeless trade in raw silk, 
 cotton and the like. Now even that is gone to countries less 
 burdened with taxation. " Ships carrying goods to Constanti- 
 nople either return in ballast, or get cargoes at Smyrna, Odessa, 
 &c." Only a few of the ruder manufactures are still carried on ; 
 a woman's labor is worth four cents a day; a man's will com- 
 mand as much as fifty cents a week in the seaports. 
 
 " The provincial populations, though not devoid of capacity 
 for better things, are at present condemned to wither under a 
 general atmosphere of maladministration and decay. . . . Beg- 
 gars all, beggars all, marry, good sir; little doing, less likely 
 22 
 
338 ELEMENTS OF POLITICAL ECONOMY. 
 
 to be done; trade degenerated into pedlary, enterprise into 
 swindling, banking into usury, policy into intrigue, lands un- 
 tilled, forests wasted, mineral treasures unexplored, roads, har- 
 bors, bridges, every class of public works utterly neglected and 
 falling into ruin, pastoral life with nothing of the Abel about 
 it, agriculture that Cain himself, and metallurgy that his work- 
 man-son might have been ashamed of; in public life, universal 
 venality and corruption ; in social life, ignorance and bigotry ; 
 and in private life, immorality of every kind ; not ' something,' 
 but everything 'rotten in the state of Turkey. Such is the 
 picture " drawn by Dr. Lennep. " We may add that it is hardly 
 an overdrawn one." 
 
 See for this and the quotations that follow, the article " Provincial 
 Turkey," in the London Quarterly Review for October, 1874. 
 
 Yet the fault is not in the country or the people ; for the 
 Turks are '^ as a rule industrious, simple, thrifty, ingenious too, 
 peaceable and orderly;'' as free from the grosser and worser 
 forms of vice and crime as any nation under the sun. " That they 
 enjoy a climate than which few are more favorable to labor and 
 produce ; that the soil is almost everywhere fertile above, and 
 rich in valuable ores below; that the coast abounds in places of 
 shelter, and the inland with noble rivers, are facts which no one 
 will question. Yet it is no less certain that capital has van- 
 ished from the land, that every undertaking, every enterprise, 
 is surely smitten with failure ; that the social condition is dete- 
 riorating in every respect, the number of the inhabitants dimia 
 ishing, and that the symptoms precursive of a general bank- 
 ruptcy, not of means and finances only, but of vitality and of 
 men, become more menacing year by year, almost day by day." 
 
 And at the bottom of all the mischief lies the impoverishment 
 of the people through a bad national economy. ^' Want of 
 capital is the head and front of Turkey's ills throughout her 
 length and breadth at the present day ; want of men, the ne- 
 cessary correlative or result of the former, the second." No- 
 thing is left her but agriculture, and such an agriculture ! " All 
 up the sides of the green hill " upon which a Turkish governor's 
 
THE DECAY OF TURKISH INDUSTRIES. 339 
 
 palace is perched, " far over the wide Asiatic plain, we see the 
 yet unefFaced traces of irrigation channels, now broken down 
 and dry ; while removed from their original places, and strewed 
 at random over the ground here and there, lie the boundary 
 stones that once marked the limits of fields since abandoned to 
 weed and bush. At forty per cent, taxation, and such is the 
 very lowest rate levied by the Stamboulee tithe-gatherers on 
 the Turkish — if the crop be bad, the percentage may amount to 
 something much higher — agriculture is not a paying business; 
 and such luxuries as irrigation, drainage, manure, and improve- 
 ments of any kind, are out of the question. The landowner, 
 impoverished and in debt, cannot make them; the government 
 has very different uses for the money it takes from them, and 
 will not." 
 
 "Another blight overspreads the land as pestilence follows 
 famine. What the tax-gatherer has left is gleaned by the 
 usurer. . . There exists even now no credit-system in Turkey, 
 no country bank, no means of obtaining an advance except by 
 private loans ; no investment except in such loans ; no limit to 
 the terms, no security on the payment." With the destruction 
 of capital through the paralysis of societary circulation, and the 
 drain of money abroad, the destruction of credit has gone on 
 pari passu. There are a few banks in the seaport towns, but as 
 their transactions are chiefly the negotiation of government 
 loans and speculations with foreign or mixed companies, they 
 tend " to draw off the wealth of the Empire, not to husband it; 
 they are not reservoirs, but drains. The peasant, pressed by the 
 claims of the tax-gatherer, the landowner in need of money for 
 improvements, the shopkeeper desirous of outfit, the artisan who 
 would set up or extend his workshops, are one and all driven 
 into the hands of the private lender. . . The unfortunate peasant 
 is thus ground as between an upper and a nether millstone. 
 Three per cent, a month is the ordinary rate of interest ; and 
 this, if unpaid, is at the end of the year added to the principal. 
 The day of selling out soon comes ; the family emigrates or 
 starves. We have known a single money-lender thus draw to 
 
340 ELEMENTS OF POLITICAL ECONOMY. 
 
 himself the substance of a whole district. Another evil that 
 naturally follows is that capital wherever it exists is certain to 
 be applied almost exclusively to loans of this nature, while for 
 productive investment scarce a farthing can be found. A profit 
 of thirty-six per cent, is sure, particularly with the Asiatics, to 
 be preferred to one of four or five per cent, though more solid 
 and made by honester means, such as mining, agriculture, and 
 the like. Hence, too, every work of public utility is thrown 
 into the hands of foreigners ; foreign capitalists construct 
 harbors, work mines, utilize forests, lay down railroads, or at 
 least organize companies which profess to do all these things; 
 while the profits, if any, are shared among foreigners and outside 
 the country. . . Lastly, whatever home-made capital still remains 
 in the territory is unavoidably, by the very universality of small 
 private loans, so broken up and subdivided as to become prac- 
 tically useless for any serious purpose. Of all the sinister in- 
 fluences at work within the empire, none is more directly 
 destructive of its internal prosperity, and, above all, of its agri- 
 cultural and landed well-being, than this. ' Not a single 
 property, great or small, within this district, but is burdened to 
 my certain knowledge with obligations and liabilities exceeding 
 the value of its possible produce for two generations to come,' 
 said a Turkish provincial governor." 
 
 The outside world is continually deceived by a show and pre- 
 tence of reform, but these go no deeper than the surface. Things 
 are growing worse, not better. " The administration is more 
 corrupt than ever, justice more venal, popular education more 
 neglected, taxation much heavier, and the population at large 
 more impoverished and dwindling than in any preceding epoch. 
 . . . When the mines of Anatolia are worked, the manufactures 
 of Syria encouraged, the dikes of the Tigris valley restored; 
 when the bridges, roads, quays, embankments, canals, reservoirs, 
 caravanseries, all that was the pride and profit of local govern- 
 ments, and is now perishing or has perished with them, are re- 
 paired and perfected, — then indeed will there be hope for the 
 government and the governed, for Turkey and her Sultan." 
 
OUR COLONIAL HISTORY. 341 
 
 Hand-in-hand with the destruction of local centres of industry, 
 with the lowering of the people to the level of a single employ- 
 ment, and with the eflfaceuient of the freedom and individuality 
 of character that accompany diversified employment, has gone a 
 parallel political revolution that closely corresponds to the 
 economic one. " From a confederacy of half-independent states, 
 each retaining in the main its own customs, privileges and insti- 
 tutions, guaranteed by a strength to defend them, and by a 
 rough but efficacious popular representation, Turkey has within 
 the last fifty years sunk into an absolute, uncontrolled, central- 
 ized despotism, under which every former privilege, institution, 
 custom, popular representation — in a word, every vestige of 
 popular freedom and local autonomy — has been merged and lost 
 in one blind centralized uniformity." " She has sacrificed an 
 empire to a capital." And the decline of military power has 
 followed that of industry. " Whoever lists may now assail the 
 provinces with the safe assurance that the regular troops once 
 overcome no further opposition will remain ; the people starved, 
 disheartened, disarmed, and thoroughly alienated at heart from 
 a government that is a mere synonym for fiscal extortion, that 
 takes all and gives nothing, that has forgotten the traditions of 
 its youth, and preferred the office of tax-collector to that of 
 leader, will offer no resistance.'^ 
 
 §294. The history of American industry may be said to begin 
 with the independence of the nation, or rather with the adop- 
 tion of the present Constitution. The navigation laws confined 
 the carrying trade of the colonies to English or colonial vessels. 
 In 1672 duties were imposed upon goods carried from one Brit- 
 ish colony to another, and as the West Indies at that time sup- 
 plied us with sugar, cotton, tobacco and indigo, took timber, 
 grain, &c., in exchange, the trade thus taxed for the benefit of 
 the English treasury was an extensive one. 
 
 During the last century the tendency of the colonies to unite 
 manufactures with their agriculture and save the expense of 
 transportation of the raw produce they sold and the manufac- 
 tured goods they imported, was sternly repressed by English 
 
342 ELEMENTS OF POLITICAL ECONOMY. 
 
 legislation. They saw, as Franklin wrote from London in 1771, 
 that " every manufacturer in our country makes part of a market 
 for provisions within ourselves, and saves so much money to the 
 country as must otherwise be exported to pay for the manufac- 
 tures he supplies. Here in England it is well known and under- 
 stood that wherever a manufacture is established which employs 
 a number of hands, it raises the value of land in the neighbor- 
 ing country all around. It seems, therefore, the interest of our 
 farmers and owners of land to encourage young manufactures in 
 preference to foreign ones." 
 
 In 1699 the export of wool and woollens from the colonies, as 
 well as from Ireland, was forbidden. In 1731 an inquiry of the 
 Board of Trade ascertained that the colonies were making linens, 
 woollens, iron-wares, paper, hats and leather, and even export- 
 ing hats. The carriage of these, even from one " plantation " or 
 colony to another, was forbidden. In 1750 the preparation of 
 iron, except in its rudest form for export to England, was pro- 
 hibited; and every slitting or rolling mill, tilt-hammer, forge or 
 steel furnace was declared " a common nuisance.'^ The making 
 of pig iron was allowed, because, the application of coal to its 
 manufacture being as yet not invented, and the American woods 
 furnishing an unlimited supply of charcoal, it was thought good 
 policy to encourage the colonies in this line. The law was very 
 commonly evaded, as the ruins of the old steel furnaces and iron 
 works in out-of-the-way places of New Jersey and other states 
 still show. 
 
 The economical theories which underlay this British policy will be found 
 in a standard work of that period — Gee On Trade, (London, 1750). " Our 
 colonies," he says, " are much in the same state that Ireland was in when 
 they," the Irish, " began the woollen manufactory, and, as their numbers 
 increase, will fall upon manufactures for themselves. A little regulation 
 would remove all this out of the way, It is proposed that no weaver 
 have liberty to set up any looms without first registering the name and 
 abode of any journeyman that shall work for him; that all negroes shall 
 be prohibited from weaving either linen or woollen, or combing of wool, 
 or working at any manufacture of iron, further than making it into pig 
 or bar iron ; they shall for time to come never erect the manufacture of 
 nails, under the size of a two-shilling nail, horse-nails excepted; that all 
 
THE REVOLUTION AN INDUSTRIAL REVOLT. 343 
 
 slitting-mills and engines for drawing wire or weaving stockings be put 
 down ; that also they be prohibited from manufacturing hats, stockings 
 or leather of any kind. ... If we examine into the circumstances of 
 the inhabitants of our plantations, and our own, it will appear that not 
 one-fourth part of their products redounds to their own profit, for out of 
 all that comes here, they only carry back clothing and other accommoda- 
 tions for their families, all of which is of the merchandise and manufac- 
 ture of this kingdom. . . . All these advantages we receive by the 
 plantations, besides the mortgages on the planters' estates, and the high 
 interest they pay us, which is very considerable ,• and therefore very great 
 care ought to be taken that they are not put under too many difficulties, 
 but encouraged to go on cheerfully. . . . The colonies have not commo- 
 dities and products enough to send us in return for purchasing their 
 necessary clothing, but are under very great difficulties, and therefore any 
 ordinary sort sell with them, and when they have grown out of fashion 
 with us, they are new-fashioned enough there." 
 
 This is not irony, as we might have supposed if De Foe had written 
 it, but sober earnest. It represents the unquestioned English opinion of 
 that day. Even our friend Lord Chatham declared in the same spirit 
 that the colonies should not be allowed to manufacture " so much as a 
 hob-nail " for themselves. 
 
 § 295. The legislation to keep the colonies to the work of 
 producing raw materials for English manufacturers, and take in 
 pay a small share of English goods, while through their ne- 
 cessities English capital became more and more the master of 
 their estates, was among the provocations that led to the American 
 war of independence. While the war lasted English goods found 
 but scanty access to American markets, and the people were 
 forced to make for themselves the articles of prime necessity 
 which they had hitherto bought in England. Among the worst 
 hardships of the earlier years of the struggle was the absence 
 of those native industries that would have made the country in- 
 dependent of the foreign market. The return of peace in 1783 
 brought ruin upon the home manufactures which the war had 
 called into existence. England had an attack of the exportation 
 mania. Every one who had hoarded up a few pounds, even the 
 maid-servants, invested their savings in a " venture" to the new 
 country. The American market was flooded with British wares ; 
 they soon sold at far less than the English prices, inflicting se- 
 vere loss upon these " adventurers." But the blow fell still more 
 
344 ELEMENTS OF POLITICAL ECONOMY. 
 
 heavily upoQ the workman at home. " Not a hatter, a boot or 
 shoe maker, a saddler, or a brass-founder, could carry on his 
 business, except in the coarsest and most ordinary productions 
 of their various trades, under the pressure of foreign competi- 
 tion. . . The people had gone to war not for names, but for 
 things, . . to redress their own grievances, to improve their own 
 condition, to throw off the burden of the colonial system. . . . 
 The arm which struck for independence in the field was palsied 
 in the workshop ; the industry which had been burdened in the 
 colonies was crushed in the free states." The Articles of Con- 
 federation, adopted during the war, constituted a central govern- 
 ment too feeble in its powers to remedy this and other evils. 
 Individual states adopted protective tariffs, but these cut the 
 confederation into parts separated by custom-house frontiers. 
 To remedy this a new and stronger union was demanded, — a 
 government constituted directly by " the people of the United 
 States,'' and not by a contract between the states, a government 
 in whose hands should be placed the power " to promote the 
 general welfare " by providing for the industrial development 
 of the whole country. The new Constitution went into effect in 
 1789. "I conceive, sir," says Fisher Ames, a leading member 
 of the Convention that drafted it, ** that the present Constitution 
 was dictated by commercial necessity more than by any other 
 cause. The want of an efficient government to secure the manu- 
 facturing interests, and to advance our commerce, was long seen 
 and pointed out." The power to regulate both foreign com- 
 merce and that between the states was clearly vested in the 
 national government by the new document, and for ever taken 
 away from the states. 
 
 § 296. President Washington was inaugurated in a coat of 
 home-spun cloth, and selected for Secretary of the Treasury 
 Alexander Hamilton, a young man who had already distinguished 
 himself as a man of business, a soldier and a political thinker, 
 and was to prove himself perhaps the very greatest of American 
 statesmen. He had an enormous task before him ; the country 
 was burdened with an unjustly contracted and justly hated debt; 
 
ALEX. HAMILTON'S PROTECTIVE POLICY. 345 
 
 its credit destroyed, its people all but bankrupt. But his A'igor- 
 ous administration of the finances brought back prosperity. 
 
 The first Congress found its table loaded with petitions from 
 the business men of all the leading cities of the Union from 
 Boston to Charleston ; these portrayed the ruin that had been 
 wrought by the competition of the foreign trader, not only upon 
 manufactures but upon all the interests of the country, and with 
 one voice asked the intervention of the national government for 
 its protection. A bill was passed (and signed by the President 
 July 4th 1789) imposing " duties on goods, wares and mer- 
 chandise imported," this being " necessary," the preamble alleges, 
 " for the payment of the debts of the United States and the en- 
 couragement and protection of manufactures." These duties 
 were very low, — too low to aflFord much protection, even in those 
 days when the cost of transport was so great. So we find 
 Washington reminding the adjourned session of this Congress 
 (Jan. 1790) that " the safety and interest of the people require 
 that they should promote such manufactures as tend to render 
 them independent of others for essential (particularly for mili- 
 tary) supplies." A second and much more protective tariff was 
 adopted (August 1790) after Secretary Hamilton had been asked 
 to "report a plan, conformably to the recommendation of the 
 President, for the encouragement and promotion of manu- 
 factures." At the next session, October 1791, Hamilton made 
 his famous " Treasury Report " on the subject. It was a masterly 
 statement of the new era upon which industry was entering, 
 through the use of machinery and the division of labor; of the 
 advantages that would be lost to the nation who fell behind in 
 this advance ; of the interdependence of all the material interests 
 of the country, and of the relation of a diversified industry to 
 national prosperity. He stated with candor and refuted with 
 force the usual objections to a protective policy. He pointed 
 out seventeen branches of manufacture already established, and 
 some of them even in a position to export their products. He 
 reminded Congress that " when a domestic manufacture has at 
 
346 ELEMENTS OF POLITICAL ECONOMY. 
 
 tained to perfection, and has engaged in the prosecution of it a 
 competent number of persons, it invariably becomes cheaper." 
 
 Strangely enough, the production of raw cotton was one of 
 the industries specially protected at this period. South Carolina 
 and Georgia were at this time in a state of industrial prostration. 
 India had secured their European market for rice and indigo, 
 and the price had fallen so low that it was not worth while to 
 export them. They were looking around for some other staple, 
 such as hemp; one of their representatives in Congress said in 
 1789 : " cotton was likewise in contemplation among them, and 
 if good seed could be procured he hoped might succeed.'^ Raw 
 cotton was taxed 3 cents a pound for their benefit, being 8 or 10 
 per cent, of its value, and this was continued in the face of 
 Hamilton's protest that it was unwise to put a duty on the raw 
 materials of a manufacture. For years every New England 
 factory — almost every New England family — paid three cents a 
 pound more for West Indian cotton. In 1794 Mr. Jay, in nego- 
 tiating a treaty with Great Britain, put cotton into the list of 
 articles not to be imported thither in American ships. In 1796 
 a Wilmington firm petitioned Congress for a repeal of the duty, 
 and was refused because it " would damp the growth of cotton 
 in our own country." In 1794 Eli Whitney, a Yankee living in 
 Georgia, and observing the costly and clumsy way in which the 
 cotton was cleaned from the seeds by hand, invented the cotton- 
 gin, which gradually revolutionized the industry and at once put 
 the Southern States ahead of all competition. 
 
 The facts are given in detail in Edward Everett's Address lefore the 
 American Institute in 1831. 
 
 § 297. The breaking out of the wars that followed the 
 French Revolution furnished a still more effective protection to 
 American industry by interrupting the communication with Eu- 
 rope — the British Orders in Council (1806) having declared 
 the coast of Europe in a state of blockade, and the Berlin and 
 Milan Decrees of Napoleon (1806 and 1807) having retorted 
 with a similar paper blockade of the British Islands. Ameri- 
 can trading vessels had to run the risk of capture by one of 
 
THE LESSONS OF WAR TIME. 347 
 
 these powers when bound for the dominions of the other. This, 
 with England's claim of the right to search American vessels 
 for English seamen, led to acts of retaliation on the latter 
 power. All British vessels were ordered to leave American 
 ports, and an embargo was laid upon American vessels, forbid- 
 ding them to sail for England. This was followed by a non-in- 
 tercourse law in 1808, renewed in 1809. In 1812 war broke 
 out between England and America, and the duties upon all spe- 
 cies of foreign merchandise were doubled to meet its expenses, 
 the increase to be in force till a year after its close. But in 
 spite of the impulse given to native industry by the political 
 troubles, it found the United States unprepared. " What did 
 we discover," says Dr. Bushnell, •'* in our war of 1812, but that 
 we had nothing to equip the war? Having no woollen manu- 
 facture, we could not clothe our soldiers ; we could not even 
 make a blanket. We had been free traders, buying all such 
 things because we could buy them cheaper ; but we now dis- 
 covered that we mi^ht better have been making blankets at 
 double the cost for the last fifty years. The same was true of 
 saltpetre for gunpowder; of guns, and cannons, and swords, 
 and iron and steel out of which to make them We be- 
 gan, also, to discover that the very insignificant article of salt, 
 coming short in the supply, was nearly a dead necessity — one of 
 the munitions of war — and that manufacturing it for ourselves 
 at double the cost would have been a true advantage. . . . We 
 very soon discovered in the facts referred to the lowness of our 
 organization, and the very incomplete scope of our industrial 
 equipments. Our products were not various enough tor make a 
 complete nation." 
 
 The tarifi" legislation up to this war, and, indeed, till 1824, 
 had the defect of the tariff of 1790 ; while framed with the 
 best intentions, it was, in fact, inadequate. Its authors had as 
 yet no conception of the enormous power brought to bear for the 
 destruction of our industries and the preservation of the supre- 
 macy of British manufactures. It was part of the English pro- 
 gramme to keep America in the position of colonial dependence 
 
348 ELEMENTS OF POLITICAL ECONOMY. 
 
 by these new weapons after the political independence of the 
 republic had been acknowledged. A Birmingham manufacturer 
 prophesied on the breaking out of the war that the crops of the 
 United States would be devoured with vermin, because there 
 was not skill enough in America to manufacture a mouse-trap. 
 Others put much the same estimates of us into more polished 
 forms ; the chief industrial function they saw in the young 
 republic was its power to purchase English goods. As Lord 
 Lyndhurst said in 1838 : " The United States of America was 
 always considered our own especial market.'' " The extent and 
 swift, regular progress of the American market for English 
 goods," said Henry (afterwards Lord) Brougham in 1813, " we 
 can easily account for America is an immense agricul- 
 tural country, where land is plentiful and cheap ; men and 
 labor, though quickly increasing, are yet still scarce and dear 
 when compared with the boundless regions which they occupy 
 and cultivate. In such a country manufactures do not natu- 
 rally thrive ; every exertion, if matters be left to themselves, 
 goes into other channels. This people is connected with 
 England by origin, language, manners and institutions; their 
 tastes go along with their convenience, and they come to us, as 
 a matter of course, for the articles they do not make them- 
 selves." After noting that they bought about £16,000,000 a 
 year of English cloths, he continues : " But it is not merely in 
 clothing. Gro to any house in the Union, from their large and 
 wealthy cities to the most solitary cabin or log-house in the 
 forests — you find in every corner the furniture, tools and orna- 
 ments of Staffordshire, of Warwickshire, and of the northern 
 counties of England The whole population of the coun- 
 try is made up of customers, who require and wlio can afford to 
 pay for our goods." But the Orders in Council had made a 
 change. The English system was " forcing manufactures all over 
 America to rival our own. There is not one branch of the many 
 in which, we used quietly, and without fear of competition, to 
 supply them, that is not now, to a certain degree, cultivated by 
 
"STIFLE THEM IN THE CRADLE.'* 349 
 
 themselves ; many have wholly taken rise since 1807 — all have, 
 rapidly sprung up to a formidable maturity." 
 
 § 298. When the war ended there was a considerable por- 
 tion of the people of the United States engaged in manufac- 
 tures, and a large amount of capital had been turned in that 
 direction, and could not be diverted into others without great 
 loss to its owners. This fact was not due to any financial legis- 
 lation, wise or unwise ; it grew out of the necessities of the war. 
 New England, the chief commercial quarter of the Union, had 
 seen her merchant marine rotting at her quays month after 
 month and year after year. She had groaned and fretted, but 
 she did not fold her hands in fretting. She went into the new 
 work of home manufactures with all her strength. What would 
 the nation do to support these industries that its act had called 
 into being after destroying her shipping — the nation into whose 
 hands she had given the control of her material interests ? Eng- 
 lish capitalists did not wait for the question to be solved ; another 
 mania of exportation seized them ; they deluged America as they 
 were deluging the Continent, with the goods that the war had 
 hitherto kept them from exporting. " The frenzy," says 
 Brougham in 1816, " I can call it nothing less after the " South 
 American ''experiences of 1806 and 1810, descended to persons 
 in the humblest circumstances, and the furthest removed by 
 
 their pursuits from commercial cares Not only clerks 
 
 and laborers, but menial servants, engaged the little sum they 
 had been laying up for a provision against old age and sickness." 
 He is speaking of the Continental trade, but he adds : " The 
 peace with America has produced somewhat of a similar efi'ect, 
 though I am very far from placing the vast exports which it oc- 
 casioned upon the same footing with those to the European mar- 
 ket the year before ; both because ultimately the Americans will 
 pay, which the exhausted state of the Continent renders very 
 unlikely; and because it was well worth while to incur a loss 
 upon the first exportation, in order, by the glut, to stifle in the 
 cradle those rising manufactures in the United States, which the 
 war had forced into existence, contrary to the natural course of 
 
350 ELEMENTS OF POLITICAL ECONOMY. 
 
 things Eighteen millions worth of goods, I believe, were 
 
 exported to North America in one year, and for a considerable 
 part of this no returns have been received, while still more of 
 it must have been selling at a very scanty profit.'^ 
 
 § 299. The first session of Congress after the war began two 
 months before the date at which the double duties on imports 
 would cease. President Madison in his message called attention 
 to the effect that the war had had upon manufacturing indus- 
 try ; " it has made among us a progress, and exhibited an eflS- 
 ciency which justifies the belief that, with a protection not 
 more than is due to the enterprising citizens whose interests are 
 now at stake, it will become at an early day not only safe against 
 occasional competition from abroad, but a source of domestic 
 wealth, and even of external commerce." Of the numerous 
 petitions which urged the same facts upon Congress, that of 
 the cotton-spinners excited most attention. This industry em- 
 ployed some 100,000 persons, and produced goods of the value 
 of $24,000,000, having increased nine-fold during the war; 
 it consumed American cottons, and thus contributed to the pros- 
 perity of the South. For this reason, apparently, it received 
 the support of some Southerners, notably that of John C. Cal- 
 houn. After hot discussion, a duty of thirty, twenty-five and 
 twenty percent, was laid on cottons, descending every two years, 
 and $7.50 a ton on pig iron. The whole tariff was a sort of com- 
 promise between protection and free trade; like its predecessors, 
 it even fell short of what its authors expected, and formed — as 
 we have seen — no effectual barrier against excessive and specu- 
 lative imports. The years when it was in operation were years 
 of distress and embarrassment; the tale of bankruptcies length- 
 ened out day by day ; the value of home produce and of all sorts 
 of property declined. The revenue showed a yearly deficit, and 
 the national currency fell off fifty-nine per cent, in three years, 
 indicating a general stagnation in commerce. All interests suf- 
 fered, notably the farmers, who largely petitioned against 
 duties, and talked as if our government could repeal the 
 English corn laws. The manufactures of earthenware, glass, 
 
OUR FIRST GOOD TARIFF. 351 
 
 white and red lead, wholly disappeared ; that of iron was at the 
 point of extinction. The manufacturers never ceased to peti- 
 tion Congress to extend to them even a fraction of the protection 
 enjoyed by their English and French rivals. 
 
 When Congress met in December 1823, President Monroe 
 for the second time urged the adoption of additional duties 
 upon imported manufactures, and in January a new tariff bill 
 was reported. It proposed higher rates of duty because '' what 
 in 1816 was called ' a moderate protecting duty,' would scarcely 
 have been adequate protection against a fair and liberal Eu- 
 ropean competition, but was absolutely nothing against the 
 oppression of wealthy foreign manufacturers, who can afford 
 cargoes of their goods at reduced prices or at no prices, in order 
 to break down a growing rival, and indemnify themselves by 
 fleecing the country afterwards.'' The chief advocate of the 
 measure was Henry Clay, of Kentucky ; its chief opponent 
 Daniel Webster, of Massachusetts. The same antagonism of 
 their views had been brought out in the debate on the amount 
 of the duties to be imposed in 1816. New England had 
 already invested a large amount of money in manufacturing, 
 but not so much as to make that ■ a controlling interest ; her 
 vote, which was for Free Trade before the war, was now divided 
 (15 to 23). As a large majority of the South were now op- 
 posed to the policy which had called their cotton-growing into 
 existence and had given it the command of the home-market in 
 the years of its weakness, the bill was carried by the votes of 
 the Middle and Western States. For the first time the country 
 had a tariff that was, both in its purpose and in its effects, pro- 
 tective. One marked defect it had ; the duties on woollen 
 goods, both in their amount and the manner of their imposition, 
 were far from satisfactory. This manufacture languished while 
 all others throve. A bill to remedy this was passed by the 
 House in 1827, and lost in the Senate, which it reached too late 
 for passage. 
 
 §300. In December 1828, the Report of the Secretary of 
 the Treasury, Mr. Rush, called attention to the general pros- 
 
352 ELEMENTS OF POLITICAL ECONOMY. 
 
 perity that had followed the adoption of the tariff of 1824, 
 and especiallj the way in which it had given the country such 
 a measure of industrial dependence, as prevented the European 
 panic of 1826 from seriously affecting American interests ; he 
 suggested an increase of some leading duties. At the end of 
 January the tariff of 1828 was reported and passed after a bril- 
 liant debate, io which Mr. Webster now took the aflfirmative 
 side, declaring that New England was now for protection. The 
 South complained that they had reaped none of the advantages 
 of the new system ; that they were falling off in wealth rather 
 than advancing — complaints probably due to the growing contrast 
 between the regions blighted by slave labor and those blessed 
 with free industry. With some changes in the method of as- 
 sessing duties, and a few in their rates, this tariff remained in 
 force till 1832. 
 
 " We cannot manufacture, said Senator Hayne, of South Carolina, 
 in 1832, " except as to a few coarse articles ; slave labor is utterly incapa- 
 ble of being successfully applied to such an object. Slav^es are too im- 
 provident ; too incapable of that minute, constant, delicate attention 
 and that persevering industry which is essential to the success of manu- 
 facturing establishments." 
 
 § SOL How did the country prosper under the new system, 
 as compared with the old ? " If I were to select," says Henry 
 Clay in 1831, "any term of seven years since the adoption of 
 the present Constitution, which exhibits a scene of the most wide- 
 spread dismay and desolation, it would be exactly that term of 
 seven years which immediately preceded the establishment of 
 the tariff of 1824.'' As to the state of the nation when he 
 spoke : " We behold cultivation extended, the arts flourishing, 
 the face of the country improved, our people fully and profitably 
 employed, ... a people out of debt; land rising slowly in 
 value, but in a secure and salutary degree ; a ready, though not 
 extravagant market for all the surplus products of our industry ; 
 ... our cities expanded and whole villages springing up as if 
 by enchantment; our tonnage, foreign and coastwise, swelling 
 and fully occupied; ... the currency sound and abundant; 
 
SOUTH CAROLINA TRIES NULLIFICATION. 353 
 
 the public debt of two wars nearly redeemed, and, to crown all, 
 the public treasury overflowing — embarrassing Congress not to 
 find subjects of taxation, but to select objects which shall be re- 
 lieved from impost. If the term of seven years were to be se- 
 lected of the greatest prosperity which this people have enjoyed 
 since the establishment of their present Constitution, it would be 
 exactly that period of seven years which immediately followed 
 the passage of the tariff of 1824." 
 
 The tariff of 1828 imposed a large number of duties for reve- 
 nue upon articles (tea, coffee, &c.) not produced in the United 
 States, in opposition to the wishes of Clay and the consistent 
 protectionists. In 1882 these were removed or largely reduced, 
 while some of the protective duties were slightly so, partly with 
 a view to reducing the revenue, which was considerably in 
 excess of the needs of the government. 
 
 §302. In 1833 the question took a political shape; South 
 Carolina, with the moral support of Virginia, Georgia and Ala- 
 bama, announced her purpose to resist the enforcement of the 
 national tariff legislation. President Jackson, who had always 
 advocated protection, was now full of the impending danger to 
 the Union ; he saw all questions through the one medium, and 
 advised a reconsideration of the tariff in detail and the removal 
 of some of its duties. Henry Clay, being likewise a candidate 
 for the presidency, saw matters in much the same light. He 
 was an honest man at heart, who " would rather be right than 
 be President," but the concealed magnet in the White House 
 often makes the most honest compasses deflect from the north star 
 of principle. He introduced a compromise bill into the Senate, 
 providing for a gradual lowering of duties, by which they were 
 to be reduced to twenty per cent, on the 30th of June 1812. 
 It was only three weeks before the end of the session, but the 
 bill was carried through both houses before the session closed. 
 Till 1842 the process of reduction went on, and the gradual clos- 
 ing of American factories and workshops went with it. The capi- 
 tal of the country, the accumulations of years of protected and 
 prosperous industry, being driven from manufactures, sought a 
 23 
 
354 ELEMENTS OF POLITICAL ECONOMY. 
 
 channel for investment in other quarters. The sale of public 
 lands rose in 1836 to $24,877,179, or more than ten times what 
 had been the average rate. There was an enormous expansion 
 of the currency and inflation of prices. Imports increased 
 seventy-five per cent. Speculation ran riot ; wild-cat banks grew 
 up as fast as mushrooms. The craziest schemes to become rich 
 without the trouble of earning wealth by hard work, found ready 
 listeners. M. Chevalier, who visited America at this time, says in 
 the account of what he saw in 1835 : " Everybody is speculating, 
 and everything has become an object of speculation. The most 
 daring enterprises find encouragement; all projects find sub- 
 scribers." Places were sold as building lots that lay far beyond 
 the range of settlement for years to come; cities grew up in a 
 night — on paper; sites of houses and streets that lay in pesti- 
 lential marshes, or on naked precipices of rock, or six feet under 
 water, found eager buyers. No new channels for industrial en- 
 terprise were opening; the old were closing; the enterprise that 
 must find an outlet somewhere sought all manner of absurd and 
 hazardous channels. We were to produce all sorts of raw ma- 
 terials that the old world had monopolized ; the morus multicau- 
 lis was to give us cheap silk for the whole world. Then in 1837 
 came the crash, the banks suspended specie payment, and the 
 country wakened up from a feverish dream to find itself on the 
 point of bankruptcy. The revenue fell ofi" so greatly that the 
 government was obliged to ask loans, first in the home and then 
 in the foreign money market, and met only with rebufi" in both, 
 although the loan asked was less than a fourth of its ordinary 
 income. Labor ran begging for employment, and during 1839— 
 1841, the cry was heard far and near, " Give me work, only give 
 me work ! Make your own terms ; myself and family have 
 nothing to eat !" 
 
 By 1840 the country was thoroughly aroused, and elected a 
 protectionist President, after the fiercest political campaign in 
 our history. When Congress met in December of 1841, Gen. 
 Harrison was dead, but his successor, Tyler, recommended an 
 
THE DALLAS TARIFF AND ITS METHODS. 355 
 
 increase of duties in a conciliatory spirit. The tariflF of 1842, 
 one of the best and most protective ever enacted, was adopted, 
 and no more threats of secession were heard. The prosperity 
 that free trade was to brins; to the South had not been achieved, 
 and the preservation and extension of slavery now absorbed the 
 attention of that section. The new policy bore the old fruits; 
 languishing industries were quickened into life; with the growth 
 of the power to purchase, foreign commerce revived; govern- 
 ment reaped a large revenue, and the finances of the country 
 were again in a satisfactory state. The home production of great 
 staples was multiplied, and the prices of many of them fell. 
 A better and more trustworthy currency came into circulation. 
 Then, in 1846, the policy was changed once more, and that 
 of military aggression upon weaker neighbors at home suc- 
 ceeded that of industrial resistance to more powerful nations 
 abroad. England, after some five centuries of rigid protection, 
 had adopted the policy of free trade, and was preaching it with all 
 her eloquence to the rest of the world. Mr. Robert J. Walker, 
 secretary of the U. S. treasury, was one of her disciples. " Let 
 them alone^^ he told Congress, " is all that is required of man ; 
 let all international exchanges of products move as freely in 
 their orbits as the heavenly bodies in their spheres, and their 
 order and harmony will be as perfect, and their results as bene- 
 ficial, as in every movement under the laws of nature when un- 
 disturbed by the errors and interference of man." But even a 
 Democratic Congress had not quite forgotten the past, nor broken 
 so far with the Democratic precedents of 1824-1828. The 
 Dallas ^arifi" of 1846 was still protective. It adopted, indeed, 
 the vicious method of imposing ad valorem duties, while those 
 of 1842 had been specific; and it taxed a host of articles that 
 better tariffs, before and since, put into the free list. But it 
 still imposed duties of from 40 to 20 per cent, upon the 
 great staples of manufacture. Had these rates been calculated 
 on the average price of the several articles, and then made spe- 
 cific at that figure, the eff'ect would have been far better. For 
 ad valorem duties make the home market far more dependent 
 
356 ELEMENTS OF POLITICAL ECONOMY. 
 
 upon the fluctuations of the foreign market, and in the long run 
 bring it under the power of the trader and the foreign producer. 
 Thus during the years 1846-9 English iron was cheap, selling in 
 New York at $40 a ton, and largely driving the home producer 
 out of the market. One- third of the furnaces and iron-mills 
 of Pennsylvania ceased operations soon after the tarilff was 
 enacted, many being sold out by the sheriiF; the rest were sorely 
 crippled, and the amount of their production greatly diminished. 
 The iron men met, and in a memorial, prepared by Stephen Col- 
 well, expostulated with Congress, showing that the ruin, which 
 was impetiding over their industry, would be a costly injury to 
 the whole country. They predicted that if home competition 
 were out of the way, the nation would soon learn that the price 
 of British iron was fixed, not by the cost of production but by 
 the demand made upon that market, and the dependent condi- 
 tion of their customers. Their remonstrances were unheeded; 
 the work of destroying a great industry went on, and its traces 
 may be seen in the old furnaces of the Alleghany ridges. In 
 1851-4, when home competition was virtually out of the way, 
 iron sold for $80 a ton, whereas native iron had been furnished 
 for $60. When English iron was cheap, the duty was also low, 
 and the native producer was driven from the home market. 
 When it rose in price, the duty rose also, and enhanced its value 
 to a degree that greatly checked its consumption. But this rise 
 gave no security to the home producer to increase his turn-out, 
 or to the capitalist to begin iron-works. Neither could tell how 
 soon a real or an artificial cheapness might destroy his market 
 again. There was no security for the home producer, while the 
 home consumer was fleeced to the uttermost. 
 ^ The Dallas tarifl" lasted till 1857, and inflicted injuries upon 
 ' nearly all our industries, preventing the influx of capital in that 
 direction. To compensate for this we were to have an unlimited 
 foreign market for breadstuff's since England had repealed the 
 corn laws. The more we bought of her, the more we must sell 
 her, as " commodities are paid for with commodities." The 
 commodity witl which we chiefly paid was gold. The tariff 
 
THE slave-holders' POLICY. 357 
 
 increased the dependence of the country upon both the buyer 
 and the seller of foreign markets. Its bad effects were alleviated 
 by the discoveries of gold in California, which gave an impulse 
 to all kinds of business. In 1857 Coniiress reduced the duties 
 by twenty-five per cent. This was not a sudden change of 
 policy, but the crowning of the edifice that had been building 
 for eleven years past. It at once intensified all the unwhole- 
 some tendencies in our commercial and industrial life, turned 
 capital once more from production to speculation, and led to 
 a large and varying increase of importations. Another great 
 panic followed through the collapse of unsound enterprises, and 
 carried with it many that were sound. Every one had been buy- 
 ing at any price ; every one made haste to sell, and found no 
 customers. Lands in what was then the far West, by whose 
 purchase fortunes were confidently expected, were sold by the 
 county to pay the taxes. The treasury was again depleted, and 
 years came in which it must borrow the means to carry on the 
 government. 
 
 In 1860 the Republican party, composed very largely of the 
 old Protectionist party, won its first national victory, and broke, 
 for the third time in sixty years, the Democratic succession of 
 Presidents. In 1861 the war for the Union began, and the 
 Morrill tarifi" was enacted, and up to the present writing that 
 policy has been persisted in by the nation. Not that that tariff, 
 either in its original form or as subsequently modified, is satis- 
 factory in its application of general principles. It has been made 
 more satisfactory, indeed, by fairer protection to the woollen in- 
 dustry, and by the removal of duties that had been laid upon 
 articles that cannot be produced at home. Another great defect 
 in our financial system was the heavy internal revenue duties 
 levied until after the war, — duties that took away with one hand 
 nearly all that was given with the other. 
 
 When the war began American industry was unable to furnish 
 all the materials to arm and equip the national forces. Steel and 
 cloth, and blankets, had to be got from England ; and fortunately 
 the seas were open. Long before it closed all these elements 
 
358 ELExMENTS OF POLITICAL ECONOMY. 
 
 of the national defence were produced at home, of as good 
 ■juality and in quantities large enough to meet any demand. 
 But from the very start to the close of the struggle the North 
 reaped the advantage of the possession of that diversified in- 
 dustry which had perpetuated itself in the face of so many dis- 
 couragements, and now sprang into vigorous life; — while the 
 merely agricultural South was continually hampered through the 
 absence of manufactures, of the middle class who sustain them, 
 and of the industrial habits which they cultivate. 
 
 § 303. Nine times in one hundred years the American people 
 have changed their financial policy, sometimes carried from Pro- 
 tection toward Free Trade by the influence of specious theories, 
 but as often driven back to the policy of Protection by hard expe- 
 rience. The two periods of longest continuance in any policy is 
 the Protectionist period which followed the establishment of the 
 government (1789-1801), and the Protectionist period in which 
 we now are living. Four times the scaiFolding of the tariff has 
 been torn down from the uncompleted edifice of our industrial 
 development, and as often the work has been begun again — if 
 not from the foundation, yet from a point much less advanced 
 than had been reached under the previous protective tariff. This 
 time it seems to be the nation's purpose that the scaffold shall be 
 kept up until the roof is on. 
 
 § 304. It is admitted on all hands that the effect of our pres- 
 ent protective tariff has been an extraordinary development of 
 our manufacturing industries, and a rapid advance toward a 
 period when we shall be altogether independent of the rest of 
 the world as regards all the great staples which are capable of 
 economical production on American soil. The census of 1870 
 showed an increase of more than one hundred and eight per 
 cent, in the value of our manufactures; that of 1880 is ex- 
 pected to show a still greater advance. Between these two 
 censuses came the great Centennial Exhibition, which was to 
 multitudes of the American people a revelation of the growth 
 of our industries in quality and in quantity alike. No part of 
 that vast display excited so much patriotic satisfaction as did 
 
PROF. ROULEAUX AT THE CENTENNIAL. 359 
 
 the accumulated results of American skill and ingenuity ex- 
 hibited in Machinery Hall. Prof. Rouleaux of Berlin was at 
 least as well fitted as any of our foreign visitors to pronounce an 
 estimate of the whole exhibit of our industries. He declared it 
 to be one for which Europeans were quite unprepared as regards 
 its abundance and magnificence, and the admirable adaptation of 
 means to ends in all our processes and implements. In his 
 opinion American manufacture has escaped a great mischief 
 in aiming at good quality rather than mere cheapness in its 
 products; and he deplores the fact that Germany has injured 
 herself and lost her hold on the best customers by following the 
 lead of England in this respect. In many lines of manufacture, 
 such as cottons of all the lower grades, American goods take pre- 
 cedence of every other in point of excellence ; and in England 
 itself a demand exists for our cottons as the most trustworthy 
 that are to be found. 
 
 § 305. Prof Rouleaux very justly criticised as unsatisfactory 
 those branches of our manufactures which employ the arts of design. 
 He found clumsy earthenwares, ill-designed and crudely-colored 
 carpets, an excess of allegorical motive in our silver and other 
 ornamental wares, and a general failure to put the finest materials 
 in the world to the most efiective use. Those criticisms would 
 hardly be just if repeated now. The year 1876 was a time of 
 new beginnings in the development of those branches of manu- 
 facture which demand the application of artistic taste and skill. 
 The sight of what other countries had done in this department 
 was a stimulus to our own efibrts, and in the following years the 
 application of art to manufactures advanced with rapid strides. 
 Much is still needed, especially in the general diffusion of a 
 knowledge of the arts of design through our public-school 
 system; but a country which is admitted to have outstripped 
 every other in the quality of its wood-engraving must possess 
 in its own people artistic resources which, if developed, will 
 make it altogether independent of the help of foreign de- 
 signers. 
 
 § 306. In the development of American ingenuity the pro- 
 
360 ELEMENTS OF POLITICAL ECONOMY. 
 
 tective policy has played a remarkable part. Mr. Mill's sug- 
 gestion, that the establishment of an old industry among a new 
 people is followed generally by improvements in its methods, is 
 fully confirmed by recent American experiences. In many manu- 
 facturing establishments there is a standing oifer of rewards for 
 such improvements devised by the workmen. American im- 
 provements are not monopolized by our manufacturers. We 
 have no law against their export, such as England maintained 
 for nearly a century, and Mr. McCulloch defended in his Dic- 
 tionary of Commerce. Our models of axes, saws and other 
 tools are reproduced in Birmingham ] our improvements in the 
 Bessemer-steel apparatus are copied in the North of England ; 
 sewing-machines are made abroad under all our expired and 
 many of our unexpired patents, royalty being paid in the latter 
 case ; and so- forth. An English authority laments the fact that 
 nearly every labor-saving invention of recent years is of Amer- 
 ican origin. The centrifugal apparatus for refining sugar is 
 a notable exception to this rule ; but it is the rule. The cost 
 of some of the great staples has been reduced, not only to 
 America, but to the world, by the protective policy, which set 
 American invention to overcome Nature's resistance to our get- 
 ting them cheaply. And we look for still greater results of this 
 kind in the future. 
 
 § 307. Our tarilBF is found fault with because it does not 
 make men prudent and virtuous, besides giving them the oppor- 
 tunity to become prosperous. (1) It is said to be responsible for 
 the over-production which has characterized some branches of 
 manufacture. Thus, although we do not produce cotton goods 
 sufficient to supply the national demand, we do produce more 
 than enough of the more homely and substantial sorts; and at 
 times our cotton-factories are forced to diminish their production 
 below their capacity, and to reduce the time and wages of their 
 work-people. The same evil occurs, and more frequently, in 
 Lancashire under Free Trade. The common cause in both 
 countries is a defective judgment as to the capacity of the 
 market, and no legislation can be devised which will obviate 
 
DOES THE TARIFF MAKE MEN IMMORAL? 361 
 
 the difficulty. There still are plenty of openings for the in- 
 vestment of new capital in manufactures, if our manufacturers 
 will study the lists of imports to find where the home supply 
 is inadequate to the home demand. 
 
 § 308. The depression of 1873 and the following year grew 
 out of an excessive construction of railroads in America, and a 
 consequently feverish stimulation of the iron and steel indus- 
 tries. The great outlays in wages to iron-workers imparted a 
 similar impetus to textile and other manufactures, which con- 
 tinued until the collapse of the Northern Pacific Railroad pre- 
 cipitated a panic far less severe than those of 1837 and 1857, 
 but whose efiects were felt for years. 
 
 § 309. (2) Again, in the course of time a duty becomes exces- 
 sive through a change in the conditions of production, and it is said 
 that the American manufacturer, if the home competition do not 
 prevent this, will raise his price to the highest figure permitted 
 by the tariff, and will make excessive profits by doing this. 
 Whether this be an actual situation or not, it is a conceivable 
 one. There are two remedies for it. One is found in the 
 certainty that excessive profits will increase home competition 
 by leading to a large investment of capital in that particular in- 
 dustry; another may be found in the reduction of the duty to 
 an amount sufficient to compensate the disadvantages, as regards 
 labor, capital, taxation and so forth, under which the American 
 producer lies. The principle of protection justifies no duty of a 
 higher rate than this. In so far as the tariff goes beyond it, 
 it is not protective, but prohibitive. 
 
 But it is altogether absurd to abuse the tariff because business- 
 men will not resist the temptation to take advantage of such a 
 situation as has been supposed. The tariff will produce no 
 higher results than the average morality of the business com- 
 munity. This average is in America at least as high in the 
 manufacturing class as in any other. Dr. Lyon Playfair thinks 
 he finds in the honesty of our manufactures the traces of the old 
 Puritan passion for righteousness. His praise may be deserved, 
 without being true of all our manufacturers. But certainly 
 
362 ELEMENTS OF POLITICAL ECONOMY. 
 
 neither he nor any impartial observer would select any of our 
 protected industries as furnishing comparatively glaring in- 
 stances of our want of a high moral standard. He would 
 select rather the grain, stock and oil gambling of the trading 
 classes and the management of some of our great railroads. 
 
 § 310. It is charged against aur protective system that it has 
 resulted in the destruction of American comnierce. Objectors 
 of this kind use the word " commerce " in the narrow and con- 
 ventional sense which has been affixed to it by English writers, 
 and which corresponds to the situation of England. They mean 
 by it the export and import of commodities. The true sense of 
 the word is " the exchange of services or commodities between 
 persons of different industrial functions." In this sense Protec- 
 tion is a great promoter of commerce. It creates variety of in- 
 dustrial function within the nation, and fosters the most rapid 
 and continual interchange of services between persons thus dif- 
 ferentiated. It promotes association between meml&ers of the 
 same nation by producing variety in their employments ; while 
 Free Trade between more and less advanced nations always has 
 resulted in the destruction of asssociation among the people of 
 the less advanced, and in their reduction to a monotony of occu- 
 pation. There is no vaster commerce in the world than that 
 which takes place between the fifty millions of people who live 
 inside the line drawn by the American tariff, and who are grow- 
 ing in mutual interdependence with every year of its existence. 
 
 § 311. As was said in the tenth chapter, we cannot accept the 
 amount of exports and imports as affording any fair test of the 
 country's prosperity. Such a test could have been devised only 
 in a country which had made itself dependent upon others for 
 supplies of food and raw materials, and for customers for its 
 manufactures. But, even when gauged by this test, America is 
 found to have made no retrogression. The proportion of exports 
 of manufactures to the population was greater in 1880 than in 
 1860. This export might be much greater if we took the 
 proper steps to increase it. It might be expected, for instance, 
 that the nations of South America would be large customers for 
 
OUR FREE TRADE IN SHIPS. 363 
 
 our manufactures. We buy of them great amounts of coffee, 
 hides and wool. We can furnish them with many manufactures 
 which they have no ambition to make for themselves, and in 
 some cases not the resources. But our chief trade with that 
 part of the continent is conducted in English ships, which go 
 thither with cargoes of English wares, and come back, by way 
 of New York, with cargoes of South American produce, which 
 they replace by cargoes of American wheat. When we secure 
 direct commercial intercourse with the countries which have few 
 manufactures, we may expect to find foreign markets for our 
 own. At present we have such intercourse only with countries 
 largely engaged in manufacture. 
 
 § 312. It is charged that the Protectionist policy has debarred 
 us from getting our fair share of the carrying trade of the world. 
 But American citizens are free to own and sail ships built in any 
 dockyard of the world. Our laws place such vessels under no 
 disadvantage. We admit ships of every build on equal terms 
 to our ports, and remit many of the charges, such as lighthouse 
 dues, which are charged in the ports of other countries. It is 
 true that by a law passed in Washington's first administration, 
 and continued in force by every party which has been in power 
 since that time, ships of foreign build are not admitted to Amer- 
 ican registration. They cannot carry the American flag, and 
 our government assumes no responsibility for their safety. But 
 American registration confers no commercial advantages. On 
 the contrary, it brings with it ser'ious disadvantages. The laws 
 for the protection of American seamen impose burdens on the 
 owners of ships in our registration much heavier than are borne 
 by others. Our consulate system collects far heavier fees from 
 them ; our systems of State taxation impose, as a rule, much 
 heavier fiscal burdens on them ; and in return for these the 
 vessel which has American "registry receives no compensatory 
 advantages. The nation does not maintain a decent navy foi 
 its protection ; it does not exert itself with any remarkable 
 energy in the defence of American interests, property or 
 citizens abroad. In these respects it is much behind Eng- 
 
364 ELEMENTS OF POLITICAL ECONOMY. 
 
 land, which is ready to continue registration and efficient pro- 
 tection to any ship which Americans may purchase from 
 British owners. 
 
 In fine, we have absolute Free Trade in the matter of mer- 
 chant marine. It is to this, in great measure, that we owe the 
 decline in American shipbuilding — a decline which began in 
 1855, six years before the Morrill Tariff was enacted. We are 
 almost the only country which has acted on the laissez /aire 
 maxim in this matter. Great Britain built up hers by a system 
 of subsidies, at first paid openly, afterward under the cover of 
 payment for carrying the mails. France has a subsidy system 
 more thorough and extensive than any other country of Europe. 
 In America the same method was followed until 1855, when, on 
 recommendation of the Senate Committee of Commerce — Mr. 
 Jefferson Davis was chairman — subsidies were discontinued. 
 Their resumption is demanded now by many of the most in- 
 fluential commercial bodies in America, and is expected from 
 the Congress in session at this writing. 
 
 § 313. Protection corresponds to the purpose of the Amer- 
 ican people to be a complete and entire nation, at peace with 
 every other in so far as in us lies, desiring no advantage at the 
 expense of any other, wishing for them that fulness of national 
 life which we desire for ourselves, but as independent of their 
 good or ill will as the resources of the national domain will per- 
 mit us to be. It sometimes is denounced as irreligious and self- 
 ish, but only by those who have taken no pains to understand it. 
 There is a religion. The Saturday Review says, which became 
 current in England about 1851, made up of " Free Trade and 
 the pleasanter parts of Christianity;" with that religion Pro- 
 tection comes into conflict. But there is nothing in it which is 
 inconsistent with the Golden Rule : " Whatsoever ye would that 
 men should do to you, do ye even so to them." 
 
THE ECONOMY OF INTELLIGENCE AND EDUCATION. 365 
 
 CHAPTER THIRTEENTH. 
 
 The Science and Economy of Intelligence and 
 
 Education. 
 
 § 314. In presenting what have been found to be wise methods 
 of national economy, and in attempting the solution of economic 
 problems, it has again and again been pointed out in the fore- 
 going chapters, that the education and the consequent high in- 
 telligence of the people is essential to the prosperity of a nation. 
 
 We have seen that an agriculture that is not directed by scien- 
 tific knowledge is wasteful in itself, and will at last be unable to 
 meet — much less to outrun — the ever-increasing demand of the 
 people upon its productiveness. Experience also shows that, so 
 long as farming is conducted in an unintelligent way, it will 
 never be anything but a distasteful drudgery, which will drive 
 the best young men of the agricultural class into the cities, and 
 to occupations that employ mind as well as muscle. 
 
 We have seen that the notion that labor will always leave an ill- 
 rewarded employment for one that is better paid, is disproved by 
 facts. The uneducated farm-hand of Dorsetshire, with his 
 mental horizon no larger than the visible one, shrinks from 
 pushing out into an unknown and untried world to seek his for- 
 tune, and puts up with ten shillings a week, when a few shires 
 farther north he might earn a competence. The Flemish hoer 
 works for a half or a third what he might get a dozen miles to 
 the south, because he has never had the chance to pick up the 
 small amount of French that would tit him to labor in Brabant 
 or Brussels. 
 
 We have also seen that improvements in methods and in 
 machinery, by discontinuing the employment of some class of 
 workmen, inflicts great injury upon that class if its average of 
 intelligence be low, and its power of adapting itself to a new set 
 of conditions be slight. And we have also seen that all these 
 
366 SOCIAL SCIENCE AND NATIONAL ECONOMY. 
 
 improvements make a larger demand upon the workman's intel- 
 lectual gifts, and can only be carried out to the best advantage 
 where these receive a fair measure of cultivation. 
 
 It has also been seen that the condition of the working classes 
 is capable of very great improvement, through the adoption of 
 certain methods of economy — labor-banks, co<5perative societies, 
 building societies, and the like — which demand the diffusion of 
 a considerable measure of knowledge if they are to be well sup- 
 ported and wisely managed. 
 
 We have seen that the sanatory condition of a community is 
 capable of very great improvement only when the conditions 
 of life and health are understood by the people. And upon this, 
 as has been said, depends in large measure the industrial capa- 
 city and efficiency of the people. English statists estimate that 
 every death represents one hundred and sixty-six days' illness, 
 during which the sufferer, if a working man, is thrown upon the 
 charity of his friends or of society for his support. The conse- 
 quent total to be subtracted from the productive and accumula- 
 lative powers of the people is immense. 
 
 We have seen that the protective policy is vindicated by its 
 friends and conceded by its enemies to be a measure of national 
 education, whereby special advantages are given to the home 
 producer until he has learnt the habit of manufacture and 
 acquired skill in its methods. A natural accompaniment of such 
 a policy is an active national effort for the technical training of 
 those who are competent to receive it. 
 
 § 315. These and other considerations like them lead us to see 
 the importance of education as a part of a wise national economy. 
 The small outlay of the national resources that is necessary to 
 train every citizen to the highest rank in industrial eflSciency 
 that is possible to him, is well expended in the purchase of a 
 larger gain to all classes. It is one of those wise sacrifices of 
 present for future advantage, which distinguish progressive 
 societies from those that are stagnant. 
 
 But a national education can never be a merely industrial 
 education, — can never be even first and chiefly industrial. The 
 
NATIONAL EDUCATION IN ANTIQUITY. 367 
 
 industrial state is but one aspect of the national life, and an eda- 
 cation that could contemplate only its ends would come far short 
 of the training required to fit the citizen for his place in the 
 body politic. It would also defeat its own ends by leaving the man 
 undisciplined in many duties and in right methods of thought, 
 which very greatly influence his industrial worth. On the other 
 hand, there is especial need to call attention to this part of 
 national education, since the conception of the nation as an indus- 
 trial state is quite a modern one. Napoleon among the men of 
 practice and Fichte among the thinkers — closely followed by 
 Saint Simon — were the first to recognise its truth. And as in 
 earlier theories of national life, so in earlier methods of educa- 
 tion, other things were regarded and this neglected. 
 
 § 316. A National Education, limited in its range indeed, but 
 broad enough to embrace the whole scope of the nation's voca- 
 tion, was enjoined upon the Jews by the Mosaic legislation. 
 Especially of the moral law it is said: "These words which I 
 command thee this day, shall be in thine heart [i. e., thine un- 
 derstanding, thy thoughts;] and thou shalt press them upon thy 
 children, and shalt talk of them when thou sittest in thine house, 
 and when thou walkest by the way, and when thou liest down, 
 and when thou risest up.'^ The later Jews, at a time when the 
 industrial life of their nation had attained a larger development, 
 required that every father, however wealthy, should teach his 
 son a trade, so as to provide against all contingencies of fortune 
 and enable him to avoid becoming either a pauper or a thief. 
 
 In Greece we have two great methods of national education 
 standing in very sharp contrast. The Spartan was a system of 
 military discipline, of stern and unnatural restraint. It was the 
 drill of an armed garrison who gave up their individual tastes, 
 ideas and impulses, and submitted to an all-constraining law. 
 The death of the three hundred at Thermopylae, " in obedience 
 to the laws," was the crown and the flower of the life of the 
 city, which produced no great men of letters, and indeed few 
 great men of any sort. The Athenian method was a full and 
 free development of human nature, especially on its intellectual 
 
368 SOCIAL SCIENCE AND NATIONAL ECONOMY. 
 
 and aesthetic sides. In Athens, more than in any other land or 
 time, we have the results of the extension of the finest culture 
 of mind to the whole free population of a state. Of formal 
 teaching and learning there was comparatively little, except the 
 memorizing of Homer and other poets in the schools ; the new 
 science of mathematics seems to have taken its name from the 
 fact that it was the first branch of knowledge that was not picked 
 up — like reading, writing, grammar, politics, the arts — from one's 
 fellow-citizens, from being at the theatre, or from the daily con- 
 templation of great works of art, the sight of inscriptions, &c. ; 
 but needed to be learned by direct and formal application. Yet 
 their intellectual education was perfect; no accumulations of 
 knowledge or improvement of methods have enabled any 
 people or class to attain a higher or more balanced cultivation of 
 the mind. But they lacked moral balance and self-restraint, and 
 so became the victims of their own cleverness, as Socrates saw 
 and told them. 
 
 If the New Testament teaching be true, both these opposite 
 methods were right and capable of being united, because there 
 is in man a higher or spiritual nature which education is to 
 awaken into life and call forth into activity and vigor ; while 
 there is also in man a lower or animal nature, by which he must 
 not be governed, and which must be brought under restraint 
 and discipline, 
 
 § 317. The Roman inherited the Greek method of education, 
 but never gave such prominence to it. The Greek governments 
 were systems of education ; Roman education was a branch of 
 the civil service. The great university of Alexandria, the 
 Mousewn, was not only cherished by the new rulers, but repro- 
 duced in other chief cities, especially by the Athenaeum at 
 Rome. In lesser places, what we might call colleges, professional 
 chairs and schools were founded, and considerable zeal displayed 
 for the education of the higher class of citizens. But the learn- 
 ing chiefly cultivated had no relation to the practical life of the 
 times. Much attention, for instance, was given to rhetoric and 
 oratory, although all real use of these had disappeared with the 
 cessation of free popular assemblages. 
 
MEDIEVAL EDUCATION. 369 
 
 In the BjzaDtine Empire this Imperial system was perpetuated 
 down to the capture of Constantinople without the slightest 
 change even in the text-books. Except during the brief period 
 when Julian forbade the Christians to use the old classics, no 
 Christian literature of any sort was admitted to the schools of 
 the Eastern Empire, and the use of the Scriptures in such a 
 place would have been deemed sacrilege. 
 
 In the west, Karl the Great sought to trace out and revive the 
 old imperial foundations throughout his empire, and the monastic 
 schools at Fulda, Aachen, St. Gall, and other places, were prob- 
 ably the perpetuation of his eflForts. More important still was 
 the schola palatiiia^ or court school, which he made an adjunct of 
 his household, and which became a tradition of the royal court of 
 France. It was afterwards transplanted to the new capital, Paris, 
 and it enjoyed the service of many able men, such as John 
 Scotus Erigena, who came over from Ireland, then the land of 
 Christian schools and Christian learning. Karl adopted as the 
 basis of instruction in the higher schools the syistem or classifica 
 tion of Boethius, in which all learning was divided into the 
 seven liberal arts, of which three (the trinuiii) were taught in 
 the higher classes, and four (the quadriviuni) in the lower. 
 Hence the phrase " Master of Arts.''^ In the lower schools 
 reading, writing, arithmetic and singing were taught. This 
 classification lasted till the revival of classical learning. 
 
 Out of the court school, or the ecclesiastical school which 
 succeeded it, grew the University of Paris, the mother and 
 mistress of all European universities, except Bologna and Oxford, 
 whose possession made France in the earlier Middle Ages the 
 Kingdom of the University, as Italy was the Kingdom of the 
 Holy See, and Germany that of the Holy Roman Empire. The 
 rise of the University was so very gradual that the steps can 
 hardly be traced, but at the time when Abaslard was drawing 
 tens of thousands of pupils to Paris to hear him expound the 
 scholastic philosophy, and partly perhaps through his great suc- 
 cess, the University had taken a distinct shape, which was 
 chiefly changed by the division of the professors into separate 
 24 
 
370 SOCIAL SCIENCE AND NATIONAL ECONOMY. 
 
 " faculties/' and the students into '^ nations," and this formed 
 the model after which others were erected in Bohemia, Germany, 
 Spain and Scotland. These institutions were hardly instruments 
 of popular education. They attracted, indeed, an immense body 
 of students to a few great centres of culture } we read of forty 
 thousand at the University of Oxford. But their object was to 
 form a learned class, not to reach the whole people. He who 
 received it betook himself to a new sort of life ; he did not go 
 to the schools to learn what would fit him to fill his place in the 
 class in which he was born, but to leave that class and enter 
 another. It was a training for grown men, not for children. 
 Only monastic schools were open to the latter in the earlier 
 Middle Ages ; and when others were established they were 
 chiefly preparatory to the universities, and imparted a highly 
 abstract and artificial training in a very tiresome and inadequate 
 way. They were generally trivial schools in which were taught 
 the arts of grammar, music and arithmetic, i. e., the Latin 
 grammar of Donatus, the psalms and hymns of the Missal and 
 their ordinary tunes, and the elements of computation. The 
 only Latin literature read was the distichs of Cato and a Latin 
 version of ^sop's Fables; but in course of time, the Catechism 
 (i. e., the Creed, the Lord's Prayer and the Decalogue) were 
 added. Even with the revival of the study of classic learning, 
 no change was made in these schools. Luther went to school 
 under one of the new Humanists, but read nothing of the new 
 literature until he went to the University. 
 
 § 318. To the Reformation, and especially to Luther, popular 
 education owes a very great impulse. In some sense we may say 
 that it began at that date. The claim put forth that the Bible 
 should become the people's book, and the efforts to circulate the 
 new translations of it, as well as other edifying books, involved, 
 as a correlative, a general effort to make the new literature ac- 
 cessible to the common people by a general diffusion of know- 
 ledge. But Luther aimed at diffusing a national education that 
 should be truly such. In his appeals to the German cities, urg. 
 ing them to set up good schools — '' not such as have been hereto 
 
THE REFORMATION AND EDUCATION. 371 
 
 fore, where a lad learned at his Doaatus and his Alexander for 
 twenty or may be thirty years, but never learned them " — he 
 especially pleads for the general study of letters — " good poets 
 {ind histories," — and for the formation of city libraries of all 
 sorts of good books as the complement of the school system. 
 He would have the chronicles of their own country hold a promi- 
 nent place in these collections. He would thus provide not only 
 a competent body of educated men for the service of church and 
 state, but also " a plenty of fine, learned, rational, honorable, 
 well-brought-up citizens," as " the best and costliest possession 
 of a city;" 
 
 The Calvinistic Reformers laid still greater stress upon know- 
 ledge and intelligence, as needful for every true Christian. It 
 was their ideal to see the Bible in the hands of a community 
 competent to understand it. In Switzerland, Germany, Holland 
 and France, they carried out this principle with great thorough- 
 ness, but nowhere more completely than in Scotland. Knox 
 and his associates and successors worked for the establishment 
 and endowment of English and Latin schools, and the improve- 
 ment of the universities, as zealously as for the establishment of 
 the Reformed doctrines. In spite of some temporary defeats, 
 they carried their point, and the Scotch became a far better 
 educated and more intelligent people than their richer neighbors 
 at the other end of the island. In England the Reformation 
 was a measure carried through by the government and the aris- 
 tocracy ; it was not so democratic in its character, and it af- 
 fected but slightly the economic condition of the people. The 
 agitation for a j^lan of popular education, to reach and provide 
 for the most numerous class — as the higher and middle classes 
 have been provided for by old foundations and private schools — 
 has hardly been mpoted there till within the present century. 
 The first appropriation of money for the purpose was the vote 
 of £100,000 in 1847, and only in our own times has there been 
 adopted a plan of national education large enough to reach the 
 whole people. It has, of course, been opposed, (1) by some 
 few consistent free traders, like Herbert Spencer ; (2) by those 
 
372 SOCIAL SCIENCE AND NATIONAL ECONOMY. 
 
 religionists who regard education as a spiritual function and deny 
 the power of the state to exercise such functions ; and (3) by 
 those who object to the existing law, because it takes under gov- 
 crnuient patronage the various Church schools that are already 
 established. 
 
 Ireland has had an excellent national school system for a good 
 many years past, whose eflPects in the dissemination of intelli- 
 gence forbid us to ascribe the poverty of her people to igno- 
 rance. They take rank above the English in this respect. 
 
 Our chief authorities for the history of education in the old world are 
 Prof. Franz HoflFmann's Idea of a University (translated and published 
 in the Penn 3Ionthly for October, 1872) ; Prof. F. D. Maurice's Lecturea 
 on National Education (London, 1839), and his Learning and Working 
 (London, 1855); and Karl Jiirgen's Luthera Leben (Leipsic, 1846). 
 
 § 319. American education was begun by the churches, and 
 the higher institutions of learning nearly all originated with the 
 ecclesiastical bodies, as most of them are still under their control. 
 The University of Pennsylvania was, through the influence of 
 Franklin, perhaps the first to arise without formal connection 
 with the churches. The colleges and academies of the New 
 England States, and of districts settled from New England, were 
 chiefly modelled after Harvard and Yale, and drew their teachers 
 from those mother institutions and their daughters. Those of 
 the Middle and many of the Western States may commonly be 
 traced to the educational effbrts of the Presbyterian clergy from 
 the north of Ireland and from Scotland. The Puritan and 
 Presbyterian elements have been the chief agencies in our higher 
 educational system, and in both cases the interest and the motive 
 was ecclesiastical. Religion, it would appear, was the only force 
 at work in American society at large that was strong enough to 
 overcome the American passion for money-making, to insist on 
 the excellence of a liberal education, and thus to cherish the 
 love of learning and of science till it grew strong enough to 
 stand alone. Only in our own days have institutions of the same 
 character been endowed in a few places by the state govern- 
 ments. 
 
 § 330. Schools for popular education were very early cstab- 
 
OUR PUBLIC SCHOOL SYSTEM. 373 
 
 lished in nearly all of the colonies. Especially in Pennsylvania 
 the Society of Friends was most zealous in establishing elementary 
 schools, and in imparting to all within their reach the elements 
 of a good English education. At their schools in this city many 
 who were not of their body received their training, and it is very 
 largely to the influence of the Quaker element thus exerted that 
 the Commonwealth owes the solid sense and practical sagacity 
 of its best and most influential elements. But the system of state 
 education originated in New England, and has only been ex- 
 tended to other parts of the country within the memory of per- 
 sons now living, and to the South only since the recent war. 
 The progress of the system has been very rapid, and it is now 
 recognised as a universally established principle that the state is 
 responsible for the existence of illiteracy and of the crimes and 
 violences that flow from ignorance. The system is opposed (1) 
 by a very few consistent free traders, like the late Gerritt 
 Smith ; and (2) by some religious bodies, which regard educa- 
 tion as a spiritual function inhering in the church. 
 
 Less can be said for the quality than the quantity of the edu- 
 cation given by our public schools. Indeed we cannot too 
 heartily recognise the fact that education is yet in an experi- 
 mental stage among us, and that beyond the clear duty of teach- 
 ing a few of the first and plainest elements of learning, every- 
 thing else is open to question. We have too often forgotten that 
 education is a means merely, a very flexible means to any end 
 that we have in view, and that we must first fix the end by care- 
 ful reflection and then with equal care adjust the means to the 
 end. Education has been talked of as if there were something 
 magical in the contact of a young mind with a series of school 
 books and of teachers. But the magical results have not been 
 forthcoming. 
 
 Especially the notion that education — the imparting of know- 
 ledge and the discipline of the intellect — was of itself sufficient 
 to abolish all crime, has received a decided refutation. There 
 is indeed a limited amount of truth in this notion. Crimes of 
 violence, for instance, as Henry Holbeach says, very commonly 
 
374 SOCIAL SCIENCE AND NATIONAL ECONOMY. 
 
 grow out of the imperfect communication of ideas and feelings 
 between uneducated people. Their heartburnings " are born of 
 imperfect intelligence of each other in dilemmas of conscience 
 or affection, upon which such poor means of utterance as they 
 have are thrown away." Hence we speak of quarrelling persons, 
 if they be reconciled, as coming to an understanding. 
 
 There is also in the discipline of the school-room, its required 
 order, cleanliness and self-restraint, a powerful moral training 
 for the young, if the teacher be equal to the task. And even 
 the mere power to read, in the great preponderance of good 
 literature over bad, and the great prominence of the best of books 
 in modern society, is pretty sure to do far more good than evil 
 to its possessors, taken as a whole. 
 
 Yet our excellent fellow-citizen, Mr. Joseph R. Chandler, 
 gives it as the result of bis fourteen years' devotion to the 
 cause of prison-discipline, "that learning has little or nothing 
 to do with preventing or promoting crime, however it may influ- 
 ence the character of the act. . . . While in the lowest order 
 of crime I may have found more unlettered than lettered crimi- 
 nals, I have found the former more amenable to gentle moral 
 dealing than the latter were." But this generalization is not 
 based upon a comparison of two societies of different degrees of 
 intelligence, or two stages of intelligence of the same society, 
 and is, therefore, hardly justified. Indeed, the fact last alleged 
 in its support, and which Mr. Chandler's authority puts beyond 
 question, points to exactly the opposite conclusion. The edu- 
 cated criminal is more hardened, because his fall has been 
 greater; he " sinned against light,'' and that light of his intelli- 
 gence was one of the deterrent forces that might have held him 
 back. The more and the stronger those forces, the greater the 
 fall, and the more hardening its effect upon the character. Con- 
 science, however, until enlightened by intelligence, is a mere 
 spur, and not a true guide in life. It has been, when un- 
 enlightened, the source of a great multitude of crimes against 
 humanity. There are, indeed, cases in which education has been 
 80 abstractly intellectual, so devoid of all moral drift and tone. 
 
THE MEANING OF NATIONAL EDUCATION. 375 
 
 that the conscience has been almost suppressed. But education 
 may easily be made, or rather can hardly help being made, very 
 different from that, — can never be truly national, truly in ac- 
 cordance with the very first notion of the state, without being 
 very diflferent. 
 
 § 321. Without discussing in detail the merits and defects of 
 our present systems, we shall seek to discover what idea is 
 rightly conveyed by the term national education. This term 
 carries us back to the idea of the state as the institution of 
 rights, and as distinguishable into three departments of national 
 activity, — the jural estate, the culture state and the industrial 
 state. Manifestly the second of these now engrosses attention, 
 whereas we hitherto have been chiefly considering the third, A 
 natiaual education, then, is (1) one that develops in the man the 
 intellectual powers and capacities that fit him to understand the 
 ideas and the truths that are the common possession of his fel- 
 low-citizens, and that fits him to act with at least that degree of 
 mental freedom that his nation has attained. (2) It is one that 
 impresses upon him the characteristics of an upright and good 
 citizen, a man of public spirit, and a devoted patriot, and that 
 fits him to exercise such political powers as are intrusted to him 
 by the constitution of his country. (3) It is one that gives him 
 such general instruction, and ofi'ers him the opportunity to ac- 
 quire such special training, as will fit him for his special profes- 
 sion, calling or industry, and will enable him to pursue it in the 
 most eifective manner. 
 
 § 322. Firstly^ education to fit a man for his position in the 
 culture state will have reference to the rank in knowledge, in- 
 sight and mental power possessed by his own nation. The pub- 
 lic schools of China or Japan should not give lessons in German 
 philosophy, or in the English language, or any language but 
 their own. Even the intellectual growth of a nation is chiefly 
 from within, and the attempt to import a foreign culture by 
 wholesale, can only result in crushing out that which is of native 
 growth, and in retarding the normal progress of the people. 
 It will merely root out the native plants, and substitute a hortits 
 
376 SOCIAL SCIENCE AND NATIONAL ECONOMY. 
 
 SICCUS of dry and dead specimens, without sap or root. For every 
 country possesses a certain average of intelligence, and has at- 
 tained a certain stage in the great historical march of the human 
 spirit from childish subjection to manly freedom. And as the 
 nature of that march is governed by the historical constitution 
 and course of nature, each country must take the next step for- 
 ward before it can take any subsequent step, — must start from 
 the position that it now occupies, and build upon the foundation 
 that it has already laid. 
 
 Mr. Palgrave, the English art critic, for instance, expressed his feara 
 that Japanese art will be stopped in its natural course of development, 
 through the imitation of foreign models. 
 
 The language and literature of each country are at once the 
 perfect expression of the degree and quality of its culture, and 
 the means of education in conformity with that. The sure 
 foundation of all national education, on its national side, is the 
 study of the native speech, through books that record it in its 
 highest and purest forms. But text-books that give only the 
 result of such studies, and teach nothing of their method, such 
 as spelling books, school dictionaries, grammars, manuals of 
 etymology, and the like, are not educational instruments in any 
 true sense. Theyimpart information, without imparting discipline; 
 they give no impulse, save in a very few cases, to the further pur- 
 suit of the same studies, but rather weary and disgust the student. 
 They do not render the service that all rightly directed study of 
 a language through its literature will render, in training the 
 judgment to decide between greater and lesser probabilities, by 
 the problems it presents as to the meaning and connection of 
 words. They give rather a phantasm of knowledge about words, 
 a mass of definitions and statements, than an actual acquaintance 
 with words in their living uses. They are more likely to hide 
 from the student than to declare to him the wonder and beauty 
 of the language, as a work of art at once human and divine, as 
 the result of a great process of education, by which men were 
 led on from the sense perception of things material, to the appre- 
 hension of the more real and less tangible verities of life. 
 
THE NATIONAL LANGUAGE IN EDUCATION. 377 
 
 The study of another than the native language, especially of 
 a language of the same family but of earlier date, gives a great ad- 
 vantage, in enabling the student to compare and contrast the two, 
 and suggests to him open secrets that would otherwise have es- 
 caped him. Hence the great use made of Greek and Latin in the 
 higher education, one of which gives the most perfect illustration 
 of the living force of words, the other of the laws of their govern- 
 ment, and both correspond to earlier stages in the world's intellec- 
 tual development. Both have been subjected to an analysis by 
 great scholars that has extended over centuries, and are therefore 
 provided with an apparatus of study the most complete possible. 
 
 But these studies cannot be introduced into our public schools 
 generally, chiefly because their curriculum of study is not pro- 
 tracted to years in which these could be effectively pursued. 
 The best substitute attainable in those schools, is that of our 
 own language in its earlier stages, as presented, let us say, by the 
 great English classics from Chaucer to Milton. That literature 
 is as much the heritage of the American as of the English people ; 
 while un-American elements may be traced in all the great 
 writers of the following centuries, those earlier masters are free 
 from them. And they furnish a long series of noble books, 
 which embalm the wisdom and the excellence of lives not less 
 noble. With wise guidance, and not too elaborate an apparatus for 
 their study, the scholar might learn from them at once the method 
 of studying words and their history, and the personal friendship 
 for great authors, which constitutes a large part of the truest cul- 
 ture. But mere volumes of extracts, however excellent for some 
 purposes, will not answer here ; they prevent the study of literary 
 works as artistic wholes ; they do not ordinarily give a full ex- 
 hibit of the state of the language at any one era ; and they cul- 
 tivate the habit of dipping into books rather than continuous 
 reading. 
 
 There is another language, not national but universal, address- 
 ing itself not to the understanding but the heart of man — touch- 
 ing fibres of his human nature too fine to vibrate to ordinary 
 language, — fibres that lie closer to his very self and deeper than 
 
378 SOCIAL SCIENCE AND NATIONAL ECONOMY. 
 
 his ordinary self. Music should, in the opinion of Plato and 
 Milton, form a part of human education ; and the general sense 
 of mankind has assigned it a very large place in the great up- 
 lifting process which we call civilization. The hold which it 
 has taken upon the working classes in our own days, especially 
 in England, its power to elevate and refine, to harmonize and 
 humanize, to remind men of the ideal to which all worthy life 
 is ever striving, to cheer them with far-off glimpses of it amid 
 the sordidness of the actual, all confirm this high estimate of the 
 human use and worth of music as an educating force. What- 
 ever danger there may be in an excessive devotion to it, it 
 should be made a subject of universal training, and its introduc- 
 tion into our public schools, though something late, is a most 
 excellent revival of what was once a study practised in every 
 school. 
 
 Ilathematical science, in contrast to language, represents the 
 most general form of intellectual culture ) it calls forth and disci- 
 plines the reason, the universal intellectual power, which belongs 
 to man as man, and apprehends not probabilities but certain and 
 unquestionable truth. Arithmetic, geometry, algebra, have in 
 modern times held a high place in education. In our schools 
 arithmetic is not taught thoroughly, because after a slight amount 
 of instruction in the pure science, the student's attention is 
 diverted to its application to commercial computations. A more 
 thorough discipline in the analysis of number would be of far 
 more use even in practical life than these rules and methods, 
 which are mostly obsolete in our counting-houses. Geometry, for 
 the same reason that too much heed is given to what is thought 
 practical, is either entirely omitted, or is postponed till after the 
 student has mastered the more difficult subject of algebra. 
 
 ^h.Q physical sciences are a means of education only when pur- 
 sued in such a way as to teach their methods as well as their 
 results. The latter may be imparted as information in very 
 large quantities without the student's having attained any real 
 acquaintance with the facts ; he may have got no more than a 
 mass of memorized definitions and statements, and, in spite of 
 
EARTH-LORE AND NEIGHBORHOOD-LORE. 379 
 
 Bacon and all who have followed him, may mistake these for the 
 facts. He may have learnt not a whit of the patience, self- 
 distrust, humility, and loyalty to fact, that characterize the true 
 man of science, the original investigator. His powers of attention, 
 observation and accuracy may have been left dormant under it 
 all. 
 
 These objections hold with great force against the branch of 
 physical science most taught in our schools, and the method by 
 which it is taught. From the lowest to the highest schools, and 
 by a series of graded text-books, the attention of the pupil is 
 concentrated upon geography^ with no result save the overloading 
 the memory with a mass of statements which constitute no real 
 knowledge of the earth's surface. They are true in detail, but 
 the whole is false as professing to be an adequate account of our 
 planet. They are a hindrance, therefore, to real knowledge, as 
 they render the student content with what is a mere phantasm 
 knowledge. He mostly learns them by heart without any reali- 
 zing sense of their meaning, and a question out of the usual run 
 of questions often displays the vacuity of his mind on the 
 subject. 
 
 For this earth-lore it would be well to substitute neighborhood- 
 lore — or the study of those facts that actually fall under the 
 scholar's observation, and their scientific explanation. The 
 student might learn the geology of his native district ; its rela- 
 tion to all the large geographical facts, such as the isothermal 
 lines, the continental formations, the sea and the tides ; its 
 meteorology especially, its weather-lore ; its natural history in all 
 its branches, with incitement to collect specimens for the school 
 museums; its social history and progress from the days of the 
 red man's wigwam to the present time. Such a training would be 
 in the line of the providential purpose which ordinarily connects 
 each single life with a single spot of earth ; it would give the 
 mind the sense of a hold upon the world, a definite place and 
 starting-point. It would be more likely, by connecting life with 
 knowledge, to be the first stage in a life devoted to knowledge, 
 than if its youth had been spent in loading the memory with 
 
380 SOCIAL SCIENCE AND NATIONAL ECONOMY. 
 
 notions, which, however real in the knowledge of the scientist 
 possess no reality for the scholar. 
 
 And to come still more close to the student, he should be 
 taught the elements of practical hygiene in connection with the 
 broader physiological laws that govern health and disease. There 
 are few of us but would live longer and more healthfully for 
 such self-knowledge ; it would save men from grave mistakes such 
 as often embitter a lifetime by disease, and would thereby add 
 greatly to the industrial power of the nation. 
 
 § 323. Secondly, to fit a man for his place in the jural state, 
 education will implant in his mind the convictions of righteous- 
 ness, of justice, that underlie the national order and the laws by 
 which it is prescribed and enforced. The state is the organiza- 
 tion of the whole people for the purpose of securing justice; 
 this is the common vocation of all states, and except as they 
 recognise it and act on it, they are unworthy of the name and 
 forfeit the rights of nations. The elevation of the individual 
 citizen into the true national consciousness is therefore an edu- 
 cation in righteousness, in uprightness, — and the means of re- 
 straint upon unrighteousness, prohibitions and punishments, are 
 but secondary political agencies. The state must seek first of 
 all to plant the right seed, and secondarily to root out the tares. 
 
 This is, thus far, only incidentally attempted in our modern 
 system, through the influence of school discipline, the enforce- 
 ment of order, and the operation upon the mind of studies that 
 aim at other ends, but do effect something towards this end, by 
 familiarizing the mind with the conception of law as the under- 
 lying principle in every sphere of life and observation. And 
 indeed it is by indirect teaching, rather than by the imparting 
 of moral information, that most can be effected. The study of 
 the lives of great and good men may do much ; such as those 
 biographies in which Plutarch has preserved for us the life and 
 spirit of the great heroes of the Greek and Roman world. And 
 out of biographies already at hand, a corresponding book might 
 be compiled for the modern period and written with the same 
 " universal sympathy with genius " (Emerson), in the same spirit 
 
THE OLD TESTAMENT IN EDUCATION. 381 
 
 of genuine enthusiasm and admiration, and convey the same in- 
 spiration of enthusiasm to its students. Both in its selection 
 and its method, it should contemplate men in the relation of 
 their lives to the life of the state, showing how their virtues 
 contributed to its strength and its freedom, and even how their 
 vices, faults and weaknesses tended to weaken and enslave it. 
 It should be, like Plutarch's, a book '' crammed with life," with 
 " genial facility " of style, the embalming of noble lives. It 
 should stand higher than his, as modern society stands above 
 ancient, in the clearer knowledge that "righteousness is of the 
 essence of the state " (Plato), and in the firmer purpose to edu- 
 cate students into that devotion to it which is the truest and 
 highest form of the national consciousness. 
 
 The best text-books for this training are wisely written histo- 
 ries, and of these the finest is the Old Testament history of the 
 Jewish nation, which is especially fitted to exemplify the 
 great principle that is to be here inculcated, — that the divine 
 call laid upon every nation is a call to righteousness. The 
 national literature of that people tells how a family became 
 a tribe, a cluster of tribes, a nation j that the law of righteous- 
 ness was disclosed to them as the foundation of their national 
 life; that their experiences, both light and dark, disclosed to 
 them the truth that they were a strong, united and living people 
 when they lived by it, but weak, divided and dying when they 
 lost sight of it. Especially the prophets of the nation stand out 
 prominently as the interpreters of the meaning of their natio-n's 
 history, — as pointing out the moral order, the moral " constitu- 
 tion and course of nature," upon which the nation's life, free- 
 dom and prosperity depended. Their function was not specially 
 " the prediction of future events ;" some of their books contain 
 no predictions whatever, and those that occur in others for the 
 most part flow naturally from that perception of " the laws that 
 circle under the outer shell and skin of daily life," — laws at once 
 ethical and social — which they were trained to observe in '' the 
 schools of the prophets." Their power of prediction was but 
 
382 SOCIAL SCIENCE AND NATIONAL ECONOMY. 
 
 the test of the reality of their science of the moral order of 
 society, as of all other science (§ 2). 
 
 The Old Testament has heen so overlaid with allegorizing, "edifying,* 
 and other unhistorieal sorts of commentaries, that its political significance 
 has been obscured. One of the best expositions of its political side is 
 given in Prof. F. D. Maurice's Prophets and Kings of the Old Testament, 
 (Am. ed., Boston, 1854), In the same spirit Sir Edward Strachey has 
 treated the prophecies of Isaiah in his Ilehreio Politics in the Times of 
 Sargnn and Sennacherib, (2d ed., London, 1874), and Matthew Arnold 
 has published the last twenty-six chapters of that hookas a text-book for 
 schools {The Great Prophecy of Israel's Restoration). 
 
 The most instructive history of any modern nation will be the 
 one that most closely approaches to that Hebrew method of his- 
 toriography, — not by any affectation of style or the lifeless repeti- 
 tion of Bible phrases, but by the application of the same princi- 
 ples in the selection of the representative facts, and in its severe 
 and faithful, though friendly, judgments of all national trans- 
 actions. It will start from essentially the same conception of 
 the nature and the calling of the nation, and will trace the same 
 divine hand "shaping'' men's " ends'' for purposes that they 
 had not foreseen. It will give a lasting importance, an inex- 
 haustible significance to the transactions of temporal affairs, by 
 connecting them with the eternal principles of right. It will 
 'make the student feel that his calling, as a member of a nation, 
 is a lofty and solemn thing, and will awake him not only to the 
 consciousness, but also to the conscience of freedom. It will 
 show him that the privileges and franchises of citizenship are a 
 divine trust, a stewardship, and his abuse of them a crime of a 
 very high nature. 
 
 It will not be claimed that- our present school histories are 
 written on any such plan as this. They have been, for the most 
 part, modelled more after the Fourth of July oration than the 
 Hebrew prophets. They teach too often the silly vanity of 
 national boastfulness, instead of any mere ethical lesson. As 
 the sense of humor has been developed among us, such teaching 
 and such speech-making have turned our brief but honorable 
 history into a theme of jest and popular merriment, which no 
 
CHRISTIAN EDUCATION. 383 
 
 longer excites the imagination or rouses patriotic enthusiasm. 
 Our educated chesses now seek in other lands the scenes of 
 historic association which they no longer find at home. 
 
 § 324. The mere instruction in righteousness is not in itself 
 suJBBcient for the formation of a human character according to 
 the standard of our own country. The legal maxim, Svmmum 
 Jus, summa injuria^ has its truth in this connection ; the merely 
 righteous man, the just man whose justice is a hard insisting on 
 all his rights, an exacting of his own, comes short of perfect 
 lightness or righteousness, and is often guilty of acts which the 
 popular conscience pronounces to be simply wrong, though not 
 technically so. This is so because we are, however imperfectly, 
 a Christian nation, — because the national standard of character 
 is derived from the Sermon on the Mount as well as from the 
 Ten Commandments. That Sermon does not set aside the old 
 code ; it only complements it by enjoining upon the individual 
 heart and conscience a spirit of meekness, of self-sacrifice, and 
 of forgiveness, which counteracts the spirit of self-assertion and 
 hard legalism, which would bring the law itself into contempt by 
 making it the instrument of men's selfishness and rapacity. The 
 old basis of national order, the stern righteousness that demands 
 " an eye for an eye, and a tooth for a tooth,'' it leaves un- 
 touched ; but it guards that order against a peril involved in its 
 own nature as applied to the affairs of imperfect men. And it 
 announces those injunctions, not as applicable to some special 
 class of saintly characters, but as laws of the kingdom of God — 
 of God's government of men. 
 
 The New Testament, therefore, either in or out of the public 
 schools, should form an essential part of the education of the 
 young for their places as members of a Christian nation. Its 
 exclusion from those schools, even if it be taught sufficiently 
 elsewhere, may have the effect of sundering its lessons from his 
 practical life, and lead him to suppose that the book is a mere 
 ''religious" or churchly text-book, whose precepts of Christian 
 courtesy, forbearance and self-sacrifice, concern but slightly 
 his relations to society at large. The chief objections to its in- 
 
381 SOCIAL SCIENCE AND NATIONAL ECONOMY. 
 
 troduction are, we believe, based on misconceptions of its real 
 character, many of which are due to those who have come to be 
 regarded as its especial'custodians and interpreters. 
 
 Even as a literary work, the English Bible holds such a place 
 as a master-piece that no course of education can be complete 
 if it exclude it. Its phrases have become the proverbs and 
 household words of the people ; ignorance of the broad outlines 
 of its history and teachings, even of the letter of some especial 
 parts, consigns a man to social contempt. And it has become 
 entwined with all the other classical literature of the language. 
 Not only Milton, Bunyan and Cowper, but even Shakespeare, 
 Scott and Byron would be in places unintelligible to those who 
 have no acquaintance with it. For this reason, among others, the 
 Hindoos prefer to study English in the missionary schools where 
 it is read, rather than in the government schools from which it is 
 excluded. They also resent its exclusion from the latter as a 
 piece of jealousy similar to that with which they once kept the 
 Vedas from the knowledge of Europeans. 
 
 A Roman Catholie writer, the late Father F. W. Faber, says of the Eng- 
 lish Bible : " Who will say that the uncommon beauty and marvellous 
 English of the Protestant Bible is not one of the great strongholds of 
 heresy in this country ? It lives on the ear like a music that can never 
 be forgotten, like the sound of church-bells, which the convert hardly 
 knows how he can forego. Its felicities often seem to be almost things 
 rather than mere words. It is part of the national mind, the anchor of 
 the national seriousness. Nay, it is worshipped with a positive idolatry, 
 in extenuation of whose grotesque fanaticism its intrinsic beauty pleads 
 availingly with the man of letters and the scholar. The memory of the 
 dead passes into it. The potent traditions of childhood are stereotyped 
 in its verses. The power of all the griefs and trials of a man is hidden 
 beneath its words. It is the representative of his best moments, and all 
 that there has been about him of soft, and gentle, and pure, and penitent, 
 and good, speaks to him for ever out of his English Bible. It is his sacred 
 thing, which doubt has never dimmed and controversy never soiled. It 
 has been to him all along as the silent but intelligible voice of his guardian 
 angel ; and in the length and breadth of the land there is not a Protestant 
 with one spark of religiousness about him, whose spiritual biography is 
 not in his Protestant Bible" (Preface to Life of St. Francis of Asaisi, 
 1S53). 
 
 § 325. Thirdly, The state should give in its public schools 
 
AGRICULTURAL EDUCATION. 385 
 
 Buch general instruction, and should offer in special technical 
 schools such opportunity of special and technical teaching, as 
 will fit its members for their places in the industrial state. 
 
 How far this should include the training of the members of 
 the learned professions, including teachers in public schools, we 
 will not stop to inquire. We will confine ourselves to the edu- 
 cation of the persons engaged in the two productive industries, 
 a2;riculture and manufacturinor. 
 
 A scientific agriculture is one of the last attainments of even 
 enlightened and progressive nations. As we have seen, nations 
 that have made rapid advances in all the other arts, lag behind 
 in this, importing food for large numbers of their people from 
 abroad, when they could easily have raised enough and to spare 
 at home. In some cases this is partly the effect of a bad system 
 of land tenure, but in all cases' the defective intelligence and the 
 superannuated methods employed in farming are chiefly to blame. 
 Since Liebig's great discoveries in agricultural chemistry, it has 
 become perfectly possible greatly to increase the yield of any 
 given area of soil by scientific methods, and to bring under profita- 
 ble cultivation the most unpromising lands, wherever the local 
 market for food makes it worth while to employ those methods. 
 But even in such situations as this, the farming class cling to old 
 ways, refuse to employ the same foresight and enterprise as are 
 essential to success in manufacturing, and jest at " book farmers " 
 as a set of enthusiasts. Nor are they so much to blame ; their 
 comparatively isolated situation, their distance from the great 
 centres of intelligence, and the imperfections of their daily edu- 
 cation by contact with other minds, render them a very con- 
 servative class. They cling to old traditions with great tenacity. 
 Two bad consequences result. (1) A divorce of experience 
 and enterprise. The experimental" farming of the country is 
 left to editors, lawyers, clergymen, and the like, who have far 
 less practical knowledge than is needed for the undertaking. 
 Their enterprises very often — but by no means always — are need- 
 less failures; i. e. they might have been brilliant successes in 
 
 the hands of men who united a large intelligence with a large 
 25 
 
386 SOCIAL SCIENCE AND NATIONAL ECONOMY. 
 
 experience. (2) The young people, who grow up on the farm, 
 learn to regard agriculture as a soulless, mindless routine of hard 
 work, with no chances of using any higher power than the 
 muscles. They carry their brains to the best market. Some 
 become preachers, others politicians, others professional men, 
 others merchants. All these lines of activity are crowded with 
 men of more or less intelligence and mental power, who began 
 life in a farm-house, and might have been more successful and 
 useful in life had sufl&cient inducements been offered them to 
 end it there. 
 
 The technical education of the farming class should begin 
 in the public schools, and with the earliest years of study. The 
 neighborhood-knowledge proposed above would form a good 
 introduction to it. In country schools that teaching should take 
 this direction. The useful branches of natural history, the 
 nature, history and habits of the domestic animals, and of the 
 cultivated vegetables and the agricultural geology of the district, 
 should be among its themes. The child should be taught at 
 once the rightful respect for his father's mode of life as concerned 
 with the most valuable of human sciences, and also to thirst for 
 a more extensive acquaintance with those sciences, as bearing on 
 that occupation. In a word, the school should be, on this side 
 of its life, the preparation for the agricultural college. 
 
 In the college the students should receive at once the liberal 
 culture that will fit them to associate on terms of equality with 
 educated men, and the special scientific and technical training, 
 that will enable them to practise a scientific agriculture. Of 
 course the college should be, at the same time, a farm, sufficient 
 in its extent and its variety of soil and of situation to represent 
 the lands upon which its pupils are to be employed. Study and 
 work should be associated in its management, — each to give 
 direction, dignity and practical worth to the other. The best 
 stock, the most improved instruments, the most thorough methods 
 of tillage, should be exemplified on the farm ; and a system of 
 experimental agriculture should be carried on as part of its 
 activities. Above all, the pupils should be impressed with a 
 
THE DEPARTxMENT OF AGRICULTURE. 387 
 
 sense of* a vocation, firstly as farmers, and secondly as farmers 
 of education — as therefore in some degree intrusted with the 
 education of their class. And no pains should be spared to 
 impress upon the farming class the importance of such a patron- 
 age of the institution, as will make it a power to promote intelli- 
 gence and enterprise in the community. 
 
 Farmers should be incited by state and county fairs, agricul- 
 tural institutes and associations, and the like, to meet periodi- 
 cally to compare past results and devise better methods for the 
 future. Their occupation gives them leisure enough for the 
 purpose at some seasons of the year. In such meetings tho- 
 roughly educated farmers would soon hold a prominent place, 
 and become themselves the educators of others. The influence 
 of the technical school of agriculture would be thus multiplied, 
 and would leaven the whole mass. 
 
 The order of the Grangers, or Patrons of Husbandry, recently organized 
 in this country some years ago, and already very widely extended, 
 promises very excellent results in this direction of mutual education, pro- 
 vided that its constitution be rigidly adhered to, and the undertaking be 
 perseveringly sustained. But mere association will not work immediate 
 wonders, nor change at once the material thus united, and there seems to 
 be danger of the order being used for political purposes by ambitious 
 men, or smothered under the meaningless mummery of a secret association. 
 
 A governmental department of agriculture may render great 
 services to the farming class, not only by the collection and accli- 
 matization of foreign plants, seeds and animals, and their distri- 
 bution at government expense ; but also by investigating through 
 consuls, and special agents, the methods of foreign agriculture, 
 and by undertaking investigations and publishing information 
 which private publishers would find too expensive. There are 
 very clear limits to the range of its educational activities, but 
 within those limits there is much that can bo done to great 
 advantaire. 
 
 § 326. Of hardly less importance is the technical education of 
 the other classes engaged in productive industry. The era of 
 the application of science to manufacturing industry maybe said 
 to have begun with Napoleon and the Continental system, when 
 
388 SOCIAL SCIENCE AND NATIONAL ECONOMY. 
 
 upon the French and German savans was imposed the task of 
 discovering substitutes for substances which could no longer be 
 obtained from abroad. Up to that time the arts had taken the 
 lead of the sciences; Watt and Arkwright rather furnished 
 problems for scientific investigation, than acted on the guidance 
 of scientific teaching. But now science began to point out new 
 industrial methods, and suggest improvements of those that were 
 traditional. From the study and the laboratory came forth dis- 
 coveries that revolutionized the workshop. Every prooressive 
 and intelligent nation is emulating every other in their adoption, 
 and changes continually occur in great industries, by which 
 old methods are at once abandoned and new substituted. Work- 
 inguien of a low and unintelligent grade have not the power of 
 adaptation needed in those who are thus giving up old traditions 
 and adopting new ways. The onward march of the industrial army 
 will be greatly hindered if its troops have not the drill and the 
 mental equipment that fit them for it. And that equipment is 
 twofold. The man must have received such general training as 
 has developed his judgment and his powers of observation, and 
 must have a large measure of specific knowledge as to the nature 
 of his work, and the materials he deals with. 
 
 So rapid are these changes, that there are, for instance, sugar refine- 
 ries in our own country, full of machinery which is far from being worn 
 out, but which is simply rusting out in idleness, because the discovery 
 of new processes for the extraction of sugar from molasses has rendered 
 it useless. The owners could not afford to go on using it, and will finally 
 sell it as old iron. 
 
 § 327. The complexity of modern manufacturing, even if it 
 were thoroughly unprogressive, makes such technical training 
 highly desirable. Things are attempted in modern industry that 
 would once have been voted impossible, and the people who can 
 do the most of these impossible things takes the industrial lead 
 of all others. The resources of the old workshop were as limited 
 in kind as in extent; its workmen plodded on in a dull routine 
 that demanded little more than a slight cultivation of hand and 
 eye. But a walk through a modern watch factory, will show what 
 a vast number of technical educations have been expended upon 
 
THE INDUSTRIAL EXHIBITIONS. 389 
 
 the several workmen, and to what thoroughness these have been 
 carried in each case. It is true that training of this sort is 
 chiefly the work of active life, and can never be obtained tho- 
 roughly in any other way. But it is also true that very much 
 may be done indirectly to qualify the man for his work ; much 
 knowledge may be given him that practice will transform into 
 technical expertness. And above all, by showing him the rea- 
 son of his work, as well as its method, is he not only qualified 
 to act intelligently in any unforeseen circumstances, or to apply 
 the same principles in any new method, but he is also led to take 
 a deeper interest in his work, and to do it with more diligence, 
 — more love for it. 
 
 And all this applies with tenfold force to the foremen of the 
 workshop, the non-commissioned officers of industry. They 
 hold a place to which every workman should be taught to look 
 forward as the end of his labors, — as a place of honor as well as 
 of better remuneration. And they should be men who know 
 the "why" as well as the ''how" of every industrial process 
 that goes on under their oversight, for no knowledge short of 
 that will enable them to meet all contingencies. 
 
 The great industrial exhibitions, which began with that of 
 London in 1851, have opened a new era in technical education. 
 The Continental nations, taught by the display then made of the 
 great staples of English manufacture, especially metals, turned 
 their attention to the diffusion at home of such technical know- 
 ledge as would fit their workmen to produce the more elaborate 
 and costly of these, — those sorts, that is, in which the value is 
 chiefly in the workmanship expended, and not in the raw ma- 
 terial, much of the latter being imported from England. The 
 results were visible in the Paris exhibitions of 1855 and 1867, 
 and in the second at London in 1862. Each new comparison of 
 results brought new humiliation to England, and even in 1862 the 
 conclusion was reached that before England courted any new com- 
 parisons of this sort, she must do great things for the education 
 of her workmen. But 1867 found her still farther in the rear, 
 
390 SOCIAL SCIENCE AND NATIONAL ECONOMY. 
 
 and almost every competent judge of the question, who expressed 
 any opinion, united in that of Prof. Tyndall, " that in virtue of 
 the better education provided by Continental nations, England 
 must one day, and that no distant one, find herself outstripped 
 by those nations, both in the arts of peace and war." This 
 opinion, which is widely shared by patriotic Englishmen, will 
 mislead us if we ignore the existence of other elements of Eng- 
 land's commercial greatness, English competition has destroyed 
 the muslin manufactures of Dacca, and the carpet manufactures 
 of Turkey, in spite of the superiority of those wares to anything 
 of the same sort that she herself produces. But as intelligence 
 and taste are more and more widely diffused in those who use 
 as well as those who produce, superiority of workmanship be- 
 comes every day a larger element of industrial power.; and Mr. 
 Scott Russell is not far wrong in saying : " Should the day come 
 when our manufacturers are less skilled, less informed, less able 
 than our rivals, the flood of raw materials to our shores, and the 
 back-current of manufactures to replace them, may take another 
 direction and surge on other shores." 
 
 See his Systematic Technical Education for the English People; Lon- 
 don, 1869. 
 
 § 328. The technical education of the workman is especially 
 required for the production of those articles which require beauty 
 of form, of color, or of design, for their production, and in 
 which the joy of the artist is wedded to the toil of the artisan. 
 Our democratic and industrial age has indeed till recently laid 
 but little stress upon the beauty of its industrial products. It 
 has cared more for use and subtance, and less for beauty and 
 grace. There is no real antithesis between the two ] the ele- 
 gantly shaped earthenware from Greek and Roman kitchens and 
 sculleries, with which we fill our museums and adorn our mantels, 
 served their every-day uses of holding salt, oil, or the like, as 
 well as do the ugly shapeless pieces of delft that now take their 
 places, and they had cost no more for being beautiful. We have 
 not had common things about us made in beautiful shapes be- 
 
ART EDUCATION FOR THE PEOPLE. 391 
 
 cause we have not cared to have them, — because our minds have 
 lain dormant as regards the whole matter. But during the last 
 forty years there has been an ever accelerating increase in the 
 appreciation and love of the beautiful, and in the hatred and 
 contempt of the mechanical pretences at beauty that once con- 
 tented us. Our Democracy is passing out of the Thersites stage 
 into that of Pericles, and all the past history of Democracy bids 
 us expect a grand era of the fine and the industrial arts, which 
 have always lived the grandest life when in alliance with each 
 other, and with freedom and popular government. Especially 
 in our industrial age — whatever may be the future of the fine 
 arts — the manufactures that approach artistic merit and ex- 
 cellence may be expected to make great advances upon anything 
 that the past has seen, and to bring the finest combinations of 
 form and color within the reach of all who can compass even 
 the necessaries of life. For this end the artisan must once 
 more become the artist ; for all true art in every nation has been 
 born in workshops which were also studios, while it has been 
 pampered, corrupted and finally destroyed in the palaces of nobles 
 and kings. 
 
 The art education of the working classes becomes, therefore, 
 every day of greater industrial importance. In England es- 
 pecially it has made very rapid advances, since the Great Exhibi- 
 tion of 1851 brought to light the general inferiority of English 
 goods — especially glass and earthenware — to those of the Con- 
 tinent in this respect. Art schools, especially night schools for 
 workiugmen, were at once established in all the large towns, and 
 instruction in art was begun in public and other schools, and the 
 Dumber of pupils receiving this instruction has increased with 
 great rapidity. In 1866 it was over a hundred thousand. The 
 results were at once visible in the exhibition of 1862 in all 
 articles that called for designing and decorative art, and in those 
 that require in the workman a feeling for form or color, and 
 England's great progress in this direction was confessed by Con- 
 tinental observers, while her decline in some others was very 
 
392 SOCIAL SCIENCE AND NATIONAL ECONOMY. 
 
 evident. The establishment of the great South Kensington 
 Art-Museum is the last measure in a series which have brought 
 England up from the lowest place but one to one of the very 
 highest among the civilized nations that apply art to manu- 
 factures. In Germany the same branch of industrial education 
 has been vigorously pursued throughout our century ; and their 
 general artistic training, aided by fine fancy and exquisite taste, 
 has kept the French people also in advance of their insular 
 neighbors. America lags far behind all these countries; with 
 us artistic knowledge and culture of every sort is the privilege 
 of the few, instead of being the birthright of all. We are 
 beaten in that which is the peculiarity of out own country, and 
 perhaps our national vocation — the transformation of such 
 privileges into such birthrights. Hence a large part of oar 
 work, though equally costly in material and thorough in work- 
 manship, ranks below the corresponding work of Europe because 
 of this defect. And what work of another sort is done amons 
 us IS either by workmen or after patterns imported from Europe 
 for the purpose. Nor is this a matter of indifference. A very 
 considerable amount of aptitude for art lies undeveloped in this 
 unpicturesque country and among this practical people, and is 
 chiefly a source of annoyance and torment to the teacher as it 
 finds vent in all sorts of irregular ways, whereas it might be 
 made a delight and a benefit. And were our designers and 
 masters of ornamental art native to the soil, their work would 
 be far better adapted to American tastes, far more a source of 
 pleasure and instruction to the people than that which is pro- 
 duced by foreigners in Europe, or after their naturalization 
 among us. It would be the outgrowth of the national spirit, 
 and would react far more powerfully upon the national mind in 
 producing refinement and elevating thought; just as Rodgers's 
 statuettes have done more for us than Thorwaldsen's Apostles 
 could. A truly national school of art would then become 
 possible to us, for our schools of design would serve to winnow 
 out the really artistic minds from among the common people, and 
 
TRUE AND FALSE ARCHITECTURE. 393 
 
 give them a sense of the worth of their vocation in its relation 
 
 to the national life. 
 
 The perfect adaptation of wares to the national tastes is in itself a 
 measure of protection to the native manufacturer. An English dry 
 goods firm sent out instructions to its agent in China, to pick up well- 
 dressed Chinamen of different classes on the street, and buy their clothess 
 off their backs, and send these at once to England. From these sam- 
 ples it could produce goods of the very sort that the Chinese 
 wanted. In other cases the traditional costumes of European peasants 
 were procured and imitated by English firms, with great success. But 
 in a progressive society where a really cultivated, and at the same time 
 distinctively natural taste exists, and where the change of fashions 
 prevents a dead uniformity and monotony, such an imitation would be 
 impossible. 
 
 § 329. Students of the great building eras of the past, those 
 that produced the temples of classic Greece and the cathedrals 
 of mediaeval Europe, will never be equalled until the distinction 
 between the function of the architect and that of his workmen 
 is obliterated by raising the latter more nearly to the level of 
 the former. This is a subject of great importance to a young 
 country like the United States, which is putting hundreds of 
 millions into public and private buildings every year, and ex- 
 pects these to last for centuries. The advance of popular taste, 
 such as it is, has already shown us that nothing is so costly or 
 so wasteful as ugly architecture. A mechanical lifeless copy or 
 half-copy of a Doric temple or an Italian palace, or a still uglier, 
 more barn-like building, may please the people who built it and 
 be not offensive to their neighbors and contemporaries. But the 
 human mind wages ceaseless war on ugliness, detecting it in- 
 stinctively, becoming more sensitive to it with every advance in 
 culture, and finally abolishing it as an eye-sore and a nuisance. 
 All work that is not the best of its kind comes into collision 
 with this subtle, levelling force, which is stronger than mortar 
 and brick, or stone and cement 
 
 The mere spread of culture and taste among our professional 
 architects will only half solve the problem. "We have had no 
 real architecture — Mr. Ferguson, the very highest authority, 
 tells us — because our artisans have not been artists also, as all 
 
394 SOCIAL SCIENCE AND NATIONAL ECONOMY. 
 
 the Greek and mediaeval stone-masons were; and we shall only 
 go on wastefullj — building in one generation what the next 
 will overthrow — till we get back to that point. This is surely 
 the largest problem in the technical education of the working 
 classes ; but, after, all, it is only an extreme case, for the same 
 principle is applicable in every other department. Artistic 
 beauty is the crown and the flower of all the reproductive work 
 of man ; and to make the artisan an artist — to add the joy of 
 beauty to the strength of toil, is a problem that meets us on 
 every side of industrial life. Only this will lift the life of the 
 workman out of its sordid wearisomeness, and make it tolerable 
 by making it noble. 
 
 § 330. The industrial education of the people should be con- 
 templated in the common school system, as well as in the special 
 technical schools. The school-room itself should be an educa- 
 tion in the feeling for and love of the beautiful. Communities 
 and artists should discern that there is no higher use for the 
 best artistic faculty that the community possesses. And while 
 there should be a general training in drawing for all scholars, 
 there should be a special winnowing process for the selection, 
 with a view to the further training, of those who are especially 
 gifted by nature with the artist's eye and hand. 
 
 And the neighborhood knowledge proposed above should, 
 especially in our cities, take in the great local industries, their 
 histories, their growth and their methods, and whatever else is 
 suited to awaken an intelligent interest in the student's mind, 
 and lead him to look on with observant eyes at the work that is 
 going on around him. 
 
 But technical schools for the special training of actual work- 
 ingmen must be the chief dependence in this respect. There is 
 nothing new in the attempt to combine learning and working in 
 the same life. It was once the rule in the history of educa- 
 tion, while juvenile education, down to the era of the Reforma- 
 tion, was the exception. The two pursuits are not in each 
 other's way; each may give new zest and interest to the other. 
 Nor need the workingman's studies be confined to branches 
 
LEARNING AND AVORKINQ. 395 
 
 which will be of direct and practical use in his work. The ex- 
 periment of the Workingmen's Colleges in England shows that 
 this class arc fully able to receive and to appreciate what is, in 
 all essential respects, a liberal education, and that not with the 
 view of leaving their own class to enter what is socially construed 
 as a higher, but to remain in it as its educators and leaders — 
 an ideal depicted by our greatest novelist in her Felix Holt. 
 
 The general education of the working classes in all those 
 branches of learning which will directly conduce to their industrial 
 eflSciency, is the natural complement of that protective policy 
 which has already been advocated. That the nation should 
 take any steps in this direction is very consistently denied by a 
 very few free traders like Prof. Thorold Rogers, but in Eng- 
 land common sense has always counted for more than logic, 
 and very large outlays of national funds, as we have seen, have 
 been made with a view to this end. She has gone far beyond 
 our own country, although she has not yet overtaken the con- 
 sistently protectionist peoples on the Continent, who are, both by 
 restrictions on trade and by the schools of the state, training their 
 people to compete with her. We have clung to the former but 
 neglected the latter, and while there have been great advances 
 made in the character of our manufactures, we must again pro- 
 nounce the results to be unsatisfactory and insufficient. We 
 can do, we must do, greater things than we have ever attempted. 
 
 It is beyond the province and the powers of the present writer to dis- 
 cuss the details of the problem. He knows only what he has had at 
 second hand from friends sind from books — especially he would refer for 
 details to Mr. Scott Russell's Systematic Technical Education of the Eng- 
 ItHh People, and Mr. T. Twining's Technical Training, London, 1874. 
 
INDEX. 
 
 Ad valorem duties, defined, 231-2. Their effect in 1846-54, 355-6. 
 
 Agriculture, Quesnay's view of, 18. Adam Smith's, 19. A fundamental in- 
 dustry, 40, 90-1. Its historic beginnings, 49-50, 69, 197. Its progress, 
 70-2, 113-4. Intensive and extensive, 71-2, 237. Benefited by the neigh- 
 borhood of other industries, 40, 46-7, 90-3, 212-7, 223, 235-6, 241-5, 259, 
 263, 276, 291-3, 305, 311, 320, 327, 342, 352-3. Needs intelligence and 
 education, 83, 365, 385-7. In Germany, 72-3, 88-9, 122, 171-2, 323, 327. 
 In Italy, 48, 73, 90, 121. In England, 58-9, 74-83, 97, 122-3, 124, 129-30, 
 130-1, 212-4, 259. In Belgium, 57, 72, 87-8, 171, 236, 319-20. In France, 
 86-7, 97-8, 123, 171, 273. In Switzerland, 58, 89. In Spain, 73. In 
 Russia, 89-90, 124. In Scandinavia, 89, 113, 332. In America, 60, 92-3, 
 109-113, 172, 215, 239-44, 263, 341-2, 343, 348, 350, 357, 385-7. 
 
 Alcavala, a Spanish tax, 183. 
 
 Alcohol, its use a survival, 66. The heaviest tax on the working class, 131-2. 
 Taxes on it, 183, 184. In India, 314-5. In England, 302. 
 
 Alleghenies, their settlement. 111. 
 
 Annuities, perpetual, 191-2. Terminable, 192. 
 
 Apprentices, limited by Trades' Unions, 135. 
 
 Arbitration between capital and labor, 136, 139. 
 
 Architecture, true and false, 393-4. 
 
 Argyle, Duke of, 108. 
 
 Aristocracy, its origin, 32-3. Its decay, 64. Loss of power in England, 
 282-3. 
 
 Aristotle, 14, 15, 32. 
 
 Arkwright, 128, 220, 281, 388. 
 
 Art in relation to science, 11, 14-15, 23, 24, 267. 
 
 Arts, use of gold and silver in, 145. Fine art in Japan, 376. In industrial 
 education, 390-4. 
 
 ''Arts, the seven liberal," 369. 
 
 Ashburton, Lord, 156, 166. 
 
 Association, man's progress to and by, 29, 32-6, 40, 49, 50, 70, 142, 143, 154, 
 197, 216-7, 220-1. Its decline, 217, 223, 30J-2, 311-2, 334, 337-8,341. 
 Earliest forms, 32-3, 73-4, 98, 219. Of labor and capital, 115, 123, 135-6, 
 138-9, 254. Of workingmen, 25, 133-5, 136-8, 139-40, 202-3. 
 
 397 
 
398 INDEX. 
 
 Atmosphere, the great storehouse, 43-5. 
 
 Babbage, 138. 
 
 Balance of trade, mercantile theory of, 16, 209. Say on, 20, 21, 207. Tooke, 
 23-4, 207. Its relative importance, 151-2, 206-8. Between England and 
 Portugal, 334, 336. Between England and America, 343, 356. (See Pas- 
 sivity of Money.) 
 
 Bank-notes, first issued at Genoa, 153. Then in England, 153-4, 162-3. 
 Their uses, 154-5, 169-70. ''Over-issues," 156, 165,173,175. Guaran- 
 tees, 155-6. 
 
 Banks, their rise, 153, 157. Their services, 154-6. Their functions, 158-62. 
 Freedom and safety, 155-6, 170, 175. Their impolicy, 161-2, 164, 166, 173. 
 In Italy, 153, 157-8, 161, 162. In Northern Europe, 153, 157, 158, 162, 
 171, 171-2. In England, 162-8. In Scotland, 168-70. In France, 170-1. 
 In America, 172-8. (See Bullion, Cash Credits, Clearing-house, Credit 
 System, Discounts, Money of Account, Panics.) 
 
 "Bank-screw" in England, 166-7. 
 
 Banks, land, 171-2. 
 
 Banks, people's or labor, 139-40. 
 
 Bankruptcy, forced and needless, 167, 173. France in Law's time, 170. In 
 America, 350, 354, 357. 
 
 Barter, the first form of trade, 15, 142, 152. 
 
 Bastiat, 30, 126, 129, 266. 
 
 Baxter, Dudley, 211-2. 
 
 Beet sugar, 254, 272-3, 319, 322. 
 
 Benedictine monks, 14. 
 
 Berkeley, Bishop, 26. 
 
 Bible quoted : Old Testament, 35, 36, 49, 68, 73, 119, 202, 221. 367. New 
 Testament, 38, 39, 50, 190, 223, 368. Its place in education, 381-4. 
 
 Bill of exchange in antiquity, 152. Reinvented by the Caursins, 152-3. Its 
 nature, 153. Use in the United States, 177. 
 
 Biography in education, 380-1. 
 
 Black death, 74. 
 
 Blanqui, 21, 249, 253. 
 
 Belles, Prof., 26. 
 
 Bowen, 193. 
 
 Bowring, 312, 326, 328. 
 
 Bright, John, 187, 192. 
 
 Brougham, Henry, 348-50. 
 
 Bullion in the Bank of England, 165-7. In that of France, 171. 
 
 Buring, 172. 
 
 Burke, 20, 225. 
 
 Bushnell, Dr. Horace, 227-8, 231, 347. 
 
 Byles, Judge, 31, 309. 
 
 Ceesar, 214, 283. 
 
 Cairnes, J. E., 25, 63, 149. 
 
INDEX. 399 
 
 Capital defined, 115, 307-8. Its growth, 55, 237-8, 260-1. Its fair share, 
 24-5, 115-6, 124-6. Restrained by boundary lines, 19. Its tyrannous 
 power, 28-9, 200-1, 209, 222-.3, 281, 301. Its responsibility, 120-1. Its 
 relation to improved agriculture, 72. Its policy toward labor, 119-20, 
 132-9. Is benefited by varied industry, 129, 237-8, 307-8. Relative ster- 
 ility when employed in foreign trade, 205-6. Should legislation change 
 its direction ? 260-1. Fertilizes labor, 115, 123, 125-6, 135-6, 151-2, 154»-5, 
 207-8, 274. England's accumulations, 125, 149, 151-2, 168, 209,212, 281. 
 Ireland's want, 130, 307-9. Drained out of Portugal, 334. And Turkey, 
 339. 
 
 Carpets, Turkish, 336-7, 390. 
 
 "Cash credits," in Scotland, 154-5, 169. In America, 204. 
 
 Cattle, first form of property, 73-4, 142. Early use as money, 142, 143. 
 Early British, 101, 122. Value in agriculture, 46, 72, 92, 244. 
 
 Carey, Henry C, 29, 101, 126, 144, 294. 
 
 Carey, Matthew, 29, 173. 
 
 Carlyle, Thomas, 321-2. 
 
 Caursins, invented bills of exchange, 152. 
 
 Celibacy, its efiFects, 56, 65. In antiquity, 60-1. In America, 65. 
 
 Census, British, 62. Irish, 62-3. American of 1870 and 1880, 358. 
 
 Centennial Exhibition, 358-9. 
 
 Chalmers, Dr. Thomas, 23, 55, 288. 
 
 Chase, Salmon P., 176, 193. 
 
 Checks on population, 54, 56, 65. 
 
 Checks, bank, 160, 163. 
 
 Chemistry, 11, 15, 67. Agricultural, 46, 59, 113-4, 385, 386. Industrial, 
 254-5, 272, 322, 387-8. 
 
 Chevalier, 21, 149, 249, 250, 354. 
 
 Cicero, 152. 
 
 City, its history, 32-3. Becomes the empire, 33. Hated by the Teutons, 33. 
 The closest association, 142. Duties, 52-3. 
 
 Civilization, its material progress, 29-30, 37-8, 40. Is normal, not excep- 
 tional, 56-7. (See DifferoUiation of Function, Division of Labor, Potcer 
 over Nature, Progrens.) 
 
 Clay, Henry, 234, 351, 352-3. 
 
 Cleanliness, its promotion by law, 52-3, 67. And temperance, 132. 
 
 Clearing-house, anticipated in French fairs, 160. Adopted in Scotland, 160, 
 169. A bank is one, 159-60. Its operations, 160. Between national 
 banks, 176. National proposed, 177-8. 
 
 Climate, changed in England, 71. Commerce between climates, 217. 
 
 Clover, its use in farming, 45, 244. 
 
 Coal, its origin, 44. A labor-saver, 69. Irish and English, 298. Flemish, 318. 
 
 Cobden, 149, 187, 192, 230, 273, 288, 330, 336. 
 
 Coins, origin and shapes, 143. Of various substances, 148. Superseded by 
 money of account, 157-8. 
 
400 INDEX. 
 
 Coinage, English, under Sir Isaac Newton, 163. 
 
 Colbert, 17, 191, 209, 269-71, 273, 279. 
 
 Coleridge, S. T., 27, 28, 38, 79-81, 201, 253. 
 
 Colwell, Stephen, 30, 208, 356. 
 
 Commerce, definition and origin, 197. True sense of the word, 362. Trader's 
 tax on, 198-9. Neighborhood commerce, 199-200, 201-2, 216-7. Distant, 
 200-1, 210. On credit, 203-5. Smith and Say's theories of foreign, 
 205-9. The present English theory, 209-16. In raw materials, 214-6. 
 True and false commerce, 217-8. Protection makes commerce equitable, 
 245-8. French, 273, 274. English, 281, 282, 284-6. Australian, 296-7. 
 Indian, 311-2, German, 328. Portuguese, 334-5. Turkish, 336-7. Amer- 
 ican, 342-3, 348, 349-50, 355, 356, 357. (See Credit System, Trader.) 
 
 " Commodities are paid for with commodities," 20, 207-8, 334. " Gold is a 
 commodity like any other," 149-52, 207-8. 
 
 Commons enclosed in Italy, 73. In England, 77-8. 
 
 Community in land, 74, 75, 90, 98-9. 
 
 Competition highly estimated by the English school, 19, 22, 287, 309. Its 
 relation to rent, 22, 93-5, 98-9. Restricted in the land market, 96, 305-7. 
 Limited by custom, 24, 74-5, 98-9, 118-9. Does not always adjust prices, 
 201, 202. When does it raise wages? 129-30, 236, 303. Attempts to su- 
 persede it, 25, 136-8, 202-3. Protection promotes it, 226-7, 233-4, 251-2. 
 England's competition with the world, 213, 274, 281, 296-7, 301, 318, 323, 
 330, 336-7, 350-1, 356. French, Belgian, German and American com- 
 petition with England, 213, 233-4, 274, 284-7, 319, 328. 
 
 "Constitution and course of nature," 12, 29, 31, 37-8, 230, 376. Illus- 
 trated in the history of soil, 41-8. As regards population, 63-7. Of 
 human nature in regard to wages, 119-20, 121. As regards the growth 
 of varied industry, 219-21, 258-9. 
 
 Constitution of the United States, 224^5, 265. Industrial motives to its 
 adoption, 344. 
 
 " Consumer, protection discriminates a'gainst the," 256-7, 289, 327. 
 
 Continental currency, 172. 
 
 "Continental system" of Napoleon, 254-5, 271-3, 281-2, 318, 323, 387-8. 
 
 Contraction practised arbitrarily by banks, 160, 161-2, 176. In England 
 in 1783-1815, and later panics, 164, 165. Necessitated by Peel's Bank 
 Law, 166-7, 168. In Scotland, 170. In the United States, 173, 176, 193. 
 Avoided in France, 171. 
 
 Cooperation in production, 25, 136-8, 366. In housekeeping, 141. In trad- 
 ing, 202-3. 
 
 Copper in coinage, 148. Cheapened by protection, 261. 
 
 Copyhold tenure of land, 74, 77. 
 
 Coral islands, 43. 
 
 Corners in wheat, 200. (See Forestalling.) 
 
 " Corn Laws " repealed, 283, 284, 288. Their operation, 330, 350. 
 
 Cosmopolitical school founded by Adam Smith, 19-20. Its disciples, 20-26. 
 
INDEX. 401 
 
 Opposed by Fichte, 27. By Coleridge, 27-8. By List, 28-9. By Carey 
 
 and his school, 29-31. Their view of nationalities, 230-1. Their theory 
 
 of commerce, 205-218, 228-9. Of the sphere of the state, 223-8, 289. 
 
 The expediency of protection conceded by their chief authorities, 249-51. 
 Cotton, its production in America, 215-6, 240, 243, 254, 263-4, 280, 346, 350, 
 
 351. In India, 280, 311-2. In Turkey, 337. Manufacture in England, 
 
 215-6, 280, 284, 285, 311-2, 346. In India, 240, 255, 280, 311-3, 390. In 
 
 Germany, 326, 328. In Russia, 330. In Portugal, 336. In Turkey, 336. 
 
 In America, 263-4, 346, 350. Whitney's cotton-gin, 254, 281, 346. 
 Credit system, 159. Objectionable, 203-5. 
 Crime and education, 373-5. 
 Cromwell, Oliver, 83-4, 106, 277-8. 
 Culture-state, 38, 375-80. 
 
 Custom as an economic force, 24, 74-5, 86-7, 98-9, 118-9, 140. 
 Customs, in England, 187, 283-4, 290. (See Duties on Imports.) 
 Cutlery manufacture in America, 210-1, 255. In England, 277. 
 Dangerous classes, 76, 120. 
 Dearness, artificial, 200. Caused by protection, but only temporary, 233, 
 
 248, 251-2, 261. A relative matter, 215-6, 241-2, 257-8, 263. 
 Death-rate, 61-2, 67, 303. 
 Degradation, its influence on population, 67-8, 303. Efifect of low wages, 
 
 119-20. Of English peasantry, 76, 78, 83, 95, 131, 212. Of the Hindoos, 
 
 311-2, 314-6. Of the Turks, 337-41. 
 Demesne lands, 181, 185. 
 Democracy of our age, 115. Its rise in England, 288-9. Relation to art, 
 
 391. 
 Demonetization of silver, 146-8. 
 Density of population an advantage, 49-50, 59-61, 68-9, 70, 96, 98, 100, 109, 
 
 198. Its natural limits, 63-7. In diflferent countries, 57-8, 61, 87, 89, 98, 
 
 320. 
 Depopulation of the Roman Empire, 60-1, 67-8. Of places in India, 311. 
 
 Of Ireland, 63, 130, 302-3. 
 Deposits, Bank; their origin, 159-60, 175. Part of the currency, 160, 165, 
 
 175, 176. Amount under bank's control, 161, 164, 165, 165-6, 167, 168, 
 
 171, 173. Runs on them, 162. A substitute needed, 161, 162, 203. (See 
 
 Discouuta, Money of Account.) 
 Differentiation of function, the essence of social progress, 37-8, 40, 43, 128, 
 
 137, 142, 144, 145, 179-80, 197-8, 203, 216-7, 219-22, 238. (See Division 
 
 of Labor, Uniform ity.) 
 Dilke, Sir Charles, 287-8, 295, 297. 
 Discounts, Bank, 158, 159, 164, 165-6, 173, 203, 204. 
 Disraeli, 287, 288, 303. 
 Distribution, law of, on increased production in agriculture, 96-8, 122-3. 
 
 Same in regard to labor, 124-6, 127, l?2-4, 237-8, Engligh theories of, 
 
 21-2, 24, 54, 93-5, 116-7, 119, 133-4, 265. The existing system ques- 
 26 
 
402 INDEX. 
 
 tioned by Mill and other socialists, 24, 116, 264, 266. Its remediable de» 
 fects, 185-40, 201-3. 
 
 Dividends, taxes on, 183. 
 
 Division of labor, a part of social progress, 15, 68, 70, 128, 197, 237, 345. 
 Enabled by capital, 209, 237. 
 
 Drainage, natural, of poor lands, 100, 108. Artificial, its uses^ 72, 102, 105, 
 106, 109, 110, 322. 
 
 Drunkenness, how diminished, 132, 138. (See Alcohol.) 
 
 Dufferin, Lord, 300, 302, 303, 304, 305, 308, 309. 
 
 Duffy, Sir Gavan, 85. 
 
 Duhring, Dr. E., 30, 266. 
 
 Dunbar, Prof., 26. 
 
 Dureau de la Malle, 60. 
 
 Duties on imports, and their incidence, 231-5, 248. On raw materials, 
 239-40, 256, 346. Their object and ultimate effects, 251-2. Reme- 
 dies for excessive, 361. (See Ad valo7-em, Dearnesg, Protection, Specific, 
 Tariffs.) 
 
 Earthenware, why called delf, 275. Manufacture in Germany, 328. 
 
 Economistes, school founded by Quesnay, 17-8. Adam Smith's relation to, 
 19. Divorce science from art, 29. Turgot represents, 18, 271. 
 
 Economist (London) quoted, 284, 313. 
 
 Economy, not always parsimony, 14-5, 119-20, 124, 211-2, 227-8, 235. 
 
 Edinburgh Review, 124, 186-7. 
 
 Education, Malthusian hopes from, 55, 56. Promotes longevity, 67. Pro- 
 moted by good wages, 120. Diminishes drunkenness, 132. National is 
 threefold, 375. (1) For culture state, 375-6. (2) For jural state, 380-4. 
 (3) For industrial state, in agriculture, 384-7. In the arts, 387-95. 
 State provision for, 180, 224, 229-30, 248-9, 286, 366-7, 373-4, 384-5, 
 395. Neglect in England, 83, 371-2. Ancient education (Judea, Greece 
 and Rome), 367-8. Mediaeval (Eastern Empire, France, Germany 
 and England), 71, 369-70. Modern in Europe, 370-1. In America, 
 372-5. 
 
 Edward III., 276. 
 
 Elder, William, 20. 
 
 Elizabeth, Queen, 72, 83, 106, 277. 
 
 Emerson, 110. 
 
 Enclosures, 73, 75, 76, 77, 99. 
 
 Equality, natural tendency to, 29, 238, 260, 265-6, 327. Hindrances to, 30, 
 78, 168, 189, 201-2. 
 
 Equilibrium of the industries, the goal of industrial growth, 27, 30, 90-3, 
 212, 259. Destroyed in England, 78, 80-1, 212, 213-4, 259. Not attained 
 in America, 91, 92-3, 212. 
 
 Evening Post (New York), quoted, 236-7, 247. 
 
 Everett, Edward, 346. 
 
 Evictions in Scotland, 85-6. 
 
INDEX. 403 
 
 Exchequer, Notes, 164. 
 
 Excises, when first imposed, 185, Enormous growth, 186-7. Recent reduc- 
 tions, 186. Revenue from, 291. (See Internal Revenue.) 
 Exhaustion of the soil, 46, 243-4, 304. 
 Exhibitiou of 1851, 389, 391. Of 1855, 389. Of 1862, 389, 391. Of 1867, 
 
 389-90. Of 1876, 358-9. 
 Exports, no test of prosperity, 217, 262, 362. England's most valuable, go to 
 Protectionist countries, 246-7, 296-7. Does protection prevent, 262. In- 
 crease and modification through protection, 273, 327, 328. 
 Factory system invented by Arkwright, 128, 220, 281. Its benefits, 128, 220, 
 330. Not applicable to agriculture, 81. Calls for technical training, 
 388-90. 
 Family, the first form of society, 14, 32, 143, 219, 381. Its surrender of in- 
 dustries, 141. Extinction of old families, 64-5. 
 Famine, characteristic of thinly-settled regions, 59-60. Hunter's specific 
 against, 60. In antiquity, 61. In Ireland, 59-60, 62-3, 109, 302-4. In 
 India, 312. 
 Farmer, man's third stage as food-producer, 68, 69. History in England, 
 74-8. Needs direct protection, 239-40. Benefited by variety of industry 
 90-3, 214-5, 240-5, 350. Needs special training, 385-7. (See Agriculture, 
 Grain Trade.) 
 Farming the revenue, 189-90, 269, 
 
 Fashions worth more than mines to France, 279. Should be national, 392-3. 
 Fawcett, 131, 238-9. 
 Ferrara, 30, 126. 
 
 Fertility of soil, a great process, 42-6. May be destroyed by exhaustion or 
 denudation, 46-S, 244. Of midland England, 106. Of Ireland, 107, 109, 
 297. Of Southern Illinois, 112. 
 Feudal system, an enemy of national unity, 34, 179, 221. Its land tenure, 
 74-5, 79, 86-7, 97. Its villeinage, 74, 88-9, 122-3. Its tenures and ser- 
 vices abolished in England at the Restoration, 77, 79, 186. In Prussia by 
 Stein, 88-9, 122. 
 Fichte, J. G., 20, 27, 221, 367. 
 "Fields" of the Mark, 74, 75, 76, 197. 
 
 Finance; bad methods of early periods, 17, 180-1, 189-90, 268-9, 271, 276. 
 Moslem finance, 189, 313, 316-7, 337, 339. French policy, 170-1, 191, 
 269-70, 271. German, 321, 322, 323, 324, 325, 326. English, 162-3, 183, 
 185-7, 189, 190-1, 191-3, 229-30, 276, 283-4, 291. American, 176-7, 181, 
 183, 184, 185, 188-9, 193-6, 227-8, 229-30, 248-9, 344-5, 347, 352-3, 354, 
 357. Canadian, 290-2. East Indian, 313-7. 
 Folkland, 73. (See Commons, Enclosures, Mark.) 
 
 Food, a prime necessity, 41-2. Man's progress as its producer, 68, 70-2. 
 In Greece, 115. In ancient Italy, 73, 115. In France, 97-8, 123-4, 273. 
 In England, 58, 59, 71-2, 82, 83, 101-2, 122, 187, 212, 213, 241-2, 259, 277, 
 302-3. In Ireland, 62-3, 109, 130, 302-3. In Belgium, 87-8, 320. In 
 
404 INDEX. 
 
 America, 92-4, 112, 239, 243-4, 341-2, 348, 356. In India, 312, 314, 
 315. 
 
 Foreign commerce. (See Commerce, International Exchanges.) 
 
 Forestalling the market, the method, 200-1. As practised in Chicago, 200. 
 In Australia and California, 200, 290. 
 
 Fortnlgiithi Review {London), 200, 226-7, 297. 
 
 Fourier, 199. 
 
 Franklin, Benj., 18, 65, 242-3, 342, 372. 
 
 Frederick the Great, 171, 190, 272, 321-2. 
 
 Free banking, 155-6. In Scotland, 169. In Rhode Island, 174—5. 
 
 Free contract, English faith in, 19, 119, 307. Does not extend to land, 23, 
 70, 96, 305-7. (See Competition, Custom, Socialists.) 
 
 Freedom, the nation's aim, 35, 39, 376. It increases with closeness of asso- 
 ciation, 68, 220-1. Declines with its decline, 221, 306, 341. Industrial 
 freedom, 225-7, 306. 
 
 Freeholders, 75. 
 
 "Free Trade," proposed by the Economistes, 18. By Adam Smith and Say, 
 19, 20, 206, 207-8, 260-1, 272. By Torrens, Eicardo, and Mill, 22-3, 
 209-10. Opposed by Fichte and List, 27, 28-9. Based on the Laissez faire 
 theory of the state's functions, 19, 223-6, 264-7, 287, 289, 309, 355. In- 
 jurious between countries of unequal industrial status, 222-3, 301, 310-2, 
 329-30, 334-5, 336-7. Means mostly the exchange of raw materials for 
 manufactured goods, 212-3,214-6, 246-7, 263, 280, 291, 303, 311. Removes 
 across the ocean the points where their prices tend to converge, 215-6, 
 240-1. Means uniformity of occupation in the weaker country, 212-3, 
 215-6, 217, 235-6, 237, 238, 239-40, 242, 253, 295, 301-2, 303, 309, 311-3, 
 318, 329-30, 334-5, 337-8. Involves a bad economy of the weaker nation's 
 labor, 129-30, 211-2, 215-6, 235-6, 237, 254, 295, 298, 302, 303, 306, 311, 
 312, 320, 332, 334-5, 337-8, 344, 354. Involves bad and wasteful farming, 
 90-3, 214-6, 237, 239-45, 263. Involves an unfavorable balance of trade, 
 206-8, 258, 260, 329-30, 334-5, 337, 339, 356. Rejected by great states- 
 men : by Colbert, 269-70. By Napoleon, 271-3, 281-2. By Edward III., 
 276. By Elizabeth, 277. By Cromwell, 277-8. By Frederick the Great, 
 321-2. By Joseph II., 322. By Alexander I. and Count Nesselrode, 330. 
 By Gustavus Adolphus (see Hausser's Period of the Reformation, p. 4551. 
 By Count Ericeira, 334. By Fisher Ames, 344. By Gen. Washington, 
 344, 345. By Alex. Hamilton, 27, 29, 344, 345. By Thomas Jefferson, 347. 
 By James Madison, 350. By President Monroe, 351. By Henry Clay, 
 
 • 351, 352-3, 353. By Daniel Webster, 352. By John C. Calhoun, 350. 
 By Andrew Jackson, 243, 353. By Gen. Harrison, 354. Rejected by pro- 
 gressive countries : by Greece and Rome, 267-8. By France, 269-75. By 
 England till 1845, 275-81. By the English working classes, 288-9. By 
 the Australian colonies, 294-7. By Belgium, 317-20. By Germany, 320-9. 
 By Russia, 329-31. By Sweden and Denmark, 331-2. By Spain, 332-3. 
 Adopted by England after five centuries of protection, 281-5. The act 
 
INDEX. 405 
 
 of the middle classes, now to be judged by the working classes, 282-9. 
 Adopted by Canada, 290-3. By Prussia temporarily, 323-4. By Russia 
 temporarily, 329-30. By Portugal for one hundred and fifty years, 334-6. 
 By the United States by default of legislation till 1824, 347-51. Again 
 for political reasons in 1833-42, 353-4. Again partially in 1846 and 1857, 
 355-7. Forced on Ireland in 1801, 301. On India in 1813, 310-3. 
 
 Free traders, if consistent, oppose national education, 248-9, 371, 373, 395. 
 And national post-offices, 248. Are too moral to engage in protected man-' 
 ufactures, 247. Generally belong to the servile party in politics, 226, 294. 
 Are liable, by reaction, to become communists, 265-6, Have no faith in 
 the principle of nationality, 230-1. Their ablest men concede the tempo- 
 rary expediency of protection, 249-51. Admit that protection creates no 
 monopoly, 252. Seven of their objections to protection, 256-266. Are, in 
 England, the middle class, 282-3. Are not open to argument, 287, 288. 
 Their conspiracy with Napoleon III., 273. Their defeat in Germany, 324-5. 
 In Belgium, 318. In Russia, 330. In Portugal, 336. Their defeats in the 
 United States, 351, 354-5, 357-8. Their league with the Slave power, 357. 
 
 Frontiers, Custom House, inside nations, 17, 322, 323, 324, 332, 333, 344. 
 
 Fullarton, on Currency, 156, 166. 
 
 Funding national debts, 191-2, 193, 229. 
 
 Gee, o)i Trade, 342. 
 
 Geography in education, 379. 
 
 Gladstone, W. E., 96, 183, 187, 192, 273, 283-4, 287, 307. 
 
 Goethe, 20, 37, 43, 254. 
 
 Gold, why adopted for coinage, and when, 142-3. Its advantages and dis- 
 advantages, 144. Probable effects of its demonetization, 27, 145. Its sup- 
 ply, 145. Does not circulate in the East, 148. Its increase in the circula- 
 tion and the effect on its value, 23, 148-9, 151, 207-8. English legislation 
 about it, 165. (See Bullion.) French practice, 171. 
 
 Goldsmiths, English, used to act as bankers, 153, 162, 163. 
 
 Government, its development through the differentiation of function, 37-8, 
 179-80. Its function to steer, 36, 225. Its sanatory responsibilities, 50-3. 
 Its growing need of revenue, 180, 229-30. Its earlier methods of getting 
 it, 180-1. Its methods of taxation, 181-90. Its debts, 190-3. Its trea- 
 sury notes, 193. Its preparation for war in times of peace, 229-9. Its 
 duties to other nationalities, 36, 39, 228-9. Its passivity as regards indus- 
 try proposed, 18, 19, 223-31, 264-5, 289, 309, 355. That policy contrary 
 to the Constitution, 224-5, 264-5. Its methods of discrimination in favor 
 of home industry, 231-5. (See Tariff, Duties.) Its duty to the national 
 domain, 48. Its duties to education, 180, 229-30, 366-7, 373, 395. 
 
 Grain trade of Russia, 241,329-30. Of Sweden, 113, 332. Of Greece and Rome, 
 267, 268. Of the West with Europe, 92-3, 200, 239-41, 241-2, 263. 
 
 Greeley, Horace, 30. 
 
 Greenback Party, theory of the, 194. 
 
 Greg, W. R., 24, 53, 61, 64, 67. 
 
^06 INDEX. 
 
 Gustavus Adolphus, 331. 
 
 Hamilton, Alex., 27, 29, 173, 251-2, 344, 345-6. 
 
 Hardware, American, 255. 
 
 Harmony of interests, 29-30. Between capital and k.bor, 119-20, 121, 122, 
 124, 129, 135-6. Methods to realize it, 135-9. Of agricultural and 
 manufacturing classes, 220, 235-6, 241, 242-5, 263. Of producers 
 and consumers, 215-6J 220, 251-2, 257, 258, 296-7, 327. In true com- 
 merce, 197, 220. 
 
 Health, duty of the state to promote, 50-3, 180. And education, 366. 
 
 Hindrances to natural growth or progress, 28, 30, 118, 127-33, 170, 187, 
 221-3, 259, 260-1, 263-4. 
 
 History, its use in education, 381-3.' 
 
 Home iudustry, 16, 40, 211-2, 215, 216-7, 225-6, 235-9, 240-4. 
 
 Homer, 121, 368, 391. 
 
 Homestead law, 240. 
 
 Houses of the working class. 132, 260. In Philadelphia, 238. 
 
 Hughes, Thos., 105, 137. 
 
 Huguenots driven from France, 17, 271. In Germany, 322. In England, 
 277, 278-9. 
 
 Humboldt, A., 207. 
 
 Humboldt, W., 324. 
 
 Hume, David, 64, 149-50, 191. 
 
 Hunter life, 49, 68, 71. 
 
 Hunter, W. W., 60. 
 
 Huskisson, 222, 283, 324. 
 
 Imagination, its power, 263-4. 
 
 Immigration into the United States, 237, 242, 291. 
 
 Implements, agricultural, 70-1, 100. 
 
 Impot proijressif, 189. 
 
 Improvements in production, 57, 69, 72, 237, 250, 254-5. In machinery, 
 127-8, 238, 254-5, 280, 281, 336, 346, 388-9. 
 
 Incidence of taxation, 181-3, 185. Of protective duties, 332-5. 
 
 Income tax, fairest in theory, 185. Practical objections, 187-9. In Eng- 
 land, 185, 187, 189. In America, 188-9. 
 
 Individuality the correlate of interdependence and close association, 40, 
 216-7, 220-1. 
 
 "Industrial partnerships" preferable to co-operation, 138-9. 
 
 Industrial state, as conceived by Fichte and List, 27, 28-9, 367. Its nature, 
 38. Its divisions, 40. (See Equilibrium of the Industries.) Communists 
 make it everything. Free-traders nothing, 224-5, 264-6. National edu- 
 cation regards it, 375, 384-94. 
 
 Industry, Quesnay's view of, 18. Adam Smith's, 19. Fichte's, 27. Dis- 
 tinctive character of modern industry, 72, 115, 127-8, 281, 345. As re- 
 lated to money, 150, 151-2, 154-5, 207-9. Obstructed by wrong taxation, 
 182-3. Its natural growth in variety, 19, 30, 90-1, 219-20, 259. 
 
INDEX. 407 
 
 Inequality of condition, Ricardo accounts for, 22, 93-5, 117, 265. Carey on, 
 30, 117-8, 265. Promoted by panics, 168, 173. By indirect taxes, 182-3, 
 189. By free trade, 238, 260, 314, 339-40. 
 
 Inflation of prices, 354. 
 
 Ingram, Prof., 26. 
 
 Inheritances, taxes on, 183. 
 
 Instruments, the law of progress as regards, 124-6, 144, 198, 245-6. Money 
 the instrument of association and exchange, 142, 144, 151, 154, 162. 
 
 Intensive agriculture, 72, 87, 89, 237. 
 
 Interference. (See Hindrances.) 
 
 Interest on money, 151, 159, 162, 163, 165-6, 169, 172. 
 
 Interest, what is a man's, 231, 257-8. 
 
 Internal revenue, 183. (See Excises.) 
 
 International exchanges : Smith and Say's theory, 19, 20, 205-6, 207-9, 260- 1. 
 Ricardo and McCulloch's criticism of it, 206-7. The theory of Torrens, 
 Ricardo, and Mills, 22-3, 209-1 0, 256-9. Some objections to it, 210-6, 256-9. 
 No test of national prosperity, 217, 262, 274, 292, 301, 312, 332. 
 
 Inventions, 238, 281, 388, 360. 
 
 Iron: use in coinage, 148. Imported into mediaeval England from Nor- 
 mandy, 72, 276. Yarranton would import the industry, 278. Its protec- 
 tion, 1771-1834, in England, 280. Prussian and Belgian rivals the Eng- 
 lish, 285-7, 319, 328. Belgian protection, 318. French, 275. German, 
 326. In Ireland, 298, 301. In India, 259. In America, 210, 234, 255, 
 342, 347, 350, 351, 356, 357-8. 
 
 Jackson, Andrew, 174, 243, 353. 
 
 Jevons, Stanley, 149. 
 
 Jural state, its nature, 38. Its development, 179-80. Chief theme of early 
 political philosophers, 267. National education regards, 375, 380-4. 
 
 Justice or righteousness of the essence of the state, 34, 36-7, 225, 380-3. Is 
 twofold, 37, 225. Is not all of morality, 383. Justice of war, 228-9, 259. 
 "Justices' justice," 179. 
 
 Karl the Great, 369. 
 
 Kathedeisocialisten, school of the, 25, 26, 
 
 Kingsley, Chas., 132, 288. 
 
 Knox, John, 371. 
 
 Kraus, C. J., 88, 323. 
 
 Labor, the source of wealth, 16, 18, 19, 41, 114. Its development in method, 
 49-50, 68-9, 70-2, 100, 115, 121-4, 127-8, 197, 219-20, 237-8. Its growth 
 in power over capital, 74, 97, 124-6, 237-8, 265. It is most abundantly 
 employed and best paid in the neighborhood of varied industry, 129-30, 
 211-2, 235-9, 294-5, 301, 303, 305, 306, 311-2, 327, 337. "More labor is 
 less eflScient in agriculture," 81, 88, 93, 94, 95. (See Co-operation, Indus- 
 try, Wages.) 
 
 Laissez faire, 270, 364. As a theory, 286, 289, 355. 
 
 Land, the alleged monopoly of it, 22, 93, 95-6. Derives its value from labor 
 
408 INDEX. 
 
 expended, 114, 125. The worst is settled first, 99-100. (See Settlement:, 
 Much lies idle in England, 59, 82. Very little is farmed scientifically, 
 58-9, 82. It supports a relatively scanty population, 78, 212, 213, 259. 
 Is owned by a small and diminishing number of persons, 77-8, 82-3. In 
 progressive countries it is owned by a large and increasing number, 72-3, 
 86-90, 122. Duties of the state toward it, 48, 70, SS, 95-6, 304-7. (See 
 Afjrictdtin-e, Farmers, Rent, Soil.) 
 Land-banks in Europe, 163, 171-2. In the colonies, 172, 173. 
 Land-acts of 1870 and 1881, 85. 
 Landlords in Ireland, 84. 
 Land-tax, raises rents, 184. Better than taxes on personal property, 185. 
 
 English, 186. American, 185, 188. East Indian, 313-4. 
 Land tenure, primitive, was communistic, 24, 73-4, 75, 90, 98-9. Feudal, 
 74-5, 86-7, 88. In Scotland, 85. The Highlands converted into private 
 estates, 85. Abolished in England at the Restoration, 77, 79, 186. In 
 Prussia by Stein, 88-9, 122. The modern English and its failures, 75-83, 
 212, 213. Does not account for the poverty of Ireland, 304-5, 
 Language, and nationality, 34, 376. Two in Belgium, 317, 365. Language 
 
 in education, 376-7. Of the English Bible, 384. 
 Large estates in Saxony, 72. " Ruined Italy," 73. Their growth in Eng- 
 land and Scotland, 77-83. 
 Lassalle, 30, 117-8, 266. 
 Laveleye, E. de, 24, 26, 72. 
 Lavergne, M. de, 87. 
 Law, John, 170, 271. 
 Legal tender, 146-8. 
 
 Legislation, its formal beginnings, S3. Its true progress, 35, 38. Industrial, 
 presents nice problems, 225. Its true province, 30, 224-6, 258-9, 264-5. 
 As to health and population, 52-3, 60-1, 180, 249. As to pauperism, 54, 
 130-1. As to land, 73, 75, 77, 79, 86-7, 88-9, 90, 96, 99, 305-7. As to 
 slavery, 89-90, 122. As to labor, 122-3, 130-1, 133, 136. As to temper- 
 ance, 132. As to coined money, 146-8. As to banking, 155-6, 157-8, 
 ie2-.S, 165-7, 169-78. As to revenue and taxation, 180, 181, 190, 229-30, 
 313-7. As to national debts, 190-3. As to promoting home industry' 
 210, 213, 223-8, 231-5, 239-40, 247-52, 255-fi, 259-61, 264-7. As to hin- 
 dering it, 221-2, 270-1, 273-5, 289-94, 297-302. 309-12, 323-4, 329-30, 
 332-7, 341-.'), 353-4, 355-7. As to education, 180, 248-9, 366-9 371-3 
 384-5, 387, 390, 392, 395. 
 Leslie, CJiflfe, 26, 78, 81, 117, 129, 130, 236, 319-20. 
 Levees, 112. 
 Licenses, 132, 181. 
 Linen manufacture in Ireland, 130, 298-300. In England, 278, 279. In 
 
 Belgium, 275, 319. In Germany, 328. 
 List, Frederick, 28, 323, 325, 3.26» 328. 
 Local centres, 311, 314. , 
 
INDEX. 409 
 
 Lock-outs, 134, 198. 
 
 London, 67, 151, 277, 389. 
 
 London Quarterly Review on Turkey, 337-41. 
 
 London Review, 286. 
 
 Lotteries, 180. 
 
 Ludlow, J. M., 137, 310-1, 314, 315. 
 
 Luther, 372. 
 
 Macaulay, T. B., 13, 67, 77. 
 
 Macgregor, 335. 
 
 Machinery, its introduction affects labor, 50, 57, 127-9, 345, 365-6. Has 
 destroyed some local industries, 312, 317, 320, 336-7, 390. England pro- 
 hibited its export, 281, 312, 317, 330, 337. Its accumulation in England, 
 281. Invented or improved in America, 238, 281, 346. 
 
 Madison, James, 1 74,*350. 
 
 Magistrates, professional the best, 179. 
 
 Maine, Sir H. S., 24, 99. 
 
 Malthus, Rev. T. R., 21, 22, 24, 25, 53-69, 93, 94, 97, 118. 
 
 Man, not to be treated as a thing, 11-12, 119-20, 121-2. His relation to 
 Nature, 29, 41-2, 368. 
 
 Manchester, 238-9, 280, 300. 
 
 Manor, its constitution, 74, 98-9, 179. Its copy or roll (yotrdus), 74, 77, 276. 
 
 Manufactures, Quesnay's theory of, 18. Adam Smith's, 19. Their natural 
 growth, 219-23, 258-9. Benefit of their neighborhood, 90-2, 128, 129-30, 
 237-9, 240-7, 262-3. Their destruction in Ireland in the reign of Williana 
 III., 84. Effects of their absence, 40, 57, 90-3, 214*-6, 222-3, 227-8, 235, 
 292, 305-6, 311-2, 330, 334-5, 336-41. Concentration in England, 212-4, 
 280-1. Their history in Asia, Europe, and America, 267-364. In rela- 
 tion to education, 387-95. (See Equilibrium of the Industries, Machinery, 
 Protection.) 
 
 Manure, needed, but wasted, 46, 71, 72, 92, 243, 244, 273, 317. 
 
 Mark, the Teutonic, 33-4, 73-4, 197. (See Afanor.) 
 
 Markets, their primitive character, 197. "Buying in the cheapest," 210, 211, 
 215-6, 257-8, 292. Fostering a home market, 46-7, 224, 226, 241, 242, 243, 
 244, 245-6, 255, 261, 301, 332. The competitions of the home market, 
 226-7, 251-2. The trader's power over. (See Forestalling, Prices.) 
 
 Mathematics in education, 378. 
 
 Maurice, F. D., 28, 39, 137, 221, 372, 382. 
 
 McCulloch, J. C, 23, 55, 57, 61, 166, 185, 191, 206, 207, 252, 335, 336-7. 
 
 "Mercantile School," 16-7, 209. 
 
 Metals, precious: their history, 142-52. Their use as money, 143. Our 
 supply, 357. (See Gold, Silver, Money.) 
 
 Metayer system of land tenure, 90. 
 
 Method of economic study, 25, 31, 57. 
 
 Middle class in England, 282-4, 287, 288. None in the South, 358. 
 
 Military supplies, depend on manufactures, 227-8, 297, 345, 357-8. 
 
410 INDEX. 
 
 Mill, James, 22, 54. 
 
 Mill, John Stuart, 24, 25, 31, 51, 54, 55, 56-7, 95, 118, 12.4, 127, 150, 201-2, 
 209-10, 249, 250-1, 266, 301, 303. 
 
 Milton, John, 377, 378, 384. 
 
 Mind, its growth limits that of numbers, 65-6. Mind and muscle, 127-8, 237. 
 (See Culture State, Education.) 
 
 Mirabeau, 18, 322. 
 
 Mohammedan regard for trees, 48. Oppressive as rulers, 61, 67-8. Their 
 bad finance, 189, 313, 316-7, 337-8. 
 
 Money, its origin, nature and advantages, 142-4. Coined money, 143, 144:-5, 
 148-9. (See Gold, Silver, Coinage, Metals Precious.) Paper money, 149, 
 152-6. (See Bill of Exchange, Bank Notes.) Money of account, 153, 
 156-62. (See Banking.) The instrument of exchange and of associa- 
 tion, 143. The relation of its quantity to its purciiasing power, 149-52. 
 Its supply at different periods, 16, 148-9, 207. Its plenty stimulates pro- 
 duction, and vice versa, 151-2, 154-5, 208-9. Unequal commerce drains a 
 country of its money, 151-2, 206-7, 209, 329-30, 334, 336, 338, 339, 356. 
 Prohibitions on its export, 16, 17, 321. Unprogressive countries sometimes 
 absorb it, 151, 166, 206. English theories about, 22-3, 23-4, 149, 156, 165, 
 206-9. 
 
 Monopolies as a source of revenue, 17-8, 180-1, 183, 271, 313-7, 322. "Mo- 
 nopoly of land," 22, 23, 93, 95-6, 114. In trade, 223, 267-8. In banking, 
 163, 169, 171, 174-5, 176-7. Protection does not create monopoly, 251-2. 
 Its aim and tendency to destroy actual monopolies, 225-7, 295. 
 
 Monroe, President, 351. 
 
 Morality of a nation, 34-7, 39, 361-2, 380-3. Christian or individual moral- 
 ity, 383-4. Its relation to celibacy, 56, 61, 65, 110. And to wages, 120, 
 121. And to education, 374-5. 
 
 More, Sir Thomas, 75-6. 
 
 Morris, Robert, 172-3. 
 
 Mountain districts often settled before the plains. Chap. VI., passim, 
 
 Murdock, John, 86. 
 
 Murphy, J. N., 301-2, 307-9. 
 
 Music, a science and an art, 15, 23. In education, 377-8. 
 
 Napoleon, 136, 158, 255, 271-3, 281-2, 318, 329, 346, 367, 387-8. 
 
 Napoleon III., 273-4. 
 
 Nasse, 24, 75, 98-9. « 
 
 Nation (New York) quoted, 91, 178, 264. 
 
 Nation : historical origin, 33-4. The modern form of the state, 33. Its true 
 nature, 14, 34. A moral personality, 35-7, 380. Its vocation, 36, 225. 
 (See Jural State.) Its progress, 37-8, 40. Its industrial existence, 38,40. 
 (See Industrial St-ate.) Its self-preservation not selfishness, 39. Its right 
 of "eminent domain" over its soil, 48, 70, 95-6. (See Land, Soil.) The 
 territory of each is capable of feeding its people, 113, 217. Its unity is 
 strengthened by variety of industry and individual freedom, and vice versd. 
 
INDEX. 411 
 
 40, 216-7, 220-1, 223, 328-9, 341. Is wise to make sacrifices, 248-9, 226, 
 292. Its war powers and duties, preparations, 227-8, 347, 357-8. Its 
 peculiar financial policy, 229-30. Is ignored by the cosmopolitical school, 
 19-20, 230-1. 
 
 National banks, 176-7. 
 
 National debts, 190-3, 229, 344-5, 353. 
 
 National economy, 11, 14. 
 
 National education, its policy, 365-7, 373-5. Its history, 367-73. Its proper 
 shape and drift, 375-95. Its opponents, 248-9, 371, 373, 395. (See Edu- 
 cation.) 
 
 Nationalist economists; the "mercantile school," 16-7. Bishop Berkeley, 
 26. Fichte, 27. Coleridge and Maurice, 27-8. List, 28-9. H. C. Carey 
 and his school, 29-31. Horace Bushnell, 231. 
 
 Nationalist policy. (See Protection.) 
 
 Natural advantages of each country, 210, 258-9, 293. 
 
 Nature. (See Man, Wealth, Value.) 
 
 Navigation laws, English, 277-8, 300, 324, 341. 
 
 Necker, 171, 191. 
 
 Neighborhood of farm and factory benefits agriculture, 46-7, 90-3, 214-6, 
 239-45, 263, 276, 303. Of diff'erent industries raises wages, 129-30, 211-2, 
 235-9. Of producer and consumer diminishes the trader's profits and his 
 power, 198-201. Neighborhood knowledge, 379-80, 386, 394. 
 
 Nesselrode, Count, 330. 
 
 New York, 173,238. 
 
 Nickel in coinage, 148. 
 
 North British Jievicw, 284-5. 
 
 Opium in India and China, 206, 310-1, 315-6. 
 
 Over-issues. (See Bank Notes.) 
 
 Over-production, 214-5, 261. 
 
 Owen, Robert, 136, 202. 
 
 Panics, their nature, 161-2. In England, 163-4, 165, 166-8, 282, 349. In 
 Scotland, 170. In France, 170, 171, 274. In America, 173, 174, 205, 354, 
 357, 361. 
 
 Paper-money, 152-6, 193-4. 
 
 Parsimony, not always economy, 14, 119-20, 211, 235. The law of parsimony 
 applies to instruments, 119, 144, 198, 245. 
 
 Passivity, governmental, in regard to industry, 18, 19, 21, 22, 30, 210, 212, 
 223-6, 264-6, 291, 321. In regard to popular misery, 54, 95, 289. 
 
 Passivity of money, 22-3, 23-4, 149-52. 
 
 Paterson, W., 162, 168. 
 
 Patriotism in relation to national economy, 20, 39, 80, 83, 191, 212, 227-8, 
 288-9, 328-9, 341. Its truest type, 39, 382. 
 
 Patterson, R. H., 146, 149, 150, 156. 
 
 Paul, 38, 221, 257. 
 
 Pauperism, the Malthuslan view of, 22-3, 54, 116-7, 265. The true view, 30, 
 
412 INDEX. 
 
 lU. In England, 83, 130-1, 212. In Ireland, 303, 304, 308. In Bel- 
 gium, 88, 236, 320. In America, 238-9. 
 Pearson, C. H., 101-7. 
 
 Peasantry, 78, 80, 82, 82-3, 89. 
 
 Peel, Sir Robert, 165-8, 183, 187. 
 
 People's banks in Germany, 120, 366. 
 
 Personal property taxed, 184-5. 
 
 Philadelphia, 111, 172-3, 238-9. 
 
 Phosphorus in the human frame, 67. 
 
 Physical science in education, 378. 
 
 Pilgrimages, sources of pestilence, 67. 
 
 Pitt (the elder), 185, 186, 189. 
 
 Plants, their geological history, 42-3. Their food, 42, 43-7. 
 
 Platinum in Russian coins, 148. 
 
 Plato, 14, 36, 378, 381. 
 
 Pliny the elder, 73, 121. 
 
 Plutarch, 381. 
 
 Poorer classes, the statesman's problem, 115. Affected by indirect taxes, 
 182-3, 189. Buy the dearest, 202. Poorer nation injured by unrestricted 
 trade with a richer, 222-3. (See Free Trade.) 
 
 Population : its growth the first condition of advance in wealth, 49-51, 70-2, 
 100, 113-4, 198, 219. Duty of the state to foster that growth, 50-4, 366, 
 380. Malthusian theory, 21-2, 53-7, 94, 95, 110. Its English critics, 24, 
 53. Discredited by facts, 57-63. Is the parent of Ricardo's theory of 
 rent, 93. And of the wage-fund theory, 116-7. Population is self-reg- 
 ulative, 63-9. That of England, 58, 61, 62, 64, 101-2. Of Ireland, 58, 
 59-60, 62-3, 109, 130, 302-3. Of Belgium, 57, 58. Of France, 61, 62, 64, 
 123. Of America, 62, 64-5. 
 
 Post-oflBce, 180, 184, 248. 
 
 Poverty. (See Pmiperifim.) 
 
 Power over nature, 29, 41, 49, 66, 69. Power to consume, the test of pros- 
 perity, 217, 327. 
 
 Premiums, 16, 231. 
 
 Prices determined by cost of reproduction, 125. Their relation to the supply 
 of money, 22-3, 23-4, 150-3, 207-9. When can the trader fix prices, 200-2, 
 245, 294, 296-7, 356. Raised temporarily, but ultimately reduced by pro- 
 tective duties, 233-4, 248, 251-6, 280, 327, 345, 346, 355. Of labor. (See 
 Wages.) 
 
 Primogeniture, right of, 79. 
 
 Prison labor, 131, Its effect on the working classes, 131. 
 
 Production, Quesnay's theory, 18. Adam Smith's, 19. Its development, 
 68-9. Promoted by the plenty of money, 151-2, 207-9. And by ma- 
 chinery, 127-8, 281. 
 
 Profits: their inequalities, 19. Diminished by waste, 120, 138. Profits of 
 
INDEX. 413 
 
 farming, 72, 91, 214^6, 241, 242-7. Of banking, 155, 175. Of the trader, 
 198-203, 245-6. Of manufacturing, 247, 252. 
 
 Progress is normal, 19, 29-30, .34-5, 57, 69, 113-4, 125-6, 265-6. Its indus- 
 trial goal, 27, 29, 40, 115, 220, 259. Its method. (See Differentiation of 
 Function.) 
 
 Prohibition of imports, 231, 248, 272, 276, 279, 280, 283, 284, 310, 322, 323, 
 324, 332, 333. Of exports, 16, 276, 281, 298-9, 312, 317, 322, 324, 330, 337. 
 Of free contract, 96, 305-7. 
 
 Proletariat, 61, 73, 115. 
 
 Prolongation of life, 67. 
 
 Prophets, the Hebrew, 381-2. Isaiah, 73. 
 
 Protection is natural resistance to an unnatural status, 212-4, 226-7, 259. 
 Its method, 23J-5. It benefits labor, 231-9, 129-30, 211. It benefits ag- 
 riculture, 90-3, 214-6, 239-45. It makes commerce equitable, 245-8. Is 
 not irreligious and selfish, 364. Its eflFect on manufactures, 248-56. Seven 
 common objections to it answered, 256-66. It has the sanction of the 
 greatest free traders, 249-51. It is a measure of national defence, 227-9, 
 345, 347. It is the policy of progressive nations, especially in their youth, 
 226-7, 273, 275, 294-5, 317, 328. Is a great promoter of commerce, 362. 
 It does not create monopolies, 251-2. It has the sanction of the U. S. 
 Constitution, 224-5, 265, 344. Its history in Europe, 267-80, 300-1, 317- 
 333, 336. In America, 344-364. In Australia, 294-7. 
 
 Prudhommes, Conseih de, 136. 
 
 Publicans, 190. 
 
 Purchasing power of money, 22-3, 23-4, 148-52, 217. Of wages, 63, 123, 
 125, 237. 
 
 Rack-rents in Ireland, 84, 99, 304, 305. In England, 76, 78. 
 
 Railroads, subsidies, 240. Growth in India, 259. 
 
 Rainfall, aflTected by trees, 47-8, 104-5. 
 
 Rapidity of social circulation, 68, 144, 152, 156, 160, 199. How promoted, 
 150-1, 154, 198, 204-5, 205-6, 260-1, 309. How checked, 182-3, 223, 292-3, 
 301, 307-8, 311-2, 337-8, 
 
 Rate of increase of population, 53, 61-3, 66-7, 94, 303. 
 
 Rate of wages, 116, 117, 119, 123-4, 129-30, 133-4, 140. 
 
 Raw materials : their export unprofitable, 91, 214-6, 241, 314. Their pro- 
 duction protected, 239-40, 256, 346. Progressive countries cease their ex- 
 port, 246, 328. The relation of their price to that of manufactures, 241. 
 
 Raw material associations [lioh-stoff-vereine), 139-40. 
 
 Reciprocity between England and other countries, 312, 324, 330-1. Between 
 Belgium and Holland, 318. Between Austria and Germany, 325. 
 
 Reformation, 76-7, 288-9. 
 
 Rent, its supposed origin, 22-3, 93-5. Its relation to the whole product, 
 96-8. In primitive society is customary, not competitive, 24, 74-5, 98-9. 
 In England, 74-5, 76-7, 78. In Ireland, 304-7. 
 
 Reproduction : its cost determines prices, 125-6. 
 
414 INDEX. 
 
 "Reproductive consumption," 256. 
 
 Responsibility of the capitalist for rate of wages, 120-1. Of governments for 
 the public welfare, 37, 224-5, 264-5. (See Education, Government.) 
 
 Resumption. (See Specie Paymeuts.) 
 
 Revenue: growing need of, 179-80. Earlier methods of getting, 180-1, 186, 
 276. Modern methods. (See Excises, Customs, Income Tax, Taxation, 
 Land Tax, Tariff.) Should cover current expenses, 190-1. Revenue 
 tariffs objectionable, 232, 290-1, 347, 350-1, 354, 355-7. Protective tariffs 
 yield a large revenue, 233, 333, 353, 355. How raised in England, 186, 
 187, 291. In Germany, 325-7. In India, 313-7. In Turkey, 337, 339. 
 In Russia, 90. 
 
 Revolutions are abnormal, 34-5, 230. English, 123, 162, 186, 298. French 
 of 1789, 86-7, 171, 271. American, 172, 193, 281, 343. 
 
 Ricardo, 22, 23, 24, 25, 93, 114, 118, 191, 206, 207, 209, 273. 
 
 Rights, natural in their relation to the state, 34, 36, 223-4. The supposed right 
 of free trade, 223. The imperfectly defined rights of the feudal land ten- 
 ure, 74-5, 79, 88-9, 306. 
 
 Risks, the farmer's, 91, 211-2, 214, 244-5. The trader's, 203-4. The manu- 
 facturer's, 215. 
 
 Rivers, 47, 48, 100, 105, 112, 113. 
 
 Rogers, Thorold, 71-2, 74, 123, 212-3, 223, |51, 252, 395. 
 
 Roscher, Prof., 26. 
 
 Rossi, 21, 249-50. 
 
 Rotation of crops, 46, 72, 74, 92, 243-5, 385. 
 
 Rouleaux, Prof., 359. 
 
 Sacrifices, national, their wisdom, 201, 226, 248-9, 253, 286, 292, 295, 318, 
 366. 
 
 Sailors, 216, 236, 246, 259. 
 
 Saint Simon, 118. 
 
 Salt, 240, 315, 347. 
 
 Saturday Revieio, 31, 364. 
 
 Savage state, 29, 30, 38, 49, 157. 
 
 Say, J. B., 20, 21, 205, 207, 249, 272. 
 
 Schultze-Delitzsch, 30, 31, 117-8, 139-40, 203, 266. 
 
 Science, its nature and stages of development, 11-12, 14-15. 
 
 Scott, Sir Walter, 122, 154-5, 170, 384. 
 
 Selfishness not chargeable on patriotism, 39. It is short-sighted, 48, 51-2. 
 
 Senior, N. W., 23, 24, 53, 56, 78-9, 97, 288. 
 
 Serfdom, mediasval, 74, 122. Abolished in Prussia by Stein, 88-9, 122. In 
 Russia, 89-90, 331. 
 
 Settlement of the soil : its true law, 99-101. Exemplifications of the law, 
 Chapter VI. 
 
 Several. (See Community.) 
 
 Sheffield, 62, 233-4. 
 
 Shepherd life, 49, 68, 71. 
 
INDEX. 415 
 
 Shipping, English, 277-8, 324. Prussian, 324. Spanish, 333. American, 
 
 347, 349, 363, 364. 
 Silica in the soil, 45. 
 Silk production and manufacture in France, 269, 270. In China, 206. In 
 
 England, 246, 279, 284, 285, 289. In Ireland, 300. In Germany, 328. 
 
 In Russia, 330-1. In America, 354. 
 Silver in coinage, 142-52. Demonetization of, 146-8. Absorbed by the East, 
 
 148, 166, 206, 313. 
 Sinking fund, 192. 
 
 Slavery, European, 104, 121-2. American, 352, 355, 357. 
 Small farms, 72, 90. 
 Smiles, Samuel, 271, 275, 277, 279. 
 Smith, Adam, 18, 19, 20, 26, 29, 80, 99, 124, 165, 191, 205, 206, 249, 260, 266, 
 
 269, 270, 323, 324, 329-30. 
 Smith, E. Peshine, 30. 
 Smith, Gerrit, 248, 373. 
 Smith, Sidney, 186-7. 
 
 Smuggling, 184, 232. In Germany, 323. Through Portugal into Spain, 335. 
 Socialism, 25, 30, 96, 117-9, 136, 199. 
 Social science, definition, 11-15. Younger than national economy, 14—15, 
 
 267. Its history, 15-31. 
 Society Co-extensive with the human race, 13. Human welfare depends on, 
 
 13-14. Its general development, 32-4, 36, 38. Its industrial development, 
 
 29-30, 38-40, 49-50, 68-9, 70-2, 99-100, 142, 144, 197-S, 216-21. 
 Soil : man's dependence on it, 41-2. Its history and composition, 42-5. Its 
 
 exhaustion, 46-8, 92, 243-4, 304. Rarely well cultivated, 58-9, 385. (See 
 ~^ Agriculture, Farming, Land, Settlement.) 
 Solomon, 73, 119, 202. 
 Specie payments, suspended in England, 163, 164. Resumption in England 
 
 in 1821, 164. Resumption of, in the United States, 194. Suspension in 
 
 1837, 354. 
 Specific duties the best, 231-2, 233. Preferred in England, 284. In Ger- 
 many, 326-7. In Portugal, 336. (See Ad valorem.) 
 Spectator (London), 132, 255, 287, 306, 307, 313. 
 Speculation and the credit system, 204. In England, 164, 165, 282, 343-4, 
 
 349-50. In America, 173, 174, 353-4, 357. In France, 170. 
 Spencer, Herbert, 24, 37-8, 53, 66, 69, 219, 248, 371. 
 Stamp duties, 183. 
 Standard of value, 148-9. 
 State, the tribe and the city its ancient forms, and the nation its modern, 
 
 32-3. Exists jiu-e divino, 35-6. Its duty to industry, 30. (See Go&ern- 
 d ment, Nation.) 
 Steam, adapted to small establishments, 128-9. Watt's invention, 128, 
 
 281. John Fitch's, 216, 281. Steam-power comparable to paper-money 
 
 152. 
 
 \ 
 
416 INDEX. 
 
 Steel, English, 233-4. American, 256. 
 
 Stein, 88, 122. 
 
 Steuerverein, 325. 
 
 Stowe, Harriet Beecher, 86. 
 
 Strikes, 133-4. In Philadelphia, 238. 
 
 Subsidies, 240, 364. 
 
 Sugar, 284. (See Beet Sugar.) 
 
 Sully, 269. 
 
 Suspension. (See Specie Payments.) 
 
 Swift, Dean, 183, 299, 302. 
 
 Syme, David, 200, 226-7, 295, 296, 297. 
 
 Talleyrand, 294. 
 
 Tariffs and their methods, 231-5. (See Ad valorem Duties, Incidence, Specific 
 Duties.) Tinkering the tariff, 190, 234, 247. " A tariff and internal im- 
 provements," 240. Not " sectional " in their purpose, but national, 263-4. 
 Revenue tariffs, 232, 290-1. French, of 1664, 269-70. Of 1786, 271. Of 
 1815-60, 272-3, 282. Of 1861, 2743-5. English, of the seventeenth century, 
 278, 279. Of the eighteenth century, 280. Of 1819, 280, 283. Of 1832, 
 1845-6, 1851, and 1853, 283-4. Of 1861, 284, 285. Canadian, 290-1, 313. 
 Australian, 294-7. Irish of 1699, 299. Of 1783-1801, 300-1. Of 1808, 301. 
 East Indian of 1813, 310, 312. Of 1857, 1859, and later, 255, 313. Belgian, 
 of 1844,-318. German of last century, 322. Of 1813, 323. Of 1818, 324-6. 
 Of 1843-5, 326. Of 1864 and 1879, 329. Of the Steuerverein, 325. Bussian 
 of 1820 and 1822, 330. Of 1830 and 1869, 330-1. Swedish of 1824, 332. 
 Spanish of 1722, 332. Of 1778, 333. Of 1845 and 1869, 333, Portuguese of 
 1684, .334. Of 1703, 334-5. Of 1837 and 1841, 336. Turkish, dZ7. Amer- 
 ican of 1789 and 1790, 346, 358. Of 1812, 347, 350. Of 1816, 350-1. Of 
 1824,347,351-2. Of 1828, 352-3. Of 1832, 353. Of 1833-42, 353. Of 1842, 
 355. Of 1846, 355-6. Of 1857, 357. Of 1861-9, 275, 357. Of 1867, 256. 
 Of 1869, 261. Effect of the present protective tariff in the United States, 
 358, 360. 
 
 Taxation the modern source of revenue, ISO, 181. Points in it? economy, 
 189-90. Its incidence, 182. Direct and indirect sorts, 181. Indirect 
 taxes objectionable, 181-3, 186-7. Yields most when lightest, 183-4. 
 Direct taxes, 184. Capitation tax, 184-5. Taxes on real and personal 
 property, 185-8. Taxes on income, 185, 186, 187-8. English taxation, 
 185-7, 189, 229-30, 291. Canadian, 291. East Indian, 313-7. Russian, 
 90. Spanish, 183, 268, 332. Turkish, 337-9. American, 183-5, 188-9, 
 195, 196, 229-30, 240. 
 
 Tenant-right, 84. 
 
 Tennyson, Alfred, 213, 217, 228, 254. 
 
 Textile fabrics, once imported by England, 275, 276, 309. Their manufacturf 
 begun and protected, 277, 279-80. Their manufacture in France, 270, 
 285. In India, 309-10, 312, 313. In Belgium, 317, 319. In Germany, 
 
INDEX. 417 
 
 326,328. In Russia, 330-1. In Denmark, 211, 332. In Portugal, 334, 
 336. In Turkey, 336-7. In America, 342, 347, 350, 357-8. 
 
 Thiers, Adolph, 264. 
 
 Thornton, W. T., 24, 117, 125, 133-4, 304. 
 
 Thorp, 73, 74. 
 
 Tooke, Thomas, 23, 24, 156, 207. 
 
 Torrens, Col., 166, 209. 
 
 Trade. (See Commerce, International Exchange.) 
 
 Trader, his function and services, 197-8, 205, 245. His power, 198-9, 201-3, 
 245-6. His speculations, 199-200, 
 
 Trade spirit described by Coleridge, 27, 79-81. Its relation to war, 229-30, 
 And to education, 372. 
 
 Trades' unions : their origin, 133, 134-5. Their success, 117, 133-4. Out- 
 lawed, 130, 133. An exotic in America, 135. 
 
 Transportation, an unproductive and laborious employment, 216, 217, 246, 
 259, 274. Its cost an unequal tax, 214, 215, 241, 245-6, 341. How to 
 avoid paying it, 245-6, 259, 263. 
 
 Treasury notes, 194. 
 
 Treaties of commerce : English with France, 270, 271, 273-5, 284. Belgian 
 with Holland, 318-9. Austrian with Germany, 325. German with Eng- 
 land, 324. Portuguese with England, 334-5. Turkish with France and 
 England, 337. American with England, 346. With Canada, 293-4. 
 
 Trees affect rainfalls, 47-8, 101-2, 105. Their sustenance, 44-5. One obstacle 
 to the settlement of the best soils, 100, 101-2, 104-5, 105-6, 113. 
 
 Tribe, grew out of the family and into the city or nation, 32-3, 381, Its com- 
 munistic land tenure, 73-4, 98-9, Its jural and industrial methods, 68, 179, 
 219, Its poverty, 59-60, 68, 71, 102, 107, 109, 219. 
 
 Turgot, 18, 171, 208, 271. 
 
 Twiss, Dr. Travers, on Colbert, 269, 270. 
 
 Tyndall, on industrial education, 390. 
 
 Ulster, Scotch settlers in, 83. 
 
 Uniformity of occupation marks a low industrial status, 37-8, 40, 216-7, 223, 
 261, 294, 295, 301, 305, 306, 335, 338. Is associated with famine, 59, 60, 
 302-3, 312. 
 
 University, 368, 369-70, 372. 
 
 Usurers, 338, 339, 340. 
 
 Utility not value, 41, 113-4. 
 
 Value, its nature, 41, 126. Values diminish with growth of society, 125-6. 
 Of land, 114) 125. Of gold and silver, 145-9. The trader adds to value 
 rather than to wealth, 198-9, 245, 
 
 Varied industry. (See Farmer, Labor, Differentiation of Function, Protec- 
 tion.) 
 
 Vegetable kingdom feeds man, 42, Its development, 42-3. Its sustenance, 
 43-5. Vegetables in England, 72, 101, 277, When profitable as a farm 
 crop, 92, 243-5. 
 27 
 
418 INDEX. 
 
 Venice, 157-8, 161, 228, 275. 
 
 "Villeinage in mediaeval Europe, 74, 89, 99, 122. 
 
 Von Maurer, 24, 95-6. 
 
 Wage-fund theory, 22, 24, 116, 133-4. 
 
 Wages are labor's share of the joint product of labor and capital, 115-6, 137. 
 English theory of a natural and necessary rate, 21-2, 24, 54, 116-8, 119, 
 133-4, 265. And of their equality, 19, 118-9. They are highest in the 
 neighborhood of varied industry, 129-30, 235-9, 260. Trades' unions 
 have raised them, 133-4. Attempts to abolish the wages system, 25, 118, 
 136-8, 264, 265. Or to modify it, 138-9. The vp^ages of women, 140. His- 
 tory of wages in England, 74, 83, 122-3, 124, 128, 129-30, 130-1, 133-5, 
 136, 137, 138, 211-2, 236, 288. In Ireland, 63, 130, 236, 302-3. In France, 
 97-8; 123. In America, 124, 128, 138, 235, 236-7, 238-9. 
 
 Walker, Prof. F. A., 26. 
 
 Walker, Hon. Robert J., 355. 
 
 War a "check" on population, 54, 60, 62. War and debts, 190-3. Varied 
 industry a preparation for it, 227-9, 347, 357-8. War is not the worst of 
 national calamities, 192, 226, 228-9. 
 
 Warfare, industrial, its methods, 201, 212, 222, 252-3. Instances, 263, 296-7, 
 301,347-50,351. 
 
 AVashington, George, 344-5. 
 
 Waste lands in England, 59, 82. 
 
 Water : its value, 41, 69. Its utility, 41, 42, 63. Its circulation in nature, 
 47-8, 100, 102. 
 
 Watt, James, 281, 388. 
 
 Wayland, Dr. Francis, 25, 265. 
 
 Wealth defined, 41, 49. Its discussion by the economists, 18, 19, 20, 23, 27, 
 28, 29, 30. The tendency to attain wealth is natural and normal, 29-30, 
 67,265-6. The conditions of its growth. {See Labor.) 
 
 Webster, Daniel, 351, 352. 
 
 Wells, Hon. David A., 25, 262. 
 
 " Wet prairies," 112. 
 
 Whale fishery carried on by co-operation, 138. 
 
 Whately, Archbishop, 55. 
 
 Wheat, its yield in England, 68-9, 71, 76, 82. Its excessive cultivation in 
 the West, 92-3. (See Food, Grain Trade.) 
 
 Whitney's cotton gin, 254, 281, 346. 
 
 Wilsou, James, 313. 
 
 Woman, in primitive stage of society, 197. Hours of work in factories, 51. 
 Woman's wages, 124, 337. Woman's work, 140-1. 
 
 Wool production in England, 275. In Ireland, 298. In America, 256, 342. 
 In Australia, 294, 295. 
 
 Woollens, manufacture of, in England, 276, 277, 279, 280, 348. In Canada, 
 291. In Australia, 297. In Ireland, 298-9, 301. In France, 269, 276. 
 
INDEX. 419 
 
 In Germany, 328. In Russia, 331. In Portugal, 334, 336. In America, 
 
 266, 342, 347, 351, 357-8. 
 Yarranton, Andrew, 16, 278. 
 Yeates, Dr., 336. 
 
 Yeomanry in England, 76, 77. Its decline, 78. Growth elsewhere, 86. 
 Young, Arthur, 86, 109, 124, 207. 
 Zu/lverein, 282, 325-9. 
 Zumpt, 60. 
 
 THE END. 
 
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